[Title 34 CFR ]
[Code of Federal Regulations (annual edition) - July 1, 2020 Edition]
[From the U.S. Government Publishing Office]
[[Page i]]
Title 34
Education
________________________
Parts 400 to 679
Revised as of July 1, 2020
Containing a codification of documents of general
applicability and future effect
As of July 1, 2020
Published by the Office of the Federal Register
National Archives and Records Administration as a
Special Edition of the Federal Register
[[Page ii]]
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[[Page iii]]
Table of Contents
Page
Explanation................................................. v
Title 34:
SUBTITLE B--Regulations of the Offices of the Department
of Education (Continued)
Chapter IV--Office of Career, Technical, and Adult
Education, Department of Education 5
Chapter V--Office of Bilingual Education and
Minority Languages Affairs, Department of Education 71
Chapter VI--Office of Postsecondary Education,
Department of Education 75
Finding Aids:
Table of CFR Titles and Chapters........................ 655
Alphabetical List of Agencies Appearing in the CFR...... 675
List of CFR Sections Affected........................... 685
[[Page iv]]
----------------------------
Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 34 CFR 400.1 refers
to title 34, part 400,
section 1.
----------------------------
[[Page v]]
EXPLANATION
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
into 50 titles which represent broad areas subject to Federal
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parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:
Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
The appropriate revision date is printed on the cover of each
volume.
LEGAL STATUS
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HOW TO USE THE CODE OF FEDERAL REGULATIONS
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collection request.
[[Page vi]]
Many agencies have begun publishing numerous OMB control numbers as
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(a) The incorporation will substantially reduce the volume of
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(b) The matter incorporated is in fact available to the extent
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(c) The incorporating document is drafted and submitted for
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that volume.
[[Page vii]]
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Oliver A. Potts,
Director,
Office of the Federal Register
July 1, 2020
[[Page ix]]
THIS TITLE
Title 34--Education is composed of four volumes. The parts in these
volumes are arranged in the following order: Parts 1-299, parts 300-399,
parts 400-679, and part 680 to end. The contents of these volumes
represent all regulations codified under this title of the CFR as of
July 1, 2020.
For this volume, Michele Bugenhagen was Chief Editor. The Code of
Federal Regulations publication program is under the direction of John
Martinez, assisted by Stephen J. Frattini.
[[Page 1]]
TITLE 34--EDUCATION
(This book contains parts 400 to 679)
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SUBTITLE B--Regulations of the Offices of the Department of Education
(Continued)
Part
chapter IV--Office of Career, Technical, and Adult
Education, Department of Education........................ 400
chapter V--Office of Bilingual Education and Minority
Languages Affairs, Department of Education................ 500
chapter VI--Office of Postsecondary Education, Department of
Education................................................. 600
[[Page 3]]
Subtitle B--Regulations of the Offices of the Department of Education
(Continued)
[[Page 5]]
CHAPTER IV--OFFICE OF CAREER, TECHNICAL, AND ADULT EDUCATION, DEPARTMENT
OF EDUCATION
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Part Page
400
[Reserved]
401 Native American career and technical
education program....................... 7
402-403
[Reserved]
406
[Reserved]
410-413
[Reserved]
415
[Reserved]
421
[Reserved]
425-429
[Reserved]
460-461
[Reserved]
462 Measuring educational gain in the National
Reporting System for Adult Education.... 7
463 Adult Education and Family Literacy Act..... 17
464
[Reserved]
472
[Reserved]
477
[Reserved]
489-499
[Reserved]
[[Page 7]]
PART 400 [RESERVED]
PART 401_NATIVE AMERICAN CAREER AND TECHNICAL EDUCATION PROGRAM-
-Table of Contents
Subpart A_General
Sec.
401.1 Is the Secretary's decision not to make an award under the Native
American Career and Technical Education Program subject to a
hearing?
401.2-401.55 [Reserved]
Authority: 20 U.S.C. 2313(b), 25 U.S.C. 5321.
Source: 57 FR 36730, Aug. 14, 1992, unless otherwise noted.
Subpart A_General
Sec. 401.1 Is the Secretary's decision not to make an award under
the Native American Career and Technical Education Program subject
to a hearing?
(a) After receiving written notice from an authorized official of
the Department that the Secretary will not award a grant or cooperative
agreement to an eligible applicant, an Indian tribal organization has 30
calendar days to make a written request to the Secretary for a hearing
to review the Secretary's decision.
(b) Within 10 business days of the Department's receipt of a hearing
request, the Secretary designates a Department employee who is not
assigned to the Office of Career, Technical, and Adult Education to
serve as a hearing officer. The hearing officer conducts a hearing and
issues a written decision within 75 calendar days of the Department's
receipt of the hearing request. The hearing officer establishes rules
for the conduct of the hearing. The hearing officer conducts the hearing
solely on the basis of written submissions unless the officer
determines, in accordance with standards in 34 CFR 81.6(b), that oral
argument or testimony is necessary.
(c) The Secretary does not make any award under this part to an
Indian tribal organization until the hearing officer issues a written
decision on any appeal brought under this section.
[84 FR 7299, Mar. 4, 2019]
Sec. Sec. 401.2-401.5 [Reserved]
PARTS 402 403 [RESERVED]
PART 406 [RESERVED]
PARTS 410 413 [RESERVED]
PART 415 [RESERVED]
PART 421 [RESERVED]
PARTS 425 429 [RESERVED]
PART 460 461 [RESERVED]
PART 462_MEASURING EDUCATIONAL GAIN IN THE NATIONAL REPORTING SYSTEM
FOR ADULT EDUCATION--Table of Contents
Subpart A_General
Sec.
462.1 What is the scope of this part?
462.2 What regulations apply?
462.3 What definitions apply?
462.4 What are the transition rules for using tests to measure
educational gain for the National Reporting System for Adult
Education (NRS)?
Subpart B_What Process Does the Secretary Use To Review the Suitability
of Tests for Use in the NRS?
462.10 How does the Secretary review tests?
462.11 What must an application contain?
462.12 What procedures does the Secretary use to review the suitability
of tests?
462.13 What criteria and requirements does the Secretary use for
determining the suitability of tests?
462.14 How often and under what circumstances must a test be reviewed by
the Secretary?
Subpart C [Reserved]
Subpart D_What Requirements Must States and Local Eligible Providers
Follow When Measuring Educational Gain?
462.40 Must a State have an assessment policy?
462.41 How must tests be administered in order to accurately measure
educational gain?
462.42 How are tests used to place students at an NRS educational
functioning level?
462.43-462.44 [Reserved]
[[Page 8]]
Authority: 29 U.S.C. 3292, et seq., unless otherwise noted.
Source: 73 FR 2315, Jan. 14, 2008, unless otherwise noted.
Subpart A_General
Sec. 462.1 What is the scope of this part?
The regulations in this part establish the--
(a) Procedures the Secretary uses to determine the suitability of
standardized tests for use in the National Reporting System for Adult
Education (NRS) to measure educational gain of participants in an adult
education program required to report under the NRS; and
(b) Procedures States and local eligible providers must follow when
measuring educational gain for use in the NRS.
(Authority: 29 U.S.C. 3292)
[73 FR 2315, Jan. 14, 2008, as amended at 81 FR 55551, Aug. 19, 2016]
Sec. 462.2 What regulations apply?
The following regulations apply to this part:
(a) The Education Department General Administrative Regulations
(EDGAR) as follows:
(1) 34 CFR part 76 (State-Administered Programs).
(2) 34 CFR part 77 (Definitions that Apply to Department
Regulations).
(3) 34 CFR part 79 (Intergovernmental Review of Department of
Education Programs and Activities).
(4) 34 CFR part 81 (General Education Provisions Act--Enforcement).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 84 (Governmentwide Requirements for Drug-Free
Workplace (Financial Assistance)).
(7) 34 CFR part 86 (Drug and Alcohol Abuse Prevention).
(8) 34 CFR part 97 (Protection of Human Subjects).
(9) 34 CFR part 98 (Student Rights in Research, Experimental
Programs, and Testing).
(10) 34 CFR part 99 (Family Educational Rights and Privacy).
(b) The regulations in this part 462.
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide
Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part
3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards), as adopted at 2
CFR part 3474.
(Authority: 29 U.S.C. 3292)
[81 FR 55551, Aug. 19, 2016]
Sec. 462.3 What definitions apply?
(a) Definitions in the Adult Education and Family Literacy Act
(Act). The following terms used in these regulations are defined in
section 203 of the Adult Education and Family Literacy Act, 20 U.S.C.
3292 (Act):
Adult education,
Eligible provider,
Individual of limited English proficiency,
Individual with a disability,
Literacy.
(b) Other definitions. The following definitions also apply to this
part:
Adult basic education (ABE) means instruction designed for an adult
whose educational functioning level is equivalent to a particular ABE
literacy level listed in the NRS educational functioning level table in
the Guidelines.
Adult education population means individuals--
(1) Who have attained 16 years of age;
(2) Who are not enrolled or required to be enrolled in secondary
school under State law; and
(3) Who--
(i) Are basic skills deficient;
(ii) Do not have a secondary school diploma or its recognized
equivalent, and have not achieved an equivalent level of education; or
(iii) Are English language learners.
Adult secondary education (ASE) means instruction designed for an
adult whose educational functioning level is equivalent to a particular
ASE literacy level listed in the NRS educational functioning level table
in the Guidelines.
Content domains, content specifications, or NRS skill areas mean,
for the purpose of the NRS, reading, writing, and speaking the English
language, mathematics, problem solving, English language acquisition,
and other literacy skills as defined by the Secretary.
[[Page 9]]
Educational functioning levels mean the ABE, ASE, and ESL literacy
levels, as provided in the Guidelines, that describe a set of skills and
competencies that students demonstrate in the NRS skill areas.
English as a Second Language (ESL) means instruction designed for an
adult whose educational functioning level is equivalent to a particular
ESL English language proficiency level listed in the NRS educational
functioning level table in the Guidelines.
Guidelines means the Implementation Guidelines: Measures and Methods
for the National Reporting System for Adult Education (OMB Control
Number: 1830-0027) (also known as NRS Implementation Guidelines) posted
on the Internet at: www.nrsweb.org.
Local eligible provider means an ``eligible provider'' as defined in
the Act that operates an adult education program that is required to
report under the NRS.
State means ``State'' and ``Outlying area'' as defined in the Act.
Test means a standardized test, assessment, or instrument that has a
formal protocol on how it is to be administered. These protocols
include, for example, the use of parallel, equated forms, testing
conditions, time allowed for the test, standardized scoring, and the
amount of instructional time a student needs before post-testing.
Violation of these protocols often invalidates the test scores. Tests
are not limited to traditional paper and pencil (or computer-
administered) instruments for which forms are constructed prior to
administration to examinees. Tests may also include adaptive tests that
use computerized algorithms for selecting and administering items in
real time; however, for such instruments, the size of the item pool and
the method of item selection must ensure negligible overlap in items
across pre- and post-testing.
Test administrator means an individual who is trained to administer
tests the Secretary determines to be suitable under this part.
Test publisher means an entity, individual, organization, or agency
that owns a registered copyright of a test or is licensed by the
copyright holder to sell or distribute a test.
(Authority: 29 U.S.C. 3292, et seq., unless otherwise noted)
[73 FR 2315, Jan. 14, 2008, as amended at 81 FR 55551, Aug. 19, 2016]
Sec. 462.4 What are the transition rules for using tests to measure
educational gain for the National Reporting System for Adult
Education (NRS)?
A State or an eligible provider may continue to measure educational
gain for the NRS using tests that the Secretary has identified in the
most recent notice published in the Federal Register until the Secretary
announces through a notice published in the Federal Register a date by
which such tests may no longer be used.
(Authority: 29 U.S.C. 3292)
[81 FR 55551, Aug. 19, 2016]
Subpart B_What Process Does the Secretary Use To Review the Suitability
of Tests for Use in the NRS?
Sec. 462.10 How does the Secretary review tests?
(a) The Secretary only reviews tests under this part that are
submitted by a test publisher.
(b) A test publisher that wishes to have the suitability of its test
determined by the Secretary under this part must submit an application
to the Secretary, in the manner the Secretary may prescribe, by October
1, 2016, April 1, 2017, October 1, 2017, April 1, 2018, October 1, 2018,
and by October 1 of each year thereafter.
(Authority: 29 U.S.C. 3292)
[73 FR 2315, Jan. 14, 2008, as amended at 81 FR 55552, Aug. 19, 2016]
Sec. 462.11 What must an application contain?
(a) Application content and format. In order for the Secretary to
determine whether a standardized test is suitable for measuring the
gains of participants in an adult education program required to report
under the NRS, a test publisher must--
[[Page 10]]
(1) Include with its application information listed in paragraphs
(b) through (i) of this section, and, if applicable, the information
listed in paragraph (j) of this section;
(2) Provide evidence that it holds a registered copyright of a test
or is licensed by the copyright holder to sell or distribute a test.
(3)(i) Arrange the information in its application in the order it is
presented in paragraphs (b) through (j) of this section; or
(ii) Include a table of contents in its application that identifies
the location of the information required in paragraphs (b) through (j)
of this section.
(4) Submit to the Secretary four copies of its application.
(b) General information. (1) A statement, in the technical manual
for the test, of the intended purpose of the test and how the test will
allow examinees to demonstrate the skills that are associated with the
NRS educational functioning levels in the Guidelines.
(2) The name, address, e-mail address, and telephone and fax numbers
of a contact person to whom the Secretary may address inquiries.
(3) A summary of the precise editions, forms, levels, and, if
applicable, sub-tests and abbreviated tests that the test publisher is
requesting that the Secretary review and determine to be suitable for
use in the NRS.
(c) Development. Documentation of how the test was developed,
including a description of--
(1) The nature of samples of examinees administered the test during
pilot or field testing, such as--
(i) The number of examinees administered each item;
(ii) How similar the sample or samples of examinees used to develop
and evaluate the test were to the adult education population of interest
to the NRS; and
(iii) The steps, if any, taken to ensure that the examinees were
motivated while responding to the test; and
(2) The steps taken to ensure the quality of test items or tasks,
such as--
(i) The extent to which items or tasks on the test were reviewed for
fairness and sensitivity; and
(ii) The extent to which items or tasks on the test were screened
for the adequacy of their psychometric properties.
(3) The procedures used to assign items to--
(i) Forms, for tests that are constructed prior to being
administered to examinees; or
(ii) Examinees, for adaptive tests in which items are selected in
real time.
(d) Maintenance. Documentation of how the test is maintained,
including a description of--
(1) How frequently, if ever, new forms of the test are developed;
(2) The steps taken to ensure the comparability of scores across
forms of the test;
(3) The steps taken to maintain the security of the test;
(4) A history of the test's use, including the number of times the
test has been administered; and
(5) For a computerized adaptive test, the procedures used to--
(i) Select subsets of items for administration;
(ii) Determine the starting point and termination conditions;
(iii) Score the test; and
(iv) Control for item exposure.
(e) Match of content to the NRS educational functioning levels
(content validity). Documentation of the extent to which the items or
tasks on the test cover the skills in the NRS educational functioning
levels in the Guidelines, including--
(1) Whether the items or tasks on the test require the types and
levels of skills used to describe the NRS educational functioning
levels;
(2) Whether the items or tasks measure skills that are not
associated with the NRS educational functioning levels;
(3) Whether aspects of a particular NRS educational functioning
level are not covered by any of the items or tasks;
(4) The procedures used to establish the content validity of the
test;
(5) The number of subject-matter experts who provided judgments
linking the items or tasks to the NRS educational functioning levels and
their qualifications for doing so, particularly their familiarity with
adult education
[[Page 11]]
and the NRS educational functioning levels; and
(6) The extent to which the judgments of the subject matter experts
agree.
(f) Match of scores to NRS educational functioning levels.
Documentation of the adequacy of the procedure used to translate the
performance of an examinee on a particular test to an estimate of the
examinee's standing with respect to the NRS educational functioning
levels in the Guidelines, including--
(1) The standard-setting procedures used to establish cut scores for
transforming raw or scale scores on the test into estimates of an
examinee's NRS educational functioning level;
(2) If judgment-based procedures were used--
(i) The number of subject-matter experts who provided judgments, and
their qualifications; and
(ii) Evidence of the extent to which the judgments of subject-matter
experts agree;
(3) The standard error of each cut score, and how it was
established; and
(4) The extent to which the cut scores might be expected to differ
if they had been established by a different (though similar) panel of
experts.
(g) Reliability. Documentation of the degree of consistency in
performance across different forms of the test in the absence of any
external interventions, including--
(1) The correlation between raw (or scale) scores across alternate
forms of the test or, in the case of computerized adaptive tests, across
alternate administrations of the test;
(2) The consistency with which examinees are classified into the
same NRS educational functioning levels across forms of the test.
Information regarding classification consistency should be reported for
each NRS educational functioning level that the test is being considered
for use in measuring;
(3) The adequacy of the research design leading to the estimates of
the reliability of the test, including--
(i) The size of the sample(s);
(ii) The similarity between the sample(s) used in the data
collection and the adult education population; and
(iii) The steps taken to ensure the motivation of the examinees; and
(4) Any other information explaining the methodology and procedures
used to measure the reliability of the test.
(h) Construct validity. Documentation of the appropriateness of a
given test for measuring educational gain for the NRS, i.e.,
documentation that the test measures what it is intended to measure,
including--
(1) The extent to which the raw or scale scores and the educational
functioning classifications associated with the test correlate (or
agree) with scores or classifications associated with other tests
designed or intended to assess educational gain in the same adult
education population as the NRS;
(2) The extent to which the raw or scale scores are related to other
relevant variables, such as teacher evaluation, hours of instruction, or
other measures that may be related to test performance;
(3) The adequacy of the research designs associated with these
sources of evidence (see paragraph (g)(3) of this section); and
(4) Other evidence demonstrating that the test measures gains in
educational functioning resulting from adult education and not from
other construct-irrelevant variables, such as practice effects.
(i) Other information. (1) A description of the manner in which test
administration time was determined, and an analysis of the speededness
of the test.
(2) Additional guidance on the interpretation of scores resulting
from any modifications of the tests for an individual with a disability.
(3) The manual provided to test administrators containing procedures
and instructions for test security and administration.
(4) A description of the training or certification required of test
administrators and scorers by the test publisher.
(5) A description of retesting (e.g., re-administration of a test
because of problems in the original administration such as the test
taker becomes ill during the test and cannot finish, there are external
interruptions during testing, or there are administration errors)
procedures and the analysis upon
[[Page 12]]
which the criteria for retesting are based.
(6) Such other evidence as the Secretary may determine is necessary
to establish the test's compliance with the criteria and requirements
the Secretary uses to determine the suitability of tests as provided in
Sec. 462.13.
(j) Previous tests. (1) For a test used to measure educational gain
in the NRS before the effective date of these regulations that is
submitted to the Secretary for review under this part, the test
publisher must provide documentation of periodic review of the content
and specifications of the test to ensure that the test continues to
reflect NRS educational functioning levels.
(2) For a test first published five years or more before the date it
is submitted to the Secretary for review under this part, the test
publisher must provide documentation of periodic review of the content
and specifications of the test to ensure that the test continues to
reflect NRS educational functioning levels.
(3) For a test that has not changed in the seven years since the
Secretary determined, under Sec. 462.13, that it was suitable for use
in the NRS that is again being submitted to the Secretary for review
under this part, the test publisher must provide updated data supporting
the validity of the test for use in classifying adult learners with
respect to the NRS educational functioning levels and the measurement of
educational gain as defined in Sec. 462.43 of this part.
(4) If a test has been substantially revised--for example by
changing its mode of administration, administration procedures,
structure, number of items, content specifications, item types, forms,
sub-tests, or number of hours between pre- and post-testing from the
most recent edition reviewed by the Secretary under this part--the test
publisher must provide an analysis of the revisions, including the
reasons for the revisions, the implications of the revisions for the
comparability of scores on the current test to scores on the previous
test, and results from validity, reliability, and equating or standard-
setting studies undertaken subsequent to the revisions.
(Authority: 29 U.S.C. 3292)
[73 FR 2315, Jan. 14, 2008, as amended at 81 FR 55552, Aug. 19, 2016]
Sec. 462.12 What procedures does the Secretary use to review the
suitability of tests?
(a) Review. (1) When the Secretary receives a complete application
from a test publisher, the Secretary selects experts in the field of
educational testing and assessment who possess appropriate advanced
degrees and experience in test development or psychometric research, or
both, to advise the Secretary on the extent to which a test meets the
criteria and requirements in Sec. 462.13.
(2) The Secretary reviews and determines the suitability of a test
only if an application--
(i) Is submitted by a test publisher;
(ii) Meets the deadline established by the Secretary;
(iii) Includes a test that--
(A) Has two or more secure, parallel, equated forms of the same
test--either traditional paper and pencil or computer-administered
instruments--for which forms are constructed prior to administration to
examinees; or
(B) Is an adaptive test that uses computerized algorithms for
selecting and administering items in real time; however, for such an
instrument, the size of the item pool and the method of item selection
must ensure negligible overlap in items across pre- and post-testing;
(iv) Includes a test that samples one or more of the major content
domains of the NRS educational functioning levels of ABE, ASE or ESL
with sufficient numbers of questions to represent adequately the domain
or domains; and
(v) Includes the information prescribed by the Secretary, including
the information in Sec. 462.11 of this part.
(b) Secretary's determination. (1) The Secretary determines whether
a test meets the criteria and requirements in Sec. 462.13 after taking
into account the advice of the experts described in paragraph (a)(1) of
this section.
(2) For tests that contain multiple sub-tests measuring content
domains
[[Page 13]]
other than those of the NRS educational functioning levels, the
Secretary determines the suitability of only those sub-tests covering
the domains of the NRS educational functioning levels.
(c) Suitable tests. If the Secretary determines that a test
satisfies the criteria and requirements in Sec. 462.13 and, therefore,
is suitable for use in the NRS, the Secretary--
(1) Notifies the test publisher of the Secretary's decision; and
(2) Annually publishes in the Federal Register and posts on the
Internet at www.nrsweb.org a list of the names of tests and test forms
and the educational functioning levels the tests are suitable to measure
in the NRS. A copy of the list is also available from the U.S.
Department of Education, Office of Career, Technical, and Adult
Education, Division of Adult Education and Literacy, 400 Maryland Avenue
SW., Room 11152, Potomac Center Plaza, Washington, DC 20202-7240.
(d) Unsuitable tests. (1) If the Secretary determines that a test
does not satisfy the criteria and requirements in Sec. 462.13 and,
therefore, is not suitable for use in the NRS, the Secretary notifies
the test publisher of the Secretary's decision and of the reasons why
the test does not meet those criteria and requirements.
(2) The test publisher may resubmit an application to have the
suitability of its test determined by the Secretary under this part on
October 1 in the year immediately following the year in which the
Secretary notifies the publisher.
(i) An analysis of why the information and documentation submitted
meet the criteria and requirements in Sec. 462.13, notwithstanding the
Secretary's earlier decision to the contrary; and
(ii) Any additional documentation and information that address the
Secretary's reasons for determining that the test was unsuitable.
(3) The Secretary reviews the additional information submitted by
the test publisher and makes a final determination regarding the
suitability of the test for use in the NRS.
(i) If the Secretary's decision is unchanged and the test remains
unsuitable for use in the NRS, the Secretary notifies the test
publisher, and this action concludes the review process.
(ii) If the Secretary's decision changes and the test is determined
to be suitable for use in the NRS, the Secretary follows the procedures
in paragraph (c) of this section.
(e) Revocation. (1) The Secretary's determination regarding the
suitability of a test may be revoked if the Secretary determines that--
(i) The information the publisher submitted as a basis for the
Secretary's review of the test was inaccurate; or
(ii) A test has been substantially revised--for example, by changing
its mode of administration, administration procedures, structure, number
of items, content specifications, item types, forms or sub-tests, or
number of hours between pre- and post-testing.
(2) The Secretary notifies the test publisher of the--
(i) Secretary's decision to revoke the determination that the test
is suitable for use in the NRS; and
(ii) Reasons for the Secretary's revocation.
(3) Within 30 days after the Secretary notifies a test publisher of
the decision to revoke a determination that a test is suitable for use
in the NRS, the test publisher may request that the Secretary reconsider
the decision. This request must be accompanied by documentation and
information that address the Secretary's reasons for revoking the
determination that the test is suitable for use in the NRS.
(4) The Secretary reviews the information submitted by the test
publisher and makes a final determination regarding the suitability of
the test for use in the NRS.
(5) If the Secretary revokes the determination regarding the
suitability of a test, the Secretary publishes in the Federal Register
and posts on the Internet at www.nrsweb.org a notice of that revocation
along with the date by which States and eligible providers must stop
using the revoked test. A copy of the notice of revocation is also
available from the U.S. Department of Education, Office of Career,
Technical, and Adult Education, Division of Adult Education and
Literacy, 400 Maryland
[[Page 14]]
Avenue SW., Room 11152, Potomac Center Plaza, Washington, DC 20202-7240.
(Authority: 29 U.S.C. 3292)
[73 FR 2315, Jan. 14, 2008, as amended at 81 FR 55552, Aug. 19, 2016]
Sec. 462.13 What criteria and requirements does the Secretary use
for determining the suitability of tests?
In order for the Secretary to consider a test suitable for use in
the NRS, the test or the test publisher, if applicable, must meet the
following criteria and requirements:
(a) The test must measure the NRS educational functioning levels of
members of the adult education population.
(b) The test must sample one or more of the major content domains of
the NRS educational functioning levels of ABE, ASE or ESL with
sufficient numbers of questions to adequately represent the domain or
domains.
(c)(1) The test must meet all applicable and feasible standards for
test construction and validity provided in the 1999 edition of the
Standards for Educational and Psychological Testing, prepared by the
Joint Committee on Standards for Educational and Psychological Testing
of the American Educational Research Association, the American
Psychological Association, and the National Council on Measurement in
Education incorporated by reference in this section. The Director of the
Federal Register approves this incorporation by reference in accordance
with 5 U.S.C. 552(a) and 1 CFR part 51. You may obtain a copy from the
American Psychological Association, Inc., 750 First Street, NE.,
Washington, DC 20002. You may inspect a copy at the Department of
Education, room 11159, 550 12th Street, SW., Washington, DC 20202 or at
the National Archives and Records Administration (NARA). For information
on the availability of this material at NARA, call (202) 741-6030, or go
to: http://www.archives.gov/federal_register/
code_of_federal_regulations/ibr_locations.html.
(2) If requested by the Secretary, a test publisher must explain why
it believes that certain standards in the 1999 edition of the Standards
for Educational and Psychological Testing were not applicable or were
not feasible to meet.
(d) The test must contain the publisher's guidelines for retesting,
including time between test-taking, which are accompanied by appropriate
justification.
(e) The test must--
(1) Have two or more secure, parallel, equated forms of the same
test--either traditional paper and pencil or computer administered
instruments--for which forms are constructed prior to administration to
examinees; or
(2) Be an adaptive test that uses computerized algorithms for
selecting and administering items in real time; however, for such an
instrument, the size of the item pool and the method of item selection
must ensure negligible overlap in items across pre- and post-testing.
Scores associated with these alternate administrations must be
equivalent in meaning.
(f) For a test that has been modified for individuals with
disabilities, the test publisher must--
(1) Provide documentation that it followed the guidelines provided
in the Testing Individuals With Disabilities section of the 1999 edition
of the Standards for Educational and Psychological Testing;
(2) Provide documentation of the appropriateness and feasibility of
the modifications relevant to test performance; and
(3)(i) Recommend educational functioning levels based on the
information obtained from adult education students who participated in
the pilot or field test and who have the disability for which the test
has been modified; and
(ii) Provide documentation of the adequacy of the procedures used to
translate the performance of adult education students with the
disability for whom the test has been modified to an estimate of the
examinees' standing with respect to the NRS educational functioning
levels.
(Authority: 29 U.S.C. 3292)
[73 FR 2315, Jan. 14, 2008, as amended at 81 FR 55552, Aug. 19, 2016]
[[Page 15]]
Sec. 462.14 How often and under what circumstances must a test be
reviewed by the Secretary?
(a) The Secretary's determination that a test is suitable for use in
the NRS is in effect for a period of seven years from the date of the
Secretary's written notification to the test publisher, unless otherwise
indicated by the Secretary. After that time, if the test publisher wants
the test to be used in the NRS, the test must be reviewed again by the
Secretary so that the Secretary can determine whether the test continues
to be suitable for use in the NRS.
(b) If a test that the Secretary has determined is suitable for use
in the NRS is substantially revised--for example, by changing its mode
of administration, administration procedures, structure, number of
items, content specifications, item types, forms, sub-tests, or number
of hours between pre- and post-testing--and the test publisher wants the
test to continue to be used in the NRS, the test publisher must submit,
as provided in Sec. 462.11(j)(4), the substantially revised test or
version of the test to the Secretary for review so that the Secretary
can determine whether the test continues to be suitable for use in the
NRS.
(Authority: 29 U.S.C. 3292)
[73 FR 2315, Jan. 14, 2008, as amended at 81 FR 55552, Aug. 19, 2016]
Subpart C [Reserved]
Subpart D_What Requirements Must States and Local Eligible Providers
Follow When Measuring Educational Gain?
Sec. 462.40 Must a State have an assessment policy?
(a) A State must have a written assessment policy that its local
eligible providers must follow in measuring educational gain and
reporting data in the NRS.
(b) A State must submit its assessment policy to the Secretary for
review and approval at the time it submits its annual statistical report
for the NRS.
(c) The State's assessment policy must--
(1) Include a statement requiring that local eligible providers
measure the educational gain of all students who receive 12 hours or
more of instruction in the State's adult education program with a test
that the Secretary has determined is suitable for use in the NRS;
(2) Identify the pre- and post-tests that the State requires
eligible providers to use to measure the educational functioning level
gain of ABE, ASE, and ESL students;
(3)(i) Indicate when, in calendar days or instructional hours,
eligible providers must administer pre- and post-tests to students;
(ii) Ensure that the time for administering the post-test is long
enough after the pre-test to allow the test to measure educational
functioning level gains according to the test publisher's guidelines;
and
(iii) Specify a standard for the percentage of students to be pre-
and post-tested.
(4) Specify the score ranges tied to educational functioning levels
for placement and for reporting gains for accountability;
(5) Identify the skill areas the State intends to require local
eligible providers to assess in order to measure educational gain;
(6) Include the guidance the State provides to local eligible
providers on testing and placement of an individual with a disability or
an individual who is unable to be tested because of a disability;
(7) Describe the training requirements that staff must meet in order
to be qualified to administer and score each test selected by the State
to measure the educational gains of students;
(8) Identify the alternate form or forms of each test that local
eligible providers must use for post-testing;
(9) Indicate whether local eligible providers must use a locator
test for guidance on identifying the appropriate pre-test;
(10) Describe the State's policy for the initial placement of a
student at each NRS educational functioning level using test scores;
[[Page 16]]
(11) Describe the State's policy for using the post-test for
measuring educational gain and for advancing students across educational
functioning levels;
(12) Describe the pre-service and in-service staff training that the
State or local eligible providers will provide, including training--
(i) For staff who either administer or score each of the tests used
to measure educational gain;
(ii) For teachers and other local staff involved in gathering,
analyzing, compiling, and reporting data for the NRS; and
(iii) That includes the following topics:
(A) NRS policy, accountability policies, and the data collection
process.
(B) Definitions of measures.
(C) Conducting assessments; and
(13) Identify the State or local agency responsible for providing
pre- and in-service training.
(Approved by the Office of Management and Budget under control number
1830-0027)
(Authority: 29 U.S.C. 3292)
[73 FR 2315, Jan. 14, 2008, as amended at 81 FR 55552, Aug. 19, 2016]
Sec. 462.41 How must tests be administered in order to accurately
measure educational gain?
(a) General. A local eligible provider must measure the educational
gains of students using only tests that the Secretary has determined are
suitable for use in the NRS and that the State has identified in its
assessment policy.
(b) Pre-test. A local eligible provider must--
(1) Administer a pre-test to measure a student's educational
functioning level at intake, or as soon as possible thereafter;
(2) Administer the pre-test to students at a uniform time, according
to the State's assessment policy; and
(3) Administer pre-tests to students in the skill areas identified
in the State's assessment policy.
(c) Post-test. A local eligible provider must--
(1) Administer a post-test to measure a student's educational
functioning level after a set time period or number of instructional
hours;
(2) Administer the post-test to students at a uniform time,
according to the State's assessment policy;
(3)(i) Administer post-tests with a secure, parallel, equated form
of the same test--either traditional paper and pencil or computer-
administered instruments--for which forms are constructed prior to
administration to examinees to pre-test and determine the initial
placement of students; or
(ii) Administer post-tests with an adaptive test that uses
computerized algorithms for selecting and administering items in real
time; however, for such an instrument, the size of the item pool and the
method of item selection must ensure negligible overlap in items across
pre- and post-testing; and
(4) Administer post-tests to students in the same skill areas as the
pre-test.
(d) Other requirements. (1) A local eligible provider must
administer a test using only staff who have been trained to administer
the test.
(2) A local eligible provider may use the results of a test in the
NRS only if the test was administered in a manner that is consistent
with the State's assessment policy and the test publisher's guidelines.
(Approved by the Office of Management and Budget under control number
1830-0027)
(Authority: 29 U.S.C. 3292)
[73 FR 2315, Jan. 14, 2008, as amended at 81 FR 55553, Aug. 19, 2016]
Sec. 462.42 How are tests used to place students at an NRS
educational functioning level?
(a) A local eligible provider must use the results of the pre-test
described in Sec. 462.41(b) to initially place students at the
appropriate NRS educational functioning level.
(b) A local eligible provider must use the results of the post-test
described in Sec. 462.41(c)--
(1) To determine whether students have completed one or more
educational functioning levels or are progressing within the same level;
and
(2) To place students at the appropriate NRS educational functioning
level.
(c)(1) States and local eligible providers are not required to use
all of the
[[Page 17]]
skill areas described in the NRS educational functioning levels to place
students.
(2) States and local eligible providers must test and report on the
skill areas most relevant to the students' needs and to the programs'
curriculum.
(d)(1) If a State's assessment policy requires a local eligible
provider to test a student in multiple skill areas and the student will
receive instruction in all of the skill areas, the local eligible
provider must place the student in an educational functioning level that
is equivalent to the student's lowest test score for any of the skill
areas tested under Sec. 462.41(b) and (c).
(2) If a State's assessment policy requires a local eligible
provider to test a student in multiple skill areas, but the student will
receive instruction in fewer than all of the skill areas, the local
eligible provider must place the student in an educational functioning
level that is equivalent to the student's lowest test score for any of
the skill areas--
(i) Tested under Sec. 462.41(b) and (c); and
(ii) In which the student will receive instruction.
(Approved by the Office of Management and Budget under control number
1830-0027)
(Authority: 29 U.S.C. 3292)
[73 FR 2315, Jan. 14, 2008, as amended at 81 FR 55553, Aug. 19, 2016]
Sec. Sec. 462.43-462.44 [Reserved]
PART 463_ADULT EDUCATION AND FAMILY LITERACY ACT--Table of Contents
Subpart A_Adult Education General Provisions
Sec.
463.1 What is the purpose of the Adult Education and Family Literacy
Act?
463.2 What regulations apply to the Adult Education and Family Literacy
Act programs?
463.3 What definitions apply to the Adult Education and Family Literacy
Act programs?
Subpart B [Reserved]
Subpart C_How Does a State Make an Award to Eligible Providers?
463.20 What is the process that the eligible agency must follow in
awarding grants or contracts to eligible providers?
463.21 What processes must be in place to determine the extent to which
a local application for grants or contracts to provide adult
education and literacy services is aligned with a local plan
under section 108 of WIOA?
463.22 What must be included in the eligible provider's application for
a grant or contract?
463.23 Who is eligible to apply for a grant or contract for adult
education and literacy activities?
463.24 How can an eligible provider establish that it has demonstrated
effectiveness?
463.25 What are the requirements related to local administrative cost
limits?
463.26 What activities are considered local administrative costs?
Subpart D_What Are Adult Education and Literacy Activities?
463.30 What are adult education and literacy programs, activities, and
services?
463.31 What is an English language acquisition program?
463.32 How does a program that is intended to be an English language
acquisition program meet the requirement that the program lead
to attainment of a secondary school diploma or its recognized
equivalent and transition to postsecondary education and
training or leads to employment?
463.33 What are integrated English literacy and civics education
services?
463.34 What are workforce preparation activities?
463.35 What is integrated education and training?
463.36 What are the required components of an integrated education and
training program funded under title II?
463.37 How does a program providing integrated education and training
under title II meet the requirement that the three required
components be ``integrated''?
463.38 How does a program providing integrated education and training
under title II meet the requirement that an integrated
education and training program be ``for the purpose of
educational and career advancement''?
[[Page 18]]
Subpart E [Reserved]
Subpart F_Programs for Corrections Education and the Education of Other
Institutionalized Individuals?
463.60 What are programs for Corrections Education and the Education of
other Institutionalized Individuals?
463.61 How does the eligible agency award funds to eligible providers
under the program for Corrections Education and Education of
other Institutionalized Individuals?
463.62 What is the priority for programs that receive funding through
programs for Corrections Education and Education of other
Institutionalized Individuals?
463.63 How may funds under programs for Corrections Education and
Education of other Institutionalized Individuals be used to
support transition to re-entry initiatives and other post-
release services with the goal of reducing recidivism?
Subpart G_What Is the Integrated English Literacy and Civics Education
Program?
463.70 What is the Integrated English Literacy and Civics Education
program?
463.71 How does the Secretary make an award under the Integrated English
Literacy and Civics Education program?
463.72 How does the eligible agency award funds to eligible providers
for the Integrated English Literacy and Civics Education
program?
463.73 What are the requirements for eligible providers that receive
funding through the Integrated English Literacy and Civics
Education program?
463.74 How does an eligible provider that receives funds through the
Integrated English Literacy and Civics Education program meet
the requirement to use funds for Integrated English Literacy
and Civics Education in combination with integrated education
and training activities?
463.75 Who is eligible to receive education services through the
Integrated English Literacy and Civics Education program?
Subpart H_Unified and Combined State Plans Under Title I of the
Workforce Innovation and Opportunity Act
463.100 What are the purposes of the Unified and Combined State Plans?
463.105 What are the general requirements for the Unified State Plan?
463.110 What are the program-specific requirements in the Unified State
Plan for the adult, dislocated worker, and youth programs
authorized under Workforce Innovation and Opportunity Act
title I?
463.115 What are the program-specific requirements in the Unified State
Plan for the Adult Education and Family Literacy Act program
authorized under Workforce Innovation and Opportunity Act
title II?
463.120 What are the program-specific requirements in the Unified State
Plan for the Employment Service program authorized under the
Wagner-Peyser Act, as amended by Workforce Innovation and
Opportunity Act title III?
463.125 What are the program-specific requirements in the Unified State
Plan for the State Vocational Rehabilitation program
authorized under title I of the Rehabilitation Act of 1973, as
amended by Workforce Innovation and Opportunity Act title IV?
463.130 What is the development, submission, and approval process of the
Unified State Plan?
463.135 What are the requirements for modification of the Unified State
Plan?
463.140 What are the general requirements for submitting a Combined
State Plan?
463.143 What is the development, submission, and approval process of the
Combined State Plan?
463.145 What are the requirements for modifications of the Combined
State Plan?
Subpart I_Performance Accountability Under Title I of the Workforce
Innovation and Opportunity Act
463.150 What definitions apply to Workforce Innovation and Opportunity
Act performance accountability provisions?
463.155 What are the primary indicators of performance under the
Workforce Innovation and Opportunity Act?
463.160 What information is required for State performance reports?
463.165 May a State establish additional indicators of performance?
463.170 How are State levels of performance for primary indicators
established?
463.175 What responsibility do States have to use quarterly wage record
information for performance accountability?
463.180 When is a State subject to a financial sanction under the
Workforce Innovation and Opportunity Act?
463.185 When are sanctions applied for a State's failure to submit an
annual performance report?
463.190 When are sanctions applied for failure to achieve adjusted
levels of performance?
463.195 What should States expect when a sanction is applied to the
Governor's Reserve Allotment?
463.200 What other administrative actions will be applied to States'
performance requirements?
[[Page 19]]
463.205 What performance indicators apply to local areas and what
information must be included in local area performance
reports?
463.210 How are local performance levels established?
463.215 Under what circumstances are local areas eligible for State
Incentive Grants?
463.220 Under what circumstances may a corrective action or sanction be
applied to local areas for poor performance?
463.225 Under what circumstances may local areas appeal a reorganization
plan?
463.230 What information is required for the eligible training provider
performance reports?
463.235 What are the reporting requirements for individual records for
core Workforce Innovation and Opportunity Act (WIOA) title I
programs; the Wagner-Peyser Act Employment Service program, as
amended by WIOA title III; and the Vocational Rehabilitation
program authorized under title I of the Rehabilitation Act of
1973, as amended by WIOA title IV?
463.240 What are the requirements for data validation of State annual
performance reports?
Subpart J_Description of the One-Stop Delivery System Under Title I of
the Workforce Innovation and Opportunity Act
463.300 What is the one-stop delivery system?
463.305 What is a comprehensive one-stop center and what must be
provided there?
463.310 What is an affiliated site and what must be provided there?
463.315 Can a stand-alone Wagner-Peyser Act Employment Service office be
designated as an affiliated one-stop site?
463.320 Are there any requirements for networks of eligible one-stop
partners or specialized centers?
463.400 Who are the required one-stop partners?
463.405 Is Temporary Assistance for Needy Families a required one-stop
partner?
463.410 What other entities may serve as one-stop partners?
463.415 What entity serves as the one-stop partner for a particular
program in the local area?
463.420 What are the roles and responsibilities of the required one-stop
partners?
463.425 What are the applicable career services that must be provided
through the one-stop delivery system by required one-stop
partners?
463.430 What are career services?
463.435 What are the business services provided through the one-stop
delivery system, and how are they provided?
463.440 When may a fee be charged for the business services in this
subpart?
463.500 What is the Memorandum of Understanding for the one-stop
delivery system and what must be included in the Memorandum of
Understanding?
463.505 Is there a single Memorandum of Understanding for the local
area, or must there be different Memoranda of Understanding
between the Local Workforce Development Board and each
partner?
463.510 How must the Memorandum of Understanding be negotiated?
463.600 Who may operate one-stop centers?
463.605 How is the one-stop operator selected?
463.610 When is the sole-source selection of one-stop operators
appropriate, and how is it conducted?
463.615 May an entity currently serving as one-stop operator compete to
be a one-stop operator under the procurement requirements of
this subpart?
463.620 What is the one-stop operator's role?
463.625 Can a one-stop operator also be a service provider?
463.630 Can State merit staff still work in a one-stop center where the
operator is not a governmental entity?
463.635 What is the compliance date of the provisions of this subpart?
463.700 What are the one-stop infrastructure costs?
463.705 What guidance must the Governor issue regarding one-stop
infrastructure funding?
463.710 How are infrastructure costs funded?
463.715 How are one-stop infrastructure costs funded in the local
funding mechanism?
463.720 What funds are used to pay for infrastructure costs in the local
one-stop infrastructure funding mechanism?
463.725 What happens if consensus on infrastructure funding is not
reached at the local level between the Local Workforce
Development Board, chief elected officials, and one-stop
partners?
463.730 What is the State one-stop infrastructure funding mechanism?
463.731 What are the steps to determine the amount to be paid under the
State one-stop infrastructure funding mechanism?
463.735 How are infrastructure cost budgets for the one-stop centers in
a local area determined in the State one-stop infrastructure
funding mechanism?
463.736 How does the Governor establish a cost allocation methodology
used to determine the one-stop partner programs' proportionate
shares of infrastructure costs under the State one-stop
infrastructure funding mechanism?
463.737 How are one-stop partner programs' proportionate shares of
infrastructure costs determined under the State one-stop
infrastructure funding mechanism?
463.738 How are statewide caps on the contributions for one-stop
infrastructure
[[Page 20]]
funding determined in the State one-stop infrastructure
funding mechanism?
463.740 What funds are used to pay for infrastructure costs in the State
one-stop infrastructure funding mechanism?
463.745 What factors does the State Workforce Development Board use to
develop the formula described in Workforce Innovation and
Opportunity Act, which is used by the Governor to determine
the appropriate one-stop infrastructure budget for each local
area operating under the State infrastructure funding
mechanism, if no reasonably implementable locally negotiated
budget exists?
463.750 When and how can a one-stop partner appeal a one-stop
infrastructure amount designated by the State under the State
infrastructure funding mechanism?
463.755 What are the required elements regarding infrastructure funding
that must be included in the one-stop Memorandum of
Understanding?
463.760 How do one-stop partners jointly fund other shared costs under
the Memorandum of Understanding?
463.800 How are one-stop centers and one-stop delivery systems certified
for effectiveness, physical and programmatic accessibility,
and continuous improvement?
463.900 What is the common identifier to be used by each one-stop
delivery system?
Subpart K [Reserved]
Authority: 29 U.S.C. 102 and 103, unless otherwise noted.
Source: 81 FR 55553, Aug. 19, 2016, unless otherwise noted.
Subpart A_Adult Education General Provisions
Sec. 463.1 What is the purpose of the Adult Education and
Family Literacy Act?
The purpose of the Adult Education and Family Literacy Act (AEFLA)
is to create a partnership among the Federal Government, States, and
localities to provide, on a voluntary basis, adult education and
literacy activities, in order to--
(a) Assist adults to become literate and obtain the knowledge and
skills necessary for employment and economic self-sufficiency;
(b) Assist adults who are parents or family members to obtain the
education and skills that--
(1) Are necessary to becoming full partners in the educational
development of their children; and
(2) Lead to sustainable improvements in the economic opportunities
for their family;
(c) Assist adults in attaining a secondary school diploma or its
recognized equivalent and in the transition to postsecondary education
and training, through career pathways; and
(d) Assist immigrants and other individuals who are English language
learners in--
(1) Improving their--
(i) Reading, writing, speaking, and comprehension skills in English;
and
(ii) Mathematics skills; and
(2) Acquiring an understanding of the American system of Government,
individual freedom, and the responsibilities of citizenship.
(Authority: 29 U.S.C. 3271)
Sec. 463.2 What regulations apply to the Adult Education and
Family Literacy Act programs?
The following regulations apply to the Adult Education and Family
Literacy Act programs:
(a) The following Education Department General Administrative
Regulations (EDGAR):
(1) 34 CFR part 75 (Direct Grant Programs), except that 34 CFR
75.720(b), regarding the frequency of certain reports, does not apply.
(2) 34 CFR part 76 (State-Administered Programs), except that 34 CFR
76.101 (The general State application) does not apply.
(3) 34 CFR part 77 (Definitions that Apply to Department
Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of
Education Programs and Activities).
(5) 34 CFR part 81 (General Education Provisions Act--Enforcement).
(6) 34 CFR part 82 (New Restrictions on Lobbying).
(7) 34 CFR part 86 (Drug and Alcohol Prevention).
(8) 2 CFR part 200 (Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards), as adopted at 2
CFR part 3474.
(b) The regulations in 34 CFR part 462.
[[Page 21]]
(c) The regulations in 34 CFR part 463.
Sec. 463.3 What definitions apply to the Adult Education and
Family Literacy Act programs?
Definitions in the Workforce Innovation and Opportunity Act. The
following terms are defined in Sections 3, 134, 203, and 225 of the
Workforce Innovation and Opportunity Act (29 U.S.C. 3102, 3174, 3272,
and 3305):
Adult Education
Adult Education and Literacy Activities
Basic Skills Deficient
Career Pathway
Core Program
Core Program Provision
Correctional Institution
Criminal Offender
Customized Training
Eligible Agency
Eligible Individual
Eligible Provider
English Language Acquisition Program
English Language Learner
Essential Components of Reading
Family Literacy Activities
Governor
Individual with a Barrier to Employment
Individual with a Disability
Institution of Higher Education
Integrated Education and Training
Integrated English Literacy and Civics Education
Literacy
Local Educational Agency
On-the-Job Training
Outlying Area
Postsecondary Educational Institution
State
Training Services
Workplace Adult Education and Literacy Activities
Workforce Preparation Activities
Definitions in EDGAR. The following terms are defined in 34 CFR
77.1:
Applicant
Application
Award
Budget
Budget Period
Contract
Department
ED
EDGAR
Fiscal Year
Grant
Grantee
Nonprofit
Private
Project
Project Period
Public
Secretary
Subgrant
Subgrantee
Other Definitions. The following definitions also apply:
Act means the Workforce Innovation and Opportunity Act, Public Law
113-128.
Concurrent enrollment or co-enrollment refers to enrollment by an
eligible individual in two or more of the six core programs administered
under the Act.
Digital literacy means the skills associated with using technology
to enable users to find, evaluate, organize, create, and communicate
information.
Peer tutoring means an instructional model that utilizes one
institutionalized individual to assist in providing or enhancing
learning opportunities for other institutionalized individuals. A peer
tutoring program must be structured and overseen by educators who assist
with training and supervising tutors, setting educational goals,
establishing an individualized plan of instruction, and monitoring
progress.
Re-entry and post-release services means services provided to a
formerly incarcerated individual upon or shortly after release from a
correctional institution that are designed to promote successful
adjustment to the community and prevent recidivism. Examples include
education, employment services, substance abuse treatment, housing
support, mental and physical health care, and family reunification
services.
Title means title II of the Workforce Innovation and Opportunity
Act, the Adult Education and Family Literacy Act, Public Law 113-128.
Subpart B [Reserved]
Subpart C_How Does a State Make an Award to Eligible Providers?
Sec. 463.20 What is the process that the eligible agency must follow
in awarding grants or contracts to eligible providers?
(a) From grant funds made available under section 222(a)(1) of the
Act, each eligible agency must award competitive multiyear grants or
contracts to
[[Page 22]]
eligible providers within the State or outlying area to enable the
eligible providers to develop, implement, and improve adult education
and literacy activities within the State or outlying area.
(b) The eligible agency must require that each eligible provider
receiving a grant or contract use the funding to establish or operate
programs that provide adult education and literacy activities, including
programs that provide such activities concurrently.
(c) In conducting the competitive grant process, the eligible agency
must ensure that--
(1) All eligible providers have direct and equitable access to apply
and compete for grants or contracts;
(2) The same grant or contract announcement and application
processes are used for all eligible providers in the State or outlying
area; and
(3) In awarding grants or contracts to eligible providers for adult
education and literacy activities, funds shall not be used for the
purpose of supporting or providing programs, services, or activities for
individuals who are not eligible individuals as defined in the Act,
except that such agency may use such funds for such purpose if such
programs, services, or activities are related to family literacy
activities. Prior to providing family literacy activities for
individuals who are not eligible individuals, an eligible provider shall
attempt to coordinate with programs and services that do not receive
funding under this title.
(d) In awarding grants or contracts for adult education and literacy
activities to eligible providers, the eligible agency must consider the
following:
(1) The degree to which the eligible provider would be responsive
to--
(i) Regional needs as identified in the local workforce development
plan; and
(ii) Serving individuals in the community who were identified in
such plan as most in need of adult education and literacy activities,
including individuals who--
(A) Have low levels of literacy skills; or
(B) Are English language learners;
(2) The ability of the eligible provider to serve eligible
individuals with disabilities, including eligible individuals with
learning disabilities;
(3) The past effectiveness of the eligible provider in improving the
literacy of eligible individuals, especially those individuals who have
low levels of literacy, and the degree to which those improvements
contribute to the eligible agency meeting its State-adjusted levels of
performance for the primary indicators of performance described in Sec.
677.155;
(4) The extent to which the eligible provider demonstrates alignment
between proposed activities and services and the strategy and goals of
the local plan under section 108 of the Act, as well as the activities
and services of the one-stop partners;
(5) Whether the eligible provider's program--
(i) Is of sufficient intensity and quality, and based on the most
rigorous research available so that participants achieve substantial
learning gains; and
(ii) Uses instructional practices that include the essential
components of reading instruction;
(6) Whether the eligible provider's activities, including whether
reading, writing, speaking, mathematics, and English language
acquisition instruction delivered by the eligible provider, are based on
the best practices derived from the most rigorous research available,
including scientifically valid research and effective educational
practice;
(7) Whether the eligible provider's activities effectively use
technology, services and delivery systems, including distance education,
in a manner sufficient to increase the amount and quality of learning,
and how such technology, services, and systems lead to improved
performance;
(8) Whether the eligible provider's activities provide learning in
context, including through integrated education and training, so that an
individual acquires the skills needed to transition to and complete
postsecondary education and training programs, obtain and advance in
employment leading to economic self-sufficiency, and to exercise the
rights and responsibilities of citizenship;
(9) Whether the eligible provider's activities are delivered by
instructors,
[[Page 23]]
counselors, and administrators who meet any minimum qualifications
established by the State, where applicable, and who have access to high-
quality professional development, including through electronic means;
(10) Whether the eligible provider coordinates with other available
education, training, and social service resources in the community, such
as by establishing strong links with elementary schools and secondary
schools, postsecondary educational institutions, institutions of higher
education, Local WDBs, one-stop centers, job training programs, and
social service agencies, business, industry, labor organizations,
community-based organizations, nonprofit organizations, and
intermediaries, in the development of career pathways;
(11) Whether the eligible provider's activities offer the flexible
schedules and coordination with Federal, State, and local support
services (such as child care, transportation, mental health services,
and career planning) that are necessary to enable individuals, including
individuals with disabilities or other special needs, to attend and
complete programs;
(12) Whether the eligible provider maintains a high-quality
information management system that has the capacity to report measurable
participant outcomes (consistent with section Sec. 666.100) and to
monitor program performance; and
(13) Whether the local area in which the eligible provider is
located has a demonstrated need for additional English language
acquisition programs and civics education programs.
(Authority: 29 U.S.C. 3321)
Sec. 463.21 What processes must be in place to determine the extent
to which a local application for grants or contracts to provide adult
education and literacy services is aligned with a local plan under
section 108 of WIOA?
(a) An eligible agency must establish, within its grant or contract
competition, a process that provides for the submission of all
applications for funds under AEFLA to the appropriate Local Boards.
(b) The process must include--
(1) Submission of the applications to the appropriate Local Board
for its review for consistency with the local plan within the
appropriate timeframe; and
(2) An opportunity for the local board to make recommendations to
the eligible agency to promote alignment with the local plan.
(c) The eligible agency must consider the results of the review by
the Local Board in determining the extent to which the application
addresses the required considerations in Sec. 463.20.
(Authority: 29 U.S.C. 3122(d)(11), 3321(e), 3322)
Sec. 463.22 What must be included in the eligible provider's
application for a grant or contract?
