[Federal Register Volume 71, Number 107 (Monday, June 5, 2006)]
[Rules and Regulations]
[Pages 32396-32400]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-5111]



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Part IV





Department of Education





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34 CFR Part 304



Service Obligations Under Special Education; Preparation of Leadership 
Personnel; Combined Priority for Personnel Preparation; 
Interdisciplinary Training in Analysis of Large-Scale Databases; Final 
Rule and Notices

  Federal Register / Vol. 71, No. 107 / Monday, June 5, 2006 / Rules 
and Regulations  

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DEPARTMENT OF EDUCATION

34 CFR Part 304

RIN 1820-AB58


Service Obligations Under Special Education--Personnel 
Development to Improve Services and Results for Children With 
Disabilities

AGENCY: Office of Special Education and Rehabilitative Services, 
Department of Education.

ACTION: Final regulations.

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SUMMARY: The Secretary issues final regulations governing specific 
provisions of the Personnel Development to Improve Services and Results 
for Children with Disabilities program authorized under part D of the 
Individuals with Disabilities Education Act, as amended (IDEA or Act). 
The regulations are needed to implement changes made to IDEA, as 
amended by the Individuals with Disabilities Education Improvement Act 
of 2004.

DATES: These regulations are effective July 5, 2006.

FOR FURTHER INFORMATION CONTACT: Louis C. Danielson, U.S. Department of 
Education, 400 Maryland Avenue, SW., Potomac Center Plaza, room 4160, 
Washington, DC 20202-2641. Telephone: (202) 245-7371.
    If you use a telecommunications device for the deaf (TDD), you may 
call the Federal Relay System (FRS) 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 under FOR FURTHER 
INFORMATION CONTACT.

SUPPLEMENTARY INFORMATION: These regulations implement specific 
provisions of part D of the IDEA. On June 21, 2005, we published a 
notice of proposed rulemaking (NPRM) in the Federal Register (70 FR 
35782) (NPRM) to amend the regulations governing the Assistance to 
States for the Education of Children with Disabilities Program; 
Preschool Grants for Children with Disabilities Program; and Service 
Obligations under Special Education--Personnel Development to Improve 
Services and Results for Children with Disabilities. The proposed 
regulations for Service Obligations under Special Education--Personnel 
Development to Improve Services and Results for Children with 
Disabilities in 34 CFR part 304 are described on pages 35817 through 
35818 of the preamble to the NPRM. The text of the proposed regulations 
can be found on pages 35890 through 35892 of the NPRM.
    In the preamble to the NPRM, the Secretary discussed the major 
changes proposed in that document to implement the provisions of the 
Service Obligations under Special Education--Personnel Development to 
Improve Services and Results for Children with Disabilities program, as 
specified in section 662(h) of the Act. These included the following:
     Clarifying in Sec. Sec.  304.21 and 304.22 that stipends 
are not included in the cost of attendance and are not limited by the 
cap in Sec.  304.22(b).
     Clarifying in Sec.  304.30 that the Secretary is 
responsible for ensuring that scholars comply with the service 
obligation requirements.
     Describing in one section--Sec.  304.30--all of the 
requirements a scholar must meet.
    As more fully explained in the Analysis of Comments and Changes 
section of this notice, these final regulations for part 304 contain 
several changes from the regulations proposed in the NPRM.

Major Changes in the Regulations

    The following is a summary of the major substantive changes in 
these final regulations from the regulations proposed in the NPRM:
    1. Eligible employment options for scholars have been expanded 
(Sec.  304.30(e)(3)).
    2. The number of additional years allowed to fulfill a scholar's 
service obligation has been increased from three to five years (Sec.  
304.30(f)(1)).

Analysis of Comments and Changes

    In response to the Secretary's invitation in the NPRM, five parties 
submitted comments on the proposed regulations for the Service 
Obligations Under Special Education--Personnel Development to Improve 
Services and Results for Children with Disabilities (Personnel 
Development Program). An analysis of the comments and of the changes in 
the regulations since publication of the NPRM follows. We discuss 
substantive issues under the section to which they pertain. References 
to sections in this analysis are to those contained in the final 
regulations. The analysis generally does not address minor changes, 
including technical changes made to the language published in the NPRM, 
suggested changes the Secretary is not legally authorized to make under 
applicable statutory authority, or comments that express concerns of a 
general nature about the Department or other matters that are not 
directly relevant to these regulations.

