[Federal Register Volume 68, Number 171 (Thursday, September 4, 2003)]
[Notices]
[Pages 52578-52581]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-22547]



[[Page 52578]]

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DEPARTMENT OF EDUCATION


Federal Student Financial Assistance Programs--Distance Education 
Demonstration Program

AGENCY: Department of Education.

ACTION: Notice inviting applications for participation in the Distance 
Education Demonstration Program.

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SUMMARY: The Secretary of Education invites institutions of higher 
education (institutions), systems of institutions, and consortia of 
institutions to submit applications to participate in the Distance 
Education Demonstration Program authorized under section 486 of Title 
IV of the Higher Education Act of 1965, as amended (HEA). Under the 
Distance Education Demonstration Program, selected institutions 
providing distance education programs may receive waivers of specific 
statutory and regulatory provisions governing the student financial 
assistance programs authorized under Title IV of HEA.
    Instructions for Submitting an Application: Elements to be included 
in an application are described in this notice. There is no application 
form for the program. Proposals should be submitted by electronic mail 
or in hard copy to the addresses below. Applicants are urged to submit 
applications only by electronic mail, to the e-mail address below. 
Applications should clearly designate a contact person, and the 
telephone number and the e-mail and street address of the contact 
person.
    Applications submitted by electronic mail should be submitted in 
Microsoft Word version 7 or lower or WordPerfect version 7, 8, or 9.
    Further information concerning technical assistance may be found at 
the end of this notice and at the Distance Education Demonstration 
Program Web site: http://www.ed.gov/offices/OPE/PPI/DistED/.

DATES: Applications must be postmarked or submitted electronically on 
or before October 6, 2003.

ADDRESSES: Applications submitted electronically. Institutions must 
submit applications by e-mail by 5 p.m. Eastern time on October 6, 2003 
to the following address: [email protected].
    Applications submitted by mail: Hard copy applications must be sent 
to Rose Fletcher, U.S. Department of Education, 1990 K Street NW., Room 
80, Washington, DC 20006.
    An institution must show proof of mailing these documents by 
October 6, 2003. Proof of mailing consists of one of the following: (1) 
A legible mail receipt with the date of mailing stamped by the U.S. 
Postal Service, (2) a legibly dated U.S. Postal Service postmark, (3) a 
dated shipping label, invoice, or receipt from a commercial carrier, or 
(4) any other proof of mailing acceptable to the U.S. Secretary of 
Education.
    If these documents are sent through the U.S. Postal Service, the 
Secretary does not accept either of the following as proof of mailing: 
(1) A private metered postmark, or (2) a mail receipt that is not dated 
by the U.S. Postal Service. Institutions should note that the U.S. 
Postal Service does not uniformly provide a dated postmark. Before 
relying on this method, an institution should check with its local post 
office. You are encouraged to use certified or at least first-class 
mail.
    Applications delivered by hand. Hand-delivered applications must be 
taken to Rose Fletcher, U.S. Department of Education, 1990 K Street, 
NW., Room 8031, Washington, DC 20006.
    Applications that are hand-delivered will be accepted between 9 
a.m. and 5 p.m. daily (Eastern time), except Saturdays, Sundays, and 
Federal holidays. Applications must be received by 5 p.m. on October 6, 
2003.

FOR FURTHER INFORMATION CONTACT: Carney McCullough or David Bergeron 
via telephone at (202) 502-7575 or via Internet: [email protected].
    Information concerning the program can also be found on the 
Distance Education Demonstration Program Web site: http://www.ed.gov/
offices/OPE/PPI/DistEd/.
    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 
alternative format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed in the preceding 
paragraph.

