[Federal Register Volume 64, Number 136 (Friday, July 16, 1999)]
[Proposed Rules]
[Pages 38504-38508]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18175]



[[Page 38503]]

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Part II

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Department of Education





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34 CFR Part 668



Student Assistance General Provisions; Proposed Rule

  Federal Register / Vol. 64, No. 136 / Friday, July 16, 1999 / 
Proposed Rules  

[[Page 38504]]



DEPARTMENT OF EDUCATION

34 CFR Part 668

RIN 1840-AC73


Student Assistance General Provisions

AGENCY: Department of Education.

ACTION: Notice of proposed rulemaking.

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

SUMMARY: The Secretary proposes to amend the regulations governing 
student eligibility for the student financial assistance programs 
authorized under Title IV of the Higher Education Act of 1965, as 
amended (Title IV, HEA programs). These programs include the Federal 
Pell Grant Program, the campus-based programs (Federal Perkins Loan, 
Federal Work-Study (FWS), and Federal Supplemental Educational 
Opportunity Grant (FSEOG) Programs), the William D. Ford Federal Direct 
Loan (Direct Loan) Program, the Federal Family Education Loan (FFEL) 
Program, and the Leveraging Educational Assistance Partnership (LEAP) 
Program (formerly called the State Student Incentive Grant (SSIG) 
Program). The proposed regulations implement changes made to the Higher 
Education Act of 1965, as amended (HEA), by the Higher Education 
Amendments of 1998 (1998 Amendments). Most of the proposed changes 
simply conform current regulatory provisions to the statutory changes.

DATES: We must receive your comments on or before September 14, 1999.

ADDRESSES: Address all comments about these proposed regulations to 
Lloyd Horwich, U.S. Department of Education, P.O. Box 23272, 
Washington, DC 20202-3272. If you prefer to send your comments through 
the Internet, use the following address: [email protected].

FOR FURTHER INFORMATION CONTACT: Lloyd Horwich. Telephone (202) 708-
8242. If you use a telecommunications device for the deaf (TDD), you 
may call the Federal Information Relay Service (FIRS) at 1-800-877-
8339.
    Individuals with disabilities may obtain this document in an 
alternate format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed in the preceding 
paragraph.

SUPPLEMENTARY INFORMATION:

Invitation to Comment

    We invite you to submit comments regarding these proposed 
regulations. To ensure that your comments have maximum effect in 
developing the final regulations, we urge you to identify clearly the 
specific section or sections of the proposed regulations that each of 
your comments addresses and to arrange your comments in the same order 
as the proposed regulations.
    We invite you to assist us in complying with the specific 
requirements of Executive Order 12866 and its overall requirement of 
reducing regulatory burden that might result from these proposed 
regulations. Please let us know of any further opportunities we should 
take to reduce potential costs or increase potential benefits while 
preserving the effective and efficient administration of the program.
    During and after the comment period, you may inspect all public 
comments about these proposed regulations at Regional Office Building 
3, 7th and D Streets, SW, Room 3045, Washington, DC, between 8:30 a.m. 
and 4:00 p.m., Eastern time, Monday through Friday (excluding Federal 
holidays).

Assistance to Individuals With Disabilities in Reviewing the Rulemaking 
Record

    On request, we will supply an appropriate aid, such as a reader or 
print magnifier, to an individual with a disability who needs 
assistance to review the comments or other documents in the public 
rulemaking record for these proposed regulations. If you want to 
schedule an appointment for this type of aid, you can call (202) 205-
8113 or (202) 260-9895. If you use a TDD, you may call the Federal 
Information Relay Service at 1-800-877-8339.

Summary of Proposed Changes

    The Secretary proposes to revise the current Student Assistance 
General Provisions, 34 CFR part 668, concerning student eligibility for 
financial assistance programs authorized under Title IV, HEA. The 
revisions implement changes made by the 1998 Amendments (Public Law 
105-244, enacted October 7, 1998).