(a) Each eligible provider seeking a grant or contract must submit
an application to the eligible agency containing the information and
assurances listed below, as well as any additional information required
by the eligible agency, including:
(1) A description of how funds awarded under this title will be
spent consistent with the requirements of title II of AEFLA;
(2) A description of any cooperative arrangements the eligible
provider has with other agencies, institutions, or organizations for the
delivery of adult education and literacy activities;
(3) A description of how the eligible provider will provide services
in alignment with the local workforce development plan, including how
such provider will promote concurrent enrollment in programs and
activities under title I, as appropriate;
(4) A description of how the eligible provider will meet the State-
adjusted levels of performance for the primary indicators of performance
identified in the State's Unified or Combined State Plan, including how
such provider will collect data to report on such performance
indicators;
(5) A description of how the eligible provider will fulfill, as
appropriate, required one-stop partner responsibilities to--
(i) Provide access through the one-stop delivery system to adult
education and literacy activities;
(ii) Use a portion of the funds made available under the Act to
maintain
[[Page 24]]
the one-stop delivery system, including payment of the infrastructure
costs for the one-stop centers, in accordance with the methods agreed
upon by the Local Board and described in the memorandum of understanding
or the determination of the Governor regarding State one-stop
infrastructure funding;
(iii) Enter into a local memorandum of understanding with the Local
Board, relating to the operations of the one-stop system;
(iv) Participate in the operation of the one-stop system consistent
with the terms of the memorandum of understanding, and the requirements
of the Act; and
(v) Provide representation to the State board;
(6) A description of how the eligible provider will provide services
in a manner that meets the needs of eligible individuals;
(7) Information that addresses the 13 considerations listed in Sec.
463.20; and
(8) Documentation of the activities required by Sec. 463.21(b).
(b) [Reserved]
(Authority: 29 U.S.C. 3322)
Sec. 463.23 Who is eligible to apply for a grant or contract for
adult education and literacy activities?
An organization that has demonstrated effectiveness in providing
adult education and literacy activities is eligible to apply for a grant
or contract. These organizations may include, but are not limited to:
(a) A local educational agency;
(b) A community-based organization or faith-based organization;
(c) A volunteer literacy organization;
(d) An institution of higher education;
(e) A public or private nonprofit agency;
(f) A library;
(g) A public housing authority;
(h) A nonprofit institution that is not described in any of
paragraphs (a) through (g) of this section and has the ability to
provide adult education and literacy activities to eligible individuals;
(i) A consortium or coalition of the agencies, organizations,
institutions, libraries, or authorities described in any of paragraphs
(a) through (h) of this section; and
(j) A partnership between an employer and an entity described in any
of paragraphs (a) through (i) of this section.
(Authority: 29 U.S.C. 3272(5))
Sec. 463.24 How must an eligible provider establish that it has
demonstrated effectiveness?
(a) For the purposes of this section, an eligible provider must
demonstrate past effectiveness by providing performance data on its
record of improving the skills of eligible individuals, particularly
eligible individuals who have low levels of literacy, in the content
domains of reading, writing, mathematics, English language acquisition,
and other subject areas relevant to the services contained in the
State's application for funds. An eligible provider must also provide
information regarding its outcomes for participants related to
employment, attainment of secondary school diploma or its recognized
equivalent, and transition to postsecondary education and training.
(b) There are two ways in which an eligible provider may meet the
requirements in paragraph (a) of this section:
(1) An eligible provider that has been funded under title II of the
Act must provide performance data required under section 116 to
demonstrate past effectiveness.
(2) An eligible provider that has not been previously funded under
title II of the Act must provide performance data to demonstrate its
past effectiveness in serving basic skills deficient eligible
individuals, including evidence of its success in achieving outcomes
listed in paragraph (a) of this section.
(Authority: 29 U.S.C. 3272(5))
Sec. 463.25 What are the requirements related to local administrative
cost limits?
Not more than five percent of a local grant to an eligible provider
can be expended to administer a grant or contract under title II. In
cases where five percent is too restrictive to allow for administrative
activities, the eligible agency may increase the amount that can be
spent on local administration. In such cases, the eligible provider
[[Page 25]]
must negotiate with the eligible agency to determine an adequate level
of funds to be used for non-instructional purposes.
(Authority: 29 U.S.C. 3323)
Sec. 463.26 What activities are considered local administrative
costs?
An eligible provider receiving a grant or contract under this part
may consider costs incurred in connection with the following activities
to be administrative costs:
(a) Planning;
(b) Administration, including carrying out performance
accountability requirements;
(c) Professional development;
(d) Providing adult education and literacy services in alignment
with local workforce plans, including promoting co-enrollment in
programs and activities under title I, as appropriate; and
(e) Carrying out the one-stop partner responsibilities described in
Sec. 678.420, including contributing to the infrastructure costs of the
one-stop delivery system.
(Authority: 29 U.S.C. 3323, 3322, 3151)
Subpart D_What Are Adult Education and Literacy Activities?
Sec. 463.30 What are adult education and literacy programs, activities,
and services?
The term ``adult education and literacy activities'' means programs,
activities, and services that include:
(a) Adult education,
(b) Literacy,
(c) Workplace adult education and literacy activities,
(d) Family literacy activities,
(e) English language acquisition activities,
(f) Integrated English literacy and civics education,
(g) Workforce preparation activities, or
(h) Integrated education and training.
(Authority: 29 U.S.C. 3272(2))
Sec. 463.31 What is an English language acquisition program?
The term ``English language acquisition program'' means a program of
instruction--
(a) That is designed to help eligible individuals who are English
language learners achieve competence in reading, writing, speaking, and
comprehension of the English language; and
(b) That leads to--
(1) Attainment of a secondary school diploma or its recognized
equivalent; and
(2) Transition to postsecondary education and training; or
(3) Employment.
(Authority: 29 U.S.C. 3272(6))
Sec. 463.32 How does a program that is intended to be an English
language acquisition program meet the requirement that the program leads
to attainment of a secondary school diploma or its recognized equivalent
and transition to postsecondary education and training or leads to
employment?
To meet the requirement in Sec. 463.31(b) a program of instruction
must:
(a) Have implemented State adult education content standards that
are aligned with State-adopted challenging academic content standards,
as adopted under the Elementary and Secondary Education Act of 1965, as
amended (ESEA) as described in the State's Unified or Combined State
Plan and as evidenced by the use of a State or local curriculum, lesson
plans, or instructional materials that are aligned with the State adult
education content standards; or
(b) Offer educational and career counseling services that assist an
eligible individual to transition to postsecondary education or
employment; or
(c) Be part of a career pathway.
(Authority: 29 U.S.C. 3112(b)(2)(D)(ii), 3272)
Sec. 463.33 What are integrated English literacy and civics
education services?
(a) Integrated English literacy and civics education services are
education services provided to English language learners who are adults,
including professionals with degrees or credentials in their native
countries, that enable
[[Page 26]]
such adults to achieve competency in the English language and acquire
the basic and more advanced skills needed to function effectively as
parents, workers, and citizens in the United States.
(b) Integrated English literacy and civics education services must
include instruction in literacy and English language acquisition and
instruction on the rights and responsibilities of citizenship and civic
participation and may include workforce training.
(Authority: 29 U.S.C. 3272(12))
Sec. 463.34 What are workforce preparation activities?
Workforce preparation activities include activities, programs, or
services designed to help an individual acquire a combination of basic
academic skills, critical thinking skills, digital literacy skills, and
self-management skills, including competencies in:
(a) Utilizing resources;
(b) Using information;
(c) Working with others;
(d) Understanding systems;
(e) Skills necessary for successful transition into and completion
of postsecondary education or training, or employment; and
(f) Other employability skills that increase an individual's
preparation for the workforce.
(Authority: 29 U.S.C. 3272(17); P.L. 111-340)
Sec. 463.35 What is integrated education and training?
The term ``integrated education and training'' refers to a service
approach that provides adult education and literacy activities
concurrently and contextually with workforce preparation activities and
workforce training for a specific occupation or occupational cluster for
the purpose of educational and career advancement.
(Authority: 29 U.S.C. 3272(11))
Sec. 463.36 What are the required components of an integrated education
and training program funded under title II?
An integrated education and training program must include three
components:
(a) Adult education and literacy activities as described in Sec.
463.30.
(b) Workforce preparation activities as described in Sec. 463.34.
(c) Workforce training for a specific occupation or occupational
cluster which can be any one of the training services defined in section
134(c)(3)(D) of the Act.
(Authority: 29 U.S.C. 3272, 3174)
Sec. 463.37 How does a program providing integrated education and
training under title II meet the requirement that the three required
components be `integrated''?
In order to meet the requirement that the adult education and
literacy activities, workforce preparation activities, and workforce
training be integrated, services must be provided concurrently and
contextually such that--
(a) Within the overall scope of a particular integrated education
and training program, the adult education and literacy activities,
workforce preparation activities, and workforce training:
(1) Are each of sufficient intensity and quality, and based on the
most rigorous research available, particularly with respect to improving
reading, writing, mathematics, and English proficiency of eligible
individuals;
(2) Occur simultaneously; and
(3) Use occupationally relevant instructional materials.
(b) The integrated education and training program has a single set
of learning objectives that identifies specific adult education content,
workforce preparation activities, and workforce training competencies,
and the program activities are organized to function cooperatively.
(Authority: 29 U.S.C. 3272)
Sec. 463.38 How does a program providing integrated education and
training under title II meet the requirement that the integrated
education and training program be ``for the purpose of educational and
career advancement''?
A provider meets the requirement that the integrated education and
training program provided is for the purpose of educational and career
advancement if:
[[Page 27]]
(a) The adult education component of the program is aligned with the
State's content standards for adult education as described in the
State's Unified or Combined State Plan; and
(b) The integrated education and training program is part of a
career pathway.
(Authority: 29 U.S.C. 3272, 3112)
Subpart E [Reserved]
Subpart F_What are Programs for Corrections Education and the Education
of Other Institutionalized Individuals?
Sec. 463.60 What are programs for Corrections Education and the
Education of other Institutionalized Individuals?
(a) Authorized under section 225 of the Act, programs for
corrections education and the education of other institutionalized
individuals require each eligible agency to carry out corrections
education and education for other institutionalized individuals using
funds provided under section 222 of the Act.
(b) The funds described in paragraph (a) of this section must be
used for the cost of educational programs for criminal offenders in
correctional institutions and other institutionalized individuals,
including academic programs for--
(1) Adult education and literacy activities;
(2) Special education, as determined by the eligible agency;
(3) Secondary school credit;
(4) Integrated education and training;
(5) Career pathways;
(6) Concurrent enrollment;
(7) Peer tutoring; and
(8) Transition to re-entry initiatives and other post-release-
services with the goal of reducing recidivism.
(Authority: 29 U.S.C. 3302, 3305)
Sec. 463.61 How does the eligible agency award funds to eligible
providers under the program for Corrections Education and Education
of other Institutionalized Individuals?
(a) States may award up to 20 percent of the 82.5 percent of the
funds made available by the Secretary for local grants and contracts
under section 231 of the Act for programs for corrections education and
the education of other institutionalized individuals.
(b) The State must make awards to eligible providers in accordance
with subpart C.
(Authority: 29 U.S.C. 3302, 3321)
Sec. 463.62 What is the priority for programs that receive funding
through programs for Corrections Education and Education of other
Institutionalized Individuals?
Each eligible agency using funds provided under Programs for
Corrections Education and Education of Other Institutionalized
Individuals to carry out a program for criminal offenders within a
correctional institution must give priority to programs serving
individuals who are likely to leave the correctional institution within
five years of participation in the program.
(Authority: 29 U.S.C. 3305)
Sec. 463.63 How may funds under programs for Corrections Education
and Education of other Institutionalized Individuals be used to support
transition to re-entry initiatives and other post-release services with
the goal of reducing recidivism?
Funds under Programs for Corrections Education and the Education of
Other Institutionalized Individuals may be used to support educational
programs for transition to re-entry initiatives and other post-release
services with the goal of reducing recidivism. Such use of funds may
include educational counseling or case work to support incarcerated
individuals' transition to re-entry and other post-release services.
Examples include assisting incarcerated individuals to develop plans for
post-release education program participation, assisting students in
identifying and applying for participation in post-release programs, and
performing direct outreach to community-based program providers on
behalf of re-entering students. Such funds may not be used for costs for
participation in post-release programs or services.
(Authority: 29 U.S.C. 3305)
[[Page 28]]
Subpart G_What Is the Integrated English Literacy and Civics Education
Program?
Sec. 463.70 What is the Integrated English Literacy and Civics
Education program?
(a) The Integrated English Literacy and Civics Education program
refers to the use of funds provided under section 243 of the Act for
education services for English language learners who are adults,
including professionals with degrees and credentials in their native
countries.
(b) The Integrated English Literacy and Civics Education program
delivers educational services as described in Sec. 463.33.
(c) Such educational services must be delivered in combination with
integrated education and training activities as described in Sec.
463.36.
(Authority: 29 U.S.C. 3272, 3333)
Sec. 463.71 How does the Secretary make an award under the Integrated
English Literacy and Civics Education program?
(a) The Secretary awards grants under the Integrated English
Literacy and Civics Education program to States that have an approved
Unified State Plan in accordance with Sec. 463.90 through Sec.
463.145, or an approved Combined State Plan in accordance with Sec.
463.90 through Sec. 463.145.
(b) The Secretary allocates funds to States following the formula
described in section 243(b) of the Act.
(1) Sixty-five percent is allocated on the basis of a State's need
for integrated English literacy and civics education, as determined by
calculating each State's share of a 10-year average of the data of the
Office of Immigration Statistics of the Department of Homeland Security
for immigrants admitted for legal permanent residence for the 10 most
recent years; and
(2) Thirty-five percent is allocated on the basis of whether the
State experienced growth, as measured by the average of the three most
recent years for which the data of the Office of Immigration Statistics
of the Department of Homeland Security for immigrants admitted for legal
permanent residence are available.
(3) No State receives an allotment less than $60,000.
(Authority: 29 U.S.C. 3333)
Sec. 463.72 How does the eligible agency award funds to eligible
providers for the Integrated English Literacy and Civics Education
program?
States must award funds for the Integrated English Literacy and
Civics Education program to eligible providers in accordance with
subpart C.
(Authority: 29 U.S.C. 3321)
Sec. 463.73 What are the requirements for eligible providers that
receive funding through the Integrated English Literacy and Civics
Education program?
Eligible providers receiving funds through the Integrated English
Literacy and Civics Education program must provide services that--
(a) Include instruction in literacy and English language acquisition
and instruction on the rights and responsibilities of citizenship and
civic participation; and
(b) Are designed to:
(1) Prepare adults who are English language learners for, and place
such adults in, unsubsidized employment in in-demand industries and
occupations that lead to economic self-sufficiency; and
(2) Integrate with the local workforce development system and its
functions to carry out the activities of the program.
(Authority: 29 U.S.C. 3272, 3333)
Sec. 463.74 How does an eligible provider that receives funds through
the Integrated English Literacy and Civics Education program meet the
requirement to use
funds for Integrated English Literacy and Civics Education in
combination with integrated education and training activities?
An eligible provider that receives funds through the Integrated
English Literacy and Civics Education program may meet the requirement
to use funds for integrated English literacy and civics education in
combination with integrated education and training activities by:
[[Page 29]]
(a) Co-enrolling participants in integrated education and training
as described in subpart D of this part that is provided within the local
or regional workforce development area from sources other than section
243 of the Act; or
(b) Using funds provided under section 243 of the Act to support
integrated education and training activities as described in subpart D
of this part.
(Authority: 29 U.S.C. 3333, 3121, 3122, 3123)
Sec. 463.75 Who is eligible to receive education services through the
Integrated English Literacy and Civics Education program?
Individuals who otherwise meet the definition of ``eligible
individual'' and are English language learners, including professionals
with degrees and credentials obtained in their native countries, may
receive Integrated English Literacy and Civics Education services.
(Authority: 29 U.S.C. 3272)
Subpart H_Unified and Combined State Plans Under Title I of the
Workforce Innovation and Opportunity Act
Authority: Secs. 102, 103, and 503, Pub. L. 113-128, 128 Stat. 1425
(Jul. 22, 2014).
Source: 81 FR 56046, Aug. 19, 2016, unless otherwise noted.
Sec. 463.100 What are the purposes of the Unified and Combined
State Plans?
(a) The Unified and Combined State Plans provide the framework for
States to outline a strategic vision of, and goals for, how their
workforce development systems will achieve the purposes of the Workforce
Innovation and Opportunity Act (WIOA).
(b) The Unified and Combined State Plans serve as 4-year action
plans to develop, align, and integrate the State's systems and provide a
platform to achieve the State's vision and strategic and operational
goals. A Unified or Combined State Plan is intended to:
(1) Align, in strategic coordination, the six core programs required
in the Unified State Plan pursuant to Sec. 463.105(b), and additional
Combined State Plan partner programs that may be part of the Combined
State Plan pursuant to Sec. 463.140;
(2) Direct investments in economic, education, and workforce
training programs to focus on providing relevant education and training
to ensure that individuals, including youth and individuals with
barriers to employment, have the skills to compete in the job market and
that employers have a ready supply of skilled workers;
(3) Apply strategies for job-driven training consistently across
Federal programs; and
(4) Enable economic, education, and workforce partners to build a
skilled workforce through innovation in, and alignment of, employment,
training, and education programs.
Sec. 463.105 What are the general requirements for the Unified
State Plan?
(a) The Unified State Plan must be submitted in accordance with
Sec. 463.130 and WIOA sec. 102(c), as explained in joint planning
guidelines issued by the Secretaries of Labor and Education.
(b) The Governor of each State must submit, at a minimum, in
accordance with Sec. 463.130, a Unified State Plan to the Secretary of
Labor to be eligible to receive funding for the workforce development
system's six core programs:
(1) The adult, dislocated worker, and youth programs authorized
under subtitle B of title I of WIOA and administered by the U.S.
Department of Labor (DOL);
(2) The Adult Education and Family Literacy Act (AEFLA) program
authorized under title II of WIOA and administered by the U.S.
Department of Education (ED);
(3) The Employment Service program authorized under the Wagner-
Peyser Act of 1933, as amended by WIOA title III and administered by
DOL; and
(4) The Vocational Rehabilitation program authorized under title I
of the Rehabilitation Act of 1973, as amended by title IV of WIOA and
administered by ED.
(c) The Unified State Plan must outline the State's 4-year strategy
for the core programs described in paragraph (b) of this section and
meet the requirements of sec. 102(b) of WIOA, as
[[Page 30]]
explained in the joint planning guidelines issued by the Secretaries of
Labor and Education.
(d) The Unified State Plan must include strategic and operational
planning elements to facilitate the development of an aligned,
coordinated, and comprehensive workforce development system. The Unified
State Plan must include:
(1) Strategic planning elements that describe the State's strategic
vision and goals for preparing an educated and skilled workforce under
sec. 102(b)(1) of WIOA. The strategic planning elements must be informed
by and include an analysis of the State's economic conditions and
employer and workforce needs, including education and skill needs.
(2) Strategies for aligning the core programs and Combined State
Plan partner programs as described in Sec. 463.140(d), as well as other
resources available to the State, to achieve the strategic vision and
goals in accordance with sec. 102(b)(1)(E) of WIOA.
(3) Operational planning elements in accordance with sec. 102(b)(2)
of WIOA that support the strategies for aligning the core programs and
other resources available to the State to achieve the State's vision and
goals and a description of how the State Workforce Development Board
(WDB) will implement its functions, in accordance with sec. 101(d) of
WIOA. Operational planning elements must include:
(i) A description of how the State strategy will be implemented by
each core program's lead State agency;
(ii) State operating systems, including data systems, and policies
that will support the implementation of the State's strategy identified
in paragraph (d)(1) of this section;
(iii) Program-specific requirements for the core programs required
by WIOA sec. 102(b)(2)(D);
(iv) Assurances required by sec. 102(b)(2)(E) of WIOA, including an
assurance that the lead State agencies responsible for the
administration of the core programs reviewed and commented on the
appropriate operational planning of the Unified State Plan and approved
the elements as serving the needs of the population served by such
programs, and other assurances deemed necessary by the Secretaries of
Labor and Education under sec. 102(b)(2)(E)(x) of WIOA;
(v) A description of joint planning and coordination across core
programs, required one-stop partner programs, and other programs and
activities in the Unified State Plan; and
(vi) Any additional operational planning requirements imposed by the
Secretary of Labor or the Secretary of Education under sec.
102(b)(2)(C)(viii) of WIOA.
(e) All of the requirements in this subpart that apply to States
also apply to outlying areas.
Sec. 463.110 What are the program-specific requirements in the
Unified State Plan for the adult, dislocated worker, and youth
programs authorized under Workforce Innovation and Opportunity Act
title I?
The program-specific requirements for the adult, dislocated worker,
and youth programs that must be included in the Unified State Plan are
described in sec. 102(b)(2)(D) of WIOA. Additional planning requirements
may be explained in joint planning guidelines issued by the Secretaries
of Labor and Education.
Sec. 463.115 What are the program-specific requirements in the
Unified State Plan for the Adult Education and Family Literacy Act
program authorized under Workforce Innovation and Opportunity Act
title II?
The program-specific requirements for the AEFLA program in title II
that must be included in the Unified State Plan are described in secs.
102(b)(2)(C) and 102(b)(2)(D)(ii) of WIOA.
(a) With regard to the description required in sec.
102(b)(2)(D)(ii)(I) of WIOA pertaining to content standards, the Unified
State Plan must describe how the eligible agency will, by July 1, 2016,
align its content standards for adult education with State-adopted
challenging academic content standards under the Elementary and
Secondary Education Act of 1965, as amended.
(b) With regard to the description required in sec. 102(b)(2)(C)(iv)
of WIOA pertaining to the methods and factors the State will use to
distribute funds under the core programs, for title II of
[[Page 31]]
WIOA, the Unified State Plan must include--
(1) How the eligible agency will award multi-year grants on a
competitive basis to eligible providers in the State; and
(2) How the eligible agency will provide direct and equitable access
to funds using the same grant or contract announcement and application
procedure.
Sec. 463.120 What are the program-specific requirements in the
Unified State Plan for the Employment Service program authorized under
the Wagner-Peyser Act, as amended by Workforce Innovation and
Opportunity Act title III?
The Employment Service program authorized under the Wagner-Peyser
Act of 1933, as amended by WIOA title III, is subject to requirements in
sec. 102(b) of WIOA, including any additional requirements imposed by
the Secretary of Labor under secs. 102(b)(2)(C)(viii) and
102(b)(2)(D)(iv) of WIOA, as explained in joint planning guidelines
issued by the Secretaries of Labor and Education.
Sec. 463.125 What are the program-specific requirements in the
Unified State Plan for the State Vocational Rehabilitation program
authorized under title I of
the Rehabilitation Act of 1973, as amended by Workforce
Innovation and Opportunity Act title IV?
The program specific-requirements for the vocational rehabilitation
services portion of the Unified or Combined State Plan are set forth in
sec. 101(a) of the Rehabilitation Act of 1973, as amended. All
submission requirements for the vocational rehabilitation services
portion of the Unified or Combined State Plan are in addition to the
jointly developed strategic and operational content requirements
prescribed by sec. 102(b) of WIOA.
Sec. 463.130 What is the development, submission, and approval
process of the Unified State Plan?
(a) The Unified State Plan described in Sec. 463.105 must be
submitted in accordance with WIOA sec. 102(c), as explained in joint
planning guidelines issued jointly by the Secretaries of Labor and
Education.
(b) A State must submit its Unified State Plan to the Secretary of
Labor pursuant to a process identified by the Secretary.
(1) The initial Unified State Plan must be submitted no later than
120 days prior to the commencement of the second full program year of
WIOA.
(2) Subsequent Unified State Plans must be submitted no later than
120 days prior to the end of the 4-year period covered by a preceding
Unified State Plan.
(3) For purposes of paragraph (b) of this section, ``program year''
means July 1 through June 30 of any year.
(c) The Unified State Plan must be developed with the assistance of
the State WDB, as required by 20 CFR 679.130(a) and WIOA sec. 101(d),
and must be developed in coordination with administrators with optimum
policy-making authority for the core programs and required one-stop
partners.
(d) The State must provide an opportunity for public comment on and
input into the development of the Unified State Plan prior to its
submission.
(1) The opportunity for public comment must include an opportunity
for comment by representatives of Local WDBs and chief elected
officials, businesses, representatives of labor organizations,
community-based organizations, adult education providers, institutions
of higher education, other stakeholders with an interest in the services
provided by the six core programs, and the general public, including
individuals with disabilities.
(2) Consistent with the ``Sunshine Provision'' of WIOA in sec.
101(g), the State WDB must make information regarding the Unified State
Plan available to the public through electronic means and regularly
occurring open meetings in accordance with State law. The Unified State
Plan must describe the State's process and timeline for ensuring a
meaningful opportunity for public comment.
(e) Upon receipt of the Unified State Plan from the State, the
Secretary of Labor will ensure that the entire Unified State Plan is
submitted to the Secretary of Education pursuant to a process developed
by the Secretaries.
(f) The Unified State Plan is subject to the approval of both the
Secretary
[[Page 32]]
of Labor and the Secretary of Education.
(g) Before the Secretaries of Labor and Education approve the
Unified State Plan, the vocational rehabilitation services portion of
the Unified State Plan described in WIOA sec. 102(b)(2)(D)(iii) must be
approved by the Commissioner of the Rehabilitation Services
Administration.
(h) The Secretaries of Labor and Education will review and approve
the Unified State Plan within 90 days of receipt by the Secretary of
Labor, unless the Secretary of Labor or the Secretary of Education
determines in writing within that period that:
(1) The plan is inconsistent with a core program's requirements;
(2) The Unified State Plan is inconsistent with any requirement of
sec. 102 of WIOA; or
(3) The plan is incomplete or otherwise insufficient to determine
whether it is consistent with a core program's requirements or other
requirements of WIOA.
(i) If neither the Secretary of Labor nor the Secretary of Education
makes the written determination described in paragraph (h) of this
section within 90 days of the receipt by the Secretaries, the Unified
State Plan will be considered approved.
Sec. 463.135 What are the requirements for modification of the Unified
State Plan?
(a) In addition to the required modification review set forth in
paragraph (b) of this section, a Governor may submit a modification of
its Unified State Plan at any time during the 4-year period of the plan.
(b) Modifications are required, at a minimum:
(1) At the end of the first 2-year period of any 4-year State Plan,
wherein the State WDB must review the Unified State Plan, and the
Governor must submit modifications to the plan to reflect changes in
labor market and economic conditions or other factors affecting the
implementation of the Unified State Plan;
(2) When changes in Federal or State law or policy substantially
affect the strategies, goals, and priorities upon which the Unified
State Plan is based;
(3) When there are changes in the statewide vision, strategies,
policies, State negotiated levels of performance as described in Sec.
463.170(b), the methodology used to determine local allocation of funds,
reorganizations that change the working relationship with system
employees, changes in organizational responsibilities, changes to the
membership structure of the State WDB or alternative entity, and similar
substantial changes to the State's workforce development system.
(c) Modifications to the Unified State Plan are subject to the same
public review and comment requirements in Sec. 463.130(d) that apply to
the development of the original Unified State Plan.
(d) Unified State Plan modifications must be approved by the
Secretaries of Labor and Education, based on the approval standards
applicable to the original Unified State Plan under Sec. 463.130. This
approval must come after the approval of the Commissioner of the
Rehabilitation Services Administration for modification of any portion
of the plan described in sec. 102(b)(2)(D)(iii) of WIOA.
Sec. 463.140 What are the general requirements for submitting a
Combined State Plan?
(a) A State may choose to develop and submit a 4-year Combined State
Plan in lieu of the Unified State Plan described in Sec. Sec. 463.105
through 463.125.
(b) A State that submits a Combined State Plan covering an activity
or program described in paragraph (d) of this section that is, in
accordance with WIOA sec. 103(c), approved or deemed complete under the
law relating to the program will not be required to submit any other
plan or application in order to receive Federal funds to carry out the
core programs or the program or activities described under paragraph (d)
of this section that are covered by the Combined State Plan.
(c) If a State develops a Combined State Plan, it must be submitted
in accordance with the process described in Sec. 463.143.
(d) If a State chooses to submit a Combined State Plan, the plan
must include the six core programs and one or more of the Combined State
Plan
[[Page 33]]
partner programs and activities described in sec. 103(a)(2) of WIOA. The
Combined State Plan partner programs and activities that may be included
in the Combined State Plan are:
(1) Career and technical education programs authorized under the
Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C.
2301 et seq.);
(2) Temporary Assistance for Needy Families or TANF, authorized
under part A of title IV of the Social Security Act (42 U.S.C. 601 et
seq.);
(3) Employment and training programs authorized under sec. 6(d)(4)
of the Food and Nutrition Act of 2008 (7 U.S.C. 2015(d)(4));
(4) Work programs authorized under sec. 6(o) of the Food and
Nutrition Act of 2008 (7 U.S.C. 2015(o));
(5) Trade adjustment assistance activities under chapter 2 of title
II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.);
(6) Services for veterans authorized under chapter 41 of title 38
United States Code;
(7) Programs authorized under State unemployment compensation laws
(in accordance with applicable Federal law);
(8) Senior Community Service Employment Programs under title V of
the Older Americans Act of 1965 (42 U.S.C. 3056 et seq.);
(9) Employment and training activities carried out by the Department
of Housing and Urban Development (HUD);
(10) Employment and training activities carried out under the
Community Services Block Grant Act (42 U.S.C. 9901 et seq.); and
(11) Reintegration of offenders programs authorized under sec. 212
of the Second Chance Act of 2007 (42 U.S.C. 17532).
(e) A Combined State Plan must contain:
(1) For the core programs, the information required by sec. 102(b)
of WIOA and Sec. Sec. 463.105 through 463.125, as explained in the
joint planning guidelines issued by the Secretaries;
(2) For the Combined State Plan partner programs and activities,
except as described in paragraph (h) of this section, the information
required by the law authorizing and governing that program to be
submitted to the appropriate Secretary, any other applicable legal
requirements, and any common planning requirements described in sec.
102(b) of WIOA, as explained in the joint planning guidelines issued by
the Secretaries;
(3) A description of the methods used for joint planning and
coordination among the core programs, and with the required one-stop
partner programs and other programs and activities included in the State
Plan; and
(4) An assurance that all of the entities responsible for planning
or administering the programs described in the Combined State Plan have
had a meaningful opportunity to review and comment on all portions of
the plan.
(f) Each Combined State Plan partner program included in the
Combined State Plan remains subject to the applicable program-specific
requirements of the Federal law and regulations, and any other
applicable legal or program requirements, governing the implementation
and operation of that program.
(g) For purposes of Sec. Sec. 463.140 through 463.145 the term
``appropriate Secretary'' means the head of the Federal agency who
exercises either plan or application approval authority for the program
or activity under the Federal law authorizing the program or activity
or, if there are no planning or application requirements, who exercises
administrative authority over the program or activity under that Federal
law.
(h) States that include employment and training activities carried
out under the Community Services Block Grant (CSBG) Act (42 U.S.C. 9901
et seq.) under a Combined State Plan would submit all other required
elements of a complete CSBG State Plan directly to the Federal agency
that administers the program, according to the requirements of Federal
law and regulations.
(i) States that submit employment and training activities carried
out by HUD under a Combined State Plan would submit any other required
planning documents for HUD programs directly to HUD, according to the
requirements of Federal law and regulations.
[[Page 34]]
Sec. 463.143 What is the development, submission, and approval process
of the Combined State Plan?
(a) For purposes of Sec. 463.140(a), if a State chooses to develop
a Combined State Plan it must submit the Combined State Plan in
accordance with the requirements described below and sec. 103 of WIOA,
as explained in the joint planning guidelines issued by the Secretaries
of Labor and Education.
(b) The Combined State Plan must be developed with the assistance of
the State WDB, as required by 20 CFR 679.130(a) and WIOA sec. 101(d),
and must be developed in coordination with administrators with optimum
policy-making authority for the core programs and required one-stop
partners.
(c) The State must provide an opportunity for public comment on and
input into the development of the Combined State Plan prior to its
submission.
(1) The opportunity for public comment for the portions of the
Combined State Plan that cover the core programs must include an
opportunity for comment by representatives of Local WDBs and chief
elected officials, businesses, representatives of labor organizations,
community-based organizations, adult education providers, institutions
of higher education, other stakeholders with an interest in the services
provided by the six core programs, and the general public, including
individuals with disabilities.
(2) Consistent with the ``Sunshine Provision'' of WIOA in sec.
101(g), the State WDB must make information regarding the Combined State
Plan available to the public through electronic means and regularly
occurring open meetings in accordance with State law. The Combined State
Plan must describe the State's process and timeline for ensuring a
meaningful opportunity for public comment on the portions of the plan
covering core programs.
(3) The portions of the plan that cover the Combined State Plan
partner programs are subject to any public comment requirements
applicable to those programs.
(d) The State must submit to the Secretaries of Labor and Education
and to the Secretary of the agency with responsibility for approving the
program's plan or deeming it complete under the law governing the
program, as part of its Combined State Plan, any plan, application,
form, or any other similar document that is required as a condition for
the approval of Federal funding under the applicable program or
activity. Such submission must occur in accordance with a process
identified by the relevant Secretaries in paragraph (a) of this section.
(e) The Combined State Plan will be approved or disapproved in
accordance with the requirements of sec. 103(c) of WIOA.
(1) The portion of the Combined State Plan covering programs
administered by the Departments of Labor and Education must be reviewed,
and approved or disapproved, by the appropriate Secretary within 90 days
beginning on the day the Combined State Plan is received by the
appropriate Secretary from the State, consistent with paragraph (f) of
this section. Before the Secretaries of Labor and Education approve the
Combined State Plan, the vocational rehabilitation services portion of
the Combined State Plan described in WIOA sec. 102(b)(2)(D)(iii) must be
approved by the Commissioner of the Rehabilitation Services
Administration.
(2) If an appropriate Secretary other than the Secretary of Labor or
the Secretary of Education has authority to approve or deem complete a
portion of the Combined State Plan for a program or activity described
in Sec. 463.140(d), that portion of the Combined State Plan must be
reviewed, and approved, disapproved, or deemed complete, by the
appropriate Secretary within 120 days beginning on the day the Combined
State Plan is received by the appropriate Secretary from the State
consistent with paragraph (f) of this section.
(f) The appropriate Secretaries will review and approve or deem
complete the Combined State Plan within 90 or 120 days, as appropriate,
as described in paragraph (e) of this section, unless the Secretaries of
Labor and Education or appropriate Secretary have determined in writing
within that period that:
(1) The Combined State Plan is inconsistent with the requirements of
[[Page 35]]
the six core programs or the Federal laws authorizing or applicable to
the program or activity involved, including the criteria for approval of
a plan or application, or deeming the plan complete, if any, under such
law;
(2) The portion of the Combined State Plan describing the six core
programs or the program or activity described in paragraph (a) of this
section involved does not satisfy the criteria as provided in sec. 102
or 103 of WIOA, as applicable; or
(3) The Combined State Plan is incomplete, or otherwise insufficient
to determine whether it is consistent with a core program's
requirements, other requirements of WIOA, or the Federal laws
authorizing, or applicable to, the program or activity described in
Sec. 463.140(d), including the criteria for approval of a plan or
application, if any, under such law.
(g) If the Secretary of Labor, the Secretary of Education, or the
appropriate Secretary does not make the written determination described
in paragraph (f) of this section within the relevant period of time
after submission of the Combined State Plan, that portion of the
Combined State Plan over which the Secretary has jurisdiction will be
considered approved.
(h) The Secretaries of Labor and Education's written determination
of approval or disapproval regarding the portion of the plan for the six
core programs may be separate from the written determination of
approval, disapproval, or completeness of the program-specific
requirements of Combined State Plan partner programs and activities
described in Sec. 463.140(d) and included in the Combined State Plan.
(i) Special rule. In paragraphs (f)(1) and (3) of this section, the
term ``criteria for approval of a plan or application,'' with respect to
a State or a core program or a program under the Carl D. Perkins Career
and Technical Education Act of 2006 (20 U.S.C. 2301 et seq.), includes a
requirement for agreement between the State and the appropriate
Secretaries regarding State performance measures or State performance
accountability measures, as the case may be, including levels of
performance.
Sec. 463.145 What are the requirements for modifications of the
Combined State Plan?
(a) For the core program portions of the Combined State Plan,
modifications are required, at a minimum:
(1) By the end of the first 2-year period of any 4-year State Plan.
The State WDB must review the Combined State Plan, and the Governor must
submit modifications to the Combined State Plan to reflect changes in
labor market and economic conditions or other factors affecting the
implementation of the Combined State Plan;
(2) When changes in Federal or State law or policy substantially
affect the strategies, goals, and priorities upon which the Combined
State Plan is based;
(3) When there are changes in the statewide vision, strategies,
policies, State negotiated levels of performance as described in Sec.
463.170(b), the methodology used to determine local allocation of funds,
reorganizations that change the working relationship with system
employees, changes in organizational responsibilities, changes to the
membership structure of the State WDB or alternative entity, and similar
substantial changes to the State's workforce development system.
(b) In addition to the required modification review described in
paragraph (a)(1) of this section, a State may submit a modification of
its Combined State Plan at any time during the 4-year period of the
plan.
(c) For any Combined State Plan partner programs and activities
described in Sec. 463.140(d) that are included in a State's Combined
State Plan, the State--
(1) May decide if the modification requirements under WIOA sec.
102(c)(3) that apply to the core programs will apply to the Combined
State Plan partner programs, as long as consistent with any other
modification requirements for the programs, or may comply with the
requirements applicable to only the particular program or activity; and
(2) Must submit, in accordance with the procedure described in Sec.
463.143, any modification, amendment, or revision required by the
Federal law authorizing, or applicable to, the Combined
[[Page 36]]
State Plan partner program or activity.
(i) If the underlying programmatic requirements change (e.g., the
authorizing statute is reauthorized) for Federal laws authorizing such
programs, a State must either modify its Combined State Plan or submit a
separate plan to the appropriate Federal agency in accordance with the
new Federal law authorizing the Combined State Plan partner program or
activity and other legal requirements applicable to such program or
activity.
(ii) If the modification, amendment, or revision affects the
administration of only that particular Combined State Plan partner
program and has no impact on the Combined State Plan as a whole or the
integration and administration of the core and other Combined State Plan
partner programs at the State level, modifications must be submitted for
approval to only the appropriate Secretary, based on the approval
standards applicable to the original Combined State Plan under Sec.
463.143, if the State elects, or in accordance with the procedures and
requirements applicable to the particular Combined State Plan partner
program.
(3) A State also may amend its Combined State Plan to add a Combined
State Plan partner program or activity described in Sec. 463.140(d).
(d) Modifications of the Combined State Plan are subject to the same
public review and comment requirements that apply to the development of
the original Combined State Plan as described in Sec. 463.143(c) except
that, if the modification, amendment, or revision affects the
administration of a particular Combined State Plan partner program and
has no impact on the Combined State Plan as a whole or the integration
and administration of the core and other Combined State Plan partner
programs at the State level, a State may comply instead with the
procedures and requirements applicable to the particular Combined State
Plan partner program.
(e) Modifications for the core program portions of the Combined
State Plan must be approved by the Secretaries of Labor and Education,
based on the approval standards applicable to the original Combined
State Plan under Sec. 463.143. This approval must come after the
approval of the Commissioner of the Rehabilitation Services
Administration for modification of any portion of the Combined State
Plan described in sec. 102(b)(2)(D)(iii) of WIOA.
Subpart I_Performance Accountability Under Title I of the Workforce
Innovation and Opportunity Act
Authority: Secs. 116, 189, and 503 of Pub. L. 113-128, 128 Stat.
1425 (Jul. 22, 2014).
Source: 81 FR 56051, Aug. 19, 2016, unless otherwise noted.
Sec. 463.150 What definitions apply to Workforce Innovation and
Opportunity Act performance accountability provisions?
(a) Participant. A reportable individual who has received services
other than the services described in paragraph (a)(3) of this section,
after satisfying all applicable programmatic requirements for the
provision of services, such as eligibility determination.
(1) For the Vocational Rehabilitation (VR) program, a participant is
a reportable individual who has an approved and signed Individualized
Plan for Employment (IPE) and has begun to receive services.
(2) For the Workforce Innovation and Opportunity Act (WIOA) title I
youth program, a participant is a reportable individual who has
satisfied all applicable program requirements for the provision of
services, including eligibility determination, an objective assessment,
and development of an individual service strategy, and received 1 of the
14 WIOA youth program elements identified in sec. 129(c)(2) of WIOA.
(3) The following individuals are not participants:
(i) Individuals in an Adult Education and Family Literacy Act
(AEFLA) program who have not completed at least 12 contact hours;
(ii) Individuals who only use the self-service system.
(A) Subject to paragraph (a)(3)(ii)(B) of this section, self-service
occurs when individuals independently access any
[[Page 37]]
workforce development system program's information and activities in
either a physical location, such as a one-stop center resource room or
partner agency, or remotely via the use of electronic technologies.
(B) Self-service does not uniformly apply to all virtually accessed
services. For example, virtually accessed services that provide a level
of support beyond independent job or information seeking on the part of
an individual would not qualify as self-service.
(iii) Individuals who receive information-only services or
activities, which provide readily available information that does not
require an assessment by a staff member of the individual's skills,
education, or career objectives.
(4) Programs must include participants in their performance
calculations.
(b) Reportable individual. An individual who has taken action that
demonstrates an intent to use program services and who meets specific
reporting criteria of the program, including:
(1) Individuals who provide identifying information;
(2) Individuals who only use the self-service system; or
(3) Individuals who only receive information-only services or
activities.
(c) Exit. As defined for the purpose of performance calculations,
exit is the point after which a participant who has received services
through any program meets the following criteria:
(1) For the adult, dislocated worker, and youth programs authorized
under WIOA title I, the AEFLA program authorized under WIOA title II,
and the Employment Service program authorized under the Wagner-Peyser
Act, as amended by WIOA title III, exit date is the last date of
service.
(i) The last day of service cannot be determined until at least 90
days have elapsed since the participant last received services; services
do not include self-service, information-only services or activities, or
follow-up services. This also requires that there are no plans to
provide the participant with future services.
(ii) [Reserved].
(2)(i) For the VR program authorized under title I of the
Rehabilitation Act of 1973, as amended by WIOA title IV (VR program):
(A) The participant's record of service is closed in accordance with
Sec. 463.56 because the participant has achieved an employment outcome;
or
(B) The participant's service record is closed because the
individual has not achieved an employment outcome or the individual has
been determined ineligible after receiving services in accordance with
Sec. 463.43.
(ii) Notwithstanding any other provision of this section, a
participant will not be considered as meeting the definition of exit
from the VR program if the participant's service record is closed
because the participant has achieved a supported employment outcome in
an integrated setting but not in competitive integrated employment.
(3)(i) A State may implement a common exit policy for all or some of
the core programs in WIOA title I and the Employment Service program
authorized under the Wagner-Peyser Act, as amended by WIOA title III,
and any additional required partner program(s) listed in sec.
121(b)(1)(B) of WIOA that is under the authority of the U.S. Department
of Labor (DOL).
(ii) If a State chooses to implement a common exit policy, the
policy must require that a participant is exited only when all of the
criteria in paragraph (c)(1) of this section are met for the WIOA title
I core programs and the Employment Service program authorized under the
Wagner-Peyser Act, as amended by WIOA title III, as well as any
additional required partner programs listed in sec. 121(b)(1)(B) of WIOA
under the authority of DOL to which the common exit policy applies in
which the participant is enrolled.
(d) State. For purposes of this part, other than in regard to
sanctions or the statistical adjustment model, all references to
``State'' include the outlying areas of American Samoa, Guam,
Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands,
and, as applicable, the Republic of Palau.
[[Page 38]]
Sec. 463.155 What are the primary indicators of performance under the
Workforce Innovation and Opportunity Act?
(a) All States submitting either a Unified or Combined State Plan
under Sec. Sec. 463.130 and 463.143, must propose expected levels of
performance for each of the primary indicators of performance for the
adult, dislocated worker, and youth programs authorized under WIOA title
I; the AEFLA program authorized under WIOA title II; the Employment
Service program authorized under the Wagner-Peyser Act, as amended by
WIOA title III; and the VR program authorized under title I of the
Rehabilitation Act of 1973, as amended by WIOA title IV.
(1) Primary indicators of performance. The six primary indicators of
performance for the adult and dislocated worker programs, the AEFLA
program, and the VR program are:
(i) The percentage of participants who are in unsubsidized
employment during the second quarter after exit from the program;
(ii) The percentage of participants who are in unsubsidized
employment during the fourth quarter after exit from the program;
(iii) Median earnings of participants who are in unsubsidized
employment during the second quarter after exit from the program;
(iv)(A) The percentage of those participants enrolled in an
education or training program (excluding those in on-the-job training
[OJT] and customized training) who attained a recognized postsecondary
credential or a secondary school diploma, or its recognized equivalent,
during participation in or within 1 year after exit from the program.
(B) A participant who has attained a secondary school diploma or its
recognized equivalent is included in the percentage of participants who
have attained a secondary school diploma or recognized equivalent only
if the participant also is employed or is enrolled in an education or
training program leading to a recognized postsecondary credential within
1 year after exit from the program;
(v) The percentage of participants who, during a program year, are
in an education or training program that leads to a recognized
postsecondary credential or employment and who are achieving measurable
skill gains, defined as documented academic, technical, occupational, or
other forms of progress, towards such a credential or employment.
Depending upon the type of education or training program, documented
progress is defined as one of the following:
(A) Documented achievement of at least one educational functioning
level of a participant who is receiving instruction below the
postsecondary education level;
(B) Documented attainment of a secondary school diploma or its
recognized equivalent;
(C) Secondary or postsecondary transcript or report card for a
sufficient number of credit hours that shows a participant is meeting
the State unit's academic standards;
(D) Satisfactory or better progress report, towards established
milestones, such as completion of OJT or completion of 1 year of an
apprenticeship program or similar milestones, from an employer or
training provider who is providing training; or
(E) Successful passage of an exam that is required for a particular
occupation or progress in attaining technical or occupational skills as
evidenced by trade-related benchmarks such as knowledge-based exams.
(vi) Effectiveness in serving employers.
(2) Participants. For purposes of the primary indicators of
performance in paragraph (a)(1) of this section, ``participant'' will
have the meaning given to it in Sec. 463.150(a), except that--
(i) For purposes of determining program performance levels under
indicators set forth in paragraphs (a)(1)(i) through (iv) and (vi) of
this section, a ``participant'' does not include a participant who
received services under sec. 225 of WIOA and exits such program while
still in a correctional institution as defined in sec. 225(e)(1) of
WIOA; and
(ii) The Secretaries of Labor and Education may, as needed and
consistent with the Paperwork Reduction
[[Page 39]]
Act (PRA), make further determinations as to the participants to be
included in calculating program performance levels for purposes of any
of the performance indicators set forth in paragraph (a)(1) of this
section.
(b) The primary indicators in paragraphs (a)(1)(i) through (iii) and
(vi) of this section apply to the Employment Service program authorized
under the Wagner-Peyser Act, as amended by WIOA title III.
(c) For the youth program authorized under WIOA title I, the primary
indicators are:
(1) Percentage of participants who are in education or training
activities, or in unsubsidized employment, during the second quarter
after exit from the program;
(2) Percentage of participants in education or training activities,
or in unsubsidized employment, during the fourth quarter after exit from
the program;
(3) Median earnings of participants who are in unsubsidized
employment during the second quarter after exit from the program;
(4) The percentage of those participants enrolled in an education or
training program (excluding those in OJT and customized training) who
obtained a recognized postsecondary credential or a secondary school
diploma, or its recognized equivalent, during participation in or within
1 year after exit from the program, except that a participant who has
attained a secondary school diploma or its recognized equivalent is
included as having attained a secondary school diploma or recognized
equivalent only if the participant is also employed or is enrolled in an
education or training program leading to a recognized postsecondary
credential within 1 year from program exit;
(5) The percentage of participants who during a program year, are in
an education or training program that leads to a recognized
postsecondary credential or employment and who are achieving measurable
skill gains, defined as documented academic, technical, occupational or
other forms of progress towards such a credential or employment.
Depending upon the type of education or training program, documented
progress is defined as one of the following:
(i) Documented achievement of at least one educational functioning
level of a participant who is receiving instruction below the
postsecondary education level;
(ii) Documented attainment of a secondary school diploma or its
recognized equivalent;
(iii) Secondary or postsecondary transcript or report card for a
sufficient number of credit hours that shows a participant is achieving
the State unit's academic standards;
(iv) Satisfactory or better progress report, towards established
milestones, such as completion of OJT or completion of 1 year of an
apprenticeship program or similar milestones, from an employer or
training provider who is providing training; or
(v) Successful passage of an exam that is required for a particular
occupation or progress in attaining technical or occupational skills as
evidenced by trade-related benchmarks such as knowledge-based exams.
(6) Effectiveness in serving employers.
Sec. 463.160 What information is required for State performance
reports?
(a) The State performance report required by sec. 116(d)(2) of WIOA
must be submitted annually using a template the Departments of Labor and
Education will disseminate, and must provide, at a minimum, information
on the actual performance levels achieved consistent with Sec. 463.175
with respect to:
(1) The total number of participants served, and the total number of
participants who exited each of the core programs identified in sec.
116(b)(3)(A)(ii) of WIOA, including disaggregated counts of those who
participated in and exited a core program, by:
(i) Individuals with barriers to employment as defined in WIOA sec.
3(24); and
(ii) Co-enrollment in any of the programs in WIOA sec.
116(b)(3)(A)(ii).
(2) Information on the performance levels achieved for the primary
indicators of performance for all of the core programs identified in
Sec. 463.155 including disaggregated levels for:
[[Page 40]]
(i) Individuals with barriers to employment as defined in WIOA sec.
3(24);
(ii) Age;
(iii) Sex; and
(iv) Race and ethnicity.
(3) The total number of participants who received career services
and the total number of participants who exited from career services for
the most recent program year and the 3 preceding program years, and the
total number of participants who received training services and the
total number of participants who exited from training services for the
most recent program year and the 3 preceding program years, as
applicable to the program;
(4) Information on the performance levels achieved for the primary
indicators of performance consistent with Sec. 463.155 for career
services and training services for the most recent program year and the
3 preceding program years, as applicable to the program;
(5) The percentage of participants in a program who attained
unsubsidized employment related to the training received (often referred
to as training-related employment) through WIOA title I, subtitle B
programs;
(6) The amount of funds spent on career services and the amount of
funds spent on training services for the most recent program year and
the 3 preceding program years, as applicable to the program;
(7) The average cost per participant for those participants who
received career services and training services, respectively, during the
most recent program year and the 3 preceding program years, as
applicable to the program;
(8) The percentage of a State's annual allotment under WIOA sec.
132(b) that the State spent on administrative costs; and
(9) Information that facilitates comparisons of programs with
programs in other States.
(10) For WIOA title I programs, a State performance narrative,
which, for States in which a local area is implementing a pay-for-
performance contracting strategy, at a minimum provides:
(i) A description of pay-for-performance contract strategies being
used for programs;
(ii) The performance of service providers entering into contracts
for such strategies, measured against the levels of performance
specified in the contracts for such strategies; and
(iii) An evaluation of the design of the programs and performance
strategies and, when available, the satisfaction of employers and
participants who received services under such strategies.
(b) The disaggregation of data for the State performance report must
be done in compliance with WIOA sec. 116(d)(6)(C).
(c) The State performance reports must include a mechanism of
electronic access to the State's local area and eligible training
provider (ETP) performance reports.
(d) States must comply with these requirements from sec. 116 of WIOA
as explained in joint guidance issued by the Departments of Labor and
Education, which may include information on reportable individuals as
determined by the Secretaries of Labor and Education.
Sec. 463.165 May a State establish additional indicators of
performance?
States may identify additional indicators of performance for the six
core programs. If a State does so, these indicators must be included in
the Unified or Combined State Plan.
Sec. 463.170 How are State levels of performance for primary indicators
established?
(a) A State must submit in the State Plan expected levels of
performance on the primary indicators of performance for each core
program as required by sec. 116(b)(3)(A)(iii) of WIOA as explained in
joint guidance issued by the Secretaries of Labor and Education.
(1) The initial State Plan submitted under WIOA must contain
expected levels of performance for the first 2 years of the State Plan.
(2) States must submit expected levels of performance for the third
and fourth year of the State Plan before the third program year
consistent with Sec. Sec. 463.135 and 463.145.
(b) States must reach agreement on levels of performance with the
Secretaries of Labor and Education for each indicator for each core
program. These
[[Page 41]]
are the negotiated levels of performance. The negotiated levels must be
based on the following factors:
(1) How the negotiated levels of performance compare with State
levels of performance established for other States;
(2) The application of an objective statistical model established by
the Secretaries of Labor and Education, subject to paragraph (d) of this
section;
(3) How the negotiated levels promote continuous improvement in
performance based on the primary indicators and ensure optimal return on
investment of Federal funds; and
(4) The extent to which the negotiated levels assist the State in
meeting the performance goals established by the Secretaries of Labor
and Education for the core programs in accordance with the Government
Performance and Results Act of 1993, as amended.
(c) An objective statistical adjustment model will be developed and
disseminated by the Secretaries of Labor and Education. The model will
be based on:
(1) Differences among States in actual economic conditions,
including but not limited to unemployment rates and job losses or gains
in particular industries; and
(2) The characteristics of participants, including but not limited
to:
(i) Indicators of poor work history;
(ii) Lack of work experience;
(iii) Lack of educational or occupational skills attainment;
(iv) Dislocation from high-wage and high-benefit employment;
(v) Low levels of literacy;
(vi) Low levels of English proficiency;
(vii) Disability status;
(viii) Homelessness;
(ix) Ex-offender status; and
(x) Welfare dependency.
(d) The objective statistical adjustment model developed under
paragraph (c) of this section will be:
(1) Applied to the core programs' primary indicators upon
availability of data which are necessary to populate the model and apply
the model to the local core programs;
(2) Subject to paragraph (d)(1) of this section, used before the
beginning of a program year in order to reach agreement on State
negotiated levels for the upcoming program year; and
(3) Subject to paragraph (d)(1) of this section, used to revise
negotiated levels at the end of a program year based on actual economic
conditions and characteristics of participants served, consistent with
sec. 116(b)(3)(A)(vii) of WIOA.
(e) The negotiated levels revised at the end of the program year,
based on the statistical adjustment model, are the adjusted levels of
performance.
(f) States must comply with these requirements from sec. 116 of WIOA
as explained in joint guidance issued by the Departments of Labor and
Education.
Sec. 463.175 What responsibility do States have to use quarterly wage
record information for performance accountability?
(a)(1) States must, consistent with State laws, use quarterly wage
record information in measuring a State's performance on the primary
indicators of performance outlined in Sec. 463.155 and a local area's
performance on the primary indicators of performance identified in Sec.
463.205.
(2) The use of social security numbers from participants and such
other information as is necessary to measure the progress of those
participants through quarterly wage record information is authorized.
(3) To the extent that quarterly wage records are not available for
a participant, States may use other information as is necessary to
measure the progress of those participants through methods other than
quarterly wage record information.
(b) ``Quarterly wage record information'' means intrastate and
interstate wages paid to an individual, the social security number (or
numbers, if more than one) of the individual, and the name, address,
State, and the Federal employer identification number of the employer
paying the wages to the individual.
(c) The Governor may designate a State agency (or appropriate State
entity) to assist in carrying out the performance reporting requirements
for WIOA core programs and ETPs. The
[[Page 42]]
Governor or such agency (or appropriate State entity) is responsible
for:
(1) Facilitating data matches;
(2) Data quality reliability; and
(3) Protection against disaggregation that would violate applicable
privacy standards.
Sec. 463.180 When is a State subject to a financial sanction under
the Workforce Innovation and Opportunity Act?
A State will be subject to financial sanction under WIOA sec. 116(f)
if it fails to:
(a) Submit the State annual performance report required under WIOA
sec. 116(d)(2); or
(b) Meet adjusted levels of performance for the primary indicators
of performance in accordance with sec. 116(f) of WIOA.
