[Federal Register Volume 65, Number 8 (Wednesday, January 12, 2000)]
[Rules and Regulations]
[Pages 1780-1787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-646]


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DEPARTMENT OF EDUCATION

34 CFR Part 611

RIN 1840-AC65


Teacher Quality Enhancement Grants Program

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Final regulations.

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SUMMARY: The Assistant Secretary for Postsecondary Education issues 
regulations to implement a requirement of section 204(e) of the Higher 
Education Act (HEA), as amended by the Higher Education Amendments of 
1998. Section 204(e) requires that students in teacher preparation 
programs funded under the Teacher Recruitment Program must repay 
scholarships provided with program funds if they do not teach in high-
need local educational agencies for the period of time for which they 
receive scholarship assistance. These regulations also would apply to 
any scholarships awarded to students in teacher preparation programs 
funded under the State and Partnership Programs authorized in sections 
202 and 203 of the HEA.

DATES: These regulations are effective January 12, 2000.

FOR FURTHER INFORMATION CONTACT: Dr. Louis Venuto, Higher Education 
Programs, Office of Postsecondary Education, Office of Policy, 
Planning, and Innovation, 1990 K Street, NW., Washington, DC 20006-
8525: Telephone: (202) 502-7763. Inquiries also may be sent by e-mail 
to: Louis__V[email protected] or by FAX to: (202) 502-7699. 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:

Background

    On October 8, 1998, the President signed into law the Higher 
Education Amendments of 1998 (Pub. L. 105-244). Title II of this law 
addresses the Nation's need to ensure that new teachers enter the 
classroom prepared to teach all students to high standards by 
authorizing, as Title II of the Higher Education Act (HEA), Teacher 
Quality Enhancement Grants for States and Partnerships.
    The new Teacher Quality Enhancement Grants Program consists of 
three different competitive grant programs. Together, the State Grants 
Program, the Partnership Grants for Improving Teacher Preparation 
Program, and the Teacher Recruitment Program, these programs are 
designed to increase student achievement by supporting comprehensive 
approaches to improving teacher quality.
    One key aspect of the Teacher Recruitment Grants Program is the 
availability of scholarships to students who are enrolled in teacher 
preparation programs at the grantee institutions of higher education 
(IHEs) (or at IHEs working with State Teacher Recruitment Program 
grantees), and who agree to teach in high-need school districts. As 
provided in section 204(e) of the HEA, in exchange for scholarship 
support recipients must agree to incur a contractual obligation, under 
terms the Department establishes, to teach in high-need LEAs for a 
period equivalent to the period for which they receive the scholarship.
    On November 5, 1999, the Secretary published a notice of proposed 
rulemaking (NPRM) for this part in the Federal Register (64 FR 60632). 
In the preamble to the NPRM, the Secretary discussed on pages 60632 
through 60638 the proposed terms and conditions of this contractual 
agreement. The major issues addressed by the NPRM included--
     Whether all with Teacher Recruitment Program scholarship 
recipients should have to meet their service obligations by teaching in 
high-need schools of high-need LEAs;
     The definition of a ``high-need LEA'' and a ``high-need 
school'' in which scholarship recipients would need to teach in order 
to avoid responsibility for repaying their scholarships;
     How, in order to retain the financial assistance as a 
scholarship, the Department will calculate the period of time in which 
the scholarship recipient must teach in a high-need school of a high-
need LEA;
     Conditions under which the Department may defer a 
scholarship recipient's service obligation;
     The amount of the scholarship recipient's indebtedness to 
the Federal government for failure to meet the service obligation, 
terms of repayment, and any limited circumstances under which the 
Department would discharge this indebtedness;
     The content of the scholarship agreement that the 
scholarship recipient would execute;

[[Page 1781]]

     The respective responsibilities of the scholarship 
recipient, teacher preparation program in which the recipient is 
enrolled, and the LEA in which he or she is later employed, to provide 
periodically to the Department basic employment and other information 
on the recipient until the Department has determined that the recipient 
has fulfilled the service obligation or has repaid the scholarship, 
interest, and any costs of collection; and
     Whether the rules governing the receipt of scholarships 
provided under the Teacher Recruitment Program should also apply to the 
receipt of scholarships that grantees provide under the State and 
Partnership Programs.
    In response to public comment received on the NPRM, these final 
regulations have been renumbered to enhance clarity. They also contain 
three changes to the proposed regulations announced in the NPRM. These 
regulations now--
    (1) Clarify that a middle or secondary school may be considered 
``high need'' if it either has at least 50 percent of its enrolled 
students eligible for free and reduced lunch subsidies, or is otherwise 
eligible to operate as a schoolwide program under Title I of the 
Elementary and Secondary Education Act (ESEA) (Sec. 611.1);
    (2) Require program grantees offering teacher recruitment 
scholarships, in collaboration with the high-need LEA(s) participating 
in their projects, to ensure that scholarship recipients are placed, to 
the extent possible, in the highest-need schools of those LEAs 
(Sec. 611.52(c)); and
    (3) Provide two ways in which a scholarship recipient may meet his 
or her responsibility to ensure that the Department has timely 
information confirming that the recipient is meeting the service 
obligation. The first, as proposed in the NPRM, is by having the LEA in 
which he or she teaches submit the needed employment information to the 
Department in the time periods the regulation specifies. The second is 
by submitting to the Department, within the required time periods, a 
notarized statement that the recipient has asked the LEA to provide 
this information to the Department along with a copy of the information 
the LEA has been asked to provide. Where a scholarship recipient 
chooses the second option, the Department's determination that he or 
she is meeting the service obligation is only provisional; the 
recipient maintains a responsibility to work to have the LEA submit the 
needed information as soon as possible (Secs. 611.46(a) and 611.47(a)).
    Corresponding changes also have been made to the proposed terms and 
conditions of the scholarship agreement and LEA reporting form, which 
were included in the November 5, 1999 notice as Appendices A and B to 
the NPRM, respectively. In all other respects, these regulations are 
the same as those published in the NPRM.