Negotiated Rulemaking Process

    Section 492 of the HEA requires that, before publishing any 
proposed regulations to implement programs under Title IV of the Act, 
the Secretary obtain public involvement in the development of the 
proposed regulations. After obtaining advice and recommendations, the 
Secretary must conduct a negotiated rulemaking process to develop the 
proposed regulations. All published proposed regulations must conform 
to agreements resulting from the negotiated rulemaking process unless 
the Secretary reopens the negotiated rulemaking process or provides a 
written explanation to the participants in that process why the 
Secretary has decided to depart from the agreements.
    To obtain public involvement in the development of the proposed 
regulations, we published a notice in the Federal Register (63 FR 
59922, November 6, 1998) requesting advice and recommendations from 
interested parties concerning what regulations were necessary to 
implement Title IV of the HEA. We also invited advice and 
recommendations concerning which regulated issues should be subjected 
to a negotiated rulemaking process. We further requested advice and 
recommendations concerning ways to prioritize the numerous issues in 
Title IV, in order to meet statutory deadlines. Additionally, we 
requested advice and recommendations concerning how to conduct the 
negotiated rulemaking process, given the time available and the number 
of regulations that needed to be developed.
    In addition to soliciting written comments, we held three public 
hearings and several informal meetings to give interested parties an 
opportunity to share advice and recommendations with the Department. 
The hearings were held in Washington, DC, Chicago, and Los Angeles, and 
we posted transcripts of those hearings to the Department's Information 
for Financial Aid Professionals website (http://ifap.ed.gov).
    We then published a second notice in the Federal Register (63 FR 
71206, December 23, 1998) to announce the Department's intention to 
establish four negotiated rulemaking committees to draft proposed 
regulations implementing Title IV of the HEA. The notice announced the 
organizations or groups believed to represent the interests that should 
participate in the negotiated rulemaking process and announced that the 
Department would select participants for the process from nominees of 
those organizations or groups. We requested nominations for additional 
participants from anyone who believed that the organizations or groups 
listed did not adequately represent the list of interests outlined in 
section 492 of the HEA. Once the four committees were established, they 
met to develop proposed regulations over the course of several months, 
beginning in January.
    The proposed regulations contained in this NPRM reflect the final 
consensus of Committee III, which was made up of the following members:

Accrediting Commission of Career Schools and Colleges of Technology
American Association of Collegiate Registrars and Admissions 
Officers

[[Page 38505]]

American Association of Community Colleges
American Association of Cosmetology Schools
American Association of State Colleges and Universities
American Council on Education
Association of American Universities
Career College Association
Coalition of Higher Education Assistance Organizations
Education Finance Council
Legal Services Counsel/Legal Aid (a coalition)
National Association of College and University Business Officers
National Association for Equal Opportunity in Higher Education
National Association of Graduate/Professional Students
National Association of Independent Colleges and Universities
National Association of State Student Grant and Aid Programs/
National Council of Higher Education Loan Programs (a coalition)
National Association of State Universities and Land-Grant Colleges
National Association of Student Financial Aid Administrators
National Direct Student Loan Coalition
The College Board
The College Fund/United Negro College Fund
United States Department of Education
United States Student Association
U.S. Public Interest Research Group
    As stated in the committee protocols, consensus means that there 
must be no dissent by any member in order for the committee to be 
considered to have reached agreement. Consensus was reached on all of 
the proposed regulations in this document.