Assurances that Must be Provided by Grantee (Sec.  304.23)

    Comment: None.
    Discussion: Upon further review, the Department has determined 
that, at the time of exit from the program, the grantee should provide 
the scholar with a list containing all of the scholar's obligations 
under Sec.  304.30, and the scholar should certify that this list of 
obligations is correct. We believe that this requirement should be 
added because it clarifies that the grantees, which have the best 
access to this information, are responsible for sharing this 
information with the scholars.
    Change: We have deleted the requirement contained in Sec.  
304.23(c) that the grantee must ``establish policies and procedures for 
receiving and maintaining records of written certification from 
scholars.'' We have modified Sec.  304.23(c) by adding new Sec. Sec.  
304.23(c)(1) and (2), which require the grantee to provide information 
to the scholar and specify that, upon receipt of this information, the 
scholar must provide written certification to the grantee that this 
information is correct.

Requirements for Scholar (Sec.  304.30(e))

    Comment: A few commenters stated that the ``majority of children'' 
and the ``majority of time'' requirements in Sec.  304.30(e)(1) and (2) 
cause hardship for some scholars. The commenters stated that scholars 
who provide direct services in early intervention and adaptive physical 
education are most impacted by these requirements because early 
intervention and adaptive physical education positions involve working 
primarily, or exclusively, in settings in which scholars provide 
educational services, but not necessarily special education services, 
to students with the full range of abilities and disabilities in a 
general education setting. The commenters recommended eliminating the 
current ``majority of children'' and the ``majority of time'' 
requirements in Sec.  304.30(e)(1) and (2) and instead requiring only 
that scholars ``provide special education and related services to 
children with disabilities * * *'' consistent with section 662(h)(1) of 
the Act.
    Discussion: The Department supports the provision of special 
education and related services and early intervention services in 
settings with nondisabled children. However, the Department believes 
that the limited funds available for the Personnel Development Program 
should be targeted to support and train scholars who, following 
completion of

[[Page 32397]]

training, will be employed in positions (other than supervisory, 
postsecondary faculty, research, policy, technical assistance, program 
development, or administration) that meet the ``majority of time'' or 
the ``majority of children'' requirements in Sec.  304.30(e)(1) and (2) 
to ensure that the need for qualified special education personnel can 
be met. The Department believes that these majority requirements are 
necessary to ensure that there are sufficient numbers of qualified 
personnel to provide the most effective special education, related 
services, and early intervention services to infants, toddlers, and 
children with disabilities.
    Changes: None.
    Comment: None.
    Discussion: Upon internal review, the Department has determined 
that it would be helpful to define more precisely the term 
``majority,'' as it is used in Sec.  304.30(e).
    Changes: We have modified the language in Sec.  304.30(e) to 
substitute the term ``51 percent'' for the term ``majority'' throughout 
this section.
    Comment: A few commenters stated that the range of employment 
options to satisfy the service obligation requirements in Sec.  
304.30(e)(3) through (5) is too restrictive and should be expanded. The 
commenters stated that scholars should be allowed to satisfy their 
service obligation through work in other areas, such as policy, 
administration, professional development, technical assistance, and 
program development related to special education, related services, and 
early intervention services.
    Discussion: The Department agrees that there may be situations in 
which an individual can fulfill his or her service obligation in a 
position that is not described in Sec.  304.30(e), including positions 
involving policy, technical assistance, program development, or 
administration, when the individual spends at least 51 percent of his 
or her time performing work related to the training for which a 
scholarship was received.
    Changes: We have deleted Sec.  304.30(e)(4) and (5), and modified 
the language in Sec.  304.30(e)(3) to clarify that, in addition to 
positions involving supervision, teaching at the postsecondary level, 
and research, a scholar may fulfill the scholar's service obligation in 
a position involving policy, technical assistance, program development, 
or administration when the scholar spends at least 51 percent of his or 
her time performing work related to the training for which a 
scholarship was received under section 662 of the Act.
    Comment: A few commenters stated that recent Federal education 
policy, as articulated in the No Child Left Behind Act of 2001 and the 
2004 reauthorization of IDEA, focuses on addressing the needs and 
performance of children with disabilities within programs, policies, 
and procedures of the general education system. The commenters 
recommended that the Department expand the eligible employment options 
to include, under limited circumstances, employment that addresses the 
needs of children with disabilities within the broader context of 
prevention and intervention initiatives in the general education system 
that are designed to accommodate the needs of a wide range of children.
    Discussion: The purpose of providing scholarships under the 
Personnel Development Program is to ensure that there are sufficient 
numbers of qualified personnel to provide special education, related 
services, and early intervention services to infants, toddlers, and 
children with disabilities. While scholarships under this program may 
be used to provide support for training and professional development on 
topics leading to the identification of children with disabilities 
(e.g., progress monitoring and response to intervention), we do not 
believe scholars should be permitted to satisfy their service 
obligation in positions that focus primarily on nondisabled students or 
nondisabled students who may be at risk of having a disability.
    Changes: None.

