[Federal Register Volume 59, Number 115 (Thursday, June 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14594]


[[Page Unknown]]

[Federal Register: June 16, 1994]


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Part VII





Department of Education





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34 CFR Part 386




Rehabilitation Training: Rehabilitation Long-Term Training; Final Rule
DEPARTMENT OF EDUCATION

34 CFR Part 386

RIN 1820-AB21

 
Rehabilitation Training: Rehabilitation Long-Term Training

AGENCY: Department of Education.

ACTION: Final regulations.

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SUMMARY: The Secretary amends the regulations governing grants for 
long-term training to implement the Rehabilitation Act Amendments of 
1992 and the Technology-Related Assistance for Individuals With 
Disabilities Act Amendments of 1994. The Rehabilitation Long-Term 
Training program is authorized by section 302 of Title III of the 
Rehabilitation Act of 1973, as amended (the Act). The purpose of this 
discretionary grant program is to fund projects to provide academic 
training in areas of personnel shortages identified by the Secretary.

EFFECTIVE DATE: These regulations take effect either 45 days after 
publication in the Federal Register or later if the Congress takes 
certain adjournments. If you want to know the effective date of these 
regulations, call or write the Department of Education contact person. 
A document announcing the effective date will be published in the 
Federal Register.

FOR FURTHER INFORMATION CONTACT: Richard Melia, U.S. Department of 
Education, 400 Maryland Avenue, SW., Room 3324 Switzer Building, 
Washington, DC 20202-2649. Telephone (202) 205-9400. Individuals who 
use a telecommunications device for the deaf (TDD) may call the Federal 
Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. and 8 
p.m., Eastern time, Monday through Friday.

SUPPLEMENTARY INFORMATION: These final regulations implement changes 
made by the Rehabilitation Act Amendments of 1992 (Pub. L. 102-569) and 
the Technology-Related Assistance for Individuals With Disabilities Act 
Amendments of 1994 (Pub. L. 103-218). These amendments direct the 
Secretary to issue regulations, as appropriate, to carry out the 
provisions of the Rehabilitation Act of 1973, as amended.
    This program supports the National Education Goal that, by the year 
2000, every adult American be literate and possess the knowledge and 
skills necessary to compete in a global economy and exercise the rights 
and responsibilities of citizenship. The Department supports a variety 
of training activities for vocational rehabilitation personnel so that 
they may assist individuals with disabilities in gaining the knowledge 
and skills to obtain employment and compete in a global economy.
    On October 8, 1993, the Secretary published a notice of proposed 
rulemaking (NPRM) for the Rehabilitation Long-Term Training program in 
the Federal Register (58 FR 52606). The major issues related to this 
program are discussed in the preamble to the NPRM. Significant changes 
resulting from public comment since publication of the NPRM include--
(1) A waiver provision for part of the non-Federal share of the cost of 
a project if an applicant demonstrates that it does not have sufficient 
resources for the entire match; (2) An exemption for existing projects 
from the requirement to direct 75 percent of the total award to 
scholarships; and (3) A broadening of the term ``deaf'' to include 
individuals who are ``hard of hearing'' and of the term ``blind'' to 
include individuals who have ``vision impairment.''
    In addition, after the NPRM was published, the Technology-Related 
Assistance for Individuals With Disabilities Act Amendments of 1994 
(Pub. L. 103-218) was enacted. Those amendments included a technical 
change to the Rehabilitation Act of 1973, as amended, in the area of 
rehabilitation training. That statutory change has been incorporated 
into these regulations by adding the use, applications, and benefits of 
assistive technology devices and assistive technology services to the 
list of areas of personnel shortages identified in Sec. 386.1.

Analysis of Comments and Changes

    In response to the Secretary's invitation in the NPRM, 386 parties 
submitted comments on the proposed regulations. An analysis of the 
comments and of the changes in the regulations since publication of the 
NPRM follows.
    Major issues are grouped according to subject, with appropriate 
sections of the regulations referenced in parentheses. Other 
substantive issues are discussed under the section of the regulations 
to which they pertain. Technical and other minor changes are not 
addressed.

General Comments

Intent of Change in Long-Term Training Regulations
    Comment: A commenter expressed the opinion that since university 
programs have long been addressed in the long-term category, the change 
in regulations appears to be intended to eliminate any training that 
results in less than an academic degree.
    Discussion: Approximately 70 percent of grants under the 
Rehabilitation Long-Term Training program are currently for academic 
training. The 30 percent that are non-academic are concentrated in 
several areas: Administration, prosthetics and orthotics, community 
rehabilitation personnel, mental illness, independent living, client 
assistance program, supported employment, and deafness. The intent is 
not to eliminate any training for less than an academic degree, but to 
clarify and focus the specific mission of each training authority to 
improve program management. Regulations that accurately reflect the 
program purpose of providing academic training in areas of personnel 
shortages identified by the Secretary permit targeted allocations of 
funds to specific personnel needs, facilitate pertinent outcome 
measures, and ensure that administrative requirements relating to 
proposal evaluations, scholarships, recordkeeping, matching, and 
reporting are appropriate.
    Changes: None.
Insufficient Public Input in the Regulations Development Process
    Comments: There were a number of comments stating that the proposed 
regulations were developed without participation of the rehabilitation 
field.
    Discussion: The Secretary agrees that open and extensive public 
participation strengthens the regulations process. In fact, extensive 
public input was obtained when the Rehabilitation Services 
Administration (RSA) convened a public meeting on rehabilitation 
training and published a notice requesting written public comments in 
May 1991. Comments received provided useful information that was 
considered in crafting the regulations. Also, training meetings were 
held throughout the United States in 1993 on the Rehabilitation Act 
Amendments.
    Changes: None.
The Department Should Conduct a Needs Assessment Before Enacting New 
Regulations That Reduce or Eliminate Post-Employment Training for 
Rehabilitation Personnel
    Comments: Most of the comments calling for needs assessments were 
from direct service providers who were concerned that the academic 
program emphasis in the Rehabilitation Long-Term Training program would 
reduce or eliminate crucial training for current service delivery 
personnel.
    Discussion: The Department has conducted needs assessments of the 
training needs of personnel providing vocational rehabilitation 
services to individuals with disabilities since 1983 and will continue 
to do so in the future, as the authorizing statute requires it.
    Changes: None.
Funding Post-Employment Training if Long-Term Training Regulations Are 
Enacted
    Comments: A number of commenters expressed concern that there 
appears to be no money to provide post-employment training under 
training authorities other than long-term training. Commenters 
requested that, if the Rehabilitation Long-Term Training program is to 
be substantially changed, new regional networks of community-based 
continuing education units be established. These units would be similar 
to the Rehabilitation Continuing Education Programs and would be 
focused on individuals at the front lines of service delivery. Several 
commenters suggested that separate regulations could be developed for 
university and non-university grant recipients.
    Discussion: The Secretary agrees that post-employment training 
needs of community rehabilitation training providers should be 
addressed, in part, by a network of regional continuing education 
programs. The Secretary annually allocates funds to address personnel 
shortages of qualified rehabilitation personnel. These funds are 
targeted to address training needs by professional discipline and 
rehabilitation jobs. The Secretary submits an annual report to the 
Congress containing and justifying rehabilitation training allocations 
in detail. The Secretary has authority to allocate funds from the long-
term training area to continuing education or other short-term or 
specialized training for post-employment training of community 
rehabilitation personnel.
    Changes: None.