Section 668.32 Student Eligibility--General

Home-Schooled Students

    Section 484(d) of the HEA, as amended by the 1998 Amendments, 
allows a student who completes a secondary school education in a home 
school that is treated as a home school or private school under State 
law to be eligible to receive Title IV, HEA program funds. The 
Secretary proposes to amend Sec. 668.32(e) to reflect that change.
    The negotiating committee discussed the language of the 1998 
Amendments, and how different States oversee home schools, and 
concluded that the statute would be implemented best by not adding any 
additional eligibility requirements for a home-schooled student beyond 
his or her State's home-school completion requirements.
    Under proposed Sec. 668.32(e)(4), to be eligible to receive Title 
IV, HEA program funds, a home-schooled student must satisfy the home-
school completion requirements of the State in which the student was 
home-schooled. Thus, if a State requires a home-schooled student to 
obtain a secondary school completion credential for home-school study 
that is more than an attestation that the student was exempt from the 
State's mandatory school attendance law, the student must obtain such a 
credential to be eligible for Title IV, HEA program funds. If the State 
does not require the student to obtain such a credential, the student 
will satisfy Sec. 668.32(e)(4) based on the exemption from the State's 
mandatory school attendance law.
    For purposes of Title IV, HEA program aid, the Secretary will allow 
a home-schooled student to self-certify his or her eligibility in the 
same way a high school graduate or GED recipient may.
Statement of Educational Purpose
    The proposed regulations amend Sec. 668.32(h), which governs a 
student's filing of his or her Statement of Educational Purpose, to 
comply with changes made to the HEA by the 1998 Amendments. Previously, 
a student who received a loan under the FFEL program had to file the 
Statement with the lender. Under proposed Sec. 668.32(h), a student 
simply would be required to file the Statement with the Secretary.
Technical Corrections and Cross-References
    The Secretary proposes to amend Sec. 668.32(k)(7) to reflect the 
name-change of the SSIG program to the LEAP program. The Secretary 
proposes to add as Sec. 668.32(l) a cross-reference that reflects the 
student eligibility criterion concerning drug convictions added by the 
1998 Amendments and implemented by the proposed addition of 
Sec. 668.40.

Section 668.38  Enrollment in Telecommunications and Correspondence 
Courses

    Prior to the 1998 Amendments, section 484(l) of the HEA provided 
that a student enrolled in a telecommunications course would not be 
considered to be enrolled in a correspondence course under certain 
circumstances, including that the student was enrolled in a program 
that led to an associate, bachelor, or graduate degree. The 1998 
Amendments amended section 484(l) by adding another category of 
students to be similarly treated: students who are enrolled in programs 
of one academic year or longer that lead to a certificate. The proposed 
regulations amend Sec. 668.38(b) to reflect that change.
    Thus, under proposed Sec. 668.38(b), the Secretary does not 
consider a student enrolled in a telecommunications course at an 
institution of higher education (as defined in Sec. 668.38(b)(2)) to be 
enrolled in a correspondence course, if the student is enrolled in a 
program described in the preceding paragraph, and the number of 
telecommunications and correspondence courses offered by the 
institution is less than half the total number of courses offered by 
the institution.
    The 1998 Amendments also restricted the type of institution at 
which telecommunications courses can be considered not to be 
correspondence courses. Proposed Sec. 668.38(b)(2) reflects that 
restriction. It defines an institution of higher education as one which 
is not described in section 521(4)(C) of the Carl D. Perkins Vocational 
and Applied Technology Education Act, and at which at least half of the 
programs of study lead to an associate, bachelor, or graduate degree. 
If the student is enrolled in telecommunications courses at an 
institution other than an institution of higher education as defined by 
proposed Sec. 668.38(b)(2), those courses are considered correspondence 
courses.