Sec. 463.185 When are sanctions applied for a State's failure to submit
an annual performance report?
(a) Sanctions will be applied when a State fails to submit the State
annual performance report required under sec. 116(d)(2) of WIOA. A State
fails to report if the State either:
(1) Does not submit a State annual performance report by the date
for timely submission set in performance reporting guidance; or
(2) Submits a State annual performance report by the date for timely
submission, but the report is incomplete.
(b) Sanctions will not be applied if the reporting failure is due to
exceptional circumstances outside of the State's control. Exceptional
circumstances may include, but are not limited to:
(1) Natural disasters;
(2) Unexpected personnel transitions; and
(3) Unexpected technology related issues.
(c) In the event that a State may not be able to submit a complete
and accurate performance report by the deadline for timely reporting:
(1) The State must notify the Secretary of Labor or Secretary of
Education as soon as possible, but no later than 30 days prior to the
established deadline for submission, of a potential impact on the
State's ability to submit its State annual performance report in order
to not be considered failing to report.
(2) In circumstances where unexpected events occur less than 30 days
before the established deadline for submission of the State annual
performance reports, the Secretaries of Labor and Education will review
requests for extending the reporting deadline in accordance with the
Departments of Labor and Education's procedures that will be established
in guidance.
Sec. 463.190 When are sanctions applied for failure to achieve adjusted
levels of performance?
(a) States' negotiated levels of performance will be adjusted
through the application of the statistical adjustment model established
under Sec. 463.170 to account for actual economic conditions
experienced during a program year and characteristics of participants,
annually at the close of each program year.
(b) Any State that fails to meet adjusted levels of performance for
the primary indicators of performance outlined in Sec. 463.155 for any
year will receive technical assistance, including assistance in the
development of a performance improvement plan provided by the Secretary
of Labor or Secretary of Education.
(c) Whether a State has failed to meet adjusted levels of
performance will be determined using the following three criteria:
(1) The overall State program score, which is expressed as the
percent achieved, compares the actual results achieved by a core program
on the primary indicators of performance to the adjusted levels of
performance for that core program. The average of the percentages
achieved of the adjusted level of performance for each of the primary
indicators by a core program will constitute the overall State program
score.
(2) However, until all indicators for the core program have at least
2 years of complete data, the overall State program score will be based
on a comparison of the actual results achieved to the adjusted level of
performance for each of the primary indicators that have at least 2
years of complete data for that program;
[[Page 43]]
(3) The overall State indicator score, which is expressed as the
percent achieved, compares the actual results achieved on a primary
indicator of performance by all core programs in a State to the adjusted
levels of performance for that primary indicator. The average of the
percentages achieved of the adjusted level of performance by all of the
core programs on that indicator will constitute the overall State
indicator score.
(4) However, until all indicators for the State have at least 2
years of complete data, the overall State indicator score will be based
on a comparison of the actual results achieved to the adjusted level of
performance for each of the primary indicators that have at least 2
years of complete data in a State.
(5) The individual indicator score, which is expressed as the
percent achieved, compares the actual results achieved by each core
program on each of the individual primary indicators to the adjusted
levels of performance for each of the program's primary indicators of
performance.
(d) A performance failure occurs when:
(1) Any overall State program score or overall State indicator score
falls below 90 percent for the program year; or
(2) Any of the States' individual indicator scores fall below 50
percent for the program year.
(e) Sanctions based on performance failure will be applied to States
if, for 2 consecutive years, the State fails to meet:
(1) 90 percent of the overall State program score for the same core
program;
(2) 90 percent of the overall State indicator score for the same
primary indicator; or
(3) 50 percent of the same indicator score for the same program.
Sec. 463.195 What should States expect when a sanction is applied to
the Governor's Reserve Allotment?
(a) The Secretaries of Labor and Education will reduce the
Governor's Reserve Allotment by five percent of the maximum available
amount for the immediately succeeding program year if:
(1) The State fails to submit the State annual performance reports
as required under WIOA sec. 116(d)(2), as defined in Sec. 463.185;
(2) The State fails to meet State adjusted levels of performance for
the same primary performance indicator(s) under either Sec.
463.190(d)(1) for the second consecutive year as defined in Sec.
463.190; or
(3) The State's score on the same indicator for the same program
falls below 50 percent under Sec. 463.190(d)(2) for the second
consecutive year as defined in Sec. 463.190.
(b) If the State fails under paragraphs (a)(1) and either (a)(2) or
(3) of this section in the same program year, the Secretaries of Labor
and Education will reduce the Governor's Reserve Allotment by 10 percent
of the maximum available amount for the immediately succeeding program
year.
(c) If a State's Governor's Reserve Allotment is reduced:
(1) The reduced amount will not be returned to the State in the
event that the State later improves performance or submits its annual
performance report; and
(2) The Governor's Reserve will continue to be set at the reduced
level in each subsequent year until the Secretary of Labor or the
Secretary of Education, depending on which program is impacted,
determines that the State met the State adjusted levels of performance
for the applicable primary performance indicators and has submitted all
of the required performance reports.
(d) A State may request review of a sanction the Secretary of Labor
imposes in accordance with the provisions of 20 CFR 683.800.
Sec. 463.200 What other administrative actions will be applied to
States' performance requirements?
(a) In addition to sanctions for failure to report or failure to
meet adjusted levels of performance, States will be subject to
administrative actions in the case of poor performance.
(b) States' performance achievement on the individual primary
indicators will be assessed in addition to the overall State program
score and overall
[[Page 44]]
State indicator score. Based on this assessment, as clarified and
explained in guidance, for performance on any individual primary
indicator, the Secretary of Labor or the Secretary of Education will
require the State to establish a performance risk plan to address
continuous improvement on the individual primary indicator.
Sec. 463.205 What performance indicators apply to local areas and what
information must be included in local area performance reports?
(a) Each local area in a State under WIOA title I is subject to the
same primary indicators of performance for the core programs for WIOA
title I under Sec. 463.155(a)(1) and (c) that apply to the State.
(b) In addition to the indicators described in paragraph (a) of this
section, under Sec. 463.165, the Governor may apply additional
indicators of performance to local areas in the State.
(c) States must annually make local area performance reports
available to the public using a template that the Departments of Labor
and Education will disseminate in guidance, including by electronic
means. The State must provide electronic access to the public local area
performance report in its annual State performance report.
(d) The local area performance report must include:
(1) The actual results achieved under Sec. 463.155 and the
information required under Sec. 463.160(a);
(2) The percentage of a local area's allotment under WIOA secs.
128(b) and 133(b) that the local area spent on administrative costs; and
(3) Other information that facilitates comparisons of programs with
programs in other local areas (or planning regions if the local area is
part of a planning region).
(e) The disaggregation of data for the local area performance report
must be done in compliance with WIOA sec. 116(d)(6)(C).
(f) States must comply with any requirements from sec. 116(d)(3) of
WIOA as explained in guidance, including the use of the performance
reporting template, issued by DOL.
Sec. 463.210 How are local performance levels established?
(a) The objective statistical adjustment model required under sec.
116(b)(3)(A)(viii) of WIOA and described in Sec. 463.170(c) must be:
(1) Applied to the core programs' primary indicators upon
availability of data which are necessary to populate the model and apply
the model to the local core programs;
(2) Used in order to reach agreement on local negotiated levels of
performance for the upcoming program year; and
(3) Used to establish adjusted levels of performance at the end of a
program year based on actual conditions, consistent with WIOA sec.
116(c)(3).
(b) Until all indicators for the core program in a local area have
at least 2 years of complete data, the comparison of the actual results
achieved to the adjusted levels of performance for each of the primary
indicators only will be applied where there are at least 2 years of
complete data for that program.
(c) The Governor, Local Workforce Development Board (WDB), and chief
elected official must reach agreement on local negotiated levels of
performance based on a negotiations process before the start of a
program year with the use of the objective statistical model described
in paragraph (a) of this section. The negotiations will include a
discussion of circumstances not accounted for in the model and will take
into account the extent to which the levels promote continuous
improvement. The objective statistical model will be applied at the end
of the program year based on actual economic conditions and
characteristics of the participants served.
(d) The negotiations process described in paragraph (c) of this
section must be developed by the Governor and disseminated to all Local
WDBs and chief elected officials.
(e) The Local WDBs may apply performance measures to service
providers that differ from the performance indicators that apply to the
local area. These performance measures must be established after
considering:
(1) The established local negotiated levels;
[[Page 45]]
(2) The services provided by each provider; and
(3) The populations the service providers are intended to serve.
Sec. 463.215 Under what circumstances are local areas eligible for
State Incentive Grants?
(a) The Governor is not required to award local incentive funds, but
is authorized to provide incentive grants to local areas for performance
on the primary indicators of performance consistent with WIOA sec.
134(a)(3)(A)(xi).
(b) The Governor may use non-Federal funds to create incentives for
the Local WDBs to implement pay-for-performance contract strategies for
the delivery of training services described in WIOA sec. 134(c)(3) or
activities described in WIOA sec. 129(c)(2) in the local areas served by
the Local WDBs. Pay-for-performance contract strategies must be
implemented in accordance with 20 CFR part 683, subpart E and Sec.
463.160.
Sec. 463.220 Under what circumstances may a corrective action or
sanction be applied to local areas for poor performance?
(a) If a local area fails to meet the adjusted levels of performance
agreed to under Sec. 463.210 for the primary indicators of performance
in the adult, dislocated worker, and youth programs authorized under
WIOA title I in any program year, technical assistance must be provided
by the Governor or, upon the Governor's request, by the Secretary of
Labor.
(1) A State must establish the threshold for failure to meet
adjusted levels of performance for a local area before coming to
agreement on the negotiated levels of performance for the local area.
(i) A State must establish the adjusted level of performance for a
local area, using the statistical adjustment model described in Sec.
463.170(c).
(ii) At least 2 years of complete data on any indicator for any
local core program are required in order to establish adjusted levels of
performance for a local area.
(2) The technical assistance may include:
(i) Assistance in the development of a performance improvement plan;
(ii) The development of a modified local or regional plan; or
(iii) Other actions designed to assist the local area in improving
performance.
(b) If a local area fails to meet the adjusted levels of performance
agreed to under Sec. 463.210 for the same primary indicators of
performance for the same core program authorized under WIOA title I for
a third consecutive program year, the Governor must take corrective
actions. The corrective actions must include the development of a
reorganization plan under which the Governor:
(1) Requires the appointment and certification of a new Local WDB,
consistent with the criteria established under 20 CFR 679.350;
(2) Prohibits the use of eligible providers and one-stop partners
that have been identified as achieving poor levels of performance; or
(3) Takes such other significant actions as the Governor determines
are appropriate.
Sec. 463.225 Under what circumstances may local areas appeal a
reorganization plan?
(a) The Local WDB and chief elected official for a local area that
is subject to a reorganization plan under WIOA sec. 116(g)(2)(A) may
appeal to the Governor to rescind or revise the reorganization plan not
later than 30 days after receiving notice of the reorganization plan.
The Governor must make a final decision within 30 days after receipt of
the appeal.
(b) The Local WDB and chief elected official may appeal the final
decision of the Governor to the Secretary of Labor not later than 30
days after receiving the decision from the Governor. Any appeal of the
Governor's final decision must be:
(1) Appealed jointly by the Local WDB and chief elected official to
the Secretary of Labor under 20 CFR 683.650; and
(2) Must be submitted by certified mail, return receipt requested,
to the Secretary of Labor, U.S. Department of Labor, 200 Constitution
Ave. NW., Washington DC 20210, Attention: ASET. A copy of the appeal
must be simultaneously provided to the Governor.
[[Page 46]]
(c) Upon receipt of the joint appeal from the Local WDB and chief
elected official, the Secretary of Labor must make a final decision
within 30 days. In making this determination the Secretary of Labor may
consider any comments submitted by the Governor in response to the
appeals.
(d) The decision by the Governor on the appeal becomes effective at
the time it is issued and remains effective unless the Secretary of
Labor rescinds or revises the reorganization plan under WIOA sec.
116(g)(2)(C).
Sec. 463.230 What information is required for the eligible training
provider performance reports?
(a) States are required to make available and publish annually using
a template the Departments of Labor and Education will disseminate
including through electronic means, the ETP performance reports for ETPs
who provide services under sec. 122 of WIOA that are described in 20 CFR
680.400 through 680.530. These reports at a minimum must include,
consistent with Sec. 463.175 and with respect to each program of study
that is eligible to receive funds under WIOA:
(1) The total number of participants as defined by Sec. 463.150(a)
who received training services under the adult and dislocated worker
programs authorized under WIOA title I for the most recent year and the
3 preceding program years, including:
(i) The number of participants under the adult and dislocated worker
programs disaggregated by barriers to employment;
(ii) The number of participants under the adult and dislocated
worker programs disaggregated by race, ethnicity, sex, and age;
(iii) The number of participants under the adult and dislocated
worker programs disaggregated by the type of training entity for the
most recent program year and the 3 preceding program years;
(2) The total number of participants who exit a program of study or
its equivalent, including disaggregate counts by the type of training
entity during the most recent program year and the 3 preceding program
years;
(3) The average cost-per-participant for participants who received
training services for the most recent program year and the 3 preceding
program years disaggregated by type of training entity;
(4) The total number of individuals exiting from the program of
study (or the equivalent) with respect to all individuals engaging in
the program of study (or the equivalent); and
(5) The levels of performance achieved for the primary indicators of
performance identified in Sec. 463.155(a)(1)(i) through (iv) with
respect to all individuals engaging in a program of study (or the
equivalent).
(b) Apprenticeship programs registered under the National
Apprenticeship Act are not required to submit ETP performance
information. If a registered apprenticeship program voluntarily submits
performance information to a State, the State must include this
information in the report.
(c) The State must provide a mechanism of electronic access to the
public ETP performance report in its annual State performance report.
(d) States must comply with any requirements from sec. 116(d)(4) of
WIOA as explained in guidance issued by DOL.
(e) The Governor may designate one or more State agencies such as a
State Education Agency or other State Educational Authority to assist in
overseeing ETP performance and facilitating the production and
dissemination of ETP performance reports. These agencies may be the same
agencies that are designated as responsible for administering the ETP
list as provided under 20 CFR 680.500. The Governor or such agencies, or
authorities, is responsible for:
(1) Facilitating data matches between ETP records and unemployment
insurance (UI) wage data in order to produce the report;
(2) The creation and dissemination of the reports as described in
paragraphs (a) through (d) of this section;
(3) Coordinating the dissemination of the performance reports with
the ETP list and the information required to accompany the list, as
provided in 20 CFR 680.500.
[[Page 47]]
Sec. 463.235 What are the reporting requirements for individual records
for core Workforce Innovation and Opportunity Act (WIOA) title I programs;
the Wagner-Peyser Act Employment Service program, as amended by WIOA
title III; and the Vocational Rehabilitation program
authorized under title I of the Rehabilitation Act of 1973, as
amended by WIOA title IV?
(a) On a quarterly basis, each State must submit to the Secretary of
Labor or the Secretary of Education, as appropriate, individual records
that include demographic information, information on services received,
and information on resulting outcomes, as appropriate, for each
reportable individual in either of the following programs administered
by the Secretary of Labor or Secretary of Education: A WIOA title I core
program; the Employment Service program authorized under the Wagner-
Peyser Act, as amended by WIOA title III; or the VR program authorized
under title I of the Rehabilitation Act of 1973, as amended by WIOA
title IV.
(b) For individual records submitted to the Secretary of Labor,
those records may be required to be integrated across all programs
administered by the Secretary of Labor in one single file.
(c) States must comply with the requirements of sec. 116(d)(2) of
WIOA as explained in guidance issued by the Departments of Labor and
Education.
Sec. 463.240 What are the requirements for data validation of State
annual performance reports?
(a) States must establish procedures, consistent with guidelines
issued by the Secretary of Labor or the Secretary of Education, to
ensure that they submit complete annual performance reports that contain
information that is valid and reliable, as required by WIOA sec.
116(d)(5).
(b) If a State fails to meet standards in paragraph (a) of this
section as determined by the Secretary of Labor or the Secretary of
Education, the appropriate Secretary will provide technical assistance
and may require the State to develop and implement corrective actions,
which may require the State to provide training for its subrecipients.
(c) The Secretaries of Labor and Education will provide training and
technical assistance to States in order to implement this section.
States must comply with the requirements of sec. 116(d)(5) of WIOA as
explained in guidance.
Subpart J_Description of the One-Stop Delivery System Under Title I of
the Workforce Innovation and Opportunity Act
Authority: Secs. 503, 107, 121, 134, 189, Pub. L. 113-128, 128 Stat.
1425 (Jul. 22, 2014).
Source: 81 FR 56057, Aug. 19, 2016, unless otherwise noted.
Sec. 463.300 What is the one-stop delivery system?
(a) The one-stop delivery system brings together workforce
development, educational, and other human resource services in a
seamless customer-focused service delivery network that enhances access
to the programs' services and improves long-term employment outcomes for
individuals receiving assistance. One-stop partners administer
separately funded programs as a set of integrated streamlined services
to customers.
(b) Title I of the Workforce Innovation and Opportunity Act (WIOA)
assigns responsibilities at the local, State, and Federal level to
ensure the creation and maintenance of a one-stop delivery system that
enhances the range and quality of education and workforce development
services that employers and individual customers can access.
(c) The system must include at least one comprehensive physical
center in each local area as described in Sec. 463.305.
(d) The system may also have additional arrangements to supplement
the comprehensive center. These arrangements include:
(1) An affiliated site or a network of affiliated sites, where one
or more partners make programs, services, and activities available, as
described in Sec. 463.310;
[[Page 48]]
(2) A network of eligible one-stop partners, as described in
Sec. Sec. 463.400 through 463.410, through which each partner provides
one or more of the programs, services, and activities that are linked,
physically or technologically, to an affiliated site or access point
that assures customers are provided information on the availability of
career services, as well as other program services and activities,
regardless of where they initially enter the public workforce system in
the local area; and
(3) Specialized centers that address specific needs, including those
of dislocated workers, youth, or key industry sectors, or clusters.
(e) Required one-stop partner programs must provide access to
programs, services, and activities through electronic means if
applicable and practicable. This is in addition to providing access to
services through the mandatory comprehensive physical one-stop center
and any affiliated sites or specialized centers. The provision of
programs and services by electronic methods such as Web sites,
telephones, or other means must improve the efficiency, coordination,
and quality of one-stop partner services. Electronic delivery must not
replace access to such services at a comprehensive one-stop center or be
a substitute to making services available at an affiliated site if the
partner is participating in an affiliated site. Electronic delivery
systems must be in compliance with the nondiscrimination and equal
opportunity provisions of WIOA sec. 188 and its implementing regulations
at 29 CFR part 38.
(f) The design of the local area's one-stop delivery system must be
described in the Memorandum of Understanding (MOU) executed with the
one-stop partners, described in Sec. 463.500.
Sec. 463.305 What is a comprehensive one-stop center and what must
be provided there?
(a) A comprehensive one-stop center is a physical location where job
seeker and employer customers can access the programs, services, and
activities of all required one-stop partners. A comprehensive one-stop
center must have at least one title I staff person physically present.
(b) The comprehensive one-stop center must provide:
(1) Career services, described in Sec. 463.430;
(2) Access to training services described in 20 CFR 680.200;
(3) Access to any employment and training activities carried out
under sec. 134(d) of WIOA;
(4) Access to programs and activities carried out by one-stop
partners listed in Sec. Sec. 463.400 through 463.410, including the
Employment Service program authorized under the Wagner-Peyser Act, as
amended by WIOA title III (Wagner-Peyser Act Employment Service
program); and
(5) Workforce and labor market information.
(c) Customers must have access to these programs, services, and
activities during regular business days at a comprehensive one-stop
center. The Local Workforce Development Board (WDB) may establish other
service hours at other times to accommodate the schedules of individuals
who work on regular business days. The State WDB will evaluate the hours
of access to service as part of the evaluation of effectiveness in the
one-stop certification process described in Sec. 463.800(b).
(d) ``Access'' to each partner program and its services means:
(1) Having a program staff member physically present at the one-stop
center;
(2) Having a staff member from a different partner program
physically present at the one-stop center appropriately trained to
provide information to customers about the programs, services, and
activities available through partner programs; or
(3) Making available a direct linkage through technology to program
staff who can provide meaningful information or services.
(i) A ``direct linkage'' means providing direct connection at the
one-stop center, within a reasonable time, by phone or through a real-
time Web-based communication to a program staff member who can provide
program information or services to the customer.
(ii) A ``direct linkage'' cannot exclusively be providing a phone
number or
[[Page 49]]
computer Web site or providing information, pamphlets, or materials.
(e) All comprehensive one-stop centers must be physically and
programmatically accessible to individuals with disabilities, as
described in 29 CFR part 38, the implementing regulations of WIOA sec.
188.
Sec. 463.310 What is an affiliated site and what must be provided
there?
(a) An affiliated site, or affiliate one-stop center, is a site that
makes available to job seeker and employer customers one or more of the
one-stop partners' programs, services, and activities. An affiliated
site does not need to provide access to every required one-stop partner
program. The frequency of program staff's physical presence in the
affiliated site will be determined at the local level. Affiliated sites
are access points in addition to the comprehensive one-stop center(s) in
each local area. If used by local areas as a part of the service
delivery strategy, affiliate sites must be implemented in a manner that
supplements and enhances customer access to services.
(b) As described in Sec. 463.315, Wagner-Peyser Act employment
services cannot be a stand-alone affiliated site.
(c) States, in conjunction with the Local WDBs, must examine lease
agreements and property holdings throughout the one-stop delivery system
in order to use property in an efficient and effective way. Where
necessary and appropriate, States and Local WDBs must take expeditious
steps to align lease expiration dates with efforts to consolidate one-
stop operations into service points where Wagner-Peyser Act employment
services are colocated as soon as reasonably possible. These steps must
be included in the State Plan.
(d) All affiliated sites must be physically and programmatically
accessible to individuals with disabilities, as described in 29 CFR part
38, the implementing regulations of WIOA sec. 188.
Sec. 463.315 Can a stand-alone Wagner-Peyser Act Employment Service
office be designated as an affiliated one-stop site?
(a) Separate stand-alone Wagner-Peyser Act Employment Service
offices are not permitted under WIOA, as also described in 20 CFR
652.202.
(b) If Wagner-Peyser Act employment services are provided at an
affiliated site, there must be at least one or more other partners in
the affiliated site with a physical presence of combined staff more than
50 percent of the time the center is open. Additionally, the other
partner must not be the partner administering local veterans' employment
representatives, disabled veterans' outreach program specialists, or
unemployment compensation programs. If Wagner-Peyser Act employment
services and any of these 3 programs are provided at an affiliated site,
an additional partner or partners must have a presence of combined staff
in the center more than 50 percent of the time the center is open.
Sec. 463.320 Are there any requirements for networks of eligible
one-stop partners or specialized centers?
Any network of one-stop partners or specialized centers, as
described in Sec. 463.300(d)(3), must be connected to the comprehensive
one-stop center and any appropriate affiliate one-stop centers, for
example, by having processes in place to make referrals to these centers
and the partner programs located in them. Wagner-Peyser Act employment
services cannot stand alone in a specialized center. Just as described
in Sec. 463.315 for an affiliated site, a specialized center must
include other programs besides Wagner-Peyser Act employment services,
local veterans' employment representatives, disabled veterans' outreach
program specialists, and unemployment compensation.
Sec. 463.400 Who are the required one-stop partners?
(a) Section 121(b)(1)(B) of WIOA identifies the entities that are
required partners in the local one-stop delivery systems.
(b) The required partners are the entities responsible for
administering the
[[Page 50]]
following programs and activities in the local area:
(1) Programs authorized under title I of WIOA, including:
(i) Adults;
(ii) Dislocated workers;
(iii) Youth;
(iv) Job Corps;
(v) YouthBuild;
(vi) Native American programs; and
(vii) Migrant and seasonal farmworker programs;
(2) The Wagner-Peyser Act Employment Service program authorized
under the Wagner-Peyser Act (29 U.S.C. 49 et seq.), as amended by WIOA
title III;
(3) The Adult Education and Family Literacy Act (AEFLA) program
authorized under title II of WIOA;
(4) The Vocational Rehabilitation (VR) program authorized under
title I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.), as
amended by WIOA title IV;
(5) The Senior Community Service Employment Program authorized under
title V of the Older Americans Act of 1965 (42 U.S.C. 3056 et seq.);
(6) Career and technical education programs at the postsecondary
level authorized under the Carl D. Perkins Career and Technical
Education Act of 2006 (20 U.S.C. 2301 et seq.);
(7) Trade Adjustment Assistance activities authorized under chapter
2 of title II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.);
(8) Jobs for Veterans State Grants programs authorized under chapter
41 of title 38, U.S.C.;
(9) Employment and training activities carried out under the
Community Services Block Grant (42 U.S.C. 9901 et seq.);
(10) Employment and training activities carried out by the
Department of Housing and Urban Development;
(11) Programs authorized under State unemployment compensation laws
(in accordance with applicable Federal law);
(12) Programs authorized under sec. 212 of the Second Chance Act of
2007 (42 U.S.C. 17532); and
(13) Temporary Assistance for Needy Families (TANF) authorized under
part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.),
unless exempted by the Governor under Sec. 463.405(b).
Sec. 463.405 Is Temporary Assistance for Needy Families a required
one-stop partner?
(a) Yes, TANF, authorized under part A of title IV of the Social
Security Act (42 U.S.C. 601 et seq.), is a required partner.
(b) The Governor may determine that TANF will not be a required
partner in the State, or within some specific local areas in the State.
In this instance, the Governor must notify the Secretaries of the U.S.
Departments of Labor and Health and Human Services in writing of this
determination.
(c) In States, or local areas within a State, where the Governor has
determined that TANF is not required to be a partner, local TANF
programs may still work in collaboration or partnership with the local
one-stop centers to deliver employment and training services to the TANF
population unless inconsistent with the Governor's direction.
Sec. 463.410 What other entities may serve as one-stop partners?
(a) Other entities that carry out a workforce development program,
including Federal, State, or local programs and programs in the private
sector, may serve as additional partners in the one-stop delivery system
if the Local WDB and chief elected official(s) approve the entity's
participation.
(b) Additional partners may include, but are not limited to:
(1) Employment and training programs administered by the Social
Security Administration, including the Ticket to Work and Self-
Sufficiency Program established under sec. 1148 of the Social Security
Act (42 U.S.C. 1320b-19);
(2) Employment and training programs carried out by the Small
Business Administration;
(3) Supplemental Nutrition Assistance Program (SNAP) employment and
training programs, authorized under secs. 6(d)(4) and 6(o) of the Food
and Nutrition Act of 2008 (7 U.S.C. 2015(d)(4));
[[Page 51]]
(4) Client Assistance Program authorized under sec. 112 of the
Rehabilitation Act of 1973 (29 U.S.C. 732);
(5) Programs authorized under the National and Community Service Act
of 1990 (42 U.S.C. 12501 et seq.); and
(6) Other appropriate Federal, State or local programs, including,
but not limited to, employment, education, and training programs
provided by public libraries or in the private sector.
Sec. 463.415 What entity serves as the one-stop partner for a particular
program in the local area?
(a) The entity that carries out the program and activities listed in
Sec. 463.400 or Sec. 463.410, and therefore serves as the one-stop
partner, is the grant recipient, administrative entity, or organization
responsible for administering the funds of the specified program in the
local area. The term ``entity'' does not include the service providers
that contract with, or are subrecipients of, the local administrative
entity. For programs that do not include local administrative entities,
the responsible State agency must be the partner. Specific entities for
particular programs are identified in paragraphs (b) through (e) of this
section. If a program or activity listed in Sec. 463.400 is not carried
out in a local area, the requirements relating to a required one-stop
partner are not applicable to such program or activity in that local
one-stop delivery system.
(b) For title II of WIOA, the entity or agency that carries out the
program for the purposes of paragraph (a) of this section is the sole
entity or agency in the State or outlying area responsible for
administering or supervising policy for adult education and literacy
activities in the State or outlying area. The State eligible entity or
agency may delegate its responsibilities under paragraph (a) of this
section to one or more eligible providers or consortium of eligible
providers.
(c) For the VR program, authorized under title I of the
Rehabilitation Act of 1973, as amended by WIOA title IV, the entity that
carries out the program for the purposes of paragraph (a) of this
section is the designated State agencies or designated State units
specified under sec. 101(a)(2) of the Rehabilitation Act that is
primarily concerned with vocational rehabilitation, or vocational and
other rehabilitation, of individuals with disabilities.
(d) Under WIOA title I, the national programs, including Job Corps,
the Native American program, YouthBuild, and Migrant and Seasonal
Farmworker programs are required one-stop partners. The entity for the
Native American program, YouthBuild, and Migrant and Seasonal Farmworker
programs is the grantee of those respective programs. The entity for Job
Corps is the Job Corps center.
(e) For the Carl D. Perkins Career and Technical Education Act of
2006, the entity that carries out the program for the purposes of
paragraph (a) of this section is the eligible recipient or recipients at
the postsecondary level, or a consortium of eligible recipients at the
postsecondary level in the local area. The eligible recipient at the
postsecondary level may also request assistance from the State eligible
agency in completing its responsibilities under paragraph (a) of this
section.
Sec. 463.420 What are the roles and responsibilities of the required
one-stop partners?
Each required partner must:
(a) Provide access to its programs or activities through the one-
stop delivery system, in addition to any other appropriate locations;
(b) Use a portion of funds made available to the partner's program,
to the extent consistent with the Federal law authorizing the partner's
program and with Federal cost principles in 2 CFR parts 200 and 3474
(requiring, among other things, that costs are allowable, reasonable,
necessary, and allocable), to:
(1) Provide applicable career services; and
(2) Work collaboratively with the State and Local WDBs to establish
and maintain the one-stop delivery system. This includes jointly funding
the one-stop infrastructure through partner contributions that are based
upon:
(i) A reasonable cost allocation methodology by which infrastructure
costs are charged to each partner based on proportionate use and
relative benefit received;
[[Page 52]]
(ii) Federal cost principles; and
(iii) Any local administrative cost requirements in the Federal law
authorizing the partner's program. (This is further described in Sec.
463.700.)
(c) Enter into an MOU with the Local WDB relating to the operation
of the one-stop delivery system that meets the requirements of Sec.
463.500(b);
(d) Participate in the operation of the one-stop delivery system
consistent with the terms of the MOU, requirements of authorizing laws,
the Federal cost principles, and all other applicable legal
requirements; and
(e) Provide representation on the State and Local WDBs as required
and participate in Board committees as needed.
Sec. 463.425 What are the applicable career services that must be
provided through the one-stop delivery system by required one-stop
partners?
(a) The applicable career services to be delivered by required one-
stop partners are those services listed in Sec. 463.430 that are
authorized to be provided under each partner's program.
(b) One-stop centers provide services to individual customers based
on individual needs, including the seamless delivery of multiple
services to individual customers. There is no required sequence of
services.
Sec. 463.430 What are career services?
Career services, as identified in sec. 134(c)(2) of WIOA, consist of
three types:
(a) Basic career services must be made available and, at a minimum,
must include the following services, as consistent with allowable
program activities and Federal cost principles:
(1) Determinations of whether the individual is eligible to receive
assistance from the adult, dislocated worker, or youth programs;
(2) Outreach, intake (including worker profiling), and orientation
to information and other services available through the one-stop
delivery system. For the TANF program, States must provide individuals
with the opportunity to initiate an application for TANF assistance and
non-assistance benefits and services, which could be implemented through
the provision of paper application forms or links to the application Web
site;
(3) Initial assessment of skill levels including literacy, numeracy,
and English language proficiency, as well as aptitudes, abilities
(including skills gaps), and supportive services needs;
(4) Labor exchange services, including--
(i) Job search and placement assistance, and, when needed by an
individual, career counseling, including--
(A) Provision of information on in-demand industry sectors and
occupations (as defined in sec. 3(23) of WIOA); and
(B) Provision of information on nontraditional employment; and
(ii) Appropriate recruitment and other business services on behalf
of employers, including information and referrals to specialized
business services other than those traditionally offered through the
one-stop delivery system;
(5) Provision of referrals to and coordination of activities with
other programs and services, including programs and services within the
one-stop delivery system and, when appropriate, other workforce
development programs;
(6) Provision of workforce and labor market employment statistics
information, including the provision of accurate information relating to
local, regional, and national labor market areas, including--
(i) Job vacancy listings in labor market areas;
(ii) Information on job skills necessary to obtain the vacant jobs
listed; and
(iii) Information relating to local occupations in demand and the
earnings, skill requirements, and opportunities for advancement for
those jobs;
(7) Provision of performance information and program cost
information on eligible providers of education, training, and workforce
services by program and type of providers;
(8) Provision of information, in usable and understandable formats
and languages, about how the local area is performing on local
performance accountability measures, as well as any additional
performance information relating to the area's one-stop delivery system;
[[Page 53]]
(9) Provision of information, in usable and understandable formats
and languages, relating to the availability of supportive services or
assistance, and appropriate referrals to those services and assistance,
including: Child care; child support; medical or child health assistance
available through the State's Medicaid program and Children's Health
Insurance Program; benefits under SNAP; assistance through the earned
income tax credit; and assistance under a State program for TANF, and
other supportive services and transportation provided through that
program;
(10) Provision of information and meaningful assistance to
individuals seeking assistance in filing a claim for unemployment
compensation.
(i) ``Meaningful assistance'' means:
(A) Providing assistance on-site using staff who are well-trained in
unemployment compensation claims filing and the rights and
responsibilities of claimants; or
(B) Providing assistance by phone or via other technology, as long
as the assistance is provided by trained and available staff and within
a reasonable time.
(ii) The costs associated in providing this assistance may be paid
for by the State's unemployment insurance program, or the WIOA adult or
dislocated worker programs, or some combination thereof.
(11) Assistance in establishing eligibility for programs of
financial aid assistance for training and education programs not
provided under WIOA.
(b) Individualized career services must be made available if
determined to be appropriate in order for an individual to obtain or
retain employment. These services include the following services, as
consistent with program requirements and Federal cost principles:
(1) Comprehensive and specialized assessments of the skill levels
and service needs of adults and dislocated workers, which may include--
(i) Diagnostic testing and use of other assessment tools; and
(ii) In-depth interviewing and evaluation to identify employment
barriers and appropriate employment goals;
(2) Development of an individual employment plan, to identify the
employment goals, appropriate achievement objectives, and appropriate
combination of services for the participant to achieve his or her
employment goals, including the list of, and information about, the
eligible training providers (as described in 20 CFR 680.180);
(3) Group counseling;
(4) Individual counseling;
(5) Career planning;
(6) Short-term pre-vocational services including development of
learning skills, communication skills, interviewing skills, punctuality,
personal maintenance skills, and professional conduct services to
prepare individuals for unsubsidized employment or training;
(7) Internships and work experiences that are linked to careers (as
described in 20 CFR 680.170);
(8) Workforce preparation activities;
(9) Financial literacy services as described in sec. 129(b)(2)(D) of
WIOA and 20 CFR 681.500;
(10) Out-of-area job search assistance and relocation assistance;
and
(11) English language acquisition and integrated education and
training programs.
(c) Follow-up services must be provided, as appropriate, including:
Counseling regarding the workplace, for participants in adult or
dislocated worker workforce investment activities who are placed in
unsubsidized employment, for up to 12 months after the first day of
employment.
(d) In addition to the requirements in paragraph (a)(2) of this
section, TANF agencies must identify employment services and related
support being provided by the TANF program (within the local area) that
qualify as career services and ensure access to them via the local one-
stop delivery system.
Sec. 463.435 What are the business services provided through the
one-stop delivery system, and how are they provided?
(a) Certain career services must be made available to local
employers, specifically labor exchange activities and labor market
information described in Sec. 463.430(a)(4)(ii) and (a)(6). Local areas
must establish and develop relationships and networks with large and
[[Page 54]]
small employers and their intermediaries. Local areas also must develop,
convene, or implement industry or sector partnerships.
(b) Customized business services may be provided to employers,
employer associations, or other such organizations. These services are
tailored for specific employers and may include:
(1) Customized screening and referral of qualified participants in
training services to employers;
(2) Customized services to employers, employer associations, or
other such organizations, on employment-related issues;
(3) Customized recruitment events and related services for employers
including targeted job fairs;
(4) Human resource consultation services, including but not limited
to assistance with:
(i) Writing/reviewing job descriptions and employee handbooks;
(ii) Developing performance evaluation and personnel policies;
(iii) Creating orientation sessions for new workers;
(iv) Honing job interview techniques for efficiency and compliance;
(v) Analyzing employee turnover;
(vi) Creating job accommodations and using assistive technologies;
or
(vii) Explaining labor and employment laws to help employers comply
with discrimination, wage/hour, and safety/health regulations;
(5) Customized labor market information for specific employers,
sectors, industries or clusters; and
(6) Other similar customized services.
(c) Local areas may also provide other business services and
strategies that meet the workforce investment needs of area employers,
in accordance with partner programs' statutory requirements and
consistent with Federal cost principles. These business services may be
provided through effective business intermediaries working in
conjunction with the Local WDB, or through the use of economic
development, philanthropic, and other public and private resources in a
manner determined appropriate by the Local WDB and in cooperation with
the State. Allowable activities, consistent with each partner's
authorized activities, include, but are not limited to:
(1) Developing and implementing industry sector strategies
(including strategies involving industry partnerships, regional skills
alliances, industry skill panels, and sectoral skills partnerships);
(2) Customized assistance or referral for assistance in the
development of a registered apprenticeship program;
(3) Developing and delivering innovative workforce investment
services and strategies for area employers, which may include career
pathways, skills upgrading, skill standard development and certification
for recognized postsecondary credential or other employer use, and other
effective initiatives for meeting the workforce investment needs of area
employers and workers;
(4) Assistance to area employers in managing reductions in force in
coordination with rapid response activities and with strategies for the
aversion of layoffs, which may include strategies such as early
identification of firms at risk of layoffs, use of feasibility studies
to assess the needs of and options for at-risk firms, and the delivery
of employment and training activities to address risk factors;
(5) The marketing of business services to appropriate area
employers, including small and mid-sized employers; and
(6) Assisting employers with accessing local, State, and Federal tax
credits.
(d) All business services and strategies must be reflected in the
local plan, described in 20 CFR 679.560(b)(3).
Sec. 463.440 When may a fee be charged for the business services in
this subpart?
(a) There is no requirement that a fee-for-service be charged to
employers.
(b) No fee may be charged for services provided in Sec. 463.435(a).
(c) A fee may be charged for services provided under Sec.
463.435(b) and (c). Services provided under Sec. 463.435(c) may be
provided through effective business intermediaries working in
conjunction with the Local WDB and may also be provided on a fee-for-
service basis or through the leveraging of economic development,
philanthropic, and other
[[Page 55]]
public and private resources in a manner determined appropriate by the
Local WDB. The Local WDB may examine the services provided compared with
the assets and resources available within the local one-stop delivery
system and through its partners to determine an appropriate cost
structure for services, if any.
(d) Any fees earned are recognized as program income and must be
expended by the partner in accordance with the partner program's
authorizing statute, implementing regulations, and Federal cost
principles identified in Uniform Guidance.
Sec. 463.500 What is the Memorandum of Understanding for the
one-stop delivery system and what must be included in the Memorandum
of Understanding?
(a) The MOU is the product of local discussion and negotiation, and
is an agreement developed and executed between the Local WDB and the
one-stop partners, with the agreement of the chief elected official and
the one-stop partners, relating to the operation of the one-stop
delivery system in the local area. Two or more local areas in a region
may develop a single joint MOU, if they are in a region that has
submitted a regional plan under sec. 106 of WIOA.
(b) The MOU must include:
(1) A description of services to be provided through the one-stop
delivery system, including the manner in which the services will be
coordinated and delivered through the system;
(2) Agreement on funding the costs of the services and the operating
costs of the system, including:
(i) Funding of infrastructure costs of one-stop centers in
accordance with Sec. Sec. 463.700 through 463.755; and
(ii) Funding of the shared services and operating costs of the one-
stop delivery system described in Sec. 463.760;
(3) Methods for referring individuals between the one-stop operators
and partners for appropriate services and activities;
(4) Methods to ensure that the needs of workers, youth, and
individuals with barriers to employment, including individuals with
disabilities, are addressed in providing access to services, including
access to technology and materials that are available through the one-
stop delivery system;
(5) The duration of the MOU and procedures for amending it; and
(6) Assurances that each MOU will be reviewed, and if substantial
changes have occurred, renewed, not less than once every 3-year period
to ensure appropriate funding and delivery of services.
(c) The MOU may contain any other provisions agreed to by the
parties that are consistent with WIOA title I, the authorizing statutes
and regulations of one-stop partner programs, and the WIOA regulations.
(d) When fully executed, the MOU must contain the signatures of the
Local WDB, one-stop partners, the chief elected official(s), and the
time period in which the agreement is effective. The MOU must be updated
not less than every 3 years to reflect any changes in the signatory
official of the Board, one-stop partners, and chief elected officials,
or one-stop infrastructure funding.
(e) If a one-stop partner appeal to the State regarding
infrastructure costs, using the process described in Sec. 463.750,
results in a change to the one-stop partner's infrastructure cost
contributions, the MOU must be updated to reflect the final one-stop
partner infrastructure cost contributions.
Sec. 463.505 Is there a single Memorandum of Understanding for the
local area, or must there be different Memoranda of Understanding between
the Local Workforce Development Board and each partner?
(a) A single ``umbrella'' MOU may be developed that addresses the
issues relating to the local one-stop delivery system for the Local WDB,
chief elected official and all partners. Alternatively, the Local WDB
(with agreement of chief elected official) may enter into separate
agreements between each partner or groups of partners.
(b) Under either approach, the requirements described in Sec.
463.500 apply. Since funds are generally appropriated annually, the
Local WDB may negotiate financial agreements with each partner annually
to update funding of
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services and operating costs of the system under the MOU.
Sec. 463.510 How must the Memorandum of Understanding be negotiated?
(a) WIOA emphasizes full and effective partnerships between Local
WDBs, chief elected officials, and one-stop partners. Local WDBs and
partners must enter into good-faith negotiations. Local WDBs, chief
elected officials, and one-stop partners may also request assistance
from a State agency responsible for administering the partner program,
the Governor, State WDB, or other appropriate parties on other aspects
of the MOU.
(b) Local WDBs and one-stop partners must establish, in the MOU, how
they will fund the infrastructure costs and other shared costs of the
one-stop centers. If agreement regarding infrastructure costs is not
reached when other sections of the MOU are ready, an interim
infrastructure funding agreement may be included instead, as described
in Sec. 463.715(c). Once agreement on infrastructure funding is
reached, the Local WDB and one-stop partners must amend the MOU to
include the infrastructure funding of the one-stop centers.
Infrastructure funding is described in detail in Sec. Sec. 463.700
through 463.760.
(c) The Local WDB must report to the State WDB, Governor, and
relevant State agency when MOU negotiations with one-stop partners have
reached an impasse.
(1) The Local WDB and partners must document the negotiations and
efforts that have taken place in the MOU. The State WDB, one-stop
partner programs, and the Governor may consult with the appropriate
Federal agencies to address impasse situations related to issues other
than infrastructure funding after attempting to address the impasse.
Impasses related to infrastructure cost funding must be resolved using
the State infrastructure cost funding mechanism described in Sec.
463.730.
(2) The Local WDB must report failure to execute an MOU with a
required partner to the Governor, State WDB, and the State agency
responsible for administering the partner's program. Additionally, if
the State cannot assist the Local WDB in resolving the impasse, the
Governor or the State WDB must report the failure to the Secretary of
Labor and to the head of any other Federal agency with responsibility
for oversight of a partner's program.
Sec. 463.600 Who may operate one-stop centers?
(a) One-stop operators may be a single entity (public, private, or
nonprofit) or a consortium of entities. If the consortium of entities is
one of one-stop partners, it must include a minimum of three of the one-
stop partners described in Sec. 463.400.
(b) The one-stop operator may operate one or more one-stop centers.
There may be more than one one-stop operator in a local area.
(c) The types of entities that may be a one-stop operator include:
(1) An institution of higher education;
(2) An Employment Service State agency established under the Wagner-
Peyser Act;
(3) A community-based organization, nonprofit organization, or
workforce intermediary;
(4) A private for-profit entity;
(5) A government agency;
(6) A Local WDB, with the approval of the chief elected official and
the Governor; or
(7) Another interested organization or entity, which is capable of
carrying out the duties of the one-stop operator. Examples may include a
local chamber of commerce or other business organization, or a labor
organization.
(d) Elementary schools and secondary schools are not eligible as
one-stop operators, except that a nontraditional public secondary school
such as a night school, adult school, or an area career and technical
education school may be selected.
(e) The State and Local WDBs must ensure that, in carrying out WIOA
programs and activities, one-stop operators:
(1) Disclose any potential conflicts of interest arising from the
relationships of the operators with particular training service
providers or other service providers (further discussed in 20 CFR
679.430);
[[Page 57]]
(2) Do not establish practices that create disincentives to
providing services to individuals with barriers to employment who may
require longer-term career and training services; and
(3) Comply with Federal regulations and procurement policies
relating to the calculation and use of profits, including those at 20
CFR 683.295, the Uniform Guidance at 2 CFR part 200, and other
applicable regulations and policies.
Sec. 463.605 How is the one-stop operator selected?
(a) Consistent with paragraphs (b) and (c) of this section, the
Local WDB must select the one-stop operator through a competitive
process, as required by sec. 121(d)(2)(A) of WIOA, at least once every 4
years. A State may require, or a Local WDB may choose to implement, a
competitive selection process more than once every 4 years.
(b) In instances in which a State is conducting the competitive
process described in paragraph (a) of this section, the State must
follow the same policies and procedures it uses for procurement with
non-Federal funds.
(c) All other non-Federal entities, including subrecipients of a
State (such as local areas), must use a competitive process based on
local procurement policies and procedures and the principles of
competitive procurement in the Uniform Guidance set out at 2 CFR 200.318
through 200.326. All references to ``noncompetitive proposals'' in the
Uniform Guidance at 2 CFR 200.320(f) will be read as ``sole source
procurement'' for the purposes of implementing this section.
(d) Entities must prepare written documentation explaining the
determination concerning the nature of the competitive process to be
followed in selecting a one-stop operator.
Sec. 463.610 When is the sole-source selection of one-stop operators
appropriate, and how is it conducted?
(a) States may select a one-stop operator through sole source
selection when allowed under the same policies and procedures used for
competitive procurement with non-Federal funds, while other non-Federal
entities including subrecipients of a State (such as local areas) may
select a one-stop operator through sole selection when consistent with
local procurement policies and procedures and the Uniform Guidance set
out at 2 CFR 200.320.
(b) In the event that sole source procurement is determined
necessary and reasonable, in accordance with Sec. 463.605(c), written
documentation must be prepared and maintained concerning the entire
process of making such a selection.
(c) Such sole source procurement must include appropriate conflict
of interest policies and procedures. These policies and procedures must
conform to the specifications in 20 CFR 679.430 for demonstrating
internal controls and preventing conflict of interest.
(d) A Local WDB may be selected as a one-stop operator through sole
source procurement only with agreement of the chief elected official in
the local area and the Governor. The Local WDB must establish sufficient
conflict of interest policies and procedures and these policies and
procedures must be approved by the Governor.
Sec. 463.615 May an entity currently serving as one-stop operator
compete to be a one-stop operator under the procurement requirements
of this subpart?
(a) Local WDBs may compete for and be selected as one-stop
operators, as long as appropriate firewalls and conflict of interest
policies and procedures are in place. These policies and procedures must
conform to the specifications in 20 CFR 679.430 for demonstrating
internal controls and preventing conflict of interest.
(b) State and local agencies may compete for and be selected as one-
stop operators by the Local WDB, as long as appropriate firewalls and
conflict of interest policies and procedures are in place. These
policies and procedures must conform to the specifications in 20 CFR
679.430 for demonstrating internal controls and preventing conflict of
interest.
(c) In the case of single-area States where the State WDB serves as
the Local WDB, the State agency is eligible to compete for and be
selected as operator as long as appropriate firewalls and conflict of
interest policies
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are in place and followed for the competition. These policies and
procedures must conform to the specifications in 20 CFR 679.430 for
demonstrating internal controls and preventing conflicts of interest.
Sec. 463.620 What is the one-stop operator's role?
(a) At a minimum, the one-stop operator must coordinate the service
delivery of required one-stop partners and service providers. Local WDBs
may establish additional roles of one-stop operator, including, but not
limited to: Coordinating service providers across the one-stop delivery
system, being the primary provider of services within the center,
providing some of the services within the center, or coordinating
service delivery in a multi-center area, which may include affiliated
sites. The competition for a one-stop operator must clearly articulate
the role of the one-stop operator.
(b)(1) Subject to paragraph (b)(2) of this section, a one-stop
operator may not perform the following functions: Convene system
stakeholders to assist in the development of the local plan; prepare and
submit local plans (as required under sec. 107 of WIOA); be responsible
for oversight of itself; manage or significantly participate in the
competitive selection process for one-stop operators; select or
terminate one-stop operators, career services, and youth providers;
negotiate local performance accountability measures; or develop and
submit budget for activities of the Local WDB in the local area.
(2) An entity serving as a one-stop operator, that also serves a
different role within the one-stop delivery system, may perform some or
all of these functions when it is acting in its other role, if it has
established sufficient firewalls and conflict of interest policies and
procedures. The policies and procedures must conform to the
specifications in 20 CFR 679.430 for demonstrating internal controls and
preventing conflict of interest.
Sec. 463.625 Can a one-stop operator also be a service provider?
Yes, but there must be appropriate firewalls in place in regards to
the competition, and subsequent oversight, monitoring, and evaluation of
performance of the service provider. The operator cannot develop,
manage, or conduct the competition of a service provider in which it
intends to compete. In cases where an operator is also a service
provider, there must be firewalls and internal controls within the
operator-service provider entity, as well as specific policies and
procedures at the Local WDB level regarding oversight, monitoring, and
evaluation of performance of the service provider. The firewalls must
conform to the specifications in 20 CFR 679.430 for demonstrating
internal controls and preventing conflicts of interest.
Sec. 463.630 Can State merit staff still work in a one-stop center
where the operator is not a governmental entity?
Yes. State merit staff can continue to perform functions and
activities in the one-stop center. The Local WDB and one-stop operator
must establish a system for management of merit staff in accordance with
State policies and procedures. Continued use of State merit staff for
the provision of Wagner-Peyser Act services or services from other
programs with merit staffing requirements must be included in the
competition for and final contract with the one-stop operator when
Wagner-Peyser Act services or services from other programs with merit
staffing requirements are being provided.
Sec. 463.635 What is the compliance date of the provisions of this
subpart?
(a) No later than July 1, 2017, one-stop operators selected under
the competitive process described in this subpart must be in place and
operating the one-stop center.
(b) By November 17, 2016, every Local WDB must demonstrate it is
taking steps to prepare for competition of its one-stop operator. This
demonstration may include, but is not limited to, market research,
requests for information, and conducting a cost and price analysis.
Sec. 463.700 What are the one-stop infrastructure costs?
(a) Infrastructure costs of one-stop centers are nonpersonnel costs
that are
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necessary for the general operation of the one-stop center, including:
(1) Rental of the facilities;
(2) Utilities and maintenance;
(3) Equipment (including assessment-related products and assistive
technology for individuals with disabilities); and
(4) Technology to facilitate access to the one-stop center,
including technology used for the center's planning and outreach
activities.
(b) Local WDBs may consider common identifier costs as costs of one-
stop infrastructure.
(c) Each entity that carries out a program or activities in a local
one-stop center, described in Sec. Sec. 463.400 through 463.410, must
use a portion of the funds available for the program and activities to
maintain the one-stop delivery system, including payment of the
infrastructure costs of one-stop centers. These payments must be in
accordance with this subpart; Federal cost principles, which require
that all costs must be allowable, reasonable, necessary, and allocable
to the program; and all other applicable legal requirements.
Sec. 463.705 What guidance must the Governor issue regarding one-stop
infrastructure funding?
(a) The Governor, after consultation with chief elected officials,
the State WDB, and Local WDBs, and consistent with guidance and policies
provided by the State WDB, must develop and issue guidance for use by
local areas, specifically:
(1) Guidelines for State-administered one-stop partner programs for
determining such programs' contributions to a one-stop delivery system,
based on such programs' proportionate use of such system, and relative
benefit received, consistent with Office of Management and Budget (OMB)
Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards in 2 CFR part 200, including determining
funding for the costs of infrastructure; and
(2) Guidance to assist Local WDBs, chief elected officials, and one-
stop partners in local areas in determining equitable and stable methods
of funding the costs of infrastructure at one-stop centers based on
proportionate use and relative benefit received, and consistent with
Federal cost principles contained in the Uniform Guidance at 2 CFR part
200.
(b) The guidance must include:
(1) The appropriate roles of the one-stop partner programs in
identifying one-stop infrastructure costs;
(2) Approaches to facilitate equitable and efficient cost allocation
that results in a reasonable cost allocation methodology where
infrastructure costs are charged to each partner based on its
proportionate use of the one-stop centers and relative benefit received,
consistent with Federal cost principles at 2 CFR part 200; and
(3) The timelines regarding notification to the Governor for not
reaching local agreement and triggering the State funding mechanism
described in Sec. 463.730, and timelines for a one-stop partner to
submit an appeal in the State funding mechanism.
Sec. 463.710 How are infrastructure costs funded?
Infrastructure costs are funded either through the local funding
mechanism described in Sec. 463.715 or through the State funding
mechanism described in Sec. 463.730.
Sec. 463.715 How are one-stop infrastructure costs funded in the
local funding mechanism?
(a) In the local funding mechanism, the Local WDB, chief elected
officials, and one-stop partners agree to amounts and methods of
calculating amounts each partner will contribute for one-stop
infrastructure funding, include the infrastructure funding terms in the
MOU, and sign the MOU. The local funding mechanism must meet all of the
following requirements:
(1) The infrastructure costs are funded through cash and fairly
evaluated non-cash and third-party in-kind partner contributions and
include any funding from philanthropic organizations or other private
entities, or through other alternative financing options, to provide a
stable and equitable funding stream for ongoing one-stop delivery system
operations;
[[Page 60]]
(2) Contributions must be negotiated between one-stop partners,
chief elected officials, and the Local WDB and the amount to be
contributed must be included in the MOU;
(3) The one-stop partner program's proportionate share of funding
must be calculated in accordance with the Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards
in 2 CFR part 200 based upon a reasonable cost allocation methodology
whereby infrastructure costs are charged to each partner in proportion
to its use of the one-stop center, relative to benefits received. Such
costs must also be allowable, reasonable, necessary, and allocable;
(4) Partner shares must be periodically reviewed and reconciled
against actual costs incurred, and adjusted to ensure that actual costs
charged to any one-stop partners are proportionate to the use of the
one-stop center and relative to the benefit received by the one-stop
partners and their respective programs or activities.
(b) In developing the section of the MOU on one-stop infrastructure
funding described in Sec. 463.755, the Local WDB and chief elected
officials will:
(1) Ensure that the one-stop partners adhere to the guidance
identified in Sec. 463.705 on one-stop delivery system infrastructure
costs.
(2) Work with one-stop partners to achieve consensus and informally
mediate any possible conflicts or disagreements among one-stop partners.