Specific Comments by Section

The Program Purpose of Rehabilitation Long-Term Training (Secs. 386.1 
and 386.20(g)(2)
    Comments: A number of commenters supported inclusion of academic 
training as the primary purpose of the Rehabilitation Long-Term 
Training program. They stated that the emphasis on academic outcomes is 
consistent with the requirements of the Rehabilitation Act Amendments 
of 1992 (1992 Amendments) to the Rehabilitation Act, which stress the 
use of ``qualified'' personnel. However, a number of other commenters 
asked about the statutory authority for funding only academic programs 
and excluding continuing education programs under the Rehabilitation 
Long-Term Training program. These commenters argued that there is no 
justification in the Rehabilitation Act for stating that the purpose of 
RSA's Long-Term Training program is to provide ``academic'' training.
    Discussion: Section 302 of the Rehabilitation Act, as amended, is 
the statutory basis for the rehabilitation training programs. Except 
for the in-service training program, which now is included in the Act, 
the specific rehabilitation training programs, including the 
Rehabilitation Long-Term Training program, are established in 
regulations issued by the Secretary based on the statutory authority in 
section 302. The Secretary establishes programs so that each has a 
specific mission defined in regulations with appropriate outcome 
measures. The Secretary believes that the long-term training program 
should be focused on academic training.
    Changes: None
Client Assistance Program (CAP) (Sec. 386.1)
    Comments: Several commenters observed that preparation for 
employment in client assistance programs is not currently offered in 
academic training settings and that CAP training should continue to be 
provided under long-term training.
    Discussion: The Secretary agrees that no current academic training 
exists for preparing individuals to work in client assistance programs 
and that there is a demonstrated need for continued post-employment 
training of CAP personnel. Existing CAP training projects will continue 
to be funded until their current grant periods end. The Secretary plans 
to invite future applications for CAP training under the provisions in 
section 302 of the Act and in the general regulations for 
Rehabilitation Training in 34 CFR part 385. Future CAP training notices 
will be targeted to specific needs for training and technical 
assistance and published for public comment before applications are 
solicited.
    Changes: None.
Fields of Study Under the Rehabilitation Long-Term Training Program 
(Sec. 386.1)
    Comments: Several commenters suggested revisions in the listing of 
fields of study to conform with the listing of fields of study in 
section 302(b)(1)(B) of the Rehabilitation Act and to include 
additional, specific fields, such as vision therapy and rehabilitation 
computer systems.
    Discussion: The listing of fields in the Rehabilitation Act does 
not provide enough detail. For example, a specific category is needed 
for the Secretary to target training resources for the preparation of 
specialized personnel for individuals who are blind or have vision 
impairment. The list of 30 areas established in regulations builds upon 
the listing in the Act by using areas that have been included in past 
long-term training competitions because they are areas where needs 
assessments show continuing needs. The Secretary has the authority 
under Sec. 386.1(b)(30) of the regulations to invite applications in 
other fields, such as vision therapy and rehabilitation computer 
systems, contributing to the rehabilitation of individuals with 
disabilities. Also, the Experimental and Innovative Training program 
(34 CFR part 387) offers opportunities for submittal of proposals to 
develop new types of training programs for rehabilitation personnel.
    Changes: None.
Use of the Term ``Blind'' and the Term ``Deaf'' (Sec. 386.1)
    Comments: One commenter suggested that the term ``blind'' be 
eliminated because it connotes the absence of vision, and the vast 
majority of individuals who are targeted for rehabilitation under this 
category have residual vision (i.e., are partially sighted). Another 
commenter suggested substituting a broader category that would include 
blind individuals as well as other individuals with visual impairment. 
One Commenter suggested elimination of the term ``deaf'' as it connotes 
the absence of hearing, and many individuals served under the 
Rehabilitation Act have partial hearing loss. The commenter suggested 
use of a more inclusive phrase, such as persons with hearing loss.
    Discussion: The Secretary agrees that a change is needed in the 
identification of these categories of training. In the past, the Act 
included specialized personnel in providing services to individuals who 
are blind and to individuals who are deaf among the targeted areas of 
personnel shortages to which training projects might be directed. The 
terms ``blind'' and ``deaf'' were not specifically defined, but were 
broadly interpreted to include individuals with partial or total vision 
or hearing loss. The 1992 Amendments removed the terms ``blind'' and 
``deaf'' from the listing of training areas in section 302(b)(1) and 
substituted training of personnel to provide services to individuals 
with specific disabilities. Since the regulations in 34 CFR part 386 
provide the basis for specific allocations of training funds to 
targeted areas of personnel shortages, it is particularly important 
that the listing of targeted areas be as specific and inclusive as 
possible.
    Changes: The Secretary has included ``specialized personnel for 
rehabilitation of individuals who are blind or have vision impairment'' 
and ``specialized personnel for rehabilitation of individuals who are 
deaf or hard of hearing'' as targeted areas within Sec. 386.1 for 
training allocations.
Lack of Academic Training in Guam (Sec. 386.1)
    Comment: One commenter expressed concern that rehabilitation 
training in Guam, which in the past has been provided through 
continuing education projects under the long-term training program, 
will no longer be available.
    Discussion: The Secretary recognizes the need for improved access 
to rehabilitation training for Guam and other remote and isolated 
areas. The Secretary believes that these needs will be met, in part, by 
distance learning training, which was first funded in fiscal year 1993 
as a result of the 1992 Amendments (section 803(a) of the 
Rehabilitation Act of 1973, as amended).
    Changes: None.
Eligibility of State Agencies and Other Public or Nonprofit Agencies 
and Organizations, Including Institutions of Higher Education, Under 
the Rehabilitation Long-Term Training Program (Sec. 386.2)
    Comment: One commenter noted that, since State agencies and other 
public or nonprofit agencies do not offer degrees or certificates, 
maintaining those organizations as eligible applicants implies the 
intent to continue non-academic long-term training.
    Discussion: Section 302(a) of the Act establishes the broad 
eligibility criteria for applicants under the Rehabilitation Long-Term 
Training program. The Secretary is aware of the rapidly changing 
auspices and circumstances under which specialized academic and 
certificate training is offered in the field of rehabilitation. 
Consortia and partnerships of States, public or nonprofit private 
agencies and organizations, and institutions of higher education may be 
formed to address rehabilitation training needs. The Secretary 
encourages those efforts and desires regulations that will facilitate 
new approaches through flexibility in eligibility requirements.
    Changes: None.
Professional Corporation or Professional Practice (Sec. 386.4)
    Comment: One commenter wrote in support of the provisions in the 
regulations that define professional corporation or professional 
practice.
    Discussion: The Secretary appreciates the support for the 
definition of professional corporation or professional practice.
    Changes: None.
Related Agency (Sec. 386.4)
    Comment: One commenter suggested substituting the legislative 
definition of ``community rehabilitation program'' in place of the 
language proposed in Sec. 386.4(b) describing related agencies that are 
not American Indian rehabilitation programs.
    Discussion: Section 7(25) of the Act includes an expanded 
definition of ``community rehabilitation program.'' The Secretary 
reviewed the definition of community rehabilitation program in 
preparing regulations implementing the Rehabilitation Act Amendments of 
1992. There is not an exact match between the expanded definition of 
community rehabilitation program in Title I of the Act and the 
legislative definition of related agency in Title III. Therefore, 
``community rehabilitation program'' was not used in the definition of 
related agency.
    Changes: None.
Including Specific References to Culturally Diverse Populations in 
Appropriate Sections of the Regulations (Secs. 386.1, 386.20, 386.33, 
and 386.40)
    Comments: Several commenters felt that, although individuals who 
are unserved or underserved by programs under the Act are specifically 
referenced in the description of the Rehabilitation Long-Term Training 
program, policies and procedures to include culturally diverse 
recruitment and retention efforts should be implemented for all 30 
categories of rehabilitation training. Selection criteria should be 
modified to give credit for program development related to culturally 
diverse populations.
    Discussion: The Secretary agrees that it is essential that all 
requirements in the Rehabilitation Act of 1973, as amended, are 
implemented to ensure equal access and outreach for traditionally 
underserved populations, including minorities. At present, the primary 
method for directing rehabilitation training program grantees to meet 
those requirements is through the assurances mandated for each 
applicant. The Department is currently working to implement section 21 
of the Act, including outreach services and other related activities, 
to enhance the capacity of minority institutions to compete for grants, 
contracts, and cooperative agreements. In the future, the Department 
may propose specific priorities or selection criteria that address 
needs of traditionally underserved populations across the range of 
rehabilitation discretionary programs.
    Changes: None.
Minimum 10 Percent Matching Requirement (Sec. 386.30)
    Comments: Many comments were received objecting to the requirement 
that the Federal share of an award may not be more than 90 percent of 
the total cost of a project under this program. A number of commenters 
pointed out that the eight percent indirect costs currently allowed by 
the Department on training awards do not cover current administrative 
costs. Concern was expressed that many universities would not provide a 
10 percent match. Some commenters observed that the present negotiated 