Analysis of Comments and Changes

    In response to the Assistant Secretary's invitation in the NPRM, we 
received eight comments. An analysis of these comments and of the 
changes in the regulations since publication of the NPRM is published 
in an appendix at the end of these final regulations. Generally, we do 
not address technical and other minor changes--and suggested changes 
the law does not authorize the Secretary to make.

Goals 2000: Educate America Act

    The Goals 2000: Educate America Act (Goals 2000) focuses the 
Nation's education reform efforts on the eight National Education Goals 
and provides a framework for meeting them. Goals 2000 promotes new 
partnerships to strengthen schools and expands the Department's 
capacities for helping communities to exchange ideas and obtain 
information needed to achieve the goals.
    These proposed regulations would address the National Education 
Goal that the Nation's teaching force will have the content knowledge 
and teaching skills needed to instruct all American students for the 
next century.

Paperwork Reduction Act of 1995

    The Paperwork Reduction Act of 1995 does not require you to respond 
to a collection of information unless it displays a valid OMB control 
number. We display the valid OMB control numbers assigned to the 
collections of information in these final regulations at the end of the 
affected sections of the regulations.

Intergovernmental Review

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

Assessment of Educational Impact

    In the NPRM we requested comments on whether the proposed 
regulations would require transmission of information that any other 
agency or authority of the United States gathers or makes available.
    Based on the response to the NPRM and on our review, we have 
determined that these final regulations do not require transmission of 
information that any other agency or authority of the United States 
gathers or makes available.

Waiver of Delayed Effective Date

    5 U.S.C. 553(d) provides that the effective date of regulations 
generally must be at least 30 days after their publication in the 
Federal Register, but permits the Secretary to establish an earlier 
effective date for good cause found and published with the regulations. 
The Secretary makes thee regulations effective as of the date of 
publication because program grantees need them immediately in order to 
award scholarships with grant funds for the academic term beginning 
January 2000.

Electronic Access to This Document

    You may review this document, as well as all other Department of 
Education documents published in the Federal Register, in text or 
portable document format (PDF) on the World Wide Web at either of the 
following sites: http://ocfo.ed.gov/fedreg.htm, http://www.ed.gov/
news.html. To use the PDF you must have the Adobe Acrobat Reader 
Program with Search, which is available free at either of these sites. 
If you have questions about using the PDF, call the U.S. Government 
Printing Office at (202) 512-1530 or, toll free, at 1-888-293-6498.

    Note: The official version of the 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

(Catalog of Federal Domestic Assistance Number 84.336: Teacher 
Quality Enhancement Grants Program)

List of Subjects in 34 CFR part 611

    Colleges and universities, Elementary and secondary education, 
Grant programs--education.


[[Page 1782]]


    Dated: January 6, 2000.
A. Lee Fritschler,
Assistant Secretary for Postsecondary Education.

    For the reasons stated in the preamble, the Secretary amends 
Chapter VI of title 34 of the Code of Federal Regulations by revising 
part 611 to read as follows:

PART 611--TEACHER QUALITY ENHANCEMENT GRANTS PROGRAM

Subpart A--General Provisions

Sec.
611.1  What definitions apply to the Teacher Quality Enhancement 
Grants Program?

Subpart B [Reserved]

Subpart C [Reserved]

Subpart D [Reserved]

Subpart E--Scholarships

611.41  Under what circumstances may an individual receive a 
scholarship of program funds to attend a teacher training program?
611.42  How does the Secretary calculate the period of the 
scholarship recipient's service obligation?
611.43  What are the consequences of a scholarship recipient's 
failure to meet the service obligation?
611.44  Under what circumstances may the Secretary defer a 
scholarship recipient's service obligation?
611.45  Under what circumstances does the Secretary discharge a 
scholarship recipient's obligation to repay for failure to meet the 
service obligation?
611.46  What are a scholarship recipient's reporting 
responsibilities upon graduation from the teacher preparation 
program?
611.47  What are a scholarship recipient's reporting 
responsibilities upon the close of the LEA's academic year?
611.48  What are a scholarship recipient's reporting 
responsibilities upon failure to graduate or withdrawal of 
scholarship support?
611.49  What are a grantee's responsibilities for implementing the 
scholarship requirements before awarding a scholarship?
611.50  What are a grantee's reporting responsibilities?
611.51  How does a grantee ensure that a scholarship recipient 
understands the terms and conditions of the scholarship before the 
recipient leaves the teacher preparation program?
611.52  What are a grantee's programmatic responsibilities for 
ensuring that scholarship recipients become successful teachers in 
high-need schools?

Subpart F--Other Grant Conditions

611.61 What is the maximum indirect cost rate for States and local 
educational agencies?

    Authority: 20 U.S.C. 1021 et seq. and 1024(e), unless otherwise 
noted.

Subpart A--General Provisions


Sec. 611.1  What definitions apply to the Teacher Quality Enhancement 
Grants Program?

    The following definitions apply to this part:
    High-need local educational agency (LEA) means an LEA that meets 
one of the following definitions:
    (1) An LEA with at least one school--
    (i) In which 50 percent or more of the enrolled students are 
eligible for free and reduced lunch subsidies; or
    (ii) That otherwise is eligible, without receipt of a waiver, to 
operate as a schoolwide program under Title I of the Elementary and 
Secondary Education Act.
    (2) An LEA that has one school where--
    (i) More than 34 percent of academic classroom teachers overall 
(across all academic subjects) do not have a major, minor, or 
significant course work in their main assignment field; or
    (ii) More than 34 percent of the main assignment faculty in two of 
the core-subject departments do not have a major, minor, or significant 
work in their main assigned field.
    (3) An LEA that serves a school whose attrition rate among 
classroom teachers was 15 percent or more over the last three school 
years.
    High-need school means an elementary, middle, or secondary school 
operated by a high-need LEA in which the school's students or teaching 
staff meet the elements in paragraphs (1), (2), or (3) of the 
definition of a high-need LEA.
    Main assignment field means the academic field in which teachers 
have the largest percentage of their classes.
    Significant course work means four or more college-or graduate-
level courses in the content area.

