[Federal Register Volume 60, Number 231 (Friday, December 1, 1995)]
[Rules and Regulations]
[Pages 61776-61788]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29181]




[[Page 61775]]

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Part V





Department of Education





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34 CFR Part 668



Student Assistance General Provisions; Final Rule

  Federal Register / Vol. 60, No. 231 / Friday, December 1, 1995 / 
Rules and Regulations   

[[Page 61776]]


DEPARTMENT OF EDUCATION

34 CFR Part 668

RIN 1840-AB44


Student Assistance General Provisions

Agency: Department of Education.

Action: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Secretary amends the Student Assistance General 
Provisions. These amendments are necessary to implement the Student 
Right-to-Know Act, as amended by the Higher Education Amendments of 
1991, and the Higher Education Technical Amendments of 1993. These 
final regulations require an institution that participates in any 
student financial assistance program under Title IV of the Higher 
Education Act of 1965, as amended (title IV, HEA program) to disclose 
information about graduation or completion rates to current and 
prospective students. The final regulations 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 or completion 
rates of categories of student-athletes, to potential student-athletes, 
and to the athletes' parents, coaches, and high school counselors.

EFFECTIVE DATE: These regulations take effect on July 1, 1996, and 
apply to the 1996-1997 and subsequent award years. However, affected 
parties do not have to comply with the information requirements in 
Sec. 668.41, Sec. 668.46, and Sec. 668.49 until the Department of 
Education publishes in the Federal Register the control numbers 
assigned by the Office of Management and Budget (OMB) to these 
information collection requirements. Publication of the control numbers 
notifies the public that OMB has approved these information 
requirements under the Paperwork Reduction Act of 1995.

FOR FURTHER INFORMATION CONTACT: Ms. Paula Husselmann or Mr. David 
Lorenzo, U.S. Department of Education, 600 Independence Avenue, S.W., 
Regional Office Building 3, Room 3053, Washington, D.C. 20202. 
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 8:00 a.m. and 8:00 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). These final regulations 
are necessary to implement changes to the HEA made by the Student 
Right-to-Know Act, Pub. L. 101-542, as amended by the Higher Education 
Technical Amendments of 1991, Pub. L. 102-26, and the Higher Education 
Technical Amendments of 1993, Pub. L. 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. A second 
proposed rule addressing the Student Right-to-Know portion of Pub. L. 
101-542 was published on September 21, 1995.

Background

    The September 21, 1995 Notice of Proposed Rulemaking (NPRM) 
contained regulations that would implement the Student Right-to-Know 
portion of Pub. L. 101-542 for consumer information purposes only. In 
that NPRM the Secretary emphasized that the proposed regulations were 
meant to provide flexibility and create a minimum of burden to 
institutions, while generating useful and comparable data for student 
consumer information purposes. The Secretary's discussion and 
solicitation of comments on these and related issues are contained in 
60 FR 49156-49157.
    The September 21, 1995 NPRM also included a discussion of major 
issues regarding the proposed regulations that will not be repeated 
here. The following list summarizes those issues and identifies the 
pages of the preamble to the NPRM on which a discussion of those issues 
can be found.
    Disclosure of information on graduation or completion rates for the 
general student population contained in Sec. 668.41(a) (page 49157).
    Disclosure of information on the general student population, and on 
the completion or graduation rates of various categories of student 
athletes, and the report of that information to the Secretary, 
contained in Sec. 668.41(b) (page 49157).
    Issues concerning the definitions of ``full-time,'' ``normal 
time,'' ``athletically-related student aid,'' and ``prospective 
student,'' as contained in Sec. 668.41(a) (pages 49157-49158).
    Issues concerning the composition of students who make up the 
denominator of the institution's graduation or completion rate 
fraction, as contained in 668.46(a) (page 49158).
    Issues concerning the tracking of students, related to 
Sec. 668.46(a) (page 49158).
    Issues concerning the latest dates on which institutions must 
disclose their completion or graduation rate information, contained in 
Sec. 668.46(a)(2) (pages 49158-49159).
    The students an institution may include in the numerator of its 
completion or graduation rate fraction, and issues related to the 
documentation of those students, as contained in Sec. 668.46(b) (pages 
49159-49160).
    The students who may be excluded from the institution's calculation 
of a completion or graduation rate, as contained in Sec. 668.46(b)(2) 
(page 49160).
    The disclosure of the components of the numerator of the 
institution's completion or graduation rate fraction, as contained in 
Sec. 668.46(c) (page 49160).
    The provisions for waivers for institutions that are members of 
athletic conferences or associations that provide substantially 
comparable data, as contained in Sec. 668.46(d) (page 49160).
    The requirement that institutions that award athletically-related 
student aid disclose data regarding the completion or graduation rates 
of student athletes, and other general information, to a student 
offered athletically-related student aid, and to his or her parents, 
coaches, and high school counselors, and send a report of that data to 
the Secretary, as contained in Sec. 668.49(a) (page 49160).
    The requirement that such institutions report and disclose that 
data by July 1 of every year, beginning July 1, 1997, as contained in 
Sec. 668.49(a) (page 49160).
    The kinds of general data to be reported and disclosed, and the 
categories of students for whom completion or graduation rates are to 
be calculated, reported, and disclosed, as contained in Sec. 668.41(a) 
(pages 49160-49161).
    The definition of ``sport'', as contained in Sec. 668.49(a)(2) 
(page 49161).
    The requirement that completion or graduation rates be calculated 
in the same manner as specified in Sec. 668.46 (b) and (c), as 
contained in Sec. 668.49(b).
    The provision that an institution, if it wishes, may provide 
information to potential student-athletes and the Secretary regarding 
the completion or graduation rate of students who transfer into the 
institution, and the number of students who transfer out of the 
institution, as contained in Sec. 668.49(c) (page 49161).
    The provision that allows institutions that are members of athletic 
conferences 

[[Page 61777]]
or associations to obtain waivers if the conference or association of 
which it is a member provides substantially comparable information, as 
contained in Sec. 668.49(d) (page 49161).

Summary of Changes From the Proposed Regulations

    The Secretary has added definitions of ``first-time freshman 
students,'' ``certificate- or degree-seeking students,'' and 
``undergraduate students''. The Secretary has also changed the 
definitions of ``full-time students'' and ``normal time''.
    The Secretary requires institutions to disclose information on 
completion or graduation rates and transfer-out rates for the general 
student body by the January 1 immediately following the expiration of 
150% of normal time for the group of students on which the institution 
bases its completion or graduation rate calculation.
    The Secretary requires an institution that offers a predominant 
number of programs based on standard terms (semesters, trimesters, or 
quarters) to establish a fall cohort, consisting of undergraduate 
students who are enrolled as of October 15, or the end of the 
institution's drop-add period, on which to calculate its completion or 
graduation rate. The Secretary also requires such an institution to 
count as an entering student an undergraduate student who is enrolled 
at the institution as of October 15.
    The Secretary requires an institution that does not offer a 
predominant number of programs based on standard terms (semesters, 
trimesters, or quarters) to count as entering students all full-time 
undergraduate students who enter the institution between July 1 and 
June 30 for purposes of calculating its completion or graduation rate. 
Such an institution will consider a student to have entered for these 
purposes if the student attends at least one day of class.
    The Secretary requires an institution to count as an entering 
student only first-time freshman students as defined in the 
regulations. An institution may calculate a completion or graduation 
rate or rates for students who transfer into the institution as 
separate and supplemental rate or rates.
    The Secretary requires institutions to publish two rates: one, the 
rate at which students complete or graduate, and the other, the rate at 
which students transfer out of the institution.
    The Secretary allows institutions to count as completers those 
students who complete a transfer preparatory program described in 
Sec. 668.8(b)(1)(ii).
    The Secretary is dropping the proposal that would have allowed 
institutions to count as completers those students still enrolled in 
good standing in programs longer than the program on which the 
institution bases its disclosure date.
    The Secretary will require documentation of a transfer in order for 
an institution to count a student as a transfer-out, and will accept 
such documentation as a certification letter, electronic certification, 
confirmation of enrollment data from a legally-mandated tracking 
system, or institutional data exchange information confirming that a 
student has enrolled in another institution.
    The Secretary is clarifying that an institution that is covered by 
waivers for substantially comparable data gathered by an athletic 
association or conference must still comply with the information 
dissemination provisions of the statute and these regulations.
    The Secretary is including a de minimus exception to the disclosure 
requirements for the completion or graduation rates of student athletes 
that allows institutions not to disclose those rates for categories 
that include five or fewer students.

