[Federal Register Volume 73, Number 210 (Wednesday, October 29, 2008)]
[Rules and Regulations]
[Pages 64436-64513]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-25270]



[[Page 64435]]

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Part III





Department of Education





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34 CFR Part 200



Title I--Improving the Academic Achievement of the Disadvantaged; Final 
Rule

  Federal Register / Vol. 73, No. 210 / Wednesday, October 29, 2008 / 
Rules and Regulations  

[[Page 64436]]


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DEPARTMENT OF EDUCATION

34 CFR Part 200

RIN 1810-AB01
[Docket ID ED-2008-OESE-0003]


Title I--Improving the Academic Achievement of the Disadvantaged

AGENCY: Office of Elementary and Secondary Education, Department of 
Education.

ACTION: Final regulations.

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SUMMARY: The Secretary amends the regulations governing programs 
administered under Part A of Title I of the Elementary and Secondary 
Education Act of 1965, as amended, to clarify and strengthen current 
Title I regulations in the areas of assessment, accountability, public 
school choice, and supplemental educational services.

DATES: These regulations are effective November 28, 2008.

FOR FURTHER INFORMATION CONTACT: Zollie Stevenson, Jr., Director, 
Student Achievement and School Accountability Programs, Office of 
Elementary and Secondary Education, U.S. Department of Education, 400 
Maryland Avenue, SW., room 3W230, Washington, DC 20202-6132. Telephone: 
(202) 260-1824.
    If you use a telecommunications device for the deaf (TDD), you may 
call the Federal Relay Service (FRS) at 1-800-877-8339.
    Individuals with disabilities may obtain this document in an 
alternative format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed under FOR FURTHER 
INFORMATION CONTACT.

SUPPLEMENTARY INFORMATION: These regulations amend regulations in 34 
CFR part 200, implementing certain provisions of Title I, Part A of the 
Elementary and Secondary Education Act of 1965 (ESEA), as amended by 
the No Child Left Behind Act of 2001 (NCLB), which are designed to help 
disadvantaged children meet high academic standards. On April 23, 2008, 
the Secretary published a notice of proposed rulemaking (NPRM) for the 
Title I, Part A program in the Federal Register (73 FR 22020).
    These final regulations reflect an effort to respond to the results 
of six years of implementation of the reforms introduced into the ESEA 
by NCLB. The accountability reforms implemented during that time--
including annual testing in reading and mathematics, school and local 
educational agency (LEA) accountability for the achievement of all 
students (including students in certain subgroups), the measurement of 
school performance and identification for improvement where necessary, 
and the provision of public school choice and supplemental educational 
services (SES) options to parents and their children--have resulted in 
fundamental changes in the way that States and LEAs approach the 
challenge of educating all students to high standards. Parents and 
educators now have more information and data than ever before on how 
our schools are performing and where schools and LEAs need to make 
changes. Superintendents, principals, and teachers are hard at work 
developing and implementing strategies for raising student achievement 
and improving school performance, including by fundamentally 
restructuring chronically poor-performing schools. Nearly all States 
are reporting increases in student achievement, as measured by their 
own assessments in reading and mathematics in grades 3 through 8 and 
high school, and all States have put in place comprehensive plans for 
ensuring that all students are proficient in reading and mathematics by 
2014.
    These final regulations build on and strengthen the advances States 
have made with their assessment and accountability systems. We believe 
a small number of significant regulatory changes can make a real 
difference in sustaining and advancing the reforms brought about by 
NCLB, pending reauthorization of the ESEA. The final regulations 
reflect careful consideration of comments we received on our proposed 
regulations and include a number of changes made in response to those 
comments, while remaining consistent with the policy goals of the NPRM.
    The most far-reaching change in these regulations is in how States, 
LEAs, and schools are held accountable for graduating students from 
high school. We believe that establishing a uniform and more accurate 
measure of calculating graduation rate that is comparable across States 
is a critical and essential step forward in improving high school 
accountability. New requirements governing the provision of SES and 
public school choice will help ensure that parents and students are 
informed of their options in a timely and effective manner and that 
LEAs make effective use of their funds to provide public school choice 
and SES. The changes to the regulations regarding SES will also help 
ensure that SES providers offer high-quality services. Changes 
addressing the inclusion of student subgroups in school and LEA 
adequate yearly progress (AYP) determinations will ensure greater 
accountability for the achievement of all groups of students. 
Amendments to the regulations governing restructuring of schools in 
improvement will help ensure that LEAs take significant reform actions 
to improve chronically underperforming schools, as required by the 
statute. Requiring the inclusion of State data from the National 
Assessment of Educational Progress (NAEP) on State and local report 
cards will provide parents and the public with additional important 
information about the performance of the students in their State.
    The other provisions of these final regulations make important 
clarifications or technical changes to existing policies. The 
regulations permit all States to request authority to include measures 
of student growth in their AYP determinations so long as States' growth 
proposals meet certain criteria. The regulations also codify the 
creation of the National Technical Advisory Council (National TAC) and 
the Department's current policy regarding the identification of schools 
and LEAs for improvement. Amendments to the assessment regulations 
clarify that the term ``multiple measures'' in the statute means that 
States may use single or multiple question formats, or multiple 
assessments within a subject area. Lastly, technical changes to the 
definition of ``highly qualified teacher'' align the Title I 
regulations with the Individuals with Disabilities Education Act 
(IDEA).
    In the absence of reauthorization, we believe these final 
regulations are necessary to further the interests of parents and 
children and to improve the implementation of NCLB in order to continue 
progress toward the goal of 100 percent student proficiency in reading 
and mathematics by 2014.

Major Changes in the Regulations

    The following is a summary of the major substantive changes in 
these final regulations from the regulations proposed in the NRPM. (The 
rationale for each of these changes is discussed in the Analysis of 
Comments and Changes section elsewhere in this preamble.)
     In Sec.  200.7(a)(2)(iii) (disaggregation of data), the 
final regulations require each State to submit its revised Consolidated 
State Application Accountability Workbook (Accountability Workbook), 
which would include any changes to its minimum group size and other 
components of AYP, to the Department for peer review in time for any 
changes

[[Page 64437]]

to be in effect for AYP determinations based on 2009-2010 assessment 
results.
     Section 200.11 (participation in NAEP) clarifies the NAEP 
data that State and LEA report cards must contain: the percentage of 
students at each achievement level reported on the NAEP, in the 
aggregate and, for State report cards, disaggregated for each subgroup 
described in Sec.  200.13(b)(7)(ii); and participation rates for 
students with disabilities and limited English proficient (LEP) 
students.
     The final regulations make a number of changes to Sec.  
200.19 (other academic indicators). The section is reorganized to 
separate the requirements for other academic indicators for elementary 
and middle schools from the requirements for calculating graduation 
rate (the required ``other academic indicator'' for high schools). The 
final regulations maintain the current requirements for the other 
academic indicators for elementary and middle schools; however, they 
make a number of changes for calculating graduation rate.

--Section 200.19(b)(1)(ii)(A) adds a definition of ``students who 
transfer into the cohort'' to mean those students who enroll after the 
beginning of the entering cohort's first year in high school, up to and 
including in grade 12.
--Section 200.19(b)(1)(ii)(B) makes clear that a student who emigrates 
to another country may be removed from the cohort and clarifies that a 
school or LEA must confirm in writing that a student transferred out, 
emigrated to another country, or is deceased.
--Section 200.19(b)(1)(ii)(B)(1) clarifies that, to confirm that a 
student transferred out, the school or LEA must have official written 
documentation that the student enrolled in another school or 
educational program that culminates in the award of a regular high 
school diploma.
--Section 200.19(b)(1)(iii) clarifies that the term ``students who 
graduate in four years'' means students who earn a regular high school 
diploma at the conclusion of their fourth year, before the conclusion 
of their fourth year, or during a summer session immediately following 
their fourth year.
--Section 200.19(b)(1)(v) permits a State, in addition to calculating a 
four-year adjusted cohort graduation rate, to propose to the Secretary 
for approval an ``extended-year adjusted cohort graduation rate.''
--Section 200.19(b)(1)(v)(A) defines an extended-year adjusted cohort 
graduation rate as the number of students who graduate in four years or 
more with a regular high school diploma divided by the number of 
students who form the adjusted cohort for the four-year adjusted cohort 
graduation rate, provided that the adjustments account for any students 
who transfer into the cohort by the end of the year of graduation being 
considered minus the number of students who transfer out, emigrate to 
another country, or are deceased by the end of that year.
--Section 200.19(b)(1)(v)(B) permits a State to calculate one or more 
extended-year adjusted cohort graduation rates.
--The final regulations do not require a State to use the Averaged 
Freshman Graduation Rate (AFGR) prior to the State's ability to use an 
adjusted cohort graduation rate.
--Section 200.19(b)(2) permits a State to use a transitional graduation 
rate before being required to use the four-year adjusted cohort 
graduation rate, if that transitional rate meets the graduation rate 
requirements in the current regulations.
--Section 200.19(b)(3)(i) requires a State to set a single graduation 
rate goal that represents the rate the State expects all high schools 
in the State to meet and annual graduation rate targets that reflect 
continuous and substantial improvement from the prior year toward 
meeting or exceeding the State's graduation rate goal.
--Section 200.19(b)(3)(ii) requires a State to hold any high school or 
LEA that serves grade 12 and the State accountable for meeting the 
State's graduation rate goal or targets beginning with AYP 
determinations based on school year 2009-2010 assessment results.
--Section 200.19(b)(4)(ii) requires a State and its LEAs to report the 
four-year adjusted cohort graduation rate in the aggregate and 
disaggregated by the subgroups described in Sec.  200.13(b)(7)(ii) 
beginning with report cards providing results of assessments 
administered in the 2010-2011 school year. If a State adopts an 
extended-year adjusted cohort graduation rate, the State and its LEAs 
must report this rate separately from its four-year rate beginning with 
the first year for which the State calculates such a rate.
--Section 200.19(b)(5) requires a State, beginning with AYP 
determinations based on school year 2011-2012 assessment results, to 
use the four-year adjusted cohort graduation rate to calculate AYP at 
the school, LEA, and State levels, in the aggregate and disaggregated 
by the subgroups described in Sec.  200.13(b)(7)(ii).
--Prior to calculating AYP under Sec.  200.20(a)(1)(ii) (meeting the 
State's annual measurable objectives) based on school year 2011-2012 
assessment results, a State must calculate graduation rate in the 
aggregate at the school, LEA, and State levels using the four-year 
adjusted cohort graduation rate or the transitional graduation rate.
--Section 200.19(b)(6) requires a State to revise its Accountability 
Workbook to include certain information and submit its revisions to the 
Department for technical assistance and peer review in time for any 
changes to be in effect for AYP determinations based on 2009-2010 
assessment results.
--Section 200.19(b)(7) permits a State that cannot meet the regulatory 
deadline for reporting a four-year adjusted cohort graduation rate to 
request an extension of time from the Secretary, provided the State 
submits, by March 2, 2009, evidence satisfactory to the Secretary 
demonstrating that it cannot meet that deadline and a detailed plan and 
timeline addressing the steps the State will take to implement, as 
expeditiously as possible, the four-year adjusted cohort graduation 
rate. Even if a State receives an extension, it must calculate 
graduation rate at the school, LEA, and State levels both in the 
aggregate and disaggregated by the subgroups described in Sec.  
200.13(b)(7)(ii) beginning with AYP determinations based on school year 
2011-2012 assessment results.

     Section 200.22(b)(1) (National TAC) makes clear that the 
National TAC must include members who have knowledge of and expertise 
in designing and implementing standards, assessments, and 
accountability systems for all students, including students with 
disabilities and LEP students.
     Section 200.37(b)(5)(ii)(B) (notice of identification for 
improvement, corrective action, or restructuring) requires an LEA to 
indicate, in its notice to parents, those SES providers who are able to 
serve students with disabilities or LEP students.
     Section 200.39(c)(1) (responsibilities resulting from 
identification for school improvement) requires an LEA to display 
certain information regarding public school choice and SES on its Web 
site in a timely manner to ensure that parents have current 
information. Paragraph (c)(2) requires an SEA to post on its Web site 
the required information for any

[[Page 64438]]

LEA that does not have its own Web site.
     Section 200.43 (restructuring) contains two changes. 
First, paragraph (a)(4) makes clear that, if a school begins to 
implement a restructuring option as a corrective action, the school 
need not implement a significantly more rigorous and comprehensive 
reform at the restructuring stage. Second, paragraph (b)(3)(v) 
clarifies that a major restructuring of a school's governance may 
include replacing the principal so long as this change is part of a 
broader reform effort.
     Section 200.44(a)(2) (public school choice) makes clear 
that an LEA must offer, through the 14-day notice required under Sec.  
200.37, the option to parents to transfer their child so that the child 
may transfer in the school year following the school year in which the 
LEA administered the assessments that resulted in its identification of 
the school for improvement, corrective action, or restructuring.
     Section 200.47 (SEA responsibilities for SES) contains 
several changes.

--Paragraph (a)(1)(ii)(B) requires an SEA to post on its Web site, for 
each LEA, the amount of funds the LEA must spend on choice-related 
transportation and SES and the maximum per-pupil amount the LEA must 
spend for SES.
--Paragraph (a)(3)(ii) requires an SEA to indicate on its list of 
approved SES providers those that are able to serve students with 
disabilities or LEP students.
--Paragraph (b)(2)(ii)(C) requires an LEA to ensure that the 
instruction a provider gives and the content a provider uses are of 
high quality, research-based, and specifically designed to increase the 
academic achievement of eligible children.

     Section 200.48 (funding for choice-related transportation 
and SES) contains several changes.

--Paragraph (d)(1)(i) no longer requires an LEA to obtain approval from 
its SEA before spending less than an amount equal to at least 20 
percent of its Title I, Part A allocation (the ``20 percent 
obligation'') on choice-related transportation, SES, and parent 
outreach and assistance. Instead, revised paragraph (d)(2) requires an 
LEA that wishes to use unspent choice-related transportation and SES 
funds for other allowable activities to (1) meet, at a minimum, certain 
criteria specified in paragraph (d)(2)(i), (2) maintain records 
demonstrating that it has met those criteria, (3) notify the SEA that 
it has met the criteria and that it intends to spend the remainder of 
its 20 percent obligation on other allowable activities, and (4) 
specify the amount of the remainder.
--Paragraph (d)(3) requires SEAs to ensure an LEA's compliance with the 
criteria in paragraph (d)(2)(i) through its regular monitoring process. 
However, in addition to its regular monitoring process, for any LEA 
that (1) the SEA determines has spent a significant portion of its 20 
percent obligation for other allowable activities and (2) has been the 
subject of multiple complaints, supported by credible evidence, 
regarding its implementation of the Title I public school choice or SES 
requirements, the SEA must review the LEA's compliance with the 
criteria in paragraph (d)(2)(i) by the beginning of the next school 
year.
--Paragraph (d)(4)(i) provides that, if an SEA finds that an LEA has 
failed to meet any of the criteria in paragraph (d)(2)(i), the LEA must 
(1) spend an amount equal to the remainder specified in paragraph 
(d)(2)(iii)(B) in the subsequent school year, in addition to its 20 
percent obligation for that year, on choice-related transportation 
costs, SES, or parent outreach and assistance; or (2) meet the criteria 
in paragraph (d)(2)(i) and obtain permission from the SEA before using 
any unspent choice-related transportation and SES funds for other 
allowable activities in that subsequent school year.
--Under paragraph (d)(4)(ii), an SEA may not grant permission to an LEA 
to spend less than the amount in paragraph (d)(4)(i)(A) unless the SEA 
has confirmed the LEA's compliance with the criteria in paragraph 
(d)(2)(i) for that subsequent school year.
--Paragraph (d)(2)(i)(A) requires an LEA that wishes to use unspent 
funds from its 20 percent obligation for other allowable activities to 
partner, ``to the extent practicable,'' with outside groups, such as 
faith-based organizations, other community-based organizations, and 
business groups to help inform eligible students and their families of 
the opportunities to transfer or receive SES.
--Paragraph (d)(2)(i)(B)(3) requires an LEA to provide a minimum of two 
enrollment ``windows,'' at separate points in the school year, that are 
of sufficient length to enable parents of eligible students to make 
informed decisions about requesting supplemental educational services 
and selecting a provider.

     Section 200.56 (definition of ``highly qualified 
teacher'') makes clear that a special education teacher is a ``highly 
qualified teacher'' under the ESEA if the teacher meets the 
requirements for a ``highly qualified special education teacher'' under 
the Individuals with Disabilities Education Act (IDEA).

Analysis of Comments and Changes

    In response to the Secretary's invitation in the NPRM, 400 parties 
submitted comments on the proposed regulations. An analysis of the 
comments and changes in the regulations since publication of the NPRM 
follows.
    We discuss substantive issues under the sections of the regulations 
to which they pertain. Generally, we do not address technical or minor 
changes, and suggested changes that we are not authorized to make under 
the law.

Section 200.2 State Responsibilities for Assessment

    Comment: Numerous commenters argued that the definition of multiple 
measures, as proposed in Sec.  200.2(b)(7), is far too narrow and 
should be expanded to permit States to include, in their AYP 
definitions, other measures of student performance such as written and 
oral presentations and projects, student portfolios, performance 
assessments, local assessments, teacher-designed assessments, and 
curriculum-embedded assessments. Other commenters stated that formative 
and adaptive assessments are widely used at the local level and asked 
that they be specifically referenced in the regulations. One commenter 
stated that student learning needs to be assessed throughout the year 
with several assessments in order to determine how much students learn 
during the school year. Several commenters recommended that the 
regulations specifically reference alternate assessments based on 
grade-level achievement standards as one way to meet the multiple 
measures requirement.
    Discussion: The Secretary's intent in amending Sec.  200.2(b)(7) 
was to clarify the meaning of ``multiple measures'' in the context of 
State assessment systems required under section 1111(b)(3) of the ESEA, 
particularly in light of frequent criticisms that school accountability 
should not be based only on a single assessment of student achievement. 
Section 1111(b)(3)(C)(vi) of the ESEA requires that State assessments 
``involve multiple up-to-date measures of student academic achievement, 
including measures that assess higher-order thinking skills and 
understanding.'' In proposed Sec.  200.2(b)(7), we clarified that this 
requirement could be met by using

[[Page 64439]]

single or multiple question formats that range in cognitive complexity 
within a single assessment or by using multiple assessments within a 
subject area. We did not in any way intend to narrow the basic 
definition of the term or to permit States to use only certain types of 
assessments.
    The requirement that State assessments involve multiple measures of 
academic achievement is one of a number of requirements in section 
1111(b)(3)(C) of the ESEA that all State assessments must meet (e.g., 
that State assessments are used to measure the achievement of all 
children; that they are aligned with the State's challenging academic 
content and student academic achievement standards; that they are valid 
and reliable; and that they are of adequate technical quality for each 
purpose used). These requirements do not prevent a State from using, in 
determining AYP, results from other measures of student achievement 
such as those mentioned by the commenters (e.g., local assessments; 
curriculum-embedded assessments; performance assessments), provided 
those measures are submitted for peer review and determined by the 
Secretary to meet the statutory and regulatory requirements.
    The Secretary does not believe it is necessary or appropriate to 
refer to specific types of assessments, such as formative assessments, 
adaptive assessments, and portfolio assessments, in Sec.  200.2(b)(7). 
The key point is not the type of measure but the fact that any 
assessment used by a State for accountability determinations must meet 
the requirements in section 1111(b)(3)(C) of the ESEA and be approved 
by the Secretary.
    Changes: None.
    Comment: Many commenters recommended that non-test-based measures 
such as attendance rates, grade-point averages, graduation and dropout 
rates, in-school retention rates, and the percentage of students taking 
honors and advanced placement classes be included in AYP 
determinations.
    Discussion: The ESEA and the Department's current regulations 
already both require and permit States to use non-test-based measures, 
such as those recommended by the commenters, in AYP determinations. 
Specifically, both section 1111(b)(2)(C)(vi) of the ESEA and current 
Sec.  200.19(a)(1) (new Sec.  200.19(a) and (b)) require a State to 
include at least one other academic indicator in its AYP 
determinations, which must be the graduation rate for high schools and 
an academic indicator of the State's choosing for elementary and middle 
schools. A State may, at its discretion, also include additional 
academic indicators. Current Sec.  200.19(b) (new Sec.  200.19(c)) 
provides examples of additional academic indicators that a State may 
use, which include additional State or local assessments, the 
percentage of students completing advanced placement courses, and 
retention rates. As outlined in current Sec.  200.19(c) (new Sec.  
200.19(d)), however, a State's other academic indicators must be valid 
and reliable; consistent with relevant, nationally recognized 
professional and technical standards, if any; and consistent throughout 
the State within each grade span. Moreover, under Sec.  200.19(e), a 
State may not use its other academic indicators to reduce the number 
of, or change, the schools that would otherwise be subject to school 
improvement, corrective action, or restructuring.
    Changes: None.
    Comment: One commenter stated that the Department should provide 
more flexibility for LEAs to experiment with various assessment systems 
that are aligned with the State's academic content and student academic 
achievement standards, but developed with community and local 
involvement and input.
    Discussion: Section 200.3 specifically permits a State to include, 
in the State assessment system that it uses to determine AYP, a 
combination of State and local assessments. If a State permits the 
inclusion of local assessments, however, the State must, among other 
things, establish technical criteria to ensure that each local 
assessment meets, for example, the statutory and regulatory 
requirements for validity, reliability, and technical quality, and 
demonstrate that the local assessments are equivalent to one another in 
their content coverage, difficulty, and quality; have comparable 
validity and reliability with respect to subgroups of students; and 
provide unbiased, rational, and consistent determinations of the annual 
progress of schools and LEAs within the State. Moreover, locally 
developed assessments that are not included as part of the annual State 
assessment system under section 1111(b)(3) of the ESEA may be used as 
an additional other academic indicator under current Sec.  200.19(b) 
(new Sec.  200.19(c)).
    Changes: None.
    Comment: Numerous commenters supported the proposed changes in 
Sec.  200.2(b)(7). One of these commenters, however, expressed concern 
that there may be continued confusion about the differences between the 
use of multiple measures and the use of multiple non-academic 
indicators in accountability determinations.
    Discussion: Section 200.2(b)(7) addresses only the requirement in 
section 1111(b)(3)(C)(vi) of the ESEA that State assessments involve 
multiple, up-to-date measures of student academic achievement. As 
discussed earlier, such measures must meet all the statutory and 
regulatory requirements applicable to State assessments. Separate and 
apart from this requirement is the flexibility for a State to include 
multiple, additional academic indicators in making AYP determinations, 
consistent with section 1111(b)(2)(C)(vii) and (b)(2)(D) of the ESEA 
and current Sec.  200.19(b) (new Sec.  200.19(c)). These indicators, 
however, may not be used to reduce the number of, or change, the 
schools that would otherwise be subject to school improvement, 
corrective action, or restructuring (see Sec.  200.19(e)).
    Changes: None.
    Comment: One commenter expressed concern that requiring multiple 
types of questions on a State assessment could delay the reporting of 
results. One commenter stated that including different types of 
questions to assess higher-order thinking skills would add complexity 
to an assessment and may increase the time it takes to score the 
assessment and make AYP determinations. Another commenter stated that 
the language in the proposed regulations did not describe how States 
should assess higher-order thinking skills.
    Discussion: We wish to emphasize that the new language in Sec.  
200.2(b)(7) is intended merely to clarify the several ways a State may 
involve multiple measures in the State's assessment system. If a State 
chooses to make a substantive revision to its assessment system by 
changing the way it implements the multiple measures requirement in 
Sec.  200.2(b)(7), it must submit its proposed change to the Department 
for peer review. Otherwise, no actions are required by States as a 
result of the amendment to this section.
    Changes: None.
    Comment: One commenter stated that the regulations on multiple 
measures set a bar that any State could currently claim to meet. 
Another commenter asked why the requirement to use multiple measures to 
assess student achievement and higher-order thinking skills was not 
negotiated as a part of the original State accountability plans, given 
the statutory mandate that such measures be used. Another commenter 
asked why the Department is only now emphasizing that multiple 
assessments may be used in States' accountability systems. One 
commenter stated that the Department objected to multiple

[[Page 64440]]

measures in the early implementation of the NCLB amendments to the ESEA 
and asked why the Department has changed its position.
    Discussion: The Secretary explained in the preamble to the NPRM 
that the changes to Sec.  200.2(b)(7) simply clarify section 
1111(b)(3)(C)(vi) of the ESEA, which requires State accountability 
systems to include multiple up-to-date measures of student academic 
achievement. We believe it is necessary to make these clarifications 
based on our understanding that some parents, teachers, and 
administrators mistakenly believe that the ESEA requires the use of a 
single assessment. The changes do not impose new requirements or 
require States to change their current assessment systems; nor do they 
represent a change in the Department's position. The Department has 
consistently made clear to States, since the early implementation of 
NCLB, that multiple assessments may be used to measure student 
achievement in a subject area in order to assess mastery of the breadth 
of a particular content domain, provided that all assessments used to 
determine AYP meet the applicable statutory and regulatory 
requirements. There are States, for example, that currently use reading 
and writing assessments to calculate AYP in reading/language arts or 
use algebra and probability assessments to calculate AYP in 
mathematics. These policies may continue under the revised regulation.
    Changes: None.
    Comment: One commenter requested clarification regarding whether a 
State that uses multiple assessments to measure achievement must ensure 
that those assessments are uniform throughout the State.
    Discussion: Section 1111(b)(1)(B) of the ESEA and Sec.  200.1 make 
clear that a State must adopt challenging academic content and student 
achievement standards, which must be the same standards the State 
applies to all students. A State's assessments must be aligned with 
those standards. Therefore, a State's assessments, although they need 
not necessarily be uniform, must measure the same content and the same 
level of achievement.
    Changes: None.
    Comment: One commenter objected to the provision in proposed Sec.  
200.2(b)(7)(i), which stated that multiple measures may include a 
single-question format to measure student achievement. The commenter 
recommended removing the words ``single or'' in Sec.  200.2(b)(7)(i).
    Discussion: We believe that States should have the flexibility to 
assess student academic achievement, as defined by the State, using a 
single-question format. Assessments that use one type of question 
format are able to, and in fact are required to, assess varying levels 
of cognitive complexity and higher-order thinking skills. Therefore, we 
decline to make the change suggested by the commenter.
    Changes: None.
    Comment: One commenter stated that the proposed regulation would 
define multiple measures in a way that undermines the ESEA by subsuming 
the multiple-measures requirement within the requirement to assess 
higher-order thinking skills and understanding of challenging content. 
The commenter stated that the purpose of multiple measures is to ensure 
the validity and reliability of judgments about proficiency, as 
required by the ESEA, by providing multiple ways for students to 
demonstrate proficiency in the same skills and knowledge. The commenter 
maintained that the regulation, as drafted, implies that the purpose of 
multiple measures is to assess higher-order thinking skills and 
understanding of challenging content. The commenter recommended that 
the Department (1) remove the proposed language and retain the language 
in the current regulations; (2) clarify that, in order to achieve the 
overall purpose of ensuring validity and reliability of the proficiency 
determinations made under the ESEA, multiple measures must include 
different ways of measuring the same proficiencies of students in the 
knowledge and skills identified in the State's standards; and (3) 
provide guidance on how multiple measures can be combined in order to 
make valid and reliable determinations of a student's proficiencies.
    Discussion: The regulations provide clarifications that are 
necessary to ensure that States understand that their assessments may 
include single or multiple question formats and that they may use 
multiple assessments to measure achievement in a specific content 
domain. They also refer to assessments that measure objectives within a 
particular content domain and assessments with items that both measure 
higher-order thinking skills (e.g., reasoning, synthesis, and analysis) 
and knowledge and recall items that assess the depth and breadth of 
mastery of a particular content domain. The changes requested by the 
commenter are not necessary given the purpose of the amendments to this 
particular section of the regulations.
    Changes: None.
    Comment: Many commenters recommended that the final regulations in 
Sec.  200.2(b)(7) include language requiring that assessments use the 
principles of ``universal design'' in order to increase the 
accessibility of assessments for a wide variety of students.
    Discussion: Although we agree that using the principles of 
universal design in developing assessments would increase the 
accessibility of assessments, we do not believe it is necessary to 
include such a requirement in these regulations. Section 200.2(b)(2) 
already requires State assessments to be ``designed to be valid and 
accessible for use by the widest possible range of students, including 
students with disabilities and students with limited English 
proficiency.'' In addition, the regulations in 34 CFR 300.160(g) 
implementing the IDEA require States to use universal design 
principles, to the extent possible, in developing all general State and 
district-wide assessment programs, including assessments described 
under section 1111 of the ESEA.
    Changes: None.

Section 200.7 Disaggregation of Data

    Comment: Many commenters objected to the Department's proposal to 
amend Sec.  200.7, which would require a State to determine the minimum 
number of students sufficient to yield statistically reliable 
information for each purpose for which disaggregated data are used and 
to ensure, to the maximum extent practicable, that all student 
subgroups are included, particularly at the school level, for purposes 
of making accountability decisions. Several commenters did not agree 
with the statement in the preamble to the NPRM that nearly 2 million 
students are not counted in NCLB subgroup accountability determinations 
at the school level because States set unnecessarily large minimum 
group sizes. The commenters asserted that this statement is not based 
on peer-reviewed research by reputable scholars. One of the commenters 
argued that the statement ignores the fact that every child is included 
in at least one group (the ``all students'' group) either at the school 
or LEA level. Other commenters objected to statements in the preamble 
that the commenters interpreted to be a suggestion by the Department 
that States set their minimum group size in order to exclude certain 
subgroups and minority students from accountability determinations. 
These commenters maintained that States set minimum group sizes in 
order to protect the privacy of students and not to exclude certain 
subgroups and minority students from accountability determinations.

[[Page 64441]]

Another commenter stated that the proposed changes would result in 
schools being identified for improvement based on the scores of too few 
students.
    Discussion: The Secretary's intent in amending Sec.  200.7 was to 
ensure that schools and LEAs are held accountable for the achievement 
of all their students. The Department recognizes that, when reporting 
information to the public, States must balance the need to maintain 
student privacy and the need for statistically reliable information 
with the clear intent of the statute to hold schools and LEAs 
accountable for the achievement of their subgroups. Further, if schools 
and LEAs are held accountable only for the achievement of their 
students as a whole, the importance that the ESEA places on 
disaggregated data and subgroup accountability would be diminished.
    Section 1111(b)(2)(C)(v) of the ESEA requires a State to define AYP 
so that its annual measurable objectives apply to all students as well 
as to specific subgroups of students--that is, economically 
disadvantaged students, students from major racial and ethnic groups, 
students with disabilities, and LEP students. Section 1111(b)(2)(I) of 
the ESEA makes clear that, for a school or LEA to make AYP, all 
students as well as each subgroup of students must meet or exceed the 
State's annual measurable objectives. This emphasis on subgroup 
accountability is one of the major changes that Congress made to the 
ESEA's accountability provisions when it enacted NCLB. In fact, as 
stated in section 1001(3) of the ESEA, one of the primary purposes of 
NCLB is to close the achievement gap between high- and low-performing 
students, especially the achievement gaps between minority and non-
minority students and between disadvantaged children and their more 
advantaged peers. This purpose could not be accomplished without 
subgroup accountability.
    Disaggregated accountability is tempered only by the need to ensure 
statistical reliability and to protect student privacy. Thus, section 
1111(b)(2)(C)(v) of the ESEA and Sec.  200.7 do not require 
accountability determinations by student subgroup if the size of the 
subgroup is too small to yield statistically reliable information or is 
such that personally identifiable information about individual students 
would be revealed. Logically, the larger a State's minimum group size, 
the less likely that students in a subgroup will constitute an 
accountability group, particularly at the school level, and that the 
school will be held accountable for the performance of that subgroup. 
Thus, it is appropriate that the regulations require States to find the 
optimal minimum group size that maximizes the inclusion of student 
subgroups in accountability decisions.
    It is important to note that these regulations amend Sec.  
200.7(a), which is intended to ensure that the minimum group size that 
is used by a State to calculate proficiency rates in AYP determinations 
yields statistically reliable information. Section 200.7(b) of the 
current regulations includes an additional requirement with which a 
State must comply when reporting information to the public. 
Specifically under this section, a State may not report achievement 
results if the results would reveal personally identifiable information 
about an individual student in accordance with the Family Educational 
Rights and Privacy Act (FERPA). 20 U.S.C. 1232g; 34 CFR part 99. 
Because the threshold (i.e., the number of students) that a State uses 
to ensure that it does not reveal personally identifiable information 
is generally lower than the threshold it uses for ensuring its 
proficiency calculations yield statistically reliable information, a 
State can, and often does, establish separate minimum group sizes for 
calculating proficiency rates and for reporting assessment results.
    Changes: None.
    Comment: Some commenters stated that the proposed regulations did 
not go far enough to ensure that States use statistically reliable 
methods to determine minimum group size. Several commenters recommended 
that the Department establish a uniform minimum group size for all 
States. A few commenters recommended a minimum group size of between 10 
and 20 with confidence intervals that do not exceed 95 percent. Another 
commenter recommended a minimum group size of no greater than 30 and no 
confidence intervals greater than 90 percent. Several commenters 
supported a minimum group size of 67.
    Other commenters argued that a State should be permitted to use 
confidence intervals along with their minimum group size in making AYP 
determinations. One commenter stated that a small minimum group size 
requires larger confidence intervals to make accurate school and LEA 
AYP determinations. Some commenters, however, stated that confidence 
intervals exceeding 95 percent are unwarranted. Still other commenters 
argued that confidence intervals greater than 90 percent should not be 
allowed.
    Discussion: The diversity of recommendations by commenters reflects 
the lack of consensus in the education community on a uniform minimum 
group size that all States would be required to use. Given this lack of 
consensus, as well as the lack of research supporting the use of a 
specific number, we believe the requirements in Sec.  200.7 establish a 
reasonable approach to ensuring that States establish minimum group 
sizes that appropriately balance statistical reliability and privacy 
with the statutory emphasis on disaggregation and subgroup 
accountability.
    A State's minimum group size must be large enough to produce 
statistically reliable information and protect students' privacy, yet 
small enough to maximize the inclusion of student subgroups in 
accountability decisions. Further, the Department believes that a 
State's minimum group size must be considered along with other 
components of a State's AYP definition. Therefore, Sec.  
200.7(a)(2)(ii) requires a State to explain how a State's minimum group 
size interacts with the other components of its AYP definition to 
affect the statistical reliability of the data, and to ensure the 
maximum inclusion of students and student subgroups in AYP 
determinations.
    The National TAC will provide advice to the Department on how a 
State should consider the interactions of the various components in its 
AYP definition (such as the interaction of minimum group size and 
confidence intervals). In addition, external peer reviewers will review 
the evidence submitted by a State in order to help ensure that the 
State is establishing a system that leads to statistically sound AYP 
determinations and also maximizes the inclusion of all students and 
student subgroups while ensuring student privacy.
    Changes: None.
    Comment: A few commenters requested that the Department consider 
requiring States and LEAs to include additional groups in the student 
subgroups referenced in proposed Sec.  200.7(a)(2). One commenter 
suggested that the Department require States and LEAs to disaggregate 
data for AYP determinations not only for students with disabilities but 
by disability category.
    Discussion: Although the Secretary understands the intent of these 
comments, we do not think it is appropriate to expand the subgroups 
covered by this regulation beyond those specified in the ESEA and Sec.  
200.13(b)(7)(ii). We believe that the inclusion of these subgroups is 
sufficient to ensure meaningful and comprehensive accountability for 
all students. Further, the more specific the

[[Page 64442]]

categories (e.g., individual disability categories), the smaller the 
groups would be and, therefore, the less likely they would meet a 
State's minimum group size and be reflected in accountability 
determinations.
    Changes: None.
    Comment: Another commenter, wanting to gain more information about 
the extent to which accountability systems exclude highly mobile 
students from accountability determinations, suggested that proposed 
Sec.  200.7(a)(2) require States to provide information about the 
number of students excluded from accountability determinations due to 
student mobility.
    Discussion: We agree with the commenter and believe Sec.  
200.7(a)(2)(ii)(C) already requires a State to provide information in 
its Accountability Workbook about students excluded from accountability 
determinations due to student mobility. Section 200.7(a)(2)(ii)(C) 
requires a State to provide information regarding the number and 
percentage of students and student subgroups excluded from school-level 
accountability determinations. This requirement encompasses subgroups 
that are excluded from school-level accountability determinations as a 
result of the State's minimum group size and other statistical 
principles, as well as students excluded from school-level 
accountability determinations as a result of not attending the same 
school for a ``full academic year.''
    Changes: None.
    Comment: One commenter stated that lowering a State's minimum group 
size would have a profound impact on small schools because the 
assessment results from one or two students could affect AYP 
determinations.
    Discussion: It is true that if a State, through the process 
outlined in the final regulations, adopts a smaller minimum group size, 
the number of schools with student subgroups included in AYP 
calculations is likely to increase. A State's minimum group size, 
however, would still need to be of sufficient size to yield 
statistically reliable information and protect the privacy of 
individual students. Thus, it is unlikely that one or two students 
would have a deleterious effect on AYP determinations, except when a 
subgroup is at or near a State's minimum group size. In that case, the 
performance of one or two students could affect AYP determinations no 
matter what the minimum group size is. We believe that the requirement 
that States adopt an optimal minimum group size strikes a balance 
between the need to produce statistically reliable information and the 
goal of maximizing inclusion of student subgroups in accountability. 
When this balance is achieved, students in all schools, including small 
schools, benefit because their schools are held accountable for their 
achievement.
    Changes: None.
    Comment: One commenter recommended that States be allowed to use a 
specific number or percentage of a population in their definition of 
minimum group size.
    Discussion: Any State that uses or wishes to use a minimum group 
size that is based on a specific number or percentage of the school 
population would need to demonstrate how this method yields 
statistically reliable information for each purpose for which 
disaggregated data are used and ensure that, to the maximum extent 
practicable, all groups are included for the purposes of making 
accountability determinations, consistent with Sec.  200.7(a)(2)(i).
    Changes: None.
    Comment: One commenter recommended that the regulations clarify 
whether the minimum group size applies to graduation rate calculations.
    Discussion: Section 200.7(a)(2)(i)(A) requires a State to establish 
a minimum group size that yields statistically reliable information for 
each purpose for which disaggregated data are used. Therefore, minimum 
group size, and the requirements that accompany it, applies to 
determining whether a group has met the State's annual measurable 
objectives; whether it has at least a 95 percent participation rate; 
whether it made AYP based on ``safe harbor;'' and whether it met the 
State's objectives for the other academic indicators, including 
graduation rate. Minimum group size also applies to reporting 
achievement data to the public. The Department believes that the 
current language is clear and declines to amend the regulations.
    Changes: None.
    Comment: Many commenters expressed concerns regarding the provision 
in proposed Sec.  200.7(a)(2)(ii) that would require a State to revise 
its Accountability Workbook to include information about its minimum 
group size and the students and student subgroups excluded from school-
level accountability determinations. Several commenters representing 
States asserted that revising their Accountability Workbook would be an 
unnecessary fiscal and staffing burden. Others stated that the time and 
resources needed to revise the Accountability Workbook were 
significantly underestimated in the Summary of Costs and Benefits in 
the NPRM. One commenter stated that requiring a State to revise its 
Accountability Workbook gives the perception that the State is 
concealing its data.
    A number of other commenters supported proposed Sec.  
200.7(a)(2)(ii). Several commenters recommended making information 
about the exclusion of students from accountability determinations more 
transparent by requiring a State to report: (a) The results of 
empirical or simulation studies and the process the State used to 
select its minimum group size; and (b) the number and percentage of 
subgroups that made AYP using the ``safe harbor'' provision or 
confidence intervals. The commenters recommended including information 
about the exclusion of students from accountability determinations on 
State and LEA report cards because the public is more likely to read a 
report card than an Accountability Workbook.
    Discussion: Transparency is a key element of NCLB. The Department 
believes it is appropriate for a State to explain in its Accountability 
Workbook the effect that the various components of the State's AYP 
definition have on the inclusion of students and student subgroups in 
accountability determinations. Making this information available 
through a State's Accountability Workbook will enable the public to 
gain a better understanding of how schools are being held accountable 
for the performance of their students and student subgroups.
    We disagree that the requirements in Sec.  200.7(a)(2)(ii) are 
unnecessary or give the impression that a State is concealing data. We 
believe that the benefits of increasing transparency and accountability 
greatly outweigh the costs to a State of revising its Accountability 
Workbook. We address the specific concerns about the costs of revising 
Accountability Workbooks in the Summary of Costs and Benefits section 
later in this preamble.
    We do not believe it is necessary to require a State to submit the 
additional information recommended by the commenters. Although some 
States may include the information recommended by the commenters in 
their Accountability Workbook, we believe that States should have 
flexibility in how they address the requirements in Sec.  
200.7(a)(2)(ii). We also do not agree that the information included in 
a State's Accountability Workbook should be included on State and LEA 
report cards. The information in Sec.  200.7(a)(2)(ii) that a State is 
required to submit to the Department is more appropriately provided in 
the State's Accountability Workbook where the

[[Page 64443]]

various elements of the State's AYP definition are outlined and to 
ensure peer review of those elements.
    Changes: None.
    Comment: Several commenters objected to requiring a State to submit 
a revised Accountability Workbook six months following the effective 
date of the final regulations. The commenters stated that a six-month 
timeline is too short and is unrealistic given that each State would 
need to conduct an extensive policy review to establish its minimum 
group size. Other commenters requested that the Department wait until 
Congress reauthorizes the ESEA before requiring a State to revise its 
Accountability Workbook because reauthorization will likely require 
additional changes to States' accountability systems.
    Discussion: In order to have a cohesive accountability system, a 
State must understand how the various components of its AYP 
determinations fit together to provide accurate accountability 
decisions. The Secretary believes that now, more than six years after 
the implementation of NCLB, is an appropriate time for a State to 
reexamine its policies to ensure that there is a balance between, on 
the one hand, the need for statistical reliability of AYP 
determinations and students' privacy and, on the other hand, the need 
to ensure maximum inclusion of students and student subgroups in 
accountability determinations. Since receiving initial approval for its 
accountability system, every State has amended its Accountability 
Workbook with respect to the definition of AYP. Although the Department 
has worked to ensure that any amendments to a State's AYP definition 
are considered within the context of other components in the 
definition, we believe that now is an appropriate time to reexamine how 
the components fit together to ensure that sound accountability 
decisions are made.
    However, the Department recognizes that it will take some time for 
the National TAC to provide input on the types of evidence the 
Secretary should consider in reviewing a State's Accountability 
Workbook and for the Department to provide guidance to States. 
Therefore, we have revised Sec.  200.7(a)(2)(iii) to require a State to 
submit the required information in time for changes to be in effect for 
school year 2010-2011 AYP determinations using school year 2009-2010 
assessment results.
    Changes: We have revised Sec.  200.7(a)(2)(iii) to require each 
State to submit a revised Consolidated State Application Accountability 
Workbook in accordance with paragraph (a)(2)(ii) to the Department in 
time for any changes to be in effect for school year 2010-2011 AYP 
determinations based on school year 2009-2010 assessment results.
    Comment: A few commenters recommended that Sec.  200.7(a)(2)(ii)(C) 
be revised to refer to ``school-level subgroup accountability'' rather 
than ``school-level accountability.'' The commenters stated that 
students in an excluded group would still be included in the overall 
school AYP calculation and that it is important to be clear that the 
concern is with students who are excluded from school-level 
accountability determinations.
    Discussion: We believe Sec.  200.7(a)(2)(ii)(C) appropriately 
requires each State to provide information regarding the number and 
percentage of students and student subgroups that are excluded from 
school-level accountability determinations, which will include, but not 
be limited to, students from various subgroups who are excluded from 
accountability determinations. In addition to a State's minimum group 
size, other factors in a State's AYP definition affect the inclusion of 
students at the school level. For example, a State's definition of 
``full academic year'' also affects the number of students who are 
excluded from school-level accountability determinations. We believe it 
is important to understand the full impact of the components that 
converge to make up a State's definition of AYP at both the school and 
subgroup levels. Therefore, we decline to make the suggested change.
    Changes: None.
    Comment: A few commenters supported the requirements in Sec.  
200.7(a)(2)(ii) regarding the submission of Accountability Workbooks, 
but stated that the additional data collection will be costly. The 
commenters requested that Congress provide additional funding and 
resources to allow States to upgrade their data systems.
    Discussion: Section 200.7(a)(2)(ii) requires a State, in its 
Accountability Workbook, to: (a) Explain how the State's minimum group 
size yields statistically reliable information and ensures that all 
student subgroups, to the maximum extent practicable, are included in 
AYP determinations; (b) explain how components of the State's 
definition of AYP, in addition to the minimum group size, interact to 
affect the statistical reliability of the data and to ensure the 
maximum inclusion of all students and student subgroups; and (c) 
provide information regarding the number and percentage of students and 
student subgroups excluded from school accountability determinations. 
Considering that a State uses this information each year to make AYP 
determinations, the Department believes that the State should have this 
information readily available and should not have to collect additional 
data. In addition, evaluating a State's definition of AYP is a 
statutory requirement and part of what is required in an Accountability 
Workbook. We address other more specific concerns about the costs of 
revising Accountability Workbooks in the Summary of Costs and Benefits 
section.
    With regard to the commenters' request for additional funding and 
resources for a State to upgrade its data systems, the Department's 
Institute of Education Sciences (IES) Statewide Longitudinal Data 
Systems program has provided almost $122 million to 27 States to 
design, develop, and implement statewide longitudinal data systems that 
can accurately manage, analyze, disaggregate, and use individual 
student data. The President's fiscal year 2009 budget request for this 
program is $100 million, a significant increase intended to support new 
awards to States that have not yet received funding, as well as to 
support the expansion of systems in previously funded States. The 2009 
request would support approximately 32 awards for developing 
longitudinal data systems or expanding existing data systems.
    Changes: None.
    Comment: One commenter suggested that the Department identify 
States that need to change their minimum group size and require only 
those States to revise their Accountability Workbooks. Another 
commenter recommended that the Department establish a specific minimum 
group size and require States that want a different minimum group size 
to revise their Accountability Workbooks.
    Discussion: The Department believes that each State should re-
examine its minimum group size, along with the other components of its 
AYP definition, in order to ensure that the components interact to 
provide statistically reliable information while maximizing the 
inclusion of students and student subgroups in accountability 
determinations. Section 200.7(a)(2)(ii) is focused not only on a 
State's minimum group size, but also on ensuring that the entirety of a 
State's AYP definition is coherent and results in statistically 
reliable accountability determinations. For the reasons stated 
previously in this section, at this time, we do not believe

[[Page 64444]]

it is appropriate to establish one minimum group size for all States.
    Changes: None.
    Comment: One commenter expressed concern that decisions regarding 
minimum group size would be partisan and biased if States were required 
to justify their minimum group size to the National TAC.
    Discussion: The National TAC will not evaluate States' minimum 
group size. Rather, the National TAC will provide advice to the 
Department on how States should consider the interactions of the 
various components in their AYP definition and will provide 
recommendations to the Secretary that the Secretary and peer reviewers 
may consider when reviewing each State's revised Accountability 
Workbook. We note that the National TAC is a nonpartisan group that is 
subject to Federal Advisory Committee Act (FACA) requirements, thus 
guarding against any perception that its recommendations are based on 
anything but sound education policy.
    Changes: None.
    Comment: None.
    Discussion: In the course of our internal review of the proposed 
regulations, we determined that the regulations should refer to 
``minimum group size'' rather than ``minimum subgroup size'' because 
AYP determinations are made for the ``all students'' group as well as 
student subgroups.
    Changes: We have revised Sec.  200.7(a)(2)(ii) to change the term 
``minimum subgroup size'' to ``minimum group size.''

Section 200.11 Participation in NAEP

Section 200.11(c) Report Cards

    Comment: Many commenters supported the proposal in Sec.  200.11(c) 
that States and LEAs be required to include results from the NAEP on 
their report cards, stating that this information provides an important 
tool to help the public evaluate and compare results across States and 
to help parents learn more about how the rigor of their State's 
standards and assessments might compare with other States and with 
national benchmarks.
    However, several commenters recommended that the regulations 
encourage, but not require, States to include NAEP results on State and 
LEA report cards. One commenter maintained that States should have the 
discretion to determine whether information on the NAEP would be 
valuable to the public and, if so, how to disseminate it. Several 
commenters stated that it is unnecessary to require States to include 
NAEP results on State and LEA report cards because many States already 
post NAEP results on their Web sites. Other commenters recommended 
requiring NAEP results to be posted on State and LEA Web sites instead 
of requiring that they be included on SEA and LEA report cards. One 
commenter stated that State Web sites are the most appropriate vehicle 
for making publicly available comparisons of results from State 
assessments and the NAEP and for communicating the relationship between 
the NAEP and State assessments. Finally, several commenters stated that 
this proposed requirement could be viewed as an effort to push States 
to adopt a national curriculum that is aligned with the standards and 
curriculum implicit in the NAEP.
    Discussion: The NAEP is the only nationally representative and 
continuing assessment of what America's students know and can do in 
various grades and subject areas and, therefore, is an important source 
of information about student achievement. The Secretary believes that 
NAEP data should be easily accessible and available to parents and the 
public in order to provide them with a tool for comparing how students 
in a State are performing on the NAEP with how students in the State 
are performing on State assessments.
    The Department does not believe that giving States the option to 
include NAEP data on State and LEA report cards or requiring only that 
they post NAEP results on State or LEA Web sites would be sufficient. 
We believe that including NAEP results on State and LEA report cards 
provides the greatest transparency and gives parents easy access to an 
important tool for assessing the educational performance of students in 
their State. We also do not agree with commenters who stated that 
requiring the inclusion of NAEP data on State and LEA report cards may 
be viewed as an effort to push States to adopt a national curriculum 
aligned with the standards and curriculum implicit in the NAEP. The 
purpose of requiring State and LEA report cards to include NAEP results 
is to ensure that NAEP results are easily accessible and available to 
parents and the public.
    Changes: None.
    Comment: A number of commenters supported requiring NAEP results on 
State report cards, but not on LEA report cards. One commenter stated 
that State NAEP results on LEA report cards would be irrelevant to 
parents because the data would not help a parent decide which school 
their child should attend. Other commenters stated that including the 
information on LEA report cards would lead parents and the public to 
conclude, mistakenly, that students in that LEA participated in the 
NAEP.
    Discussion: While we agree that including NAEP results on LEA 
report cards will not likely help a parent decide which school their 
child should attend, we believe that the data will give parents an 
important comparison between the percent of students proficient 
according to State standards and assessments and the percent of 
students proficient on the NAEP. Therefore, we disagree with commenters 
who recommended that we require NAEP results to be included only on 
State report cards.
    Changes: None.
    Comment: Several commenters recommended amending the regulations to 
make clear that NAEP results must be reported on State and LEA report 
cards disaggregated by subgroup, including subgroups for students from 
major ethnic and racial groups, LEP students, and students with 
disabilities. The commenters also recommended that we require States 
and LEAs to include on their report cards information about the 
participation of students with disabilities on the NAEP. Other 
commenters recommended that we require State and LEA report cards to 
include the State's average scale score for the NAEP mathematics and 
reading assessments in comparison with the national average scale score 
for the NAEP mathematics and reading assessments.
    Discussion: The Secretary agrees that the regulations should be 
more specific about the State NAEP data that are to be reported on 
State and LEA report cards. In order to provide parents and the public 
with sufficient information to compare how students in a State are 
performing on the NAEP with their performance on State assessments, we 
believe the data should, at a minimum, be reported in terms of the 
percentage of students, at each achievement level reported on the NAEP 
(below basic, basic, proficient, advanced) in the aggregate on State 
and LEA report cards. Recognizing commenters' concerns, as described 
later in this section regarding the burden of including NAEP data on 
State and LEA report cards, however, we are revising the regulations to 
require that the achievement data be disaggregated for each subgroup 
for which AYP determinations are made only on the State's report card.
    We also agree with commenters that the participation rates for 
students with disabilities and the participation rates for LEP students 
should be included on

[[Page 64445]]

both State and LEA report cards. States and LEAs may include additional 
NAEP data, such as scale scores, but we decline to require them to do 
so.
    Changes: We have revised Sec.  200.11(c) to make clear that each 
State and LEA must include on its report card the most recent available 
academic achievement results in grades four and eight on the State's 
NAEP reading and mathematics assessments. We also have added two 
paragraphs to this section to make clear that State and LEA report 
cards must include: (1) The percentage of students at each achievement 
level reported on the NAEP in the aggregate and, for State report 
cards, disaggregated by economically disadvantaged students, students 
from major racial and ethnic groups, students with disabilities, and 
LEP students; and (2) the participation rates for students with 
disabilities and the participation rates for LEP students.
    Comment: Numerous commenters opposed the proposed regulations, 
stating that NAEP results would be misinterpreted by parents and the 
public and create an inappropriate comparison because the results 
reflect different types of tests that are developed for different 
purposes and that have different constructs, different standards-
setting procedures, and different ``cut scores.'' Many commenters 
stated that parents already receive an abundance of data on the 
academic performance of their child, and on their child's school and 
LEA, and that adding NAEP results to report cards would be cumbersome, 
confusing, and of little value to parents. Other commenters stated that 
the NAEP and State assessments test different groups of students and 
are not administered at the same time in the school year, and that NAEP 
results are not disaggregated by the same subgroups required under the 
ESEA.
    A number of commenters stated that it is important to clarify on 
report cards, using simple and clear terms, that only limited 
comparisons can be made between the NAEP results and the results on 
State assessments and to clearly explain that NAEP results are based on 
Statewide samples of students and not necessarily on the same students 
whose results are reported on the State assessments. Several commenters 
stated that the Department has not provided guidance on how to 
interpret NAEP results and to explain the differences between the NAEP 
and State assessments. One commenter asked whether the Department will 
provide technical assistance to help States accurately interpret and 
explain the differences between the NAEP and State assessments.
    Discussion: The Secretary recognizes that simple comparisons of 
student performance on the NAEP and State assessments cannot be made 
without some understanding of the key differences between the two 
assessments. Just as States and LEAs provide information about their 
State assessments to help parents and the public interpret assessment 
data, we encourage States and LEAs to provide information on 
interpreting NAEP results. We believe that providing parents and the 
public with information about the differences between the NAEP and 
State assessments, in a manner that is easily accessible and 
understandable, will allay commenters' concerns that NAEP results would 
be misinterpreted, misleading, confusing, or of little value to parents 
and the public. The Department intends to provide guidance to States on 
how best to convey this information to parents and the public in simple 
and clear terms.
    Changes: None.
    Comment: A number of commenters stated that the Department exceeded 
its statutory authority by requiring State and LEA report cards to 
include NAEP results. The commenters stated that the ESEA prescribes in 
detail the information that must be included on State and LEA report 
cards, as well as other information that may be included. Because the 
ESEA does not require the inclusion of NAEP results on report cards, 
and does not indicate that States and LEAs may include this information 
on their report cards, the commenters stated that the Department lacks 
the authority to add to these requirements.
    Discussion: We agree with the commenters that section 1111(h)(1) 
and (2) of the ESEA sets out specific information that States and LEAs 
must include on their report cards and also permits States and LEAs to 
include additional optional information. We note that section 
1111(h)(1)(D) specifically expresses the rationale for including 
optional information on report cards: to ``best provide parents, 
students, and other members of the public with information regarding 
the progress of each of the State's public elementary schools and 
public secondary schools.'' Congress obviously believed that 
participation in the NAEP is important because, in sections 1111(c)(2) 
and 1112(b)(1)(F) of the ESEA, it required each State and LEA, if 
selected, to participate in NAEP's reading and mathematics assessments 
in fourth and eighth grades as a condition of receiving Title I, Part A 
funds. For the reasons stated previously, we believe that including 
State NAEP results on State and LEA report cards is consistent with 
Congress' reason for permitting additional information on report 
cards--that is, to best provide parents, students, and the public 
information regarding the academic progress of students in the State. 
Accordingly, the Secretary has exercised her specific regulatory 
authority in section 1901(a) of the ESEA and her general regulatory 
authority in section 410 of the General Education Provisions Act, 20 
U.S.C. 1221e-3, to require States and LEAs to include State NAEP data 
on their report cards to provide another significant indicator of 
student achievement in the State.
    Changes: None.
    Comment: One commenter stated that the proposed amendment to Sec.  
200.11 conflicts with language in Executive Order 12866 on reducing 
regulatory burden.
    Discussion: Executive Order 12866, which governs Federal agencies' 
regulatory planning and review, requires agencies to adhere to a number 
of principles when considering and promulgating regulations. Among 
those Principles of Regulation is the principle that each agency tailor 
its regulations to impose the least burdens on society, including 
individuals, businesses of differing sizes, and other entities 
(including small communities and governmental entities), consistent 
with obtaining the agency's objectives, taking into account, among 
other things and to the extent practicable, the costs of cumulative 
regulations.
    Thus, although Executive Order 12866 encourages agencies to take 
efforts to reduce regulatory burden, it also recognizes that some 
burden may be necessary for an agency to achieve its objectives. The 
Executive Order, therefore, also requires an agency to analyze the 
costs and the benefits of a regulation and ``to propose or adopt a 
regulation only upon a reasoned determination that the benefits of the 
intended regulation justify its costs.'' As we discuss elsewhere in 
this section, we believe that the benefits of requiring States and LEAs 
to include NAEP data on their respective report cards significantly 
outweigh the burden of complying with this requirement. The NAEP is the 
only nationally representative and continuing assessment of student 
achievement. We believe that keeping parents and the public informed 
about student achievement is worth the additional time and resources 
needed to make this information readily available. Accordingly, we 
disagree with the commenter that the NAEP requirement conflicts with 
Executive Order 12866.
    Changes: None.