(Authority: 20 U.S.C. 1024(e))

Subparts B-D [Reserved]

Subpart E--Scholarships


Sec. 611.41  Under what circumstances may an individual receive a 
scholarship of program funds to attend a teacher training program?

    (a) General: The service obligation. An individual, whom a grantee 
finds eligible to receive a scholarship funded under this part to 
attend a teacher preparation program, may receive the scholarship only 
after executing a binding agreement with the institution of higher 
education (IHE) offering the scholarship that, after completing the 
program, the individual will either--
    (1) Teach in a high-need school of a high-need LEA for a period of 
time equivalent to the period for which the individual receives the 
scholarship; or
    (2) Repay, as set forth in Sec. 611.43, the Teacher Quality 
Enhancement Grant Program funds provided as a scholarship.
    (b) Content of the scholarship agreement. To implement the service-
obligation requirement, the scholarship agreement must include terms, 
conditions, and other information consistent with Secs. 611.42-611.49 
that the Secretary determines to be necessary.

    (Approved by the Office of Management and Budget under control 
number 1840-0753)

    (Authority: 20 U.S.C. 1024(e))


Sec. 611.42  How does the Secretary calculate the period of the 
scholarship recipient's service obligation?

    (a) Calculation of period of scholarship assistance.
    (1) The Secretary calculates the period of time for which a student 
received scholarship assistance on the basis of information provided by 
the grantee under Sec. 611.50.
    (2) The period for which the recipient received scholarship 
assistance is the period during which an individual enrolled in the 
teacher preparation program on a full-time basis, excluding the summer 
period, would have completed the same course of study.
    (b) Calculation of period needed to teach to meet the service 
obligation. (1) The period of the scholarship recipient's service 
obligation is the period of the individual's receipt of scholarship 
assistance as provided in paragraph (a) of this section.
    (2) The Secretary calculates the period that a scholarship 
recipient must teach in a high-need school of a high-need LEA in order 
to fulfill his or her service obligation by--
    (i) Comparing the period in which the recipient received a 
scholarship as provided in paragraph (a) of this section with the 
information provided by the high-need LEA under Secs. 611.46 and 611.47 
on the period the recipient has taught in one of its high-need schools; 
and
    (ii) Adjusting the period in which the recipient has taught in a 
high-need school to reflect the individual's employment, if any, as a 
teacher on a part-time basis relative to classroom teachers the LEA 
employs on a full-time basis under the LEA's standard yearly contract 
(excluding any summer or intersession period).
    (c) The Secretary adjusts the period of a scholarship recipient's 
service obligation as provided in paragraph (b) of this section to 
reflect information the

[[Page 1783]]

high-need LEA provides under Secs. 611.46 and 611.47 that the 
scholarship recipient also has taught in a high-need school in a summer 
or intersession period.

    (Approved by the Office of Management and Budget under control 
number 1840-0753)

    (Authority: 20 U.S.C. 1024(e))


Sec. 611.43  What are the consequences of a scholarship recipient's 
failure to meet the service obligation?

    (a) Obligation to repay: General. (1) A scholarship recipient who 
does not fulfill his or her service obligation must--
    (i) Repay the Department the full amount of the scholarship, 
including the principal balance, accrued interest, and any collection 
costs charged under paragraphs (c) and (d) of this section; or
    (ii) Be discharged of any repayment obligation as provided in 
Sec. 611.45.
    (2) Unless the service obligation is deferred as provided in 
Sec. 611.44 or the repayment requirement is discharged, the obligation 
to repay the amount provided in paragraph (a)(1) of this section begins 
six months after the date the recipient--
    (i) Completes the teacher training program without beginning to 
teach in a high-need school of a high-need LEA; or
    (ii) Is no longer enrolled in the teacher training program.
    (3) The Secretary determines whether a scholarship recipient has 
fulfilled the service obligation on the basis of information that the 
Department receives as provided in Secs. 611.46 and 611.47.
    (b) Obligation to Repay: Partial performance of the service 
obligation. (1) A scholarship recipient who teaches in a high-need 
school of a high-need school district for less than the period of his 
or her service obligation must repay--
    (i) The amount of the scholarship that is proportional to the unmet 
portion of the service obligation;
    (ii) Interest that accrues on this portion of the scholarship 
beginning six months after the recipient's graduation from the teacher 
preparation program; and
    (iii) Costs of collection, if any.
    (2) Unless the service obligation is deferred or the repayment 
requirement is discharged, the obligation to repay the amount provided 
in paragraph (b)(1) of this section begins six months after the date 
the recipient is no longer employed as a teacher in a high-need school 
of a high-need LEA.
    (c) Availability of payment schedule. (1) Upon request to the 
Secretary, the scholarship recipient may repay the scholarship and 
accrued interest according to a payment schedule that the Secretary 
establishes.
    (2) A payment schedule must permit the full amount of the 
scholarship and accrued interest to be repaid within ten years. The 
minimum monthly payment is $50 unless a larger monthly payment is 
needed to enable the full amount that is due to be paid within this 
timeframe.
    (d) Interest. In accordance with 31 U.S.C. 3717 and 34 CFR part 30, 
the Secretary charges interest on the unpaid balance that the 
scholarship recipient owes. (The grantee offering the scholarship must 
ensure that scholarship agreement the recipient executes includes the 
current rate of interest, as provided by the Department.) However, 
except as provided in Sec. 611.44(d), the Secretary does not charge 
interest for the period of time that precedes the date on which the 
scholarship recipient is required to begin repayment.
    (e) Failure to meet requirements. A scholarship recipient's failure 
to satisfy the requirements of Secs. 611.42-611.48 in a timely manner 
results in the recipient being--
    (1) In non-compliance with the terms of the scholarship;
    (2) Liable for repayment of the scholarship and accrued interest; 
and
    (3) Subject to collection action.
    (f) Action by reason of default. The Secretary may take any action 
authorized by law to collect the amount of scholarship, accrued 
interest and collection costs, if any, on which a scholarship recipient 
obligated to repay under this section has defaulted. This action 
includes, but is not limited to, filing a lawsuit against the 
recipient, reporting the default to national credit bureaus, and 
requesting the Internal Revenue Service to offset the recipient's 
Federal income tax refund.

