[Federal Register Volume 74, Number 83 (Friday, May 1, 2009)]
[Rules and Regulations]
[Pages 20210-20225]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-10094]


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DEPARTMENT OF EDUCATION

34 CFR Parts 668, 686, 690, and 691

RIN 1840-AC96
[Docket ID ED-2009-OPE-0001]


Student Assistance General Provisions; Teacher Education 
Assistance for College and Higher Education (TEACH) Grant Program; 
Federal Pell Grant Program; Academic Competitiveness Grant Program and 
National Science and Mathematics Access To Retain Talent Grant Program

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Interim final rule; request for comments.

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SUMMARY: The Secretary amends the regulations for the Academic 
Competitiveness Grant (ACG) and National Science and Mathematics Access 
to Retain Talent Grant (National SMART Grant) Programs. These interim 
final regulations are needed to implement provisions of the Higher 
Education Act of 1965 (HEA), as amended by the Ensuring Continued 
Access to Student Loans Act of 2008 (ECASLA) and the Higher Education 
Opportunity Act of 2008 (HEOA). The new statutory provisions are 
effective July 1, 2009. The Secretary also amends the regulations in 
the Student Assistance General Provisions, and the regulations for the 
Teacher Education Assistance for College and Higher Education (TEACH) 
Grant Program and the Federal Pell Grant Program to implement 
conforming changes based on the statutory amendments to the ACG and 
National SMART Grant programs.

DATES: These regulations are effective July 1, 2009. We must receive 
your comments on or before June 1, 2009.

ADDRESSES: Submit your comments through the Federal eRulemaking Portal 
or via postal mail, commercial delivery, or hand delivery. We will not 
accept comments by fax or by e-mail. Please submit your comments only 
one time, in order to ensure that we do not receive duplicate copies. 
In addition, please include the Docket ID at the top of your comments.
     Federal eRulemaking Portal: Go to http://www.regulations.gov to submit your comments electronically. Information 
on using Regulations.gov, including instructions for accessing agency 
documents, submitting comments, and viewing the docket is available on 
the site under ``How To Use This Site.''

[[Page 20211]]

     Postal Mail, Commercial Delivery, or Hand Delivery: If you 
mail or deliver your comments about these interim final regulations, 
address them to Sophia McArdle, U.S. Department of Education, 1990 K 
Street, NW., room 8019, Washington, DC 20006-8544.

    Privacy Note:  The Department's policy for comments received 
from members of the public (including those comments submitted by 
mail, commercial delivery, or hand delivery) is to make these 
submissions available for public viewing in their entirety on the 
Federal eRulemaking Portal at http://www.regulations.gov. Therefore, 
commenters should be careful to include in their comments only 
information that they wish to make publicly available on the 
Internet.


FOR FURTHER INFORMATION CONTACT: 

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                 Topic                    Contact person and information
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General information and information      Sophia McArdle. Telephone:
 related to rigorous secondary school     (202) 219-7078 or via the
 programs and eligible majors.            Internet:
                                         [email protected].
Information related to grade level       Fred Sellers. Telephone: (202)
 progression.                             502-7502 or via the Internet:
                                          [email protected].
Information related to payments for      Jacquelyn Butler. Telephone:
 part-time students.                      (202) 502-7890 or via the
                                          Internet:
                                         [email protected].
Information related to prior enrollment  Carney McCullough. Telephone:
                                          (202) 502-7639 or via the
                                          Internet:
                                          [email protected].
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    If you use a telecommunications device for the deaf (TDD), call the 
Federal Relay Service (FRS), toll free, at 1-800-877-8339.
    Individuals with disabilities may obtain this document in an 
accessible format (e.g., braille, large print, audiotape, or computer 
diskette) on request to the first contact person listed under FOR 
FURTHER INFORMATION CONTACT.

SUPPLEMENTARY INFORMATION: 

Invitation To Comment

    We invite you to submit comments regarding these interim final 
regulations. To ensure that your comments have maximum effect in 
developing the final regulations, we urge you to identify clearly the 
specific section or sections of the interim final regulations that each 
of your comments addresses and to arrange your comments in the same 
order as the interim final regulations.
    We invite you to assist us in complying with the specific 
requirements of Executive Order 12866 and its overall requirement of 
reducing regulatory burden that might result from these interim final 
regulations. Please let us know of any further opportunities we should 
take to reduce potential costs or increase potential benefits while 
preserving the effective and efficient administration of the program.
    During and after the comment period, you may inspect all public 
comments about these interim final regulations by accessing 
Regulations.gov. You may also inspect the comments, in person, in room 
8019, 1990 K Street, NW., Washington, DC, between the hours of 8:30 
a.m. and 4 p.m., Eastern time, Monday through Friday of each week 
except Federal holidays.

Assistance to Individuals With Disabilities in Reviewing the Rulemaking 
Record

    On request, we will supply an appropriate aid, such as a reader or 
print magnifier, to an individual with a disability who needs 
assistance to review the comments or other documents in the public 
rulemaking record for these interim final regulations. If you want to 
schedule an appointment for this type of aid, please contact the first 
person listed under FOR FURTHER INFORMATION CONTACT.

Background

    These interim final regulations implement certain provisions of the 
HEA, as amended by the ECASLA (Pub. L. 110-227) and the HEOA (Pub. L. 
110-315), which become effective on July 1, 2009. The ECASLA makes ACGs 
and National SMART Grants available to eligible non-citizens and 
students enrolled at least half-time, provides that maximum ACG and 
National SMART Grant awards for part-time students be proportionally 
reduced consistent with the requirements in the Federal Pell Grant 
Program, and requires grant awards and payments to be determined on the 
same basis as in the Federal Pell Grant Program. Furthermore, the 
ECASLA provides that grant awards be based on a student's grade level, 
instead of academic year. Additionally, the ECASLA authorizes the award 
of ACGs for students enrolled in a one- or two-year certificate program 
at a degree-granting institution and allows students who were once 
enrolled in an undergraduate program as part of a secondary school 
program of study to receive a first-year ACG if the student is 
otherwise eligible. Finally, the ECASLA creates three additional 
program options by which students can qualify for a National SMART 
Grant. The HEOA amends the method by which secondary school programs of 
study are determined to be rigorous, while maintaining rigorous 
programs previously recognized by the Secretary in regulations.

Waiver of Rulemaking

    Under the Administrative Procedure Act (APA) (5 U.S.C. 553), the 
Department is generally required to publish a notice of proposed 
rulemaking and provide the public with an opportunity to comment on 
proposed regulations prior to establishing a final rule. In addition, 
all Department regulations for programs authorized by Title IV of the 
HEA (Title IV, HEA programs) are subject to the negotiated rulemaking 
requirements of section 492 of the HEA.\1\
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    \1\ Section 492 provides specifically that any regulations 
issued for the Title IV, HEA programs shall be subject to negotiated 
rulemaking to obtain the advice of and recommendations from 
individuals and groups involved in the student financial assistance 
programs.
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    Section 402(b) of the HEOA waives the negotiated rulemaking 
requirements in section 492 of the HEA (as well as the master calendar 
requirements in section 482 of the HEA) for changes made to the ACG and 
National SMART Grant Programs in both the ECASLA and in the HEOA. 
Consequently, the negotiated rulemaking requirements in section 492 of 
the HEA do not apply to the interim final regulations in this notice 
and we will not subject them to negotiated rulemaking.
    We are waiving the notice-and-comment rulemaking requirements under 
the APA. The APA provides that an agency is not required to conduct 
notice-and-comment rulemaking when the agency for good cause finds that 
notice and public procedure thereon are impracticable, unnecessary, or 
contrary to the public interest. Although these regulations are subject 
to the APA's notice-and-comment requirements, the

[[Page 20212]]

Secretary has determined that it would be impracticable to conduct 
notice-and-comment rulemaking in time to implement these changes for 
the 2009-2010 award year. Waiver of rulemaking under the 
impracticability exemption in the APA is warranted because it would not 
be possible for the Department to comply with the APA's rulemaking 
mandates and execute its statutory duties under the HEA, as amended by 
the ECASLA and the HEOA.\2\ The Department cannot both implement these 
changes to the ACG and National SMART Grant programs, including making 
awards to eligible students, by the beginning of the 2009-2010 award 
year, and conduct notice-and-comment rulemaking for the regulations for 
these programs.
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    \2\ See Riverbend Farms, Inc. v. Madigan, 958 F.2d 1479, 1484, 
n.2 (9th Cir. 1992). The term ``impracticable'' has also been 
described as meaning ``a situation in which the due and required 
execution of the agency functions would be unavoidably prevented by 
its undertaking rulemaking proceedings.'' Zhang v. Slattery, 55 F.3d 
732, 746 (2d Cir. 1995), citing National Nutritional Foods Ass'n v. 
Kennedy, 572 F.2d 377, 385 (2d Cir. 1978), citing S. Rep. No. 752, 
79th Cong., 1st Sess. (1945). See also New Jersey Dept of Envtl. 
Prot. v. U.S. EPA, 626 F.2d 1038, 1046 (D.C. Cir. 1980).
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    In the ECASLA, enacted on May 7, 2008, Congress made a number of 
changes to the ACG and National SMART Grant programs that were to be 
effective on January 1, 2009. On August 14, 2008, Congress enacted the 
HEOA, which amended some of the changes made in the ECASLA and made 
additional changes. The HEOA provides that amendments made by the 
ECASLA and HEOA are effective July 1, 2009. The Department therefore 
has a short window to plan the administration of the changes and make 
awards consistent with those changes for the 2009-2010 award year.
    Even on an extremely expedited timeline, the Department could not 
feasibly conduct notice-and-comment rulemaking and then promulgate 
final regulations in time to make awards for the 2009-2010 award year. 
Publishing a notice of proposed rulemaking, reviewing the public 
comments, and issuing final regulations normally takes at least six 
months, and this could not be accomplished prior to the statutory July 
1, 2009 effective date.
    In addition to developing and issuing these regulations, there are 
a number of other steps necessary for the Department to implement the 
changes to the ACG and National SMART Grant programs for the 2009-2010 
award year that make rulemaking impracticable. Implementation requires 
the Department to make a number of changes to the Department's 
financial aid systems so that students can apply for and receive ACGs 
and National SMART Grants for which they are eligible. The process of 
completing all of these steps and developing program regulations 
through notice-and-comment rulemaking requires far more time than that 
available to the Department in order to make awards to students for the 
upcoming 2009-2010 award year.
    Based upon this information, and in order to make timely grant 
awards for the 2009-2010 award year, the Secretary is issuing these 
interim final regulations without first publishing proposed regulations 
for public comment.
    Although the Department is adopting these regulations on an interim 
final basis, the Department requests public comment on these 
regulations. After consideration of public comments, the Secretary will 
publish final regulations.

Significant Regulations

    We discuss substantive issues under the sections of the interim 
final regulations to which they pertain. Generally, we do not address 
regulatory provisions that are technical or otherwise minor in effect.

