[Federal Register Volume 73, Number 77 (Monday, April 21, 2008)]
[Proposed Rules]
[Pages 21260-21286]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-8261]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 73, No. 77 / Monday, April 21, 2008 / 
Proposed Rules  

[[Page 21260]]



DEPARTMENT OF HOMELAND SECURITY

U.S. Immigration and Customs Enforcement

8 CFR Parts 103 and 214

[DHS No. ICEB-2008-0004]
RIN 1653-AA54


Adjusting Program Fees and Establishing Procedures for Out-of-
Cycle Review and Recertification of Schools Certified by the Student 
and Exchange Visitor Program To Enroll F or M Nonimmigrant Students

AGENCY: U.S. Immigration and Customs Enforcement, DHS.

ACTION: Proposed rule.

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

SUMMARY: The Department of Homeland Security (DHS) is proposing to 
amend the Student and Exchange Visitor Program (SEVP) school 
certification petition fee and the application fee for nonimmigrants 
seeking to become academic (F visa) or vocational (M visa) students, or 
exchange visitors (J visa). This proposed rule would adjust the fees 
for schools seeking to admit F or M students; adjust the fees paid by 
individual F, M or J nonimmigrants; implement mandatory review of fees 
collected by SEVP; set the fee for submitting a school certification 
petition at $1700, plus $655 for each site; set the fee for each F or M 
student at $200; for most J exchange visitors at $180; and for exchange 
visitors seeking admission as au pairs, camp counselors, and summer 
work/travel program participants at $35. DHS proposes to make this rule 
effective at the beginning of fiscal year 2009, on October 1, 2008.
    DHS proposes also to establish oversight and recertification of 
schools for attendance by F or M students. The proposed rule would 
establish procedures for schools to submit their recertification 
petitions, add a provision allowing a school to voluntarily withdraw 
from its certification, and clarify procedures for school operation 
with regard to F or M students during recertification and following a 
denial of recertification or a withdrawal of certification. Further, 
the proposed rule would remove obsolete provisions used prior to 
implementation of the Student and Exchange Visitor Information System 
(SEVIS), a Web-enabled database that provides current information on F, 
M and J nonimmigrants in the United States.

DATES: Comments must be submitted on or before June 20, 2008.

ADDRESSES: You may submit comments, which must be identified by DHS 
docket number ICEB-2008-0004, using one of the following methods:
    Federal Rulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting comments.
    Mail: Office of Policy, U.S. Immigration and Customs Enforcement, 
U.S. Department of Homeland Security, 425 I St., NW., Room 7257, 
Washington, DC 20536.
    Hand Delivery/Courier: The address for sending comments by hand 
delivery or courier is the same as that for submitting comments by 
mail. Contact telephone number is (202) 514-8693.
    Facsimile: Comments may be submitted by facsimile at (866) 466-
5370.

FOR FURTHER INFORMATION CONTACT: Louis Farrell, Director, Student and 
Exchange Visitor Program; U.S. Immigration and Customs Enforcement, 
Department of Homeland Security; Chester Arthur Building, 425 I St., 
NW., Suite 6034, Washington, DC 20536; telephone number (202) 305-2346. 
This is not a toll-free number. Program information can be found at 
http://www.ice.gov/sevis/.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Public Participation
II. Background
    A. Student and Exchange Visitor Program Legal Authority and 
Requirements
    B. Student and Exchange Visitor Information System
    C. Development of SEVP
III. Adjustment of SEVP Fees
    A. Rationale for New Fee Schedule
    B. SEVP Funding Authority
    C. SEVP Baseline Costs and Fees
    D. Methodology
    1. Activity-Based Costing Approach
    2. Full Cost
    3. Cost Basis for SEVP Fees Based on Current Services
    4. Enhancements
    E. Summary of the Full Cost Information for FY 2009
    1. Fee Allocation
    2. SEVP FY 2009 Cost Model Results
    3. Fee Calculations
    4. Calculation of Site-Visit Cost
    5. Proposed Fee Levels
    F. Impact on Applicants
IV. Procedures for Certification, Out-of-Cycle Review and 
Recertification of Schools
    A. Filing a Petition for SEVP Certification, Out-of-Cycle Review 
or Recertification
    1. General Requirements
    2. School Systems
    3. Petition Submission Requirements
    4. Eligibility
    B. Interview of Petitioner
    C. Notices and Communications
    D. Recordkeeping, Retention and Reporting Requirements
    E. SEVP Certification, Recertification, Out-of-Cycle Review and 
Oversight
    1. Certification
    2. Recertification
    3. School Recertification Process
    4. Out-of-Cycle Review
    5. Voluntary Withdrawal of Certification
    F. Designated School Officials
    G. Denial or Withdrawal of SEVP Certification or Recertification 
Procedures
    1. Automatic Withdrawal
    2. Withdrawal on Notice
    3. Operations at a School When SEVP Certification Is Withdrawn 
or Recertification Denied
V. Statutory and Regulatory Requirements
    A. Regulatory Flexibility Act
    B. Unfunded Mandates Reform Act
    C. Small Business Regulatory Enforcement Fairness Act of 1996
    D. Executive Order 12866: Regulatory Review
    E. Executive Order 13132, Federalism
    F. Executive Order 12988 Civil Justice Reform
    G. Paperwork Reduction Act
List of Subjects

Table of Abbreviations and Acronyms

ABC Activity-based Costing
CBP U.S. Customs and Border Protection
CEU Compliance Enforcement Unit
CFO Chief Financial Officer
DHS Department of Homeland Security
DOS Department of State
DSO Designated school official
EBSVERA Enhanced Border Security and Visa Entry Reform Act of 2002, 
Public Law 107-173; May 14, 2002
FASAB Federal Accounting Standards Advisory Board
HSPD-2 Homeland Security Presidential Directive--2
ICE U.S. Immigration and Customs Enforcement
IIRIRA Illegal Immigration Reform and Immigrant Responsibility Act 
of 1996

[[Page 21261]]

INA Immigration and Nationality Act of 1952
INS Immigration and Naturalization Service
IRM Information Resources Management
IT information technology
NAICS North American Industry Classification System
NOIW Notice of Intent to Withdraw
OMB Office of Management and Budget
PDSO Principal designated school official
RFA Regulatory Flexibility Act
RFE Request for evidence
SBA Small Business Administration
SCB School Certification Branch
SEVIS Student and Exchange Visitor Information System
SEVP Student and Exchange Visitor Program
SFFAS FASAB Statement of Federal Financial Accounting Standard No 4: 
Managerial Cost Accounting Concepts and Standards for the Federal 
Government
SSA Social Security Administration
UMRA Unfunded Mandates Reform Act of 1995
USCIS U.S. Citizenship and Immigration Services

I. Public Participation

    Interested persons are invited to comment on this rulemaking by 
submitting written data, views, or arguments on all aspects of the 
proposed rule. DHS invites comments related to the potential economic, 
environmental, or Federalism effects that might result from this 
proposed rule. Comments that will most assist DHS will reference a 
specific portion of this proposed rule and preamble by the 
identification number at the heading of the specific section being 
addressed. The reason for any recommended change should be explained. 
Data, information, and the authority that supports the recommended 
change should be included.
    DHS has entered into the docket for this rulemaking the SEVP Fee 
Study, and Initial Regulatory Flexibility Act Analysis: Impact on Small 
Schools of the Change in Fees for Certification and Institution of 
Recertification by the Student and Exchange Visitor Program.
    DHS welcomes comments on the information and analyses in these 
supporting documents. The budget methodology software used in computing 
the SEVIS fees is a commercial product licensed to SEVP, which may be 
accessed on-site by appointment by calling (202) 305-2346.
    Instructions: All submissions received must include the agency name 
and Department of Homeland Security Docket No. ICEB-2008-0004. All 
comments received (including any personal information provided) will be 
posted without change to http://www.regulations.gov. See ADDRESSES, 
above, for methods to submit comments. Mailed submissions may be paper, 
disk, or CD-ROM.
    Comments may be viewed online at http://www.regulations.gov, or in 
person at U.S. Immigration and Customs Enforcement, Department of 
Homeland Security, 425 I St., NW., Room 7257, Washington, DC 20536, by 
appointment.

II. Background

A. Student and Exchange Visitor Program Legal Authority and 
Requirements

    Under section 101(a)(15)(F)(i) of the Immigration and Nationality 
Act of 1952, as amended (INA), 8 U.S.C. 1101(a)(15)(F)(i), a foreign 
student may be admitted into the United States in nonimmigrant status 
to attend an academic or language training school (F visa). Under 
section 101(a)(15)(M)(i) of the INA, 8 U.S.C. 1101(a)(15)(M)(i), a 
foreign student may be admitted into the United States in nonimmigrant 
status to attend a vocational education school (M visa). An F or M 
student may enroll in a particular school only if the Secretary of 
Homeland Security has certified the school for the attendance of F or M 
students. Under section 101(a)(15)(j) of the INA, 8 U.S.C. 
1101(a)(15)(j), a foreign citizen may be admitted into the United 
States in nonimmigrant status as an exchange visitor (J visa) in an 
exchange program sponsored by the Department of State (DOS).
    Section 641 of the Illegal Immigration Reform and Immigrant 
Responsibility Act of 1996 (IIRIRA), Public Law 104-208, Div. C, 110 
Stat. 3009-546 (September 30, 1996), authorized the creation of a 
program to collect current and ongoing information provided by schools 
and exchange visitor programs regarding F, M, or J nonimmigrants during 
the course of their stay in the United States, using electronic 
reporting technology to the fullest extent practicable. IIRIRA further 
authorized DHS to certify schools participating in F or M student 
enrollment.
    The Uniting and Strengthening America by Providing Appropriate 
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public 
Law 107-56, 115 Stat. 272 (October 26, 2001), provided that alien date 
of entry and port of entry information be collected. On October 30, 
2001, the President issued Homeland Security Presidential Directive No. 
2 (HSPD-2) requiring DHS to conduct periodic, ongoing recertification 
of all schools certified to accept F or M students. 37 Weekly Comp. 
Pres. Docs. 1570, 1571-72 (October 29, 2001).
    The Enhanced Border Security and Visa Entry Reform Act of 2002 
(EBSVERA), Public Law 107-173, 116 Stat. 543 (May 14, 2002), 8 U.S.C. 
1762, provided for DHS to recertify all schools approved for attendance 
by F or M students within two years of enactment. Further, EBSVERA 
provided that DHS conduct an additional recertification of these 
schools every two years thereafter. Data collection requirements for 
SEVP certification, oversight and recertification of schools authorized 
to enroll F or M students are not specified in legislation, but are 
enumerated by regulation. 8 CFR 214.3, 214.4.
    This proposed rule would amend DHS regulations governing 
certification, oversight and recertification of schools by SEVP for 
attendance by F or M students. The proposed rule would establish 
procedures for schools to submit their recertification petitions, add a 
provision allowing a school to voluntarily withdraw from its 
certification, clarify procedures for school operation with regard to F 
or M students during recertification and following a withdrawal of 
certification, and remove obsolete provisions used prior to 
implementation of SEVIS. The proposed rule would adjust the SEVP 
certification fee and student application fee (I-901 SEVIS fee) to 
reflect existing operating costs, program requirements, and planned 
enhancements.

B. Student and Exchange Visitor Information System

    SEVP administers SEVIS, a Web-based data entry, collection and 
reporting system. SEVIS provides authorized users access to reliable 
information on F, M and J nonimmigrants, and their dependents. DHS, 
DOS, and other government agencies, as well as SEVP-certified schools 
and DOS-designated exchange visitor programs, use SEVIS data.
    Awareness of the information flow for F and M students is critical 
to understanding the use of SEVIS. A nonimmigrant must apply to an 
SEVP-certified school and be accepted for enrollment. From the 
information provided by the nonimmigrant, the school enters student 
information into SEVIS and issues a Form I-20, Certificate of 
Eligibility for Nonimmigrant Student Status. The nonimmigrant must 
submit an approved Form I-20 when applying for an F or M visa.
    Similarly, a nonimmigrant must apply to a DOS-designated exchange 
visitor program and be accepted for enrollment as a basis for applying 
for a J exchange visitor visa. From the information provided by the 
nonimmigrant, the

[[Page 21262]]

exchange visitor program enters exchange visitor information into SEVIS 
and issues a Form DS-2019, Certificate of Eligibility for Exchange 
Visitor (J-1) Status. The nonimmigrant must submit an approved Form DS-
2019 when applying for a J visa.
    U.S. Customs and Border Protection (CBP) inspectors will enter data 
into DHS systems related to the F, M or J admission to the United 
States. These systems interface with SEVIS, providing SEVP with these 
data.
    Certified schools and exchange visitor programs update information 
on their approved F, M and J nonimmigrants after the nonimmigrants' 
admission and during their stay in the United States.
    The SEVIS database enables DHS and DOS to efficiently administer 
their approval (i.e., certification and designation, respectively) and 
oversight processes of schools and programs wishing to benefit from 
enrolling nonimmigrants. SEVIS assists law enforcement agencies in 
tracking and monitoring F, M and J nonimmigrant status and apprehending 
violators before they can potentially endanger the national security of 
the United States. SEVIS assists government benefit and service 
providers to better serve their F, M and J nonimmigrant applicants. 
Finally, SEVIS enables schools and exchange visitor programs to 
instantaneously transmit electronic information and changes in required 
information on F, M and J nonimmigrants to U.S. Immigration and Customs 
Enforcement (ICE) and DOS throughout their stay in the United States. 
These include required notifications, reports, and updates to personal 
data.
    SEVIS data are used continually to qualify individuals applying for 
F, M and J status and to facilitate port of entry screening by CBP; to 
process benefit applications; to monitor nonimmigrant status 
maintenance; and, as needed, to facilitate timely removal.

C. Development of SEVP

    On July 1, 2002, selected schools that had been previously approved 
to enroll F and M students began to receive preliminary certification 
in SEVIS. After September 25, 2002, all schools became eligible to 
petition for certification in SEVIS. By February 15, 2003, schools were 
required to be certified in SEVIS in order to be authorized to issue 
initial Forms I-20. As of August 1, 2003, schools and exchange visitor 
programs were required to enter all F, M and J nonimmigrant data into 
SEVIS.
    As of February 1, 2008, SEVIS contained 1,016,029 active records on 
F, M, and J students and exchange visitor. More than 9,000 schools are 
currently SEVP-certified; more than 1,400 exchange visitor programs are 
DOS-designated.
    SEVP levies two fees to recoup the cost of DHS and DOS program 
operations and services, as well as to maintain and enhance SEVIS. The 
fees include: The I-901 SEVIS fee for the registration of student and 
exchange visitor information in SEVIS, and the Certification Fee for 
schools and school systems to accept nonimmigrant students 
participating in the F and M visa programs.
    On July 1, 2004, DHS promulgated a final rule that required the 
collection of information relating to F, M and J nonimmigrants and 
providing for the collection of the required fee to defray cost. 69 FR 
39814. That rule provided for the collection of a fee to be paid by 
foreign citizens seeking nonimmigrant status as F or M students or J 
exchange visitors.
    HSPD-2 requires DHS to conduct ongoing oversight and periodic 
recertification of all schools certified to accept F and/or M students. 
On September 25, 2002, the Department of Justice published an interim 
rule that implemented the certification process for schools to receive 
authorization to enroll F or M nonimmigrant students in SEVIS, 
including the fees charged for this service and the accompanying site 
visit. 67 FR 60107. This certification process includes an ongoing 
commitment by schools to maintain current and accurate records in SEVIS 
on their F and M students, as well as on their own operations.
    Congress required DHS to recertify all schools approved for 
attendance by F or M students within two years of the passage of 
EBSVERA. EBSVERA section 502(a), 8 U.S.C. 1762(a). Congress also 
required that schools be recertified every two years to confirm that 
the schools remain eligible for certification and are in compliance 
with recordkeeping, retention and reporting requirements.
    Funding for recertification will be provided by a portion of the I-
901 SEVIS fee levied on F and M students.
    In establishing the recertification process, SEVP conducted a 
detailed business process analysis to document the recertification 
business process; developed standard operating processes for 
recertification; developed cycle time measurements of the proposed 
processes; and estimated the level of effort required to conduct 
compliance reviews of certified schools. Based on this analysis, SEVP 
developed the projected cost for recertification.

III. Adjustment of SEVP Fees

A. Rationale for New Fee Schedule

    The proposed amended fees are driven by two factors: The need to 
comply with statutory and regulatory requirements that SEVP review its 
fee structure every two years to ensure that the cost of the services 
that are provided are fully captured by fees assessed on those 
receiving the services; and the need to enhance SEVP capability to 
achieve its legislative goals to support national security and counter 
immigration fraud through the development and implementation of 
critical system and programmatic enhancements.
    This proposed rule would establish a fee structure that 
incorporates the added cost of school recertification into the I-901 
SEVIS fee that is paid by applicants for F and M status, allowing SEVP 
to capture the entire cost for activities related to recertification. 
The proposed rule would allow SEVP to fully fund activities and 
institute critical near-term program and system enhancements in a 
manner that fairly allocates cost and acknowledges defined performance 
goals.

B. SEVP Funding Authority

    The Secretary is authorized to collect fees for SEVP from 
prospective F and M students and J exchange visitors. IIRIRA section 
641(e)(1), as amended, 8 U.S.C. 1372(e)(1). Fees for specific classes 
of aliens were statutorily limited, but the Secretary was authorized to 
revise those fees. IIRIRA section 641(e)(4)(A), (g)(2), as amended, 8 
U.S.C. 1372(e)(4)(A), (g)(2). These fees are deposited as offsetting 
receipts into the Immigration Examinations Fee Account and are 
available to the Secretary until expended for the purposes of the 
program. IIRIRA section 641(e)(4)(B), 8 U.S.C. 1372(e)(4)(B).
    The Immigration Examination Fee Account, under INA section 286(m), 
8 U.S.C. 1356(m), provides that the Secretary may collect fees at a 
level that would ensure recovery of the full costs of providing 
adjudication services, including the costs of providing similar 
services without charge to asylum applicants and certain other 
immigrants:

    Notwithstanding any other provisions of law, all adjudication 
fees as are designated by the [Secretary] in regulations shall be 
deposited as offsetting receipts into a separate account entitled 
``Immigration Examinations Fee Account'' in the Treasury of the 
United States, * * *: Provided further, That fees for providing 
adjudication and naturalization services may be set at a level that 
will ensure recovery of the full costs of providing all such 
services, including the costs of similar services provided without

[[Page 21263]]

charge to asylum applicants or other immigrants. Such fees may also 
be set at a level that will recover any additional costs associated 
with the administration of the fees collected.