[[Page 64446]]

    Comment: One commenter stated that the amount of time and effort 
that would be required to ensure accurate and appropriate use of NAEP 
results far outweighs any potential benefits. A number of commenters 
stated that NAEP results are already available to States and the public 
and that requiring the data to be included on report cards would place 
an undue burden on States and LEAs and require additional resources. 
The commenters stated that changes to report cards require significant 
staff time and resources because States must seek input from 
stakeholders, obtain State Board of Education approval, and pay the 
costs for reproduction. Several commenters stated that the Department 
should provide States with sufficient time to make these changes.
    Discussion: We disagree with the comment that the amount of time 
and effort required to ensure accurate and appropriate use of NAEP 
results outweighs any potential benefits of including this information 
on report cards. We believe that the benefits of providing parents and 
the public with information that will help them evaluate student 
achievement and the State's educational system outweigh the additional 
time and resources needed to make this information readily available. 
Further, we do not agree that the amount of time and effort required to 
include NAEP data (and appropriate interpretations of those data) will 
be substantial. State NAEP results are available on the Web site of the 
Department's National Center for Education Statistics (NCES), as well 
as through other sources, and obtaining these data should not pose a 
significant burden. That said, as we have noted previously, we are 
revising the regulations to provide that only State report cards must 
include disaggregated achievement data.
    Finally, we note that States and LEAs may use their Title I, Part A 
administrative funds to pay for the staff time and resources needed to 
make these changes to their report cards, which we expect to be 
implemented when States and LEAs report the results from assessments 
administered in the 2008-2009 school year. We address the specific 
concerns about the costs of making these changes to State and LEA 
report cards in the Summary of Costs and Benefits section.
    Changes: We have revised Sec.  200.11(c) to make clear in paragraph 
(c)(1) that only State report cards must include NAEP achievement data 
disaggregated by subgroup.
    Comment: One commenter recommended that, in addition to the results 
from State NAEP reading and mathematics assessments, States and LEAs 
should be required to report NAEP results on assessments for all 
academic subjects, including history, civics, government, economics, 
and geography.
    Discussion: We agree that including NAEP results on State and LEA 
report cards for all academic subjects would be informative. Given that 
AYP determinations are based on student performance in reading/language 
arts and mathematics, however, we believe that, at a minimum, NAEP 
results for these two subjects must be included on State and LEA report 
cards. There is nothing in these regulations that would prevent a State 
or LEA from reporting the results from other NAEP assessments on their 
report cards if they so choose.
    Changes: None.
    Comment: One commenter agreed with the proposal to require NAEP 
results on State and LEA report cards, provided that the most recent 
data are used and that the Department ranks State assessments for rigor 
so that stakeholders can determine whether their State's assessments 
reflect the same level of rigor as the NAEP. One commenter expressed 
concern that NAEP results would not be available in time to report them 
with the State assessment data. Another commenter recommended that the 
regulations establish a specific date by which NAEP results will be 
provided so that there would be no delay in reporting State assessment 
data. The commenter recommended that the Department not enforce the 
NAEP requirement if there is a delay in releasing NAEP data.
    Discussion: Section 200.11(c) requires States and LEAs to include 
only the most recently available academic achievement results from the 
State's NAEP reading and mathematics assessments on their report cards. 
In other words, States and LEAs will include on their report cards the 
most recent NAEP data that are available (whatever year's data happen 
to be most recent). A delay in the release of NAEP data therefore would 
not affect the timing of report cards. With regard to the commenters' 
recommendation that the Department rank order State assessments for 
rigor, NCES has conducted several analyses comparing the results from 
the NAEP with results from State assessments in reading and mathematics 
(see http://nces.ed.gov/nationsreportcard/researchcenter/statemapping.asp).
    Changes: None.
    Comment: One commenter opposed requiring States to report NAEP 
results on State and LEA report cards because of deficiencies in the 
NAEP mathematics assessment. The commenter recommended that, because 
the National Mathematics Advisory Panel report identified a deficiency 
with the NAEP mathematics assessment, the Department correct this 
problem before requiring States and LEAs to include NAEP results on 
their report cards.
    Discussion: NCES is responsible by law for carrying out the NAEP. 
See 20 U.S.C. 9010. The National Assessment Governing Board, appointed 
by the Secretary but independent of the Department, sets policy for the 
NAEP and is responsible for developing the framework and test 
specifications that serve as the blueprint for the assessments. NCES 
and the National Assessment Governing Board take seriously the 
criticisms of the National Mathematics Advisory Panel and are 
considering the Panel's recommendations.
    In the meantime, we note that one of the resources upon which the 
National Mathematics Advisory Panel relied in making its 
recommendations for NAEP and State tests was the 2007 Validity Study of 
the NAEP Mathematics Assessment: Grades 4 and 8. Although that report 
identified some areas for improvement, it concluded that, ``The NAEP 
mathematics assessment is sufficiently robust to support the main 
conclusions that have been drawn about United States and state progress 
since 1990.'' \1\ The Task Group on Assessment of the Mathematics 
Advisory Panel found that NAEP employs acceptable processes for setting 
standards and cut scores.\2\ Based on the findings of these reviews, 
the Secretary continues to believe that NAEP is still the best 
indicator of student achievement in mathematics and that the inclusion 
of NAEP data on State and local report cards should not be delayed 
until NCES makes revisions in response to the National Mathematics 
Advisory Panel's recommendations.
---------------------------------------------------------------------------

    \1\ Daro, P., Stancavage, F., Ortega, M., DeStefano, L., & Linn, 
R. (2007). Validity Study of the NAEP Mathematics Assessment: Grades 
4 and 8. (pp. ii and 119).
    \2\ U.S. Department of Education, Standards for Success: The 
National Mathematics Advisory Panel, Reports of the Task Groups and 
Subcommittees. (2008). Washington, DC: Author.
---------------------------------------------------------------------------

    Changes: None.

Section 200.19 Other Academic Indicators

Reorganization of Sec.  200.19

    Comment: None.
    Discussion: In light of the significant number of changes the 
Department is including in the final regulations on the ``other 
academic indicator'' for high

[[Page 64447]]

schools, we have reorganized Sec.  200.19 to group all the requirements 
for high schools in new paragraph (b) and all the requirements for 
elementary and middle schools in new paragraph (a). We believe that 
this reorganization makes this section of the regulations more 
accessible and will aid readers' understanding of the new high school 
graduation requirements.
    Changes: Section 200.19 has been reorganized as follows:
     Section 200.19(a) sets forth all of the requirements for 
elementary and middle schools with respect to other academic 
indicators.
     Section 200.19(b) sets forth all of the requirements for 
high schools with respect to the other academic indicator--graduation 
rate.
     Section 200.19(c) incorporates the requirements from 
current Sec.  200.19(b) regarding additional academic indicators.
     Section 200.19(d) incorporates the requirements from 
current Sec.  200.19(c) regarding statistical quality of data.
     Section 200.19(e) is substantively unchanged from the 
current regulation and has been changed only to update cross-references 
to other paragraphs within this section.

New Sec.  200.19(b) (Proposed Sec.  200.19(a)(1)) Definition of 
Adjusted Cohort Graduation Rate

General

    Comment: Many commenters supported the Department's proposal to 
require States to use an adjusted cohort graduation rate, as defined in 
proposed Sec.  200.19(a)(1), to calculate graduation rate for purposes 
of determining whether a high school has made AYP. The commenters noted 
that the proposed definition closely follows the definition of 
graduation rate adopted by the National Governors Association (NGA) in 
2005. Commenters also stated that using a uniform method of calculating 
graduation rate would allow policymakers to make more meaningful cross-
State comparisons and would give parents and other interested 
individuals a more accurate picture of high school completion in their 
communities. In addition, the commenters stated that information gained 
from using this graduation rate would allow school leaders to make more 
targeted adjustments in high school curriculum and programs in order to 
improve the transition of students from school to work and from school 
to college.
    Other commenters, however, opposed our proposal regarding the 
definition of graduation rate. Several of these commenters suggested 
that the Department conduct studies of the implications of using an 
adjusted cohort graduation rate before requiring the use of such a rate 
for LEA-or school-level accountability determinations. Other commenters 
stated that the proposed regulations were too prescriptive and punitive 
and recommended that the Department instead take a broader approach and 
provide technical assistance to States in the design, development, and 
implementation of initiatives that would result in improved graduation 
rates.
    Several commenters argued that, while establishing a uniform method 
for calculating graduation rate is a commendable endeavor, the 
regulations do not provide for the support system and services 
necessary to address the causes of low graduation rates. One commenter 
suggested that any additional focus on graduation rate be coupled with 
support for research on and development of career and technical 
education strategies.
    Discussion: The Secretary appreciates the commenters' support for 
the proposed regulations. We do not agree with those commenters who 
believe that studies are needed before States are required to use an 
adjusted cohort rate. Nor do we agree that the regulations are 
prescriptive or punitive. The regulations requiring States to use a 
uniform and accurate cohort-based method of calculating high school 
graduation rates reflect broad consensus in the field. In August 2004, 
NCES released a report synthesizing the recommendations of a panel of 
experts on graduation rate calculations that recommended the use of an 
adjusted cohort graduation rate.\3\ Additionally, in 2005, the lead 
recommendation of the NGA Task Force on High School Graduation Rate 
Data was for all States to immediately adopt and begin taking steps to 
implement a standard four-year adjusted cohort graduation rate (the 
``NGA rate''), consistent with that proposed by the NCES panel.\4\ All 
50 governors agreed to adopt the NGA rate.
---------------------------------------------------------------------------

    \3\ National Institute of Statistical Sciences and Education 
Statistics Services Institute. (2004). National Institute of 
Statistical Sciences/Education Statistics Services Institute Task 
Force on Graduation, Completion, and Dropout Indicators (NCES 2005-
105). U.S. Department of Education. Washington, DC: National Center 
for Education Statistics.
    \4\ National Governors Association. (2006). Graduation Counts: A 
Report of the National Governors Association Task Force on High 
School Graduation Rate Data. Washington, DC: Author.
---------------------------------------------------------------------------

    An adjusted cohort graduation rate will improve our understanding 
of the characteristics of the population of students who do not earn 
regular high school diplomas or who take longer than four years to 
graduate. An approach that provides technical assistance to States in 
designing programs to increase high school graduation is not 
sufficient. Moreover, all 50 States have already agreed to adopt the 
NGA rate, a rate similar to the four-year adjusted cohort graduation 
rate, and most States have made significant progress in implementing 
the rate. NGA's recent report (2008) states that 16 States already use 
the NGA rate to calculate their high school graduation rate; five more 
States plan to report the NGA rate in late 2008, eight more in 2009, 
nine more in 2010, six more in 2011, and one more in 2012; five States 
are uncertain about their plans to use the NGA rate.\5\ In summary, the 
great majority of States are planning to implement the NGA rate within 
the next few years. Later in this preamble, we provide data suggesting 
that all but one State will have the capability to implement an 
adjusted cohort graduation rate within four years.
---------------------------------------------------------------------------

    \5\ National Governors Association. (2008). Implementing 
Graduation Counts: State Progress to Date, 2008. Washington, DC: 
Author.
---------------------------------------------------------------------------

    We agree that better and more data alone will not increase 
graduation rates, but those data will provide States, LEAs, and schools 
with critical information that is necessary for understanding the 
reasons for low graduation rates and for designing better programs and 
services to help students graduate.
    Changes: None.
    Comment: Several commenters questioned whether the Secretary has 
the authority to define how each State must calculate its graduation 
rate.
    Discussion: We believe these regulations, which require a uniform 
definition of graduation rate that each State must use for NCLB 
purposes, are clearly within the Secretary's regulatory authority. 
Section 1111(b)(2)(C)(vi) of the ESEA requires a State to include, in 
determining AYP, a measure of graduation rate, defined as ``the 
percentage of students who graduate from secondary school with a 
regular diploma in the standard number of years.'' The legislative 
history accompanying NCLB makes clear that this definition must track 
students who graduate ``on time''--that is, ``within four years of 
starting the ninth grade for high schools that begin with the ninth 
grade''--and must avoid counting a dropout as a transfer. H.R. Rep. No. 
334, 107th Cong, 1st Sess. 713 (2001). To date, each State has used its 
own definition. Some of those definitions, however, do not track a 
cohort of students from entry in high school through graduation. 
Moreover, many do

[[Page 64448]]

not sufficiently account for students who drop out, thereby overstating 
a school's graduation rate. Section 1901(a) of the ESEA authorizes the 
Secretary to ``issue such regulations as are necessary to reasonably 
ensure that there is compliance with [Title I].'' Accordingly, the 
Secretary has chosen to require that States use a uniform and accurate 
method of calculating graduation rate in order to hold schools, LEAs, 
and States accountable for increasing the number of students who 
graduate on time with a regular high school diploma.
    Changes: None.
    Comment: Several commenters stated that adopting an adjusted cohort 
definition of graduation rate has significant costs because States 
would be required to establish data systems that can track students 
individually. Other commenters contended that States do not have the 
data-system capacity to track students who transfer between LEAs and 
that current budget constraints are affecting States' development of 
longitudinal data systems. Other commenters suggested that the Federal 
government provide technical assistance and funding to help States 
build capacity and the infrastructure needed to track transferring 
students. One commenter recommended that the Department provide 
incentives and funding to help States develop longitudinal data systems 
that can track individual students over time, whether they drop out of 
high school and re-enter at a later date, enroll in a General Education 
Development (GED) program, enter an alternative school, or are placed 
in a juvenile detention center.
    Discussion: The definition of graduation rate in the final 
regulations is very similar to the one that States' governors endorsed 
and requires the same data system capacity. In addition, the NGA 
reports that 36 States now have the information systems they need to 
collect longitudinal data and are tracking cohorts of students as they 
progress through the school system and, within four years, 49 States 
should have high school cohort data that will allow them to use the NGA 
rate.\6\ Again, these data reflect activities that States initiated in 
the absence of these regulations. Moreover, the Department supports 
States' development of longitudinal student data systems through the 
Department's Statewide Longitudinal Data Systems program. As noted 
earlier, for fiscal years 2005 (when the program began) through 2008, 
Congress appropriated more than $122 million for this program and, 
through fiscal year 2007, 27 States have received these grants. In 
addition, the President, in his fiscal year 2009 budget request, has 
asked Congress to more than double funding for this program to $100 
million. Thus, we believe that the regulations would not impose 
significant costs on States that they were not already likely to assume 
in the absence of these regulations or that they would have to support 
with non-Federal funds.
---------------------------------------------------------------------------

    \6\ Id.
---------------------------------------------------------------------------

    Changes: None.
    Comment: One commenter argued that the proposed definition of 
graduation rate would unfairly penalize a school for students who drop 
out of school in order to get a job because, under the proposed 
definition, a dropout could not be removed from the cohort. This 
commenter stated that some students do not function well in a regular 
school setting and may need to enter the workforce early; in these 
cases, the commenter said that dropping out of school may be in the 
best interest of all concerned.
    Discussion: The Secretary strongly disagrees that it would be best 
for the educational system and students if certain students drop out of 
high school to join the workforce instead of graduating from high 
school. Numerous reports and statistics from the U.S. Department of 
Labor (DOL) indicate the importance of a high school diploma. For 
example, in 2006, the unemployment rate for high school dropouts aged 
25 and older was more than 1.5 times the rate of individuals who had a 
high school diploma (6.8 percent compared to 4.3 percent, 
respectively). Data for the same year also show that median annual 
earnings for high school graduates were $29,000, or nearly 32 percent 
higher than the $22,000 earned by those who did not receive a high 
school diploma.\7\ These data make very clear the high economic costs 
of not completing high school.
---------------------------------------------------------------------------

    \7\ U.S. Department of Education. (2008). Condition of Education 
2008. Washington, DC: Author.
---------------------------------------------------------------------------

    Changes: None.
    Comment: Several commenters questioned the Department's proposal to 
require States to use an adjusted graduation cohort rate that is based 
on ``first-time in 9th grade'' cohorts because, according to the 
commenters, the rate would not account for the 9th grade ``bulge'' 
reported in nearly all high schools (i.e., a larger enrollment of 
students in 9th grade due to student retention). Several commenters 
suggested that the adjusted cohort graduation rate allow States to use 
actual 9th grade enrollment rather than an estimated enrollment. One 
commenter recommended that the Department consider requiring States to 
use an alternative definition of graduation rate that would use an age 
rather than a grade as the starting point. Another commenter noted that 
there are students who drop out of school prior to entering high school 
and recommended that, because the adjusted cohort graduation rate would 
not include these students, the Department should adopt an approach 
that measures the high school graduation rate of students who graduate 
from middle or junior high school.
    Discussion: Including ``first-time 9th graders'' in the definition 
of graduation rate in the final regulation is explicitly intended to 
account for the 9th grade ``bulge,'' which otherwise would distort the 
adjusted cohort rate by counting retained students in multiple cohorts. 
For example, unless the cohort is based on a count of first-time 9th 
graders, a student who is retained in 9th grade, but successfully 
completes the next four years of high school and receives a regular 
diploma, would be counted as a four-year graduate, even though the 
student spent five years in high school. To avoid such inaccuracies in 
measuring a school's graduation rate, a State must have data allowing 
it to determine ``first-time'' status for each student in 9th grade and 
thus count, not estimate, the number of such students in order to 
accurately identify the 9th grade cohort for a given year. Note that 
high schools in which the 10th grade is the earliest grade would use 
first-time 10th graders as the initial cohort. Further, we decline to 
adopt the recommendation that the Department base the adjusted cohort 
graduation rate on the age of students. Nor do we agree that the 
Department should be measuring the graduation rate of students starting 
with middle school graduates as the baseline. The ESEA specifically 
requires a measurement of on-time graduation from high school as a 
means of holding high schools accountable; a measure that is either 
based on age or uses middle school graduation as the starting point 
most likely would not meet that requirement.
    Changes: None.

Adjusted Cohort Graduation Rate--Standard Number of Years and Extended-
year Graduation Rate

    Comment: Some commenters supported proposed Sec.  
200.19(a)(1)(i)(C)(1), which would have defined the term ``standard 
number of years'' to mean four years unless a high school begins after 
ninth grade, in which case the standard number of years is the number 
of grades

[[Page 64449]]

in the school. Many commenters, however, opposed this definition. A 
number of these commenters expressed concern that applying this 
definition would penalize schools serving students who typically take 
longer to graduate, such as students with disabilities; LEP students; 
returning dropouts; students with necessary medical leave; children of 
immigrants; children of migrant workers; children with parents serving 
in the military; incarcerated students; students involved in the foster 
care, juvenile justice, or homeless shelter systems; students in 
alternative education programs; and students who enter high school 
performing at a State's lowest level of achievement. The commenters 
stated that the effect of this provision would be to undermine the 
education and accomplishments of these struggling students. Other 
commenters stated that schools and LEAs should not be penalized in AYP 
calculations for any student who takes more than four years to 
graduate, no matter how long that student takes. Some commenters argued 
that the proposed definition did not recognize the investments that 
SEAs and LEAs have made in programs that provide additional time and 
services to students who need more support to meet challenging content 
standards and pass rigorous exit exams. Some commenters argued that 
early college high schools and alternative education settings, such as 
those designed for students who are ``under-credited'' or have dropped 
out of high school, that award a regular high school diploma should be 
provided a waiver from meeting the four-year requirement for 
accountability purposes. Some commenters expressed concern that 
subgroups singled out for not reaching a ``standard number of years'' 
target would be stigmatized and that this regulation could promote 
discrimination. One commenter asked if there was a research basis for 
our proposed definition of ``standard number of years.''
    One commenter recommended that the graduation rate calculation take 
into account that some students graduate high school in less than the 
``standard number of years'' and ensure that these students are not 
counted as dropouts.
    Discussion: Section 1111(b)(2)(C)(vi) of the ESEA requires that 
graduation rate be defined as the percentage of students who graduate 
from secondary school with a regular diploma in the ``standard number 
of years.'' We have interpreted and continue to interpret the 
``standard number of years'' to be four years because the vast majority 
of high schools in this country provide four years of education and 
expect students to graduate at the end of those four years with a 
regular high school diploma. Rather than using the phrase ``standard 
number of years,'' however, we now use ``students who graduate in four 
years'' and define that phrase in Sec.  200.19(b)(1)(iii) to make clear 
that it includes not only students who earn a regular high school 
diploma at the conclusion of their fourth year but also those who 
graduate early or during a summer session immediately following their 
fourth year. Moreover, as described in greater detail later in this 
preamble, we have added a provision in Sec.  200.19(b)(1)(v) that 
addresses many of the commenters' concerns about students who need more 
than four years to graduate by permitting a State also to include in 
its AYP definition, subject to approval by the Secretary, an 
``extended-year adjusted cohort graduation rate.'' This extended-year 
graduation rate would include students who graduate in four years or 
more with a regular high school diploma. States may decide to include 
one or more years beyond the standard four years (e.g., an extended-
year graduation rate that combines a five-year rate and a six-year 
rate). A State may also choose to have more than one extended-year 
graduation rate (e.g., a five-year rate and a six-year rate) without 
combining those rates into one extended-year graduation rate. Examples 
of ways in which extended-year graduation rates may be used in AYP 
determinations can be found later in this preamble in the discussion of 
new Sec.  200.19(b)(6)(i)(F). If a State chooses to calculate an 
extended-year graduation rate, such rate should not be limited to 
groups of students based on their characteristics (e.g., students with 
disabilities, LEP students).
    Changes: New Sec.  200.19(b)(1)(i)(A) (proposed Sec.  
200.19(a)(1)(i)(A)(1)) defines ``four-year adjusted cohort graduation 
rate'' as the number of students who graduate in four years with a 
regular high school diploma divided by the number of students who form 
the adjusted cohort for that graduating class. New Sec.  
200.19(b)(1)(ii)(A) defines ``students who transfer into the cohort'' 
to mean the students who enroll after the beginning of the entering 
cohort's first year in high school, up to and including in grade 12. 
New Sec.  200.19(b)(1)(iii) defines ``students who graduate in four 
years'' as students who earn a regular high school diploma at the 
conclusion of their fourth year, before the conclusion of their fourth 
year, or during a summer session immediately following their fourth 
year. (For ease of reference, we sometimes refer to this rate elsewhere 
in the preamble as the ``four-year rate.'') The following formula shows 
the calculation of the four-year adjusted cohort graduation rate 
reported in the summer of 2006 (based on the class entering 9th grade 
in the fall of 2002).
[GRAPHIC] [TIFF OMITTED] TR29OC08.000

    We also have revised the regulations in Sec.  200.19(b)(1)(v) to 
provide that, in addition to calculating a four-year rate, a State may 
propose to the Secretary for approval an extended-year adjusted cohort 
graduation rate. This rate is defined as the number of students who 
graduate in four years or more with a regular high school diploma 
divided by the number of students who form the adjusted cohort for the 
four-year rate, accounting for any students who transfer into the 
cohort by the end of the year of graduation being considered and for 
students who transfer out, emigrate to another country, or are deceased 
by the end of that year. A State may calculate one or more extended-
year adjusted cohort graduation rates. (For ease of reference, we 
sometimes refer to the extended-year adjusted cohort graduation rate or 
rates elsewhere in the preamble as the ``extended-year rate.'') The 
following formula shows the calculation of a five-year extended-year 
rate reported in the summer of 2007 (based on the class entering 9th 
grade in the fall of 2002).

[[Page 64450]]

[GRAPHIC] [TIFF OMITTED] TR29OC08.001

    Appendix A provides an example of how the four-year and extended-
year adjusted cohort graduation rates would be calculated.
    Comment: Several commenters argued that the definition of 
``standard number of years'' should not apply to students with 
disabilities because the IDEA allows students with disabilities to 
receive special education services through 21 years of age. The 
commenters stated that this requirement in the IDEA should supersede 
the ESEA requirements and that the definition of adjusted cohort 
graduation rate should provide an exception for students with 
disabilities who require additional time to (1) complete the 
requirements for a regular high school diploma, (2) meet their 
individualized education program (IEP) goals, or (3) fulfill the 
requirements for other State-approved diplomas.
    Discussion: As we noted in response to the previous comments, we 
are revising the regulations, in new Sec.  200.19(b)(1)(v), to permit a 
State, in addition to calculating a four-year rate, to calculate an 
extended-year rate that includes, as graduates, students who graduate 
in four years or more with a regular high school diploma. Therefore, 
students with disabilities who need additional time to complete the 
requirements for a regular high school diploma and who graduate with a 
regular high school diploma may be included as graduates in an 
extended-year rate (if a State chooses to use an extended-year rate). 
Students with disabilities who fulfill requirements for any other 
State-approved alternative award, certificate of attendance, or GED 
credential or who complete their IEP goals but do not receive a regular 
high school diploma may not be counted as graduating in either the 
four-year or extended-year rate, consistent with the definition of 
regular high school diploma in new Sec.  200.19(b)(1)(iv).
    Changes: As previously noted, we have revised the regulations to 
provide in new Sec.  200.19(b)(1)(v) that, in addition to calculating a 
four-year rate, a State may calculate an extended-year adjusted cohort 
graduation rate.
    Comment: One commenter asked how the definition of ``standard 
number of years'' in proposed Sec.  200.19(a)(1)(i)(C)(1) would apply 
to a school that does not have four grades.
    Discussion: New Sec.  200.19(b)(1)(i)(B) provides that, if a high 
school does not have four grades (e.g., does not have a 9th grade), 
then the State uses the number of grades in the school to calculate its 
adjusted cohort graduation rate. For example, if a school has three 
grades, then the adjusted cohort will be made up of those three grades. 
Any student who graduates in more than three years would be included in 
an extended-year rate, if a State chooses to use an extended-year rate.
    Changes: None.
    Comment: Some commenters supported proposed Sec.  
200.19(a)(1)(i)(C)(2), which would have permitted a State to propose, 
for approval by the Secretary, an alternate definition of ``standard 
number of years'' that would apply to limited categories of students 
who, under certain conditions, may take longer to graduate. These 
commenters stated that schools and LEAs should receive credit for 
students who take longer than four years to graduate. However, the 
majority of commenters opposed this proposal for a variety of reasons. 
Several commenters expressed concern that the criteria the Department 
would use to evaluate a State's alternate definition of ``standard 
number of years'' would be subjective and stated that further 
discussion was necessary to ensure that the Department establishes a 
clear, transparent process and timeline for approving States' alternate 
definitions. The commenters contended that, if States are permitted to 
propose their own categories of students and alternate definitions of 
``standard number of years,'' graduation rates will remain difficult, 
if not impossible, to compare across States. Some commenters, on the 
other hand, argued that States should have the flexibility to propose 
an alternate definition of ``standard number of years'' without seeking 
approval from the Department. Other commenters objected to this 
provision because they wanted schools and States to be accountable for 
graduating all students within four years and stated that no exceptions 
should be allowed for students who may take longer to graduate.
    Discussion: The Secretary has amended the final regulations to 
remove the provision for a State to propose an alternate definition of 
``standard number of years'' when calculating the four-year adjusted 
cohort graduation rate. Accordingly, each school, LEA, and State must 
calculate a four-year adjusted cohort graduation rate, in accordance 
with Sec.  200.19(b)(1)(i) through (iv). This provision will ensure use 
of an accurate, uniform method of calculating graduation rate that will 
be comparable across States. To address the commenters' concerns that 
some students need more time to graduate with a regular high school 
diploma, new Sec.  200.19(b)(1)(v) permits a State to also establish an 
extended-year adjusted cohort graduation rate because we recognize it 
is important for schools and LEAs to receive credit for successfully 
graduating students, even if some students take longer to graduate for 
a variety of reasons.
    Changes: As previously noted, new Sec.  200.19(b)(1)(i)(A) provides 
for a four-year adjusted cohort graduation rate. New Sec.  
200.19(b)(1)(v) provides that, in addition to calculating a four-year 
rate, a State may calculate an extended-year adjusted cohort graduation 
rate, subject to approval by the Secretary.

Cohort Reassignment

    Comment: Many commenters opposed proposed Sec.  
200.19(a)(1)(i)(C)(2), which would have allowed States to propose and 
use, if approved by the Secretary, an alternate definition of the 
``standard number of years'' required for high school graduation 
because it would have allowed States to reassign students from their 
original cohort to a subsequent cohort if those students were not 
expected to graduate in the ``standard number of years.'' Commenters 
identified three major problems with using cohort reassignment. First, 
according to the commenters, cohort reassignment would allow States to 
predetermine how many years certain categories of students would take 
to graduate high school with a regular high school diploma, thereby 
reducing State accountability for those students and causing schools to 
ignore the educational needs of individual students. This potential 
outcome was

[[Page 64451]]

particularly troubling to commenters because, according to these 
commenters, the populations that are most likely to be reassigned are 
students who already suffer from low expectations (e.g., students with 
disabilities and LEP students). Second, many commenters stated that 
cohort reassignment is complicated and lacks transparency. These 
commenters argued that it is difficult to know which students and how 
many were reassigned to later cohorts and to identify the cohorts to 
which they were reassigned. They claimed that, therefore, cohort 
reassignment would make the adjusted cohort rate less useful as a tool 
for determining whether a school is graduating its students on time. 
Third, some commenters argued that permitting cohort reassignment would 
be inconsistent with the Department's overall goal of having States use 
a consistent, accurate, and uniform method for calculating graduation 
rate. Many of these commenters recommended use of an extended-year 
graduation rate.
    Discussion: As noted previously, after considering the public 
comments, the Secretary has revised the regulations to remove the 
provision that would have allowed a State to propose and use an 
alternate definition of ``standard number of years.'' We recognize, 
however, that some students may take longer to graduate than others. 
Accordingly, rather than permitting cohort reassignment, we have 
revised the regulations to require States to calculate and report a 
four-year adjusted cohort graduation rate. If a State chooses to do so, 
and receives approval from the Secretary, it may also calculate and 
report an extended-year graduation rate. We believe that, with these 
changes, schools and LEAs will be held accountable for their 
performance in graduating students in four years while also receiving 
credit for graduating additional students in a cohort over a longer 
time frame. We agree with the commenters that cohort reassignment could 
reduce State and local accountability for students who are reassigned 
to a different cohort, would add complexity and reduce transparency in 
graduation rate calculations, and would undermine comparability in 
graduation rates across States.
    Changes: As previously stated, new Sec.  200.19(b)(1)(i)(A) 
requires States to calculate a four-year adjusted cohort graduation 
rate. New Sec.  200.19(b)(1)(v) provides that, in addition to 
calculating a four-year rate, a State may calculate an extended-year 
adjusted cohort graduation rate.

Adjusted Cohort Graduation Rate--Removing Students From the Cohort

    Comment: None.
    Discussion: In reviewing the comments on documenting student 
transfers, we realized that the proposed definition of the adjusted 
cohort graduation rate did not provide for removing a student from the 
cohort who emigrates to another country and is no longer in the United 
States. We believe such a student should not continue to be included in 
the cohort and have revised the regulations accordingly.
    Changes: We have revised new Sec.  200.19(b)(1)(ii)(B) to include 
students who emigrate to another country among the students whom a 
school or LEA may, with written confirmation (as discussed in the 
following paragraphs), remove from the cohort.
    Comment: A number of commenters expressed concern about requiring 
States to document that a student has transferred before removing the 
student from an adjusted cohort. Several commenters requested that we 
modify the requirement in proposed Sec.  200.19(a)(1)(i)(A)(2) that 
would require a school or LEA to have official documentation that the 
student has enrolled in a program of study in another school, LEA, or 
other educational program that culminates in the award of a regular 
high school diploma in order to confirm that a student has transferred. 
These commenters appeared to assume that, in proposing to require 
``official documentation,'' we meant to require a school to receive a 
request for a student's transcript. These commenters argued that, in 
many cases, it would be very difficult for schools to obtain this 
specific documentation and suggested the Department consider other 
types of documentation. They also stated that documenting transfers can 
be challenging because some families move and withdraw from school 
without any notification to school officials, especially in the case of 
migrant students, children of undocumented immigrants, or students who 
move outside the United States. The commenters specifically noted that 
there is no national database with common student identifiers to track 
students who transfer across State lines and that parents are not 
required under most State laws to notify their child's school when they 
move out of an LEA or to provide the child's former school with the 
name of the student's new high school.
    One commenter questioned why proof of enrollment in another school 
would be required when a family moves. The commenter stated that, in 
these circumstances, a school should be required only to obtain 
evidence that a family has moved in order to count the student as a 
transfer. Several commenters suggested that a school or LEA should only 
be required to have ``reasonable evidence'' (rather than ``official 
documentation'') that the student has enrolled in a program of study in 
another school, LEA, or other educational program that culminates in 
the award of a regular high school diploma. These commenters suggested 
that ``reasonable evidence'' that a student has transferred could 
include: a records request from the receiving high school; an approved 
application for home schooling, or enrollment in a virtual school or 
distance education program; signed documentation from the student's 
parent or legal guardian that the family is moving out of the LEA, 
State, or country and that the student will be enrolled in school in 
the new location; and telephone or other personal contact with a 
responsible adult who verifies that the student's family has moved out 
of the LEA and that the adult believes the student is attending school 
elsewhere. These commenters also stated that ``reasonable evidence'' 
that a student has died may include a written statement to that effect. 
One commenter recommended that, if a student transfers to another 
school in the same State, confirmation that the student appears on the 
receiving school's enrollment list in the State's student record system 
should be required.
    Discussion: We agree with the commenters that further clarification 
is needed regarding the documentation that is needed to confirm that a 
student has transferred out, emigrated to another country, or died. New 
Sec.  200.19(b)(1)(ii)(B) therefore requires a school or LEA, before 
removing a student from the cohort, to confirm in writing that the 
student transferred out, emigrated to another country, or is deceased. 
Unless a school or LEA can confirm that a student has transferred out, 
emigrated to another country, or is deceased, the school or LEA must 
consider that student to still be in the cohort for purposes of the 
graduation rate calculation. Too often, any student who leaves the 
cohort for any reason is classified as a transfer, even if the student 
does not enroll in another program of study that culminates in the 
award of a regular high school diploma.
    With respect to a student who transfers out, in particular, new 
Sec.  200.19(b)(1)(ii)(B)(1) requires the school or LEA to have 
official written documentation that the student has

[[Page 64452]]

enrolled in another school or in an educational program that culminates 
in the award of a regular high school diploma. Official written 
documentation that a student transferred out may include several 
different types of documentation, such as a request for records from 
the receiving high school; an approved application for home schooling 
or distance education; evidence of a transfer that is recorded in a 
State's data system; or a letter from an official in the receiving 
school acknowledging the student's enrollment. Documentation must be in 
writing rather than a telephone conversation or other verbal 
communication with a parent, relative, or neighbor so that the transfer 
can be verified through audits or monitoring.
    Although the Secretary appreciates that it may be difficult for a 
school or LEA to confirm through official written documentation that a 
student has transferred to another school or educational program that 
awards a regular high school diploma, we believe that it is critically 
important for school officials to do so in order to have an accurate 
measure of the school's and LEA's graduation rates.
    With respect to students who are deceased or who have emigrated to 
another country, the school or LEA also must confirm this fact in 
writing but need not obtain official documentation. For example, 
written confirmation of a student who has emigrated might include a 
school administrator's memo to the student's file, based on a phone 
conversation with a parent, stating that the student is leaving the 
country. The Department plans to provide non-regulatory guidance on 
ways that States can obtain official written documentation of a 
student's transfer to another school or educational program and can 
obtain appropriate written confirmation of a student's emigration or 
death before removing the student from the cohort.
    Finally, regarding the comment that it is difficult to confirm the 
transfer of migrant students, the Department is currently implementing 
the Migrant Student Information Exchange system. This system contains 
information on migrant students that can be accessed by all States and 
LEAs to help ensure that the academic records of these highly mobile 
students are preserved despite frequent moves, and should be of great 
assistance to States in need of documentation of the re-enrollment of 
students in another school or in an educational program that results in 
the award of a regular high school diploma.
    Changes: Section 200.19(b)(1)(ii)(B) has been amended to clarify 
that, to remove a student from the cohort, a school or LEA must confirm 
in writing that the student transferred out, emigrated to another 
country, or is deceased. Section 200.19(b)(1)(ii)(B)(1) has been 
amended to require that, when confirming that a student has transferred 
out, a school or LEA must have official written documentation that the 
student has enrolled in another school or in an educational program 
that culminates in the award of a regular high school diploma.
    Comment: Several commenters recommended that schools and LEAs not 
be penalized if, after multiple attempts, they are unsuccessful in 
contacting the parents or student to confirm that a student has 
transferred. Several other commenters, however, recommended that we 
specifically prohibit States from removing a student from a cohort as 
an ``error'' simply because the school could not confirm the student's 
final status.
    Discussion: Although we recognize that in some cases it may be 
difficult for an LEA to obtain official written documentation of a 
student's transfer, we decline to allow a State to remove a student 
from the cohort simply because the student's status cannot be 
confirmed. Currently, in many cases, a student who is documented as a 
transfer to another school has dropped out of school, and removal of 
such a student from the cohort produces an inaccurate graduation rate. 
It is critical that LEAs accurately calculate high school graduation 
rates in order to give parents and the public important information 
about the success of a school, LEA, and State in graduating students 
and to ensure that AYP determinations are based on valid graduation 
rate calculations.
    With respect to commenters who requested that we specifically 
prohibit the removal of students whose status cannot be confirmed as 
``errors,'' we believe the regulation is clear that students may not be 
removed from the cohort in this situation and believe that no further 
change in the regulations is necessary.
    Changes: None.
    Comment: One commenter stated that many youth leave school and then 
enter workforce programs and adult basic education programs, and even 
go directly into community colleges, and do not necessarily return to 
high school. This commenter recommended that LEA data systems document 
and take these transitions into account.
    Discussion: Although LEAs may choose to track and report on 
students who leave school and enter workforce programs, adult basic 
education programs, and community colleges, they may not count these 
students as transfers in the four-year adjusted cohort graduation rate. 
These students must be counted as dropouts unless they earn a regular 
high school diploma or enroll in another school or in an educational 
program that culminates in the award of a regular high school diploma 
(not including an alternative degree, such as a GED credential).
    Changes: None.
    Comment: Several commenters recommended that the regulations more 
specifically address the issue of creating uniform exit code policies 
across States. One commenter stated that, without transparency and 
common guidelines for exit codes, inconsistent coding practices 
undermine the accuracy of graduation rates and contribute to a lack of 
comparability among States. One commenter recommended that the 
Department require, through these regulations, that States submit to 
the Secretary for approval a plan for how State exit codes will be 
considered in calculating graduation rate in order to help ensure that 
the use of exit codes does not undermine the accuracy, comparability, 
and transparency of graduation rates.
    Discussion: Although we agree with the commenter that it is 
important for States to create and maintain exit code rules, we do not 
think it is appropriate that the Department require standardized exit 
codes across States. However, the Department, through NCES, has 
provided guidance for the inclusion of exit codes in State data 
systems. In 2006, a Task Force of NCES' National Forum on Education 
Statistics (Task Force) developed a system of voluntary student exit 
codes designed for use with student information systems. The Task 
Force's goal was to construct a taxonomy that could account, at any 
point in time, for all students enrolled (or previously enrolled) in a 
particular school or LEA. Through careful review of coding systems used 
by States and LEAs, six broad categories emerged that were mutually 
exclusive and covered every possible situation. The six major exit code 
categories are: still enrolled in the same LEA; transferred; dropped 
out; completed school; not enrolled, eligible to return (e.g., a 
student who is participating in a foreign exchange program); and 
exited--neither completed nor dropped out (e.g., a student who is 
deceased). This work was published in a guidebook that can be found at: 
http://nces.ed.gov/pubs2006/2006804.pdf. The Department will continue 
to provide guidance to States in this area and encourages States

[[Page 64453]]

as they develop their data systems to consider the recommendations of 
the Task Force.
    Changes: None.
    Comment: One commenter recommended that the Department clarify in 
the regulations that the requirements for calculating an adjusted 
cohort graduation rate apply to States as well as schools and LEAs, and 
that States may not remove students from a cohort without acceptable 
confirmation and documentation from an LEA.
    Discussion: We do not anticipate that a State would remove students 
from a cohort without confirmation from an LEA. Because a State must 
calculate the same graduation rate that is required for its schools and 
LEAs, we do not believe it is necessary to make any additional 
clarifications in the regulations specific to calculating States' 
graduation rates.
    Changes: None.
    Comment: One commenter suggested requiring an SEA- or LEA-
administered audit in any school or LEA in which 20 percent or more of 
the entering 9th grade class is removed from the cohort on the basis of 
having transferred prior to graduation, or in any school or LEA in 
which documentation is lacking for more than 10 percent of students who 
are removed from the cohort as transfer students. This commenter also 
suggested that the Department direct the Office of Inspector General 
(OIG), as a priority activity, to review graduation rate data, conduct 
audits to determine the accuracy of State-reported graduation rates, 
and evaluate the adequacy of State policies regarding data quality and 
accuracy.
    Discussion: Although we agree that States may determine that either 
an SEA- or an LEA-administered audit is necessary in schools or LEAs in 
which a certain percentage of students are removed from the cohort, we 
do not believe it is appropriate for the Federal government to require 
these audits. We also decline to direct the OIG to review the accuracy 
of State-reported graduation rates and State policies regarding data 
quality and accuracy because the Secretary does not set OIG priorities. 
We do, however, monitor State compliance with these regulations, and 
implementation of the four-year adjusted cohort graduation rate will 
certainly be a component of the Department's monitoring of Title I 
programs.
    Changes: None.
    Comment: One commenter recommended that the Department specifically 
state in the regulations that ``marginalized'' students, such as 
incarcerated students, must remain in the cohort and be included in the 
denominator of the adjusted cohort rate. Several commenters expressed 
concern that using an adjusted cohort rate would allow States to remove 
students who are in prison from the cohort. The commenters stated that 
this should not be permitted and suggested requiring States that want 
to remove incarcerated students from the cohort to propose, for 
approval by the Secretary, evidence that a State has in place (1) a 
plan to educate children in prison that will allow those students to 
receive a regular high school diploma; and (2) measures to ensure a 
full accounting of every child removed from any school's cohort. One 
commenter recommended that the regulations make clear that students who 
are incarcerated may be removed from the adjusted cohort. Another 
commenter recommended that States be permitted to remove students in 
alternative programs from the adjusted cohort.
    Discussion: New Sec.  200.19(b)(1)(ii)(B) makes clear that, in 
order to remove a student from the adjusted cohort, a school or LEA 
must confirm in writing that the student (1) transferred to another 
school or in an educational program that culminates in the award of a 
regular high school diploma; (2) emigrated to another country, or (3) 
is deceased. Unless a student, such as an incarcerated student or a 
student in an alternative program, meets one of these three conditions, 
the student may not be removed from the adjusted cohort and must remain 
in the denominator in calculations of the four-year rate for the 
school, LEA, and State in which the student last attended high school.
    Changes: None.
    Comment: We received a number of comments about how the proposed 
regulations would affect the tracking of students who are homeless or 
otherwise highly mobile. One commenter suggested that, because LEAs may 
not have much control over how long it takes highly mobile students to 
graduate, the regulations should allow States to assign these students 
to a cohort based on a student's grade-level placement at the time of 
the transfer. Another commenter opposed use of the adjusted cohort rate 
because it assumes a relatively stable student cohort beginning with 
the 9th grade and, according to the commenter, some programs with 
students who are highly mobile have no cohort to track. Another 
commenter stated that the proposed regulations would provide a 
disincentive for an LEA to which a highly mobile student has 
transferred to promote the continued education of this student who 
might not graduate on time. Another commenter asked that the Department 
clarify how calculation of the adjusted cohort graduation rate would be 
affected by school boundary changes within an LEA.
    Discussion: The adjusted cohort rate does not assume stable 
cohorts, but does assume that a State has in place an accurate student 
record system that can track the progress of all individual students 
over time. States must account for students who are highly mobile in 
the same way that they track students who do not move frequently. If a 
student transfers out of a school, and the transfer can be documented, 
the student is placed in the corresponding cohort at the new school or 
program. This should provide an incentive, not a disincentive, for a 
receiving school to graduate that student on time. Schools that undergo 
a boundary change should be able to obtain the proper documentation 
from the LEA necessary to account for transfers out of a given cohort, 
and to place transfers into their proper cohorts.
    Changes: None.
    Comment: Several commenters noted that rapid and sustained 
enrollment increases or decreases will either mask or exaggerate 
graduation rates.
    Discussion: The adjusted cohort graduation rate is based on data 
that follow the trajectory of individual students over time. States 
should not encounter problems with either masked or exaggerated 
graduation rates.
    Changes: None.

Regular High School Diploma

    Comment: Some commenters expressed concern about our proposal to 
define a regular high school diploma as the standard high school 
diploma that is awarded to students in the State, that is fully aligned 
with the State's academic content standards or is a higher diploma, and 
that is not a GED credential, certificate of attendance, or any 
alternative award. The commenters stated that allowing States to set 
their own high school graduation requirements would reduce the 
comparability of graduation rates due to differing standards for 
graduation. Another commenter remarked that the proposed regulations 
did not provide a definition of what graduation itself means. This 
commenter stated that State governors and educators generally agree 
that graduation should attest to the readiness of a student for 
postsecondary education or for productive work and that our regulations 
should reflect this definition. Some commenters argued that the 
graduation rate should include students who pass local requirements but 
not State assessment requirements for graduation.

[[Page 64454]]

    Discussion: State requirements for earning a regular high school 
diploma vary across States, and it is the role of States, not the 
Federal government, to define what high school graduation means, based 
on a State's content standards, which indicate what students should 
know and be able to do by the time they leave high school. In fact, 
under section 1905 of the ESEA, as well as other similar provisions, 
the Secretary is specifically prohibited from mandating, directing, or 
controlling a State's, LEA's, or school's ``specific instructional 
content, academic achievement standards and assessments, curriculum, or 
program of instruction.'' To regulate on what constitutes 
``graduation'' or what curricula a student must complete to receive a 
``regular high school diploma'' would violate this prohibition. We, 
therefore, are not authorized to make the commenters' recommended 
changes to the regulations.
    Changes: None.
    Comment: Many commenters stated that the proposed definition of 
regular high school diploma was too narrow and that it should include 
any type of graduation diploma issued to a student. Some commenters 
suggested that the definition should include GED credentials. These 
commenters argued that a GED credential is accepted as an alternative 
to a regular high school diploma and satisfies eligibility requirements 
for entrance into postsecondary training opportunities, such as 
colleges and technical schools, as well as entrance into the job 
market.
    Some commenters argued that modified or special education diplomas 
should be considered regular high school diplomas because not including 
these types of diplomas penalizes high schools for meeting the needs of 
students with disabilities. Several commenters recommended that the 
regulations explain that States have the option to craft a definition 
of ``regular diploma'' that encompasses high-quality accredited 
alternative education programs or special-purpose schools with 
curricula that are aligned with State academic standards and offer 
students a regular high school diploma based on graduation requirements 
that may differ from those applied to other schools in the State. One 
commenter recommended that States be more transparent about the 
requirements for earning a regular high school diploma.
    Discussion: It is important that only students who receive a 
regular high school diploma (which could include a higher diploma) that 
is fully aligned with a State's academic content standards be included 
in the four-year rate in order to ensure that graduation rates 
accurately reflect the percentage of students who graduate with a 
diploma that represents what the State determines all students should 
know and be able to do by the end of 12th grade; alternative 
credentials, such as a GED credential and modified special education 
diplomas, do not meet these requirements. Furthermore, research 
demonstrates that GED recipients earn less than, and are generally not 
as successful in the labor market and in postsecondary education as, 
students who earn a regular high school diploma.\8\ We agree with the 
commenter that States should be transparent about their diploma 
requirements and encourage States to make that information widely 
available.
---------------------------------------------------------------------------

    \8\ Id.
---------------------------------------------------------------------------

    Changes: None.
    Comment: Another commenter noted that the definition of graduation 
rate proposed by the Department differs from the graduation rate 
adopted by the NGA. The commenter stated that, under the NGA rate, 
students who earn modified diplomas, such as special education 
diplomas, count as graduates if the modified diploma is the standard 
that the State and the school system have set for a student with an 
IEP.
    Discussion: The commenter is correct that the NGA rate allows 
students who graduate with modified high school diplomas to count as 
graduates. Section 1111(b)(2)(C)(iv) of the ESEA, however, defines 
graduation rate as the ``percentage of students who graduate from 
secondary school with a regular diploma in the standard number of 
years.'' The legislative history accompanying this provision makes 
clear that Congress intended a ``regular diploma'' to exclude ``an 
alternative degree that may not be fully aligned with State academic 
standards, such as a certificate or GED.'' H.R. Rep. No. 334, 107th 
Cong, 1st Sess. 713 (2001). The four-year rate required in these 
regulations, therefore, does not permit students who receive modified 
or other diplomas that are not regular high school diplomas to be 
counted in the rate. For this reason, we no longer refer to the ``NGA 
rate'' when discussing the four-year adjusted cohort graduation rate, 
as defined in new Sec.  200.19(b)(1).
    Changes: None.
    Comment: Some commenters recommended that we authorize States to 
establish procedures allowing schools and LEAs to count as graduates 
some students with the most significant cognitive disabilities who 
perform at a proficient level on a State's alternate assessment based 
on alternate academic achievement standards, but in no case more than 
one percent of all students assessed.
    Discussion: In order for students to be counted as graduates, they 
must graduate with a regular high school diploma. Typically, students 
with the most significant cognitive disabilities do not receive regular 
high school diplomas but, instead, are working to meet their IEP goals 
or fulfill the requirements for a State-approved alternative diploma. 
Performing at a proficient level on a State's alternate assessment 
based on alternate academic achievement standards is not equivalent to 
receiving a regular high school diploma. Any student graduating with a 
credential other than a regular high school diploma may not be counted 
as a graduate for purposes of determining AYP; however, a State may 
choose to report the rate of students who successfully meet their IEP 
goals in order to highlight this important work. The final regulations 
also permit a State to set its graduation rate goal at less than 100 
percent in recognition that students who are assessed based on 
alternate academic achievement standards, for example, may not receive 
a regular high school diploma. We discuss these provisions later in 
this preamble.
    Changes: None.

Timeline for Use of the Four-Year Adjusted Cohort Graduation Rate

    Comment: Several commenters opposed the requirement in proposed 
Sec.  200.19(a)(1)(i) that would require States to use the four-year 
adjusted cohort rate definition no later than the 2012-2013 school 
year. Other commenters recommended that the Department require States 
to use the four-year adjusted cohort graduation rate earlier than the 
proposed 2012-2013 school year deadline; some commenters suggested that 
the deadline be the 2010-2011 school year, while others recommended a 
2011-2012 school year deadline. One commenter suggested that States, 
LEAs, and schools be required to report the adjusted cohort graduation 
rate no later than the 2010-2011 school year and to use the rate for 
AYP determinations no later than the 2011-2012 school year. Some of the 
commenters who suggested requiring implementation earlier than the 
proposed deadline stated that the Department should provide States that 
do not have the technical capacity to implement the four-year adjusted 
cohort graduation rate by the new deadline additional time to do so. 
Most of the commenters who suggested requiring an earlier deadline 
stated that in no case should the Department permit a State to

[[Page 64455]]

implement the adjusted cohort graduation rate any later than the 2012-
2013 school year.
    Discussion: We agree with the commenters who recommended requiring 
States to implement the four-year adjusted cohort graduation rate 
earlier than the 2012-2013 school year, given that, based on data from 
the recent NGA report,\9\ we believe the great majority of States will 
be able to do so. We believe that an earlier deadline will help 
maximize the number of States using this rate as soon as possible. 
Accordingly, the final regulations require States to (a) report the 
four-year rate beginning with report cards providing results of 
assessments administered in the 2010-2011 school year and (b) calculate 
the four-year rate for determining AYP based on school year 2011-2012 
assessment results.
---------------------------------------------------------------------------

    \9\ Id.
---------------------------------------------------------------------------

    Under the heading, Implementation Timelines, later in this notice, 
we have summarized the implementation timeline for the graduation rate 
requirements.
    Changes: We have revised the regulations as follows:
     New Sec.  200.19(b)(4) provides that States must 
calculate, for reporting purposes, the four-year adjusted cohort 
graduation rate, in the aggregate and disaggregated by subgroup, 
beginning with report cards providing assessment results for the 2010-
2011 school year.
     New Sec.  200.19(b)(5) requires a State to calculate the 
four-year rate, in the aggregate and disaggregated by subgroups, for 
purposes of determining AYP, beginning with AYP determinations based on 
school year 2011-2012 assessment results.
    Comment: Some commenters requested that the Department allow 
flexibility for States that do not have the capacity to implement the 
four-year adjusted cohort graduation rate by the deadline proposed in 
the regulations. These commenters noted that States may need additional 
time, beyond the deadline proposed, to develop their longitudinal data 
systems and to train staff on implementing the new requirements. 
Several commenters recommended that States that currently do not have 
the capacity to implement the adjusted rate, or States that would not 
be able to meet the proposed 2012-2013 deadline, be required to 
demonstrate why they do not have the capacity, what changes they must 
make in order to attain that capacity, and the timeline for making 
those changes. Commenters suggested a range of ways a State could 
demonstrate this. Some commenters suggested that this justification be 
required in the State's Accountability Workbook; one commenter 
suggested that the Department enter into compliance agreements or 
timeline waivers with any States that do not implement the rate using 
the adjusted cohort definition by the deadline.
    Commenters made various suggestions as to the information a State 
should be required to provide, such as an affirmation that it lacks the 
data system to report the data; an explanation of what changes will 
need to be made to its data systems; the transitional rate the State 
will use in the meantime; a timeline for creating the capacity and 
using the data; and an agreement to file interim reports on its 
progress.
    Discussion: We understand, based on the NGA report, that some 
States will not be able to begin using the four-year rate for reporting 
and AYP determinations by the deadlines and agree with the commenters 
who suggested States be able to request more time to do so. We also 
agree with commenters that if these States need more time, these final 
regulations should require States to explain why they do not have that 
capacity, what changes they will make in order to develop that 
capacity, and their timeline for making those changes. We, therefore, 
have added new Sec.  200.19(b)(7), which permits a State that is unable 
to meet the 2010-2011 deadline for reporting the four-year adjusted 
cohort graduation rate to request an extension of that deadline from 
the Secretary. To receive an extension, a State must submit, by March 
2, 2009, evidence satisfactory to the Secretary demonstrating that it 
cannot meet the deadline and a detailed plan and timeline addressing 
the steps the State will take to implement, as expeditiously as 
possible, a graduation rate consistent with Sec.  200.19(b)(1)(i) 
through (iv). As a condition of approving an extension, the Secretary 
may require the State to use a more rigorous transitional graduation 
rate than it has been using until such time as the State is able to 
implement the four-year adjusted cohort graduation rate. The Department 
will use the State's plan and timeline to provide technical assistance 
and support to the State to implement the four-year rate as soon as 
possible. In addition, fiscal year 2009 grantees under the Statewide 
Longitudinal Data Systems grant program that lack the capacity to 
implement the four-year rate may use their grant to develop the data 
capabilities needed to implement that rate.
    Any State that cannot meet the 2010-2011 deadline for reporting the 
four-year adjusted cohort graduation rate and does not submit a request 
for an extension by March 2, 2009, which is subsequently approved by 
the Secretary, will be out of compliance with the regulations. Should a 
State not meet the 2010-2011 deadline, the Secretary has the authority 
to take appropriate action, including, but not limited to placing a 
condition on a State's Title I, Part A grant, requiring the State to 
enter into a Compliance Agreement with the Department, or withholding 
Title I, Part A funds.
    Changes: We have added the following regulations:
     New Sec.  200.19(b)(7)(i) provides that, if a State cannot 
meet the deadline for reporting the four-year rate in Sec.  
200.19(b)(4)(ii)(A), the State may request an extension of that 
deadline from the Secretary.
     New Sec.  200.19(b)(7)(ii) requires that, to receive an 
extension, a State must submit, by March 2, 2009, evidence satisfactory 
to the Secretary demonstrating that the State cannot meet the deadline 
in Sec.  200.19(b)(4)(ii)(A), and a detailed plan and timeline 
addressing the steps the State will take to implement, as expeditiously 
as possible, a graduation rate consistent with Sec.  200.19(b)(1)(i) 
through (iv).
    Comment: Some commenters asked whether proposed Sec.  
200.19(a)(1)(ii)(A) would have required States that can calculate the 
adjusted cohort graduation rate to begin using it immediately for 
reporting and AYP purposes (i.e., for the 2008-2009 school year), ahead 
of the timeline that we proposed in the NPRM. Some commenters argued 
that, given that most States have or are close to having the data 
systems necessary to calculate the adjusted cohort graduation rate, the 
regulations should specify that States that can immediately calculate 
the adjusted cohort graduation rate must do so. On the other hand, some 
commenters opposed any requirement that States be required to use the 
adjusted cohort graduation rate immediately.
    Discussion: The final regulations do not require immediate use of 
the four-year adjusted cohort graduation rate by States that have the 
systems and data required to calculate this rate. According to NGA, 
only 16 States currently have the ability to calculate the four-year 
rate.\10\ The Secretary has decided not to require these 16 States to 
use the four-year adjusted cohort graduation rate for accountability

[[Page 64456]]

purposes before the deadlines in Sec.  200.19(b)(4) and (5). However, 
we encourage such States to use the four-year rate as soon as possible.
---------------------------------------------------------------------------

    \10\ Id.
---------------------------------------------------------------------------

    Changes: None.