system offers flexibility. Many commenters pointed out that post-
employment training programs for community rehabilitation personnel 
would have difficulty with the 10 percent required match. Some 
university commenters indicated that their institutions face 
substantial resource problems. Other commenters asked if the match 
could be in-kind. One commenter wrote that the limitation of 90 percent 
Federal support for proposed projects is fair and reasonable.
    Discussion: The Rehabilitation Act of 1973, as amended, requires a 
matching component for rehabilitation training grants. The Secretary 
believes that, if the Department states the minimum matching amount in 
advance of negotiations, the award process is more understandable and 
efficient. Most current academic grantees under the Rehabilitation 
Long-Term Training program have negotiated awards with a match in 
excess of 10 percent. The Secretary is aware that a number of non-
academic, post-employment training grantees under this program have 
experienced difficulty meeting even a 10 percent matching requirement. 
This problem will be solved, in part, by funding some future awards 
with a post-employment focus under the Rehabilitation Continuing 
Education program in which the current matching requirement as 
presented in recent closing date announcements is four percent. In all 
instances, the applicant share may be in-kind. As a result of a recent 
program audit that identified problems in the use of faculty time for 
in-kind matching, the Secretary prefers that the applicant share in the 
Rehabilitation Long-Term Training program by directly funding student 
scholarship assistance as the designated match.
    Changes: The 10 percent matching requirement remains, but a new 
provision has been added indicating that the Secretary may waive part 
of the non-Federal share of the cost of the project if the applicant 
demonstrates during the negotiations process that it does not have 
sufficient resources to contribute the entire match.
Requirements for Directing Grant Funds: Adverse Impact of the 
Requirement That a Grantee Must Use at Least 75 Percent of Total Award 
for Scholarships as Defined in Sec. 386.4 (Sec. 386.31)
    Comments: Numerous commenters, primarily from community 
rehabilitation programs and related personnel training programs, 
expressed concern that the proposed 75 percent scholarship requirement 
would limit access of community rehabilitation program personnel to 
needed continuing education programs.
    Discussion: The Secretary agrees that personnel employed in 
community rehabilitation programs should continue to receive short-
term, continuing rehabilitation training. This will be accomplished by 
offering that training under other, more appropriate Rehabilitation 
Training program categories, including 34 CFR part 389 (Rehabilitation 
Continuing Education Programs) and 34 CFR part 390 (Rehabilitation 
Short-Term Training). The Secretary believes that the availability of 
needed post-employment training for community rehabilitation personnel 
will be provided through regional continuing education programs. 
However, the Secretary wants to ensure that all currently funded multi-
year long-term training projects continue for the remainder of their 
project period.
    Changes: A new provision has been added (Sec. 386.31(c)) stating 
that the requirement for a grantee to use at least 75 percent of the 
total award for scholarships does not apply for the remainder of the 
project period for multi-year projects in existence as of October 1, 
1994.
    Comments: One commenter expressed concern that directing long-term 
training programs to use at least 75 percent of their total award for 
scholarships will reduce cross-training of professionals who work with 
individuals with disabilities.
    Discussion: The Secretary believes that rehabilitation short-term, 
continuing education, and in-service training programs offer excellent 
opportunities for cross-training of rehabilitation professionals. In 
addition, the Secretary believes that existing professional program 
accreditation processes and individual licensure and certification 
procedures by national, State, and professional organizations are 
attentive to cross-training needs.
    Changes: None.
    Comments: Several commenters observed that scholarships are not 
needed in a prosthetic or orthotic curriculum because programs attract 
more than enough qualified students. Moreover, it was noted that 
prosthetic and orthotic programs are costly to operate. Students attend 
labor intensive lab classes with a low student to instructor ratio. 
Although programs are making changes that will reduce expenses, supply 
and equipment costs are high, and without additional Federal support, 
it would be difficult to operate them. Many students now take loans to 
pay for their education, are supported by employers, or are self-
supporting. Supplementation of these resources with direct student 
support from RSA could be useful, but the commenters do not feel this 
should be the primary method of support.
    Discussion: The Secretary acknowledges that prosthetics and 
orthotics (P & O) rehabilitation training is highly individualized and 
often requires intensive lab supervision and high equipment costs. The 
Secretary will take these unique circumstances, to the extent that they 
are supported with evidence in the proposal, into consideration in 
reviewing the requirement to direct at least 75 percent of the total 
award for scholarships. The Secretary is concerned by the argument that 
scholarships are not needed in PP & O because the field attracts more 
than enough students. The purpose of the Rehabilitation Long-Term 
Training program is to provide academic training in areas of personnel 
shortages identified by the Secretary. P & O has been identified as an 
area with personnel shortages, and providing students with scholarships 
ensures that the work-or-repay provisions of the Rehabilitation Act 
will direct graduates to service in support of State rehabilitation 
agencies in areas of personnel shortages.
    Changes: None.
    Comments: A number of commenters requested that the current 
regulations be maintained to address specialized nonacademic programs 
in deafness, blindness, mental illness, independent living, and in 
vocational evaluation because unique, one-of-a-kind projects currently 
funded under long-term training would no longer be eligible for support 
under the new regulations.
    Discussion: The Secretary believes that the Rehabilitation Long-
Term Training program cannot be expected to meet all specialized 
training needs, particularly in nonacademic areas. The Secretary plans 
to make greater use of the extensive flexibility provided by section 
302 of the Act and the six specific rehabilitation training programs to 
ensure that specialized training needs are addressed.
    Changes: None.
    Comments: Several representatives of tribal-controlled colleges 
commented that, because of support that they receive from the Bureau of 
Indian Affairs for each Native American student, there is less need for 
stipends and scholarships as student incentives. Tribal-controlled 
colleges, however, need greater levels of financial support to maintain 
national and regional networks through faculty travel, for supervision 
at internship sites, for course development, and for materials 
development. Commenters were concerned that the 75 percent limit would 
hurt program growth and quality and would be detrimental to 
undergraduate rehabilitation programs in rural regions where graduates 
work with American Indian clients.
    Discussion: The Secretary agrees that tribal-controlled colleges 
and other training programs for Native Americans often conduct 
rehabilitation training under unique circumstances. Under 
Sec. 386.31(b), the Secretary may award grants that use less than 75 
percent of the total award for scholarships based on the unique nature 
of the project. It will be particularly important for applicants to 
document the unique circumstances that apply in their proposals to 
assist the Secretary in making this determination.
    Changes: None.
    Comments: Two commenters observed that, if a quantitative 
requirement regarding the percentage of funds directed to scholarships 
is necessary, there should be a reduction in the limit and a broadening 
of the unique circumstances under Sec. 386.31(b) if less than 75 
percent of the funds are devoted to scholarships. The Department should 
provide examples of circumstances of projects funded with less than 75 
percent in scholarships. In addition, projects should be approved that 
demonstrate that the shortage they intend to meet is best met by 
funding training program resources such as faculty and equipment. Many 
traditional degree or certificate granting disciplines, such as 
physical medicine and rehabilitation and its residency programs, are 
limited because of the lack of adequate numbers of faculty and, 
therefore, programs. Also, there should be an exception for training 
programs in newly emerging areas, such as independent living, that do 
not have degrees or certificates.
    Discussion: The Secretary believes that a quantitative limit is 
necessary to establish clear standards for all applicants. Current 
long-term training grants average over $100,000 per year; therefore, a 
grant with 75 percent of the award targeted for scholarships will still 
have more than $25,000 for other related costs. Broadening the 
circumstances under which unique projects may be supported that use 
less than 75 percent of the total award for scholarships is not 
consistent with the overall objective of the long-term training 
program.
    Changes: None.
    Comments: Many commenters from university rehabilitation training 
programs expressed concern that programs at their institutions might be 
discontinued if Federal funds were required to be directed to student 
support rather than for paying for instructional costs.
    Discussion: Existing regulations require academic training projects 
with a multi-year project period to increase the grantee's share of 
teaching costs progressively in each succeeding year so that total 
personnel costs are fully absorbed by the grantee at the termination of 
the project period. The 75 percent requirement provides greater 
latitude than existing regulations.
    Changes: None.
Requirements for Directing Grant Funds: The Department of Education 
Should Target Priorities To Require Grantees To Award Specific Degrees 
or Certificates (Sec. 386.31).
    Comments: One commenter requested that the Secretary use program 
announcements to target programs on degrees and certificates in 
appropriate areas. Two commenters requested that the Secretary be 
sensitive to individual student preferences for attending degree or 
certificate programs.
    Discussion: The Secretary believes that current professional 
accreditation by the designated accrediting agency in the professional 
field in which grant support is being provided is adequate assurance 