    (Approved by the Office of Management and Budget under control 
number 1840-0753)

    (Authority: 20 U.S.C. 1024(e))


Sec. 611.44  Under what circumstances may the Secretary defer a 
scholarship recipient's service obligation?

    (a) Upon written request, the Secretary may defer a service 
obligation for a scholarship recipient who--
    (1) Has not begun teaching in a high-need school of a high-need LEA 
as required by Sec. 611.41(a); or
    (2) Has begun teaching in a high-need school of a high-need LEA, 
and who requests the deferment within six months of the date he or she 
no longer teaches in this school.
    (b) To obtain a deferment of the service obligation, the recipient 
must provide the Secretary satisfactory information of one or more of 
the following circumstances:
    (1) Serious physical or mental disability that prevents or 
substantially impairs the scholarship recipient's employability as a 
teacher.
    (2) The scholarship recipient's inability, despite due diligence 
(for reasons that may include the failure to pass a required teacher 
certification or licensure examination), to secure employment as a 
teacher in a high-need school of a high-need school LEA.
    (3) Membership in the armed forces of the United States on active 
duty for a period not to exceed three years.
    (4) Other extraordinary circumstances that the Secretary accepts.
    (c) Unless the Secretary determines otherwise--
    (1) A scholarship recipient must apply to renew a deferment of the 
service obligation on a yearly basis; and
    (2) The recipient has 60 days from the end of the deferment period 
to begin teaching in a high-need school of a high-need LEA or become 
liable for repayment of the scholarship, any accrued interest, and any 
costs of collection.
    (d)(1) As provided in Sec. 611.43(a)(2), during periods for which 
the Secretary defers a scholarship recipient's service obligation, the 
scholarship recipient does not have an obligation to repay the 
scholarship. However, interest continues to accrue on the amount of the 
scholarship.
    (2) If the scholarship recipient fulfills his or her service 
obligation after the end of the deferment, the Secretary waives the 
obligation to repay accrued interest.

    (Approved by the Office of Management and Budget under control 
number 1840-0753)


    (Authority: 20 U.S.C. 1024(e))


Sec. 611.45  Under what circumstances does the Secretary discharge a 
scholarship recipient's obligation to repay for failure to meet the 
service obligation?

    (a) The Secretary discharges the obligation of a scholarship 
recipient to repay the scholarship, interest, and any costs for failure 
to meet the service obligation based on information acceptable to the 
Secretary of--
    (1) The recipient's death; or
    (2) The total and permanent physical or mental disability of the 
recipient that prevents the individual from being employable as a 
classroom teacher.
    (b) Upon receipt of acceptable documentation and approval of the 
discharge request, the Secretary returns

[[Page 1784]]

to the scholarship recipient, or for a discharge based on death to the 
recipient's estate, those payments received after the date the 
eligibility requirements for discharge were met. The Secretary returns 
these payments whether they are received before or after the date the 
discharge was approved.

    (Approved by the Office of Management and Budget under control 
number 1840-0753)

    (Authority: 20 U.S.C. 1024(e))


Sec. 611.46  What are a scholarship recipient's reporting 
responsibilities upon graduation from the teacher preparation program?

    (a) Within six months of graduating from a teacher preparation 
program, a scholarship recipient must either--
    (1) Have the LEA in which the recipient is employed as a teacher 
provide the Department information, which the Secretary may require, to 
confirm--
    (i) The home address, phone number, social security number, and 
other identifying information about the recipient;
    (ii) That he or she is teaching in a high-need school of a high-
need LEA; and
    (iii) Whether the individual is teaching full- or part-time and, if 
part-time, the full-time equivalency of this teaching compared to the 
LEA's full-time teachers;
    (2) Provide the Department--
    (i) A notarized statement that the scholarship recipient has asked 
the LEA to provide the Department the information identified in 
paragraph (a)(1) of this section, including the name and telephone 
number of the LEA official to whom the request was made; and
    (ii) A copy of the information identified in paragraph (a)(1) of 
this section that the recipient has asked the LEA to provide to the 
Department; or
    (3) Provide the Department a current home address and telephone 
number, a work address and telephone number, the recipient's social 
security number, and one of the following:
    (i) The required repayment of the scholarship.
    (ii) A request that the Secretary permit the recipient to repay the 
scholarship and accrued interest in installments as permitted by 
Sec. 611.43(c).
    (iii) A request that the Secretary defer the service obligation as 
permitted by Sec. 611.44.
    (b) If the recipient provides the Department the information 
identified in paragraph (a)(1) of this section, the Department accepts 
the information provisionally, but the recipient retains responsibility 
for working to have the LEA submit the information.

    (Approved by the Office of Management and Budget under control 
number 1840-0753)

    (Authority: 20 U.S.C. 1024(e))


Sec. 611.47  What are a scholarship recipient's reporting 
responsibilities upon the close of the LEA's academic year?

