[Federal Register Volume 60, Number 183 (Thursday, September 21, 1995)]
[Proposed Rules]
[Pages 49156-49163]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-23389]




[[Page 49155]]

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Part XI





Department of Education





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34 CFR Part 668



Student Assistance General Provisions; Proposed Rule

  Federal Register / Vol. 60, No. 183 / Thursday, September 21, 1995 / 
Proposed Rules  

[[Page 49156]]


DEPARTMENT OF EDUCATION

34 CFR Part 668

RIN 1840-AB44


Student Assistance General Provisions

AGENCY: Department of Education.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Secretary proposes to amend the Student Assistance General 
Provisions. These amendments are necessary to implement the Student 
Right-to-Know Act, as amended by the Higher Education Technical 
Amendments of 1991 and the Higher Education Technical Amendments of 
1993. The proposed regulations would require an institution that 
participates in any student assistance program under Title IV of the 
Higher Education Act of 1965, as amended (title IV, HEA program) to 
disclose information about graduation rates to current and prospective 
students. The proposed regulations would also require an institution 
that participates in any title IV, HEA program and awards athletically 
related student aid to provide certain types of data regarding the 
institution's student population, and the graduation rates of 
categories of student-athletes, to potential student-athletes and to 
the athletes' parents, coaches, and high school guidance counselors.

DATES: Comments must be received by October 25, 1995.

ADDRESSES: All comments concerning these proposed regulations should be 
addressed to: Ms. Paula Husselmann, U.S. Department of Education, P.O. 
Box 23272, Washington, DC 20026-3272, or to the following internet 
address: [email protected].
    To ensure that public comments have maximum effect in developing 
the final regulations, the Department urges that each comment clearly 
identify the specific section or sections of the regulations that the 
comment addresses and that comments be in the same order as the 
regulations.
    A copy of any comments that concern information collection 
requirements should also be sent to the Office of Management and Budget 
at the address listed in the Paperwork Reduction Act section of this 
preamble. A copy of those comments may also be sent to the Department 
representative named in the above paragraph.

FOR FURTHER INFORMATION CONTACT: Ms. Paula Husselmann or Mr. David 
Lorenzo, U.S. Department of Education, 600 Independence Avenue, SW., 
ROB-3, Room 3045, Washington, DC 20202-5346. Telephone: (202) 708-7888. 
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: The Student Assistance General Provisions 
(34 CFR part 668) apply to all institutions that participate in the 
student financial assistance programs authorized by Title IV of the 
Higher Education Act of 1965, as amended (HEA). The proposed changes in 
these regulations are necessary to implement changes to the HEA made by 
the Student Right-to-Know Act, Public Law 101-542, as amended by the 
Higher Education Technical Amendments of 1991, Public Law 102-26, and 
the Higher Education Technical Amendments of 1993, Public Law 103-208. 
The Secretary published a proposed rule on July 10, 1992 to implement 
the Student Right-to-Know and Campus Security Act. Over three hundred 
commenters responded to those proposed rules. Final regulations 
implementing the Campus Security Act were published separately on April 
29, 1994.
    This second proposed rule incorporates a number of recommendations 
submitted by the higher education community in response to the first 
proposed rule. In addition, this second proposed rule is published in 
response to comments expressed in many meetings with the higher 
education community concerning the implementation of the various 
graduation rate requirements mandated by the Higher Education 
Amendments of 1992, Public Law 102-325.
    The HEA, as amended by Public Law 102-325, uses completion or 
graduation rates for administering provisions of the statute beyond 
those governing student consumerism. The July 10, 1992 NPRM proposed a 
rigorous, standardized methodology so that the same data could be used 
for purposes of the Student Right-to-Know regulations, the State 
Postsecondary Review Program, and regulations governing institutional 
eligibility for short-term vocational programs. However, Congress has 
rescinded funding for the State Postsecondary Review Program and has 
not proposed funding for future years. Unlike the provisions of the 
Student Right-to-Know Act, the statutory requirements for completion or 
graduation rate data for institutional eligibility purposes do not 
apply to all schools that participate in title IV, HEA programs. The 
Secretary has therefore decided that this proposed rule would address 
only the calculation of completion or graduation rates for purposes of 
the consumer information requirements of the Student Right-to-Know Act, 
and that these proposed rules would be more flexible than the July 10, 
1992 NPRM.
    The Secretary appreciates that some members of the higher education 
community favor the promulgation of a single valid methodological 
approach that would cover all the Student Assistance General Provisions 
regulations that require the calculation of completion or graduation 
rates. The Secretary believes, however, that the flexible approach and 
narrow scope of these proposed rules are appropriate. The Student 
Right-to-Know statute only requires completion or graduation rate 
calculations for consumer information purposes, so the scope of these 
proposed regulations is consistent with the law. The relative lack of 
methodological prescription in the statute means that the more 
prescriptive approach needed to generate completion or graduation rate 
calculations for other purposes would not be required by this law. The 
separation of these regulations governing student consumer information 
requirements from other regulations also makes it easier for the 
Department to meet the requirements of Executive Order 12866 to 
regulate flexibly and minimize burden on institutions. Finally, the 
Secretary solicits comments on whether the guidance these proposed 
regulations would provide is sufficient to generate useful data for the 
student consumer information purposes outlined in the statute, and on 
ways in which these proposed rules might be improved.
    Given the flexible and limited approach the Secretary has adopted, 
the Secretary also, in the preparation of final regulations, wants to 
strike an appropriate balance among several important but sometimes 
competing aims related to these issues. First, the Secretary wants to 
balance the need to preserve flexibility with the need to avoid 
requiring institutions to use different methodologies when calculating 
completion or graduation rates to satisfy the requirements of this 
statute and other statutes and regulations. Second, the Secretary wants 
to balance the need to regulate institutions within the current level 
of technology and available information while preserving the 
flexibility to anticipate future developments. The Secretary foresees 
that institutions' ability to gather information and measure completion 
or graduation rates 