Preparation of Final Regulations

    The Secretary has formulated these 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 promulgating 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 prospective students, and 
prospective student athletes, will be better able to make informed 
choices when they choose a postsecondary institution.
    The Secretary believes that these final regulations strike an 
appropriate balance between establishing a basic level of useful 
consumer information for students, and keeping burden on institutions 
to a minimum.

Analysis of Comments

    In response to the Secretary's invitation in the September 21, 1995 
NPRM, approximately 100 parties, including representatives of large and 
small institutions, athletic associations, college and university 
associations, associations of collegiate registrars and institutional 
researchers, student advocacy groups, and student right-to-know 
advocates, submitted comments on the proposed regulations. A summary of 
those comments, and an analysis of changes in the regulations since the 
publication of the NPRM, follows.
    Substantive issues are discussed under the section of the 
regulations to which they pertain. Technical and other minor changes--
and suggested changes the Secretary is not legally authorized to make 
under the applicable statutory authority--are not addressed.

General

    Comments: Some commenters agreed that the amount of flexibility 
contained in the proposed rules was appropriate for the purpose of 
providing consumer information. These commenters believed that the 
added flexibility of these proposed rules reduced burden, reflected the 
letter and spirit of the statute, or took into account changes in 
technology. Some of these commenters maintained that nationwide 
comparability of data should not be the most important factor in the 
implementation of the statute, and expressed appreciation that these 
proposed rules, unlike earlier proposals, recognized the diversity of 
institutions of higher education. Other commenters agreed that the 
level of flexibility was appropriate because the only relevant 
comparisons to be made were within different sectors of the higher 
education community, and that these proposed rules provided adequate 
guidance to make such comparisons possible.
    Some commenters believed that any degree of flexibility defeated 
the purpose of the statute in providing meaningful and useful consumer 
information, and asked the Department to establish and require the use 
of a standard federal methodology and a set of standard federal 
definitions.
    A majority of commenters appreciated the Secretary's attempt to 
provide flexibility, but believed the amount of flexibility contained 
in the proposed rules did not serve well the consumer purpose of this 
statute. These commenters maintained that the proposed rules would 
result in the provision of inconsistent, incomparable data that would 
be of little use to student consumers.
    Of these commenters, many believed that for reasons of 
comparability and burden reduction, the final rules should require all 
institutions to report according to the definitions and methods 
contained in the forthcoming National Center for Education Statistics 
(NCES) Integrated Postsecondary Education Data System (IPEDS) 
Graduation Rate Survey (GRS). These 

[[Page 61778]]
commenters maintained that only a mandatory system would generate 
meaningful, comparable, and useful consumer information, and that this 
goal would be met with the least burden by requiring the use of the GRS 
rather than the imposition of another, different methodology. These 
commenters noted that all institutions would soon be required to report 
to the NCES through the GRS.
    Many others asked that the Secretary give serious consideration to 
following the recommendations of the report on graduation rates and 
other statistics the Joint Commission on Accountability Reporting 
(JCAR) is now developing. These commenters argued that (1) graduation 
rate statistics alone are not meaningful consumer information, and that 
the JCAR survey will provide better information in the form of 
statistics on graduation, completion, transfers, advancement, and 
persistence, and (2) the JCAR statistics are fair, consistent among all 
institutions, and easy to calculate.
    A number of commenters asked that the GRS, the JCAR survey, or the 
National Collegiate Athletic Association (NCAA) survey be approved as 
ways of meeting the requirements of this statute. One commenter asked 
that the IPEDS GRS be adopted as the model methodology. One commenter 
asked that the Secretary implement final regulations that would provide 
consistency among those reports and the report required by this 
statute.
    Several commenters maintained that the simple model the Secretary 
put forth would lead to meaningless or dishonest reporting, in that it 
attempts to condense necessary information into a single statistic. One 
of these commenters argued that the type of information needed for 
student consumers was more complex than that required by other types of 
consumers, and that such information could only be gathered by closely 
scrutinizing an institution's mission and programs in the context of 
the student's own interests, abilities, and willingness to complete a 
program.
    Discussion: The Secretary continues to believe that the provision 
of graduation rate data will provide meaningful information to student 
consumers, and that a degree of flexibility is consonant with 
generating useful consumer information. However, the Secretary has been 
persuaded by the number and nature of comments that the degree of 
flexibility contained in the proposed rules may present problems of 
comparability.
    Therefore, based on these comments, the Secretary is making changes 
to the final regulations that address problems of comparability. The 
Secretary requires institutions to use the definitions of 
``certificate- or degree-seeking students,'' ``first time students,'' 
and ``undergraduate students'' that are based on those definitions as 
they are published in the IPEDS GRS Glossary, NCES 95-822. These 
definitions have been changed slightly from the IPEDS definition to 
conform to the statute, but are the functional equivalent of the IPEDS 
definitions. Because institutions will in the future be required to 
report these data according to these definitions under IPEDS, the 
Secretary believes that using definitions based on the IPEDS 
definitions that are slightly changed to fit the requirements of the 
statute, will increase comparability without increasing burden.
    Also in the interests of comparability, the Secretary has removed 
from the definitions the flexible definition of ``full-time students'' 
included in the proposed rules. Institutions must instead use the 
definition of ``full-time student'' as defined in Sec. 668.2 of the 
Student Assistance General Provisions regulations. This definition that 
is functionally equivalent to the definition found in the IPEDS 
Glossary.
    In order to increase comparability and to decrease the possibility 
that institutions will need to calculate duplicate graduation or 
completion rates, the Department will work with organizations such as 
the NCES, the JCAR, athletic conferences or associations, and state 
agencies, or other organizations that are attempting to gather 
completion or graduation rate data, to help those organizations develop 
protocols that will generate data substantially comparable to the data 
required by the statute and these regulations. If these organizations 
do develop such protocols that meet the methodological and definitional 
standards set by the statute and regulations, the Secretary will inform 
institutions that the use of those protocols meet the requirements for 
the compilation of these data under the statute and the regulations. 
The Secretary, however, will not accept the protocols of these 
organizations for these purposes, nor grant waivers to athletic 
associations or conferences for their protocols, nor deem the protocols 
of any organization or institution to be in compliance with the statute 
and these regulations, if those protocols fail to incorporate the 
provisions of the statute and regulations.
    Changes: Section 668.41(c) has been changed to include definitions 
of ``degree- or certificate-seeking student'' and ``first-time freshman 
student'' that are based on the definitions published by IPEDS. ``Full-
time student'' is defined in accordance with the definition in 
Sec. 668.2.
    Comments: Many commenters expressed concern that these proposed 
rules would create another set of reporting criteria that institutions 
must meet, in addition to other reports on the same topic now required 
of institutions by the NCES, the NCAA, JCAR, and accrediting agencies, 
and that therefore these proposed rules were overly burdensome. Some of 
these commenters maintained that smaller institutions, which employ 
small staffs, would find it impossible to meet any new reporting 
requirements in addition to those which they must already meet. Some 
commenters reported that their institutions already were collecting 
information based on the NCAA model (in which completion or graduation 
rates are calculated for a cohort of first-time, full-time, 
baccalaureate students who enter an institution during the 
institution's fall term), the model set forth in the 1991 Dear 
Colleague letter, or another system, and that to force them to change 
systems to comply with new regulations would be prohibitively expensive 
and extremely burdensome. One commenter asked that the final rules not 
differ significantly from the guidance provided by Dear Colleague 
Letter GEN-91-27. One commenter reported that the flexibility of the 
rules allowing institutions to set their own definitions would prevent 
coordinating bodies from collecting information from groups of 
institutions.
    One commenter believed that the provision of graduation rate 
information as a regulatory issue was moot, given that several athletic 
associations and news publications now provide statistics, and 
expressed the belief that a regulatory system for providing this 
information would only add to the current confusion.
    Discussion: The Secretary recognizes that the calculation of these 
rates in different ways as required by different organizations would 
represent a burden on institutions. However, the Secretary is bound by 
statute to require that these rates be calculated and published, and 
that they be calculated according to statutory requirements. Insofar as 
is possible within the terms of the statute, the Secretary is providing 
flexibility for institutions to report according to protocols by which 
institutions will be required to calculate completion or graduation 
rates in the future, notwithstanding these regulations, e.g., the IPEDS 
GRS and the JCAR survey, as well as surveys by state agencies and the 
NCAA. However, if any particular 