Under this authority, user fees are employed, not only for the benefit 
of the payer of the fee and any collateral benefit resulting to the 
public, but also provide a benefit to certain others, particularly 
asylum applicants and refugees and others whose fees are waived. The 
fees proposed in this rule would not fund any support for asylum 
applicants or refugees, but would support specific sets of reduced fee 
and fee-exempt exchange visitors.
    The Secretary is required to certify schools for participation in 
SEVIS and authorization to enroll F and M students. INA section 
101(a)(15)(F)(i), (M)(i), 8 U.S.C. 1101(a)(15)(F)(i), (M)(i). The 
Secretary charges a fee for this adjudication and approval under the 
Immigration Examinations Fee Account. INA section 286(m), 8 U.S.C. 
1356(m).
    The Secretary is also required to review and recertify schools 
biennially. EBSVERA section 502(a), 8 U.S.C. 1762(a). The Secretary 
must charge a fee for this service under the Immigration Examinations 
Fee Account. INA section 286(m), 8 U.S.C. 1356(m). The Secretary would 
recover the costs of recertification in this proposed rule from the 
students who are benefited by the recertification.
    In developing fees and fee rules, DHS looks to a range of 
governmental accounting provisions. The Office of Management and Budget 
(OMB) Circular A-25, User Charges (revised), section 6, 58 FR 38142 
(July 15, 1993) defines ``full cost'' to include all direct and 
indirect cost to any part of the Federal government for providing a 
good, resource, or service. These costs include, but are not limited 
to, an appropriate share of: direct and indirect personnel cost; 
physical overhead; consulting and other indirect cost; management and 
supervisory cost; enforcement; information collection and research; and 
establishment of standards and regulation, including any required 
environmental impact statements.
    OMB Circular A-11, Preparation, Submission and Execution of the 
Budget, section 31.12, July 2, 2007, directs agencies to develop user 
charge estimates based on the full cost recovery policy set forth in 
OMB Circular A-25, User Charges (budget formulation and execution 
policy regarding user fees).
    The Federal Accounting Standards Advisory Board (FASAB) Statement 
of Federal Financial Accounting Standards (SFFAS) No. 4: Managerial 
Cost Accounting Concepts and Standards for the Federal Government, July 
31, 1995, provides the standards regarding managerial cost accounting 
and full cost. SFFAS No. 4 defines ``full cost'' to include ``direct 
and indirect costs that contribute to the output, regardless of funding 
sources.'' FASAB identifies various classifications of cost to be 
included and recommends various methods of cost assignment to identify 
full cost. Activity-based costing (ABC) is highlighted as a costing 
methodology useful to determine full cost within an agency.
    The Chief Financial Officers Act of 1990, 31 U.S.C. 901-903, 
requires each agency's Chief Financial Officer (CFO) to ``review, on a 
biennial basis, the fees, royalties, rents and other charges imposed by 
the agency for services and things of value it provides, and make 
recommendations on revising those charges to reflect cost incurred by 
it in providing those services and things of value.'' 31 U.S.C. 
902(a)(8).
    This proposed rule reflects the recommendations made by the CFO. 
This proposed rule proposes increased funding that supports new 
initiatives critical to improving homeland security; funds operations 
to comply with statutory requirements to implement school 
recertification, and reflects the implementation of specific cost 
allocation methods to segment program cost to the appropriate fee, 
either F and M students or schools, to ensure compliance with the legal 
framework for fee setting.

C. SEVP Baseline Costs and Fees

    SEVP certifies schools to enroll F and M students; administers, 
maintains, and develops SEVIS; collects fees from F and M students, J 
exchange visitors, and schools; adjudicates certification appeals; and 
provides overall guidance to schools regarding program enrollment and 
compliance, as well as the use of SEVIS. These activities are funded 
solely through the collection of fees.
    The I-901 SEVIS fee, collected from students and exchange visitors, 
funds: the operation of SEVP; the cost of administering, maintaining, 
and developing SEVIS; the cost of school recertification; and all 
activities related to individual and organizational compliance issues 
within the jurisdiction of SEVP. Individual and organizational 
compliance includes funding the cost of investigations of compliance 
issues related to schools participating in SEVP and exchange visitor 
programs, as well as F, M, or J nonimmigrants where potential threats 
to national security are identified, where immigration violation or 
fraud is suspected, or both.
    The Certification Fee is paid by schools that petition for the 
authority to issue Forms I-20 to prospective nonimmigrant students for 
the purpose of enrolling them in F or M visa status. These monies fund 
the base internal cost for SEVP to process and adjudicate the initial 
school certification petition (Form I-17, Petition for Approval of 
School for Attendance by Nonimmigrant Student).
    SEVP expects to receive and Congress has approved expenditure for 
$56.2 million in student and certification fees in FY 2008. Budget of 
the United States, FY2008, Appendix: Detailed Budget Estimates, at 459 
(2007); Pub. L. 110-161, Div. E, 121 Stat. 1844 (2007). SEVP has 
requested $119.58 million in expenditure authority for FY 2009. Budget 
of the United States, FY2009, Appendix: Detailed Budget Estimates, at 
490 (2008).
    The I-901 SEVIS fee and school certification fee were initially set 
when they were established in 2002 and have not been adjusted since 
that time.

D. Methodology

    SEVP captured and allocated cost utilizing an ABC approach to 
define full cost, outline the sources of SEVP cost and define the fees. 
The ABC approach also provides detailed information on the cost and 
activities allocated to each fee.
1. Activity-Based Costing Approach
    SEVP used BusinessObjects Metify ABM Solo Edition, version 3.0.1, 
build 1277, ABC modeling software to determine the full cost associated 
with updating and maintaining SEVIS to collect and maintain information 
on F, M, and J nonimmigrants; certifying schools; overseeing school 
compliance; recertifying schools; adjudicating appeals; investigating 
suspected violations of immigration law and other potential threats to 
national security by F, M, or J nonimmigrants; providing outreach and 
education to users; and performing regulatory and policy analysis. The 
model was also used to identify management and overhead cost associated 
with the program.
    ABC is a business management methodology that relates inputs (cost) 
and outputs (products and services) by quantifying how work is 
performed in an organization (activities). The ABC methodology provides 
a way for fee-funded organizations to trace the cost of the provided 
services and to calculate an appropriate fee for the service, based on 
the cost of activities that are associated with the services for which 
the fee is levied.

[[Page 21264]]

    Using the ABC methodology, SEVP identified and defined the 
activities needed to support SEVP functions, to include those of 
current and future initiatives; captured the full resource cost and 
apportioned it to the appropriate activity; and assigned the cost to 
the appropriate fee category, based on the nature of the activity.
    SEVP used an independent contractor and commercially available ABC 
software to compute the fees. The structure of the software was 
tailored to SEVP needs for continual and real-time fee review and cost 
management.
2. Full Cost
    A critical element in building the ABC model for SEVP was to 
identify the sources and cost for all elements of the program. 
Legislative and regulatory guidance requires that the SEVP fees recoup 
the full cost of providing its resources and services, including, but 
not limited to, an appropriate share of: direct and indirect personnel 
cost, including salaries and fringe benefits, such as medical insurance 
and retirement; retirement cost, including all (funded or unfunded) 
accrued cost not covered by employee contributions, as specified in OMB 
Circular A-11; overhead, consulting, and other indirect cost, including 
material and supply cost, utilities, insurance, travel, as well as 
rents or imputed rents on land, buildings, and equipment; management 
and supervisory cost; and cost of enforcement, collection, research, 
establishment of standards, and regulation.
    To the extent applicable, SEVP used the cost accounting concepts 
and standards recommended in the FASAB ``Statement of Financial 
Accounting Standards Number 4, Managerial Cost Accounting Concepts and 
Standards for the Federal Government'' (1996). FASAB Standard Number 4 
sets the following five standards as fundamental elements of managerial 
cost accounting: accumulate and report cost of activities on a regular 
basis for management information purposes; define responsibility 
segments and report the cost of each segment's outputs; report the full 
cost of outputs (full cost includes resources that directly or 
indirectly contribute to the output and supporting services within the 
entity and from other entities); include full-cost, inter-entity cost, 
significant and material items provided by all Federal entities; and 
use appropriate costing methodologies to accumulate and assign cost to 
output.
3. Cost Basis for SEVP Fees Based on Current Services
    The FY 2009 budget provides the cost basis for the fees. The FY 
2009 budget reflects the required revenue to sustain current 
initiatives and to fund program enhancements: the implementation of 
SEVIS II, enhanced enforcement capability, the expansion of school 
liaison activity, and recertification.
    Determining the projected cost for the current efforts involved 
routine U.S. budget projection methodology. The U.S. budget establishes 
the current services of the program and projects the mandatory and 
inflation-based adjustments necessary to maintain current services. The 
budget adjusts the current services to include enhancements to reflect 
program policy decisions. Table 1 reflects the fiscal year 2007 final 
budget, the FY 2008 President's request, and the FY 2009 program 
budget.

   Table 1.--Student and Exchange Visitor Program Summary of Requirements by Organization and Program Category
                                              [Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
                                                    2007 spend      2008 spend      2009 spend       2008-2009
                  Organization                         plan            plan            plan           change
----------------------------------------------------------------------------------------------------------------
 SEVP Management................................           6,785           2,586           8,639          6,053
 School Certification Branch....................           1,320           1,519           3,330          1,811
 Information Technology Branch..................           1,060           1,194           1,276             82
 SEVP Liaison Branch............................             365             684           4,737          4,053
 Policy Branch..................................             251             618             647             29
 Mission Support Branch.........................             480             667             757             90
 Office of the Principal Legal Advisor..........             113             157             176             19
                                                 ---------------------------------------------------------------
     Total......................................          10,374           7,425          19,562         12,137
                                                 ===============================================================
 Contractors                                               7,991          12,954           9,063         (3,891)
 Program Expenses
     CEU........................................          12,256          12,682          44,597         31,915
     SEVIS II*..................................  ..............  ..............          25,100         25,100
     Office of the Chief Information Officer....           2,003           2,162           2,465            303
    SEVIS (IRM).................................          17,683          16,235          13,593         (2,642)
     DOS........................................             509             470             511             41
     SEVIS Security.............................             672             698             500           (198)
     Department of the Treasury.................           2,857           3,526           3,689            163
                                                 ---------------------------------------------------------------
         Total, SEVP............................          54,345          56,153         119,580         63,427
                                                 ===============================================================
 Carry-forward
    SEVIS II....................................  ..............          12,500  ..............        (12,500)
    CEU.........................................  ..............           5,600  ..............         (5,600)
                                                 ---------------------------------------------------------------
        Total Carry-forward.....................  ..............          18,100  ..............        (18,100)
                                                 ===============================================================
        Total, SEVP.............................          54,345          74,253         119,580         45,327
                                                 ---------------------------------------------------------------
 Full Time Equivalent Personnel.................             121             135             274            139
----------------------------------------------------------------------------------------------------------------


[[Page 21265]]

    The program budget funds are expended to support personnel costs, 
required travel to support the program, and for other objects, which 
are reflected in Table 2.

       Table 2.--Student and Exchange Visitor Program Summary of Requirements by Program and Object Class
                                             [Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
                                                                       2008            2009
                 Object classes                    2007  End of     President's     President's      2008-2009
                                                    Year budget       budget          request         Change
----------------------------------------------------------------------------------------------------------------
 Total Full-Time Equivalent personnel                      7,239           7,479          24,239          16,760
 compensation...................................
 Other personnel compensation...................              81              84             254             170
 Benefits.......................................           3,511           3,628           7,841           4,213
 Travel.........................................             448             463           1,437             974
 Transportation of materiel.....................              10              10              17               7
 General Services Administration rent...........              10              10              17               7
 Other rent.....................................             235             243             406             163
 Communications, rent & misc. charges...........             609             629           1,084             455
 Advisory & Assistance Services.................           7,468           7,763          13,958           6,195
 Other services.................................           7,471           7,719          10,623           2,904
 Purchase from Government Accounts..............             509             526             907             381
 Operations & maintenance of equipment..........          16,460          17,006          20,116           4,110
 Supplies & Materials...........................             645             667           1,150             483
 Equipment......................................           9,438           9,751          37,098          29,347
 Land & Structures..............................             215             222             383             161
                                                 ---------------------------------------------------------------
    Total, SEVP.................................          54,349          56,200         119,530          66,380
                                                 ---------------------------------------------------------------
 Full Time equivalents..........................             121             135             261             126
----------------------------------------------------------------------------------------------------------------

4. Enhancements
    In developing this proposed rule, SEVP reviewed its recent costs 
and conducted a comprehensive feasibility study that identified goals 
for services and projected future workload analyses, allocating costs 
to specific services. Specifically, the increased fees described in 
this proposed rule would fund: development of SEVIS II, the next 
generation of critical systems infrastructure; acquisition of 
additional Compliance Enforcement Unit (CEU) personnel; implementation 
of recertification and improved oversight; and additions to outreach 
and liaison activities with the academic community.
a. SEVIS II
    SEVIS became fully operational in February of 2003. It is a Web-
enabled database that gives schools and program sponsors the capability 
to transmit information and event notifications about F, M and J 
nonimmigrants electronically to DHS and DOS throughout their 
nonimmigrant stay in the United States.
    Today, SEVIS has evolved well beyond its original, limited purpose 
as a tracking tool. SEVIS is a critical national security component, a 
primary resource for conducting counterterrorism and/or 
counterintelligence threat analysis by the law enforcement and 
intelligence communities. These national security attributes were not 
fully envisioned or initially developed into the original design of 
SEVIS. Two primary law enforcement/intelligence users of SEVIS are the 
Foreign Terrorist Tracking Task Force and the CEU.
    These new demands, along with ongoing concerns of the school and 
exchange visitor sponsor communities, have been accommodated by the 
creation of software updates and enhancements. The number of system 
revisions that were made total in the thousands. While SEVIS has 
adapted through upgrades and patches, SEVIS end-users still face 
limitations in searching, sorting, and exporting data, as well as in 
producing needed management reports. Data integrity concerns (due to 
time lags, system constraints, and/or system design limitations) 
continue to impact all SEVIS users.
    SEVP began a comprehensive feasibility study in January 2007 to 
determine and compare the viability of two options: to continue with 
SEVIS as it is currently, relying on upgrades; or, to develop a next 
generation system. Through intensive discussion with stakeholders, this 
study identified vulnerabilities of the existing SEVIS database and, 
additionally, identified the need to shift the focus from the original 
intent of SEVIS to simply track documents to the more useful tracking 
of individuals. Tracking individuals presents a paradigm shift, both in 
the focus and use of SEVIS. Stakeholders indicated that the current 
design infrastructure creates a high probability of an individual 
having numerous distinct and unassociated records within the system, 
making it almost impossible to comprehensively track all activities 
associated with a single individual.
    Stakeholders stated that the current SEVIS configuration presented 
national security vulnerabilities that could not be eliminated by 
simply altering or upgrading the current system and echoed the need for 
a new system. SEVIS II, the next generation of software, is necessary 
to more adequately perform and sustain mission-critical functions that 
evolved in the use of SEVIS, but for which the system was not designed.
    Building on the guidance provided by the feasibility study, 
detailed requirements working sessions were conducted with both 
external (i.e., schools and programs) and internal (i.e., Federal law 
enforcement and intelligence communities) stakeholders. The purpose of 
these working sessions was to gain more precision and detail for SEVIS 
II that would: convert from a system that is centered on paper forms to 
a real-time, automated system that is person-centric, incorporating 
electronic forms (i.e., e-forms); greatly enhance the ability to search 
the system, increase efficiency, and decrease risk of user error; 
employ the Fingerprint Identification Number as the biometric 
identifier to accurately and rapidly