[[Page 49157]]
will evolve and improve in the future. Such developments might lead to 
the identification and adoption of more rigorous methodologies for 
calculating completion or graduation rates for other regulatory 
purposes. If such methodologies are identified and adopted, the 
Secretary will look at the possibility of allowing institutions to use 
those methodologies to satisfy the requirements of the Student Right-
to-Know statute as well as the requirements of other statutes and 
regulations.
    In this regard the Secretary asks for comments on possible ways 
that consistency might be attained and overall burden reduced in light 
of the different purposes to which completion or graduation rate 
calculations are used in the Student Assistance General Provisions 
regulations. The Secretary also asks for comments on whether these 
proposed regulations strike the appropriate balance between flexibility 
and duplication of effort, and between current conditions and future 
developments in technology and information management, and how these 
regulations might be improved to better address these issues.

Preparation of Proposed Regulations

    The Secretary has formulated these proposed regulations in 
accordance with Executive Order 12866, the Administration's initiative 
on regulatory reinvention, and the Department's own Principles for 
Regulating.
    The Secretary believes that the Student Right-to-Know Act 
establishes important consumer information disclosure standards for 
institutions. In proposing these regulations, the Secretary's goal is 
to ensure that institutions provide consistent and useful information 
on completion and graduation rates. With this information in hand, the 
Secretary believes that students and student-athletes can make better, 
more informed choices when they choose a postsecondary institution.
    The Secretary believes these proposed regulations strike an 
appropriate balance between establishing a basic level of useful 
consumer information for students, and keeping the burden on 
institutions to a minimum. However, the Secretary solicits comments on 
ways to reach both the goal of providing useful consumer information 
and the goal of keeping burden on institutions to a minimum, and on 
whether these proposed regulations are successful in meeting both 
goals.

Summary of the Proposed Regulations

    The following is a summary of the regulations that the Secretary 
proposes to implement the Student Right-to-Know Act:

Section 668.41  Reporting and disclosure of information

    Public Law 101-542 expands the types of ``consumer information'' 
that institutions must disclose to students to include completion or 
graduation rates. The statute and Sec. 668.41(a)(3) of these 
regulations require an institution to update this information annually, 
and to make that updated information readily available, through 
appropriate publications and mailings, to both current and prospective 
students. The statute also requires an institution to disclose the 
information to prospective students before they enroll or enter into 
any financial obligation with the institution. The statute defines a 
prospective student as ``an individual who has contacted an eligible 
institution requesting information concerning admission to that 
institution.'' The Secretary also encourages institutions to make the 
rates available to secondary schools and guidance counselors so they 
have the information needed to advise student and parent consumers.
    The Secretary invites comments on the differences between the 
reporting requirements contained in these proposed regulations and 
those contained in the Campus Security Act final regulations, with 
regard to where the institutions should publish this information, and 
whether the Department should regulate the placement of information in 
publications.
    With respect to potential student-athletes, the statute and 
Sec. 668.41(b) require that institutions that award athletically 
related student aid develop an annual, updated report containing 
information regarding the graduation rates of athletes, categorized by 
race, gender, and sport, as well as other data regarding the 
institution's student profile. The statute, and these proposed 
regulations, also require that institutions provide this report not 
only to the prospective student-athlete, but also to his or her 
parents, coach, and guidance counselor when the institution offers a 
potential student-athlete some form of athletically related student 
aid. The statute, and these regulations, define athletically related 
student aid as ``any scholarship, grant, or other form of financial 
assistance, offered by an institution, the terms of which require the 
recipient to participate in a program of intercollegiate athletics at 
the institution in order to receive that assistance.''
    The statute, and Sec. 668.41(b)(2) of these regulations, require 
that institutions provide a copy of this report on the completion or 
graduation rates of student-athletes to the Secretary by every July 1, 
beginning July 1, 1997.
    The Secretary is proposing the following definitions in 
Sec. 668.41(c) of these regulations:
    The Secretary proposes to define ``full-time'' to mean the student 
workload, measured in credit or clock hours, that the institution 
consistently designates as a full-time workload. The Secretary is 
proposing this definition rather than the definition found elsewhere in 
the student assistance general provisions, in 34 CFR 668.2, to allow 
institutions greater flexibility in establishing the group of entering 
students on which the graduation rate is based. The definition of 
``full-time'' in Sec. 668.2 is designed for the narrow purpose of 
calculating award amounts for title IV, HEA program purposes; the 
Secretary proposes that institutions have wider latitude in defining 
``full-time'' for this purpose than is provided by that definition.
    The Secretary emphasizes, however, that this flexibility does not 
allow institutions to create new definitions of ``full-time'' for use 
only for purposes of these calculations. The Secretary also expects 
that the institution's customary definition of ``full-time'' is located 
in publications widely available to students. The Secretary solicits 
comment as to the utility of requiring an institution to supply its 
definition of ``full-time'' in the completion or graduation rate 
information it discloses so that students will have information about 
the different underlying components that contribute to a final 
completion or graduation rate.
    These regulations would define the statutory term ``normal time'' 
as the minimum length of time necessary for a full-time student, 
continuously attending the institution, to complete a certificate or 
degree program. Many students do not complete or graduate within this 
definition of normal time for a variety of reasons, for example, family 
responsibilities, the need to work to earn income, the need for 
remediation, or changes in academic program or goals. An institution's 
completion or graduation rate may be influenced by varying factors, 
such as open admission requirements and student profiles. But the 
Secretary believes it was the intent of Congress in using the term 
``normal time'' in the statute to mean a minimal length of time, rather 
than an average length of time, and that Congress meant to address the 
issues discussed above when it set the limit for counting 

[[Page 49158]]
completers or graduates at 150% of normal time.
    These regulations also contain the statutory definitions of the 
terms ``athletically related student aid'' and ``prospective 
students''.