[[Page 61779]]
organization on this list fails to develop protocols that accord with 
the statute and these regulations, the Secretary cannot simply waive 
the requirements of this statute or change the specifics of the 
statutory calculation to fit those circumstances. Institutions must 
calculate and publish these rates, and do so in accordance with the 
statute and regulations.
    With regard to the particular case of the GRS survey to be 
conducted by the NCES, the Secretary appreciates that while the 
Statement of Educational Impact contained below is technically correct 
in maintaining that no agency of the federal government is currently 
gathering this information, commenters were concerned that the 
forthcoming NCES GRS and these regulations may in the future require 
institutions to submit the same types of information, compiled in 
different ways, to the Federal Government. Because the NCES is a 
federal entity, the Secretary will insure that the results of future 
NCES GRS surveys will be acceptable for purposes of this statute and 
these regulations.
    The Secretary also notes that the definitions and suggested 
protocols included in these final regulations substantially mirror the 
provisions of Dear Colleague Letter GEN-91-27.
    Changes: None.
    Comments: Several commenters suggested that the Secretary encourage 
institutions to supply additional information to place their graduation 
rate reports in context, as a way of providing greater comparability 
and usefulness without significantly increasing burden. One commenter 
asked that all institutions be required to provide such contextual 
information.
    Discussion: The Secretary strongly encourages institutions to 
provide contextual information. There is, however, no statutory 
authority to require institutions to provide such information.
    Changes: None.
    Comments: Several commenters asked that the disclosure requirements 
for short-term programs at proprietary schools regarding job placement, 
licensure requirement, and licensure pass rate information that had 
been previously included in the Student Assistance General Provisions 
regulations be reinstated as part of these final regulations. One of 
these commenters argued that the types of students who enter these 
programs tended to be the consumers most in need of information and 
protection. This commenter maintained that such provisions would embody 
the spirit and intent of both the statute and other Congressional 
commentary on consumer information issues regarding short-term 
programs. This commenter also recommended that the information 
generated by such requirements be reported to a government agency to be 
compiled and published.
    Discussion: Because these provisions are no longer included in the 
statute, the Secretary will not include them in these regulations.
    Changes: None.

Section 668.41  Information Disclosure

    Comments: Several commenters proposed that the Department mandate 
the Campus Security model for the placement of this information in 
publications. These commenters maintained that this model was not 
burdensome.
    Several commenters opposed the Campus Security model. Several 
commenters opposed any regulation of the placement of this information, 
besides the general requirement that it be published in publications 
that students and prospective students receive. These commenters 
maintained that each individual institution was the best judge of where 
such information be published. One commenter believed that no 
regulation was necessary so long as institutions provided the 
information before the student entered into any financial obligation. 
One commenter asked that nonbinding guidance rather than regulations be 
promulgated in this matter. One commenter objected to the Campus 
Security model as now formulated in the regulations, in that it 
requires the distribution of information.
    One commenter asked that the Department mandate publication in the 
institution's catalog or other similar publication that provides 
meaningful context to this information. One commenter maintained that 
trade schools be required to publish this information in their catalog. 
One commenter asked that the Secretary clarify that publication in a 
catalog or other such publication meets the requirements of the 
statute.
    One commenter maintained that the requirement to make this 
information available through publications and mailing to prospective 
students would be overly burdensome. This commenter argued that general 
availability through literature racks and provision upon request should 
be deemed as fulfilling the requirements of this statute.
    Discussion: The Secretary agrees that the level of specificity 
contained in the Campus Security model of disclosure need not apply to 
these regulations. The Secretary believes that such publications as 
catalogs, admission literature, or other similar types of publication 
are appropriate places for this material. Because the statute requires 
that this material be available in ``appropriate mailings,'' the 
Secretary disagrees that the mere maintenance of this material in 
literature racks would satisfy the requirements of the statute.
    Changes: None.
    Comments: One commenter maintained that the suggestion that 
institutions also provide this information to secondary schools and 
guidance counselors was too expensive and burdensome.
    Discussion: The Secretary will not require institutions to provide 
this information automatically to secondary schools and guidance 
counselors, but strongly encourages institutions to provide this 
information on request to parties such as guidance counselors.
    Changes: None.
    Comments: One commenter asked for a clarification of the standard 
that students have this information before they enter into ``financial 
obligation,'' and inquired whether payment of an application fee would 
count as a financial obligation, as opposed, for example, to the 
payment of tuition. This commenter argued that if the former were the 
case, insurmountable problems would arise, since some students apply 
for admission without first contacting the institution.
    Discussion: The Secretary interprets ``financial obligation'' to 
mean any agreement that obliges the student to pay significant sums of 
money. This would include, for example, tuition or room and board 
deposits, advance payments for tuition, room and board, and books and 
supplies. The Secretary does not interpret the tacit agreement to pay 
an application fee when submitting an application to fall within the 
scope of ``financial obligation'' as that term is used in the statute.
    Changes: None.

Section 668.41  Disclosures of Information on Student-Athletes

    Comments: One commenter asked the Secretary to reformulate the 
requirement that institutions provide the graduation rate data for 
athletes to the student's parents, given that locating and providing 
materials to both parents in cases of separation or divorce was very 
burdensome. This commenter recommended that the relevant language be 
changed to indicate that provision of these data to a single parent or 
a guardian, when appropriate, would satisfy this requirement.
    Several commenters asked that only general guidelines regarding the 
medium in which the information is transmitted be promulgated, as 

[[Page 61780]]
institutions are attempting to move away from paper formats to 
electronic means of transmitting and disseminating information.
    Discussion: The Secretary interprets this provision of the statute 
to require the notification of the parent who acts as the student's 
guardian.
    The Secretary agrees that general guidelines will allow 
institutions flexibility in adapting to technological changes, and 
believes the regulatory text is consistent with that intent. However, 
the Secretary also believes that institutions should have paper copies 
available for parties who do not have electronic access.
    Changes: None.

Definitions

    Comments: Most commenters requested the Secretary to require the 
use of standard definitions. Their reasoning was to ensure uniformity, 
comparability among institutions, and ease of understanding for the 
consumer of this information. The commenters stated that flexibility 
with many of the definitions proposed in the NPRM is undesirable 
because it will produce noncomparable data that would be confusing to 
the consumer.
    Most of the commenters recommended that the regulations require the 
use of IPEDS definitions. The commenters explained that institutions 
are already familiar with these definitions, that they are already 
being used by the Secretary, and they would not require additional 
classifications of students beyond those already used. As such, these 
definitions would significantly reduce burden on institutions.
    A much smaller number of commenters appreciated the flexibility 
provided by the NPRM to use varying definitions so long as the 
definitions were part of the information disclosed. A considerable 
number of commenters recommended that the Secretary require the 
definitions used by JCAR. JCAR also uses some of the IPEDS definitions. 
In particular, most commenters recommended the IPEDS definitions for 
the following terms: full-time, certificate or degree-seeking, first-
time freshman student, and undergraduate student.
    Discussion: Upon reviewing the comments, the Secretary agrees that 
statutory definitions of key terms will increase comparability and 
benefit consumers. The Secretary also agrees that any definitions 
promulgated in these regulations should be definitions with which 
institutions are already familiar.
    Changes: Particular changes to the ``definitions'' section of these 
regulations are addressed below.
    Comments: A majority of commenters argued that the amount of 
flexibility in these proposed rules with regard to the definition of 
``normal time'' would result in incomparable data. Many of these 
commenters asked that the sector (less than two year, two year, and 
four year) definitions promulgated by IPEDS be placed in the 
regulations. Many others asked that the JCAR definitions of catalog 
award-time, extended award-time, and eventual award-time be adopted as 
mandatory definitions.
    One commenter believed that defining ``normal time'' as ``minimal 
time'' is inappropriate, given the number of students who enter 
institutions with a large number of credits by means such as Advanced 
Placement Tests and summer sessions, as well as the number of students 
who take overloads and independent study courses. This commenter 
believed that normal time instead be defined as ``designated completion 
time.'' One commenter maintained that normal time should be the 
advertised time to graduation or completion published in an 
institution's advising worksheets, catalog, or similar publications, 
and that if the institution does not publish such information, that 
normal time for that institution be one year (twelve months) for a 
certificate program, two years (twenty-four months) for an associate 
degree, and four years (forty-eight months) for a bachelor's degree.
    One commenter supported the use of normal time rather than average 
time, because the latter would tend to change. One commenter supported 
the definition of normal time as minimal time to complete or graduate 
from a certificate or degree program, but asked that this be clarified 
to exclude summer terms.
    Several commenters supported the use of some type of ``average'' 
time rather than minimal time as the definition of normal time, given 
that outside factors, such as family commitments, work time, and 
availability of funds, affect the time students need to graduate or 
complete. These commenters suggested that institutions be permitted to 
determine ``normal time'' using other means, for example, measuring the 
``normal time'' to completion experienced by the most recent cohort of 
students, or using sampling techniques of student populations. One 
commenter believed that the concept of normal time itself as used in 
the statute and defined in these regulations was a misnomer, given that 
students now routinely switch between full-time and part-time status, 
and are affected by a whole range of non-academic factors.
    Several commenters believed that the definition of normal time 
should not include the term full-time, given that full-time represents 
only a minimum number, not a particular number, and so two students who 
take different full-time loads would have different normal times to 
graduation or completion. One commenter believed that the definition of 
normal time could contain the term full-time only if the latter term 
was clarified to mean the greater of the institution's definition of 
full-time, or the title IV, HEA definition of full-time.
    Several commenters asked the Department to mandate that 
institutions report their definition of normal time as part of their 
graduation rate report.
    Discussion: The Secretary agrees that the term ``normal time'' 
should not include the term ``full-time'' because the meaning of the 
term ``full-time'' with regard to academic workloads may vary from 
student to student.
    The Secretary agrees with the commenters who concurred that 
``normal time'' not be defined to mean ``average time.'' The Secretary 
believes that Congress meant to address such issues as stop outs, work, 
remediation, and other factors when it set the time for graduation or 
completion at 150% of normal time. The Secretary also believes that 
Congress meant ``normal time'' itself to be the standard, traditional 
time to degree, e.g., four years for a bachelor's degree, two years for 
an associate degree, and the scheduled time for clock hour programs. 
The Secretary agrees that to make these points clear, the definition of 
``normal time'' in the regulations should make reference to an 
institution's catalog time. The Secretary also agrees to include the 
specific time in standard terms (semesters, trimesters, or quarters, 
not including summer terms) to completion that have been traditionally 
associated with degrees. The Secretary acknowledges that measuring time 
to completion in standard terms (semesters, trimesters, or quarters) 
rather than months for degree programs is a change from earlier 
guidance, but believes this change is necessary in order for this 
information to be provided in a timely fashion. Time to completion 
measured in months, for example, for a four year institution, would end 
after the July 30 date for completors or graduates to count, and would 
therefore delay disclosure for up to 15 months after the end of the 
students' 150% of normal time, given the change to the January 1 
disclosure date discussed below. Measured in standard terms, the data 
will only be six 