Time Period (Sec.  304.30(f))

    Comment: A few commenters suggested changing the length of the 
service obligation in Sec.  304.30(f)(1) so that scholars who are 
unable to satisfy the ``majority of children'' or the ``majority of 
time'' requirement in any single year would either automatically be 
subject to one extra year of service, or, upon request, receive a 
deferral of up to two years.
    Discussion: Section 304.30(f)(1) requires scholars to complete at 
least two years of service obligation for every academic year for which 
assistance was received and to complete their service obligation in not 
more than the sum of the number of years required plus three additional 
years. The Department recognizes that some employment circumstances may 
make it difficult for scholars to fulfill their service obligation, as 
defined in Sec.  304.30(e), within this time period. While implementing 
the commenters' recommendations would be too complex and burdensome to 
administer and monitor, we believe it would be appropriate to expand 
the number of years that scholars will have to fulfill their service 
obligation.
    Changes: We have revised Sec.  304.30(f)(1) to allow all scholars 
five, instead of three, additional years to fulfill their service 
obligation.
    Comment: A few commenters expressed concern that, when scholars who 
are qualified service providers before they enter an academic program 
(e.g., teachers returning to school for a masters degree) do not 
complete one academic year of study because of personal or professional 
reasons, they must repay their scholarship. The commenters stated that 
these scholars, who are already qualified to provide special education, 
related services, or early intervention services to children with 
disabilities, should be permitted to satisfy their obligation through 
service, rather than repaying the cost of the scholarship, even though 
they have not accumulated one year of academic credit, as required in 
Sec.  304.30(f)(2).
    Discussion: The Department believes that scholars are unlikely to 
make substantial gains in their knowledge and skills in less than one 
year such that they would be able to provide improved special 
education, related services, or early intervention services to infants, 
toddlers, and children with disabilities.
    Changes: None.

Executive Order 12866

    These final regulations have been reviewed by the Office of 
Management and Budget (OMB) as a significant regulatory action in 
accordance with Executive Order 12866. Under the terms of the order we 
have assessed the potential costs and benefits of this regulatory 
action.
    The potential costs associated with the final regulations are those 
resulting from statutory requirements and those we have determined to 
be necessary for administering this program effectively and 
efficiently.
    In assessing the potential costs and benefits of these final 
regulations, we have determined that the benefits of the regulations 
justify the costs.

Summary of Potential Costs and Benefits

Service Obligation Tracking Burden

    The statutory change incorporated in these final regulations, which 
shifts the burden for ensuring that scholars comply with their service 
obligation from grantees to the Secretary, was not specifically 
addressed in the Summary of potential costs and benefits section 
contained in the NPRM because this

[[Page 32398]]

change does not impose any additional burden on grantees, and will not 
result in any significant additional costs or benefits.
    We include additional discussion of potential costs and benefits in 
the section of this preamble titled Analysis of Comment and Changes.

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. The collection of information in these final regulations has 
been approved by OMB under OMB control number 1820-0622. We also 
display this OMB control number in these final regulations at the end 
of the affected sections of the regulations.
    The clarification of the written certification requirement from the 
scholar in Sec.  304.23(c)(2) was not discussed in the NPRM but has 
been added to the final regulations. This imposes a new information 
collection requirement, however, it does not fall under the Paperwork 
Reduction Act's definition of ``information'' as explained in 5 CFR 
1320.3(h).

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 the Department's 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.

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/news/fedregister.
    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 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.gpoaccess.gov/nara/index.html.


(Catalog of Federal Domestic Assistance Number 84.325 Personnel 
Development to Improve Services and Results for Children with 
Disabilities).