New Sec.  200.19(b)(2) (Proposed Sec.  200.19(a)(1)(i))--Transitional 
Graduation Rate

    Comment: One commenter supported our proposal in the NPRM to 
require States that are not yet able to calculate the adjusted cohort 
graduation rate to use the AFGR on a transitional basis. Another 
commenter supported the use of the AFGR for reporting purposes because, 
according to the commenter, it would be useful to compare the AFGR to 
what States are currently reporting for graduation rate. However, for 
several reasons, the vast majority of commenters opposed requiring the 
AFGR as the transitional measure of graduation rate for accountability 
purposes. First, commenters argued that the AFGR is an inadequate 
substitute for a true longitudinal rate and stated that they did not 
agree with the statement in the NPRM that research has shown the AFGR 
to be a reliable, accurate estimate of the high school graduation rate. 
According to the commenters, the AFGR would likely over-estimate 
graduation rates in high schools in which students drop out before the 
beginning of 10th grade, a common occurrence in schools serving large 
numbers of minority and low-income students. The commenters also stated 
that the AFGR is inaccurate in communities with significant in-or out-
migration because the AFGR calculation has no mechanism for reassigning 
students whose families enter or leave an LEA. Second, commenters 
expressed concern that requiring States to use the AFGR as a 
transitional measure would create additional administrative, technical, 
and financial burdens and hinder States' efforts to transition to the 
adjusted cohort graduation rate, as well as hinder efforts to educate 
and inform high schools and the public of the pending adoption of the 
adjusted cohort graduation rate. Third, commenters argued that making a 
significant change now in defining graduation rate, and then again when 
the adjusted cohort graduation rate definition is implemented, would 
only create confusion, undermine public confidence regarding graduation 
rate data and school accountability systems in general, and complicate 
longitudinal analyses due to the use of as many as three different 
rates as well as multiple sets of goals and targets. Overall, 
commenters stated that the problems potentially created by using the 
AFGR as the transitional measure of graduation rate greatly outweigh 
the possible benefits of its increased accuracy compared to the rates 
currently used by some States.
    Other commenters recommended alternatives to using the AFGR. Some 
commenters recommended that States be allowed to continue using their 
current graduation rate definitions until they can implement the 
adjusted cohort graduation rate. One commenter suggested that the AFGR 
be required as a transitional measure only for States that, by 2009, 
have not collected at least two years of data necessary to compute the 
adjusted cohort graduation rate. One commenter recommended the use of 
what the commenter said was a more reliable estimate of graduation 
rate, the Cumulative Promotion Index (CPI) method. Another commenter 
recommended that States be allowed to propose, for Secretarial 
approval, an interim rate that measures or estimates the number of 
graduates compared to the number of students in a high school's 
entering grade; does not use dropout data; counts as graduates only 
those students who receive a regular high school diploma; can be 
disaggregated; and can be used on an annual basis to determine a rate 
of growth.
    Discussion: Although we believe the AFGR is a more valid and 
reliable graduation rate measure than some States currently use, we are 
persuaded by the commenters' reasons for not requiring the use of the 
AFGR as the transitional measure. To respond to these concerns, we have 
revised the regulations to focus States, LEAs, and schools on moving 
toward a uniform and more accurate method of calculating high school 
graduation rate--the four-year adjusted cohort graduation rate--in 
order to provide parents and the public with important information 
about the number of students graduating in four years with a regular 
high school diploma, and to ensure that AYP determinations are based on 
valid graduation rate calculations. We now believe that requiring the 
use of any interim alternative graduation rate, whether the AFGR or the 
alternatives suggested by the commenters, would not necessarily produce 
increases in accuracy and reliability, compared to current rates used 
by States, sufficient to compensate for the risks of slowing progress 
toward fully implementing the four-year rate.
    Changes: We have removed the requirement in proposed Sec.  
200.19(a)(1)(ii) to use the AFGR as the transitional measure for those 
States that cannot yet calculate the four-year rate. Instead, under new 
Sec.  200.19(b)(2), a State must use either the four-year adjusted 
cohort graduation rate or, on a transitional basis, a graduation rate 
that meets the requirements in current Sec.  200.19(a)(1)--i.e., 
measures the percentage of students from the beginning of high school 
who graduate with a regular high school diploma in the standard number 
of years, or another definition, developed by the State and approved by 
the Secretary, that more accurately measures the rate of student 
graduation from high school with a regular high school diploma.
    Comment: One commenter questioned the apparent inconsistency in the 
proposed regulations that would have required use of the AFGR in 
school-level ``safe harbor'' AYP determinations but not for other 
school-level AYP determinations.
    Discussion: The proposed regulations would not have required 
disaggregated AFGR results at the school level, except in the case of 
``safe harbor'' calculations, because we did not have sufficient 
confidence in the validity of disaggregated AFGR results with small 
populations of students. However, because section 1111(b)(2)(I)(i) of 
the ESEA requires disaggregation of the other academic indicator--in 
this case, the graduation rate--in calculating ``safe harbor'' at the 
school level, we had no choice but to propose requiring disaggregation 
of the AFGR for ``safe harbor'' calculations. We note that this 
apparent inconsistency is not present in the final regulations, which 
do not require use of the AFGR.
    Changes: As noted previously, we have removed the requirement in 
proposed Sec.  200.19(a)(1)(ii) to use the AFGR as the transitional 
measure for those States that cannot yet calculate the four-year rate.
    Comment: One commenter recommended that the Department publish 
State-level AFGRs for every State through 2012-2013.
    Discussion: The Department currently publishes State-level AFGRs at 
the following Web site: http://nces.ed.gov/programs/digest/d07/tables/dt07_102.asp?referrer=list.
    Changes: None.
    Comment: One commenter asked specific questions about how to 
calculate the AFGR.
    Discussion: As stated previously, we are removing the requirement 
to use the AFGR as the transitional graduation rate measure. However, 
information about the AFGR is available at the following Web site: 
http://nces.ed.gov/pubs2007/dropout05/DefiningAveragedFreshman.asp.
    Changes: None.

[[Page 64457]]

New Sec.  200.19(b)(3) (Proposed Sec.  200.19(d)(1))--Goal and Targets

    Comment: Several commenters supported proposed Sec.  200.19(d) (new 
Sec.  200.19(b)(3)), which would require States to set a graduation 
rate goal that represents the rate that the State expects all high 
schools to meet and to define how schools and LEAs must demonstrate 
continuous and substantial improvement from the prior year toward 
meeting or exceeding the State's graduation rate goal. However, some of 
these commenters expressed concern that the proposed regulations did 
not go far enough in specifying what the Department would consider to 
be rigorous goals and targets, arguing that States are not likely to 
make needed improvements in their graduation goals and targets if they 
are allowed to set their own goals and targets and are required only to 
undergo another round of Secretarial review. One commenter noted that 
the proposed regulations would not have required States' goals and 
targets to be peer reviewed and did not provide specific guidance on 
how States should set their goals and targets. Another commenter 
requested clarification about the role the Department would play in 
approving States' goals and targets.
    Some commenters noted that the term ``continuous and substantial 
improvement'' in proposed Sec.  200.19(d)(1)(ii) (new Sec.  
200.19(b)(3)(i)(B)) was not defined and suggested that the regulations 
indicate more clearly what standards States' goals and targets would be 
expected to meet. Many commenters suggested changes intended to ensure 
adoption of rigorous goals and targets, including requiring all States 
to use the same goals and targets (in part, to promote comparability), 
requiring ``high, ambitious end goals'' and growth targets, and 
requiring States to set a minimum increase in the rate each year that 
is ``aggressive, attainable, and uniform.''
    Other recommendations included adding specific goals (e.g., 90 
percent) and targets (e.g., three percent increase annually), requiring 
higher targets for five-year graduation rates than for four-year rates, 
setting targets that would eliminate subgroup differences in graduation 
rates within four years, or establishing goals that reflect the 
economic needs of a State's employers.
    On the other hand, one commenter supported flexibility in this area 
and urged the Department not to impose rigid standards for approving a 
State's goal and targets. The commenter requested that the Department 
use a transparent peer review process and permit States to use a 
variety of approaches in setting their goals and targets, including, 
for example, goals that increase over time and definitions of progress 
that use an averaging model.
    Discussion: The Secretary believes that high schools and LEAs with 
low rates of graduation should not make AYP by simply maintaining the 
same low rate or minimally increasing it from year to year. At a time 
when a high school diploma is the absolute minimum credential needed 
for success in the labor force, the Secretary believes States must set 
aggressive goals and hold LEAs and high schools accountable for 
graduating more of their students. However, given the variation in 
State assessment and accountability systems and differences in State 
graduation requirements, the Secretary believes that States should have 
the flexibility to establish their own graduation rate goal and targets 
and, therefore, declines to specify in these regulations what the goal 
and targets must be for each State or to define ``continuous and 
substantial improvement.''
    We agree that the proposed regulations should have been clearer in 
requiring States to set a single graduation goal and to set specific 
targets towards meeting or exceeding that goal. Therefore, we have 
amended proposed Sec.  200.19(d)(1) (new Sec.  200.19(b)(3)(i)) to 
require States to set a single graduation rate goal that represents the 
rate the State expects all high schools in the State to meet and to set 
annual graduation rate targets that reflect continuous and substantial 
improvement from the prior year toward meeting or exceeding the 
graduation rate goal.
    Regarding questions about the Department's role in approving 
States' goal and targets, the final regulations require each State to 
submit its graduation rate goal and targets to the Department as part 
of its revised Accountability Workbook, which will be peer reviewed.
    Changes: We have made the following changes in new Sec.  
200.19(b)(3)(i) (proposed Sec.  200.19(d)(1)):
     Section 200.19(b)(3)(i)(A) requires a State to set a 
single graduation rate goal that represents the rate it expects all 
high schools in the State to meet.
     Section 200.19(b)(3)(i)(B) requires a State to set annual 
graduation rate targets that reflect continuous and substantial 
improvement from the prior year toward meeting or exceeding the State's 
goal.
    We also have added new Sec.  200.19(b)(6)(i), which requires each 
State to revise its Accountability Workbook to include the following:
     The State's graduation rate definition that the State will 
use to determine AYP based on school year 2009-2010 assessment results 
(new Sec.  200.19(b)(6)(i)(A)).
     The State's progress toward meeting the deadline in Sec.  
200.19(b)(4)(ii)(A) for calculating and reporting the graduation rate 
defined in Sec.  200.19(b)(1)(i) through (iv) (new Sec.  
200.19(b)(6)(i)(B)).
     The State's graduation rate goal and targets (new Sec.  
200.19(b)(6)(i)(C)).
     An explanation of how the State's graduation rate goal 
represents the rate the State expects all high schools in the State to 
meet and how the State's targets demonstrate continuous and substantial 
improvement from the prior year toward meeting or exceeding the goal 
(new Sec.  200.19(b)(6)(i)(D)).
     The graduation rate for the most recent school year of the 
high school at the 10th percentile, the 50th percentile, and the 90th 
percentile in the State, ranked in terms of graduation rate (new Sec.  
200.19(b)(6)(i)(E)).
     If a State uses an extended-year adjusted cohort 
graduation rate, a description of how it will use that rate with its 
four-year rate to determine whether its schools and LEAs have made AYP 
(new Sec.  200.19(b)(6)(i)(F)).
    In addition, we have added new Sec.  200.19(b)(6)(ii) to require 
each State to submit, consistent with the timeline in Sec.  
200.7(a)(2)(iii), its revised Accountability Workbook to the Department 
for technical assistance and peer review.
    Comment: Several commenters stated that rules or policies on 
establishing graduation rate goals and targets need to be reasonable 
and realistic for alternative schools, including early college high 
schools and schools designed to serve former or potential dropout 
students, so as to ensure that these schools are not penalized for 
helping struggling students successfully complete high school.
    One commenter suggested that States be permitted to set different 
goals for different schools based on each school's present level of 
performance, rather than one statewide goal. This commenter suggested 
that setting the same goal, with the same time frame, for a high school 
that currently has a graduation rate of 60 percent and a high school 
with a current graduation rate of 80 percent means that the bar is set 
too high for the first school and too low for the second school.
    Discussion: We agree that States should carefully consider 
graduation rate targets for alternative and early college high schools. 
However, we do

[[Page 64458]]

not agree that the State graduation rate goal for alternative schools 
should be lower than those for other schools because, as with the 
annual measurable objectives set for reading and math proficiency under 
NCLB, States must have the same high expectations regarding graduation 
rate for all schools. The Secretary believes strongly that States must 
set a graduation rate goal that represents the rate a State expects all 
high schools to meet, but acknowledges that it may be appropriate for 
schools to have different graduation rate targets. For example, a State 
might propose targets for schools with the lowest graduation rates that 
are more aggressive than targets for schools that are very close to 
meeting the State goal since schools with the lowest graduation rates 
will need to make more progress to reach the State's goal. A State 
might propose a target that represents a percent reduction from the 
prior year in the number of students not reaching the graduation rate 
goal. When approving a State's goal and targets, the Department intends 
to consider the relationship between the State's goal and its targets.
    Changes: As noted previously, new Sec.  200.19(b)(3)(i)(A) requires 
a State to set a single graduation rate goal that represents the rate 
it expects all high schools to meet. Also, new Sec.  200.19(b)(3)(i)(B) 
requires a State to set annual graduation rate targets that reflect 
continuous and substantial improvement from the prior year toward the 
State's goal, but does not require that those targets be the same for 
every high school.
    Comment: Several commenters requested that the regulations require 
States to be transparent in setting their graduation rate goals and 
targets and suggested requiring States to hold public meetings or to 
report to the public on their graduation rate goals and targets. Some 
commenters recommended that States explain how they set their goals and 
targets and how they plan to meet them. One commenter suggested that 
LEAs be required to hold public meetings that are accessible for 
individuals with limited English proficiency and individuals with 
disabilities, and are well advertised in advance, including through 
schools and, where available, minority and alternative language media 
outlets to discuss the establishment of the State's graduation goal and 
targets. One commenter recommended that each State be required to 
report to the public on how its goal and targets would lead to 100 
percent of students graduating and the number of years that would be 
required to meet this 100-percent graduation goal. Finally, one 
commenter recommended requiring each State, in setting its goal and 
targets, to consider the views of experts on the needs of students at 
the highest risk of dropping out, including racial, ethnic, and 
language minority students, children from low-income families and 
neighborhoods of concentrated poverty, students with disabilities, 
pregnant students or students who are parents, and students whose 
families move frequently during their school years.
    Discussion: In general, the Secretary agrees that each State should 
use an open and ``transparent'' process to set its graduation rate goal 
and targets. We encourage States and LEAs to involve parents and the 
public, as appropriate, in this process. However, we decline to 
regulate on any specific requirements for such a process. We believe 
these decisions are best left to States.
    At the same time, we believe it is appropriate to require each 
State to include additional information on its graduation rate goal and 
targets in its Accountability Workbook. Therefore, as noted earlier, we 
have amended the final regulations to require each State to include in 
its Accountability Workbook, in addition to the State's graduation rate 
goal and targets, an explanation of how the State's graduation rate 
goal represents the rate the State expects all high schools to meet and 
of how the State's targets demonstrate continuous and substantial 
improvement from the prior year toward meeting or exceeding the goal. 
In order for the Department and the public to consider the approximate 
number of years it will take for a State to reach its graduation rate 
goal, we are also requiring States to include in their Accountability 
Workbook, the graduation rate of the school at the 10th percentile, the 
50th percentile, and the 90th percentile in the State (ranked in terms 
of graduation rate). We believe these three points depict the range of 
graduation rates among a State's high schools and provide context for 
considering the goal and targets the State has chosen.
    For example, a State might report in its Accountability Workbook 
that it proposes to set its graduation rate goal at 90 percent and its 
target as a five percent increase per year, and that the school at the 
10th percentile has a graduation rate of 50 percent, which would 
indicate that the State will hold its lowest-performing schools 
accountable for reaching the State's graduation rate goal in at least 
eight years.
    Changes: As previously noted, new Sec.  200.19(b)(6)(i)(E) has been 
added to require each State to include in its Accountability Workbook 
the graduation rate for the most recent school year of the high school 
at the 10th percentile, 50th percentile, and 90th percentile in the 
State (ranked in terms of graduation rate).
    Comment: Two commenters suggested that the Department allow each 
State to wait until the State implements the four-year adjusted cohort 
rate before requiring a more rigorous definition of its graduation rate 
goal and continuous and substantial improvement towards meeting that 
goal.
    Discussion: The purpose of setting a meaningful graduation rate 
goal and targets, whether a State has adopted the four-year rate in new 
Sec.  200.19(b)(1) or is using a transitional rate until it can 
calculate the four-year rate, is to focus attention on graduation rates 
and motivate efforts to improve these rates as soon as possible. The 
Secretary does not believe that we can afford to wait one, two, or 
three years to begin addressing the human and economic costs of 
education systems under which, on average, roughly one-quarter of the 
Nation's high school students leave school without a diploma. When a 
State changes to the four-year rate, it may reset its goal and targets 
to align with that graduation rate and resubmit any changes to the 
Secretary for approval.
    Changes: None.
    Comment: Several commenters argued that only Congress, not the 
Secretary, has the authority to require States to set a graduation rate 
goal and targets, and that any new graduation rate requirements should 
be considered only in the context of comprehensive changes to the 
overall Title I accountability system.
    Discussion: Section 1901(a) of the ESEA authorizes the Secretary to 
``issue such regulations as are necessary to reasonably ensure that 
there is compliance with [Title I].'' The Secretary has chosen to 
require a more accurate, uniform definition of graduation rate in order 
to raise expectations and to hold high schools, LEAs, and States 
accountable for increasing the number of students who graduate on time 
with a regular high school diploma. Given the ever-increasing 
importance of a high school diploma, allowing high schools and LEAs 
with low rates of graduation to make AYP by simply maintaining the same 
low rate or minimally increasing the number of graduates from the 
previous year would not provide for appropriate and meaningful 
accountability. Moreover, although new Sec.  200.19(b)(3) requires a 
State to set a graduation rate goal and targets, the regulations leave 
to the States the

[[Page 64459]]

determination of what the goal and targets should be. The Secretary is 
promulgating these regulations now because Congress has not yet 
completed the reauthorization of the ESEA, and because she believes 
strongly that we should continue to address the needs of students and 
their parents while Congress considers various reauthorization 
proposals.
    Changes: None.
    Comment: Several commenters argued that the proposed 2008-2009 
timeline for establishing the new goal and targets would not provide 
adequate lead time because many States must undergo a thorough review 
and approval process for any changes to their policies, including, for 
example, reviews by stakeholder groups, State boards of education, and 
State legislatures.
    Discussion: The Department agrees that additional time is needed 
for States to implement new graduation rate goals and targets, 
particularly given that States have different procedures they must 
follow in adopting and implementing new State policies. Therefore, we 
have changed the timeline to require that a State's graduation goal and 
targets under new Sec.  200.19(b)(3)(ii) first be used for AYP 
determinations based on school year 2009-2010 assessment results.
    Changes: New Sec.  200.19(b)(3)(ii) requires a State to use its 
graduation rate goal and targets for the first time with AYP 
determinations based on school year 2009-2010 assessment results.
    Comment: Some commenters opposed including graduation rate goals 
and targets in AYP determinations, as proposed Sec.  200.19(d) would 
have required, because, according to the commenters, including goals 
and targets would significantly increase the number of high schools and 
LEAs that are identified for improvement. The commenters also stated 
that requiring all States to resubmit their Accountability Workbooks 
would result in unnecessary expenditures of time and money for both the 
States and the Department.
    Discussion: We agree that the inclusion of a graduation rate goal 
and targets in AYP calculations is likely to increase the number of 
high schools and LEAs identified for improvement, although it is 
difficult to estimate the extent of any increase because the proportion 
of schools and LEAs identified for improvement already is rising due to 
higher annual proficiency objectives as we move toward the goal of 
ensuring that all students are proficient in reading and mathematics by 
2013-2014. We believe that any additional identifications for 
improvement that occur because high schools or LEAs miss a State's 
graduation rate goal or targets would be entirely appropriate as part 
of the overall effort to improve graduation rates, which is the purpose 
of these regulations. In addition, we believe that the benefits of more 
meaningful accountability for graduation rates far exceed the costs of 
implementing these new requirements.
    Changes: None.

New Sec.  200.19(b)(6)(i)(F)--Determining AYP With an Extended-Year 
Rate

    Comment: Many of the commenters who supported allowing the use of 
an extended-year graduation rate also recommended various ways to 
include the extended-year rate with the four-year adjusted cohort 
graduation rate in determining AYP. Many commenters recommended basing 
AYP determinations primarily on the four-year rate but giving schools 
and LEAs credit for students who graduate in five years or more. These 
commenters stated that the four-year rate should constitute a high and 
specific percentage (e.g., 90 percent) of the AYP calculation. Another 
commenter recommended requiring a weighted graduation index that 
combines a four-year adjusted cohort graduation rate (weighted no less 
than 70 percent of the index), a five-year adjusted cohort graduation 
rate, and a longer-term adjusted cohort graduation rate. One commenter 
suggested that the Department allow States to propose rules under which 
schools receive full credit for graduating students in four years and 
partial credit for students graduating in more than four years (e.g., 
students who fall behind in credit accumulation or otherwise struggle 
to complete graduation requirements). One commenter recommended 
weighting the graduation rate calculation by giving 75 percent of the 
weight to the four-year rate and the remaining 25 percent to the 
extended-year rate. Some commenters recommended requiring States to set 
higher graduation rate targets for students graduating in four years, 
compared to those graduating in more than four years. Several 
commenters recommended that AYP determinations based on the four-year 
and extended-year graduation rates be calculated in the same manner 
across all States to ensure comparability; otherwise, any differences 
in four-year and five-year graduation rates should be indicated in 
reports on high school graduation rates.
    Discussion: As previously discussed, the Secretary agrees that 
States should be permitted to use an extended-year adjusted cohort 
graduation rate, in addition to the required four-year adjusted cohort 
graduation rate, for purposes of determining AYP. The Secretary offers 
this flexibility for States but prefers that they adopt AYP definitions 
that hold LEAs and schools accountable for graduating the vast majority 
of their students in four years. For example, a State might use an 
index that weights the four-year rate significantly more than the 
extended-year rate (e.g., 80 percent for the four-year rate and 20 
percent for the extended-year rate) or a State might use a higher 
target for the four-year rate than for the extended-year rate (e.g., an 
increase of 5 percent for the four-year rate versus an increase of 3 
percent for the extended-year rate) and require that an LEA or school 
meet both targets in order to make AYP. The Department plans to issue 
non-regulatory guidance providing more specific examples of how a State 
might use its four-year rate and extended-year rate in AYP 
calculations. Regardless of the methodology a State uses to calculate 
AYP, a State must report its four-year rate separately from any 
extended-year rate, consistent with Sec.  200.19(b)(4)(ii)(B).
    We believe it is important that a State have the flexibility to 
consider how to use its four-year rate and an extended-year rate in AYP 
calculations, subject to peer review and approval by the Secretary. 
Therefore, as previously noted, we have added new Sec.  
200.19(b)(6)(i)(F) to require a State that uses an extended-year 
graduation rate to submit to the Department, for technical assistance 
and peer review, a description, in its Accountability Workbook, of how 
it will use an extended-year rate along with its four-year rate to 
determine whether its schools and LEAs make AYP.
    Changes: We have added new Sec.  200.19(b)(6)(i)(F) to provide 
that, if a State uses an extended-year cohort graduation rate, the 
State must submit as part of its Accountability Workbook, for peer 
review and approval by the Secretary, a description of how it will use 
its extended-year rate with its four-year rate to determine whether its 
schools and LEAs have made AYP.

Section 200.19(b)(5) (Proposed Sec.  200.19(e))--Disaggregation for 
Determining AYP

    Comment: Some commenters expressed support for the requirement to 
disaggregate graduation rates in proposed Sec.  200.19(e) because, 
according to the commenters, disaggregation of data is vital to 
realizing the goals of improving graduation rates for subgroups with 
below-average graduation rates. Some commenters

[[Page 64460]]

supported reporting disaggregated graduation rates but opposed the use 
of these rates in AYP determinations because, according to the 
commenters, it would add another level of complexity and confusion to 
AYP calculations and potentially erode support for the core principles 
of NCLB.
    Many commenters opposed the requirement to use disaggregated data 
in AYP determinations because they believed more schools and LEAs would 
not make AYP based on disaggregated data. Other commenters opposed the 
regulation because, they claimed, it would disproportionately affect 
the most diverse schools. One commenter argued that this requirement 
increases the Federal role in education, rather than diminishing it, 
and focuses on process instead of achievement. One commenter urged 
caution because of the likely variability in graduation rates among 
small subgroups, while another claimed that verifying disaggregated 
results could make it difficult for a State to release AYP results 
before the start of the school year.
    Discussion: When the current regulations were issued in 2002 (67 FR 
71710, 71742 (Dec. 2, 2002)), the Department believed that permitting 
States to use aggregate graduation rate data for the purpose of 
determining AYP, while requiring disaggregation for reporting, would be 
sufficient to ensure school and LEA accountability for the achievement 
of all groups of students and would avoid overburdening State 
accountability systems. Six years later, we now know that simply 
reporting disaggregated graduation rate data is not sufficient to 
ensure that graduation rates improve for all students. Although we 
recognize that the use of disaggregated graduation rates in AYP 
determinations may increase the number of schools and LEAs identified 
for improvement, we decline to eliminate this requirement because we 
believe too many high schools currently are not being held accountable 
for improving graduation rates that are well below the national 
average. Moreover, it is evident that there are significant disparities 
in outcomes among subgroups. For example, data provided by NCES show 
significant gaps in subgroup AFGRs. Data from the 2005-2006 school year 
found that the average AFGR for white students was 80.6 percent, 
whereas the average AFGR for Hispanic, black, and American Indian/
Alaska Native students was 61.4 percent, 59.1 percent, and 61.8 
percent, respectively.\11\ Similar to the importance of disaggregating 
assessment results to ensure that high performance by the ``all 
students'' group does not mask low performance by subgroups of 
students, we believe schools and LEAs need to be held accountable for 
the differences in graduation rates among subgroups.
---------------------------------------------------------------------------

    \11\ National Center for Education Statistics. (2008). Public 
School Graduates and Dropouts from the Common Core of Data: School 
Year 2005-2006. Washington, DC: Author.
---------------------------------------------------------------------------

    Changes: None.
    Comment: A number of commenters recommended that the Department 
wait to require disaggregation of graduation rates until the ESEA is 
reauthorized. Some commenters, for example, opposed the use of 
disaggregated graduation rates in determining AYP until the rates can 
be considered in the context of the overall structure of States' 
accountability systems. Some commenters stated that now is not the 
right time to add new data cells for determining AYP when efforts to 
improve the ESEA's accountability system, such as the Department's 
differentiated accountability pilot, have not had a chance to take 
effect on a large scale.
    Discussion: As discussed previously, the Secretary proposed new 
graduation rate regulations precisely because Congress has not yet 
completed the reauthorization of the ESEA, and because she believes 
strongly that we cannot delay addressing this critical area. The 
Secretary has chosen to regulate use of a uniform definition of 
graduation rate and disaggregation of that rate for accountability 
purposes in order to raise expectations and to hold high schools, LEAs, 
and States accountable for increasing the number of students who 
graduate on time with a regular high school diploma. We note that the 
final regulations in new Sec.  200.19(b)(5) would not require 
disaggregation of graduation rates for AYP purposes until a State makes 
AYP determinations based on school year 2011-2012 assessment results.
    Changes: None.
    Comment: Several commenters recommended requiring disaggregation of 
graduation rate data for AYP purposes earlier than the timelines in 
proposed Sec.  200.19(e). Other commenters, who generally supported the 
regulations, suggested a later timeline to coincide with the use of the 
adjusted cohort graduation rate or, to ensure comparable data, after 
the adjusted cohort rate has been implemented fully for at least two 
years.
    Discussion: Proposed Sec.  200.19(e)(2) would have required States, 
beginning in the 2008-2009 school year, to disaggregate graduation rate 
data (either the AFGR or the adjusted cohort graduation rate) at the 
LEA and State levels for determining AYP, and at the school, LEA, and 
State levels for reporting. All States would have been required to use 
the adjusted cohort graduation rate and disaggregate graduation rate 
for AYP and reporting purposes no later than the 2012-2013 school year.
    The Secretary has modified the timeline for disaggregating 
graduation rate data in the final regulations to require States to 
report disaggregated data for the four-year adjusted cohort graduation 
rate one year before disaggregated data are required for AYP 
determinations. The Secretary believes that this timeline will enable a 
State to resolve any data quality and accuracy issues associated with 
calculating the four-year rate and disaggregating the results prior to 
using those disaggregated results to determine AYP based on school year 
2011-2012 assessment results.
    States that cannot meet the 2010-2011 deadline for calculating the 
four-year rate and receive an extension from the Secretary, as provided 
in new Sec.  200.19(b)(7)(iii), must make AYP determinations using a 
transitional graduation rate, as provided in new Sec.  200.19(b)(2), in 
the aggregate and disaggregated by subgroups at the same time as States 
that implement the four-year rate--that is, for AYP determinations 
based on school year 2011-2012 assessment results.
    Changes: We have made the following changes in the final 
regulations to reflect the modifications to the timeline for 
disaggregating graduation rates:

Reporting

     New Sec.  200.19(b)(4)(ii)(A) requires reporting the four-
year adjusted cohort graduation rate in the aggregate and disaggregated 
by subgroups at the high school, LEA, and State levels on report cards 
providing results of assessments administered in the 2010-2011 school 
year.
     New Sec.  200.19(b)(4)(ii)(B) requires that, if a State 
adopts an extended-year adjusted graduation cohort rate, the State must 
report that rate separately from the four-year rate, in the aggregate 
and disaggregated by subgroups, beginning with the first year for which 
the State calculates such a rate.
     New Sec.  200.19(b)(4)(ii)(C) requires, prior to school 
year 2010-2011, reporting of graduation rate, in the aggregate and 
disaggregated by subgroups, at the high school, LEA, and State levels 
using either the four-year adjusted cohort graduation rate or the 
transitional rate.

[[Page 64461]]

Determining AYP
     New Sec.  200.19(b)(5)(i) requires that a State use the 
four-year adjusted cohort graduation rate, in the aggregate and 
disaggregated by subgroups, at the high school, LEA, and State levels 
for determining AYP beginning with AYP determinations based on school 
year 2011-2012 assessment results.
     New Sec.  200.19(b)(5)(ii) requires that, prior to school 
year 2011-2012, a State calculate graduation rate, in the aggregate, 
using either the four-year adjusted cohort graduation rate or the 
transitional rate, for determining AYP at the high school, LEA, and 
State levels, although disaggregation is required for ``safe harbor.''
     New Sec.  200.19(b)(7)(iii) provides that a State that 
cannot meet the school year 2010-2011 deadline for calculating and 
reporting the four-year rate and receives an extension from the 
Secretary, must make AYP determinations based on school year 2011-2012 
assessment results, in the aggregate and disaggregated by subgroups, 
using the State's transitional graduation rate under Sec.  
200.19(b)(2).
    Comment: One commenter expressed concern that requiring graduation 
rates to be disaggregated for the purpose of calculating AYP may be a 
disincentive for States to set an aggressive graduation rate goal and 
targets.
    Discussion: Although we understand this commenter's concern, as 
noted previously the Secretary will review each State's graduation rate 
goal and targets to ensure that the State sets (1) a single goal that 
represents the on-time graduation rate the State expects all high 
schools to meet, and (2) targets that demonstrate continuous and 
substantial improvement toward meeting or exceeding that goal, in order 
to make AYP.
    Changes: None.
    Comment: Several commenters argued that requiring States to use 
disaggregated graduation rate data in AYP determinations exceeds the 
Secretary's legal authority and has no basis in statute. One of these 
commenters further argued that requiring States to use disaggregated 
graduation rate data in AYP determinations appears to contradict 
section 1111(b)(2)(C)(vi) and (vii) of the ESEA, which, according to 
the commenter, gives States the authority to determine their own other 
academic indicators.
    Discussion: We believe the commenter has misunderstood the 
statutory requirements regarding the need to use other academic 
indicators in determining AYP. Section 1111(b)(2)(C)(vi) of the ESEA 
requires a State to select one other academic indicator (in addition to 
assessment results and assessment participation rates) to be used in 
determining AYP, but also specifies that, for high schools, that 
indicator must be the graduation rate. Thus, graduation rate is a 
required element of determining AYP for high schools, not an element 
that, at a State's discretion, may or may not be adopted. A State has 
discretion to select the other academic indicator for elementary and 
middle schools. In addition under section 1111(b)(2)(C)(vii) of the 
ESEA, a State has discretion to select other academic indicators, in 
addition to those required by section 1111(b)(2)(C)(vi), that must be 
measured separately for each group described in section 
1111(b)(2)(C)(v) of the ESEA, provided those additional indicators do 
not reduce the number of or change the schools that would otherwise be 
subject to school improvement.
    Section 1111(b)(2)(C)(vi) of the ESEA does not explicitly address, 
and thus does not prohibit, the use of results disaggregated by 
subgroup for the other academic indicators required for AYP 
determinations, including graduation rate. We believe that stronger 
subgroup accountability with respect to graduation rate is needed in 
order to accomplish the statutory purpose of Title I--that is, ``to 
ensure that all children have a fair, equal, and significant 
opportunity to obtain a high-quality education'' by closing the 
achievement gap between high- and low-performing students, especially 
between minority and non-minority students and between disadvantaged 
students and their more advantaged peers, and to hold schools and LEAs 
accountable for improving the achievement of all students (see section 
1001 of the ESEA). We believe the best way to close the gap in 
graduation rates among subgroups is to hold schools accountable for the 
graduation rate of those groups. Accordingly, the Secretary has decided 
to require disaggregation of graduation rate data for calculating AYP 
as well as for reporting and believes this regulation is well within 
her regulatory authority under section 1901(a) of the ESEA to ``issue 
such regulations as are necessary to reasonably ensure that there is 
compliance with [Title I].''
    Changes: None.
    Comment: Several commenters stated that minimum group size should 
be considered before including a subgroup's graduation rate in AYP 
determinations. One commenter suggested that the danger in using the 
graduation rate for relatively small subgroups is that small shifts in 
counts of students could generate large changes in graduation rates. 
Some commenters suggested that the same minimum group size used for 
including subgroups in AYP determinations be used for graduation rate 
subgroup accountability. Several commenters also asked whether any of 
the statistical measures allowed in current AYP calculations, including 
multi-year averaging of data and confidence intervals, would be allowed 
for the graduation rate indicator. One of these commenters recommended 
that these statistical measures be permitted in order to minimize the 
effect of normal yearly fluctuations among cohorts of students on AYP 
determinations.
    Discussion: Section 200.7(a) requires that a State determine the 
minimum number of students sufficient to yield statistically reliable 
information for each purpose for which disaggregated data are used. 
This requirement applies to graduation rates used for AYP calculations; 
States are permitted to set minimum group sizes and to use other 
statistical measures, such as multi-year averaging, to ensure 
statistical reliability. Some statistical measures, however, such as 
confidence intervals, which generally are used with samples of a 
population rather than an entire population, would likely not be 
appropriate if applied to graduation rates, which are actual counts of 
individual students in a cohort. The Department will review any 
proposed application of statistical measures to graduation rates as 
part of its review of States' Accountability Workbooks under new Sec.  
200.19(b)(6).
    Changes: None.
    Comment: One commenter stated that the proposed regulations erred 
in requiring a State and its LEAs to report disaggregated graduation 
rates only for the subgroups in Sec.  200.13(b)(7)(ii), which does not 
include gender and migrant status as required by section 1111(h) of the 
ESEA. (Section 200.13(b)(7)(ii) describes the subgroups for AYP 
accountability as economically disadvantaged students; students from 
major racial and ethnic groups; students with disabilities as defined 
in section 9101(5) of the ESEA; and students with limited English 
proficiency as defined in section 9101(25) of the ESEA.) The commenter 
claimed that, by removing gender and migrant status from the statutory 
list of subgroups that must be used for reporting purposes, the 
Department exceeded its rulemaking authority.
    Discussion: The Secretary disagrees with the commenter that the 
proposed regulations erred in requiring disaggregation only for the 
subgroups

[[Page 64462]]

described in Sec.  200.13(b)(7)(ii) (subgroups for determining AYP), 
rather than the subgroups listed in section 1111(h)(1)(C)(i) of the 
ESEA (report cards). The list in section 1111(h)(1)(C)(i), which 
includes gender and migrant status in addition to the subgroups in 
Sec.  200.13(b)(7)(ii), pertains to reporting disaggregated achievement 
results on a State's academic assessments. Section 1111(h)(1)(C)(vi) of 
the ESEA, which requires reporting graduation rates for secondary 
school students, contains no similar list of disaggregation categories. 
Accordingly, we have taken our cue from section 1111(b)(2)(C)(v)(II) of 
the ESEA and Sec.  200.13(b)(7)(ii), which list the subgroups for which 
a State must disaggregate data for AYP purposes. It is these categories 
that a State uses to calculate ``safe harbor'' and that these 
regulations now require for disaggregating AYP results. Therefore, we 
believe it is appropriate to require reporting of disaggregated 
graduation rates only by the categories that are used for other AYP 
purposes, because graduation rate data will already be disaggregated by 
those categories.
    Changes: None.
    Comment: A number of commenters recommended changes to the 
subgroups for which graduation rates must be disaggregated. Several 
commenters, for example, questioned the need to disaggregate by race or 
ethnicity because, they argued, substantial evidence exists to show 
that socioeconomic status is a more meaningful indicator than race when 
it comes to student performance. On the other hand, some commenters 
suggested requiring further disaggregation of student racial subgroups 
by socioeconomic status to reveal a more accurate picture of student 
performance in each subgroup. One commenter recommended that 
disaggregation be required for former LEP students and recently arrived 
LEP students in addition to LEP students in general. One commenter 
suggested requiring disaggregation by additional ethnic subgroups, 
particularly Asian subgroups. Several commenters suggested that the 
regulations require reporting graduation rates in a format that can be 
cross-tabulated so that users of the data can identify and evaluate the 
interplay of race, ethnicity, disability, poverty, and other factors. 
One commenter recommended requiring a State and its LEAs to report data 
on students who do not graduate, disaggregated by the reasons for not 
graduating.
    Discussion: Although the Department understands the intent of these 
commenters, we do not think it would be appropriate or beneficial to 
change the requirements for disaggregating graduation rates beyond the 
subgroups described in Sec.  200.13(b)(7)(ii) that are used for 
determining AYP. We believe that requiring disaggregation of data for 
these subgroups is sufficient to ensure meaningful and comprehensive 
accountability for all high schools and LEAs with respect to graduation 
rate. Further, we are concerned that the more specific the subgroup 
categories, the less likely they would actually be reflected in 
accountability decisions because too few students would likely fall 
into a given category. Further, we note that each State determines 
which major racial and ethnic categories in the State will be used in 
accountability determinations. Although we agree that cross-tabulation 
of subgroups could be informative, we believe that requiring cross-
tabulation would be excessively burdensome and costly for States and 
also could raise privacy concerns if the resulting groups are small. 
Although a State may not eliminate subgroups from those described in 
Sec.  200.13(b)(7)(ii), a State is not prohibited from adding reporting 
categories that may provide additional insights on why students do not 
graduate from high school.
    Changes: None.
    Comment: One commenter recommended that the regulations require 
standardized business rules across States with regard to how they 
calculate graduation rates for certain subgroups (e.g., the LEP 
subgroup or the students with disabilities subgroup) in which students 
may enter or exit during their four years of high school (e.g., 
reporting graduation rates by subgroup based on a student's status as a 
first time 9th grader).
    Discussion: Under current Sec.  200.19(d)(2)(ii), States have been 
required to include disaggregated graduation rates on their State 
report cards since December 2002. States should, therefore, already 
have business rules for determining how to count students who enter or 
exit a subgroup during high school. We agree with the commenter that it 
is important for States to create and maintain these kinds of rules and 
will provide guidance to States on ways to count students who enter or 
exit a subgroup during high school. However, we believe it would be 
inappropriate for the Department to require specific business rules 
across States.
    Changes: None.
    Comment: Some commenters stated that a student who falls within 
more than one subgroup should not be counted in the graduation rate 
more than once. The commenters recommended that the Department develop 
special formulas to address students belonging to more than one 
subgroup so as not to affect unfairly the graduation rate and resulting 
AYP status of schools and LEAs. One commenter recommended permitting 
States to explain to the public that students may be counted in more 
than one subgroup.
    Discussion: The Department declines to address the issue of student 
membership in multiple subgroups in the final regulations. Section 
1111(b)(2)(C)(v) requires AYP to be defined so that it applies 
separately to the achievement of all public elementary and secondary 
school students as well as to the achievement of students in each of 
four specific subgroups: economically disadvantaged, major racial and 
ethnic groups, students with disabilities, and LEP students. This 
provision serves a very important purpose: to focus attention on those 
schools and LEAs in which the ``all students'' group may be achieving 
but in which particular subgroups may not be achieving. The statute 
does not authorize, either expressly or implicitly, a State to choose 
to omit certain subgroups, to ``prioritize'' subgroups and thus give 
greater weight to students in some subgroups over others, or to 
randomly select one of several subgroups to which a student would be 
assigned. There simply is no support in the statute for a State to 
include a student in some but not all of the subgroups in which the 
student is a member. To do so would misrepresent the achievement of 
subgroups.
    We believe it is important to know how each subgroup performs with 
respect to graduation rate. Even if it were possible to develop a 
special formula for assigning students to only one subgroup for the 
purpose of disaggregating graduation rates, such an approach would skew 
the data for particular subgroups, because not all students who fall 
within each subgroup would be counted. However, States may, if they 
choose, explain on their report cards that students may be counted in 
more than one subgroup.
    Changes: None.
    Comment: One commenter asked why high schools must be held 
accountable for subgroup performance for graduation rate when 
elementary and middle schools are not held accountable for subgroup 
performance for their other academic indicators.
    Discussion: The Secretary is requiring disaggregation only of 
graduation rates for determining AYP because she believes it is 
critically important to improve the graduation rates of

[[Page 64463]]

subgroups. By holding schools and LEAs accountable for ensuring that 
each subgroup either meets or exceeds the State's graduation rate goal 
or meets its annual target, we hope to focus greater attention on 
improving graduation rates for all students. Moreover, there is no 
single indicator for elementary or middle schools that has an impact 
comparable to graduation rate on the lives and economic opportunities 
of millions of students. We do not believe that requiring 
disaggregation of the other academic indicators for elementary or 
middle schools would have the same critical effect of improving student 
outcomes that it will for high schools.
    Change: None.

New Sec.  200.19(b)(4) (Proposed Sec.  200.19(e))--Reporting

    Comment: Some commenters recommended that States be required to 
report three-, five-, six- and seven-year graduation rates in addition 
to a four-year rate. One commenter recommended requiring States to 
report an aggregated graduation rate, as well as disaggregated data, on 
the number and percentage of students who drop out of high school, 
attend high school but do not graduate, ``age out'' (i.e., reach the 
State's maximum age for public education and leave high school without 
a regular diploma), transfer to another school, or die. Another 
commenter requested that the regulatory requirements for reporting 
graduation rates be clear so that State reports are accurate and 
comparable. Several commenters suggested that the Department require 
schools to track and report the graduation rates of students who are 
pregnant and students who are parents. One commenter recommended 
requiring States to report dropout rates (aggregated and 
disaggregated), completion rates for students enrolled in alternative 
programs, GED credential completion rates, and rates of students who 
complete high school course requirements but do not pass State high 
school graduation examinations.
    Discussion: States and LEAs must report a four-year rate, as well 
as any extended-year rate they use in AYP calculations, in the 
aggregate and disaggregated by the subgroups described in Sec.  
200.13(b)(7)(ii). As discussed earlier, the final regulations require 
each State and its LEAs to report a four-year rate, consistent with new 
Sec.  200.19(b)(1). In addition, under new Sec.  200.19(b)(1)(v), a 
State may, but is not required to, adopt an extended-year rate. If a 
State does not calculate a four-year rate before the deadline specified 
in new Sec.  200.19(b)(4), the State must use a transitional graduation 
rate, consistent with new Sec.  200.19(b)(2). The requirements in new 
Sec.  200.19(b)(2) are virtually identical to the graduation rate 
definition in current Sec.  200.19(a).
    If a State adopts an extended-year rate, the extended-year rate 
must be reported separately from the four-year rate in order to ensure 
that LEAs and schools are held accountable both for their performance 
in graduating students in the four-year timeframe and for their success 
in teaching students who need more time to obtain a regular high school 
diploma. A State must also report its transitional rate if it does not 
calculate a four-year adjusted cohort graduation rate before the 
deadlines specified in new Sec.  200.19(b)(4).
    We agree that information about the total number of students in the 
graduating cohort, the number who graduated in four years, and the 
number who graduated in more than four years would provide a more 
complete description of how high schools are addressing the needs of 
their students. We also believe that the data would provide the 
Department, States, LEAs, and schools with information that is 
essential in understanding the reasons for low graduation rates and for 
designing better programs and services to help students graduate from 
high school who are at risk of dropping out and those who have dropped 
out. The Department plans to propose that States report these data to 
the EDFacts system, the centralized portal through which States submit 
their education data to the Department. States are currently required 
to submit aggregated and disaggregated graduation rates to EDFacts (OMB 
collection 1810-0614). Requiring these additional data to be reported 
through EDFacts will not add a significant burden to States because 
these data are needed to calculate the four-year adjusted cohort 
graduation rate required in new Sec.  200.19(b)(1)(i) through (iv) and 
any extended-year adjusted cohort graduation rate in new Sec.  
200.19(b)(1)(v). Almost all States have begun the process of developing 
the data systems and data definitions needed to calculate a four-year 
rate. The Department will notify the public of its plans to collect 
these data through a notice in the Federal Register and provide the 
public with an opportunity to comment on these new data collection 
requirements.
    We agree that the other high school data that commenters 
recommended States collect and report (e.g., dropout rates; the number 
of students who age out, become pregnant, or are parents; transfer 
students; and deceased students) might provide useful information. 
However, we do not believe that this information (with the exception of 
dropout rates) is essential and, therefore, decline to add burden to 
States by requiring them to collect and report these data. We note that 
data on the number of students who drop out are currently collected as 
part of the Common Core of Data, and we will continue to collect these 
data. A disaggregated State-level dropout rate is currently collected 
as part of the Consolidated State Performance Report. The Department 
does not anticipate any additional reporting requirements for dropout 
data at this time.
    Changes: As noted earlier, we have revised the final regulations to 
provide in new Sec.  200.19(b)(4) that a State and its LEAs, beginning 
with report cards providing assessment results for the 2010-2011 school 
year, must report, under section 1111(h) of the ESEA (annual report 
cards), the four-year adjusted cohort graduation rate at the school, 
LEA, and State levels in the aggregate and disaggregated by the 
subgroups in Sec.  200.13(b)(7)(ii). In addition, new Sec.  
200.19(b)(4)(ii)(B) requires a State that adopts an extended-year rate 
to report, beginning in the first year for which the State calculates 
such a rate, the extended-year rate separately from the four-year rate.
    Comment: Several commenters stated that the definition of 
``graduation'' under the IDEA and the ESEA are not the same and 
recommended that graduation rate calculations and reporting under the 
two laws be better aligned. Some commenters suggested that the 
Department align the data systems and reporting requirements under the 
IDEA and the ESEA, specifically related to post-school transition 
outcomes.
    Discussion: Neither the IDEA nor the ESEA regulations define 
``graduation,'' but the use of the term is consistent across the 
programs. New Sec.  200.19(b)(1)(iv) of the ESEA regulations and Sec.  
300.102(a)(3)(iv) of the IDEA regulations make clear that a regular 
high school diploma does not include an alternative degree that is not 
fully aligned with the State's academic standards, such as a 
certificate or a GED credential.
    In new Sec.  200.19(b)(1), the Department has established a uniform 
method for calculating graduation rate under the ESEA, rather than the 
multiple methods that were permitted under current Sec.  200.19(a)(1). 
Section 612(a)(15) of the IDEA requires States to establish performance 
goals for children with disabilities that are the same as the annual 
measurable objectives in the State's definition of AYP under the

[[Page 64464]]

ESEA and that address graduation rate, among other factors. We are 
aware that some States do not report the same graduation rates in their 
IDEA State Performance Plans (SPPs) and in their Annual Performance 
Reports (APRs) that they use for calculating AYP under the ESEA. In the 
future, States will be required to use the four-year adjusted cohort 
graduation rate and any extended-year rate in their IDEA SPPs and APRs, 
consistent with the timelines in these regulations, and align the IDEA 
SPP graduation rate goals with the goal and targets that a State uses 
for accountability under Title I.
    However, some differences in reported graduation rates are 
unavoidable. In particular, section 618 of the IDEA requires the 
Department to collect and report by State each year the number and 
percentage of children with disabilities, from age 14 through 21, who 
stopped receiving special education and related services and the 
reasons why those students stopped receiving special education and 
related services. Based on these data, the Department considers the 
ratio of 14 through 21 year old students with disabilities who stopped 
receiving special education and related services (i.e., the 
denominator) with the number of students with disabilities who 
graduated from high school with a regular high school diploma (i.e., 
the numerator). The Department uses these data to report, for 
Government Performance Results Act purposes, a rate of children with 
disabilities who graduate with a regular high school diploma for each 
State that is computed differently than the graduation rate under new 
Sec.  200.19(b)(1).
    Finally, with regard to the recommendation that the Department 
align the data reporting requirements related to post-school transition 
outcomes, we note that, although States are required to report annually 
to the Department post-secondary outcome data related to students with 
disabilities as part of their APRs under the IDEA, there is no similar 
requirement under the ESEA; thus there is nothing to align.
    Changes: None.