[[Page 61781]]
months old by the December 1 disclosure date.
    With regard to completion or graduation rate, or transfer-out rate 
calculations based on ``extended catalog time'' (more than 150% of 
normal time), the statute does not require that such rates be 
calculated or disclosed. Institutions may always disclose such rates as 
supplemental information.
    Changes: A definition of ``normal time,'' based on the JCAR 
definition of normal time, has been inserted in Sec. 668.41(c), which 
defines normal time as the time necessary for a student to complete all 
requirements for a degree or certificate according to an institution's 
catalog. This is typically 4 years (8 semesters or trimesters, or 12 
quarters, excluding summer terms) for a bachelor's degree, 2 years (4 
semesters or trimesters, or 6 quarters, excluding summer terms) for an 
associate's degree, and the scheduled times for certificate programs.
    Comments: A majority of commenters believed that the degree of 
flexibility permitted institutions to define full-time would lead to 
non-comparable data. Most of these commenters supported the mandatory 
use of the IPEDS definition of full-time.
    Several commenters supported the proposed regulatory definition. 
One commenter asked that an institution be required to disclose any 
differences between its definition of full-time for academic purposes 
and its definition of full-time for tuition purposes. Several 
commenters asked that the Secretary require institutions to publish 
their definitions with their graduation rate data.
    Discussion: Upon further consideration, the Secretary agrees with 
the commenters who asked that a definition of ``full-time'' be included 
in the regulations. Because the definition of ``full-time'' in 
Sec. 668.2 is familiar to all institutions, was the definition provided 
in Dear Colleague Letter GEN-91-27, and is functionally the same as the 
IPEDS definition of ``full-time,'' the Secretary applies that 
definition to this section of the regulations. The Secretary believes 
that for these reasons referring to this definition in the regulations 
will increase comparability and decrease potential confusion.
    Changes: The definition of ``full-time student'' has been removed 
from Sec. 668.41(c). Institutions are required to use the definition of 
``full-time student'' found in Sec. 668.2.
    Comments: Most commenters recommended the use of the first-time 
freshman student definition under IPEDS. This definition provides for a 
student attending any institution for the first time at the 
undergraduate level; this includes students enrolled in the fall term 
who attended college for the first time in the prior summer term, and 
also includes students who entered with advanced standing.
    Discussion: The Secretary agrees with the commenters that for 
reasons of comparability, consistency, and burden reduction, the 
regulations should mandate the use of a particular definition of 
``first-time freshman student,'' and that the definition should be the 
IPEDS' definition or its functional equivalent. Promulgating such a 
definition will ensure consistency of data among institutions, and is 
less burdensome to institutions because institutions are already 
familiar with the IPEDS definitions.
    Changes: Section 668.41(c) has been changed to require institutions 
to use a definition of ``first-time freshman student'' that is based on 
the IPEDS definition found in the IPEDS Glossary, NCES 95-22.
    Comments: Many commenters asked that the IPEDS definition of 
``undergraduate student'' be included in the final regulations.
    Discussion: For reasons of consistency and familiarity, the 
Secretary agrees to include the IPEDS definition of ``undergraduate 
student'' in the final regulations.
    Changes: The definition of ``undergraduate student'' as found in 
the IPEDS Glossary, NCES95-822, has been added to Sec. 668.41(c).

Section 668.46  Information on Completion or Graduation Rates and 
Transfer-Out Rates

    Comments: Many commenters objected to the October 1 disclosure date 
for this information. In general these commenters maintained that the 
amount of time between June 30 and October 1 was insufficient for 
institutions to calculate these graduation rates. Several of these 
commenters maintained that the statute provided institutions with one 
year between the point in time when a group's 150% of normal time 
elapsed and the required disclosure date. Several other commenters 
suggested disclosure dates in the November or December immediately 
following the elapse of 150% of normal time.
    Discussion: The Secretary agrees to allow a disclosure date in the 
next calendar year following the expiration of 150% of normal time. 
However, in the interest of consumers, the Secretary believes that this 
date should be the earliest possible. Therefore, the Secretary changes 
the disclosure date to the first January 1 following the expiration of 
150% of normal time for the entire group of students on which the 
institution bases its completion or graduation rate calculation.
    Changes: Section 668.46(a)(5) has been changed to require that an 
institution, beginning with the group of students who enter the 
institution on or after July 1, 1996, disclose this information no 
later than the January 1 immediately following the point in time that 
150% of normal time has elapsed for the entire group of students on 
which the institution bases its completion or graduation rate, and 
every January 1 thereafter.
    Comments: Most commenters recommended that the Secretary require 
the use of a snapshot approach for tracking students, that is, taking a 
snapshot of a cohort that does not change for the entire length of the 
analysis. Electronically, this methodology means comparing only two 
files. For institutions that will make calculations from paper records, 
the ``snapshot'' methodology requires looking at records from only two 
academic years. The commenters explained that a snapshot methodology 
will limit the requirement to comparison of a cohort's file for only 
two years--at the time of entry and at the time of disclosure. The 
commenters' concern is that continuous tracking would be an added and 
unnecessary burden on institutions. The commenters also indicated that 
the snapshot methodology is sufficient to produce the required 
information under the statute. Very few commenters supported the 
concept of tracking individual students.
    Discussion: The Secretary agrees that a snapshot methodology is 
appropriate for purposes of these regulations. To help institutions 
implement this methodology, the Secretary is adjusting other elements 
of the methodology, such as the characterization of an entering 
student.
    Changes: None.
    Comments: The commenters almost unanimously recommended that the 
Secretary require the use of a fall cohort to calculate an 
institution's graduation rate. Most institutions' believe that students 
entering in this term will be a representative sample of students 
entering during the entire year. Institutions argue that using the same 
methodology will produce more consistent and comparable data. The 
commenters stated that using a full-year cohort would dramatically 
increase data tracking and reporting burden on institutions. Moreover, 
use of the fall cohort methodology is consistent with both the IPEDS 
GRS under development and the JCAR methodology, and many 