that an academic program offers an appropriate degree. From time to 
time, the Secretary may assign an absolute priority to proposals 
offering a specific degree or certificate if the Secretary has 
determined that personnel shortages in the professional field require 
that preference. Those priorities will be presented for public comment 
before applications are solicited. The Secretary agrees that, to the 
extent possible in responding to personnel shortages, a wide range of 
degree and certificate programs offering Federal rehabilitation 
scholarship assistance should be available to facilitate student 
choice. However, no change in the regulations is required.
    Changes: None.
Exclusion of Federal Employees From Receiving Training Scholarships 
(Sec. 386.33(a)(2))
    Comment: One commenter protested that this is not a fair regulation 
because it discriminates against a group of people--Federal employees. 
The example was a full-time GS-7 Federal correctional officer enrolled 
in a rehabilitation counseling program at a university with an RSA 
grant.
    Discussion: The Secretary agrees that the limitation on Federal 
employees serves no useful purpose.
    Changes: The restrictive language has been dropped.
Grantee Disbursement and Scholarship Assurance Provisions (Secs. 386.33 
Through 386.43)
    Comments: Several commenters called for a less adversarial phrasing 
of scholarship conditions to enhance recruitment of trainees. Other 
suggestions included placing the burden on the scholar (at the time of 
the exit interview) to report to the grantee using a packet containing 
several change-of-address forms, change-of-employment forms, and a 
completion of work obligation form. Another commenter stated the belief 
that any tracking or reporting activities pursuant to payback 
obligations are the exclusive responsibility of the granting agency.
    Discussion: The regulations describe conditions that must be met by 
a grantee after award in subpart D and conditions that must be met by a 
scholar in subpart E. No adversarial system of grantee vs. scholar or 
Federal agency vs. grantee is implied or intended. The intent is to 
clearly identify the responsibilities of all parties. Tracking and 
recordkeeping, which can be facilitated by change-of-address and 
change-of-employment forms, are not excessively burdensome for the 
numbers of students supported by the average grant under the 
Rehabilitation Long-Term Training program.
    Changes: None.
Work-or-Repay Requirements for Certificate Programs (Secs. 386.4 and 
386.34)
    Comment: One commenter asked for assurances that the work-or-repay 
provisions will be applied to all academic degree pre- or post-
employment programs as well as to non-degree awarding, certificate 
granting continuing education programs.
    Discussion: The Secretary agrees that the work-or-repay provision 
applies to each individual who receives a scholarship, whether for a 
degree or a certificate program. The term ``certificate'' is defined in 
Sec. 386.4 of the regulations. Examples of certificate programs that 
offer scholarships and are subject to the work-or-repay provision 
include post-baccalaureate training in allied health areas, such as 
occupational therapy, physical therapy, and prosthetics and orthotics. 
The Secretary believes that the work-or-repay provision does not apply 
to certificate programs in non-academic or emerging areas because no 
scholarship assistance is provided to individuals. Assistance in the 
form of per-diem expenses for short-term training is not considered to 
be scholarship assistance subject to the work-or-repay provision. It 
would be burdensome and inappropriate to enforce a work-or-repay 
provision for that assistance. The Secretary believes that confusion 
about the different types of certificates and the applicability of 
repayment will be resolved by focusing the Rehabilitation Long-Term 
Training program on academic scholarship training (degree and 
certificate) subject to the work-or-repay provision and using other 
more appropriate training authorities for non-academic, non-
scholarship, post-employment training.
    Changes: None.
Stricter Standards for Work-or-Repay Provision (Sec. 386.34)
    Comment: One commenter suggested that grantees be required to 
arrange for all scholars to attend an extensive pre-enrollment work-or-
repay seminar series at which participating agencies in the city or 
State (along with the grantee) would provide clearly detailed 
information regarding job opportunities for and subsequent 
responsibilities of scholars.
    Discussion: The Secretary agrees that a job seminar would be 
valuable for many scholarship recipients and potential rehabilitation 
employers. Such an activity, however, should be at the discretion of 
the grantee and not a regulatory requirement.
    Changes: None.
Flexibility in Future Applications of Work-or-Repay Requirements 
(Sec. 386.34)
    Comment: One commenter encouraged flexibility in the application of 
this requirement to emerging fields like independent living.
    Discussion: The Secretary agrees that the work-or-repay provision 
should apply only to academic training and that fields such as 
independent living (IL) do not currently provide academic training 
subject to the work-or-repay provision. The Secretary plans to support 
future post-employment training grants in IL under training authorities 
that are not subject to the work-or-repay provision. However, it 
appears likely that research and curriculum development advances will 
soon make academic training, particularly in community colleges, 
possible. Therefore, in anticipation of the need to provide academic or 
certificate training opportunities, the Secretary has also retained IL 
as a Rehabilitation Long-Term Training program field.
    Changes: None.
Work-or-Repay Tracking Systems (Sec. 386.34(g))
    Comments: Several commenters expressed concern that the proposed 
regulations inappropriately place grantee institutions in watch-dog 
roles. In particular, there was objection to the requirement for 
documentation that the grantee has checked for addresses of missing 
scholars with alumni organizations.
    Discussion: The Secretary does not believe that the requirement 
that the grantee check with university-sponsored alumni organizations 
if it is experiencing difficulty in locating a scholar is 
inappropriate. The regulations do not constitute a basis for forcing 
disclosure of records from any private organization. If a grantee 
cannot document, because of the inability to locate a scholar who has 
graduated, that requirements of the work-or-repay provision have been 
met by an individual, the grantee will be responsible for reporting to 
the Secretary that the individual has not completed the requirement. 
The Secretary will then initiate enforcement actions as outlined in 
Sec. 386.43. The intent of the regulations is to have the grantee 
exhaust all possibilities to locate and contact the individual before 
the matter is referred to the Secretary.
    Changes: None.
Work-or-Repay Records (Sec. 386.34(h))
    Comments: Two commenters expressed concern that the proposed 
regulations inappropriately obligate grantee institutions to perform 
time-consuming and expensive database creation, maintenance, updating, 
and reporting functions for as many as six years for which the grantee 
receives no compensation from the Federal Government.
    Discussion: The Secretary believes that the work-or-repay provision 
is a partnership between grantees and the Federal Government. Grantees 
are closest to the individuals and are in the best position to advise, 
assist, and admonish scholars on matters related to their work-or-repay 
requirements. The Secretary believes that administrative costs for 
these activities are minimal and are not feasible for line itemization. 
Instead, the Secretary sees these costs as subsumed under grantee 
indirect costs. The regulations have been written to state clearly that 
the responsibility for recordkeeping extends until the repayment period 
has ended for all students provided scholarships.
    Changes: None.
June 1, 1992, Effective Date for New Work-or-Repay Provisions 
(Sec. 386.34)
    Comment: A commenter expressed concern that this requirement is 
being imposed a full five months before the 1992 Amendments to the 
Rehabilitation Act were even approved. The commenter asked how, if 
these proposed regulations are in response to the 1992 Amendments, can 
this date be required since it predates the amendments?
    Discussion: The June 1992 effective date was set retroactively in 
the Rehabilitation Act Amendments of 1992.
    Changes: None.
Payback Requirements for Scholars Who Become University Educators 
(Sec. 386.34)
    Comments: Two commenters observed that the proposed regulations do 
not permit graduate and doctoral level scholarship recipients to meet 
the work-or-repay provision by teaching at a university unless the 
university has a formal agreement with the State agency identifying the 
university as a ``related agency.''
    Discussion: The identification of a ``related agency'' derives from 
the Rehabilitation Act of 1973, as amended. Educators whose college or 
university employer meets the definition of a related agency 
(Sec. 386.4) by providing services to individuals with disabilities 
under an agreement with a designated State agency and who are employed 
in the area of specialty for which Federal support for their training 
was provided will have no problem meeting the requirement. Examples of 
acceptable arrangements include educators who have agreements to 
supervise field placements of students in training at State agencies 
and related agencies, who serve as advisors or consultants to State 
agencies and related agencies, and who provide direct services through 
their universities, including the instruction of individuals with 
disabilities. The key to meeting the work-or-repay requirement through 
employment in an educational institution is that the institution have 
an appropriate agreement with the designated State agency and that the 
scholar work in his or her specialty area.
    Changes: None.
Proposed Six-Year Repayment Period (Sec. 386.34)
    Comment: One commenter expressed concern that, after completing a 
two-year graduate program, a scholar will have only six years for 
repayment instead of the current ten-year repayment period.
    Discussion: The time limits are set in the Rehabilitation Act 
Amendments of 1992.
    Changes: None.
Work-or-Repay Provisions for Scholars Receiving Federal Benefits 
(Sec. 386.43)
    Comment: One commenter suggested that the deferral of repayment due 
to disability be modified to exclude circumstances under which the 
individual achieves Social Security Disability Insurance (SSDI) earned 
income status.
    Discussion: The Secretary does not believe that there is a need to 
distinguish the repayment status of scholars by the type of disability 
benefits a scholar may be receiving.
    Changes: None.