SUPPLEMENTARY INFORMATION: 

Background and Purpose of the Distance Education Demonstration Program

    There has been rapid growth in the number of institutions providing 
courses and degree programs in various modes of ``distance education.'' 
For purposes of the Distance Education Demonstration Program and this 
notice, ``distance education'' is defined as an educational process 
that is characterized by the separation, in time or place, between 
instructor and student. This process may include courses offered 
principally through the use of television, audio, or computer 
transmission, such as open broadcast, closed circuit, cable, microwave, 
or satellite transmission; audio or computer conferencing; video 
cassettes or discs; or correspondence.
    The growth in distance education has occurred in response to 
increasing demand from students who have little or no options to enroll 
in more traditional programs, including working adults, parents, people 
who live in rural communities, and students with disabilities. Another 
reason for this growth is the potential for cost control. Distance 
education is also attractive to institutions that are unable to make 
large investments in new facilities to meet increased student demand. 
Additionally, through consortia and other agreements among institutions 
that provide distance education, many students are able to take 
advantage of a richer selection of course offerings tailored to their 
individual needs than are available at the institutions where they are 
enrolled.
    Currently, some statutory provisions defining institutional 
eligibility for the Title IV, HEA programs limit the circumstances in 
which Title IV, HEA program funds can be provided to students enrolled 
in distance education. For example, institutions that offer more than 
50 percent of their courses via distance education or enroll more than 
50 percent of their students in distance education programs (hereafter 
referred to as ``the 50 percent rules'') are not eligible to 
participate in the Title IV, HEA programs.
    Other statutory and regulatory provisions are based on the patterns 
and structure of on-campus education and traditional academic terms. As 
such, they can be burdensome and difficult to apply to distance 
education programs. They may also limit institutions from structuring 
programs that may best meet the needs of distance education students, 
institutions, and systems and consortia of such institutions.
    Enacted in 1998, as described in section 486(a) of the HEA, the 
purpose of the Distance Education Demonstration Program is to--
    (1) Allow demonstration programs that are strictly monitored by the 
Department of Education (Department) to test the quality and viability 
of expanded distance education programs currently restricted under HEA;
    (2) Provide for increased student access to higher education 
through distance education programs; and
    (3) Help determine the--
    (A) Most effective means of delivering quality education via 
distance education course offerings;
    (B) Specific statutory and regulatory requirements which should be 
altered to

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provide greater access to high quality distance education programs; and
    (C) Appropriate level of Federal assistance for students enrolled 
in distance education programs.
    Under the Distance Education Demonstration Program, participants 
may offer Title IV, HEA program funds to students enrolled in 
educational programs utilizing distance education delivery methods for 
all or a portion of their classes without being subject to certain 
statutory and regulatory provisions, upon granting by the Secretary of 
an institution's request for waiver of these provisions. The purpose of 
these waivers is to test new ways of administering the Federal student 
assistance programs and to consider how the law and regulations might 
be altered to allow for expansion of aid to distance students and still 
ensure program integrity.
    The legislation creating this program authorized the Secretary to 
select, from among eligible applicants, up to a total of 15 
institutions, systems of institutions, or consortia of institutions to 
begin participation in the first year of the program. (For these 
purposes, a system of institutions could be a group of institutions 
with a common governing board. An example would be a community college 
system or a group of private institutions owned by the same 
corporation. A consortium of institutions could be two or more 
institutions that have agreed to collaborate on a common effort such as 
sharing distance education courses or a two-year and four-year 
institution cooperating to offer a bachelor's degree completion 
program.) The 15 participants for the first year of the program were 
selected in May of 1999 and began participation on July 1, 1999.
    The Secretary is authorized to select, from among eligible 
applicants, up to a total of 35 additional institutions, systems of 
institutions, or consortia of institutions to begin participation in 
the third year of the program. Nine institutions, systems of 
institutions or consortia of institutions were selected in June 2001 
and began participation on July 1, 2001. Additional institutions, 
systems of institutions, or consortia of institutions will be selected 
to increase the diversity of the types of institutions in the program. 
The Secretary anticipates that these additional institutions, systems 
or consortia selected will continue to participate until June 30, 2005. 
Participation will be conditioned upon their meeting the requirements 
of the Distance Education Demonstration Program and continued 
participation in Title IV, HEA programs. Institutions desiring to 
withdraw from the Distance Education Demonstration Program may do so 
without jeopardy to their participation in Title IV, HEA programs but 
must meet all the eligibility criteria in section 102 of HEA. Also, the 
scope of the participation, such as the specific distance education 
programs included and waivers provided, may be modified as agreed upon 
by the Secretary and the participant, to allow for changes in the 
programs offered, the modes of delivery used, the size of participants' 
distance programs, or other changes desired by the Secretary or the 
participant as experience is gained in the program.
    On November 1, 2002, the Department published regulations that 
modified 34 CFR Sections 668.2, 668.3, and 668.8 that limited 
institutions in the area of distance learning. These changes were 
based, in part, on experiences gained from the Distance Education 
Demonstration Program. Since that time, we have decided that it would 
be appropriate to accept applications to participate in this program to 
determine what other barriers continue to exist and to increase the 
diversity of the types of participants in the Distance Education 
Demonstration Program. To that end, we are particularly seeking 
applications from eligible applicants that would increase the diversity 
of the types of participants in the Distance Education Demonstration 
Program, particularly in the number of institutions that exclusively 
provide instruction online.
    The Department works closely with accrediting agencies and States 
to determine how their respective roles contribute to assuring quality 
and integrity in distance learning. Accrediting agencies play an 
important role in monitoring the demonstration programs, consistent 
with their responsibilities. Where State requirements are relevant to 
distance education programs, the Department works with States to 
determine how their monitoring role assists in ensuring program 
integrity.
    The participants must agree to provide data and information that 
will assist the Secretary in evaluating the Distance Education 
Demonstration Program and in reporting to Congress as required by HEA. 
The data and information provided by participants will assist the 
Secretary in determining whether statutory and regulatory changes might 
be needed to support the growth of quality distance education courses 
and programs and the appropriate level of Federal assistance for 
students enrolled in distance education programs, two of the purposes 
of the program that are specified in the statute. A copy of the form 
containing the data collection requirements can be found on the program 
Web site.
    The program is also designed to examine ways to assure the 
integrity of Title IV, HEA programs in the context of distance 
education. This examination is accomplished principally through the 
close monitoring of participants' administration of Title IV, HEA 
programs.