Section 668.46  Report on Completion/Graduation Rate

    This new section of the regulations would incorporate section 
485(a)(1)(L) of the HEA, which requires an institution to disclose the 
completion or graduation rate of certificate- or degree-seeking, full-
time, undergraduate students entering the institution. To promote 
flexibility and reduce regulatory burden, the Secretary is proposing 
that each institution have discretion to define the terms 
``certificate- or degree-seeking students'' and ``undergraduate 
students'' for purposes of these regulations, but expects that the 
definitions it uses for these terms will be those it customarily 
employs. The Secretary solicits comment as to the utility of requiring 
an institution to supply its definition of ``full-time'' in the 
completion or graduation rate information it discloses so that students 
will have information about the different underlying components that 
contribute to a final completion or graduation rate.
    Institutions are required by the statute to base their graduation 
rate on the group of students who enter between each July 1 and June 
30, beginning with students who enter on or after July 1, 1996. This is 
reflected in Secs. 668.46(a) and 668.46(a)(1)(i). An institution may 
arrive at this rate by counting all the graduates or completers among 
all the students who enter for this entire time period (year-long 
data), or by counting those in a portion of this time period (e.g., 
fall enrollment) who complete or graduate and then extrapolate from 
those data a final rate. In this regard, the Secretary only requires 
that the institution's methodology be reasonable, and that the 
completion or graduation rate yielded by that methodology represent an 
accurate description of the completion or graduation rate at the 
institution. However, the Secretary invites comments on this proposal, 
and particularly wishes to hear the views of the higher education 
community with regard to issues of comparability between those 
institutions that use fall cohorts, and those institutions that count 
all students who enter during the year.
    The Department will publish a sample methodology that institutions 
may use to satisfy the requirements of this statute, and will work with 
the higher education community to identify other satisfactory 
methodologies.
    With regard to the statutory provision that institutions base their 
graduation rate on students who ``enter'' between every July 1 and June 
30, the Department's July 10, 1992 NPRM would have excluded transfer 
students from the completion or graduation rate calculation, on the 
grounds that those students were not ``first-time students.'' The 
Secretary received comments from the higher education community that 
failure to consider transfer students in an institution's completion or 
graduation rate did not accurately reflect the true completion or 
graduation rate for institutions that admit a considerable number of 
transfer students. In light of these comments, the Secretary proposes 
to require the inclusion of transfer students--as well as first-time 
students--in the denominator of the institution's completion or 
graduation rate fraction.
    Thus, the Secretary proposes in Sec. 668.46(a)(1)(ii) of these 
regulations that ``entering students'' include both first-time students 
and students who enter the institution by transfer. The Secretary also 
believes that for both first-time and transfer students, ``enter'' 
would mean a student's attendance of at least one day of class.
    The concept of ``entering'' raises in addition the question of how 
to track students' performance. The July 10, 1992 NPRM proposed for 
institutions without continuous enrollment the tracking of first-time 
students entering in the fall, as defined by the Integrated 
Postsecondary Educational Data System (IPEDS), or, for institutions 
with continuous enrollment, the tracking of first-time students 
entering between July and September. These proposed regulations do not 
prescribe any specific tracking methodology. Instead, these regulations 
allow institutions the flexibility to choose the methodology that best 
suits the institution's circumstances, including tracking on a student 
by student basis, on a program by program basis, or on a cohort basis, 
so long as that methodology (a) is applied to a population of students 
based on the group of full-time, certificate- or degree-seeking 
students who enter between every July 1 and June 30; (b) is applied to 
both first-time students and transfer students, as discussed above; and 
(c) is reasonable and generates an accurate completion or graduation 
rate for the group of students described by the statute.
    Nor do these regulations per se propose that institutions track 
students continuously during 150% of normal time for completion or 
graduation from their respective programs. These regulations only 
propose that an institution take a reasonable methodological approach 
to tracking students for purposes of calculating the completion or 
graduation rates required by the statute. One reasonable approach an 
institution may choose to take is to establish a cohort for a given 
year and look back after 150% of normal time has elapsed to see how 
many students in that cohort completed, graduated, or transferred to a 
program for which the student's prior program provided substantial 
preparation. This process entails no individual tracking and keeps 
administrative burden to a minimum. The Secretary plans to disseminate 
non-binding guidance at a later date that will contain a model 
methodology for tracking students that institutions may use (but will 
not be required to use) to satisfy the requirements of the statute and 
these regulations.
    With regard to the issue of tracking, the Secretary is concerned 
that the goals of providing useful consumer information and of 
providing institutional flexibility both be met in these regulations, 
and solicits comments concerning how both these goals may be 
accomplished, and whether this portion of the proposed regulations does 
in fact accomplish both.
    The Secretary is cognizant that tracking students who enter an 
institution creates particular kinds of administrative burdens on some 
schools. In view of these concerns, and the lack of statutory 
requirements on this point, the Secretary does not propose to regulate 
how institutions must track or place transfer students, but rather 
proposes that institutions adopt a reasonable approach for tracking 
transfer students, and placing them in groups of students that make up 
the denominators of particular completion or graduation rate fractions. 
However, the Secretary expects institutions to place a transfer student 
in the group of students that most closely matches the transfer 
student's academic status. For example, the Secretary would not deem it 
reasonable for an institution that offers only four-year programs to 
place a transfer student that it classifies academically as a junior in 
a group of students that it classifies as freshmen. The Secretary 
solicits comments on this issue, especially with regard to possible 
abuses, and whether the Department should include in the final 
regulations specific guidance regarding the placement of transfer 
students.
    Section 668.46(a)(2)(i) of these regulations proposes that an 
institution disclose its first graduation rate no later than the 
October 1st following the 