Section 200.20(h) Making Adequate Yearly Progress

    Comment: Numerous commenters expressed support for our proposal in 
Sec.  200.20(h) to permit all States to request authority to 
incorporate individual student academic growth (using what is often 
referred to as a ``growth model'') in a State's definition of AYP. One 
commenter stated that the criteria established in Sec.  200.20(h)(2) 
are sufficiently rigorous to ensure that the lowest-achieving students 
must make the greatest gains in order for schools to make AYP using 
measures of individual student growth, while also providing useful 
information about student achievement and growth. Another commenter, 
however, recommended that we adopt clearer and more specific approval 
criteria. Several commenters objected to proposed Sec.  
200.20(h)(2)(i)(B), which would require a State's annual growth targets 
to be based on meeting the State's proficient level of academic 
achievement on the State's assessments and not on individual student 
background characteristics. These commenters stated that a school 
should receive credit for any growth, regardless of whether the growth 
is sufficient to achieve proficiency by 2013-2014. Alternatively, two 
commenters expressed concern that students who are already far behind 
their peers will never reach proficiency and close the achievement gap 
if they make only the same amount of progress as their peers. These 
commenters acknowledged that students who are below grade level must 
make more than a year's growth in a school year to reach proficiency by 
2013-2014. These commenters also expressed concern that States lack the 
technical knowledge necessary to set appropriate growth targets for LEP 
students.
    Discussion: We believe that Sec.  200.20(h) establishes the 
criteria necessary to ensure that schools continue to be held 
accountable for the achievement of all students, while providing 
flexibility for States to propose a variety of growth models that 
provide schools and teachers with useful information on how their 
students are progressing towards grade-level proficiency.
    Consistent with section 1111(b)(2)(F) of the ESEA, a State's 
accountability system must ensure that all students are proficient by 
2013-2014. The Secretary's intent in these regulations is to allow 
States to include accurate measures of individual student academic 
progress in AYP calculations, not to lower expectations for student 
achievement.
    The criteria established in Sec.  200.20(h)(2) help ensure that 
States develop growth models that hold schools accountable for the 
achievement of all students to State standards. It is not sufficient to 
provide ``credit for any growth'' as this would not encourage efforts 
to close the achievement gap, which by definition requires accelerated 
growth.
    In response to the commenters who suggested that States do not have 
the technical expertise to set appropriate targets for LEP students, 
Sec.  200.2(h)(2)(i)(A) and (B) specifically requires a State to 
establish annual targets for individual students that will lead to all 
students being proficient by the 2013-2014 school year and that the 
annual targets be based on meeting the State's proficient level of 
academic achievement on the State's assessments, not on an individual 
student's background. Therefore, setting growth targets does not 
require expertise in the achievement of particular groups of students 
(e.g., LEP students). Rather, States must have the technical 
understanding of how to establish appropriate student academic growth 
targets that result in all students reaching grade-level proficiency. 
Schools must make the greatest gains with the lowest-achieving students 
because the expectation for reaching or exceeding grade-level 
proficiency remains the same for all students and groups of students. 
Thus, in order for a school or LEA to make AYP using its growth model, 
the achievement gap must continue to close. Moreover, although growth 
models must measure the growth of students who are at or above 
proficiency in order to provide information to schools and parents, 
their performance may not be used to mask the lack of growth for 
students who are below proficient.
    Changes: None.
    Comment: A number of commenters disagreed with the criterion 
proposed in Sec.  200.20(h)(2)(iv), which would require a State's 
growth model to be based on State assessments that produce comparable 
results from grade to grade and from year to year in mathematics and 
reading/language arts, have been in use by the State for more than one 
year, and have received full approval from the Secretary. Some 
commenters argued that States should be allowed to use adaptive and 
formative assessments in their growth models. One commenter recommended 
revising the criterion to permit a specified amount of annual growth 
through the use of pre- and post-test gains as a more accurate measure 
of accountability for instructional gains.
    Discussion: Section 1111(b)(3) of the ESEA requires States to 
develop and implement student academic assessments and to use the 
results of those assessments in reading/language arts and mathematics 
to determine AYP. Because strong accountability depends on the quality 
of those assessments, section 1111(b)(3)(C) sets forth a number of 
requirements that a State's assessments must meet. The Secretary 
believes strongly that these requirements must also be the basis for

[[Page 64465]]

measuring individual student growth. The regulations do not prohibit a 
State from using any particular form of assessment, such as adaptive 
assessments or pre- and post-test gains to measure student achievement 
for determining AYP, provided those assessments meet the requirements 
in section 1111(b)(3)(C) of the ESEA and Sec. Sec.  200.2 and 200.3.
    Changes: None.
    Comment: A few commenters objected to the requirement in Sec.  
200.20(h)(2)(iv)(C) that allows a State to use a growth model only if 
the State has a fully approved standards and assessment system. One 
commenter suggested that States with partial approval of their 
assessment systems be allowed to implement a growth measure using the 
approved assessments. The commenter argued that disapproval of a 
State's alternate assessment that, even if approved, would not be able 
to measure student growth accurately should not preclude a State from 
using a growth model. Another commenter expressed concern that the 
requirement for full approval of a State's assessment system 
potentially excludes many States that use additional assessments at the 
high school level that are not used for AYP determinations under NCLB 
and, therefore, are not approved by the Secretary through the peer 
review process. This commenter recommended amending the criteria in 
Sec.  200.20(h)(2)(iv)(C) to permit the use of State assessments to 
measure individual student academic growth at the high school level if 
at least one assessment used in the growth model calculation receives 
full approval by the Secretary and if the other assessments used in the 
growth model, while not required to receive the Secretary's approval, 
produce results comparable to the results from assessments approved by 
the Secretary.
    Discussion: The foundation of a State's accountability model is its 
standards and assessments in reading/language arts and mathematics. The 
desire to incorporate individual student growth into AYP determinations 
is not a rationale for undermining that foundation. The Secretary 
believes strongly that for a State to be eligible to implement a growth 
model it must have fully approved assessments in reading/language arts 
and mathematics, which include alternate assessments for students with 
disabilities. States must be able to demonstrate that they have the 
capacity to develop and administer such assessments and ensure that all 
students are validly and reliably assessed before turning their 
attention to developing a model to measure individual student academic 
growth.
    Changes: None.
    Comment: We received several comments about how to account for 
students with disabilities in a State's growth model. One commenter 
stated that a State's growth model should measure the achievement of 
students with disabilities based on progress in meeting their IEP goals 
in order to be consistent with the IDEA. Others stated that the 
criteria for growth models should specifically require States to 
include the scores of students with disabilities who take alternate 
assessments based on alternate, modified, or grade-level academic 
achievement standards.
    Discussion: The Department has previously addressed in other 
rulemakings whether States may measure the achievement of students with 
disabilities against the goals in their IEPs, rather than against 
grade-level academic achievement standards for purposes of determining 
AYP. The Department's position has consistently been that this practice 
does not comply with the ESEA (see 68 FR 68698 (Dec. 9, 2003)) and we 
have no reason to adopt a different position now. Section 1111(b)(1)(B) 
of the ESEA requires a State to apply the same grade-level academic 
content and academic achievement standards to all students in the 
State, including students with disabilities. Section 1111(b)(3)(C)(ix) 
of the ESEA requires a State's assessment system, which is based on 
these grade-level achievement standards, to assess students with 
disabilities, with or without appropriate accommodations. Except for 
the small population of students with disabilities for whom the 
Department's regulations in Sec.  200.6(a)(2) permit a State to measure 
achievement with alternate assessments based on alternate or modified 
academic achievement standards, students with disabilities must be 
assessed based on the State's grade-level academic achievement 
standards, not a student's IEP goals. There is no reason that measuring 
individual student academic growth should be based on anything 
different.
    We agree with the comment that students with disabilities who are 
assessed with an alternate assessment should, to the extent possible, 
be included in a State's growth model. The Department believes it is 
possible to include results from alternate assessments based on 
alternate academic achievement standards in a growth model. Currently, 
two of the 11 States approved in the growth model pilot include results 
from their alternate assessments based on alternate academic 
achievement standards in the State's growth model. The Department 
strongly encourages States to pursue models that include the results of 
alternate assessments based on alternate academic achievement 
standards.
    However, we understand that not all alternate assessments can 
support a growth measure. In many cases, the technical complexity 
needed for a State's growth model may not be supported by alternate 
assessments based on alternate or modified academic achievement 
standards. Alternate assessments based on modified academic achievement 
standards, in particular, are still in their infancy, not having been 
permitted until the Department's April 2007 Title I regulations,\12\ 
and currently no State has met all ESEA requirements for these 
assessments. As such, it may be difficult for a State that is 
developing an alternate assessment based on modified academic 
achievement standards to achieve the stability in those assessments 
necessary to meaningfully and validly include the results in its growth 
model. The Department will continue to work with States on 
understanding how these assessments can best be included in growth 
models and encourages States to pursue models that support the 
inclusion of alternate assessments based on modified academic 
achievement standards. States submitting growth model proposals to the 
Department for peer review should include all students in their growth 
model, to the extent possible, and must provide a justification for the 
exclusion of any students. We note, however, that all students, 
including students with disabilities who take alternate assessments 
must be included in AYP determinations under Sec.  200.20(a)(1) 
(``status'') and Sec.  200.20(b) (``safe harbor'').
---------------------------------------------------------------------------

    \12\ 12 FR 17748, April 9, 2007.
---------------------------------------------------------------------------

    Changes: None.
    Comment: Several commenters supported the use of growth models 
generally, but stated that it is too early to allow all States to use a 
growth model because there is still much to be learned from the 
original growth model pilot. The commenters recommended that a report 
on the lessons learned from the original growth model pilot be 
completed before the Department allows all States to adopt growth 
models.
    Discussion: The Secretary believes that these commenters may have 
misunderstood the intent of the proposed regulations. The regulations 
do not provide blanket authority for all States to incorporate 
individual student

[[Page 64466]]

academic progress in their definitions of AYP. Rather, the regulations 
establish the criteria that a State must meet before the State may 
implement such a model. We believe that the criteria in proposed Sec.  
200.20(h) provide sufficient rigor to ensure that schools are held 
accountable for the grade-level achievement of all students, while 
giving schools the opportunity to demonstrate progress toward this 
goal. Therefore, although the regulations afford all States the 
opportunity to implement a growth model, in order to implement such a 
model a State must demonstrate that its growth model meets all seven 
criteria described in Sec.  200.20(h)(2)(i) through (vii). Moreover, as 
with the proposals submitted in the growth model pilot, a State's 
proposal to use a growth model must be approved by the Department 
through its peer review process.
    Changes: None.
    Comment: One commenter supported the expanded use of growth models, 
but encouraged the Department to ensure that States have data systems 
that are technically capable of supporting a growth model.
    Discussion: The Department agrees with this commenter that it is 
important for a State using a growth model to have a data system that 
can accurately measure student academic growth on the State's 
assessments from grade to grade. Section 200.2(h)(2)(iv) and (v) 
require that a State wishing to incorporate student academic growth in 
its definition of AYP have a fully approved assessment system that has 
been operational for more than one year and a data system that can 
track student progress through the State data system. This is 
particularly important for students who move between schools or LEAs 
over time. Through the Department's peer review process, we will ensure 
that a State's data system is sufficiently robust to support the 
State's growth model.
    Changes: None.
    Comment: One commenter recommended that the regulations reflect the 
urgency of high school accountability by promoting States' efforts to 
incorporate individual student academic progress into high school 
accountability determinations.
    Discussion: The Department agrees that there is a need for greater 
accountability at the high school level. The ESEA, however, requires 
only one year of testing at the high school level. As a result, it is 
difficult for a State to accurately measure growth from a student's 8th 
grade assessment to his or her high school assessment. For this reason, 
the Secretary does not believe it would be appropriate to require 
States to incorporate individual student academic progress into high 
school accountability determinations; however, we welcome and encourage 
States to find innovative ways to include individual student academic 
progress in measures of academic achievement at the high school level.
    Changes: None.
    Comment: One commenter requested that the Department add a 
requirement for LEAs to provide a plan for measuring student academic 
growth for students who transfer or transition out of traditional high 
school settings into alternative educational settings, such as 
workforce training or post-secondary ``bridge'' programs. The commenter 
stated that growth models are particularly helpful for alternative 
educational settings that cater to struggling students.
    Discussion: A State that implements individual student academic 
growth measures at the high school level should include students who 
transfer to alternative high schools. Tracking such students should be 
possible because Sec.  200.20(h)(2)(v) requires a State to demonstrate 
that it has a data system capable of tracking students as they move 
between schools or LEAs over time. However, as explained in the 
response to the previous comment, because most States administer a high 
school assessment in only one grade, it is often difficult to measure 
student growth at the high school level, regardless of whether students 
are transferring schools. As a result, the Secretary declines to adopt 
the commenter's suggestion.
    Changes: None.
    Comment: One commenter supported the proposal to permit States to 
incorporate individual student academic growth in their definitions of 
AYP, but asked that the Department also increase scientifically based 
research on the development of growth models. The commenter also 
recommended requiring States to obtain stakeholder input in the 
development of their growth models.
    Discussion: The Department recognizes the importance of 
scientifically based research and is supporting an external evaluation 
of the growth model pilot, which will inform the field and increase the 
level of knowledge about successful growth models that other States 
might replicate.
    With regard to the recommendation to require States to obtain 
stakeholder input, we agree that stakeholder input in the development 
of a State's growth model is important, particularly given that most 
growth models include very complex mathematical formulas and 
computations that require technical expertise. However, we believe that 
each State is in the best position to determine how and when to involve 
stakeholders in the process of developing its growth model.
    Changes: None.
    Comment: Several commenters supported the proposed regulations, 
stating that they will add consistency to how growth models are 
approved and implemented. However, these commenters questioned how the 
regulations would affect the Department's ability to approve 
flexibility agreements under section 9401 of the ESEA. Specifically, 
these commenters stated that the purpose of section 9401 is to permit 
and support innovation by States through waivers of statutory or 
regulatory requirements, and that the constraints included in proposed 
Sec.  200.20(h) would potentially undermine that purpose. These 
commenters requested clarification regarding whether the Secretary 
would retain authority to approve applications for flexibility under 
section 9401, including growth model applications.
    Discussion: The Secretary's intent in promulgating the criteria in 
Sec.  200.20(h) that a State's growth model must meet is to establish 
clear criteria that the Department can apply consistently in approving 
flexibility agreements proposing the use of growth models under section 
9401 of the ESEA. To the extent that a State's growth model proposal is 
particularly innovative or unique in ways that conflict with the 
regulatory criteria in Sec.  200.20(h), the Secretary may exercise her 
authority in section 9401 to waive those criteria, as she can with most 
other statutory and regulatory requirements. Given that Sec.  200.20(h) 
reflects the criteria that the Secretary deems essential for quality 
growth models, however, we do not anticipate that the Secretary will 
need to waive those criteria in many, if any, circumstances. These 
regulations in no way constrain the Secretary's authority to approve 
flexibility agreements under section 9401 with regard to other matters.
    Changes: None.
    Comment: Several commenters stated that the criteria in proposed 
Sec.  200.20(h)(2) are too restrictive and that the models that the 
Department would allow under the regulations are really trajectory 
models that do not give full credit for gains in student achievement. 
One of the commenters added that, because of the restrictions imposed 
by the criteria in Sec.  200.20(h)(2), the growth models approved by 
the Department would produce the same results as status models.

[[Page 64467]]

    Discussion: The Department disagrees that the requirements 
established by Sec.  200.2(h)(2) are too restrictive. Through the 
growth model pilot, the Department approved a variety of models. These 
models include trajectories of student performance, as well as value 
tables that assign points based on movement across achievement levels. 
In response to the comment that growth models produce the same results 
as status models because the Department's criteria for growth models 
are restrictive, we note that the relevant question for growth models 
is whether they truly measure gains in student achievement in a school 
or LEA, not the degree to which AYP determinations may vary using a 
growth model versus a status model or as a way for more schools to make 
AYP. We believe that growth models can strengthen accountability by 
providing more useful information on the performance of individual 
students to schools, teachers, and parents.
    Changes: None.
    Comment: One commenter objected to the statement in the preamble in 
the NPRM that encouraged States to include a teacher identifier in 
their data systems. The commenter argued that this statement was 
included to promote teacher pay-for-performance initiatives. The 
commenter noted that experts do not believe it is possible to validly 
isolate and evaluate the effect of teachers on student achievement. 
Another commenter, however, supported the statement.
    Discussion: We believe that the information gained by including a 
teacher identifier could provide States, schools, and teachers with 
valuable information to guide a number of policy objectives; for 
example, linking student performance with specific teachers could guide 
professional development or other instructional improvement strategies. 
We note, however, that the criteria in Sec.  200.20(h)(2) do not 
require a State's growth model to include a teacher identifier.
    Changes: None.
    Comment: One commenter requested that funds be appropriated to 
support States in implementing a longitudinal student information 
system.
    Discussion: Through the IES' Statewide Longitudinal Data Systems 
program, the Department has provided almost $122 million to 27 States 
to design, develop, and implement statewide longitudinal data systems 
that can accurately manage, analyze, disaggregate, and use individual 
student data. In addition, the President's fiscal year 2009 budget 
request for this program is $100 million, a significant increase 
intended to support new awards to States that have not yet received 
funding under the program, while also supporting the expansion of 
systems in previously funded States. The 2009 budget request could 
support approximately 32 new awards for developing longitudinal data 
systems or expanding existing data systems to include postsecondary and 
workforce information, as well as funding for State coordinators and 
data coordination. It is the Congress, however, and not the Department, 
that makes the final decision on Federal education appropriations.
    Changes: None.
    Comment: Several commenters agreed that States should be permitted 
to use individual student academic growth measures when determining 
AYP, but asked that the Department permit any State that would like to 
use such a model to do so.
    Discussion: Section 200.20(h) does not limit the number of States 
that may incorporate individual student academic growth into their AYP 
definitions, but establishes specific criteria growth models must meet 
to ensure that they produce technically sound results that uphold the 
core tenets of the NCLB. The criteria outlined in Sec.  200.20(h) are 
designed to promote ingenuity while ensuring that States have the 
capacity to implement growth measures through stable standards and 
assessments that are part of data systems that can track student 
progress and measure student achievement over time so as to ensure 
accountability for grade-level proficiency in reading and mathematics.
    Changes: None.
    Comment: A few commenters suggested amending Sec.  200.20(h) to 
allow States to implement other types of growth measures, particularly 
for States that do not have the capacity to measure individual student 
progress.
    Discussion: The intent of Sec.  200.20(h) is to guide the 
development and implementation of measures of individual student 
academic progress. A State with an innovative growth model that does 
not measure individual student academic progress may request permission 
to use that model for purposes of determining AYP through a flexibility 
agreement under section 9401 of the ESEA that the Secretary may grant, 
at her discretion. States that do not have the capacity to measure 
individual student progress are already using a group measure of 
progress through what is referred to as ``safe harbor.'' This approach 
allows a school to make AYP when the percent of students who were not 
proficient from one year to the next decreases by at least 10 percent. 
This is, in fact, a measure of school progress already allowed and used 
by every State.
    Changes: None.
    Comment: A few commenters requested that the Department expand upon 
Sec.  200.20(h)(3), which requires a State's growth model proposal to 
be peer reviewed. These commenters suggested that experts in the 
teaching and learning of LEP students and students with disabilities be 
a part of the peer review process.
    Discussion: The Department intends, throughout the peer review of 
State growth model proposals, to continue to include peers with 
expertise in assessing students with diverse needs, as has been the 
case under the growth model pilot.
    Changes: None.

Section 200.22 National Technical Advisory Council (National TAC)

Section 200.22(a) Purpose of the National TAC

    Comment: One commenter stated that establishing the National TAC 
should not result in another layer of review of State accountability 
plans, like the Title I peer review process, that could prevent States 
from implementing innovative accountability solutions. One commenter 
recommended that the expert findings from the National TAC inform the 
peer review process and provide guidelines to States on what 
constitutes acceptable practice in technical areas. Another commenter 
stated that there appeared to be overlap in the roles of the National 
TAC and the peer review process and asked how the peer review panels 
and the National TAC would coordinate their responsibilities. The 
commenter stated that the membership of the National TAC appears to 
focus primarily on individuals with technical knowledge in statistics 
and psychometrics, which appears inconsistent with the requirements for 
the peer review process in section 1111(e) of the ESEA. Another 
commenter stated that the purpose of the National TAC should be to 
review and approve or deny State accountability plans.
    Discussion: The functions of the peer review process and the 
National TAC are different, but complementary. Section 1111(e)(1)(A) of 
the ESEA requires the Secretary to establish a peer review process for 
the review of State plans and to appoint peer reviewers who are 
representative of parents, teachers, SEAs, and LEAs, and familiar with 
educational standards, assessments, accountability, the needs of low-
performing schools, and other

[[Page 64468]]

educational needs of students. The National TAC will not replace this 
peer review process and will not review, or recommend for approval or 
disapproval, individual State accountability plans. Rather, the 
National TAC will consider complex technical issues that affect all 
States, and on which the Department would benefit from discussions with 
experts in the fields of educational standards, assessments, 
accountability, statistics, and psychometrics (e.g., the appropriate 
use of confidence intervals and performance indexes). The Department 
intends to use the advice from the National TAC to inform the peer 
review process and provide guidance to States. In sum, the National TAC 
will have a broad advisory role but will not participate in the review 
and approval of individual State accountability plans.
    Changes: None.
    Comment: One commenter stated that creating a National TAC to 
advise the Secretary empowers the current Secretary or future 
secretaries with additional authority well beyond that which is 
circumscribed by the law creating the U.S. Department of Education.
    Discussion: We do not agree that creating the National TAC is 
beyond the authority of the Department of Education Organization Act 
(DEOA) (Pub. L. 96-88), 20 U.S.C. 3401 et seq. There is a long history 
of the Federal government seeking advice from the public on Federal 
policies and programs. Recognizing the value of advice from the public, 
Congress enacted the Federal Advisory Committee Act (FACA) (Pub. L. 92-
463), 5 U.S.C. App. 2, in 1972. Section 3(2) of FACA specifically 
provides that committees may be established by statute, reorganization 
plan, or the President, or by a Federal agency. The Department will 
ensure that the National TAC adheres to the requirements of FACA and 
operates in a transparent and open manner, including by providing 
opportunities for the public to comment.
    Changes: None.
    Comment: Numerous commenters supported the formation of the 
National TAC so long as it includes widely respected scholars and 
practitioners and is non-partisan. However, one commenter questioned 
the value of and compelling need for the National TAC at this time, and 
a few commenters stated that appointments to the National TAC should be 
made by a new Administration. Another commenter stated that 
establishing the National TAC is in direct conflict with the effective 
and efficient administration of Title I.
    Discussion: We agree that the National TAC should include widely 
respected scholars and practitioners and be nonpartisan. That is why 
Sec.  200.22(b)(3) requires a very public and open process for 
soliciting nominations from the public for National TAC members and 
Sec.  200.22(b)(1) requires the National TAC to include persons who 
have knowledge of and expertise in the design and implementation of 
educational standards, assessments, and accountability systems, 
including experts with technical knowledge related to statistics and 
psychometrics.
    On August 13, 2008, Secretary Spellings announced the appointment 
of 16 members to the National TAC. All members are experts in 
assessment and accountability and represent a range of backgrounds from 
academicians and researchers to national, State, and local 
policymakers. The following Web site has a list of the council members 
and their affiliations: http://www.ed.gov/news/pressreleases/2008/08/08132008.html. Proposed Sec.  200.22(b)(2) would have provided for 10 
to 15 National TAC members. We have changed the number of members to 10 
to 20 to conform with the Secretary's desire to appoint 16 members to 
the National TAC.
    We do not agree that creation of the National TAC is in direct 
conflict with the effective and efficient administration of Title I, or 
that appointments to the National TAC should be made by a new 
Administration. There are a number of complex technical issues related 
to State standards, assessments, and accountability systems that we 
have identified as important issues to be considered by the National 
TAC. For example, the appropriate use of confidence intervals and 
performance indexes in determining AYP are issues that would benefit 
from immediate consideration by the National TAC. In addition, we plan 
to use the National TAC to advise the Department on how a State should 
determine an appropriate minimum group size taking into consideration 
other elements of the State's AYP definition, consistent with the 
amendments to Sec.  200.7 that we are adopting. We believe that 
addressing these issues as soon as possible will benefit the 
Department, States, and, ultimately, students in ensuring that State 
standards and assessments are of the highest technical quality and that 
State accountability systems hold schools and LEAs accountable for the 
achievement of all students.
    Changes: The number of National TAC members has been changed from 
``10 to 15'' to ``10 to 20'' in Sec.  200.22(b)(2).
    Comment: One commenter stated that the Department should not rely 
solely on the National TAC for advice, but should utilize existing 
resources in the Department (e.g., IES) and other agencies (e.g., 
National Science Foundation), as well as commissioned studies (e.g., by 
the Government Accountability Office (GAO)) in making decisions on 
technical issues related to standards, assessments, and accountability.
    Discussion: We agree with the commenter. The Department values the 
information provided by existing resources in the Department, as well 
as information provided by other agencies and commissioned studies. The 
Department will continue to avail itself of these resources, along with 
the advice of the National TAC, in addressing technical issues related 
to the design and implementation of standards, assessments, and 
accountability systems.
    Changes: None.
    Comment: One commenter supported the creation of the National TAC, 
but stressed that it should be sensitive to State authority and the 
need to permit latitude for States to develop their own innovative 
approaches to standards, assessments, and accountability systems. 
Several commenters expressed concern that the National TAC not adhere 
to a ``one-size-fits-all'' approach.
    Discussion: The Department has no intention of using the National 
TAC to arrive at a single national answer to every issue it is asked to 
address, nor do we believe that the regulatory language implies or 
suggests that this is the Department's intent. We recognize a State's 
authority to develop its own standards, assessments, and accountability 
system.
    Changes: None.
    Comment: One commenter recommended that States receive technical 
assistance from the National TAC at least six months prior to the date 
a State's revised accountability plan is due.
    Discussion: The purpose of the National TAC is to advise the 
Secretary on key technical issues related to State standards, 
assessments, and accountability systems that are part of State plans. 
We do not anticipate that the National TAC will provide direct 
technical assistance to States. However, we do anticipate using the 
advice that we receive from the National TAC to provide technical 
assistance to States on improving their accountability systems.

[[Page 64469]]

    Changes: None.
    Comment: One commenter suggested that the National TAC consider how 
the Carl D. Perkins Career and Technical Education Act of 2006, Public 
Law 109-270, 20 U.S.C. 2301 (Perkins Act), relates to NCLB and examine 
ways to better align the Perkins Act with NCLB and to incorporate the 
learning that takes place in work-based settings into accountability 
determinations.
    Discussion: The National TAC will focus on key technical issues 
related to State standards, assessments, and accountability systems 
that are part of State plans under Title I. Examining the alignment of 
the Perkins Act with NCLB would not be in keeping with the Department's 
intentions for the National TAC. However, the National TAC may consider 
requirements under the Perkins Act that are related to State standards, 
assessments, and accountability under Title I.
    Changes: None.
    Comment: One commenter recommended that the National TAC (a) focus 
on ensuring that the reauthorized ESEA meets the needs of the education 
community; (b) work with the education research community to develop 
new research that is informed by and useful to education practitioners; 
(c) provide advice to the Department about how the Department can 
develop guidance with recommendations that can be most effectively 
implemented in schools; and (d) offer guidance about how the Department 
can best communicate with teachers and the larger education community.
    Discussion: The recommendations provided by the commenter are not 
in keeping with the Department's intention for the National TAC, which 
is that it advises the Secretary on key technical issues related to 
State standards, assessments, and accountability systems that are part 
of State plans under Title I.
    Changes: None.

Section 200.22(b) Members of the National TAC

    Comment: Various commenters recommended that parents; current K-12 
teachers and practitioners; principals; professional groups concerned 
with measuring student achievement; educators with an understanding of 
career and technical education; and individuals representing all core 
academic subjects, including social studies, music, and other arts, be 
required members of the National TAC. Other commenters stated that the 
National TAC should include a cross-section of experts, including 
practitioners in the areas of curriculum, standards, measurement, 
statistics, psychometrics, policy, and State and LEA accountability 
systems. Several commenters stated that the National TAC should not be 
limited to experts, but include practitioners, members of community-
based organizations, and professionals who reflect the interests of 
LEAs and communities.
    Discussion: The purpose of the National TAC is to advise the 
Secretary on key technical issues related to State standards, 
assessments, and accountability systems. The National TAC will consider 
complex issues that affect all States, as well as issues that would 
benefit from discussions with experts in the field. Section 
200.22(b)(1) specifically requires the members of the National TAC to 
have knowledge of and expertise in the design and implementation of 
educational standards, assessments, and accountability systems, 
including technical knowledge related to statistics and psychometrics. 
Individuals who meet these criteria and who are also parents, current 
K-12 teachers and practitioners, principals, educators with an 
understanding of career and technical education, representatives of 
professional groups concerned with measuring student achievement, 
members of community-based organizations, individuals with expertise in 
core academic subjects, and others would bring important perspectives 
to the National TAC. However, we do not agree that such individuals 
without technical expertise in standards, assessments, and 
accountability should be required members of the National TAC.
    Changes: None.
    Comment: Many commenters emphasized the importance of ensuring that 
National TAC members are trusted by the States and include experts with 
knowledge about the operational aspects of administering assessments 
and with experience in handling the practical challenges that States 
and LEAs face in implementing assessment and accountability systems. 
Other commenters emphasized the importance of including local education 
practitioners as members of the National TAC in order to ensure that 
the realities of NCLB implementation in schools and LEAs are 
considered. A few commenters recommended that at least 50 percent of 
the members be individuals who are directly responsible for 
implementing the requirements of NCLB.
    Discussion: We agree that it is important to include experts with 
first-hand knowledge of and experience in assessments and 
accountability at the State and local levels as members of the National 
TAC. That is why Sec.  200.22(b)(1) requires the National TAC to 
include members with knowledge and expertise in the design and 
implementation of educational standards, assessments, and 
accountability systems. The 16 members that the Secretary appointed to 
the National TAC on August 13, 2008 reflect her desire for the National 
TAC to include experts with State and local experience in assessments 
and accountability. We believe that experts with experience in these 
areas, regardless of whether they are currently directly responsible 
for implementing NCLB, have valuable information and experiences to 
contribute to the National TAC. Moreover, the primary purpose of the 
National TAC is to advise the Secretary on technical issues (such as 
statistical validity and reliability) related to the standards, 
assessments, and accountability systems required by NCLB. For this 
reason, the membership of the National TAC is necessarily weighted 
toward individuals with technical expertise.
    Changes: None.
    Comment: A number of commenters objected to the Secretary 
appointing the members of the National TAC. One commenter stated that 
National TAC members should be selected independently and suggested 
that the President of the National Academy of Sciences screen and 
select members. Another commenter recommended that the members be 
appointed by their peers. Several commenters recommended that States 
and LEAs play a role in appointing members to the National TAC. Other 
commenters stated that stakeholder organizations should be permitted to 
elect a member with appropriate expertise to serve on the National TAC. 
Another commenter urged the Department to ensure that the process for 
selecting National TAC members is fully transparent, explicit, and 
inclusive and that the selection process for the National TAC meets the 
requirements of FACA so as to ensure a fair and balanced council. The 
commenter stated that it is critical to include diverse viewpoints and 
identify potential conflicts of interest when decision-makers are being 
chosen so that processes remain fair and open. One commenter stated 
that the specific criteria used in the selection process were not 
included in the regulations and that, unless a more transparent and 
inclusive process to select the members is provided, the National TAC 
would have no credibility.
    Discussion: Section 200.22(b)(3) requires the use of a very public 
and open process to solicit nominations

[[Page 64470]]

from the public for National TAC members. The selection of National TAC 
members complied with the requirements of FACA that the council be 
fairly balanced in terms of points of view, including the members' 
backgrounds and qualifications. We believe that this requirement, along 
with the requirements in Sec.  200.22(b)(1) that members of the 
National TAC have knowledge of and expertise in the design and 
implementation of educational standards, assessments, and 
accountability systems, sufficiently outlines the criteria for 
selecting National TAC members.
    The members of the National TAC are Special Government Employees 
(SGEs) and, as such, are subject to all Federal conflict-of-interest 
laws and regulations. Consistent with FACA and the members' status as 
SGEs, the Department provided prospective members of the National TAC 
with information regarding the Department's standards of conduct, 
including those imposed by Federal conflict-of-interest statutes. As 
required in Sec.  200.22(b)(4), the Secretary screened nominees for 
membership on the National TAC for potential conflicts of interest in 
order to prevent, to the extent possible, such conflicts, or the 
appearance thereof, in the National TAC's performance of its 
responsibilities under this section.
    We do not agree that the selection of the National TAC members 
should be made by anyone other than the Secretary. The purpose of the 
National TAC is to advise the Secretary on key technical issues related 
to State standards, assessments, and accountability systems. It would 
defeat the purpose of the National TAC for the Secretary and the 
Department to select members of the National TAC who did not represent 
a range of perspectives, from a variety of fields, and with diverse 
viewpoints. That is why the regulations specifically require that the 
National TAC include persons who have knowledge of and expertise in the 
design and implementation of educational standards, assessments, and 
accountability systems, including experts with technical knowledge 
related to statistics and psychometrics.
    Changes: None.
    Comment: Several commenters recommended that the National TAC 
include members who represent the diverse needs and situations of 
States. The commenters stated that the National TAC should include 
members from different geographic regions of the United States, and 
members from States that differ in terms of their size and populations. 
Several commenters stated that the National TAC should include members 
with knowledge of and expertise with diverse student populations. A 
number of commenters supported the creation of the National TAC so long 
as it includes at least one member with expertise on assessment and 
accountability for students with disabilities, including students with 
the most significant cognitive disabilities. Several commenters 
recommended requiring at least one member of the National TAC to have 
knowledge in the design and implementation of educational standards, 
assessments, and accountability systems for LEP students.
    Discussion: We agree that the National TAC should include members 
who have experience with diverse populations, such as students with 
disabilities and LEP students and have modified Sec.  200.22(b)(1) to 
require inclusion of members with that expertise. We note that the 
members of the National TAC appointed by the Secretary on August 13, 
2008 include such experts. Regarding the comment that members come from 
different regions of the United States and from small and large States, 
we do not believe that selecting members based on where they live would 
be beneficial in enabling the National TAC to fulfill its purpose and, 
therefore, decline to make the change suggested by the commenter. 
Nevertheless, we also note that the members of the National TAC 
appointed in August represent a cross section of the Nation.
    Changes: We have revised Sec.  200.22(b)(1) to require the National 
TAC to include persons who have knowledge of and expertise in the 
design and implementation of educational standards, assessments, and 
accountability systems for all students, including students with 
disabilities and LEP students.
    Comment: One commenter asked for information about the tenure of 
National TAC members, including whether there will be a rotation 
schedule for selecting members and whether membership on the National 
TAC will be connected to a specific Secretary's tenure. Another 
commenter recommended requiring that appointments to the National TAC 
be made at the discretion of the Secretary and not include fixed terms 
of service.
    Discussion: All members serve at the pleasure of the Secretary. The 
next Secretary may appoint new members at his or her discretion. That 
said, the charter provides that each member appointed by the Secretary 
shall serve a term of three years, except that the terms of the initial 
members shall be staggered as follows: One year for five members; two 
years for five members; and three years for six members. Initial terms 
of members are determined by a random selection process at the time of 
appointment. No member may serve more than two terms.
    Changes: None.

Section 200.22(d) Rules of Procedure for the National TAC

    Comment: Several commenters asked how the Department and the 
Secretary will ensure that there is a balanced perspective on issues 
considered by the National TAC. A number of commenters emphasized the 
importance of ``transparency'' in the operation of the National TAC. 
Several commenters urged that the meetings of the National TAC be 
public so that States and the public can participate and understand the 
recommendations made to the Department. One commenter recommended 
requiring transparency so that members of the public would not have to 
exercise their rights under the Freedom of Information Act. One 
commenter supported the National TAC in theory, but opposed the 
proposed regulation, stating that the process for creating the National 
TAC lacked safeguards against bias. Another commenter expressed concern 
that a small group of people would have the power to drive assessment 
policies and stated that the proposed regulations gave too much power 
to an advisory council that the public would not be able to hold 
accountable. The commenter stated that the Secretary and Congress 
should not rely on a single source of advice, but should obtain advice 
from a variety of professionals, practitioners, and organizations 
representing many fields of expertise in order to ensure that a broad 
cross-section of the public will be heard and to mitigate against a 
panel skewed by ideology or special interests.
    Discussion: The National TAC operates in a manner that is open and 
transparent to the public and provides opportunities for a fair and 
balanced discussion of the issues. The National TAC strictly adheres to 
FACA, which requires that meetings be announced at least fifteen days 
in advance and that meetings are presumed to be open to the public 
except in certain limited circumstances. In short, the provisions of 
FACA require that the Department: (a) Arrange meetings of the National 
TAC at reasonably accessible and convenient locations and times; (b) 
publish advance notice of meetings in the Federal Register; (c) open 
National TAC meetings to the public; (d) make available for public 
inspection, subject to the exceptions of the Freedom of Information 
Act, papers and records, including detailed minutes of each

[[Page 64471]]

meeting; and (e) maintain records of expenditures.
    In addition, as required by FACA, the Department has appointed a 
full-time Federal employee (Designated Federal Official, or DFO) who 
will (a) call, attend, and adjourn meetings of the National TAC; (b) 
approve agendas; (c) maintain required records on costs and membership; 
(d) ensure efficient operations; (e) maintain records for availability 
to the public; and (f) provide copies of council reports to the 
Department's Committee Management Officer for forwarding to the Library 
of Congress.
    We believe that the commenter's concerns that a small group of 
people would have the power to drive assessment policies are unfounded. 
The National TAC is an advisory committee, not a policy-making body. As 
such, it will provide the Secretary with advice, which the Secretary 
will consider along with information from other resources within the 
Department and from outside sources.
    Changes: None.
    Comment: One commenter requested more detail on the creation, 
organization, and governance of the National TAC. The commenter 
requested information on who creates the internal governance procedures 
for the council; whether the procedures can be amended; and the 
parameters of the work of the council. Another commenter requested that 
the regulations elaborate on the National TAC members' specific duties 
and terms and the meetings that the National TAC will hold.
    Discussion: We believe that the parameters of the National TAC's 
work are clearly stated in Sec.  200.22(a). The Department followed all 
FACA requirements, including rules on governance, in establishing the 
National TAC. As required by FACA, the National TAC published a charter 
that includes detailed information about the purpose of the council, 
its structure, meetings, estimated annual cost, and reporting 
requirements. The Department filed the charter for the National TAC on 
April 7, 2008 with the relevant committees of the U.S. House of 
Representatives and the U.S. Senate, the Library of Congress, the 
Secretary, and the General Services Administration (GSA), as required 
by FACA. The charter is posted on the Department's Web site at http://www.ed.gov/about/bdscomm/list/ntac/index.html.
    We believe that this detailed information is more appropriate for 
inclusion in the National TAC's charter and, therefore, decline to 
follow the commenter's recommendation to include these procedures in 
the regulations. In response to the commenter who asked about amending 
the National TAC's procedures, changing the National TAC's procedures 
would require amending the charter, which can be done if the need 
arises.
    Changes: None.
    Comment: One commenter encouraged the Department to permit ongoing 
and regular access to the National TAC by States and to allow States to 
bring forward complex issues for the National TAC to consider. Another 
commenter recommended changing the regulations to require that the 
findings and recommendations of the National TAC be publicly available 
through the Department's Web site.
    Discussion: The Department will include time for public comment at 
each meeting of the National TAC. This will provide an opportunity for 
States, as well as the public, to have regular opportunities to comment 
on the work of the National TAC. We agree that the findings and 
recommendations of the National TAC should be publicly available 
through the Department's Web site, but decline to follow the 
recommendation to add a regulation to achieve this goal. We believe 
this action is unnecessary because the National TAC's charter states 
that the Council will, in lieu of an annual report, provide a summary 
of the proceedings, prepared by the DFO and reviewed and approved by 
the Council, to the public after every meeting. The meeting summary 
will, at a minimum, contain the topics discussed, a summary of the 
discussion, and recommendations for the Department, including, as 
appropriate, recommendations on research that the Department might 
undertake. The meeting summaries, along with a transcript of every 
meeting, will be posted on the Department's Web site. As noted 
previously, this Web site is http://www.ed.gov/about/bdscomm/list/ntac/index.html.
    Changes: None.
    Comment: One commenter stated that it is not clear what authority 
the National TAC will have and whether decisions made by the National 
TAC will be binding on the Department in its consideration of future 
policies.
    Discussion: The National TAC operates under the rules and 
requirements of FACA. Under section 9(b) of FACA, agencies are not 
required to implement the advice or recommendations of their Federal 
advisory committees; advisory committees are by definition advisory 
and, therefore, the recommendations and advice of the National TAC are 
not binding on the Department.
    Changes: None.
    Commenter: A few commenters, while supportive of establishing the 
National TAC, questioned whether it was necessary to include the 
requirement to establish the National TAC in the Department's 
regulations. Another commenter noted that the Department published a 
notice in the Federal Register on March 18, 2008, establishing the 
National TAC, and stated that proposing the National TAC in the NPRM 
was unnecessary because it was clear that decisions about the National 
TAC had already been made.
    Discussion: Although we did not necessarily need to codify the 
authority to establish the National TAC in our regulations, we chose to 
do so in the interest of transparency and continuity. We intended that, 
by including our proposals concerning the National TAC in the NPRM, the 
public would have a greater opportunity to comment and make 
recommendations on how the National TAC might be structured and 
operated. The input we received has been very helpful and, as a result 
of public comments, we have changed the regulations to require the 
National TAC to include members with expertise in standards, 
assessments, and accountability for students with disabilities and LEP 
students. Providing for the establishment of the National TAC in the 
regulations also will ensure that the Department continues to benefit 
from the advice of experts in the field and that the public continues 
to have the opportunity to provide input on overarching standards, 
assessment, and accountability issues. Just as States have established 
State technical advisory committees to advise them on the development 
and implementation of their State standards, assessments, and 
accountability systems, we believe that regular access to a group of 
experts will benefit the Department, States, and, ultimately, students 
in ensuring that State standards and assessments are of the highest 
technical quality and that State accountability systems hold schools 
and LEAs accountable for the achievement of all students.
    Changes: None.

Sections 200.32 and 200.50 Identification of Schools and LEAs for 
Improvement

    Comment: Many commenters supported our proposed changes to Sec.  
200.32 to codify current Department policy that an LEA may base 
identification of a school for improvement on whether the school did 
not make AYP because it did not meet the annual measurable objective 
(AMO) in the same subject for two consecutive

[[Page 64472]]

years, but may not limit such identification to those schools that did 
not meet the AMO in the same subject for the same subgroup for two 
consecutive years. We proposed a similar change to Sec.  200.50, 
regarding State identification of LEAs for improvement.
    Several commenters misunderstood the proposed regulation and 
thought that the regulation permitted LEAs to limit identification of 
schools for improvement to schools that did not meet the AMO in the 
same subject for the same subgroup every year. In addition, the 
majority of those who commented opposed the regulatory changes, stating 
that they are overly rigid and would restrict States' and LEAs' 
authority and flexibility to target LEAs and schools that are truly in 
need of improvement. Several commenters stated that the Department is 
exceeding its administrative authority by promulgating a regulation 
that is not expressly authorized in the statute.
    Discussion: As stated in the preamble to the NPRM, we are codifying 
the Department's current policy in order to establish clear parameters 
for LEAs and States to use when identifying schools and LEAs for 
improvement. We believe that this policy and the final regulations are 
consistent with the statute, its emphasis on proficiency in separate 
subjects, and its requirement to include, in AYP calculations, separate 
participation rates for mathematics and reading/language arts 
assessments.
    Section 1116(b)(1) of the ESEA requires an LEA to identify for 
school improvement any Title I school that fails, for two consecutive 
years, to make AYP as defined under section 1111(b)(2). Section 
1116(c)(3) contains a similar requirement for identifying LEAs for 
improvement. There is flexibility in section 1111(b)(2) to permit an 
LEA to identify schools (and a State to identify LEAs) in need of 
improvement on the basis of not making AYP in the same subject for two 
consecutive years. This flexibility stems from other provisions in the 
statute that treat reading and mathematics independently (e.g., 
separate starting points and AMOs). These provisions recognize that 
student achievement in reading and mathematics in a State may start at 
very different points and, thus, that the State would need to establish 
different trajectories for reaching 100 percent proficiency in each 
subject. As a result, it makes sense to permit an LEA to identify 
schools (and a State to identify LEAs) in need of improvement based on 
not making AYP for two years in the same subject.
    Subgroups, on the other hand, are not treated differently in the 
ESEA and, thus, the statute does not support identifying schools or 
LEAs for improvement on the basis of ``same-subgroup'' performance for 
two consecutive years. Moreover, such a policy would be inconsistent 
with the accountability provisions in section 1111(b)(2)(C) of the 
ESEA, which require that each subgroup meet the State's AMOs in each 
subject each year. The intent of school identification is not to lay 
blame on a particular group of students, as a ``same subgroup/same 
subject'' approach would do, but to identify the instructional and 
academic areas that need to be improved. A school or LEA that is 
identified for improvement should look to specific instructional 
remedies in the subject area, other indicator, or participation rate 
that resulted in its identification.
    Changes: None.

Section 200.37 Notice of Identification for Improvement, Corrective 
Action, or Restructuring

Section 200.37(b)(4)(iv) Notification of Available School Choices

    Comment: A number of commenters expressed support for the 
requirement in Sec.  200.37(b)(4)(iv) that LEAs notify the parents of 
eligible students of their Title I public school choice options at 
least 14 calendar days before the start of the school year (14-day 
notification requirement). At the same time, a number of commenters 
objected to the 14-day notification requirement because, according to 
the commenters, most SEAs cannot release AYP data to LEAs in time for 
LEAs to determine students' eligibility for public school choice and 
notify families about their public school choice options 14 days before 
the start of the school year. Commenters stated that the 14-day 
notification requirement does not acknowledge the complexities of 
making AYP determinations, which involve scoring assessments, ensuring 
that test scores are received on time, verifying the accuracy of the 
data, and computing AYP for the seven required grades, all of which can 
result in delaying AYP determinations. Other commenters noted that, 
although parental notification is an LEA responsibility, LEAs do not 
control when test results or AYP data are available and would not be 
able to meet the 14-day notification requirement unless States provide 
AYP determinations to LEAs in a timely manner.
    Some commenters expressed concern that States may need to amend 
their assessment policies or renegotiate their contracts with testing 
companies in order to meet the 14-day notification requirement. Other 
commenters suggested that the 14-day notification requirement would 
pressure States to test students too early in the school year or lead 
to increases in testing and scoring errors and less time to verify 
assessment results. One commenter suggested that the 14-day 
notification requirement would complicate LEAs' participation in the 
Department's SES pilot project, which permits certain LEAs to offer SES 
to students enrolled in schools that are in year one of improvement 
status.
    Discussion: The Secretary strongly believes that early notification 
to parents of their public school choice options is essential for 
parents to have a genuine opportunity to exercise those options. At the 
same time, the Secretary recognizes the practical challenges that some 
LEAs may face in meeting the 14-day notification requirement and 
acknowledges that AYP determinations take time and that States may need 
to consider changes to their assessment policies and contracts. 
Nevertheless, the goal of the 14-day notification requirement is to 
ensure that parents have sufficient time, in advance of the school 
year, to make an informed decision about transferring their child to 
another school. The Secretary believes the 14-day notification 
requirement strikes a reasonable balance between the needs of parents 
for early notification and the practical realities of assessment 
reporting and AYP determinations.
    With regard to the comment that the 14-day notification requirement 
would complicate LEAs' participation in the Department's SES pilot 
project, we disagree. LEAs participating in the SES pilot, which allows 
schools in the LEA to provide SES or choice to students enrolled in 
schools that are in year one of improvement status, must follow the 
same timelines as all other schools, including the 14-day notification 
requirement.
    Changes: None.
    Comment: A number of commenters recommended that the Department 
revise the 14-day notification requirement. Some commenters stated that 
14 days should be the minimum time and that more time would be better, 
with some commenters recommending a 30-day notification requirement. 
One commenter recommended requiring LEAs to notify parents about their 
Title I public school choice options in the spring or early summer, at 
the same time LEAs offer other school choice programs. Another 
commenter recommended a 30-day

[[Page 64473]]

notification requirement, except when a State's late release of AYP 
determinations prevents an LEA from meeting this requirement. In such 
cases, the commenter recommended that an LEA base student eligibility 
for public school choice on the previous year's AYP data. One commenter 
suggested that the Department survey States to determine if they report 
assessment results in time for LEAs to meet the 14-day notification 
requirement; for States that do not report assessment results in time 
to meet the 14-day notification requirement, the commenter suggested 
giving LEAs an additional 30 days to notify parents of their public 
school choice options.
    Several commenters recommended that the Department require, when 
the State does not notify its LEAs of the final AYP status of their 
schools at least 21 days in advance of the start of the school year, an 
LEA to notify parents no later than 14 days after the LEA receives AYP 
results from the State. One commenter recommended requiring States to 
give LEAs final AYP determinations for schools 21 or more days before 
the school year begins, and another recommended requiring LEAs to 
notify parents no later than seven days before the start of the school 
year. Another commenter suggested that the Department give States the 
flexibility to submit plans to the Department on how the State would 
ensure that more parents have timely information about a school's 
improvement status and parents' public school choice options; for 
example, States might propose requiring schools that are currently in 
school improvement to meet the 14-day notification requirement, while 
requiring schools that are newly identified for improvement to notify 
parents by the first day of school. Finally, a commenter suggested 
that, if an LEA is not able to execute parents' transfer requests 
within a 14- to 21-day time period, the LEA should be required to 
notify parents early enough to accommodate parents' requests in a 
timely manner.
    Discussion: The Secretary appreciates the recommendations made by 
these commenters, all of which appear to reflect sincere efforts to 
address the complexity and variability in State accountability systems. 
However, most of the suggested alternatives primarily address the needs 
of States and LEAs, rather than the needs and concerns of parents with 
children struggling to reach proficiency in reading and mathematics in 
schools identified for improvement, corrective action, or 
restructuring. The result, in nearly every case, would be less time for 
parents to consider their transfer options before the start of the 
school year or, in some cases, a deferral of that process until well 
after the start of the school year, by which time few parents seriously 
consider transferring their children to a new school.
    In sum, while we appreciate the differences in State accountability 
systems and the practical concerns of making timely AYP determinations, 
we believe that the 14-day notification requirement strikes the 
appropriate balance to ensure that parents have sufficient time to make 
an informed decision on whether to transfer their children to another 
public school.
    Changes: None.
    Comment: One commenter supported the 14-day notification 
requirement but stated that receiving 14 days' notice would not help 
parents in LEAs that do not offer the option to transfer to 
conveniently located public schools or cannot accommodate all eligible 
students who wish to transfer.
    Discussion: The Department acknowledges that some LEAs may not be 
able to provide transfer options because: (1) The LEA only has a single 
school at a grade level; (2) all schools at a grade level are in school 
improvement; or (3) the distances between schools make changing schools 
impracticable. In such situations, section 1116(b)(11) of the ESEA 
requires that the LEA, to the extent practicable, enter into a 
cooperative agreement with neighboring LEAs to provide a transfer 
option. In addition, an LEA may offer SES to students attending schools 
in the first year of improvement (see Sec.  200.44(h)(2)). However, 
under Sec.  200.44(d), an LEA may not use lack of capacity as a reason 
to deny public school choice to students in schools identified for 
improvement, corrective action, or restructuring.
    Changes: None.
    Comment: Some commenters who objected to the 14-day notification 
requirement recommended that LEAs be required to comply with a specific 
notification requirement only for schools that were in improvement in 
the previous school year and will continue to be in improvement in the 
upcoming school year whether or not they make AYP. These commenters 
said that, for newly identified schools, LEAs should be required to 
provide notification of public school choice options to parents no 
later than the first day of school.
    Discussion: We decline to accept the commenters' suggestion to 
require differential treatment of students who attend schools that have 
been previously identified for improvement and students who attend 
schools newly identified for improvement. The Department recognizes, 
however, that it would be much easier for LEAs and most beneficial for 
students and parents identified if LEAs provided early notice of 
available choice options to the parents of students attending schools 
already identified for improvement and whose obligation to provide 
public school choice would continue irrespective of their next AYP 
determination. We, therefore, encourage LEAs to take advantage of such 
situations and provide notice to parents of students in previously 
identified schools as early as possible, preferably in the spring or 
early summer, before the start of the school year.
    Changes: None.
    Comment: A number of commenters stated that unstable enrollments in 
high-poverty schools, such as Title I schools, often make it impossible 
for an LEA to know 14 days prior to the start of the school year which 
students are eligible for public school choice.
    Discussion: High rates of student mobility in many high-poverty 
areas do not relieve an LEA of its responsibility to provide parents of 
eligible students with timely notification of public school choice 
options. Indeed, such students often are precisely those who would most 
benefit from the opportunity to transfer to another public school. 
Where high mobility makes it difficult to obtain accurate enrollment 
data prior to the beginning of the school year, an LEA must provide 
notice using the best available data to identify and notify eligible 
parents at least 14 calendar days before school starts.
    Changes: None.
    Comment: One commenter asked the Department to consider whether an 
LEA should be required to notify parents of students who enroll in a 
school after the LEA has already sent out public school choice and SES 
notifications.
    Discussion: The Department encourages LEAs to be as flexible as 
possible with newly enrolled students. If a student enrolls in a school 
identified for improvement, corrective action, or restructuring early 
in the school year, we encourage the LEA to make every effort to 
accommodate parents who wish to transfer their child to another public 
school. Likewise, we encourage an LEA to offer SES to newly enrolled 
students who are eligible and who would have sufficient time remaining 
in the school year to complete an SES program. An LEA that provides two 
enrollment windows, as required under Sec.  200.48(d)(2) for LEAs that 
wish to spend less than the amount needed to meet the 20 percent 
obligation, could accommodate, in many instances,

[[Page 64474]]

eligible students who enroll in a school after the start of the school 
year and wish to participate in SES. We believe that many LEAs will 
choose to provide two enrollment windows in anticipation of needing to 
meet this requirement in order to use unspent choice-related 
transportation and SES funds on other allowable activities. Finally, we 
note that the 14-day notification requirement applies only to public 
school choice and not to SES.
    Changes: None.
    Comment: A few commenters questioned whether the lack of timely 
notification is the primary reason that more parents do not choose to 
transfer their child to another public school under the Title I public 
school choice provisions. These commenters suggested that there are 
other explanations, such as parents believing that their child's school 
is doing well despite being identified for improvement, a desire to 
keep their child in the school closest to home, and a willingness to 
participate actively in school improvement efforts.
    Discussion: The Secretary agrees that there are valid reasons 
unrelated to LEA notification practices, such as those described by the 
commenters, why eligible parents decide not to transfer their child to 
another public school under the public school choice provisions. 
However, evaluation data indicate that the timing of notification is a 
significant factor in influencing whether parents choose to transfer 
their child, and that LEAs that notify parents about their public 
school choice options prior to the first day of school have higher 
participation rates than LEAs that provide notification later.\13\ The 
14-day notification requirement in Sec.  200.37(b)(4)(iv) is a direct 
response to the evaluation data and is intended to give families more 
time to make informed decisions about available public school choice 
options.
---------------------------------------------------------------------------

    \13\ Stullich, S., Eisner, E., & McCrary, J. (2007). National 
Assessment of Title I: Final Report, Volume I: Implementation. 
Washington, DC: National Center for Education Evaluation and 
Regional Assistance, Institute of Education Sciences, U.S. 
Department of Education.
---------------------------------------------------------------------------

    Changes: None.
    Comment: One commenter expressed support for the 14-day 
notification requirement and recommended requiring LEAs to offer 
parents of eligible children detailed academic information on their 
public school choice options. The commenter suggested that LEAs could 
make available for each public school choice option the academic report 
cards required under section 1111(h) of the ESEA.
    Discussion: Section 200.37(b)(4)(ii) already requires LEAs to 
provide parents of eligible children academic information on the school 
or schools to which their child may transfer. The Department believes 
that LEAs are in the best position to determine the academic 
information that would be most useful in helping families decide on 
transfer options. We note, for example, that the local report cards 
required under section 1111(h) are LEA report cards and, therefore, 
would include academic information on all schools in an LEA. Depending 
on the number of schools in an LEA, providing the LEA's report card may 
confuse parents who are interested only in the achievement data for 
their available public school choice options.
    Changes: None.
    Comment: A number of commenters stated that the 14-day notification 
requirement in proposed Sec.  200.37(b)(4)(iv) conflicts with Sec.  
200.44(a), which implements section 1116(b)(1)(E)(i) of the ESEA and 
requires an LEA to provide all eligible students enrolled in the LEA 
with the option to transfer to another public school not later than the 
first day of the school year.
    Discussion: The Department does not agree that the 14-day 
notification requirement conflicts with either statutory or regulatory 
language regarding the provision of public school choice to eligible 
students. Rather, the 14-day notification requirement defines, pursuant 
to the Secretary's regulatory authority in section 1901 of the ESEA, 
the minimum amount of time before the start of school that is required 
for notice of public school choice to be meaningful, i.e., to give a 
parent sufficient time to make an informed decision about transferring 
his or her eligible child to another public school. We encourage LEAs 
to allow students to enroll in their school of choice as soon as 
possible following receipt of the transfer request from parents.
    We agree that there is a discrepancy between the 14-day 
notification requirement in proposed Sec.  200.37(b)(4)(iv), which was 
referenced in proposed Sec.  200.44(a)(2)(ii), and the language in 
proposed Sec.  200.44(a)(2)(i), which would have required an LEA to 
offer public school choice options not later than the first day of the 
school year. We have revised Sec.  200.44(a)(2) to eliminate this 
discrepancy.
    Changes: We have revised Sec.  200.44(a)(2) to make clear that an 
LEA must offer parents the opportunity to transfer their child to 
another public school, through the notice required in Sec.  200.37, so 
that students may transfer in the school year following the year in 
which the LEA administered the assessments that resulted in 
identification of the school for improvement, corrective action, or 
restructuring.
    Comment: Several commenters stated that compliance with the 14-day 
notification requirement would create administrative burdens for LEAs. 
Two commenters asserted that the requirement would increase local 
administrative costs; one commenter contended that those costs would 
not be paid for with Federal funds. Another commenter asserted that in 
many LEAs there may not be sufficient staff available to produce the 
notifications 14 days before the start of the school year.
    Discussion: The Secretary believes strongly that Sec.  
200.37(b)(4)(iv) is necessary so that parents have sufficient time, 
prior to the start of the school year, to make important decisions 
about the school their child will attend. We note that LEAs may use 
Title I, Part A funds, as well as other authorized Federal funds, to 
support the costs of notifying parents of their public school choice 
options. Additionally, we are adopting in these final regulations the 
changes we proposed in the NPRM to Sec.  200.48(a)(2)(iii)(C). Under 
these changes, an LEA is allowed to count parent outreach costs toward 
the funds it is required to spend for choice-related transportation and 
SES, up to an amount equal to 0.2 percent of the LEA's Title I, Part A, 
subpart 2 allocation. Those funds may be used to implement the 14-day 
notification requirement.
    Changes: None.
    Comment: Several commenters argued that, in States that issue both 
preliminary and final AYP data, the regulations would require LEAs to 
send out multiple notices reflecting changes in public school choice 
options as a result of final AYP determinations. Two other commenters 
argued that, because final AYP determinations may not be made 14 days 
before the start of school, Sec.  200.37(b)(4)(iv) could require LEAs 
to provide and pay for public school choice for students attending 
schools that ultimately are not identified for improvement, which would 
confuse parents, waste Title I funds, and not increase participation 
rates.
    Discussion: The 14-day notification requirement is not intended to 
cause LEAs to offer public school choice before receiving final AYP 
determinations. We note that, under section 1116(b)(1)(B) of the ESEA, 
final AYP determinations must take place prior to the start of the 
school year. We encourage LEAs to prepare notices and

[[Page 64475]]

make provisional transportation plans in advance of receiving final AYP 
determinations, when necessary, in order to expedite notifying parents 
of their child's eligibility for public school choice when final AYP 
determinations are available, in accordance with the 14-day 
notification requirement.
    Changes: None.
    Comment: Several commenters expressed concern about how the 14-day 
notification requirement would affect (1) year-round schools, (2) 
States with rolling start dates, rather than a single, statewide start 
date; and (3) schools that open in early August.
    Discussion: In each of these situations, LEAs must notify parents 
of their public school choice options 14 days before the beginning of 
the ``school year,'' as that term is defined by the SEA or LEA.
    Changes: None.
    Comment: Two commenters stated that the proposed requirements in 
Sec.  200.37, including the 14-day notification requirement and 
expanded notice requirements for both public school choice and SES, are 
an inappropriate attempt to ``micromanage'' schools and LEAs.
    Discussion: The new requirements in Sec.  200.37 respond to 
evaluation and monitoring data suggesting that public school choice and 
SES are poorly implemented by too many LEAs, more than six years after 
public school choice and SES options were first required by the ESEA. 
For example, evaluation data show that SES notifications often are 
confusing, incomplete, and even discourage the use of SES.\14\ The 
final regulations are a direct response to these data and part of the 
Department's overall effort to promote more effective implementation of 
Title I public school choice and SES.
---------------------------------------------------------------------------

    \14\ Id.
---------------------------------------------------------------------------

    Changes: None.