Definitions (Sec.  691.2)

ACG and National SMART Grant Scheduled Award
    Statute: Section 10 of the ECASLA amends section 401A of the HEA by 
replacing the term ``academic year'' with the term ``year'' in those 
provisions related to determining a student's period of eligibility for 
an ACG or a National SMART Grant (e.g., section 401A(b), (c)(3), 
(d)(1)(A)(iii), and (d)(2) of the HEA). Section 10 of the ECASLA also 
amends section 401A of the HEA by adding a third year of eligibility 
for National SMART Grants for any otherwise eligible student enrolled 
in a program with at least five full years of coursework (see section 
401A(c)(3)(E)).
    Current Regulations: Current Sec.  691.2(d) defines an ACG or 
National SMART Grant Scheduled Award as the amount that would be paid 
to a full-time student for a full academic year.
    Regulations: We are amending the definitions in Sec.  691.2(d) to 
provide that an ACG Scheduled Award is the maximum amount of an ACG 
that would be paid to a full-time first-year student or a full-time 
second-year student for the applicable year. A National SMART Grant 
Scheduled Award is the maximum amount of a National SMART Grant that 
would be paid to a full-time third-year, fourth-year, or fifth-year 
student for the applicable year.
    Reason: We are amending these definitions to reflect the statutory 
change that a student's eligibility for a grant is based on his or her 
grade level as a first-, second-, third-, fourth-, or fifth-year 
student, rather than the student's academic year.
Annual Award
    Statute: Section 10(a)(3) of the ECASLA amends section 401A(c) of 
the HEA to provide that a student enrolled or accepted for enrollment 
in an institution of higher education on not less than a half-time 
basis may be an eligible student (see section 401A(c)(3) of the HEA). 
Prior to the ECASLA, only full-time students were eligible.
    Current Regulations: None.
    Regulations: We are amending Sec.  691.2(d) to define the term 
annual award as the maximum ACG or National SMART Grant amount a 
student would receive for enrolling as a full-time, three-quarter-time, 
or half-time student and remaining in that enrollment status for one 
year.
    Reason: We are adding this definition, in conjunction with other 
changes to Subpart F (Determination of Awards) of part 691, to ensure 
compliance with the statutory requirement that a student's payments be 
adjusted based on the student's enrollment status during a payment 
period.
Eligible Major
    Statute: Section 10(a)(3)(C)(v) of the ECASLA amends the HEA by 
adding a new section 401A(c)(3)(D), which extends eligibility for a 
National SMART Grant to a student enrolled in a qualifying liberal arts 
curriculum. Prior to this statutory change, an eligible major for a 
National SMART Grant was a major in the physical, life, or computer 
sciences, mathematics, technology, or engineering (as determined by the 
Secretary pursuant to regulations), or a foreign language that the 
Secretary, in consultation with the Director of National Intelligence, 
determines is critical to the national security of the United States.
    Current Regulations: Current Sec.  691.2(d) defines the term 
eligible major, for purposes of the National SMART Grant Program, as a 
major, as determined by the Secretary under Sec.  691.17, in one of the 
physical, life, or computer sciences, mathematics, technology, 
engineering, or a critical foreign language.
    Regulations: We are amending the definition of the term eligible 
major to include, in addition to majors in physical, life, or computer 
sciences, mathematics, technology, engineering or a critical foreign 
language, a qualifying

[[Page 20213]]

liberal arts curriculum as determined by the Secretary under new Sec.  
691.17(b).
    Reason: The amendments to the definition of the term eligible major 
implement the new statutory provision that a student may be eligible 
for a National SMART Grant by enrolling in a qualifying liberal arts 
curriculum.
Eligible Program
    Statute: Section 10(a)(3)(C)(ii) of the ECASLA amends section 
401A(c)(3) of the HEA by providing that an eligible student enrolled in 
an institution of higher education in an undergraduate certificate 
program at least one year in length may be eligible for an ACG (see 
section 401A(c)(3)(A) of the HEA). Section 10(a)(3)(C)(v) of the ECASLA 
also amends section 401A(c)(3) of the HEA to provide that a student 
enrolled in a program at a degree-granting institution of higher 
education that requires at least five full years of coursework may be 
eligible for a National SMART Grant in his or her fifth--as well as 
third and fourth--year of enrollment (see section 401A(c)(3)(E) of the 
HEA).
    Current Regulations: Current Sec.  691.2(d) defines the term 
eligible program as an eligible program, as defined in 34 CFR 668.8, 
that (a) for the ACG Program, leads to an associate's or bachelor's 
degree, is a two-academic-year program acceptable for full credit 
toward a bachelor's degree, or is a graduate degree program that 
includes at least three academic years of undergraduate education or 
(b) for the National SMART Grant Program, leads to a bachelor's degree 
in an eligible major or is a graduate degree program in an eligible 
major that includes at least three academic years of undergraduate 
education.
    Regulations: We are amending the definition of an eligible program 
in Sec.  691.2 to include, for the ACG Program, an undergraduate 
certificate program of at least one academic year in length. We are 
also amending the definition of the term eligible program to include a 
degree program with at least five full undergraduate years of 
coursework at a degree-granting institution of higher education (a 
student in this type of program would be eligible for a National SMART 
Grant for the third, fourth, and fifth years of the program). In order 
to be consistent with the statutory changes regarding the inclusion of 
five-year programs under the National SMART Grant Program, we are 
amending the definition of eligible program to clarify that a five-year 
program is an eligible program if--(a) an appropriate official of an 
institution of higher education with authority to approve curricula 
certifies that the program requires at least five full undergraduate 
years of coursework to complete (as documented in the institution's 
records), and (b) each year of the program, including the fifth year, 
is not less than 24 semester hours, 36 quarter credits, or 900 clock 
hours. Paragraph (2)(ii)(C) of the definition clarifies that a program 
with a qualifying liberal arts curriculum identified as an eligible 
major under Sec.  691.17(b) is not eligible as a five-year program.
    Reason: We are amending the definition of the term eligible program 
to implement the statutory changes that a student may be eligible for 
an ACG if the student is enrolled in a certificate program at least one 
academic year in length and that a student may be eligible for a 
National SMART Grant for his or her fifth year in an eligible five-year 
program.
    We are amending the definition of the term eligible program, for 
purposes of the ACG Program, to include undergraduate programs of at 
least one academic year in length leading to a certificate. While the 
statutory language refers to ``a program of not less than one year for 
which the institution awards a certificate,'' we believe that the 
minimum length of the program should be tied to an ``academic year,'' 
and not a ``year.'' This is because to qualify as an institution of 
higher education under 34 CFR 600.4(a)(4)(iii) of the institutional 
eligibility regulations, an institution must offer a certificate 
program that is at least one academic year in length.
    With respect to the fifth-year National SMART Grant, the 
certification requirement reflected in new paragraph (2)(ii)(A) of the 
definition is required by section 401A(c)(3)(E) of the HEA. The 
requirement that the certification be documented in the institution's 
records is intended to avoid any additional reporting burden on 
institutions.
First-, Second-, Third-, Fourth-, and Fifth-Year
    Statute: Section 10 of the ECASLA amends section 401A of the HEA by 
replacing the term ``academic year'' with the term ``year'' in those 
provisions related to determining a student's period of eligibility for 
an ACG or a National SMART Grant (e.g., section 401A(b), (c)(3), 
(d)(1)(A)(iii) and (d)(2) of the HEA). Section 10 of the ECASLA also 
amends section 401A of the HEA by adding a third year of eligibility 
for National SMART Grants for any otherwise eligible student enrolled 
in a program with five full years of coursework (see section 
401A(c)(3)(E)).
    Current Regulations: None.
    Regulations: We are adding a new Sec.  691.2(e)(1) to define the 
terms ``first-year,'' ``second-year,'' ``third-year,'' ``fourth-year,'' 
and ``fifth-year'' as a student's grade level in the student's eligible 
program as determined by the institution for all students in the 
eligible program. We are also adding a new Sec.  691.2(e)(2) to provide 
that a student's grade level for purposes of the ACG and National SMART 
Grant programs must be the same grade level used for determining annual 
loan limits under the FFEL and Direct Loan programs (34 CFR parts 682 
and 685).
    Reason: New Sec.  691.2(e)(1) implements the statutory change from 
use of ``academic year'' to ``year.'' It is necessary for the 
Department to clarify that, in using the term ``year,'' we mean the 
student's grade level. New Sec.  691.2(e)(2) ensures the consistent 
treatment of students in all Title IV, HEA programs.

Duration of Student Eligibility--Undergraduate Course of Study (Sec.  
691.6)

    Statute: Section 10 of the ECASLA amends section 401A of the HEA to 
provide that an eligible student may only receive one ACG for each of 
the first or second years of an undergraduate program and one National 
SMART Grant for each of the third, fourth, or fifth years of a 
bachelor's degree program, rather than the first, second, third, or 
fourth academic year of the program (see section 401A(c)(3) of the 
HEA). In addition, section 10 of the ECASLA amends section 401A of the 
HEA by adding a new paragraph (c)(3)(E) to provide that a student may 
be eligible for a third National SMART Grant for enrollment in the 
fifth year of an undergraduate baccalaureate program if that program 
requires at least five full years of coursework.
    Current Regulations: Current Sec.  691.6 bases the duration of 
student eligibility for the ACG and National SMART Grant programs on 
academic year and restricts a student to one grant for each of his or 
her first, second, third, or fourth academic years of enrollment in an 
eligible program.
    Regulations: We are amending Sec.  691.6 to provide that a student 
is eligible for one ACG Scheduled Award while enrolled as a first-year 
student, one ACG Scheduled Award while enrolled as a second-year 
student, one National SMART Grant Scheduled Award while enrolled as a 
third-year student, one National SMART Grant Scheduled Award while 
enrolled as a fourth-year student, and, in the case of a program with 
at least five full years of

[[Page 20214]]