Section 668.40  Suspension of Eligibility for Drug-Related Offenses

    The 1998 Amendments added section 484(r) to the HEA. Under that 
subsection, a student who has been convicted under Federal or State law 
of possession or sale of a controlled substance, regardless of when the 
conviction occurred, is ineligible for Title IV, HEA program funds for 
the period specified in that subsection.
    The periods of ineligibility, which begin as of the date of the 
conviction, are as follows:
    If convicted of an offense involving the possession of a controlled 
substance, the ineligibility period is:

First offense............................  1 year.
------------------------------------------------------------------------
Second offense...........................  2 years.
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Third offense............................  Indefinite.
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    If convicted of an offense involving the sale of a controlled 
substance, the ineligibility period is:

First offense............................  2 year.
------------------------------------------------------------------------
Second offense...........................  Indefinite.
------------------------------------------------------------------------

    The Secretary proposes to add Sec. 668.40(a) and (b) to implement 
those statutory provisions. Note that for purposes of determining a 
student's

[[Page 38506]]

eligibility for Title IV assistance, a conviction means a conviction 
that is on a student's record at the time the student's eligibility is 
being determined. Therefore, a conviction that was reversed, set aside, 
or removed from the student's record is not relevant.
    Because the statutory ineligibility periods begin on the date of 
conviction, if a student has been convicted of both possession and sale 
of a controlled substance and the two ineligibility periods overlap, 
the periods run concurrently for the time during which they overlap. 
The start of the ineligibility period for the later conviction is not 
postponed until the ineligibility period for the earlier conviction 
ends. For example, if a student is convicted on July 1, 2000 for the 
first time for possession of a controlled substance and convicted on 
January 1, 2001 for the first time for sale of a controlled substance, 
the student will regain eligibility on January 1, 2003.
    Section 484(r) of the HEA further provides that a student can 
regain eligibility, regardless of the number or type of convictions on 
the student's record, by successfully completing a drug rehabilitation 
program that complies with criteria established by the Secretary and 
that includes two unannounced drug tests. The proposed regulations 
establish criteria for an acceptable drug rehabilitation program in 
Sec. 668.40(d)(2). Under the proposed criteria, a drug rehabilitation 
program must (1) have received or be qualified to receive funds 
directly or indirectly under a Federal, State, or local government 
program, (2) be administered or recognized by a Federal, State, or 
local government agency or court, (3) have received or be qualified to 
receive payment directly or indirectly from a State-licensed insurance 
company, or (4) be administered or recognized by a State-licensed 
hospital, health clinic or medical doctor. The Secretary believes, and 
the rest of Committee III concurs, that these criteria would ensure the 
availability of a wide-range of opportunities for students to regain 
their eligibility, and that an acceptable drug rehabilitation program 
would have to be approved by an entity qualified to make such an 
assessment.
    Having reviewed the language of the new statutory provision and its 
legislative history, the Secretary believes, and the rest of Committee 
III concurs, that Congress intended the drug rehabilitation relief 
provision to be available at the same time students are subject to the 
loss of eligibility. Members of Congress specifically indicated in 
statements on the floor of Congress that students should be able to 
regain Title IV, HEA program eligibility if they complete a 
rehabilitation program. Since the HEA requires that acceptable 
rehabilitation programs comply with criteria prescribed by the 
Secretary in regulations and such regulations (as proposed in this 
NPRM) will not be effective until July 1, 2000, this new student 
eligibility provision will not be implemented until July 1, 2000. Until 
that time no student will be determined to be ineligible for Title IV 
assistance under the new provision.
    Nonetheless, a student's actions between now and the effective date 
of the regulations may affect eligibility. For example, a first 
conviction for possession of a controlled substance on February 1, 
2000, will make a student ineligible for Title IV assistance from July 
1, 2000--the effective date of the regulations--through January 31, 
2001--one year from the date of the conviction. If the conviction were 
the student's second, the student would not regain eligibility until 
February 1, 2002. Because of the serious consequences to some students 
of the new provision and because there are certain actions that they 
could take to mitigate those consequences, the Secretary strongly 
encourages, but is not requiring, institutions to inform their students 
of this provision and to help students understand how their actions 
might affect their future eligibility. For example, students whose 
Title IV assistance otherwise would be jeopardized under the new law 
can avoid a loss of eligibility by completing an acceptable drug 
rehabilitation program before July 1, 2000.
    The Secretary will not require institutions to question their 
Federal aid applicants about drug-related matters. The Secretary 
intends to use the 2000-2001 aid applicantion processes--Free 
Applications for Federal Student Aid (FAFSA) and Student Aid Report 
(SAR)--to collect needed informatiom from applicants and to report the 
results to schools on Institutional Student Information Records 
(ISIRs). The Secretary has been working with representatives from the 
higher education community in planning these new and sensitive 
processes, and will keep the community updated as these plans are 
developed.