(3) Provide technical assistance to new one-stop partners and local
grant recipients to ensure that those entities are informed and
knowledgeable of the elements contained in the MOU and the one-stop
infrastructure costs arrangement.
(c) The MOU may include an interim infrastructure funding agreement,
including as much detail as the Local WDB has negotiated with one-stop
partners, if all other parts of the MOU have been negotiated, in order
to allow the partner programs to operate in the one-stop centers. The
interim infrastructure funding agreement must be finalized within 6
months of when the MOU is signed. If the interim infrastructure funding
agreement is not finalized within that timeframe, the Local WDB must
notify the Governor, as described in Sec. 463.725.
Sec. 463.720 What funds are used to pay for infrastructure costs in
the local one-stop infrastructure funding mechanism?
(a) In the local funding mechanism, one-stop partner programs may
determine what funds they will use to pay for infrastructure costs. The
use of these funds must be in accordance with the requirements in this
subpart, and with the relevant partner's authorizing statutes and
regulations, including, for example, prohibitions against supplanting
non-Federal resources, statutory limitations on administrative costs,
and all other applicable legal requirements. In the case of partners
administering programs authorized by title I of WIOA, these
infrastructure costs may be considered program costs. In the case of
partners administering adult education and literacy programs authorized
by title II of WIOA, these funds must include Federal funds made
available for the local administration of adult education and literacy
programs authorized by title II of WIOA. These funds may also include
non-Federal resources that are cash, in-kind or third-party
contributions. In the case of partners administering the Carl D. Perkins
Career and Technical Education Act of 2006, funds used to pay for
infrastructure costs may include funds available for local
administrative expenses, non-Federal resources that are cash, in-kind or
third-party contributions, and may include other funds made available by
the State.
(b) There are no specific caps on the amount or percent of overall
funding a one-stop partner may contribute to fund infrastructure costs
under the local funding mechanism, except that contributions for
administrative costs may not exceed the amount available for
administrative costs under the authorizing statute of the partner
program. However, amounts contributed for infrastructure costs must be
allowable and based on proportionate use of the one-stop centers and
relative benefit received by the partner program, taking into account
the total cost of the one-stop infrastructure as well as
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alternate financing options, and must be consistent with 2 CFR part 200,
including the Federal cost principles.
(c) Cash, non-cash, and third-party in-kind contributions may be
provided by one-stop partners to cover their proportionate share of
infrastructure costs.
(1) Cash contributions are cash funds provided to the Local WDB or
its designee by one-stop partners, either directly or by an interagency
transfer.
(2) Non-cash contributions are comprised of--
(i) Expenditures incurred by one-stop partners on behalf of the one-
stop center; and
(ii) Non-cash contributions or goods or services contributed by a
partner program and used by the one-stop center.
(3) Non-cash contributions, especially those set forth in paragraph
(c)(2)(ii) of this section, must be valued consistent with 2 CFR 200.306
to ensure they are fairly evaluated and meet the partners' proportionate
share.
(4) Third-party in-kind contributions are:
(i) Contributions of space, equipment, technology, non-personnel
services, or other like items to support the infrastructure costs
associated with one-stop operations, by a non-one-stop partner to
support the one-stop center in general, not a specific partner; or
(ii) Contributions by a non-one-stop partner of space, equipment,
technology, non-personnel services, or other like items to support the
infrastructure costs associated with one-stop operations, to a one-stop
partner to support its proportionate share of one-stop infrastructure
costs.
(iii) In-kind contributions described in paragraphs (c)(4)(i) and
(ii) of this section must be valued consistent with 2 CFR 200.306 and
reconciled on a regular basis to ensure they are fairly evaluated and
meet the proportionate share of the partner.
(5) All partner contributions, regardless of the type, must be
reconciled on a regular basis (i.e., monthly or quarterly), comparing
actual expenses incurred to relative benefits received, to ensure each
partner program is contributing its proportionate share in accordance
with the terms of the MOU.
Sec. 463.725 What happens if consensus on infrastructure funding is
not reached at the local level between the Local Workforce Development
Board, chief elected officials, and one-stop partners?
With regard to negotiations for infrastructure funding for Program
Year (PY) 2017 and for each subsequent program year thereafter, if the
Local WDB, chief elected officials, and one-stop partners do not reach
consensus on methods of sufficiently funding local infrastructure
through the local funding mechanism in accordance with the Governor's
guidance issued under Sec. 463.705 and consistent with the regulations
in Sec. Sec. 463.715 and 463.720, and include that consensus agreement
in the signed MOU, then the Local WDB must notify the Governor by the
deadline established by the Governor under Sec. 463.705(b)(3). Once
notified, the Governor must administer funding through the State funding
mechanism, as described in Sec. Sec. 463.730 through 463.738, for the
program year impacted by the local area's failure to reach consensus.
Sec. 463.730 What is the State one-stop infrastructure funding
mechanism?
(a) Consistent with sec. 121(h)(1)(A)(i)(II) of WIOA, if the Local
WDB, chief elected official, and one-stop partners in a local area do
not reach consensus agreement on methods of sufficiently funding the
costs of infrastructure of one-stop centers for a program year, the
State funding mechanism is applicable to the local area for that program
year.
(b) In the State funding mechanism, the Governor, subject to the
limitations in paragraph (c) of this section, determines one-stop
partner contributions after consultation with the chief elected
officials, Local WDBs, and the State WDB. This determination involves:
(1) The application of a budget for one-stop infrastructure costs as
described in Sec. 463.735, based on either agreement reached in the
local area negotiations or the State WDB formula outlined in Sec.
463.745;
(2) The determination of each local one-stop partner program's
proportionate use of the one-stop delivery system and relative benefit
received,
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consistent with the Uniform Guidance at 2 CFR part 200, including the
Federal cost principles, the partner programs' authorizing laws and
regulations, and other applicable legal requirements described in Sec.
463.736; and
(3) The calculation of required statewide program caps on
contributions to infrastructure costs from one-stop partner programs in
areas operating under the State funding mechanism as described in Sec.
463.738.
(c) In certain situations, the Governor does not determine the
infrastructure cost contributions for some one-stop partner programs
under the State funding mechanism.
(1) The Governor will not determine the contribution amounts for
infrastructure funds for Native American program grantees described in
20 CFR part 684. The appropriate portion of funds to be provided by
Native American program grantees to pay for one-stop infrastructure must
be determined as part of the development of the MOU described in Sec.
463.500 and specified in that MOU.
(2) In States in which the policy-making authority is placed in an
entity or official that is independent of the authority of the Governor
with respect to the funds provided for adult education and literacy
activities authorized under title II of WIOA, postsecondary career and
technical education activities authorized under the Carl D. Perkins
Career and Technical Education Act of 2006, or VR services authorized
under title I of the Rehabilitation Act of 1973 (other than sec. 112 or
part C), as amended by WIOA title IV, the determination of the amount
each of the applicable partners must contribute to assist in paying the
infrastructure costs of one-stop centers must be made by the official or
chief officer of the entity with such authority, in consultation with
the Governor.
(d) Any duty, ability, choice, responsibility, or other action
otherwise related to the determination of infrastructure costs
contributions that is assigned to the Governor in Sec. Sec. 463.730
through 463.745 also applies to this decision-making process performed
by the official or chief officer described in paragraph (c)(2) of this
section.
Sec. 463.731 What are the steps to determine the amount to be paid
under the State one-stop infrastructure funding mechanism?
(a) To initiate the State funding mechanism, a Local WDB that has
not reached consensus on methods of sufficiently funding local
infrastructure through the local funding mechanism as provided in Sec.
463.725 must notify the Governor by the deadline established by the
Governor under Sec. 463.705(b)(3).
(b) Once a Local WDB has informed the Governor that no consensus has
been reached:
(1) The Local WDB must provide the Governor with local negotiation
materials in accordance with Sec. 463.735(a).
(2) The Governor must determine the one-stop center budget by
either:
(i) Accepting a budget previously agreed upon by partner programs in
the local negotiations, in accordance with Sec. 463.735(b)(1); or
(ii) Creating a budget for the one-stop center using the State WDB
formula (described in Sec. 463.745) in accordance with Sec.
463.735(b)(3).
(3) The Governor then must establish a cost allocation methodology
to determine the one-stop partner programs' proportionate shares of
infrastructure costs, in accordance with Sec. 463.736.
(4)(i) Using the methodology established under paragraph (b)(2)(ii)
of this section, and taking into consideration the factors concerning
individual partner programs listed in Sec. 463.737(b)(2), the Governor
must determine each partner's proportionate share of the infrastructure
costs, in accordance with Sec. 463.737(b)(1), and
(ii) In accordance with Sec. 463.730(c), in some instances, the
Governor does not determine a partner program's proportionate share of
infrastructure funding costs, in which case it must be determined by the
entities named in Sec. 463.730(c)(1) and (2).
(5) The Governor must then calculate the statewide caps on the
amounts that partner programs may be required to contribute toward
infrastructure funding, according to the steps found at Sec.
463.738(a)(1) through (4).
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(6) The Governor must ensure that the aggregate total of the
infrastructure contributions according to proportionate share required
of all local partner programs in local areas under the State funding
mechanism do not exceed the cap for that particular program, in
accordance with Sec. 463.738(b)(1). If the total does not exceed the
cap, the Governor must direct each one-stop partner program to pay the
amount determined under Sec. 463.737(a) toward the infrastructure
funding costs of the one-stop center. If the total does exceed the cap,
then to determine the amount to direct each one-stop program to pay, the
Governor may:
(i) Ascertain, in accordance with Sec. 463.738(b)(2)(i), whether
the local partner or partners whose proportionate shares are calculated
above the individual program caps are willing to voluntarily contribute
above the capped amount to equal that program's proportionate share; or
(ii) Choose from the options provided in Sec. 463.738(b)(2)(ii),
including having the local area re-enter negotiations to reassess each
one-stop partner's proportionate share and make adjustments or identify
alternate sources of funding to make up the difference between the
capped amount and the proportionate share of infrastructure funding of
the one-stop partner.
(7) If none of the solutions given in paragraphs (b)(6)(i) and (ii)
of this section prove to be viable, the Governor must reassess the
proportionate shares of each one-stop partner so that the aggregate
amount attributable to the local partners for each program is less than
that program's cap amount. Upon such reassessment, the Governor must
direct each one-stop partner program to pay the reassessed amount toward
the infrastructure funding costs of the one-stop center.
Sec. 463.735 How are infrastructure cost budgets for the one-stop
centers in a local area determined in the State one-stop infrastructure
funding mechanism?
(a) Local WDBs must provide to the Governor appropriate and relevant
materials and documents used in the negotiations under the local funding
mechanism, including but not limited to: The local WIOA plan, the cost
allocation method or methods proposed by the partners to be used in
determining proportionate share, the proposed amounts or budget to fund
infrastructure, the amount of total partner funds included, the type of
funds or non-cash contributions, proposed one-stop center budgets, and
any agreed upon or proposed MOUs.
(b)(1) If a local area has reached agreement as to the
infrastructure budget for the one-stop centers in the local area, it
must provide this budget to the Governor as required by paragraph (a) of
this section. If, as a result of the agreed upon infrastructure budget,
only the individual programmatic contributions to infrastructure funding
based upon proportionate use of the one-stop centers and relative
benefit received are at issue, the Governor may accept the budget, from
which the Governor must calculate each partner's contribution consistent
with the cost allocation methodologies contained in the Uniform Guidance
found in 2 CFR part 200, as described in Sec. 463.736.
(2) The Governor may also take into consideration the extent to
which the partners in the local area have agreed in determining the
proportionate shares, including any agreements reached at the local
level by one or more partners, as well as any other element or product
of the negotiating process provided to the Governor as required by
paragraph (a) of this section.
(3) If a local area has not reached agreement as to the
infrastructure budget for the one-stop centers in the local area, or if
the Governor determines that the agreed upon budget does not adequately
meet the needs of the local area or does not reasonably work within the
confines of the local area's resources in accordance with the Governor's
one-stop budget guidance (which is required to be issued by WIOA sec.
121(h)(1)(B) and under Sec. 463.705), then, in accordance with Sec.
463.745, the Governor must use the formula developed by the State WDB
based on at least the factors required under Sec. 463.745, and any
associated weights to determine the local area budget.
[[Page 64]]
Sec. 463.736 How does the Governor establish a cost allocation
methodology used to determine the one-stop partner programs'
proportionate shares of infrastructure costs under the State one-stop
infrastructure funding mechanism?
Once the appropriate budget is determined for a local area through
either method described in Sec. 463.735 (by acceptance of a budget
agreed upon in local negotiation or by the Governor applying the formula
detailed in Sec. 463.745), the Governor must determine the appropriate
cost allocation methodology to be applied to the one-stop partners in
such local area, consistent with the Federal cost principles permitted
under 2 CFR part 200, to fund the infrastructure budget.
Sec. 463.737 How are one-stop partner programs' proportionate shares
of infrastructure costs determined under the State one-stop
infrastructure funding mechanism?
(a) The Governor must direct the one-stop partners in each local
area that have not reached agreement under the local funding mechanism
to pay what the Governor determines is each partner program's
proportionate share of infrastructure funds for that area, subject to
the application of the caps described in Sec. 463.738.
(b)(1) The Governor must use the cost allocation methodology--as
determined under Sec. 463.736--to determine each partner's
proportionate share of the infrastructure costs under the State funding
mechanism, subject to considering the factors described in paragraph
(b)(2) of this section.
(2) In determining each partner program's proportionate share of
infrastructure costs, the Governor must take into account the costs of
administration of the one-stop delivery system for purposes not related
to one-stop centers for each partner (such as costs associated with
maintaining the Local WDB or information technology systems), as well as
the statutory requirements for each partner program, the partner
program's ability to fulfill such requirements, and all other applicable
legal requirements. The Governor may also take into consideration the
extent to which the partners in the local area have agreed in
determining the proportionate shares, including any agreements reached
at the local level by one or more partners, as well as any other
materials or documents of the negotiating process, which must be
provided to the Governor by the Local WDB and described in Sec.
463.735(a).
Sec. 463.738 How are statewide caps on the contributions for one-stop
infrastructure funding determined in the State one-stop infrastructure
funding mechanism?
(a) The Governor must calculate the statewide cap on the
contributions for one-stop infrastructure funding required to be
provided by each one-stop partner program for those local areas that
have not reached agreement. The cap is the amount determined under
paragraph (a)(4) of this section, which the Governor derives by:
(1) First, determining the amount resulting from applying the
percentage for the corresponding one-stop partner program provided in
paragraph (d) of this section to the amount of Federal funds provided to
carry out the one-stop partner program in the State for the applicable
fiscal year;
(2) Second, selecting a factor (or factors) that reasonably
indicates the use of one-stop centers in the State, applying such
factor(s) to all local areas in the State, and determining the
percentage of such factor(s) applicable to the local areas that reached
agreement under the local funding mechanism in the State;
(3) Third, determining the amount resulting from applying the
percentage determined in paragraph (a)(2) of this section to the amount
determined under paragraph (a)(1) of this section for the one-stop
partner program; and
(4) Fourth, determining the amount that results from subtracting the
amount determined under paragraph (a)(3) of this section from the amount
determined under paragraph (a)(1) of this section. The outcome of this
final calculation results in the partner program's cap.
(b)(1) The Governor must ensure that the funds required to be
contributed by each partner program in the local areas in the State
under the State funding
[[Page 65]]
mechanism, in aggregate, do not exceed the statewide cap for each
program as determined under paragraph (a) of this section.
(2) If the contributions initially determined under Sec. 463.737
would exceed the applicable cap determined under paragraph (a) of this
section, the Governor may:
(i) Ascertain if the one-stop partner whose contribution would
otherwise exceed the cap determined under paragraph (a) of this section
will voluntarily contribute above the capped amount, so that the total
contributions equal that partner's proportionate share. The one-stop
partner's contribution must still be consistent with the program's
authorizing laws and regulations, the Federal cost principles in 2 CFR
part 200, and other applicable legal requirements; or
(ii) Direct or allow the Local WDB, chief elected officials, and
one-stop partners to: Re-enter negotiations, as necessary; reduce the
infrastructure costs to reflect the amount of funds that are available
for such costs without exceeding the cap levels; reassess the
proportionate share of each one-stop partner; or identify alternative
sources of financing for one-stop infrastructure funding, consistent
with the requirement that each one-stop partner pay an amount that is
consistent with the proportionate use of the one-stop center and
relative benefit received by the partner, the program's authorizing laws
and regulations, the Federal cost principles in 2 CFR part 200, and
other applicable legal requirements.
(3) If applicable under paragraph (b)(2)(ii) of this section, the
Local WDB, chief elected officials, and one-stop partners, after
renegotiation, may come to agreement, sign an MOU, and proceed under the
local funding mechanism. Such actions do not require the redetermination
of the applicable caps under paragraph (a) of this section.
(4) If, after renegotiation, agreement among partners still cannot
be reached or alternate financing cannot be identified, the Governor may
adjust the specified allocation, in accordance with the amounts
available and the limitations described in paragraph (d) of this
section. In determining these adjustments, the Governor may take into
account information relating to the renegotiation as well as the
information described in Sec. 463.735(a).
(c) Limitations. Subject to paragraph (a) of this section and in
accordance with WIOA sec. 121(h)(2)(D), the following limitations apply
to the Governor's calculations of the amount that one-stop partners in
local areas that have not reached agreement under the local funding
mechanism may be required under Sec. 463.736 to contribute to one-stop
infrastructure funding:
(1) WIOA formula programs and Wagner-Peyser Act Employment Service.
The portion of funds required to be contributed under the WIOA youth,
adult, or dislocated worker programs, or under the Wagner-Peyser Act (29
U.S.C. 49 et seq.) must not exceed three percent of the amount of the
program in the State for a program year.
(2) Other one-stop partners. For required one-stop partners other
than those specified in paragraphs (c)(1), (3), (5), and (6) of this
section, the portion of funds required to be contributed must not exceed
1.5 percent of the amount of Federal funds provided to carry out that
program in the State for a fiscal year. For purposes of the Carl D.
Perkins Career and Technical Education Act of 2006, the cap on
contributions is determined based on the funds made available by the
State for postsecondary level programs and activities under sec. 132 of
the Carl D. Perkins Career and Technical Education Act and the amount of
funds used by the State under sec. 112(a)(3) of the Perkins Act during
the prior year to administer postsecondary level programs and
activities, as applicable.
(3) Vocational Rehabilitation
(i) Within a State, for the entity or entities administering the
programs described in WIOA sec. 121(b)(1)(B)(iv) and Sec. 463.400, the
allotment is based on the one State Federal fiscal year allotment, even
in instances where that allotment is shared between two State agencies,
and the cumulative portion of funds required to be contributed must not
exceed--
(A) 0.75 percent of the amount of Federal funds provided to carry
out such program in the State for Fiscal Year 2016 for purposes of
applicability of the State funding mechanism for PY 2017;
[[Page 66]]
(B) 1.0 percent of the amount provided to carry out such program in
the State for Fiscal Year 2017 for purposes of applicability of the
State funding mechanism for PY 2018;
(C) 1.25 percent of the amount provided to carry out such program in
the State for Fiscal Year 2018 for purposes of applicability of the
State funding mechanism for PY 2019;
(D) 1.5 percent of the amount provided to carry out such program in
the State for Fiscal Year 2019 and following years for purposes of
applicability of the State funding mechanism for PY 2020 and subsequent
years.
(ii) The limitations set forth in paragraph (d)(3)(i) of this
section for any given fiscal year must be based on the final VR
allotment to the State in the applicable Federal fiscal year.
(4) Federal direct spending programs. For local areas that have not
reached a one-stop infrastructure funding agreement by consensus, an
entity administering a program funded with direct Federal spending, as
defined in sec. 250(c)(8) of the Balanced Budget and Emergency Deficit
Control Act of 1985, as in effect on February 15, 2014 (2 U.S.C.
900(c)(8)), must not be required to provide more for infrastructure
costs than the amount that the Governor determined (as described in
Sec. 463.737).
(5) TANF programs. For purposes of TANF, the cap on contributions is
determined based on the total Federal TANF funds expended by the State
for work, education, and training activities during the prior Federal
fiscal year (as reported to the Department of Health and Human Services
(HHS) on the quarterly TANF Financial Report form), plus any additional
amount of Federal TANF funds that the State TANF agency reasonably
determines was expended for administrative costs in connection with
these activities but that was separately reported to HHS as an
administrative cost. The State's contribution to the one-stop
infrastructure must not exceed 1.5 percent of these combined
expenditures.
(6) Community Services Block Grant (CSBG) programs. For purposes of
CSBG, the cap on contributions will be based on the total amount of CSBG
funds determined by the State to have been expended by local CSBG-
eligible entities for the provision of employment and training
activities during the prior Federal fiscal year for which information is
available (as reported to HHS on the CSBG Annual Report) and any
additional amount that the State CSBG agency reasonably determines was
expended for administrative purposes in connection with these activities
and was separately reported to HHS as an administrative cost. The
State's contribution must not exceed 1.5 percent of these combined
expenditures.
(d) For programs for which it is not otherwise feasible to determine
the amount of Federal funding used by the program until the end of that
program's operational year--because, for example, the funding available
for education, employment, and training activities is included within
funding for the program that may also be used for other unrelated
activities--the determination of the Federal funds provided to carry out
the program for a fiscal year under paragraph (a)(1) of this section may
be determined by:
(1) The percentage of Federal funds available to the one-stop
partner program that were used by the one-stop partner program for
education, employment, and training activities in the previous fiscal
year for which data are available; and
(2) Applying the percentage determined under paragraph (d)(1) of
this section to the total amount of Federal funds available to the one-
stop partner program for the fiscal year for which the determination
under paragraph (a)(1) of this section applies.
Sec. 463.740 What funds are used to pay for infrastructure costs
in the State one-stop infrastructure funding mechanism?
(a) In the State funding mechanism, infrastructure costs for WIOA
title I programs, including Native American Programs described in 20 CFR
part 684, may be paid using program funds, administrative funds, or
both. Infrastructure costs for the Senior Community Service Employment
Program under title V of the Older Americans Act (42 U.S.C. 3056 et
seq.) may also be paid
[[Page 67]]
using program funds, administrative funds, or both.
(b) In the State funding mechanism, infrastructure costs for other
required one-stop partner programs (listed in Sec. Sec. 463.400 through
463.410) are limited to the program's administrative funds, as
appropriate.
(c) In the State funding mechanism, infrastructure costs for the
adult education program authorized by title II of WIOA must be paid from
the funds that are available for local administration and may be paid
from funds made available by the State or non-Federal resources that are
cash, in-kind, or third-party contributions.
(d) In the State funding mechanism, infrastructure costs for the
Carl D. Perkins Career and Technical Education Act of 2006 must be paid
from funds available for local administration of postsecondary level
programs and activities to eligible recipients or consortia of eligible
recipients and may be paid from funds made available by the State or
non-Federal resources that are cash, in-kind, or third-party
contributions.
Sec. 463.745 What factors does the State Workforce Development Board
use to develop the formula described in Workforce Innovation and
Opportunity Act, which
is used by the Governor to determine the appropriate one-stop
infrastructure budget for each local area operating under the
State infrastructure funding mechanism, if no reasonably
implementable locally negotiated budget exists?
The State WDB must develop a formula, as described in WIOA sec.
121(h)(3)(B), to be used by the Governor under Sec. 463.735(b)(3) in
determining the appropriate budget for the infrastructure costs of one-
stop centers in the local areas that do not reach agreement under the
local funding mechanism and are, therefore, subject to the State funding
mechanism. The formula identifies the factors and corresponding weights
for each factor that the Governor must use, which must include: the
number of one-stop centers in a local area; the population served by
such centers; the services provided by such centers; and any factors
relating to the operations of such centers in the local area that the
State WDB determines are appropriate. As indicated in Sec.
463.735(b)(1), if the local area has agreed on such a budget, the
Governor may accept that budget in lieu of applying the formula factors.
Sec. 463.750 When and how can a one-stop partner appeal a one-stop
infrastructure amount designated by the State under the State
infrastructure funding mechanism?
(a) The Governor must establish a process, described under sec.
121(h)(2)(E) of WIOA, for a one-stop partner administering a program
described in Sec. Sec. 463.400 through 463.410 to appeal the Governor's
determination regarding the one-stop partner's portion of funds to be
provided for one-stop infrastructure costs. This appeal process must be
described in the Unified State Plan.
(b) The appeal may be made on the ground that the Governor's
determination is inconsistent with proportionate share requirements in
Sec. 463.735(a), the cost contribution limitations in Sec. 463.735(b),
the cost contribution caps in Sec. 463.738, consistent with the process
described in the State Plan.
(c) The process must ensure prompt resolution of the appeal in order
to ensure the funds are distributed in a timely manner, consistent with
the requirements of 20 CFR 683.630.
(d) The one-stop partner must submit an appeal in accordance with
State's deadlines for appeals specified in the guidance issued under
Sec. 463.705(b)(3), or if the State has not set a deadline, within 21
days from the Governor's determination.
Sec. 463.755 What are the required elements regarding infrastructure
funding that must be included in the one-stop Memorandum of
Understanding?
The MOU, fully described in Sec. 463.500, must contain the
following information whether the local areas use either the local one-
stop or the State funding method:
(a) The period of time in which this infrastructure funding
agreement is effective. This may be a different time period than the
duration of the MOU.
(b) Identification of an infrastructure and shared services budget
that will be
[[Page 68]]
periodically reconciled against actual costs incurred and adjusted
accordingly to ensure that it reflects a cost allocation methodology
that demonstrates how infrastructure costs are charged to each partner
in proportion to its use of the one-stop center and relative benefit
received, and that complies with 2 CFR part 200 (or any corresponding
similar regulation or ruling).
(c) Identification of all one-stop partners, chief elected
officials, and Local WDB participating in the infrastructure funding
arrangement.
(d) Steps the Local WDB, chief elected officials, and one-stop
partners used to reach consensus or an assurance that the local area
followed the guidance for the State funding process.
(e) Description of the process to be used among partners to resolve
issues during the MOU duration period when consensus cannot be reached.
(f) Description of the periodic modification and review process to
ensure equitable benefit among one-stop partners.
Sec. 463.760 How do one-stop partners jointly fund other shared
costs under the Memorandum of Understanding?
(a) In addition to jointly funding infrastructure costs, one-stop
partners listed in Sec. Sec. 463.400 through 463.410 must use a portion
of funds made available under their programs' authorizing Federal law
(or fairly evaluated in-kind contributions) to pay the additional costs
relating to the operation of the one-stop delivery system. These other
costs must include applicable career services and may include other
costs, including shared services.
(b) For the purposes of paragraph (a) of this section, shared
services' costs may include the costs of shared services that are
authorized for and may be commonly provided through the one-stop partner
programs to any individual, such as initial intake, assessment of needs,
appraisal of basic skills, identification of appropriate services to
meet such needs, referrals to other one-stop partners, and business
services. Shared operating costs may also include shared costs of the
Local WDB's functions.
(c) Contributions to the additional costs related to operation of
the one-stop delivery system may be cash, non-cash, or third-party in-
kind contributions, consistent with how these are described in Sec.
463.720(c).
(d) The shared costs described in paragraph (a) of this section must
be allocated according to the proportion of benefit received by each of
the partners, consistent with the Federal law authorizing the partner's
program, and consistent with all other applicable legal requirements,
including Federal cost principles in 2 CFR part 200 (or any
corresponding similar regulation or ruling) requiring that costs are
allowable, reasonable, necessary, and allocable.
(e) Any shared costs agreed upon by the one-stop partners must be
included in the MOU.
Sec. 463.800 How are one-stop centers and one-stop delivery systems
certified for effectiveness, physical and programmatic accessibility,
and continuous improvement?
(a) The State WDB, in consultation with chief elected officials and
Local WDBs, must establish objective criteria and procedures for Local
WDBs to use when certifying one-stop centers.
(1) The State WDB, in consultation with chief elected officials and
Local WDBs, must review and update the criteria every 2 years as part of
the review and modification of State Plans pursuant to Sec. 463.135.
(2) The criteria must be consistent with the Governor's and State
WDB's guidelines, guidance, and policies on infrastructure funding
decisions, described in Sec. 463.705. The criteria must evaluate the
one-stop centers and one-stop delivery system for effectiveness,
including customer satisfaction, physical and programmatic
accessibility, and continuous improvement.
(3) When the Local WDB is the one-stop operator as described in 20
CFR 679.410, the State WDB must certify the one-stop center.
(b) Evaluations of effectiveness must include how well the one-stop
center integrates available services for participants and businesses,
meets the workforce development needs of participants and the employment
needs of
[[Page 69]]
local employers, operates in a cost-efficient manner, coordinates
services among the one-stop partner programs, and provides access to
partner program services to the maximum extent practicable, including
providing services outside of regular business hours where there is a
workforce need, as identified by the Local WDB. These evaluations must
take into account feedback from one-stop customers. They must also
include evaluations of how well the one-stop center ensures equal
opportunity for individuals with disabilities to participate in or
benefit from one-stop center services. These evaluations must include
criteria evaluating how well the centers and delivery systems take
actions to comply with the disability-related regulations implementing
WIOA sec. 188, set forth at 29 CFR part 38. Such actions include, but
are not limited to:
(1) Providing reasonable accommodations for individuals with
disabilities;
(2) Making reasonable modifications to policies, practices, and
procedures where necessary to avoid discrimination against persons with
disabilities;
(3) Administering programs in the most integrated setting
appropriate;
(4) Communicating with persons with disabilities as effectively as
with others;
(5) Providing appropriate auxiliary aids and services, including
assistive technology devices and services, where necessary to afford
individuals with disabilities an equal opportunity to participate in,
and enjoy the benefits of, the program or activity; and
(6) Providing for the physical accessibility of the one-stop center
to individuals with disabilities.
(c) Evaluations of continuous improvement must include how well the
one-stop center supports the achievement of the negotiated local levels
of performance for the indicators of performance for the local area
described in sec. 116(b)(2) of WIOA and part 463. Other continuous
improvement factors may include a regular process for identifying and
responding to technical assistance needs, a regular system of continuing
professional staff development, and having systems in place to capture
and respond to specific customer feedback.
(d) Local WDBs must assess at least once every 3 years the
effectiveness, physical and programmatic accessibility, and continuous
improvement of one-stop centers and the one-stop delivery systems using
the criteria and procedures developed by the State WDB. The Local WDB
may establish additional criteria, or set higher standards for service
coordination, than those set by the State criteria. Local WDBs must
review and update the criteria every 2 years as part of the Local Plan
update process described in Sec. 463.580. Local WDBs must certify one-
stop centers in order to be eligible to use infrastructure funds in the
State funding mechanism described in Sec. 463.730.
(e) All one-stop centers must comply with applicable physical and
programmatic accessibility requirements, as set forth in 29 CFR part 38,
the implementing regulations of WIOA sec. 188.
Sec. 463.900 What is the common identifier to be used by each one-stop
delivery system?
(a) The common one-stop delivery system identifier is ``American Job
Center.''
(b) As of November 17, 2016, each one-stop delivery system must
include the ``American Job Center'' identifier or ``a proud partner of
the American Job Center network'' on all primary electronic resources
used by the one-stop delivery system, and on any newly printed,
purchased, or created materials.
(c) As of July 1, 2017, each one-stop delivery system must include
the ``American Job Center'' identifier or ``a proud partner of the
American Job Center network'' on all products, programs, activities,
services, electronic resources, facilities, and related property and new
materials used in the one-stop delivery system.
(d) One-stop partners, States, or local areas may use additional
identifiers on their products, programs, activities, services,
facilities, and related property and materials.
Subpart K [Reserved]
PART 464 [RESERVED]
[[Page 70]]
PART 472 [RESERVED]
PART 477 [RESERVED]
PARTS 489 499 [RESERVED]
[[Page 71]]
CHAPTER V--OFFICE OF BILINGUAL EDUCATION AND MINORITY LANGUAGES AFFAIRS,
DEPARTMENT OF EDUCATION
--------------------------------------------------------------------
Part Page
500-599
[Reserved]
[[Page 73]]
PARTS 500 599 [RESERVED]
[[Page 75]]
CHAPTER VI--OFFICE OF POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION
--------------------------------------------------------------------
Part Page
600 Institutional eligibility under the Higher
Education Act of 1965, as amended....... 77
601 Institution and lender requirements relating
to education loans...................... 113
602 The Secretary's recognition of accrediting
agencies................................ 121
603 Secretary's recognition procedures for State
agencies................................ 150
604 Federal-State relationship agreements....... 153
606 Developing Hispanic-serving institutions
program................................. 155
607 Strengthening institutions program.......... 166
608 Strengthening historically Black colleges
and universities program................ 180
609 Strengthening historically Black graduate
institutions program.................... 187
628 Endowment challenge grant program........... 192
637 Minority science and engineering improvement
program................................. 200
642 Training program for Federal TRIO programs.. 206
643 Talent search............................... 214
644 Educational opportunity centers............. 226
645 Upward bound program........................ 236
646 Student support services program............ 252
647 Ronald E. McNair Postbaccalaureate
Achievement Program..................... 263
648 Graduate assistance in areas of national
need.................................... 273
650 Jacob K. Javits fellowship program.......... 284
654
[Reserved]
655 International education programs--general
provisions.............................. 289
656 National resource centers program for
foreign language and area studies or
foreign language and international
studies................................. 292
657 Foreign language and area studies
fellowships program..................... 299
[[Page 76]]
658 Undergraduate international studies and
foreign language program................ 305
660 The international research and studies
program................................. 310
661 Business and international education program 314
662 Fulbright-Hays doctoral dissertation
research abroad fellowship program...... 316
663 Fulbright-Hays faculty research abroad
fellowship program...................... 320
664 Fulbright-Hays group projects abroad program 325
668 Student assistance general provisions....... 329
669 Language resource centers program........... 563
673 General provisions for the Federal Perkins
loan program, Federal work-study
program, and Federal supplemental
educational opportunity grant program... 565
674 Federal Perkins loan program................ 571
675 Federal work-study programs................. 634
676 Federal supplemental educational opportunity
grant program........................... 648
677-679
[Reserved]
[[Page 77]]
PART 600_INSTITUTIONAL ELIGIBILITY UNDER THE HIGHER EDUCATION ACT OF 1965,
AS AMENDED--Table of Contents
Subpart A_General
Sec.
600.1 Scope.
600.2 Definitions.
600.3 [Reserved]
600.4 Institution of higher education.
600.5 Proprietary institution of higher education.
600.6 Postsecondary vocational institution.
600.7 Conditions of institutional ineligibility.
600.8 Treatment of a branch campus.
600.9 State authorization.
600.10 Date, extent, duration, and consequence of eligibility.
600.11 Special rules regarding institutional accreditation or
preaccreditation.
600.12 Severability.
Subpart B_Procedures for Establishing Eligibility
600.20 Notice and application procedures for establishing,
reestablishing, maintaining, or expanding institutional
eligibility and certification.
600.21 Updating application information.
Subpart C_Maintaining Eligibility
600.30 [Reserved]
600.31 Change in ownership resulting in a change in control for private
nonprofit, private for-profit and public institutions.
600.32 Eligibility of additional locations.
600.33 Severability.
Subpart D_Loss of Eligibility
600.40 Loss of eligibility.
600.41 Termination and emergency action proceedings.
600.42 Severability.
Subpart E_Eligibility of Foreign Institutions To Apply To Participate in
the Federal Family Education Loan (FFEL) Programs
600.51 Purpose and scope.
600.52 Definitions.
600.53 Requesting an eligibility determination.
600.54 Criteria for determining whether a foreign institution is
eligible to apply to participate in the Direct Loan Program.
600.55 Additional criteria for determining whether a foreign graduate
medical school is eligible to apply to participate in the
Direct Loan Program.
600.56 Additional criteria for determining whether a foreign veterinary
school is eligible to apply to participate in the FFEL
programs.
600.57 Additional criteria for determining whether a foreign nursing
school is eligible to apply to participate in the Direct Loan
Program.
600.58 Duration of eligibility determination.
Authority: 20 U.S.C. 1001, 1002, 1003, 1088, 1091, 1094, 1099b, and
1099c, unless otherwise noted.
Source: 53 FR 11210, Apr. 5, 1988, unless otherwise noted.
Subpart A_General
Source: 59 FR 22336, Apr. 29, 1994, unless otherwise noted.
Sec. 600.1 Scope.
This part establishes the rules and procedures that the Secretary
uses to determine whether an educational institution qualifies in whole
or in part as an eligible institution of higher education under the
Higher Education Act of 1965, as amended (HEA). An eligible institution
of higher education may apply to participate in programs authorized by
the HEA (HEA programs).
(Authority: 20 U.S.C. 1088, 1094, 1099b, 1099c, and 1141)
Sec. 600.2 Definitions.
The following definitions apply to terms used in this part:
Accredited: The status of public recognition that a nationally
recognized accrediting agency grants to an institution or educational
program that meets the agency's established requirements.
Additional location: A facility that is geographically apart from
the main campus of the institution and at which the institution offers
at least 50 percent of a program and may qualify as a branch campus.
Award year: The period of time from July 1 of one year through June
30 of the following year.
Branch campus: An additional location of an institution that is
geographically apart and independent of the main campus of the
institution. The Secretary considers a location of an institution to be
independent of the main campus if the location--
[[Page 78]]
(1) Is permanent in nature;
(2) Offers courses in educational programs leading to a degree,
certificate, or other recognized educational credential;
(3) Has its own faculty and administrative or supervisory
organization; and
(4) Has its own budgetary and hiring authority.
Clock hour: A period of time consisting of--
(1) A 50- to 60-minute class, lecture, or recitation in a 60-minute
period;
(2) A 50- to 60-minute faculty-supervised laboratory, shop training,
or internship in a 60-minute period; or
(3) Sixty minutes of preparation in a correspondence course.
Correspondence course: (1) A course provided by an institution under
which the institution provides instructional materials, by mail or
electronic transmission, including examinations on the materials, to
students who are separated from the instructor. Interaction between the
instructor and student is limited, is not regular and substantive, and
is primarily initiated by the student. Correspondence courses are
typically self-paced.
(2) If a course is part correspondence and part residential
training, the Secretary considers the course to be a correspondence
course.
(3) A correspondence course is not distance education.
Credit hour: Except as provided in 34 CFR 668.8(k) and (l), a credit
hour is an amount of work represented in intended learning outcomes and
verified by evidence of student achievement that is an institutionally
established equivalency that reasonably approximates not less than--
(1) One hour of classroom or direct faculty instruction and a
minimum of two hours of out of class student work each week for
approximately fifteen weeks for one semester or trimester hour of
credit, or ten to twelve weeks for one quarter hour of credit, or the
equivalent amount of work over a different amount of time; or
(2) At least an equivalent amount of work as required in paragraph
(1) of this definition for other academic activities as established by
the institution including laboratory work, internships, practica, studio
work, and other academic work leading to the award of credit hours.
Direct assessment program: A program as described in 34 CFR 668.10.
Distance education means education that uses one or more of the
technologies listed in paragraphs (1) through (4) of this definition to
deliver instruction to students who are separated from the instructor
and to support regular and substantive interaction between the students
and the instructor, either synchronously or asynchronously. The
technologies may include--
(1) The internet;
(2) One-way and two-way transmissions through open broadcast, closed
circuit, cable, microwave, broadband lines, fiber optics, satellite, or
wireless communications devices;
(3) Audio conferencing; or
(4) Video cassettes, DVDs, and CD-ROMs, if the cassettes, DVDs, or
CD-ROMs are used in a course in conjunction with any of the technologies
listed in paragraphs (1) through (3) of this definition.
Educational program: (1) A legally authorized postsecondary program
of organized instruction or study that:
(i) Leads to an academic, professional, or vocational degree, or
certificate, or other recognized educational credential, or is a
comprehensive transition and postsecondary program, as described in 34
CFR part 668, subpart O; and
(ii) May, in lieu of credit hours or clock hours as a measure of
student learning, utilize direct assessment of student learning, or
recognize the direct assessment of student learning by others, if such
assessment is consistent with the accreditation of the institution or
program utilizing the results of the assessment and with the provisions
of Sec. 668.10.
(2) The Secretary does not consider that an institution provides an
educational program if the institution does not provide instruction
itself (including a course of independent study) but merely gives credit
for one or more of the following: Instruction provided by other
institutions or schools; examinations or direct assessments provided by
agencies or organizations; or other
[[Page 79]]
accomplishments such as ``life experience.''
Eligible institution: An institution that--
(1) Qualifies as--
(i) An institution of higher education, as defined in Sec. 600.4;
(ii) A proprietary institution of higher education, as defined in
Sec. 600.5; or
(iii) A postsecondary vocational institution, as defined in Sec.
600.6; and
(2) Meets all the other applicable provisions of this part.
Federal Family Education Loan (FFEL) Programs: The loan programs
(formerly called the Guaranteed Student Loan (GSL) programs) authorized
by title IV-B of the HEA, including the Federal Stafford Loan, Federal
PLUS, Federal Supplemental Loans for Students (Federal SLS), and Federal
Consolidation Loan programs, in which lenders use their own funds to
make loans to enable students or their parents to pay the costs of the
students' attendance at eligible institutions. The Federal Stafford
Loan, Federal PLUS, Federal SLS, and Federal Consolidation Loan programs
are defined in 34 CFR part 668.
Incarcerated student: A student who is serving a criminal sentence
in a Federal, State, or local penitentiary, prison, jail, reformatory,
work farm, or other similar correctional institution. A student is not
considered incarcerated if that student is in a half-way house or home
detention or is sentenced to serve only weekends.
Legally authorized: The legal status granted to an institution
through a charter, license, or other written document issued by the
appropriate agency or official of the State in which the institution is
physically located.
Nationally recognized accrediting agency: An agency or association
that the Secretary recognizes as a reliable authority to determine the
quality of education or training offered by an institution or a program
offered by an institution. The Secretary recognizes these agencies and
associations under the provisions of 34 CFR part 602 and publishes a
list of the recognized agencies in the Federal Register.
Nonprofit institution: An institution that--
(1)(i) Is owned and operated by one or more nonprofit corporations
or associations, no part of the net earnings of which benefits any
private shareholder or individual;
(ii) Is legally authorized to operate as a nonprofit organization by
each State in which it is physically located; and
(iii) Is determined by the U.S. Internal Revenue Service to be an
organization to which contributions are tax-deductible in accordance
with section 501(c)(3) of the Internal Revenue Code (26 U.S.C.
501(c)(3)); or
(2) For a foreign institution--
(i) An institution that is owned and operated only by one or more
nonprofit corporations or associations; and
(ii)(A) If a recognized tax authority of the institution's home
country is recognized by the Secretary for purposes of making
determinations of an institution's nonprofit status for title IV
purposes, is determined by that tax authority to be a nonprofit
educational institution; or
(B) If no recognized tax authority of the institution's home country
is recognized by the Secretary for purposes of making determinations of
an institution's nonprofit status for title IV purposes, the foreign
institution demonstrates to the satisfaction of the Secretary that it is
a nonprofit educational institution.
(3) Is determined by the U.S. Internal Revenue Service to be an
organization to which contributions are tax-deductible in accordance
with section 501(c)(3) of the Internal Revenue Code (26 U.S.C.
501(c)(3)).
One-academic-year training program: An educational program that is
at least one academic year as defined under 34 CFR 668.2.
Preaccreditation: The status of accreditation and public recognition
that a nationally recognized accrediting agency grants to an institution
or program for a limited period of time that signifies the agency has
determined that the institution or program is progressing toward full
accreditation and is likely to attain full accreditation before the
expiration of that limited period of time (sometimes referred to as
``candidacy'').
Recognized equivalent of a high school diploma: The following are
the equivalent of a high school diploma--
[[Page 80]]
(1) A General Education Development Certificate (GED);
(2) A State certificate received by a student after the student has
passed a State-authorized examination that the State recognizes as the
equivalent of a high school diploma;
(3) An academic transcript of a student who has successfully
completed at least a two-year program that is acceptable for full credit
toward a bachelor's degree; or
(4) For a person who is seeking enrollment in an educational program
that leads to at least an associate degree or its equivalent and who has
not completed high school but who excelled academically in high school,
documentation that the student excelled academically in high school and
has met the formalized, written policies of the institution for
admitting such students.
Recognized occupation: An occupation that is--
(1) Identified by a Standard Occupational Classification (SOC) code
established by the Office of Management and Budget (OMB) or an
Occupational Information Network O*Net-SOC code established by the
Department of Labor, which is available at www.onetonline.org or its
successor site; or
(2) Determined by the Secretary in consultation with the Secretary
of Labor to be a recognized occupation.
Regular student: A person who is enrolled or accepted for enrollment
at an institution for the purpose of obtaining a degree, certificate, or
other recognized educational credential offered by that institution.
Religious mission: A published institutional mission that is
approved by the governing body of an institution of postsecondary
education and that includes, refers to, or is predicated upon religious
tenets, beliefs, or teachings.
Secretary: The Secretary of the Department of Education or an
official or employee of the Department of Education acting for the
Secretary under a delegation of authority.
State: A State of the Union, American Samoa, the Commonwealth of
Puerto Rico, the District of Columbia, Guam, the Virgin Islands, the
Commonwealth of the Northern Mariana Islands, the Republic of the
Marshall Islands, the Federated States of Micronesia, and the Republic
of Palau. The latter three are also known as the Freely Associated
States.
State authorization reciprocity agreement: An agreement between two
or more States that authorizes an institution located and legally
authorized in a State covered by the agreement to provide postsecondary
education through distance education or correspondence courses to
students located in other States covered by the agreement and cannot
prohibit any member State of the agreement from enforcing its own
general-purpose State laws and regulations outside of the State
authorization of distance education.
Teach-out: A process during which a program, institution, or
institutional location that provides 100 percent of at least one program
engages in an orderly closure or when, following the closure of an
institution or campus, another institution provides an opportunity for
the students of the closed school to complete their program, regardless
of their academic progress at the time of closure.
Teach-out agreement: A written agreement between institutions that
provides for the equitable treatment of students and a reasonable
opportunity for students to complete their program of study if an
institution, or an institutional location that provides 100 percent of
at least one program offered, ceases to operate or plans to cease
operations before all enrolled students have completed their program of
study.
Teach-out plan: A written plan developed by an institution that
provides for the equitable treatment of students if an institution, or
an institutional location that provides 100 percent of at least one
program, ceases to operate or plans to cease operations before all
enrolled students have completed their program of study.
[[Page 81]]
Title IV, HEA program: Any of the student financial assistance
programs listed in 34 CFR 668.1(c).
(Authority: 20 U.S.C. 1001, 1002, 1071, et seq., 1078-2, 1088, 1091,
1094, 1099b, 1099c, 1141; 26 U.S.C. 501(c))
[59 FR 22336, Apr. 29, 1994, as amended at 63 FR 40622, July 29, 1998;
64 FR 58615, Oct. 29, 1999; 71 FR 45692, Aug. 9, 2006; 74 FR 55425, Oct.
27, 2009; 74 FR 55932, Oct. 29, 2009; 75 FR 66946, Oct. 29, 2010, 75 FR
67192, Nov. 1, 2010; 79 FR 65006, Oct. 31, 2014; 81 FR 92262, Dec. 19,
2016; 84 FR 58914, Nov. 1, 2019]
Sec. 600.3 [Reserved]
Sec. 600.4 Institution of higher education.
(a) An institution of higher education is a public or private
nonprofit educational institution that--
(1) Is in a State, or for purposes of the Federal Pell Grant,
Federal Supplemental Educational Opportunity Grant, Federal Work-Study,
and Federal TRIO programs may also be located in the Federated States of
Micronesia or the Marshall Islands;
(2) Admits as regular students only persons who--
(i) Have a high school diploma;
(ii) Have the recognized equivalent of a high school diploma; or
(iii) Are beyond the age of compulsory school attendance in the
State in which the institution is physically located;
(3) Is legally authorized to provide an educational program beyond
secondary education in the State in which the institution is physically
located in accordance with Sec. 600.9;
(4)(i) Provides an educational program--
(A) For which it awards an associate, baccalaureate, graduate, or
professional degree;
(B) That is at least a two-academic-year program acceptable for full
credit toward a baccalaureate degree; or
(C) That is at least a one academic year training program that leads
to a certificate, or other nondegree recognized credential, and prepares
students for gainful employment in a recognized occupation; and
(ii) May provide a comprehensive transition and postsecondary
program, as described in 34 CFR part 668, subpart O; and
(5) Is--
(i) Accredited or preaccredited; or
(ii) Approved by a State agency listed in the Federal Register in
accordance with 34 CFR part 603, if the institution is a public
postsecondary vocational educational institution that seeks to
participate only in Federal student assistance programs.
(b) An institution is physically located in a State if it has a
campus or other instructional site in that State.
(c) The Secretary does not recognize the accreditation or
preaccreditation of an institution unless the institution agrees to
submit any dispute involving an adverse action, such as the final
denial, withdrawal, or termination of accreditation, to arbitration
before initiating any other legal action.
(Authority: 20 U.S.C. 1091, 1094, 1099b, 1141(a))
[59 FR 22336, Apr. 29, 1994, as amended at 64 FR 58615, Oct. 29, 1999;
74 FR 55932, Oct. 29, 2009; 75 FR 66946, Oct. 29, 2010; 84 FR 58915,
Nov. 1, 2019]
Sec. 600.5 Proprietary institution of higher education.
(a) A proprietary institution of higher education is an educational
institution that--
(1) Is not a public or private nonprofit educational institution;
(2) Is in a State;
(3) Admits as regular students only persons who--
(i) Have a high school diploma;
(ii) Have the recognized equivalent of a high school diploma; or
(iii) Are beyond the age of compulsory school attendance in the
State in which the institution is physically located;
(4) Is legally authorized to provide an educational program beyond
secondary education in the State in which the institution is physically
located in accordance with Sec. 600.9;
(5)(i)(A) Provides an eligible program of training, as defined in 34
CFR 668.8, to prepare students for gainful employment in a recognized
occupation; or
(B)(1) Has provided a program leading to a baccalaureate degree in
liberal arts, as defined in paragraph (e) of this section, continuously
since January 1, 2009; and
(2) Is accredited by a recognized regional accrediting agency or
association, and has continuously held such
[[Page 82]]
accreditation since October 1, 2007, or earlier; and
(ii) May provide a comprehensive transition and postsecondary
program for students with intellectual disabilities, as provided in 34
CFR part 668, subpart O;
(6) Is accredited; and
(7) Has been in existence for at least two years.
(b)(1) The Secretary considers an institution to have been in
existence for two years only if--
(i) The institution has been legally authorized to provide, and has
provided, a continuous educational program to prepare students for
gainful employment in a recognized occupation during the 24 months
preceding the date of its eligibility application; and
(ii) The educational program that the institution provides on the
date of its eligibility application is substantially the same in length
and subject matter as the program that the institution provided during
the 24 months preceding the date of its eligibility application.
(2)(i) The Secretary considers an institution to have provided a
continuous educational program during the 24 months preceding the date
of its eligibility application even if the institution did not provide
that program during normal vacation periods, or periods when the
institution temporarily closed due to a natural disaster that directly
affected the institution or the institution's students.
(ii) The Secretary considers an institution to have satisfied the
provisions of paragraph (b)(1)(ii) of this section if the institution
substantially changed the subject matter of the educational program it
provided during that 24-month period because of new technology or the
requirements of other Federal agencies.
(3) In determining whether an applicant institution satisfies the
requirement contained in paragraph (b)(1) of this section, the
Secretary--
(i) Counts any period during which the applicant institution has
been certified as a branch campus; and
(ii) Except as provided in paragraph (b)(3)(i) of this section, does
not count any period during which the applicant institution was a part
of another eligible proprietary institution of higher education,
postsecondary vocational institution, or vocational school.
(c) An institution is physically located in a State if it has a
campus or other instructional site in that State.
(d) The Secretary does not recognize the accreditation of an
institution unless the institution agrees to submit any dispute
involving an adverse action, such as the final denial, withdrawal, or
termination of accreditation, to arbitration before initiating any other
legal action.
(e) For purposes of this section, a ``program leading to a
baccalaureate degree in liberal arts'' is a program that is a general
instructional program falling within one or more of the following
generally accepted instructional categories comprising such programs,
but including only instruction in regular programs, and excluding
independently designed programs, individualized programs, and
unstructured studies:
(1) A program that is a structured combination of the arts,
biological and physical sciences, social sciences, and humanities,
emphasizing breadth of study.
(2) An undifferentiated program that includes instruction in the
general arts or general science.
(3) A program that focuses on combined studies and research in
humanities subjects as distinguished from the social and physical
sciences, emphasizing languages, literature, art, music, philosophy, and
religion.
(4) Any single instructional program in liberal arts and sciences,
general studies, and humanities not listed in paragraphs (e)(1) through
(3) of this section.
(Approved by the Office of Management and Budget under control number
1845-0012)
(Authority: 20 U.S.C. 1088, 1091)
[59 FR 22336, Apr. 29, 1994; 59 FR 32082, June 22, 1994, as amended at
59 FR 47801, Sept. 19, 1994; 59 FR 61177, Nov. 29, 1994; 61 FR 29901,
June 12, 1996; 61 FR 60569, Nov. 29, 1996; 64 FR 58615, Oct. 29, 1999;
74 FR 55932, Oct. 29, 2009; 76 FR 66946, Oct. 29, 2010; 84 FR 58915,
Nov. 1, 2019]
[[Page 83]]
Sec. 600.6 Postsecondary vocational institution.
(a) A postsecondary vocational institution is a public or private
nonprofit educational institution that--
(1) Is in a State;
(2) Admits as regular students only persons who--
(i) Have a high school diploma;
(ii) Have the recognized equivalent of a high school diploma; or
(iii) Are beyond the age of compulsory school attendance in the
State in which the institution is physically located;
(3) Is legally authorized to provide an educational program beyond
secondary education in the State in which the institution is physically
located in accordance with Sec. 600.9;
(4)(i) Provides an eligible program of training, as defined in 34
CFR 668.8, to prepare students for gainful employment in a recognized
occupation; and
(ii) May provide a comprehensive transition and postsecondary
program for students with intellectual disabilities, as provided in 34
CFR part 668, subpart O;
(5) Is--
(i) Accredited or preaccredited; or
(ii) Approved by a State agency listed in the Federal Register in
accordance with 34 CFR part 603, if the institution is a public
postsecondary vocational educational institution that seeks to
participate only in Federal assistance programs; and
(6) Has been in existence for at least two years.
(b)(1) The Secretary considers an institution to have been in
existence for two years only if--
(i) The institution has been legally authorized to provide, and has
provided, a continuous education or training program to prepare students
for gainful employment in a recognized occupation during the 24 months
preceding the date of its eligibility application; and
(ii) The education or training program it provides on the date of
its eligibility application is substantially the same in length and
subject matter as the program it provided during the 24 months preceding
the date of its eligibility application.
(2)(i) The Secretary considers an institution to have provided a
continuous education or training program during the 24 months preceding
the date of its eligibility application even if the institution did not
provide that program during normal vacation periods, or periods when the
institution temporarily closed due to a natural disaster that affected
the institution or the institution's students.
(ii) The Secretary considers an institution to have satisfied the
provisions of paragraph (b)(1)(ii) of this section if the institution
substantially changed the subject matter of the educational program it
provided during that 24-month period because of new technology or the
requirements of other Federal agencies.