Waiver of Notice of Proposed Rulemaking

    In accordance with section 431(b)(2)(A) of the General Education 
Provisions Act (20 U.S.C. 1232(b)(2)(A)) and the Administrative 
Procedure Act (5 U.S.C. 553), it is the practice of the Secretary to 
offer interested parties the opportunity to comment on proposed 
regulations. However, the language added in Sec. 386.1(b)(30) merely 
incorporates into the regulations a statutory change made by the 
Technology-Related Assistance for Individuals With Disabilities Act 
Amendments of 1994 to the Rehabilitation Act of 1973, as amended, and 
does not implement substantive policy. Therefore, the Secretary has 
determined, pursuant to 5 U.S.C. 553(b)(B), that public comment on the 
change in the regulations is unnecessary and contrary to the public 
interest.

Intergovernmental Review

    This program is subject to the requirements of Executive Order 
12372 and the regulations in 34 CFR Part 79. The objective of the 
Executive order is to foster an intergovernmental partnership and 
strengthened federalism by relying on processes developed by State and 
local governments for coordination and review of proposed Federal 
financial assistance.
    In accordance with the order, this document is intended to provide 
early notification of the Department's specific plans and actions for 
this program.

Assessment of Educational Impact

    In the notice of proposed rulemaking, the Secretary requested 
comments on whether the proposed regulations would require transmission 
of information that is being gathered by or is available from any other 
agency or authority of the United States.
    Based on the response to the proposed regulations and on its own 
review, the Department has determined that the regulations in this 
document do not require transmission of information that is being 
gathered by or is available from any other agency or authority of the 
United States.

List of Subjects in 34 CFR Part 386

    Grant programs, Rehabilitation training. Reporting and 
recordkeeping requirements.

    Dated: June 9, 1994.

(Catalog of Federal Domestic Assistance Number 84.129, 
Rehabilitation Training: Rehabilitation Long-Term Training)
Judith E. Heumann,
Assistant Secretary for Special Education and Rehabilitative Services.

    The Secretary amends title 34 of the Code of Federal Regulations by 
revising part 386 to read as follows:

PART 386--REHABILITATION TRAINING: REHABILITATION LONG-TERM 
TRAINING

Subpart A--General

Sec.
386.1  What is the Rehabilitation Long-Term Training program?
386.2  Who is eligible for an award?
386.3  What regulations apply?
386.4  What definitions apply?

Subpart B--[Reserved]

Subpart C--How Does the Secretary Make an Award?

386.20  What selection criteria does the Secretary use?

Subpart D--What Conditions Must Be Met After an Award?

386.30  What are the matching requirements?
386.31  What are requirements for directing grant funds?
386.32  What are allowable costs?
386.33  What are the requirements for grantees in disbursing 
scholarships?
386.34  What assurances must be provided by a grantee that intends 
to provide scholarships?
386.35  What information must be provided by a grantee that is an 
institution of higher education to assist designated State agencies?

Subpart E--What Conditions Must Be Met by a Scholar?

386.40  What are the requirements for scholars?
386.41  Under what circumstances does the Secretary grant a deferral 
or exception to performance or repayment under a scholarship 
agreement?
386.42  What must a scholar do to obtain a deferral or exception to 
performance or repayment under a scholarship agreement?
386.43  What are the consequences of a scholar's failure to meet the 
terms and conditions of scholarship agreement?