Section 200.37(b)(5) Annual SES Notice

    Comment: Several commenters expressed support for proposed Sec.  
200.37(b)(5)(ii)(C), which would require an LEA's annual notice to 
parents of the availability of SES to include an explanation of the 
benefits of receiving SES, and proposed Sec.  200.37(b)(5)(iii), which 
would require this notice to be clear and concise and clearly 
distinguishable from other school improvement information sent to 
parents. One of these commenters recommended strengthening these 
requirements by encouraging LEAs to inform parents directly about the 
merits of particular SES programs.
    Discussion: The Secretary appreciates the commenters' support for 
improved SES notice requirements. Regarding the comment to encourage 
LEAs to inform parents directly about specific SES programs, LEAs are 
currently required, under section 1116(e)(2)(A)(iii) of the ESEA and 
Sec.  200.37(b)(5)(ii)(B), to provide parents with a brief description 
of the services, qualifications, and demonstrated effectiveness of each 
provider that is available within the LEA.
    Changes: None.
    Comment: One commenter interpreted the proposed changes to 
Sec. Sec.  200.37(b)(5)(ii)(C) and 200.37(b)(5)(iii) as requiring LEAs 
to notify parents about the availability of SES prior to the start of 
the school year.
    Discussion: The commenter appears to have misunderstood the 
proposed regulations. Although the Secretary supports timely 
notification to parents of their child's eligibility for SES, the 
regulations do not require that LEAs notify parents about SES prior to 
the start of the school year.
    Changes: None.
    Comment: Two commenters stated that the Department should require 
LEAs to include, in their annual notice of the availability of SES, 
information on whether available SES providers are qualified to serve 
students with disabilities and LEP students.
    Discussion: Section 200.46(a)(4) requires an LEA to ensure that 
eligible students with disabilities and LEP students are able to 
receive appropriate SES and accommodations in the provision of those 
services. We agree that it would be helpful for parents to know whether 
particular SES providers are able to serve students with disabilities 
or LEP students. Therefore, we have revised Sec.  200.37, regarding LEA 
notices, and Sec.  200.47, regarding SEA responsibilities for SES.
    Changes: We have revised Sec.  200.37(b)(5)(ii)(B) to provide that 
an LEA's notification to parents regarding SES include an indication of 
those providers that are able to serve students with disabilities or 
LEP students. We also have restructured Sec.  200.47(a)(3) and added a 
new paragraph (a)(3)(ii) requiring an SEA to indicate on its list of 
approved providers those providers that are able to serve students with 
disabilities or LEP students.
    Comment: A few commenters suggested that LEAs include, in the 
notice on SES, information about whether there is independent evidence 
from an evaluation or scientifically based research about the 
effectiveness of each provider's services and indicate whether a 
provider has been removed from any State's list of approved providers.
    Discussion: Section 1116(e)(2)(A)(iii) of the ESEA and Sec.  
200.37(b)(5)(ii)(B) already require LEAs to include information on 
providers' effectiveness in their notices to parents, and Sec.  
200.47(b)(3)(i) requires States to consider, in their approval of 
providers, whether a provider has been removed from another State's 
list. Additionally, under Sec.  200.47(b)(2)(ii)(C), a State may not 
include a provider on the State's list of approved SES providers unless 
the provider agrees to ensure that the instruction it will provide is 
of high quality, research-based, and specifically designed to increase 
the academic achievement of eligible children. The Department does not 
believe further regulation is required in this area.
    Changes: None.
    Comment: Many commenters opposed the SES notice requirements in 
Sec.  200.37(b)(5)(ii)(C) and Sec.  200.37(b)(5)(iii). Some of these 
commenters stated that these requirements are examples of over-
regulation by the Department. Other commenters argued that requiring 
the SES notice to be concise is illogical, given the numerous items 
required to be included in the notice. Some commenters argued that the 
requirements are ambiguous and that it would be difficult for LEAs to 
comply with them and for SEAs to monitor implementation by LEAs. A few 
commenters recommended that the Department provide a model notice for 
LEAs to use, while another commenter stated that using a model notice 
should be optional, not required.
    One commenter argued that the proposed requirements would be 
burdensome because LEAs would need to send two notices to parents whose 
children are eligible for SES--one on SES and one with information 
about school improvement. Another commenter recommended that LEAs have 
flexibility to notify parents in the most appropriate manner for the 
communities they serve. One commenter recommended that the Department 
clarify that the SES notice may be sent to parents with other materials 
so long as it is clearly distinguishable from those materials.
    Another commenter recommended eliminating the requirement that SES 
notification letters be ``clearly distinguishable'' from other 
information sent home to parents. This commenter suggested that the 
requirement would draw attention to the SES notice at the expense of 
other LEA and school information, and that it is not the Department's 
responsibility to tell LEAs

[[Page 64476]]

and schools how to provide their notifications to parents.
    Other commenters asserted that there is little evidence available 
on the benefits of SES. Another commenter recommended that the 
Department modify the regulations to require LEAs to include only those 
benefits of SES that are based on scientifically based research. 
Another commenter recommended that Sec.  200.37(b)(5)(ii)(C) be changed 
to require an LEA to explain only the ``potential'' benefits of SES 
until there is research verifying that SES increases student 
achievement.
    Discussion: The Secretary believes that it is important for LEAs' 
communication to parents of their SES options be as straightforward and 
easy for parents to understand as possible. During our monitoring and 
outreach visits, we have seen examples of LEAs' notices to parents that 
were unclear, incomplete, and negative in tone. We also know from 
evaluation data that parents of eligible students often report that 
they have not received a notice about SES from their LEA.\15\ To 
address these problems, the Secretary believes it is necessary and in 
students' and parents' best interests to require LEAs to send parents 
SES notification letters that are clear and concise and explain the 
benefits of SES. In order to assist LEAs in meeting this requirement, 
we intend to provide, through Department guidance, one or more sample 
notification letters that include the elements required by these 
regulations.
---------------------------------------------------------------------------

    \15\ Id.
---------------------------------------------------------------------------

    Section 200.37(b)(5)(iii) does not require an LEA to send an SES 
notice that is separate from its school improvement notice; rather, the 
SES notice must be ``distinguishable'' from other improvement 
information. This does not preclude an LEA, therefore, from including 
the SES notice in the same mailing with other information about school 
improvement.
    We believe that LEAs should have the discretion to determine what 
information on the benefits of SES to include in the notice to parents. 
In addition to benefits substantiated by research conducted by the 
Department or by States, LEAs, or other entities, an LEA's notice could 
include, for example, the fact that supplemental educational services 
are available at no cost to parents and make productive use of a 
student's out-of-school time in a safe environment; that parents may 
select the approved provider of their choice that best meets their 
child's academic needs; and that supplemental educational services have 
the potential to improve a student's academic proficiency.
    Changes: None.
    Comment: Several commenters recommended that all notices and 
information on public school choice and SES be provided to parents in a 
language parents can understand.
    Discussion: Section 1116(b)(6) of the ESEA and Sec.  200.36(b)(2) 
already require that, to the extent practicable, LEAs provide notices 
on public school choice and SES to parents in a language parents can 
understand. Therefore, it is unnecessary to regulate further in this 
area.
    Changes: None.
    Comment: One commenter recommended several changes to Sec.  200.37 
in order to improve access to public school choice and SES for 
``disconnected'' youth. This commenter suggested that the regulations 
be revised to require LEAs to: (1) Provide public school choice and SES 
information to parents of disconnected youth whose cohort is either 
still in school or has graduated less than three years ago, and to 
parents of youth who have transferred from traditional high schools 
into alternative educational settings; and (2) encourage LEAs to be 
more proactive when informing parents and students of their SES options 
through provider fairs, SES informational sessions, and other means.
    Discussion: The Secretary appreciates the commenter's concern for 
disconnected youth. Disconnected youth who are from low-income families 
and enrolled in a Title I elementary or secondary school in improvement 
status (in year two of improvement for SES eligibility), including an 
alternative high school, are eligible for public school choice and SES. 
Disconnected youth who are not enrolled in a public Title I school in 
improvement status, however, are not eligible. The Department strongly 
encourages LEAs to actively notify parents of their options for public 
school choice and SES using multiple methods and venues, such as those 
recommended by the commenter.
    Changes: None.

Section 200.39 Responsibilities Resulting From Identification for 
School Improvement

    Comment: A number of commenters expressed support for the 
Department's proposed amendments to Sec.  200.39(c), which would 
require LEAs to post on their Web sites information on the number of 
students who were eligible for and the number of students who 
participated in Title I public school choice and SES, a list of the SES 
providers approved by the State to serve the LEA and the locations 
where services are provided, and a list of available schools for the 
current school year to which eligible students may transfer. One 
commenter stated, however, that, although the requirements in Sec.  
200.39(c) are not unreasonable, the commenter doubted that these 
requirements would lead to an increase in participation for public 
school choice and SES.
    Discussion: The National Assessment of Title I (NATI) report (2007) 
and information from the Department's monitoring and outreach visits 
show that parents are more likely to be aware of and take advantage of 
Title I public school choice and SES options when they hear about their 
options from more than one source.\16\ For this reason, the Department 
believes that expanding the mediums through which parents receive 
information on their public school choice and SES options will make it 
more likely that parents know about, understand, and take advantage of 
their options.
---------------------------------------------------------------------------

    \16\ Stullich, S., Eisner, E., & McCrary, J. (2007). National 
Assessment of Title I: Final Report, Volume I: Implementation. 
Washington, DC: National Center for Education Evaluation and 
Regional Assistance, Institute of Education Sciences, U.S. 
Department of Education.
---------------------------------------------------------------------------

    Changes: None.
    Comment: A number of commenters stated that it would be difficult 
for LEAs to maintain an up-to-date list of SES providers and their 
locations, because this information changes over the course of a school 
year. One of these commenters raised similar concerns about keeping 
track of available public school choice options, which may change due 
to shifting enrollment and other factors. Precisely because the 
availability of SES providers can change throughout the year, another 
commenter recommended requiring LEAs to update their Web sites on an 
ongoing basis.
    Two commenters recommended requiring LEAs to post the information 
no later than 30 days following the end of the previous school year. 
Another commenter stated that, while LEAs should be able to report 
information about SES providers at the beginning of a school year, data 
on the number of students who participate in SES would not be available 
until the end of the school year.
    Discussion: The Department recognizes that information on SES 
providers may change during the school year; indeed, the primary reason 
we proposed Sec.  200.39(c) was because Web sites can be easily updated 
with the most current information. However, we understand the 
administrative

[[Page 64477]]

challenges of continuously updating data on public school choice 
options and SES providers. Therefore, we have revised Sec.  
200.39(c)(1) to require LEAs to post the information required in Sec.  
200.39(c) in a timely manner to ensure that parents have current 
information on their public school choice and SES options. In addition, 
LEAs might request that SES providers submit regular updates about 
their locations to facilitate making useful and timely information 
available to parents.
    Changes: Section 200.39(c)(1) has been revised to clarify that an 
LEA must post the information regarding choice and SES on its Web site 
``in a timely manner to ensure that parents have current information.''
    Comment: A number of commenters expressed concern that the 
requirements in Sec.  200.39(c) would increase the reporting and 
administrative burden for schools and LEAs. Several commenters 
suggested that one way to alleviate the burden would be to permit an 
SEA to post the required information on its Web site and for LEAs to 
create appropriate links on their Web sites to their SEA's Web site.
    One commenter recommended that, in addition to the information in 
proposed Sec.  200.39(c), LEAs should be required to display on their 
Web sites information on the number of applications for SES, the number 
of students placed with SES providers, the number of students currently 
served by SES providers, and the number of students served by each SES 
provider.
    Discussion: The Secretary does not agree that the requirements in 
proposed Sec.  200.39(c) will add substantially to LEAs' reporting and 
administrative requirements. As indicated in the Summary of Costs and 
Benefits section, we estimate that it would take an LEA an average of 
25 hours to prepare the information for its Web site. LEAs already 
report student eligibility and participation data on public school 
choice and SES to their States for inclusion in State reports to the 
Secretary. Additionally, under Sec.  200.37(b)(4) and (b)(5), LEAs must 
provide information on SES providers and public school choice options 
to parents through written notifications. Therefore, although the 
requirement for LEAs to display this information on their Web sites is 
new, LEAs already are required to collect and report these data, which 
will minimize the administrative burden of the new requirements.
    With regard to requiring LEAs to include additional SES data on 
their Web sites (e.g., the number of applications for SES, the number 
of students placed with SES providers, and the number of students 
served by each SES provider), LEAs would have to collect new data. We 
believe that requiring LEAs to collect and report these new data would 
add burden on LEAs with little added benefit for parents. Therefore, we 
decline to require LEAs to report on the additional data recommended by 
the commenter.
    Finally, although some SEAs may display information on public 
school choice and SES on their Web sites, such information may not be 
easily accessible to parents seeking information about their own LEA. 
SEA Web sites typically include information about education at all 
levels across a State. As a result, many of these sites can be 
difficult to navigate. LEA Web sites, by contrast, generally are less 
complex and easier to navigate. In addition, parents are more likely to 
be familiar with LEA Web sites than SEA Web sites and are more likely 
to visit the former in order to obtain local school information (e.g., 
school menus, events calendars). Because the goal of Sec.  200.39(c) is 
to make information about local Title I public school choice and SES 
options accessible to parents and other interested parties, we believe 
this information should be displayed directly on LEA Web sites. 
Therefore, we decline to permit LEAs to meet the requirements in Sec.  
200.39(c) by providing a link to the information on SEA Web sites.
    Changes: None.
    Comment: One commenter observed that many LEAs, particularly small, 
rural LEAs, do not have Web sites and asked whether these LEAs would be 
required to establish and maintain a Web site to comply with Sec.  
200.39(c). The commenter added that many of these same LEAs are not 
able to provide either public school choice or SES to their students 
and, thus, would have little or none of the information that Sec.  
200.39(c) would require them to post on their Web sites, even if they 
had one. Another commenter recommended that LEAs without Web sites be 
permitted to communicate the information required in Sec.  200.39(c) 
through other means.
    Discussion: The requirements in Sec.  200.39(c) do not apply to 
LEAs that do not have to provide public school choice or SES options to 
their students, either because they do not have any schools identified 
for improvement, corrective action, or restructuring or because they 
are unable to provide such options due to a lack of available public 
school choice options or SES providers. However, for LEAs that provide 
public school choice and SES options to their eligible students, but do 
not have their own Web sites, we believe it would be appropriate and 
reasonable to require the SEA to display the LEA data required in Sec.  
200.39(c) on the SEA's Web site and have made this change in the 
regulations.
    Changes: A new paragraph (c)(2) has been added to Sec.  200.39, 
which provides that if an LEA does not have its own Web site, the SEA 
must include on the SEA's Web site the required information for the 
LEA.
    Comment: One commenter asked the Department to clarify the 
requirement in proposed Sec.  200.39(c)(1)(iii) that LEAs post on their 
Web sites information on the locations where SES services are provided. 
The commenter asked whether LEAs must post the specific addresses where 
services are provided or if they may post more general information 
about the types of locations where services are provided. The commenter 
noted that the location of services may change as locations are added 
to accommodate increasing SES enrollment. The commenter also expressed 
concern that the list of available schools offered as Title I public 
school choice options could be confusing to parents if, as is typically 
the case, their actual choices are limited to a few schools and not all 
schools on the list.
    Discussion: Our rationale for requiring LEAs to post certain 
information related to public school choice and SES on their Web sites 
is to ensure that current information is readily available to 
interested parents. For this reason, the list of approved SES providers 
on LEA Web sites should include the most current information available, 
including the address or addresses where services are offered. The 
Department recognizes that requiring LEAs to update their Web sites 
continuously as provider information changes would be administratively 
burdensome and, as noted earlier, has revised the regulations to 
require in new Sec.  200.39(c)(1) the posting of the information 
required in a timely manner to ensure that parents have current 
information.
    In addition, we encourage LEAs to include, in their list of public 
school transfer options, any explanatory material necessary to ensure 
that parents understand the school choices available to their child.
    Changes: As noted previously, Sec.  200.39(c)(1) has been revised 
to clarify that an LEA must post the information required for choice 
and SES on its Web site in a timely manner to ensure that parents have 
current information.
    Comment: Several commenters recommended requiring LEAs to post the 
information on public school choice and SES required in proposed

[[Page 64478]]

Sec.  200.39(c) on their Web sites in languages other than English. One 
commenter recommended requiring LEAs to post the information in any 
language spoken by any significant number of LEP parents. Two 
commenters also recommended requiring LEAs to make this information 
available in print, including in languages other than English, and to 
ensure that this information is sent home to parents.
    Discussion: We decline to adopt the commenters' suggestion to 
require an LEA to post the information required in Sec.  200.39(c) in 
languages other than English. We note that the notice requirements in 
Sec.  200.37 are the primary means through which LEAs provide written 
notification to parents of the Title I public school choice and SES 
options for their eligible children. Section 200.36 requires that such 
notification be provided directly to parents, by such means as the U.S. 
mail, and, to the extent practicable, in a language that parents can 
understand. We believe that many LEAs serving large numbers of LEP 
students and their families provide notices and other materials for 
parents in multiple languages and will likely do the same in complying 
with Sec.  200.39(c).
    The purpose of Sec.  200.39(c) is to ensure that, in addition to 
the written notification already required, LEAs make such information 
widely and publicly available by posting it on their Web sites. The 
Secretary believes that, to require home delivery of the information 
required in Sec.  200.39(c) would be overly burdensome for LEAs. Again, 
the primary vehicle for informing parents of their options--the notice 
required in Sec.  200.37(b)(4) and (5)--already must be provided 
directly to parents by such means as the U.S. mail.
    Changes: None.
    Comment: Two commenters expressed concern that LEA Web sites are 
not easily accessible to parents and individuals, particularly those 
from low-income families, seeking information about public school 
choice and SES options.
    Discussion: The Secretary recognizes that not every family, 
particularly those with low incomes, has a personal computer with 
Internet access in the home. However, the number of families with 
Internet access is growing as the cost of both personal computers and 
Internet access continues to decline. In addition, libraries and 
community centers typically make available to the public, at no charge, 
computers connected to the Internet, and many of these facilities 
maintain evening and weekend hours that are convenient for working 
parents. Also, although LEAs have the flexibility to use a variety of 
strategies to notify parents, ranging from written materials delivered 
by mail or sent home with students, to newspaper announcements, 
enrollment fairs, or open houses, each of these strategies has the 
disadvantage of being a ``one-time only'' notification event, 
potentially making it difficult for a parent who missed the event to 
obtain the desired information. The Secretary believes that Sec.  
200.39(c) provides an additional, low-cost method of informing parents 
that has the advantage of making information about public school choice 
and SES options readily available to parents on an ongoing basis.
    Changes: None.
    Comment: One commenter asserted that the requirements in Sec.  
200.39(c) do not go far enough, and that posting information on LEA Web 
sites is not sufficient to ensure that parents and students receive the 
information they need in a timely manner. This commenter recommended 
that LEAs provide additional support to help low-income families learn 
about the educational options for their children.
    Discussion: The final regulations, in their entirety, reflect the 
Secretary's strong agreement that multiple avenues of communication are 
needed to ensure that all parents of eligible students receive timely 
information that gives them a genuine opportunity to make an informed 
choice when selecting from available public school choice and SES 
options. For example, in addition to the new requirements in Sec.  
200.39(c), the final regulations in new Sec.  200.48(d)(2)(i)(A) 
(proposed Sec.  200.48(d)(1)(i)) require LEAs, before using unspent 
choice-related transportation and SES funds for other allowable 
activities, to partner with outside groups, such as faith-based 
organizations, other community-based organizations, and business groups 
to help inform parents of their public school choice and SES options. 
Another criterion for effective implementation of SES in new Sec.  
200.48(d)(2)(i)(B)(2) (proposed Sec.  200.48(d)(1)(ii)(B)) is ensuring 
that sign-up forms for SES ``are distributed directly to all eligible 
students and their parents and are made widely available and accessible 
through broad means of dissemination, such as the Internet, other 
media, and communications through public agencies serving eligible 
students and their families.'' Finally, the requirement in Sec.  
200.37(b)(4)(iv) that LEAs notify the parents of eligible students of 
their Title I public school choice options at least 14 calendar days 
before the start of the school year will help ensure that the parents 
of eligible low-income students also have sufficient time to make an 
informed decision about transferring their children to another public 
school. The Department believes that all of these provisions, in 
combination, go a long way toward providing the ``additional support to 
help low-income families learn about the educational options for their 
children,'' as recommended by the commenter, and declines to regulate 
further in this area.
    Changes: None.
    Comment: A number of commenters recommended requiring LEAs to 
include on their Web sites the names of SES providers that have been 
removed from the lists of approved providers in other States. Two 
commenters also recommended requiring LEAs to identify SES providers 
that evaluations have shown to be effective, as well as SES providers 
that do not serve LEP students or students with disabilities. Other 
commenters recommended requiring LEAs to post information on whether 
providers are able to serve LEP students and students with 
disabilities.
    Discussion: Section 200.47(b)(3) requires an SEA, in approving SES 
providers, to consider information from a provider on whether the 
provider has been removed from any State's approved provider list, as 
well as evaluation results, if any, demonstrating that the provider's 
instructional program has improved student achievement. The SEA must 
also determine that the prospective provider has a demonstrated record 
of effectiveness in increasing the academic achievement of students. 
Thus, it is an SEA's responsibility to consider this information in 
approving prospective providers. Once an SEA has made a decision to 
approve a provider, we do not believe this information is pertinent to 
LEAs.
    As we noted in our discussion of Sec.  200.37, we agree that it is 
important for parents to know which SES providers are able to serve 
students with disabilities or LEP students. Accordingly, we have added 
a requirement in Sec.  200.37(b)(5)(ii)(B) and Sec.  200.47(a)(3)(ii) 
that an LEA and SEA, respectively, indicate on its list of approved SES 
providers those providers that are able to serve these students.
    Changes: Sections 200.37(b)(5)(ii)(B) and 200.47(a)(3)(ii) have 
been revised to require an LEA and SEA, respectively to indicate on its 
list of approved SES providers those providers that are able to serve 
students with disabilities or LEP students.
    Comment: Two commenters expressed concern that the public school 
choice and SES participation

[[Page 64479]]

information that LEAs will be required to post on their Web sites under 
Sec.  200.39(c) could be misleading due to the limited funding to 
support such options.
    Discussion: The Secretary agrees that raw participation data may 
not always be a true measure of an LEA's success in implementing public 
school choice and SES because, in an LEA with many schools identified 
for improvement, the number of students eligible for SES and choice may 
greatly exceed the number that may be served with available funds. 
However, LEAs are free to explain, along with the participation data 
required in Sec.  200.39(c), how available funding may affect the 
number of students transferring to new schools or obtaining SES.
    Changes: None.
    Comment: Two commenters claimed that public reporting on 
eligibility and participation in public school choice and SES, as 
required in Sec.  200.39(c), would be misleading without an explanation 
of the personal and private factors that influenced parental decision-
making.
    Discussion: The Secretary believes that information on student 
eligibility and participation in public school choice and SES are 
useful both for increasing parental awareness of the availability of 
these options and for providing a rough measure of how well LEAs are 
implementing the public school choice and SES requirements. LEAs are 
free to add an explanation of the factors that they believe contribute 
to or explain participation rates.
    Changes: None.
    Comment: Two commenters stated that publicly posting a list of 
approved SES providers is meaningless because the general public does 
not participate in SES.
    Discussion: It may be true that the general public may not be 
particularly interested in information about SES providers, but the 
purpose of Sec.  200.39(c) is to ensure that information on SES 
providers is broadly disseminated, publicly available, and easily 
accessible to those who are interested. The Secretary believes it is 
important to provide these additional sources of information for 
parents seeking to obtain SES for their eligible children.
    Changes: None.
    Comment: One commenter expressed concern that posting the names of 
SES providers on LEA Web sites could be viewed as endorsing the 
providers, yet LEAs have no way of holding these providers accountable.
    Discussion: LEAs are free to provide the information about SES 
providers in a manner that clearly conveys that no endorsement of 
individual providers is implied. We disagree that LEAs do not have a 
way to hold SES providers accountable. Under section 1116(e)(3)(C) of 
the ESEA, LEAs are responsible for terminating an agreement with an SES 
provider if the provider fails to meet the goals and timetables in that 
agreement.
    Changes: None.
    Comment: A number of commenters recommended requiring LEAs to 
disaggregate the public school choice and SES data posted on their Web 
sites by student subgroups, grade level, school, and provider. One 
commenter recommended requiring LEAs to post the total amount of 
funding they make available for public school choice and SES, as well 
as their per-child allocation for SES. Two commenters suggested 
requiring SEAs to publish the per-child allocations for each LEA, as 
well as the minimum each LEA must spend on public school choice and 
SES.
    Discussion: The Secretary agrees that such additional information 
could be useful in identifying specific problems or challenges related 
to implementing public school choice and SES. However, we believe that 
requiring LEAs to disaggregate their public school choice and SES data 
by student subgroup, grade level, school, and provider would require 
nearly all LEAs and SEAs to change their data collection processes to 
support disaggregated reporting and, therefore, would be overly 
burdensome and costly. Therefore, we decline to require LEAs to 
disaggregate their public school choice and SES data.
    In contrast, the amount an LEA must spend on choice-related 
transportation and SES (an amount equal to at least 20 percent of the 
LEA's Title I, Part A allocation (the LEA's 20 percent obligation)) and 
the maximum per-child allocation for SES for each LEA receiving Title 
I, Part A funds (the LEA's Title I, Part A allocation divided by the 
number of children in low-income families as determined by the Bureau 
of the Census) are easily calculated from data the SEA already 
collects. Posting this information on the SEA's Web site would require 
adding two columns to the tables that SEAs already prepare showing 
their final Title I, Part A allocations to LEAs (one column showing 20 
percent of each LEA's final allocation and one column dividing the 
final allocation by the number of students from low-income families in 
the LEA as determined by the Bureau of the Census). Therefore, because 
of the minimal burden involved, and because the Secretary believes such 
information would help give all stakeholders a better understanding of 
the resources available to support Title I public school choice and 
SES, we have added a requirement in Sec.  200.47 for each SEA to post 
on its Web site these amounts for each LEA. However, we believe that 
making such information available on SEA Web sites is sufficient, and 
decline to add a similar new requirement for LEAs because it would be 
unnecessarily duplicative. We also decline to require either SEAs or 
LEAs to post the statutory minimum allocations for choice-related 
transportation and SES. The Secretary does not believe that this 
additional information would be as useful.
    Changes: We have added new Sec.  200.47(a)(1)(ii)(B)(1) and (2) to 
require each SEA to post on its Web site, for each LEA, the amount that 
equals 20 percent of the LEA's Title I, Part A allocation that is 
available for choice-related transportation and SES, as required in 
Sec.  200.48(a)(2), and the maximum per-child amount available for SES 
calculated under Sec.  200.48(c)(1).
    Comment: One commenter stated that, due to the small number of 
students participating in public school choice and SES, posting the 
participation data required in Sec.  200.39(c) on LEA Web sites could 
disclose personally identifiable information about individual students.
    Discussion: When publicly reporting any data, care must be taken 
not to reveal personally identifiable information about individual 
students, in accordance with the requirements in FERPA. In the vast 
majority of LEAs required to comply with Sec.  200.39(c), posting 
public school choice and SES participation data on their Web sites will 
likely not reveal such information. In the limited number of cases in 
which such a violation could occur, LEAs should follow FERPA's 
requirements to ensure that personally identifiable information is not 
disclosed.
    Changes: None.

Section 200.43 Restructuring

    Comment: Several commenters expressed support for the proposed 
changes in Sec.  200.43, stating that the changes would help schools 
make AYP and exit restructuring as soon as possible. The commenters 
agreed with the Department that restructuring is not always being 
implemented effectively. Many commenters expressed concerns about the 
general statutory requirements for restructuring. Some stated that the 
statutory options for alternative governance are not supported by 
research; some stated that the options are too ``extreme,'' while 
others stated that the statute takes a ``cookie-cutter'' approach to 
improvement that is not

[[Page 64480]]

appropriate. Other commenters stated that staffing changes should not 
be made as part of restructuring and school improvement in general.
    Some commenters requested that the statutory restructuring 
requirements not be enforced until the ESEA is reauthorized. One 
commenter suggested that a school should not enter restructuring unless 
the percentage of students scoring below proficient in a subgroup 
exceeds 35 percent of a school's enrollment. Another commenter stated 
that the restructuring requirements, in particular, and NCLB, in 
general, are designed to address the problems of schools in urban areas 
and not rural schools in high-poverty areas because in rural areas 
access to SES providers is limited, public school choice is not 
realistic, and private management companies are not interested in 
managing rural schools.
    Discussion: The purpose of the proposed regulations is to clarify 
the intent of the statute, which is that restructuring must be a 
significant change in the governance of a school that has not made AYP 
for five years. General concerns about the school improvement timeline 
in section 1116 of the ESEA and the specific requirements of 
restructuring should be addressed through the reauthorization process, 
not these regulations. We disagree that the statute should not be 
enforced until the ESEA is reauthorized.
    Changes: None.
    Comment: Several commenters asked the Department to improve its 
monitoring of States' implementation of the restructuring requirements. 
One commenter specifically suggested that the Department monitor and 
enforce the provisions of the ESEA requiring parent involvement in the 
restructuring process.
    Discussion: The Secretary agrees with the commenters that 
monitoring is critical to ensuring that the restructuring requirements 
are implemented effectively and that parents should be involved in the 
restructuring process. The Department's monitoring protocol requires 
States to provide evidence of how they ensure that LEAs carry out their 
responsibilities for schools in improvement, corrective action, and 
restructuring. In preparation for the current monitoring cycle, the 
Department strengthened its monitoring of restructuring implementation 
by placing greater emphasis on how statewide systems of support and 
LEAs work with schools to determine the restructuring option that will 
be implemented by each LEA. The Department also added LEAs to its on-
site monitoring to specifically examine the implementation of parental 
involvement requirements, including how parents are involved in 
corrective action and restructuring efforts.
    Changes: None.
    Comment: Two commenters stated that the proposed changes to Sec.  
200.43 exceed the Department's legal authority and should instead be 
left to Congress to address during the reauthorization of the ESEA. One 
commenter further stated that the regulations violate section 553(b)(2) 
of the Administrative Procedure Act.
    Discussion: The Secretary believes that the proposed changes to 
Sec.  200.43 merely clarify the intent of the statute and do not exceed 
the boundaries of the ESEA. Therefore, they are consistent with the 
Secretary's rulemaking authority, and do not violate the Administrative 
Procedure Act.
    Changes: None.
    Comment: Several commenters recommended that LEAs be required to 
involve educators, administrators, and parents, at a minimum, in the 
restructuring planning process.
    Discussion: The statute and regulations already require, in section 
1116(b)(8)(C) of the ESEA and Sec.  200.43(b)(4), that LEAs provide 
parents and teachers with an opportunity to comment before the 
development of a proposed restructuring plan and an opportunity to 
participate in the development of that plan.
    Changes: None.
    Comment: Several commenters expressed concerns about the proposed 
changes in Sec.  200.43(a)(1) and (a)(5) regarding the definition of 
restructuring. The commenters stated that the proposed regulations in 
paragraph (a)(1) exceed the statute by requiring ``fundamental 
reforms'' in instructional programs in addition to alternative 
governance arrangements. One commenter asserted that the Department 
misinterpreted the provisions of the ESEA by applying the language in 
section 1116(b)(8)(v) to the definition of restructuring, noting that 
it is not appropriate to require instructional reform in addition to 
alternative governance and staffing changes. Other commenters stated 
that our proposal in paragraph (a)(5) to require a restructuring plan 
to ``address the reason for the school's being in restructuring'' was 
not appropriate because the options for schools under restructuring are 
alternative governance arrangements, not educational interventions. 
Other commenters stated that the limited options available under 
restructuring make it difficult or impossible to address the specific 
reasons a school has been identified for restructuring.
    Discussion: The Secretary disagrees that it is not appropriate to 
use the term ``fundamental reforms'' in the definition of 
restructuring. Contrary to the commenter's assumption, the term 
``fundamental reforms'' does not imply required changes in 
instructional programs in addition to changes in governance. Rather, 
Sec.  200.43(a)(1) provides that restructuring must include a major 
reorganization of the school's governance arrangement that, among other 
things, must include fundamental reforms to improve academic 
achievement in a school that has not made AYP for five years. Clearly, 
the options in Sec.  200.43(b)(3)(i) through (iv), by definition, meet 
that standard. An LEA must ensure that, if it restructures a school 
under Sec.  200.43(b)(3)(v), the restructuring makes fundamental 
reforms in the governance of the school.
    Similarly, we disagree with the commenters who suggested that 
defining restructuring as needing to ``address the reason for the 
school's being in restructuring'' is not appropriate because the 
options for schools under restructuring are alternative governance 
arrangements, not educational interventions. First, it is unlikely that 
an LEA would deliberately select a restructuring option that did not 
best address the reasons the school is in restructuring. Second, and 
more importantly, it would be imprudent for an LEA to ignore a 
restructured school's instructional programs. As the Department notes 
in its 2006 non-regulatory guidance on LEA and school improvement 
(available at http://www.ed.gov/policy/elsec/guid/schoolimprovementguid.doc), ``the restructuring intervention will 
likely not address all of the identified needs of a school and cannot 
substitute for a coherent plan for systemic change. The intervention an 
LEA chooses should be viewed as one strategy in a school's 
comprehensive plan for improvement.'' The overriding requirement of the 
statute is that a school in restructuring has the tools to improve 
achievement, make AYP, and exit restructuring status. Ignoring 
instruction and curricular issues during restructuring is setting the 
stage for failure and will not enable the school to improve student 
achievement and exit restructuring as quickly as possible. The intent 
of restructuring, in particular, is to make fundamental reforms in the 
governance of a school--along with improving instructional changes--to 
provide children in the school with a quality education that enables 
them to meet State standards; schools and LEAs that merely focus on

[[Page 64481]]

doing just enough to comply with the letter of the law will not likely 
implement strategies that are effective in helping that school.
    Changes: None.
    Comment: Many commenters expressed concerns regarding proposed 
Sec.  200.43(a)(4), which would require restructuring interventions to 
be ``significantly more rigorous and comprehensive'' than those taken 
as part of corrective action. Many commenters stated that this 
requirement would weaken the corrective action phase of the school 
improvement timeline. They argued that, because there is a fair amount 
of overlap between what is permitted for corrective action and for 
restructuring, the proposed requirement would discourage LEAs from 
being proactive and instituting rigorous interventions during 
corrective action, given that they would have to implement 
significantly more rigorous interventions if they entered the 
restructuring phase of school improvement. For example, schools might 
delay making significant staffing changes until they entered 
restructuring. Several commenters asked whether a school that made 
significant staffing changes during the corrective action phase would 
be required to implement significant staffing changes again in 
restructuring. The commenters also stated that, under proposed Sec.  
200.43(a)(4), schools would have to abandon interventions begun during 
corrective action before they were able to have any effect and noted 
that, according to research, significant improvements in academic 
achievement are unlikely to be observed after one year of implementing 
a new intervention. Other commenters stated that schools could see 
improvement after implementing effective interventions during 
corrective action, but not enough to make AYP. Some commenters stated 
that the current options available under restructuring would not be 
permissible under Sec.  200.43(a)(4), which would further limit options 
for schools and LEAs. Several of these commenters stated that the 
proposed regulatory language in Sec.  200.43(a)(4) was too vague to be 
helpful and questioned how the phrase ``significantly more rigorous and 
comprehensive'' would be defined. One commenter stated that the use of 
the term ``rigorous'' might lead to a focus on consequences and 
punishments rather than data-driven and research-based interventions.
    Discussion: The Secretary appreciates the concerns of commenters 
who do not want the Department to create incentives for LEAs to weaken 
corrective actions or delay significant staffing changes or other 
restructuring options. The purpose of proposed Sec.  200.43(a)(4) was 
not to add a new requirement, but to clarify the intent of the statute. 
By the time a school has not made AYP for six years, section 1116(b)(8) 
of the ESEA requires schools to implement alternative governance 
arrangements or significant staffing changes. States and LEAs are free 
to implement these changes on an earlier timeline. Furthermore, it was 
not our intent, in proposing Sec.  200.43(a)(4), that schools abandon 
actions undertaken during corrective action before they have had a 
chance to take effect. If a school implements significant staffing 
changes, or takes other actions that meet the requirements for 
restructuring during corrective action, the Secretary agrees that the 
school should not be required to take further action when it enters 
restructuring. Further, when an LEA implements corrective actions that 
appear to be promising in improving student achievement, those actions 
or interventions should be continued as part of the restructuring plan. 
Restructuring should build on the previous efforts implemented to turn 
around a school during any phase of the school improvement process. If 
previous efforts do not appear to hold promise of improving student 
achievement, however, the LEA may need to take an altogether different 
approach during restructuring.
    We have revised Sec.  200.43(a)(4) to clarify that, if an LEA 
implements a restructuring action that meets the requirements in Sec.  
200.43(b) during corrective action, the LEA does not need to implement 
a significantly more rigorous and comprehensive reform once the school 
is in restructuring status. In such cases, the LEA should closely 
examine the school's achievement data to ensure that the interventions 
implemented during corrective action are having a positive effect on 
student achievement, and make adjustments as necessary.
    We also recognize that there are many reasons that schools may be 
identified for restructuring and that some schools will need more 
significant changes than others. Restructuring should not be a ``one-
size-fits-all'' response; rather, schools and LEAs should consider new 
approaches to professional development of teachers, instruction, and 
effective organization and management of instruction. We expect that 
the progression in interventions will look different depending on the 
reasons for a school entering restructuring.
    Changes: We have revised Sec.  200.43(a)(4) to provide that the 
restructuring must be significantly more rigorous and comprehensive 
than the corrective action implemented by the LEA unless the school has 
begun to implement one of the other restructuring options in Sec.  
200.43(b) as a corrective action.
    Comment: One commenter recommended that the regulations require 
schools in restructuring to develop plans that include multiple 
components and not to rely on one approach alone to turn around a 
school.
    Discussion: The Secretary agrees that it is important that there be 
multiple strategies in a restructuring plan. We believe that the 
language in Sec.  200.43(a)(5), as well as the provisions in Sec.  
200.43(b)(3)(v), will help ensure that an LEA takes a comprehensive 
approach when developing a school's restructuring plan.
    Changes: None.
    Comment: One commenter stated that the proposed regulations are not 
based on scientific evidence. Several commenters recommended that the 
only restructuring options that should be available to schools and LEAs 
are those based on scientific evidence. Another commenter recommended 
that an LEA be required to provide evidence that the selected 
interventions are effective at addressing the reasons a school has been 
identified for improvement. Other commenters stated that the Department 
should provide more technical assistance and disseminate information on 
research-based practices for restructuring.
    Discussion: There is a tremendous need for technical assistance on 
research-based practices for restructuring, as well as more research on 
effective methods of turning around low-performing schools. To assist 
States and LEAs in their efforts, IES' What Works Clearinghouse 
released a practice guide in May 2008 entitled Turning Around 
Chronically Low Performing Schools. This guide is available online at 
http://ies.ed.gov/ncee/wwc/pdf/practiceguides/20072003.pdf.
    In addition, the National Center for Education Research (NCER) is 
currently designing a study to identify promising models for turning 
around chronically low-performing schools and to provide multiple 
design options for rigorously evaluating the identified schools' 
restructuring programs. The results of this study will help inform the 
field, as well as policy makers, as to what strategies are most 
effective in turning around low-performing schools.
    The Department's Comprehensive Centers are also available to 
provide assistance to low-performing schools and LEAs. The centers 
provide technical

[[Page 64482]]

assistance and research findings to States on approaches to turning 
around school performance. The Center on Innovation and Improvement in 
particular focuses its work on school improvement and restructuring 
(see http://www.centerii.org/).
    We disagree with commenters that the absence of research should 
obviate the responsibility of States and LEAs to implement any 
restructuring requirements. Although we recognize the importance of 
such research and are investing in an evaluation of restructuring 
approaches, we believe that students in persistently low-performing 
schools cannot wait for research to be completed before significant 
actions are taken to turn around their schools.
    Changes: None.
    Comment: Many commenters objected to proposed Sec.  
200.43(b)(3)(ii) and (v), which state that significant staffing changes 
``may include, but may not be limited to, replacing the principal.'' 
These commenters argued that, in many cases, replacing the principal 
might be the best option and that, with effective leadership, existing 
school staff may be able to turn around a low-performing school. 
Several commenters stated that there is more research supporting the 
efficacy of principal replacement than there is supporting the efficacy 
of other significant staffing changes. One commenter noted that IES' 
recent practice guide, Turning Around Chronically Low Performing 
Schools, highlights evidence on the effectiveness of principal 
replacement and leadership change as a means of turning around 
chronically low-performing schools. Some commenters argued that States 
and LEAs need the flexibility to tailor restructuring to the needs of 
the school in order to implement meaningful interventions and to 
differentiate consequences; they asserted that the Department has no 
basis for restricting restructuring in this manner. One commenter 
stated that proposed Sec.  200.43(b)(3)(ii) and (v) are inconsistent 
with the principles of the Department's differentiated accountability 
pilot, which recognizes that there is a need to give States more 
flexibility in shaping school interventions.
    Discussion: The Department agrees that, for some schools, the only 
staffing change that may be necessary is replacing the principal. Our 
intent in proposing Sec.  200.43(b)(3)(v) was to ensure that a school 
does not simply replace the principal, without also implementing other 
reforms. For the restructuring option in Sec.  200.43(b)(3)(ii), 
however, we do not believe that a school could simply replace the 
principal and meet the requirement to replace ``all or most of the 
school staff (which may include the principal),'' since that 
restructuring option is focused on staff replacement, including but 
clearly not limited to the principal, as the primary means of turning 
around a school.
    Section 200.43(b)(3)(v) provides schools with the flexibility to 
develop different strategies for implementing alternative governance 
arrangements. Staffing changes may be a part of that approach, and only 
replacing the principal would be permissible, so long as that is not 
the only change that the school implements as part of its restructuring 
plan. We have, therefore, revised proposed Sec.  200.43(b)(3)(v) to 
clarify that the major restructuring of a school's governance may 
include replacing the principal so long as this change is part of a 
broader reform effort.
    Changes: We have removed the parenthetical ``(which may include but 
not be limited to, replacing the principal)'' in Sec.  200.43(b)(3)(v) 
and revised the sentence to provide that major restructuring of a 
school's governance may include replacing the principal, so long as 
this change is part of a broader reform effort.
    Comment: One commenter suggested that the Department establish a 
new restructuring option that would allow States to meet the 
restructuring requirements if they create community schools, which 
could include a variety of components such as an extended school day 
and year, health and social services, local government partnerships, 
and coordination with the juvenile justice system.
    Discussion: LEAs might incorporate some elements of the concept of 
``community schools'' in a restructuring plan, so long as the totality 
of the restructuring plan meets the regulatory definition and 
requirements for restructuring in Sec.  200.43.
    Changes: None.

Section 200.44 Public School Choice

    Comment: Two commenters suggested that proposed Sec.  
200.44(a)(2)(i), which would allow an LEA to offer public school choice 
as late as the first day of the school year, conflicts with the 14-day 
notification requirement in Sec.  200.37(b)(4)(iv), which was 
referenced in proposed Sec.  200.44(a)(2)(ii).
    Discussion: As we noted in our discussion of Sec.  200.37, we have 
modified the language in Sec.  200.44(a)(2) to clarify that an LEA must 
offer, through the notice required in Sec.  200.37, all students 
eligible for public school choice the option to transfer to another 
public school. Consistent with Sec.  200.37(b)(4)(iv), this notice must 
be made sufficiently in advance of, and not later than 14 calendar days 
before, the start of the school year so that parents have adequate time 
to exercise their public school choice option before the school year 
begins.
    Changes: We have revised Sec.  200.44(a)(2) to clarify that an LEA 
must offer public school choice, through the notice required in Sec.  
200.37, so that a student may transfer in the school year following the 
school year in which the LEA administered the assessments that resulted 
in the identification of the student's school for improvement, 
corrective action, or restructuring.

Section 200.47 SEA Responsibilities for Supplemental Educational 
Services

General

    Comment: A number of commenters expressed support for one or more 
of the proposed amendments in Sec.  200.47 regarding SEA monitoring of 
LEA implementation of SES requirements and State approval and 
monitoring of SES providers. Some commenters stated that the new 
requirements would hold SEAs and LEAs accountable for providing a more 
open process to approve qualified SES providers. One commenter stated 
that the requirements would provide the public with better information 
on the effectiveness of tutoring in increasing student achievement and 
on the compliance of LEAs and providers with SES implementation 
requirements. However, some commenters expressed concern about the 
potential costs of implementing the proposed regulations and argued 
that SEAs would need to divert resources from services to students (or 
from providing technical assistance to schools and LEAs in improvement 
status) in order to pay for monitoring the implementation of SES unless 
Congress appropriates more funds. These commenters expressed concern 
that SEAs with limited staff and resources will not be able to meet the 
requirements in Sec.  200.47. A few commenters requested that Congress 
provide funds to implement the requirements in Sec.  200.47 before the 
regulations become effective. One commenter suggested that the 
requirements in Sec.  200.47 be structured as mandates for providers, 
rather than for SEAs, so as not to establish unfunded mandates on SEAs.
    Discussion: The Secretary believes that any additional costs for 
implementing the requirements in Sec.  200.47 for approving and 
monitoring providers will be minimal (as discussed in detail in the 
Summary of Costs and

[[Page 64483]]

Benefits section) because States are already required, under section 
1116(e)(4)(D) of the ESEA, to develop and implement standards and 
techniques to monitor the quality and effectiveness of SES and to have 
a process in place to publicly report on those standards and 
techniques. The Secretary believes that the regulations in Sec.  200.47 
will give more meaning and clarity to this statutory requirement and 
address concerns, raised during the Department's monitoring, about the 
inconsistencies across States in their monitoring of SES providers. 
Likewise, the Secretary does not believe that monitoring LEAs' 
implementation of SES will add costs because SEAs must already monitor 
their LEAs' compliance with statutory and regulatory requirements under 
34 CFR 80.40.
    We do not believe that implementing these regulations will diminish 
the amount of funding available to serve students because SEAs will not 
support their monitoring efforts with funds that would otherwise be 
distributed to LEAs and used for services to students. Rather, SEAs 
will use their State administrative reservations under Title I, Part A 
to support the strengthened monitoring efforts required by Sec.  
200.47. For that same reason, we do not believe the requirements in 
Sec.  200.47 represent an unfunded mandate. In addition, the Department 
notes that SES providers serve students; efforts to ensure the quality 
and effectiveness of approved providers should not be viewed as a 
diversion of resources from services to students.
    Finally, we do not believe it would be appropriate to structure the 
new regulations as provider mandates rather than as criteria for SEAs' 
approval and monitoring of providers. As noted earlier, section 
1116(e)(4) of the ESEA clearly assigns SEAs responsibility for 
approving entities to provide SES in a State and for developing, 
implementing, and publicly reporting on standards and techniques for 
monitoring the quality and effectiveness of the services offered by 
approved providers. The regulations merely clarify what it means for 
SEAs to implement those statutory requirements.
    Changes: None.

Monitoring LEAs' Implementation of SES

    Comment: One commenter questioned the intent of the requirements 
related to State monitoring of LEAs' implementation of SES. Another 
commenter recommended that there be a ``gatekeeper'' at the Federal 
level to monitor States' compliance with their responsibilities 
regarding the implementation, management, and enforcement of SES 
requirements at the local level. Another commenter asked what an SEA 
must do in order to meet the requirement to develop, implement, and 
publicly report on the States' standards and techniques for monitoring 
the quality and effectiveness of the services offered by each SES 
provider. The commenter asked whether a State could meet the 
requirements by providing, on its Web site, information on the 
standards and techniques it uses for monitoring LEAs' implementation of 
SES, or if the Department expects a State to include this information 
on report cards or disseminate the information in other ways. Another 
commenter supported using rigorous and clear criteria when monitoring 
LEAs' implementation of SES, but did not believe that these criteria 
should be publicly reported. One commenter stated that SES is well 
implemented in the commenter's State and that it is not necessary to 
require that SEAs monitor LEA implementation, as proposed in Sec.  
200.47(a)(4)(iii).
    Discussion: The Secretary believes it is necessary for States to 
report publicly on the criteria they use to monitor LEAs in order to 
ensure that all parties involved in SES--including SEAs, LEAs, schools, 
parents, and providers--understand and are aware of these criteria. The 
Department already includes SES implementation in its regular 
monitoring of Title I programs and, therefore, there is no need for an 
additional ``gatekeeper'' at the Federal level to monitor SES 
implementation, as suggested by one commenter.
    A State's criteria for monitoring LEAs' implementation of SES 
should ensure that LEAs meet the requirements in section 1116(e) of the 
ESEA and Sec.  200.46. We believe that States should have the 
flexibility to determine how best to share this information with the 
public, which may include, among other methods, posting the information 
on a State's Web site.
    While many LEAs may be implementing SES requirements effectively, 
we do not believe that this is uniformly the case in all States. As we 
stated in the preamble to the NPRM, we believe that requiring States to 
develop, implement, and publicly report on the criteria they use to 
monitor LEAs' implementation of SES will help ensure that all SEAs set 
rigorous and clear expectations for their LEAs, which, in turn, will 
lead to more effective implementation of SES.
    Changes: None.
    Comment: Some commenters suggested that the Department require 
States to take additional actions to monitor LEAs' implementation of 
SES. One commenter recommended requiring States to report to the public 
and the Department on whether LEAs: (1) Develop agreements with 
providers that include specific student achievement goals, progress 
measures, and timelines for achieving the goals; and (2) terminate 
agreements with providers that fail to meet achievement goals and 
timelines. Another commenter suggested requiring States to conduct 
focus groups with families eligible for SES in order to gather 
information on how SES policies are implemented at the local level.
    Discussion: An LEA is required under the ESEA to develop student 
agreements that include a provider's goals and timelines for achieving 
those goals, and provisions for terminating the agreements if the goals 
or timelines are not met. Accordingly, an SEA should assess the LEA's 
compliance with these requirements during the SEA's periodic 
monitoring. Given these requirements, we believe that requiring States 
to collect data and report on the agreements that LEAs enter into with 
each provider would be time consuming and of limited value. Therefore, 
we decline to require States to report to the public the information 
recommended by the commenter.
    Regarding the recommendation that States conduct focus groups with 
families to obtain information on SES implementation at the local 
level, the Secretary believes that parents can provide important 
information and insights on ways to improve the implementation of SES 
and encourages States to meet with parents to hear about their 
experiences with LEA implementation of SES. We believe that States are 
in the best position, however, to decide how best to obtain feedback 
from families on LEA implementation practices.
    Changes: None.