(3) In determining whether an applicant institution satisfies the
requirement contained in paragraph (b)(1) of this section, the
Secretary--
(i) Counts any period during which the applicant institution
qualified as an eligible institution of higher education;
(ii) Counts any period during which the applicant institution was
part of another eligible institution of higher education, provided that
the applicant institution continues to be part of an eligible
institution of higher education;
(iii) Counts any period during which the applicant institution has
been certified as a branch campus; and
(iv) Except as provided in paragraph (b)(3)(iii) of this section,
does not count any period during which the applicant institution was a
part of another eligible proprietary institution of higher education or
postsecondary vocational institution.
(c) An institution is physically located in a State or other
instructional site if it has a campus or instructional site in that
State.
(d) The Secretary does not recognize the accreditation or
preaccreditation of an institution unless the institution agrees to
submit any dispute involving
[[Page 84]]
an adverse action, such as the final denial, withdrawal, or termination
of accreditation, to arbitration before initiating any other legal
action.
(Authority: 20 U.S.C. 1088, 1091, 1094(c)(3))
[59 FR 22336, Apr. 29, 1994, as amended at 64 FR 58616, Oct. 29, 1999;
74 FR 55933, Oct. 29, 2009; 75 FR 66946, Oct. 29, 2010; 84 FR 58915,
Nov. 1, 2019]
Sec. 600.7 Conditions of institutional ineligibility.
(a) General rule. For purposes of title IV of the HEA, an
educational institution that otherwise satisfies the requirements
contained in Sec. Sec. 600.4, 600.5, or 600.6 nevertheless does not
qualify as an eligible institution under this part if--
(1) For its latest complete award year--
(i) More than 50 percent of the institution's courses were
correspondence courses as calculated under paragraph (b) of this
section;
(ii) Fifty percent or more of the institution's regular enrolled
students were enrolled in correspondence courses;
(iii) More than twenty-five percent of the institution's regular
enrolled students were incarcerated;
(iv) More than fifty percent of its regular enrolled students had
neither a high school diploma nor the recognized equivalent of a high
school diploma, and the institution does not provide a four-year or two-
year educational program for which it awards a bachelor's degree or an
associate degree, respectively;
(2) The institution, or an affiliate of the institution that has the
power, by contract or ownership interest, to direct or cause the
direction of the management of policies of the institution--
(A) Files for relief in bankruptcy, or
(B) Has entered against it an order for relief in bankruptcy; or
(3) The institution, its owner, or its chief executive officer--
(i) Has pled guilty to, has pled nolo contendere to, or is found
guilty of, a crime involving the acquisition, use, or expenditure of
title IV, HEA program funds; or
(ii) Has been judicially determined to have committed fraud
involving title IV, HEA program funds.
(b) Special provisions regarding correspondence courses and
students--(1) Calculating the number of correspondence courses. For
purposes of paragraphs (a)(1) (i) and (ii) of this section--
(i) A correspondence course may be a complete educational program
offered by correspondence, or one course provided by correspondence in
an on-campus (residential) educational program;
(ii) A course must be considered as being offered once during an
award year regardless of the number of times it is offered during that
year; and
(iii) A course that is offered both on campus and by correspondence
must be considered two courses for the purpose of determining the total
number of courses the institution provided during an award year.
(2) Exceptions. (i) The provisions contained in paragraphs (a)(1)
(i) and (ii) of this section do not apply to an institution that
qualifies as a ``technical institute or vocational school used
exclusively or principally for the provision of vocational education to
individuals who have completed or left high school and who are available
for study in preparation for entering the labor market'' under section
3(3)(C) of the Carl D. Perkins Vocational and Applied Technology
Education Act of 1995.
(ii) The Secretary waives the limitation contained in paragraph
(a)(1)(ii) of this section for an institution that offers a 2-year
associate-degree or a 4-year bachelor's-degree program if the students
enrolled in the institution's correspondence courses receive no more
than 5 percent of the title IV, HEA program funds received by students
at that institution.
(c) Special provisions regarding incarcerated students--(1)
Exception. The Secretary may waive the prohibition contained in
paragraph (a)(1)(iii) of this section, upon the application of an
institution, if the institution is a nonprofit institution that provides
four-year or two-year educational programs for which it awards a
bachelor's degree, an associate degree, or a postsecondary diploma.
(2) Waiver for entire institution. If the nonprofit institution that
applies for a waiver consists solely of four-year or two-year
educational programs for which it awards a bachelor's degree, an
[[Page 85]]
associate degree, or a postsecondary diploma, the Secretary waives the
prohibition contained in paragraph (a)(1)(iii) of this section for the
entire institution.
(3) Other waivers. If the nonprofit institution that applies for a
waiver does not consist solely of four-year or two-year educational
programs for which it awards a bachelor's degree, an associate degree,
or a postsecondary diploma, the Secretary waives the prohibition
contained in paragraph (a)(1)(iii) of this section--
(i) For the four-year and two-year programs for which it awards a
bachelor's degree, an associate degree or a postsecondary diploma; and
(ii) For the other programs the institution provides, if the
incarcerated regular students enrolled in those other programs have a
completion rate of 50 percent or greater.
(d) Special provision for a nonprofit institution if more than 50
percent of its enrollment consists of students who do not have a high
school diploma or its equivalent. (1) Subject to the provisions
contained in paragraphs (d)(2) and (d)(3) of this section, the Secretary
waives the limitation contained in paragraph (a)(1)(iv) of this section
for a nonprofit institution if that institution demonstrates to the
Secretary's satisfaction that it exceeds that limitation because it
serves, through contracts with Federal, State, or local government
agencies, significant numbers of students who do not have a high school
diploma or its recognized equivalent.
(2) Number of critical students. The Secretary grants a waiver under
paragraph (d)(1) of this section only if no more than 40 percent of the
institution's enrollment of regular students consists of students who--
(i) Do not have a high school diploma or its equivalent; and
(ii) Are not served through contracts described in paragraph (d)(3)
of this section.
(3) Contracts with Federal, State, or local government agencies. For
purposes of granting a waiver under paragraph (d)(1) of this section,
the contracts referred to must be with Federal, State, or local
government agencies for the purpose of providing job training to low-
income individuals who are in need of that training. An example of such
a contract is a job training contract under the Job Training Partnership
Act (JPTA).
(e) Special provisions. (1) For purposes of paragraph (a)(1)of this
section, when counting regular students, the institution shall--
(i) Count each regular student without regard to the full-time or
part-time nature of the student's attendance (i.e., ``head count''
rather than ``full-time equivalent'');
(ii) Count a regular student once regardless of the number of times
the student enrolls during an award year; and
(iii) Determine the number of regular students who enrolled in the
institution during the relevant award year by--
(A) Calculating the number of regular students who enrolled during
that award year; and
(B) Excluding from the number of students in paragraph
(e)(1)(iii)(A) of this section, the number of regular students who
enrolled but subsequently withdrew or were expelled from the institution
and were entitled to receive a 100 percent refund of their tuition and
fees less any administrative fee that the institution is permitted to
keep under its fair and equitable refund policy.
(2) For the purpose of calculating a completion rate under paragraph
(c)(3)(ii) of this section, the institution shall--
(i) Determine the number of regular incarcerated students who
enrolled in the other programs during the last completed award year;
(ii) Exclude from the number of regular incarcerated students
determined in paragraph (e)(2)(i) of this section, the number of those
students who enrolled but subsequently withdrew or were expelled from
the institution and were entitled to receive a 100 percent refund of
their tuition and fees, less any administrative fee the institution is
permitted to keep under the institution's fair and equitable refund
policy;
(iii) Exclude from the total obtained in paragraph (e)(2)(ii) of
this section, the number of those regular incarcerated students who
remained enrolled in
[[Page 86]]
the programs at the end of the applicable award year;
(iv) From the total obtained in paragraph (e)(2)(iii) of this
section, determine the number of regular incarcerated students who
received a degree, certificate, or other recognized educational
credential awarded for successfully completing the program during the
applicable award year; and
(v) Divide the total obtained in paragraph (e)(2)(iv) of this
section by the total obtained in paragraph (e)(2)(iii) of this section
and multiply by 100.
(f)(1) If the Secretary grants a waiver to an institution under this
section, the waiver extends indefinitely provided that the institution
satisfies the waiver requirements in each award year.
(2) If an institution fails to satisfy the waiver requirements for
an award year, the institution becomes ineligible on June 30 of that
award year.
(g)(1) For purposes of paragraph (a)(1) of this section, and any
applicable waiver or exception under this section, the institution shall
substantiate the required calculations by having the certified public
accountant who prepares its audited financial statement under 34 CFR
668.15 or its title IV, HEA program compliance audit under 34 CFR 668.23
report on the accuracy of those determinations.
(2) The certified public accountant's report must be based on
performing an ``attestation engagement'' in accordance with the American
Institute of Certified Public Accountants (AICPA's) Statement on
Standards for Attestation Engagements. The certified public accountant
shall include that attestation report with or as part of the audit
report referenced in paragraph (g)(1) of this section.
(3) The certified public accountant's attestation report must
indicate whether the institution's determinations regarding paragraph
(a)(1) of this section and any relevant waiver or exception under
paragraphs (b), (c), and (d) of this section are accurate; i.e., fairly
presented in all material respects.
(h) Notice to the Secretary. An institution shall notify the
Secretary--
(1) By July 31 following the end of an award year if it falls within
one of the prohibitions contained in paragraph (a)(1)of this section, or
fails to continue to satisfy a waiver or exception granted under this
section; or
(2) Within 10 days if it falls within one of the prohibitions
contained in paragraphs (a)(2) or (a)(3) of this section.
(i) Regaining eligibility. (1) If an institution loses its
eligibility because of one of the prohibitions contained in paragraph
(a)(1) of this section, to regain its eligibility, it must demonstrate--
(i) Compliance with all eligibility requirements;
(ii) That it did not fall within any of the prohibitions contained
in paragraph (a)(1) of this section for at least one award year; and
(iii) That it changed its administrative policies and practices to
ensure that it will not fall within any of the prohibitions contained in
paragraph (a)(1) of this section.
(2) If an institution loses its eligibility because of one of the
prohibitions contained in paragraphs (a)(2) and (a)(3) of this section,
this loss is permanent. The institution's eligibility cannot be
reinstated.
(Approved by the Office of Management and Budget under control number
1840-0098)
(Authority: 20 U.S.C. 1088)
[59 FR 22336, Apr. 29, 1994; 59 FR 32082, June 22, 1994, as amended at
59 FR 47801, Sept. 19, 1994; 60 FR 34430, June 30, 1995; 64 FR 58616,
Oct. 29, 1999; 71 FR 45692, Aug. 9, 2006]
Sec. 600.8 Treatment of a branch campus.
A branch campus of an eligible proprietary institution of higher
education or a postsecondary vocational institution must be in existence
for at least two years as a branch campus after the branch is certified
as a branch campus before seeking to be designated as a main campus or a
free-standing institution.
(Authority: 20 U.S.C. 1099c)
[64 FR 58616, Oct. 29, 1999, as amended at 67 FR 67070, Nov. 1, 2002]
Sec. 600.9 State authorization.
(a)(1) An institution described under Sec. Sec. 600.4, 600.5, and
600.6 is legally authorized by a State if the State has a process to
review and appropriately act
[[Page 87]]
on complaints concerning the institution including enforcing applicable
State laws, and the institution meets the provisions of paragraphs
(a)(1)(i), (a)(1)(ii), or (b) of this section.
(i)(A) The institution is established by name as an educational
institution by a State through a charter, statute, constitutional
provision, or other action issued by an appropriate State agency or
State entity and is authorized to operate educational programs beyond
secondary education, including programs leading to a degree or
certificate.
(B) The institution complies with any applicable State approval or
licensure requirements, except that the State may exempt the institution
from any State approval or licensure requirements based on the
institution's accreditation by one or more accrediting agencies
recognized by the Secretary or based upon the institution being in
operation for at least 20 years.
(ii) If an institution is established by a State on the basis of an
authorization to conduct business in the State or to operate as a
nonprofit charitable organization, but not established by name as an
educational institution under paragraph (a)(1)(i) of this section, the
institution--
(A) By name, must be approved or licensed by the State to offer
programs beyond secondary education, including programs leading to a
degree or certificate; and
(B) May not be exempt from the State's approval or licensure
requirements based on accreditation, years in operation, or other
comparable exemption.
(2) The Secretary considers an institution to meet the provisions of
paragraph (a)(1) of this section if the institution is authorized by
name to offer educational programs beyond secondary education by--
(i) The Federal Government; or
(ii) As defined in 25 U.S.C. 1802(2), an Indian tribe, provided that
the institution is located on tribal lands and the tribal government has
a process to review and appropriately act on complaints concerning an
institution and enforces applicable tribal requirements or laws.
(b) An institution is considered to be legally authorized to operate
educational programs beyond secondary education if it is exempt as a
religious institution from State authorization under the State
constitution or by State law.
(c)(1)(i) If an institution that meets the requirements under
paragraph (a)(1) or (b) of this section offers postsecondary education
through distance education or correspondence courses to students located
in a State in which the institution is not physically located or in
which the institution is otherwise subject to that State's jurisdiction
as determined by that State, except as provided in paragraph (c)(1)(ii)
of this section, the institution must meet any of that State's
requirements for it to be legally offering postsecondary distance
education or correspondence courses in that State. The institution must,
upon request, document the State's approval to the Secretary; or
(ii) If an institution that meets the requirements under paragraph
(a)(1) or (b) of this section offers postsecondary education through
distance education or correspondence courses in a State that
participates in a State authorization reciprocity agreement, and the
institution is covered by such agreement, the institution is considered
to meet State requirements for it to be legally offering postsecondary
distance education or correspondence courses in that State, subject to
any limitations in that agreement and to any additional requirements of
that State not relating to State authorization of distance education.
The institution must, upon request, document its coverage under such an
agreement to the Secretary.
(c)(2)(i) For purposes of this section, an institution must make a
determination, in accordance with the institution's policies or
procedures, regarding the State in which a student is located, which
must be applied consistently to all students.
(ii) The institution must, upon request, provide the Secretary with
written documentation of its determination of a student's location,
including the basis for such determination.
[[Page 88]]
(iii) An institution must make a determination regarding the State
in which a student is located at the time of the student's initial
enrollment in an educational program and, if applicable, upon formal
receipt of information from the student, in accordance with the
institution's procedures, that the student's location has changed to
another State.
(d) An additional location or branch campus of an institution that
meets the requirements under paragraph (a)(1) of this section and that
is located in a foreign country, i.e., not in a State, must comply with
Sec. Sec. 600.8, 600.10, 600.20, and 600.32, and the following
requirements:
(1) For any additional location at which 50 percent or more of an
educational program (as defined in Sec. 600.2) is offered, or will be
offered, or at a branch campus--
(i) The additional location or branch campus must be legally
authorized by an appropriate government authority to operate in the
country where the additional location or branch campus is physically
located, unless the additional location or branch campus is physically
located on a U.S. military base, facility, or area that the foreign
country has granted the U.S. military to use and the institution can
demonstrate that it is exempt from obtaining such authorization from the
foreign country;
(ii) The institution must provide to the Secretary, upon request,
documentation of such legal authorization to operate in the foreign
country, demonstrating that the foreign governmental authority is aware
that the additional location or branch campus provides postsecondary
education and that the government authority does not object to those
activities;
(iii) The additional location or branch campus must be approved by
the institution's recognized accrediting agency in accordance with Sec.
602.22(a)(2)(ix) and (c).
(iv) The additional location or branch campus must meet any
additional requirements for legal authorization in that foreign country
as the foreign country may establish;
(v) The institution must report to the State in which the main
campus of the institution is located at least annually, or more
frequently if required by the State, the establishment or operation of
each foreign additional location or branch campus; and
(vi) The institution must comply with any limitations the State
places on the establishment or operation of the foreign additional
location or branch campus.
(2) An additional location at which less than 50 percent of an
educational program (as defined in Sec. 600.2) is offered or will be
offered must meet the requirements for legal authorization in that
foreign country as the foreign country may establish.
(3) In accordance with the requirements of 34 CFR 668.41, the
institution must disclose to enrolled and prospective students at
foreign additional locations and foreign branch campuses the information
regarding the student complaint process described in 34 CFR 668.43(b),
of the State in which the main campus of the institution is located.
(4) If the State in which the main campus of the institution is
located limits the authorization of the institution to exclude the
foreign additional location or branch campus, the foreign additional
location or branch campus is not considered to be legally authorized by
the State.
(Authority: 20 U.S.C. 1001 and 1002)
[75 FR 66946, Oct. 29, 2010, as amended at 81 FR 92262, Dec. 19, 2016;
81 FR 92261, Dec. 19, 2016; 84 FR 58915, Nov. 1, 2019]
Sec. 600.10 Date, extent, duration, and consequence of eligibility.]
(a) Date of eligibility. (1) If the Secretary determines that an
applicant institution satisfies all the statutory and regulatory
eligibility requirements, the Secretary considers the institution to be
an eligible institution as of the date--
(i) The Secretary signs the institution's program participation
agreement described in 34 CFR part 668, subpart B, for purposes of
participating in any title IV, HEA program; and
(ii) The Secretary receives all the information necessary to make
that determination for purposes other than participating in any title
IV, HEA program.
[[Page 89]]
(2) [Reserved]
(b) Extent of eligibility. (1) If the Secretary determines that the
entire applicant institution, including all its locations and all its
educational programs, satisfies the applicable requirements of this
part, the Secretary extends eligibility to all educational programs and
locations identified on the institution's application for eligibility.
(2) If the Secretary determines that only certain educational
programs or certain locations of an applicant institution satisfy the
applicable requirements of this part, the Secretary extends eligibility
only to those educational programs and locations that meet those
requirements and identifies the eligible educational programs and
locations in the eligibility notice sent to the institution under Sec.
600.21.
(3) Eligibility does not extend to any location that an institution
establishes after it receives its eligibility designation if the
institution provides at least 50 percent of an educational program at
that location, unless--
(i) The Secretary approves that location under Sec. 600.20(e)(4);
or
(ii) The location is licensed and accredited, the institution does
not have to apply to the Secretary for approval of that location under
Sec. 600.20(c), and the institution has reported to the Secretary that
location under Sec. 600.21.
(c) Educational programs. (1) An eligible institution that seeks to
establish the eligibility of an educational program must--
(i) Pursuant to a requirement regarding additional programs included
in the institution's program participation agreement under 34 CFR
668.14, obtain the Secretary's approval;
(ii) For a direct assessment program under 34 CFR 668.10, and for a
comprehensive transition and postsecondary program under 34 CFR 668.232,
obtain the Secretary's approval; and
(iii) For an undergraduate program that is at least 300 clock hours
but less than 600 clock hours and does not admit as regular students
only persons who have completed the equivalent of an associate degree
under 34 CFR 668.8(d)(3), obtain the Secretary's approval.
(2) Except as provided under Sec. 600.20(c), an eligible
institution does not have to obtain the Secretary's approval to
establish the eligibility of any program that is not described in
paragraph (c)(1) of this section.
(3) An institution must repay to the Secretary all HEA program funds
received by the institution for an educational program, and all the
title IV, HEA program funds received by or on behalf of students who
enrolled in that program if the institution--
(i) Fails to comply with the requirements in paragraph (c)(1) of
this section; or
(ii) Incorrectly determines that an educational program that is not
subject to approval under paragraph (c)(1) of this section is an
eligible program for title IV, HEA program purposes.
(d) Duration of eligibility. (1) If an institution participates in
the title IV, HEA programs, the Secretary's designation of the
institution as an eligible institution under the title IV, HEA programs
expires when the institution's program participation agreement, as
described in 34 CFR part 668, subpart B, expires.
(2) If an institution participates in an HEA program other than a
title IV, HEA program, the Secretary's designation of the institution as
an eligible institution, for purposes of that non-title IV, HEA program,
does not expire as long as the institution continues to satisfy the
statutory and regulatory requirements governing its eligibility.
(e) Consequence of eligibility. (1) If, as a part of its
institutional eligibility application, an institution indicates that it
wishes to participate in a title IV, HEA program and the Secretary
determines that the institution satisfies the applicable statutory and
regulatory requirements governing institutional eligibility, the
Secretary will determine whether the institution satisfies the standards
of administrative capability and financial responsibility contained in
34 CFR part 668, subpart B.
(2) If, as part of its institutional eligibility application, an
institution indicates that it does not wish to participate in any title
IV, HEA program and
[[Page 90]]
the Secretary determines that the institution satisfies the applicable
statutory and regulatory requirements governing institutional
eligibility, the institution is eligible to apply to participate in any
HEA program listed by the Secretary in the eligibility notice it
receives under Sec. 600.21. However, the institution is not eligible to
participate in those programs, or receive funds under those programs,
merely by virtue of its designation as an eligible institution under
this part.
(Approved by the Office of Management and Budget under control number
1845-0098)
(Authority: 20 U.S.C. 1001, 1002, 1088, 1094, and 1141)
[59 FR 22336, Apr. 29, 1994, as amended at 59 FR 47801, Sept. 19, 1994;
65 FR 65671, Nov. 1, 2000; 71 FR 45692, Aug. 9, 2006; 75 FR 66676, Oct.
29, 2010; 79 FR 65006, Oct. 31, 2014; 84 FR 31452, July 1, 2019]
Sec. 600.11 Special rules regarding institutional accreditation or
preaccreditation.
(a) Change of accrediting agencies. (1) For purposes of Sec. Sec.
600.4(a)(5)(i), 600.5(a)(6), and 600.6(a)(5)(i), the Secretary does not
recognize the accreditation or preaccreditation of an otherwise eligible
institution if that institution is in the process of changing its
accrediting agency, unless the institution provides the following to the
Secretary and receives approval:
(i) All materials related to its prior accreditation or
preaccreditation.
(ii) Materials demonstrating reasonable cause for changing its
accrediting agency. The Secretary will not determine such cause to be
reasonable if the institution--
(A) Has had its accreditation withdrawn, revoked, or otherwise
terminated for cause during the preceding 24 months, unless such
withdrawal, revocation, or termination has been rescinded by the same
accrediting agency; or
(B) Has been subject to a probation or equivalent, show cause order,
or suspension order during the preceding 24 months.
(2) Notwithstanding paragraph (a)(1)(ii) of this section, the
Secretary may determine the institution's cause for changing its
accrediting agency to be reasonable if the agency did not provide the
institution its due process rights as defined in Sec. 602.25, the
agency applied its standards and criteria inconsistently, or if the
adverse action or show cause or suspension order was the result of an
agency's failure to respect an institution's stated mission, including
religious mission.
(b) Multiple accreditation. The Secretary does not recognize the
accreditation or preaccreditation of an otherwise eligible institution
if that institution is accredited or preaccredited as an institution by
more than one accrediting agency, unless the institution--
(1) Provides to each such accrediting agency and the Secretary the
reasons for that multiple accreditation or preaccreditation;
(2) Demonstrates to the Secretary reasonable cause for that multiple
accreditation or preaccreditation.
(i) The Secretary determines the institution's cause for multiple
accreditation to be reasonable unless the institution--
(A) Has had its accreditation withdrawn, revoked, or otherwise
terminated for cause during the preceding 24 months, unless such
withdrawal, revocation, or termination has been rescinded by the same
accrediting agency; or
(B) Has been subject to a probation or equivalent, show cause order,
or suspension order during the preceding 24 months.
(ii) Notwithstanding paragraphs (b)(2)(i)(A) and (B) of this
section, the Secretary may determine the institution's cause for seeking
multiple accreditation or preaccreditation to be reasonable if the
institution's primary interest in seeking multiple accreditation is
based on that agency's geographic area, program-area focus, or mission;
and
(3) Designates to the Secretary which agency's accreditation or
preaccreditation the institution uses to establish its eligibility under
this part.
(c) Loss of accreditation or preaccreditation. (1) An institution
may not be considered eligible for 24 months after it has had its
accreditation or preaccreditation withdrawn, revoked,
[[Page 91]]
or otherwise terminated for cause, unless the accrediting agency that
took that action rescinds that action.
(2) An institution may not be considered eligible for 24 months
after it has withdrawn voluntarily from its accreditation or
preaccreditation status under a show-cause or suspension order issued by
an accrediting agency, unless that agency rescinds its order.
(d) Religious exception. (1) If an otherwise eligible institution
loses its accreditation or preaccreditation, the Secretary considers the
institution to be accredited or preaccredited for purposes of complying
with the provisions of Sec. Sec. 600.4, 600.5, and 600.6 if the
Secretary determines that its loss of accreditation or
preaccreditation--
(i) Is related to the religious mission or affiliation of the
institution; and
(ii) Is not related to its failure to satisfy the accrediting
agency's standards.
(2) If the Secretary considers an unaccredited institution to be
accredited or preaccredited under the provisions of paragraph (d)(1) of
this section, the Secretary will consider that unaccredited institution
to be accredited or preaccredited for a period sufficient to allow the
institution to obtain alternative accreditation or preaccreditation,
except that period may not exceed 18 months.
(Authority: 20 U.S.C. 1099b)
[59 FR 22336, Apr. 29, 1994, as amended at 85 FR 58916, Nov.1, 2019]
Sec. 600.12 Severability.
If any provision of this subpart or its application to any person,
act, or practice is held invalid, the remainder of the subpart or the
application of its provisions to any person, act, or practice shall not
be affected thereby.
[84 FR 58916, Nov. 1, 2019]
Subpart B_Procedures for Establishing Eligibility
Source: 59 FR 22336, Apr. 29, 1994, unless otherwise noted.
Sec. 600.20 Notice and application procedures for establishing,
reestablishing, maintaining, or expanding institutional eligibility
and certification.
(a) Initial eligibility application. (1) An institution that wishes
to establish its eligibility to participate in any HEA program must
submit an application to the Secretary for a determination that it
qualifies as an eligible institution under this part.
(2) If the institution also wishes to be certified to participate in
the title IV, HEA programs, it must indicate that intent on the
application, and submit all the documentation indicated on the
application to enable the Secretary to determine that it satisfies the
relevant certification requirements contained in 34 CFR part 668,
subparts B and L.
(3) A freestanding foreign graduate medical school, or a foreign
institution that includes a foreign graduate medical school, must
include in its application to participate--
(i)(A) A list of all medical school educational sites and where they
are located, including all sites at which its students receive clinical
training, except those clinical training sites that are not used
regularly, but instead are chosen by individual students who take no
more than two electives at the location for no more than a total of
eight weeks; and
(B) The type of clinical training (core, required clinical rotation,
not required clinical rotation) offered at each site listed on the
application in accordance with paragraph (a)(3)(i)(A) of this section;
and
(ii) Whether the school offers--
(A) Only post-baccalaureate/equivalent medical programs, as defined
in Sec. 600.52;
(B) Other types of programs that lead to employment as a doctor of
osteopathic medicine or doctor of medicine; or
(C) Both; and
(iii) Copies of the formal affiliation agreements with hospitals or
clinics providing all or a portion of a clinical training program
required under Sec. 600.55(e)(1).
(b) Reapplication. (1) A currently designated eligible institution
that is not
[[Page 92]]
participating in the title IV, HEA programs must apply to the Secretary
for a determination that the institution continues to meet the
requirements in this part if the Secretary requests the institution to
reapply. If the institution wishes to be certified to participate in the
title IV, HEA programs, it must submit an application to the Secretary
and must submit all the supporting documentation indicated on the
application to enable the Secretary to determine that it satisfies the
relevant certification requirements contained in subparts B and L of 34
CFR part 668.
(2) A currently designated eligible institution that participates in
the title IV, HEA programs must apply to the Secretary for a
determination that the institution continues to meet the requirements in
this part and in 34 CFR part 668 if the institution wishes to--
(i) Continue to participate in the title IV, HEA programs beyond the
scheduled expiration of the institution's current eligibility and
certification designation;
(ii) Reestablish eligibility and certification as a private
nonprofit, private for-profit, or public institution following a change
in ownership that results in a change in control as described in Sec.
600.31; or
(iii) Reestablish eligibility and certification after the
institution changes its status as a proprietary, nonprofit, or public
institution.
(3) A freestanding foreign graduate medical school, or a foreign
institution that includes a foreign graduate medical school, must
include in its reapplication to participate--
(i)(A) A list of all of the foreign graduate medical school's
educational sites and where they are located, including all sites at
which its students receive clinical training, except those clinical
training sites that are not used regularly, but instead are chosen by
individual students who take no more than two electives at the location
for no more than a total of eight weeks; and
(B) The type of clinical training (core, required clinical rotation,
not required clinical rotation) offered at each site listed on the
application in accordance with paragraph (b)(3)(i)(A) of this section;
and
(ii) Whether the school offers--
(A) Only post-baccalaureate/equivalent medical programs, as defined
in Sec. 600.52;
(B) Other types of programs that lead to employment as a doctor of
osteopathic medicine or doctor of medicine; or
(C) Both; and
(iii) Copies of the formal affiliation agreements with hospitals or
clinics providing all or a portion of a clinical training program
required under Sec. 600.55(e)(1).
(c) Application to expand eligibility. A currently designated
eligible institution that wishes to expand the scope of its eligibility
and certification and disburse title IV, HEA Program funds to students
enrolled in that expanded scope must apply to the Secretary and wait for
approval to--
(1) Add an educational program or a location at which the
institution offers or will offer 50 percent or more of an educational
program if one of the following conditions applies, otherwise it must
report to the Secretary under Sec. 600.21:
(i) The institution participates in the title IV, HEA programs under
a provisional certification, as provided in 34 CFR 668.13.
(ii) The institution receives title IV, HEA program funds under the
reimbursement or cash monitoring payment method, as provided in 34 CFR
part 668, subpart K.
(iii) The institution acquires the assets of another institution
that provided educational programs at that location during the preceding
year and participated in the title IV, HEA programs during that year.
(iv) The institution would be subject to a loss of eligibility under
34 CFR 668.188 if it adds that location.
(v) The Secretary notifies, or has notified, the institution that it
must apply for approval of an additional educational program or a
location under Sec. 600.10(c).
(2) Increase its level of program offering (e.g., adding graduate
degree programs when it previously offered only baccalaureate degree
programs);
(3) Add an educational program if the institution is required to
apply to the Secretary for approval under Sec. 600.10(c);
[[Page 93]]
(4) Add a branch campus at a location that is not currently included
in the institution's eligibility and certification designation;
(5) For a freestanding foreign graduate medical school, or a foreign
institution that includes a foreign graduate medical school, add a
location that offers all or a portion of the foreign graduate medical
school's core clinical training or required clinical rotations, except
for those locations that are included in the accreditation of a medical
program accredited by the Liaison Committee on Medical Education (LCME)
or the American Osteopathic Association (AOA); or
(6) Convert an eligible location to a branch campus.
(d) Notice and application. (1) Notice and application procedures.
(i) To satisfy the requirements of paragraphs (a), (b), and (c) of this
section, an institution must notify the Secretary of its intent to offer
an additional educational program, or provide an application to expand
its eligibility, in a format prescribed by the Secretary and provide all
the information and documentation requested by the Secretary to make a
determination of its eligibility and certification.
(ii)(A) An institution that notifies the Secretary of its intent to
offer an educational program under paragraph (c)(3) of this section must
ensure that the Secretary receives the notice described in paragraph
(d)(2) of this section at least 90 days before the first day of class of
the educational program.
(B) An institution that submits a notice in accordance with
paragraph (d)(1)(ii)(A) of this section is not required to obtain
approval to offer the additional educational program unless the
Secretary alerts the institution at least 30 days before the first day
of class that the program must be approved for title IV, HEA program
purposes. If the Secretary alerts the institution that the additional
educational program must be approved, the Secretary will treat the
notice provided about the additional educational program as an
application for that program.
(C) If an institution does not provide timely notice in accordance
with paragraph (d)(1)(ii)(A) of this section, the institution must
obtain approval of the additional educational program from the Secretary
for title IV, HEA program purposes.
(D) If an additional educational program is required to be approved
by the Secretary for title IV, HEA program purposes under paragraph
(d)(1)(ii)(B) or (C) of this section, the Secretary may grant approval,
or request further information prior to making a determination of
whether to approve or deny the additional educational program.
(E) When reviewing an application under paragraph (d)(1)(ii)(B) of
this section, the Secretary will take into consideration the following:
(1) The institution's demonstrated financial responsibility and
administrative capability in operating its existing programs.
(2) Whether the additional educational program is one of several new
programs that will replace similar programs currently provided by the
institution, as opposed to supplementing or expanding the current
programs provided by the institution.
(3) Whether the number of additional educational programs being
added is inconsistent with the institution's historic program offerings,
growth, and operations.
(4) Whether the process and determination by the institution to
offer an additional educational program that leads to gainful employment
in a recognized occupation is sufficient.
(F)(1) If the Secretary denies an application from an institution to
offer an additional educational program, the denial will be based on the
factors described in paragraphs (d)(1)(ii)(E)(2), (3), and (4) of this
section, and the Secretary will explain in the denial how the
institution failed to demonstrate that the program is likely to lead to
gainful employment in a recognized occupation.
(2) If the Secretary denies the institution's application to add an
additional educational program, the Secretary will permit the
institution to respond to the reasons for the denial and request
reconsideration of the denial.
[[Page 94]]
(2) Notice format. An institution that notifies the Secretary of its
intent to offer an additional educational program under paragraph (c)(3)
of this section must at a minimum--
(i) Describe in the notice how the institution determined the need
for the program and how the program was designed to meet local market
needs, or for an online program, regional or national market needs. This
description must contain any wage analysis the institution may have
performed, including any consideration of Bureau of Labor Statistics
data related to the program;
(ii) Describe in the notice how the program was reviewed or approved
by, or developed in conjunction with, business advisory committees,
program integrity boards, public or private oversight or regulatory
agencies, and businesses that would likely employ graduates of the
program;
(iii) Submit documentation that the program has been approved by its
accrediting agency or is otherwise included in the institution's
accreditation by its accrediting agency, or comparable documentation if
the institution is a public postsecondary vocational institution
approved by a recognized State agency for the approval of public
postsecondary vocational education in lieu of accreditation; and
(iv) Provide the date of the first day of class of the new program.
(e) Secretary's response to applications. (1) If the Secretary
receives an application under paragraph (a) or (b)(1) of this section,
the Secretary notifies the institution--
(i) Whether the applicant institution qualifies in whole or in part
as an eligible institution under the appropriate provisions in
Sec. Sec. 600.4 through 600.7; and
(ii) Of the locations and educational programs that qualify as the
eligible institution if only a portion of the applicant qualifies as an
eligible institution;
(2) If the Secretary receives an application under paragraphs (a) or
(b) of this section and that institution applies to participate in the
title IV, HEA programs, the Secretary notifies the institution--
(i) Whether the institution is certified to participate in those
programs;
(ii) Of the title IV, HEA programs in which it is eligible to
participate;
(iii) Of the title IV, HEA programs in which it is eligible to apply
for funds;
(iv) Of the effective date of its eligibility to participate in
those programs; and
(v) Of the conditions under which it may participate in those
programs;
(3) If the Secretary receives an application under paragraph (b)(2)
of this section, the Secretary notifies the institution whether it
continues to be certified, or whether it reestablished its eligibility
and certification to participate in the title IV, HEA programs and the
scope of such approval.
(4) If the Secretary receives an application under paragraph (c)(1)
of this section for an additional location, the Secretary notifies the
institution whether the location is eligible or ineligible to
participate in the title IV, HEA programs, and the date of eligibility
if the location is determined eligible;
(5) If the Secretary receives an application under paragraph (c)(2)
of this section for an increase in the level of program offering, or for
an additional educational program under paragraph (c)(3) of this
section, the Secretary notifies the institution whether the program
qualifies as an eligible program, and if the program qualifies, the date
of eligibility; and
(6) If the Secretary receives an application under paragraphs (c)(4)
or (c)(5) of this section to have a branch campus certified to
participate in the title IV, HEA programs as a branch campus, the
Secretary notifies the institution whether that branch campus is
certified to participate and the date that the branch campus is eligible
to begin participation.
(f) Disbursement rules related to applications. (1)(i) Except as
provided under paragraph (f)(1)(ii) of this section and 34 CFR 668.26,
if an institution submits an application under paragraph (b)(2)(i) of
this section because its participation period is scheduled to expire,
after that expiration date the institution may not disburse title IV,
HEA program funds to students attending that institution until the
institution receives the Secretary's notification that the
[[Page 95]]
institution is again eligible to participate in those programs.
(ii) An institution described in paragraph (f)(1)(i) of this section
may disburse title IV, HEA program funds to its students if the
institution submits to the Secretary a materially complete renewal
application in accordance with the provisions of 34 CFR 668.13(b)(2),
and has not received a final decision from the Department on that
application.
(2)(i) Except as provided under paragraph (f)(2)(ii) of this section
and 34 CFR 668.26, if a private nonprofit, private for-profit, or public
institution submits an application under paragraph (b)(2)(ii) or
(b)(2)(iii) of this section because it has undergone or will undergo a
change in ownership that results in a change of control or a change in
status, the institution may not disburse title IV, HEA program funds to
students attending that institution after the change of ownership or
status until the institution receives the Secretary's notification that
the institution is eligible to participate in those programs.
(ii) An institution described in paragraph (f)(2)(i) of this section
may disburse title IV, HEA program funds to its students if the
Secretary issues a provisional extension of certification under
paragraph (g) of this section.
(3) If an institution must apply to the Secretary under paragraphs
(c)(1) through (c)(4) of this section, the institution may not disburse
title IV, HEA program funds to students attending the subject location,
program, or branch until the institution receives the Secretary's
notification that the location, program, or branch is eligible to
participate in the title IV, HEA programs.
(4) If an institution applies to the Secretary under paragraph
(c)(5) of this section to convert an eligible location to a branch
campus, the institution may continue to disburse title IV, HEA program
funds to students attending that eligible location.
(5) If an institution does not apply to the Secretary to obtain the
Secretary's approval of a new location, program, increased level of
program offering, or branch, and the location, program, or branch does
not qualify as an eligible location, program, or branch of that
institution under this part and 34 CFR part 668, the institution is
liable for all title IV, HEA program funds it disburses to students
enrolled at that location or branch or in that program.
(g) Application for provisional extension of certification. (1) If a
private nonprofit institution, a private for-profit institution, or a
public institution participating in the title IV, HEA programs undergoes
a change in ownership that results in a change of control as described
in 34 CFR 600.31, the Secretary may continue the institution's
participation in those programs on a provisional basis, if the
institution under the new ownership submits a ``materially complete
application'' that is received by the Secretary no later than 10
business days after the day the change occurs.
(2) For purposes of this section, a private nonprofit institution, a
private for-profit institution, or a public institution submits a
materially complete application if it submits a fully completed
application form designated by the Secretary supported by--
(i) A copy of the institution's State license or equivalent document
that--as of the day before the change in ownership--authorized or will
authorize the institution to provide a program of postsecondary
education in the State in which it is physically located;
(ii) A copy of the document from the institution's accrediting
association that--as of the day before the change in ownership--granted
or will grant the institution accreditation status, including approval
of any non-degree programs it offers;
(iii) Audited financial statements of the institution's two most
recently completed fiscal years that are prepared and audited in
accordance with the requirements of 34 CFR 668.23; and
(iv) Audited financial statements of the institution's new owner's
two most recently completed fiscal years that are prepared and audited
in accordance with the requirements of 34 CFR 668.23, or equivalent
information for that owner that is acceptable to the Secretary.
(h) Terms of the extension. (1) If the Secretary approves the
institution's materially complete application, the
[[Page 96]]
Secretary provides the institution with a provisional Program
Participation Agreement (PPA). The provisional PPA extends the terms and
conditions of the program participation agreement that were in effect
for the institution before its change of ownership.
(2) The provisional PPA expires on the earlier of--
(i) The date on which the Secretary signs a new program
participation agreement;
(ii) The date on which the Secretary notifies the institution that
its application is denied; or
(iii) The last day of the month following the month in which the
change of ownership occurred, unless the provisions of paragraph (h)(3)
of this section apply.
(3) If the provisional PPA will expire under the provisions of
paragraph (h)(2)(iii) of this section, the Secretary extends the
provisional PPA on a month-to-month basis after the expiration date
described in paragraph (h)(2)(iii) of this section if, prior to that
expiration date, the institution provides the Secretary with--
(i) A ``same day'' balance sheet showing the financial position of
the institution, as of the date of the ownership change, that is
prepared in accordance with Generally Accepted Accounting Principles
(GAAP) published by the Financial Accounting Standards Board and audited
in accordance with Generally Accepted Government Auditing Standards
(GAGAS) published by the U.S. General Accounting Office;
(ii) If not already provided, approval of the change of ownership
from the State in which the institution is located by the agency that
authorizes the institution to legally provide postsecondary education in
that State;
(iii) If not already provided, approval of the change of ownership
from the institution's accrediting agency; and
(iv) A default management plan unless the institution is exempt from
providing that plan under 34 CFR 668.14(b)(15).
(Approved by the Office of Management and Budget under control number
1845-0012)
(Authority: 20 U.S.C. 1001, 1002, 1088, 1094, and 1099c)
[65 FR 65671, Nov. 1, 2000, as amended at 75 FR 66677, Oct. 29, 2010; 75
FR 67192, Nov. 1, 2010; 79 FR 65006, Oct. 31, 2014]
Sec. 600.21 Updating application information.
(a) Reporting requirements. Except as provided in paragraph (b) of
this section, an eligible institution must report to the Secretary in a
manner prescribed by the Secretary no later than 10 days after the
change occurs, of any change in the following:
(1) Its name, the name of a branch, or the name of a previously
reported location.
(2) Its address, the address of a branch, or the address of a
previously reported location.
(3) Its establishment of an accredited and licensed additional
location at which it offers or will offer 50 percent or more of an
educational program if the institution wants to disburse title IV, HEA
program funds to students enrolled at that location, under the
provisions in paragraph (d) of this section.
(4) Except as provided in 34 CFR 668.10, the way it measures program
length (e.g., from clock hours to credit hours, or from semester hours
to quarter hours).
(5) A decrease in the level of program offering (e.g. the
institution drops its graduate programs).
(6) A person's ability to affect substantially the actions of the
institution if that person did not previously have this ability. The
Secretary considers a person to have this ability if the person--
(i) Holds alone or together with another member or members of his or
her family, at least a 25 percent ``ownership interest'' in the
institution as defined in Sec. 600.31(b);
(ii) Represents or holds, either alone or together with other
persons, under a voting trust, power of attorney, proxy, or similar
agreement at least a 25 percent ``ownership interest'' in the
institution, as defined in Sec. 600.31(b); or
[[Page 97]]
(iii) Is a general partner, the chief executive officer, or chief
financial officer of the institution.
(7) The individual the institution designates under 34 CFR
668.16(b)(1) as its title IV, HEA Program administrator.
(8) The closure of a branch campus or additional location that the
institution was required to report to the Secretary.
(9) The governance of a public institution.
(10) For a freestanding foreign graduate medical school, or a
foreign institution that includes a foreign graduate medical school, the
school adds a location that offers all or a portion of the school's
clinical rotations that are not required, except for those that are
included in the accreditation of a medical program accredited by the
Liaison Committee on Medical Education (LCME) or the American
Osteopathic Association (AOA), or that are not used regularly, but
instead are chosen by individual students who take no more than two
electives at the location for no more than a total of eight weeks.
(11) For any program that is required to provide training that
prepares a student for gainful employment in a recognized occupation--
(i) Establishing the eligibility or reestablishing the eligibility
of the program;
(ii) Discontinuing the program's eligibility under 34 CFR 668.410;
(iii) Ceasing to provide the program for at least 12 consecutive
months;
(iv) Losing program eligibility under Sec. 600.40;
(v) Changing the program's name, CIP code, as defined in 34 CFR
668.402, or credential level; or
(vi) Updating the certification pursuant to Sec. 668.414(b).
(b) Additional reporting from institutions owned by publicly-traded
corporations. An institution that is owned by a publicly-traded
corporation must report to the Secretary any change in the information
described in paragraph (a)(6) of this section when it notifies its
accrediting agency, but no later than 10 days after the institution
learns of the change.
(c) Secretary's response to reporting. The Secretary notifies an
institution if any reported changes affects the institution's
eligibility, and the effective date of that change.
(d) Disbursement rules related to additional locations. When an
institution must report to the Secretary about an additional location
under paragraph (a)(3) of this section, the institution may not disburse
title IV, HEA funds to students at that location before it reports to
the Secretary about that location. Unless it is an institution that must
apply to the Secretary under Sec. 600.20(c)(1), once it reports to the
Secretary about that location, the institution may disburse those funds
to those students if that location is licensed and accredited.
(e) Consequence of failure to report. An institution's failure to
inform the Secretary of a change described in paragraph (a) of this
section within the time period stated in that paragraph may result in
adverse action against the institution.
(f) Definition. A family member includes a person's--
(1) Parent or stepparent, sibling or step-sibling, spouse, child or
stepchild, or grandchild or step-grandchild;
(2) Spouse's parent or stepparent, sibling or step-sibling, child or
stepchild, or grandchild or step-grandchild;
(3) Child's spouse; and
(4) Sibling's spouse.
(Approved by the Office of Management and Budget under control number
1845-0012)
(Authority: 20 U.S.C. 1094, 1099b)
[65 FR 65673, Nov. 1, 2000, as amended at 67 FR 67070, Nov. 1, 2002; 71
FR 45692, Aug. 9, 2006; 75 FR 67193, Nov. 1, 2010; 79 FR 65006, Oct. 31,
2014; 84 FR 31452, July 1, 2019]
Subpart C_Maintaining Eligibility
Source: 59 FR 22336, Apr. 29, 1994, unless otherwise noted.
Sec. 600.30 [Reserved]
Sec. 600.31 Change in ownership resulting in a change in control for
private nonprofit, private for-profit and public institutions.
(a)(1) Except as provided in paragraph (a)(2) of this section, a
private nonprofit, private for-profit, or public institution that
undergoes a change in ownership that results in a change in control
ceases to qualify as an eligible
[[Page 98]]
institution upon the change in ownership and control. A change of
ownership that results in a change in control includes any change by
which a person who has or thereby acquires an ownership interest in the
entity that owns the institution or the parent of that entity, acquires
or loses the ability to control the institution.
(2) If a private nonprofit, private for-profit, or public
institution has undergone a change in ownership that results in a change
in control, the Secretary may, under the provisions of Sec. 600.20(g)
and (h), continue the institution's participation in the title IV, HEA
programs on a provisional basis, provided that the institution submits,
under the provisions of Sec. 600.20(g), a materially complete
application--
(i) No later than 10 business days after the change occurs; or
(ii) For an institution owned by a publicly-traded corporation, no
later than 10 business days after the institution knew, or should have
known of the change based upon SEC filings, that the change occurred.
(3) In order to reestablish eligibility and to resume participation
in the title IV, HEA programs, the institution must demonstrate to the
Secretary that after the change in ownership and control--
(i) The institution satisfies all the applicable requirements
contained in Sec. Sec. 600.4, 600.5, and 600.6, except that if the
institution is a proprietary institution of higher education or
postsecondary vocational institution, it need not have been in existence
for two years before seeking eligibility; and
(ii) The institution qualifies to be certified to participate under
34 CFR part 668, subpart B.
(b) Definitions. The following definitions apply to terms used in
this section:
Closely-held corporation. Closely-held corporation (including the
term ``close corporation'') means--
(1) A corporation that qualifies under the law of the State of its
incorporation or organization as a closely-held corporation; or
(2) If the State of incorporation or organization has no definition
of closely-held corporation, a corporation the stock of which--
(i) Is held by no more than 30 persons; and
(ii) Has not been and is not planned to be publicly offered.
Control. Control (including the terms controlling, controlled by and
under common control with) means the possession, direct or indirect, of
the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting
securities, by contract, or otherwise.
Ownership or ownership interest. (1) Ownership or ownership interest
means a legal or beneficial interest in an institution or its corporate
parent, or a right to share in the profits derived from the operation of
an institution or its corporate parent.
(2) Ownership or ownership interest does not include an ownership
interest held by--
(i) A mutual fund that is regularly and publicly traded;
(ii) A U.S. institutional investor, as defined in 17 CFR 240.15a-
6(b)(7);
(iii) A profit-sharing plan of the institution or its corporate
parent, provided that all full-time permanent employees of the
institution or its corporate parent are included in the plan; or
(iv) An employee stock ownership plan (ESOP).
Parent. The parent or parent entity is the entity that controls the
specified entity directly or indirectly through one or more
intermediaries.
Person. Person includes a legal entity or a natural person.
Wholly-owned subsidiary. A wholly-owned subsidiary is one
substantially all of whose outstanding voting securities are owned by
its parent together with the parent's other wholly-owned subsidiaries.
(c) Standards for identifying changes of ownership and control--(1)
Closely-held corporation. A change in ownership and control occurs
when--
(i) A person acquires more than 50 percent of the total outstanding
voting stock of the corporation;
(ii) A person who holds an ownership interest in the corporation
acquires control of more than 50 percent of the outstanding voting stock
of the corporation; or
[[Page 99]]
(iii) A person who holds or controls 50 percent or more of the total
outstanding stock of the corporation ceases to hold or control that
proportion of the stock of the corporation.
(2) Publicly traded corporations required to be registered with the
Securities and Exchange Commission (SEC). A change in ownership and
control occurs when--
(i) A person acquires such ownership and control of the corporation
so that the corporation is required to file a Form 8K with the SEC
notifying that agency of the change in control; or
(ii) (A) A person who is a controlling shareholder of the
corporation ceases to be a controlling shareholder. A controlling
shareholder is a shareholder who holds or controls through agreement
both 25 percent or more of the total outstanding voting stock of the
corporation and more shares of voting stock than any other shareholder.
A controlling shareholder for this purpose does not include a
shareholder whose sole stock ownership is held as a U.S. institutional
investor, as defined in 17 CFR 240.15a-6(b)(7), held in mutual funds,
held through a profit-sharing plan, or held in an Employee Stock
Ownership Plan (ESOP).
(B) When a change of ownership occurs as a result of paragraph
(c)(2)(ii)(A) of this section, the institution may submit its most
recent quarterly financial statement as filed with the SEC, along with
copies of all other SEC filings made after the close of the fiscal year
for which a compliance audit has been submitted to the Department of
Education, instead of the ``same day'' balance sheet.
(C) If a publicly-traded institution is provisionally certified due
to a change in ownership under paragraph (c)(2)(ii) of this section, and
that institution experiences another change of ownership under paragraph
(c)(2)(ii) of this section, an approval of the subsequent change in
ownership does not extend the original expiration date for the
provisional certification provided that any current controlling
shareholder was listed on the change of ownership application for which
the original provisional approval was granted.
(3) Other entities. The term ``other entities'' includes limited
liability companies, limited liability partnerships, limited
partnerships, and similar types of legal entities. A change in ownership
and control of an entity that is neither closely-held nor required to be
registered with the SEC occurs when--
(i) A person who has or acquires an ownership interest acquires both
control of at least 25 percent of the total of outstanding voting stock
of the corporation and control of the corporation; or
(ii) A person who holds both ownership or control of at least 25
percent of the total outstanding voting stock of the corporation and
control of the corporation, ceases to own or control that proportion of
the stock of the corporation, or to control the corporation.
(4) General partnership or sole proprietorship. A change in
ownership and control occurs when a person who has or acquires an
ownership interest acquires or loses control as described in this
section.
(5) Wholly owned subsidiary. An entity that is a wholly owned
subsidiary changes ownership and control when its parent entity changes
ownership and control as described in this section.
(6) Nonprofit institution. A nonprofit institution changes ownership
and control when a change takes place that is described in paragraph (d)
of this section.
(7) Public institution. The Secretary does not consider that a
public institution undergoes a change in ownership that results in a
change of control if there is a change in governance and the institution
after the change remains a public institution, provided--
(i) The new governing authority is in the same State as included in
the institution's program participation agreement; and
(ii) The new governing authority has acknowledged the public
institution's continued responsibilities under its program participation
agreement.
(d) Covered transactions. For the purposes of this section, a change
in ownership of an institution that results in a change of control may
include, but is not limited to--
(1) The sale of the institution;
[[Page 100]]
(2) The transfer of the controlling interest of stock of the
institution or its parent corporation;
(3) The merger of two or more eligible institutions;
(4) The division of one institution into two or more institutions;
(5) The transfer of the liabilities of an institution to its parent
corporation;
(6) A transfer of assets that comprise a substantial portion of the
educational business of the institution, except where the transfer
consists exclusively in the granting of a security interest in those
assets; or
(7) A change in status as a for-profit, nonprofit, or public
institution.
(e) Excluded transactions. A change in ownership and control
reported under Sec. 600.21 and otherwise subject to this section does
not include a transfer of ownership and control of all or part of an
owner's equity or partnership interest in an institution, the
institution's parent corporation, or other legal entity that has signed
the institution's Program Participation Agreement--
(1) From an owner to a ``family member'' of that owner as defined in
Sec. 600.21(f); or
(2) Upon the retirement or death of the owner, to a person with an
ownership interest in the institution who has been involved in
management of the institution for at least two years preceding the
transfer and who has established and retained the ownership interest for
at least two years prior to the transfer.
(Approved by the Office of Management and Budget under control number
1845-0012)
(Authority: 20 U.S.C. 1099c)
[59 FR 22336, Apr. 29, 1994, as amended at 59 FR 47801, Sept. 19, 1994;
60 FR 33430, June 30, 1995; 64 FR 58616, Oct. 29, 1999; 65 FR 65673,
Nov. 1, 2000; 67 FR 67070, Nov. 1, 2002; 84 FR 58916, Nov. 1, 2019]
Sec. 600.32 Eligibility of additional locations.
(a) Except as provided in paragraphs (b), (c), and (d) of this
section, to qualify as an eligible location, an additional location of
an eligible institution must satisfy the applicable requirements of this
section and Sec. Sec. 600.4, 600.5, 600.6, 600.8, and 600.10.
(b) To qualify as an eligible location, an additional location is
not required to satisfy the two-year requirement of Sec. Sec.
600.5(a)(7) or 600.6(a)(6), unless--
(1) The location was a facility of another institution that has
closed or ceased to provide educational programs for a reason other than
a normal vacation period or a natural disaster that directly affects the
institution or the institution's students;
(2) The applicant institution acquired, either directly from the
institution that closed or ceased to provide educational programs, or
through an intermediary, the assets at the location; and
(3) The institution from which the applicant institution acquired
the assets of the location--
(i) Owes a liability for a violation of an HEA program requirement;
and
(ii) Is not making payments in accordance with an agreement to repay
that liability.
(c) Notwithstanding paragraph (b) of this section, an additional
location is not required to satisfy the two-year requirement of Sec.
600.5(a)(7) or Sec. 600.6(a)(6) if the applicant institution and the
original institution are not related parties and there is no commonality
of ownership, control, or management between the institutions, as
described in 34 CFR 668.188(b) and 34 CFR 668.207(b) and the applicant
institution agrees--
(1) To be liable for all improperly expended or unspent title IV,
HEA program funds received during the current academic year and up to
one academic year prior by the institution that has closed or ceased to
provide educational programs;
(2) To be liable for all unpaid refunds owed to students who
received title IV, HEA program funds during the current academic year
and up to one academic year prior; and
(3) To abide by the policy of the institution that has closed or
ceased to provide educational programs regarding refunds of
institutional charges to students in effect before the date of the
acquisition of the assets of the additional location for the students
who were enrolled before that date.