coursework, one National SMART Grant Scheduled Award while enrolled as 
a fifth-year student. We are providing that a fourth-year student, 
enrolled in a National SMART Grant-eligible program with less than five 
full years of coursework, continues to be a fourth-year student until 
he or she completes his or her first undergraduate baccalaureate course 
of study. We are also providing that a fifth-year student, enrolled in 
a National SMART Grant-eligible program with at least five full years 
of coursework, continues to be a fifth-year student until he or she has 
completed his or her first undergraduate baccalaureate course of study.
    Reason: These interim final regulations implement the changes to 
the HEA by providing that the duration of a student's eligibility is 
based on the student's year in postsecondary education, consistent with 
the use of this term in the FFEL and Direct Loan programs, rather than 
the number of academic years the student has completed.
    Under the amendments to Sec.  691.6, a student's eligibility is 
based on the student's grade level rather than academic year. This 
change in implementation of the ACG and National SMART Grant programs 
will begin in the 2009-2010 award year. We believe that awards for some 
continuing students may be affected as they progress to the comparable 
point in grade level that they were previously deemed to have reached 
in an academic year. However, most of these students will still be 
eligible to receive the same amount of grant funds over their entire 
period of enrollment. A student who received a third-academic-year 
National SMART Grant Scheduled Award in the 2008-2009 award year, for 
example, may now be considered to be in the second-year grade level of 
his or her National SMART Grant-eligible program in the 2009-2010 award 
year. That student would no longer be eligible for a National SMART 
Grant until the student advances to the fourth year of his or her 
National SMART Grant-eligible program. However, in this example, 
although the student has already received a third-year National SMART 
Grant Scheduled Award, the student may be paid for any remaining 
eligibility for a second-year ACG Scheduled Award, if otherwise 
eligible, because only the student's grade level is the determining 
factor, without regard to any particular progression.
    Some of these students, however, will no longer be eligible to 
receive the same amount of grant funds over their entire period of 
enrollment. For example, a student who initially enrolled in the fall 
of 2008 with 30 semester hours based on Advanced Placement courses and 
received a first-academic-year ACG Scheduled Award in the 2008-2009 
award year while earning an additional 30 semester hours, may now be 
considered to be in the third-year grade level of his or her eligible 
program in the 2009-2010 award year and would not be eligible for a 
second-year ACG in 2009-2010. The student could receive a third-year 
National SMART Grant, if he or she met other eligibility criteria.
    The provision that a fourth-year student enrolled in a National 
SMART Grant-eligible program with less than five full years of 
coursework continues to be considered a fourth-year student until he or 
she completes his or her first undergraduate baccalaureate course of 
study, and that a fifth-year student in a five-year program continues 
to be a fifth-year student until he or she completes his or her 
undergraduate baccalaureate course of study is designed to provide 
students with the greatest amount of National SMART Grant funds 
possible, by allowing a student who was ineligible for some part of his 
or her fourth or fifth year to obtain a fourth- or fifth-year award.
    For example, a student is enrolled in a program that requires full-
time attendance for nine semesters, and a student normally completes a 
grade level by successfully completing two semesters of coursework. In 
the fall of 2008, the student begins her fourth year and completes the 
2008-2009 fall and spring terms which are the seventh and eighth 
semesters of the student's program. During the 2008-2009 award year, 
the student did not receive a Federal Pell Grant, and as a result none 
of the fourth-year National SMART Grant Scheduled Award was disbursed. 
In the fall term of 2009, the student enrolls for the final semester of 
her program and receives a Federal Pell Grant. For the fall term, as 
part of the extended fourth year, the student would also receive a 
National SMART Grant disbursement from the fourth-year National SMART 
Grant Scheduled Award, if otherwise eligible.

Enrollment Status for Students Taking Regular and Correspondence 
Courses (Sec.  691.8)

    Statute: The statute does not address how taking correspondence 
courses affects a student's enrollment status in an eligible program. 
Section 10(c)(2) of the ECASLA, however, amends section 401A(c)(2) of 
the HEA to provide that a student may be eligible for an ACG or a 
National SMART Grant if he or she is enrolled or accepted for 
enrollment in an institution of higher education on at least a half-
time basis. Before the ECASLA, only full-time students were eligible 
for grants under these programs.
    Current Regulations: Current Sec.  691.8 sets forth the 
circumstances under which correspondence courses may be applied toward 
a student's full-time enrollment status in an eligible program.
    Regulations: We are amending Sec.  691.8 to describe how 
correspondence courses may be applied toward a student's enrollment 
status (i.e., as a half-time, three-quarter-time, and full-time 
student) in an eligible program.
    Reason: Because the statute now allows students enrolled or 
accepted for enrollment in an institution of higher education on at 
least a half-time basis to be eligible for an ACG or a National SMART 
Grant, it is necessary to make changes to Sec.  691.8, regarding how 
correspondence courses may be applied to a student's less-than-full-
time enrollment in an eligible program.

Citizenship and Student Eligibility (Sec. Sec.  668.33 and 691.15)

    Statute: Section 10(a)(3) of the ECASLA amends section 401A(c) of 
the HEA by removing the requirement that a student be a U.S. citizen to 
be eligible for an ACG or a National SMART Grant.
    Current Regulations: Current Sec. Sec.  691.15(a)(1) and 668.33(c) 
provide that a student must be a U.S. citizen to be eligible to receive 
an ACG or a National SMART Grant.
    Regulations: We are removing the provisions in Sec. Sec.  
691.15(a)(1) and 668.33(c) that only U.S. citizens are eligible to 
receive ACGs or National SMART Grants.
    Reason: These amendments reflect the statutory change that 
eliminates the requirement that only students who are U.S. citizens may 
qualify for assistance under the ACG and National SMART Grant programs. 
Moreover, this change is consistent with section 484(a)(5) of the HEA, 
which provides that a student who is not a United States citizen or 
national but who can provide evidence that he or she is in the United 
States for other than a temporary purpose with the intention of 
becoming a citizen or permanent resident may qualify as an eligible 
student for the Title IV, HEA programs.

Enrollment Status and Student Eligibility (Sec. Sec.  668.32, 691.2, 
691.15, 691.76, and 691.80)

    Statute: Section 10(a)(3) of the ECASLA amends section 401A(c) of 
the HEA to remove the requirement that a student be enrolled full-time 
to receive an ACG or a National SMART Grant. Instead, a student must be 
enrolled at

[[Page 20215]]

least half-time in order to receive an ACG or a National SMART Grant.
    Current Regulations: Current Sec.  691.15(a)(3) provides that a 
student must be enrolled full-time in order to be eligible to receive 
an ACG or a National SMART Grant.
    Regulations: We are removing from Sec.  691.15(a) the requirement 
that a student be enrolled full-time to be eligible to receive an ACG 
or a National SMART Grant. Also, we are amending the general student 
eligibility requirements for the Title IV, HEA programs in Sec.  
668.32(a)(2) by adding the ACG and National SMART Grant programs to the 
list of programs that require students to be enrolled at least half-
time.
    We are also amending the list of definitions used in the ACG and 
National SMART Grant regulations to refer to the existing definitions 
of the terms half-time student and three-quarter-time student contained 
in 34 CFR 668.2 of the Student Assistance General Provisions.
    Finally, we are amending Sec. Sec.  691.76 (Frequency of payment) 
and 691.80 (Redetermination of eligibility for a grant award) to 
address how (a) an institution determines a student's enrollment status 
for payment purposes for prior payment periods, and (b) changes in a 
student's enrollment status, which are now permitted under the statute, 
are handled for purposes of recalculation of award amounts.
    Reason: We are making the changes to Sec. Sec.  691.2 and 691.15 to 
implement the statutory change allowing students attending at least 
half-time to be eligible for an award under the ACG and National SMART 
Grant programs.
    We also believe that it is appropriate to amend the student 
eligibility provisions in 34 CFR part 668 (Student Assistance General 
Provisions) to include the ACG and National SMART Grant programs among 
the other Title IV, HEA programs that have the same enrollment status 
requirement.
    The amendments to Sec. Sec.  691.76 and 691.80 enable institutions 
to adjust ACG and National SMART Grant award payments based on a change 
in a student's enrollment status. These amendments are consistent with 
34 CFR 690.76 and 690.80 in the Federal Pell Grant Program regulations.

Prior Enrollment and Student Eligibility (Sec.  691.15)

    Statute: Section 10(a)(3)(C)(ii)(III) of the ECASLA amends section 
401A(c)(3)(A)(ii) of the HEA to clarify that students who were enrolled 
in a program of undergraduate education as part of a secondary school 
program of study are not subject to the prior enrollment restriction 
for first-year students.
    Current Regulations: Current Sec.  691.15(b)(1)(ii)(C) provides 
that a student is not eligible for a first-year ACG if the student was 
enrolled as a regular student in an ACG-eligible program while the 
student was at or below the age of compulsory attendance while he or 
she was in high school.
    Regulations: We are amending Sec.  691.15(b)(1)(ii)(C) to provide 
that the restriction on prior enrollment does not apply to students who 
were enrolled as regular students in an eligible program of 
undergraduate education that was also part of a secondary school 
program of study. We are also clarifying in new Sec.  
691.15(b)(1)(ii)(C) that transfer students who are first-year students 
are not considered to have been previously enrolled and, therefore, are 
not subject to the prior enrollment restriction.
    Reason: These interim final regulations implement the statutory 
clarification concerning prior enrollment and clarify that we do not 
consider transfer students to have been previously enrolled.

Rigorous Secondary School Program of Study (Sec.  691.16)

    Statute: Section 401A(f) of the HEA, as amended by section 10(a)(3) 
of the ECASLA and section 401(c)(3) of the HEOA, require the Secretary 
to recognize not less than one rigorous secondary school program of 
study in each State for the purpose of determining student eligibility 
for an ACG.
    Section 401A(c)(3)(A)(i)(I) of the HEA provides that a rigorous 
secondary school program of study established by a State educational 
agency (SEA) or local educational agency (LEA) after January 1, 2006, 
but before July 1, 2009, and recognized by the Secretary continues to 
be an eligible rigorous secondary school program of study for a first-
year ACG. Section 401A(c)(3)(B)(i)(I) of the HEA provides that a 
rigorous secondary school program of study established by an SEA or LEA 
after January 1, 2005, but before July 1, 2009, and recognized by the 
Secretary continues to be an eligible rigorous secondary school program 
of study for a second-year ACG. Section 401A(c)(3)(A)(i)(II)(aa) and 
401A(c)(3)(B)(i)(II)(aa) of the HEA provides that a rigorous secondary 
school program includes any secondary school program of study that, on 
or after July 1, 2009, a designated official recognizes--in a report to 
the Secretary--as a rigorous secondary school program of study that 
prepares students for college. Section 401A(c)(3)(A)(i)(II)(bb) and 
(c)(3)(B)(i)(II)(bb) of the HEA further provides that a rigorous 
secondary school program includes any secondary school program of study 
recognized as rigorous by the Secretary in regulations that were in 
effect on May 6, 2008.
    Current Regulations: Current Sec.  691.16(a) provides that, for an 
award year, the Secretary recognizes in each State at least one 
rigorous secondary school program of study established by an SEA or, if 
authorized by the State to establish a separate secondary school 
program of study, an LEA. Current Sec.  691.16(d) provides that, in 
addition to those programs established by States and LEAs and 
recognized by the Secretary under Sec.  691.16(b) and (c), the 
Secretary recognizes certain other secondary school programs of study 
as rigorous, including continued recognition of advanced or honors 
secondary school programs of study by the Secretary for school years 
subsequent to the 2005-2006 school year. Also under current Sec.  
691.16(d)(4) and (d)(5), successful completion of a secondary school 
program that includes at least two AP or IB courses and scoring a 3 or 
higher on the corresponding AP exams or a 4 or higher on the 
corresponding IB exams is considered by the Secretary to demonstrate 
that the student completed a rigorous secondary school program of 
study. Furthermore, under current Sec.  691.16(d)(2), the Secretary 
recognizes successful completion of the following coursework to fulfill 
the requirement that a student complete a rigorous secondary school 
program of study: four years of English; three years of mathematics, 
including Algebra I and a higher level class such as Geometry; three 
years of science, including one year each of at least two of the 
following courses: Biology, Chemistry, and Physics; three years of 
social studies; and one year of a language other than English.
    Current Sec.  691.16(b)(2) allows SEAs and LEAs to request 
recognition of rigorous secondary school programs of study for school 
years beyond the immediate next school year.
    Pursuant to current Sec.  691.16(e), the Secretary publishes a list 
of rigorous secondary school programs of study that the Secretary 
recognizes.
    Regulations: We are amending and reorganizing current Sec.  691.16 
by removing paragraphs (a) and (c) because these provisions apply to 
the Secretary's recognition of rigorous secondary school programs of 
study as established by an SEA or LEA. Effective July 1, 2009, the 
Secretary will no longer recognize new