[[Page 49159]]
lapsing of 150% of normal time for all certificate- or degree-seeking, 
full-time undergraduate students who enter the institution between July 
1, 1996 and June 30, 1997. If an institution offers programs of varying 
lengths, these regulations allow the institution to disclose its 
graduation rate no later than the October 1st following the lapse of 
150% of normal time for its longest program. An institution may report 
earlier if it wishes, or on a program by program basis. The Secretary 
would expect, however, that an institution would report on the basis of 
the length of its predominant program, ``predominant'' being measured 
by the standards of both the number of programs of a particular length, 
and the number of students in programs of a particular length. The 
Secretary also solicits comments on the entire issue of reporting 
dates, and how the Secretary should balance flexibility in reporting 
with students' need for timely consumer information.
    While these proposed regulations would not require institutions to 
provide information on groups of students who enter before July 1, 
1996, the Secretary encourages institutions to disclose the completion 
or graduation rates for earlier groups. If an institution does disclose 
information on earlier groups, it should use the statutory methodology 
described below for counting the students it places in the completion 
or graduation rate denominator.
    Section 668.46(a)(2)(ii) of these regulations proposes that an 
institution subsequently disclose its graduation rate no later than the 
October 1st following the lapsing of 150% of normal time for all 
certificate- or degree-seeking, full-time undergraduate students who 
enter between every July 1 and June 30. This date represents the latest 
time that an institution may disclose its graduation rate for that 
group, except in cases where 150% of normal time elapses on a date 
between July 1 and October 1. In those cases the Secretary will allow 
institutions to report no later than the following October 1.
    In all cases, these regulations allow an institution to report 
earlier than the latest reporting date described above. For example, an 
institution may choose to report before the lapse of 150% of normal 
time. And, as discussed above, an institution that has programs of 
different lengths may choose to report on the basis of 150% of the 
normal time for its longest program, or a program other than its 
longest program, subject to the Secretary's expectations on this matter 
regarding the institution's ``predominant'' programs. But regardless of 
the length of the program on which the institution bases its disclosure 
date, each student would still be limited to 150% of normal time for 
his or her program to complete, graduate or transfer in order to count 
in the numerator of the institution's completion or graduation rate 
calculation. For example, the students enrolled in a two-year program 
at an institution would receive three years to complete or graduate in 
order to count as completers or graduates for these purposes, and 
students in a year-long program at the same institution would only 
receive eighteen months to complete or graduate, even if the 
institution bases its disclosure date on 150% of the normal time for 
the two-year program.
    Under the flexible provisions of these regulations, an institution 
would have to decide the following: (a) Whether it will track students 
on a cohort basis, a program by program basis, or an individual basis; 
(b) whether its methodology will track the entire group of students who 
enter between July 1 and June 30, or will track some appropriate 
portion (e.g., fall enrollment); and (c) the length of the program on 
which the reporting date will be based.
    For example, suppose an institution (a) uses a cohort methodology; 
(b) uses a fall only cohort, and admits students in the fall up to 
September 1; and (c) offers only four-year programs on a fall and 
spring semester schedule. The institution would tag students who enter 
during the fall of 1996, allow 150% of normal time to elapse (six 
years), and disclose its first graduation rate no later than October 1, 
2002. That rate would be based on the percentage of students in the 
original cohort who completed or graduated no later than the end of the 
institution's sixth academic year at the end of the spring semester of 
2002. If the institution had chosen to track the cohort of students who 
entered up to the beginning of the spring semester of 1997, rather than 
the fall only cohort, disclosure would take place no later than October 
1, 2003, and would include all students who completed, graduated, or 
transferred as of the end of the fall semester of 2002.
    If an institution (a) tracked students on a student by student 
basis, (b) tracked all students who entered between July 1 and June 30, 
and (c) offered two-year associate degree programs only, the latest 
that institution could disclose a graduation rate for students entering 
the institution between July 1, 1996 and June 30, 1997 would be October 
1, 2000. This would allow 150% of normal time--that is, three years--to 
elapse for all students who entered up to June 30, 1997 and would 
include in the numerator of the fraction all students in the group who 
completed, graduated, or transferred by June 30, 2000.
    If an institution (a) tracked on a program by program basis, (b) 
offered six-month programs, and (c) tracked students admitted to 
programs between July 1 and June 30, the last class entering the 
program by June 30, 1997 would complete 150% of normal time in March, 
1998, and the institution would disclose its completion or graduation 
rate information on the entire group no later than October 1, l998, 
reflecting students who completed, graduated, or transferred no later 
than the end of March 1998 (nine months after the beginning of the 
program).
    Section 668.46(b)(1) of the proposed rules follows the statute in 
specifying that institutions count a student as having completed or 
graduated from his or her program only if the student completed or 
graduated from his or her program within 150% of the normal time for 
completion or graduation from that program, or, within that time frame, 
subsequently enrolled in any program of an eligible institution for 
which the prior program provided substantial preparation.
    The Secretary is proposing institutional flexibility with respect 
to the determination of substantial preparation for transferring 
students, with the exception that the student must be in good academic 
standing at the time the student transfers to another eligible program. 
Each institution must document that substantial preparation has taken 
place in order to comply with the statute. However, unlike the 
provisions of the July 10, 1992 NPRM, the Secretary is not proposing 
regulations that specify the kinds of documentation an institution must 
collect as proof that a student has transferred. Rather, the Secretary 
asks for comments regarding which methods for documenting transfers the 
Department should accept as reasonable interpretations of the statute. 
For example, should the Department accept as sufficient proof of 
transfer a simple request that an academic transcript be sent to 
another institution? Or should the Department only accept a request 
made by an institution to which the student intends to transfer or has 
already transferred? The Secretary is also interested in comments 
proposing other methods for determining the number of students who 
transfer, other than a student by student count, that would fulfill the 
requirements of the statute. For example, should the 