    Authortiy: 29 U.S.C. 711(c) and 774, unless otherwise noted.

Subpart A--General


Sec. 386.1  What is the Rehabilitation Long-Term Training program?

    (a) The Rehabilitation Long-Term Training program provides 
financial assistance for--
    (1) Projects that provide basic or advanced training leading to an 
academic degree in one of those fields of study identified in paragraph 
(b) of this section;
    (2) Projects that provide a specified series of courses or program 
of study leading to award of a certificate in one of those fields of 
study identified in paragraph (b) of this section; and
    (3) Projects that provide support for medical residents enrolled in 
residency training programs in the specialty of physical medicine and 
rehabilitation.
    (b) The Rehabilitation Long-Term Training program is designed to 
provide academic training in areas of personnel shortages identified by 
the Secretary and published in a notice in the Federal Register. These 
areas may include--
    (1) Vocational rehabilitation counseling;
    (2) Rehabilitation technology;
    (3) Rehabilitation medicine;
    (4) Rehabilitation nursing;
    (5) Rehabilitation social work;
    (6) Rehabilitation psychiatry;
    (7) Rehabilitation psychology;
    (8) Rehabilitation dentistry;
    (9) Physical therapy;
    (10) Occupational therapy;
    (11) Speech pathology and audiology;
    (12) Physical education;
    (13) Therapeutic recreation;
    (14) Community rehabilitation program personnel;
    (15) Prosthetics and orthotics;
    (16) Specialized personnel for rehabilitation of individuals who 
are blind or have vision impairment;
    (17) Rehabilitation of individuals who are deaf or hard of hearing;
    (18) Rehabilitation of individuals who are mentally ill;
    (19) Undergraduate education in the rehabilitation services;
    (20) Independent living;
    (21) Client assistance;
    (22) Administration of community rehabilitation programs;
    (23) Rehabilitation administration;
    (24) Vocational evaluation and work adjustment;
    (25) Services to individuals with specific disabilities or specific 
impediments to rehabilitation, including individuals who are members of 
populations that are unserved or underserved by programs under this 
Act;
    (26) Job development and job placement services to individuals with 
disabilities;
    (27) Supported employment services, including services of 
employment specialists for individuals with disabilities;
    (28) Specialized services for individuals with severe disabilities;
    (29) Recreation for individuals with disabilities;
    (30) The use, applications, and benefits of assistive technology 
devices and assistive technology services; and
    (31) Other fields contributing to the rehabilitation of individuals 
with disabilities.

(Authority: 29 U.S.C. 711 and 771a)


Sec. 386.2  Who is eligible for an award?

    Those agencies and organizations eligible for assistance under this 
program are described in 34 CFR 385.2.

(Authority: 29 U.S.C. 771a(a))


Sec. 386.3  What regulations apply?

    The following regulations apply to the Rehabilitation Training: 
Rehabilitation Long-Term Training program:
    (a) The regulations in this part 386.
    (b) The regulations in 34 CFR part 385.

(Authority: 29 U.S.C. 771a)


Sec. 386.4  What definitions apply?

    The following definitions apply to this program:
    (a) Definitions in 34 CFR 385.4.
    (b) Other definitions. The following definitions also apply to this 
part:
    Academic year means a full-time course of study--
    (1) Taken for a period totaling at least nine months; or
    (2) Taken for the equivalent of at least two semesters, two 
trimesters, or three quarters.
    Certificate means a recognized educational credential awarded by a 
grantee under this part that attests to the completion of a specified 
series of courses or program of study.
    Professional corporation or professional practice means--
    (1) A professional service corporation or practice formed by one or 
more individuals duly authorized to render the same professional 
service, for the purpose of rendering that service; and
    (2) The corporation or practice and its members are subject to the 
same supervision by appropriate State regulatory agencies as individual 
practitioners.
    Related agency means--
    (1) An American Indian rehabilitation program; or
    (2) Any of the following agencies that provide services to 
individuals with disabilities under an agreement with a designated 
State agency in the area of specialty for which training is provided:
    (i) A Federal, State, or local agency.
    (ii) A nonprofit organization.
    (iii) A professional corporation or professional practice group.
    Scholar means an individual who is enrolled in a certificate or 
degree granting course of study in one of the areas listed in 
Sec. 386.1(b) and who receives scholarship assistance under this part.
    Scholarship means an award of financial assistance to a scholar for 
training and includes all disbursements or credits for student 
stipends, tuition and fees, and student travel in conjunction with 
training assignments.
    State rehabilitation agency means the designated State agency.

(Authority: 29 U.S.C. 711(c))

Subpart B--[Reserved]

Subpart C--How Does the Secretary Make an Award?


Sec. 386.20  What selection criteria does the Secretary use?

    The Secretary uses the following criteria to evaluate an 
application:
    (a) Plan of operation. (30 points) The Secretary evaluates each 
application on the basis of the criterion in Sec. 385.32(a).
    (b) Quality of key personnel. (10 points) The Secretary evaluates 
each application on the basis of the criterion in Sec. 385.32(b).
    (c) Budget and cost effectiveness. (10 points) The Secretary 
evaluates each application on the basis of the criterion in 
Sec. 385.32(c).
    (d) Evaluation plan. (5 points) The Secretary evaluates each 
application on the basis of the criterion in Sec. 385.32(d).
    (e) Adequacy of resources. (5 points) The Secretary evaluates each 
application on the basis of criterion in Sec. 385.32(e).
    (f)(1) Evidence of need. (10 points) The Secretary reviews each 
application for information that shows that the need for the training 
project has been adequately justified.
    (2) The Secretary looks for information that shows that the need 
for the training project has been established in terms of 
rehabilitation supply and demand for qualified rehabilitation personnel 
and includes an assessment of how the project will respond to personnel 
needs established in local, State, or national studies.
    (g)(1) Relevance to State-Federal rehabilitation service program. 
(10 points) The Secretary reviews each application for information that 
shows that the proposed project appropriately relates to the mission of 
the State-Federal rehabilitation service program.
    (2) The Secretary looks for information that shows that the project 
can be expected either to increase the supply of trained personnel 
available to State and other public or nonprofit agencies involved in 
the rehabilitation of individuals with physical or mental disabilities 
through degree or certificate granting programs, or to improve the 
skills and quality of professional personnel in the rehabilitation 
field in which the training is to be provided through the granting of a 
degree or certificate.
    (h)(1) Nature and scope of curriculum. (20 points) The Secretary 
reviews each application for information that demonstrates the adequacy 
of the proposed curriculum.
    (2) The Secretary looks for information that shows--
    (i) The scope and nature of the coursework reflect content that can 
be expected to enable the achievement of the established project 
objectives;
    (ii) The curriculum and teaching methods provide for an integration 
of theory and practice relevant to the educational objectives of the 
program;
    (iii) There is evidence of educationally focused practical and 
other field experiences in settings that ensure student involvement in 
the provision of vocational rehabilitation, supported employment, or 
independent living rehabilitation services to individuals with 
disabilities, especially individuals with severe disabilities;
    (iv) The coursework includes student exposure to vocational 
rehabilitation, supported employment, or independent living 
rehabilitation processes, concepts, programs, and services; and
    (v) If applicable, there is evidence of current professional 
accreditation by the designated accrediting agency in the professional 
field in which grant support is being requested.

(Approved by the Office of Management and Budget under control 
number 1820-0018.)