[[Page 61782]]
institutions and state-level agencies have already developed data 
systems using the fall cohort methodology recommended by Dear Colleague 
Letter GEN-91-27. A number of institutions opposed extrapolation to a 
full-year rate; a small number supported such extrapolation. Some 
institutions believe flexibility should be given to institutions for 
whom a fall cohort is not representative.
    Discussion: The Secretary accepts the commenters' assertion that 
the use of a fall cohort is the best approach for some institutions, 
namely standard term-based (semester, trimester, quarter) institutions, 
which primarily commented on this issue. To be a standard term-based 
institution for these purposes, the institution must offer 
predominantly standard term-based programs, that is, greater than 50% 
of its programs must be term-based. In order to accommodate 
institutions for whom a fall cohort may not suffice, the regulations 
require the use of a year-long cohort (July 1-June 30) for institutions 
that do not operate on a standard term basis.
    Changes: Section 668.46(a)(2) has been added to require 
institutions that offer a predominant number of semester, trimester, or 
quarter based programs to use a fall cohort of students entering 
between every July 1 and October 15. An institution using a snapshot 
methodology may use a census date of October 15 or another appropriate 
date to identify that cohort. Institutions that do not have a 
predominant number of programs based on standard semesters, trimesters, 
and quarters must use a year-long cohort of students who enter between 
every July 1 and June 30. The Secretary believes this is a reasonable 
differentiation because most non-term based institutions are 
proprietary schools, and the Secretary understands that these 
institutions are now required by their accrediting agencies to track 
all their students.
    Comments: All commenters who addressed the concept of an entering 
student's attendance for at least one day of class opposed the 
proposal. The commenters explained that many students register, add and 
drop courses, and withdraw after the first day of class. Moreover, 
institutions generally use an enrollment date or census date to record 
a snapshot of their enrollment. Typically this date is at least ten 
days to thirty-five days after the beginning of a term; some states 
mandate the actual census date. The commenters indicated that, 
realistically, institutions simply do not have mechanisms to know if a 
student attends only one day of class. Therefore, the commenters feel 
the Secretary should refer institutions to the definition of entering 
(or first-time) student under the IPEDS Fall Enrollment Survey (the 
count of students by the NCES that counts the number of students 
enrolled as of October 15 for the purpose of providing annual 
projections of college enrollment for the NCES publications Condition 
of Education and The Digest of Education). As previously indicated, 
institutions are generally familiar with these definitions.
    Discussion: The Secretary is concerned by the issues raised by the 
commenters, in part because it is important for other parts of the 
regulations governing the title IV, HEA programs (e.g., refunds) that 
institutions know when students withdraw or drop out of an institution. 
However, given the number and nature of the comments received on this 
issue, the Secretary agrees that it will reduce burden and increase 
comparability to require institutions to use the enrollment date 
(October 15) set by the IPEDS Fall Enrollment Survey, or the end of the 
institution's drop-add period, for purposes of identifying an entering 
student for institutions that are required by these regulations to use 
a fall cohort.
    For institutions that use a year-long cohort, an entering student 
is a student who attends at least one day of class. The Secretary 
believes that this differentiation among schools on this issue is 
logical since non-term based schools are better able to track their 
students from the first day because such institutions do not have drop-
add periods.
    Changes: A change has been made in Sec. 668.46(a) that mandates 
institutions that offer a predominant number of programs based on 
semesters, trimesters, or quarters to base their calculations on the 
students who enter during the institution's fall term, beginning July 
1, 1996. An entering student shall be considered to have entered for 
these purposes if that entering student is enrolled as of October 15 or 
the end of the institution's drop-add period. All other institutions 
must count all students who enter between every July 1 and June 30, and 
attend at least one day of class, beginning July 1, 1996.
    Comments: The primary concern raised by the commenters concerning 
the definition of entering students was the treatment of students 
transferring into an institution. Almost unanimously the commenters 
favored a separate cohort and graduation rate for these students. The 
commenters believed that including students who transfer into colleges 
and universities in the same cohort with first-time freshman students 
will lead to inconsistent and noncomparable data among institutions, 
because institutions evaluate transfer students differently and at 
different times, and different levels of credit may be awarded for 
different curriculum choices. Some commenters recommended that the 
progress of transfers-in should be accounted for by using a snapshot 
methodology at 150% of the normal time to complete from their time of 
entrance into the new institution. That is, their status should be 
measured at the time of entry and at the time of disclosure and be 
reported separately. Other commenters noted that the inclusion of 
transfers-in with first-time freshman students requires a continuing 
adjustment to the entering cohort. This approach would violate the 
snapshot methodology recommended by so many commenters. Moreover, some 
commenters believe that such a methodology complicates the 
calculations, creates a burden on the institutions, and ultimately 
confuses the consumer. Other commenters note that separate reporting 
for first-time freshman students and transfers-in is consistent with 
established tracking methodologies in the states, which for the most 
part concentrate on tracking first-time freshmen.
    Discussion: In response to the commenters' concerns, the Secretary 
has reconsidered the position taken in the NPRM and excludes from the 
definition of ``entering'' students those students who transfer into an 
institution. The Secretary will now consider reporting on students who 
transfer into an institution to be an optional disclosure for Student 
Right-to-Know purposes. If an institution does choose to establish a 
cohort of transfers-in, the calculation of the completion or graduation 
rate of these students must be separate from the calculation of the 
completion or graduation rate of the first-time cohort, and the two 
rates must be published and labeled as two separate rates.
    Changes: Section 668.46(a) is revised to make optional and separate 
the reporting on students transferring into an institution.
    Comments: Many commenters urged the Secretary to consider adopting 
the JCAR methodology, which includes the disclosure of completion or 
graduation rates, and other information, on part-time as well as full-
time undergraduate students. These commenters maintained that 
information on part-time students was necessary to meet the needs of a 
large number of student consumers who do not fit into the traditional 
category of full-time students. 

[[Page 61783]]

    Discussion: The statute only requires that institutions compile and 
disclose information on full-time, certificate- or degree-seeking 
undergraduate students. Institutions may always disclose completion or 
graduation rates and other information on part-time students or other 
types of students as supplemental information.
    Changes: None.
    Comments: Many commenters recommended that the Secretary not 
consider students who transfer to a new institution to be completers. 
These commenters believed that considering transfers-out to be 
completers is inaccurate because an individual could be counted as a 
completer by two separate institutions. These commenters also asserted 
that students who transfer out of an institution are not equivalent to 
completers, since their final outcome is unknown.
    Many other commenters recommended that the Secretary should 
regulate what types of documentation the Secretary will accept to 
define ``substantial preparation.'' Moreover, these commenters 
recommended that the Secretary not define substantial preparation 
because these definitions would place a burden on institutions, since 
they would require evaluation of transfer credits at entry, an uncommon 
practice in higher education. The absence of a standard practice for 
evaluating transfer credits and the varying definitions of academic 
standing minimizes the comparability of data from one institution to 
another and introduces the possibility of data manipulation. Both 
produce poor consumer information in the eyes of these commenters.
    Some commenters appreciated the flexibility to allow transfers-out 
in good standing to be completers and request that the institutions be 
allowed to define good standing.
    A number of commenters consider a request for a transcript an 
insufficient indicator of students' transfer behavior; transcript 
requests do not provide the necessary certification, as they are 
generated for many reasons unrelated to a student's intent to transfer.
    Some commenters indicate that surveys are also insufficient. Such 
estimates introduce considerable uncertainty and variation in the data. 
Other commenters support the idea of surveys as a viable means of 
dealing with this statutory requirement.
    Many commenters recommended that the regulations allow one of four 
types of documentation that a student has transferred to another 
institution. First, a certification letter or document from the 
registrar of the receiving institution that a student is enrolled is 
evidence of transfer. Second, an electronic certification, such as a 
SPEEDE/ExPRESS or a secure e-mail message, from the registrar of the 
receiving institution is evidence of transfer. Third, the confirmation 
of enrollment data from a legally-mandated, statewide or regional 
tracking system (or shared information from such systems) is evidence 
of transfer. Fourth, other documentation of enrollment at the receiving 
institution, such as institutional data exchanges of students enrolled 
as of the official enrollment date, is evidence of transfer. Some 
commenters requested that the Secretary specify these means of evidence 
in the regulations. A number of commenters believed that enrollment at 
a new institution alone is evidence of substantial preparation. 
Further, institutions should be permitted to use a variety of sources 
for this rate, without being required to have documented proof of 
transfer on a student-by-student basis. It must be emphasized that an 
approximate rate is more useful to the student than a rate which is 
clearly underrepresented because of difficulties in student-by-student 
data collection and documentation.
    Most commenters urged the Secretary to adopt separate reporting of 
completion and transfer-out rates if it is legally necessary to address 
transfers-out. The resulting statistics represent distinct pieces of 
consumer information depending upon an entering student's own 
objective. The commenters indicate that combining these rates into a 
single statistic will not help students make the choices that actually 
face them.
    Many of the commenters petitioned the Secretary to work with the 
academic community to devise procedures which would facilitate the 
transfer of data among institutions which chose to participate in such 
data transfer mechanisms. A significant number of commenters 
recommended that the Secretary consider the method employed by the GRS 
because of its flexibility in reporting students who transfer out of an 
institution. Some commenters recommended that transfers-out be 
considered completers if they are ``transfer-ready.'' In other words, 
if the student enrolled in a transfer preparation program had achieved 
a certain grade point average and completed a certain number of 
credits, the student could be considered to have received ``substantial 
preparation'' and therefore, be ``transfer-ready.'' This student, the 
commenters maintained, is a completer.
    Discussion: The Secretary agrees that combining graduates with 
transfers-out in a single rate will lead to confusing and sometimes 
misleading information. Therefore, the Secretary requires that 
institutions publish separately its transfer-out rate.
    The Secretary recognizes the variety of serious problems associated 
with the statutory provision that transfers-out be reported. Because 
the provision is mandated by law, institutions may not ignore it. 
However, the Secretary wishes to provide institutions with flexibility 
to address transfers-out. Therefore, consistent with the treatment of 
transfers-out in the GRS, an institution is only required to report on 
those students the institution knows have transferred to another 
institution.
    For the reasons cited by the commenters, the Secretary agrees that 
merely requesting a transcript is insufficient evidence of transfer. 
There must be reasonable evidence of a transfer in order for an 
institution to consider a student a transfer-out. The four examples of 
valid documentation suggested by many of the commenters have been 
incorporated into the regulations per their request.
    Moreover, in order to resolve the conflict between the transfer-out 
provision and the particular mission of community colleges in preparing 
students for transfer to other institutions, these regulations provide 
that institutions that offer transfer preparatory programs as described 
in Sec. 668.8(b)(1)(ii) may consider a student who is ``transfer-
ready'' to be a completer. A transfer-ready student is a student who 
has successfully completed his or her transfer program.
    With respect to the Student Right-to-Know Act disclosures, in 
response to the commenters' concerns, an institution must disclose the 
transfer-out rate separately from its graduation rate, but may provide 
additional information that combines the completion or graduation rate 
with its transfer-out rate.
    Changes: A change has been made in Sec. 668.46(c) that mandates 
that institutions report their transfer-out rate separately. Section 
668.46(c) has also been changed to require an institution to document 
that a student has transferred to another institution, and provides 
examples of the types of documentation necessary to document a 
transfer-out.
    A change has been made to Sec. 668.46(b) which allows an 
institution to count in its completion or graduation rate a student who 
has successfully completed a transfer-preparatory program as described 
in Sec. 668.8(b)(1)(ii).
    Comments: Some commenters believe the use of a persistence rate for 
programs longer than the predominant 