[[Page 49160]]
Department accept the use of a methodology by which an institution 
samples students who leave the institution and extrapolates from those 
data a transfer percentage reflecting the entire population?
    Also in contrast with the July 10, 1992 NPRM, the Secretary does 
not propose in these regulations that the transferring student, in 
order to be counted as a completer or graduate, be required to enter a 
higher-level program. Several commenters on the earlier NPRM argued 
that counting only those students who transfer to higher-level programs 
unfairly penalizes institutions who prepared students to transfer to 
parallel or other programs. Since the statute only speaks to 
substantial preparation for a program, the Secretary would allow 
institutions to count as completers or graduates all transfers that the 
institution can document as transferring with substantial preparation. 
However, the Secretary solicits comments on whether this position 
sufficiently protects against potential abuses, and if there are 
alternative ways of providing relief in this area that may better 
protect against potential abuse.
    In Sec. 668.46(b)(1)(iii) the Secretary also proposes allowing 
institutions to count as a completer or graduate for these purposes a 
student who originally enrolled in a program longer than the program on 
which the institution bases its disclosure and who is still enrolled in 
that program and in good academic standing, so long as 150% of the 
normal time for completion or graduation for the student's program has 
not elapsed by the date the institution makes its completion or 
graduation rate information available. The Secretary believes that this 
is necessary to allow institutions to report on a basis earlier than 
150% of normal time for their longest programs and not be penalized for 
their inability to count students who would complete or graduate from 
those longer programs. In this case, the Secretary believes that the 
value derived from encouraging an institution to report its completion 
or graduation rate information sooner rather than later outweighs any 
loss of precision that may arise from counting these students who are 
still enrolled in longer-term programs as completers or graduates. 
However, the Secretary reiterates the expectation that an institution 
use as the program on which it bases its reporting date a predominant 
or other program that best reflects the overall profile of the 
institution's program offerings.
    The July 10, 1992 NPRM proposed the disclosure of what was 
essentially a persistence rate for all students until such time that 
the graduation rate could be disclosed. For institutions that wish to 
consider the disclosure of a persistence rate, the Secretary considers 
the use of a persistence rate as a reasonable proxy for a graduation 
rate until such time that the graduation rate can be disclosed. These 
proposed regulations, however, would not require that institutions 
disclose a persistence rate. The Secretary also notes that a 
persistence rate cannot substitute for the graduation rate mandated by 
the statute except in the limited circumstances regarding an enrolled 
student in a program longer than the program on which the institution's 
disclosure date is based, as described above.
    The statute and Sec. 668.46(b)(2) allow an institution to exclude 
certain students from the calculation of a graduation rate, namely, 
students who leave the institution to serve: In the Armed Forces; on 
official church mission assignments; and with a foreign aid service of 
the Federal Government, such as the Peace Corps. The Secretary also 
proposes in these regulations to allow an institution to exclude those 
students who have died, or are unable to continue enrollment because of 
a permanent and total disability. The Secretary believes that 
institutions should not be required to include these students in their 
completion and graduation rate calculation because these students are 
unable to complete or graduate.
    Some commenters on the July 10, 1992 NPRM believed that documenting 
these statutory exclusions would be difficult. The Secretary notes that 
the statute and these regulations do not require an institution to 
exclude these students; rather, an institution may choose whether to do 
so.
    In Sec. 668.46(c) of these regulations the Secretary proposes that 
institutions disclose as part of their completion or graduation rate 
the separate ratios of the following to the denominator of the 
completion or graduation rate fraction: (1) The number of completers or 
graduates included in the numerator; (2) the number of transfer 
students included in the numerator; and (3) the number of students in 
good academic standing still enrolled in programs longer than the 
program the institution uses as the basis of its disclosure date 
included in the numerator. The Secretary believes that it is useful and 
important for students and potential students to have this breakdown of 
the completion or graduation rate on hand, because it allows them to 
separate the completion rate of students who received a degree or 
certificate from the rate of those students who transfer, and from the 
rate of those who are still persisting in longer programs. The 
Secretary also believes that this reporting requirement is not 
burdensome, as it only requires the reporting of details that the 
institution would have assembled in order to calculate its completion 
or graduation rate.
    Section 668.46(d) of these proposed rules contains the statutory 
provision that authorizes the Secretary to waive the requirements of 
this section if the institution belongs to an athletic association or 
conference that publishes substantially comparable information, and if 
the institution, or athletic association or conference, satisfies the 
Secretary that this information is accurate and substantially 
comparable. An institution is still responsible for making this 
information available under the provisions listed in Sec. 668.41(a)(3) 
even if it does successfully request waivers for this portion of the 
regulations.