List of Subjects in 34 CFR Part 304

    Service obligations under special education--personnel development 
to improve services and results for children with disabilities.

    Dated: May 26, 2006.
John H. Hager,
Assistant Secretary for Special Education and Rehabilitative Services.

0
For the reasons set forth above, the Department revises 34 CFR part 304 
to read as follows:

PART 304--SERVICE OBLIGATIONS UNDER SPECIAL EDUCATION--PERSONNEL 
DEVELOPMENT TO IMPROVE SERVICES AND RESULTS FOR CHILDREN WITH 
DISABILITIES

Subpart A--General
Sec.
304.1 Purpose.
304.3 Definitions.
Subpart B--Conditions That Must Be Met by Grantee
304.21 Allowable costs.
304.22 Requirements for grantees in disbursing scholarships.
304.23 Assurances that must be provided by grantee.
Subpart C--Conditions That Must Be Met by Scholar
304.30 Requirements for scholar.
304.31 Requirements for obtaining an exception or deferral to 
performance or repayment under an agreement.

    Authority: 20 U.S.C. 1462(h), unless otherwise noted.

Subpart A--General


Sec.  304.1  Purpose.

    Individuals who receive scholarship assistance from projects funded 
under the Special Education--Personnel Development to Improve Services 
and Results for Children with Disabilities program are required to 
complete a service obligation, or repay all or part of the costs of 
such assistance, in accordance with section 662(h) of the Act and the 
regulations of this part.

(Authority: 20 U.S.C. 1462(h))

Sec.  304.3  Definitions.

    The following definitions apply to this program:
    (a) Academic year means--
    (1) A full-time course of study--
    (i) Taken for a period totaling at least nine months; or
    (ii) Taken for the equivalent of at least two semesters, two 
trimesters, or three quarters; or
    (2) For a part-time scholar, the accumulation of periods of part-
time courses of study that is equivalent to an ``academic year'' under 
paragraph (a)(1) of this definition.
    (b) Act means the Individuals with Disabilities Education Act, as 
amended, 20 U.S.C. 1400 et seq.
    (c) Early intervention services means early intervention services 
as defined in section 632(4) of the Act and includes early intervention 
services to infants and toddlers with disabilities, and as applicable, 
to infants and toddlers at risk for disabilities under sections 632(1) 
and 632(5)(b) of the Act.
    (d) Full-time, for purposes of determining whether an individual is 
employed full-time in accordance with Sec.  304.30 means a full-time 
position as defined by the individual's employer or by the agencies 
served by the individual.
    (e) Related services means related services as defined in section 
602(26) of the Act.
    (f) Repayment means monetary reimbursement of scholarship 
assistance in lieu of completion of a service obligation.
    (g) Scholar means an individual who is pursuing a degree, license, 
endorsement, or certification related to special education, related 
services, or early intervention services and who receives scholarship 
assistance under section 662 of the Act.
    (h) Scholarship means financial assistance to a scholar for 
training under the program and includes all disbursements or credits 
for tuition, fees, stipends, books, and travel in conjunction with 
training assignments.
    (i) Service obligation means a scholar's employment obligation, as 
described in section 662(h) of the Act and Sec.  304.30.
    (j) Special education means special education as defined in section 
602(29) of the Act.

(Authority: 20 U.S.C. 1462(h))

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Subpart B--Conditions That Must be Met by Grantee


Sec.  304.21  Allowable costs.

    In addition to the allowable costs established in the Education 
Department General Administrative Regulations in 34 CFR 75.530 through 
75.562, the following items are allowable expenditures by projects 
funded under the program:
    (a) Cost of attendance, as defined in Title IV of the Higher 
Education Act of 1965, as amended, 20 U.S.C. 1087ll (HEA), including 
the following:
    (1) Tuition and fees.
    (2) An allowance for books, supplies, transportation, and 
miscellaneous personal expenses.
    (3) An allowance for room and board.
    (b) Stipends.
    (c) Travel in conjunction with training assignments.

(Authority: 20 U.S.C. 1462(h))

Sec.  304.22  Requirements for grantees in disbursing scholarships.