    (a) At the close of the LEA's academic year, a scholarship 
recipient whose LEA reports under Sec. 611.46(a) that he or she is 
teaching in a high-need school of a high-need LEA must--
    (1) Have the LEA provide information to the Department, as the 
Secretary may require, that confirms the recipient's actual employment 
status for the preceding period; or
    (2) Provide the Department--
    (i) A notarized statement that the scholarship recipient has asked 
the LEA to provide the Department the information identified in 
paragraph (a)(1) of this section, including the name and telephone 
number of the LEA official to whom the request was made; and
    (ii) A copy of the information identified in paragraph (a)(1) of 
this section that the recipient has asked the LEA to provide to the 
Department.
    (b) If the recipient provides the Department the notarized 
statement and accompanying information identified in paragraph (a)(2) 
of this section, the Department accepts the information provisionally, 
but the recipient retains an ongoing responsibility for working to have 
the LEA submit the information directly to the Department.
    (c) In subsequent school years, the recipient must have the LEA 
continue to provide information to the Department on the recipient's 
employment as the Secretary may require, until the Department notifies 
the recipient that the service obligation has been fulfilled. The 
alternative procedures in paragraph (a)(2) of this section also apply 
in subsequent years.
    (d)(1) The Secretary provides a scholarship recipient with credit 
toward the service obligation for teaching in a high-need school of a 
high-need LEA during a summer or intersession period (for LEAs that 
operate year-round programs).
    (2) To receive this credit, the recipient must have the LEA at the 
end of the summer or intersession period provide information to the 
Department, as the Secretary may require, that confirms that the 
recipient has taught during this period in a high-need school.

    (Approved by the Office of Management and Budget under control 
number 1840-0753)

    (Authority: 20 U.S.C. 1024(e))


Sec. 611.48  What are a scholarship recipient's reporting 
responsibilities upon failure to graduate or withdrawal of scholarship 
support?

    (a)(1) Within six months of the date the scholarship recipient is 
no longer enrolled in the teacher training program, or within six 
months of the IHE's withdrawal of scholarship support for failure to 
maintain good academic standing, the recipient must submit to the 
Department--
    (i) The required repayment of the scholarship;
    (ii) A request that the Secretary establish a binding schedule 
under which the recipient is obligated to repay the scholarship, 
accrued interest, and any costs of collection; or
    (iii) A request that the Secretary defer the service obligation as 
permitted by Sec. 611.44.
    (2) Upon review of the repayment or information provided under 
paragraph (a)(1) of this section, the Department notifies the recipient 
of the status of the recipient's obligations and of any schedule under 
which the recipient must repay the scholarship.
    (b) Until the Secretary determines that the individual either has 
satisfied his or her service obligation or has repaid the full amount 
of the scholarship, accrued interest, and any costs, the recipient also 
remains responsible for providing the Department--
    (1) The information identified in this part; and
    (2) A current home address and telephone number, and a current work 
address and work telephone number.

    (Approved by the Office of Management and Budget under control 
number 1840-0753)

    (Authority: 20 U.S.C. 1024(e))


Sec. 611.49  What are a grantee's responsibilities for implementing the 
scholarship requirements before awarding a scholarship?

    Before awarding scholarship assistance with funds provided under 
this part to any student attending a teacher preparation program, a 
grantee must--
    (a) Ensure that the student understands the terms and conditions 
that the Secretary has determined must be included in the scholarship 
agreement;
    (b) Have the student and the institution awarding the scholarship 
execute a scholarship agreement that contains these terms and 
conditions; and
    (c) Establish policies for--
    (1) The withdrawal of scholarship support for any student who does 
not remain in good academic standing; and

[[Page 1785]]

    (2) Determining when and if re-negotiation of a student's 
scholarship package over an extended period of time is appropriate.

    (Approved by the Office of Management and Budget under control 
number 1840-0753)

    (Authority: 20 U.S.C. 1024(e))


Sec. 611.50  What are a grantee's reporting responsibilities?

    (a) Within 30 days of the beginning of the teacher preparation 
program's academic term or within 30 days of the execution of any 
scholarship agreement, whichever is later, the grantee must provide to 
the Department the following information:
    (1) The identity of each scholarship recipient.
    (2) The amount of the scholarship provided with program funds to 
each recipient.
    (3) The full-time equivalency, over each academic year, of each 
recipient's enrollment in the teacher training program for which he or 
she receives scholarship assistance.
    (4) Other information as the Secretary may require.
    (b) Within 30 days of a scholarship recipient's graduation or 
withdrawal from the teacher preparation program, the grantee must 
provide to the Department the following information:
    (1) The date of the recipient's graduation or withdrawal.
    (2) The total amount of program funds the grantee awarded as a 
scholarship to the recipient.
    (3) The original of any scholarship agreement executed by the 
scholarship recipient and the grantee (or its partnering IHE if the 
grantee is not an IHE) before the recipient was awarded a scholarship 
with program funds.
    (4) A statement of whether the institution has withdrawn 
scholarship support because of the recipient's failure to maintain good 
academic standing.
    (5) Other information as the Secretary may require.

    (Approved by the Office of Management and Budget under control 
number 1840-0753)

    (Authority: 20 U.S.C. 1024(e))


Sec. 611.51  How does a grantee ensure that a scholarship recipient 
understands the terms and conditions of the scholarship before the 
recipient leaves the teacher preparation program?