Eligible Applicants

    The following institutions are eligible to apply to participate in 
the Distance Education Demonstration Program:
    (1) Institutions located in the United States that participate in 
the Title IV, HEA programs; and
    (2) Institutions located in the United States that provide a two-
year program that leads to an associate degree or a four-year program 
that leads to a baccalaureate or higher degree and would be eligible to 
participate in the Title IV, HEA programs but for the fact that they do 
not meet one or both of the 50 percent rules. Such institutions must 
apply to participate in Title IV, HEA programs at the same time they 
submit an application to the Distance Education Demonstration Program.
    In addition, systems and consortia of these institutions are 
eligible to participate in this program. As stated earlier, the 
Secretary is particularly interested in including institutions that 
exclusively provide instruction on-line.

Statutory and Regulatory Provisions That May Be Waived

    The Secretary may waive statutory and regulatory provisions. To 
obtain a waiver, an institution must request the waiver in its 
application to participate in the program and must provide reasons for 
the waiver. Where possible, the applicant should suggest an alternative 
that is designed to meet the same objectives as those achieved by the 
waived statutory or regulatory provision. For example, if an applicant 
seeks to waive the requirement that students must achieve satisfactory 
academic progress as defined in Department regulations, the applicant 
should suggest an alternative means to ensure that Federal student aid 
funds are provided only to students who are making progress towards a 
degree or certificate. An applicant need not include an alternative 
approach with regard to a request to waive one or both of the 50 
percent rules.

Statutory Provisions

    The Secretary may waive the following HEA statutory provisions:

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    [sbull] Section 102(a)(3)(A). This section makes an otherwise 
eligible institution ineligible if more than 50 percent of its courses 
are offered by correspondence and telecommunication.
    [sbull] Section 102(a)(3)(B). This section makes an otherwise 
eligible institution ineligible if 50 percent or more of its students 
are enrolled in correspondence or telecommunications courses.
    [sbull] Section 484(l)(1). This section defines a 
telecommunications student at an institution as a correspondence 
student if (1) the student is enrolled in certificate programs of less 
than one year; (2) the institution provides more certificate than 
degree programs; or (3) 50 percent or more of the institution's courses 
are offered by correspondence and telecommunications.