Approval and Monitoring of SES Providers

    Comment: Some commenters stated that the requirements for approving 
and monitoring SES providers extend beyond the Department's regulatory 
authority.
    Discussion: We do not agree. Section 1116(e)(4)(D) of the ESEA 
requires SEAs to develop, implement, and publicly report on standards 
and techniques for monitoring the quality and effectiveness of 
supplemental educational services. This requirement clearly assigns to 
SEAs the responsibility to hold SES providers accountable for the 
quality of the services they provide and the results they achieve, and 
for withdrawing

[[Page 64484]]

approval of providers that are ineffective.
    All the requirements in Sec.  200.47(c) are based on the statutory 
requirements related to the provision of SES. The requirement in Sec.  
200.47(c)(1)(i), which requires an SEA to monitor whether a provider's 
instructional program is consistent with the instruction provided and 
the content used by the LEA and the SEA, reflects the nearly identical 
statutory requirement in section 1116(e)(5)(B) of the ESEA. Likewise, 
the requirement in Sec.  200.47(c)(1)(ii) that SEAs monitor whether a 
provider's instructional program addresses students' individual 
academic needs reflects the requirement in section 1116(e)(3)(A) that 
an LEA develop, in consultation with parents and the provider, a 
statement of the specific achievement goals the student will achieve 
through SES. The requirement in Sec.  200.47(c)(1)(iii) that SEAs 
monitor whether a provider's services are contributing to students' 
academic proficiency reflects the statutory requirements in sections 
1116(e)(4)(D) (withdrawal of approval of providers that do not 
contribute to increasing the academic proficiency of students served) 
and 1116(e)(12)(C) (supplementary educational services must be 
specifically designed to increase the academic achievement of eligible 
children). Finally, the requirement in Sec.  200.47(c)(1)(iv) that SEAs 
monitor the alignment of SES with the State's academic content and 
student academic achievement standards is consistent with the 
requirement in section 1116(e)(5)(B) of the ESEA. Given the direct 
statutory authority for each regulatory provision, the Secretary has 
clearly not exceeded her regulatory authority in section 1901 of the 
ESEA.
    The requirements in Sec.  200.47(c)(2) are conditional, in that 
they require the information to be considered by an SEA in monitoring 
approved providers only if such information is available. For example, 
while results from parent surveys can provide important information 
about the quality of a provider's services, Sec.  200.47(c)(2)(i) does 
not require an SEA to conduct a parent survey. Rather, Sec.  
200.47(c)(2)(i) requires that an SEA take this information into 
consideration if such information exists. As a result, these regulatory 
provisions also do not exceed the Secretary's regulatory authority.
    Changes: None.
    Comment: One commenter recommended that, instead of monitoring 
providers for effectiveness, States should monitor for program quality.
    Discussion: Section 1116(e)(4)(D) requires an SEA to monitor the 
``quality and effectiveness of the services offered by approved 
providers.'' Thus, the statute requires that an SEA monitor both for 
effectiveness and program quality. The ultimate measure of a provider's 
program quality and effectiveness is improved student achievement.
    Changes: None.
    Comment: One commenter asked whether formal alignment studies must 
be completed in order for SEAs to comply with Sec.  200.47(b)(2)(ii)(B) 
and (c)(1)(iv), which require the SEA to ensure that a provider's 
instructional program is aligned with State academic content and 
student academic achievement standards. Another commenter recommended 
amending Sec.  200.47(b)(2)(ii)(B) and (c)(1)(iv) to prohibit States 
from approving providers that do not make available rigorous evidence 
of how their instruction and content are aligned with State content and 
achievement standards.
    Discussion: Formal alignment studies are one way for a provider to 
demonstrate that its instructional program is aligned with State 
academic content and student academic achievement standards. However, 
the Secretary believes that States should have discretion in 
determining the evidence that must be provided to demonstrate that the 
instruction the provider gives and the content the provider uses are 
aligned with State academic content and student academic achievement 
standards. Therefore, we decline to amend Sec.  200.47(b)(2)(ii)(B) and 
(c)(1)(iv) in the manner recommended by the commenter.
    Changes: None.
    Comment: One commenter requested clarification of the term 
``research-based'' in Sec.  200.47(b)(2)(ii)(C), which provides that, 
in order for an SEA to include a provider on the State's list of 
approved SES providers, the provider must agree to ensure that the 
instruction the provider gives and the content the provider uses are 
research-based.
    Discussion: Section 1116(e)(12)(C)(ii) of the ESEA requires that 
supplemental educational services be of high quality, research-based, 
and specifically designed to increase the academic achievement of 
eligible children on the academic assessments required under section 
1111 of the ESEA and enable those children to attain proficiency in 
meeting the State's academic achievement standards. We believe, after 
further consideration, that the regulatory language should adhere more 
closely to the statutory requirement and have made this change in Sec.  
200.47(b)(2)(ii)(C). We decline to promulgate a specific regulatory 
definition of ``research-based,'' as we do not believe there is a 
single definition that would be appropriate in all circumstances. 
Rather, we believe that States should have flexibility in implementing 
the statutory requirement in a manner that reflects their individual 
circumstances and the variety of studies conducted on the effectiveness 
of SES programs.
    Changes: We have amended Sec.  200.47(b)(2)(ii)(C) to require that 
a provider agree to ensure that the instruction it provides and the 
content it uses ``are of high quality, research-based, and specifically 
designed to increase the academic achievement of eligible children'' in 
place of the proposed language requiring a provider to agree to ensure 
that its instruction and content ``are research-based.''
    Comment: One commenter supported the changes in Sec.  200.47 and 
agreed that the effectiveness of SES providers should be monitored more 
closely, but stated that supplemental educational services should be 
aligned with students' areas of academic need. The commenter argued 
that, at times, parents choose providers that offer tutoring in 
reading, for example, when their child's academic need is in 
mathematics.
    Discussion: The requirements in section 1116(e) and current Sec.  
200.46(b)(2) help ensure that supplemental educational services are 
aligned with students' areas of academic need. Section 200.46(b)(2) 
requires LEAs to enter into an agreement with each provider selected by 
a parent and develop, in consultation with the parent and the provider, 
a statement that includes specific achievement goals for the student, a 
description of how the student's progress will be measured, and a 
timetable for improving achievement. LEAs also are required to describe 
the procedures for regularly informing the student, parents, and 
teachers of the student's progress and to terminate the agreement if 
the provider is unable to meet the goals and timetables specified in 
the agreement (Sec.  200.46(b)(2)(ii) and (iii)). Ideally, through this 
agreement, parents and LEAs will develop goals in the areas that best 
address the student's needs. Ultimately, however, it is the parents' 
prerogative to select the provider of their choice, even if the 
provider does not provide services in the area of the student's 
greatest need.
    Changes: None.
    Comment: Several commenters opposed, as burdensome and

[[Page 64485]]

impractical, proposed Sec.  200.47(c)(1)(i), which would require an SEA 
to examine evidence that a providers' instructional program is 
consistent with the instruction provided and the content used by the 
LEA and SEA. One commenter proposed that a provider's instructional 
programs address a student's individual needs as described in the 
student's SES plan.
    Discussion: Section 1116(e)(12)(B)(ii) of the ESEA requires a 
provider to provide SES that is consistent with the instructional 
program of the LEA and the academic standards of the State. Similarly, 
section 1116(e)(5)(B) of the ESEA requires a provider to ensure that 
the instruction it provides and the content it uses are consistent with 
the instruction provided and content used by the LEA and the State and 
are aligned with the State's academic achievement standards. Section 
200.47(c)(1)(i) merely requires an SEA, during its approval of 
providers, to ensure that each provider meets these important 
instructional requirements. Although an SEA cannot guarantee, through 
its State-level approval process, that a provider's instructional 
programs address each student's individual needs, an LEA, through its 
agreement with the provider, can and must do so.
    Changes: None.
    Comment: One commenter applauded the Department's proposal to 
require SEAs to consider the results of parent surveys in approving 
providers and recommended that the regulations provide incentives to 
ensure that parent recommendations are considered. However, one 
commenter stated that requiring States to use information from parent 
recommendations and surveys in approving providers would be 
inconsistent with the statutory requirement to use objective approval 
criteria to determine whether a provider has a demonstrated record of 
effectiveness in increasing the academic proficiency of students. The 
commenter stated that results from parent surveys are not a valid 
measure of whether the provider's instructional program increases 
student achievement and, instead, may reflect parent approval of non-
academic benefits of SES. Another commenter questioned the usefulness 
of parent surveys for making decisions about approving providers and 
expressed concern that parent surveys are not reliable. One commenter 
stated that the use of parent surveys is not consistent with other 
aspects of NCLB in which accountability is defined by students' 
academic performance. Another commenter stated that parent surveys rely 
on accurate reporting by providers and asked what the Department would 
consider to be suitable evidence for satisfying this requirement.
    Discussion: The Secretary believes that parents can be objective 
and reliable sources of information for States to consider in approving 
providers. Parents have an interest in ensuring that reputable, 
effective providers are approved by a State and retained on the State's 
list of approved providers and, thus, it seems unlikely that parents 
would want a State to approve or retain a provider that did not have a 
demonstrated record of effectiveness. However, we agree that 
information from parent surveys would not, by itself, offer complete 
information on whether a provider's program is successful in raising 
student achievement. We included this requirement in the regulations 
because we believe that parent feedback, in addition to evaluation 
results, is an important source of information, if available, that SEAs 
should consider in approving and monitoring providers. The requirement 
that States consider the results from parent surveys, if any, does not 
mean that this information has to be supplied by a provider. This 
information could come from other sources. The regulations simply 
provide that a State must consider parent recommendations or the 
results of a parent survey regarding the success of a provider's 
instructional program in increasing student achievement if such 
recommendations or surveys exist.
    Regarding concerns that parent surveys may reflect parent approval 
of non-academic benefits of SES or be inconsistent with NCLB's focus on 
student academic performance, Sec.  200.47(b)(3)(ii) and (c)(2)(i) 
specifically requires that a State consider parent surveys and 
recommendations (if any) regarding the success of the provider's 
instructional program in increasing student achievement. We do not 
believe that the regulations should include incentives to ensure that 
parent surveys are considered in approving providers. Section 
200.47(b)(3)(ii) and (c)(2)(i) clearly states that SEAs must consider 
parent recommendations or results from parent surveys, if any are 
available.
    With regard to the question of what the Department would consider 
suitable evidence for satisfying the requirement to consider parent 
surveys or recommendations, if any, we believe that a State should have 
the discretion to determine the evidence that is most appropriate and 
suitable given the manner in which SES is implemented in its LEAs. For 
example, a State that has providers from small, local community-based 
organizations might obtain parent recommendations in a manner that 
differs from a State that has a few large, for-profit providers.
    Changes: None.
    Comment: One commenter requested clarification regarding Sec.  
200.47(b)(3)(iii) and (c)(2)(ii), which would require States, in 
approving or renewing the approval of a provider, to consider 
evaluation results, if any, demonstrating that the provider's 
instructional program has improved student achievement. The commenter 
suggested defining acceptable evaluations as ones that are conducted by 
independent researchers using scientifically valid methods. Two 
commenters asked what it means for a provider to improve student 
achievement. These commenters recommended that the Department, in order 
to assist States in meeting their responsibility to monitor providers' 
effectiveness, establish a definition of improved student achievement 
and the methods that a State may use to demonstrate such improvement. 
Another commenter recommended that States consider only objective 
evaluations of SES providers.
    One commenter expressed concern that the monitoring and evaluation 
of providers could be based on evidence from the provider's own 
evaluations and feedback from parents, with minimal regard for 
rigorous, high-quality, and valid evaluations. Several commenters 
expressed concern that providers would be permitted to use self-
reported data to demonstrate effectiveness, rather than results on 
State assessments. However, one commenter recommended that SEAs be 
prohibited from taking into consideration student performance on State 
assessments when they consider whether to continue or withdraw approval 
of a provider. The commenter stated that the number of hours of service 
provided through SES is not sufficient to affect student achievement on 
a State assessment. Another commenter suggested that SEAs establish the 
minimum number of hours of SES that a student must receive before the 
student's test scores are included in an evaluation of a provider's 
effectiveness.
    Discussion: It is important to note that, in approving and 
monitoring SES providers, SEAs must consider evaluation results only if 
they are available. Moreover, SEAs have considerable latitude in 
determining the type of evaluation results they will consider. While 
SEAs should consider only evaluations that they believe have used 
objective methodologies and should give preference to those that have 
used scientifically valid methods,

[[Page 64486]]

we believe it would be inappropriate for the Department to regulate on 
the types of evaluation results SEAs may use in determining whether SES 
providers are successful in raising student achievement.
    The requirement to consider evaluation results, if any are 
available, should not be confused with the requirement to evaluate the 
quality and effectiveness of each provider. Using evaluation results is 
one, but by no means the only, way to judge a provider's effectiveness. 
We agree that the results of student performance on State assessments 
may not, by themselves, be a complete and satisfactory indicator of the 
effectiveness of SES. However, nothing in the statute or regulations 
would prevent a State from considering student performance on a State 
assessment to evaluate provider effectiveness, or establishing a 
minimum number of hours of SES to be completed before the student's 
test scores are included in an evaluation of providers. We believe 
these decisions are best left to the discretion of each SEA and, 
therefore, decline to define the specific evaluation methods States may 
use in evaluating the success of a provider's instructional program in 
improving student achievement.
    Changes: None.
    Comment: One commenter expressed concern that requiring providers 
to ensure that their instruction is research-based and requiring SEAs 
to consider parent recommendations or results from parent surveys in 
approving providers would discriminate against new or smaller providers 
that may not have the experience or resources to provide lengthy 
analyses to meet these requirements. Another commenter stated that 
meeting these requirements would be overly burdensome on new SES 
providers or non-corporate providers.
    Discussion: Section 1116(e)(12)(B)(i) of the ESEA requires 
providers to have a demonstrated record of effectiveness in increasing 
student academic achievement. In addition, section 1116(e)(12)(C)(ii) 
requires supplemental educational services to be of high quality and 
research-based. Therefore, all providers, including new or smaller 
providers, must ensure that their instruction is of high quality and 
research-based. However, the Secretary recognizes that new or smaller 
providers may not have the same data or evaluation results as larger 
and longstanding providers to demonstrate the success of their 
instructional programs in improving student achievement. That is why 
Sec.  200.47(b)(3)(ii) and (iii) and (c)(2)(i) require an SEA to 
consider parent recommendations or results from parent surveys and 
evaluation results, if any are available.
    Changes: None.
    Comment: One commenter recommended that the regulations specify 
that States may not use providers' financial or staffing information in 
evaluating whether providers have contributed to improving student 
achievement. Another commenter recommended requiring States to consider 
the opinions of educators and administrators in making decisions to 
approve providers.
    Discussion: Section 1116(e)(12)(B)(iii) of the ESEA requires 
providers to be financially sound. Therefore, the Secretary believes it 
is reasonable for a State to request a provider's financial information 
in deciding whether to approve the provider, although not when 
evaluating the effectiveness of a provider's program. However, the 
Secretary does not believe that additional regulation in this area is 
needed. With regard to using staffing information to evaluate a 
provider's program, we believe that information about the 
qualifications of the individuals hired to provide SES is a reasonable 
factor that an SEA may want to consider in approving an SES provider 
although, again, we note that the issue of whether the instructors 
employed by a provider have adequate qualifications is separate from 
the issue of whether the provider's program is bringing about higher 
student achievement. We note that a State may not require a provider, 
as a condition of approval, to hire only staff who meet the ``highly 
qualified teacher'' requirements in Sec. Sec.  200.55 and 200.56, 
consistent with Sec.  200.47(b)(3).
    We agree that input from teachers and administrators, particularly 
those who have direct experience with providers and who are in a 
position to assess the effectiveness of their instructional programs, 
could contribute valuable information to the provider approval process. 
However, the Secretary believes that SEAs are in the best position to 
decide on the additional criteria they will use to evaluate a 
provider's instructional program and, therefore, declines to require 
all States to consider staffing information or recommendations from 
teachers and administrators in evaluating a provider's program.
    Changes: None.
    Comment: One commenter recommended that the Department require SES 
providers to submit to the SEA records of complaints received by the 
SES provider, so that the SEA can use those records in considering a 
provider's approval or renewal. The commenter also recommended that 
completion rates and other performance indicators be considered when a 
State is renewing a provider's approval.
    Discussion: The Secretary proposed Sec.  200.47(c) in order to 
specify and clarify the evidence that SEAs must consider, at a minimum, 
in monitoring the effectiveness of a provider's instructional program. 
States are free to include other criteria that they believe would be 
useful in evaluating the effectiveness of a provider's program.
    Changes: None.
    Comment: Two commenters recommended that the regulations require 
SEAs, in determining whether to approve or renew the approval of a 
provider, to consider evidence that the provider does not discriminate 
in its employment practices and agrees to be subject to the same anti-
discrimination laws and regulations that apply to recipients of Federal 
funds.
    Discussion: Current Sec.  200.47(b)(2)(iii) already requires an SEA 
to determine, before it can approve a provider, that the provider meets 
all applicable Federal, State, and local health, safety, and civil 
rights laws. The Department has clarified, in its Supplemental 
Educational Services Non-Regulatory Guidance (June 13, 2005), how 
Federal civil rights laws apply to SES providers (see question C-3 in 
the guidance, which is available at http://www.ed.gov/policy/elsec/guid/suppsvcsguid.doc).
    Changes: None.
    Comment: Some commenters stated that LEAs should have the authority 
to monitor or ensure the quality of SES providers. Another commenter 
stated that LEAs should be permitted to terminate contracts with SES 
providers that fail to adhere to contract provisions or fail to raise 
student achievement. One commenter recommended that a procedure be 
established to allow LEAs to file complaints against SES providers.
    Discussion: Section 1116(e)(4)(D) of the ESEA clearly gives SEAs 
the responsibility to monitor the quality and effectiveness of the 
services offered by approved SES providers and to withdraw approval 
from providers that fail, for two consecutive years, to contribute to 
increasing the academic proficiency of the students they serve. We do 
not have the authority to alter this basic requirement through these 
regulations. Additionally, the Secretary does not believe it would be 
advisable to create, through regulations, a separate role for LEAs in 
monitoring and enforcing SES quality because doing so could result in 
overlapping monitoring

[[Page 64487]]

actions that would unnecessarily complicate accountability for SES. The 
Secretary does, however, support SEA efforts to involve LEAs in their 
monitoring efforts, for instance by having LEAs collect and report 
participation and assessment data to the SEA.
    Regarding an LEA's ability to terminate a provider, section 
1116(e)(3)(C) of the ESEA permits LEAs to terminate an individual 
student's agreement with a provider if the provider is unable to meet 
the goals and timetables in the agreement established with the 
provider. LEAs may also terminate a contract if the provider violates 
other provisions in the contract, such as provisions regarding student 
progress reports, invoicing payment for services, preserving student 
privacy, and complying with applicable health, safety, and civil rights 
laws. Further, LEAs may terminate a contract if a provider fails to 
meet additional administrative or operational terms that may be 
included in the contract, such as conducting background checks on the 
provider's employees, provided those terms are reasonable, do not 
subject the provider to more stringent requirements than apply to other 
contractors of the LEA, and do not have the effect of inappropriately 
limiting educational options for students and their parents. However, 
it is not within an LEA's authority to remove a provider from the 
approved provider list or to terminate an agreement with a provider for 
failing to raise student achievement unless the provider has failed to 
meet the goals and timetables specified in the individual agreement. 
Only an SEA may withdraw approval of a provider if, for two consecutive 
years, the provider does not contribute to increasing the academic 
proficiency of the students it serves (see section 1116(e)(4)(D) of the 
ESEA).
    We decline to adopt the suggestion of one commenter that we 
establish procedures to allow LEAs to file complaints against SES 
providers with the SEA. Although it is essential that States facilitate 
open communication between their LEAs and providers so that 
disagreements can be resolved quickly and appropriately, we believe 
that States must have the discretion to establish procedures to receive 
feedback from their LEAs regarding a provider's actions in delivering 
SES.
    Changes: None.
    Comment: One commenter recommended that a national clearinghouse be 
established to collect and disseminate information on whether a 
provider has been removed from a State's list of approved providers. 
Another commenter suggested that the Department maintain a database 
with this information, as well as information on States' evaluations of 
the effectiveness of instructional programs provided by SES providers. 
One commenter stated that it would be difficult for an SEA to know if a 
provider was removed from another State's list of approved providers 
and argued that it would be inappropriate for a State to base its 
decision on another State's data.
    Discussion: We decline to adopt the commenter's suggestion that the 
Federal government establish and maintain a national clearinghouse or 
database identifying providers that have been removed from States' 
approved provider lists and the results of any State evaluations of 
provider instructional programs. Rather, we believe it is sufficient 
that a provider that seeks approval from a State inform the State 
whether it has been removed from another State's list of approved 
providers and include any relevant information regarding such removal. 
If a State needs additional information or clarification, it may 
contact the State that removed the provider directly. We note that 
whether a provider has been removed from another State's list of 
approved providers is only one of the standards that a State must use 
in approving or renewing approval of providers under Sec.  200.47(b) 
and (c).
    Changes: None.
    Comment: One commenter suggested that a provider be removed from a 
State's approved provider list if the provider gives false information 
on whether it has been removed from another State's list of approved 
providers.
    Discussion: The Secretary agrees that there could be cause for 
removal from a State's approved provider list if a provider makes false 
claims about its removal from another State's list of approved 
providers. Ultimately, however, the decision to remove a provider from 
a State's list of approved providers remains with the State.
    Changes: None.
    Comment: One commenter recommended that the Secretary require SEAs, 
in approving SES providers, to: (1) Identify a pool of providers that 
demonstrate effectiveness in engaging with ``disconnected youth'' and 
reinforce State standards in developing workforce skills; (2) identify 
and remove barriers that hinder the approval and participation of local 
community-based organizations as SES providers; and (3) include 
specific selection criteria for providers to address workforce and 
youth development needs.
    Discussion: The primary purpose of SES is to increase the academic 
achievement of eligible students on State assessments and help students 
attain proficiency in meeting the State's academic achievement 
standards. A State with a particular need for SES providers to serve 
eligible disconnected youth could develop and use criteria in addition 
to the approval criteria in Sec.  200.47(b)(2) and (b)(3) in order to 
identify a pool of providers that can effectively engage with 
disconnected youth to help them meet the State's academic achievement 
standards. However, the Secretary does not believe that all providers 
should be required to have that particular expertise and declines to 
establish specific selection criteria related to serving disconnected 
youth.
    The Secretary agrees that it is important to engage community-based 
organizations in providing SES. Section 1116(e)(4)(A) of the ESEA and 
Sec.  200.47(a)(1)(i) already require a State to consult with LEAs, 
parents, teachers, and other interested members of the public in order 
to promote maximum participation by providers so that parents have as 
many choices of SES providers as possible. We believe it is extremely 
important for parents, teachers, and members of the public to encourage 
and recruit community-based organizations to apply to their State to 
become approved SES providers. In addition, States should ensure that 
they create ways to tap this potential pool of SES providers.
    Changes: None.
    Comment: A number of commenters recommended that the Department 
require States to approve an adequate number of SES providers who are 
trained to provide services to students with disabilities, including 
students with the most significant cognitive disabilities and students 
with low-incidence disabilities (e.g., students with mental 
retardation, deaf students, students who are blind). Other commenters 
recommended that all approved providers be required to serve students 
with disabilities and LEP students. Similarly, some commenters 
recommended that a provider's instruction and content be appropriate 
for and accessible to all students, including students with 
disabilities and LEP students. One commenter recommended adding a 
requirement that States consider, as part of their approval process, 
the ability of SES providers to provide quality services to LEP 
students. Some commenters recommended that States be required to 
indicate, on their lists of approved

[[Page 64488]]

providers, the providers that are trained to serve students with 
disabilities.
    Discussion: Current Sec.  200.47(a)(5) and (a)(6), respectively, 
requires SEAs to ensure that eligible students with disabilities under 
the IDEA and students covered under section 504 of the Rehabilitation 
Act of 1973, as amended (Section 504), receive appropriate supplemental 
educational services and accommodations in the provision of those 
services, and that eligible LEP students receive appropriate 
supplemental educational services and language assistance in the 
provision of those services. These regulations clearly require SEAs to 
ensure that an adequate number of providers in the State have the 
capability to provide services to students with disabilities and LEP 
students. Moreover, as indicated in the Department's Supplemental 
Educational Services Non-Regulatory Guidance (June 13, 2005), if no 
provider is able to provide SES to eligible students with disabilities, 
students covered under Section 504, or LEP students, an LEA would need 
to provide these services, with necessary accommodations and language 
assistance, either directly or through a contract (see questions C-4 
and C-5 in the guidance available at http://www.ed.gov/policy/elsec/guid/suppsvcsguid.doc).
    SES providers include a wide variety of agencies and organizations, 
including LEAs, large national operators, and small local organizations 
that focus on providing SES to particular groups of students. For 
example, a small community-based organization might have particular 
expertise in serving LEP students in one specific language group; 
another might focus on students with a specific disability. Requiring 
all prospective providers to serve students with the full range of 
disabilities or students with the full range of second-language needs 
would undoubtedly result in disqualifying many potentially effective 
providers from the program. Therefore, we decline to require that all 
providers be able to serve students with disabilities and LEP students.
    As we noted in the discussion of the comments on Sec.  200.37, the 
Secretary agrees that State and LEA lists of approved providers should 
include information on providers who serve students with disabilities 
and providers who serve LEP students. We, therefore, have added 
language to Sec.  200.37(b)(5)(ii)(B) and Sec.  200.47(a)(3)(ii) to 
make this clear.
    Changes: As noted previously, we have revised Sec.  
200.37(b)(5)(ii)(B) and Sec.  200.47(a)(3)(ii) to require LEAs and 
States, respectively, to indicate on the list of approved SES providers 
those providers that are able to serve students with disabilities or 
LEP students.
    Comment: One commenter recommended that States be required to 
monitor providers' data and performance with students with disabilities 
and LEP students. Another commenter suggested that, as part of a 
State's monitoring of providers, the State should be required to 
consider the effectiveness of SES providers in serving LEP students.
    Discussion: Section 1116(e)(4)(D) of the ESEA is clear that the SEA 
is responsible for monitoring the quality and effectiveness of the 
services offered by approved providers. A provider that serves students 
with disabilities or LEP students should be monitored by the SEA in the 
same manner as the SEA monitors other providers.
    Changes: None.

Section 200.48 Funding for Choice-Related Transportation and 
Supplemental Educational Services

Section 200.48(a) Costs for Outreach and Assistance to Parents

    Comment: Several commenters supported proposed Sec.  
200.48(a)(2)(iii)(C), which would allow an LEA to count its costs for 
parent outreach and assistance toward the requirement to spend an 
amount equal to at least 20 percent of the LEA's Title I, Part A 
allocation on choice-related transportation and SES (the ``20 percent 
obligation''). This change would permit an LEA to allocate up to 0.2 
percent of its Title I, Part A allocation, (i.e., 1.0 percent of the 20 
percent obligation), in that manner (the 0.2 percent cap). However, 
other commenters objected to this proposal. One commenter stated that 
this provision would increase the procedural ``hoops'' through which 
LEAs must jump and dilute needed classroom services. Similarly, another 
commenter stated that the provision would ``tie the hands'' of LEAs in 
their expenditure of local dollars.
    Discussion: The commenters objecting to the new flexibility to 
count parent outreach and assistance funds toward meeting the 20 
percent obligation appear to have misunderstood the proposal. The new 
regulation would not create any new procedural requirements for LEAs or 
tie their hands in spending funds; rather, Sec.  200.48(a)(2)(iii)(C) 
provides additional flexibility that should make it easier for LEAs to 
finance the provision of outreach and other assistance to parents to 
help them take advantage of their Title I public school choice and SES 
options. Although LEAs should already be undertaking parent outreach 
activities and providing parent assistance related to public school 
choice and SES, LEAs' inability to count the cost of those activities 
toward meeting the 20 percent obligation may have limited the extent of 
that outreach. Section 200.48(a)(2)(iii)(C) should encourage LEAs to 
provide needed outreach and assistance to parents and may also make it 
easier for LEAs to meet their 20 percent obligation.
    Changes: None.
    Comment: A number of commenters expressed concern that the 0.2 
percent cap on parent outreach and assistance would be insufficient for 
LEAs to engage in significant outreach activities. Other commenters 
stated that the 0.2 percent cap should not be limited to outreach 
expenses and recommended that the final regulations allow other 
administrative expenses to count toward meeting the 20 percent 
obligation. The commenters also suggested that such expenses be subject 
to a larger cap or not be capped at all.
    Discussion: In order to increase participation in public school 
choice and SES, the Secretary believes that LEAs need to devote 
sufficient effort to notifying parents of available public school 
choice and SES options. The Secretary proposed to permit LEAs to count 
a portion of their public school choice and SES outreach expenses 
toward meeting the 20 percent obligation in order to ensure that LEAs 
provide parents the information they need to make the best, most 
informed decisions for their children. This amount is capped at 0.2 
percent of an LEA's Title I, Part A allocation. The Secretary believes 
that this amount is sufficient to support meaningful outreach 
activities in many LEAs. We believe that expanding the size of the cap 
or extending it to cover other administrative expenses related to 
public school choice and SES might lead to a reduction in the number of 
students who could take advantage of these options. Therefore, we 
decline to allow other administrative expenses to count toward meeting 
the 20 percent obligation or to permit no cap or a higher cap. 
Moreover, LEAs already have great flexibility in the use of their Title 
I, Part A allocations to administer all aspects of their local Title I 
programs.
    Changes: None.
    Comment: Two commenters recommended that transportation be provided 
to children who enroll in SES and that LEAs be allowed to count the 
costs of that transportation toward meeting the 20 percent obligation.

[[Page 64489]]

    Discussion: Although section 1116(b)(9) of the ESEA requires LEAs 
to provide transportation or pay for the cost of transportation for 
students taking advantage of the public school choice option under Part 
A of Title I, it does not include a similar requirement with respect to 
SES. In addition, current Sec.  200.48(a)(2)(iii)(B) does not allow an 
LEA to include transportation costs for SES to count toward meeting the 
20 percent obligation. The Secretary believes that funds made available 
for SES should be used to pay for actual services and not 
transportation costs. We, therefore, decline to make the changes 
requested by the commenter.
    Changes: None.
    Comment: One commenter supported the proposal allowing LEAs to 
count funds used for parent outreach toward meeting the 20 percent 
obligation but suggested that the Department publish a list of 
allowable uses of those funds. The commenter also expressed opposition 
to any provision requiring States to track and report LEAs' use of 
outreach funds. Another commenter recommended that the final 
regulations require LEAs to prepare a plan detailing and justifying the 
use of the funds for parent outreach and assistance.
    Discussion: The Secretary believes that LEAs are in the best 
position to determine the most effective means of providing parent 
outreach and assistance related to public school choice and SES. 
Therefore, we do not believe that it is necessary to specify in the 
regulations the types of parent outreach and assistance activities that 
LEAs may implement with funds counted toward meeting the 20 percent 
obligation under Sec.  200.48(a)(2)(iii)(C). We believe it is best left 
to LEAs to determine the methods of outreach and assistance that meet 
the needs of the parents and students they serve. We also believe that 
a requirement for LEAs to prepare a detailed plan for the use of the 
outreach funds would create unnecessary burden without sufficient 
corresponding benefit.
    The Department notes that Title I, Part A funds expended to meet 
the 20 percent obligation, like other Title I, Part A funds, would be 
auditable expenses and that LEAs should account for them as they would 
other Federal funds. The Department is not, at this time, intending to 
collect data on the use of these funds.
    Changes: None.

Section 200.48(d) 20 Percent Obligation

    Comment: A number of commenters supported proposed Sec.  
200.48(d)(1), which would have required an LEA, before using unspent 
funds from its 20 percent obligation for other purposes, to demonstrate 
to the SEA success in meeting the following criteria:
    (a) Partnering with community-based organizations or other groups 
to help inform eligible students and their families of the 
opportunities to transfer or to receive supplemental educational 
services;
    (b) Ensuring that eligible students and their parents had a genuine 
opportunity to sign up to transfer or to obtain SES, including by--
    (i) Providing timely, accurate notice as required in Sec. Sec.  
200.36 and 200.37;
    (ii) Ensuring that sign-up forms for SES are distributed directly 
to all eligible students and their parents and are made widely 
available and accessible through broad means of dissemination, such as 
the Internet, other media, and communications through public agencies 
serving eligible students and their families; and
    (iii) Allowing eligible students to sign up to receive SES 
throughout the school year; and
    (c) Ensuring that eligible SES providers are given access to school 
facilities, using a fair, open, and objective process, on the same 
basis and terms as are available to other groups that seek access to 
school facilities.
    Other commenters opposed the proposed regulations. Some commenters 
asserted that the changes in proposed Sec.  200.48(d) were inconsistent 
with the statute and that the Secretary does not have the authority to 
require LEAs to carry over unexpended public school choice and SES 
funds.
    Discussion: The Secretary believes that the regulations are fully 
consistent with section 1116(b)(10) of the ESEA, which requires an LEA 
to spend, each year, an amount equal to at least 20 percent of its 
Title I, Part A allocation for choice-related transportation and SES 
unless a lesser amount is needed to satisfy all demand. Thus, unless an 
LEA has met all demand, this statutory obligation continues to exist, 
and the LEA must fulfill its obligation in the subsequent fiscal year. 
This is true with respect to any statutory set-aside requirement. For 
example, section 1118(a)(3) of the ESEA requires an LEA to reserve not 
less than one percent of its Title I, Part A allocation each year for 
parent involvement activities. If an LEA does not spend the full one 
percent for parent involvement activities in the year for which its 
Part A allocation was appropriated, the LEA must spend the unspent 
portion in the subsequent year for parent involvement activities, in 
addition to meeting its statutory obligation for that subsequent year. 
There are two differences, however, between most set-aside requirements 
and the 20 percent obligation: (1) The 20 percent obligation need not 
be met with Title I, Part A funds; and (2) the 20 percent obligation is 
dependent on demand, which may, in fact, result in an LEA spending less 
than the full statutory amount if it has met all demand for choice-
related transportation and SES. We proposed the criteria in Sec.  
200.48(d)(1) (new Sec.  200.48(d)(2)(i)) to encourage LEAs to devote 
sufficient effort to ensuring they have met the demand for public 
school choice and SES by notifying parents of their available public 
school choice and SES options and to making SES conveniently available 
in order to afford parents a genuine opportunity to participate. We 
believe the Secretary has the authority to make these changes under 
section 1901(a) of the ESEA, which authorizes the Secretary to ``issue 
such regulations as are necessary to reasonably ensure that there is 
compliance with [Title I].''
    Changes: None.
    Comment: One commenter objected to the criteria in proposed Sec.  
200.48(d)(1) because, according to the commenter, they would decrease 
LEA flexibility to spend Title I funds on plans that LEAs know will 
work best for the students in their schools. Other commenters stated 
that the proposed regulations would result in ``micromanaging'' LEAs 
and inappropriately blame LEAs for parental decisions not to transfer 
their child to a new school or obtain SES for their child. One 
commenter asserted that proposed Sec.  200.48(d) would result in 
``favorable treatment'' of Title I public school choice and SES options 
relative to the ``regular'' Title I program.
    Discussion: The Secretary understands the need to balance the 
demand for SES and public school choice with the desire of LEAs to use 
all available funds to implement effective Title I programs. However, 
evidence from a wide range of sources, including participation data 
reported by States in their Consolidated State Performance Reports, 
data on participation rates and notification practices from the NATI 
report, and the Department's monitoring of public school choice and SES 
notification and enrollment practices, suggests that, in many LEAs 
across the country, low demand for public school choice and SES is 
related to poor-quality implementation. The regulations are not 
intended to prevent LEAs from appropriately using unspent choice-
related transportation and SES funds on other allowable activities or 
to favor one part of Title I over another, but to ensure that, before 
using these funds for other

[[Page 64490]]

purposes, parents of all eligible students are given a genuine 
opportunity to request a school transfer or sign up to receive SES.
    Changes: None.
    Comment: One commenter recommended that LEAs that spend an amount 
equal to at least 10 percent of their Title I, Part A allocations on 
choice-related transportation and SES should not have to meet the 
criteria in proposed Sec.  200.48(d)(1).
    Discussion: The Department believes it would be inconsistent with 
the statute to exempt from compliance with the requirements in Sec.  
200.48(d) an LEA that spends less than its 20 percent obligation on 
choice-related transportation and SES. Section 1116(b)(10) of the ESEA 
clearly requires that an LEA spend an amount equal to at least 20 
percent of its Title I, Part A allocation on choice-related 
transportation and SES unless it has met all demand for public school 
choice and SES with a lesser amount. Moreover, the purpose of the 
requirements in Sec.  200.48(d) is not to ensure that an LEA spends any 
particular proportion of its 20 percent obligation on choice-related 
transportation and SES, but to promote effective implementation of 
Title I public school choice and SES options. For example, one LEA 
meeting all of the criteria in new Sec.  200.48(d)(2)(i) (proposed 
Sec.  200.48(d)(1)) may experience demand requiring only one-quarter of 
its 20 percent obligation, while another LEA spending half of its 20 
percent obligation, the proportion recommended by the commenter, may 
well be ignoring significant additional demand for public school choice 
and SES if it is not meeting the criteria in new Sec.  200.48(d)(2)(i) 
(proposed Sec.  200.48(d)(1)).
    Changes: None.
    Comment: Several commenters objected to proposed Sec.  200.48(d) 
because, according to the commenters, this provision does not take into 
account situations in which an LEA may have a legitimate reason for 
either not spending the full 20 percent obligation or not being able to 
meet one or more of the criteria in proposed Sec.  200.48(d)(1). Some 
commenters noted, for example, that many rural LEAs are not able to 
provide public school choice because they have only one school at each 
grade level and are not able to provide SES because there are so few 
SES providers in the area. Another commenter provided an example of an 
LEA that has one school in corrective action and that, even assuming 
all eligible students took advantage of their public school choice and 
SES options, would need to spend only one-third of its 20 percent 
obligation to meet the needs of those students. Yet another commenter 
offered an example of an LEA that for the past two years has set aside 
the full 20 percent obligation, over-enrolled students in SES, and then 
not spent all of its 20 percent obligation due to the failure of 
particular providers to serve students or to complete services 
according to the contracted schedule. This commenter objected to being 
forced to carry over dollars that were not spent because providers did 
not provide the contracted services. One commenter claimed that States 
are better positioned than the Department to understand these local 
circumstances and determine whether LEAs are appropriately implementing 
the public school choice and SES requirements.
    Discussion: The Department believes these commenters are 
misinterpreting the requirements in Sec.  200.48(d), which would not 
apply to LEAs that, for legitimate reasons, cannot spend their full 20 
percent obligation. In general, the Department agrees that States would 
have the authority, under existing law and regulation, to determine 
that the provisions in Sec.  200.48(d) do not apply in the 
circumstances cited by the commenters. For example, the provisions in 
Sec.  200.48(d) would not apply to LEAs that are not able to provide 
public school choice because they have only one school at each grade 
level or to LEAs that are not served by SES providers and, thus, are 
not able to make SES available to students who otherwise would be 
eligible for such services.
    Similarly, the requirements in Sec.  200.48(d) do not apply if an 
LEA enrolls sufficient numbers of eligible students to spend all funds 
reserved for choice-related transportation and SES, but has funds left 
over at the end of the year because one or more providers did not 
fulfill their contractual obligations or because enrolled students did 
not begin or complete services. However, if an LEA experiences 
significant student attrition in its SES program early in the school 
year, leading to lower than anticipated expenditures, it would be 
expected to hold a second enrollment period and sign up sufficient 
students to use the full 20 percent obligation.
    In the case of an LEA that is able to provide public school choice 
and SES to all eligible students without spending its full 20 percent 
obligation, the requirements in Sec.  200.48(d) apply only to the funds 
that are reserved to serve eligible students. For example, if an LEA 
can serve all eligible students with an amount equal to 10 percent of 
its Title I, Part A allocation, it would be required to reserve only 
that amount for choice-related transportation and SES and would be able 
to use the other half of its 20 percent obligation immediately for 
other allowable activities. Note, however, that an LEA seeking to 
exempt a portion of its 20 percent obligation from the requirements in 
Sec.  200.48(d) must base the amount that it reserves for choice-
related transportation and SES on the assumption that all eligible 
students will choose to transfer schools or obtain SES. If the amount 
reserved in this manner is less than the full 20 percent obligation, 
then the requirements in Sec.  200.48(d) apply only to this lesser 
amount. Finally, any LEA that is already providing public school choice 
and SES to all eligible students would not be subject to Sec.  
200.48(d).
    Changes: None.
    Comment: A large number of commenters expressed concern about the 
effect of the provisions in Sec.  200.48(d) on LEAs' Title I, Part A 
allocations. These concerns appeared to be based primarily on the 
potential interaction of the requirements in Sec.  200.48(d) with the 
statutory limitation in section 1127(a) of the ESEA that prohibits LEAs 
from carrying over more than 15 percent of their Title I, Part A 
allocations from one fiscal year to the next fiscal year. Some 
commenters stated that the proposed regulations could lead to the loss 
of millions of dollars appropriated for Title I and, as a result, 
prevent LEAs from operating quality programs. Two commenters requested 
clarification of what happens when funds are carried over, including 
the possibility that unspent choice-related transportation and SES 
funds are carried over repeatedly for a number of years. Finally, other 
commenters recommended various measures to avoid such losses, such as 
allowing States to waive the criteria in proposed Sec.  200.48(d)(1) 
for LEAs that otherwise would lose access to Title I funds due to the 
15 percent carryover limitation. Another commenter recommended 
excluding funds from the 20 percent obligation from the 15 percent 
carryover limitation and not restricting any funds that are carried 
over as a result of this exclusion for choice-related transportation or 
SES.
    Discussion: LEAs, like other recipients of Federal education funds, 
are subject to a variety of requirements governing the availability and 
use of those funds. If LEAs do not meet these requirements, for 
whatever reason, it is possible to lose access to the funds. However, 
LEAs have considerable flexibility in managing their Federal 
allocations, including those received under Title I, Part A of the 
ESEA, and the Department does not believe that the

[[Page 64491]]

application of Sec.  200.48(d) is likely to lead to a loss of Title I 
funding. The Department also believes that the commenters have 
exaggerated the number of LEAs, even under the proposed regulation, 
that would be required to carry over unspent choice-related 
transportation and SES funds and thus potentially be subject (assuming 
they are carrying over Title I funds) to the 15 percent Title I 
carryover limitation. The vast majority of LEAs seeking to use unspent 
choice-related transportation and SES funds for other allowable 
activities are likely to take whatever measures are required to meet 
the criteria in new Sec.  200.48(d)(2)(i) (proposed Sec.  
200.48(d)(1)), use unspent funds as needed, and thus avoid any 
potential problems that could be created by carrying over a significant 
amount of Title I funds from one year to the next. Those that do carry 
over Title I funds are likely to employ ``first in-first out'' 
accounting practices under which affected LEAs would spend any carried 
over ``prior-year'' funds first, before using current year funds, in 
order to avoid lapsing any prior-year funds due to the end of the 
period of availability.
    Under the final regulation, the LEAs that are likely to carry over 
unused choice-related transportation and SES funds are those that have 
not met the criteria in new Sec.  200.48(d)(2)(i) (proposed Sec.  
200.48(d)(1)). However, even these LEAs would be unlikely to lose Title 
I funds due to the 15 percent Title I carryover limitation or other 
Federal accounting requirements, for several reasons. First, under 
section 1127(b) of the ESEA, an LEA may apply to the State for a one-
year exemption (available once every three years) from the 15 percent 
Title I carryover limitation. This exemption is one reason that the 
Department believes that other measures proposed by commenters to 
ensure that an LEA does not lose unspent choice-related transportation 
and SES funds due to the 15 percent Title I carryover limitation, such 
as a waiver of the criteria in new Sec.  200.48(d)(2)(i) (proposed 
Sec.  200.48(d)(1)) or excluding funds from the 20 percent obligation 
from the 15 percent Title I carryover limitation, are unnecessary.
    The second reason the 15 percent Title I carryover limitation 
should not lead to the loss of an LEA's Title I funds is that Sec.  
200.48(d) focuses on the amount that must be spent on choice-related 
transportation and SES, not the specific funds or source of funds that 
an LEA uses to satisfy that amount. In other words, what is actually 
``carried over'' is a funding commitment, not actual funds. LEAs not 
meeting the criteria must add the amount of any unused portion of the 
20 percent obligation to the amount that must be spent on choice-
related transportation and SES in the subsequent year. Thus, an LEA 
that does not meet the criteria in new Sec.  200.48(d)(2)(i) (proposed 
Sec.  200.48(d)(1)), and that has, for example, $100,000 in unused 
fiscal year 2009 Title I, Part A funds that were reserved as part of 
the LEA's 20 percent obligation in the 2009-2010 school year, does not 
have to carry over those specific Title I funds to the next school 
year. The LEA could use that $100,000 in fiscal year 2009 Title I funds 
for other Title I activities in the 2009-2010 school year, so long as 
it adds the same $100,000 amount--from any Federal, State, or local 
source--to its 20 percent obligation for the 2010-2011 school year. The 
third reason that LEAs in this situation would be unlikely to allow 
carried-over Title I funds to lapse is that they are likely to use 
``first in-first out'' accounting rules, as described earlier in this 
discussion.
    For all of these reasons, the Department believes that the concerns 
expressed by commenters about the potential loss of Title I funds due 
to the interaction of the requirements in Sec.  200.48(d) and the 15 
percent Title I carryover limitation are unwarranted. Moreover, it is 
not the intention, or the expectation, of the Secretary that any LEA 
will lose access to any portion of its Title I, Part A allocation due 
to the requirements in Sec.  200.48(d). Rather, these requirements are 
intended to promote, consistent with the authorizing statute, maximum 
participation by eligible students in Title I public school choice and 
SES.
    Changes: None.
    Comment: One commenter asserted that the criteria in proposed Sec.  
200.48(d)(1) that an LEA must meet in order to carry over unused funds 
from its 20 percent obligation are inconsistent with the current 15 
percent Title I carryover limitation because the primary purpose of 
that limitation is to ensure that most Title I funds are spent in the 
program year for which the funds were appropriated.
    Discussion: Assuming proper implementation of public school choice 
and SES, the Secretary expects that, consistent with the intent of the 
carryover limitation in section 1127 of the ESEA, all funds from an 
LEA's 20 percent obligation should be spent in the school year for 
which these funds are appropriated. However, if proper implementation 
does not happen, we believe it is appropriate to require LEAs to 
redouble their efforts in the following year, even if that requires 
carrying over some portion of their 20 percent obligation. Also, as 
described in detail in the previous comment and discussion, Sec.  
200.48(d) does not require LEAs to carry over any specific funds. 
Rather, any LEA not meeting the criteria in new Sec.  200.48(d)(2)(i) 
(proposed Sec.  200.48(d)(1)) for a given school year must, in the 
following school year, spend on choice-related transportation and SES 
an amount equal to its 20 percent obligation for that school year plus 
the amount of any unspent choice-related transportation and SES funds 
from the previous school year. Meeting the requirements in Sec.  
200.48(d) does not require carrying over funds from one year to the 
next.
    Changes: None.
    Comment: One commenter warned that the 15 percent Title I carryover 
limitation could allow LEAs to evade the requirements in Sec.  
200.48(d). More specifically, the commenter stated that, if an LEA was 
already carrying over other Title I funds close to or exceeding the 15 
percent Title I carryover limitation, it would not be able to carry 
over any unused funds from its 20 percent obligation and, thus, would 
not be able to add these unused funds to the amount required to be 
spent on choice-related transportation and SES in the subsequent year. 
To avoid this possible outcome, the commenter recommended that the 
final regulations exclude unused funds from the 20 percent obligation 
from the 15 percent Title I carryover limitation and require affected 
LEAs to disclose publicly the amount of any funds carried over due to 
failing to meet the criteria in proposed Sec.  200.48(d)(1).
    Discussion: While the Department understands the commenter's 
concern that some LEAs may attempt to use the 15 percent Title I 
carryover limitation to evade the requirements in Sec.  200.48(d), we 
believe the commenter's analysis is incorrect in several ways. First, 
the Department believes that there are few, if any, LEAs that would 
prefer simply to lose access to a significant portion of their Title I 
allocation rather than comply with the criteria in new Sec.  
200.48(d)(2)(i) (proposed Sec.  200.48(d)(1)) that can help raise 
student achievement and help schools and LEAs make AYP. Second, if an 
LEA already is carrying over 15 percent of its Title I, Part A 
allocation (before the addition of any unspent portion of its 20 
percent obligation to the carryover total), it would first need to use 
those funds to meet unmet requirements, such as the 20 percent 
obligation. Finally, as with section 1116(b)(10) of the ESEA, which 
refers not to specific funds but to ``an amount equal to'' 20 percent 
of an

[[Page 64492]]

LEA's Title I, Part A allocation, new Sec.  200.48(d)(1)(i) (proposed 
Sec.  200.48(d)(1)) requires an LEA that does not meet the criteria 
``to spend the unexpended amount in the subsequent school year'' 
(emphasis added) on choice-related transportation, SES, or parent 
outreach and assistance. This means that, regardless of the loss of 
access to specific Title I or non-Title I funds due to carryover 
limitations or other requirements governing the use of such funds, the 
LEA remains obligated to add the ``unexpended amount'' to the 20 
percent obligation for public school choice and SES in the following 
year, and would have to identify another source of funding to replace 
any funds lost due to the 15 percent Title I carryover limitation. 
Because it is the requirement to spend this ``unexpended amount,'' and 
not the specific funds originally reserved to meet the 20 percent 
obligation, that is carried over to the following year, there is no 
need to exempt unused funds from an LEA's 20 percent obligation from 
the statutory 15 percent Title I carryover limitation, a change that in 
any case would not be possible through regulatory action alone. As for 
the recommendation that LEAs publicly disclose any unexpended amount 
that is carried over to the subsequent year, the Department believes 
that such disclosure would be subject to misinterpretation and would 
not necessarily provide useful information to parents.
    Changes: None.
    Comment: Two commenters expressed concern about the potential 
impact that the criteria in proposed Sec.  200.48(d)(1) would have on 
private school students receiving equitable services under Title I. One 
commenter stated, for example, that Sec.  200.48(d) would require an 
LEA to carry over all unspent funds to the following year for the 
exclusive use of public schools, thereby eliminating the opportunity 
for private school students to benefit from their equitable share of 
the unspent funds. The second commenter recommended that any unspent 
funds be made available as soon as possible during the school year so 
that nonpublic school students can receive their fair share under the 
equitable participation requirements of the ESEA.
    Discussion: Section 1120 of the ESEA requires an LEA to provide 
equitable Title I services to eligible students enrolled in private 
elementary and secondary schools, their teachers, and their families. 
Funds to provide these services are generated by students from low-
income families who reside in a participating public school attendance 
area and attend a private school. Equitable services for private school 
students generally apply to Title I funds spent for instruction for 
elementary and secondary school students, professional development, and 
parent involvement. They do not apply, however, to all uses of Title I 
funds. For example, they do not apply to preschool services, because 
preschool is generally not considered to be elementary education under 
State law, and they do not apply to Title I funds reserved for choice-
related transportation and SES, because private schools are not subject 
to school improvement and private school students do not receive SES. 
Thus, if an LEA carries over unspent Title I funds to the subsequent 
year for particular purposes such as SES, the application of the 
equitable services requirements depends on the purpose for which those 
carryover funds are used.
    For this reason, the Department does not believe that the 
provisions in Sec.  200.48(d), which potentially require an LEA with 
unused funds from its 20 percent obligation to carry over those funds 
for expenditure on choice-related transportation and SES in the 
subsequent school year, unlawfully or otherwise inappropriately affect 
the amount of carryover funds available for equitable services for 
private school students. It is important to note that the requirement 
to spend an amount equal to at least 20 percent of an LEA's Title I, 
Part A allocation for choice-related transportation and SES applies 
even if an LEA does not use Title I, Part A funds to meet its 20 
percent obligation. However, assuming an LEA does use Title I, Part A 
funds, those funds are not subject to the equitable services 
requirement, as noted previously, because they are specifically used to 
provide choice-related transportation, SES, and parent outreach to 
eligible students in schools in need of improvement, corrective action, 
and restructuring--requirements that do not apply to private schools or 
services that private school students receive under Title I, Part A, 
just as they do not apply to services for students in public schools 
that are not identified for improvement. The regulations in Sec.  
200.48(d) merely require an LEA that did not spend the requisite amount 
in a given year on choice-related transportation, SES, and parent 
outreach to spend the unexpended amount on those same activities in the 
following year (unless the LEA meets the criteria in new Sec.  
200.48(d)(2)(i) (proposed Sec.  200.48(d)(1)). If an LEA reserved Title 
I, Part A funds for those activities and can demonstrate that spending 
an amount less than the 20 percent obligation is warranted, the Title 
I, Part A funds that the LEA then may use for other allowable 
activities would be subject to the equitable services requirements, as 
applicable. The revised criteria in new Sec.  200.48(d)(2)(i), 
particularly in new paragraph (d)(2)(i)(B)(3) relating to two 
enrollment ``windows,'' should enable an LEA to determine by mid-year 
whether it has met all demand for choice-related transportation and SES 
and, thus, can spend any unspent funds on other allowable activities. 
After it makes this determination, the LEA must consult with 
appropriate private school officials pursuant to section 1120(b) of the 
ESEA as to what equitable services the LEA will provide to eligible 
private school students with funds remaining from its 20 percent 
obligation.
    Changes: None.
    Comment: One commenter claimed that forcing LEAs to carry over 
unused State or local funds that were part of an LEA's 20 percent 
obligation would violate the unfunded mandates provision in section 
9527(a) of the ESEA. Another commenter requested clarification on the 
potential impact of Sec.  200.48(d) on any non-Title I funds reserved 
to meet an LEA's 20 percent obligation.
    Discussion: The claim that the criteria in new Sec.  
200.48(d)(2)(i) (proposed Sec.  200.48(d)(1)) violate the so-called 
``unfunded mandates'' provision in section 9527(a) of the ESEA is 
incorrect. Section 9527(a) prohibits the Secretary from mandating that 
a State or LEA ``spend any funds or incur any costs not paid for under 
[the ESEA].'' As noted previously, the 20 percent obligation for 
choice-related transportation and SES created by section 1116(b)(10) of 
the ESEA does not require the use of any particular Federal, State, or 
local funds; instead, it requires an LEA with schools identified for 
improvement, corrective action, or restructuring to spend an amount 
equal to at least 20 percent of its Title I, Part A allocation on 
choice-related transportation and SES unless a lesser amount is needed. 
An LEA has complete discretion as to the source of funds, and the 
Secretary is not mandating through Sec.  200.48(d) that an LEA use 
State or local funds to meet this requirement. Likewise, an LEA that 
does not meet the criteria in new Sec.  200.48(d)(2)(i) (proposed Sec.  
200.48(d)(1)) would not be required to carry over any specific unused 
State or local funds it has set aside to meet its 20 percent 
obligation, but would add the amount of those unused funds to its 20 
percent obligation for the subsequent year.
    Changes: None.

[[Page 64493]]

    Comment: One commenter requested that the Department clarify in the 
final regulations that the standard used to determine the amount that 
an LEA must spend on SES before using unspent funds for other purposes 
is based on an amount equal to 15 percent of the LEA's Title I, Part A 
allocation, rather than the current five percent minimum. Other 
commenters recommended that we clarify in the final regulations that 
this 5 percent minimum is all that an LEA must spend on SES under the 
statute.
    Discussion: These comments appear to have been based on a 
misunderstanding of current law and regulations. Under section 
1116(b)(10) of the ESEA, an LEA is required to spend a minimum of an 
amount equal to five percent of its Title I, Part A allocation on SES 
only in situations where the LEA faces such strong demand for choice-
related transportation that it otherwise might spend the full 20 
percent obligation only on choice-related transportation and not offer 
SES to any eligible students. Current law and regulations already 
require LEAs to spend the equivalent of 20 percent of their Title I, 
Part A allocation on choice-related transportation, SES, or a 
combination of the two, assuming there is sufficient demand for these 
options. Within that 20 percent, the statutory requirement in section 
1116(b)(1) to spend at least 15 percent on SES would continue to apply 
if an LEA spends no more than five percent on choice-related 
transportation.
    Changes: None.
    Comment: One commenter opposed the requirements in Sec.  200.48(d), 
recommending instead that any unused funds from the 20 percent 
obligation be redirected to Title I schools that have been identified 
for improvement.
    Discussion: The purpose of the requirements in Sec.  200.48(d) is 
to help ensure that LEAs improve their implementation of Title I public 
school choice and SES and thereby increase participation in these 
options. Redirecting unused portions of an LEA's 20 percent obligation 
to school improvement purposes, rather than requiring those portions to 
be carried over and used to support public school choice and SES in the 
subsequent year, would be inconsistent with this purpose.
    Changes: None.
    Comment: One commenter recommended that the Department require an 
LEA to spend any unused funds from its 20 percent obligation to provide 
additional SES.
    Discussion: We interpret this comment to mean that an LEA should 
not be permitted to spend unused funds from its 20 percent obligation 
for other allowable activities. However, section 1116(b)(10)(A) of the 
ESEA clearly anticipates situations in which an LEA may legitimately 
spend less than the full 20 percent obligation on choice-related 
transportation and SES and may then redirect such funds to other 
allowable activities.
    Changes: None.