    (a) An institution that provides a scholarship with funds provided 
under this part must conduct an exit conference with each scholarship 
recipient before that individual leaves the institution. During the 
exit conference the institution must give the recipient a copy of any 
scholarship agreement the recipient has executed.
    (b) The institution also must review with the recipient the terms 
and conditions of the scholarship, including--
    (1) The recipient's service obligation;
    (2) How the recipient can confirm whether a school and LEA in which 
he or she would teach will satisfy the service obligation;
    (3) Information that the recipient will need to have the LEA 
provide to the Department to enable the Secretary to confirm that the 
recipient is meeting the service obligation;
    (4) How the recipient may request a deferment of the service 
obligation, and information that the recipient should provide the 
Department in any deferment request;
    (5) The consequences of failing to meet the service obligation 
including, at a minimum, the amount of the recipient's potential 
indebtedness; the possible referral of the indebtedness to a collection 
firm, reporting it to a credit bureau, and litigation; and the 
availability of a monthly payment schedule;
    (6) The amount of scholarship assistance and interest charges that 
the recipient must repay for failing to meet the service obligation; 
and
    (7) The recipient's responsibility to ensure that the Department 
has a home address and telephone number, and a work address and 
telephone number until the Secretary has determined that the recipient 
has fulfilled the service obligation or the recipient's debt has been 
paid or discharged; and
    (8) The follow-up services that the institution will provide the 
student during his or her first three years of teaching in a high-need 
school of a high-need LEA.

    (Authority: 20 U.S.C. 1024(e))


Sec. 611.52  What are a grantee's programmatic responsibilities for 
ensuring that scholarship recipients become successful teachers in 
high-need schools?

    In implementing its approved project, the grantee must--
    (a) Provide scholarship recipients both before and after graduation 
with appropriate support services, including academic assistance, job 
counseling, placement assistance, and teaching support that will help 
to ensure that--
    (1) Upon graduation, scholarship recipients are able to secure 
teaching positions in high-need schools of high-need LEAs; and
    (2) After beginning to teach in a high-need school of a high-need 
LEA, former scholarship recipients have appropriate follow-up services 
and assistance during their first three years of teaching;
    (b) Provide LEAs with which the grantees collaborate in teacher 
recruitment activities with information and other assistance they need 
to recruit highly-qualified teachers effectively; and
    (c) Work with the high-need LEAs participating in its project to 
ensure that scholarship recipients are placed, to the extent possible, 
in highest-need schools of those LEAs.

    (Authority: 20 U.S.C. 1024(e))

Subpart F--Other Grant Conditions


Sec. 611.61  What is the maximum indirect cost rate for States and 
local educational agencies?

    Notwithstanding 34 CFR 75.560-75.562 and 34 CFR 80.22, the maximum 
indirect cost rate that a State or local educational agency receiving 
funding under the Teacher Quality Enhancement Grants Program may use to 
charge indirect costs to these funds is the lesser of--
    (a) The rate established by the negotiated indirect cost agreement; 
or
    (b) Eight percent.

    (Authority: 20 U.S.C. 1021 et seq.)

    Note: The following appendix will not appear in the Code of 
Federal Regulations.

Appendix--Analysis of Comments and Changes

    Comment: Proposed Sec. 611.1 defines a high-need school and a 
high-need local educational agency (LEA). These definitions are 
important because after graduating from their teacher preparation 
programs, scholarship recipients must teach in these schools and 
LEAs in order to meet their service obligations.
    Consistent with section 201(b)(2) of the Higher Education Act 
(HEA), the definition would offer three alternative criteria by 
which a school (of a high-need LEA) can be considered high-need. Two 
commenters urged us to expand these proposed criteria so that more 
schools could qualify as ones in which scholarship recipients can 
teach and meet their service obligations. Under one of these 
proposed criteria, a school would qualify as high-need if at least 
50 percent of its enrolled students are eligible to receive free and 
reduced lunch subsidies, i.e., if the school is eligible to operate 
a schoolwide program under Title I of the Elementary and Secondary 
Education Act (ESEA). One commenter supported this proposal, but 
noted that many secondary schools do not have reliable data on 
student eligibility for free-and reduced-lunch subsidies. The 
commenter proposed, therefore, that a secondary school qualify as 
one in which scholarship recipients can meet their service 
obligations through alternative factors. These factors would include 
having (a) multiple elementary and middle schools in its feeder 
system that meet this 50-percent test; (b) a

[[Page 1786]]

