[Federal Register Volume 74, Number 224 (Monday, November 23, 2009)]
[Rules and Regulations]
[Pages 61240-61246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-28050]



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Part III





Department of Education





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34 CFR Parts 668, 686, 690, and 691



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; Final Rule

  Federal Register / Vol. 74 , No. 224 / Monday, November 23, 2009 / 
Rules and Regulations  

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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: Final regulations.

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SUMMARY: The Secretary is adopting as final, with changes, interim 
final regulations for the Academic Competitiveness (ACG) and National 
Science and Mathematics to Retain Talent Grant (National SMART Grant) 
programs; Student Assistance General Provisions; Federal Pell Grant 
Program; and Teacher Education Assistance for College and Higher 
Education (TEACH) Grant Program. These 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 became effective July 1, 2009.

DATES: These regulations are effective January 22, 2010.

FOR FURTHER INFORMATION CONTACT:

------------------------------------------------------------------------
                 Topic                    Contact person and information
------------------------------------------------------------------------
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 can 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: On May 1, 2009, the Secretary published 
interim final regulations for the ACG and National SMART Grant Programs 
in the Federal Register (74 FR 20210). The interim final regulations 
became effective July 1, 2009. At the time the interim final 
regulations were published, the Secretary requested public comment on 
whether changes to the regulations were warranted.
    In the preamble to the interim final regulations, the Secretary 
discussed, on pages 20210 through 20218, the major issues covered by 
the regulations. The following paragraphs summarize those issues and 
identify the relevant sections of the interim final regulations:
    The Secretary amended the definition of the term ACG Scheduled 
Award to be 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 was defined as 
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 (see Sec.  691.2(d)).
    In Sec.  691.2(d), the Secretary defined the term annual award to 
be 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.
    The Secretary amended the definition of the term eligible major in 
Sec.  691.2(d) to include, in addition to majors in physical, life, or 
computer sciences, mathematics, technology, engineering or a critical 
foreign language, a qualifying liberal arts curriculum as determined by 
the Secretary.
    The Secretary amended the definition of the term eligible program 
to include, for the ACG program, an undergraduate certificate program 
of at least one academic year in length and, for the National SMART 
Grant program, a degree program with at least five full undergraduate 
years of coursework at a degree-granting institution of higher 
education (see Sec.  691.2(d)).
    In Sec.  691.2(e), the Secretary defined 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.
    The Secretary amended the method by which the duration of student 
eligibility was determined, by basing eligibility on a student's grade 
level, rather than on the student's academic year (see Sec. Sec.  
691.2(d) and 691.6). In Sec.  691.6(b)(2), the Secretary provided 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 for purposes of the National SMART 
Grant program until he or she completes his or her first undergraduate 
baccalaureate course of study, and that a fifth-year student, enrolled 
in a National SMART Grant-eligible program with a least five full years 
of coursework, continues to be considered a fifth-year student until he 
or she completes his or her first undergraduate baccalaureate course of 
study.
    In Sec.  691.8, the Secretary detailed how correspondence courses 
would 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.
    The Secretary removed the provisions from Sec.  691.15(a) that 
stated that eligibility for ACGs and National SMART Grants is limited 
to U.S. citizens and students who are enrolled full-time.

[[Page 61241]]

    With respect to eligibility for a first-year ACG, the Secretary 
provided 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, and clarified 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 (Sec.  
691.15(b)(1)(ii)(C)).
    The Secretary amended Sec.  691.16 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. These programs supplement the 
secondary school programs previously recognized by the Secretary as 
rigorous. It is no longer the Secretary's role to recognize secondary 
school programs of study as rigorous.
    The Secretary exempted 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 and provided that an 
institution need only document a student's progress in completing the 
program in the intended or declared National SMART Grant-eligible 
program (Sec. Sec.  691.15(d)(3) and 691.15(e)).
    The Secretary amended the regulations to provide that an eligible 
major includes any ``critical foreign language'' found in section 
103(3) of the HEA, rather than critical foreign languages identified by 
the Secretary after consulting with the Director of National 
Intelligence. The Secretary also amended the regulations to provide 
that an eligible major includes qualifying liberal arts curricula and 
to describe the process by which an institution requests designation of 
a liberal arts curriculum as an eligible major.
    In Sec.  691.62, the Secretary set the ACG and National SMART Grant 
annual award amounts for full-time, three-quarter-time, and half-time 
students. The annual award for a full-time student is the same amount 
as the student's Scheduled Award.
    The Secretary described in Sec. Sec.  691.63 and 691.66 how ACG and 
National SMART Grant payments for a payment period must be calculated 
for full-time, three-quarter-time, and half-time students as well as 
for students in a program of study offered by correspondence.
    The Secretary amended 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.