[[Page 21266]]

match records to specific aliens (i.e., one alien, one record); and use 
the current DHS enterprise architecture structure to create a system 
that integrates well with existing systems throughout the government 
and that is open, flexible, and scalable. Such interoperability with 
other government systems would better provide critical, real-time 
national security information and enhance the capability beyond that of 
SEVIS I to determine changes of academic majors and identify academic 
courses that are of national security interest.
    While the mission for each stakeholder group varies, the 
participants of the SEVIS II functional workshops agreed unanimously in 
the prioritization of design elements, including development of the 
unique identifier to make student lifecycle information readily 
accessible by searching under a single identification. Additionally, 
U.S. Citizenship and Immigration Service's (USCIS's) Enumeration 
Service would increase the capability to share SEVIS data and improve 
analytical capabilities throughout the immigration and law enforcement 
community. Event driven workflow would reduce the probability that 
students and exchange visitors who are associated with ``at risk'' 
activities would be overlooked, and would enhance the current SEVIS I 
capability to determine when changes of academic majors might be of 
national security interest. Data management would provide the ability 
for end-users to extract required information from a single source. 
Finally, the use of electronic forms would create real-time 
availability for all specified roles and permissions, reducing the 
potential for nonimmigrants to perpetrate fraudulent activity.
    The proposed system, planned for implementation in FY2009, would 
greatly enhance the capability of DHS to identify and reduce national 
security threats; reduce the possibility for errors or abuses of status 
by prospective and approved F, M and J nonimmigrants, as well as their 
schools and programs; and better provide updated, correct, real-time 
information to academic, law enforcement, and other government users. 
SEVIS II would be the main repository of record.
    SEVP projects that the cost for developing and deploying SEVIS II 
would be $40.9 million. SEVP would incur $15.3 million of that cost in 
FY 2007 and FY 2008. To complete the systems development and to 
transition and migrate data from SEVIS I to SEVIS II, SEVP would need 
$25.6 million in FY 2009.
b. Additional CEU Personnel
    SEVP and SEVIS were initiated in the post-9/11 era, when the 
necessity for a fully functioning monitoring system was made apparent 
by the identification of many of the involved terrorists with misuse or 
abuse of nonimmigrant status. The immigration system was again 
challenged five years later, when eleven Egyptian students scheduled to 
attend a summer program, failed to report to the school under which 
they were admitted. Fortunately, in this instance, nothing developed 
from subsequent investigation to indicate that a terrorist attack had 
been intended. However, had the intent been to create a national 
threat, the availability of SEVIS, the training of the respective 
school officials, and the involvement of CEU personnel worked to 
reasonably ensure that such a threat would not have succeeded. All 
eleven of these nonimmigrants were located within days of their failure 
to properly report and detained. A dedicated compliance enforcement 
program that includes criminal investigative efforts has been and 
continues to be employed to ensure the success of SEVP.
    The CEU is able to investigate only the highest priority leads 
identified by analysis of SEVIS data at present. Additional CEU 
personnel would be used to investigate administrative and criminal 
violations related to individual students and SEVP-certified schools. 
To the extent that adequate resources are allocated and employed for 
this purpose, increased CEU staffing levels would reduce the 
vulnerability of the United States to future terrorist attacks and the 
exploitation of the student and exchange visitor programs.
    Compliance enforcement program and criminal investigative efforts 
are helping to ensure the success of SEVP. The goal of ICE compliance 
efforts is to achieve 100% compliance with F, M, and J nonimmigrant 
regulations, to ensure that the institutions responsible for 
participating in these programs are in compliance, and to prohibit any 
abuse of SEVIS for criminal purposes. By ensuring the integrity of 
SEVIS through consistent and expanded enforcement efforts, the 
viability of the F, M, and J student and exchange visitor programs 
within the United States would be maintained.
    The current number of enforcement positions funded by SEVP fees is 
inadequate. Accordingly, ICE does not have the needed personnel to 
resolve all of the national security priority leads generated in SEVIS 
that the CEU refers to its field offices. ICE does not receive 
appropriated funds for these purposes and has utilized I-901 SEVIS fees 
for these costs. The number of additional positions required to conduct 
SEVP enforcement was calculated using data gathered from compliance 
enforcement statistics from June 2003, to the present. The resource 
projection took into account the average time required to complete a 
compliance investigation and the average number of priority leads 
referred to ICE field offices annually. The cases used for these 
projections include administrative investigations of F, M and J status 
violators, as well as criminal investigations into individuals and 
organizations that have sought to exploit SEVIS for illicit purposes.
    ICE resource projections indicate the need to hire additional 
Special Agents to conduct these investigations. ICE has determined that 
121 special agents are required. Based on established workforce 
management ratios, additional Supervisory Special Agents, Investigative 
Assistants, Intelligence Research Specialists, and Program Managers are 
also required to support the additional Special Agent positions. CEU 
collects detailed data during the course of investigations that capture 
the amount of time needed and personnel utilized when pursuing an SEVP-
related investigation. CEU also collects data on each type of 
investigation. Using the historical data for SEVP-related 
investigations, CEU projected the need for 155 new positions, including 
logistical support, as follows: 75 additional special agents to 
investigate potential SEVP student and exchange visitor violators; 46 
special agents to conduct criminal investigations of schools and 
programs; 10 supervisory special agents in the field; 10 investigative 
assistants and 10 intelligence research specialists to support field 
investigations; and 4 special agent program managers for headquarters.
c. Recertification
    The EBSVERA provided that DHS conduct a recertification of SEVP-
certified schools every two years. SEVP recertification is a review of 
a school previously SEVP-certified to affirm that the school remains 
eligible and is complying with regulatory recordkeeping, retention, 
reporting and other requirements. The purpose, focus, and process of 
recertification are addressed in section IV of this proposed rule.
    The cost of recertification is incorporated in the I-901 SEVIS fee. 
To project the cost for recertification in FY 2009 and FY 2010, SEVP 
conducted a bottom-up analysis using cycle time and business process 
analysis. It forecast

[[Page 21267]]

assumptions to project the total workload capacity needed for 
recertification and the resulting resource requirements.
d. School Liaison Activity
    School liaison positions, originally proposed in the initial fee 
rule in 2004, were not developed. SEVP did not designate specific, co-
located staff for this function but has instead relied upon its 
headquarters staff to conduct an aggressive outreach program, coupled 
with targeted training opportunities, to inform and educate its 
stakeholders. This approach can be credited for the high degree of 
compliance that was achieved by the schools that were randomly selected 
to participate in the data validation study conducted by SEVP in 2006. 
That study was recently given national acclaim by DHS as a benchmark 
for providing customer service.
    In 2005-06, the Department of Education listed 4,216 schools of 
higher education as eligible to issue diplomas to students. By 2005, 
86% or 3,657 of these schools were also SEVP-certified. As market 
saturation is reached in this category, new petitioners for SEVP 
certification are typically small schools. Since 2005, 80% of new 
petitions for SEVP certification were from schools that meet the Small 
Business Administration (SBA) definition of ``small business''. Such 
schools often enroll fewer F and/or M students. Consequently, school 
officials at such schools often have fewer training resources and 
opportunities to practice SEVIS skills and knowledge.
    Moving forward in its planning for recertification and out-of-cycle 
reviews, SEVP is committed to assuring that those schools which apply 
for certification are given the resources and tools to remain 
compliant. Should out-of-cycle and recertification reviews reveal 
anomalies in either student or school records, SEVP would identify 
solutions and work with the affected schools to enhance their knowledge 
of SEVP regulations and their ability to work within the SEVIS 
environment.
    An expanded liaison function would give SEVP the resources to 
continue providing stakeholders with high caliber information and 
educational materials, plus opportunities to enhance ongoing and future 
initiatives, such as recertification and the implementation of SEVIS 
II. Increased resources would be used, specifically, to work with those 
SEVP-certified schools that are identified during out-of-cycle reviews 
with reporting anomalies. Training and increased oversight, targeted to 
ensure the school's compliance and continued certification, would 
foster SEVP-school liaison and promote interaction.
    The projected cost for expanding school liaison activity is 
equivalent to adding 64 new personnel positions.

E. Summary of the Full Cost Information for FY 2009

    The total cost projection for FY 2009 is $119,580,000. Table 3 sets 
out the projected current services for SEVP and supporting CEU 
personnel in FY 2009 ($56.9 million). These costs are direct extensions 
of the FY 2007 costs that are supported by the current fees. Table 3 
also summarizes the enhancements for SEVIS II, additional CEU law 
enforcement and supporting personnel, the recertification process, and 
school liaison activities.

                Table 3.--FY 2009 SEVP Cost by Initiative
------------------------------------------------------------------------
                                                        FY 2009 budgeted
              Program cost by initiative                cost (millions)
------------------------------------------------------------------------
Program Base:
    SEVP (current operational level).................             $35.23
    CEU (current operational level)..................              21.67
                                                      ------------------
        Subtotal.....................................              56.90
                                                      ==================
Enhancements:
    SEVIS II.........................................              25.60
    Additional CEU Personnel.........................              26.78
    Recertification..................................               3.24
    School Liaison...................................               7.06
                                                      ------------------
        Subtotal.....................................              62.68
                                                      ==================
            Total....................................             119.58
------------------------------------------------------------------------

1. Fee Allocation
    The purpose of the ABC methodology is to be able trace cost to 
organizational elements, as well as to be able to identify all cost 
components associated with the goods and services offered. For fee-
based organizations such as SEVP, this allows the assignment of cost to 
one or more fees.
    SEVP defined two fee categories: the I-901 SEVIS fee and the 
Certification fee.
    SEVP considered the creation of additional fee categories in 
deciding how to apportion fees. For example, SEVP considered charging a 
separate I-901 SEVIS Fee to F, M, and J dependents. SEVP also examined 
various tiered fee structures. SEVP considered assigning some specific 
costs (e.g., Form I-515 processing, data fixes, and appeals) to 
separate fees. The ABC fee model allowed SEVP to evaluate these 
scenarios. ICE opted for a fee structure with fewer fees and, as a 
consequence, lower overhead (based on the increased cost of collecting 
fees, combined with the marginal impact on the two fees).
    I-901 SEVIS Fee. Recovers the systems cost for SEVIS and a portion 
of the SEVP administrative cost, including the cost of recertification 
(recovers the full cost to process school recertification applications, 
including compliance cost directly related to the application process, 
as well as a portion of SEVP administrative cost), program compliance 
and enforcement. The fee would be apportioned between three 
categories--full fee of $200 for F and M students, reduced fee of $180 
for most J participants (excluding the costs for recertification) and 
the further reduced fee of $35 for certain J program participants. 
Government-sponsored J program participants are fee-exempt by law.
    Certification Fee. Recovers the full cost to process initial school

[[Page 21268]]

certification applications and a portion of SEVP administrative cost.
2. SEVP FY 2009 Cost Model Results
    Tables 4 and 5 show the summary of SEVP FY 2009 cost by source of 
cost and by program cost by initiative. Tables 4 and 5 provide summary 
level model results. Those interested in accessing the model to see 
more detailed information can contact SEVP at (202) 305-2346 to make an 
appointment. The ABC modeling software is a commercial product licensed 
to SEVP.

            Table 4.--Total SEVP FY 2009 Cost by Fee Category
------------------------------------------------------------------------
                                                        FY 2009 budgeted
            SEVP ABC model output category              cost (millions)
------------------------------------------------------------------------
I-901 SEVIS fee......................................            $117.91
Certification........................................               1.67
                                                      ------------------
    Total............................................             119.58
------------------------------------------------------------------------

    Table 5 shows a more detailed cost breakdown. The numbers are shown 
in thousands, rather than millions, of dollars due to the level of 
detail. There are three levels for some costs: process, activity, and 
sub-activity. Other costs have only two levels of detail. To simplify 
the presentation, the numbers are rounded to the nearest thousand. 
These numbers are not rounded in the costing model.

                                  Table 5.--SEVP Activity Cost by Fee Category
                                                [$ in thousands]
----------------------------------------------------------------------------------------------------------------
                                                                                                       School
             Process                        Activity                Sub-activity          I-901    certification
                                                                                        SEVIS fee       fee
----------------------------------------------------------------------------------------------------------------
Direct Assignment................  Pass through cost--Site Visit Contracts              .........          543
----------------------------------------------------------------------------------------------------------------
Compliance Enforcement...........  CEU Operations...........  Access SEVIS data for           442  .............
                                                               investigative leads.
                                                              Analyze SEVIS data to         3,136  .............
                                                               identify potential
                                                               status violators
                                                               pursuant to the INA.
                                                              Assign viable leads to          249  .............
                                                               ICE Special Agent in
                                                               Charge offices for
                                                               further investigation
                                                               and enforcement action
                                                               if required.
                                                              Determine quality of            634  .............
                                                               SEVIS lead.
                                   CEU Programs.............  Act as a liaison with           100  .............
                                                               the law enforcement and
                                                               intelligence
                                                               communities concerning
                                                               SEVIS data and provide
                                                               expertise in dealing
                                                               with student
                                                               investigations and
                                                               enforcement.
                                                              Assess vulnerabilities          292  .............
                                                               in SEVIS that can be
                                                               exploited to misuse the
                                                               system or otherwise
                                                               violate law.
                                                              Perform alien flight            100  .............
                                                               student program duties.
                                                              Perform budget                  100  .............
                                                               formulation duties.
                                                              Perform school                   82           18
                                                               certification and
                                                               regulatory compliance.
                                                              Provide enforcement              50  .............
                                                               related training to
                                                               field personnel with
                                                               respect to the use of
                                                               SEVIS.
                                                              Provide input to policy         292  .............
                                                               and regulatory changes
                                                               affecting enforcement
                                                               and national security.
                                                              Provide programmatic            100  .............
                                                               oversight.
                                   Investigations...........  Perform Fraud                11,256  .............
                                                               Investigations (I-17).
                                                              Perform Student              31,595  .............
                                                               Investigations (I-901).
----------------------------------------------------------------------------------------------------------------
CEU Liaison......................  Coordinate SEVIS data to enhance field                       9  .............
                                    investigations
                                   Interface with schools to provide initial contact            9  .............
                                    prior to CEU involvement
                                   Provide liaison support to CEU for other SEVP leads          9  .............
                                   Provide liaison support to CEU regarding possible           36  .............
                                    leads from SEVIS
Case Resolution Unit: Resolve      Access Government Lockbox queues                            13  .............
 Issues for Fee Payments.          Administer SEVIS FMJ fee e-mail                            104  .............
                                   Answer phone queries on I-901 SEVIS fee payment             29  .............
                                    issues
                                   Process credit card charge backs                             7  .............
                                   Process fee payment transfer requests                        2  .............
                                   Process refund requests                                     27  .............
                                   Process returned checks                                      0  .............
                                   Work with U.S. Bank and Treasury to enhance I-901           13  .............
                                    system
                                   Work with U.S. Bank Government Lockbox to resolve            2  .............
                                    fee payment issues
Department of State..............  Develop exchange visitor policy and regulations            102  .............
                                   Monitor complaints                                         102  .............
                                   Perform exchange visitor program redesignations            102  .............
                                   Receive review and determine status of exchange            102  .............
                                    visitor program applications
                                   Review change of status applications                       102  .............
I-515 Operations.................  Close out I-515 case                                       100  .............

[[Page 21269]]

 
                                   Coordinate with external organizations                      45  .............
                                   Document and research I-515 case                            94  .............
                                   Provide I-515 program management                           165  .............
----------------------------------------------------------------------------------------------------------------
Information Technology...........  Maintain and update SEVIS  Coordinate and monitor        1,124  .............
                                                               system performance.          2,175  .............
                                                              Identify and define new
                                                               system requirements.
                                                              Manage system security..      1,803  .............
                                                              Modify and enhance SEVIS     31,420  .............
                                                               interface and
                                                               functionality (design
                                                               and development).
                                                              Monitor and manage Help         443  .............
                                                               Desk Team performance.
                                                              Provide system testing          719  .............
                                                               and release readiness
                                                               reviews.
                                                              Resolve errors in system        888  .............
                                                               data.
                                   Other IT Support.........  Administer SEVIS Toolbox         98            4
                                                              Liaison with Chief              754           32
                                                               Information Officer
                                                               other system owners,
                                                               the Federal Bureau of
                                                               Investigation, etc.
                                                              Manage IT contracts.....        136  .............
                                                              Perform ad hoc IT               820           35
                                                               projects.
                                                              Perform procurement              39            2
                                                               activities.
                                                              Provide general IT               43            2
                                                               support to SEVP office.
                                   Provide Help Desk Support  Contact customer to             270  .............
                                                               convey ticket
                                                               resolution.
                                                              Document ticket                 140  .............
                                                               resolution and provide
                                                               daily and weekly
                                                               statuses.
                                                              Handle ticket                   140  .............
                                                               escalations.
                                                              Log initial help desk         1,062  .............
                                                               ticket.
                                                              Perform research to           2,159  .............
                                                               resolve ticket.
Policy and Planning..............  Policy development and     Develop strategic plan..         66  .............
                                    analysis.                 Draft implement and             110  .............
                                                               support plans and
                                                               procedures.
                                                              Maintain forms..........         21  .............
                                                              Perform record retention         15  .............
                                                               and disposition.
                                                              Prepare and update              354  .............
                                                               policies procedures,
                                                               frequently asked
                                                               questions, regulations,
                                                               and Fact Sheets.
                                                              Provide guidance on SEVP        338  .............
                                                               policy issues.
                                                              Provide liaison support         139  .............
                                                               to SEVP internal and
                                                               external stakeholders,
                                                               to include
                                                               teleconferences and
                                                               working groups.
                                                              Provide review and              122  .............
                                                               answers to SEVIS source
                                                               e-mail site and
                                                               inquiries.
                                                              Publish rules and FR            234  .............
                                                               notices.
                                                              Respond and comment on          110  .............
                                                               pending legislation.
                                   Provide Liaison Support    Coordinate Federal               29  .............
                                    to Federal partners.       partner/SEVP                    77  .............
                                                               interactions with other
                                                               government
                                                               organizations.
                                                              Coordinate Federal
                                                               partner/SEVP
                                                               interactions with other
                                                               government
                                                               organizations.
                                                              Coordinate policies and         119  .............
                                                               procedures with Federal
                                                               partners.
                                   Provide Social Security    Provide SSA Liaison               7  .............
                                    Administration (SSA)       Support.
                                    Liaison Support.
----------------------------------------------------------------------------------------------------------------
Program Analysis.................  Analyze SEVP/SEVIS data and processes                      211            9
                                   Collect data for analysis and reporting                    151            6
                                   Prepare reports                                            118            5
----------------------------------------------------------------------------------------------------------------

[[Page 21270]]

 
Resource Management..............  Manage Financial           Formulate and execute           198            8
                                    Resources.                 budget.                         84            4
                                                              Manage financial systems
                                                               (Travel Manager,
                                                               Federal Financial
                                                               Management System,
                                                               Electronic System for
                                                               Personnel).
                                                              Manage travel/purchase           70            3
                                                               card.
                                                              Perform Contracting              34            1
                                                               Officer's Technical
                                                               Representative duties.
                                                              Perform revenue analysis         68            3
                                                              Prepare and monitor 5-          102            4
                                                               year spend plans.
                                                              Prepare and respond to           28            1
                                                               audit requests.
                                                              Prepare bi-annual fee           128            5
                                                               review.
                                                              Provide program                  32            1
                                                               logistics.
                                   Manage Personnel           Manage payroll issues...        106            4
                                    Resources.                Manage position                  95            4
                                                               description.
                                                              Perform personnel                 3            0
                                                               actions (SF-521).
                                                              Prepare and execute             160            7
                                                               hiring plans.
                                                              Provide Human Resources          46            2
                                                               Division and Security
                                                               relevant personnel data.
                                   Pass through cost--        Pass through cost--           3,689  .............
                                    Treasury Fee Collection.   Treasury Fee Collection.
School Certification and           Perform initial school     Perform certification--   .........          307
 Recertification.                   certification.             approvals.               .........          388
                                                              Perform certification--
                                                               denials.
                                   Perform other School       Monitor school                3,060  .............
                                    Group activities.          compliance.                    992          212
                                                              Process and adjudicate
                                                               appeals.
                                                              Process and adjudicate           45           10
                                                               motions.
                                                              Process and adjudicate          791  .............
                                                               petition updates.
                                   Perform school             Perform recertification--     1,114  .............
                                    recertifications.          approvals.                   1,010  .............
                                                              Perform recertification--
                                                               denials.
                                                              Perform student                 640  .............
                                                               notifications.
                                                              Withdraw schools from           539  .............
                                                               SEVIS.
----------------------------------------------------------------------------------------------------------------
School Liaison...................  Develop Liaison Program                                    383  .............
                                   Implement Liaison Program                                  402  .............
                                   Perform school liaison functions                         1,946  .............
SEVP Administrative Support......  Answer the main telephone line                              82            3
                                   Liaison with service providers for copier                   30            1
                                    maintenance, DHL/FedEx mail, cell phones,
                                    blackberries, etc.
                                   Maintain SEVP supplies and materials                        66            3
                                   Manage executive correspondence                             88            4
                                   Process time and attendance/travel vouchers                 25            1
                                   Provide administrative support for special projects        132            6
SEVP Management..................  Coordinate with internal and external stakeholders         156            7
                                   Oversee process improvements                               160            7
                                   Provide program oversight                                  476           20
----------------------------------------------------------------------------------------------------------------
Training and Outreach............  Develop and deliver SEVIS  Deliver training........      2,126  .............
                                    training.                 Develop training plans          236  .............
                                                               based on requirements.
                                                              Develop training                203  .............
                                                               requirements for
                                                               designated school
                                                               officials, responsible
                                                               officers, immigration
                                                               inspectors, DOS, etc.
                                   Develop and implement....  Attend and prepare            1,147  .............
                                                               conferences/workshops
                                                               related to the SEVIS
                                                               community.
                                   SEVIS communication        Contact and educate             236  .............
                                    strategy.                  student organizations,          77  .............
                                                               associations,
                                                               embassies,
                                                               Congressional staffers,
                                                               etc.
                                                              Develop and provide
                                                               rollout plans.
                                                              Facilitate SEVIS problem        132  .............
                                                               resolution.
                                                              Monitor and enhance             248  .............
                                                               SEVIS source Web-site.
                                                              Prepare and distribute          129  .............
                                                               quarterly newsletter.