Executive Order 12866

1. Potential Costs and Benefits

    Under Executive Order 12866, we have assessed the potential costs 
and benefits of this regulatory action.
    The potential costs associated with the proposed regulations are 
those resulting from statutory requirements and those we have 
determined as necessary for administering this program effectively and 
efficiently.
    In assessing the potential costs and benefits of this regulatory 
action--both quantitative and qualitative--we have determined that the 
benefits would justify the costs.
    We have also determined that this regulatory action would not 
unduly interfere with State, local, and tribal governments in the 
exercise of their governmental functions.
    We note that, as these proposed regulations were subject to 
negotiated rulemaking, the costs and benefits of the various 
requirements were discussed thoroughly by negotiators. The resultant 
consensus reached on a particular requirement generally reflected 
agreement on the best possible approach to that requirement in terms of 
cost and benefit.
    To assist the Department in complying with the specific 
requirements of Executive Order 12866, the Secretary invites comments 
on whether there may be further opportunities to reduce any potential 
costs or to increase any potential benefits resulting from these 
proposed regulations without impeding the effective and efficient 
administration of the Title IV, HEA programs.
    Elsewhere in this preamble, we discuss the potential costs and 
benefits of these proposed regulations under the heading Regulatory 
Flexibility Act Certification.

2. Clarity of the Regulations

    Executive Order 12866 and the President's Memorandum of June 1, 
1998 on ``Plain Language in Government Writing'' require each agency to 
write regulations that are easy to understand.
    The Secretary invites comments on how to make these proposed 
regulations easier to understand, including answers to questions such 
as the following:
     Are the requirements in the proposed regulations clearly 
stated?
     Do the proposed regulations contain technical terms or 
other wording that interferes with their clarity?
     Does the format of the proposed regulations (grouping and 
order of sections, use of headings, paragraphing, etc.) aid or reduce 
their clarity?
     Would the proposed regulations be easier to understand if 
we divided them into more (but shorter) sections? (A ``section'' is 
preceded by the symbol ``Sec. '' and a numbered heading; for example, 
Sec. 668.32, Student eligibility--general.)

[[Page 38507]]

     Could the description of the proposed regulations in the 
SUPPLEMENTARY INFORMATION section of this preamble be more helpful in 
making the proposed regulations easier to understand? If so, how?
     What else could we do to make the proposed regulations 
easier to understand?
    Send any comments that concern how the Department could make these 
proposed regulations easier to understand to the person listed in the 
ADDRESSES section of the preamble.

Regulatory Flexibility Act Certification

    The Secretary certifies that these proposed regulations would not 
have a significant economic impact on a substantial number of small 
entities.
    Entities affected by these regulations are institutions of higher 
education that participate in the Title IV, HEA programs. These 
institutions are defined as small entities, according to the U.S. Small 
Business Administration, if they are: for-profit or nonprofit entities 
with total revenue of $5,000,000 or less; or entities controlled by 
governmental entities with populations of 50,000 or less. These 
proposed regulations would not impose a significant economic impact on 
a substantial number of small entities. The regulations would benefit 
both small and large institutions, without requiring significant 
changes to current institutional system operations, through: the 
further simplification of the filing of a student's Statement of 
Educational Purpose; and the expansion of Title IV eligibility 
provisions regarding home-schooled students and students enrolled in 
telecommunications and correspondence courses. These proposed 
regulations also implement the new statutory criterion for Title IV 
eligibility concerning convictions for possession or sale of a 
controlled substance. This provision was discussed extensively as part 
of the negotiated rulemaking process, and the Secretary believes that 
the proposal to implement this change through the use of the student 
aid application processes is the best approach and would prevent 
unnecessary administrative burden on institutions.
    The Secretary invites comments from small institutions as to 
whether the proposed changes would have a significant economic impact 
on them.