drop-out rate that exceeds a specified amount; (c) more than 15 
percent of teachers teaching out of files; and (d) a teacher 
turnover rate exceeding ten percent.
    Another commenter urged that the criterion related to the 
percentage of the school's teachers teaching out-of-field be 
expanded. In this regard, section 201(b)(2) of the HEA provides that 
a school can be considered high-need if there is a high percentage 
of secondary school teachers who are not teaching in the content 
area in which the teachers were trained to teach. As proposed, 
Sec. 611.1 would define this element to mean that more than 34 
percent of either academic classroom teacher overall, or main 
assignment faculty in two core subject departments, do not have a 
major, minor, or significant course work in their main assignment 
field. The proposed regulation goes on to define ``significant 
coursework'' to mean ``four or more college or graduate-level 
courses in the content area.''
    The commenter notes that his State now requires teaching 
candidates to have taken more than four courses to earn a teaching 
certificate in a particular content area. The commenter, therefore, 
recommends that the definition also permit a school to qualify as a 
high-need school if more than 34 percent of academic classroom 
teachers do not have certification to teach in their main assignment 
field.
    Discussion: We agree that clarification is needed on how a 
secondary school may qualify, on the basis of the percent of poverty 
in the area it serves, as one in which a scholarship recipient may 
meet his or her service obligation. As the first commenter notes, we 
know from experience that high school and middle school students are 
less likely to participate in free- and reduced-price lunch programs 
than are elementary school students. Hence, those schools often may 
not be identified as eligible for Title I services, or not qualify 
to operate Title I, ESEA, schoolwide programs, despite the actual 
poverty rates in the area they serve.
    However, if a school--elementary, middle, or secondary--is to 
meet the statutory criterion of high need because it serves an area 
with a high percentage of individuals from families with incomes 
below the poverty line, we continue to believe that the school still 
must be eligible under Title I requirements to operate a Title I 
schoolwide program. In this regard, the Department has issued 
guidance for the Title I program that addresses alternative measures 
for determining a secondary school's eligibility to participate in 
Title I. This guidance clarifies that a school district may use 
comparable data to data for free- and reduced-lunch eligibility (or 
other measures permitted under Title I) that are collected through 
alternative means such as a survey. Also, an LEA may use the feeder 
pattern concept. This concept would allow the LEA to project the 
number of low-income children in a middle school or high school 
based on the average poverty rate of the elementary school 
attendance areas that feed into that school. More specific 
information on these alternative measures for secondary and middle 
school eligibility under Title I may be found in part two of the 
April 1996 Title I, Part A, Policy Guidance: Improving Basic 
Programs Operated by Local Educational Agencies. This guidance is 
available on the Internet at http://www.ed.gov/legislation/ESEA/
Title I/. Further information also is available from those in the 
State educational agency who administer the Title I program. (The 
ESEA authorizes waivers of most Title I program requirements, 
including the requirement that schools that wish to be schoolwide 
programs serve an area with a specified level of poverty. The HEA 
contains no comparable waiver authority. Therefore, a middle or high 
school that lacks data to confirm its eligibility to operate as a 
Title I schoolwide program cannot become eligible to be a high-need 
school through a waiver of the Title I schoolwide program 
requirements.)
    Beyond this clarification, we are unable to accept the 
commenter's recommendations for alternative factors that the 
regulations would identify as making a secondary school one in which 
a scholarship recipient may meet the service obligation. Simply 
having some feeder schools meet the 50 percent threshold for free- 
and reduced-lunch subsidies may not adequately address the level of 
poverty in the entire area the high school serves. The school's 
drop-out rate is not sufficiently related to the permissible 
criteria in section 201(b)(2) of the statute.
    Finally, we believe that the standards of (1) 15 percent of 
teachers teaching out-of-field, and (2) a teacher turnover rate 
exceeding ten percent, which the commenter proposes, would permit 
too many schools to be considered high need. Aside from the poverty 
criterion, the law permits high need to be based on a ``high'' 
percentage of secondary school teachers teaching out-of-field, or a 
``high'' teacher turnover rate. In the application package available 
in February 1999 for the initial Teacher Quality Enhancement Grant 
Program competitions, we explained that 34 percent (incorrectly 
printed as ``35 percent'') teaching out-of-field and a 15 percent 
attrition rate reflect the best available national data on what 
these statutory terms mean. More specifically, 34 percent teaching 
out-of-field reflects an average of the percentage of public school 
teachers without a major or minor in their main assignment field and 
the percentage of teachers in high-poverty schools teaching out-of-
field. A 15 percent teacher attrition rate reflects nationwide data 
on the percentage of teachers in all schools, including in high-
poverty schools, who do not return to the same school the following 
year.
    Action: The definition of ``high-need LEA'' in Sec. 611.1 has 
been modified. It now clarifies that the term includes an LEA with 
at least one school (1) in which at least 50 percent of enrolled 
students are eligible for free- and reduced lunch subsidies, or (2) 
that otherwise is eligible, without a waiver, to operate as a 
schoolwide program under Title I of the ESEA.
    Comment: One commenter stated that it is not practical for an 
IHE to provide follow-up services to former scholarship recipients 
for three years after the individual becomes a teacher. The 
commenter, from a grantee awarded a Partnership Program grant under 
section 203 of the HEA, asserts that there are many contractual and 
budgetary issues affecting the LEA that are beyond the IHE's 
control. The commenter recommends that the regulations instead 
require the IHE to provide induction services during the teacher's 
first year, and otherwise make services available to the teacher, 
upon request, for up to three years after graduation.
    Discussion: Section 204(d)(1)(C) of the HEA requires that 
Teacher Recruitment Program grantees provide follow-up services to 
former scholarship recipients during their first three years of 
teaching. For the other two Teacher Quality Enhancement Grant 
Programs, the State Grant Program and the Partnership Grants for 
Improving Teacher Education Program, the law authorizes grantees to 
use program funds for ``[a]ctivities described in section 204(d).'' 
See sections 202(d)(7) and 203(d)(7) of the HEA, respectively. As 
section 204(d)(1)(C) authorizes scholarship assistance to 
individuals attending teacher preparation programs, State and 
Partnership Program grantees may use grant funds to award these 
scholarships.
    However, by authorizing State and Partnership Program grantees 
to use program funds for activities described in section 207(d), we 
believe Congress intended that those who receive scholarship 
assistance under these two programs would benefit before and after 
graduation from the same range of IHE services that recipients of 
scholarships funded under the Teacher Recruitment Program must 
receive. Hence, we also believe that it is appropriate to require, 
through these regulations, State and Partnership grantees to provide 
former scholarship recipients with the same level of follow-up 
services after graduation as is required under the Teacher 
Recruitment Program. These services would include, as required by 
section 204(d)(1)(c), follow-up activities during these new 
teachers' first three years of teaching.
    We do note that the law does not specify the degree of these 
services. Consistent with a grantee's approved applications, we 
believe that the form, content, and extent of these follow-up 
services will be determined through collaboration among the LEA, 
scholarship recipient(s), and the program grantee.
    Action: None.
    Comment: One commenter stated that all States and partnerships 
using program funds to award teacher recruitment scholarships should 
prioritize placements in ways that assure that schools in the States 
with greatest need have the best opportunities to hire well-trained 
teachers. Therefore, the commenter recommended that all States and 
partnerships, in collaboration with high-need LEAs, be required to 
give priority in placing scholarship recipients in LEAs and schools 
that demonstrate the greatest need according to one of the three 
criteria with which 611.1 defines ``high need.''
    Discussion: We agree with the thrust of the comment. The purpose 
of the Teacher Recruitment Program is to address chronic shortages 
of qualified teachers in high-need schools and school districts. 
IHEs and LEAs should work together to encourage teaching