[[Page 21271]]

 
                                                              Provide Webinars........        129  .............
                                                              Respond to Public               210  .............
                                                               Affairs and
                                                               Congressional Inquiries.
                                                                                       -------------------------
    Total........................  .........................  ........................    117,907        1,673
----------------------------------------------------------------------------------------------------------------

3. Fee Calculations
    The cost model provides detailed cost information by activity and a 
summary cost for each, giving the aggregate fee cost by category. Next, 
SEVP projected the total number of fee payments of each type for FY 
2009 and determined the fee-recoverable budget--the full cost of the 
service minus any offsets. Offsets include such costs as pass through 
cost for contractors or appropriated funding.
    SEVP selected a forecasting approach to determine the total number 
of expected fee payments for each fee.
a. I-901 SEVIS Fee
    To calculate a fee amount for the I-901 SEVIS Fee, SEVP estimated 
the number of fee payments expected in FY 2009 for each of the four fee 
payment levels: fee-exempt, reduced fee, full fee for J participants 
(excluding the cost for recertification of F and M certified schools), 
and full fee for F and M students (including recertification costs).
    The legislation exempted government-sponsored J-1 exchange visitors 
from the fee payment when the fee was initially provided for in section 
641 of IIRIRA. All other F, M and J nonimmigrants were to pay $100. An 
additional modification was made by Congress establishing the reduced 
fee of $35 for au pairs, camp counselors, or participants in a summer 
work travel program. Public Law 106-553, App. B, sec. 110, 114 Stat. 
2762, 2762A-51, 2762A-68 (Dec. 21, 2000). IIRIRA also provided for 
revising the fee once the program to collect information was expanded 
to include all F, M, and J nonimmigrants, to take into account the 
actual cost of carrying out the program. As a result, SEVP needed to 
forecast the number of prospective F, M and J nonimmigrants in FY 2009, 
with a breakout of J exchange visitors by exchange visitor category.
    After determining the number of expected I-901 SEVIS fee payments 
in FY 2009, SEVP calculated the I-901 SEVIS fee.
    There are only two complete years of I-901 SEVIS fee payment data 
available for projecting the fee demand. Because these data are not 
sufficient to make a reliable projection of future demand with any 
degree of statistical accuracy, SEVP developed a surrogate for 
historical I-901 SEVIS fee payment data, based on visa issuance data 
from DOS.
    While the number of F, M and J nonimmigrant visas issued does not 
equal the number of I-901 SEVIS fee payments, there is a correlation 
between the two numbers. Table 6 reflects the change in the numbers of 
visas issued to provide the trend data needed to project the growth in 
I-901 SEVIS fee payments.

    Table 6.--F, M, and J Visa Issuance Data 1997-2006 Issued Visas*
------------------------------------------------------------------------
                                                           Growth rate**
               Fiscal year                     Total         (percent)
------------------------------------------------------------------------
1997....................................         453,156  ..............
1998....................................         450,531            -0.6
1999....................................         480,131             6.6
2000....................................         526,997             9.8
2001....................................         560,500             6.4
2002....................................         485,276           -13.4
2003....................................         473,719            -2.4
2004....................................         478,219             0.9
2005....................................         518,873             8.5
2006....................................         591,050           13.9
------------------------------------------------------------------------
* Does not include dependent visa holders, as they are not subject to
  payment of the I-901 SEVIS fee.
** Growth rate rounded to nearest tenth of a percent.

    As indicated in Table 6, the level of visa issuances varied greatly 
over the past ten years. The impact of the terrorist attacks of 9/11 
and the aftermath had a significant impact on the number of visas 
issued. Other factors that impact the number of visas issued include: 
strategies employed by other countries to retain/attract international 
students; economic growth rate changes in source countries; changing 
populations in source countries; new programs and schools; 
globalization; program marketing; and foreign currency exchange rates. 
This high degree of variation in the historical data, combined with the 
variables impacting demand for visas, called for a simplified 
forecasting methodology.
    Consequently, SEVP selected a three-year moving average of prior 
year growth rates in visa issuance data as the method to forecast 
program demand. A moving average is the arithmetic average of a certain 
number (n) of the most recent observations. When a new observation is 
added, the oldest observation is dropped. Moving averages, in smoothing 
out short-term fluctuations, highlight longer-term trends or cycles. A 
three-year moving average is more representative of latest changes in 
demand than of the average of all years; moderates extremes, while 
still matching overall trends; is slow to react to sharp changes--
trailing measure; and is based on historical data of visa issuances 
rather than econometric forecasts of prospective students and exchange 
visitors.
    SEVP evaluated alternative forecasting methods, including average 
growth rate, linear regression, and second degree polynomial 
regression. SEVP rejected these methods due to inaccuracy, poor fit as 
measured by the r-squared statistic, and the projection of 
unsustainable, sub-exponential growth, respectively. SEVP selected a 
three-year moving average because it best exhibited the characteristics 
of a balanced method between accuracy and conservatism, considering the 
limitations of the underlying data. As a trailing measure, a moving 
average is a conservative method and is, therefore, especially suitable 
for use in fee setting because it mitigates risk to the cash flow and 
subsequent solvency of SEVP. A three-year moving average, reflected in 
Table 7, places a balanced mix of emphasis on recent and historical 
data and still contains enough data points to smooth out some 
variability in the underlying data. SEVP determined that this method 
was the best fit, based on the deficiencies of other statistical 
methods and a qualitative evaluation of how well this method achieved 
the objectives of accuracy and conservatism.

[[Page 21272]]



                                 Table 7.--Historical Three-Year Moving Average
----------------------------------------------------------------------------------------------------------------
                                                                                                   3-Year moving
                                                   Issued visas    3-Year moving    Growth rate     average by
                   Fiscal year                       (primary)        average        (percent)         rate
                                                                                                     (percent)
----------------------------------------------------------------------------------------------------------------
1997............................................         453,156  ..............  ..............  ..............
1998............................................         450,531  ..............  ..............  ..............
1999............................................         480,131  ..............  ..............  ..............
2000............................................         526,997         485,886             9.8             5.3
2001............................................         560,500         522,543             6.4             7.6
2002............................................         485,276         524,258           -13.4             0.9
2003............................................         473,719         506,498            -2.4            -3.1
2004............................................         478,219         479,071             0.9            -5.0
2005............................................         518,873         490,270             8.5             2.4
2006............................................         591,050         529,381            13.9             7.8
----------------------------------------------------------------------------------------------------------------

    Once the three-year moving average was used to forecast issued 
visas, SEVP converted these values to payment estimates by multiplying 
by the ratio of historical payments to issued visas, as reflected in 
Table 8. This rate was developed by comparing the historical payments 
in FY 2005-FY 2007 to the F-1, M-1, and J-1 visas issued during the 
same time period. In addition to the overall I-901 SEVIS fee payment 
rate, the study also determined the proportion of payments between $0, 
$35, $180, and $200 fee payments. This proportion was developed based 
on the profile of F and M students and J exchange visitors that 
currently have active records in SEVIS.

         Table 8.--I-901 SEVIS Fee Payment Forecast FY 2009-2010
------------------------------------------------------------------------
                 I-901 Payment sub-type                       FY 2009
------------------------------------------------------------------------
Full Payments ($200), F/M...............................         395,915
Full Payment ($180), J..................................         180,950
Subsidized ($35)........................................         221,223
No Payment ($0).........................................          34,384
                                                         ---------------
  Total.................................................         832,472
------------------------------------------------------------------------

The ABC model calculated a total I-901 SEVIS fee cost (including the 
cost of recertification) of $117,907 for FY 2009. This is offset by 
subtracting the payment made to the Department of the Treasury for 
expedited delivery of receipts for payment of I-901 SEVIS fees. (SEVP 
already recovers this cost through a direct payment of $30 paid by 
individuals who choose expedited delivery. Thus, SEVP must subtract 
this cost from the full budget to avoid collecting twice for the same 
service, as reflected in Table 9.)

                                 Table 9.--FY 2009 I-901 Fee Recoverable Budget
----------------------------------------------------------------------------------------------------------------
                                                                                                       Fee-
                                                                 Total budget       Offsets        recoverable
----------------------------------------------------------------------------------------------------------------
FY 2009 Budget...............................................    $117,907,380       $1,828,464     $116,084,916
----------------------------------------------------------------------------------------------------------------

    To arrive at the final proposed fees, rounding was applied to the 
result of the fee algorithm. 8 CFR 103.7(b). Rounding results in a fee 
of $200 for F and M students and $180 for those J exchange visitors 
subject to the full fee.
b. Certification Fee
    The demand pattern for school certification is difficult to 
predict. The historical data include the mass enrollment of schools 
into SEVIS in 2002 and 2003. While there is some continued demand for 
SEVP-certification from new schools, the demand has slowed; most 
potential participants have either already become certified or decided 
not to enroll F or M students. A higher fee may deter some schools from 
applying for certification. Given the difficulties in making the 
projection, SEVP elected to use a moving three-year average with the 
historical data from FY 2004 to FY 2006, illustrated in Table 10.

      Table 10.--Three-Year Moving Average of the Number of School
                  Certification Applications Processed
------------------------------------------------------------------------
                                                                 3-Year
         Fiscal year           Approved    Denied     Total      moving
                                                                average
------------------------------------------------------------------------
2002........................      1,636        297      1,933  .........
2003........................      5,367        976      6,343  .........
2004........................        745        135        880      3,052
2005........................        491         89        580      2,601
2006........................        536         97        633      * 698
------------------------------------------------------------------------
* Rounded to 700.

The total fee category budget is taken directly from the FY 2009 SEVP 
ABC model, reflected in Table 11. The figures under the offsets heading 
are from site-visit contracts that are priced separately from the 
certification fee. The cost is treated as pass-through cost (i.e., paid 
by the petitioning school).

[[Page 21273]]



                             Table 11.--FY 2009 Certification Fee Recoverable Budget
----------------------------------------------------------------------------------------------------------------
                                                                                                       Fee-
                Fee category                       Units         Total budget       Offsets        recoverable
----------------------------------------------------------------------------------------------------------------
Certification...............................             700       $1,672,630         $543,000       $1,129,630
----------------------------------------------------------------------------------------------------------------

    School certification fees are calculated by dividing the fee-
recoverable budget by the anticipated number of payments. This results 
in a fee-recoverable amount from schools of $1,613 each. To arrive at 
the final proposed fee, rounding was applied to the result of the fee 
algorithm. This results in a Certification Fee of $1,700 per school.
c. Recertification Cost
    As with the other fees, determining the fee amount to be 
incorporated in the I-901 SEVIS fee associated with recertification 
requires determining the full cost of recertification and the number of 
schools that would choose to recertify.
    Number of Schools Expected to Recertify. As a new requirement, 
there is no program history to provide any insight into the level of 
participation in the school recertification program. In addition, due 
to the mass-enrollment of schools in 2002 and 2003 during the initial 
rollout of SEVIS and the biennial review requirement, as established in 
EBSVERA, most certified schools would be required to petition at the 
onset of recertification. As such, SEVP intends to schedule the 
recertification workload over a two-year period in order to smooth 
program demand and avoid the associated cyclical variation in workload 
and resource requirements.
    As part of the procedure to establish the recertification workflow, 
SEVP conducted business process analysis to document the 
recertification business process, developed standard operating 
procedures for recertification, developed cycle-time measurements of 
the proposed processes, and estimated the level of effort required to 
conduct compliance reviews of certified schools. To accomplish this, 
SEVP collected cycle-time samples or cycle-time estimates from activity 
subject matter experts and validated these estimates through SEVP 
management.
    Given the nature of initiating a new program, SEVP management 
developed notional estimates to forecast program demand. SEVP 
management made several assumptions as the basis of their estimates. 
First, SEVP assumed that not all schools would elect to recertify and 
that schools with extremely low student participation rates were more 
likely to elect to withdraw from the program, rather than assume the 
administrative burden of recertification. SEVP analyzed the number of 
schools in the SEVIS database that had F and/or M students attending 
their school. Of all the schools in SEVIS, 33% had no F and/or M 
students enrolled and 55% had less than five F and/or M students 
enrolled.
    Based on this information, combined with knowledge and experience 
about currently certified schools, SEVP developed a notional estimate 
that 73% of certified schools would elect to recertify. This estimate 
was validated and accepted by SEVP management as part of the business 
process analysis and served as an assumption in the formulation of the 
FY 2009 proposed budget for recertification, as captured in the SEVP 
ABC model. SEVP used the same notional 73% estimate that was used to 
formulate the budget request as an input to the methodology used to 
develop the forecast for program demand for recertification:
    SEVP determined the total number of participating schools in the 
program. This number reflects a snapshot in time, as the total number 
of program participants fluctuates with new schools being certified and 
other schools withdrawing from certification. At the time of this 
analysis, SEVIS contained 8,967 certified schools.
    SEVP divided the total number of schools in half because, while 
schools are required to be recertified every two years, the 
recertification workload will be spread over two years during the first 
cycle of recertification to better distribute the labor and program 
resource demand.
    SEVP multiplied the number of eligible schools (from Step 2) by the 
anticipated recertification participation rate of 73%. This step 
reduced the recertification-eligible schools to the subset of schools 
that SEVP believes would actually elect to undergo the recertification 
process and represents the total number of expected recertification 
petitions in FY 2009. This reduction reflects the elimination of most 
schools that do not enroll F and/or M students at present, but have 
enrolled small numbers of F and/or M students in the past. SEVP expects 
that such schools would not elect to continue SEVP certification.
    Based on this calculation, SEVP forecasts that 3,250 schools would 
elect to recertify in FY 2009. A similar number of schools are expected 
to petition for recertification in FY 2010, the second year of the fee 
adjustment cycle.
    I-17 Recertification Forecast Validation Analysis. Given the 
notional estimates used in the formulation of the recertification 
budget and subsequent recertification petition forecast, SEVP conducted 
a separate analysis to create a demand model for determining the 
probability that a school would recertify. The number of schools 
recertifying is derived by determining the probability of 
recertification for each currently certified school in SEVIS as of May 
2007.\1\ The most important criterion used in determining whether a 
school would petition to recertify is whether or not it currently 
enrolls F and/or M students. The schools are divided into two groups. 
The first is schools that have never enrolled an F or M student (1,386 
schools) and the second group is those that have had a least one F or M 
student or that created initial records for future enrollments (7,576).
---------------------------------------------------------------------------

    \1\ The number of schools in SEVIS varies as schools are added 
and withdrawn. The total number of schools for a specific analysis 
will differ from that of another analysis where data was extracted 
at a different time.
---------------------------------------------------------------------------

    The demand for each year was determined by adding the probability 
of recertification for all schools. For example, one school with a 90% 
probability of recertifying and another school with a 10% probability 
of recertifying count as one probable certification. All schools had a 
probability factor between zero and one.
    Demand Calculation for Zero-Student Schools. In determining the 
probability that a school that has never enrolled an F or M student 
would recertify, SEVP assumes that the more years a school has been 
certified, but does not enroll F and/or M students, the less likely it 
is that the school would recertify.
    Demand Calculation for Schools with F and/or M Students. In 
determining the demand for recertification for a school with an 
enrolled F/M student population, three student population factors were 
considered. The student population factors considered: F/M student 
population for 2006 (or 2007 if the number was larger); F/M student 
population as a percentage of the total

[[Page 21274]]

student population; and growth of F/M student population over the last 
two years. SEVP elected to use the notional estimate of a 73% 
recertification rate as the recertification petition forecast for the 
FY 2009 fee analysis.
    Once the number of schools expected to recertify was established, 
the next step was to determine the appropriate recertification fee-
recoverable budget for FY 2009, based on the capacity needed to certify 
this number of schools. Because there are no offsets, the 
recertification fee-recoverable budget is $5,332,690. To arrive at the 
final proposed fee, rounding was applied to the result of the fee 
algorithm. This resulted in a fee-recoverable recertification fee 
amount of $20 per F and M student, which is charged within the I-901 
SEVIS fee.
4. Calculation of Site-Visit Cost
    The cost of site visits for SEVP certification is a function of the 
number of locations listed on the school's Form I-17 petition, each of 
which must be visited. The current basic cost per site visit location 
for initial certification is $350. The proposed fee amount is $655 per 
location. The site visit fee is based on existing contracts that run 
from FY 2009 through FY 2011. Schools must pay the amount they 
calculate on the payment Web site, https://www.pay.gov/paygov/ at the 
time they submit their petition.
5. Proposed Fee Levels
    The full I-901 SEVIS fee for F and M students is increased from 
$100 to $200. The full I-901 SEVIS fee for most J exchange visitors is 
increased from $100 to $180. SEVP has not adjusted these fees since its 
inception in 2004. The I-901 SEVIS fee for special J-visa categories 
(au pair, camp counselor and summer work travel) remains at the 
previous $35 level, set in IIRIRA. IIRIRA also exempts government-
sponsored exchange visitors in the G-1 programs.
    The Certification Fee is increased from $230 to $1,700. This fee 
was set in 2002, prior to the reorganization of the Immigration and 
Naturalization Service (INS) into DHS. This is the base fee for 
certification and does not include the site visit fee.
    The site visit cost for SEVP certification is priced separately as 
a pass-through charge to recover the associated contract cost. While 
this contract cost is in the cost model, it was subtracted from the 
Certification Fee calculations. All schools applying for SEVP 
certification would pay the site visit fee.
    The proposed program fee schedule for SEVP in FY 2009 is shown in 
Table 12:

                  Table 12.--FY 2009 SEVP Program Fees
------------------------------------------------------------------------
                        Category                              Amount
------------------------------------------------------------------------
I-901 SEVIS Fees:
     I-901 Primary F/M visa holders (Full                   $200
     payment)...........................................
     I-901 Primary J visa holders (Full payment)             190
     I-901 Special J-visa Categories (Subsidized              35
     payment)...........................................
     I-901 Government Visitor (G-1) (No payment)               0
I-17 School Fee:
     Certification Fee..........................           1,700
     Site visit fee for initial certification                655
     (base fee to be multiplied by number of locations
     cited on the Form I-17)............................
------------------------------------------------------------------------

    Table 13 reflects the break even analysis based on the proposed fee 
schedule and the proportional fee volumes (rounded) required to 
generate sufficient revenue to offset proposed program costs.