    Before disbursement of scholarship assistance to an individual, a 
grantee must--
    (a) Ensure that the scholar--
    (1) Is a citizen or national of the United States;
    (2) Is a permanent resident of--
    (i) Puerto Rico, the United States Virgin Islands, Guam, American 
Samoa, or the Commonwealth of the Northern Mariana Islands; or
    (ii) The Republic of the Marshall Islands, the Federated States of 
Micronesia, or the Republic of Palau during the period in which these 
entities are eligible to receive an award under the Personnel 
Development to Improve Services and Results for Children with 
Disabilities program; or
    (3) Provides evidence from the U.S. Department of Homeland Security 
that the individual is--
    (i) A lawful permanent resident of the United States; or
    (ii) In the United States for other than a temporary purpose with 
the intention of becoming a citizen or permanent resident;
    (b) Limit the cost of attendance portion of the scholarship 
assistance (as discussed in Sec.  304.21(a)) to the amount by which the 
individual's cost of attendance at the institution exceeds the amount 
of grant assistance the scholar is to receive for the same academic 
year under title IV of the HEA; and
    (c) Obtain a Certification of Eligibility for Federal Assistance 
from each scholar, as prescribed in 34 CFR 75.60, 75.61, and 75.62.

(Authority: 20 U.S.C. 1462(h))

Sec.  304.23  Assurances that must be provided by grantee.

    Before receiving an award, a grantee that intends to grant 
scholarships under the program must include in its application an 
assurance that the following requirements will be satisfied:
    (a) Requirement for agreement. Prior to granting a scholarship, the 
grantee will require each scholar to enter into a written agreement in 
which the scholar agrees to the terms and conditions set forth in Sec.  
304.30. This agreement must explain the Secretary's authority to grant 
deferrals and exceptions to the service obligation pursuant to Sec.  
304.31 and include the current Department address for purposes of the 
scholar's compliance with Sec.  304.30(i), or any other purpose under 
this part.
    (b) Standards for satisfactory progress. The grantee must 
establish, notify scholars of, and apply reasonable standards for 
measuring whether a scholar is maintaining satisfactory progress in the 
scholar's course of study.
    (c) Exit certification.
    (1) At the time of exit from the program, the grantee must provide 
the following information to the scholar:
    (i) The number of years the scholar needs to work to satisfy the 
work requirements in Sec.  304.30(d);
    (ii) The total amount of scholarship assistance received subject to 
Sec.  304.30;
    (iii) The time period, consistent with Sec.  304.30(f)(1), during 
which the scholar must satisfy the work requirements; and
    (iv) As applicable, all other obligations of the scholar under 
Sec.  304.30.
    (2) Upon receipt of this information from the grantee, the scholar 
must provide written certification to the grantee that the information 
is correct.
    (d) Information. The grantee must forward the information and 
written certification required in paragraph (c) of this section to the 
Secretary, as well as any other information that is necessary to carry 
out the Secretary's functions under section 662 of the Act and this 
part.
    (e) Notification to the Secretary. If the grantee is aware that the 
scholar has chosen not to fulfill or will be unable to fulfill the 
obligation under Sec.  304.30(d), the grantee must notify the Secretary 
when the scholar exits the program.

(Approved by the Office of Management and Budget under control 
number 1820-0622)

(Authority: 20 U.S.C. 1462(h))

Subpart C--Conditions That Must Be Met by Scholar


Sec.  304.30  Requirements for scholar.

    Individuals who receive scholarship assistance from grantees funded 
under section 662 of the Act must--
    (a) Training. Receive the training at the educational institution 
or agency designated in the scholarship;
    (b) Educational allowances. Not accept payment of educational 
allowances from any other entity if that allowance conflicts with the 
scholar's obligation under section 662 of the Act and this part;
    (c) Satisfactory progress. Maintain satisfactory progress toward 
the degree, certificate, endorsement, or license as determined by the 
grantee;
    (d) Service obligation. Upon exiting the training program under 
paragraph (a) of this section, subsequently maintain employment--
    (1) On a full-time or full-time equivalent basis; and
    (2) For a period of at least two years for every academic year for 
which assistance was received;
    (e) Eligible employment. In order to meet the requirements of 
paragraph (d) of this section for any project funded under section 662 
of the Act, be employed in a position in which--
    (1) At least 51 percent of the infants, toddlers, and children to 
whom the individual provides services are receiving special education, 
related services, or early intervention services from the individual;
    (2) The individual spends at least 51 percent of his or her time 
providing special education, related services, or early intervention 
services to infants, toddlers, and children with disabilities; or
    (3) If the position involves supervision (including in the capacity 
of a principal), teaching at the postsecondary level, research, policy, 
technical assistance, program development, or administration, the 
individual spends at least 51 percent of his or her time performing 
work related to the training for which a scholarship was received under 
section 662 of the Act.
    (f) Time period. Meet the service obligation under paragraph (d) of 
this section as follows:
    (1) A scholar must complete the service obligation within the 
period ending not more than the sum of the number of years required in 
paragraph (d)(2) of this section, as appropriate, plus five additional 
years, from the date the scholar completes the training for which the 
scholarship assistance was awarded.