[[Page 61784]]
program is necessary because it shows recognition that not all programs 
are defined in the same way among all institutions. Other commenters 
believe that persistence rates should not be allowed to substitute for 
graduation rates in any cases because an institution cannot determine 
whether a persister will graduate. These commenters believe that 
counting persisters as completers distorts the graduation rate. These 
commenters therefore believe that students who are enrolled in a 
program that is longer than the program on which the institution bases 
its disclosure, should not be counted as completers. These commenters 
recommended use of the GRS.
    Other commenters recommended that institutions be given an option 
of calculating a persistence rate until they are able to calculate a 
graduation rate.
    Discussion: While the Secretary is concerned that graduation rates 
be disclosed as early as is legally possible so that students may 
receive current information, the Secretary has been persuaded by the 
commenters that any type of equation of persisters with graduates is 
misleading. Therefore, the Secretary has eliminated the proposal that 
an institution consider students in good standing who are enrolled in 
programs longer than the predominant programs' length as completers for 
the purpose of disclosing its graduation or completion rate.
    As for the disclosure of a persistence rate in general, either 
before a disclosure date, or at the disclosure date, an institution may 
disclose such a rate as supplemental information, but must clearly mark 
the rate as a persistence rate.
    Changes: A change has been made to Sec. 668.46(b) that eliminates 
the inclusion of students persisting in programs longer than the 
program on which the disclosure date is based as completers.
    Comments: Most commenters support the cohort's exclusion of 
students who die or become permanently and totally disabled. A number 
of commenters pointed out the small number of these students would have 
little effect on graduation rates.
    Some commenters expressed serious concern that the graduation rates 
at institutions with a significant number of legal exclusions may 
appear artificially low. For example, an institution with a large 
percentage of its students who serve on church missions will report a 
low graduation rate if those students do not complete within the 
statutory time frame. Many commenters objected to the statutory 
exclusions and believe that any post-hoc adjustment of the cohort based 
on subsequent student behavior will affect comparability of data. These 
commenters recommend use of the GRS to allow reporting these students 
as not enrolled if the time of reporting coincides with the time of the 
special circumstance, and separate statistics for students who have 
left the institution for various reasons, e.g., performing church 
missions, joining the Armed Forces, etc. One commenter argued that in 
order to be excluded, the student must leave school for the express 
purpose of joining the Armed Forces, going on a church mission, etc., 
and not just subsequently join such an endeavor after leaving school 
for another reason.
    Discussion: In response to the commenters' support, the regulations 
retain the exclusions for students who die or become totally and 
permanently disabled.
    The Secretary appreciates the concerns raised regarding the other 
statutory exclusions, such as church missionary activity. However, the 
Secretary is unable to extend the time frame within which graduation or 
completion may take place for the student to be counted as a completor 
or graduate in the institution's completion or graduation rate, because 
this time frame (150% of normal time) is a statutory provision. An 
institution, however, may choose to deal with the difficulties of this 
situation in several ways. It could explain the reasons why only a few 
students are in its cohort, if it excludes these students through the 
statutory provisions. Or it could include these students in its cohort, 
and supplement the required calculation with additional information on 
the graduation rate of those students when an extended time frame is 
applied. The Secretary encourages institutions to provide supplementary 
information and data concerning these and other limitations of its 
graduation rate disclosure.
    The Secretary also agrees that a student must leave the institution 
due to one of the circumstances described in Sec. 668.46(d) in order to 
be excluded from the denominator of the completion or graduation rate 
fraction.
    Changes: None.
    Comments: Most commenters recommended that institutions not report 
a single graduation rate number based on a ratio of completers, 
transfers and persisters. Institutions strongly recommend the reporting 
of separate rates for graduates, students still enrolled, transfers-
out, transfers-in and students not enrolled or graduated. The 
commenters believe that combining these rates will lead to a 
meaningless statistic.
    Discussion: As noted above, the Secretary has dropped the proposal 
that institutions be allowed to count students persisting in programs 
longer than the program on which the institution bases its disclosure 
date as completers. The Secretary also mandates a separate completion 
or graduation rate, and a separate transfer-out rate. Therefore, the 
provisions in the proposed Sec. 668.46(c) that required the break out 
of the different factors of the institution's graduation or completion 
rate have been eliminated.
    As noted above, an institution may also supply supplemental 
information describing the transfer rate of the students who transfer 
into the institution. It may also publish supplemental information 
describing the rate of those who complete or graduate when combined 
with the rate of those students who transferred-out.
    Changes: Section 668.46(c) is revised as described above.
    Comments: Several commenters supported the provisions that allow 
the Secretary to waive the requirements of Secs. 668.46 and 668.49 if 
an athletic association or conference of which it is a member satisfies 
the Secretary that it compiles and publishes substantially comparable 
data. Some of these commenters asked that the standard process for 
obtaining a waiver be published with the final regulations. One of 
these commenters also expressed the belief that the granting of the 
waiver should be pro forma. One of these commenters asked that an 
institution that is a member of such an athletic association or 
conference be allowed to maintain, publish, and distribute its own set 
of data as well. One commenter asked that an athletic conference or 
association be allowed to apply on behalf of all its members at once, 
rather than for each institution individually.
    One commenter asked that state higher education agencies be given 
the opportunity to request similar waivers for their member 
institutions. This commenter argued that such additional waivers would 
not result in any more incomparability than would already be generated 
under the flexible rules the Secretary is proposing.
    Several commenters argued that the Secretary should not give 
institutions the opportunity to obtain a waiver. These commenters 
maintained that in the interests of accurate and comparable consumer 
information, the Department recognize only the GRS as an acceptable 
method for gathering this information, and that athletic associations 
or conferences not be allowed to determine the methodology by which any 
of these data is gathered. 