Analysis of Comments and Changes

    The final regulations in this document were developed through the 
analysis of the two comments we received on the interim final 
regulations published on May 1, 2009. An analysis of the comments and 
of the changes to the regulations since publication of the interim 
final regulations follows. We group major issues according to subject, 
with appropriate sections of the regulations referenced in parentheses. 
Generally, we do not address technical and other minor changes.

General Comment

    Comment: One commenter supported the interim final regulations, 
citing in particular its approval of the definitions of annual award, 
first-year, second-year, third-year, fourth-year, and fifth-year, the 
requirement that the grade level used for purposes of awarding ACG and 
National SMART Grant funds be the same grade level used for determining 
annual loan limits under the Federal Family Education Loan (FFEL) 
Program and the William D. Ford Federal Direct Loan (Direct Loan) 
Program, and the provisions governing enrollment status and student 
eligibility that allow students enrolled less than full-time but at 
least half-time to be eligible for ACG and National SMART Grants.
    Discussion: The Secretary appreciates the support of the commenter.
    Changes: None.

Definitions (Sec.  691.2)

Eligible Program (Sec.  691.2(d))
    Comment: One commenter was concerned that, under the definition of 
the term eligible program in Sec.  691.2(d), a five-year program that 
is a qualifying liberal arts curriculum identified as an eligible major 
under Sec.  691.17(b) would not qualify as a National SMART Grant-
eligible program. The commenter believed that the HEA does not 
disqualify a five-year program from eligibility and that a student in 
such a program would be eligible for a third- and fourth-year National 
SMART Grant.
    Discussion: We do not agree with the commenter. Section 
401A(c)(3)(E) of the HEA specifies that a student can receive a fifth-
year National SMART Grant if he or she is enrolled in a program 
requiring five full years of coursework for which a baccalaureate 
degree is awarded in the physical, life, or computer sciences, 
mathematics, technology, engineering, or a critical foreign language. 
Section 401A(c)(3)(D) of the HEA contains National SMART Grant 
eligibility requirements for students enrolled in a liberal arts 
curriculum, providing that such curriculum must consist of at least 
four years of study in mathematics and three years of study in the 
sciences, with a laboratory requirement in each of those years or that 
the student study a subject that is at least equal to the requirements 
for an academic major at an institution that offers a baccalaureate 
degree in that subject. While section 401A(c)(3)(D) of the HEA does not 
explicitly state that a qualified liberal arts curriculum may not be a 
five year program, we find it to be implicit, based on the structure of 
section 401(c)(3) and because section 401A(c)(3)(E) of the HEA, 
covering fifth-year National SMART Grant eligibility, does not include 
liberal arts curricula as a major for which a student may earn a fifth-
year grant.
    Changes: None.
    Comments: One commenter noted that the definition of the term 
eligible program for purposes of the ACG Program incorporates 
certificate programs but does not specify that certificate programs 
must be offered by degree-granting institutions of higher education.
    Discussion: We agree with the commenter that a certificate program 
is an eligible program only if it is offered at a two-year or four-year 
degree-granting institution. Section 401A(c)(3)(A) of the HEA provides 
that an eligible student that receives a first-year ACG award must be 
enrolled or accepted for enrollment in the first year of a program of 
undergraduate education at a two- or four-year degree-granting 
institution of higher education, ``including a program of not less than 
one year for which the institution awards a certificate.'' To receive a 
second year ACG in accordance with section 401A(c)(3)(B) of the HEA, an 
eligible student must be enrolled or accepted for enrollment in the 
second year of a program of undergraduate education at a two- or four-
year degree-granting institution of higher education, ``including a 
program of not less than two years for which the institution awards a 
certificate.''
    Changes: We have amended the definition of the term eligible 
program in Sec.  691.2(d) to provide that, for purposes of the ACG 
Program, an undergraduate program of at least one academic year in 
length that leads to a certificate must be offered by a two-year or 
four-year degree-granting institution of higher education for a first-
year ACG. Also, we have clarified in this definition that, for a 
second-year ACG, an eligible program is an undergraduate program of

[[Page 61242]]

at least two academic years in length that leads to a certificate or 
associate degree and is offered by a two-year or four-year degree-
granting institution of higher education.