Regulatory Provisions

    In addition to the aforementioned statutory provisions, the 
Secretary may waive the regulatory provisions implementing part G of 
HEA that inhibit the operation of quality distance education programs. 
Part G consists of sections 481 through 493B of HEA. These sections 
contain numerous provisions dealing with the Title IV, HEA programs 
including those that limit the amount of aid that can be provided for 
correspondence courses and programs. In general, the regulations 
implementing these provisions are contained in 34 CFR part 668.
    (Under the Distance Education Demonstration Program, the Secretary 
is authorized to waive any regulations governing part F of Title IV, 
which deals with need analysis and costs of attendance. However, the 
Secretary is not authorized to issue regulations implementing part F; 
therefore, there are no regulations to waive.)

Application Proposal Requirements

    Each application proposal to participate in this program shall 
include--
    1. The name, address, and Web site address, if any, of the 
institution, system, or members of the consortium seeking to 
participate, and the name, title, mailing and e-mail addresses, and 
telephone number of a contact person for the institution, system, or 
consortium;
    2. A description of the distance education programs offered or to 
be offered for which the institution is seeking a waiver or waivers. An 
institution may request a waiver or waivers for one, several, or all of 
its distance education courses or programs. The description should 
include the types of programs, degrees or certificates offered, program 
goals, and the methods used or proposed to be used to deliver distance 
education;
    3. A description of the applicant's consultation with a recognized 
accrediting agency or agencies with respect to quality assurances for 
the distance education programs to be offered;
    4. A description of the types of students that the distance 
education programs are intended to serve, (e.g., adult learners, rural 
populations, individuals with disabilities);
    5. The Title IV, HEA programs under which distance education 
students will receive funds;
    6. The specific statutory and regulatory provisions to be waived, 
the scope of each waiver, and the reason for each waiver. The applicant 
should propose an alternative to the provision or explain why no 
alternative is necessary;
    7. An assurance that the institution, system, or a consortium will 
fully cooperate with the Department's ongoing evaluations of the 
program; and
    8. A statement of the goals of the institution, system, or 
consortium for participation along with the method the institution will 
use to evaluate achievement of the goals.
    In addition to the information described above, systems and 
consortia must provide the following additional information--
    1. A description of the system or consortium and the relationship 
among the members of the system or consortium, a copy of any agreement 
governing the relationship of institutions that are members of the 
system or consortium, and a list of the institutions which are members;
    2. A description of the manner in which the distance education 
programs are or will be conducted among the system and consortium 
members particularly as that manner is related to the waiver request; 
and
    3. The manner in which Title IV, HEA program funds will be 
administered for the students in the distance education programs. (This 
would include such matters as the disbursement procedures that would be 
followed, the definition of an academic year that would be used, how 
attendance would be monitored, and the satisfactory academic progress 
rules that would be followed.)

Selection of Participants

    In selecting applicants to participate in the Distance Education 
Demonstration Program, the Secretary will take into account the--
    1. Number and quality of applications received;
    2. Department's capacity to oversee and monitor the applicant's 
participation;
    3. Applicant's financial responsibility, administrative capability, 
and the program or programs being offered via distance education; and
    4. Necessity of including different types of participating 
institutions vis-[agrave]-vis size, mission, and geographic 
distribution, with an emphasis on institutions that provide education 
exclusively through on-line instruction.
    As part of the selection process, the Department will screen the 
applications to ensure that applicants are eligible. Then, outside 
reviewers will recommend the best applications given the statutory 
criteria. The Secretary will make final selections, based on the 
recommendations of the outside reviewers and the criteria listed in 
HEA.

Evaluations

    The HEA requires the Secretary to submit reports to Congress 
evaluating the Distance Education Demonstration Program annually and 
eighteen months after the initiation of the program. As specified in 
HEA, the evaluations are to include the following:
    1. The extent to which the institution, system or consortium has 
met the goals set forth in its application to the Secretary, including 
the measures of program quality assurance.
    2. The number and types of students participating in the programs 
offered, including the progress of participating students toward 
recognized certificates or degrees and the extent to which 
participation in such programs increased.
    3. Issues related to student financial assistance for distance 
education.
    4. Effective technologies for delivering distance education course 
offerings.
    5. The extent to which statutory or regulatory requirements not 
waived under the Distance Education Demonstration Program present 
difficulties for students or institutions.
    To assist the Secretary in conducting such evaluations, 
participants in the Distance Education Demonstration Program will be 
required to provide information to the Secretary, such as: Course level 
detail regarding their offerings, the degrees or certificates awarded 
for successful completion, data on persistence and completion, data 
regarding student demographics, information regarding tuition and fees 
charged by the participant, program design and use of technology, 
information regarding the educational environment and student support, 
and student satisfaction surveys.