State Review Process

    Comment: Several commenters claimed that ensuring compliance with 
the requirements in Sec.  200.48(d) would impose a significant and 
unnecessary burden on States, with some commenters recommending that 
compliance be enforced through State monitoring rather than through an 
advance approval process. One commenter argued that the provisions in 
proposed Sec.  200.48(d) appear to penalize all LEAs for the failures 
of a few, and that a better approach would be to investigate 
allegations of poor implementation of public school choice and SES. 
Another commenter observed that not meeting the full 20 percent 
obligation is not necessarily a sign of ``bad faith'' and recommended 
that the criteria apply only in cases where Federal or State monitoring 
efforts identify substantial problems in an LEA's implementation of the 
public school choice and SES requirements.
    Discussion: Proposed Sec.  200.48(d) was not intended to punish any 
LEA, but to help ensure that LEAs devote sufficient effort to notifying 
parents of available public school choice and SES options. The 
Secretary believes that many LEAs already make good-faith efforts to 
implement the public school choice and SES requirements and will have 
little difficulty meeting the new criteria if they want to use unspent 
funds from their 20 percent obligation for other purposes.
    As for the recommendation that proposed Sec.  200.48(d) apply only 
where Federal or State monitoring has found problems with LEA 
implementation of public school choice and SES requirements, the 
Department believes that the appropriate response to findings from 
State performance reports, evaluations, and Federal monitoring reports 
documenting continuing low participation rates in the face of a 
potentially increasing number of eligible students is not to continue 
to rely solely on routine monitoring. Although the Secretary does not 
agree that the requirements in proposed Sec.  200.48(d) would have 
created significant and unnecessary new administrative burden for 
States, she does agree that the goal of the proposed regulation--
improved implementation of Title I public school choice and SES 
provisions--can be met through a more targeted approach to enforcement. 
For this reason, and to reduce administrative burden on States and 
LEAs, we have restructured and made several changes to proposed Sec.  
200.48(d). First, LEAs are not required to submit evidence of 
compliance with the criteria in new Sec.  200.48(d)(2)(i) (proposed 
Sec.  200.48(d)(1)) to their SEA, or to receive SEA approval before 
using unspent choice-related transportation and SES funds for other 
allowable activities. Instead, the final regulations only require an 
LEA seeking to use unspent choice-related transportation and SES funds 
for other allowable activities to (1) maintain records showing that it 
has met the criteria in new Sec.  200.48(d)(2)(i), (2) notify the SEA 
that it has met those criteria, and (3) notify the SEA that it intends 
to spend the remainder of its 20 percent obligation on other allowable 
activities and indicate the amount of that remainder. An SEA will not 
be required to review and approve each LEA's use of unspent funds from 
its 20 percent obligation but generally will ensure LEA compliance 
through its regular monitoring process. However, in addition to its 
regular monitoring, an SEA must review any LEA that (1) the SEA 
determines has spent a significant portion of its 20 percent obligation 
for other activities, and (2) has been the subject of multiple 
complaints, supported by credible evidence, regarding the LEA's 
implementation of the public school choice and SES requirements. The 
SEA must complete the required review of such LEAs before the beginning 
of the next school year. We also note that an SEA may target for review 
any LEA that it believes is not implementing public school choice and 
SES in accordance with the law and regulations.
    If an SEA finds during its monitoring and review that an LEA failed 
to meet any of the criteria in new Sec.  200.48(d)(2)(i) (proposed 
Sec.  200.48(d)(1)), the LEA must (1) add the amount of any unspent 
choice-related transportation and SES funds (i.e., the ``remainder'' 
specified in new Sec.  200.48(d)(2)(iii)(B)) to its 20 percent 
obligation for the next school year or (2) meet the criteria in new 
Sec.  200.48(d)(2)(i) and obtain permission from the SEA before 
spending any portion of this total amount on activities other than 
choice-related transportation, SES, or parent outreach and assistance. 
In addition, the SEA must confirm the LEA's compliance with the 
criteria in new

[[Page 64494]]

Sec.  200.48(d)(2)(i) (proposed Sec.  200.48(d)(1)) for the subsequent 
year before it grants this permission.
    The final regulations also clarify that the criteria in new Sec.  
200.48(d)(2)(i) (proposed Sec.  200.48(d)(1)) are the minimum criteria 
that LEAs must meet before spending any portion of their 20 percent 
obligation on other allowable activities. An SEA may establish 
additional criteria for the effective implementation of Title I public 
school choice and SES options. We note, however, that any other 
criteria used by an SEA to review LEA compliance with the requirements 
in new Sec.  200.48(d)(2)(i) (proposed Sec.  200.48(d)(1)) must be in 
addition to, and may not serve as a substitute for, the criteria in new 
Sec.  200.48(d)(2)(i) (proposed Sec.  200.48(d)(1)).
    Changes: For purposes of clarification, we have revised Sec.  
200.48(a)(2)(iii)(C) to define ``20 percent obligation'' as an amount 
equal to 20 percent of an LEA's Title I, Part A allocation. We have 
restructured Sec.  200.48(d) and included the minimum criteria that an 
LEA must meet before using unspent funds from its 20 percent obligation 
for other allowable activities in new paragraph (d)(2)(i)(A) through 
(C) (proposed paragraph (d)(1)(i) through (iii)). A new Sec.  
200.48(d)(2)(ii) has been added to require an LEA seeking to spend less 
than its 20 percent obligation on choice-related transportation, SES, 
and parent outreach and assistance to maintain records demonstrating 
compliance that it has met the criteria in new Sec.  200.48(d)(2)(i). A 
new Sec.  200.48(d)(2)(iii) has been added to also require the LEA to 
notify the SEA that it has met these criteria, and that it intends to 
spend the remainder of its 20 percent obligation on other allowable 
activities and indicate the amount of that remainder. A new paragraph 
(d)(3) has been added to require each SEA, in addition to enforcing 
Sec.  200.48(d) through its regular monitoring of LEA Title I programs, 
to review for compliance with new Sec.  200.48(d)(2)(i) any LEA that 
(1) the SEA determines has spent a significant portion of its 20 
percent obligation for other activities, and (2) has been the subject 
of multiple complaints, supported by credible evidence, regarding its 
implementation of public school choice or SES requirements. A new 
paragraph (d)(3)(ii)(B) has been added to require the SEAs to complete 
the review of such LEAs before the beginning of the next school year.
    Proposed Sec.  200.48(d)(2) has been redesignated as new Sec.  
200.48(d)(1)(ii) and a new paragraph (d)(4) has been added to provide 
that if an SEA determines, either through its regular monitoring or 
through the review required by new paragraph (d)(3)(ii), that an LEA 
has failed to meet any of the criteria in new paragraph (d)(2)(i), the 
LEA must (1) spend an amount equal to the remainder specified in its 
notice to the SEA under new Sec.  200.48(d)(2)(iii)(B) in the 
subsequent school year, in addition to its 20 percent obligation for 
that year on choice-related transportation costs, SES, or parent 
outreach and assistance or (2) meet the criteria in new Sec.  
200.48(d)(2)(i) and obtain permission from the SEA before spending less 
than this total amount (the remainder plus the new 20 percent 
obligation) on choice-related transportation, SES, or parent outreach 
and assistance. The SEA must confirm that the LEA has complied with the 
criteria in new paragraph (d)(2)(i) for that subsequent school year 
before granting such permission.
    Comment: One commenter recommended that we revise the regulations 
to provide authority for SEAs to waive LEA compliance with any of the 
criteria in proposed Sec.  200.48(d)(1).
    Discussion: As noted earlier in this section, Sec.  200.48(d) is 
intended to improve implementation of Title I public school choice and 
SES requirements by LEAs with large numbers of eligible students and 
low participation rates. After more than six years of NCLB 
implementation, a considerable body of evidence on existing 
implementation practices argues strongly for less, rather than more, 
flexibility in this area. This is why new Sec.  200.48(d)(2)(i) 
(proposed Sec.  200.48(d)(1)) identifies several ``best practices'' 
associated with effective implementation of and greater participation 
in public school choice and SES and generally requires that an LEA 
follow these practices before using unspent funds from its 20 percent 
obligation for other allowable activities. The Department also 
believes, as noted earlier in this preamble, that States already have 
the authority, under existing law and regulations, to determine that 
the provisions in Sec.  200.48(d) do not apply under certain 
circumstances, such as in LEAs that are not able to make available 
public school choice or SES options to their students due to a lack of 
such options in their geographic area. However, States do not have the 
authority to waive compliance with a specific criterion for an LEA to 
which Sec.  200.48(d) does apply.
    Changes: None.
    Comment: One commenter recommended that the evidence submitted to 
an SEA by an LEA to demonstrate success in meeting the criteria in 
proposed Sec.  200.48(d)(1) be publicly available, and that such 
evidence include a separate breakout of the funds spent on choice-
related transportation and SES, the amount of the unspent funds, and a 
justification for how the funds would subsequently be used.
    Discussion: The final regulations do not require LEAs to submit 
evidence that they have met the criteria in new Sec.  200.48(d)(2)(i) 
(proposed Sec.  200.(d)(1)) before using unspent choice-related 
transportation and SES funds for other allowable activities. The 
Secretary made this change, in part, to alleviate SEA and LEA concerns 
about administrative burden, and declines the commenter's 
recommendation to increase that burden by adding new data collection 
and disclosure requirements to the final regulations.
    Changes: None.

New Sec.  200.48(d)(2)(i)(A) (Proposed Sec.  200.48(d)(1)(i)) 
Partnering With Outside Organizations

    Comment: We received a number of comments on the proposal that an 
LEA, before using unspent choice-related transportation and SES funds 
for other purposes, demonstrate success in partnering with community-
based organizations (CBOs) or other groups to help inform eligible 
students and their families of the opportunities to transfer to another 
public school or to receive SES. One of these commenters recommended 
that this requirement be optional because some communities have few 
CBOs that are available or interested in partnering with LEAs.
    Discussion: The Department proposed this requirement based on 
findings from the NATI report and other evaluation data that 
participation in public school choice and SES is higher when parents 
learn of these options from multiple sources within their 
communities.\17\ However, the Department recognizes that in some 
communities, particularly in rural or geographically isolated areas, it 
may be difficult to identify a willing partner for educational outreach 
activities. We, therefore, have revised Sec.  200.48(d)(2)(i)(A) 
(proposed Sec.  200.48(d)(1)(i)) to require LEAs to partner with a CBO 
or other groups for the purpose of promoting participation in Title I 
public school choice and SES ``to the extent practicable.'' We have 
also expanded the examples of such groups to include faith-based 
organizations (FBOs), other CBOs, and business groups.
---------------------------------------------------------------------------

    \17\ Id.

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

[[Page 64495]]

    Changes: We have added ``to the extent practicable'' to the 
criterion in new Sec.  200.48(d)(2)(i)(A) (proposed Sec.  
200.48(d)(1)(i)) regarding partnering with outside groups and have also 
added examples of such outside groups to include faith-based 
organizations, other community-based organizations, and business 
groups.
    Comment: Two commenters stated that an LEA should not be required 
to demonstrate success in partnering with CBOs as a criterion for 
reallocating unspent funds from its 20 percent obligation because, 
according to the commenters, this requirement would increase 
administrative costs. One of these commenters added that the 
requirement to partner with CBOs would be an excessive burden on public 
schools already mandated to provide information on Web sites, in 
newsletters, and in letters to parents.
    Discussion: The Department recognizes that meeting the criterion in 
new Sec.  200.48(d)(2)(i)(A) (proposed Sec.  200.48(d)(1)(i)) could 
entail additional administrative costs, but believes that such costs, 
as described in the Summary of Costs and Benefits section, would be 
minimal and would be far outweighed by the potential benefits of more 
effective implementation of and participation in Title I public school 
choice and SES. These requirements also reflect evidence from the NATI 
report and other sources that pursuing multiple avenues of 
communicating with parents about public school choice and SES is one of 
the most effective strategies for increasing participation in these 
options. In addition, the Department believes that partnering with 
outside groups is one of the most cost-effective ways to promote SES, 
as FBOs, CBOs, and business groups already have a presence in the 
community and thus, gives LEAs a way to tap existing resources in their 
effort to reach out to parents about Title I public school choice and 
SES options. However, as discussed previously, the Department 
acknowledges that partnering with outside groups may be challenging for 
some LEAs, and we have revised the regulations to provide that an LEA 
establish such partnerships ``to the extent practicable.''
    Changes: None.
    Comment: One commenter recommended that the Department prescribe in 
the final regulations specific requirements for an LEA to meet in 
establishing a partnership with CBOs for the purpose of this section, 
such as responsibility for choosing the CBO partners, the elements of 
an adequate partnership, and the appropriate division of authority 
between the LEA and its partners.
    Discussion: The Secretary believes that LEAs are in the best 
position to decide how to develop and structure partnerships with 
outside groups in their communities. Establishing requirements for such 
partnerships through these regulations would create a ``one-size-fits-
all'' approach that would likely stifle the development of cooperative 
and innovative partnerships.
    Changes: None.
    Comment: One commenter objected to requiring LEAs to partner with 
CBOs because, according to the commenter, it should be sufficient for 
LEAs to make parents aware of their public school choice and SES 
options through written notifications sent by mail.
    Discussion: The Secretary does not dispute that sending written 
information through the U.S. mail is a standard and widely accepted 
practice, used by a variety of Federal, State, and local government 
agencies, including LEAs, for communicating with the public. However, 
as discussed in the preamble to the NPRM, there is evidence that, 
regardless of the method of transmission, mailings and other written 
materials alone are often insufficient to make eligible parents aware 
of their Title I public school choice and SES options. For example, the 
NATI report found that, in the 2004-2005 school year, while nearly 70 
percent of LEAs provided written notification of public school choice 
options and 94 percent of LEAs used written materials to inform parents 
of SES options, surveys of parents in eight large urban LEAs showed 
that just over a quarter (27 percent) of eligible parents reported 
receiving notification about public school choice and about half of 
parents (53 percent) reported receiving notice of SES options.\18\
---------------------------------------------------------------------------

    \18\ Id.
---------------------------------------------------------------------------

    One problem with using written materials alone to communicate with 
parents is that such materials can vary widely in content and clarity. 
The NATI report also found that, although some notification letters 
were easy to read and presented public school choice and SES options as 
a positive benefit for eligible students, others were confusing, 
discouraged parents from changing schools, or appeared to be biased in 
favor of certain SES providers.\19\ Finally, the families of many 
students attending the high-poverty schools served by Title I, 
particularly in urban areas, often are highly mobile and, thus, hard to 
reach at a fixed address via U.S. mail.
---------------------------------------------------------------------------

    \19\ Id.
---------------------------------------------------------------------------

    For all of these reasons, the Secretary believes that it is 
important for LEAs to use multiple methods for informing eligible 
parents of their public school choice and SES options. The Secretary 
believes that partnering with CBOs is an effective, low-cost strategy 
for LEAs to help ensure that eligible parents learn about and take 
advantage of public school choice and SES options for their children.
    Changes: None.
    Comment: One commenter recommended adding language ensuring that 
the criteria in proposed Sec.  200.48(d)(1), and more specifically the 
criteria to partner with CBOs and to permit enrollment in SES 
throughout the school year, take into account the needs of homeless, 
migrant, foster, and other highly mobile students.
    Discussion: The Secretary agrees that it is important for LEAs to 
reach out to all eligible students in order to provide a genuine 
opportunity for all eligible students to obtain SES. This is one reason 
the final regulations include multiple criteria that LEAs must meet 
before spending any unused funds from their 20 percent obligation for 
other allowable activities. These criteria require an LEA that wishes 
to use unspent funds from its 20 percent obligation for other allowable 
activities to engage in broader outreach efforts that must include, to 
the extent practicable, partnering with outside groups (such as CBOs 
serving homeless, migrant, foster, and other mobile students), hold a 
minimum of two SES enrollment periods so that a student who starts 
school after the beginning of the school year has at least one 
opportunity to sign up for SES, and afford greater opportunities to 
obtain SES in school facilities--a convenient, safe location for 
students who otherwise might not be able to access SES. We believe that 
implementation of these ``best practices'' will greatly benefit 
homeless, migrant, foster, and other mobile students and increase their 
participation in public school choice and SES. However, we believe that 
LEAs should have flexibility to meet the criteria in new Sec.  
200.48(d)(2)(i) (proposed Sec.  200.48(d)(1)) in ways that best meet 
the needs, and accommodate the circumstances, of their students, and we 
decline to add references to any particular student group in this 
section.
    Changes: None.

[[Page 64496]]

New Sec.  200.48(d)(2)(i)(B)(2) (Proposed Sec.  200.48(d)(1)(ii)(B)) 
SES Enrollment Forms

    Comment: One commenter suggested that the Secretary modify proposed 
Sec.  200.48(d)(1)(ii)(B) to require that sign-up forms for SES be 
distributed through the Department-funded Parent Training and 
Information Centers and Parent Information and Resource Centers.
    Discussion: New. Sec.  200.48(d)(2)(i)(B)(2) (proposed Sec.  
200.48(d)(1)(ii)(B)) provides that, to ensure that eligible students 
and their parents have a genuine opportunity to sign up to transfer or 
to obtain SES, an LEA must, among other things, ensure that SES sign-up 
forms are distributed directly to all eligible students and their 
parents and are made widely available through broad means of 
dissemination, such as through public agencies serving eligible 
students and their families. The Secretary prefers to give LEAs 
flexibility in selecting those public agencies that are in the 
community and able to assist the LEA, rather than mandating that each 
LEA work with a specific agency or center. In many LEAs, there will be 
no Parent Training and Information Center or Parent Information and 
Resource Center present and available to work with the LEA on the 
distribution of sign-up forms.
    Changes: None.

New Sec.  200.48(d)(2)(i)(B)(3) (Proposed Sec.  200.48(d)(1)(ii)(C)) 
SES Enrollment Period

    Comment: Many commenters opposed the criterion in proposed Sec.  
200.48(d)(1)(ii)(C) that LEAs provide opportunities for enrollment in 
SES throughout the school year. For example, one commenter asserted 
that meeting this criterion would effectively prevent an LEA from ever 
using unspent funds from its 20 percent obligation for other 
instructional purposes because funds would have to be reserved through 
the end of the school year. Another commenter claimed that offering 
year-round services would be a resource and staffing burden for LEAs. 
An SES provider expressed similar concerns, stating that continuous or 
open enrollment throughout the school year would be administratively 
burdensome because it is difficult to schedule services on short notice 
and because services may begin too late in the year for students to 
finish an SES program. This commenter recommended that LEAs instead be 
required to offer three enrollment windows during which parents and 
students could sign up to receive SES. Another commenter recommended 
that States be permitted to set their own dates for releasing unused 
funds from an LEA's 20 percent obligation.
    Discussion: The Secretary recognizes that the proposed full-year 
SES enrollment criterion, although desirable as a way of maximizing 
opportunities for parents to obtain SES for their eligible children, 
could be difficult for LEAs to implement and could hamper the provision 
of effective SES programs. In addition, as the commenters noted, to 
meet this criterion an LEA would have to reserve funding for SES until 
very late in the school year, making it difficult to spend unused funds 
for other purposes. Setting a requirement that could severely restrict 
an LEA's use of unspent funds from its 20 percent obligation could have 
the unintended effect of serving as a disincentive to undertake good-
faith efforts to promote public school choice and SES. On the other 
hand, simply setting a fixed date in the school year for release and 
use of unspent choice-related transportation and SES funds could 
encourage half-hearted enrollment practices by LEAs seeking to maximize 
the amount of funds that could be used for other allowable Title I 
activities.
    To address these concerns, while continuing to pursue the goal of 
expanding SES enrollment opportunities for eligible students and their 
parents, the final regulations require LEAs to provide a minimum of two 
enrollment windows at separate points in the school year. In addition, 
we have added language requiring that these enrollment windows be of 
sufficient length to enable parents to make informed decisions about 
requesting SES and selecting a provider. We note that to help ensure 
that parents have a genuine opportunity to sign up for SES, enrollment 
windows should be at times and places that are convenient for the 
parents of eligible students, including working parents and single 
parents. One approach, for example, would be to link enrollment windows 
to the end of grading periods and the associated parent-teacher 
conferences that typically create a natural opportunity to encourage 
and promote SES enrollment. Multiple enrollment windows will also help 
ensure that students who enroll after the beginning of the school year 
have an opportunity to sign up for SES.
    Changes: We have revised the criterion in new Sec.  
200.48(d)(2)(i)(B)(3) (proposed Sec.  200.48(d)(1)(ii)(C)) to require 
an LEA to provide a minimum of two enrollment windows, at separate 
points in the school year, that are of sufficient length to enable 
parents of eligible students to make informed decisions about 
requesting SES and selecting a provider.
    Comment: Two commenters suggested that the Department modify 
proposed Sec.  200.48(d)(1)(ii)(C) to require an LEA to allow eligible 
students to sign up to receive SES not only throughout the school year 
but also through summer learning programs before being permitted to use 
unspent funds from its 20 percent obligation for other allowable 
activities.
    Discussion: The Department encourages LEAs to begin SES at the 
beginning of the school year because, as stated in section 
1116(e)(12)(C) of the ESEA, the primary purpose of SES is to increase 
the academic achievement of eligible children on the State's academic 
assessments. The Department's guidance permits summer SES programs, but 
in most cases it will be preferable to provide services that take place 
over the course of the school year. In addition, the Department 
recognizes that waiting until late in the school year, or even until 
the summer, before beginning the process of spending unused choice-
related transportation and SES funds could result in less effective use 
of those funds. For these reasons, the Department believes that the 
decision to offer SES late in the school year or in the summer is best 
left to the discretion of individual LEAs.
    Changes: None.
    Comment: One commenter recommended that the Department require an 
LEA to maintain a student waiting list for SES in order to ensure that 
the LEA meets all demand for SES before using unspent funds from its 20 
percent obligation for other allowable activities.
    Discussion: Maintaining a waiting list for SES essentially requires 
continuous or open enrollment in SES throughout the school year (and 
perhaps into the summer months). As we have discussed in our responses 
to other comments, we no longer believe we should require an LEA to 
provide continuous or open enrollment throughout the school year.
    Changes: None.

New Sec.  200.48(d)(2)(i)(C) (Proposed Sec.  200.48(d)(l)(iii)) SES 
Provider Access to School Facilities

    Comment: Several commenters expressed concern that proposed Sec.  
200.48(d)(1)(iii), which requires LEAs to offer SES providers fair 
access to school facilities on the same basis and terms as are 
available to other groups, may conflict with State and local 
prerogatives and authority governing access to public facilities. 
Another commenter recommended that LEAs be permitted to differentiate 
among for-

[[Page 64497]]

profit and non-profit groups and organizations, including SES 
providers, in granting access to school facilities.
    Discussion: The intention of the fair provider access criterion in 
new Sec.  200.48(d)(2)(i)(C) (proposed Sec.  200.48(d)(1)(iii)) is not 
to override State and local policies with respect to determining the 
terms of access to school facilities, but to ensure that all SES 
providers are treated fairly under those policies. The Secretary 
recognizes that many municipalities and LEAs may have access policies 
that differentiate among public and private and non-profit and for-
profit organizations seeking to use school facilities. However, the 
Department believes that those policies must take into account both the 
educational purpose of SES and the requirement to implement SES fairly 
as part of an LEA's overall Title I program. In this context, the 
Department believes it is reasonable to require that State and local 
municipalities ensure that their policies do not unfairly exclude SES 
providers, regardless of their profit-making status, from school 
facilities.
    Changes: None.
    Comment: One commenter stated that meeting the criterion in 
proposed Sec.  200.48(d)(1)(ii)(C) to offer the opportunity to enroll 
in SES throughout the school year, and the criterion under which an LEA 
would have to provide SES providers with access to school facilities in 
proposed Sec.  200.48(d)(1)(iii) could create capacity concerns for 
LEAs. Another commenter asserted that many LEAs simply do not have the 
capacity to offer access to school facilities for SES because of the 
extensive after-school programs already offered on school sites.
    Discussion: The Secretary recognizes that LEAs have limited space 
and times available for organizations seeking use of school facilities. 
In particular, we recognize that access to school facilities in any 
particular LEA may depend on such factors as the size of those 
facilities, the number of organizations seeking access, and the cost of 
keeping facilities open outside of the regular school day. The final 
regulations, however, simply provide that, when making facilities 
available, LEAs use a fair, open, and objective process that offers 
access to SES providers on the same basis and terms that are available 
to other groups seeking access to school facilities. In addition, the 
final regulations in new Sec.  200.48(d)(2)(i)(B)(3) reduce facilities 
planning burdens on LEAs by modifying the proposed SES ``full-year 
enrollment'' criterion to require, instead, a minimum of two enrollment 
``windows'' at separate points in the school year.
    Changes: None.
    Comment: One commenter expressed concern that the fair provider 
access criterion in proposed Sec.  200.48(d)(1)(iii) could lead some 
LEAs to implement or raise fees charged to other (non-SES provider) 
organizations for access to school facilities.
    Discussion: We understand that many LEAs currently make school 
facilities available to community groups and other organizations at 
little or no cost, and that increased demand for facility space from 
SES providers and regulatory pressure to equalize access may lead some 
LEAs to adopt more restrictive space-use policies, including the 
possible imposition of new or higher fees for using school space. The 
Secretary believes that such changes would be detrimental both to SES 
and to non-SES-related organizations. However, the Secretary believes 
that in most cases LEAs will endeavor to make fair arrangements for all 
entities seeking access to school facilities and that any additional 
cost or other limitations on such access for non-SES-related 
organizations must be balanced against the benefits potentially gained 
through greater student access to SES at school sites.
    Changes: None.
    Comment: Two commenters expressed concern that the proposed 
criterion that an LEA provide fair and open access to school facilities 
for SES providers could force LEAs to grant access to organizations 
that present a danger to students or other school personnel and that 
LEAs should not have to provide space for ``unproven services.''
    Discussion: The criterion in new Sec.  200.48(d)(2)(i)(C) (proposed 
Sec.  200.48(d)(1)(iii)) would not require an LEA to grant access to 
school facilities to any organization that presents a danger to 
students, teachers, or other school personnel. It merely provides that 
an LEA choosing to take advantage of the flexibility offered in the 
regulations implement a policy, if it does not already have one, that 
provides fair and open access to school facilities by SES providers on 
the same basis and terms as are available to other groups. Moreover, 
the assertion that SES providers, in general, represent a threat to 
school safety has no basis in either fact or experience. SES providers 
are approved by the SEAs of the States in which they operate and 
typically are required as part of that approval process to conduct 
criminal background checks on their employees. Providers operate openly 
in the communities they serve, often recruit by word of mouth, hire 
public school teachers as tutors, and even serve students in their own 
homes in many locations. SEAs monitor SES providers, typically with 
assistance from LEAs, and the Department is not aware of any 
significant safety issues arising with the SES program since it began 
nearly six years ago.
    With respect to the claim that SES services are ``unproven,'' under 
Sec.  200.47(b), an SEA may only grant approval to providers with a 
``demonstrated record of effectiveness,'' and final regulations in 
Sec.  200.47 would strengthen the process for approving and renewing 
and withdrawing approval of SES providers.
    Changes: None.

Section 200.56(d) Definition of ``Highly Qualified Teacher''

    Comment: Two commenters expressed concern about proposed Sec.  
200.56(d), which would include a cross-reference to the definition of 
``highly qualified special education teacher'' in 34 CFR 300.18(d) of 
the IDEA regulations. The commenters stated that the Department should 
not incorporate by reference a regulation from one law (IDEA) into a 
regulation for another law (ESEA) that contains no reference to special 
education teachers. The commenters stated that, as a matter of law, the 
requirements for highly qualified special education teachers may be 
applied and enforced only under the IDEA, not under the ESEA. Other 
commenters supported including the cross-reference in Sec.  200.56. One 
commenter, however, said that it did not make sense to add more 
regulations for special education teachers seven years after NCLB was 
enacted. Other commenters stated that the proposed regulation would 
weaken the requirements for highly qualified teachers and should not be 
adopted.
    Discussion: Section 1119(a) of the ESEA requires that all teachers, 
which includes special education teachers, teaching core academic 
subjects be ``highly qualified'' by the 2005-2006 school year. In 2004, 
Congress amended the IDEA and established, in section 602(10), 
requirements governing the qualifications of special education teachers 
that differ from those in the ESEA. The ``highly qualified special 
education teacher'' definition in section 602(10) of the IDEA requires 
all special education teachers, including those who teach core academic 
subjects, to meet a State's special education certification or 
licensure requirements. In addition, if special education teachers are 
teaching core academic subjects, they must demonstrate subject-matter 
competency.

[[Page 64498]]

Under the IDEA, the ways in which some special education teachers can 
demonstrate subject-matter competency also differ from the regulations 
under the ESEA. For example, with respect to new special education 
teachers who are teaching multiple core academic subjects and who are 
highly qualified in mathematics, language arts, or science, section 
602(10)(D) of the IDEA allows those teachers up to two years from the 
date of employment to demonstrate competence in the other core academic 
subjects that they teach. Section 602(10)(F) of the IDEA also provides 
that a teacher who is highly qualified under the IDEA will be 
considered highly qualified for purposes of the ESEA.
    Our intent in the NPRM was to reference the definition of ``highly 
qualified special education teacher'' in 34 CFR 300.18 of the IDEA 
regulations so as to clarify, consistent with section 602(10)(F) of the 
IDEA, that the flexibility in meeting the highly qualified requirements 
afforded some special education teachers under the IDEA applies to 
determinations of whether they are highly qualified under the ESEA. The 
language in the preamble to the NPRM, however, might have implied that 
special education teachers who do not teach core academic subjects 
would be covered by the ESEA regulations. Such an implication would be 
inaccurate because the term ``highly qualified'' in the ESEA is only 
used with regard to teachers who are teaching core academic subjects. 
The preamble to the NPRM might also have implied that special education 
teachers would have to meet the highly qualified requirements in the 
IDEA in order to be highly qualified under the ESEA, even if they met 
the requirements in Sec.  200.56. We did not intend to change the 
requirements for highly qualified teachers under the IDEA or the ESEA 
or imply that the requirements for all highly qualified special 
education teachers would be enforced under the ESEA. We merely wanted 
to clarify that, if a special education teacher is highly qualified 
under 34 CFR 300.18, that teacher is considered highly qualified under 
Sec.  200.56, recognizing that the term ``highly qualified'' in the 
ESEA is used only with regard to teachers who are teaching core 
academic subjects. Therefore, we are revising Sec.  200.56(d) to make 
clear that a special education teacher is a highly qualified teacher 
for purposes of the ESEA if the teacher is a ``highly qualified special 
education teacher'' under 34 CFR 300.18. Special education teachers who 
meet the requirements in Sec.  200.56(a) and (b) or (c) are also highly 
qualified under the ESEA even if they do not meet the requirements 
under the IDEA.
    Changes: We have revised Sec.  200.56(d) and the introductory 
language in Sec.  200.56 to make clear that a special education teacher 
is highly qualified under Sec.  200.56 if the teacher is a ``highly 
qualified special education teacher'' under 34 CFR 300.18.

Implementation Timeline

    Comment: Some commenters stated that the effective date of the 
proposed regulations could inhibit meaningful implementation because 
the regulations take effect in the middle of school year 2008-2009.
    Discussion: The NPRM was not clear on when States and LEAs would 
need to begin implementing the various sections of the regulations. 
Therefore, we are including a table (Table 1) that provides a detailed 
timeline for implementing the final regulatory requirements. The 
timeline includes provisions for which States or LEAs must take action 
and does not include voluntary provisions (e.g., Sec.  200.20 
incorporating growth in calculating AYP) or provisions that do not 
require actions by States and LEAs (e.g., Sec.  200.22 National TAC).
    We are also including another table (Table 2) that provides a 
detailed timeline for implementing the graduation rate requirements.

                    Table 1--Implementation Timeline
------------------------------------------------------------------------
         Regulatory requirement                Implementation date
------------------------------------------------------------------------
Sec.   200.7--Review of minimum group    In time for changes to be
 size, confidence intervals, etc. Each    effective for AYP
 State must submit revisions to its       determinations based on 2009-
 Accountability Workbook.                 2010 assessment results.
Sec.   200.11--Reporting NAEP data on    Report cards issued in 2009-
 report cards.                            2010 for 2008-2009 school year
                                          data (with NAEP data from the
                                          most recent year available).
Sec.   200.19--Other Academic
 Indicators
    Implementing transitional            AYP determinations based on
     graduation rate.                     2008-2009 assessment results.
    Establishing a goal and targets/     AYP determinations based on
     continuous and substantial           2009-2010 assessment results.
     improvement for AYP.
    Reporting of four-year adjusted      Report cards providing
     cohort graduation rate.              assessment results for the
                                          2010-2011 school year.
    Reporting of extended-year adjusted  The first year for which a
     cohort graduation rate.              State separately calculates
                                          such a rate.
    Implementing four-year adjusted      AYP determinations based on
     cohort graduation rate for AYP       2011-2012 assessment results.
     purposes, in the aggregate and
     disaggregated.
    Accountability Workbook revisions..  In time for changes to be
                                          effective for AYP
                                          determinations based on 2009-
                                          2010 assessment results.
    Request for extension of the         March 2, 2009.
     deadline for reporting four-year
     adjusted cohort graduation rate.
Sec.   200.37--Notice of identification
    14-day notice for choice...........  Before start of 2009-2010
                                          school year.
    New provisions for SES notice......  Beginning with 2009-2010
                                          notice.
Sec.   200.39--Responsibilities          In a timely manner to ensure
 regarding improvement (publication of    that parents have current
 data on LEA Web site).                   information on their public
                                          school choice and SES options.
Sec.   200.47--SEA responsibility re:
 SES
    SEA posting of data on Web site for  Before the start of the 2009-
     LEAs.                                2010 school year.
    Develop, implement, and publish      Before the start of the 2009-
     standards for monitoring LEAs.       2010 school year.
    Approving providers using new        Beginning with next approval
     criteria.                            cycle.
    Monitoring providers using new       Beginning with next monitoring
     criteria.                            cycle of SES.
Sec.   200.48(d) 20 percent obligation.  Beginning with funds expended
                                          during 2009-2010 school year.
------------------------------------------------------------------------


[[Page 64499]]


                              Table 2--Implementation Timeline for Graduation Rates
----------------------------------------------------------------------------------------------------------------
                                                     School year and regulatory requirements
                               ---------------------------------------------------------------------------------
                                     2008-2009            2009-2010            2010-2011           2011-2012
                               ---------------------------------------------------------------------------------
                                 AYP based on 2008-   AYP based on 2009-  AYP based on 2010-  AYP based on 2011-
                                  2009 assessment      2010 assessment      2011 assessment     2012 assessment
                                      results              results              results             results
----------------------------------------------------------------------------------------------------------------
AYP...........................  States must calculate high school graduation rate for AYP     States must
                                 determinations in the aggregate using an approved             calculate high
                                 transitional rate or the four-year adjusted cohort            school graduation
                                 graduation rate and any extended-year adjusted cohort         rate for AYP, in
                                 graduation rate                                               the aggregate and
                                                                                               disaggregated by
                                                                                               subgroup, using
                                                                                               the four-year
                                                                                               rate and any
                                                                                               extended-year
                                                                                               rate.
                               ---------------------------------------------------------------------------------
Reporting.....................  States must report disaggregated
                                 graduation rate data using an approved
                                 transitional rate or the four-year rate
                                 (any extended-year rate must be
                                 reported separately)
                                Beginning with report cards providing
                                 assessment results for the 2010-2011
                                 school year, States must report
                                 disaggregated graduation rate data
                                 using the four-year rate (any extended-
                                 year rate must be reported separately).
                               ---------------------------------------------------------------------------------
Goal and Targets..............  States may use       States must have a single goal and targets that meet the
                                 current goals and    criteria in the regulations. States may need to change
                                 targets.             their goal and targets when they begin using the four-year
                                                      rate for AYP.
----------------------------------------------------------------------------------------------------------------

    To read this chart: For example, for the 2008-2009 school year, a 
State must (a) calculate high school graduation rate for AYP 
determinations using an approved transitional rate or the four-year 
adjusted cohort graduation rate (that meets the requirements in the 
regulation); (b) report its graduation rate disaggregated by subgroup; 
and (c) may use its current goal and targets.

Executive Order 12866

    Under Executive Order 12866, the Secretary must determine whether 
this regulatory action is ``significant'' and therefore subject to the 
requirements of the Executive Order and subject to review by OMB. 
Section 3(f) of Executive Order 12866 defines a ``significant 
regulatory action'' as an action likely to result in a rule that may 
(1) have an annual effect on the economy of $100 million or more, or 
adversely affect a sector of the economy, productivity, competition, 
jobs, the environment, public health or safety, or State, local or 
tribal governments, or communities in a material way (also referred to 
as an ``economically significant'' rule); (2) create serious 
inconsistency or otherwise interfere with an action taken or planned by 
another agency; (3) materially alter the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raise novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive order. The Secretary has 
determined that this regulatory action is significant under section 
3(f)(4) of the Executive order.

Summary of Costs and Benefits

    The Department believes many of the regulatory changes included in 
these final regulations will not impose significant costs on States, 
LEAs, or other entities that participate in programs funded under Part 
A of Title I. Other changes will impose costs, but the Department 
believes that the benefits resulting from the regulations will greatly 
exceed those costs. Although many commenters claimed that the proposed 
regulations would increase State or local burden (and one commenter 
stated specifically that the cost-benefit analysis included in the NPRM 
underestimated the costs of implementing the proposed regulations), 
commenters did not provide alternative estimates of the costs of 
implementing the various proposals. Therefore, this final cost-benefit 
analysis generally continues the Department's original estimates, 
making revisions only to reflect changes in the regulations or in other 
places where the Department determined that revisions were needed.
    The major benefit of these regulations, taken in their totality, is 
a Title I, Part A program in which clearer accountability and 
implementation requirements (particularly in the areas of high school 
graduation rate, public school choice, and SES) will be coupled with 
greater flexibility in implementation (particularly in the use of 
measures of individual student academic growth in calculating AYP). 
These regulations will, thus, add to the contributions that NCLB has 
made to the creation of a system in which schools, LEAs, and States 
expect to educate all children to high standards and are held 
accountable for doing so. The regulations will support the attainment 
of increases in student achievement that build on the improvements that 
the Nation has seen in the last several years. The benefits to the 
United States of having a more educated citizenry have been plentiful 
and will continue to be so as the reforms implemented as a result of 
NCLB (and as supported through these regulations) continue to take 
hold.
    The Department's analysis of the costs and benefits of implementing 
specific provisions of the regulations follows. The costs to implement 
specific provisions of the regulations are included in the tables at 
the end of the Paperwork Reduction Act of 1995 section of this notice.

Accountability Workbook (Minimum Group Size and Graduation Rate)

    The regulations in Sec.  200.7 clarify that State definitions of 
AYP must include a minimum group size that is based on sound 
statistical methodology, that yields statistically reliable information 
for each purpose for which disaggregated data are used, and that 
ensures that, to the maximum extent practicable, all student groups are 
included, particularly at the school level, in accountability 
determinations. The Department has previously reviewed each State's 
minimum group size and believes that some States already meet the 
requirements of Sec.  200.7. Some States, however, may need to revise 
their minimum group size and other components of the State's AYP 
definition based on the final

[[Page 64500]]

regulations and on feedback from the new peer review.
    All States are required to revise their Accountability Workbook and 
explain how their minimum group size meets the requirements in Sec.  
200.7 and to provide certain other information on their minimum group 
size and AYP definition (information on how other components of the 
State's AYP definition, in addition to its minimum group size, interact 
to affect statistical reliability and ensure the maximum inclusion of 
all students and student subgroups in AYP determinations as well as 
information on the exclusion of students and subgroups from those 
determinations). States are required to submit to the Department, for 
technical assistance and peer review, a revised Accountability Workbook 
that reflects these new requirements in time for AYP determinations 
based on 2009-2010 assessment results.
    Under the regulations in Sec.  200.19(b)(6), States will also need 
to revise their Accountability Workbook in order to include: (a) The 
State's current graduation rate definition, (b) the State's progress 
toward meeting the deadline for calculating and reporting the four-year 
adjusted cohort graduation rate, (c) the State's graduation rate goal 
and targets, (d) an explanation of how the State's graduation rate goal 
represents the rate the State expects all high schools in the State to 
meet and of how the State's targets demonstrate continuous and 
substantial improvement toward meeting or exceeding the goal, and (e) 
the graduation rate for the most recent school year of the high school 
at the 10th percentile, the 50th percentile, and the 90th percentile in 
the State (ranked in terms of graduation rate). If a State decides to 
use an extended-year adjusted cohort graduation rate as part of its AYP 
definition, the State must also describe, in its Accountability 
Workbook, how it will use that rate with its four-year adjusted cohort 
graduation rate to determine whether its schools and LEAs have made 
AYP. These requirements are somewhat different from what the Department 
proposed in the NPRM.
    We have revised our earlier estimates (included in the NPRM) of the 
cost to States of submitting a revised Accountability Workbook in order 
to include the time necessary to prepare and submit the information 
related to graduation rates. The Department estimates that each State 
would, on average, require 276 hours of staff time to complete this 
effort, including 80 hours for development and analysis of a proposed 
minimum group size policy (within an overall definition of AYP), 132 
hours for the development of new graduation rate definitions and 
policies, and an additional 64 hours for actual preparation of the 
Accountability Workbook. We further estimate that SEAs' cost for that 
activity will be $30 an hour. For the 50 States, the District of 
Columbia, and Puerto Rico, the estimated cost of revising and 
submitting their Accountability Workbook would thus be $430,560. These 
estimates incorporate an assumption that some States will need to do 
additional work on their Accountability Workbook as a result of 
feedback from the peer review.
    In response to the NPRM, one commenter stated that our cost 
estimates severely underestimated the time and resources States would 
expend to revise their Accountability Workbook. However, the commenter 
did not provide alternative estimates for the Department to consider. 
Moreover, this cost-benefit analysis includes a ``sensitivity 
analysis'' (discussed later in this section) that subjects the cost 
calculations to alternative (and higher) assumptions about the amount 
of time that will be required for compliance.
    The Department believes that the benefits of the change in minimum 
group size policy, in terms of greater accountability that would result 
from a State's use of a minimum group size that meets the regulatory 
criteria, would greatly outweigh the minimal costs of compliance.

Participation in NAEP

    In the NPRM, the Department projected that States and LEAs would be 
able to implement at minimal cost the requirement to include NAEP data 
on State and LEA report cards. The Department made this projection 
because State NAEP results are available on the NCES Web site and 
through other sources, and obtaining those data should not pose a 
significant burden. Neither should including the data on report cards, 
as the NAEP results would be a minor addition to the data already so 
included.
    Several individuals who commented on the NPRM stated that it would 
be burdensome for SEAs and LEAs to ensure the accurate and appropriate 
use of NAEP results and some said, more specifically, that the 
incorporation of NAEP results on State report cards would require 
significant staff time and resources because States must seek input 
from stakeholders, obtain State Board of Education approval, and pay 
the costs for reproduction. Other commenters stressed that LEAs would 
need to clarify, on their report cards, that only limited comparisons 
can be made between NAEP and State assessments because of the 
differences between the two assessments.
    In consideration of these comments, the Department reiterates that 
NAEP data are readily available and that it should not be a significant 
burden for States and LEAs to obtain and include those data on their 
report cards. However, the Department also acknowledges that there will 
be some cost, particularly in the first year, of making the transition 
to including NAEP data on State and local report cards. The 
Department's final estimate is that, in the first year, each SEA will 
require 24 hours to incorporate NAEP data on State report cards and, 
thereafter, each SEA will require the 5 hours annually that the 
Department estimated in the Paperwork Reduction Act analysis included 
in the NPRM. At $30 per hour, the estimated cost of implementation for 
52 States is, thus, $37,440 in the first year and $7,800 in each 
succeeding year.
    Similarly, at the local level, the Department also estimates 24 
hours of burden in the first year and 5 hours thereafter. For 
approximately 14,000 LEAs, at $25 per hour, the total cost will be 
$8,400,000 in year one and $1,750,000 annually thereafter.
    These estimates take into consideration the changes made in the 
final regulations, which provide greater specificity on the NAEP data 
that must be reported and no longer require LEAs to publish 
disaggregated NAEP results. The Department does not believe that those 
changes will add measurably to the cost of compliance.
    We note that the NAEP reading and mathematics assessments are 
administered only once every two years. In the second year of a cycle, 
the costs to SEAs and LEAs of including NAEP data on their report cards 
should be particularly low. Further, the Department assumes that, in 
many States, the SEA will prepare summaries of the NAEP data (largely 
from the ``snapshots'' provided by NCES and accessible on the NCES Web 
site) and provide them to LEAs, which in turn will be able to include 
those summaries on their report cards with little investment of time or 
effort. The Department, thus, does not believe that the cost of 
including NAEP data on the report cards will be any greater than what 
is estimated above.
    The Department believes that these minimal costs of implementing 
the requirements to include NAEP data on report cards will be greatly 
outweighed by the benefits of providing the public with important 
additional information

[[Page 64501]]

on student achievement with which to compare State assessment results.

High School Graduation Rate

    The final regulations restructure the regulations in Sec.  200.19 
on ``Other Academic Indicators'' and, in particular, require States to 
adopt a ``four-year adjusted cohort graduation rate'' and, at a State's 
option, an ``extended-year adjusted cohort graduation rate,'' for the 
purpose of reporting no later than school year 2010-2011 and for the 
purpose of making AYP determinations no later than school year 2011-
2012. Prior to those deadlines, States will use either the four-year 
adjusted cohort graduation rate or a transitional graduation rate, 
which for most States will be the rate they currently use, for those 
two purposes. (Unlike the NPRM, the final regulations do not require 
States to implement an ``Averaged Freshman Graduation Rate'' during the 
interim period.) The regulations also require the use of disaggregated 
graduation rate data for AYP determinations beginning with the 
determinations based on school year 2011-2012 assessment results (with 
the exception that ``safe-harbor'' determinations, which are already 
required to include disaggregated data, would continue to include 
them). In addition, the final regulations require a State to include in 
its AYP definition (a) a single graduation rate goal that the State 
expects all high schools in the State to meet, and (b) annual 
graduation rate targets that reflect continuous and substantial 
improvement from the prior year toward meeting or exceeding the goal. 
To make AYP beginning with determinations based on 2009-2010 assessment 
results, any school or LEA that serves grade 12, and the State, must 
meet or exceed the graduation rate goal or annual target.
    In order to meet the deadlines for implementation of the four-year 
adjusted cohort graduation rate, States will need to have in place a 
data system that can track students who emigrate to another country, 
transfer to another school, or die. States also will need to collect 
four years of student data through those systems in order to implement 
the new rate by the deadline established in the final regulations.
    In 2005, all 50 States agreed to the NGA's Graduation Counts: A 
Compact on State High School Graduation Data, which calls for each 
State to develop a longitudinal graduation rate. A recent publication 
by the NGA \20\ reports that 36 States already have the information 
systems needed to collect student longitudinal data and are tracking 
cohorts of students as they progress through school. Within four years, 
according to this report, 49 States should have the high school cohort 
data needed to implement an adjusted cohort graduation rate, although 
States will still need to provide guidance to local officials who 
collect and report the data and to take other actions to ensure data 
quality and accuracy. This activity reflects policies the States have 
adopted, and actions they have taken, in the absence of Federal 
regulations. Based on this information, we believe that the regulations 
on development and implementation of a four-year adjusted cohort 
graduation rate will not impose significant costs on the great majority 
of States that they were not likely to assume in the absence of the 
regulations. That is, in light of the progress by almost all States in 
developing the systems needed to calculate a four-year adjusted cohort 
graduation rate, it would not be appropriate to attribute to the 
regulations the costs that States are assuming in this area.\21\ 
Moreover, the Federal government supports States' development of 
longitudinal student data systems through the Department's Statewide 
Longitudinal Data Systems program. For the fiscal years 2005 (when the 
program began) through 2008, the Congress appropriated more than $122 
million for this program and, through fiscal year 2007, 27 States have 
received these grants.
---------------------------------------------------------------------------

    \20\ National Governors Association. (2008). Implementing 
Graduation Counts: State Progress to Date, 2008. Washington, DC: 
Author.
    \21\ More specifically, we estimate that 36 States will require 
an average of 240 hours to complete the development or refinements 
of their data systems for the purpose of computing the four-year 
adjusted cohort graduation rate consistent with the regulations, for 
a total of 8,640 hours nationally. Based on information from the NGA 
reports, we believe the additional 16 States will not need to assume 
those costs because they have already completed that work. Further, 
we assume that the 52 States will require an average of 120 hours to 
compute the extended-year adjusted cohort graduation rate, should 
all decide to adopt such a rate, for a total of 6,240 hours. At $30 
per hour, the total cost of implementing these requirements would be 
$446,400, or approximately $8,585 per State.
---------------------------------------------------------------------------

    At the local level, the major cost of implementing the new 
regulations on graduation rate will be in determining whether students 
who have left the schools of an LEA have transferred to another LEA or 
school or have dropped out. We estimate that each LEA will require 50 
hours annually to meet this responsibility. For approximately 14,000 
LEAs nationally, at $25 per hour, the cost of implementation will be 
approximately $17.5 million.
    We believe the benefits of the changes regarding graduation rate 
definitions and the use of disaggregated graduation rate data in AYP 
calculations will be significant. A uniform and accurate method of 
calculating graduation rate is needed to raise expectations and to hold 
schools, LEAs, and States accountable for increasing the number of 
students who graduate on time with a regular high school diploma, as 
well as to provide parents and the public with more accurate 
information. By requiring all States to use a more rigorous and 
accurate graduation rate calculation, the Department can ensure greater 
accountability and transparency on this important indicator. In 
addition, we need to have a uniform and accurate method of calculating 
high school graduation rate to improve our understanding of the scope 
and characteristics of those students dropping out of school or taking 
longer to graduate. Finally, the use of disaggregated graduation rate 
data in AYP calculations will help ensure that schools and LEAs do not 
allow overall success in graduating students in four years (or less) to 
mask low graduation rates for individual student groups.

Growth Models

    The final regulations allow States to use measures of individual 
student academic growth in school and LEA AYP determinations and, thus, 
provide States with greater flexibility without burdening them with 
significant additional costs. To receive permission to incorporate 
individual student academic growth into its AYP definition, a State 
will have to have implemented a longitudinal data system that tracks 
student progress from grade to grade. However, as discussed earlier 
under the heading High School Graduation Rate, almost all States are 
developing student longitudinal data systems in the absence of Federal 
regulations; this is the case because the benefits of having a 
longitudinal student data system are much greater than just having the 
ability to support the use of individual student academic growth in 
calculating AYP. States have found such systems to be valuable in 
numerous ways,\22\ including in tracking the educational progress of 
students as they progress through grades and across schools and school 
systems; more accurately determining whether students graduate from 
high school; calculating accurate student dropout

[[Page 64502]]

rates; holding schools and LEAs accountable for results; targeting 
assistance to those schools and LEAs most in need; determining whether 
the content their secondary schools offer is well aligned with college-
preparedness requirements; identifying strengths and weaknesses in 
teacher preparedness; and measuring the educational performance of the 
State as a whole. Therefore, the Department believes it would be 
inappropriate to assign the costs States incur in designing and 
implementing longitudinal data systems as a cost of complying with this 
section of the final regulations.
---------------------------------------------------------------------------

    \22\ Ewell, P., & Boeke, M. (2007). Tracking student 
progression: The State of the States; Retrieved October 10, 2008 
from http://www.nchems.org/c2sp/sur/SURSurveyReport.pdf.
---------------------------------------------------------------------------

    In order to implement an AYP definition that includes measures of 
student academic growth, an SEA will need to submit a request to the 
Department that describes that definition and meets certain other 
requirements. We estimate that a State would need 240 hours to prepare 
such a request. If all 52 States prepare such requests, the total cost 
would be $374,720 (again assuming $30 per hour).