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

    Comment: One commenter supported the provisions in Sec.  691.6(b) 
that extend the National SMART Grant eligibility of a student in the 
final year of a student's four- or five-year program until the student 
graduates. Under these provisions, a student enrolled in a National 
SMART Grant-eligible program with less than five full years of 
coursework in the case of a fourth-year student, or with at least five 
full years of coursework in the case of a fifth-year student, remains a 
fourth- or fifth-year student respectively until the completion of his 
or her undergraduate baccalaureate course of study. The commenter 
encouraged the Department to adopt the same policy for students 
enrolled in associate degree programs and questioned whether the policy 
would also apply to certificate programs.
    The commenter also believed that under Sec.  691.6 a student 
enrolled in a certificate program that is longer than one academic year 
in length would be eligible for a second-year ACG. For example, an 
eligible student enrolled in a program that is 45 credit hours and 45 
weeks of instructional time in length would receive the maximum first-
year ACG as well as half of a second-year ACG. The commenter further 
questioned whether that student could ever be eligible to receive more 
than half of a second-year ACG.
    The commenter also stated that in the loan programs, a student 
enrolled in a program that is one academic year in length could never 
receive funds at second-year loan limits regardless of how long it took 
the student to complete the program. The commenter questioned whether a 
student who took more than one academic year to complete a one-year 
certificate program would ever be eligible to receive any portion of a 
second-year ACG for the extra time it took to complete the program.
    Discussion: We appreciate the commenter's support of the change in 
the regulations that extends a student's eligibility for a National 
SMART Grant award for a fourth- and fifth-year student until the 
student completes his or her first undergraduate baccalaureate course 
of study. We also appreciate the commenter's recommendation that the 
regulations should extend the final year of eligibility to students 
enrolled in one-academic-year certificate programs or two-academic-year 
certificate or associate degree programs. However, to provide the 
extensions for shorter educational programs would result in an 
estimated increase in program costs of $16 million over the final two 
years of the ACG and National SMART Grant programs. To make the 
changes, we would need to identify savings to offset the cost increase. 
We have been unable to identify any offsetting savings.
    We do not agree with the commenter's assessment that a student 
enrolled in a program that is 45 credit hours and 45 weeks of 
instructional time in length would be eligible for half of a second-
year ACG. The student in that example would only qualify for a full 
first-year ACG. Section 401A(c)(3)(D) of the HEA provides that a 
student may be eligible for a second-year ACG if he or she is enrolled 
in a certificate program of not less than two years. Although the 
program in the example is longer than one-academic year in length, the 
student would not qualify for any portion of the second-year ACG 
because the program is less than two academic years in length. The 
program is an eligible program only for a first-year ACG.
    We note that in some cases, under the FFEL and Direct Loan 
programs, a student in a certificate or associate degree program that 
extends to a third-year grade level may receive funds at the third-year 
annual loan limits. For purposes of ACG, as a third-year student, the 
student would not qualify for funds from a second-year ACG.
    Changes: None.

Eligibility To Receive a Grant (Sec.  691.15)

    Comments: One commenter noted that a student who enters college 
with a full year of credit from Advanced Placement (AP) or 
International Baccalaureate (IB) coursework will not have a grade point 
average (GPA), and therefore cannot qualify for a second-year ACG 
because he or she cannot meet the minimum 3.0 GPA required to receive 
an ACG. The commenter suggested that the Department allow the AP or IB 
exam scores to satisfy the GPA requirement, or allow the final high 
school GPA to be used, or provide some other method by which an 
equivalency for the GPA could be determined.
    Discussion: Section 401A(c)(3)(B)(ii) of the HEA specifies that to 
receive a second-year ACG, a student must obtain a cumulative GPA of at 
least 3.0 (or the equivalent as determined under regulations prescribed 
by the Secretary) at the end of the first year of the program of 
undergraduate education. The statute does not allow for any other GPA, 
such as a final high school GPA, to satisfy the 3.0 GPA requirement. 
With respect to AP or IB exam scores, there is no standardized 
methodology for equating AP or IB exam scores with undergraduate 
grades. Regulations for determining the numeric equivalent at 
institutions of higher education that assess GPA on a numeric scale 
other than a 4.0 scale were previously published. In the case of 
credits that are awarded when no postsecondary coursework has been 
completed, the Secretary believes that it is not possible to determine 
a numeric equivalent, and therefore agrees with the commenter that a 
student in this circumstance cannot qualify for a second-year ACG 
because he or she cannot meet the minimum 3.0 GPA required to receive 
an ACG.
    Changes: None.
    Comment: One commenter commended the Secretary for eliminating from 
Sec.  691.15(e) the requirement that the institution document a 
student's progress in his or her major each term. The same commenter 
stated that any requirement to document progress in the student's 
program outside of normal satisfactory academic progress is unnecessary 
and meaningless and recommended deleting all of Sec.  691.15(e).
    Discussion: The commenter misunderstood the interim final 
regulations. The Secretary did not eliminate the requirement to 
document progress in the major for each term. Rather, the interim final 
regulations removed the requirement in Sec.  691.15(c)(2)(ii) that a 
student enroll in courses necessary both to complete the degree program 
and fulfill the requirements of the eligible major each payment period, 
and that the institution document that enrollment. Section 691.15(e) 
continues to require an institution to document a student's progress in 
taking the courses necessary to complete the National SMART Grant-
eligible program in the intended or declared major. The Secretary does 
not agree that documenting progress in the student's program beyond 
that required to show a student's satisfactory academic progress under 
Sec.  668.34(e) is unnecessary or meaningless. National SMART Grant 
eligibility is determined each payment period, and institutions must 
document that a student achieved at least a 3.0 cumulative GPA for each 
payment period. Under the satisfactory academic progress regulations in 
Sec.  668.34(e), an institution is required to review a student's 
academic progress only at the end of each year. Because eligibility for 
a National SMART Grant is determined each payment period, an annual 
review would be insufficient to