Section 668.49  Report on Completion or Graduation Rates for Student 
Athletes

    This section incorporates section 485(e) of the HEA by requiring 
each institution that awards athletically related student aid to 
disclose the completion or graduation rates of various student 
populations at the institution, including student athletes, beginning 
July 1, 1997.
    Specifically, the statute and Sec. 668.49(a) require an institution 
that awards athletically related student aid to disclose to the 
potential student-athlete and his or her parents, high school coach, 
and guidance counselor the following information at the time the 
institution makes the potential student-athlete an offer of 
athletically related student aid: (1) The number of students at the 
institution, categorized by race and gender, and (2) the number of 
those students, by sport, who receive athletically related student aid, 
categorized by race and gender. The Secretary proposes that the data 
under these provisions be based on students who attended the 
institution during the year preceding the year in which the institution 
discloses the data. This section would also require an institution to 
supply information concerning the completion or graduation rate for 
each category (race, gender, and sport) of these students within the 
group defined in Secs. 668.46(a)(1)(i) and 668.46(a)(1)(ii) of these 
proposed rules. It also requires the provision of a four-year average 
of the graduation rates of the group of students defined in 
Secs. 668.46(a)(1)(i) and 668.46(a)(1)(ii), categorized by race and 
gender. An institution that has 

[[Page 49161]]
completion or graduation rates for fewer than four classes would have 
to disclose the average rate of those classes for which it has rates.
    For these purposes, a sport is defined by the statute, and 
Sec. 668.49(a)(2) of these proposed regulations, as basketball; 
football; baseball; cross-country and track combined; and all other 
sports combined. A ``sport'' is also defined under the Equity in 
Athletics Disclosure Act, but it is defined in that statute to include 
all varsity teams. Normally the Secretary, as encouraged by the higher 
education community, prefers consistency of definitions under the 
student aid programs. However, in this case the Secretary has no 
discretionary authority under either statute to allow for consistent 
treatment. The Secretary does note that the institutions affected by 
this section of the proposed regulations are a subset of those covered 
by the Equity in Athletics Disclosure Act, and that they may obtain 
waivers to these provisions as described below.
    In order to reduce burden on institutions, Sec. 668.49(b) proposes 
that the calculation of graduation rates in this section follow the 
regulations contained in Sec. 668.46(b) and (c).
    The statute and Sec. 668.49(c) of these proposed regulations 
provide that an institution may, if it so wishes, provide supplemental 
information to the Secretary, potential student-athletes, and others 
regarding: (1) The graduation rate of those students who transfer into 
the institution, and (2) the number of students who transfer out of the 
institution.
    In addition, as under Sec. 668.46(d), the Secretary is authorized 
to waive the requirements of this section if the institution belongs to 
an athletic association or conference that publishes substantially 
comparable information, and the institution, or conference or 
association applying on its behalf, satisfies the Secretary that this 
information is accurate and substantially comparable to the information 
this statute requires institutions to produce.

Executive Order 12866

l. Assessment of Costs and Benefits

    These proposed regulations have been reviewed in accordance with 
Executive Order 12866. Under the terms of the order, the Secretary has 
assessed the potential costs and benefits of the regulatory action. The 
potential costs associated with the proposed regulations are those 
resulting from statutory requirements. Burdens specifically associated 
with information collection requirements are identified and explained 
elsewhere in the preamble under the heading Paperwork Reduction Act of 
1995.
    To assist the Department in complying with the specific 
requirements of Executive Order 12866, the Secretary invites comment on 
how to minimize potential costs or to increase potential benefits 
resulting from these proposed regulations consistent with the purposes 
of the Student Right-to-Know Act.

2. Clarity of the Regulations

    Executive Order 12866 requires each agency to write regulations 
that are easy to understand.
    The Secretary invites comments on how to make these regulations 
easier to understand, including answers to questions such as the 
following: (1) Are the requirements in the regulations clearly stated? 
(2) Do the regulations contain technical terms or other wording that 
interferes with their clarity? (3) Does the format of the regulations 
(grouping and order of sections, use of headings, paragraphing, etc.) 
aid or reduce their clarity? Would the regulations be easier to 
understand if they were divided into more (but shorter) sections? (A 
``section'' is preceded by the symbol ``Sec. '' and a numbered heading: 
For example, Sec. 668.46 Report on completion or graduation rates). (4) 
Is the description of the proposed regulating in the ``Supplementary 
Information'' section of this preamble helpful in understanding the 
proposed regulations? How could this description be more helpful in 
making the proposed regulations easier to understand? (5) What else 
could the Department do to make the regulations easier to understand?
    A copy of any comments that concern how the Department could make 
these proposed regulations easier to understand should be sent to Mr. 
Stanley M. Cohen, Regulations Quality Officer, U.S. Department of 
Education, 600 Independence Avenue SW. (room 5121, FOB-10), Washington, 
DC 20202-2241.

Paperwork Reduction Act of 1995

    Sections 668.41, 668.46 and 668.49 contain information collection 
requirements. As required by the Paperwork Reduction Act of 1995, the 
Department of Education has submitted a copy of these sections to the 
Office of Management and Budget (OMB) for its review.
    Collection of Information: Student Right-to-Know.
    These regulations affect the following types of entities eligible 
to participate in the Title IV, HEA programs: Educational institutions 
that are public or nonprofit institutions, and businesses and other 
for-profit institutions. The information to be collected includes the 
graduation rate of full-time, certificate- or degree-seeking 
undergraduate students entering the institution; the number of students 
attending the institution; the number of students attending the 
institution who received athletically related student aid, broken down 
by race and gender; the completion or graduation rate of full-time, 
certificate- or degree-seeking undergraduate students broken down by 
race and gender; the completion or graduation rate of full-time, 
certificate- or degree-seeking undergraduate students who received 
athletically related student aid, broken down by race and gender within 
each sport; and the average completion or graduation rate of full-time, 
certificate- or degree-seeking undergraduate students for the four most 
recent completing or graduating classes, broken down by race and 
gender. Institutions of higher education that participate in title IV, 
HEA programs will need and use the information required by these 
regulations to meet the eligibility requirements for participation in 
those programs that were added by the Student Right-to-Know Act. 
Institutions must make available to current and prospective students 
the information regarding completion or graduation rates of full-time, 
certificate- or degree-seeking, undergraduate students described above, 
and the general and completion or graduation rate information of 
students who received athletically related student aid to students 
offered athletically related student aid, and to the parents, coaches, 
and guidance counselors of those students. Institutions that award 
athletically related student aid must also provide a report to the 
Secretary of the completion or graduation rate information those 
institutions must provide to students offered athletically related 
student aid. The Secretary needs and uses this report to fulfill 
statutory requirements under the Student Right-to-Know Act to publish 
that information broken down by institution and athletic conference.
    Information is to be collected and disclosed once each year for 
institutions covered by Secs. 668.41(a)(3) and 668.46, and collected, 
disclosed, and reported to the Secretary once each year for 
institutions covered by Secs. 668.41(b) and 668.49. Annual public 
reporting and recordkeeping burden is estimated to average 24.5 hours 
for each response for 8,000 respondents for Sec. 668.46, and 24.5 