                                          Table 13.--Projected Revenue
----------------------------------------------------------------------------------------------------------------
                                                                                   Forecasted
                             Fee                                    Amount           volume          Revenue
----------------------------------------------------------------------------------------------------------------
I-901 F/M full...............................................             $200          392,284      $78,456,822
I-901 J full.................................................              180          179,291       32,272,295
I-901 partial................................................               35          219,194        7,671,797
                                                              --------------------------------------------------
    I-901 Subtotal...........................................  ...............          790,769      118,400,914
                                                              ==================================================
Certification Fee............................................            1,700              694        1,179,087
                                                              --------------------------------------------------
    Grand Total..............................................  ...............          791,463      119,580,001
----------------------------------------------------------------------------------------------------------------

F. Impact on Applicants

    ICE recognizes that this proposed rule may have an impact on F, M, 
and J nonimmigrants, as well as the programs and schools seeking to 
become either SEVP-certified or recertified. The current school 
certification fee is based on the historical INS cost, determined prior 
to the inception of SEVIS. It reflects circumstances and work processes 
that were entirely different from those used today.
    The current student fees are based on a fee analysis performed when 
SEVP was first established. The cost calculations were established on 
the basis of projected workload volumes and processes. In addition, 
Congress appropriated SEVP $30 million to develop SEVIS. Consequently, 
neither the cost for system development nor the cost of recertification 
was reflected in the earlier I-901 SEVIS fee.
    The new fee analysis proposes fees that would: Recover the full 
cost of SEVP operations with fee-generated revenue; align the fees with 
currently planned costs and processes that have been redesigned and 
refined as the program has gained experience and maturity; and take 
advantage of more detailed and accurate data sources and improved 
management tools to align resources and workload. In addition, the

[[Page 21275]]

new fees reflect the development of a newly engineered database.
    SEVP is mandated to review its fee structure at least every two 
years. See 31 U.S.C. 902(a)(8); OMB Circular A-25. Future fee rules 
would combine historic data with more recent experience, which would 
generate cost adjustments that would reflect new efficiencies, activity 
changes, amended security measures, or legislation developed in 
response to global developments. Although prediction of future fee 
adjustments is speculative, the historically long development of an 
intervening fee schedule, as well as the development costs that are 
necessarily included in this fee adjustment, suggests that future 
biennial fee adjustments would not be as substantial as the adjustments 
proposed in this rule.

IV. Procedures for Certification, Out-of-Cycle Review and 
Recertification of Schools

    DHS is proposing to recertify all schools approved for attendance 
by F and M students every two years, pursuant to Title V, section 502 
of EBSVERA and HSPD-2. DHS would establish procedures for review of 
each SEVP-certified school every two years. In addition, SEVP would 
conduct ``out-of-cycle'' reviews whenever it determines that 
clarification or investigation of school performance or eligibility is 
necessary. Certification, under this proposed rule, is a continuous, 
on-going process. From initial certification, SEVP continually oversees 
school compliance with recordkeeping, retention and reporting 
requirements. SEVP can identify deviations from reporting requirements 
by schools and take appropriate action through SEVIS and other 
resources.
    Recertification is, in effect, a ``report card'' given to a school 
every two years to verify achievement of required standards in the 
period since the previous certification. The focus of oversight and 
recertification is past performance, coupled with a review to ensure 
that the educational institution maintains the basic eligibility 
required for certification.
    Performance is monitored through SEVIS, DHS records, submissions 
from the school, and on-site reviews, when warranted. SEVP would 
require schools, as appropriate, to make corrections immediately, 
rather than wait for formal recertification. SEVP would review the 
school's compliance with Federal regulations and SEVP guidance.
    A summary of proposed rule changes and explanation for the changes 
follows.

A. Filing a Petition for SEVP Certification, Out-of-Cycle Review or 
Recertification

1. General Requirements
    Petition filings related to school adjudications are now submitted 
to SEVP through SEVIS, rather than the USCIS district director. This 
change was a result of the transfer of school adjudications from USCIS 
to ICE. The requirement for a separate petition to be filed by school 
systems or schools with campuses overlapping USCIS district boundaries 
has been deleted.
2. School Systems
    The term ``school system'' is clarified to refer to groups of 
inter-related schools providing instruction to public school grade 
levels 9-12 and private school levels kindergarten through 12.
3. Petition Submission Requirements
    Document submission requirements for petitions are clarified with 
respect to the need for providing paper copies of the Form I-17 with 
original signatures of all school officials entered on the form. More 
importantly, the scope of responsibility that a school official assumes 
in signing the Form I-17 is more clearly stated and the consequences of 
willful misstatement are established.
4. Eligibility
    School eligibility criteria for SEVP certification are transferred 
from their present location in 8 CFR 214.3 to a position directly 
following the listing of types of schools that may be approved for SEVP 
certification. This repositioning is intended to provide a concise 
statement for prospective petitioners in their suitability assessment 
for becoming certified.

B. Interview of Petitioner

    SEVP may conduct ``in-person'' interviews with the petitioner or 
the petitioner's representative as part of adjudication. SEVP proposes 
to expand this option to include telephone interviews, recognizing a 
telephone interview as having the same legal impact as testimony given 
in physical presence.

C. Notices and Communications

    SEVP relies on procedures in 8 CFR 103.2 to give notices to schools 
to support the administration of the petition adjudication process. 
This is a USCIS-specific regulation; some terms and officials 
identified in the regulation do not pertain to ICE. This proposed rule 
identifies respective ICE counterparts that must be substituted for the 
SEVP application. SEVP has also expanded the use of these notices to 
include the compliance considerations of oversight, out-of-cycle review 
and recertification.
    All notices from SEVP to schools related to certification, 
oversight, recertification, denial, appeals and withdrawal, as well as 
requests for evidence (RFEs) are generated and transmitted through 
SEVIS by e-mail. The date of service is reduced to the date of notice 
transmission by eliminating the delay of traditional mailing. All SEVP-
certified schools are responsible for maintaining the accuracy of 
designated school official (DSO) information in SEVIS. Since notices 
are sent to all DSOs, SEVP would not recognize non-receipt of 
notification as grounds for appeal of a denial or withdrawal of a 
school. Schools are required to ensure that their spam filters do not 
block reception of SEVP notices. The term, ``in writing'' is expanded 
to include the option for electronic signatures to support movement 
toward a paperless environment.
    The proposed rule would require that any change in school 
information in SEVIS must be updated and identifies the circumstances 
when changes that must be reported might occur.
    A Notice of Intent to Withdraw (NOIW) is sent to a school 30 days 
prior to the school's certification expiration date as notification 
that a complete petition for recertification has not been received and 
advising the school that it would be automatically withdrawn on the 
certification expiration date if a completed petition has not been 
received. This notice ensures adequate due process before the benefit 
to enroll F and M students is removed. During an out-of-cycle review, 
an NOIW advises a school that SEVP has identified a compliance issue 
and is allowing the school an opportunity to correct any misperception 
by SEVP.
    Notices of Denial, Automatic Withdrawal and Withdrawal are sent to 
advise schools of the date of the decision, appeal rights (if any), and 
the responsibilities for school operations until the SEVIS access 
termination date.
    A Notice of SEVIS Access Termination Date informs a school of the 
date when all F and/or M students at a school which has been withdrawn 
from SEVP certification or denied recertification must complete 
transfer to another SEVP-certified school or depart the United States 
to remain in compliance with their status obligations. By the SEVIS 
access termination date, the denied or withdrawn school must have 
either

[[Page 21276]]

released the SEVP records of their F and M students or completed them. 
On this date, the school can no longer gain access to SEVIS for any 
updates, and all student records of the school's remaining in Active 
status are terminated. In most instances, this date would not be sent 
until appeals options have been exhausted and the decision to withdraw 
or deny has been upheld.

D. Recordkeeping, Retention and Reporting Requirements

    Student records. The record retention period for student records is 
extended from one to three years beyond a student's program completion, 
including denial of reinstatement. This is to support review of 
recordkeeping compliance during the school's recertification. The 
proposed rule is clarified to ensure that the school continues to 
maintain the same recordkeeping and reporting obligations during a 
pending reinstatement as when the student is in status. School 
recordkeeping for F or M students, beyond information entered into 
SEVIS, is clarified to include that information generally recognized as 
contained in a school transcript. Schools must be able to provide 
transcripts or access to an equivalent tracking system. Information on 
coursework must be compiled and recorded within the term the courses 
are taken and graded. These clarifications articulate the intent of 
existing regulation and enable SEVP to better monitor student progress 
in his or her program, as well as participation.
    Reporting Changes in Student and School Information. The proposed 
rule would clarify that, other than immediate updates of changes in 
school information following approval of a petition for SEVP 
certification or recertification, changes in any other information must 
be entered in SEVIS within 21 days of their occurrence. The standard 
had not been previously identified.
    The proposed rule further clarifies that the terms ``program start 
date'' (used in SEVIS) and ``report date'' (used on Forms I-20) for 
initial students are interchangeable. It then goes to identify accepted 
considerations that can be taken by a DSO in determining the actual 
date. This clarification is necessary to ensure that nonimmigrants do 
not have excessive time in the United States before being required to 
report to their programs.
    A requirement is established to update the program completion date 
in SEVIS when student performance indicates that the date already in 
SEVIS is no longer accurate. This is necessary to reduce the 
opportunity for inappropriate student overstays beyond actual program 
completion and is consistent with the requirement for timely recording 
of student information related to course enrollment and completion.

E. SEVP Certification, Recertification, Out-of-Cycle Review and 
Oversight

1. Certification
    The proposed rule would establish a requirement that an on-line fee 
to petition must be filed before the petition would be adjudicated. The 
proposed rule updates fees for the certification petition and for site 
visits, as discussed above.
    The proposed rule would set time requirements for conduct of the 
site visit following the date SEVP contacts the school for that 
purpose. The proposed rule would establish that failure by the school 
to comply with this requirement would result in the petition being 
denied for abandonment. The proposed rule would require knowledge 
proficiency standards for those persons identified as DSOs. The 
inability of personnel to demonstrate reasonable knowledge and 
competence of DSO requirements and responsibilities could be cause for 
petition denial.
2. Recertification
    The proposed rule would specify the sections of 8 CFR 214.3 related 
to eligibility and compliance that would be examined during 
recertification. Following a distribution of certification expiration 
dates by SEVP in the first cycle of recertification to enable leveling 
of the workload, all subsequent petitions for recertification would be 
tied to exactly two years from the certification expiration date in the 
first recertification cycle. Delays in petition filing, adjudication 
and appeals (if any) would not impact a school's next certification 
expiration date. Schools should file as early as possible in the 
recertification eligibility period to preclude unnecessary processing 
delays in adjudication.
    The timeline for filing is established. A school must submit a 
complete package before adjudication would begin, and SEVP would 
confirm with the school when a complete petition has been received. 
SEVP urges schools to submit their complete petition packages at least 
12 weeks before their certification expiration date to allow SEVP 
adequate time to verify and confirm with the school that they filed 
their recertification petition package properly. Complete and timely 
filing is viewed by SEVP as a reflection on the DSOs' qualification for 
continued certification.
    A school that has not filed a complete petition for SEVP 
recertification by its certification expiration date would be given 
immediate automatic withdrawal from certification.
3. School Recertification Process
    SEVP would consider a range of factors in conducting 
recertification analyses. Indications of substandard performance and/or 
anomalies in SEVIS or from other sources since the previous 
certification may cause increased scrutiny. Analysis of a school may be 
modified if the school falls into special interest categories for 
enforcement.
    The proposed rule establishes a school's responsibility for the 
actions of its employees (e.g., DSOs), whether or not they are 
currently employed at the time of recertification. The principal 
designated school official (PDSO) at a school is presumed to exercise 
oversight of all DSOs.
    Few schools would receive an on-site review during SEVP 
recertification. On-site review in recertification is distinguished 
from an on-site visit given during initial certification. The purposes 
of an on-site visit include confirmation of a school's eligibility for 
SEVP certification, promoting basic competencies for DSOs, and 
providing outreach to better familiarize the school with the roles and 
responsibilities that come with the benefit of SEVP certification.
    The purpose of an on-site review is, generally, to address 
compliance. While a few random on-site reviews may be conducted to 
maintain a performance baseline for all schools or to explore potential 
performance benchmarks, the primary reason an on-site review is 
conducted is to resolve questions or concerns about school performance.
4. Out-of-Cycle Review
    The term ``out-of-cycle'' review is introduced in the proposed rule 
to replace the term ``periodic'' review, which implied a review at 
regular intervals. Out-of-cycle review can be conducted at any time and 
would be conducted when the level of concern warrants.
    The proposed rule now specifies some types of changes to school 
information in SEVIS that would warrant an out-of-cycle review. In most 
instances, these reviews are limited to phone e-mail contact to gather 
details and confirm school eligibility for continued SEVP 
certification. Incomplete or ambiguous responses, coupled with other 
performance indicators, might lead to further investigation.

[[Page 21277]]

    A school may be requested to electronically update all school 
information in SEVIS and/or provide SEVP with supporting documentation 
for the update at any time. The filing must be within 10 business days 
of the request.
    On-site review in out-of-cycle review may be conducted for the same 
reasons as during recertification. A school undergoing out-of-cycle 
review that does not support an on-site review within 30 days of being 
contacted by SEVP would have its SEVP certification withdrawn.
    The Notice of Continued Approval, advising of a positive 
determination to an out-of-cycle review, would have no impact on a 
school's established certification expiration date for recertification. 
An out-of-cycle review, generally, would be issue-oriented, while 
recertification entails an overall, more comprehensive review of school 
performance.
5. Voluntary Withdrawal of Certification
    The proposed rule establishes procedures for a school to withdraw 
from its SEVP certification, addressing options for future petitioning 
to certify and the impact of previous performance on adjudication of 
future petitions. SEVP seeks to facilitate withdrawal of schools that 
it determines are not suitable for the continued enrollment of F and/or 
M students. If it subsequently elects to petition for SEVP 
certification, a school's past performance would be considered in the 
adjudication.

F. Designated School Officials

    Only the PDSO of the main campus is authorized to submit a Form I-
17 for recertification. SEVP may also designate certain functions in 
SEVIS for use by the PDSO only.

G. Denial or Withdrawal of SEVP Certification or Recertification 
Procedures

    The proposed rule is updated, in accordance with EBSVERA, to 
recognize that future petitions for SEVP certification by schools that 
have been withdrawn on notice would be accepted at the discretion of 
the Director of SEVP. Reasons that a school might be no longer entitled 
to SEVP certification are clarified and expanded.
1. Automatic Withdrawal
    The proposed rule establishes re-petitioning criteria for schools 
that have been automatically withdrawn. Automatic withdrawal is viewed 
by SEVP as essentially an administrative action. New petitions for SEVP 
certification are, consequently, accepted from schools that have been 
automatically withdrawn without restriction. However, schools that have 
been previously SEVP-certified would be subject to consideration of 
past performance in the adjudication of any new petition. The proposed 
rule identifies circumstances when automatic withdrawal would be 
implemented.
2. Withdrawal on Notice
    The proposed rule clarifies existing text and gives a school that 
files an appeal of a withdrawal on notice the choice to request a 
telephone interview in support of its response to an NOIW.
3. Operations at a School When SEVP Certification Is Withdrawn or 
Recertification Denied
    The proposed rule establishes the legal requirements and necessary 
procedures for such schools in the interim between receipt of a Notice 
of Denial or Withdrawal of SEVP Certification through the SEVIS access 
termination date. It prescribes actions that DSOs must take on behalf 
of their F or M students to protect and avoid wrongful termination of 
their visa status. The proposed rule describes the SEVIS access 
termination date and the parameters by which it is determined. The 
proposed rule recognizes the responsibility and liability that SEVP-
certified schools have for their F and M students, and identifies the 
SEVIS access termination date as the date when school responsibility is 
relinquished and liability for these students is removed.