[[Page 20216]]

rigorous secondary school programs of study submitted by an SEA or LEA; 
thus paragraphs (a) and (c) are no longer needed. As a result of 
removing paragraphs (a) and (c) of this section, we are redesignating 
paragraphs (b) and (d) as paragraphs (a) and (b), respectively.
    We are amending current Sec.  691.16(b) (new Sec.  691.16(a)) to 
provide that, starting with the 2009-2010 award year, a designated 
official, consistent with State law, may recognize and report to the 
Secretary any secondary school programs of study that prepare students 
for college and that the designated official deems rigorous. Programs 
reported to the Secretary by designated officials under new Sec.  
691.16(a) supplement the secondary school programs recognized by the 
Secretary as rigorous under the current regulations.
    We are amending current Sec.  691.16(b)(1) and (2) (new Sec.  
691.16(a)(2)(i) and (ii)) such that a designated official may report to 
the Secretary rigorous programs for students graduating during the 
current award year and for students graduating during award years 
subsequent to the current award year.
    We are amending current Sec.  691.16(d) (new Sec.  691.16(b)) by 
adding paragraph (b)(6) to include--in the list of preapproved rigorous 
secondary school programs of study--any rigorous programs submitted by 
States and recognized by the Secretary as rigorous after January 1, 
2005, but before July 1, 2009.
    Reason: The amendments to Sec.  691.16 implement the statutory 
change that, instead of submitting secondary school programs of study 
for the Secretary's recognition as rigorous, starting with the 2009-
2010 award year, designated officials report to the Secretary rigorous 
secondary school programs of study, including such programs of study in 
home schools and private schools, that prepare students for college. As 
indicated in the Paperwork Reduction Act of 1995 section of this 
notice, we are specifically requesting comments on the most effective 
methods by which designated officials would report information about 
rigorous secondary school programs of study in private schools and home 
schools to the Secretary and how that information would most 
effectively be transmitted to institutions to allow them to determine a 
student's eligibility for an ACG.
    These interim final regulations, consistent with changes made to 
the HEA by the HEOA, also retain as rigorous those secondary school 
programs of study submitted by States after January 1, 2005 but before 
July 1, 2009 and recognized as rigorous by the Secretary. Finally, the 
interim final regulations allow designated officials to report their 
rigorous programs to the Secretary for both the current and future 
award years.

Eligible Majors (Sec. Sec.  691.2(b), 691.15, and 691.17)

Declaring and Documenting a Major (Sec.  691.15)

    Statute: Section 401A(c)(3)(C) and (c)(3)(D) of the HEA, as amended 
by section 10(a)(3) of the ECASLA, identify the majors that are 
eligible for a National SMART Grant for a student in his or her third 
or fourth year of undergraduate education at an institution of higher 
education. Section 401A(c)(3)(C)(i) of the HEA provides that a student 
pursuing a major in the physical, life, or computer sciences, 
mathematics, technology, engineering, or a critical foreign language 
(which is defined in section 103(3) of the HEA) may be eligible for a 
National SMART Grant. Section 401A(c)(3)(D)(i)(I) of the HEA provides 
that a student at an institution of higher education that offers a 
single liberal arts curriculum that was offered prior to February 8, 
2006, under which a student is not permitted to declare a major in a 
particular subject area, may receive a National SMART Grant if the 
student studies a subject that has requirements that are at least equal 
to the requirements for an academic major in the physical, life, or 
computer sciences, mathematics, technology, engineering, or a critical 
foreign language at another institution of higher education that offers 
a baccalaureate degree in that subject. Alternatively, under section 
401A(c)(3)(D)(i)(II) of the HEA, a student at such institution may 
undertake a rigorous course of study in mathematics, biology, 
chemistry, and physics that consists of at least four years of study in 
mathematics and three years of study in the sciences, with a laboratory 
component in each of those years.
    Under section 401A(c)(3)(E) of the HEA, as amended by the ECASLA, a 
student may be eligible for a National SMART Grant in his or her fifth 
year of undergraduate education if the student pursues a major in the 
physical, life, or computer sciences, mathematics, technology, 
engineering, or a critical foreign language if an appropriate 
institutional official certifies that the program requires five full 
years of coursework.
    Current Regulations: Current Sec.  691.15(c)(2) requires that, to 
be eligible for a National SMART Grant, a student must formally declare 
his or her eligible major in accordance with the institution's academic 
requirements. However, if under an institution's procedures, a student 
would not be able to formally declare a major in time to qualify for a 
National SMART Grant, the student must demonstrate his or her intent to 
declare an eligible major as documented by the institution. Under 
current Sec.  691.15(c)(2), as soon as the student is able to formally 
declare a major, the student must do so in order to remain eligible for 
a National SMART Grant. In the case of a student who has declared or 
intends to declare an eligible major, the student must enroll in the 
courses necessary to complete the degree program and to fulfill the 
eligible major requirements.
    Current Sec. Sec.  691.15(d)(1) and 691.15(e) specify how an 
institution must document a student's declaration of an eligible major, 
and progress in the eligible program and major, by requiring the 
institution to maintain the following documentation: (a) Documentation 
of the declared major or, in the case of a student's intent to declare 
a major, a written declaration of intent provided by the student that 
has been received recently enough for the institution to determine that 
it still correctly reflects the student's stated intent; and (b) 
written documentation showing that the student is completing coursework 
at an appropriate pace in the student's declared or intended eligible 
program and eligible major.
    Regulations: Section 691.15(d)(3) exempts a student enrolled in a 
qualifying liberal arts curriculum from the requirement that the 
student must declare an eligible major to receive a National SMART 
Grant.
    We also are amending Sec.  691.15(c)(2)(ii) and Sec.  691.15(e) to 
provide that an institution need only document a student's progress in 
completing the program in the intended or declared National SMART 
Grant-eligible program.
    Reason: Under the new statutory provision reflected in section 
401A(c)(3)(D) of the HEA, a student enrolled in a qualifying liberal 
arts curriculum as a major is necessarily enrolled in a National SMART 
Grant-eligible major. Because students in a qualifying liberal arts 
curriculum do not declare majors, it is not possible for the 
institution to document the student's declaration of a major as 
required under the current regulations. We are, therefore, removing the 
documentation requirement for students in qualifying liberal arts 
curricula.
    In addition, a major change to the National SMART Grant Program is 
the extension of eligibility to otherwise eligible students who are 
enrolled less

[[Page 20217]]

than full-time but at least half-time. A student who is enrolled on a 
less-than-full-time basis would have difficulty enrolling in a course 
in the eligible major each payment period as currently required because 
a part-time student will typically only enroll in two or three courses 
in a payment period. Thus, even though the part-time student could be 
progressing in a satisfactory manner in his or her program, the student 
would be ineligible for a National SMART Grant under the current 
requirements. Sections 691.15(c)(2) and (e), therefore, amend the 
current regulations to require an institution to document a student's 
progress in completing the program in the intended or declared National 
SMART Grant-eligible program rather than coursework strictly specific 
to the academic major's requirements each payment period.

Determination of Eligible Majors (Sec. Sec.  691.2(b) and 691.17)

    Statute: Section 401A(c)(3)(C) and (D) of the HEA, as amended by 
section 10(a)(3) of the ECASLA, identifies the majors that a student 
must pursue to be eligible for a National SMART Grant in his or her 
third or fourth year of undergraduate education at an institution of 
higher education.
    Specifically, section 401A(c)(3)(C)(i) of the HEA provides that a 
student pursuing a major in the physical, life, or computer sciences, 
mathematics, technology, engineering, or a critical foreign language is 
eligible for a National SMART Grant, provided the student meets other 
eligibility criteria.
    Section 401A(c)(3)(D) of the HEA extends eligibility for a National 
SMART Grant to a student enrolled in a program at an institution of 
higher education that offers a single liberal arts curriculum leading 
to a baccalaureate degree that was offered prior to February 8, 2006, 
and under which the student is not permitted to declare a major in a 
particular subject area. A student in this type of program may receive 
a National SMART Grant if (a) the student studies a subject that has 
requirements that are at least equal to the requirements for an 
academic major in the physical, life, or computer sciences, 
mathematics, technology, engineering, or a critical foreign language at 
another institution of higher education that offers a baccalaureate 
degree in that subject and the student has obtained a cumulative grade 
point average of at least 3.0 in the relevant coursework (see section 
401A(c)(3)(D)(i)(I) of the HEA); or (b) the student undertakes a 
rigorous course of study in mathematics, biology, chemistry, and 
physics that consists of at least four years of study in mathematics 
and three years of study in the sciences, with a laboratory component 
in each of those years (see section 401A(c)(3)(D)(i)(II) of the HEA).
    Section 401A(c)(3)(E) of the HEA, as amended by the ECASLA, 
identifies the majors a student must pursue to be eligible for a 
National SMART Grant in his or her fifth year of undergraduate 
education. These majors are the same as those identified for 
eligibility for third- and fourth-year National SMART Grants except 
that the major may not be a liberal arts curriculum.
    Current Regulations: Current Sec.  691.17(a) provides that, for 
each award year, the Secretary identifies eligible majors in the 
physical, life, or computer sciences, mathematics, technology, 
engineering, and, after consulting with the Director of National 
Intelligence, critical foreign languages.
    Regulations: Section 691.17(a) amends the current regulations to 
incorporate the new definition of a ``critical foreign language'' found 
in section 103(3) of the HEA. Current Sec.  691.17(b) is removed and 
replaced with a new Sec.  691.17(b) to include a qualifying liberal 
arts curriculum as an eligible major. Section 691.17(d) amends the 
current regulations for designating an additional eligible major by 
adding a requirement that an institution requesting designation of a 
liberal arts curriculum as an eligible major submit, in addition to the 
information requested in Sec.  691.17(d)(1), information demonstrating 
that the liberal arts curriculum complies with the requirements in new 
Sec.  691.17(b).
    Reason: The interim final regulations are necessary to implement 
the statutory provisions that expand the list of majors eligible for a 
National SMART Grant and to provide a mechanism for an institution to 
request designation of a qualifying liberal arts curriculum as a 
National SMART Grant-eligible major.

Calculation of a Grant (Sec.  691.62)

    Statute: Section 10(a)(3) of the ECASLA amends section 401A(c) of 
the HEA to provide that a student enrolled or accepted for enrollment 
in an institution of higher education on not less than a half-time 
basis may be an eligible student. Section 10(a)(4) of the ECASLA amends 
section 401A(d)(1)(B) of the HEA to clarify that, in any case in which 
a student attends on a less than full-time basis, the student's grant 
amount shall be reduced in the same manner as a Federal Pell Grant is 
reduced under section 401(b)(2)(B) of the HEA.
    Current Regulations: Current Sec.  691.62(b) describes the maximum 
ACG and National SMART Grant Scheduled Award amounts for an eligible 
full-time student, but does not provide annual award amounts for three-
quarter-time and half-time students.
    Regulations: We are amending Sec.  691.62 by adding paragraphs (c) 
and (d) to describe the ACG and National SMART Grant annual award 
amounts for full-time, three-quarter-time, and half-time students.
    Reason: We are adding Sec.  691.62(c) and (d) in conjunction with 
other changes to Subpart F, to ensure compliance with the statutory 
requirement that a student's payments be adjusted based on the 
student's enrollment status during a payment period consistent with the 
calculation of a payment for a payment period under the Federal Pell 
Grant Program.