(Authority: 29 U.S.C. 711(c) and 771a)

Subpart D--What Conditions Must Be Met After an Award?


Sec. 386.30  What are the matching requirements?

    The Federal share may not be more than 90 percent of the total cost 
of a project under this program. The Secretary may waive part of the 
non-Federal share of the cost of the project after negotiations if the 
applicant demonstrates that it does not have sufficient resources to 
contribute the entire match.

(Authority: 29 U.S.C. 711(c))


Sec. 386.31  What are the requirements for directing grant funds?

    (a) A grantee must use at least 75 percent of the total award for 
scholarships as defined in Sec. 386.4.
    (b) The Secretary may award grants that use less than 75 percent of 
the total award for scholarships based upon the unique nature of the 
project, such as the establishment of a new training program or long-
term training in an emerging field that does not award degrees or 
certificates.
    (c) For multi-year projects in existence on October 1, 1994, the 
requirements of paragraph (a) of this section do not apply for the 
remainder of the project period.

(Authority: 29 U.S.C. 711(c) and 771a)


Sec. 386.32  What are allowable costs?

    In addition to those allowable costs established in the Education 
Department General Administrative Regulations in 34 CFR 75.530 through 
75.562, the following items are allowable under long-term training 
projects:
    (a) Student stipends.
    (b) Tuition and fees.
    (c) Student travel in conjunction with training assignments.

(Authority: 29 U.S.C. 711(c) and 771a)


Sec. 386.33  What are the requirements for grantees in disbursing 
scholarships?

    (a) Before disbursement of scholarship assistance to an individual, 
a grantee--
    (1)(i) Shall obtain documentation that the individual is--
    (A) A U.S. citizen or national; or
    (B) A permanent resident of the Republic of the Marshall Islands, 
Federated States of Micronesia, Republic of Palau, or the Commonwealth 
of the Northern Mariana Islands; or
    (ii) Shall confirm from documentation issued to the individual by 
the U.S. Immigration and Naturalization Service that he or she--
    (A) Is a lawful permanent resident of the United States; or
    (B) Is in the United States for other than a temporary purpose with 
the intention of becoming a citizen or permanent resident; and
    (2) Shall confirm that the applicant has expressed interest in a 
career in clinical practice, administration, supervision, teaching, or 
research in the vocational rehabilitation, supported employment, or 
independent living rehabilitation of individuals with disabilities, 
especially individuals with severe disabilities;
    (3) Shall have documentation that the individual expects to 
maintain or seek employment in a designated State rehabilitation agency 
or in a nonprofit rehabilitation, professional corporation, 
professional practice group, or related agency providing services to 
individuals with disabilities or individuals with severe disabilities 
under an agreement with a designated State agency;
    (4) Shall reduce the scholarship by the amount in which the 
combined awards would be in excess of the cost of attendance, if a 
scholarship, when added to the amount the scholar is to receive for the 
same academic year under Title IV of the Higher Education Act, would 
otherwise exceed the scholar's cost of attendance;
    (5) Shall limit scholarship assistance to the individual's cost of 
attendance at the institution for no more than four academic years 
except that the grantee may provide an extension consistent with the 
institution's accommodations under section 504 of the Act if the 
grantee determines that an individual has a disability that seriously 
affects the completion of the course of study; and
    (6) Shall obtain a Certification of Eligibility for Federal 
Assistance from each scholar as prescribed in 34 CFR 75.60, 75.61, and 
75.62.

(Approved by the Office of Management and Budget under control 
number 1820-0018.)

(Authority: 29 U.S.C. 711(c) and 771a(b))


Sec. 386.34  What assurances must be provided by a grantee that intends 
to provide scholarships?

    A grantee under this part that intends to grant scholarships for 
any academic year beginning after June 1, 1992, shall provide the 
following assurances before an award is made:
    (a) Requirement for agreement. No individual will be provided a 
scholarship without entering into a written agreement containing the 
terms and conditions required by this section. An individual will sign 
and date the agreement prior to the initial disbursement of scholarship 
funds to the individual for payment of the individual's expenses, such 
as tuition.
    (b) Disclosure to applicants. The terms and conditions of the 
agreement that the grantee enters into with a scholar will be fully 
disclosed in the application for scholarship.
    (c) Form and terms of agreement. Each scholarship agreement with a 
grantee will be in the form and contain the terms that the Secretary 
requires, including at a minimum the following provisions:
    (1) The scholar will--
    (i) Maintain employment--
    (A) In a nonprofit rehabilitation agency or related agency or in a 
State rehabilitation agency or related agency, including a professional 
corporation or professional practice group through which the individual 
has a service arrangement with the designated State agency;
    (B) On a full- or part-time basis; and
    (C) For a period of not less than the full-time equivalent of two 
years for each year for which assistance under this section was 
received, within a period, beginning after the recipient completes the 
training for which the scholarship was awarded, of not more than the 
sum of the number of years required in this paragraph and two 
additional years; and
    (ii) Repay all or part of any scholarship received, plus interest, 
if the individual does not fulfill the requirements of paragraph 
(c)(1(i) of this section, except as the Secretary by regulations may 
provide for repayment exceptions and deferrals.
    (2) The employment obligation in paragraph (c)(1) of this section 
as applied to a part-time scholar will be based on the accumulated 
academic years of training for which the scholarship is received.
    (3) Until the scholar has satisfied the employment obligation 
described in paragraph (c)(1) of this section, the scholar will inform 
the grantee of any change of name, address, or employment status and 
will document employment satisfying the terms of the agreement.
    (4) Subject to the provisions in Sec. 386.41 regarding a deferral 
or exception, when the scholar enters repayment status under 
Sec. 386.43(e), the amount of the scholarship that has not been retired 
through eligible employment will constitute a debt owed to the United 
States that--
    (i) Will be repaid by the scholar, including interest and costs of 
collection as provided in Sec. 386.43; and
    (ii) May be collected by the Secretary in accordance with 34 CFR 
Part 30, in the case of the scholar's failure to meet the obligation of 
Sec. 386.43.
    (d) Executed agreement. The grantee will provide an original 
executed agreement upon request to the Secretary.
    (e) Standards for satisfactory progress. The grantee will 
establish, publish, and apply reasonable standards for measuring 
whether a scholar is maintaining satisfactory progress in the scholar's 
course of study. The Secretary considers an institution's standards to 
be reasonable if the standards--
    (1) Conform with the standards of satisfactory progress of the 
nationally recognized accrediting agency that accredits the 
institution's program of study, if the institution's program of study 
is accredited by such an agency, and if the agency has those standards;
    (2) For a scholar enrolled in an eligible program who is to receive 
assistance under the Rehabilitation Act, are the same as or stricter 
than the institution's standards for a student enrolled in the same 
academic program who is not receiving assistance under the 
Rehabilitation Act; and
    (3) Include the following elements:
    (i) Grades, work projects completed, or comparable factors that are 
measurable against a norm.
    (ii) A maximum timeframe in which the scholar shall complete the 
scholar's educational objective, degree, or certificate.
    (iii) Consistent application of standards to all scholars within 
categories of students; e.g., full-time, part-time, undergraduates, 
graduate students, and students attending programs established by the 
institution.
    (iv) Specific policies defining the effect of course incompletes, 
withdrawals, repetitions, and noncredit remedial courses on 
satisfactory progress.
    (v) Specific procedures for appeal of a determination that a 
scholar is not making satisfactory progress and for reinstatement of 
aid.
    (f) Exit certification. The grantee has established policies and 
procedures for receiving written certification from scholars at the 
time of exit from the program acknowledging the following:
    (1) The name of the institution and the number of the Federal grant 
that provided the scholarship.
    (2) The scholar's field of study.
    (3) The number of years the scholar needs to work to satisfy the 
work requirements in Sec. 386.34(c)(1)(i)(C).
    (4) The total amount of scholarship assistance received subject to 
the work-or-repay provision in Sec. 386.34(c)(1)(ii).
    (5) The time period during which the scholar must satisfy the work 
requirements in Sec. 386.34(c)(1)(i)(C).
    (6) All other obligations of the scholar in Sec. 386.34.
    (g) Tracking system. The grantee has established policies and 
procedures to determine compliance of the scholar with the terms of the 
agreement. In order to determine whether a scholar has met the work-or-
repay provision in Sec. 386.34(c)(1)(i), the tracking system must 
include for each employment position maintained by the scholar--
    (1) Documentation of the employer's name, address, dates of the 
scholar's employment, and the position the scholar maintained;
    (2) Documentation of how the employment meets the requirements in 
Sec. 386.34(c)(1)(i); and
    (3) Documentation that the grantee, if experiencing difficulty in 
locating a scholar, has checked with existing tracking systems operated 
by alumni organizations.
    (h) Reports. The grantee shall make reports to the Secretary that 
are necessary to carry out the Secretary's functions under this part.
    (i) Records. The grantee shall maintain the information obtained in 
paragraphs (g) and (h) of this section for a period of time equal to 
the time required to fulfill the obligation under 
Sec. 386.34(c)(1)(i)(C).