V. Statutory and Regulatory Requirements

A. Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (RFA; 5 U.S.C. 
601(6)), ICE examined the impact of this proposed rule on small 
entities. The ``Regulatory Flexibility Act Analysis: Impact on Small 
Schools of the Change in Fees for Certification and Institution of 
Recertification by the Student and Exchange Visitor Program,'' located 
in the docket, provides details of how the analysis was conducted and 
detailed information on the results.
    As described above, under INA section 186(m)-(n), 8 U.S.C. 1356(m)-
(n), SEVP is authorized to collect fees to support the costs of 
certification and recertification from those entities that benefit from 
the certification/recertification process. Initial certification is 
viewed as a benefit to the school. Recertification is viewed as a 
benefit to F and M students. Recovery of the full cost of all 
operations is essential because SEVP receives no appropriated funds and 
is fully dependent on fees to meet operating expenses and newly 
identified requirements.
    A small entity may be a small business (defined as any 
independently owned and operated business not dominant in its field 
that qualifies as a small business, per the Small Business Act (15 
U.S.C. 632)); a small, not-for-profit organization; or a small 
governmental jurisdiction (locality with fewer than 50,000 people). 
This analysis focuses on small schools. SEVP used the North American 
Industry Classification System (NAICS) for the Educational Sector \2\ 
combined with the Small Business Administration (SBA) definition of 
small entities for all schools except public high schools.
---------------------------------------------------------------------------

    \2\ The Educational Services sector comprises establishments 
that provide instruction and training in a wide variety of subjects. 
This instruction and training is provided by specialized 
establishments, such as schools, colleges, universities, and 
training centers. These establishments may be privately owned and 
operated for profit or not for profit, or they may be publicly owned 
and operated. They may also offer food and accommodation services to 
their students.
---------------------------------------------------------------------------

    The RFA and SBA guidance requires each agency to make its own 
determination of significant impact, given the characteristics of the 
regulated population and the given rule. Among the things the agency 
considers when determining the impact of a rule are: the possibilities 
of long-term insolvency; short-term insolvency; disproportional burden, 
based on whether or not the regulations place the small entities at a 
significant competitive disadvantage; and inefficiency, based on 
whether the social cost imposed on small entities outweighs the social 
benefit of regulating them.
    Establishing a cut-off level for significant impact on this 
population is difficult. Many schools are non-profit or public. 
Privately owned schools often operate with modest profit margins. 
Profits go back into the school for expansion of the school or the 
facilities in most cases.
    Certification and recertification are voluntary. In addition, 
schools with no F and/or M students and no concrete plans to enroll 
any, in particular, have little motive to recertify.
    Another factor is that SEVP cannot certify or recertify schools 
that are under-funded or financially unstable. The certification 
regulations require that a school ``possesses the necessary facilities, 
personnel, and finances to conduct instruction in recognized courses.'' 
Regulations require that schools be established and recognized

[[Page 21278]]

institutions of learning prior to becoming SEVP-certified. This 
eliminates marginal and start-up schools from the population of schools 
that can seek certification.
    SEVP examined the entire range of potential impacts on schools and 
did an in-depth analysis of the smalls schools at two levels--``3% and 
over'' and ``5% and over,'' meaning that the certification fee is ``3% 
and over'' or ``5% and over'' of the total earnings of the school in 
tuition collected from their F and/or M students. Detailed results of 
this examination are in the ``Regulatory Flexibility Act Analysis: 
Impact on Small Schools of the Change in Fee for Certification and 
Institution of Recertification by the Student and Exchange Visitor 
Program,'' located in the docket.
    SEVP conducted the analysis of the potential impact of the proposed 
Certification Fee in accordance with the RFA using data drawn from 
SEVIS in May 2007. At that time, there were 8,961 SEVP-certified 
schools. This number may differ from other analyses as the number of 
certified schools fluctuates with SEVP continually adding newly 
certified schools and schools withdrawing from certification.
    All SEVP-certified schools self-report average enrollment and 
average tuition cost for students. SEVP did not need to use publicly 
available information or use sampling, therefore, to gather data on the 
finances of the schools. The reported number of students and the 
tuition cost per student were used to estimate annual total tuition 
income. The tuition cost per student was determined by the data in the 
school's Form I-17, available in SEVIS, and the tuition cost reported 
for F and/or M students.
    In some cases, the data supplied by a school for the average cost 
to students appeared erroneous. In these instances, the cost was 
updated using the school's published tuition rate from its Web site or 
the amount of tuition shown in the records of individual F and/or M 
students at that school.
    SEVP found that 46% of schools in SEVIS meet the SBA definition of 
a small entity. Table 14 provides a list of schools by type and SBA 
NAICS code as well as the percent of large and small schools in that 
category.

                    Table 14.--Percent of SEVP-Certified Schools by Type and SBA NAICS Codes
----------------------------------------------------------------------------------------------------------------
                                                                                             Percent    Percent
           Type of school                         Description                NAICS codes     of large   of small
                                                                                             schools    schools
----------------------------------------------------------------------------------------------------------------
Arts...............................  Schools clearly identifiable as       611610.........        1.1        0.8
                                      giving instruction in the fine
                                      arts; a mix of F and M schools.
Flight.............................  Schools that offer only flight        611512.........        0.4        3.5
                                      training and other related
                                      technical training.
English Language...................  Schools that offer English language   611630.........        4.4        3.1
                                      instruction only.
English Language and Other.........  Schools that offer English language   611630.........        1.3        0.5
                                      instruction and other courses, such  611691.........
                                      as test preparation.                 611430.........
Seminary...........................  Schools with seminary or theology in  ...............        1.5        3.8
                                      the name. Most issue a degree.
Other Private Academic.............  F schools that do not fall into       611410.........        1.0        3.0
                                      another category. Includes Bible     611420.........
                                      schools, nursing schools, etc. that  611430.........
                                      do not issue a degree.
Private K-12.......................  Private elementary, middle and        611110.........       20.1       44.4
                                      secondary schools.
Public HS..........................  Public high schools.................  611110.........        5.0       14.4
Technical Vocational...............  M schools that do not fall into       611210.........        5.1       13.5
                                      another category (diverse group      611410.........
                                      that includes schools of             611420.........
                                      horseshoeing, beauty schools,        611430.........
                                      culinary arts schools, non-degree    611511.........
                                      medical instruction, and computer    611519.........
                                      technical training).
University or College..............  Schools that issue one of the         611310.........       60.1       12.9
                                      following degrees: associates,       611210.........
                                      bachelors, masters, and Ph.D. These
                                      schools may also offer programs of
                                      study in the other areas listed.
----------------------------------------------------------------------------------------------------------------

    Twenty-nine SEVP-certified schools have not registered any F or M 
students. Nearly 25 percent of SEVP-certified schools have five or 
fewer F and or M students enrolled. Most have not had more than five 
since the inception of SEVP. SEVP does not expect these schools to 
recertify.
    The resulting profile was used to project the expected 
characteristics for the 700 new schools expected to certify annually. 
This analysis indicated that approximately 82% of the schools seeking 
certification in the future would be small schools. Table 16 provides 
the projected number of schools at each level of impact.

   Table 16.--Projected Number of Small Schools Expected To Certify by
                             Level of Impact
------------------------------------------------------------------------
                                                            Projected
                    Level of impact                      number of small
                                                             schools
------------------------------------------------------------------------
Under 0.5%.............................................              469
0.5% to under 1%.......................................               59
1% to under 2%.........................................               29
2% to under 3%.........................................                7
3% to under 4%.........................................                1
4% to under 5%.........................................                5
5% to under 6%.........................................                1
6% to under 7%.........................................                2
7% to under 8%.........................................                0
10% to under 11%.......................................                0
12% to under 13%.......................................                1
23% to under 24%.......................................                1
------------------------------------------------------------------------

Of the 574 small schools expected to apply for certification, SEVP 
projects that about 10 schools may be impacted by 3% or more. That is, 
the certification fee is 3% or more of the total earnings of the school 
in tuition collected by their F and/or M students. That represents 
about 1.7% of the small school certification applicants. SEVP expects 
that four small schools (0.7%) would be impacted by 5% or more.
    The category most impacted would be ``Other Private Academic'' 
schools. Of the 16 schools of this type, SEVP projects, as illustrated 
in Table 17, two would be impacted by 3% and over and none would be 
impacted by 5% and over.

[[Page 21279]]



   Table 17.--Summary of the Impact of the Certification Fee on Small
                                 Schools
------------------------------------------------------------------------
                                                 Percent of   Percent of
                                                   small        small
                                                  schools      schools
                                                  impacted     impacted
                                                3% and over  5% and over
------------------------------------------------------------------------
Certification Fee.............................          1.7          0.7
------------------------------------------------------------------------

SEVP did not make a determination of substantial numbers, as the 
percentage of schools impacted by the fees is so low that it does not 
appear substantial.
    SEVP considered four alternatives to the proposed Certification Fee 
in this proposed rule. The need for fees to recover the operating costs 
of SEVP was inherent in all of the alternatives. Three were rejected 
for the reasons given. Option 2 was chosen. SEVP seeks comments on the 
alternatives considered and any significant alternatives not 
considered.
    Option 1: Do not charge a fee to cover the costs of certification 
and recertification. SEVP does not consider a ``no charge'' option to 
be viable. There are only two sources of income available to SEVP: fee 
income or appropriated funds. Congress mandated that ICE/SEVP certify 
schools that wish to enroll F or M students and recertify those schools 
every two years. It is unlikely that Congress would appropriate 
operating funds for a program that has the authority to collect fees 
from the entities that derive direct benefits from it.
    Option 2: Allocate some or all costs to the I-901 SEVIS fee. One 
alternative was to assign all costs to the fee charged to F, M and J 
nonimmigrants. This would spread the fee-recoverable cost of the 
program against a larger population. The I-901 SEVIS fee is authorized 
by the Illegal Immigration Reform and Responsibility Act of 2002 
(IIRIRA, 8 U.S.C. 1372). SEVP considers availability of certified 
schools that F and M students can attend as a benefit to students. 
Initial certification constitutes a potential benefit to the 
petitioning schools, however, under INA section 286(m), 8 U.S.C. 
1356(m), SEVP opted to collect a fee from schools filing a 
certification petition, but to pass the cost of recertification to the 
nonimmigrants being benefited for these reasons.
    Option 3: Apportion recertification fees by number of F and/or M 
students enrolled. SEVP would assess a Recertification Fee based on the 
number of F and/or M students enrolled at a school during the previous 
two years in this scenario. The advantages of this load-based scenario 
include: lower fees for schools with fewer F and/or M students and the 
scenario may deter schools from issuing Forms I-20 to marginally 
qualified students. The disadvantages of this scenario include: the 
schools with large enrollments would pay a disproportionate part of the 
cost of recertification because the cost for oversight and 
recertification does not vary directly with the number of students; the 
number of students would have to be calculated; a school would not be 
able to predict its fee from year to year; a process for resolving 
billing disputes would be needed; and SEVP would need to create a fee 
collection system that creates an invoice to the school.
    SEVP rejected this option because assessing and collecting the fee 
would require building a payment process that captured the needed data, 
generated invoices, and tracked invoice payment. The cost to build and 
operate a fee payment system of this complexity could increase the 
overall program costs. It would also make it more difficult for SEVP-
certified schools to budget for the recertification.
    Option 4: Charge a variable recertification fee based on the risk 
profile for the school. Schools would be put into a risk category based 
on the student profile. SEVP would need to develop a methodology to 
assign a risk factor for each type of school. For example, schools that 
enroll grades K-12 deal with a lower risk population, so their risk is 
reduced. For these K-12 schools the risk factor might be 75%, whereas a 
high-risk group might have a factor of 125%. The fees would be adjusted 
so that schools in a higher risk category would pay higher fees.
    The advantages would be: schools with classes of students that pose 
a lower risk would pay a smaller fee; types of schools with past 
performance indicating a higher risk would pay a higher fee; and the 
fee would be predictable.
    The disadvantages would be: the rationale for the fee structure is 
complex and would need to be supported by a full analysis; any 
rationale for assessing risk would be controversial; the fee would be 
higher than that in the current version of the rule for many small 
schools; and some schools highly in compliance with SEVP requirements 
would be penalized for the poor performance of other schools in that 
group, as schools would be grouped by type.
    SEVP rejected this alternative due to the inherent complexity and 
difficulty in making fair risk assessments for entire groups of 
schools.
    SEVP believes that, based on this analysis, the option it chose for 
this proposed rule is the most appropriate option and that this 
proposed rule, once final, would not have a significant economic impact 
on a substantial number of small entities. SEVP welcomes comments on 
that conclusion. Members of the public should please submit a comment, 
as described in this proposed rule under ``Public Participation,'' if 
they think that their business, organization, or governmental 
jurisdiction qualifies as a small entity and that this proposed rule 
would have a significant economic impact on it. It would be helpful if 
commenters provide SEVP with as much of the following information as 
possible. Is the commenter's school currently SEVP-certified? If not, 
does the school plan to seek certification? Does it meet the SBA 
criteria for a small entity? If not, what criteria should SEVP use to 
properly identify small schools? Indicate the type of school, using one 
of those listed in this analysis or a more complete description. Please 
describe the type and extent of the impact on the commenter's school. 
Please describe any recommended alternative method of assessing the 
Certification Fee or the institution of recertification that would 
mitigate the impact on a small school or comment upon the alternatives 
presented in the ``Regulatory Flexibility Act Analysis,'' located in 
the docket.
    SEVP may certify in the final rule that this action does not have a 
significant economic impact on a substantial number of small entities 
if comments received do not demonstrate that the rule would cause a 
substantial number of small entities to incur significant direct costs.

B. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (UMRA) requires certain 
actions to be taken by an agency before ``promulgation of any rule that 
includes any Federal mandate that may result in the expenditure by 
State, Local and Tribal governments, in the aggregate, or by the 
private sector, of $100,000,000 or more (adjusted annually for 
inflation) in any 1 year.'' 2 U.S.C. 1532(a). This rulemaking is not a 
``Federal mandate,'' as defined for UMRA purposes, 2 U.S.C. 658(6), as 
the payment of an SEVP certification fee by individuals, Local 
governments or other private sector entities is (to the extent it could 
be termed an enforceable duty) one that arises from participation in a 
voluntary Federal program (i.e., applying for status as F-1, F-3, M-1, 
or M-3 students or as J-1 exchange visitor in the United States or 
seeking approval from the United

[[Page 21280]]

States for attendance by certain aliens seeking status as F-1, F-3, M-1 
students). 2 U.S.C. 658(7)(A)(ii). Therefore, no actions were deemed 
necessary under the provisions of the UMRA.

C. Small Business Regulatory Enforcement Fairness Act of 1996

    This rulemaking is not a major rule, as defined by 5 U.S.C. 804, 
for purposes of Congressional review of agency rulemaking under the 
Small Business Regulatory Enforcement Act of 1996, Public Law 104-121. 
This rulemaking would not result in an annual effect on the economy of 
more than $100 million; a major increase in costs or prices; or 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of U.S.-based companies to 
compete with foreign-based companies in domestic and export markets.

D. Executive Order 12866: Regulatory Review

    This proposed rule is not considered by DHS to be an economically 
significant regulatory action under Executive Order 12866, section 
3(f), Regulatory Planning and Review, since it would not have an annual 
effect on the United States' economy of $100 million. The 
implementation of this proposed rule would provide ICE SEVP with 
additional fee revenue of $58,538 million in FY 2009 and $62,581 
million in FY 2010. It is however, a significant rulemaking and has 
been reviewed by OMB.

E. Executive Order 13132, Federalism

    This rulemaking would not have substantial direct effects on the 
States, or on the relationship between the National Government and the 
States, or on the distribution of power and responsibilities among the 
various levels of Government. Consequently, DHS has determined that 
this rulemaking does not have sufficient Federalism implications to 
warrant the preparation of a Federalism summary impact statement, in 
accordance with section 6 of Executive Order 13132.

F. Executive Order 12988 Civil Justice Reform

    This proposed rule meets the applicable standards set forth in 3(a) 
and 3(b)(2) of Executive Order 12988.

G. Paperwork Reduction Act

    All Departments are required to submit to OMB for review and 
approval, any reporting or recordkeeping requirements inherent in a 
rule under the Paperwork Reduction Act of 1995, Public Law 104-13, 109 
Stat. 163 (1995), 44 U.S.C. 3501, et seq. Schools will be using SEVIS 
to petition for recertification. The recertification process requires 
schools to input data in SEVIS, print the Form I-17 and sign the form. 
The electronic data captured for the Form I-17 have been previously 
approved for use by the Office of Management and Budget (OMB) as one 
component of the data that are captured in SEVIS. The OMB Control 
Number for this collection is 1615-0066 (changed to 1653-0038). With 
the implementation of SEVIS under 67 FR 60107 (September 25, 2002), 
most schools enrolled in SEVIS were petitioning for DHS 
recertification, rather than initial certification (i.e., enrolling F 
or M nonimmigrant students for the first time). The workload for both 
certification and recertification was included under OMB 1615-0066.
    The changes to the fees would require changes to SEVIS and the I-
901 software to reflect the updated fee amounts, as these systems 
generate the pertinent petition and application forms. ICE SEVP would 
submit a revision to OMB with respect to any changes to existing 
information collection approvals.

List of Subjects

8 CFR Part 103

    Administrative practice and procedure, Authority delegations 
(Government agencies), Freedom of Information, Privacy, Reporting and 
recordkeeping requirements, Surety bonds.

8 CFR Part 214

    Administrative practice and procedure, Aliens, Employment, Foreign 
officials, Health professions, Reporting and recordkeeping 
requirements, Students.

    Accordingly, Chapter I of Title 8 of the Code of Federal 
Regulations is proposed to be amended as follows:

PART 103--POWERS AND DUTIES; AVAILABILITY OF RECORDS

    1. The authority citation for part 103 is revised to read as 
follows:

    Authority: 5 U.S.C. 301, 552, 552a; 8 U.S.C. 1101, 1103, 1304, 
1356, 1372; 31 U.S.C. 9701; Public Law 107-296, 116 Stat. 2135 (6 
U.S.C. 1 et seq.); E.O. 12356, 47 FR 14874, 15557, 3 CFR, 1982 
Comp., p. 166; 8 CFR part 2.