(d)(1) An institution that conducts a teach-out at a site of a
closed institution or an institution engaged in a
[[Page 101]]
teach-out plan approved by the institution's agency may apply to have
that site approved as an additional location if--
(i) The closed institution ceased operations, or the closing
institution is engaged in an orderly teach-out plan and the Secretary
has evaluated and approved that plan; and
(ii) The teach-out plan required under 34 CFR 668.14(b)(31) is
approved by the closed or closing institution's accrediting agency.
(2)(i) An institution that conducts a teach-out and is approved to
add an additional location described in paragraph (d)(1) of this
section--
(A) Does not have to meet the requirement of Sec. 600.5(a)(7) or
Sec. 600.6(a)(6) for the additional location described in paragraph
(d)(1) of this section;
(B) Is not responsible for any liabilities of the closed or closing
institution as provided under paragraph (c)(1) and (c)(2) of this
section if the institutions are not related parties and there is no
commonality of ownership or management between the institutions, as
described in 34 CFR 668.188(b) and 34 CFR 668.207(b); and
(C) Will not have the default rate of the closed institution
included in the calculation of its default rate, as would otherwise be
required under 34 CFR 668.184 and 34 CFR 668.203, if the institutions
are not related parties and there is no commonality of ownership or
management between the institutions, as described in 34 CFR 668.188(b)
and 34 CFR 668.207(b).
(ii) As a condition for approving an additional location under
paragraph (d)(1) of this section, the Secretary may require that
payments from the institution conducting the teach-out to the owners or
related parties of the closed institution, are used to satisfy any
liabilities owed by the closed institution.
(e) For purposes of this section, an ``additional location'' is a
location of an institution that was not designated as an eligible
location in the eligibility notification provided to an institution
under Sec. 600.21.
(Authority: 20 U.S.C. 1088, 1099c, 1141)
[59 FR 22336, Apr. 29, 1994, as amended at 74 FR 55933, Oct. 29, 2009;
84 FR 58916, Nov. 1, 2019]
Sec. 600.33 Severability.
If any provision of this subpart or its application to any person,
act, or practice is held invalid, the remainder of the subpart or the
application of its provisions to any person, act, or practice shall not
be affected thereby.
[84 FR 58917, Nov. 1, 2019]
Subpart D_Loss of Eligibility
Source: 59 FR 22336, Apr. 29, 1994, unless otherwise noted.
Sec. 600.40 Loss of eligibility.
(a)(1) Except as provided in paragraphs (a) (2) and (3) of this
section, an institution, or a location or educational program of an
institution, loses its eligibility on the date that--
(i) The institution, location, or educational program fails to meet
any of the eligibility requirements of this part;
(ii) The institution or location permanently closes;
(iii) The institution or location ceases to provide educational
programs for a reason other than a normal vacation period or a natural
disaster that directly affects the institution, particular location, or
the students of the institution or location; or
(iv) For purposes of the title IV, HEA programs--
(A) The institution's period of participation as specified under 34
CFR 668.13 expires; or
(B) The institution's provisional certification is revoked under 34
CFR 668.13.
(2) If an institution loses its eligibility because it violated the
requirements of Sec. 600.5(a)(8), as evidenced by the determination
under provisions contained in Sec. 600.5(d), it loses its eligibility
on the last day of the fiscal year used in Sec. 600.5(d), except that
if an institution's latest fiscal year was described in Sec.
600.7(h)(1), it loses its eligibility as of June 30, 1994.
(3) If an institution loses its eligibility under the provisions of
Sec. 600.7(a)(1), it loses its eligibility on the last day of the award
year being evaluated under that provision.
[[Page 102]]
(b) If the Secretary undertakes to terminate the eligibility of an
institution because it violated the provisions of Sec. 600.5(a)(8) or
Sec. 600.7(a), and the institution requests a hearing, the presiding
official must terminate the institution's eligibility if it violated
those provisions, notwithstanding its status at the time of the hearing.
(c)(1) If the Secretary designates an institution or any of its
educational programs or locations as eligible on the basis of inaccurate
information or documentation, the Secretary's designation is void from
the date the Secretary made the designation, and the institution or
program or location, as applicable, never qualified as eligible.
(2) If an institution closes its main campus or stops providing any
educational programs on its main campus, it loses its eligibility as an
institution, and that loss of eligibility includes all its locations and
all its programs. Its loss of eligibility is effective on the date it
closes that campus or stops providing any educational program at that
campus.
(d) Except as otherwise provided in this part, if an institution
ceases to satisfy any of the requirements for eligibility under this
part--
(1) It must notify the Secretary within 30 days of the date that it
ceases to satisfy that requirement; and
(2) It becomes ineligible to continue to participate in any HEA
program as of the date it ceases to satisfy any of the requirements.
(Authority: 20 U.S.C. 1088, 1099a-3, and 1141)
[59 FR 22336, Apr. 29, 1994, as amended at 63 FR 40622, July 29, 1998]
Sec. 600.41 Termination and emergency action proceedings.
(a) If the Secretary believes that a previously designated eligible
institution as a whole, or at one or more of its locations, does not
satisfy the statutory or regulatory requirements that define that
institution as an eligible institution, the Secretary may--
(1) Terminate the institution's eligibility designation in whole or
as to a particular location--
(i) Under the procedural provisions applicable to terminations
contained in 34 CFR 668.81, 668.83, 668.86, 668.87, 668.88, 668.89,
668.90 (a)(1), (a)(4), and (c) through (f), and 668.91; or
(ii) Under a show-cause hearing, if the institution's loss of
eligibility results from--
(A) Its previously qualifying as an eligible vocational school;
(B) Its loss of accreditation or preaccreditation;
(C) Its loss of legal authority to provide postsecondary education
in the State in which it is physically located;
(D) Its violations of the provisions contained in Sec. 600.5(a)(8)
or Sec. 600.7(a);
(E) Its permanently closing; or
(F) Its ceasing to provide educational programs for a reason other
than a normal vacation period or a natural disaster that directly
affects the institution, a particular location, or the students of the
institution or location;
(2) Limit, under the provisions of 34 CFR 668.86, the authority of
the institution to disburse, deliver, or cause the disbursement or
delivery of funds under one or more title IV, HEA programs as otherwise
provided under 34 CFR 668.26 for the benefit of students enrolled at the
ineligible institution or location prior to the loss of eligibility of
that institution or location; and
(3) Initiate an emergency action under the provisions contained in
34 CFR 668.83 with regard to the institution's participation in one or
more title IV, HEA programs.
(b) If the Secretary believes that an educational program offered by
an institution that was previously designated by the Secretary as an
eligible institution under the HEA does not satisfy relevant statutory
or regulatory requirements that define that educational program as part
of an eligible institution, the Secretary may in accordance with the
procedural provisions described in paragraph (a) of this section--
(1) Undertake to terminate that educational program's eligibility
under one or more of the title IV, HEA programs under the procedural
provisions applicable to terminations described in paragraph (a) of this
section;
(2) Limit the institution's authority to deliver, disburse, or cause
the delivery or disbursement of funds provided under that title IV, HEA
program to students enrolled in that educational
[[Page 103]]
program, as otherwise provided in 34 CFR 668.26; and
(3) Initiate an emergency action under the provisions contained in
34 CFR 668.83 with regard to the institution's participation in one or
more title IV, HEA programs with respect to students enrolled in that
educational program.
(c)(1) An action to terminate and limit the eligibility of an
institution as a whole or as to any of its locations or educational
programs is initiated in accordance with 34 CFR 668.86(b) and becomes
final 20 days after the Secretary notifies the institution of the
proposed action, unless the designated department official receives by
that date a request for a hearing or written material that demonstrates
that the termination and limitation should not take place.
(2) Once a termination under this section becomes final, the
termination is effective with respect to any commitment, delivery, or
disbursement of funds provided under an applicable title IV, HEA program
by the institution--
(i) Made to students enrolled in the ineligible institution,
location, or educational program; and
(ii) Made on or after the date of the act or omission that caused
the loss of eligibility as to the institution, location, or educational
program.
(3) Once a limitation under this section becomes final, the
limitation is effective with regard to any commitment, delivery, or
disbursement of funds under the applicable title IV, HEA program by the
institution--
(i) Made after the date on which the limitation became final; and
(ii) Made to students enrolled in the ineligible institution,
location, or educational program.
(d) After a termination under this section of the eligibility of an
institution as a whole or as to a location or educational program
becomes final, the institution may not originate applications for, make
awards of or commitments for, deliver, or disburse funds under the
applicable title IV, HEA program, except--
(1) In accordance with the requirements of 34 CFR 668.26(c) with
respect to students enrolled in the ineligible institution, location, or
educational program; and
(2) After satisfaction of any additional requirements, imposed
pursuant to a limitation under paragraph (a)(2) of this section, which
may include the following:
(i) Completion of the actions required by 34 CFR 668.26(a) and (b).
(ii) Demonstration that the institution has made satisfactory
arrangements for the completion of actions required by 34 CFR 668.26(a)
and (b).
(iii) Securing the confirmation of a third party selected by the
Secretary that the proposed disbursements or delivery of title IV, HEA
program funds meet the requirements of the applicable program.
(iv) Using institutional funds to make disbursements permitted under
this paragraph and seeking reimbursement from the Secretary for those
disbursements.
(e) If the Secretary undertakes to terminate the eligibility of an
institution, location, or program under paragraphs (a) and (b) of this
section:
(1) If the basis for the loss of eligibility is the loss of
accreditation or preaccreditation, the sole issue is whether the
institution, location, or program has the requisite accreditation or
preaccreditation. The presiding official has no authority to consider
challenges to the action of the accrediting agency.
(2) If the basis for the loss of eligibility is the loss of legal
authorization, the sole issue is whether the institution, location, or
program has the requisite legal authorization. The presiding official
has no authority to consider challenges to the action of a State agency
in removing the legal authorization.
(3) If the basis for the loss of eligibility of a foreign graduate
medical school is one or more annual pass rates on the U.S. Medical
Licensing Examination below the threshold required in Sec.
600.55(f)(1)(ii), the sole issue is whether one or more of the foreign
medical school's pass rate or rates for the preceding calendar year fell
below that threshold. For a foreign graduate medical school that opted
to have the Educational Commission for Foreign Medical Graduates (ECFMG)
calculate and
[[Page 104]]
provide the pass rates directly to the Secretary for the preceding
calendar year as permitted under Sec. 600.55(d)(2) in lieu of the
foreign graduate medical school providing pass rate data to the
Secretary under Sec. 600.55(d)(1)(iii), the ECFMG's calculations of the
school's rates are conclusive; and the presiding official has no
authority to consider challenges to the computation of the rate or rates
by the ECFMG.
(Authority: 20 U.S.C. 1088, 1091, 1094, 1099a-3, and 1141)
[59 FR 22336, Apr. 29, 1994, as amended at 63 FR 40623, July 29, 1998;
75 FR 67193, Nov. 1, 2010; 84 FR 58917, Nov. 1, 2019]
Sec. 600.42 Severability.
If any provision of this subpart or its application to any person,
act, or practice is held invalid, the remainder of the subpart or the
application of its provisions to any person, act, or practice shall not
be affected thereby.
[84 FR 58917, Nov. 1, 2019]
Subpart E_Eligibility of Foreign Institutions To Apply To Participate in
the Federal Family Education Loan (FFEL) Programs
Source: 59 FR 22063, Apr. 28, 1994, unless otherwise noted.
Sec. 600.51 Purpose and scope.
(a) A foreign institution is eligible to apply to participate in the
Federal Family Education Loan (FFEL) programs if it is comparable to an
eligible institution of higher education located in the United States
and has been approved by the Secretary in accordance with the provisions
of this subpart.
(b) This subpart E contains the procedures and criteria under which
a foreign institution may be deemed eligible to apply to participate in
the FFEL programs.
(c) Applicability of other title IV, HEA program regulations.
(1) A foreign institution must comply with all requirements for
eligible and participating institutions except when made inapplicable by
the HEA or when the Secretary, through publication in the Federal
Register, identifies specific provisions as inapplicable to foreign
institutions.
(2)(i) A public or nonprofit foreign institution that meets the
requirements of this subpart, and that also meets the requirements of
this part except as provided in Sec. Sec. 600.51(c)(1) and 600.54(a),
is considered an ``institution of higher education'' for purposes of the
title IV, HEA program regulations; and
(ii) A for-profit foreign institution that meets the requirements of
this subpart, and that also meets the requirements of this Part, except
as provided in Sec. Sec. 600.51(c)(1) and 600.54(a), is considered a
``proprietary institution'' for purposes of title IV, HEA program
regulations.
(d)(1) A program offered by a foreign school through any use of a
telecommunications course, correspondence course, or direct assessment
program is not an eligible program;
(2) Correspondence course has the meaning given in Sec. 600.2;
(3) Direct assessment program has the meaning given in Sec.
668.10(a)(1) of this chapter;
(4) Telecommunications course is a course offered through any one or
a combination of the technologies listed in the definition of
telecommunications course in Sec. 600.2, except that telecommunications
technologies may be used to supplement and support instruction that is
offered in a classroom located in the foreign country where the students
and instructor are physically present.
(Authority: 20 U.S.C. 1082, 1088)
[59 FR 22063, Apr. 28, 1994, as amended at 71 FR 45692, Aug. 9, 2006; 75
FR 67193, Nov. 1, 2010]
Sec. 600.52 Definitions.
The following definitions apply to this subpart E:
Associate degree school of nursing: A school that provides primarily
or exclusively a two-year program of postsecondary education in
professional nursing leading to a degree equivalent to an associate
degree in the United States.
Clinical training: The portion of a graduate medical education
program that counts as a clinical clerkship for
[[Page 105]]
purposes of medical licensure comprising core, required clinical
rotation, and not required clinical rotation.
Collegiate school of nursing: A school that provides primarily or
exclusively a minimum of a two-year program of postsecondary education
in professional nursing leading to a degree equivalent to a bachelor of
arts, bachelor of science, or bachelor of nursing in the United States,
or to a degree equivalent to a graduate degree in nursing in the United
States, and including advanced training related to the program of
education provided by the school.
Diploma school of nursing: A school affiliated with a hospital or
university, or an independent school, which provides primarily or
exclusively a two-year program of postsecondary education in
professional nursing leading to the equivalent of a diploma in the
United States or to equivalent indicia that the program has been
satisfactorily completed.
Foreign graduate medical school: A foreign institution (or, for a
foreign institution that is a university, a component of that foreign
institution) having as its sole mission providing an educational program
that leads to a degree of medical doctor, doctor of osteopathic
medicine, or the equivalent. A reference in these regulations to a
foreign graduate medical school as ``freestanding'' pertains solely to
those schools that qualify by themselves as foreign institutions and not
to schools that are components of universities that qualify as foreign
institutions.
Foreign institution:
(1) For the purposes of students who receive title IV aid, an
institution that--
(i) Is not located in a State;
(ii) Except as provided with respect to clinical training offered
under Sec. 600.55(h)(1), Sec. 600.56(b), or Sec. 600.57(a)(2)--
(A) Has no U.S. location;
(B) Has no written arrangements, within the meaning of Sec. 668.5,
with institutions or organizations located in the United States for
students enrolling at the foreign institution to take courses from
institutions located in the United States;
(C) Does not permit students to enroll in any course offered by the
foreign institution in the United States, including research, work,
internship, externship, or special studies within the United States,
except that independent research done by an individual student in the
United States for not more than one academic year is permitted, if it is
conducted during the dissertation phase of a doctoral program under the
guidance of faculty, and the research can only be performed in a
facility in the United States;
(iii) Is legally authorized by the education ministry, council, or
equivalent agency of the country in which the institution is located to
provide an educational program beyond the secondary education level; and
(iv) Awards degrees, certificates, or other recognized educational
credentials in accordance with Sec. 600.54(e) that are officially
recognized by the country in which the institution is located; or
(2) If the educational enterprise enrolls students both within a
State and outside a State, and the number of students who would be
eligible to receive title IV, HEA program funds attending locations
outside a State is at least twice the number of students enrolled within
a State, the locations outside a State must apply to participate as one
or more foreign institutions and must meet all requirements of paragraph
(1) of this definition, and the other requirements of this part. For the
purposes of this paragraph, an educational enterprise consists of two or
more locations offering all or part of an educational program that are
directly or indirectly under common ownership.
Foreign nursing school: A foreign institution (or, for a foreign
institution that is a university, a component of that foreign
institution) that is an associate degree school of nursing, a collegiate
school of nursing, or a diploma school of nursing. A reference in these
regulations to a foreign nursing school as ``freestanding'' pertains
solely to those schools that qualify by themselves as foreign
institutions and not to schools that are components of universities that
qualify as foreign institutions.
Foreign veterinary school: A foreign institution (or, for a foreign
institution that is a university, a component of that foreign
institution) having as its
[[Page 106]]
sole mission providing an educational program that leads to the degree
of doctor of veterinary medicine, or the equivalent. A reference in
these regulations to a foreign veterinary school as ``freestanding''
pertains solely to those schools that qualify by themselves as foreign
institutions and not to schools that are components of universities that
qualify as foreign institutions.
National Committee on Foreign Medical Education and Accreditation
(NCFMEA): The operational committee of medical experts established by
the Secretary to determine whether the medical school accrediting
standards used in other countries are comparable to those applied to
medical schools in the United States, for purposes of evaluating the
eligibility of accredited foreign graduate medical schools to
participate in the title IV, HEA programs.
Passing score: The minimum passing score as defined by the
Educational Commission for Foreign Medical Graduates (ECFMG), or on the
National Council Licensure Examination for Registered Nurses (NCLEX-RN),
as applicable.
Post-baccalaureate/equivalent medical program: A program offered by
a foreign graduate medical school that requires, as a condition of
admission, that its students have already completed their non-medical
undergraduate studies and that consists solely of courses and training
leading to employment as a doctor of medicine or doctor of osteopathic
medicine.
Secondary school: A school that provides secondary education as
determined under the laws of the country in which the school is located.
(Authority: 20 U.S.C. 1082, 1088)
[59 FR 22063, Apr. 28, 1994, as amended at 75 FR 67193, Nov. 1, 2010]
Sec. 600.53 Requesting an eligibility determination.
(a) To be designated as eligible to apply to participate in the FFEL
programs or to continue to be eligible beyond the scheduled expiration
of the institution's current period of eligibility, a foreign
institution must--
(1) Apply on the form prescribed by the Secretary; and
(2) Provide all the information and documentation requested by the
Secretary to make a determination of that eligibility.
(b) If a foreign institution fails to provide, release, or authorize
release to the Secretary of information that is required in this subpart
E, the institution is ineligible to apply to participate in the FFEL
programs.
(Approved by the Office of Management and Budget under control number
1840-0673)
(Authority: 20 U.S.C. 1082, 1088)
Sec. 600.54 Criteria for determining whether a foreign institution
is eligible to apply to participate in the Direct Loan Program.
The Secretary considers a foreign institution to be comparable to an
eligible institution of higher education in the United States and
eligible to apply to participate in the Direct Loan Program if the
foreign institution meets the following requirements:
(a)(1) Except for a freestanding foreign graduate medical school,
foreign veterinary school, or foreign nursing school, the foreign
institution is a public or private nonprofit educational institution.
(2) For a public or private nonprofit foreign institution, the
institution meets the requirements of Sec. 600.4, except Sec.
600.4(a)(1), (a)(2), (a)(3), (a)(4)(ii), (a)(5), (b), (c), and any
requirements the HEA or the Secretary has designated as inapplicable in
accordance with Sec. 600.51(c)(1).
(3) For a for-profit foreign medical, veterinary, or nursing school,
the school meets the requirements of Sec. 600.5, except Sec.
600.5(a)(2), (a)(3), (a)(4), (a)(5)(i)(B), (a)(5)(ii), (a)(6), (c), (d),
(e) and any requirements the HEA or the Secretary has designated as
inapplicable in accordance with Sec. 600.51(c)(1).
(b) The foreign institution admits as regular students only persons
who--
(1) Have a secondary school completion credential; or
(2) Have the recognized equivalent of a secondary school completion
credential.
(c) Notwithstanding Sec. 668.5, an eligible foreign institution may
not enter into a written arrangement under which an ineligible
institution or organization provides any portion of one or more of the
eligible foreign institution's programs. For the purposes of
[[Page 107]]
this paragraph, written arrangements do not include affiliation
agreements for the provision of clinical training for foreign medical,
veterinary, and nursing schools.
(d) An additional location of a foreign institution must separately
meet the definition of a foreign institution in Sec. 600.52 if the
additional location is--
(1) Located outside of the country in which the main campus is
located, except as provided in Sec. 600.55(h)(1), Sec. 600.56(b),
Sec. 600.57(a)(2), Sec. 600.55(h)(3), and the definition of foreign
institution found in Sec. 600.52; or
(2) Located within the same country as the main campus, but is not
covered by the legal authorization of the main campus.
(e) The foreign institution provides an eligible education program--
(1) For which the institution is legally authorized to award a
degree that is equivalent to an associate, baccalaureate, graduate, or
professional degree awarded in the United States;
(2) That is at least a two-academic-year program acceptable for full
credit toward the equivalent of a baccalaureate degree awarded in the
United States; or
(3)(i) That is equivalent to at least a one-academic-year training
program in the United States that leads to a certificate, degree, or
other recognized educational credential and prepares students for
gainful employment in a recognized occupation within the meaning of the
gainful employment provisions.
(ii) An institution must demonstrate to the satisfaction of the
Secretary that the amount of academic work required by a program in
paragraph (e)(3)(i) of this section is equivalent to at least the
definition of an academic year in Sec. 668.3.
(f) For a for-profit foreign medical, veterinary, or nursing
school--
(1) No portion of an eligible medical or veterinary program offered
may be at what would be an undergraduate level in the United States; and
(2) The title IV, HEA program eligibility does not extend to any
joint degree program.
(g) Proof that a foreign institution meets the requirements of
paragraph (1)(iii) of the definition of a foreign institution in Sec.
600.52 may be provided to the Secretary by a legal authorization from
the appropriate education ministry, council, or equivalent agency--
(1) For all eligible foreign institutions in the country;
(2) For all eligible foreign institutions in a jurisdiction within
the country; or
(3) For each separate eligible foreign institution in the country.
(Authority: 20 U.S.C. 1082, 1088)
[75 FR 67194, Nov. 1, 2010]
Sec. 600.55 Additional criteria for determining whether a foreign
graduate medical school is eligible to apply to participate in the
Direct Loan Program.
(a) General. (1) The Secretary considers a foreign graduate medical
school to be eligible to apply to participate in the title IV, HEA
programs if, in addition to satisfying the criteria of this part (except
the criterion in Sec. 600.54 that the institution be public or private
nonprofit), the school satisfies the criteria of this section.
(2) A foreign graduate medical school must provide, and in the
normal course require its students to complete, a program of clinical
training and classroom medical instruction of not less than 32 months in
length, that is supervised closely by members of the school's faculty
and that--
(i) Is provided in facilities adequately equipped and staffed to
afford students comprehensive clinical training and classroom medical
instruction;
(ii) Is approved by all medical licensing boards and evaluating
bodies whose views are considered relevant by the Secretary; and
(iii) As part of its clinical training, does not offer more than two
electives consisting of no more than eight weeks per student at a site
located in a foreign country other than the country in which the main
campus is located or in the United States, unless that location is
included in the accreditation of a medical program accredited by the
Liaison Committee on Medical Education (LCME) or the American
Osteopathic Association (AOA).
(3) A foreign graduate medical school must appoint for the program
described in paragraph (a)(2) of this section only
[[Page 108]]
those faculty members whose academic credentials are the equivalent of
credentials required of faculty members teaching the same or similar
courses at medical schools in the United States.
(4) A foreign graduate medical school must have graduated classes
during each of the two twelve-month periods immediately preceding the
date the Secretary receives the school's request for an eligibility
determination.
(b) Accreditation. A foreign graduate medical school must--
(1) Be approved by an accrediting body--
(i) That is legally authorized to evaluate the quality of graduate
medical school educational programs and facilities in the country where
the school is located; and
(ii) Whose standards of accreditation of graduate medical schools
have been evaluated by the NCFMEA or its successor committee of medical
experts and have been determined to be comparable to standards of
accreditation applied to medical schools in the United States; or
(2) Be a public or private nonprofit educational institution that
satisfies the requirements in Sec. 600.4(a)(5)(i).
(c) Admission criteria. (1) A foreign graduate medical school having
a post-baccalaureate/equivalent medical program must require students
accepted for admission who are U.S. citizens, nationals, or permanent
residents to have taken the Medical College Admission Test (MCAT) and to
have reported their scores to the foreign graduate medical school; and
(2) A foreign graduate medical school must determine the consent
requirements for, and require the necessary consents of, all students
accepted for admission for whom the school must report to enable the
school to comply with the collection and submission requirements of
paragraph (d) of this section.
(d) Collection and submission of data. (1) A foreign graduate
medical school must obtain, at its own expense, and submit, by the date
required by paragraph (d)(3) of this section--
(i) To its accrediting authority and, on request, to the Secretary,
the scores on the MCAT or successor examination, of all students
admitted during the preceding calendar year who are U.S. citizens,
nationals, or eligible permanent residents, together with a statement of
the number of times each student took the examination;
(ii) To its accrediting authority and, on request, to the Secretary,
the percentage of students graduating during the preceding calendar year
(including at least all graduates who are U.S. citizens, nationals, or
eligible permanent residents) who obtain placement in an accredited U.S.
medical residency program;
(iii) To the Secretary, except as provided for in paragraph (d)(2)
of this section, all scores, disaggregated by step/test--i.e., Step 1,
Step 2--Clinical Skills (Step 2-CS), and Step 2--Clinical Knowledge
(Step 2-CK), or the successor examinations--and attempt, earned during
the preceding calendar year by each student and graduate, on Step 1,
Step 2-CS, and Step 2-CK, or the successor examinations, of the U.S.
Medical Licensing Examination (USMLE), together with the dates the
student has taken each test, including any failed tests;
(iv) To the Secretary, a statement of its citizenship rate for the
preceding calendar year for a school that is subject to paragraph
(f)(1)(i)(A) of this section, together with a description of the
methodology used in deriving the rate that is acceptable to the
Secretary.
(2) In lieu of submitting the information required in paragraph
(d)(1)(iii) of this section to the Secretary, a foreign graduate medical
school that is not subject to paragraph (f)(4) of this section may agree
to allow the Educational Commission for Foreign Medical Graduates
(ECFMG) or other responsible third party to calculate the rate described
in paragraph (f)(1)(ii) and (f)(3) of this section for the preceding
calendar year and provide the rate directly to the Secretary on the
school's behalf with a copy to the foreign graduate medical school,
provided--
(i) The foreign graduate medical school has provided by April 30 to
the Secretary written consent acceptable to the Secretary to reliance by
the Secretary on the pass rate as calculated by the ECFMG or other
responsible third
[[Page 109]]
party for purposes of determining compliance with paragraph (f)(1)(ii)
and (f)(3) of this section for the preceding calendar year; and
(ii) The foreign graduate medical school agrees in its written
consent that for the preceding calendar year the rate as calculated by
the ECFMG or other designated third party will be conclusive for
purposes of determining compliance with paragraph (f)(1)(ii) and (f)(3)
of this section.
(3) A foreign graduate medical school must submit the data it
collects in accordance with paragraph (d)(1) of this section no later
than April 30 of each year, unless the Secretary specifies a different
date through a notice in the Federal Register.
(e) Requirements for clinical training. (1)(i) A foreign graduate
medical school must have--
(A) A formal affiliation agreement with any hospital or clinic at
which all or a portion of the school's core clinical training or
required clinical rotations are provided; and
(B) Either a formal affiliation agreement or other written
arrangements with any hospital or clinic at which all or a portion of
its clinical rotations that are not required are provided, except for
those locations that are not used regularly, but instead are chosen by
individual students who take no more than two electives at the location
for no more than a total of eight weeks.
(ii) The agreements described in paragraph (e)(1)(i) of this section
must state how the following will be addressed at each site--
(A) Maintenance of the school's standards;
(B) Appointment of faculty to the medical school staff;
(C) Design of the curriculum;
(D) Supervision of students;
(E) Evaluation of student performance; and
(F) Provision of liability insurance.
(2) A foreign graduate medical school must notify its accrediting
body within one year of any material changes in--
(i) The educational programs, including changes in clinical training
programs; and
(ii) The overseeing bodies and in the formal affiliation agreements
with hospitals and clinics described in paragraph (e)(1)(i) of this
section.
(f) Citizenship and USMLE pass rate percentages. (1)(i)(A) During
the calendar year preceding the year for which any of the school's
students seeks an title IV, HEA program loan, at least 60 percent of
those enrolled as full-time regular students in the school and at least
60 percent of the school's most recent graduating class must have been
persons who did not meet the citizenship and residency criteria
contained in section 484(a)(5) of the HEA, 20 U.S.C. 1091(a)(5); or
(B) The school must have had a clinical training program approved by
a State prior to January 1, 2008, and must continue to operate a
clinical training program in at least one State that approves the
program; and
(ii) Except as provided in paragraph (f)(4) of this section, for a
foreign graduate medical school outside of Canada, for Step 1, Step 2-
CS, and Step 2-CK, or the successor examinations, of the USMLE
administered by the ECFMG, at least 75 percent of the school's students
and graduates who took that step/test of the examination in the year
preceding the year for which any of the school's students seeks a title
IV, HEA program loan must have received a passing score on that step/
test and are taking the step/test for the first time; or
(2)(i) The school must have had a clinical training program approved
by a State as of January 1, 1992; and
(ii) The school must continue to operate a clinical training program
in at least one State that approves the program.
(3) In performing the calculation required in paragraph (f)(1)(ii)
of this section, a foreign graduate medical school shall--
(i) Include as a graduate each student who graduated from the school
during the three years preceding the year for which the calculation is
performed and who took that step/test for the first time in that year;
and
(ii) Include students and graduates who take more than one step/test
of the USMLE examination for the first time in the same year in the
denominator for each of those steps/tests;
[[Page 110]]
(4)(i) If the calculation described in paragraph (f)(1)(ii) of this
section would result in any step/test pass rate based on fewer than
eight students, a single pass rate for the school is determined instead
based on the performance of the school's students and graduates on Step
1, Step 2-CS, and Step 2-CK combined;
(ii) If combining the results on all three step/tests as permitted
in paragraph (f)(4)(i) of this section would result in a pass rate based
on fewer than eight step/test results, the school is deemed to have no
pass rate for that year and the results for the year are combined with
each subsequent year until a pass rate based on at least eight step/test
results is derived.
(g) Other criteria. (1) As part of establishing, publishing, and
applying reasonable satisfactory academic progress standards, a foreign
graduate medical school must include as a quantitative component a
maximum timeframe in which a student must complete his or her
educational program that must--
(i) Be no longer than 150 percent of the published length of the
educational program measured in academic years, terms, credit hours
attempted, clock hours completed, etc., as appropriate; and
(ii) Meet the requirements of Sec. 668.16(e)(2)(ii)(B), (C) and
(D).
(2) A foreign graduate medical school must document the educational
remediation it provides to assist students in making satisfactory
academic progress.
(3) A foreign graduate medical school must publish all the languages
in which instruction is offered.
(h) Location of a program. (1) Except as provided in paragraph
(h)(3)(ii) of this section, all portions of a graduate medical education
program offered to U.S. students must be located in a country whose
medical school accrediting standards are comparable to standards used in
the United States, as determined by the NCFMEA, except for clinical
training sites located in the United States.
(2) No portion of the graduate medical educational program offered
to U.S. students, other than the clinical training portion of the
program, may be located outside of the country in which the main campus
of the foreign graduate medical school is located.
(3)(i) Except as provided in paragraph (h)(3)(ii) of this section,
for any part of the clinical training portion of the educational program
located in a foreign country other than the country in which the main
campus is located or in the United States, in order for students
attending the site to be eligible to borrow title IV, HEA program
funds--
(A) The site must be located in an NCFMEA approved comparable
foreign country;
(B) The institution's medical accrediting agency must have conducted
an on-site evaluation and specifically approved the clinical training
site; and
(C) Clinical instruction must be offered in conjunction with medical
educational programs offered to students enrolled in accredited medical
schools located in that approved foreign country.
(ii) A clinical training site located in a foreign country other
than the country in which the main campus is located or in the United
States is not required to meet the requirements of paragraph (h)(3)(i)
of this section in order for students attending that site to be eligible
to borrow title IV, HEA program funds if--
(A) The location is included in the accreditation of a medical
program accredited by the Liaison Committee on Medical Education (LCME)
or the American Osteopathic Association (AOA); or
(B) No individual student takes more than two electives at the
location and the combined length of the electives does not exceed eight
weeks.
[75 FR 67195, Nov. 1, 2010]
Sec. 600.56 Additional criteria for determining whether a foreign
veterinary school is eligible to apply to participate in the Direct
Loan Program.
(a) The Secretary considers a foreign veterinary school to be
eligible to apply to participate in the Direct Loan Program if, in
addition to satisfying the criteria in this part (except the criterion
in Sec. 600.54 that the institution be public or private nonprofit),
the school satisfies all of the following criteria:
[[Page 111]]
(1) The school provides, and in the normal course requires its
students to complete, a program of clinical and classroom veterinary
instruction that is supervised closely by members of the school's
faculty, and that is provided in facilities adequately equipped and
staffed to afford students comprehensive clinical and classroom
veterinary instruction through a training program for foreign veterinary
students that has been approved by all veterinary licensing boards and
evaluating bodies whose views are considered relevant by the Secretary.
(2) The school has graduated classes during each of the two twelve-
month periods immediately preceding the date the Secretary receives the
school's request for an eligibility determination.
(3) The school employs for the program described in paragraph (a)(1)
of this section only those faculty members whose academic credentials
are the equivalent of credentials required of faculty members teaching
the same or similar courses at veterinary schools in the United States.
(4) Effective July 1, 2015, the school is accredited or
provisionally accredited by an organization acceptable to the Secretary
for the purpose of evaluating veterinary programs.
(b)(1) No portion of the foreign veterinary educational program
offered to U.S. students, other than the clinical training portion of
the program as provided for in paragraph (b)(2) of this section, may be
located outside of the country in which the main campus of the foreign
veterinary school is located;
(2)(i) For a veterinary school that is neither public nor private
nonprofit, the school's students must complete their clinical training
at an approved veterinary school located in the United States;
(ii) For a veterinary school that is public or private nonprofit,
the school's students may complete their clinical training at an
approved veterinary school located--
(A) In the United States;
(B) In the home country; or
(C) Outside of the United States or the home country, if--
(1) The location is included in the accreditation of a veterinary
program accredited by the American Veterinary Medical Association
(AVMA); or
(2) No individual student takes more than two electives at the
location and the combined length of the elective does not exceed eight
weeks.
(Authority: 20 U.S.C. 1002 and 1092.)
[75 FR 67197, Nov. 1, 2010]
Sec. 600.57 Additional criteria for determining whether a foreign
nursing school is eligible to apply to participate in the Direct
Loan Program.
(a) Effective July 1, 2012 for a foreign nursing school that was
participating in any title IV, HEA program on August 13, 2008, and
effective July 1, 2011 for all other foreign nursing schools, the
Secretary considers the foreign nursing school to be eligible to apply
to participate in the Direct Loan Program if, in addition to satisfying
the criteria in this part (except the criterion in Sec. 600.54 that the
institution be public or private nonprofit), the nursing school
satisfies all of the following criteria:
(1) The nursing school is an associate degree school of nursing, a
collegiate school of nursing, or a diploma school of nursing.
(2) The nursing school has an agreement with a hospital located in
the United States or an accredited school of nursing located in the
United States that requires students of the nursing school to complete
the student's clinical training at the hospital or accredited school of
nursing.
(3) The nursing school has an agreement with an accredited school of
nursing located in the United States providing that students graduating
from the nursing school located outside of the United States also
receive a degree from the accredited school of nursing located in the
United States.
(4) The nursing school certifies only Federal Stafford Loan program
loans or Federal PLUS program loans, as those terms are defined in Sec.
668.2, for students attending the nursing school.
(5) The nursing school reimburses the Secretary for the cost of any
loan defaults for current and former students included in the
calculation of the institution's cohort default rate during the previous
fiscal year.
[[Page 112]]
(6)(i) The nursing school determines the consent requirements for
and requires the necessary consents of all students accepted for
admission who are U.S. citizens, nationals, or eligible permanent
residents to enable the school to comply with the collection and
submission requirements of paragraph (a)(6)(ii) of this section.
(ii) The nursing school annually either--
(A) Obtains, at its own expense, all results achieved by students
and graduates who are U.S. citizens, nationals, or eligible permanent
residents on the National Council Licensure Examination for Registered
Nurses (NCLEX-RN), together with the dates the student has taken the
examination, including any failed examinations, and provides such
results to the Secretary; or
(B) Obtains a report or reports from the National Council of State
Boards of Nursing (NCSB), or an NCSB affiliate or NCSB contractor,
reflecting the percentage of the school's students and graduates taking
the NCLEX-RN in the preceding year who passed the examination, or the
data from which the percentage could be derived, and provides the report
to the Secretary.
(7) Not less than 75 percent of the school's students and graduates
who are U.S. citizens, nationals, or eligible permanent residents who
took the NCLEX-RN in the year preceding the year for which the
institution is certifying a Federal Stafford Loan or a Federal Plus
Loan, passed the examination.
(8) The school provides, including under the agreements described in
paragraphs (a)(2) and (a)(3) of this section, and in the normal course
requires its students to complete, a program of clinical and classroom
nursing instruction that is supervised closely by members of the
school's faculty that is provided in facilities adequately equipped and
staffed to afford students comprehensive clinical and classroom nursing
instruction, through a training program for foreign nursing students
that has been approved by all nurse licensing boards and evaluating
bodies whose views are considered relevant by the Secretary.
(9) The school has graduated classes during each of the two twelve-
month periods immediately preceding the date the Secretary receives the
school's request for an eligibility determination.
(10) The school employs only those faculty members whose academic
credentials are the equivalent of credentials required of faculty
members teaching the same or similar courses at nursing schools in the
United States.
(b) For purposes of paragraph (a)(5) of this section, the cost of a
loan default is the estimated future cost of collections on the
defaulted loan.
(c) The Department continues to collect on the Direct Loan after a
school reimburses the Secretary for the amount specified in paragraph
(b) of this section until the loan is paid in full or otherwise
satisfied, or the loan account is closed out.
(d) No portion of the foreign nursing program offered to U.S.
students may be located outside of the country in which the main campus
of the foreign nursing school is located, except for clinical sites
located in the United States.
[75 FR 67197, Nov. 1, 2010]
Sec. 600.58 Duration of eligibility determination.
(a) The eligibility of a foreign institution under this subpart
expires six years after the date of the Secretary's determination that
the institution is eligible to apply for participation, except that the
Secretary may specify a shorter period of eligibility. In the case of a
foreign graduate medical school, continued eligibility is dependent upon
annual submission of the data and information required under Sec.
600.55(a)(5)(i), subject to the terms described in Sec. 600.53(b).
(b) A foreign institution that has been determined eligible loses
its eligibility on the date that the institution no longer meets any of
the criteria in this subpart E.
(c) Notwithstanding the provisions of 34 CFR 668.26, if a foreign
institution loses its eligibility under this subpart E, an otherwise
eligible student, continuously enrolled at the institution before the
loss of eligibility, may receive an FFEL program loan for attendance at
that institution for the
[[Page 113]]
academic year succeeding the academic year in which that institution
lost its eligibility, if the student actually received an FFEL program
loan for attendance at the institution for a period during which the
institution was eligible under this subpart E.
(Authority: 20 U.S.C. 1082, 1088, 1099c)
[59 FR 22063, Apr. 28, 1994. Redesignated at 64 FR 58616, Oct. 29, 1999,
as amended at 69 FR 12275, Mar. 16, 2004. Redesignated at 75 FR 67197,
Nov. 1, 2010]
PART 601_INSTITUTION AND LENDER REQUIREMENTS RELATING TO EDUCATION LOANS-
-Table of Contents
Subpart A_General
Sec.
601.1 Scope.
601.2 Definitions.
Subpart B_Loan Information To Be Disclosed by Covered Institutions and
Institution-Affiliated Organizations
601.10 Preferred lender arrangement disclosures.
601.11 Private education loan disclosures and self-certification form.
601.12 Use of institution and lender name.
Subpart C_Responsibilities of Covered Institutions and Institution-
Affiliated Organizations
601.20 Annual report.
601.21 Code of conduct.
Subpart D_Loan Information To Be Disclosed by Institutions Participating
in the William D. Ford Direct Loan Program
601.30 Duties of institutions.
Subpart E_Lender Responsibilities
601.40 Disclosure and reporting requirements for lenders.
Authority: 20 U.S.C. 1019-1019d, 1021, 1094(a) and (h).
Source: 74 FR 55643, Oct. 28, 2009, unless otherwise noted.
Subpart A_General
Sec. 601.1 Scope.
This part establishes disclosure and reporting requirements for
covered institutions, institution-affiliated organizations, and lenders
that provide, issue, recommend, promote, endorse, or provide information
relating to education loans. Education loans include loans authorized by
the Higher Education Act of 1965, as amended (HEA) and private education
loans.
(Authority:20 U.S.C. 1019-1019d, 1021, 1094(a)(25) and (e)).
Sec. 601.2 Definitions.
(a) The definitions of the following terms used in this part are set
forth in the regulations for Institutional Eligibility under the Higher
Education Act of 1965, as amended, 34 CFR part 600:
Federal Family Education Loan (FFEL) Program
Secretary
Title IV, HEA program
(b) The following definitions also apply to this part:
Agent: An officer or employee of a covered institution or an
institution-affiliated organization.
Covered institution: Any institution of higher education,
proprietary institution of higher education, postsecondary vocational
institution, or institution outside the United States, as these terms
are defined in 34 CFR part 600, that receives any Federal funding or
assistance.
Education loan: Except when used as part of the term ``private
education loan'',
(1) Any loan made, insured, or guaranteed under the Federal Family
Education Loan (FFEL) Program;
(2) Any loan made under the William D. Ford Federal Direct Loan
Program; or
(3) A private education loan.
Institution-affiliated organization: (1) Any organization that--
(i) Is directly or indirectly related to a covered institution; and
(ii) Is engaged in the practice of recommending, promoting, or
endorsing education loans for students attending such covered
institution or the families of such students.
(2) An institution-affiliated organization--
(i) May include an alumni organization, athletic organization,
foundation, or social, academic, or professional organization, of a
covered institution; and
[[Page 114]]
(ii) Does not include any lender with respect to any education loan
secured, made, or extended by such lender.
Lender: (1) An eligible lender in the Federal Family Education Loan
(FFEL) Program, as defined in 34 CFR 682.200(b);
(2) The Department in the Direct Loan program;
(3) In the case of a private educational loan, a private education
lender as defined in section 140 of the Truth in Lending Act; and
(4) Any other person engaged in the business of securing, making, or
extending education loans on behalf of the lender.
Officer: A director or trustee of a covered institution or
institution-affiliated organization, if such individual is treated as an
employee of such covered institution or institution-affiliated
organization, respectively.
Preferred lender arrangement: (1) An arrangement or agreement
between a lender and a covered institution or an institution-affiliated
organization of such covered institution--
(i) Under which a lender provides or otherwise issues education
loans to the students attending such covered institution or the families
of such students; and
(ii) That relates to such covered institution or such institution-
affiliated organization recommending, promoting, or endorsing the
education loan products of the lender.
(2) A preferred lender arrangement does not include--
(i) Arrangements or agreements with respect to loans made under the
William D. Ford Federal Direct Loan Program; or
(ii) Arrangements or agreements with respect to loans that originate
through the PLUS Loan auction pilot program under section 499(b) of the
HEA.
(3) For purpose of this definition, an arrangement or agreement does
not exist if the private education loan provided or issued to a student
attending a covered institution is made by the covered institution or by
an institution-affiliated organization of the covered institution, and
the private education loan is--
(i) Funded by the covered institution's or institution-affiliated
organization's own funds;
(ii) Funded by donor-directed contributions;
(iii) Made under title VII or title VIII of the Public Service
Health Act; or
(iv) Made under a State-funded financial aid program, if the terms
and conditions of the loan include a loan forgiveness option for public
service.
Private education loan: As the term is defined in 12 CFR
226.46(b)(5), a loan provided by a private educational lender that is
not a title IV loan and that is issued expressly for postsecondary
education expenses to a borrower, regardless of whether the loan is
provided through the educational institution that the student attends or
directly to the borrower from the private educational lender. A private
education loan does not include--
(1) An extension of credit under an open end consumer credit plan, a
reverse mortgage transaction, a residential mortgage transaction, or any
other loan that is secured by real property or a dwelling; or
(2) An extension of credit in which the educational institution is
the lender if--
(i) The term of the extension of credit is 90 days or less; or
(ii) An interest rate will not be applied to the credit balance and
the term of the extension of credit is one year or less, even if the
credit is payable in more than four installments.
(Authority:20 U.S.C. 1019)
Subpart B_Loan Information To Be Disclosed by Covered Institutions and
Institution-Affiliated Organizations
Sec. 601.10 Preferred lender arrangement disclosures.
(a) A covered institution, or an institution-affiliated organization
of such covered institution, that participates in a preferred lender
arrangement must disclose--
(1) On such covered institution's or institution-affiliated
organization's Web site and in all informational materials described in
paragraph (b) of this
[[Page 115]]
section that describe or discuss education loans--
(i) The maximum amount of Federal grant and loan aid under title IV
of the HEA available to students, in an easy to understand format;
(ii) The information identified on a model disclosure form developed
by the Secretary pursuant to section 153(a)(2)(B) of the HEA, for each
type of education loan that is offered pursuant to a preferred lender
arrangement of the institution or institution-affiliated organization to
students of the institution or the families of such students; and
(iii) A statement that such institution is required to process the
documents required to obtain a loan under the Federal Family Education
Loan (FFEL) Program from any eligible lender the student selects; and
(2) On such covered institution's or institution-affiliated
organization's Web site and in all informational materials described in
paragraph (b) of this section that describe or discuss private education
loans--
(i) In the case of a covered institution, the information that the
Board of Governors of the Federal Reserve System requires to be
disclosed under section 128(e)(11) of the Truth in Lending Act (15
U.S.C. 1638(e)(11)), for each type of private education loan offered
pursuant to a preferred lender arrangement of the institution to
students of the institution or the families of such students; and
(ii) In the case of an institution-affiliated organization of a
covered institution, the information the Board of Governors of the
Federal Reserve System requires to be disclosed under section 128(e)(1)
of the Truth in Lending Act (15 U.S.C. 1638(e)(1)), for each type of
private education loan offered pursuant to a preferred lender
arrangement of the organization to students of such institution or the
families of such students.
(b) The informational materials described in paragraphs (a)(1) and
(a)(2) of this section are publications, mailings, or electronic
messages or materials that--
(1) Are distributed to prospective or current students of a covered
institution and families of such students; and
(2) Describe or discuss the financial aid opportunities available to
students at an institution of higher education.
(c)(1) Each covered institution and each institution-affiliated
organization that participates in a preferred lender arrangement must
provide the information described in paragraph (a)(1)(ii) of this
section, and the information described in paragraphs (a)(2)(i) and
(a)(2)(ii) of this section, respectively, for each type of education
loan offered pursuant to the preferred lender arrangement.
(2) The information identified in paragraph (c)(1) of this section
must be provided to students attending the covered institution, or the
families of such students, as applicable, annually and must be provided
in a manner that allows for the students or their families to take such
information into account before selecting a lender or applying for an
education loan.
(d) If a covered institution compiles, maintains, and makes
available a preferred lender list as required under Sec. 668.14(b)(28),
the institution must--
(1) Clearly and fully disclose on such preferred lender list--
(i) Not less than the information required to be disclosed under
section 153(a)(2)(A) of the HEA;
(ii) Why the institution participates in a preferred lender
arrangement with each lender on the preferred lender list, particularly
with respect to terms and conditions or provisions favorable to the
borrower; and
(iii) That the students attending the institution, or the families
of such students, do not have to borrow from a lender on the preferred
lender list;
(2) Ensure, through the use of the list of lender affiliates
provided by the Secretary under section 487(h)(2) of the HEA, that--
(i) There are not less than three FFEL lenders that are not
affiliates of each other included on the preferred lender list and, if
the institution recommends, promotes, or endorses private education
loans, there are not less than two lenders of private education loans
that are not affiliates of each other included on the preferred lender
list; and
(ii) The preferred lender list under paragraph (d) of this section--
[[Page 116]]
(A) Specifically indicates, for each listed lender, whether the
lender is or is not an affiliate of each other lender on the preferred
lender list; and
(B) If a lender is an affiliate of another lender on the preferred
lender list, describes the details of such affiliation;
(3) Prominently disclose the method and criteria used by the
institution in selecting lenders with which to participate in preferred
lender arrangements to ensure that such lenders are selected on the
basis of the best interests of the borrowers, including--
(i) Payment of origination or other fees on behalf of the borrower;
(ii) Highly competitive interest rates, or other terms and
conditions or provisions of Title IV, HEA program loans or private
education loans;
(iii) High-quality servicing for such loans; or
(iv) Additional benefits beyond the standard terms and conditions or
provisions for such loans;
(4) Exercise a duty of care and a duty of loyalty to compile the
preferred lender list under paragraph (d) of this section without
prejudice and for the sole benefit of the students attending the
institution, or the families of such students; and
(5) Not deny or otherwise impede the borrower's choice of a lender
or cause unnecessary delay in loan certification under title IV of the
HEA for those borrowers who choose a lender that is not included on the
preferred lender list.
(Approved by the Office of Management and Budget under control number
1845-XXXA)
(Authority:20 U.S.C. 1019a(a)(1)(A) and 1019b(c))
Sec. 601.11 Private education loan disclosures and self-certification form.
(a) A covered institution, or an institution-affiliated organization
of such covered institution, that provides information regarding a
private education loan from a lender to a prospective borrower must
provide private education loan disclosures to the prospective borrower,
regardless of whether the covered institution or institution-affiliated
organization participates in a preferred lender arrangement.
(b) The private education loan disclosures must--
(1) Provide the prospective borrower with the information the Board
of Governors of the Federal Reserve System requires to be disclosed
under section 128(e)(1) of the Truth in Lending Act (15 U.S.C.
1638(e)(1)) for such loan;
(2) Inform the prospective borrower that--
(i) The prospective borrower may qualify for loans or other
assistance under title IV of the HEA; and
(ii) The terms and conditions of Title IV, HEA program loans may be
more favorable than the provisions of private education loans.
(c) The covered institution or institution-affiliated organization
must ensure that information regarding private education loans is
presented in such a manner as to be distinct from information regarding
Title IV, HEA program loans.
(d) Upon an enrolled or admitted student applicant's request for a
private education loan self-certification form, an institution must
provide to the applicant, in written or electronic form--
(1) The self-certification form for private education loans
developed by the Secretary in consultation with the Board of Governors
of the Federal Reserve System, to satisfy the requirements of section
128(e)(3) of the Truth in Lending Act (15 U.S.C. 1638(e)(3)); and
(2) The information required to complete the form, to the extent the
institution possesses such information as specified in 34 CFR
668.14(b)(29).
(Approved by the Office of Management and Budget under control number
1845-XXXA)
(Authority:20 U.S.C. 1019a(a)(1)(B) and 1019d)
Sec. 601.12 Use of institution and lender name.
A covered institution, or an institution-affiliated organization of
such covered institution, that participates in a preferred lender
arrangement with a lender regarding private education loans must--
(a) Not agree to the lender's use of the name, emblem, mascot, or
logo of such institution or organization, or other words, pictures, or
symbols readily identified with such institution or
[[Page 117]]
organization, in the marketing of private education loans to students
attending such institution in any way that implies that the loan is
offered or made by such institution or organization instead of the
lender; and
(b) Ensure that the name of the lender is displayed in all
information and documentation related to the private education loans
described in this section.
(Authority:20 U.S.C. 1019a(a)(2)-(a)(3))
Subpart C_Responsibilities of Covered Institutions and Institution-
Affiliated Organizations
Sec. 601.20 Annual report.
Each covered institution, and each institution-affiliated
organization of such covered institution, that participates in a
preferred lender arrangement, must--
(a) Prepare and submit to the Secretary an annual report, by a date
determined by the Secretary, that includes, for each lender that
participates in a preferred lender arrangement with such covered
institution or organization--
(1) The information described in Sec. 601.10(c); and
(2) A detailed explanation of why such covered institution or
institution-affiliated organization participates in a preferred lender
arrangement with the lender, including why the terms, conditions, and
provisions of each type of education loan provided pursuant to the
preferred lender arrangement are beneficial for students attending such
institution, or the families of such students, as applicable; and
(b) Ensure that the report required under this section is made
available to the public and provided to students attending or planning
to attend such covered institution and the families of such students.
(Approved by the Office of Management and Budget under control number
1845-XXXA)
(Authority:20 U.S.C. 1019b(c)(2))
Sec. 601.21 Code of conduct.
(a)(1) A covered institution that participates in a preferred lender
arrangement must comply with the code of conduct requirements described
in this section.
(2) The covered institution must--
(i) Develop a code of conduct with respect to FFEL Program loans and
private education loans with which the institution's agents must comply.
The code of conduct must--
(A) Prohibit a conflict of interest with the responsibilities of an
agent of an institution with respect to FFEL Program loans and private
education loans; and
(B) At a minimum, include the provisions specified in paragraph (c)
of this section;
(ii) Publish such code of conduct prominently on the institution's
Web site; and
(iii) Administer and enforce such code by, at a minimum, requiring
that all of the institution's agents with responsibilities with respect
to FFEL Program loans or private education loans be annually informed of
the provisions of the code of conduct.
(b) Any institution-affiliated organization of a covered institution
that participates in a preferred lender arrangement must--
(1) Comply with the code of conduct developed and published by such
covered institution under paragraph (a)(1) of this section;
(2) If such institution-affiliated organization has a Web site,
publish such code of conduct prominently on the Web site; and
(3) Administer and enforce such code of conduct by, at a minimum,
requiring that all of such institution-affiliated organization's agents
with responsibilities with respect to FFEL Program loans or private
education loans be annually informed of the provisions of such code of
conduct.
(c) A covered institution's code of conduct must prohibit--
(1) Revenue-sharing arrangements with any lender.The institution
must not enter into any revenue-sharing arrangement with any lender. For
purposes of this paragraph, the term revenue-sharing arrangement means
an arrangement between a covered institution and a lender under which--
(i) A lender provides or issues a FFEL Program loan or private
education loan to students attending the
[[Page 118]]
institution or to the families of such students; and
(ii) The institution recommends the lender or the loan products of
the lender and in exchange, the lender pays a fee or provides other
material benefits, including revenue or profit sharing, to the
institution, an agent;
(2)(i) Employees of the financial aid office receiving gifts from a
lender, a guarantor, or a loan servicer. Agents who are employed in the
financial aid office of the institution or who otherwise have
responsibilities with respect to FFEL Program loans or private education
loans, must not solicit or accept any gift from a lender, guarantor, or
servicer of FFEL Program loans or private education loans;
(ii) For purposes of paragraph (c) of this section, the term gift
means any gratuity, favor, discount, entertainment, hospitality, loan,
or other item having a monetary value of more than a de minimus amount.
The term includes a gift of services, transportation, lodging, or meals,
whether provided in kind, by purchase of a ticket, payment in advance,
or reimbursement after the expense has been incurred;
(iii) The term gift does not include any of the following:
(A) Standard material, activities, or programs on issues related to
a loan, default aversion, default prevention, or financial literacy,
such as a brochure, a workshop, or training.