[[Page 32400]]

    (2) A scholar may begin eligible employment subsequent to the 
completion of one academic year of the training for which the 
scholarship assistance was received that otherwise meets the 
requirements of paragraph (1);
    (g) Part-time scholars. If the scholar is pursuing coursework on a 
part-time basis, meet the service obligation in this section based on 
the accumulated academic years of training for which the scholarship is 
received;
    (h) Information upon exit. Provide the grantee all requested 
information necessary for the grantee to meet the exit certification 
requirements under Sec.  304.23(c);
    (i) Information after exit. Within 60 days after exiting the 
program, and as necessary thereafter for any changes, provide the 
Department, via U.S. mail, all information that the Secretary needs to 
monitor the scholar's service obligation under this section, including 
social security number, address, employment setting, and employment 
status;
    (j) Repayment. If not fulfilling the requirements in this section, 
subject to the provisions in Sec.  304.31 regarding an exception or 
deferral, repay any scholarship received, plus interest, in an amount 
proportional to the service obligation not completed as follows:
    (1) The Secretary charges the scholar interest on the unpaid 
balance owed in accordance with the Debt Collection Act of 1982, as 
amended, 31 U.S.C. 3717.
    (2)(i) Interest on the unpaid balance accrues from the date the 
scholar is determined to have entered repayment status under paragraph 
(4) of this section.
    (ii) Any accrued interest is capitalized at the time the scholar's 
repayment schedule is established.
    (iii) No interest is charged for the period of time during which 
repayment has been deferred under Sec.  304.31.
    (3) Under the authority of the Debt Collection Act of 1982, as 
amended, the Secretary may impose reasonable collection costs.
    (4) A scholar enters repayment status on the first day of the first 
calendar month after the earliest of the following dates, as 
applicable:
    (i) The date the scholar informs the grantee or the Secretary that 
the scholar does not plan to fulfill the service obligation under the 
agreement.
    (ii) Any date when the scholar's failure to begin or maintain 
employment makes it impossible for that individual to complete the 
service obligation within the number of years required in Sec.  
304.30(f).
    (iii) Any date on which the scholar discontinues enrollment in the 
course of study under Sec.  304.30(a).
    (5) The scholar must make payments to the Secretary that cover 
principal, interest, and collection costs according to a schedule 
established by the Secretary.
    (6) Any amount of the scholarship that has not been repaid pursuant 
to paragraphs (j)(1) through (j)(5) of this section will constitute a 
debt owed to the United States that may be collected by the Secretary 
in accordance with 34 CFR part 30.

(Approved by the Office of Management and Budget under control 
number 1820-0622)

(Authority: 20 U.S.C. 1462(h))

Sec.  304.31  Requirements for obtaining an exception or deferral to 
performance or repayment under an agreement.

    (a) Based upon sufficient evidence to substantiate the grounds, the 
Secretary may grant an exception to the repayment requirement in Sec.  
304.30(j), in whole or part, if the scholar--
    (1) Is unable to continue the course of study in Sec.  304.30 or 
perform the service obligation because of a permanent disability; or
    (2) Has died.
    (b) Based upon sufficient evidence to substantiate the grounds, the 
Secretary may grant a deferral of the repayment requirement in Sec.  
304.30(j) during the time the scholar--
    (1) Is engaging in a full-time course of study at an institution of 
higher education;
    (2) Is serving on active duty as a member of the armed services of 
the United States;
    (3) Is serving as a volunteer under the Peace Corps Act; or
    (4) Is serving as a full-time volunteer under title I of the 
Domestic Volunteer Service Act of 1973.

(Authority: 20 U.S.C. 1462(h))

[FR Doc. 06-5111 Filed 6-2-06; 8:45 am]
BILLING CODE 4000-01-P