[[Page 1787]]

candidates who receive scholarship assistance with Teacher Quality 
Enhancement Program funds to fulfill their service obligations by 
becoming teachers in the highest need schools and school districts.
    However, we are concerned that the commenter's recommendations 
would (1) burden IHEs unduly with the responsibility for securing 
data on literally scores of schools and then somehow ranking those 
schools by relative need, and (2) involve the IHE too intimately in 
hiring decisions that are better left to the scholarship recipients 
and LEA and school officials. For this reason, we believe that the 
better approach is to require the IHE, in collaboration with the 
high-need LEA(s) with which it partners, to ensure that scholarship 
recipients are placed, to the extent possible, in the highest-need 
schools of those LEAs.
    Action: Section 611.52(c) (proposed 611.40(d)(3)) has been 
modified accordingly.
    Comment: As proposed, Sec. 611.39(a) would require former 
scholarship recipients who are fulfilling their service obligations 
to have high-need LEAs in which they teach submit employment 
information periodically to the Department confirming that they are, 
in fact, meeting their service obligation. One commenter expressed 
concern that if, through no fault of the teacher, the LEA does not 
forward the information to the Department, the former scholarship 
recipient could be wrongly held responsible for repaying the 
scholarship assistance he or she had received. The commenter 
recommended that we accept, on an interim basis if necessary, 
evidence such as a notarized statement that the scholarship 
recipient had requested the LEA to submit the information verifying 
employment.
    Discussion: We agree with the commenter's concern and 
recommendation, except that we believe the recommendation does not 
sufficiently encourage recipients to have LEAs provide us with 
timely information that verifies the scholarship recipient's 
employment as a teacher in a high-need school of a high-need LEA. 
After considering the matter, we are satisfied that the scholarship 
recipient should be permitted to meet this responsibility to verify 
that he or she is meeting the service obligation in either of two 
ways. Specifically, in lieu of having the LEA provide the needed 
information to us in a timely manner, the recipient may attach to 
the notarized statement a copy of the information that he or she has 
asked the LEA to provide to the Department.
    We will consider the timely receipt of this notarized statement 
and attachment as satisfactory provisional evidence that the 
individual is meeting the service obligation, and so should not be 
responsible for its repayment. However, the Department will be 
unable to determine finally that this is so without the signed 
statement from the LEA. Therefore, the scholarship recipient will 
have a continuing responsibility to work to get the LEA to submit 
this information.
    Action: Sections 611.46 and 611.47 (proposed Sec. 611.39(a) and 
(b)) have been modified accordingly.
    Comment: One commenter stated that the proposed reasons for 
which the Department would defer a scholarship recipient's service 
obligation are too limited. The commenter recommends that deferments 
also be available for students who currently are attending two-year 
institutions and cannot be admitted to the continuing, and 
certifying, higher education program due to changes in admission 
standards that were implemented after the student had received a 
Title II scholarship.
    Discussion: A scholarship recipient's responsibility for 
repaying the scholarship, accrued interest, and costs of collection, 
if any, only arises if the scholarship recipient (1) graduates from 
a teacher preparation program and fails to confirm to the Department 
that he or she has fulfilled the service obligation, (2) withdraws 
from the teacher preparation program, or (3) is found to be no 
longer in good standing. We see no reason to expand the proposed 
areas in which deferment of the service obligation, or 
responsibility to repay the indebtedness, is available. One of the 
conditions of the scholarship is that the recipient will repay the 
scholarship amount plus accrued interest if he or she does not 
remain in good academic standing. Assuming that the recipient 
remains in good academic standing, we believe that the appropriate 
response to the situation the commenter posed is for the grantee to 
continue working with the scholarship recipient to permit him or her 
to meet any new admission requirements that the continuing 
institution may adopt.
    We add only that we believe the situations the commenter 
describes should be quite rare. First, the kinds of changes in 
admission standards that the commenter describes are likely to be 
very infrequent. Beyond this, with regard to scholarship recipients, 
we presume that program grantees are in a position to influence the 
admission standards and decisions of the teacher preparation 
programs they are implementing or with which they are partnering.
    Action: None.
    Comment: One commenter asserted that the proposed regulations 
would inappropriately penalize scholarship recipients who, upon 
graduation, fail immediately to find employment as teachers in high-
need schools and school districts. The commenter also criticized the 
service obligation as a disincentive to minority recruitment since 
students have other scholarship opportunities that do not attach 
these conditions.
    Discussion: The law requires those who receive scholarships with 
Teacher Quality Enhancement Grant Program funds to meet the service 
obligation. Moreover, as proposed, Sec. 611.37(b)(2) would enable a 
scholarship recipient to have the service obligation deferred where, 
despite due diligence, the recipient is unable to secure employment 
as a teacher in a high-need school of a high-need LEA.
    Action: None.
    Comment: One commenter stated that while most of the regulations 
were clearly stated, the regulations would be easier to read if they 
were divided into more, but shorter, sections.
    Discussion: Some of the regulations do not seem appropriate for 
dividing into parts. However, we agree with the commenter that both 
proposed Sec. 611.39 (``What are a scholarship recipient's reporting 
responsibilities?'') and proposed Sec. 611.40 (``What are a 
grantee's responsibilities for helping to implement the scholarship 
requirements?'') would be clearer if broken into a series of shorter 
regulations.
    Action: The final regulations have been revised accordingly.
    We also have made these regulations applicable to all three of 
the Teacher Quality Enhancement Grant Programs by (1) renumbering 
them, (2) moving them to a new and generally applicable subpart E, 
``Scholarships,'' and (3) thereby eliminating, as no longer 
necessary, proposed Sec. 611.42 (``What rules govern scholarships 
funded by the State or Partnership Programs for individuals 
attending teacher preparation programs?'')

[FR Doc. 00-646 Filed 1-11-00; 8:45 am]
BILLING CODE 4000-01-U