Calculation of a Grant for a Payment Period (Sec. Sec.  691.63 and 
691.66)

General
    Statute: Section 10(a)(3) of the ECASLA amends section 401A(c) of 
the HEA to provide that a student enrolled or accepted for enrollment 
in an institution of higher education on not less than a half-time 
basis may be an eligible student. Section 10(a)(4) of the ECASLA also 
amends section 401A(d)(1)(B)(i) of the HEA to provide that, in any case 
in which a student attends on a less than full-time basis, the 
student's grant amount shall be reduced in the same manner as a Federal 
Pell Grant is reduced under section 401(b)(2)(B) of the HEA.
    Current Regulations: Current Sec.  691.63 provides that an ACG or a 
National SMART Grant payment for a payment period is calculated only on 
the basis of the ACG or National SMART Grant Scheduled Award. This 
section does not address how an ACG Grant or a National SMART Grant 
payment for a payment period is calculated for less-than-full-time 
students.
    Regulations: We are amending Sec.  691.63(h) to describe how ACG 
and National SMART Grant payments for a payment period are calculated 
for full-time, three-quarter-time, and half-time students. In addition, 
throughout Sec.  691.63, except as provided in Sec.  691.63(e), we 
change references from ``Scheduled Award'' to ``annual award under 
Sec.  691.62'' to account for a student's enrollment status as a full-
time, three-quarter-time, or half-time student in calculating the 
student's payment for a payment period.
    Finally, we are adding a new Sec.  691.66 to address how 
institutions of higher education calculate an ACG and a National SMART 
Grant payment for a

[[Page 20218]]

payment period in a program of study offered by correspondence. 
Conforming changes are also made to Sec.  686.25 and Sec.  690.66.
    Reason: We are amending Sec.  691.63 and adding Sec.  691.66, in 
conjunction with other changes to Subpart F, to ensure compliance with 
the statutory requirement that a student's payments be adjusted based 
on the student's enrollment status during a payment period and that a 
student enrolled at least half-time in a program of study offered by 
correspondence would be eligible for an ACG or a National SMART Grant.
Payment Period and Grade Level Progression
    Statute: As discussed elsewhere in this notice, section 10 of the 
ECASLA amends the provisions of section 401A of the HEA by replacing 
the term ``academic year'' with the term ``year'' in those instances 
related to determining a student's period of eligibility for an ACG or 
a National SMART Grant (e.g., section 401A(b), (c)(3), (d)(1)(A)(iii) 
and (d)(2) of the HEA).
    Current Regulations: Current Sec.  691.63(h) provides that a 
student may not progress to the next academic year during a payment 
period.
    Regulations: We are amending Sec.  691.63(h) to provide that a 
student may not progress to the next year in a grade level (rather than 
next academic year) during a payment period.
    Reason: We are making this change because eligibility for the ACG 
and National SMART Grant programs is no longer based on the student's 
academic year standing. Eligibility is based on ``year,'' which refers 
to a student's grade level consistent with the FFEL and Direct Loan 
programs.

Executive Order 12866

1. Regulatory Impact Analysis

    Under Executive Order 12866, the Secretary must determine whether 
the regulatory action is ``significant'' and therefore subject to the 
requirements of the Executive order and subject to review by the Office 
of Management and Budget (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.
    Pursuant to the terms of the Executive order, it has been 
determined that this interim final regulatory action will have an 
annual effect on the economy of more than $100 million. Therefore, this 
action is ``economically significant'' and subject to OMB review under 
section 3(f)(1) of Executive Order 12866.
Need for Federal Regulatory Action
    These interim final regulations address a range of issues affecting 
students and institutions of higher education participating in the ACG 
and National SMART Grant programs. They are needed to implement 
statutory changes enacted through the ECASLA and the HEOA.
Regulatory Alternatives Considered
    The Department cannot modify statutory program requirements through 
regulations. Because the interim final regulations merely implement 
specific statutory provisions, the Department had extremely limited 
discretion to consider alternative approaches. In general, as discussed 
in detail under the Reason sections that accompany the discussion of 
each interim final regulatory provision, the Department used this 
limited discretion to minimize burden and complexity and, to the extent 
possible, mirror comparable regulations for other student aid programs. 
In assessing the budgetary impact of these alternatives, the Department 
considered the effect of possible changes on student eligibility for 
ACG and National SMART Grant awards and on the size or timing of 
student awards. In all cases, the alternatives considered did not have 
a measurable effect on Federal costs.
Transfers
    These interim final regulations broaden access to the ACG and 
National SMART Grant programs by implementing statutory changes that 
extend eligibility to part-time students who are enrolled at their 
institution on at least a half-time basis, eligible non-citizens, and 
students enrolled in certain certificate programs. The interim final 
regulations also allow eligible degree programs with at least five full 
undergraduate years to award National SMART Grant awards in the third, 
fourth, and fifth years of the program. Mandatory funding for the ACG 
and National SMART Grant programs is provided through fiscal year 2010, 
after which the program would sunset. Funds for fiscal year 2010 would 
be used to support the 2010-2011 award year. The Department estimates 
that changes implemented through these interim final regulations, which 
become effective July 1, 2009, will result in 538,000 additional awards 
totaling $448 million over award years 2009-2010 and 2010-2011. More 
specifically, under current estimates, expanding eligibility to less-
than-full-time students, eligible non-citizens, and students at 
certificate programs will increase ACG awards by 209,000 in 2009-2010 
and 241,000 in 2010-2011 and increase National SMART Grant awards by 
43,000 in 2009-2010 and 45,000 in 2010-2011.
    Other changes in these interim final regulations implement 
statutory changes replacing the term ``academic year'' with the term 
``year'' for the purposes of determining a student's period of 
eligibility for an ACG or a National SMART Grant. These changes are 
expected to significantly simplify the process of determining 
eligibility for participating institutions of higher education and 
students.
    As noted, statutory changes in program eligibility criteria 
implemented by these interim final regulations will increase the dollar 
amount of grant awards under the ACG and National SMART Grant programs 
by $448 million over award years 2009-2010 and 2010-2011. This will 
increase Federal costs by the same amount.
    Because institutions of higher education affected by these interim 
final regulations already participate in the ACG and National SMART 
Grant programs, these schools must have already established systems and 
procedures to meet program eligibility requirements. The interim final 
regulations reflect discrete changes in specific parameters associated 
with the Department's existing regulations for these programs, rather 
than entirely new requirements. Accordingly, entities wishing to 
continue to participate in the programs have already absorbed most of 
the administrative costs related to implementing these interim final 
regulations. Marginal costs over this baseline are primarily related to 
one-time changes that, while possibly significant in some cases, are an 
unavoidable cost of continued program participation.
    Elsewhere in this SUPPLEMENTARY INFORMATION section, we identify 
and

[[Page 20219]]

explain burdens specifically associated with information collection 
requirements. See the heading Paperwork Reduction Act of 1995.
Accounting Statement
    As required by OMB Circular A-4 (available at http://www.Whitehouse.gov/omb/Circulars/a004/a-4.pdf), in Table 1, we have 
prepared an accounting statement showing the classification of the 
expenditures associated with the provisions of these interim final 
regulations. As shown in the table, the Department estimates that these 
interim final regulations will increase Federal grant payments to 
students by $448 million.

   Table 1--Accounting Statement: Classification of Estimated Savings
                              [In millions]
------------------------------------------------------------------------
                          Category                             Transfer
------------------------------------------------------------------------
Annualized monetized transfers..............................        $448
------------------------------------------------------------------------

2. Clarity of the Regulations

    Executive Order 12866 and the Presidential memorandum on ``Plain 
Language in Government Writing'' require each agency to write 
regulations that are easy to understand.
    The Secretary invites comments on how to make these interim final 
regulations easier to understand, including answers to questions such 
as the following:
     Are the requirements in the interim final regulations 
clearly stated?
     Do the interim final regulations contain technical terms 
or other wording that interferes with their clarity?
     Does the format of the interim final regulations (grouping 
and order of sections, use of headings, paragraphing, etc.) aid or 
reduce their clarity?
     Would the interim final regulations be easier to 
understand if we divided them into more (but shorter) sections? (A 
``section'' is preceded by the symbol ``Sec. '' and a numbered heading; 
for example, Sec.  691.16 Rigorous Secondary School Program of Study.)
     Could the description of the interim final regulations in 
the SUPPLEMENTARY INFORMATION section of this preamble be more helpful 
in making the interim final regulations easier to understand? If so, 
how?
     What else could we do to make the interim final 
regulations easier to understand?
    To send any comments that concern how the Department could make 
these interim final regulations easier to understand, see the 
instructions in the ADDRESSES section of this preamble.

Regulatory Flexibility Act Certification

    The Secretary certifies that these interim final regulations will 
not have a significant economic impact on a substantial number of small 
entities. These interim final regulations affect institutions of higher 
education, States, State agencies, and individual students. The U.S. 
Small Business Administration (SBA) Size Standards define these 
institutions as ``small entities'' if they are for-profit or nonprofit 
institutions with total annual revenue below $5,000,000 or if they are 
institutions controlled by governmental entities with populations below 
50,000. Individuals are not defined as ``small entities'' under the 
Regulatory Flexibility Act.
    A significant percentage of the schools participating in the ACG 
and National SMART Grant programs meet the definition of ``small 
entities.'' While these schools fall within the SBA size guidelines, 
these interim final regulations do not impose significant new costs on 
these entities.
    Specific burden concerns are discussed in more detail elsewhere in 
this preamble, primarily in the Paperwork Reduction Act of 1995 
section.

Paperwork Reduction Act of 1995

    Sections 691.15 and 691.16 contain information collection 
requirements. Under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)), the Department has submitted a copy of these sections to OMB 
for its review.

Section 691.15(a)--Eligibility To Receive a Grant

    The interim final regulations amend the eligibility requirements to 
receive an ACG or a National SMART Grant by removing several 
restrictive criteria. Currently, only students who are U.S. citizens 
are eligible to receive an ACG or a National SMART Grant. Under these 
interim final regulations, and consistent with other Title IV, HEA 
programs, in addition to U.S. citizens, students who can provide 
evidence from the United States Citizenship and Immigration Service, an 
office of the United States Department of Homeland Security, that they 
are in the United States for other than a temporary purpose with the 
intention of becoming a citizen or permanent resident, may qualify as 
eligible non-citizens for the ACG and National SMART Grant programs.
    The requirement that a student be enrolled on a full-time basis is 
also removed. Under these interim final regulations, students enrolled 
on at least a half-time or greater basis may be eligible to receive an 
ACG or a National SMART Grant.
    The interim final regulations provide that the restriction on prior 
postsecondary enrollment does not apply to students who were enrolled 
as regular students in an eligible program of undergraduate education 
that was also part of a secondary school program of study. We also 
clarify that transfer students who are first-year students are not 
considered to have been previously enrolled and, therefore, are not 
subject to the prior enrollment restriction.
    It is estimated that these changes regarding student eligibility 
will result in an increase in the burden hours associated with the 
programs through the Common Origination and Disbursement (COD) System. 
We estimate that the interim final regulations will increase burden for 
institutions of higher education by 12,412 hours, under OMB Control 
Number 1845-0039.