[[Page 49162]]
hours for each response for 1,800 respondents for Sec. 668.49. These 
hours include the time needed for searching existing data sources and 
gathering, maintaining and disclosing the data. Educational 
institutions that are public or nonprofit institutions or businesses or 
other for-profit institutions may participate in the Title IV, HEA 
programs. Institutions of higher education that participate in title 
IV, HEA programs will need and use the information required by these 
regulations to meet the eligibility requirements for participation in 
those programs that were added by the Student Right-to-Know Act. Thus, 
the total annual reporting and recordkeeping burden for this proposed 
collection is estimated to be 240,100 hours.
    Organizations and individuals desiring to submit comments on the 
information collection requirements should direct them to the Office of 
Information and Regulatory Affairs, OMB, Room 10235, New Executive 
Office Building, Washington, DC 20503; Attention: Desk Officer for U.S. 
Department of Education.
    The Department considers comments by the public on these proposed 
collections of information in--
    Evaluating whether the proposed collections of information are 
necessary for the proper performance of the functions of the 
Department, including whether the information will have practical use;
    Evaluating the accuracy of the Department's estimate of the burden 
of the proposed collections of information, including the validity of 
the methodology and assumptions used;
    Enhancing the quality, usefulness, and clarity of the information 
to be collected; and
    Minimizing the burden of the collection of information on those who 
are to respond, including the use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology; e.g., permitting electronic submission of 
responses.
    OMB is required to make a decision concerning the collections of 
information contained in these proposed regulations between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, a comment to OMB is best assured of having its full effect 
if OMB receives it within 30 days of publication. This does not affect 
the deadline for the public to comment to the Department on the 
proposed regulations.

Invitation To Comment

    Interested persons are invited to submit comments and 
recommendations regarding these proposed regulations.
    All comments submitted in response to these proposed regulations 
will be available for public inspection, during and after the comment 
period, in Room 3045, Regional Office Building 3, 7th and D Streets 
SW., Washington, DC, between the hours of 8:30 a.m. and 4 p.m., Monday 
through Friday of each week except Federal holidays.

Assessment of Educational Impact

    The Secretary particularly requests comments on whether the 
proposed regulations in this document would 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 668

    Administrative practice and procedure, Colleges and universities, 
Consumer protection, Education, Grant programs--education, Loan 
programs--education, Reporting and recordkeeping requirements, Student 
aid.

    Dated: September 14, 1995.
Richard W. Riley,
Secretary of Education.
(Catalog of Federal Domestic Assistance Numbers: 84.007 Federal 
Supplemental Educational Opportunity Grant Program; 84.032 Federal 
Stafford Loan Program; 84.032 Federal PLUS Program; 84.032 Federal 
Supplemental Loans for Students Program; 84.033 Federal Work-Study 
Program; 84.038 Federal Perkins Loan Program; 84.063 Federal Pell 
Grant Program; 84.069 State Student Incentive Grant Program; 84.268 
Federal Direct Student Loan Program; and 84.272 National 
Intervention and Scholarship and Partnership Program. Catalog of 
Federal Domestic Assistance Number for the Presidential Access 
Scholarship Program has not been assigned.)

    The Secretary proposes to amend part 668 of title 34 of the Code of 
Federal Regulations as follows:

PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS

    1. The authority citation for part 668 continues to read as 
follows:

    Authority: 20 U.S.C. 1085, 1088, 1091, 1092, 1094, 1099c and 
1141, unless otherwise noted.

    2. Section 668.41 is amended by adding a new paragraph (a)(3); 
redesignating paragraph (b) as paragraph (c) and revising the newly 
redesignated paragraph (c); and by adding new paragraph (b) to read as 
follows:


Sec. 668.41  Scope and special definitions.

    (a) * * *
    (3) The institution's completion or graduation rate, produced in 
accordance with Sec. 668.46.
    (b)(1) Each institution participating in any title IV, HEA program, 
when it offers a potential student-athlete athletically related student 
aid, shall provide to the potential student-athlete, and his or her 
parents, high school coach, and guidance counselor, the information on 
graduation rates and other data produced in accordance with 
Sec. 668.49.
    (2) The institution shall also submit to the Secretary the report 
produced in accordance with Sec. 668.49 by July 1, 1997 and by every 
July 1 thereafter.
    (c) The following definitions apply to this subpart:
    Athletically related student aid means any scholarship, grant, or 
other form of financial assistance, offered by an institution, the 
terms of which require the recipient to participate in a program of 
intercollegiate athletics at the institution in order to receive that 
assistance.
    Full-time means the student workload, measured in credit or clock 
hours, that the institution customarily designates as a full-time 
workload.
    Normal time means the amount of time necessary for a full-time 
student continuously attending the institution to complete a 
certificate or degree program.
    Prospective students means individuals who have contacted an 
eligible institution requesting information concerning admission to 
that institution.