Paperwork Reduction Act of 1995

    These proposed regulations do not contain any information 
collection requirements.

Intergovernmental Review

    This program is not subject to Executive Order 12372 and the 
regulations in 34 CFR Part 79.

Assessment of Educational Impact

    The Secretary particularly requests comments on whether these 
proposed regulations would require transmission of information that any 
other agency or authority of the United States gathers or makes 
available.

Electronic Access to This Document

    You may view this document as published in the Federal Register, in 
text or Adobe Portable Document Format (PDF), on the Internet at the 
following sites:

http://ocfo.ed.gov/fedreg.htm
http://ifap.ed.gov/csb__html/fedlreg.htm
http://www.ed.gov/legislation/HEA/rulemaking/

 To use the PDF you must have the Adobe Acrobat Reader Program with 
Search, which is available free at the previous sites. If you have 
questions about using the PDF, call the U.S. Government Printing Office 
(GPO), toll free, at 1-888-293-6498; or in the Washington, D.C., area 
at (202) 512-1530.

    Note: The official version of this document is the document 
published in the Federal Register. Free Internet access to the 
official edition of the Federal Register and the Code of Federal 
Regulations is available on GPO Access at: http://
www.access.gpo.gov/nara/index.html.

List of Subjects in 34 CFR Part 668

    Administrative practice and procedure, Colleges and universities, 
Student aid, Reporting and recordkeeping requirements.

    Dated: July 8, 1999.
Richard W. Riley,
Secretary of Education.

(Catalog of Federal Domestic Assistance numbers: 84.007 Federal 
Supplemental Educational Opportunity Grant Program; 84.032 
Consolidation Program; 84.032 Federal Stafford Loan Program; 84.032 
Federal PLUS Program; 84.032 Federal Supplemental Loans for Students 
Program; 84.033 Federal Work-Study Program; 84.038 Federal Perkins 
Loan Program; 84.063 Federal Pell Grant Program; 84.069 LEAP; and 
84.268 William D. Ford Federal Direct Loan Programs)

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

PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS

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

    Authority: 20 U.S.C. 1001, 1002, 1003, 1085, 1088, 1091, 1092, 
1094, 1099c, and 1099c-1, unless otherwise noted.

    2. Section 668.32 is amended as follows:
    A. In paragraph (e)(2), by removing ``or'';
    B. In paragraph (e)(3), by removing the period at the end of the 
paragraph and adding in its place a semi-colon, and adding ``or'' after 
the semi-colon;
    C. By adding a new paragraph (e)(4) to read as follows;
    D. In paragraph (h), by removing ``or in the case of a loan made 
under the FFEL Program, with the lender'';
    E. In paragraph (j), by removing the ``and'' after the semi-colon;
    F. In paragraph (k)(7), by removing ``SSIG'' and adding in its 
place, ``LEAP,'' by removing the period at the end of the paragraph and 
adding in its place a semi-colon, and adding ``and'' after the semi-
colon; and
    G. By adding paragraph (l) to read as follows.


Sec. 668.32  Student eligibility--general.

* * * * *
    (e) * * *
    (4) Was home-schooled, and either--
    (i) Obtained a secondary school completion credential for home 
school (other than a high school diploma or its recognized equivalent) 
provided for under State law; or
    (ii) If State law does not require a home-schooled student to 
obtain the credential described in paragraph (e)(4)(i) of this section, 
has completed a secondary school education in a home school setting 
that qualifies as an exemption from compulsory attendance requirements 
under State law.
* * * * *
    (l) Is not ineligible under 34 CFR 668.40.
    3. Section 668.38 is amended by revising paragraph (b) to read as 
follows:


Sec. 668.38  Enrollment in telecommunications and correspondence 
courses.