(B) Food, refreshments, training, or informational material
furnished to an agent as an integral part of a training session that is
designed to improve the service of a lender, guarantor, or servicer of
FFEL Program loans or private education loans to the institution, if
such training contributes to the professional development of the agent.
(C) Favorable terms, conditions, and borrower benefits on a FFEL
Program loan or private education loan provided to a student employed by
the institution if such terms, conditions, or benefits are comparable to
those provided to all students of the institution.
(D) Entrance and exit counseling services provided to borrowers to
meet the institution's responsibilities for entrance and exit counseling
as required by Sec. Sec. 682.604(f) and 682.604(g), as long as the
institution's staff are in control of the counseling (whether in person
or via electronic capabilities) and such counseling does not promote the
products or services of any specific lender.
(E) Philanthropic contributions to an institution from a lender,
servicer, or guarantor of FFEL Program loans or private education loans
that are unrelated to FFEL Program loans or private education loans or
any contribution from any lender, servicer, or guarantor, that is not
made in exchange for any advantage related to FFEL Program loans or
private education loans.
(F) State education grants, scholarships, or financial aid funds
administered by or on behalf of a State; and
(iv) For purposes of paragraph (c) of this section, a gift to a
family member of an agent, or to any other individual based on that
individual's relationship with the agent, is considered a gift to the
agent if--
(A) The gift is given with the knowledge and acquiescence of the
agent; and
(B) The agent has reason to believe the gift was given because of
the official position of the agent;
(3) Consulting or other contracting arrangements. An agent who is
employed in the financial aid office of the institution or who otherwise
has responsibilities with respect to FFEL Program loans or private
education loans must not accept from any lender or affiliate of any
lender any fee, payment, or other financial benefit (including the
opportunity to purchase stock) as compensation for any type of
consulting arrangement or other contract to provide services to a lender
or on behalf of a lender relating to FFEL Program loans or private
education loans. Nothing in paragraph (c)(3) of this section will be
construed as prohibiting--
(i) An agent who is not employed in the institution's financial aid
office and who does not otherwise have responsibilities with respect to
FFEL Program loans or private education loans from performing paid or
unpaid service on a board of directors of a lender, guarantor, or
servicer of education loans;
(ii) An agent who is not employed in the institution's financial aid
office but who has responsibility with respect to FFEL Program loans or
private education loans from performing paid or
[[Page 119]]
unpaid service on a board of directors of a lender, guarantor, or
servicer of FFEL Program loans or private education loans, if the
institution has a written conflict of interest policy that clearly sets
forth that agents must recuse themselves from participating in any
decision of the board regarding FFEL Program loans or private education
loans at the institution; or
(iii) An officer, employee, or contractor of a lender, guarantor, or
servicer of FFEL Program loans or private education loans from serving
on a board of directors, or serving as a trustee, of an institution, if
the institution has a written conflict of interest policy that the board
member or trustee must recuse themselves from any decision regarding
FFEL Program loans or private education loans at the institution;
(4) Directing borrowers to particular lenders or delaying loan
certifications. The institution must not--
(i) For any first-time borrower, assign, through award packaging or
other methods, the borrower's loan to a particular lender; or
(ii) Refuse to certify, or delay certification of, any loan based on
the borrower's selection of a particular lender or guaranty agency;
(5)(i) Offers of funds for private loans. The institution must not
request or accept from any lender any offer of funds to be used for
private education loans, including funds for an opportunity pool loan,
to students in exchange for the institution providing concessions or
promises regarding providing the lender with--
(A) A specified number of FFEL Program loans or private education
loans;
(B) A specified loan volume of such loans; or
(C) A preferred lender arrangement for such loans.
(ii) For purposes of paragraph (c) of this section, the term
opportunity pool loan means a private education loan made by a lender to
a student attending the institution or the family member of such a
student that involves a payment, directly or indirectly, by such
institution of points, premiums, additional interest, or financial
support to such lender for the purpose of such lender extending credit
to the student or the family;
(6) Staffing assistance. The institution must not request or accept
from any lender any assistance with call center staffing or financial
aid office staffing, except that nothing in this paragraph will be
construed to prohibit the institution from requesting or accepting
assistance from a lender related to--
(i) Professional development training for financial aid
administrators;
(ii) Providing educational counseling materials, financial literacy
materials, or debt management materials to borrowers, provided that such
materials disclose to borrowers the identification of any lender that
assisted in preparing or providing such materials; or
(iii) Staffing services on a short-term, nonrecurring basis to
assist the institution with financial aid-related functions during
emergencies, including State-declared or Federally declared natural
disasters, Federally declared national disasters, and other localized
disasters and emergencies identified by the Secretary; and
(7) Advisory board compensation. Any employee who is employed in the
financial aid office of the institution, or who otherwise has
responsibilities with respect to FFEL Program loans or private education
loans or other student financial aid of the institution, and who serves
on an advisory board, commission, or group established by a lender,
guarantor, or group of lenders or guarantors, must not receive anything
of value from the lender, guarantor, or group of lenders or guarantors,
except that the employee may be reimbursed for reasonable expenses, as
that term is defined in Sec. 668.16(d)(2)(ii), incurred in serving on
such advisory board, commission, or group.
(Approved by the Office of Management and Budget under control number
1845-XXXA)
(Authority:20 U.S.C. 1019b(c)(2)), 1094(a)(25) and (e)
[[Page 120]]
Subpart D_Loan Information To Be Disclosed by Institutions Participating
in the William D. Ford Direct Loan Program
Sec. 601.30 Duties of institutions.
(a) Each covered institution participating in the William D. Ford
Direct Loan Program under part D of title IV of the HEA must--
(1) Make the information identified in a model disclosure form
developed by the Secretary pursuant to section 154(a) of the HEA
available to students attending or planning to attend the institution,
or the families of such students, as applicable; and
(2) If the institution provides information regarding a private
education loan to a prospective borrower, concurrently provide such
borrower with the information identified on the model disclosure form
that the Secretary provides to the institution under section 154(a) of
the HEA.
(b) In providing the information required under paragraph (a) of
this section, a covered institution may use a comparable form designed
by the institution instead of the model disclosure form.
(Approved by the Office of Management and Budget under control number
1845-XXXB)
(Authority:20 U.S.C. 1019c(b))
Subpart E_Lender Responsibilities
Sec. 601.40 Disclosure and reporting requirements for lenders.
(a) Disclosures to borrowers. (1) A lender must, at or prior to
disbursement of a FFEL loan, provide the borrower, in writing (including
through electronic means), in clear and understandable terms, the
disclosures required in Sec. 682.205(a) and (b).
(2) A lender must, for each of its private education loans, comply
with the disclosure requirements under section 128(e) of the Truth in
Lending Act (15 U.S.C. 1638(e)).
(b) Reports to the Secretary. Each FFEL lender must report annually
to the Secretary--
(1) Any reasonable expenses paid or provided to any agent of a
covered institution who is employed in the financial aid office or has
other responsibilities with respect to education loans or other student
financial aid of the institution for service on a lender advisory board,
commission or group established by a lender or group of lenders; or
(2) Any similar expenses paid or provided to any agent of an
institution-affiliated organization who is involved in recommending,
promoting, or endorsing education loans.
(3) The report required by this paragraph must include--
(i) The amount of expenses paid or provided for each specific
instance in which the lender provided expenses;
(ii) The name of any agent described in paragraph (b)(1) of this
section to whom the expenses were paid or provided;
(iii) The dates of the activity for which the expenses were paid or
provided; and
(iv) A brief description of the activity for which the expenses were
paid or provided.
(c) Lender certification of compliance. (1) Any FFEL lender
participating in one or more preferred lender arrangements must annually
certify to the Secretary its compliance with the Higher Education Act of
1965, as amended; and
(2) If the lender is required to submit an audit under 34 CFR
682.305(c), the lender's compliance with the requirements under this
section must be reported on and attested to annually by the lender's
auditor.
(3) A lender may comply with the certification requirements of this
section if the certifications are provided as part of the annual audit
required by 34 CFR 682.305(c).
(4) A lender who is not required to submit an audit must submit the
required certification at such time and in such manner as directed by
the Secretary.
(d) Annual lender report to covered institutions. A FFEL lender with
a preferred lender arrangement with a covered institution or an
institution-affiliated organization relating to FFEL loans must
annually, on a date prescribed by the Secretary, provide to the covered
institution or the institution-affiliated organization and to the
Secretary, such information required by the Secretary in relation to the
[[Page 121]]
FFEL loans the lender plans to offer pursuant to that preferred lender
arrangement for the next award year.
(Approved by the Office of Management and Budget under control number
1845-XXXA)
(Authority:20 U.S.C. 1019a(b) and 1019b(b))
PART 602_THE SECRETARY'S RECOGNITION OF ACCREDITING AGENCIES-
-Table of Contents
Subpart A_General
Sec.
602.1 Why does the Secretary recognize accrediting agencies?
602.2 How do I know which agencies the Secretary recognizes?
602.3 What definitions apply to this part?
602.4 Severability.
Subpart B_The Criteria for Recognition
Basic Eligibility Requirements
602.10 Link to Federal programs.
602.11 Geographic area of accrediting activities.
602.12 Accrediting experience.
602.13 [Reserved]
Organizational and Administrative Requirements
602.14 Purpose and organization.
602.15 Administrative and fiscal responsibilities.
Required Standards and Their Application
602.16 Accreditation and preaccreditation standards.
602.17 Application of standards in reaching accreditation decisions.
602.18 Ensuring consistency in decision-making.
602.19 Monitoring and reevaluation of accredited institutions and
programs.
602.20 Enforcement of standards.
602.21 Review of standards.
Required Operating Policies and Procedures
602.22 Substantive changes and other reporting requirements.
602.23 Operating procedures all agencies must have.
602.24 Additional procedures certain institutional accreditors must
have.
602.25 Due process.
602.26 Notification of accrediting decisions.
602.27 Other information an agency must provide the Department.
602.28 Regard for decisions of States and other accrediting agencies.
602.29 Severability.
Subpart C_The Recognition Process
Application and Review by Department Staff
602.30 [Reserved]
602.31 Agency applications and reports to be submitted to the
Department.
602.32 Procedures for submitting an application for recognition, renewal
of recognition, expansion of scope, compliance reports, and
increases in enrollment.
602.33 Procedures for review of agencies during the period of
recognition, including the review of monitoring reports.
Review by the National Advisory Committee on Institutional Quality and
Integrity
602.34 Advisory Committee meetings.
602.35 Responding to the Advisory Committee's recommendation.
Review and Decision by the Senior Department Official
602.36 Senior Department official's decision.
Appeal Rights and Procedures
602.37 Appealing the senior Department official's decision to the
Secretary.
602.38 Contesting the Secretary's final decision to deny, limit,
suspend, or terminate an agency's recognition.
602.39 Severability.
Subpart D_Department Responsibilities
602.50 What information does the Department share with a recognized
agency about its accredited institutions and programs?
Authority: 20 U.S.C. 1099b, unless otherwise noted.
Source: 64 FR 56617, Oct. 20, 1999, unless otherwise noted.
Subpart A_General
Sec. 602.1 Why does the Secretary recognize accrediting agencies?
(a) The Secretary recognizes accrediting agencies to ensure that
these agencies are, for the purposes of the Higher Education Act of
1965, as amended (HEA), or for other Federal purposes, reliable
authorities regarding the quality of education or training offered by
the institutions or programs they accredit.
(b) The Secretary lists an agency as a nationally recognized
accrediting agency if the agency meets the criteria for
[[Page 122]]
recognition listed in subpart B of this part.
(Authority: 20 U.S.C. 1099b)
Sec. 602.2 How do I know which agencies the Secretary recognizes?
(a) Periodically, the Secretary publishes a list of recognized
agencies in the Federal Register, together with each agency's scope of
recognition. You may obtain a copy of the list from the Department at
any time. The list is also available on the Department's web site.
(b) If the Secretary denies continued recognition to a previously
recognized agency, or if the Secretary limits, suspends, or terminates
the agency's recognition before the end of its recognition period, the
Secretary publishes a notice of that action in the Federal Register. The
Secretary also makes the reasons for the action available to the public,
on request.
(Authority: 20 U.S.C. 1099b)
Sec. 602.3 What definitions apply to this part?
(a) The following definitions are contained in the regulations for
Institutional Eligibility under the Higher Education Act of 1965, as
amended, 34 CFR part 600:
(1) Accredited
(2) Additional location
(3) Branch campus
(4) Correspondence course
(5) Direct assessment program
(6) Institution of higher education
(7) Nationally recognized accrediting agency
(8) Preaccreditation
(9) Religious mission
(10) Secretary
(11) State
(12) Teach-out
(13) Teach-out agreement
(14) Teach-out plan
(b) The following definitions apply to this part:
Accreditation means the status of public recognition that an
accrediting agency grants to an educational institution or program that
meets the agency's standards and requirements.
Accrediting agency or agency means a legal entity, or that part of a
legal entity, that conducts accrediting activities through voluntary,
non-Federal peer review and makes decisions concerning the accreditation
or preaccreditation status of institutions, programs, or both.
Act means the Higher Education Act of 1965, as amended.
Adverse accrediting action or adverse action means the denial,
withdrawal, suspension, revocation, or termination of accreditation or
preaccreditation, or any comparable accrediting action an agency may
take against an institution or program.
Advisory Committee means the National Advisory Committee on
Institutional Quality and Integrity.
Compliance report means a written report that the Department
requires an agency to file when the agency is found to be out of
compliance to demonstrate that the agency has corrected deficiencies
specified in the decision letter from the senior Department official or
the Secretary. Compliance reports must be reviewed by Department staff
and the Advisory Committee and approved by the senior Department
official or, in the event of an appeal, by the Secretary.
Designated Federal Official means the Federal officer designated
under section 10(f) of the Federal Advisory Committee Act, 5 U.S.C.
Appdx. 1.
Distance education means education that uses one or more of the
technologies listed in paragraphs (1) through (4) of this definition to
deliver instruction to students who are separated from the instructor
and to support regular and substantive interaction between the students
and the instructor, either synchronously or asynchronously. The
technologies may include--
(1) The internet;
(2) One-way and two-way transmissions through open broadcast, closed
circuit, cable, microwave, broadband lines, fiber optics, satellite, or
wireless communications devices;
(3) Audio conferencing; or
(4) Video cassettes, DVDs, and CD-ROMs, if the cassettes, DVDs, or
CD-ROMs are used in a course in conjunction with any of the technologies
listed in paragraphs (1) through (3) of this definition.
[[Page 123]]
Final accrediting action means a final determination by an
accrediting agency regarding the accreditation or preaccreditation
status of an institution or program. A final accrediting action is a
decision made by the agency, at the conclusion of any appeals process
available to the institution or program under the agency's due process
policies and procedures.
Institutional accrediting agency means an agency that accredits
institutions of higher education.
Monitoring report means a report that an agency is required to
submit to Department staff when it is found to be substantially
compliant. The report contains documentation to demonstrate that--
(i) The agency is implementing its current or corrected policies; or
(ii) The agency, which is compliant in practice, has updated its
policies to align with those compliant practices.
Program means a postsecondary educational program offered by an
institution of higher education that leads to an academic or
professional degree, certificate, or other recognized educational
credential.
Programmatic accrediting agency means an agency that accredits
specific educational programs, including those that prepare students in
specific academic disciplines or for entry into a profession,
occupation, or vocation.
Recognition means an unappealed determination by the senior
Department official under Sec. 602.36, or a determination by the
Secretary on appeal under Sec. 602.37, that an accrediting agency
complies with the criteria for recognition listed in subpart B of this
part and that the agency is effective in its application of those
criteria. A grant of recognition to an agency as a reliable authority
regarding the quality of education or training offered by institutions
or programs it accredits remains in effect for the term granted except
upon a determination made in accordance with subpart C of this part that
the agency no longer complies with the subpart B criteria or that it has
become ineffective in its application of those criteria.
Representative of the public means a person who is not--
(1) An employee, member of the governing board, owner, or
shareholder of, or consultant to, an institution or program that either
is accredited or preaccredited by the agency or has applied for
accreditation or preaccreditation;
(2) A member of any trade association or membership organization
related to, affiliated with, or associated with the agency; or
(3) A spouse, parent, child, or sibling of an individual identified
in paragraph (1) or (2) of this definition.
Scope of recognition or scope means the range of accrediting
activities for which the Secretary recognizes an agency. The Secretary
may place a limitation on the scope of an agency's recognition for title
IV, HEA purposes. The Secretary's designation of scope defines the
recognition granted according to--
(i) Types of degrees and certificates covered;
(ii) Types of institutions and programs covered;
(iii) Types of preaccreditation status covered, if any; and
(iv) Coverage of accrediting activities related to distance
education or correspondence courses.
Senior Department official means the official in the U.S. Department
of Education designated by the Secretary who has, in the judgment of the
Secretary, appropriate seniority and relevant subject matter knowledge
to make independent decisions on accrediting agency recognition.
Substantial compliance means the agency demonstrated to the
Department that it has the necessary policies, practices, and standards
in place and generally adheres with fidelity to those policies,
practices, and standards; or the agency has policies, practices, and
standards in place that need minor modifications to reflect its
generally compliant practice.
(Authority: 20 U.S.C. 1099b)
[64 FR 56617, Oct. 20, 1999, as amended at 74 FR 55426, Oct. 27, 2009;
84 FR 58917, Nov. 1, 2019]
Sec. 602.4 Severability.
If any provision of this subpart or its application to any person,
act, or practice is held invalid, the remainder of
[[Page 124]]
the subpart or the application of its provisions to any person, act, or
practice shall not be affected thereby.
[84 FR 58918, Nov. 1, 2019]
Subpart B_The Criteria for Recognition
Basic Eligibility Requirements
Sec. 602.10 Link to Federal programs.
The agency must demonstrate that--
(a) If the agency accredits institutions of higher education, its
accreditation is a required element in enabling at least one of those
institutions to establish eligibility to participate in HEA programs.
If, pursuant to 34 CFR 600.11(b), an agency accredits one or more
institutions that participate in HEA programs and that could designate
the agency as its link to HEA programs, the agency satisfies this
requirement, even if the institution currently designates another
institutional accrediting agency as its Federal link; or
(b) If the agency accredits institutions of higher education or
higher education programs, or both, its accreditation is a required
element in enabling at least one of those entities to establish
eligibility to participate in non-HEA Federal programs.
(Authority: 20 U.S.C. 1099b)
[64 FR 56617, Oct. 20, 1999, as amended at 85 FR 58918, Nov. 1, 2019]
Sec. 602.11 Geographic area of accrediting activities.
The agency must demonstrate that it conducts accrediting activities
within--
(a) A State, if the agency is part of a State government;
(b) A region or group of States chosen by the agency in which an
agency provides accreditation to a main campus, a branch campus, or an
additional location of an institution. An agency whose geographic area
includes a State in which a branch campus or additional location is
located is not required to also accredit a main campus in that State. An
agency whose geographic area includes a State in which only a branch
campus or additional location is located is not required to accept an
application for accreditation from other institutions in such State; or
(c) The United States.
(Authority: 20 U.S.C. 1099b)
[84 FR 58918, Nov. 1, 2019]
Sec. 602.12 Accrediting experience.
(a) An agency seeking initial recognition must demonstrate that it
has--
(1) Granted accreditation or preaccreditation prior to submitting an
application for recognition--
(i) To one or more institutions if it is requesting recognition as
an institutional accrediting agency and to one or more programs if it is
requesting recognition as a programmatic accrediting agency;
(ii) That covers the range of the specific degrees, certificates,
institutions, and programs for which it seeks recognition; and
(iii) In the geographic area for which it seeks recognition; and
(2) Conducted accrediting activities, including deciding whether to
grant or deny accreditation or preaccreditation, for at least two years
prior to seeking recognition, unless the agency seeking initial
recognition is affiliated with, or is a division of, an already
recognized agency.
(b)(1) A recognized agency seeking an expansion of its scope of
recognition must follow the requirements of Sec. Sec. 602.31 and 602.32
and demonstrate that it has accreditation or preaccreditation policies
in place that meet all the criteria for recognition covering the range
of the specific degrees, certificates, institutions, and programs for
which it seeks the expansion of scope and has engaged and can show
support from relevant constituencies for the expansion. A change to an
agency's geographic area of accrediting activities does not constitute
an expansion of the agency's scope of recognition, but the agency must
notify the Department of, and publicly disclose on the agency's website,
any such change.
(2) An agency that cannot demonstrate experience in making
accreditation or preaccreditation decisions under the expanded scope at
the time of its application or review for an expansion of scope may--
[[Page 125]]
(i) If it is an institutional accrediting agency, be limited in the
number of institutions to which it may grant accreditation under the
expanded scope for a designated period of time; or
(ii) If it is a programmatic accrediting agency, be limited in the
number of programs to which it may grant accreditation under that
expanded scope for a certain period of time; and
(iii) Be required to submit a monitoring report regarding
accreditation decisions made under the expanded scope.
(Authority: 20 U.S.C. 1099b)
[84 FR 58918, Nov. 1, 2019]
Sec. 602.13 [Reserved]
Organizational and Administrative Requirements
Sec. 602.14 Purpose and organization.
(a) The Secretary recognizes only the following four categories of
accrediting agencies:
(1) A State agency that--
(i) Has as a principal purpose the accrediting of institutions of
higher education, higher education programs, or both; and
(ii) Has been listed by the Secretary as a nationally recognized
accrediting agency on or before October 1, 1991.
(2) An accrediting agency that--
(i) Has a voluntary membership of institutions of higher education;
(ii) Has as a principal purpose the accrediting of institutions of
higher education and that accreditation is used to provide a link to
Federal HEA programs in accordance with Sec. 602.10; and
(iii) Satisfies the ``separate and independent'' requirements in
paragraph (b) of this section.
(3) An accrediting agency that--
(i) Has a voluntary membership; and
(ii) Has as its principal purpose the accrediting of institutions of
higher education or programs, and the accreditation it offers is used to
provide a link to non-HEA Federal programs in accordance with Sec.
602.10.
(4) An accrediting agency that, for purposes of determining
eligibility for title IV, HEA programs--
(i)(A) Has a voluntary membership of individuals participating in a
profession; or
(B) Has as its principal purpose the accrediting of programs within
institutions that are accredited by another nationally recognized
accrediting agency; and
(ii) Satisfies the ``separate and independent'' requirements in
paragraph (b) of this section or obtains a waiver of those requirements
under paragraph (d) of this section.
(b) For purposes of this section, ``separate and independent'' means
that--
(1) The members of the agency's decision-making body, who decide the
accreditation or preaccreditation status of institutions or programs,
establish the agency's accreditation policies, or both, are not elected
or selected by the board or chief executive officer of any related,
associated, or affiliated trade association, professional organization,
or membership organization and are not staff of the related, associated,
or affiliated trade association, professional organization, or
membership organization;
(2) At least one member of the agency's decision-making body is a
representative of the public, and at least one-seventh of the body
consists of representatives of the public;
(3) The agency has established and implemented guidelines for each
member of the decision-making body including guidelines on avoiding
conflicts of interest in making decisions;
(4) The agency's dues are paid separately from any dues paid to any
related, associated, or affiliated trade association or membership
organization; and
(5) The agency develops and determines its own budget, with no
review by or consultation with any other entity or organization.
(c) The Secretary considers that any joint use of personnel,
services, equipment, or facilities by an agency and a related,
associated, or affiliated trade association or membership organization
does not violate the ``separate and independent'' requirements in
paragraph (b) of this section if--
(1) The agency pays the fair market value for its proportionate
share of the joint use; and
[[Page 126]]
(2) The joint use does not compromise the independence and
confidentiality of the accreditation process.
(d) For purposes of paragraph (a)(4) of this section, the Secretary
may waive the ``separate and independent'' requirements in paragraph (b)
of this section if the agency demonstrates that--
(1) The Secretary listed the agency as a nationally recognized
agency on or before October 1, 1991, and has recognized it continuously
since that date;
(2) The related, associated, or affiliated trade association or
membership organization plays no role in making or ratifying either the
accrediting or policy decisions of the agency;
(3) The agency has sufficient budgetary and administrative autonomy
to carry out its accrediting functions independently;
(4) The agency provides to the related, associated, or affiliated
trade association or membership organization only information it makes
available to the public.
(e) An agency seeking a waiver of the ``separate and independent''
requirements under paragraph (d) of this section must apply for the
waiver each time the agency seeks recognition or continued recognition.
(Authority: 20 U.S.C. 1099b)
[84 FR 58919, Nov. 1, 2019]
Sec. 602.15 Administrative and fiscal responsibilities.
The agency must have the administrative and fiscal capability to
carry out its accreditation activities in light of its requested scope
of recognition. The agency meets this requirement if the agency
demonstrates that--
(a) The agency has--
(1) Adequate administrative staff and financial resources to carry
out its accrediting responsibilities;
(2) Competent and knowledgeable individuals, qualified by education
or experience in their own right and trained by the agency on their
responsibilities, as appropriate for their roles, regarding the agency's
standards, policies, and procedures, to conduct its on-site evaluations,
apply or establish its policies, and make its accrediting and
preaccrediting decisions, including, if applicable to the agency's
scope, their responsibilities regarding distance education and
correspondence courses;
(3) Academic and administrative personnel on its evaluation, policy,
and decision-making bodies, if the agency accredits institutions;
(4) Educators, practitioners, and/or employers on its evaluation,
policy, and decision-making bodies, if the agency accredits programs or
single-purpose institutions that prepare students for a specific
profession;
(5) Representatives of the public, which may include students, on
all decision-making bodies; and
(6) Clear and effective controls, including guidelines, to prevent
or resolve conflicts of interest, or the appearance of conflicts of
interest, by the agency's--
(i) Board members;
(ii) Commissioners;
(iii) Evaluation team members;
(iv) Consultants;
(v) Administrative staff; and
(vi) Other agency representatives; and
(b) The agency maintains complete and accurate records of--
(1) Its last full accreditation or preaccreditation review of each
institution or program, including on-site evaluation team reports, the
institution's or program's responses to on-site reports, periodic review
reports, any reports of special reviews conducted by the agency between
regular reviews, and a copy of the institution's or program's most
recent self-study; and
(2) All decision letters issued by the agency regarding the
accreditation and preaccreditation of any institution or program and any
substantive changes.
(Authority: 20 U.S.C. 1099b)
[84 FR 58919, Nov. 1, 2019]
Required Standards and Their Application
Sec. 602.16 Accreditation and preaccreditation standards.
(a) The agency must demonstrate that it has standards for
accreditation, and preaccreditation, if offered, that are sufficiently
rigorous to ensure that the agency is a reliable authority regarding the
quality of the education or training provided by the institutions or
programs it accredits. The agency
[[Page 127]]
meets this requirement if the following conditions are met:
(1) The agency's accreditation standards must set forth clear
expectations for the institutions or programs it accredits in the
following areas:
(i) Success with respect to student achievement in relation to the
institution's mission, which may include different standards for
different institutions or programs, as established by the institution,
including, as appropriate, consideration of State licensing
examinations, course completion, and job placement rates.
(ii) Curricula.
(iii) Faculty.
(iv) Facilities, equipment, and supplies.
(v) Fiscal and administrative capacity as appropriate to the
specified scale of operations.
(vi) Student support services.
(vii) Recruiting and admissions practices, academic calendars,
catalogs, publications, grading, and advertising.
(viii) Measures of program length and the objectives of the degrees
or credentials offered.
(ix) Record of student complaints received by, or available to, the
agency.
(x) Record of compliance with the institution's program
responsibilities under title IV of the Act, based on the most recent
student loan default rate data provided by the Secretary, the results of
financial or compliance audits, program reviews, and any other
information that the Secretary may provide to the agency; and
(2) The agency's preaccreditation standards, if offered, must--
(i) Be appropriately related to the agency's accreditation
standards; and
(ii) Not permit the institution or program to hold preaccreditation
status for more than five years before a final accrediting action is
made.
(b) Agencies are not required to apply the standards described in
paragraph (a)(1)(x) of this section to institutions that do not
participate in title IV, HEA programs. Under such circumstance, the
agency's grant of accreditation or preaccreditation must specify that
the grant, by request of the institution, does not include participation
by the institution in title IV, HEA programs.
(c) If the agency only accredits programs and does not serve as an
institutional accrediting agency for any of those programs, its
accreditation standards must address the areas in paragraph (a)(1) of
this section in terms of the type and level of the program rather than
in terms of the institution.
(d)(1) If the agency has or seeks to include within its scope of
recognition the evaluation of the quality of institutions or programs
offering distance education, correspondence courses, or direct
assessment education, the agency's standards must effectively address
the quality of an institution's distance education, correspondence
courses, or direct assessment education in the areas identified in
paragraph (a)(1) of this section.
(2) The agency is not required to have separate standards,
procedures, or policies for the evaluation of distance education or
correspondence courses.
(e) If none of the institutions an agency accredits participates in
any title IV, HEA program, or if the agency only accredits programs
within institutions that are accredited by a nationally recognized
institutional accrediting agency, the agency is not required to have the
accreditation standards described in paragraphs (a)(1)(viii) and
(a)(1)(x) of this section.
(f) An agency that has established and applies the standards in
paragraph (a) of this section may establish any additional accreditation
standards it deems appropriate.
(g) Nothing in paragraph (a) of this section restricts--
(1) An accrediting agency from setting, with the involvement of its
members, and applying accreditation standards for or to institutions or
programs that seek review by the agency;
(2) An institution from developing and using institutional standards
to show its success with respect to student achievement, which
achievement may be considered as part of any accreditation review; or
(3) Agencies from having separate standards regarding an
institution's or a program's process for approving curriculum to enable
programs to more effectively meet the recommendations of--
[[Page 128]]
(i) Industry advisory boards that include employers who hire program
graduates;
(ii) Widely recognized industry standards and organizations;
(iii) Credentialing or other occupational registration or licensure;
or
(iv) Employers in a given field or occupation, in making hiring
decisions.
(4) Agencies from having separate faculty standards for instructors
teaching courses within a dual or concurrent enrollment program, as
defined in 20 U.S.C. 7801, or career and technical education courses, as
long as the instructors, in the agency's judgment, are qualified by
education or work experience for that role.
(Authority: 20 U.S.C. 1099b)
[84 FR 58919, Nov. 1, 2019]
Sec. 602.17 Application of standards in reaching accreditation decisions.
The agency must have effective mechanisms for evaluating an
institution's or program's compliance with the agency's standards before
reaching a decision to accredit or preaccredit the institution or
program. The agency meets this requirement if the agency demonstrates
that it--
(a) Evaluates whether an institution or program--
(1) Maintains clearly specified educational objectives that are
consistent with its mission and appropriate in light of the degrees or
certificates awarded;
(2) Is successful in achieving its stated objectives at both the
institutional and program levels; and
(3) Maintains requirements that at least conform to commonly
accepted academic standards, or the equivalent, including pilot programs
in Sec. 602.18(b);
(b) Requires the institution or program to engage in a self-study
process that assesses the institution's or program's education quality
and success in meeting its mission and objectives, highlights
opportunities for improvement, and includes a plan for making those
improvements;
(c) Conducts at least one on-site review of the institution or
program during which it obtains sufficient information to determine if
the institution or program complies with the agency's standards;
(d) Allows the institution or program the opportunity to respond in
writing to the report of the on-site review;
(e) Conducts its own analysis of the self-study and supporting
documentation furnished by the institution or program, the report of the
on-site review, the institution's or program's response to the report,
and any other information substantiated by the agency from other sources
to determine whether the institution or program complies with the
agency's standards;
(f) Provides the institution or program with a detailed written
report that assesses the institution's or program's compliance with the
agency's standards, including areas needing improvement, and the
institution's or program's performance with respect to student
achievement;
(g) Requires institutions to have processes in place through which
the institution establishes that a student who registers in any course
offered via distance education or correspondence is the same student who
academically engages in the course or program; and
(h) Makes clear in writing that institutions must use processes that
protect student privacy and notify students of any projected additional
student charges associated with the verification of student identity at
the time of registration or enrollment.
(Authority: 20 U.S.C. 1099b)
[84 FR 58920, Nov. 1, 2019]
Sec. 602.18 Ensuring consistency in decision-making.
(a) The agency must consistently apply and enforce standards that
respect the stated mission of the institution, including religious
mission, and that ensure that the education or training offered by an
institution or program, including any offered through distance
education, correspondence courses, or direct assessment education is of
sufficient quality to achieve its stated objective for the duration of
any accreditation or preaccreditation period.
(b) The agency meets the requirement in paragraph (a) of this
section if the agency--
(1) Has written specification of the requirements for accreditation
and
[[Page 129]]
preaccreditation that include clear standards for an institution or
program to be accredited or preaccredited;
(2) Has effective controls against the inconsistent application of
the agency's standards;
(3) Bases decisions regarding accreditation and preaccreditation on
the agency's published standards and does not use as a negative factor
the institution's religious mission-based policies, decisions, and
practices in the areas covered by Sec. 602.16(a)(1)(ii), (iii), (iv),
(vi), and (vii) provided, however, that the agency may require that the
institution's or program's curricula include all core components
required by the agency;
(4) Has a reasonable basis for determining that the information the
agency relies on for making accrediting decisions is accurate;
(5) Provides the institution or program with a detailed written
report that clearly identifies any deficiencies in the institution's or
program's compliance with the agency's standards; and
(6) Publishes any policies for retroactive application of an
accreditation decision, which must not provide for an effective date
that predates either--
(i) An earlier denial by the agency of accreditation or
preaccreditation to the institution or program; or
(ii) The agency's formal approval of the institution or program for
consideration in the agency's accreditation or preaccreditation process.
(c) Nothing in this part prohibits an agency, when special
circumstances exist, to include innovative program delivery approaches
or, when an undue hardship on students occurs, from applying equivalent
written standards, policies, and procedures that provide alternative
means of satisfying one or more of the requirements set forth in 34 CFR
602.16, 602.17, 602.19, 602.20, 602.22, and 602.24, as compared with
written standards, policies, and procedures the agency ordinarily
applies, if--
(1) The alternative standards, policies, and procedures, and the
selection of institutions or programs to which they will be applied, are
approved by the agency's decision-making body and otherwise meet the
intent of the agency's expectations and requirements;
(2) The agency sets and applies equivalent goals and metrics for
assessing the performance of institutions or programs;
(3) The agency's process for establishing and applying the
alternative standards, policies, and procedures is set forth in its
published accreditation manuals; and
(4) The agency requires institutions or programs seeking the
application of alternative standards to demonstrate the need for an
alternative assessment approach, that students will receive equivalent
benefit, and that students will not be harmed through such application.
(d) Nothing in this part prohibits an agency from permitting the
institution or program to be out of compliance with one or more of its
standards, policies, and procedures adopted in satisfaction of
Sec. Sec. 602.16, 602.17, 602.19, 602.20, 602.22, and 602.24 for a
period of time, as determined by the agency annually, not to exceed
three years unless the agency determines there is good cause to extend
the period of time, and if--
(1) The agency and the institution or program can show that the
circumstances requiring the period of noncompliance are beyond the
institution's or program's control, such as--
(i) A natural disaster or other catastrophic event significantly
impacting an institution's or program's operations;
(ii) Accepting students from another institution that is
implementing a teach-out or closing;
(iii) Significant and documented local or national economic changes,
such as an economic recession or closure of a large local employer;
(iv) Changes relating to State licensure requirements;
(v) The normal application of the agency's standards creates an
undue hardship on students; or
(vi) Instructors who do not meet the agency's typical faculty
standards, but who are otherwise qualified by education or work
experience, to teach courses within a dual or concurrent enrollment
program, as defined in 20 U.S.C. 7801, or career and technical education
courses;
[[Page 130]]
(2) The grant of the period of noncompliance is approved by the
agency's decision-making body;
(3) The agency projects that the institution or program has the
resources necessary to achieve compliance with the standard, policy, or
procedure postponed within the time allotted; and
(4) The institution or program demonstrates to the satisfaction of
the agency that the period of noncompliance will not--
(i) Contribute to the cost of the program to the student without the
student's consent;
(ii) Create any undue hardship on, or harm to, students; or
(iii) Compromise the program's academic quality.
(Authority: 20 U.S.C. 1099b)
[84 FR 58920, Nov. 1, 2019]
Sec. 602.19 Monitoring and reevaluation of accredited institutions
and programs.
(a) The agency must reevaluate, at regularly established intervals,
the institutions or programs it has accredited or preaccredited.
(b) The agency must demonstrate it has, and effectively applies,
monitoring and evaluation approaches that enable the agency to identify
problems with an institution's or program's continued compliance with
agency standards and that take into account institutional or program
strengths and stability. These approaches must include periodic reports,
and collection and analysis of key data and indicators, identified by
the agency, including, but not limited to, fiscal information and
measures of student achievement, consistent with the provisions of Sec.
602.16(g). This provision does not require institutions or programs to
provide annual reports on each specific accreditation criterion.
(c) Each agency must monitor overall growth of the institutions or
programs it accredits and, at least annually, collect head-count
enrollment data from those institutions or programs.
(d) Institutional accrediting agencies must monitor the growth of
programs at institutions experiencing significant enrollment growth, as
reasonably defined by the agency.
(e) Any agency that has notified the Secretary of a change in its
scope in accordance with Sec. 602.27(a) must monitor the headcount
enrollment of each institution it has accredited that offers distance
education or correspondence courses. The Secretary will require a
review, at the next meeting of the National Advisory Committee on
Institutional Quality and Integrity, of any change in scope undertaken
by an agency if the enrollment of an institution that offers distance
education or correspondence courses that is accredited by such agency
increases by 50 percent or more within any one institutional fiscal
year. If any such institution has experienced an increase in head-count
enrollment of 50 percent or more within one institutional fiscal year,
the agency must report that information to the Secretary within 30 days
of acquiring such data.
(Authority: 20 U.S.C. 1099b)
[84 FR 58921, Nov. 1, 2019]
Sec. 602.20 Enforcement of standards.
(a) If the agency's review of an institution or program under any
standard indicates that the institution or program is not in compliance
with that standard, the agency must--
(1) Follow its written policy for notifying the institution or
program of the finding of noncompliance;
(2) Provide the institution or program with a written timeline for
coming into compliance that is reasonable, as determined by the agency's
decision-making body, based on the nature of the finding, the stated
mission, and educational objectives of the institution or program. The
timeline may include intermediate checkpoints on the way to full
compliance and must not exceed the lesser of four years or 150 percent
of the--
(i) Length of the program in the case of a programmatic accrediting
agency; or
(ii) Length of the longest program at the institution in the case of
an institutional accrediting agency;
(3) Follow its written policies and procedures for granting a good
cause extension that may exceed the standard timeframe described in
paragraph (a)(2) of this section when such an extension is determined by
the agency to be warranted; and
[[Page 131]]
(4) Have a written policy to evaluate and approve or disapprove
monitoring or compliance reports it requires, provide ongoing
monitoring, if warranted, and evaluate an institution's or program's
progress in resolving the finding of noncompliance.
(b) Notwithstanding paragraph (a) of this section, the agency must
have a policy for taking an immediate adverse action, and take such
action, when the agency has determined that such action is warranted.
(c) If the institution or program does not bring itself into
compliance within the period specified in paragraph (a) of this section,
the agency must take adverse action against the institution or program,
but may maintain the institution's or program's accreditation or
preaccreditation until the institution or program has had reasonable
time to complete the activities in its teach-out plan or to fulfill the
obligations of any teach-out agreement to assist students in
transferring or completing their programs.
(d) An agency that accredits institutions may limit the adverse or
other action to particular programs that are offered by the institution
or to particular additional locations of an institution, without
necessarily taking action against the entire institution and all of its
programs, provided the noncompliance was limited to that particular
program or location.
(e) All adverse actions taken under this subpart are subject to the
arbitration requirements in 20 U.S.C. 1099b(e).
(f) An agency is not responsible for enforcing requirements in 34
CFR 668.14, 668.15, 668.16, 668.41, or 668.46, but if, in the course of
an agency's work, it identifies instances or potential instances of
noncompliance with any of these requirements, it must notify the
Department.
(g) The Secretary may not require an agency to take action against
an institution or program that does not participate in any title IV, HEA
or other Federal program as a result of a requirement specified in this
part.
(Authority: 20 U.S.C. 1099b)
[84 FR 58922, Nov. 1, 2019]
Sec. 602.21 Review of standards.
(a) The agency must maintain a comprehensive systematic program of
review that involves all relevant constituencies and that demonstrates
that its standards are adequate to evaluate the quality of the education
or training provided by the institutions and programs it accredits and
relevant to the educational or training needs of students.
(b) The agency determines the specific procedures it follows in
evaluating its standards, but the agency must ensure that its program of
review--
(1) Is comprehensive;
(2) Occurs at regular, yet reasonable, intervals or on an ongoing
basis;
(3) Examines each of the agency's standards and the standards as a
whole; and
(4) Involves all of the agency's relevant constituencies in the
review and affords them a meaningful opportunity to provide input into
the review.
(c) If the agency determines, at any point during its systematic
program of review, that it needs to make changes to its standards, the
agency must initiate action within 12 months to make the changes and
must complete that action within a reasonable period of time.
(d) Before finalizing any changes to its standards, the agency
must--
(1) Provide notice to all of the agency's relevant constituencies,
and other parties who have made their interest known to the agency, of
the changes the agency proposes to make;
(2) Give the constituencies and other interested parties adequate
opportunity to comment on the proposed changes; and
(3) Take into account and be responsive to any comments on the
proposed changes submitted timely by the relevant constituencies and
other interested parties.
(Authority: 20 U.S.C. 1099b)
[64 FR 56617, Oct. 20, 1999, as amended at 84 FR 58922, Nov. 1, 2019]
[[Page 132]]
Required Operating Policies and Procedures
Sec. 602.22 Substantive changes and other reporting requirements.
(a)(1) If the agency accredits institutions, it must maintain
adequate substantive change policies that ensure that any substantive
change, as defined in this section, after the agency has accredited or
preaccredited the institution does not adversely affect the capacity of
the institution to continue to meet the agency's standards. The agency
meets this requirement if--
(i) The agency requires the institution to obtain the agency's
approval of the substantive change before the agency includes the change
in the scope of accreditation or preaccreditation it previously granted
to the institution; and
(ii) The agency's definition of substantive change covers high-
impact, high-risk changes, including at least the following:
(A) Any substantial change in the established mission or objectives
of the institution or its programs.
(B) Any change in the legal status, form of control, or ownership of
the institution.
(C) The addition of programs that represent a significant departure
from the existing offerings or educational programs, or method of
delivery, from those that were offered or used when the agency last
evaluated the institution.
(D) The addition of graduate programs by an institution that
previously offered only undergraduate programs or certificates.
(E) A change in the way an institution measures student progress,
including whether the institution measures progress in clock hours or
credit-hours, semesters, trimesters, or quarters, or uses time-based or
non-time-based methods.
(F) A substantial increase in the number of clock hours or credit
hours awarded, or an increase in the level of credential awarded, for
successful completion of one or more programs.
(G) The acquisition of any other institution or any program or
location of another institution.
(H) The addition of a permanent location at a site at which the
institution is conducting a teach-out for students of another
institution that has ceased operating before all students have completed
their program of study.
(I) The addition of a new location or branch campus, except as
provided in paragraph (c) of this section. The agency's review must
include assessment of the institution's fiscal and administrative
capability to operate the location or branch campus, the regular
evaluation of locations, and verification of the following:
(1) Academic control is clearly identified by the institution.
(2) The institution has adequate faculty, facilities, resources, and
academic and student support systems in place.
(3) The institution is financially stable.
(4) The institution had engaged in long-range planning for
expansion.
(J) Entering into a written arrangement under 34 CFR 668.5 under
which an institution or organization not certified to participate in the
title IV, HEA programs offers more than 25 and up to 50 percent of one
or more of the accredited institution's educational programs.
(K) Addition of each direct assessment program.
(2)(i) For substantive changes under only paragraph (a)(1)(ii)(C),
(E), (F), (H), or (J) of this section, the agency's decision-making body
may designate agency senior staff to approve or disapprove the request
in a timely, fair, and equitable manner; and
(ii) In the case of a request under paragraph (a)(1)(ii)(J) of this
section, the agency must make a final decision within 90 days of receipt
of a materially complete request, unless the agency or its staff
determine significant circumstances related to the substantive change
require a review by the agency's decision-making body to occur within
180 days.
(b) Institutions that have been placed on probation or equivalent
status, have been subject to negative action by the agency over the
prior three academic years, or are under a provisional certification, as
provided in 34 CFR 668.13,
[[Page 133]]
must receive prior approval for the following additional changes (all
other institutions must report these changes within 30 days to their
accrediting agency):
(1) A change in an existing program's method of delivery.
(2) An aggregate change of 25 percent or more of the clock hours,
credit hours, or content of a program since the agency's most recent
accreditation review.
(3) The development of customized pathways or abbreviated or
modified courses or programs to--
(i) Accommodate and recognize a student's existing knowledge, such
as knowledge attained through employment or military service; and
(ii) Close competency gaps between demonstrated prior knowledge or
competency and the full requirements of a particular course or program.
(4) Entering into a written arrangement under 34 CFR 668.5 under
which an institution or organization not certified to participate in the
title IV, HEA programs offers up to 25 percent of one or more of the
accredited institution's educational programs.
(c) Institutions that have successfully completed at least one cycle
of accreditation and have received agency approval for the addition of
at least two additional locations as provided in paragraph (a)(1)(ii)(I)
of this section, and that have not been placed on probation or
equivalent status or been subject to a negative action by the agency
over the prior three academic years, and that are not under a
provisional certification, as provided in 34 CFR 668.13, need not apply
for agency approval of subsequent additions of locations, and must
report these changes to the accrediting agency within 30 days, if the
institution has met criteria established by the agency indicating
sufficient capacity to add additional locations without individual prior
approvals, including, at a minimum, satisfactory evidence of a system to
ensure quality across a distributed enterprise that includes--
(1) Clearly identified academic control;
(2) Regular evaluation of the locations;
(3) Adequate faculty, facilities, resources, and academic and
student support systems;
(4) Financial stability; and
(5) Long-range planning for expansion.
(d) The agency must have an effective mechanism for conducting, at
reasonable intervals, visits to a representative sample of additional
locations approved under paragraphs (a)(1)(ii)(H) and (I) of this
section.
(e) The agency may determine the procedures it uses to grant prior
approval of the substantive change. However, these procedures must
specify an effective date, on which the change is included in the
program's or institution's grant of accreditation or preaccreditation.
The date of prior approval must not pre-date either an earlier agency
denial of the substantive change, or the agency's formal acceptance of
the application for the substantive change for inclusion in the
program's or institution's grant of accreditation or preaccreditation.
An agency may designate the date of a change in ownership as the
effective date of its approval of that substantive change if the
accreditation decision is made within 30 days of the change in
ownership. Except as provided in paragraphs (d) and (f) of this section,
an agency may require a visit before granting such an approval.
(f) Except as provided in paragraph (c) of this section, if the
agency's accreditation of an institution enables the institution to seek
eligibility to participate in title IV, HEA programs, the agency's
procedures for the approval of an additional location that is not a
branch campus where at least 50 percent of an educational program is
offered must include--
(1) A visit, within six months, to each additional location the
institution establishes, if the institution--
(i) Has a total of three or fewer additional locations;
(ii) Has not demonstrated, to the agency's satisfaction, that the
additional location is meeting all of the agency's standards that apply
to that additional location; or
(iii) Has been placed on warning, probation, or show cause by the
agency or is subject to some limitation by the
[[Page 134]]
agency on its accreditation or preaccreditation status;
(2) A mechanism for conducting, at reasonable intervals, visits to a
representative sample of additional locations of institutions that
operate more than three additional locations; and
(3) A mechanism, which may, at the agency's discretion, include
visits to additional locations, for ensuring that accredited and
preaccredited institutions that experience rapid growth in the number of
additional locations maintain education quality.
(g) The purpose of the visits described in paragraph (f) of this
section is to verify that the additional location has the personnel,
facilities, and resources the institution claimed it had in its
application to the agency for approval of the additional location.
(h) The agency's substantive change policy must define when the
changes made or proposed by an institution are or would be sufficiently
extensive to require the agency to conduct a new comprehensive
evaluation of that institution.
(Authority: 20 U.S.C. 1099b)
[84 FR 58922, Nov. 1, 2019]
Sec. 602.23 Operating procedures all agencies must have.
(a) The agency must maintain and make available to the public
written materials describing--
(1) Each type of accreditation and preaccreditation it grants;
(2) The procedures that institutions or programs must follow in
applying for accreditation, preaccreditation, or substantive changes and
the sequencing of those steps relative to any applications or decisions
required by States or the Department relative to the agency's
preaccreditation, accreditation, or substantive change decisions;
(3) The standards and procedures it uses to determine whether to
grant, reaffirm, reinstate, restrict, deny, revoke, terminate, or take
any other action related to each type of accreditation and
preaccreditation that the agency grants;
(4) The institutions and programs that the agency currently
accredits or preaccredits and, for each institution and program, the
year the agency will next review or reconsider it for accreditation or
preaccreditation; and
(5) A list of the names, academic and professional qualifications,
and relevant employment and organizational affiliations of--
(i) The members of the agency's policy and decision-making bodies;
and
(ii) The agency's principal administrative staff.
(b) In providing public notice that an institution or program
subject to its jurisdiction is being considered for accreditation or
preaccreditation, the agency must provide an opportunity for third-party
comment concerning the institution's or program's qualifications for
accreditation or preaccreditation. At the agency's discretion, third-
party comment may be received either in writing or at a public hearing,
or both.
(c) The accrediting agency must--
(1) Review in a timely, fair, and equitable manner any complaint it
receives against an accredited institution or program that is related to
the agency's standards or procedures. The agency may not complete its
review and make a decision regarding a complaint unless, in accordance
with published procedures, it ensures that the institution or program
has sufficient opportunity to provide a response to the complaint;
(2) Take follow-up action, as necessary, including enforcement
action, if necessary, based on the results of its review; and
(3) Review in a timely, fair, and equitable manner, and apply
unbiased judgment to, any complaints against itself and take follow-up
action, as appropriate, based on the results of its review.
(d) If an institution or program elects to make a public disclosure
of its accreditation or preaccreditation status, the agency must ensure
that the institution or program discloses that status accurately,
including the specific academic or instructional programs covered by
that status and the name and contact information for the agency.
(e) The accrediting agency must provide for the public correction of
incorrect or misleading information an accredited or preaccredited
institution or program releases about--
[[Page 135]]
(1) The accreditation or preaccreditation status of the institution
or program;
(2) The contents of reports of on-site reviews; and
(3) The agency's accrediting or preaccrediting actions with respect
to the institution or program.
(f)(1) If preaccreditation is offered--
(i) The agency's preaccreditation policies must limit the status to
institutions or programs that the agency has determined are likely to
succeed in obtaining accreditation;
(ii) The agency must require all preaccredited institutions to have
a teach-out plan, which must ensure students completing the teach-out
would meet curricular requirements for professional licensure or
certification, if any, and which must include a list of academic
programs offered by the institution and the names of other institutions
that offer similar programs and that could potentially enter into a
teach-out agreement with the institution;
(iii) An agency that denies accreditation to an institution it has
preaccredited may maintain the institution's preaccreditation for
currently enrolled students until the institution has had a reasonable
time to complete the activities in its teach-out plan to assist students
in transferring or completing their programs, but for no more than 120
days unless approved by the agency for good cause; and
(iv) The agency may not move an accredited institution or program
from accredited to preaccredited status unless, following the loss of
accreditation, the institution or program applies for initial
accreditation and is awarded preaccreditation status under the new
application. Institutions that participated in the title IV, HEA
programs before the loss of accreditation are subject to the
requirements of 34 CFR 600.11(c).
(2) All credits and degrees earned and issued by an institution or
program holding preaccreditation from a nationally recognized agency are
considered by the Secretary to be from an accredited institution or
program.
(g) The agency may establish any additional operating procedures it
deems appropriate. At the agency's discretion, these may include
unannounced inspections.
(Approved by the Office of Management and Budget under control number
1845-0003)
(Authority: 20 U.S.C. 1099b)
[64 FR 56617, Oct. 20, 1999, as amended at 74 FR 55428, Oct. 27, 2009;
84 FR 58923, Nov. 1, 2019]
Sec. 602.24 Additional procedures certain institutional agencies
must have.
If the agency is an institutional accrediting agency and its
accreditation or preaccreditation enables those institutions to obtain
eligibility to participate in title IV, HEA programs, the agency must
demonstrate that it has established and uses all of the following
procedures:
(a) Branch campus. The agency must require the institution to notify
the agency if it plans to establish a branch campus and to submit a
business plan for the branch campus that describes--
(1) The educational program to be offered at the branch campus; and
(2) The projected revenues and expenditures and cash flow at the
branch campus.
(b) Site visits. The agency must undertake a site visit to a new
branch campus or following a change of ownership or control as soon as
practicable, but no later than six months, after the establishment of
that campus or the change of ownership or control.
(c) Teach-out plans and agreements. (1) The agency must require an
institution it accredits to submit a teach-out plan as defined in 34 CFR
600.2 to the agency for approval upon the occurrence of any of the
following events:
(i) For a nonprofit or proprietary institution, the Secretary
notifies the agency of a determination by the institution's independent
auditor expressing doubt about the institution's ability to operate as a
going concern or indicating an adverse opinion or a finding of material
weakness related to financial stability.
(ii) The agency acts to place the institution on probation or
equivalent status.
(iii) The Secretary notifies the agency that the institution is
participating in title IV, HEA programs under a provisional program
participation agreement and the Secretary has required a
[[Page 136]]
teach-out plan as a condition of participation.
(2) The agency must require an institution it accredits or
preaccredits to submit a teach-out plan and, if practicable, teach-out
agreements (as defined in 34 CFR 600.2) to the agency for approval upon
the occurrence of any of the following events:
(i) The Secretary notifies the agency that it has placed the
institution on the reimbursement payment method under 34 CFR 668.162(c)
or the heightened cash monitoring payment method requiring the
Secretary's review of the institution's supporting documentation under
34 CFR 668.162(d)(2).
(ii) The Secretary notifies the agency that the Secretary has
initiated an emergency action against an institution, in accordance with
section 487(c)(1)(G) of the HEA, or an action to limit, suspend, or
terminate an institution participating in any title IV, HEA program, in
accordance with section 487(c)(1)(F) of the HEA.
(iii) The agency acts to withdraw, terminate, or suspend the
accreditation or preaccreditation of the institution.
(iv) The institution notifies the agency that it intends to cease
operations entirely or close a location that provides one hundred
percent of at least one program, including if the location is being
moved and is considered by the Secretary to be a closed school.
(v) A State licensing or authorizing agency notifies the agency that
an institution's license or legal authorization to provide an
educational program has been or will be revoked.
(3) The agency must evaluate the teach-out plan to ensure it
includes a list of currently enrolled students, academic programs
offered by the institution, and the names of other institutions that
offer similar programs and that could potentially enter into a teach-out
agreement with the institution.
(4) If the agency approves a teach-out plan that includes a program
or institution that is accredited by another recognized accrediting
agency, it must notify that accrediting agency of its approval.
(5) The agency may require an institution it accredits or
preaccredits to enter into a teach-out agreement as part of its teach-
out plan.