Section 691.16--Rigorous Secondary School Program of Study

    The interim final regulations amend the current regulations to 
provide that, starting with the 2009-2010 award year, a designated 
official, consistent with State law, may recognize and report any 
information to the Secretary about rigorous secondary school programs 
of study that prepare students for college. These rigorous programs 
provide an option by which a student could meet the rigorous secondary 
school program of study requirement for receipt of an ACG.
    Consistent with the amendments to section 401A of the HEA, rigorous 
programs submitted by States and recognized by the Secretary as 
rigorous after January 1, 2005, but before July 1, 2009, will continue 
to be listed in the document published annually by the Secretary 
listing rigorous secondary school programs of study. This listing also 
includes the new rigorous secondary programs of study as reported to 
the Department for students graduating during the current award year 
and for students graduating during award years subsequent to the 
current award year. In addition to any new programs of study, the 
information that designated officials report to the Department about 
rigorous secondary school programs of study also includes changes to 
previously reported rigorous programs of study or any deleted rigorous 
programs of study. Consistent

[[Page 20220]]

with the deadline set by the Secretary for reporting rigorous high 
school programs to the Department, we expect that 56 SEAs reporting for 
the State (and/or on behalf of the State's LEAs) will be reporting to 
the Department annually. In addition, designated officials will report 
information regarding the rigorous programs offered by private and home 
schools for an estimated 36,000 high school students who attend private 
high schools and home schools for the year of the students' secondary 
school graduation or completion. We specifically request comments on 
the most effective methods by which designated officials would report 
information about rigorous secondary school programs of study in 
private schools and home schools to the Secretary and how that 
information would most effectively be transmitted to institutions to 
allow them to determine a student's eligibility for an ACG.
    It is estimated that these changes regarding reporting of rigorous 
secondary school programs of study will result in an increase in burden 
hours. We estimate that the interim final regulations will increase 
burden for States, private high schools, home schools, and individuals 
by 18,280 hours, under new OMB Control Number 1845-XXXX.

                        Collection of Information
------------------------------------------------------------------------
                                   Information
     Regulatory section            collection            Collection
------------------------------------------------------------------------
691.15......................  This interim final    OMB 1845-0039.
                               regulation expands   This is a revision
                               student eligibility   of an existing
                               requirements for      collection which is
                               the ACG and           being submitted to
                               National SMART        OMB with these
                               Grant programs.       interim final
                                                     regulations.
691.16......................  This interim final    OMB 1845-XXXX. This
                               regulation provides   will be a new
                               for States to         collection. A
                               report new,           separate 60-day
                               changed, or deleted   Federal Register
                               rigorous secondary    notice will be
                               programs of study.    published to
                                                     solicit comment on
                                                     this form once it
                                                     is developed.
------------------------------------------------------------------------

    If you want to comment on the information collection requirements, 
please send your comments to the Office of Information and Regulatory 
Affairs, OMB, Attention: Desk Officer for U.S. Department of Education. 
Send these comments by e-mail to [email protected] or by fax to 
(202) 395-6974. Commenters need only submit comments via one submission 
method. You may also send a copy of these comments to the Department 
contact named in the ADDRESSES section of this preamble.
    We consider your comments on these collections of information in--
     Deciding whether the collections are necessary for the 
proper performance of our functions, including whether the information 
will have practical use;
     Evaluating the accuracy of our estimate of the burden of 
the collections, including the validity of our methodology and 
assumptions;
     Enhancing the quality, usefulness, and clarity of the 
information we collect; and
     Minimizing the burden on those who must respond. This 
includes exploring the use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology; e.g., permitting electronic submission of 
responses.
    OMB is required to make a decision concerning the collections of 
information contained in these interim final regulations between 30 and 
60 days after publication of this document in the Federal Register. 
Therefore, to ensure that OMB gives your comments full consideration, 
it is important that OMB receives the comments within 30 days of 
publication. This does not affect the deadline for your comments to us 
on the interim final regulations.

Intergovernmental Review

    These programs are subject to Executive Order 12372 and the 
regulations in 34 CFR part 79. One of the objectives of the Executive 
order is to foster an intergovernmental partnership and a strengthened 
federalism. The Executive Order relies on processes developed by State 
and local governments for coordination and review of proposed Federal 
financial assistance.
    This document provides early notification of our specific plans and 
actions for this program.

Assessment of Educational Impact

    We have determined that these interim final regulations do not 
require transmission of information that any other agency or authority 
of the United States gathers or makes available. However, in accordance 
with section 411 of the General Education Provisions Act, 20 U.S.C. 
1221e-4, the Secretary requests comments on whether these interim final 
regulations would require transmission of information that any other 
agency or authority of the United States gathers or makes available.

Electronic Access to This Document

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

    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 Numbers: 84.063 Federal Pell 
Grants; 84.375 Academic Competitiveness Grants; 84.376 National 
SMART Grants; 84.379 TEACH Grants)

List of Subjects in 34 CFR Parts 668, 686, 690, and 691

    Colleges and universities, Elementary and secondary education, 
Grant programs education, Student aid.

    Dated: April 28, 2009.
Arne Duncan,
Secretary of Education.

0
For the reasons discussed in the preamble, the Secretary amends parts 
668, 686, 690, and 691 of title 34 of the Code of Federal Regulations 
as follows:

PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS

0
1. The authority citation for part 668 continues to read as follows:


[[Page 20221]]


    Authority:  20 U.S.C. 1001, 1002, 1003, 1070g, 1085, 1088, 1091, 
1092, 1094, 1099c, and 1099c-1, unless otherwise noted.

Sec.  668.32  [Amended]

0
2. Section 668.32(a)(2) is amended by:
0
A. Adding the words ``ACG, National SMART Grant,'' after the words 
``For purposes of the''.
0
B. Adding the punctuation ``,'' after the word ``FFEL''.

Sec.  668.33  [Amended]

0
3. Section 668.33 is amended by:
0
A. In paragraph (a), introductory text, removing the words ``paragraphs 
(b) and (c)'' and adding, in their place, the words ``paragraph (b)''.
0
B. Removing paragraph (c).
0
C. Redesignating paragraph (d) as paragraph (c).

PART 686--TEACHER EDUCATION ASSISTANCE FOR COLLEGE AND HIGHER 
EDUCATION (TEACH) GRANT PROGRAM

0
4. The authority citation for part 686 continues to read as follows:

    Authority:  20 U.S.C. 1070g, et seq., unless otherwise noted.

Sec.  686.22  [Amended]

0
5. Section 686.22 is amended in paragraph (f), by removing the words 
``or (e)'' both times they appear.

Sec.  686.25  [Amended]

0
6. Section 686.25 is amended by:
0
A. Removing paragraph (b)(1).
0
B. Redesignating paragraphs (b)(2)(i) and (b)(2)(ii) as paragraphs 
(b)(1) and (b)(2), respectively.
0
C. In paragraph (c)(2)(i), adding the words ``to calculate the payment 
for the payment period'' after the word ``used''.
0
D. In paragraph (c)(2)(ii), adding the words ``to calculate the payment 
for the payment period'' after the word ``used''.

PART 690--FEDERAL PELL GRANT PROGRAM

0
7. The authority citation for part 690 continues to read as follows:

    Authority:  20 U.S.C. 1070a, 1070g, unless otherwise noted.


0
8. Section 690.63 is amended by:
0
A. Revising paragraph (d)(1)(i).
0
B. In paragraph (f), removing the words ``or (e)'' both times they 
appear and removing the word ``paragraphs'' and adding, in its place, 
the word ``paragraph''.
    The revision reads as follows:


Sec.  690.63  Calculation of a Federal Pell Grant for a payment period.

* * * * *
    (d) * * *
    (1)(i) Determining his or her enrollment status for the term;

Sec.  690.66  [Amended]

0
9. Section 690.66 is amended by:
0
A. Removing paragraph (b)(1).
0
B. Redesignating paragraphs (b)(2)(i) and (b)(2)(ii) as paragraphs 
(b)(1) and (b)(2), respectively.
0
C. In newly redesignated paragraph (b)(1), removing the parenthetical 
``(4)''.
0
D. In newly redesignated paragraph (b)(2), removing the parentheticals 
``(a)(4)'' and adding, in their place, the words ``paragraph (a)''.
0
E. In paragraphs (c)(2)(i) and (c)(2)(ii), adding the words ``to 
calculate the payment for the payment period'' after the word ``used'' 
both times it is used.

PART 691--ACADEMIC COMPETITIVENESS GRANT (ACG) AND NATIONAL SCIENCE 
AND MATHEMATICS ACCESS TO RETAIN TALENT GRANT (NATIONAL SMART 
GRANT) PROGRAMS

0
10. The authority citation for part 691 continues to read as follows:

    Authority:  20 U.S.C. 1070a-1, unless otherwise noted.

Sec.  691.1  [Amended]

0
11. Section 691.1(b) is amended by removing the words ``and fourth-
year'' and adding, in their place, the words ``, fourth-, and, in the 
case of a program with at least five full years, fifth-year''.
0
12. Section 691.2 is amended by:
0
A. In paragraph (a), adding, in alphabetical order, the term ``Federal 
Family Education Loan (FFEL) Programs''.
0
B. In paragraph (b), adding, in alphabetical order, the terms ``Half-
time student'', ``Three-quarter time student'', and ``William D. Ford 
Federal Direct Loan (Direct Loan) Program''.
0
C. In paragraph (d), revising the definitions of ``ACG Scheduled 
Award'', ``Eligible major'', ``Eligible program'', and ``National SMART 
Grant Scheduled Award''; and adding, in alphabetical order, the 
definition for ``Annual award''.
0
D. Adding a new paragraph (e).
    The additions and revisions read as follows:


Sec.  691.2  Definitions.

* * * * *
    (d) * * *
    ACG Scheduled Award: The maximum amount of an ACG that would be 
paid to a full-time first-year student or a full-time second-year 
student for the applicable year.
    Annual award: The maximum ACG or National SMART Grant amount a 
student would receive for enrolling as a full-time, three-quarter-time, 
or half-time student and remaining in that enrollment status for one 
year.
* * * * *
    Eligible major: A major, as identified by the Secretary under Sec.  
691.17(a), in one of the physical, life, or computer sciences, 
mathematics, technology, engineering, or a critical foreign language as 
defined in section 103(3) of the HEA; or a qualifying liberal arts 
curriculum as identified by the Secretary under Sec.  691.17(b).
    Eligible program: An eligible program as defined in 34 CFR 668.8 
that--
    (1) For purposes of the ACG Program, leads to an associate's degree 
or a bachelor's degree, is an undergraduate program at least one 
academic year in length leading to a certificate, is at least a two-
academic-year program acceptable for full credit toward a bachelor's 
degree, or is a graduate degree program that includes at least three 
years of undergraduate education; or
    (2) For purposes of the National SMART Grant Program--
    (i) Leads to a bachelor's degree in an eligible major or is a 
graduate degree program in an eligible major that includes at least 
three years of undergraduate education; and
    (ii) In the case of a five-year program, is a program that--
    (A) Requires at least five full undergraduate years to complete, as 
certified by an appropriate institutional official in accordance with 
the institution's policies and procedures and documented in the 
institution's records;
    (B) Contains not less than 24 semester hours, 36 quarter credits, 
or 900 clock hours in each year of the program, including the fifth 
year; and
    (C) Is not a program that is a qualifying liberal arts curriculum 
identified as an eligible major under Sec.  691.17(b).
    (3) For purposes of paragraph (2)(ii)(A) of this definition, the 
appropriate official of an institution is the chief executive officer, 
provost, dean, academic department chairman, or other official with 
responsibility for setting a degree program's coursework.
* * * * *
    National SMART Grant Scheduled Award: The maximum amount of a 
National SMART Grant that would be paid to a full-time third-year, 
fourth-year, or fifth-year student for the applicable year.
* * * * *
    (e)(1) As used in this part, the terms ``first-year,'' ``second-
year,'' ``third-

[[Page 20222]]

year,'' ``fourth-year,'' and ``fifth-year'' refer to a student's grade 
level in the student's eligible program as determined by the 
institution for all students in the eligible program.
    (2) A student's grade level for purposes of the ACG and National 
SMART Grant programs must be the same grade level as used for 
determining annual loan limits under the FFEL and Direct Loan programs 
(34 CFR parts 682 and 685).
* * * * *

0
13. Section 691.6 is revised to read as follows:


Sec.  691.6  Duration of student eligibility--undergraduate course of 
study.