* * * * *
    (b) (1) For purposes of this section, a student enrolled in a 
telecommunications course at an institution of higher education is not 
enrolled in a correspondence course, if--
    (i) The student is enrolled in a program that leads to a 
certificate for a program of study of 1 year or longer, or an 
associate, bachelor, or graduate degree; and
    (ii) The number of telecommunications and correspondence courses 
the institution offered during its latest completed

[[Page 38508]]

award year was fewer than 50 percent of all the courses the institution 
offered during that same year.
    (2) For purposes of paragraph (b)(1) of this section, an 
institution of higher education is one--
    (i) That is not an institute or school described in section 
521(4)(C) of the Carl D. Perkins Vocational and Applied Technology Act; 
and
    (ii) At which at least 50 percent of the programs of study offered 
by the institution during its latest completed award year led to an 
associate, bachelor, or graduate degree.
    (3) For purposes of paragraph (b)(1)(ii) of this section, the 
institution must calculate the number of courses using the provisions 
contained in 34 CFR 600.7(b)(2).
    4. Section 668.40 is added to read as follows:


668.40  Conviction for possession or sale of illegal drugs.

    (a)(1) A student is ineligible to receive Title IV, HEA program 
funds if the student has been convicted of an offense involving the 
possession or sale of illegal drugs for the period described in 
paragraph (b) of this section. However, the student may regain 
eligibility before that period expires under the conditions described 
in paragraph (c) of this section.
    (2) For purposes of this section, a conviction means only a 
conviction that is on a student's record at the time the student's 
eligibility is being determined. A conviction that was reversed, set 
aside, or removed from the student's record is not relevant for 
purposes of this section.
    (3) For purposes of this section, an illegal drug is a controlled 
substance as defined by section 102(6) of the Controlled Substances Act 
(21 U.S.C. 801(6)), and does not include alcohol or tobacco.
    (b)(1) Possession. Except as provided in paragraph (c) of this 
section, if a student has been convicted--
    (i) Only one time for possession of illegal drugs, the student is 
ineligible to receive Title IV, HEA program funds for one year after 
the date of conviction;
    (ii) Two times for possession of illegal drugs, the student is 
ineligible to receive Title IV, HEA program funds for two years after 
the date of the second conviction; or
    (iii) Three or more times for possession of illegal drugs, the 
student is ineligible to receive Title IV, HEA program funds for an 
indefinite period after the date of the third conviction.
    (2) Sale. Except as provided in paragraph (c) of this section, if a 
student has been convicted--
    (i) Only one time for sale of illegal drugs, the student is 
ineligible to receive Title IV, HEA program funds for two years after 
the date of conviction; or
    (ii) Two or more times for sale of illegal drugs, the student is 
ineligible to receive Title IV, HEA program funds for an indefinite 
period after the date of the second conviction.
    (c) If a student successfully completes a drug rehabilitation 
program described in paragraph (d) of this section after the student's 
most recent drug conviction, the student regains eligibility on the 
date the student successfully completes the program.
    (d) A drug rehabilitation program referred to in paragraph (c) of 
this section is one which--
    (1) Includes at least two unannounced drug tests; and
    (2)(i) Has received or is qualified to receive funds directly or 
indirectly under a Federal, State, or local government program;
    (ii) Is administered or recognized by a Federal, State, or local 
government agency or court;
    (iii) Has received or is qualified to receive payment directly or 
indirectly from a State-licensed insurance company; or
    (iv) Is administered or recognized by a State-licensed hospital, 
health clinic or medical doctor.

(Authority: 20 U.S.C. 1091(r))

[FR Doc. 99-18175 Filed 7-15-99; 8:45 am]
BILLING CODE 4000-01-P