(Authority: 20 U.S.C. 1092)

    3. Section 668.46 is added to subpart D, to read as follows:


Sec. 668.46  Information on completion or graduation rates.

    (a) An institution shall prepare annually information regarding the 
completion or graduation rate of the certificate- or degree-seeking, 
full-time undergraduate students entering that institution on or after 
July 1, 1996.
    (1)(i) An institution must base its completion or graduation rate 
calculation on the group of certificate- or degree-seeking, full-time 
undergraduate students who enter the institution between every July 1st 
and June 30th.
    (ii) An institution shall count as entering students--
    (A) First-time students; and
    (B) Students who enter the institution by transfer.
    (2)(i) Beginning with the group of students who enter the 
institution between July 1, 1996 and June 30, 1997, 

[[Page 49163]]
an institution shall disclose its graduation or completion rate 
information no later than the October 1 immediately following the point 
in time when 150% of the normal time for completion or graduation has 
elapsed for all the students in the group.
    (ii) An institution shall disclose no later than October 1 each 
year thereafter its completion or graduation rate information for each 
succeeding group of students who, as of the preceding June 30, 
completed or graduated within 150% of normal time for completion or 
graduation from their programs.
    (b)(1) In calculating the completion or graduation rate under 
paragraph (a) of this section, an institution shall count as completed 
or graduated--
    (i) Students who have completed or graduated within 150% of the 
normal time for completion or graduation from their program;
    (ii) Students who, within 150% of the normal time for completion or 
graduation from the program in which the student was enrolled, 
subsequently enroll in any program of an eligible institution for which 
the prior program provides substantial preparation; or
    (iii) Students who are in good standing and still enrolled in a 
program of greater length than the length of the program on which the 
institution bases its reporting date, unless 150% of the normal time 
for graduation or completion from that longer program has elapsed by 
the reporting date.
    (2) For the purpose of calculating a completion or graduation rate, 
an institution may exclude from the calculation of completion or 
graduation rates students who--
    (i) Have left school to serve in the Armed Forces;
    (ii) Have left school to serve on official church missions;
    (iii) Have left school to serve with a foreign aid service of the 
Federal Government, such as the Peace Corps; or
    (iv) Are deceased, or totally and permanently disabled.
    (c) In reporting the graduation or completion rate as calculated in 
paragraph (b) of this section, the institution shall, as part of its 
disclosure of its overall rate of graduation or completion rate, 
disclose the ratio of each of the following to the group:
    (1) The number of students who graduated or completed, as described 
in paragraph (b)(1)(i) of this section.
    (2) The number of students who transferred, as described in 
paragraph (b)(1)(ii) of this section.
    (3) The number of students who are persisting in programs that are 
longer than the program on which the disclosure date is based, as 
described in paragraph (b)(1)(iii) of this section, if the institution 
includes these students in its graduation or completion rate.
    (d)(1) The Secretary grants a waiver of the requirements of this 
section to any institution that is a member of an athletic association 
or conference that has voluntarily published completion or graduation 
rate data, or has agreed to publish data, that the Secretary determines 
are substantially comparable to the data required by this section.
    (2) An institution, or athletic association or conference applying 
on behalf of an institution, that seeks a waiver under paragraph (d)(1) 
of this section shall submit a written application to the Secretary 
that explains why it believes the data the athletic association or 
conference publishes are accurate and substantially comparable to the 
information required by this section.

(Authority: 20 U.S.C. 1092)

    4. Section 668.49 is added to subpart D, to read as follows:


Sec. 668.49  Report on completion or graduation rates for student-
athletes

    (a)(1) By July 1, 1997, and by every July 1 thereafter, each 
institution that is attended by students receiving athletically related 
student aid shall produce an annual report containing the following 
information:
    (i) The number of students, categorized by race and gender, who 
attended that institution during the year prior to the submission of 
the report.
    (ii) The number of students described in paragraph (a)(1)(i) of 
this section who received athletically related student aid, categorized 
by race and gender within each sport.
    (iii) The completion or graduation rate of all the entering, 
certificate- or degree-seeking, full-time, undergraduate students 
described in Sec. 668.46(a)(1)(i) and Sec. 668.46(a)(1)(ii), 
categorized by race and gender.
    (iv) The completion or graduation rate of the entering students 
described in Sec. 668.46(a)(1)(i) and Sec. 668.46(a)(1)(ii) who 
received athletically related student aid, categorized by race and 
gender within each sport.
    (v) The average completion or graduation rate for the four most 
recent completing or graduating classes of entering students described 
in Sec. 668.46(a)(1)(i) and Sec. 668.46(a)(1)(ii), categorized by race 
and gender. If an institution has completion or graduation rates for 
fewer than four of those classes, it shall disclose the average rate of 
those classes for which it has rates.
    (2) For purposes of this section, sport means--
    (i) Basketball;
    (ii) Football;
    (iii) Baseball;
    (iv) Cross-country and track combined; and
    (v) All other sports combined.
    (b) The provisions of Sec. 668.46(b) and (c) apply for purposes of 
calculating the completion or graduation rates required under 
paragraphs (a)(1)(iii), (a)(1)(iv), and (a)(1)(v) of this section.
    (c) Each institution of higher education described in paragraph (a) 
of this section may also provide to students and the Secretary 
supplemental information containing--
    (i) The graduation or completion rate of the students who 
transferred into the institution; and
    (ii) The number of students who transferred out of the institution.
    (d) Section 668.46(d) applies for purposes of this section.

(Authority: 20 U.S.C. 1092)

[FR Doc. 95-23389 Filed 9-20-95; 8:45 am]
BILLING CODE 4000-01-P