    (a) While enrolled in an ACG-eligible program, a student is 
eligible to receive up to one ACG Scheduled Award while enrolled as a 
first-year student and one ACG Scheduled Award while enrolled as a 
second-year student.
    (b)(1) While enrolled in a National SMART Grant-eligible program, a 
student is eligible to receive up to one National SMART Grant Scheduled 
Award while enrolled as a third-year student, one National SMART Grant 
Scheduled Award while enrolled as a fourth-year student, and, in the 
case of a National SMART Grant-eligible program with five full years of 
coursework, one National SMART Grant Scheduled Award while enrolled as 
a fifth-year student.
    (2)(i) A student's eligibility to receive up to one National SMART 
Grant Scheduled Award as a fourth-year student, in the case of a 
National SMART Grant-eligible program with less than five full years of 
coursework, extends from the beginning of the student's fourth year 
until he or she completes his or her first undergraduate baccalaureate 
course of study.
    (ii) A student's eligibility to receive up to one National SMART 
Grant Scheduled Award as a fifth-year student, in the case of a 
National SMART Grant-eligible program with at least five full years of 
coursework, extends from the beginning of the student's fifth year 
until he or she completes his or her first undergraduate baccalaureate 
course of study.
    (c) A student may not receive more than two ACG Scheduled Awards 
and three National SMART Grant Scheduled Awards during the student's 
undergraduate education in all eligible programs.

(Authority: 20 U.S.C. 1070a-1)



0
14. Section 691.8 is amended by:
0
A. In paragraph (b)(1), adding the words ``certificate or'' after the 
word ``or'' the first time it appears.
0
B. Adding new paragraphs (c) and (d) to read as follows:


Sec.  691.8  Enrollment status for students taking regular and 
correspondence courses.

* * * * *
    (c)(1) Notwithstanding the limitation in paragraph (b)(3) of this 
section, a student who would be a half-time student based solely on his 
or her correspondence work is considered a half-time student unless the 
calculation in paragraph (b) of this section produces an enrollment 
status greater than half-time.
    (2) A student who would be a less-than-half-time student based 
solely on his or her correspondence work or based on a combination of 
his or her correspondence work and regular coursework is considered a 
less-than-half-time student and is ineligible for an ACG or a National 
SMART Grant.
    (d) The following chart provides examples of the application of the 
regulations set forth in this section. It assumes that the institution 
of higher education defines full-time enrollment as 12 credits per 
term, making half-time enrollment equal to six credits per term.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Total course load
                                               Number of credit   Number of credit   in credit hours
             Under Sec.   691.8                 hours regular          hours           to determine                    Enrollment status
                                                     work          correspondence   enrollment status
--------------------------------------------------------------------------------------------------------------------------------------------------------
(b)(3)......................................                  3                  3                  6  Half-time.
(b)(3)......................................                  3                  6                  6  Half-time.
(b)(3)......................................                  3                  9                  6  Half-time.
(b)(3)......................................                  6                  3                  9  Three-quarter-time.
(b)(3)......................................                  6                  6                 12  Full-time.
(b)(3) and (c)..............................                  2                  6                  6  Half-time.
(c) *.......................................  .................  .................  .................  Less-than-half-time.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Any combination of regular and correspondence work that is greater than zero, but less than six hours. A less-than-half-time student would be
  ineligible for an ACG or a National SMART Grant.

* * * * *

0
15. Section 691.15 is amended by:

0
A. Revising paragraph (a).
0
B. In paragraph (b)(1)(ii), removing the word ``academic''.
0
C. Revising paragraphs (b)(1)(ii)(B) and (b)(1)(ii)(C).
0
D. In paragraph (b)(1)(iii), removing the word ``academic''.
0
E. In paragraph (b)(1)(iii)(B), removing the words ``as determined by 
the institution,'', and removing the words ``recognized by the 
Secretary''.
0
F. Removing paragraph (b)(1)(iii)(C) and redesignating paragraph 
(b)(1)(iii)(D) as paragraph (b)(1)(iii)(C). In newly redesignated 
paragraph (b)(1)(iii)(C), removing the word ``academic'' the first time 
it appears.
0
G. In paragraph (b)(3)(ii), removing the citation ``691.16(d)(2)'', and 
adding, in its place, the citation ``691.16''.
0
H. In paragraph (b)(5)(i), removing the words ``recognized by the 
Secretary''.
0
I. In paragraph (c), introductory text, removing the words ``third or 
fourth academic'' and adding, in their place, the words ``third, 
fourth, or fifth''.
0
J. Removing paragraph (c)(2)(ii).
0
K. Redesignating paragraphs (c)(2)(i)(A) and (c)(2)(i)(B) as paragraphs 
(c)(2)(i) and (c)(2)(ii), respectively.
0
L. In newly redesignated paragraph (c)(2)(i), removing the word ``or''.
0
M. In newly redesignated paragraph (c)(2)(ii), removing the word 
``and'' the second time it appears and adding, in its place, the word 
``or''.
0
N. Adding a new paragraph (c)(2)(iii).
0
O. In paragraph (c)(3), removing the punctuation ``;'' and adding, in 
its place, the punctuation ``.''.
0
P. Removing paragraphs (c)(4) and (c)(5).
0
Q. Adding a new paragraph (d)(3).
0
R. In paragraph (e), introductory text, adding the words ``program in 
the'' before the word ``intended'', and removing the words ``and major 
under paragraph (c)(2)(ii) of this section''.
0
S. In paragraph (f)(1)(i), removing the words ``for one academic year 
but less than the credit or clock hours for two academic years'' and 
adding, in their place, the words ``to be considered a second-year 
student''.

[[Page 20223]]

0
T. In paragraph (f)(1)(ii), removing the words ``for one academic 
year'' and adding, in their place, the words ``to be considered a 
second-year student''.
0
U. In paragraph (f)(1)(ii)(B), removing the word ``academic''.
    The revisions and additions read as follows:


Sec.  691.15  Eligibility to receive a grant.

    (a) General. A student who meets the requirements of 34 CFR part 
668, Subpart C, is eligible to receive an ACG or a National SMART Grant 
if the student is receiving a Federal Pell Grant disbursement in the 
same award year.
    (b) * * *
    (1) * * *
    (ii) * * *
    (B) Has successfully completed, after January 1, 2006, a rigorous 
secondary school program of study under Sec.  691.16;
    (C) Has not been previously enrolled as a regular student in an 
eligible program of undergraduate education except as part of a 
secondary school program of study. A transfer student who is a first-
year student is not considered to have been previously enrolled; and
* * * * *
    (c) * * *
    (2) * * *
    (iii) Is at an institution that offers as an eligible major a 
qualifying liberal arts curriculum identified under Sec.  691.17(b); 
and
* * * * *
    (d) * * *
    (3) If the student is enrolled in a qualifying liberal arts 
curriculum as a major, there is no requirement to declare a major.
* * * * *

0
16. Section 691.16 is revised to read as follows:


Sec.  691.16  Rigorous secondary school program of study.

    (a)(1) For each award year commencing with the 2009-2010 award 
year, the Secretary establishes a deadline for submission of 
information about secondary school programs of study that are 
recognized by a designated official, consistent with State law, to 
prepare students for college and that the designated official deems 
rigorous.
    (2) The designated official may submit information pursuant to 
paragraph (a)(1) of this section--
    (i) For students graduating during the current award year; and
    (ii) For students graduating during one or more specified upcoming 
award years.
    (b) In addition to those programs reported to the Secretary as 
rigorous by the designated official under paragraph (a) of this 
section, the following secondary school programs of study are rigorous:
    (1) Advanced or honors secondary school programs established by 
States and in existence for the 2004-2005 school year or later school 
years.
    (2) Any secondary school program in which a student successfully 
completes at a minimum the following courses:
    (i) Four years of English.
    (ii) Three years of mathematics, including algebra I and a higher-
level class such as algebra II, geometry, or data analysis and 
statistics.
    (iii) Three years of science, including one year each of at least 
two of the following courses: biology, chemistry, and physics.
    (iv) Three years of social studies.
    (v) One year of a language other than English.
    (3) A secondary school program identified by a State--level 
partnership that is recognized by the State Scholars Initiative of the 
Western Interstate Commission for Higher Education (WICHE), Boulder, 
Colorado.
    (4) Any secondary school program for a student who completes at 
least two courses from an International Baccalaureate Diploma Program 
sponsored by the International Baccalaureate Organization, Geneva, 
Switzerland, and receives a score of ``4'' or higher on the 
examinations for at least two of those courses.
    (5) Any secondary school program for a student who completes at 
least two Advanced Placement courses and receives a score of ``3'' or 
higher on the College Board's Advanced Placement Program Exams for at 
least two of those courses.
    (6) Rigorous secondary school programs of study established by an 
SEA or, if legally authorized by the State to establish a separate 
secondary school program of study, an LEA, where such programs were 
recognized by the Secretary as rigorous after January 1, 2005, but 
before July 1, 2009.
    (Approved by the Office of Management and Budget under control 
number 1845-0078]

(Authority: 20 U.S.C. 1070a-1)



0
17. Section 691.17 is amended by:
0
A. In paragraph (a), removing the words ``or, as determined under 
paragraph (b) of this section, critical foreign languages.'' and 
adding, in their place, the words ``critical foreign languages as 
defined in section 103(3) of the HEA, or a qualifying liberal arts 
curriculum as an eligible major as determined under paragraph (b) of 
this section.''
0
B. Revising paragraph (b).
0
C. Redesignating paragraphs (d)(1) and (d)(2) as paragraphs (d)(2) and 
(d)(4), redesignating the introductory text after the heading of 
paragraph (d) as paragraph (d)(1), and adding a new paragraph (d)(3).
0
D. In paragraph (e), removing the words ``under paragraph (a) of this 
section''.
    The revisions and additions read as follows:


Sec.  691.17  Determination of eligible majors.