(Approved by the Office of Management and Budget under control 
number 1820-0018.)

(Authority: 29 U.S.C. 711(c) and 771a(b))


Sec. 386.35  What information must be provided by a grantee that is an 
institution of higher education to assist designated State agencies?

    A grantee that is an institution of higher education provided 
assistance under this part shall cooperate with the following requests 
for information from a designated State agency:
    (a) Information required by section 101(a)(7) of the Act which may 
include, but is not limited to--
    (1) The number of students enrolled by the grantee in 
rehabilitation training programs; and
    (2) The number of rehabilitation professionals trained by the 
grantee who graduated with certification or licensure, or with 
credentials to qualify for certification or licensure, during the past 
year.
    (b) Information on the availability of rehabilitation courses 
leading to certification or licensure, or the credentials to qualify 
for certification or licensure, to assist State agencies in the 
planning of a program of staff development for all classes of positions 
that are involved in the administration and operation of the State 
agency's vocational rehabilitation program.

(Approved by the Office of Management and Budget under control 
number 1820-0018.)

(Authority: 29 U.S.C. 711(c) and 771a)

Subpart E--What Conditions Must Be Met by a Scholar?


Sec. 386.40  What are the requirements for scholars?

    A scholar--
    (a) Shall receive the training at the educational institution or 
agency designated in the scholarship; and
    (b) Shall not accept payment of educational allowances from any 
other Federal, State, or local public or private nonprofit agency if 
that allowance conflicts with the individual's obligation under 
Sec. 386.33(a)(4) or Sec. 386.34(c)(1).
    (c) Shall enter into a written agreement with the grantee, before 
starting training, that meets the terms and conditions required in 
Sec. 386.34;
    (d) Shall be enrolled in a course of study leading to a certificate 
or degree in one of the fields designated in Sec. 386.1(b); and
    (e) Shall maintain satisfactory progress toward the certificate or 
degree as determined by the grantee.

(Authority: 29 U.S.C. 711(c) and 771a(b))


Sec. 386.41  Under what circumstances does the Secretary grant a 
deferral or exception to performance or repayment under a scholarship 
agreement?

    A deferral or repayment exception to the requirements of 
Sec. 386.34(c)(1) may be granted, in whole or part, by the Secretary as 
follows:
    (a) Repayment is not required if the scholar--
    (1) Is unable to continue the course of study or perform the work 
obligation because of a disability that is expected to continue 
indefinitely or result in death; or
    (2) Has died.
    (b) Repayment of a scholarship may be deferred during the time the 
scholar is--
    (1) Engaging in a full-time course of study at an institution of 
higher education;
    (2) Serving, not in excess of three years, on active duty as a 
member of the armed services of the United States;
    (3) Serving as a volunteer under the Peace Corps Act;
    (4) Serving as a full-time volunteer under Title I of the Domestic 
Volunteer Service Act of 1973;
    (5) Temporarily totally disabled, for a period not to exceed three 
years; or
    (6) Unable to secure employment as required by the agreement by 
reason of the care provided to a disabled spouse for a period not to 
exceed 12 months.

(Authority: 29 U.S.C. 771(c) and 771a(b))


Sec. 386.42  What must a scholar do to obtain a deferral or exception 
to performance or repayment under a scholarship agreement?

    To obtain a deferral or exception to performance or repayment under 
a scholarship agreement, a scholar shall provide the following:
    (a) Written application. A written application must be made to the 
Secretary to request a deferral or an exception to performance or 
repayment of a scholarship.
    (b) Documentation. (1) Documentation must be provided to 
substantiate the grounds for a deferral or exception.
    (2) Documentation necessary to substantiate an exception under 
Sec. 386.41(a)(1) or a deferral under Sec. 386.41(b)(5) must include a 
sworn affidavit from a qualified physician or other evidence of 
disability satisfactory to the Secretary.
    (3) Documentation to substantiate an exception under 
Sec. 386.41(a)(2) must include a death certificate or other evidence 
conclusive under State law.

(Approved by the Office of Management and Budget under control 
number 1820-0018.)

(Authority: 29 U.S.C. 711(c) and 771a)


Sec. 386.43  What are the consequences of a scholar's failure to meet 
the terms and conditions of a scholarship agreement?

    In the event of a failure to meet the terms and conditions of a 
scholarship agreement or to obtain a deferral or an exception as 
provided in Sec. 386.41, the scholar shall repay all or part of the 
scholarship as follows:
    (a) Amount. The amount of the scholarship to be repaid is 
proportional to the employment obligation not completed.
    (b) Interest rate. The Secretary charges the scholar interest on 
the unpaid balance owed in accordance with 31 U.S.C. 3717.
    (c) Interest accrual. (1) Interest on the unpaid balance accrues 
from the date the scholar is determined to have entered repayment 
status under paragraph (e) of this section.
    (2) Any accrued interest is capitalized at the time the scholar's 
repayment schedule is established.
    (3) No interest is charged for the period of time during which 
repayment has been deferred under Sec. 386.41.
    (d) Collection costs. Under the authority of 31 U.S.C. 3717, the 
Secretary may impose reasonable collection costs.
    (e) Repayment status. A scholar enters repayment status on the 
first day of the first calendar month after the earliest of the 
following dates, as applicable:
    (1) The date the scholar informs the Secretary he or she does not 
plan to fulfill the employment obligation under the agreement.
    (2) Any date when the scholar's failure to begin or maintain 
employment makes it impossible for that individual to complete the 
employment obligation within the number of years required in 
Sec. 386.34(c)(1).
    (f) Amounts and frequency of payment. The scholar shall make 
payments to the Secretary that cover principal, interest, and 
collection costs according to a schedule established by the Secretary.

(Authority: 29 U.S.C. 711(c) and 771a(b))

[FR Doc. 94-14594 Filed 6-15-94; 8:45 am]
BILLING CODE 4000-01-P