(6) The agency must require a closing institution to include in its
teach-out agreement--
(i) A complete list of students currently enrolled in each program
at the institution and the program requirements each student has
completed;
(ii) A plan to provide all potentially eligible students with
information about how to obtain a closed school discharge and, if
applicable, information on State refund policies;
(iii) A record retention plan to be provided to all enrolled
students that delineates the final disposition of teach-out records
(e.g., student transcripts, billing, financial aid records);
(iv) Information on the number and types of credits the teach-out
institution is willing to accept prior to the student's enrollment; and
(v) A clear statement to students of the tuition and fees of the
educational program and the number and types of credits that will be
accepted by the teach-out institution.
(7) The agency must require an institution it accredits or
preaccredits that enters into a teach-out agreement, either on its own
or at the request of the agency, to submit that teach-out agreement for
approval. The agency may approve the teach-out agreement only if the
agreement meets the requirements of 34 CFR 600.2 and this section, is
consistent with applicable standards and regulations, and provides for
the equitable treatment of students being served by ensuring that the
teach-out institution--
(i) Has the necessary experience, resources, and support services to
provide an educational program that is of acceptable quality and
reasonably similar in content, delivery modality, and scheduling to that
provided by the institution that is ceasing operations either entirely
or at one of its locations; however, while an option via an alternate
method of delivery may be made available to students, such an option is
not sufficient unless an option via the same method of delivery as the
original educational program is also provided;
[[Page 137]]
(ii) Has the capacity to carry out its mission and meet all
obligations to existing students; and
(iii) Demonstrates that it--
(A) Can provide students access to the program and services without
requiring them to move or travel for substantial distances or durations;
and
(B) Will provide students with information about additional charges,
if any.
(8) Irrespective of any teach-out plan or signed teach-out
agreement, the agency must not permit an institution to serve as a
teach-out institution under the following conditions:
(i) The institution is subject to the conditions in paragraph (c)(1)
or (2) of this section.
(ii) The institution is under investigation, subject to an action,
or being prosecuted for an issue related to academic quality,
misrepresentation, fraud, or other severe matters by a law enforcement
agency.
(9) The agency is permitted to waive requirements regarding the
percentage of credits that must be earned by a student at the
institution awarding the educational credential if the student is
completing his or her program through a written teach-out agreement or
transfer.
(10) The agency must require the institution to provide copies of
all notifications from the institution related to the institution's
closure or to teach-out options to ensure the information accurately
represents students' ability to transfer credits and may require
corrections.
(d) Closed institution. If an institution the agency accredits or
preaccredits closes without a teach-out plan or agreement, the agency
must work with the Department and the appropriate State agency, to the
extent feasible, to assist students in finding reasonable opportunities
to complete their education without additional charges.
(e) Transfer of credit policies. The accrediting agency must
confirm, as part of its review for initial accreditation or
preaccreditation, or renewal of accreditation, that the institution has
transfer of credit policies that--
(1) Are publicly disclosed in accordance with Sec.
[thinsp]668.43(a)(11); and
(2) Include a statement of the criteria established by the
institution regarding the transfer of credit earned at another
institution of higher education.
(f) Agency designations. In its accrediting practice, the agency
must--
(1) Adopt and apply the definitions of ``branch campus'' and
``additional location'' in 34 CFR 600.2;
(2) On the Secretary's request, conform its designations of an
institution's branch campuses and additional locations with the
Secretary's if it learns its designations diverge; and
(3) Ensure that it does not accredit or preaccredit an institution
comprising fewer than all of the programs, branch campuses, and
locations of an institution as certified for title IV participation by
the Secretary, except with notice to and permission from the Secretary.
(Authority: 20 U.S.C. 1099b)
[84 FR 58924, Nov. 1, 2019]
Sec. 602.25 Due process.
The agency must demonstrate that the procedures it uses throughout
the accrediting process satisfy due process. The agency meets this
requirement if the agency does the following:
(a) Provides adequate written specification of its requirements,
including clear standards, for an institution or program to be
accredited or preaccredited.
(b) Uses procedures that afford an institution or program a
reasonable period of time to comply with the agency's requests for
information and documents.
(c) Provides written specification of any deficiencies identified at
the institution or program examined.
(d) Provides sufficient opportunity for a written response by an
institution or program regarding any deficiencies identified by the
agency, to be considered by the agency within a timeframe determined by
the agency, and before any adverse action is taken.
(e) Notifies the institution or program in writing of any adverse
accrediting action or an action to place the institution or program on
probation or show cause. The notice describes the basis for the action.
[[Page 138]]
(f) Provides an opportunity, upon written request of an institution
or program, for the institution or program to appeal any adverse action
prior to the action becoming final.
(1) The appeal must take place at a hearing before an appeals panel
that--
(i) May not include current members of the agency's decision-making
body that took the initial adverse action;
(ii) Is subject to a conflict of interest policy;
(iii) Does not serve only an advisory or procedural role, and has
and uses the authority to make the following decisions: To affirm,
amend, or remand adverse actions of the original decision-making body;
and
(iv) Affirms, amends, or remands the adverse action. A decision to
affirm or amend the adverse action is implemented by the appeals panel
or by the original decision-making body, at the agency's option;
however, in the event of a decision by the appeals panel to remand the
adverse action to the original decision-making body for further
consideration, the appeals panel must explain the basis for a decision
that differs from that of the original decision-making body and the
original decision-making body in a remand must act in a manner
consistent with the appeals panel's decisions or instructions.
(2) The agency must recognize the right of the institution or
program to employ counsel to represent the institution or program during
its appeal, including to make any presentation that the agency permits
the institution or program to make on its own during the appeal.
(g) The agency notifies the institution or program in writing of the
result of its appeal and the basis for that result.
(h)(1) The agency must provide for a process, in accordance with
written procedures, through which an institution or program may, before
the agency reaches a final adverse action decision, seek review of new
financial information if all of the following conditions are met:
(i) The financial information was unavailable to the institution or
program until after the decision subject to appeal was made.
(ii) The financial information is significant and bears materially
on the financial deficiencies identified by the agency. The criteria of
significance and materiality are determined by the agency.
(iii) The only remaining deficiency cited by the agency in support
of a final adverse action decision is the institution's or program's
failure to meet an agency standard pertaining to finances.
(2) An institution or program may seek the review of new financial
information described in paragraph (h)(1) of this section only once and
any determination by the agency made with respect to that review does
not provide a basis for an appeal.
(Authority: 20 U.S.C. 1099b)
[74 FR 55429, Oct. 27, 2009, as amended at 84 FR 58925, Nov. 1, 2019]
Sec. 602.26 Notification of accrediting decisions.
The agency must demonstrate that it has established and follows
written procedures requiring it to provide written notice of its
accrediting decisions to the Secretary, the appropriate State licensing
or authorizing agency, the appropriate accrediting agencies, and the
public. The agency meets this requirement if the agency, following its
written procedures--
(a) Provides written notice of the following types of decisions to
the Secretary, the appropriate State licensing or authorizing agency,
the appropriate accrediting agencies, and the public no later than 30
days after it makes the decision:
(1) A decision to award initial accreditation or preaccreditation to
an institution or program.
(2) A decision to renew an institution's or program's accreditation
or preaccreditation;
(b) Provides written notice of a final decision of a probation or
equivalent status or an initiated adverse action to the Secretary, the
appropriate State licensing or authorizing agency, and the appropriate
accrediting agencies at the same time it notifies the institution or
program of the decision and requires the institution or program to
disclose such an action within seven business
[[Page 139]]
days of receipt to all current and prospective students;
(c) Provides written notice of the following types of decisions to
the Secretary, the appropriate State licensing or authorizing agency,
and the appropriate accrediting agencies at the same time it notifies
the institution or program of the decision, but no later than 30 days
after it reaches the decision:
(1) A final decision to deny, withdraw, suspend, revoke, or
terminate the accreditation or preaccreditation of an institution or
program.
(2) A final decision to take any other adverse action, as defined by
the agency, not listed in paragraph (c)(1) of this section;
(d) Provides written notice to the public of the decisions listed in
paragraphs (b) and (c) of this section within one business day of its
notice to the institution or program;
(e) For any decision listed in paragraph (c) of this section,
requires the institution or program to disclose the decision to current
and prospective students within seven business days of receipt and makes
available to the Secretary, the appropriate State licensing or
authorizing agency, and the public, no later than 60 days after the
decision, a brief statement summarizing the reasons for the agency's
decision and the official comments that the affected institution or
program may wish to make with regard to that decision, or evidence that
the affected institution has been offered the opportunity to provide
official comment;
(f) Notifies the Secretary, the appropriate State licensing or
authorizing agency, the appropriate accrediting agencies, and, upon
request, the public if an accredited or preaccredited institution or
program--
(1) Decides to withdraw voluntarily from accreditation or
preaccreditation, within 10 business days of receiving notification from
the institution or program that it is withdrawing voluntarily from
accreditation or preaccreditation; or
(2) Lets its accreditation or preaccreditation lapse, within 10
business days of the date on which accreditation or preaccreditation
lapses.
(Approved by the Office of Management and Budget under control number
1845-0003)
(Authority: 20 U.S.C. 1099b)
[64 FR 56617, Oct. 20, 1999, as amended at 74 FR 55429, Oct. 27, 2009;
84 FR 58924, Nov. 1, 2019]
Sec. 602.27 Other information an agency must provide the Department.
(a) The agency must submit to the Department--
(1) A list, updated annually, of its accredited and preaccredited
institutions and programs, which may be provided electronically;
(2) A summary of the agency's major accrediting activities during
the previous year (an annual data summary), if requested by the
Secretary to carry out the Secretary's responsibilities related to this
part;
(3) Any proposed change in the agency's policies, procedures, or
accreditation or preaccreditation standards that might alter its--
(i) Scope of recognition, except as provided in paragraph (a)(4) of
this section; or
(ii) Compliance with the criteria for recognition;
(4) Notification that the agency has expanded its scope of
recognition to include distance education or correspondence courses as
provided in section 496(a)(4)(B)(i)(I) of the HEA. Such an expansion of
scope is effective on the date the Department receives the notification;
(5) The name of any institution or program it accredits that the
agency has reason to believe is failing to meet its title IV, HEA
program responsibilities or is engaged in fraud or abuse, along with the
agency's reasons for concern about the institution or program; and
(6) If the Secretary requests, information that may bear upon an
accredited or preaccredited institution's compliance with its title IV,
HEA program responsibilities, including the eligibility of the
institution or program to participate in title IV, HEA programs.
(b) If an agency has a policy regarding notification to an
institution or program of contact with the Department in accordance with
paragraph
[[Page 140]]
(a)(5) or (6) of this section, it must provide for a case-by-case review
of the circumstances surrounding the contact, and the need for the
confidentiality of that contact. When the Department determines a
compelling need for confidentiality, the agency must consider that
contact confidential upon specific request of the Department.
[84 FR 58926, Nov. 1, 2019]
Sec. 602.28 Regard for decisions of States and other accrediting agencies.
(a) If the agency is an institutional accrediting agency, it may not
accredit or preaccredit institutions that lack legal authorization under
applicable State law to provide a program of education beyond the
secondary level.
(b) Except as provided in paragraph (c) of this section, the agency
may not grant initial or renewed accreditation or preaccreditation to an
institution, or a program offered by an institution, if the agency
knows, or has reasonable cause to know, that the institution is the
subject of--
(1) A pending or final action brought by a State agency to suspend,
revoke, withdraw, or terminate the institution's legal authority to
provide postsecondary education in the State;
(2) A decision by a recognized agency to deny accreditation or
preaccreditation;
(3) A pending or final action brought by a recognized accrediting
agency to suspend, revoke, withdraw, or terminate the institution's
accreditation or preaccreditation; or
(4) Probation or an equivalent status imposed by a recognized
agency.
(c) The agency may grant accreditation or preaccreditation to an
institution or program described in paragraph (b) of this section only
if it provides to the Secretary, within 30 days of its action, a
thorough and reasonable explanation, consistent with its standards, why
the action of the other body does not preclude the agency's grant of
accreditation or preaccreditation.
(d) If the agency learns that an institution it accredits or
preaccredits, or an institution that offers a program it accredits or
preaccredits, is the subject of an adverse action by another recognized
accrediting agency or has been placed on probation or an equivalent
status by another recognized agency, the agency must promptly review its
accreditation or preaccreditation of the institution or program to
determine if it should also take adverse action or place the institution
or program on probation or show cause.
(e) The agency must, upon request, share with other appropriate
recognized accrediting agencies and recognized State approval agencies
information about the accreditation or preaccreditation status of an
institution or program and any adverse actions it has taken against an
accredited or preaccredited institution or program.
(Approved by the Office of Management and Budget under control number
1845-0003)
(Authority: 20 U.S.C. 1099b)
Sec. 602.29 Severability.
If any provision of this subpart or its application to any person,
act, or practice is held invalid, the remainder of the subpart or the
application of its provisions to any person, act, or practice shall not
be affected thereby.
(Authority: 20 U.S.C. 1099b)
[84 FR 58926, Nov. 1, 2019]
Subpart C_The Recognition Process
Source: 74 FR 55430, Oct. 27, 2009, unless otherwise noted.
Application and Review by Department Staff
Sec. 602.30 [Reserved]
Sec. 602.31 Agency applications and reports to be submitted to
the Department.
(a) Applications for recognition or renewal of recognition. An
accrediting agency seeking initial or continued recognition must submit
a written application to the Secretary. Each accrediting agency must
submit an application for continued recognition at least once every five
years, or within a shorter time period specified in the final
recognition decision, and, for an agency seeking renewal of recognition,
24 months prior to the date on which
[[Page 141]]
the current recognition expires. The application, to be submitted
concurrently with information required by Sec. [thinsp]602.32(a) and,
if applicable, Sec. [thinsp]602.32(b), must consist of--
(1) A statement of the agency's requested scope of recognition;
(2) Documentation that the agency complies with the criteria for
recognition listed in subpart B of this part, including a copy of its
policies and procedures manual and its accreditation standards; and
(3) Documentation of how an agency that includes or seeks to include
distance education or correspondence courses in its scope of recognition
applies its standards in evaluating programs and institutions it
accredits that offer distance education or correspondence courses.
(b) Applications for expansions of scope. An agency seeking an
expansion of scope by application must submit a written application to
the Secretary. The application must--
(1) Specify the scope requested;
(2) Provide copies of any relevant standards, policies, or
procedures developed and applied by the agency for its use in
accrediting activities conducted within the expansion of scope proposed
and documentation of the application of these standards, policies, or
procedures; and
(3) Provide the materials required by Sec. [thinsp]602.32(j) and,
if applicable, Sec. [thinsp]602.32(l).
(c) Compliance or monitoring reports. If an agency is required to
submit a compliance or monitoring report, it must do so within 30 days
following the end of the period for achieving compliance as specified in
the decision of the senior Department official or Secretary, as
applicable.
(d) Review following an increase in headcount enrollment. If an
agency that has notified the Secretary in writing of its change in scope
to include distance education or correspondence courses in accordance
with Sec. [thinsp]602.27(a)(4) reports an increase in headcount
enrollment in accordance with Sec. [thinsp]602.19(e) for an institution
it accredits, or if the Department notifies the agency of such an
increase at one of the agency's accredited institutions, the agency
must, within 45 days of reporting the increase or receiving notice of
the increase from the Department, as applicable, submit a report
explaining--
(1) How the agency evaluates the capacity of the institutions or
programs it accredits to accommodate significant growth in enrollment
and to maintain education quality;
(2) The specific circumstances regarding the growth at the
institution or program that triggered the review and the results of any
evaluation conducted by the agency; and
(3) Any other information that the agency deems appropriate to
demonstrate the effective application of the criteria for recognition or
that the Department may require.
(e) Consent to sharing of information. By submitting an application
for recognition, the agency authorizes Department staff throughout the
application process and during any period of recognition--
(1) To observe its site visits to one or more of the institutions or
programs it accredits or preaccredits, on an announced or unannounced
basis;
(2) To visit locations where agency activities such as training,
review and evaluation panel meetings, and decision meetings take place,
on an announced or unannounced basis;
(3) To obtain copies of all documents the staff deems necessary to
complete its review of the agency; and
(4) To gain access to agency records, personnel, and facilities.
(f) Public availability of agency records obtained by the
Department.
(1) The Secretary's processing and decision-making on requests for
public disclosure of agency materials reviewed under this part are
governed by the Freedom of Information Act, 5 U.S.C. 552; the Trade
Secrets Act, 18 U.S.C. 1905; the Privacy Act of 1974, as amended, 5
U.S.C. 552a; the Federal Advisory Committee Act, 5 U.S.C. Appdx. 1; and
all other applicable laws. In recognition proceedings, agencies must,
before submission to the Department--
(i) Redact the names and any other personally identifiable
information about individual students and any other individuals who are
not agents of the agency or of an institution or program the agency is
reviewing;
(ii) Redact the personal addresses, personal telephone numbers,
personal
[[Page 142]]
email addresses, Social Security numbers, and any other personally
identifiable information regarding individuals who are acting as agents
of the agency or of an institution or program under review;
(iii) Designate all business information within agency submissions
that the agency believes would be exempt from disclosure under exemption
4 of the Freedom of Information Act (FOIA), 5 U.S.C. 552(b)(4). A
blanket designation of all information contained within a submission, or
of a category of documents, as meeting this exemption will not be
considered a good faith effort and will be disregarded; and
(iv) Ensure documents submitted are only those required for
Department review or as requested by Department officials.
(2) The agency may, but is not required to, redact the identities of
institutions or programs that it believes are not essential to the
Department's review of the agency and may identify any other material
the agency believes would be exempt from public disclosure under FOIA,
the factual basis for the request, and any legal basis the agency has
identified for withholding the document from public disclosure.
(3) The Secretary processes FOIA requests in accordance with 34 CFR
part 5 and makes all documents provided to the Advisory Committee
available to the public.
(4) Upon request by Department staff, the agency must disclose to
Department staff any specific material the agency has redacted that
Department staff believes is needed to conduct the staff review.
Department staff will make any arrangements needed to ensure that the
materials are not made public if prohibited by law.
(g) Length of submissions. The Secretary may publish reasonable,
uniform limits on the length of submissions described in this section.
(Authority: 20 U.S.C. 1099b)
[84 FR 58926, Nov. 1, 2019]
Sec. 602.32 Procedures for submitting an application for recognition,
renewal of recognition, expansion of scope, compliance reports, and
increases in enrollment.
(a) An agency preparing for renewing recognition will submit, 24
months prior to the date on which the current recognition expires, and
in conjunction with the materials required by Sec. [thinsp]602.31(a), a
list of all institutions or programs that the agency plans to consider
for an award of initial or renewed accreditation over the next year or,
if none, over the succeeding year, as well as any institutions or
programs currently subject to compliance report review or reporting
requirements. An agency that does not anticipate a review of any
institution or program for an initial award of accreditation or renewed
accreditation in the 24 months prior to the date of recognition
expiration may submit a list of institutions or programs it has reviewed
for an initial award of accreditation or renewal of accreditation at any
time since the prior award of recognition or leading up to the
application for an initial award of recognition.
(b) An agency seeking initial recognition must follow the policies
and procedures outlined in paragraph (a) of this section, but in
addition must also submit--
(1) Letters of support for the agency from at least three accredited
institutions or programs, three educators, and, if appropriate, three
employers or practitioners, explaining the role for such an agency and
the reasons for their support; and
(2) Letters from at least one program or institution that will rely
on the agency as its link to a Federal program upon recognition of the
agency or intends to seek multiple accreditation which will allow it in
the future to designate the agency as its Federal link.
(c) Department staff publishes a notice of the agency's submission
of an application in the Federal Register inviting the public to comment
on the agency's compliance with the criteria for recognition and
establishing a deadline for receipt of public comment.
(d) The Department staff analyzes the agency's application for
initial or renewal of recognition, to determine
[[Page 143]]
whether the agency satisfies the criteria for recognition, taking into
account all available relevant information concerning the compliance of
the agency with those criteria and the agency's consistency in applying
the criteria. The analysis of an application may include and, after
January 1, 2021, will include--
(1)(i) Observations from site visits, on an announced or unannounced
basis, to the agency or to a location where the agency conducts
activities such as training, review and evaluation panel meetings, or
decision meetings;
(ii) Observations from site visits, on an announced or unannounced
basis, to one or more of the institutions or programs the agency
accredits or preaccredits;
(iii) A file review at the agency of documents, at which time
Department staff may retain copies of documents needed for inclusion in
the administrative record;
(iv) Review of the public comments and other third-party information
Department staff receives by the established deadline, the agency's
responses to the third-party comments, as appropriate, and any other
information Department staff obtains for purposes of evaluating the
agency under this part; and
(v) Review of complaints or legal actions involving the agency; and
(2) Review of complaints or legal actions against an institution or
program accredited or preaccredited by the agency, which may be
considered but are not necessarily determinative of compliance.
(e) The Department may view as a negative factor when considering an
application for initial, or expansion of scope of, recognition as
proposed by an agency, among other factors, any evidence that the agency
was part of a concerted effort to unnecessarily restrict the
qualifications necessary for a student to sit for a licensure or
certification examination or otherwise be eligible for entry into a
profession.
(f) Department staff's evaluation of an agency may also include a
review of information directly related to institutions or programs
accredited or preaccredited by the agency relative to their compliance
with the agency's standards, the effectiveness of the standards, and the
agency's application of those standards, but must make all materials
relied upon in the evaluation available to the agency for review and
comment.
(g) If, at any point in its evaluation of an agency seeking initial
recognition, Department staff determines that the agency fails to
demonstrate compliance with the basic eligibility requirements in
Sec. Sec. [thinsp]602.10 through 602.15, the staff--
(1) Returns the agency's application and provides the agency with an
explanation of the deficiencies that caused staff to take that action;
and
(2) Requires that the agency withdraw its application and instructs
the agency that it may reapply when the agency is able to demonstrate
compliance.
(h) Except with respect to an application that has been returned and
is withdrawn under paragraph (g) of this section, when Department staff
completes its evaluation of the agency, the staff may and, after July 1,
2021, will--
(1) Prepare a written draft analysis of the agency's application;
(2) Send to the agency the draft analysis including any identified
areas of potential noncompliance and all third-party comments and
complaints, if applicable, and any other materials the Department
received by the established deadline or is including in its review;
(3) Invite the agency to provide a written response to the draft
analysis and third-party comments or other material included in the
review, specifying a deadline that provides at least 180 days for the
agency's response;
(4) Review the response to the draft analysis the agency submits, if
any, and prepares the written final analysis--
(i) Indicating that the agency is in full compliance, substantial
compliance, or noncompliance with each of the criteria for recognition;
and
(ii) Recommending that the senior Department official approve, renew
with compliance reporting requirements due in 12 months, renew with
compliance reporting requirements with a deadline in excess of 12 months
based on a finding of good cause and
[[Page 144]]
extraordinary circumstances, approve with monitoring or other reporting
requirements, or deny, limit, suspend, or terminate recognition; and
(5) Provide to the agency, no later than 30 days before the Advisory
Committee meeting, the final staff analysis and any other available
information provided to the Advisory Committee under Sec. 602.34(c).
(i) The agency may request that the Advisory Committee defer acting
on an application at that Advisory Committee meeting if Department staff
fails to provide the agency with the materials described, and within the
timeframes provided, in paragraphs (g)(3) and (5) of this section. If
the Department staff's failure to send the materials in accordance with
the timeframe described in paragraph (g)(3) or (5) of this section is
due to the failure of the agency to, by the deadline established by the
Secretary, submit reports to the Department, other information the
Secretary requested, or its response to the draft analysis, the agency
forfeits its right to request a deferral of its application.
(j) An agency seeking an expansion of scope, either as part of the
regular renewal of recognition process or during a period of
recognition, must submit an application to the Secretary, separately or
as part of the policies and procedures outlined in paragraph (a) of this
section, that satisfies the requirements of Sec. Sec. 602.12(b) and
602.31(b) and--
(1) States the reason for the expansion of scope request;
(2) Includes letters from at least three institutions or programs
that would seek accreditation under one or more of the elements of the
expansion of scope; and
(3) Explains how the agency must expand capacity to support the
expansion of scope, if applicable, and, if necessary, how it will do so
and how its budget will support that expansion of capacity.
(k) The Department may view as a negative factor when considering an
application for initial or expansion of scope of recognition as proposed
by an agency, among other factors, any evidence that the agency was part
of a concerted effort to unnecessarily restrict the qualifications
necessary for a student to sit for a licensure or certification
examination or otherwise be eligible for entry into a profession.
(l) Department staff's evaluation of a compliance report includes
review of public comments solicited by Department staff in the Federal
Register received by the established deadline, the agency's responses to
the third-party comments, as appropriate, other third-party information
Department staff receives, and additional information described in
paragraphs (d) and (e) of this section, as appropriate.
(m) The Department will process an application for an expansion of
scope, compliance report, or increase in enrollment report in accordance
with paragraphs with paragraphs (c) through (h) of this section.
(Authority: 20 U.S.C. 1099b)
[84 FR 58927, Nov. 1, 2019]
Sec. 602.33 Procedures for review of agencies during the period of
recognition, including the review of monitoring reports.
(a) Department staff may review the compliance of a recognized
agency with the criteria for recognition at any time--
(1) Based on the submission of a monitoring report as directed by a
decision by the senior Department official or Secretary; or
(2) Based on any information that, as determined by Department
staff, appears credible and raises concerns relevant to the criteria for
recognition.
(b) The review may include, but need not be limited to, any of the
activities described in Sec. 602.32(d) and (f).
(c) If, in the course of the review, and after providing the agency
the documentation concerning the inquiry and consulting with the agency,
Department staff notes that one or more deficiencies may exist in the
agency's compliance with the criteria for recognition or in the agency's
effective application of those criteria, Department staff--
(1) Prepares a written draft analysis of the agency's compliance
with the criteria of concern;
(2) Sends to the agency the draft analysis including any identified
areas of noncompliance and all supporting documentation;
[[Page 145]]
(3) Invites the agency to provide a written response to the draft
analysis within 90 days; and
(4) Reviews any response provided by the agency, including any
monitoring report submitted, and either--
(i) Concludes the review;
(ii) Continues monitoring of the agency's areas of deficiencies; or
(iii)(A) Notifies the agency, in the event that the agency's
response or monitoring report does not satisfy the staff, that the draft
analysis will be finalized for presentation to the Advisory Committee;
(B) Publishes a notice in the Federal Register with an invitation
for the public to comment on the agency's compliance with the criteria
in question and establishing a deadline for receipt of public comment;
(C) Provides the agency with a copy of all public comments received
and invites a written response from the agency;
(D) Finalizes the staff analysis as necessary to reflect its review
of any agency response and any public comment received;
(E) Provides to the agency, no later than 30 days before the
Advisory Committee meeting, the final staff analysis and a recognition
recommendation and any other information provided to the Advisory
Committee under Sec. 602.34(c); and
(F) Submits the matter for review by the Advisory Committee in
accordance with Sec. 602.34.
(Authority: 20 U.S.C. 1099b)
[84 FR 58928, Nov. 1, 2019]
Review by the National Advisory Committee on Institutional Quality and
Integrity
Sec. 602.34 Advisory Committee meetings.
(a) Department staff submits a proposed schedule to the Chairperson
of the Advisory Committee based on anticipated completion of staff
analyses.
(b) The Chairperson of the Advisory Committee establishes an agenda
for the next meeting and, in accordance with the Federal Advisory
Committee Act, presents it to the Designated Federal Official for
approval.
(c) Before the Advisory Committee meeting, Department staff provides
the Advisory Committee with--
(1) The agency's application for recognition, renewal of
recognition, or expansion of scope when Advisory Committee review is
required, or the agency's compliance report and supporting documentation
submitted by the agency;
(2) The final Department staff analysis of the agency developed in
accordance with Sec. [thinsp]602.32 or Sec. [thinsp]602.33, and any
supporting documentation;
(3) The agency's response to the draft analysis;
(4) Any written third-party comments the Department received about
the agency on or before the established deadline;
(5) Any agency response to third-party comments; and
(6) Any other information Department staff relied upon in developing
its analysis.
(d) At least 30 days before the Advisory Committee meeting, the
Department publishes a notice of the meeting in the Federal Register
inviting interested parties to make oral presentations before the
Advisory Committee.
(e) The Advisory Committee considers the materials provided under
paragraph (c) of this section in a public meeting and invites Department
staff, the agency, and other interested parties to make oral
presentations during the meeting. A transcript is made of all Advisory
Committee meetings.
(f) The written motion adopted by the Advisory Committee regarding
each agency's recognition will be made available during the Advisory
Committee meeting. The Department will provide each agency, upon
request, with a copy of the motion on recognition at the meeting. Each
agency that was reviewed will be sent an electronic copy of the motion
relative to that agency as soon as practicable after the meeting.
(g) After each meeting of the Advisory Committee, the Advisory
Committee forwards to the senior Department official its recommendation
with respect to each agency, which may include, but is not limited to--
[[Page 146]]
(1)(i) For an agency that is fully compliant, approve initial or
renewed recognition;
(ii) Continue recognition with a required compliance report to be
submitted to the Department within 12 months from the decision of the
senior Department official;
(iii) In conjunction with a finding of exceptional circumstances and
good cause, continue recognition for a specified period in excess of 12
months pending submission of a compliance report;
(iv) In the case of substantial compliance, grant initial
recognition or renewed recognition and recommend a monitoring report
with a set deadline to be reviewed by Department staff to ensure that
corrective action is taken, and full compliance is achieved or
maintained (or for action by staff under Sec. [thinsp]602.33 if it is
not); or
(v) Deny, limit, suspend, or terminate recognition;
(2) Grant or deny a request for expansion of scope; or
(3) Revise or affirm the scope of the agency.
(Authority: 20 U.S.C. 1099b)
[84 FR 58929, Nov. 1, 2019]
Sec. 602.35 Responding to the Advisory Committee's recommendation.
(a) Within ten business days following the Advisory Committee
meeting, the agency and Department staff may submit written comments to
the senior Department official on the Advisory Committee's
recommendation. The agency must simultaneously submit a copy of its
written comments, if any, to Department staff. Department staff must
simultaneously submit a copy of its written comments, if any, to the
agency.
(b) Comments must be limited to--
(1) Any Advisory Committee recommendation that the agency or
Department staff believes is not supported by the record;
(2) Any incomplete Advisory Committee recommendation based on the
agency's application; and
(3) The inclusion of any recommendation or draft proposed decision
for the senior Department official's consideration.
(c)(1) Neither the Department staff nor the agency may submit
additional documentationwith its comments unless the Advisory
Committee's recognition recommendation proposes finding the agency
noncompliant with, or ineffective in its application of, a criterion or
criteria for recognition not identified in the final Department staff
analysis provided to the Advisory Committee.
(2) Within ten business days of receipt by the Department staff of
an agency's comments or new evidence, if applicable, or of receipt by
the agency of the Department staff's comments, Department staff, the
agency, or both, as applicable, may submit a response to the senior
Department official. Simultaneously with submission, the agency must
provide a copy of any response to the Department staff. Simultaneously
with submission, Department staff must provide a copy of any response to
the agency. No additional comments or new documentation may be submitted
after the responses described in this paragraph are submitted.
(Authority: 20 U.S.C. 1099b)
[74 FR 55430, Oct. 27, 2009, as amended at 84 FR 58929, Nov. 1, 2019]
Review and Decision by the Senior Department Official
Sec. 602.36 Senior Department official's decision.
(a) The senior Department official makes a decision regarding
recognition of an agency based on the record compiled under Sec. Sec.
602.32, 602.33, 602.34, and 602.35 including, as applicable, the
following:
(1) The materials provided to the Advisory Committee under Sec.
602.34(c).
(2) The transcript of the Advisory Committee meeting.
(3) The recommendation of the Advisory Committee.
(4) Written comments and responses submitted under Sec. 602.35.
(5) New documentation submitted in accordance with Sec.
602.35(c)(1).
(6) A communication from the Secretary referring an issue to the
senior Department official's consideration under Sec. 602.37(e).
(b) In the event that statutory authority or appropriations for the
Advisory Committee ends, or there are
[[Page 147]]
fewer duly appointed Advisory Committee members than needed to
constitute a quorum, and under extraordinary circumstances when there
are serious concerns about an agency's compliance with subpart B of this
part that require prompt attention, the senior Department official may
make a decision on an application for renewal of recognition or
compliance report on the record compiled under Sec. 602.32 or Sec.
602.33 after providing the agency with an opportunity to respond to the
final staff analysis. Any decision made by the senior Department
official under this paragraph from the Advisory Committee may be
appealed to the Secretary as provided in Sec. 602.37.
(c) Following consideration of an agency's recognition under this
section, the senior Department official issues a recognition decision.
(d) Except with respect to decisions made under paragraph (f) or (g)
of this section and matters referred to the senior Department official
under Sec. 602.37(e) or (f), the senior Department official notifies
the agency in writing of the senior Department official's decision
regarding the agency's recognition within 90 days of the Advisory
Committee meeting or conclusion of the review under paragraph (b) of
this section.
(e) The senior Department official's decision may include, but is
not limited to, approving for recognition; approving with a monitoring
report; denying, limiting, suspending, or terminating recognition
following the procedures in paragraph (g) of this section; granting or
denying an application for an expansion of scope; revising or affirming
the scope of the agency; or continuing recognition pending submission
and review of a compliance report under Sec. Sec. 602.32 and 602.34 and
review of the report by the senior Department official under this
section.
(1)(i) The senior Department official approves recognition if the
agency has demonstrated compliance or substantial compliance with the
criteria for recognition listed in subpart B of this part. The senior
Department official may determine that the agency has demonstrated
compliance or substantial compliance with the criteria for recognition
if the agency has a compliant policy or procedure in place but has not
had the opportunity to apply such policy or procedure.
(ii) If the senior Department official approves recognition, the
recognition decision defines the scope of recognition and the
recognition period. The recognition period does not exceed five years,
including any time during which recognition was continued to permit
submission and review of a compliance report.
(iii) If the scope of recognition is less than that requested by the
agency, the senior Department official explains the reasons for
continuing or approving a lesser scope.
(2)(i) Except as provided in paragraph (e)(3) of this section, if
the agency fails to comply with the criteria for recognition listed in
subpart B of this part, the senior Department official denies, limits,
suspends, or terminates recognition.
(ii) If the senior Department official denies, limits, suspends, or
terminates recognition, the senior Department official specifies the
reasons for this decision, including all criteria the agency fails to
meet and all criteria the agency has failed to apply effectively.
(3)(i) If the senior Department official concludes an agency is
noncompliant, the senior Department official may continue the agency's
recognition, pending submission of a compliance report that will be
subject to review in the recognition process, provided that--
(A) The senior Department official concludes that the agency will
demonstrate compliance with, and effective application of, the criteria
for recognition within 12 months from the date of the senior Department
official's decision; or
(B) The senior Department official identifies a deadline more than
12 months from the date of the decision by which the senior Department
official concludes the agency will demonstrate full compliance with, and
effective application of, the criteria for recognition, and also
identifies exceptional circumstances and good cause for allowing the
agency more than 12 months to achieve compliance and effective
application.
[[Page 148]]
(ii) In the case of a compliance report ordered under paragraph
(e)(3)(i) of this section, the senior Department official specifies the
criteria the compliance report must address, and the time period for
achieving compliance and effective application of the criteria. The
compliance report documenting compliance and effective application of
criteria is due not later than 30 days after the end of the period
specified in the senior Department official's decision.
(iii) If the record includes a compliance report required under
paragraph (e)(3)(i) of this section, and the senior Department official
determines that an agency has not complied with the criteria for
recognition, or has not effectively applied those criteria, during the
time period specified by the senior Department official in accordance
with paragraph (e)(3)(i) of this section, the senior Department official
denies, limits, suspends, or terminates recognition, except, in
extraordinary circumstances, upon a showing of good cause for an
extension of time as determined by the senior Department official and
detailed in the senior Department official's decision. If the senior
Department official determines good cause for an extension has been
shown, the senior Department official specifies the length of the
extension and what the agency must do during it to merit a renewal of
recognition.
(f) If the senior Department official determines that the agency is
substantially compliant, or is fully compliant but has concerns about
the agency maintaining compliance, the senior Department official may
approve the agency's recognition or renewal of recognition and require
periodic monitoring reports that are to be reviewed and approved by
Department staff.
(g) If the senior Department official determines, based on the
record, that a decision to deny, limit, suspend, or terminate an
agency's recognition may be warranted based on a finding that the agency
is noncompliant with one or more criteria for recognition, or if the
agency does not hold institutions or programs accountable for complying
with one or more of the agency's standards or criteria for accreditation
that were not identified earlier in the proceedings as an area of
noncompliance, the senior Department official provides--
(1) The agency with an opportunity to submit a written response
addressing the finding; and
(2) The staff with an opportunity to present its analysis in
writing.
(h) If relevant and material information pertaining to an agency's
compliance with recognition criteria, but not contained in the record,
comes to the senior Department official's attention while a decision
regarding the agency's recognition is pending before the senior
Department official, and if the senior Department official concludes the
recognition decision should not be made without consideration of the
information, the senior Department official either--
(1)(i) Does not make a decision regarding recognition of the agency;
and
(ii) Refers the matter to Department staff for review and analysis
under Sec. 602.32 or Sec. 602.33, as appropriate, and consideration by
the Advisory Committee under Sec. 602.34; or
(2)(i) Provides the information to the agency and Department staff;
(ii) Permits the agency to respond to the senior Department official
and the Department staff in writing, and to include additional
documentation relevant to the issue, and specifies a deadline;
(iii) Provides Department staff with an opportunity to respond in
writing to the agency's submission under paragraph (h)(2)(ii) of this
section, specifying a deadline; and
(iv) Issues a recognition decision based on the record described in
paragraph (a) of this section, as supplemented by the information
provided under this paragraph (h).
(i) No agency may submit information to the senior Department
official, or ask others to submit information on its behalf, for
purposes of invoking paragraph (h) of this section. Before invoking
paragraph (h) of this section, the senior Department official will take
into account whether the information, if submitted by a third party,
could have been submitted in accordance with Sec. 602.32(a) or Sec.
602.33(e)(2).
[[Page 149]]
(j) If the senior Department official does not reach a final
decision to approve, deny, limit, suspend, or terminate an agency's
recognition before the expiration of its recognition period, the senior
Department official automatically extends the recognition period until a
final decision is reached.
(k) Unless appealed in accordance with Sec. 602.37, the senior
Department official's decision is the final decision of the Secretary.
(Authority: 20 U.S.C. 1099b)
[84 FR 58929, Nov. 1, 2019]
Appeal Rights and Procedures
Sec. 602.37 Appealing the senior Department official's decision
to the Secretary.
(a) The agency may appeal the senior Department official's decision
to the Secretary. Such appeal stays the decision of the senior
Department official until final disposition of the appeal. If an agency
wishes to appeal, the agency must--
(1) Notify the Secretary and the senior Department official in
writing of its intent to appeal the decision of the senior Department
official, no later than 10 business days after receipt of the decision;
(2) Submit its appeal to the Secretary in writing no later than 30
days after receipt of the decision; and
(3) Provide the senior Department official with a copy of the appeal
at the same time it submits the appeal to the Secretary.
(b) The senior Department official may file a written response to
the appeal. To do so, the senior Department official must--
(1) Submit a response to the Secretary no later than 30 days after
receipt of a copy of the appeal; and
(2) Provide the agency with a copy of the senior Department
official's response at the same time it is submitted to the Secretary.
(c) Once the agency's appeal and the senior Department official's
response, if any, have been provided, no additional written comments may
be submitted by either party.
(d) Neither the agency nor the senior Department official may
include in its submission any new documentation it did not submit
previously in the proceeding.
(e) On appeal, the Secretary makes a recognition decision, as
described in Sec. [thinsp]602.36(e). If the decision requires a
compliance report, the report is due within 30 days after the end of the
period specified in the Secretary's decision. The Secretary renders a
final decision after taking into account the senior Department
official's decision, the agency's written submissions on appeal, the
senior Department official's response to the appeal, if any, and the
entire record before the senior Department official. The Secretary
notifies the agency in writing of the Secretary's decision regarding the
agency's recognition.
(f) The Secretary may determine, based on the record, that a
decision to deny, limit, suspend, or terminate an agency's recognition
may be warranted based on a finding that the agency is noncompliant
with, or ineffective in its application with respect to, a criterion or
criteria for recognition not identified as an area of noncompliance
earlier in the proceedings. In that case, the Secretary, without further
consideration of the appeal, refers the matter to the senior Department
official for consideration of the issue under Sec. [thinsp]602.36(g).
After the senior Department official makes a decision, the agency may,
if desired, appeal that decision to the Secretary.
(g) If relevant and material information pertaining to an agency's
compliance with recognition criteria, but not contained in the record,
comes to the Secretary's attention while a decision regarding the
agency's recognition is pending before the Secretary, and if the
Secretary concludes the recognition decision should not be made without
consideration of the information, the Secretary either--
(1)(i) Does not make a decision regarding recognition of the agency;
and
(ii) Refers the matter to Department staff for review and analysis
under Sec. [thinsp]602.32 or Sec. [thinsp]602.33, as appropriate;
review by the Advisory Committee under Sec. [thinsp]602.34; and
consideration by the senior Department official under Sec.
[thinsp]602.36; or
(2)(i) Provides the information to the agency and the senior
Department official;
[[Page 150]]
(ii) Permits the agency to respond to the Secretary and the senior
Department official in writing, and to include additional documentation
relevant to the issue, and specifies a deadline;
(iii) Provides the senior Department official with an opportunity to
respond in writing to the agency's submission under paragraph (g)(2)(ii)
of this section, specifying a deadline; and
(iv) Issues a recognition decision based on all the materials
described in paragraphs (e) and (g) of this section.
(h) No agency may submit information to the Secretary, or ask others
to submit information on its behalf, for purposes of invoking paragraph
(g) of this section. Before invoking paragraph (g) of this section, the
Secretary will take into account whether the information, if submitted
by a third party, could have been submitted in accordance with Sec.
[thinsp]602.32(a) or Sec. [thinsp]602.33(c).
(i) If the Secretary does not reach a final decision on appeal to
approve, deny, limit, suspend, or terminate an agency's recognition
before the expiration of its recognition period, the Secretary
automatically extends the recognition period until a final decision is
reached.
(Authority: 20 U.S.C. 1099b)
[84 FR 58931, Nov. 1, 2019]
Sec. 602.38 Contesting the Secretary's final decision to deny, limit,
suspend, or terminate an agency's recognition.
An agency may contest the Secretary's decision under this part in
the Federal courts as a final decision in accordance with applicable
Federal law. Unless otherwise directed by the court, a decision of the
Secretary to deny, limit, suspend, or terminate the agency's recognition
is not stayed during an appeal in the Federal courts.
(Authority: 20 U.S.C. 1099b)
Sec. 602.39 Severability.
If any provision of this subpart or its application to any person,
act, or practice is held invalid, the remainder of the subpart or the
application of its provisions to any person, act, or practice shall not
be affected thereby.
(Authority: 20 U.S.C. 1099b)
[84 FR 58931, Nov. 1, 2019]
Subpart D_Department Responsibilities
Source: 64 FR 56617, Oct. 20, 1999. Redesignated at 74 FR 55435,
Oct. 27, 2009, unless otherwise noted.
Sec. 602.50 What information does the Department share with a
recognized agency about its accredited institutions and programs?
(a) If the Department takes an action against an institution or
program accredited by the agency, it notifies the agency no later than
10 days after taking that action.
(b) If another Federal agency or a State agency notifies the
Department that it has taken an action against an institution or program
accredited by the agency, the Department notifies the agency as soon as
possible but no later than 10 days after receiving the written notice
from the other Government agency.
(Authority: 20 U.S.C. 1099b)
PART 603_SECRETARY'S RECOGNITION PROCEDURES FOR STATE AGENCIES-
-Table of Contents
Subpart A [Reserved]
Subpart B_Criteria for State Agencies
Sec.
603.20 Scope.
603.21 Publication of list.
603.22 Inclusion on list.
603.23 Initial recognition, and reevaluation.
603.24 Criteria for State agencies.
603.25 Severability.
Authority: 20 U.S.C. 1001, 1002, 1094(c)(4); 38 U.S.C. 3675, unless
otherwise noted.
Subpart A [Reserved]
Subpart B_Criteria for State Agencies
Authority: Sec. 438 (b) of the Higher Education Act of 1965 Pub. L.
89-329 as amended
[[Page 151]]
by Pub. L. 92-318, 86 Stat. 235, 264 (20 U.S.C. 1087-1(b)), unless
otherwise noted.
Source: 39 FR 30042, Aug. 20, 1974, unless otherwise noted.
Redesignated at 45 FR 77369, Nov. 21, 1980.
Sec. 603.20 Scope.
(a) Pursuant to section 438(b) of the Higher Education Act of 1965
as amended by Pub. L. 92-318, the Secretary is required to publish a
list of State agencies which he determines to be reliable authorities as
to the quality of public postsecondary vocational education in their
respective States for the purpose of determining eligibility for Federal
student assistance programs administered by the Department.
(b) Approval by a State agency included on the list will provide an
alternative means of satisfying statutory standards as to the quality of
public postsecondary vocational education to be undertaken by students
receiving assistance under such programs.
(Authority: 20 U.S.C. 1087-1(b))
Sec. 603.21 Publication of list.
Periodically the Secretary will publish a list in the Federal
Register of the State agencies which he determines to be reliable
authorities as to the quality of public postsecondary vocational
education in their respective States.
(Authority: 20 U.S.C. 1087-1(b))
Sec. 603.22 Inclusion on list.
Any State agency which desires to be listed by the Secretary as
meeting the criteria set forth in Sec. 603.24 should apply in writing
to the Director, Division of Eligibility and Agency Evaluation, Office
of Postsecondary Education, Department of Education, Washington, DC
20202.
(Authority: 20 U.S.C. 1087-1(b))
[45 FR 86300, Dec. 30, 1980]
Sec. 603.23 Initial recognition, and reevaluation.
For initial recognition and for renewal of recognition, the State
agency will furnish information establishing its compliance with the
criteria set forth in Sec. 603.24. This information may be supplemented
by personal interviews or by review of the agency's facilities, records,
personnel qualifications, and administrative management. Each agency
listed will be reevaluated by the Secretary at his discretion, but at
least once every four years. No adverse decision will become final
without affording an opportunity for a hearing.
(Authority: 20 U.S.C. 1087-1(b))
Sec. 603.24 Criteria for State agencies.
The following are the criteria which the Secretary will utilize in
designating a State agency as a reliable authority to assess the quality
of public postsecondary vocational education in its respective State.
(a) Functional aspects. The functional aspects of the State agency
must be shown by:
(1) Its scope of operations. The agency:
(i) Is statewide in the scope of its operations and is legally
authorized to approve public postsecondary vocational institutions or
programs;
(ii) Clearly sets forth the scope of its objectives and activities,
both as to kinds and levels of public postsecondary vocational
institutions or programs covered, and the kinds of operations performed;
(iii) Delineates the process by which it differentiates among and
approves programs of varying levels.
(2) Its organization. The State agency:
(i) Employs qualified personnel and uses sound procedures to carry
out its operations in a timely and effective manner;
(ii) Receives adequate and timely financial support, as shown by its
appropriations, to carry out its operations;
(iii) Selects competent and knowledgeable persons, qualified by
experience and training, and selects such persons in accordance with
nondiscriminatory practices, (A) to participate on visiting teams, (B)
to engage in consultative services for the evaluation and approval
process, and (C) to serve on decision-making bodies.
(3) Its procedures. The State agency:
(i) Maintains clear definitions of approval status and has developed
written procedures for granting, reaffirming, revoking, denying, and
reinstating approval status;
[[Page 152]]
(ii) Requires, as an integral part of the approval and reapproval
process, institutional or program self-analysis and onsite reviews by
visiting teams, and provides written and consultative guidance to
institutions or programs and visiting teams.
(A) Self-analysis shall be a qualitative assessment of the strengths
and limitations of the instructional program, including the achievement
of institutional or program objectives, and should involve a
representative portion of the institution's administrative staff,
teaching faculty, students, governing body, and other appropriate
constituencies.
(B) The visiting team, which includes qualified examiners other than
agency staff, reviews instructional content, methods and resources,
administrative management, student services, and facilities. It prepares
written reports and recommendations for use by the State agency.
(iii) Reevaluates at reasonable and regularly scheduled intervals
institutions or programs which it has approved.
(b) Responsibility and reliability. The responsibility and
reliability of the State agency will be demonstrated by:
(1) Its responsiveness to the public interest. The State agency:
(i) Has an advisory body which provides for representation from
public employment services and employers, employees, postsecondary
vocational educators, students, and the general public, including
minority groups. Among its functions, this structure provides counsel to
the State agency relating to the development of standards, operating
procedures and policy, and interprets the educational needs and manpower
projections of the State's public postsecondary vocational education
system;
(ii) Demonstrates that the advisory body makes a real and meaningful
contribution to the approval process;
(iii) Provides advance public notice of proposed or revised
standards or regulations through its regular channels of communications,
supplemented, if necessary, with direct communication to inform
interested members of the affected community. In addition, it provides
such persons the opportunity to comment on the standards or regulations
prior to their adoption;
(iv) Secures sufficient qualitative information regarding the
applicant institution or program to enable the institution or program to
demonstrate that it has an ongoing program of evaluation of outputs
consistent with its educational goals;
(v) Encourages experimental and innovative programs to the extent
that these are conceived and implemented in a manner which ensures the
quality and integrity of the institution or program;
(vi) Demonstrates that it approves only those institutions or
programs which meet its published standards; that its standards,
policies, and procedures are fairly applied; and that its evaluations
are conducted and decisions are rendered under conditions that assure an
impartial and objective judgment;
(vii) Regularly reviews its standards, policies and procedures in
order that the evaluative process shall support constructive analysis,
emphasize factors of critical importance, and reflect the educational
and training needs of the student;
(viii) Performs no function that would be inconsistent with the
formation of an independent judgment of the quality of an educational
institution or program;
(ix) Has written procedures for the review of complaints pertaining
to institutional or program quality as these relate to the agency's
standards, and demonstrates that such procedures are adequate to provide
timely treatment of such complaints in a manner fair and equitable to
the complainant and to the institution or program;
(x) Annually makes available to the public (A) its policies for
approval, (B) reports of its operations, and (C) list of institutions or
programs which it has approved;
(xi) Requires each approved school or program to report on changes
instituted to determine continued compliance with standards or
regulations;
(xii) Confers regularly with counterpart agencies that have similar
responsibilities in other and neighboring States about methods and
techniques
[[Page 153]]
that may be used to meet those responsibilities.
(2) Its assurances that due process is accorded to institutions or
programs seeking approval. The State agency:
(i) Provides for adequate discussion during the on-site visit
between the visiting team and the faculty, administrative staff,
students, and other appropriate persons;
(ii) Furnishes as a result of the evaluation visit, a written report
to the institution or program commenting on areas of strength, areas
needing improvement, and, when appropriate, suggesting means of
improvement and including specific areas, if any, where the institution
or program may not be in compliance with the agency's standards;
(iii) Provides the chief executive officer of the institution or
program with opportunity to comment upon the written report and to file
supplemental materials pertinent to the facts and conclusions in the
written report of the visiting team before the agency takes action on
the report;
(iv) Provides the chief executive officer of the institution with a
specific statement of reasons for any adverse action, and notice of the
right to appeal such action before an appeal body designated for that
purpose;
(v) Publishes rules of procedure regarding appeals;
(vi) Continues the approval status of the institution or program
pending disposition of an appeal;
(vii) Furnishes the chief executive officer of the institution or
program with a written decision of the appeal body, including a
statement of its reasons therefor.
(c) Capacity to foster ethical practices. The State agency must
demonstrate its capability and willingness to foster ethical practices
by showing that it:
(i) Promotes a well-defined set of ethical standards governing
institutional or programmatic practices, including recruitment,
advertising, transcripts, fair and equitable student tuition refunds,
and student placement services;
(ii) Maintains appropriate review in relation to the ethical
practices of each approved institution or program.
(Authority: 20 U.S.C. 1094(c)(4))
[39 FR 30042, Aug. 20, 1974, as amended at 75 FR 66947, Oct. 29, 2010;
84 FR 58931, Nov. 1, 2019]
Sec. 603.25 Severability.
If any provision of this subpart or its application to any person,
act, or practice is held invalid, the remainder of the subpart or the
application of its provisions to any person, act, or practice shall not
be affected thereby.
[84 FR 58931, Nov. 1, 2019]
PART 604_FEDERAL-STATE RELATIONSHIP AGREEMENTS--Table of Contents
Subpart A_General
Sec.
604.1 Federal-State relationship agreements.
604.2 Regulations that apply to Federal-State relationship agreements.
604.3 Definitions that apply to Federal-State relationship agreements.
Subpart B_Federal-State Relationship Agreements
604.10 Administrative requirements.
604.11 Planning requirements.
604.12 Changes in the agreement.
604.13 Denial of eligibility.
Authority: Sec. 1203 of the Higher Education Act of 1965, as amended
by Pub. L. 96-374 (20 U.S.C. 1143), unless otherwise noted.
Source: 45 FR 83221, Dec. 18, 1980, unless otherwise noted.
Subpart A_General
Sec. 604.1 Federal-State relationship agreements.
(a) A State shall enter into an agreement with the Secretary if it
wishes to participate in the following programs authorized by the Higher
Education Act of 1965, as amended: The Continuing Education Outreach
program, title I-B, with the exception of sections 116 and 117 of the
Act; the State Student Incentive Grant program, subpart 3 of title IV-A
of the Act; and the Undergraduate Academic Facilities Grant program,
title VII-A of the Act. The
[[Page 154]]
agreement must contain assurances relating to administration, financial
management, treatment of applicants for subgrants and contracts,
supplement, not supplant requirements, and planning. These assurances
are listed in subpart B of this part. The means by which these
assurances will be met must also be described.
(b) The provisions of the agreement replace comparable provisions in
annual plans previously required by each applicable program.
(Authority: 20 U.S.C. 1143)
Sec. 604.2 Regulations that apply to Federal-State relationship
agreements.
The following regulations apply to Federal-State relationship
agreements:
(a) The Education Department General Administrative Regulations
(EDGAR) in 34 CFR part 76 (State Administered Programs) and 34 CFR part
77 (Definitions).
(b) The regulations in this part 604.
(Authority: 20 U.S.C. 1232(a))
Sec. 604.3 Definitions that apply to Federal-State relationship
agreements.
(a) Definitions in EDGAR. The following terms used in this part are
defined in 34 CFR part 77:
Applicant
Application
Contract
Private
Public
Secretary
State
Subgrant
(b) Definitions that apply to this part. The following definitions
apply to this part:
Act means the Higher Education Act of 1965, as amended.
Applicable programs means the Continuing Education Outreach program,
the State Student Incentive Grant program, and the Undergraduate
Academic Facilities Grant program.
(Authority: 20 U.S.C. 1143)
Subpart B_Federal-State Relationship Agreements
Sec. 604.10 Administrative requirements.
The agreement shall contain the following assurances and a
description of the means by which they will be met:
(a) Management practices and procedures will assure proper and
efficient administration of each applicable program. The description of
these methods shall include the identification of the State entity or
entities designated to administer each applicable program as well as the
name of the responsible official.
(b) Appropriate fiscal control and fund accounting procedures will
be provided for Federal funds received under all titles of the Act.
(c) Federal funds under the applicable programs will not supplant
non-Federal funds.
(d) Equitable and appropriate criteria will be used in evaluating
applications for subgrants or proposals for contracts under each
applicable program.
(Authority: 20 U.S.C. 1143)