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Guidance

    The guidance provided below is intended to assist applicants in 
determining what information they may wish to include in their 
applications. This guidance is non-binding and does not constitute 
criteria for selection. Applications which do not include the 
information suggested in the guidance will be considered on the same 
basis as applications which include all or part of that information.
    1. Applicants should consider describing the ways that they think 
their proposals will assist the Department in determining new ways of 
administering Federal student assistance programs that better meet the 
needs of distance students.
    2. It is important that the accrediting and State authorizing 
agencies of the institution, or institutions that comprise a consortium 
or system, are willing to collaborate with the Department to determine 
how their complementary roles can best be structured to assure quality 
and integrity in institutions' distance education programs. To this 
end, applicants for this program should provide documentation that 
their accrediting agencies and States are willing to work with the 
Department to examine the respective roles of the agencies as they 
relate to institutions' distance education programs. In that 
documentation, accrediting agencies should certify that the individual 
distance programs that the institution includes in its application are 
within the scope of the institution's accreditation, and that the 
agency will review the program at an appropriate time. Consortiums and 
systems should also provide evidence that the agency or agencies which 
accredit the schools comprising the consortium or system are willing to 
work with the Department in evaluating issues relating to the quality 
of distance education offered by the institutions as a result of their 
membership in the consortium or system.
    3. While the Department will evaluate applications using the 
statutory criteria, to the extent possible, the Department will view 
those criteria in the context of the delivery of student aid to 
distance students and the changes that are needed to facilitate that 
process. Because the delivery of student aid is so critical to 
improving access to distance education, an application should fully 
describe the applicant's ability to fully execute its plans for student 
aid delivery and specify waivers requested and substitutions and 
address fully the need for the waivers and substitutions.
    4. Applicants should consider establishing both quantitative and 
qualitative objectives for their participation and include in the 
application a description of how they intend to measure goal 
attainment, including measures of program quality. The Department notes 
that quantitative measures are essential for understanding goal 
attainment.
    5. A major concern of the Department is to ensure that Federal 
funds in the Distance Education Demonstration Program are used 
appropriately. An application should address how the applicant plans to 
document student eligibility, including documentation of student 
attendance.
    6. Another major concern of the Department is that an applicant be 
committed as an institution to the success of its proposed activities. 
One way for an institution to demonstrate its commitment is to include 
with its application a letter from its chief executive officer (or 
comparable official) expressing support for the application and 
acknowledgement of the responsibilities that the institution would 
assume if the application were approved. Correspondingly, in the case 
of a consortium applicant, the submission of such a letter from the 
chief executive officer (or comparable official) of each of the 
participating institutions would demonstrate such commitment.

Technical Assistance

    Interested parties are invited to consult the Distance Education 
Demonstration Program Web site for information about applying to 
participate in the Distance Education Demonstration Program and 
providing Federal financial aid to students enrolled in distance 
education programs. The Web site also contains the names and contact 
information for Department staff with expertise on various issues 
relating to the Distance Education Demonstration Program who are 
available to answer questions and provide technical assistance 
regarding eligibility and administration of Title IV, HEA student 
financial assistance programs.

Electronic Access to This Document

    You may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or Adobe 
Portable Document Format (PDF) on the Internet at the following site: 
http://www.ed.gov/legislation/FedRegister.
    You also may view this document in text or PDF at the following 
site: http://www.ed.gov/news.html.
    To use PDF you must have Adobe Acrobat Reader, which is available 
free at this site. If you have questions about using PDF, call the U.S. 
Government Printing Office (GPO), toll free at 1-888-293-6498 or in the 
Washington, DC 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.


    Program Authority: 20 U.S.C. 1093.

    Dated: August 29, 2003.
Sally L. Stroup,
Assistant Secretary, Office of Postsecondary Education.
[FR Doc. 03-22547 Filed 9-3-03; 8:45 am]
BILLING CODE 4000-01-P