[[Page 61785]]

    Several commenters asked that waivers granted to institutions for 
substantially comparable data supplied to athletic conferences or 
associations not exempt those institutions from the requirement to 
supply information to students, prospective students, the public, or 
high school counselors and coaches, as stipulated in Secs. 668.41(a)(3) 
and 668.41(b).
    One commenter asked that small institutions be allowed to request 
waivers exempting them entirely from these regulations. This commenter 
argued that small denominators in graduation rate fractions would lead 
to huge variances in rates from year to year. If waivers could not be 
granted, this commenter asked that such institutions be permitted to 
report data for several years together in order to cure this problem.
    Discussion: The statute provides institutions the opportunity to 
ask for waivers through their athletic conferences or associations. The 
Secretary does not have the authority to remove this opportunity, or to 
withhold waivers to associations or conferences that submit 
applications that meet reasonable criteria. The Secretary will not 
approve waivers if the application does not specify that the 
methodology by which the conference or association is to gather these 
data meets the criteria set forth by the statute and these regulations. 
The Secretary believes that these approval criteria will provide 
comparable data between those institutions that report according to 
athletic association or conference protocols, and those that do not.
    As noted above, the Secretary will also consider the protocols of 
state higher education agencies or other associations as acceptable 
methodologies if those protocols meet the requirements set by the 
statute and these regulations.
    The statute is clear in requiring that all institutions that 
participate in any title IV, HEA program must comply with the 
requirements for supplying completion or graduation rate information 
and transfer-out rate information for their undergraduate populations, 
and that all institutions that participate in any title IV, HEA program 
and award athletically-related student aid must comply with the 
requirements to supply information on their general student population 
and the completion or graduation rate and transfer-out rate of their 
student-athletes. The statute only allows waivers for substantially 
comparable data submitted to an athletic conference or association. It 
does not empower the Secretary either to exempt an institution from 
these requirements, or to allow institutions to make these disclosures 
and reports on any but an annual basis.
    In response to the concerns of small schools, institutions are 
always able to provide additional information, such as prior years' 
data, and explanations of factors affecting their completion or 
graduation rates.
    The Secretary does not construe the statute to prohibit 
institutions from compiling and publishing these data even if its 
athletic conference or association has successfully requested waivers 
on its behalf, so long as the institution generates the information in 
compliance with the requirements of the statute, these regulations, and 
other Departmental guidance regarding acceptable protocols.
    The Secretary agrees with the commenter that the successful 
application for waivers of data collection requirements on behalf of an 
institution by an athletic association or conference does not also 
exempt that institution from supplying this information to the parties 
identified in the statute. Institutions that obtain such waivers must 
still comply with the information dissemination requirements set by 
Sec. 668.41.
    The Secretary will publish at a later date the procedures by which 
an athletic association or conference may request waivers for its 
member institutions.
    Changes: A change has been made to Sec. 668.46(e) that clarifies 
that an institution that obtains waivers through its athletic 
association or conference for the generation of this data must still 
comply with the provisions of Sec. 668.41.

Section 668.49  Graduation or Completion Rate and Transfer-out Rates of 
Student-athletes

    Comments: Several commenters expressed concern over the July 1, 
1997 reporting date for the data on graduation and completion rates of 
student athletes. These commenters contended that requiring 
institutions to meet this date would entail gathering information on 
students who had entered as far back as 1993, and because institutions 
who were not members of the NCAA are not tracking those students, the 
result would be inaccurate and flawed data, as well as a heavy burden 
on those institutions. These commenters believed that the tracking of 
these students should begin with the students entering after July 30, 
1996, and that the Department not require the first report to be 
compiled and issued until after the 150% of the time for graduation or 
completion for that group of students has elapsed.
    Discussion: The Secretary appreciates the concerns of these 
commenters with regard to the issue of disclosing completion or 
graduation rates for students entering before July 1, 1996.
    With regard to the students on which institutions must compile 
completion or graduation rate information, the Secretary will not 
require institutions to provide this information for students who enter 
before July 1, 1996, subject to the regulatory provisions regarding the 
provision of average rates for previous years. However, the Secretary 
is aware that a large number of schools will have in hand data on 
students entering prior to that date as a result of complying with the 
requirements of organizations such as the NCAA. The Secretary strongly 
encourages those institutions to report those data.
    All institutions must disclose the information other than the 
completion or graduation rate data required by this section beginning 
July 1, 1997. Institutions affected by these regulations must disclose 
the information on completion or graduation rates for student-athletes 
beginning on the July 1 immediately following the expiration of 150% of 
normal time for the group of students entering on or after July 1, 1996 
on which the institution bases its completion or graduation rate, in 
accordance with Sec. 668.46(a)(2).
    The Secretary also wishes to clarify that the disclosure and 
reporting date for this information is the July 1 of the calendar year 
following the expiration of the 150% of normal time for the students 
whose graduation or completion rate performance is measured. 
Institutions thus will not be required to disclose this information for 
approximately one year after the expiration of the 150% period. The 
Secretary encourages institutions to disclose earlier, for example, 
along with the January 1 disclosures for non-student athletes.
    Changes: None.
    Comments: Several comments expressed concern that the level of 
detail the statute requires regarding the gender and race of athletes 
within particular sports will result in the possibility that particular 
students will be identifiable from the data an institution reports. 
These commenters contended that such a situation would violate the 
privacy provisions of the Buckley Amendment (Family Educational Rights 
and Privacy Act), and therefore asked that the Department allow 
institutions to leave blank those categories in their reports in which 
the status of a very few students (less than five) would be reported. 

[[Page 61786]]

    Discussion: The Secretary agrees with the commenters, and will not 
require institutions to report this information if five or fewer 
students are involved. The institution must supply a note stating that 
the disclosure was not made due to privacy concerns.
    Changes: A change has been made in Sec. 668.49 to add a provision 
that an institution need not disclose a completion or graduation rate 
or a transfer-out rate for categories that include five or fewer 
students.
    Comments: Several commenters supported the provision that the same 
cohort of students be the subject of the reports in both Secs. 668.46 
and 668.49.
    Discussion: The Secretary appreciates these commenters' support.
    Changes: None.
    Comments: Several commenters noted the absence of a definition of 
the term ``athlete'' in the proposed rules, and maintained that such a 
definition should be supplied in the final rules in order for the 
regulations to generate comparable data among institutions. One of 
these commenters inquired whether the term referred only to athletes 
who receive athletically-related student aid, whether it would include 
only participants in intercollegiate athletic sports, and how long 
participants need participate before being deemed ``athletes.''
    Discussion: The Secretary does not agree that it is necessary to 
define the term ``athlete.'' The Secretary notes that the statutory 
term ``athletically-related student aid'' governs the selection of 
students upon whose performance completion or graduation rates are 
reported, and to whom information on performance is provided. The 
Secretary believes that for the purposes of the information required by 
Sec. 668.49(a)(1)(ii), students who receive athletically-related 
student aid are all students who receive that aid at any time during 
the previous reporting year. For purposes of Sec. 668.49(a)(1)(iv), 
entering students who receive athletically-related student aid are 
those students who receive athletically-related student aid for any 
period of time between July 1 and June 30 of their entering year. The 
Secretary notes that this is a methodology similar to that now employed 
for these purposes by the NCAA.
    Changes: None.

Executive Order 12866

    These 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 regulations are those 
resulting from statutory requirements and those determined by the 
Secretary to be necessary for administering this program effectively 
and efficiently.
    In assessing the potential costs and benefits--both quantitative 
and qualitative--of these regulations, the Secretary has determined 
that the benefits of the regulations justify the costs.
    The Secretary has also determined that this regulatory action does 
not unduly interfere with State, local, and tribal government in the 
exercise of their governmental functions.

Summary of Potential Costs and Benefits

    The potential costs and benefits of these final regulations are 
discussed elsewhere in this preamble under the following heading: 
Analysis of Comment and Changes.