Public School Choice and Supplemental Educational Services

    The final regulations make a number of changes to the current 
regulations on public school choice and supplemental educational 
services.
    First, in Sec.  200.37, the regulations require LEAs to notify 
parents of eligible students of the option to transfer their child to 
another school, sufficiently in advance of, but no later than 14 
calendar days before, the start of the school year in order to give 
those parents adequate time to exercise their public school choice 
option. As stated in the NPRM, the Department believes that this 
regulation would not increase LEA costs because it would affect merely 
the timing of the parental notification. Two commenters on the NPRM 
disagreed, stating that this change in the regulations would result in 
increased local administrative costs. However, the commenters did not 
offer any facts or estimates to support that comment, so we decline to 
amend our analysis.
    Under Sec.  200.37, the regulations also require that an LEA's 
notice to parents of students eligible for SES: (a) Explain the 
benefits of SES, (b) be clear and concise, and (c) be clearly 
distinguishable from the other school improvement information sent to 
parents under Sec.  200.37. The final regulation, unlike the NPRM, also 
requires that this notice include an indication of those providers that 
are able to serve students with disabilities or LEP students. The 
Department does not believe this change will add significantly to LEAs' 
compliance burden because information on providers that are able to 
serve students with disabilities and LEP students will be available 
from the SEAs; LEAs will not need to collect that information 
themselves.
    We note that LEAs may assign costs related to meeting this 
requirement to the amount equal to 0.2 percent of their Title I, Part A 
allocation that the regulations permit LEAs to use for outreach and 
assistance to parents on public school choice and SES.
    Data from the ESEA Consolidated State Performance Report indicate 
that approximately 2,000 LEAs nationally have at least one Title I 
school in year two of school improvement (or in a later stage of the 
Title I accountability timeline). These are the schools with students 
eligible for SES that would technically be covered by this new 
requirement. However, some of these LEAs are not able to offer SES and, 
thus, are not affected by the proposed notice requirement. For example, 
rural and other small or isolated LEAs often do not have any approved 
SES providers serving their area. For this reason, our analysis assumes 
that 80 percent of the estimated 2,000 LEAs with at least one Title I 
school in year two of improvement or later, or 1,600 LEAs, will be 
subject to the notice requirement annually. We estimate that these 
1,600 LEAs will each require an average of 12 hours of staff time to 
prepare the notice to parents and that the cost for this time will 
average $25 per hour. Under this assumption, the cost for the 
preparation of this notice will be $480,000 annually.
    Further, in the 2006-2007 school year, in the States for which the 
Department has data, approximately 3.7 million students were eligible 
for SES.\23\ Assuming that approximately 3.7 million students continue 
to be eligible each year, we project that: (1) The parents of one half 
of these students would receive the SES information by mail, in a 
separate mailing, and (2) the remaining parents would receive that 
information through notices that students bring home from school, in a 
mailing that includes other information already required to be provided 
to parents (in Sec.  200.37), or by other means that impose very small 
costs on LEAs. For the parents who would receive the separate notices 
by mail, the cost of providing the notice (assuming continuation of 
current postage rates) would be $756,000, bringing the total cost for 
the implementation of the proposed SES notice requirement to 
$1,236,000.
---------------------------------------------------------------------------

    \23\ U.S. Department of Education. (2007). Consolidated State 
Performance Report, 2006-07. Unpublished raw data.
---------------------------------------------------------------------------

    These estimates are the same as those the Department included in 
the NPRM (with the exception of an adjustment to reflect a subsequent 
change in the first-class postage rate). Although one commenter stated 
that implementation of these requirements in the regulations would be 
burdensome, no commenters challenged these cost estimates.
    The regulations in Sec.  200.39 require LEAs to post on their Web 
sites information on their implementation of the public school choice 
and SES requirements, including information on the number of students 
who were eligible for and who participated in the public school choice 
and SES options, information on approved SES providers operating in the 
LEA and on the locations where services are provided, and a list of 
schools available to students who wish to take advantage of the public 
school choice option. If an LEA does not have its own Web site, the SEA 
is required to include on its Web site the information otherwise 
required of LEAs.
    Based on data from the ESEA Consolidated State Performance Report, 
approximately 3,000 LEAs have a Title I school in year one of 
improvement or later and, thus, are technically required to offer 
either public school choice, or both public school choice and SES, to 
their eligible students. However, as with the SES notice requirement, 
some of those LEAs would not be affected because they are unable to 
offer public school choice and SES due to a lack of choice options (for 
instance, rural and other small LEAs frequently have only one school at 
a particular grade span) or the absence of an approved SES provider 
serving their area. We estimate that 80 percent of the 3,000 LEAs with 
a Title I school in year one of improvement or later, or 2,400 LEAs, 
would need to post the new information on their Web site. We further 
estimate that these LEAs would require an average of 25 hours of staff 
time to prepare the data for the Web site, at a cost of $25 per hour, 
for an estimated national cost of $1,500,000 to meet the new 
requirement to post public school choice and SES information on LEA Web 
sites. Therefore, the total estimated cost for implementation of the 
new SES and Web site notice requirements is $2,736,000. These estimates 
are unchanged from those the Department included in the NPRM (again, 
with the exception of a minor adjustment because of a change in the 
postage rate). Although some commenters opposed the proposed 
requirements as burdensome, none challenged the

[[Page 64503]]

Department's cost estimates. In addition, the Department does not 
believe that the changes made since the NPRM (exempting LEAs that do 
not have a Web site from the requirement to post the information on 
public school choice and SES, but requiring that their SEA post that 
information) will make a significant difference in the cost of 
compliance.
    We have also estimated the cost to SEAs of posting the public 
school choice and SES information for LEAs that do not have their own 
Web sites. The Department projects that 47 States will need to post 
this information and that this effort will require five hours annually. 
At $30 per hour, the estimated total national cost is $7,050.
    The benefits of these provisions are that parents and others will 
have more and better information about public school choice and SES 
and, thus, parents might be more likely to take advantage of those 
options (with attendant benefits for their children) and that LEA 
implementation of the public school choice and SES requirements will be 
more transparent. We also note that LEAs may assign costs related to 
meeting this requirement to the amount equal to 0.2 percent of their 
Title I, Part A allocations under Sec.  200.48(a)(2)(iii)(C).
    The final regulations in Sec.  200.47 require SEAs to post 
information on their Web sites on the amount that each LEA must spend 
for public school choice and SES (that is, an amount equal to 20 
percent of the LEA's Title I allocation) and, for each LEA, the per-
child amount for SES. SEA Web sites must also indicate which SES 
providers are able to serve students with disabilities or LEP students. 
The Department added these provisions to the final regulations in 
response to comments on the NPRM. The Department believes that the 
information called for will be readily available to most SEAs and, 
thus, should be inexpensive to post. (A few SEAs may have to revise 
their application instructions in order to gather some of this 
information, but the cost of making such revisions should be minimal.) 
The Department estimates that it will require four hours annually for 
an SEA to post this information. For 52 SEAs at $30 an hour, the total 
annual cost will be an estimated $6,240.
    The regulations in Sec.  200.47 also clarify the SEA's 
responsibilities for SES, by stating that those responsibilities 
include developing, implementing, and publicly reporting on the SEA's 
standards and techniques for monitoring LEAs' implementation of SES. 
States should already have such standards and techniques in place 
because they are required under 34 CFR 80.40 to monitor LEA activities. 
The burden of publicly reporting on them, such as by posting 
information about them on the SEA's Web site, should be minimal. 
Specifically, we estimate that the total cost of implementation will be 
$62,400, based on an assumption that each of the 52 SEAs will require 
40 hours to fulfill these responsibilities, at a cost of $30 an hour. 
The benefit of these regulations will be greater transparency of how 
SEAs monitor LEAs' implementation of SES.
    The regulations in Sec.  200.47 also clarify that, in order to be 
approved as an SES provider, an entity must provide the State with 
evidence that the instruction it would provide and the content it would 
use are aligned with the State's academic content and student academic 
achievement standards and are of high quality, research-based, and 
specifically designed to increase the academic achievement of eligible 
children. In addition, a State must consider, at a minimum, (1) whether 
the entity has been removed from any State's approved provider list; 
(2) parent recommendations or results from parent surveys, if any, 
regarding the success of the entity's instructional program in 
increasing student achievement; and (3) evaluation results, if any, 
demonstrating that the instructional program has improved student 
achievement. The Department believes that these requirements will 
result in improvements in States' SES provider approval procedures 
leading to high-quality SES and improved student achievement, and that 
the cost of compliance will be very minimal.
    The regulations in Sec.  200.47 also further specify the evidence 
that States must consider when monitoring the quality and effectiveness 
of the services offered by an approved provider in order to inform 
decisions on renewal or withdrawal of approval of the provider. The 
statute and current regulations already require States to approve SES 
providers with a demonstrated record of effectiveness, and to develop 
and apply objective criteria for monitoring and withdrawing approval of 
providers. The regulations may add minimal costs to States if they need 
to revise their applications or monitoring protocol in order to comply 
with the requirements, or if a revised application or protocol results 
in more labor-intensive application review or monitoring. The 
regulations will only add costs to SES providers if they are not 
already providing this information to States in their applications for 
approval and renewal. The Department believes that the minimal costs to 
States and SES providers will be outweighed by the benefits of having a 
clear outline of the evidence that States must consider both before 
providers begin serving students in the State and as their programs are 
monitored and being considered for renewal or termination.
    A number of commenters expressed concern about the costs of 
implementing the changes proposed for Sec.  200.47, but did not offer 
specific estimates of the cost of implementation. For example, some 
commenters stated that the cost of SEA monitoring of SES providers 
would diminish direct services to students. The Department responded, 
in the Analysis of Comments and Changes section of this preamble, that 
State monitoring is required under the ESEA and that the regulations 
merely clarify the elements of effective monitoring. Moreover, SEA 
monitoring is financed with Title I funds that SEAs reserve for State 
administration, not with funds that would otherwise be used for 
services to students. Other commenters expressed concern about the new 
requirement for SEAs to consider, in their monitoring and in their 
review of SES provider applications, evaluation results and parent 
surveys; these commenters were concerned that the regulations would 
require SEAs to conduct costly surveys and evaluations. The Department 
pointed out that the regulations require consideration of parent 
surveys and evaluations only when they are available. After 
consideration of these comments, the Department's assessment of the 
cost of compliance for the Sec.  200.47 revisions is largely unchanged.
    The regulations on funding for public school choice and SES in 
Sec.  200.48 allow LEAs to count costs for parent outreach and 
assistance toward the requirement to spend the equivalent of 20 percent 
of the LEA's Title I, Part A allocation (the ``20 percent obligation'') 
on choice-related transportation and SES. This provision permits an LEA 
to allocate up to 0.2 percent of its Title I, Part A allocation (1.0 
percent of the 20 percent obligation) in that manner. Allowing LEAs to 
count toward meeting the 20 percent obligation a limited amount of 
funds for parent outreach and assistance will help ensure that LEAs 
provide parents the information they need to make the best decisions 
for their children. The new provision will not impose costs on LEAs, as 
they would, at their discretion, support the parental outreach and 
assistance activities by using funds from other activities.
    The amendments to Sec.  200.48 also require an LEA that uses 
unspent funds

[[Page 64504]]

from its 20 percent obligation for other allowable activities to meet 
the following criteria:
    (1) Partner, to the extent practicable, with outside groups, such 
as faith-based organizations, other community-based organizations, and 
business groups, in order to inform eligible students and their 
families about their opportunities for public school choice and SES.
    (2) Ensure that eligible students and their families have a genuine 
opportunity to transfer to schools or to receive SES. The language 
clarifies that providing such an opportunity includes (a) providing 
timely and accurate notice to those students and their families, as 
required under Sec. Sec.  200.36 and 200.37; (b) ensuring that sign-up 
forms for SES are distributed directly to all eligible students and are 
made widely available and accessible; and (c) providing a minimum of 
two SES enrollment ``windows'' at separate points in the school year 
that are of sufficient length to enable parents of eligible students to 
make informed decisions about requesting SES and selecting a provider.
    (3) Ensure that approved SES providers are given access to school 
facilities through a fair, open, and objective process.
    In response to comments on the NPRM, the Department revised the 
proposed language to require an LEA that is using funds from its 20 
percent obligation for other purposes: (1) To maintain records that it 
has met the criteria listed above, and (2) to notify the SEA that it 
has met those criteria and of the amount remaining from its 20 percent 
obligation that it intends to spend on other allowable activities. 
These requirements replace language in the NPRM that would have 
required LEAs to obtain permission from the SEA before using unspent 
funds for other purposes. The final regulations also: (1) Revise the 
proposed language on partnering to provide examples of outside groups 
with which an LEA may partner and to clarify that this activity must 
take place only to the extent practicable; and (2) replace a 
requirement that LEAs permit eligible students to sign up for SES 
throughout the school year with a requirement for two enrollment 
``windows'' at separate points in the school year. All of these changes 
should result in reduced compliance costs.
    The Department believes that most of the costs that LEAs will incur 
in meeting these requirements will be minimal. The most tangible costs 
will be for developing a clearly distinguishable notification (on 
eligibility and the benefits of SES) to parents of eligible students 
(which has been accounted for in the cost estimate for Sec.  200.37) 
and in maintaining records and informing the SEA that an LEA has met 
the various outreach and access criteria in Sec.  200.48(d) if it 
wishes to use unspent funds from its 20 percent obligation for other 
allowable activities. We estimate these additional LEA documentation 
costs related to Sec.  200.48(d) as follows.
    As noted earlier, we project that 2,400 LEAs annually will be 
required to offer public school choice, or both public school choice 
and SES, to their eligible students. Further, based on data for 378 
LEAs reported to the Department's EDFacts data system, we estimate that 
10 percent of those LEAs (240) will use the full 20 percent obligation 
for choice-related transportation and SES and, thus, will not be 
affected by the regulations.\24\ Further, based on the EDFacts data, we 
estimate that an additional 15 percent of the LEAs (360) will not meet 
the 20 percent obligation but will choose to spend the remaining funds 
for choice-related transportation and SES in the following year, rather 
than meeting the criteria in new Sec.  200.48(d)(2)(i), compiling and 
maintaining the required records, and informing the SEA of their 
actions.\25\
---------------------------------------------------------------------------

    \24\ The EDFacts data from 2005-2006 indicate that 8.2 percent 
of LEAs used the equivalent of at least 20 percent of their Title I 
allocation to fund SES. Unfortunately, the data do not include 
expenditures for choice-related transportation. We assume that the 
inclusion of expenditures for choice-related transportation would 
bring the total to approximately 10 percent.
    \25\ This estimate is based on the assumption that LEAs that 
spend close to the 20 percent will find it more efficient to spend 
the remaining funds the following year than to compile and maintain 
the records and inform the SEA of their use of those funds for other 
purposes. The EDFacts data from 2005-2006 indicate that 11.6 percent 
of LEAs used the equivalent of at least 16 percent (but less than 20 
percent) of their Title I allocations for SES. Again, the data do 
not include expenditures for choice-related transportation; we 
assume that if those expenditures were included, approximately 15 
percent of LEAs will elect to spend the remaining funds of their 
obligation in the succeeding year.
---------------------------------------------------------------------------

    The remaining 1,800 LEAs, under our assumptions, will decide to use 
unspent funds from their 20 percent obligation for other allowable 
activities and, thus, will need to maintain records demonstrating that 
they have met the criteria in Sec.  200.48(d)(2)(i) and inform the SEA 
that they have met those criteria and of the amount they intend to 
spend on other allowable activities. We estimate that the annual cost 
of this effort will be $540,000, based on an assumption that each LEA 
will require 12 hours to meet these requirements and that LEAs' costs 
for this effort will be $25 per hour.
    The final regulations also revise the language in the NPRM on SEA 
responsibilities related to an LEA's use of any unspent portion of its 
20 percent obligation. In place of the proposed requirement for SEAs to 
approve LEA requests to spend less than the 20 percent obligation, the 
final regulations require that SEAs ensure, through their regular 
monitoring process, LEAs' compliance with the criteria in new Sec.  
200.48(d)(2)(i). The regulations also require SEAs to review certain 
LEAs (those that have spent a significant portion of their 20 percent 
obligation on other allowable activities and have been the subject of 
multiple complaints, supported by credible evidence, related to public 
school choice or SES) and to complete each such review by the beginning 
of the next school year. The Department estimates that most of the 
costs of meeting these requirements will be minimal, as SEAs are 
already monitoring LEAs' implementation of the public school choice and 
SES requirements and should be able, at minimal cost, to incorporate 
the new requirements into their monitoring procedures. However, the 
requirement to complete a review of certain LEAs before the beginning 
of the next school year will likely result in SEAs having to undertake 
additional monitoring and review activities. The Department estimates 
that, of the projected 1,800 LEAs that will elect to spend less than 
their 20 percent obligation on choice-related transportation and SES, 
five percent (90) will be covered by Sec.  200.48(d)(3)(ii)(A) and, 
thus, will be required to be reviewed by the SEA prior to the beginning 
of the next school year. The Department further estimates that 80 
percent of these reviews (72) will be reviews that the State would not 
have carried out in the absence of this new requirement. Finally, the 
Department estimates that the cost of carrying out each review 
(including staff time, travel, and other expenses) will average $1,220 
(based on 24 hours of staff time per review, at $30 an hour, plus $500 
per review for travel and additional expenses). Thus, the estimated 
total cost of implementation will be $87,840 annually.
    Finally, the regulations require that, if an SEA determines that an 
LEA has failed to meet the three criteria related to implementation of 
public school choice and SES, the LEA must spend, in the next year, the 
``unexpended'' amount needed to meet the 20 percent obligation, in 
addition to the 20 percent required in that subsequent year. Such an 
LEA must also request SEA permission before spending less than the 
unexpended amount and the 20 percent obligation in the subsequent

[[Page 64505]]

year, and the SEA may not grant such permission unless it has confirmed 
the LEA's compliance with the criteria in Sec.  200.48(d)(2)(i). The 
Department believes that few LEAs will be covered by these provisions 
and, thus, that the cost of compliance will be low. Our estimate is 
that 10 percent (240) of the 2,400 LEAs required to implement public 
school choice and SES will be covered and that one half of those LEAs 
will apply to the SEA for permission to spend the unused funds. (The 
other half will add the unexpended amount to the 20 percent obligation 
in the succeeding year). We further estimate that each such LEA will 
require 12 hours (at $25 per hour) to prepare a request to the SEA to 
spend the unused funds. The total estimated annual cost of implementing 
these requirements at the LEA level is, thus, $36,000. We further 
estimate that SEAs will require 12 hours to review each request. At $30 
per hour, the total estimated annual cost for SEAs is $43,200.
    Overall, the total estimated cost of implementing the regulations 
on public school choice and SES is $3,519,060.
    Although our cost estimates for the public school choice and SES 
regulations are necessarily speculative (because of the limited 
availability of relevant data), the estimated costs are low even if 
some of the assumptions are changed significantly. For example, if the 
number of hours required at each stage of implementing the new public 
school choice and SES regulations were doubled, the total annual cost 
would increase only to $6,245,460. These costs, even when combined with 
the estimated $27,188,800 attributable to implementation (in the first 
year) of the regulations on minimum group size, high school graduation 
rates, submission of revised Accountability Workbooks, the inclusion of 
NAEP data on report cards, and implementation of AYP definitions that 
include measures of student growth are an extremely small amount within 
the context of the $13.9 billion Title I program.
    The Department believes that the regulations on public school 
choice and SES will result in significant benefits, in terms of 
providing more students with access to public school choice and SES 
under Title I and students and their families receiving better 
information about their options. A recent study by the RAND 
Corporation, supported by the Department, found that, in five out of 
the seven large urban LEAs in which there were sufficient numbers of 
students to analyze the effects, the students participating in SES 
showed statistically significant positive effects in both reading and 
mathematics achievement.\26\ Moreover, for those students using SES for 
multiple years, the analysis suggests that the positive effects might 
accumulate over time. If SES can continue to improve student 
achievement and close the achievement gap, students, schools, and LEAs 
will benefit. In sum, the Department believes that the benefits 
students will receive, if more LEAs provide eligible students with a 
genuine opportunity to take advantage of the public school choice and 
SES options, will well exceed the small costs LEAs and SEAs would 
assume in implementing these regulations. Moreover, LEAs and SEAs will 
be able to use Federal funds provided through Title I, Part A to meet 
the aforementioned administrative expenses.
---------------------------------------------------------------------------

    \26\ U.S. Department of Education. (2007). State and Local 
Implementation of the No Child Left Behind Act, Volume I--Title I 
School Choice, Supplemental Educational Services, and Student 
Achievement, Washington, DC: Author.
---------------------------------------------------------------------------

Other Provisions

    The Department believes that the additional provisions in the final 
regulations will not result in significant costs for LEAs, SEAs, or 
other entities. These provisions include, in Sec.  200.2, clarification 
of the requirement that State assessments involve multiple measures of 
student achievement and, in Sec.  200.43, clarification of the actions 
LEAs must take when schools are in ``restructuring'' status. Similarly, 
Sec.  200.22 authorizes the creation of a National Technical Advisory 
Council; all costs of operating the National TAC will be paid for with 
Department salaries and expenses funds.

Paperwork Reduction Act of 1995

    The final regulations contain information collection provisions 
that are subject to review by OMB under the Paperwork Reduction Act of 
1995 (44 U.S.C. 3501-3520). A description of the specific information 
collection requirements is provided in the following tables along with 
an estimate of the annual recordkeeping burden for these requirements. 
(Two of the requirements do not add additional burden to what has 
already been approved.) Included in the estimate is the time for 
collecting and tracking data, maintaining records, calculations, and 
reporting. We display the valid OMB control numbers assigned to the 
collections of information in these final regulations at the end of the 
affected sections of the regulations.
    The final regulations include information collection requirements 
associated with the following provisions that will add additional 
burden to already approved collections (1810-0576 and 1810-0581): Sec.  
200.7(a)(2)(ii); Sec.  200.11(c); Sec.  200.19(b)(1); Sec.  
200.19(b)(1)(ii)(B)(1); Sec.  200.19(b)(6); Sec.  200.19(b)(7); Sec.  
200.20(h); Sec.  200.37(b)(5)(ii)(C); Sec.  200.39(c)(1); Sec.  
200.39(c)(2); Sec.  200.47(a)(1)(ii)(B); Sec.  200.47(a)(3)(ii); Sec.  
200.47(a)(4)(iii); Sec.  200.48(d)(3); and 200.48(d)(4). These 
information collection requirements were listed in the NPRM or 
represent new or modified requirements in response to public comment.
    Collections of information: State Educational Agency, Local 
Educational Agency, and School Data Collection and Reporting under 
ESEA, Title I, Part A (OMB Number 1810-0581) and Consolidated State 
Application (OMB Number 1810-0576).
    Burden hours and cost estimates for the final regulations 
pertaining to ``State Educational Agency, Local Educational Agency, and 
School Data Collection and Reporting under ESEA, Title I, Part A (OMB 
Number 1810-0581)'' are presented in the following tables. The first 
table presents the estimated burden for SEAs and the second table 
presents the estimated burden for LEAs.

                                 Title I Regulations (Collection 1810-0581) Final Regulations Burden Hours/Cost for SEAs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Average
                                                                                             Number of       number of                      Total cost
                    Citation                                   Description                  respondents      hours per      Total hours   (total hours x
                                                                                                           respondent *                       $30.00)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   200.11(c)...............................  Adding NAEP data to SEA report cards                 52              24           1,248         $37,440
                                                  and developing tool for parents to
                                                  compare NAEP and State assessment data.

[[Page 64506]]

 
Sec.   200.19 (b)(1)...........................  Beginning with report cards providing                52             286          14,880         446,400
                                                  assessment results for SY 2010-11,
                                                  calculate the four-year adjusted
                                                  cohort graduation rate, and, if option
                                                  is selected by the State, the extended-
                                                  year adjusted cohort graduation rate.
Sec.   200.39(c)(2)............................  Post the information listed in Sec.                  47               5             235           7,050
                                                  200.39(c)(1) for LEAs that do not
                                                  operate their own Web site.
Sec.   200.47(a)(1)(ii)(B).....................  Post on the SEA's Web site an amount                 52               2             104           3,120
                                                  equal to 20 percent of each LEA's Part
                                                  A allocation and the per-pupil amount
                                                  available for SES.
Sec.   200.47(a)(3)(ii)........................  Indicate on the list those providers                 52               2             104           3,120
                                                  able to serve students with
                                                  disabilities or limited English
                                                  proficient students.
Sec.   200.47(a)(4)(iii).......................  Develop, implement and publicly report               52              40           2,080          62,400
                                                  on standards and techniques for
                                                  monitoring LEAs' implementation of the
                                                  SES requirements.
Sec.   200.48(d)(3)............................  Review of LEAs.........................              52              33           1,728          51,840
Sec.   200.48(d)(4)............................  Review LEA request to use unexpended                 52              28           1,440          43,200
                                                  funds.
                                                                                         ---------------------------------------------------------------
    Totals.....................................  N/A....................................              52             N/A          21,819        654,570
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Figures in this column reflect rounding.

    Information collection activities are also associated with other 
final revisions to Sec.  200.47(a)(4) at the SEA level. These 
particular revisions, however, do not pose an additional burden to 
SEAs because they simply specify how SEAs are to carry out this part 
of the regulation and related regulations but should not require 
additional time beyond the hours already estimated for Sec.  
200.47(a) in the currently approved 1810-0581 collection.

                                 Title I Regulations (Collection 1810-0581) Final Regulations Burden Hours/Cost for LEAs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Average
                                                                                             Number of       number of                      Total cost
                    Citation                                   Description                  respondents      hours per      Total hours   (total hours x
                                                                                                            respondent                        $25.00)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   200.11(c)...............................  Adding NAEP data to LEA report cards...          13,987              24         335,688      $8,392,200
Sec.   200.19(b)(1)(ii)(B)(1)..................  Documentation that a student has                 13,987              50         699,350      17,483,750
                                                  transferred out--that the student has
                                                  enrolled in another school or in an
                                                  educational program that culminates in
                                                  the award of a regular high school
                                                  diploma.
Sec.   200.37(b)(5)(ii)(C).....................  Providing notice to parents that their            1,600              12          19,200         480,000
                                                  children are eligible for SES and
                                                  describing the benefits of SES.
Sec.   200.39(c)(1)............................  Provide information on public school              2,400              25          60,000       1,500,000
                                                  choice and SES.
Sec.   200.48(d)(3)............................  Maintain records that the criteria are            1,800              12          21,600         540,000
                                                  met and meet requirements for
                                                  informing SEA.
Sec.   200.48(d)(4)............................  Apply to SEA to use unexpended funds...             120              12           1,440          36,000
                                                                                         ---------------------------------------------------------------
    Totals.....................................  .......................................          13,987             N/A       1,137,278      28,431,950
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Information collection activities are also associated with 
Sec. Sec.  200.37(b)(4)(iv) and 200.37(b)(5)(ii)(B). The information 
collection activities associated with this change do not pose an 
additional burden to LEAs, however. Sufficient hours for this 
activity are already accounted for in the currently approved 1810-
0581 collection.

Consolidated State Application (Collection 1810-0576)

    SEA burden hours and cost estimates for the final regulations 
pertaining to ``Consolidated State Application (OMB Number 1810-0576)'' 
are presented in the following table.

[[Page 64507]]



 
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Average
                                                                                             Number of       number of                      Total cost
                    Citation                                   Description                  respondents      hours per      Total hours   (total hours x
                                                                                                            respondent                        $30.00)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   200.7(a)(2)(ii).........................  Revise Accountability Workbook relating              52             112           5,824        $174,720
                                                  to minimum group size.
Sec.   200.19(b)(6) and (b)(7).................  Revise Accountability Workbook for                   52             164           8,528         255,840
                                                  Graduation:.
                                                 1. Graduation rate definition to
                                                  determine AYP based on SY 2009-2010
                                                  assessment results;
                                                 2. Progress towards deadline in Sec.
                                                  200.19(b)(4)(ii)(A) for calculating
                                                  and reporting graduation rate defined
                                                  in Sec.   200.19(b)(1)(i) through
                                                  (iv);
                                                 3. Graduation rate goal and targets;
                                                 4. Explanation of graduation rate goal
                                                  and how the targets demonstrate
                                                  continuous and substantial
                                                  improvement;
                                                 5. Graduation rate of the high school
                                                  at the 10th percentile, 50th
                                                  percentile, and 90th percentile ranked
                                                  by graduation rate;
                                                 6. If using extended-year adjusted
                                                  cohort, how it will use this rate with
                                                  the four-year rate to determine AYP;
                                                 7. Request extension of deadline, if
                                                  appropriate.
Sec.   200.20(h)...............................  Request waiver under section 9401 of                 52             240          12,480         374,400
                                                  ESEA to incorporate academic growth
                                                  into State's AYP definition.
                                                                                         ---------------------------------------------------------------
    Total......................................  .......................................              52             N/A          26,832         804,960
--------------------------------------------------------------------------------------------------------------------------------------------------------

Regulatory Flexibility Act Certification

    The Secretary certifies that these final regulations will not have 
a significant economic impact on a substantial number of small 
entities. The small entities that the final regulations will affect are 
small LEAs receiving funds under Title I. These final regulations will 
not have a significant economic impact because the regulations impose 
minimal requirements beyond those that would otherwise be required 
under the ESEA, with most of those requirements falling on SEAs. 
Further, the small LEAs should be able to meet the costs of compliance 
with these regulations using Federal funds provided through Title I.

Intergovernmental Review

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

Electronic Access to This Document

    You may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or Adobe 
Portable Document Format (PDF) on the Internet at the following site: 
http://www.ed.gov/news/fedregister.
    To use PDF you must have Adobe Acrobat Reader, which is available 
free at this site. If you have questions about using PDF, call the U.S. 
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in 
the Washington, DC, area at (202) 512-1530.

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

(Catalog of Federal Domestic Assistance Number: 84.010 Improving 
Programs Operated by Local Educational Agencies)

List of Subjects in 34 CFR Part 200

    Administrative practice and procedure, Adult education, Children, 
Education of children with disabilities, Education of disadvantaged 
children, Elementary and secondary education, Eligibility, Family-
centered education, Grant programs--education, Indians--education, 
Infants and children, Institutions of higher education, Juvenile 
delinquency, Local educational agencies, Migrant labor, Nonprofit 
private agencies, Private schools, Public agencies, Reporting and 
recordkeeping requirements, State-administered programs, State 
educational agencies.

    Dated: October 20, 2008.
Margaret Spellings,
Secretary of Education.

0
For the reasons discussed in the preamble, the Secretary amends part 
200 of title 34 of the Code of Federal Regulations as follows:

PART 200--TITLE I--IMPROVING THE ACADEMIC ACHIEVEMENT OF THE 
DISADVANTAGED

0
1. The authority citation for part 200 continues to read as follows:

    Authority: 20 U.S.C. 6301 through 6578, unless otherwise noted.


0
2. Section 200.2 is amended by revising paragraph (b)(7) to read as 
follows:


Sec.  200.2  State responsibilities for assessment.

* * * * *
    (b) * * *
    (7) Involve multiple up-to-date measures of student academic 
achievement, including measures that assess higher-order thinking 
skills and understanding of challenging content, as defined by the 
State. These measures may include--
    (i) Single or multiple question formats that range in cognitive 
complexity within a single assessment; and
    (ii) Multiple assessments within a subject area.
* * * * *

0
3. Section 200.7 is amended by:
0
A. Revising paragraph (a)(2)(i).
0
B. Redesignating paragraph (a)(2)(ii) as (a)(2)(iv).

[[Page 64508]]

0
C. Adding new paragraphs (a)(2)(ii) and (a)(2)(iii).
0
D. Adding the OMB control number before the authority citation.
    The revision and additions read as follows:


Sec.  200.7  Disaggregation of data.

    (a) * * *
    (2)(i) Based on sound statistical methodology, each State must 
determine the minimum number of students sufficient to--
    (A) Yield statistically reliable information for each purpose for 
which disaggregated data are used; and
    (B) Ensure that, to the maximum extent practicable, all student 
subgroups in Sec.  200.13(b)(7)(ii) (economically disadvantaged 
students; students from major racial and ethnic groups; students with 
disabilities as defined in section 9101(5) of the Act; and students 
with limited English proficiency as defined in section 9101(25) of the 
Act) are included, particularly at the school level, for purposes of 
making accountability determinations.
    (ii) Each State must revise its Consolidated State Application 
Accountability Workbook under section 1111 of the Act to include--
    (A) An explanation of how the State's minimum group size meets the 
requirements of paragraph (a)(2)(i) of this section;
    (B) An explanation of how other components of the State's 
definition of adequate yearly progress (AYP), in addition to the 
State's minimum group size, interact to affect the statistical 
reliability of the data and to ensure the maximum inclusion of all 
students and student subgroups in Sec.  200.13(b)(7)(ii); and
    (C) Information regarding the number and percentage of students and 
student subgroups in Sec.  200.13(b)(7)(ii) excluded from school-level 
accountability determinations.
    (iii) Each State must submit a revised Consolidated State 
Application Accountability Workbook in accordance with paragraph 
(a)(2)(ii) of this section to the Department for technical assistance 
and peer review under the process established by the Secretary under 
section 1111(e)(2) of the Act in time for any changes to be in effect 
for AYP determinations based on school year 2009-2010 assessment 
results.
* * * * *

0
4. Section 200.11 is amended by:
0
A. Adding a new paragraph (c).
0
B. Adding the OMB control number before the authority citation.
    The additions read as follows:


Sec.  200.11  Participation in NAEP.

* * * * *
    (c) Report cards. Each State and LEA must report on its annual 
State and LEA report card, respectively, the most recent available 
academic achievement results in grades four and eight on the State's 
NAEP reading and mathematics assessments under paragraph (a) of this 
section. The report cards must include--
    (1) The percentage of students at each achievement level reported 
on the NAEP in the aggregate and, for State report cards, disaggregated 
for each subgroup described in Sec.  200.13(b)(7)(ii); and
    (2) The participation rates for students with disabilities and for 
limited English proficient students.

(Approved by the Office of Management and Budget under control 
number 1810-0581)
* * * * *
0
5. Section 200.19 is amended by:
0
A. Revising paragraph (a).
0
B. Redesignating paragraphs (b) and (c) as paragraphs (c) and (d), 
respectively.
0
C. Adding a new paragraph (b).
0
D. In paragraph (e)(1), removing the words ``in paragraphs (a) and 
(b)'', and adding in their place, the words ``in paragraphs (a) through 
(c)''.
0
E. Adding the OMB control number before the authority citation.
    The revision and additions read as follows:


Sec.  200.19  Other academic indicators.

    (a) Elementary and middle schools--(1) Choice of indicator. To 
determine AYP, consistent with Sec.  200.14(e), each State must use at 
least one other academic indicator for public elementary schools and at 
least one other academic indicator for public middle schools, such as 
those in paragraph (c) of this section.
    (2) Goals. A State may, but is not required to, increase the goals 
of its other academic indicators over the course of the timeline under 
Sec.  200.15.
    (3) Reporting. A State and its LEAs must report under section 
1111(h) of the Act (annual report cards) performance on the academic 
indicators for elementary and middle schools at the school, LEA, and 
State levels in the aggregate and disaggregated by each subgroup 
described in Sec.  200.13(b)(7)(ii).
    (4) Determining AYP. A State--
    (i) Must disaggregate its other academic indicators for elementary 
and middle schools by each subgroup described in Sec.  200.13(b)(7)(ii) 
for purposes of determining AYP under Sec.  200.20(b)(2) (``safe 
harbor'') and as required under section 1111(b)(2)(C)(vii) of the Act 
(additional academic indicators under paragraph (c) of this section); 
but (ii) Need not disaggregate those indicators for determining AYP 
under Sec.  200.20(a)(1)(ii) (meeting the State's annual measurable 
objectives).
    (b) High schools--(1) Graduation rate. Consistent with paragraphs 
(b)(4) and (b)(5) of this section regarding reporting and determining 
AYP, respectively, each State must calculate a graduation rate, defined 
as follows, for all public high schools in the State:
    (i)(A) A State must calculate a ``four-year adjusted cohort 
graduation rate,'' defined as the number of students who graduate in 
four years with a regular high school diploma divided by the number of 
students who form the adjusted cohort for that graduating class.
    (B) For those high schools that start after grade nine, the cohort 
must be calculated based on the earliest high school grade.
    (ii) The term ``adjusted cohort'' means the students who enter 
grade 9 (or the earliest high school grade) and any students who 
transfer into the cohort in grades 9 through 12 minus any students 
removed from the cohort.
    (A) The term ``students who transfer into the cohort'' means the 
students who enroll after the beginning of the entering cohort's first 
year in high school, up to and including in grade 12.
    (B) To remove a student from the cohort, a school or LEA must 
confirm in writing that the student transferred out, emigrated to 
another country, or is deceased.
    (1) To confirm that a student transferred out, the school or LEA 
must have official written documentation that the student enrolled in 
another school or in an educational program that culminates in the 
award of a regular high school diploma.
    (2) A student who is retained in grade, enrolls in a General 
Educational Development (GED) program, or leaves school for any other 
reason may not be counted as having transferred out for the purpose of 
calculating graduation rate and must remain in the adjusted cohort.
    (iii) The term ``students who graduate in four years'' means 
students who earn a regular high school diploma at the conclusion of 
their fourth year, before the conclusion of their fourth year, or 
during a summer session immediately following their fourth year.
    (iv) The term ``regular high school diploma'' means the standard 
high school diploma that is awarded to students in the State and that 
is fully aligned with the State's academic content standards or a 
higher diploma and does not include a GED credential,

[[Page 64509]]

certificate of attendance, or any alternative award.
    (v) In addition to calculating a four-year adjusted cohort 
graduation rate, a State may propose to the Secretary for approval an 
``extended-year adjusted cohort graduation rate.''
    (A) An extended-year adjusted cohort graduation rate is defined as 
the number of students who graduate in four years or more with a 
regular high school diploma divided by the number of students who form 
the adjusted cohort for the four-year adjusted cohort graduation rate, 
provided that the adjustments account for any students who transfer 
into the cohort by the end of the year of graduation being considered 
minus the number of students who transfer out, emigrate to another 
country, or are deceased by the end of that year.
    (B) A State may calculate one or more extended-year adjusted cohort 
graduation rates.
    (2) Transitional graduation rate. (i) Prior to the deadline in 
paragraph (b)(4)(ii)(A) of this section, a State must calculate 
graduation rate as defined in paragraph (b)(1) of this section or use, 
on a transitional basis--
    (A) A graduation rate that measures the percentage of students from 
the beginning of high school who graduate with a regular high school 
diploma in the standard number of years; or
    (B) Another definition, developed by the State and approved by the 
Secretary, that more accurately measures the rate of student graduation 
from high school with a regular high school diploma.
    (ii) For a transitional graduation rate calculated under paragraph 
(b)(2)(i) of this section--
    (A) ``Regular high school diploma'' has the same meaning as in 
paragraph (b)(1)(iv) of this section;
    (B) ``Standard number of years'' means four years unless a high 
school begins after ninth grade, in which case the standard number of 
years is the number of grades in the school; and
    (C) A dropout may not be counted as a transfer.
    (3) Goal and targets. (i) A State must set--
    (A) A single graduation rate goal that represents the rate the 
State expects all high schools in the State to meet; and
    (B) Annual graduation rate targets that reflect continuous and 
substantial improvement from the prior year toward meeting or exceeding 
the graduation rate goal.
    (ii) Beginning with AYP determinations under Sec.  200.20 based on 
school year 2009-2010 assessment results, in order to make AYP, any 
high school or LEA that serves grade 12 and the State must meet or 
exceed--
    (A) The graduation rate goal set by the State under paragraph 
(b)(3)(i)(A) of this section; or
    (B) The State's targets for continuous and substantial improvement 
from the prior year, as set by the State under paragraph (b)(3)(i)(B) 
of this section.
    (4) Reporting. (i) In accordance with the deadlines in paragraph 
(b)(4)(ii) of this section, a State and its LEAs must report under 
section 1111(h) of the Act (annual report cards) graduation rate at the 
school, LEA, and State levels in the aggregate and disaggregated by 
each subgroup described in Sec.  200.13(b)(7)(ii).
    (ii)(A) Beginning with report cards providing results of 
assessments administered in the 2010-2011 school year, a State and its 
LEAs must report the four-year adjusted cohort graduation rate 
calculated in accordance with paragraph (b)(1)(i) through (iv) of this 
section.
    (B) If a State adopts an extended-year adjusted cohort graduation 
rate calculated in accordance with paragraph (b)(1)(v) of this section, 
the State and its LEAs must report, beginning with the first year for 
which the State calculates such a rate, the extended-year adjusted 
cohort graduation rate separately from the four-year adjusted cohort 
graduation rate.
    (C) Prior to the deadline in paragraph (b)(4)(ii)(A) of this 
section, a State and its LEAs must report a graduation rate calculated 
in accordance with paragraph (b)(1) or (b)(2) of this section in the 
aggregate and disaggregated by the subgroups in Sec.  200.13(b)(7)(ii).
    (5) Determining AYP. (i) Beginning with AYP determinations under 
Sec.  200.20 based on school year 2011-2012 assessment results, a State 
must calculate graduation rate under paragraph (b)(1) of this section 
at the school, LEA, and State levels in the aggregate and disaggregated 
by each subgroup described in Sec.  200.13(b)(7)(ii).
    (ii) Prior to the AYP determinations described in paragraph 
(b)(5)(i) of this section, a State must calculate graduation rate in 
accordance with either paragraph (b)(1) or (b)(2) of this section--
    (A) In the aggregate at the school, LEA, and State levels for 
determining AYP under Sec.  200.20(a)(1)(ii) (meeting the State's 
annual measurable objectives), except as provided in paragraph 
(b)(7)(iii) of this section; but
    (B) In the aggregate and disaggregated by each subgroup described 
in Sec.  200.13(b)(7)(ii) for purposes of determining AYP under Sec.  
200.20(b)(2) (``safe harbor'') and as required under section 
1111(b)(2)(C)(vii) of the Act (additional academic indicators under 
paragraph (c) of this section).
    (6) Accountability workbook. (i) A State must revise its 
Consolidated State Application Accountability Workbook submitted under 
section 1111 of the Act to include the following:
    (A) The State's graduation rate definition that the State will use 
to determine AYP based on school year 2009-2010 assessment results.
    (B) The State's progress toward meeting the deadline in paragraph 
(b)(4)(ii)(A) of this section for calculating and reporting the four-
year adjusted cohort graduation rate defined in paragraph (b)(1)(i) 
through (iv) of this section.
    (C) The State's graduation rate goal and targets.
    (D) An explanation of how the State's graduation rate goal 
represents the rate the State expects all high schools in the State to 
meet and how the State's targets demonstrate continuous and substantial 
improvement from the prior year toward meeting or exceeding the goal.
    (E) The graduation rate for the most recent school year of the high 
school at the 10th percentile, the 50th percentile, and the 90th 
percentile in the State (ranked in terms of graduation rate).
    (F) If a State uses an extended-year adjusted cohort graduation 
rate, a description of how it will use that rate with its four-year 
adjusted cohort graduation rate to determine whether its schools and 
LEAs have made AYP.
    (ii) Each State must submit, consistent with the timeline in Sec.  
200.7(a)(2)(iii), its revised Consolidated State Application 
Accountability Workbook in accordance with paragraph (b)(6)(i) of this 
section to the Department for technical assistance and peer review 
under the process established by the Secretary under section 1111(e)(2) 
of the Act.
    (7) Extension. (i) If a State cannot meet the deadline in paragraph 
(b)(4)(ii)(A) of this section, the State may request an extension of 
the deadline from the Secretary.
    (ii) To receive an extension, a State must submit to the Secretary, 
by March 2, 2009--
    (A) Evidence satisfactory to the Secretary demonstrating that the 
State cannot meet the deadline in paragraph (b)(4)(ii)(A) of this 
section; and
    (B) A detailed plan and timeline addressing the steps the State 
will take to implement, as expeditiously as possible, a graduation rate 
consistent with paragraph (b)(1)(i) through (iv) of this section.
    (iii) A State that receives an extension under this paragraph must, 
beginning with AYP determinations under Sec.  200.20 based on school 
year 2011-

[[Page 64510]]

2012 assessment results, calculate graduation rate under paragraph 
(b)(2) of this section at the school, LEA, and State levels in the 
aggregate and disaggregated by each subgroup described in Sec.  
200.13(b)(7)(ii).
* * * * *
(Approved by the Office of Management and Budget under control 
numbers 1810-0581 and 1810-0576)
* * * * *

0
6. Section 200.20 is amended by:
0
A. Adding a new paragraph (h).
0
B. Adding the OMB control number before the authority citation.
0
C. Revising the authority citation.
    The additions and revision read as follows:


Sec.  200.20  Making adequate yearly progress.

* * * * *
    (h) Student academic growth. (1) A State may request authority 
under section 9401 of the Act to incorporate student academic growth in 
the State's definition of AYP under this section.
    (2) A State's policy for incorporating student academic growth in 
the State's definition of AYP must--
    (i) Set annual growth targets that--
    (A) Will lead to all students, by school year 2013-2014, meeting or 
exceeding the State's proficient level of academic achievement on the 
State assessments under Sec.  200.2;
    (B) Are based on meeting the State's proficient level of academic 
achievement on the State assessments under Sec.  200.2 and are not 
based on individual student background characteristics; and
    (C) Measure student achievement separately in mathematics and 
reading/language arts;
    (ii) Ensure that all students enrolled in the grades tested under 
Sec.  200.2 are included in the State's assessment and accountability 
systems;
    (iii) Hold all schools and LEAs accountable for the performance of 
all students and the student subgroups described in Sec.  
200.13(b)(7)(ii);
    (iv) Be based on State assessments that--
    (A) Produce comparable results from grade to grade and from year to 
year in mathematics and reading/language arts;
    (B) Have been in use by the State for more than one year; and
    (C) Have received full approval from the Secretary before the State 
determines AYP based on student academic growth;
    (v) Track student progress through the State data system;
    (vi) Include, as separate factors in determining whether schools 
are making AYP for a particular year--
    (A) The rate of student participation in assessments under Sec.  
200.2; and
    (B) Other academic indicators as described in Sec.  200.19; and
    (vii) Describe how the State's annual growth targets fit into the 
State's accountability system in a manner that ensures that the system 
is coherent and that incorporating student academic growth into the 
State's definition of AYP does not dilute accountability.
    (3) A State's proposal to incorporate student academic growth in 
the State's definition of AYP will be peer reviewed under the process 
established by the Secretary under section 1111(e)(2) of the Act.

(Approved by the Office of Management and Budget under control 
number 1810-0576)

(Authority: 20 U.S.C. 6311(b)(2), (b)(3)(C)(xi); 7861)


0
7. Section 200.22 is added to read as follows:


Sec.  200.22  National Technical Advisory Council.

    (a) To provide advice to the Department on technical issues related 
to the design and implementation of standards, assessments, and 
accountability systems, the Secretary shall establish a National 
Technical Advisory Council (hereafter referred to as the ``National 
TAC''), which shall be governed by the provisions of the Federal 
Advisory Committee Act (FACA) (Pub. L. 92-463, as amended; 5 U.S.C. 
App.).
    (b)(1) The members of the National TAC must include persons who 
have knowledge of and expertise in the design and implementation of 
educational standards, assessments, and accountability systems for all 
students, including students with disabilities and limited English 
proficient students, and experts with technical knowledge related to 
statistics and psychometrics.
    (2) The National TAC shall be composed of 10 to 20 members who may 
meet as a whole or in committees, as the Secretary may determine.
    (3) The Secretary shall, through a notice published in the Federal 
Register--
    (i) Solicit nominations from the public for members of the National 
TAC; and
    (ii) Publish the list of members, once selected.
    (4) The Secretary shall screen nominees for membership on the 
National TAC for potential conflicts of interest to prevent, to the 
extent possible, such conflicts, or the appearance thereof, in the 
National TAC's performance of its responsibilities under this section.
    (c) The Secretary shall use the National TAC to provide its expert 
opinions on matters that arise during the State Plan review process.
    (d) The Secretary shall prescribe and publish the rules of 
procedure for the National TAC.

(Authority: 20 U.S.C. 6311(e))

0
8. Section 200.32 is amended by:
0
A. Redesignating paragraph (a)(1) as paragraph (a)(1)(i).
0
B. Adding a new paragraph (a)(1)(ii).
    The addition reads as follows:


Sec.  200.32  Identification for school improvement.

    (a)(1)(i) * * *
    (ii) In identifying schools for improvement, an LEA--
    (A) May base identification on whether a school did not make AYP 
because it did not meet the annual measurable objectives for the same 
subject or meet the same other academic indicator for two consecutive 
years; but
    (B) May not limit identification to those schools that did not make 
AYP only because they did not meet the annual measurable objectives for 
the same subject or meet the same other academic indicator for the same 
subgroup under Sec.  200.13(b)(7)(ii) for two consecutive years.
* * * * *

0
9. Section 200.37 is amended by:
0
A. Adding new paragraph (b)(4)(iv).
0
B. Revising paragraph (b)(5)(ii)(B).
0
C. Adding new paragraph (b)(5)(ii)(C).
0
D. Adding new paragraph (b)(5)(iii).
    The revision and additions read as follows:


Sec.  200.37  Notice of identification for improvement, corrective 
action, or restructuring.

* * * * *
    (b) * * *
    (4) * * *
    (iv) The explanation of the available school choices must be made 
sufficiently in advance of, but no later than 14 calendar days before, 
the start of the school year so that parents have adequate time to 
exercise their choice option before the school year begins.
    (5) * * *
    (ii) * * *
    (B) A brief description of the services, qualifications, and 
demonstrated effectiveness of the providers referred to in paragraph 
(b)(5)(ii)(A) of this section, including an indication of those 
providers who are able to serve students with disabilities or limited 
English proficient students.
    (C) An explanation of the benefits of receiving supplemental 
educational services.
    (iii) The annual notice of the availability of supplemental 
educational services must be--

[[Page 64511]]

    (A) Clear and concise; and
    (B) Clearly distinguishable from the other information sent to 
parents under this section.
* * * * *


0
10. Section 200.39 is amended by adding a new paragraph (c) to read as 
follows:


Sec.  200.39  Responsibilities resulting from identification for school 
improvement.

* * * * *
    (c)(1) Except as provided in paragraph (c)(2) of this section, the 
LEA must prominently display on its Web site, in a timely manner to 
ensure that parents have current information, the following information 
regarding the LEA's implementation of the public school choice and 
supplemental educational services requirements of the Act and this 
part:
    (i) Beginning with data from the 2007-2008 school year and for each 
subsequent school year, the number of students who were eligible for 
and the number of students who participated in public school choice.
    (ii) Beginning with data from the 2007-2008 school year and for 
each subsequent school year, the number of students who were eligible 
for and the number of students who participated in supplemental 
educational services.
    (iii) For the current school year, a list of supplemental 
educational services providers approved by the State to serve the LEA 
and the locations where services are provided.
    (iv) For the current school year, a list of available schools to 
which students eligible to participate in public school choice may 
transfer.
    (2) If the LEA does not have its own Web site, the SEA must include 
on the SEA's Web site the information required in paragraph (c)(1) of 
this section for the LEA.
* * * * *

0
11. Section 200.43 is amended by:
0
A. Revising paragraph (a)(1).
0
B. In paragraph (a)(2), removing the word ``and'' at the end of the 
paragraph.
0
C. In paragraph (a)(3), removing the punctuation ``.'' and adding in 
its place the punctuation ``;'' at the end of the paragraph.
0
D. Adding new paragraphs (a)(4) and (a)(5).
0
E. Revising paragraph (b)(3)(ii).
0
F. Revising paragraph (b)(3)(v).
    The additions and revisions read as follows:


Sec.  200.43  Restructuring.

    (a) * * *
    (1) Makes fundamental reforms to improve student academic 
achievement in the school;
* * * * *
    (4) Is significantly more rigorous and comprehensive than the 
corrective action that the LEA implemented in the school under Sec.  
200.42, unless the school has begun to implement one of the options in 
paragraph (b)(3) of this section as a corrective action; and
    (5) Addresses the reasons why the school was identified for 
restructuring in order to enable the school to exit restructuring as 
soon as possible.
    (b) * * *
    (3) * * *
    (ii) Replace all or most of the school staff (which may include, 
but may not be limited to, replacing the principal) who are relevant to 
the school's failure to make AYP.
* * * * *
    (v) Any other major restructuring of a school's governance 
arrangement that makes fundamental reforms, such as significant changes 
in the school's staffing and governance, in order to improve student 
academic achievement in the school and that has substantial promise of 
enabling the school to make AYP. The major restructuring of a school's 
governance may include replacing the principal so long as this change 
is part of a broader reform effort.
* * * * *

0
12. Section 200.44 is amended by revising paragraph (a)(2) to read as 
follows:


Sec.  200.44  Public school choice.

    (a) * * *
    (2) The LEA must offer this option, through the notice required in 
Sec.  200.37, so that students may transfer in the school year 
following the school year in which the LEA administered the assessments 
that resulted in its identification of the school for improvement, 
corrective action, or restructuring.
* * * * *

0
13. Section 200.47 is amended by:
0
A. Revising paragraph (a)(1)(ii).
0
B. Redesignating paragraph (a)(3) as paragraph (a)(3)(i).
0
C. In newly redesignated paragraph (a)(3)(i), removing the punctuation 
``.'' and adding in its place the words ``; and'' at the end of the 
paragraph.
0
D. Adding a new paragraph (a)(3)(ii).
0
E. Revising the introductory text in paragraph (a)(4).
0
F. In paragraph (a)(4)(i), removing the word ``and'' at the end of the 
paragraph.
0
G. In paragraph (a)(4)(ii), removing the punctuation ``.'' and adding 
in its place the words ``; and'' at the end of the paragraph.
0
H. Adding a new paragraph (a)(4)(iii).
0
I. Revising paragraph (b)(2)(ii)(B).
0
J. Redesignating paragraph (b)(2)(ii)(C) as paragraph (b)(2)(ii)(D).
0
K. Adding a new paragraph (b)(2)(ii)(C).
0
L. Redesignating paragraph (b)(3) as paragraph (b)(4).
0
M. Adding a new paragraph (b)(3).
0
N. Adding a new paragraph (c).
    The revisions and additions read as follows:


Sec.  200.47  SEA responsibilities for supplemental educational 
services.

    (a) * * *
    (1)(i) * * *
    (ii) This promotion must include--
    (A) Annual notice to potential providers of--
    (1) The opportunity to provide supplemental educational services; 
and
    (2) Procedures for obtaining the SEA's approval to be a provider of 
those services; and
    (B) Posting on the SEA's Web site, for each LEA--
    (1) The amount equal to 20 percent of the LEA's Title I, Part A 
allocation available for choice-related transportation and supplemental 
educational services, as required in Sec.  200.48(a)(2); and
    (2) The per-child amount for supplemental educational services 
calculated under Sec.  200.48(c)(1).
* * * * *
    (3)(i) * * *
    (ii) Indicate on the list those providers that are able to serve 
students with disabilities or limited English proficient students.
    (4) Consistent with paragraph (c) of this section, develop, 
implement, and publicly report on standards and techniques for--
* * * * *
    (iii) Monitoring LEAs' implementation of the supplemental 
educational services requirements of the Act and this part.
* * * * *
    (b) * * *
    (2) * * *
    (ii) * * *
    (B) Are aligned with State academic content and student academic 
achievement standards;
    (C) Are of high quality, research-based, and specifically designed 
to increase the academic achievement of eligible children; and
* * * * *
    (3) In approving a provider, the SEA must consider, at a minimum--
    (i) Information from the provider on whether the provider has been 
removed from any State's approved provider list;

[[Page 64512]]

    (ii) Parent recommendations or results from parent surveys, if any, 
regarding the success of the provider's instructional program in 
increasing student achievement; and
    (iii) Evaluation results, if any, demonstrating that the 
instructional program has improved student achievement.
* * * * *
    (c) Standards for monitoring approved providers. To monitor the 
quality and effectiveness of services offered by an approved provider 
in order to inform the renewal or the withdrawal of approval of the 
provider--
    (1) An SEA must examine, at a minimum, evidence that the provider's 
instructional program--
    (i) Is consistent with the instruction provided and the content 
used by the LEA and the SEA;
    (ii) Addresses students' individual needs as described in students' 
supplemental educational services plans under Sec.  200.46(b)(2)(i);
    (iii) Has contributed to increasing students' academic proficiency; 
and
    (iv) Is aligned with the State's academic content and student 
academic achievement standards; and
    (2) The SEA must also consider information, if any, regarding--
    (i) Parent recommendations or results from parent surveys regarding 
the success of the provider's instructional program in increasing 
student achievement; and
    (ii) Evaluation results demonstrating that the instructional 
program has improved student achievement.
* * * * *


0
14. Section 200.48 is amended by:
0
A. In paragraph (a)(2), introductory text, adding the words ``(``20 
percent obligation'')'' after the word ``part''.
0
B. In paragraph (a)(2)(iii)(A), removing the word ``and'' at the end of 
the paragraph.
0
C. In paragraph (a)(2)(iii)(B), removing the punctuation ``.'' and 
adding, in its place, the words ``; and''.
0
D. Adding a new paragraph (a)(2)(iii)(C).
0
E. Adding a new paragraph (d).
0
F. Adding the OMB control number before the authority citation.
    The additions read as follows:


Sec.  200.48  Funding for choice-related transportation and 
supplemental educational services.

    (a) * * *
    (2) * * *
    (iii) * * *
    (C) The LEA may count in the amount the LEA is required to spend 
under paragraph (a) of this section its costs for outreach and 
assistance to parents concerning their choice to transfer their child 
or to request supplemental educational services, up to an amount equal 
to 0.2 percent of its allocation under subpart 2 of part A of Title I 
of the Act.
* * * * *
    (d) Unexpended funds for choice-related transportation and 
supplemental educational services. (1)(i) Except as provided in 
paragraph (d)(2) of this section, if an LEA does not meet its 20 
percent obligation in a given school year, the LEA must spend the 
unexpended amount in the subsequent school year on choice-related 
transportation costs, supplemental educational services, or parent 
outreach and assistance (consistent with paragraph (a)(2)(iii)(C) of 
this section).
    (ii) The LEA must spend the unexpended amount under paragraph 
(d)(1)(i) of this section in addition to the amount it is required to 
spend to meet its 20 percent obligation in the subsequent school year.
    (2) To spend less than the amount needed to meet its 20 percent 
obligation, an LEA must--
    (i) Meet, at a minimum, the following criteria:
    (A) Partner, to the extent practicable, with outside groups, such 
as faith-based organizations, other community-based organizations, and 
business groups, to help inform eligible students and their families of 
the opportunities to transfer or to receive supplemental educational 
services.
    (B) Ensure that eligible students and their parents have a genuine 
opportunity to sign up to transfer or to obtain supplemental 
educational services, including by--
    (1) Providing timely, accurate notice as required in Sec. Sec.  
200.36 and 200.37;
    (2) Ensuring that sign-up forms for supplemental educational 
services are distributed directly to all eligible students and their 
parents and are made widely available and accessible through broad 
means of dissemination, such as the Internet, other media, and 
communications through public agencies serving eligible students and 
their families; and
    (3) Providing a minimum of two enrollment ``windows,'' at separate 
points in the school year, that are of sufficient length to enable 
parents of eligible students to make informed decisions about 
requesting supplemental educational services and selecting a provider.
    (C) Ensure that eligible supplemental educational services 
providers are given access to school facilities, using a fair, open, 
and objective process, on the same basis and terms as are available to 
other groups that seek access to school facilities;
    (ii) Maintain records that demonstrate the LEA has met the criteria 
in paragraph (d)(2)(i) of this section; and
    (iii) Notify the SEA that the LEA--
    (A) Has met the criteria in paragraph (d)(2)(i) of this section; 
and
    (B) Intends to spend the remainder of its 20 percent obligation on 
other allowable activities, specifying the amount of that remainder.
    (3)(i) Except as provided in paragraph (d)(3)(ii) of this section, 
an SEA must ensure an LEA's compliance with paragraph (d)(2)(i) of this 
section through its regular monitoring process.
    (ii)(A) In addition to its regular monitoring process, an SEA must 
review any LEA that--
    (1) The SEA determines has spent a significant portion of its 20 
percent obligation for other activities under paragraph (d)(2)(iii)(B) 
of this section; and
    (2) Has been the subject of multiple complaints, supported by 
credible evidence, regarding implementation of the public school choice 
or supplemental educational services requirements; and
    (B) The SEA must complete its review by the beginning of the next 
school year.
    (4)(i) If an SEA determines under paragraph (d)(3) of this section 
that an LEA has failed to meet any of the criteria in paragraph 
(d)(2)(i) of this section, the LEA must--
    (A) Spend an amount equal to the remainder specified in paragraph 
(d)(2)(iii)(B) of this section in the subsequent school year, in 
addition to its 20 percent obligation for that year, on choice-related 
transportation costs, supplemental educational services, or parent 
outreach and assistance; or
    (B) Meet the criteria in paragraph (d)(2)(i) of this section and 
obtain permission from the SEA before spending less in that subsequent 
school year than the amount required by paragraph (d)(4)(i)(A) of this 
section.
    (ii) The SEA may not grant permission to the LEA under paragraph 
(d)(4)(i)(B) of this section unless the SEA has confirmed the LEA's 
compliance with paragraph (d)(2)(i) of this section for that subsequent 
school year.

(Approved by the Office of Management and Budget under control 
number 1810-0581)
* * * * *

0
15. Section 200.50 is amended by:
0
A. Redesignating paragraph (d)(1) as paragraph (d)(1)(i).
0
B. Adding a new paragraph (d)(1)(ii).

[[Page 64513]]

    The addition reads as follows:


Sec.  200.50  SEA review of LEA progress.

* * * * *
    (d) * * *
    (1)(i) * * *
    (ii) In identifying LEAs for improvement, an SEA--
    (A) May base identification on whether an LEA did not make AYP 
because it did not meet the annual measurable objectives for the same 
subject or meet the same other academic indicator for two consecutive 
years; but
    (B) May not limit identification to those LEAs that did not make 
AYP only because they did not meet the annual measurable objectives for 
the same subject or meet the same other academic indicator for the same 
subgroup under Sec.  200.13(b)(7)(ii) for two consecutive years.
* * * * *

0
16. Section 200.56 is amended by:
0
A. Revising the introductory text.
0
B. Adding a new paragraph (d).
0
C. Revising the authority citation.
    The revisions and addition read as follows:


Sec.  200.56  Definition of ``highly qualified teacher.''

    A teacher described in Sec.  200.55(a) and (b)(1) is a ``highly 
qualified teacher'' if the teacher meets the requirements in paragraph 
(a) and paragraph (b), (c), or (d) of this section.
* * * * *
    (d) A special education teacher is a ``highly qualified teacher'' 
under the Act if the teacher meets the requirements for a ``highly 
qualified special education teacher'' in 34 CFR 300.18.

(Authority: 20 U.S.C. 1401(10); 7801(23))

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

Appendix A
[GRAPHIC] [TIFF OMITTED] TR29OC08.002

[FR Doc. E8-25270 Filed 10-28-08; 8:45 am]
BILLING CODE 4000-01-P