    2. Section 103.7(b)(1) is amended by revising the entries for Forms 
I-17, I-290B, and I-901 in the listing of fees, to read as follows:


Sec.  103.7  Fees.

* * * * *
    (b) * * *
    (1) * * *
* * * * *
    Form I-17. $1,700 plus $655 per location listed on the Form I-17B 
for filing a petition for school certification.
* * * * *
    Form I-290B. $585 (the fee will be the same when an appeal is taken 
from the denial of a petition with one or more multiple beneficiaries, 
provided that they are all covered by the same petition, and therefore, 
the same decision), for filing an appeal from any decision under the 
immigration laws (except those related to either Form I-17 SEVP 
certification or recertification) in any type of proceeding over which 
the Board of Immigration Appeals does not have appellate jurisdiction.
* * * * *
    Form I-901. $200 for remittance of the I-901 SEVIS fee levied on F 
and M students. $180 for remittance of the I-901 SEVIS fee levied on 
most J exchange visitors. $35 for remittance of the I-901 SEVIS fee 
levied for J-1 au pairs, camp counselors, and participants in a summer 
work/travel program. There is no I-901 SEVIS fee remittance obligation 
for J exchange visitors in government sponsored programs.
* * * * *

PART 214--NONIMMIGRANT CLASSES

    3. The authority citation for part 214 is revised to read as 
follows:

    Authority: 8 U.S.C. 1101, 1102, 1103, 1182, 1184, 1185 (pursuant 
to E.O. 13323, 69 FR 241, 3 CFR, 2003 Comp., p. 278), 1186a, 1187, 
1221, 1281, 1282, 1301-1305, 1356, 1372, 1379, 1731-32; section 643, 
Pub. L. 104-208, 110 Stat. 3009-708; section 141 of the Compacts of 
Free Association with the Federated States of Micronesia and the 
Republic of the Marshall Islands, and with the Government of Palau, 
48 U.S.C. 1901 note, and 1931 note, respectively, 8 CFR part 2.

    4. Section 214.3 is amended by:
    a. Revising paragraph (a)(1);
    b. Adding paragraph (a)(3);
    c. Revising the first sentence in paragraph (b) introductory text;
    d. Revising the first sentence in paragraph (c);
    e. Revising paragraphs (d), (e), and (f);
    f. Revising paragraph (g)(1);
    g. Removing paragraph (g)(2);
    h. Redesignating paragraphs (g)(3) and (g)(4) as paragraphs (g)(2) 
and (g)(3) respectively;
    i. Revising newly designated paragraph (g)(2) heading, and by 
revising newly designated paragraphs (g)(2)(i), (g)(2)(ii) introductory 
text, (g)(2)(ii)(E), and (g)(2)(iii)(C);
    j. Adding paragraph (g)(2)(iii)(D);

[[Page 21281]]

    k. Revising paragraph (h);
    l. Revising paragraph (i);
    m. Revising the introductory text of paragraph (k);
    n. Revising paragraph (l)(1)(ii); and by
    o. Revising paragraph (l)(2).
    The revisions and additions read as follows:


Sec.  214.3  Approval of schools for enrollment of F and M 
nonimmigrants.

    (a) * * *
    (1) General. A school or school system seeking initial or continued 
authorization for attendance by nonimmigrant students under sections 
101(a)(15)(F)(i) or 101(a)(15)(M)(i) of the Act, or both, must file a 
petition for certification or recertification with the Student and 
Exchange Visitor Program (SEVP), using the Student and Exchange Visitor 
Information System (SEVIS), in accordance with the procedures at 
paragraph (h) of this section. The petition must state whether the 
school or school system is seeking certification for attendance of 
nonimmigrant students under section 101(a)(15)(F)(i) or 
101(a)(15)(M)(i) of the Act or both. The petition must identify by name 
and address each location of the school that is included in the 
petition for certification or recertification, specifically including 
any physical location in which a nonimmigrant can attend classes 
through the school (i.e., campus, extension campuses, satellite 
campuses, etc.).
    (i) School systems. A school system, as used in this section, means 
public school (grades 9-12) or private school (grades kindergarten-12). 
A petition by a school system must include a list of the names and 
addresses of those schools included in the petition with the supporting 
documents.
    (ii) Submission requirements. Certification and recertification 
petitions require that a complete Form I-17, Petition for Approval of 
School for Attendance by Nonimmigrant Student, including supplements A 
and B and bearing original signatures, be included with the school's 
submission of supporting documentation. In submitting the Form I-17, a 
school certifies that the designated school officials (DSOs) signing 
the form have read and understand DHS regulations relating to: 
nonimmigrant students at 8 CFR 214.1, 214.2(f), and/or 214.2(m); change 
of nonimmigrant classification for students at 8 CFR 248; school 
certification and recertification under this section; withdrawal of 
school certification under this section and 8 CFR 214.4; that both the 
school and its DSOs intend to comply with these regulations at all 
times; and that, to the best of its knowledge, the school is eligible 
for SEVP certification. Willful misstatements constitute perjury (18 
U.S.C. 1621).
* * * * *
    (3) Eligibility. (i) The petitioner, to be eligible for 
certification, must establish at the time of filing that it:
    (A) Is a bona fide school;
    (B) Is an established institution of learning or other recognized 
place of study;
    (C) Possesses the necessary facilities, personnel, and finances to 
conduct instruction in recognized courses; and
    (D) Is, in fact, engaged in instruction in those courses.
    (ii) The petitioner, to be eligible for recertification, must 
establish at the time of filing that it:
    (A) Remains eligible for certification in accordance with paragraph 
(a)(3)(i) of this section;
    (B) Has complied during its previous period of certification with 
recordkeeping, retention, and reporting requirements and all other 
requirements of paragraphs (g), (j), (k), and (l) of this section.
    (b) * * * Institutions petitioning for certification or 
recertification must submit certain supporting documents as follows, 
pursuant to sections 101(a)(15)(F) and (M) of the Act. * * *
* * * * *
    (c) * * * If the petitioner is a vocational, business, or language 
school, or American institution of research recognized as such by the 
Secretary of Homeland Security, it must submit evidence that its 
courses of study are accepted as fulfilling the requirements for the 
attainment of an educational, professional, or vocational objective, 
and are not avocational or recreational in character. * * *
    (d) Interview of petitioner. The petitioner or an authorized 
representative of the petitioner may be required to appear in person 
before or be interviewed by telephone by a DHS representative prior to 
the adjudication of a petition for certification or recertification. 
The interview will be conducted under oath.
    (e) Notices to schools related to certification or recertification 
petitions or to out-of-cycle review--(1) General. All notices from SEVP 
to schools or school systems related to school certification, 
recertification, or out-of-cycle review will be issued in accordance 
with the procedures at 8 CFR 103.2(b)(1), (4)-(16), (18) and (19), with 
the exception that all procedures will be conducted by SEVP, the SEVP 
Director, and the Assistant Secretary, ICE, as appropriate, and except 
as provided in this section. All notices related to the collection of 
evidence, testimony, and appearance pertaining to petitions for 
recertification encompass compliance with the recordkeeping, retention 
and reporting, and other requirements of paragraphs (f), (g), (j), (k), 
and (l) of this section, as well as to eligibility. Notices will be 
generated and transmitted through SEVIS and/or by e-mail. The date of 
service is the date of transmission of the e-mail notice. DSOs must 
maintain current contact information, including current e-mail 
addresses, at all times. Failure of a school to receive SEVP notices 
due to inaccurate DSO e-mail addresses in SEVIS or blockages of the 
school's e-mail system caused by spam filters is not grounds for appeal 
of a denial or withdrawal. The term ``in writing'' means either a paper 
copy bearing original signatures or an electronic copy bearing 
electronic signatures.
    (2) SEVP approval notification and SEVIS updating by certified 
schools. SEVP will notify the petitioner by updating SEVIS to reflect 
approval of the petition and by e-mail upon approval of a certification 
or recertification petition. The certification or recertification is 
valid only for the type of program and nonimmigrant classification 
specified in the certification or recertification approval notice. The 
certification or recertification must be recertified every two years 
and may be subject to out-of-cycle review at any time. Approval may be 
withdrawn in accordance with 8 CFR 214.4.
    (3) Modifications to Form I-17 while a school is SEVP-certified. 
Any modification made by an SEVP-certified school on the Form I-17 at 
any time after certification and for the duration of a school's 
authorization to enroll F and/or M students must be reported to SEVP 
and will be processed by SEVP in accordance with the provisions of 
paragraphs (f)(1), (g)(2) and (h)(3)(i) of this section.
    (4) Notice of Intent to Withdraw (NOIW) SEVP certification--(i) 
Automatic withdrawal. SEVP will serve the school with an NOIW 30 days 
prior to a school's SEVP certification expiration date if the school 
has not submitted to SEVP a completed recertification petition, in 
accordance with paragraph (h)(2) of this section. The school will be 
automatically withdrawn immediately, in accordance with 8 CFR 
214.4(a)(3), if it has not submitted a completed recertification 
petition by the school's certification expiration date.
    (ii) Withdrawal on notice. SEVP will issue an NOIW, in accordance 
with 8

[[Page 21282]]

CFR 214.4(b), if SEVP determines that a school reviewed out-of-cycle 
has failed to sustain eligibility or has failed to comply with the 
recordkeeping, retention, reporting and other requirements of 
paragraphs (f), (g), (j), (k), and (l) of this section. When a school 
fails to file an answer to an NOIW within the 30-day period, SEVP will 
withdraw the school's certification and notify the DSOs of the 
decision, in accordance with 8 CFR 214.4(d). Such withdrawal of 
certification may not be appealed.
    (5) Notice of Denial. A Notice of Denial will be sent to a school 
when SEVP denies a petition for initial certification or 
recertification. The notice will address appeals options. Schools 
denied recertification must comply with 8 CFR 214.4(i).
    (6) Notice of Automatic Withdrawal. Schools that relinquish SEVP 
certification for any of the reasons cited in 8 CFR 214.4(a)(3) will be 
served a Notice of Automatic Withdrawal.
    (7) Notice of Withdrawal. A school found to be ineligible for 
continued SEVP certification as a result of an out-of-cycle review will 
receive a Notice of Withdrawal. Schools withdrawn must comply with 8 
CFR 214.4(i).
    (8) Notice of SEVIS Access Termination Date. The Notice of SEVIS 
Access Termination Date gives the official date for the school's denial 
or withdrawal to be final and SEVIS access to be terminated. In most 
situations, SEVP will not determine a SEVIS access termination date for 
that school until the appeals process has concluded and the initial 
denial or withdrawal has been upheld, in accordance with 8 CFR 
214.4(i)(3). The school will no longer be able to access SEVIS and SEVP 
will automatically terminate any remaining Active SEVIS records for 
that school on that date.
    (f) Adjudication of a petition for SEVP certification or 
recertification. (1) Approval. The school is required to immediately 
report through SEVIS any change to its school information upon approval 
of a petition for SEVP certification or recertification. Modification 
to school information listed in paragraph (h)(3) of this section will 
require a determination of continued eligibility for certification. The 
certification is valid only for the type of program and student 
specified in the approval notice. The certification may be withdrawn in 
accordance with the provisions of 8 CFR 214.4, is subject to review at 
any time, and will be reviewed every 2 years.
    (2) Denial. The petitioner will be notified of the reasons for the 
denial and appeal rights, in accordance with the provisions of 8 CFR 
part 103 and 8 CFR 214.4, if SEVP denies a petition for certification 
or recertification.
    (g) * * *
    (1) Student records. An SEVP-certified school must keep records 
containing certain specific information and documents relating to each 
F-1 or M-1 student to whom it has issued a Form I-20, while the student 
is attending the school and until the school notifies SEVP, in 
accordance with the requirements of paragraphs (g)(1) and (2) of this 
section, that the student is not pursuing a full course of study. The 
school must keep a record of having complied with the reporting 
requirements for at least three years after the student is no longer 
pursuing a full course of study. The school must maintain records on 
the student in accordance with paragraphs (g)(1) and (2) of this 
section if a school recommends reinstatement for a student who is out 
of status. The school must maintain records on the student for three 
years from the date of the denial if the reinstatement is denied. The 
DSO must make the information and documents required by this paragraph 
available, including academic transcripts, and must furnish them to DHS 
representatives upon request. Schools must maintain and be able to 
provide an academic transcript or other routinely maintained student 
records that reflect the total, unabridged academic history of the 
student at the institution, in accordance with paragraph (g)(1)(iv) of 
this section. All courses must be recorded in the academic period in 
which the course was taken and graded. The information and documents 
that the school must keep on each student are as follows:
    (i) Identification of the school, to include name and full address.
    (ii) Identification of the student, to include name while in 
attendance, date and place of birth, country of citizenship, school's 
student identification number.
    (iii) Current address where the student and his or her dependents 
physically reside. In the event the student or his or her dependents 
cannot receive mail at such physical residence, the school must provide 
a mailing address in SEVIS. If the mailing address and the physical 
address are not the same, the school must maintain a record of both 
mailing and physical addresses and provide the physical location of 
residence of the student and his or her dependents to DHS upon request.
    (iv) Record of coursework. Identify the student's degree program 
and field of study. For each course, give the periods of enrollment, 
course identification code and course title; the number of credits or 
contact hours, and the grade; the number of credits or clock hours, and 
for credit hour courses the credit unit; the term unit (semester hour, 
quarter hour, etc.). Include the date of withdrawal if the student 
withdrew from a course. Show the grade point average for each session 
or term. Show the cumulative credits or clock hours and cumulative 
grade point average. Narrative evaluation will be accepted in lieu of 
grades when the school uses no other type of grading.
    (v) Record of transfer credit or clock hours accepted. Type of 
hours, course identification, grades.
    (vi) Academic status. Include the effective date or period if 
suspended, dismissed, placed on probation, or withdrawn.
    (vii) Whether the student has been certified for practical 
training, and the beginning and end dates of certification.
    (viii) Statement of graduation (if applicable). Title of degree or 
credential received, date conferred, program of study or major.
    (ix) Termination date and reason.
    (x) The documents referred to in paragraph (k) of this section.
    (xi) Date of last entry into the United States; most recent Form I-
94 number and date of issue.

    Note to paragraph (g)(1): A DHS officer may request any or all 
of the above data on any individual student or class of students 
upon notice. This notice will be in writing if requested by the 
school. The school will have three work days to respond to any 
request for information concerning an individual student, and ten 
work days to respond to any request for information concerning a 
class of students. The school will respond orally on the same day 
the request for information is made if DHS requests information on a 
student who is being held in custody, and DHS will provide a written 
notification that the request was made after the fact, if the school 
so desires. DHS will first attempt to gain information concerning a 
class of students from DHS record systems.

    (2) Reporting changes in student and school information. (i) 
Schools must update SEVIS with the current information within 21 days 
of a change in any of the information contained in paragraphs (f)(1) 
and (h)(3) of this section.
    (ii) Schools are also required to report within 21 days any change 
of the information contained in paragraph (g)(1) or the occurrence of 
the following events:
* * * * *
    (E) Any other notification request not covered by paragraph (g)(1) 
of this section made by DHS with respect to the current status of the 
student.

[[Page 21283]]

    (iii) * * *
    (C) The start date of the student's next session, term, semester, 
trimester, or quarter. For initial students, the start date is the 
``program start date'' or ``report date.'' (These terms are used 
interchangeably.) The DSO may choose a reasonable date to accommodate a 
student's need to be in attendance for required activities at the 
school prior to the actual start of classes when determining the report 
date on the Form I-20. Such required activities may include, but are 
not limited to, research projects and orientation sessions. The DSO may 
not, however, indicate a report date more than 30 days prior to the 
start of classes. The next session start date is the start of classes 
for continuing students.
    (D) Adjustment to the program completion date. Any factors that 
influence the student's progress toward program completion must be 
reflected by making an adjustment updating the program completion date.
* * * * *
    (h) SEVP certification, recertification, out-of-cycle review, and 
oversight of schools--(1) Certification. A school seeking SEVP 
certification for attendance by nonimmigrants under section 
101(a)(15)(F)(i) or 101(a)(15)(m)(i) of the Act must use SEVIS to file 
an electronic petition (which compiles the data for the Form I-17) and 
must submit the nonrefundable certification petition fee on-line.
    (i) Filing a petition. The school must access the SEVP Web site at 
http://www.ice.gov/sevis to file a certification petition in SEVIS. The 
school will be issued a temporary ID and password in order to access 
SEVIS to complete and submit an electronic Form I-17. The school must 
submit online the nonrefundable certification petition fee of $1,700, 
and the mandatory site visit fee of $655. The school must pay the $655 
site visit cost for each additional school or campus listed on Form I-
17B.
    (ii) Site visit, petition adjudication and school notification. 
SEVP will conduct a site visit for each petitioning school and its 
additional schools or campuses. SEVP will contact the school to arrange 
the site visit. The school must comply with and complete the visit 
within 30 days after the date SEVP contacts the school to arrange the 
visit, or the petition for certification will be denied as abandoned. 
DSOs and school officials that have signed the school's Form I-17 
petition must be able to demonstrate to DHS representatives how they 
obtain access to the regulations cited in the certification as part of 
the site visit. Paper or electronic access is acceptable. DSOs must be 
able to extract pertinent citations within the regulations related to 
their requirements and responsibilities. SEVP will issue a notice of 
approval and SEVIS will be updated to reflect the school's 
certification if SEVP approves the school's certification petition.
    (iii) Certification denial. SEVP will issue a notice of denial in 
accordance with paragraph (f)(2) of this section if a school's petition 
for certification is denied.
    (2) Recertification. Schools are required to file a completed 
petition for SEVP recertification before the school's certification 
expiration date, which is two years from the date of their previous 
SEVP certification or recertification expiration date, except for the 
first recertification cycle after publication of the recertification 
rule. SEVP will review a petitioning school's compliance with the 
recordkeeping, retention and reporting, and other requirements of 
paragraphs (f), (g), (j), (k), and (l) of this section, as well as 
continued eligibility for certification, pursuant to paragraph (a)(3) 
of this section.
    (i) Filing of petition for recertification. Schools must submit a 
completed Form I-17 (including supplements A and B) using SEVIS, and 
submit a paper copy of the Form I-17 bearing original signatures of all 
officials. SEVP will notify all DSOs of a previously certified school 
180 days prior to the school's certification expiration date that the 
school may submit a petition for recertification. A school may file its 
recertification petition at any time after receipt of this 
notification. A school must submit a complete recertification petition 
package, as outlined in the submission guidelines, by its certification 
expiration date. SEVP will send a notice of confirmation of complete 
filing or rejection to the school upon receipt of any filing of a 
petition for recertification.
    (A) Notice of confirmation assures a school of uninterrupted access 
to SEVIS while SEVP adjudicates the school's petition for 
recertification. A school that has complied with the petition 
submission requirements will continue to have SEVIS access after its 
certification expiration date while the adjudication for 
recertification is pending. The school is required to comply with all 
regulatory, recordkeeping, retention and reporting, and other 
requirements of paragraphs (f), (g), (j), (k), and (l) of this section 
during the period the petition is pending.
    (B) Notice of rejection informs a school that it must take prompt 
corrective action in regard to its recertification petition prior to 
its certification expiration date to ensure that its SEVIS access will 
not be terminated and its petition for recertification will be accepted 
for adjudication.
    (ii) Consequence of failure to petition. SEVP will issue an NOIW to 
the school 30 days prior to a school's certification expiration date. 
SEVP will no longer accept a petition for recertification from the 
school and will immediately withdraw the school's certification if the 
school does not petition for recertification, abandons its petition, or 
does not submit a complete recertification petition package by the 
certification expiration date, in accordance with the automatic 
withdrawal criteria in 8 CFR 214.4(a)(3). The school must comply with 8 
CFR 214.4(i) upon withdrawal.
    (iii) School recertification process--(A) General. School 
recertification reaffirms the petitioning school's eligibility for SEVP 
certification and the school's compliance with recordkeeping, 
retention, reporting and other requirements of paragraphs (f), (g), 
(j), (k), and (l) of this section since its previous certification.
    (B) Compliance. Assessment by SEVP of a school petitioning for 
recertification will focus primarily on overall school compliance, but 
may also include examination of individual DSO compliance as data and 
circumstances warrant. Past performance of these individuals, whether 
or not they continue to serve as principal designated school officials 
(PDSOs) or DSOs, will be considered in any petition for recertification 
of the school.
    (C) On-site review for recertification. All schools are subject to 
on-site review, at the discretion of SEVP, in conjunction with 
recertification. The school must comply with and complete an on-site 
review within 30 days of the notification by a DHS representative of a 
school that it has been selected for an on-site review for 
recertification, or the petition for recertification will be denied as 
abandoned, resulting in the school's withdrawal from SEVIS.
    (iv) Recertification approval. SEVP will issue a notice of approval 
if a school's petition for recertification is approved. The date of the 
subsequent recertification review will be two years after the school's 
certification expiration date from this petition cycle.
    (v) Recertification denial. SEVP will issue a notice of denial if a 
school's petition for recertification is denied, in accordance with 8 
CFR 103.3.