Paperwork Reduction Act of 1995

    Sections 668.41, 668.46 and 668.49 all 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 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.
    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.
    Section 668.41--Institutions must make available to students and 
potential students information on the completion or graduation rates 
and transfer out rates of the general full-time undergraduate 
population.
    Institutions that award athletically-related student aid must 
provide the potential student athlete, and his or her parents, coaches, 
and high school counselor information on the completion or graduation 
rates and transfer-out rates of student-athletes. Institutions must 
also provide a copy of this information to the Secretary. 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.
    Section 668.46--The information to be collected includes the 
completion or graduation rate, and the transfer-out rate of full-time, 
certificate- or degree-seeking undergraduate students entering the 
institution.
    Section 668.49--The information to be collected includes the number 
of students attending the institution who received athletically related 
student aid, broken down by race and gender; the completion or 
graduation rate and transfer-out rate of full-time, certificate-or 
degree-seeking undergraduate students broken down by race and gender; 
the completion or graduation rate and transfer-out rate of full-time, 
certificate- or degree-seeking undergraduate students who received 
athletically related student aid, broken down by race and gender with 
each sport; and the average graduation or completion rate and transfer-
out rate of full-time, certificate- or degree-seeking undergraduate 
students for the four most recent graduating or completing classes, 
broken down by race and gender.
    Information is to be collected and disclosed once each year for 
institutions covered by Secs. 668.41(a) 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 hours 
for each response for 1,800 respondents for Sec. 668.49. Thus the total 
annual reporting and recordkeeping burden for this collection is 
estimated to be 240,100 hours. These hours include the time needed for 
searching existing data sources and gathering, maintaining, and 
disclosing the data.
    OMB is required to make a decision concerning the collections of 
information contained in these final regulation between 30 and 60 days 
after publication of this document in the Federal Register. Therefore, 
a comment is best assured of having its full effect if OMB receives it 
within 30 days of publication.
    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. 

[[Page 61787]]


Regulatory Flexibility Certification

    The Secretary certifies that these regulations will not have a 
significant economic impact on a substantial number of small entities. 
Small entities affected by these regulations are small institutions of 
higher education.

Assessment of Educational Impact

    In the Notice of Proposed Rulemaking, the Secretary solicited 
comments on whether the proposed regulations would require transmission 
of information that is being gathered by or is available from any other 
agency of the United States.
    Based on the response to the proposed rule, 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 668

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

(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 Perkins Loan Program; 84.063 Federal Pell Grant 
Program; 84.069 Federal State Student Incentive Grant Program; 
84.268 Federal Direct Student Loan Program; and 84.272 National 
Early Intervention Scholarship and Partnership Program.)

    Dated: November 24, 1995.
Richard W. Riley,
Secretary of Education.

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 
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 and its 
transfer-out 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 
completion and graduation rates, transfer-out 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 every year 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.
    Certificate or degree-seeking student means a student enrolled in a 
course of credit who is recognized by the institution as seeking a 
degree or certificate.
    First-time freshman student means an entering freshman who has 
never attended any institution of higher education. Includes a student 
enrolled in the fall term who attended a postsecondary institution for 
the first time in the prior summer term, and a student who entered with 
advanced standing (college credit earned before graduation from high 
school).
    Normal time is the amount of time necessary for a student to 
complete all requirements for a degree or certificate according to the 
institution's catalog. This is typically four years (8 semesters or 
trimesters, or 12 quarters, excluding summer terms) for a bachelor's 
degree in a standard term-based institution, two years (4 semesters or 
trimesters, or 6 quarters, excluding summer terms) for an associate 
degree in a standard term-based institution, and the various scheduled 
times for certificate programs.
    Prospective students means individuals who have contacted an 
eligible institution requesting information concerning admission to 
that institution.
    Undergraduate students, for purposes of this section only, means 
students enrolled in a 4- or 5-year bachelor's degree program, an 
associate's degree program, or a vocational or technical program below 
the baccalaureate.

(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)(1) An institution shall prepare annually information regarding 
the completion or graduation rate and the transfer-out rate of the 
certificate- or degree-seeking, full-time undergraduate students 
entering that institution on or after July 1, 1996.
    (2)(i) An institution that offers a predominant number of programs 
based on semesters, trimesters, or quarters shall base its completion 
or graduation rate and transfer-out rate calculations on the group of 
certificate- or degree-seeking, full-time undergraduate students who 
enter the institution during the fall term.
    (ii) An institution not covered by the provisions of paragraph 
(a)(2)(i) of this section shall base its completion or graduation rate 
and transfer-out rate calculations on the group of certificate- or 
degree-seeking, full-time undergraduate students who enter the 
institution between every July 1st of one year and June 30th of the 
following year.
    (3)(i) For purposes of the completion or graduation rate and 
transfer-out rate calculations required in paragraph (a)(1) of this 
section, an institution shall count as entering students only first-
time freshman students, as defined in Sec. 668.41(c).
    (ii) An institution may also calculate the completion or graduation 
rate of students who transfer into the institution as a separate, 
supplemental rate.
    (4)(i) An institution covered by the provisions of paragraph 
(a)(2)(i) of this section shall count as an entering student a first-
time freshman student who is enrolled as of October 15, or the end of 
the institution's drop-add period.
    (ii) An institution covered by the provisions of paragraph 
(a)(2)(ii) of this section shall count as an entering student a first-
time freshman student who has attended at least one day of class.
    (5)(i) Beginning with the group of students who enter the 
institution between July 1, 1996 and June 30, 1997, an institution 
shall disclose its completion or graduation rate and transfer-out rate 
information no later than the January 1 immediately following the point 
in time that 150% of the normal time for completion or graduation has 
elapsed for all of the students in the group on which the institution 
bases its completion or graduation rate and transfer-out rate 
calculations.
    (ii) An institution shall disclose no later than January 1 each 
year thereafter its completion or graduation rate information for each 
succeeding group 

[[Page 61788]]
of students who completed or graduated within 150% of the normal time 
for completion or graduation from their programs as of June 30 of the 
preceding year.
    (b) In calculating the completion or graduation rate under 
paragraph (a) of this section, an institution shall count as completed 
or graduated--
    (1) Students who have completed or graduated within 150% of the 
normal time for completion or graduation from their program;
    (2) Students who have completed a transfer program as described in 
Sec. 668.8(b)(1)(ii) within 150% of normal time for completion from 
that program may be counted as completers.
    (c)(1) In calculating the transfer-out rate under section paragraph 
(a) of this section, an institution shall count as students who have 
transferred out those 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;
    (2) An institution shall document that its program provided 
substantial preparation to a student by obtaining a copy of any of the 
following:
    (i) Certification letter from the receiving institution stating 
that a student is enrolled in that institution;
    (ii) Electronic certification from the receiving institution 
stating that a student is enrolled in that institution;
    (iii) Confirmation of enrollment data from a legally-authorized 
statewide or regional tracking system (or shared information from those 
systems) confirming that a student has enrolled in another institution;
    (iv) Institutional data exchange information confirming that a 
student as enrolled in another institution; or
    (v) An equivalent level of documentation.
    (d) For the purpose of calculating a completion or graduation rate 
and a transfer-out rate, an institution may exclude from the 
calculation of its completion or graduation rate and its transfer-out 
rate students who--
    (1) Have left school to serve in the Armed Forces;
    (2) Have left school to serve on official church missions;
    (3) Have left school to serve with a foreign aid service of the 
Federal Government, such as the Peace Corps; or
    (4) Are deceased, or totally and permanently disabled.
    (e)(1) The Secretary grants a waiver of the requirements of this 
section to any institution that is a member of an athletic association 
or conference that has voluntarily published completion or graduation 
rate data, or has agreed to publish data, that the Secretary determines 
are substantially comparable to the data required by this section.
    (2) An institution that receives a waiver of the requirements of 
this section must still comply with the requirements of 
Secs. 668.41(a)(3) and 668.41(b) of this subpart.
    (3) An institution, or athletic association or conference applying 
on behalf of an institution that seeks a waiver under paragraph (e)(1) 
of this section 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 every year 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 and transfer-out rate of 
all the entering, certificate- or degree-seeking, full-time, 
undergraduate students described in Sec. 668.46(a) (1), (2), (3) and 
(4).
    (iv) The completion or graduation rate and transfer-out rate of the 
entering students described in Sec. 668.46(a) (1), (2), (3)and (4) who 
received athletically-related student aid, categorized by race and 
gender within each sport.
    (v) The average completion or graduation rate and transfer-out rate 
for the four most recent completing or graduating classes of entering 
students described in Sec. 668.46(a) (2), (3), and (4) categorized by 
race and gender. If an institution has completion or graduation rates 
and transfer-out 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.
    (3) If a category of students identified in paragraph (a)(1)(iv) 
above contains five or fewer students, the institution need not 
disclose information on that category of students.
    (b) The provisions of Sec. 668.46 (a), (b) and (c) apply for 
purposes of calculating the completion or graduation rates and 
transfer-out 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--
    (1) The graduation or completion rate of the students who 
transferred into the institution; and
    (2) The number of students who transferred out of the institution.
    (d) Section 668.46(d) applies for purposes of this section.

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

[FR Doc. 95-29181 Filed 11-30-95; 8:45 am]
BILLING CODE 4000-01-P