* * * * *
    (b) Qualifying liberal arts curriculum as an eligible major. The 
Secretary may designate a baccalaureate-degree liberal arts curriculum 
as an eligible major if--
    (1) The curriculum is the only curriculum at the institution of 
higher education and was offered prior to February 8, 2006;
    (2) A student is not allowed to declare a major in a particular 
subject area; and
    (3) The Secretary determines that the curriculum--
    (i) Is at least equal to the requirements for an identified 
National SMART Grant-eligible major at an institution of higher 
education that offers a baccalaureate degree in that eligible major; or
    (ii) Requires the student to undertake a rigorous course of study 
in mathematics, biology, chemistry, and physics that consists of at 
least four years of study in mathematics and three years of study in 
the sciences, with a laboratory component in each of those years.
* * * * *
    (d) * * *
    (3) In addition to the information in paragraph (d)(2) of this 
section, requests for designation of a liberal arts curriculum as an 
eligible major must include the information demonstrating that the 
liberal arts curriculum complies with the requirements described in 
paragraph (b) of this section.
* * * * *

0
18. Section 691.62 is amended by:
0
A. In paragraph (b), removing the word ``academic'' each time it 
appears.
0
B. In paragraph (b)(2), removing the words ``third and fourth 
academic'' and adding, in their place, the words ``third, fourth, and 
fifth''.
0
C. Redesignating paragraph (c) as paragraph (f).
0
D. Adding new paragraphs (c), (d), and (e).

0
E. In newly redesignated paragraph (f), removing the words ``for an 
academic year''.
    The additions read as follows:

[[Page 20224]]

Sec.  691.62  Calculation of a grant.

* * * * *
    (c) The ACG first-year annual award for--
    (1) A full-time student is the lesser of $750 or a reduced ACG 
Scheduled Award as determined under paragraph (a)(2) of this section;
    (2) A three-quarter-time student is the lesser of $562.50 or 75 
percent of a reduced ACG Scheduled Award; and
    (3) A half-time student is the lesser of $375 or 50 percent of a 
reduced ACG Scheduled Award.
    (d) The ACG second-year annual award for--
    (1) A full-time student is the lesser of $1,300 or a reduced ACG 
Scheduled Award as determined under paragraph (a)(2) of this section;
    (2) A three-quarter-time student is the lesser of $975 or 75 
percent of a reduced ACG Scheduled Award; and
    (3) A half-time student is the lesser of $650 or 50 percent of a 
reduced ACG Scheduled Award.
    (e) The National SMART Grant annual award for--
    (1) A full-time student is the lesser of $4,000 or a reduced 
National SMART Grant Scheduled Award as determined under paragraph 
(a)(2) of this section;
    (2) A three-quarter-time student is the lesser of $3,000 or 75 
percent of a reduced National SMART Grant Scheduled Award; and
    (3) A half-time student is the lesser of $2,000 or 50 percent of a 
reduced National SMART Grant Scheduled Award.
* * * * *

0
19. Section 691.63 is amended by:
0
A. In paragraph (b)(1), removing the word ``Confirming'' and adding, in 
its place, the word ``Determining'', and removing the word ``full-
time''.
0
B. In paragraph (b)(2), removing the word ``Determining'' and adding, 
in its place, the words ``Based upon that enrollment status, 
determining'', and removing the words ``Scheduled Award; and'' and 
adding, in their place, the words ``annual award under Sec.  691.62; 
and''.
0
C. In paragraph (b)(3)(ii), removing the words ``Scheduled Award'' and 
adding, in their place, the words ``annual award''.
0
D. In paragraph (b)(3)(ii)(A), removing the words ``Scheduled Award'' 
and adding, in their place, the words ``annual award''.
0
E. In paragraph (c)(1), removing the word ``Confirming'' and adding, in 
its place, the word ``Determining''; and removing the word ``full-
time''.
0
F. In paragraph (c)(2), removing the word ``Determining'' and adding, 
in its place, the words ``Based upon that enrollment status, 
determining'', and removing the words ``Scheduled Award;'' and adding, 
in their place, the words ``annual award under Sec.  691.62;''.
0
G. In paragraph (c)(3), removing the words ``Scheduled Award'' and 
adding, in their place, the words ``annual award'', and adding in the 
denominator of each equation the words ``of instructional time'' 
immediately after the word ``weeks''.
0
H. In paragraph (c)(4)(ii), removing the words ``Scheduled Award'' and 
adding, in their place, the words ``annual award'' each time they 
appear.
0
I. Removing paragraph (d)(2).
0
J. Redesignating paragraphs (d)(1)(i) and (d)(1)(ii) as paragraphs 
(d)(1) and (d)(2), respectively.
0
K. Revising newly redesignated paragraphs (d)(1) and (d)(2).
0
L. In paragraph (d)(3), removing the words ``Scheduled Award'' and 
adding, in their place, the words ``annual award''.
0
M. In paragraph (e)(1), removing the word ``full-time'' and adding, in 
its place, the word ``half-time''.
0
N. In paragraph (f), removing the words ``Scheduled Award'' and adding, 
in their place, the words ``annual award'' both times they appear, 
removing the word ``paragraphs'' the first time it appears and adding, 
in its place, the word ``paragraph'', and removing the words ``or (e)'' 
both times they appear.
0
O. Revising paragraph (h).
    The revisions read as follows:


Sec.  691.63  Calculation of a grant for a payment period.

* * * * *
    (d) * * *
    (1) Determining his or her enrollment status for the term;
    (2) Based upon that enrollment status, determining his or her ACG 
or National SMART Grant annual award under Sec.  691.62; and
* * * * *
    (h) Payment period and grade level progression. A student may not 
progress to the next year during a payment period. The student's 
payment for the payment period--
    (1) Is from the ACG or National SMART Grant Scheduled Award of the 
year being completed; and
    (2) Is calculated based on the student's credit or clock hours for 
the payment period, and weeks of instructional time in the payment 
period.
* * * * *


Sec.  691.64  [Amended]

0
20. Section 691.64(b) is amended by removing the words ``an academic'' 
and adding, in their place, the word ``a''.


Sec.  691.65  [Amended]

0
21. Section 691.65 is amended by:
0
A. In the section heading, removing the words ``: Attendance at more 
than one institution during an academic year''.
0
B. In paragraph (c), removing the word ``academic'' the first time it 
appears; and removing the words ``that academic year'' and adding, in 
their place, the words ``the student's year at the second 
institution''.
0
C. In paragraph (d), removing the word ``academic''.
0
D. In paragraph (f), removing the words ``an academic'' and adding, in 
their place, the word ``a''.
* * * * *

0
22. Section 691.66 is added to read as follows:


Sec.  691.66  Correspondence study.

    (a) An institution calculates the ACG or National SMART Grant for a 
payment period for a student in a program of study offered by 
correspondence courses without terms, but not including any residential 
component, by--
    (1) Determining that the student is attending at least half-time;
    (2) Determining the student's half-time annual award determined 
under Sec.  691.62; and
    (3) Multiplying the student's half-time annual award by the lesser 
of--
    (i)
    [GRAPHIC] [TIFF OMITTED] TR01MY09.024
    
    or

[[Page 20225]]

[GRAPHIC] [TIFF OMITTED] TR01MY09.025

     (b) For purposes of paragraph (a) of this section--
    (1) The institution must make the first payment to a student for an 
academic year, as calculated under paragraph (a) of this section, after 
the student submits 25 percent of the lessons or otherwise completes 25 
percent of the work scheduled for the program or the academic year, 
whichever occurs last; and
    (2) The institution must make the second payment to a student for 
an academic year, as calculated under paragraph (a) of this section, 
after the student submits 75 percent of the lessons or otherwise 
completes 75 percent of the work scheduled for the program or the 
academic year, whichever occurs last.
    (c) In a program of correspondence study offered by correspondence 
courses using terms but not including any residential component--
    (1) The institution must prepare a written schedule for submission 
of lessons that reflects a workload of at least 30 hours of preparation 
per semester hour or 20 hours of preparation per quarter hour during 
the term;
    (2)(i) If the student is enrolled in at least 6 credit hours that 
commence and are completed in that term, the student's half-time annual 
award determined under Sec.  691.62 is used to calculate the payment 
for the payment period; or
    (ii) If the student is enrolled in less than 6 credit hours that 
commence and are completed in that term, the student is not eligible 
for an ACG and National SMART Grant;
    (3) A payment for a payment period is calculated using the formula 
in Sec.  691.63(d) except that paragraphs (c)(1) and (c)(2) of this 
section are used in lieu of Sec.  691.63(d)(1) and (2), respectively; 
and
    (4) The institution must make the payment to a student for a 
payment period after that student completes 50 percent of the lessons 
or otherwise completes 50 percent of the work scheduled for the term, 
whichever occurs last.
    (d) Payments for periods of residential training must be calculated 
under Sec.  691.63(d) if the residential training is offered using 
terms and credit hours or Sec.  691.63(e) if the residential training 
is offered using credit hours without terms.

(Authority: 20 U.S.C. 1070a-1)

Sec.  691.75  [Amended]

0
23. Section 691.75 is amended by:
0
A. In paragraph (a)(3), removing the words ``a full-time'' and adding, 
in their place, the words ``at least a half-time''.
0
B. In paragraph (b)(2), removing the word ``academic'', and removing 
the citation ``691.15(b)(1)(iii)(D)'', and adding, in its place, the 
citation ``691.15(b)(1)(iii)(C)''.
0
C. In paragraph (c), removing the citation ``691.15(b)(1)(iii)(D)'', 
and adding, in its place, the citation ``691.15(b)(1)(iii)(C)''.
0
D. In paragraph (d)(1)(i), removing the word ``academic'', and removing 
the citation ``691.15(b)(1)(iii)(D)'', and adding, in its place, the 
citation ``691.15(b)(1)(iii)(C)''.

0
24. Section 691.76 is amended by revising paragraph (b) to read as 
follows:


Sec.  691.76  Frequency of payment.

* * * * *
    (b) The institution may pay funds in one lump sum for all the prior 
payment periods for which the student was eligible under Sec.  691.15 
within the award year. The student's enrollment status must be 
determined according to work already completed.
* * * * *

0
25. Section 691.80 is amended by revising paragraph (b) to read as 
follows:


Sec.  691.80  Redetermination of eligibility for a grant award.

* * * * *
    (b) Change in enrollment status. (1) If the student's enrollment 
status changes from one payment period to another within the same award 
year, the institution must recalculate the student's award for the new 
payment period taking into account any changes in the cost of 
attendance.
    (2)(i) If the student's projected enrollment status changes during 
a payment period after the student has begun attendance in all of his 
or her classes for that payment period, the institution may (but is not 
required to) establish a policy under which the student's award for the 
payment period is recalculated. If such a policy is established, it 
must apply to all students and be the same as the policy established 
for the Federal Pell Grant Program.
    (ii)(A) If a student's projected enrollment status changes during a 
payment period before the student begins attendance in all of his or 
her classes for that payment period, the institution must recalculate 
the student's enrollment status to reflect only those classes for which 
the student actually began attendance.
    (B) If a student's projected enrollment status changes to less-
than-half-time during a payment period before the student begins 
attendance in all of his or her classes for that payment period, the 
institution must determine that the student is ineligible for a grant 
for that payment period.
* * * * *
[FR Doc. E9-10094 Filed 4-30-09; 8:45 am]
BILLING CODE 4000-01-P