[[Page 21284]]

    (vi) Adjustment of certification expiration date. Schools eligible 
for recertification before [Insert date 180 days from date of 
publication of the final rule in the Federal Register] will, at a 
minimum, have their certification expiration date extended to [Insert 
date 180 days from the date of publication of the final rule in the 
Federal Register]. SEVP may extend the certification expiration date 
beyond this date during the first cycle of recertification.
    (3) Out-of-cycle review and oversight of SEVP-certified schools. 
(i) SEVP will determine if out-of-cycle review is required upon receipt 
in SEVIS of any changes from an SEVP-certified school to its Form I-17 
information. The Form I-17 information that requires out-of-cycle 
review when changed includes:
    (A) Approval for attendance of students (F/M/both);
    (B) Name of school system; name of main campus;
    (C) Mailing address of the school;
    (D) Location of the school;
    (E) School type;
    (F) Public/private school indicator;
    (G) Private school owner name;
    (H) The school is engaged in;
    (I) The school operates under the following Federal, State, Local 
or other authorization;
    (J) The school has been approved by the following national, 
regional, or state accrediting association or agency;
    (K) Areas of study;
    (L) Degrees available from the school;
    (M) If the school is engaged in elementary or secondary education;
    (N) If the school is engaged in higher education;
    (O) If the school is engaged in vocational or technical education;
    (P) If the school is engaged in English language training;
    (Q) Adding or deleting campuses;
    (R) Campus name;
    (S) Campus mailing address; and
    (T) Campus location address.
    (ii) SEVP may request a school to electronically update all Form I-
17 fields in SEVIS and provide SEVP with documentation supporting the 
update. The school must complete such updates in SEVIS and submit the 
supporting documentation to SEVP within 10 business days of the request 
from SEVP.
    (iii) SEVP may review a school's certification at any time to 
verify the school's compliance with the recordkeeping, retention, 
reporting and other requirements of paragraphs (f), (g), (j), (k), and 
(l) of this section to verify the school's continued eligibility for 
SEVP certification pursuant to paragraph (a)(3) of this section. SEVP 
may initiate remedial action with the school, as appropriate, and may 
initiate withdrawal proceedings against the school pursuant to 8 CFR 
214.4(b) if noncompliance or ineligibility of a school is identified.
    (iv) On-site review. SEVP-certified schools are subject to on-site 
review at any time. SEVP will initiate withdrawal proceedings against 
the school, pursuant to 8 CFR 214.4(b), if a certified school selected 
for on-site review prior to its certification expiration date fails to 
comply with and complete the review within 30 days of the date SEVP 
contacted the school to arrange the review.
    (v) Notice of Continued Eligibility. SEVP will issue the school a 
notice of continued eligibility if, upon completion of an out-of-cycle 
review, SEVP determines that the school remains eligible for 
certification. Such notice will not change the school's previously-
determined certification expiration date unless specifically notified 
by SEVP.
    (vi) Withdrawal of certification. SEVP will institute withdrawal 
proceedings in accordance with 8 CFR 214.4(b) if, upon completion of an 
out-of-cycle review, SEVP determines that a school or its programs are 
no longer eligible for certification.
    (vii) Voluntary withdrawal. A school can voluntarily withdraw from 
SEVP certification at any time or in lieu of complying with an out-of-
cycle review or request. Failure of a school to comply with an out-of-
cycle review or request by SEVP will be treated as a voluntary 
withdrawal. A school must initiate voluntary withdrawal by sending a 
request for withdrawal on official school letterhead to SEVP.
    (i) Administration of student regulations. DHS officials may 
conduct out-of-cycle, on-site reviews on the campuses of SEVP-certified 
schools to determine whether nonimmigrant students on those campuses 
are complying with DHS regulations pertaining to them, including the 
requirement that each maintains a valid passport. DHS officers will 
take appropriate action regarding violations of the regulations by 
nonimmigrant students.
* * * * *
    (k) Issuance of Certificate of Eligibility. A DSO of an SEVP-
certified school must sign any completed Form I-20 issued for either a 
prospective or continuing student or a dependent. A Form I-20 issued by 
a certified school system must state which school within the system the 
student will attend. Only a DSO of an SEVP-certified school may issue a 
Form I-20 to a prospective student and his or her dependents, and only 
after the following conditions are met:
* * * * *
    (l) * * *
    (1) * * *
    (ii) Each campus must have one PDSO. The PDSO is responsible for 
updating SEVIS to reflect the addition or deletion of any DSO on his or 
her associated campus. SEVP will use the PDSO as the point of contact 
on any issues that relate to the school's compliance with the 
regulations, as well as any system alerts generated by SEVIS. SEVP may 
also designate certain functions in SEVIS for use by the PDSO only. The 
PDSO of the main campus is the only DSO authorized to submit a Form I-
17 for recertification. The PDSO and DSO will share the same 
responsibilities in all other respects.
* * * * *
    (2) Name, title, and sample signature. Petitions for SEVP 
certification, review and recertification must include the names, 
titles, and sample signatures of designated officials. An SEVP-
certified school must update SEVIS upon any changes to the persons who 
are principal or designated officials, and furnish the name, title and 
e-mail address of any new official within 21 days of the change. Any 
changes to the PDSO or DSO must be made by the PDSO within 21 days of 
the change. DHS may, at its discretion, reject the submission of any 
individual as a DSO or withdraw a previous submission by a school of an 
individual.
* * * * *
    5. Section 214.4 is amended by:
    a. Revising the section heading;
    b. Revising paragraph (a)(1);
    c. Redesignating paragraphs (a)(2) and (a)(3) as paragraphs (a)(3) 
and (a)(4) respectively;
    d. Adding a new paragraph (a)(2);
    e. Revising newly designated paragraph (a)(3);
    f. Revising paragraph (b);
    g. Revising paragraph (g); and by
    h. Adding paragraph (i).
    The revisions and addition read as follows:


Sec.  214.4  Denial of certification, denial of recertification or 
withdrawal of SEVP certification.

    (a) * * *
    (1) Denial of certification. The petitioning school will be 
notified of the reasons and appeal rights if a petition for 
certification is denied, in accordance with the provisions of 8 CFR 
103.3. A petitioning school denied certification may file a new 
petition for certification at any time.
    (2) Denial of recertification or withdrawal on notice. The school 
must

[[Page 21285]]

wait at least one calendar year from the date of denial of 
recertification or withdrawal on notice before being eligible to 
petition again for SEVP certification if a school's petition for 
recertification is denied by SEVP pursuant to 8 CFR 214.3(h)(3)(v), or 
its certification withdrawn on notice pursuant to paragraph (b) of this 
section. Eligibility to re-petition will be at the discretion of the 
Director of SEVP. A school or school system's SEVP certification for 
the attendance of nonimmigrant students, pursuant to sections 
101(a)(15)(F)(i) and/or 101(a)(15)(M)(i) of the Immigration and 
Nationality Act, will be withdrawn on notice subsequent to out-of-cycle 
review, or recertification denied, if the school or school system is 
determined to no longer be entitled to certification for any valid and 
substantive reason including, but not limited to, the following:
    (i) Failure to comply with 8 CFR 214.3(g)(1) without a subpoena.
    (ii) Failure to comply with 8 CFR 214.3(g)(2).
    (iii) Failure of a DSO to notify SEVP of the attendance of an F-1 
transfer student as required by 8 CFR 214.2(f)(8)(ii).
    (iv) Failure of a DSO to identify on the Form I-20 which school 
within the system the student must attend, in compliance with 8 CFR 
214.3(k).
    (v) Willful issuance by a DSO of a false statement, including 
wrongful certification of a statement by signature, in connection with 
a student's school transfer or application for employment or practical 
training.
    (vi) Conduct on the part of a DSO that does not comply with the 
regulations.
    (vii) The designation as a DSO of an individual who does not meet 
the requirements of 8 CFR 214.3(l)(1).
    (viii) Failure to provide SEVP paper copies of the school's Form I-
17 bearing the names, titles, and signatures of DSOs as required by 8 
CFR 214.3(l)(2).
    (ix) Failure to submit statements of DSOs as required by 8 CFR 
214.3(l)(3).
    (x) Issuance of Forms I-20 to students without receipt of proof 
that the students have met scholastic, language, or financial 
requirements as required by 8 CFR 214.3(k)(2).
    (xi) Issuance of Forms I-20 to aliens who will not be enrolled in 
or carry full courses of study, as defined in 8 CFR 214.2(f)(6) or 
214.2(m)(9).
    (xii) Failure to operate as a bona fide institution of learning.
    (xiii) Failure to employ adequate qualified professional personnel.
    (xiv) Failure to limit advertising in the manner prescribed in 8 
CFR 214.3(j).
    (xv) Failure to maintain proper facilities for instruction.
    (xvi) Failure to maintain accreditation or licensing necessary to 
qualify graduates as represented in the school's Form I-17.
    (xvii) Failure to maintain the physical plant, curriculum, and 
teaching staff in the manner represented in the Form I-17.
    (xviii) Failure to comply with the procedures for issuance of Forms 
I-20 as set forth in 8 CFR 214.3(k).
    (xix) Failure of a DSO to notify SEVP of material changes, such as 
changes to the school's name, address, or curriculum, as required by 8 
CFR 214.3(f)(1).
    (3) Automatic withdrawal. A school that is automatically withdrawn 
and subsequently wishes to enroll nonimmigrant students in the future 
may file a new petition for SEVP certification at any time. The school 
must use the certification petition procedures described in 8 CFR 
214.3(h)(1) to gain access to SEVIS for submitting its petition. Past 
compliance with the recordkeeping, retention, reporting and other 
requirements of 8 CFR 214.3(f), (g), (j), (k), and (l), and with the 
requirements for transition of students under paragraph (i) of this 
section will be considered in the evaluation of a school's subsequent 
petition for certification. SEVP certification will be automatically 
withdrawn:
    (i) As of the date of termination of operations, if an SEVP-
certified school terminates its operations.
    (ii) As of a school's certification expiration date, if an SEVP-
certified school does not submit a completed recertification petition 
in the manner required by 8 CFR 214.3(h)(2).
    (iii) Sixty days after the change of ownership if an SEVP-certified 
school changes ownership, unless the school files a new petition for 
SEVP certification, in accordance with the procedures at 8 CFR 
214.3(h)(1), within 60 days of the change of ownership. SEVP will 
review the petition if the school properly files such petition to 
determine whether the school still meets the eligibility requirements 
of 8 CFR 214.3(a)(3) and is still in compliance with the recordkeeping, 
retention, reporting and other requirements of 8 CFR 214.3 (f), (g), 
(j), (k), and (l). SEVP will institute withdrawal proceedings in 
accordance with paragraph (b) of this section if, upon completion of 
the review, SEVP finds that the school is no longer eligible for 
certification, or is not in compliance with the recordkeeping, 
retention, reporting and other requirements of 8 CFR 214.3 (f), (g), 
(j), (k), and (l).
    (iv) If an SEVP-certified school voluntarily withdraws from its 
certification.
    (b) Withdrawal on notice. SEVP will initiate an out-of-cycle review 
and serve the school's PDSO with a Notice of Intent to Withdraw (NOIW) 
if SEVP has information that a school or school system may no longer be 
entitled to SEVP certification prior to the school being due for its 
two-year recertification. The NOIW will inform the school of:
    (1) The grounds for withdrawing SEVP certification.
    (2) The 30-day deadline from the date of the service of the NOIW 
for the school to submit sworn statements, and documentary or other 
evidence, to rebut the grounds for withdrawal of certification in the 
NOIW. An NOIW is not a means for the school to submit evidence that it 
should have previously submitted as a part of its established reporting 
requirements.
    (3) The school's right to submit a written request (including e-
mail) within 30 days of the date of service of the NOIW for a 
telephonic interview in support of its response to the NOIW.
* * * * *
    (g) Decision. The decision of SEVP will be in accordance with 8 CFR 
103.3(a)(1).
* * * * *
    (i) Operations at a school when SEVP certification is relinquished 
or withdrawn, or whose recertification is denied and on the SEVIS 
access termination date--(1) General. A school whose certification is 
relinquished or withdrawn, or whose recertification is denied may, at 
SEVP discretion, no longer be able to create Initial student records or 
issue new Forms I-20, Certificate of Eligibility for Nonimmigrant 
Student, for initial attendance. Schools must comply with the 
instructions given in the notice of withdrawal or denial with regard to 
management of status for their Initial and continuing F and/or M 
students. All other SEVIS functionality, including event reporting for 
students, will remain unchanged until the school's SEVIS access 
termination date. The school must continue to comply with the 
recordkeeping, retention, reporting and other requirements of 8 CFR 
214.3(f), (g), (j), (k), and (l) until its SEVIS access termination 
date.
    (2) SEVIS access termination. In determining the SEVIS access 
termination date, SEVP will consider the impact that such date will 
have upon SEVP, the school, and the school's

[[Page 21286]]

nonimmigrant students in determining the SEVIS access termination date. 
SEVP will not determine a SEVIS access termination date for that school 
until the appeals process has concluded and the initial denial or 
withdrawal has been upheld unless a school whose certification is 
withdrawn or whose recertification is denied is suspected of criminal 
activity or poses a potential national security threat. The school will 
no longer be able to access SEVIS, and SEVP will automatically 
terminate any remaining Active SEVIS records for that school on the 
SEVIS access termination date.
    (3) Legal obligations and ramifications for a school and its DSOs 
when a school is having SEVP certification denied or withdrawn. Schools 
are obligated to their students to provide the programs of study to 
which they have committed themselves in the students' application for 
enrollment and acceptance process. Schools are obligated to the U.S. 
government to comply with the recordkeeping, retention, reporting and 
other requirements contained in 8 CFR 214.3. With any new petition for 
SEVP certification, SEVP will consider the extent to which a school has 
fulfilled these obligations to students and the U.S. government during 
any previous period of SEVP certification.
    6. Section 214.13 is amended by revising paragraph (a), to read as 
follows:


Sec.  214.13  SEVIS fee for certain F, J, and M nonimmigrants.

    (a) Applicability. The following aliens are required to submit a 
payment in the amount indicated for their status to the Student and 
Exchange Visitor Program (SEVP) in advance of obtaining nonimmigrant 
status as an F or M student or J exchange visitor, in addition to any 
other applicable fees, except as otherwise provided for in this 
section:
    (1) An alien who applies for F-1 or F-3 status in order to enroll 
in a program of study at an SEVP-certified institution of higher 
education, as defined in section 101(a) of the Higher Education Act of 
1965, as amended, or in a program of study at any other SEVP-certified 
academic or language-training institution including private elementary 
and secondary schools and public secondary schools, the amount of $200;
    (2) An alien who applies for J-1 status in order to commence 
participation in an exchange visitor program designated by the 
Department of State (DOS), the amount of $180, with a reduced fee for 
certain exchange visitor categories as provided in paragraphs (b)(1) 
and (c) of this section; and
    (3) An alien who applies for M-1 or M-3 status in order to enroll 
in a program of study at an SEVP-certified vocational educational 
institution, including a flight school, in the amount of $200.
* * * * *

Michael Chertoff,
Secretary.
 [FR Doc. E8-8261 Filed 4-18-08; 8:45 am]
BILLING CODE 4410-10-P