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ensure that a student continues to make the necessary progress in his 
or her National SMART Grant-eligible program for every payment period.
    Changes: None.

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

    Comment: One commenter questioned whether it was appropriate to 
provide that a student may not progress to the next grade level during 
a payment period, as was previously required when progression was based 
on a student's academic year. The commenter noted various reasons why a 
student's grade level may change during a payment period, including 
error, late grade submission, or late arriving transcripts from other 
institutions. The commenter believed that we should treat a student's 
grade level change made during a payment period similarly to the way we 
treat grade level changes for purposes of determining annual loan 
limits under the FFEL and Direct Loan programs.
    Discussion: While a student's grade level may change during a 
payment period for a variety of reasons, a student can only be eligible 
for payment from one Scheduled Award during the payment period. This 
circumstance is fundamentally different from the application of annual 
loan limits that are not applied on the same basis as determining 
Scheduled Awards for ACG and National SMART Grants. Except in the case 
of an institutional error, we believe that a Scheduled Award based on a 
student's grade level at the outset of the payment period is the most 
appropriate Scheduled Award for determining the student's eligibility 
for payment. If, due to an institutional error, an incorrect grade 
level was the basis for determining the student's award, the 
institution must correct the error and adjust the student's award based 
on the correct grade level.
    Changes: None.

Calculation of a Federal Pell Grant for a Payment Period (Sec.  
690.63(d))

    Comment: None.
    Discussion: In reviewing the interim final regulations, we 
identified an error in the amendatory language related to Sec.  
690.63(d). Specifically, we inadvertently amended Sec.  690.63(d)(1)(i) 
instead of Sec.  690.63(d)(1).
    Changes: We are correcting the error by amending Sec.  
690.63(d)(1), so that it is consistent with Sec.  691.63(d)(1), which 
governs calculation of an ACG or National SMART Grant for a payment 
period.

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 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

    As discussed in the interim final regulations, these 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

    Alternatives to the regulations were considered as part of the 
rulemaking process. These alternatives were reviewed in detail in the 
preamble to the interim final regulations under both the Regulatory 
Impact Analysis and the Reasons sections accompanying the discussion of 
each proposed regulatory provision. To the extent that they were 
addressed in response to comments received on the interim final 
regulations, alternatives are also considered elsewhere in the preamble 
to these final regulations under the Discussion sections related to 
each provision. No comments were received related to the Regulatory 
Impact Analysis discussion of these alternatives.
    As discussed above in the Analysis of Comments and Changes section, 
the final regulations reflect statutory amendments included in the HEOA 
and minor revisions in response to public comments. None of these 
changes result in revisions to cost estimates prepared for and 
discussed in the Regulatory Impact Analysis of the interim final 
regulations.
    One alternative suggested by a commenter that was considered 
involved extending the final year of eligibility for students enrolled 
in one-academic-year certificate programs or two-academic-year 
certificate or associate degree programs. A commenter argued that such 
an extension would be more equitable and would maximize the amount of 
ACG funds awarded to students who did not receive or were ineligible 
for some portion of his or her first- or second-year award. The 
Department considered providing that a first-year student, enrolled in 
an ACG-eligible certificate program of at least one academic year, but 
less than two academic years, in length would continue to be considered 
a first-year student until he or she completes the certificate program. 
Similarly, the Department also considered providing that a second-year 
student, enrolled in an ACG-eligible certificate or associate's degree 
program of at least two academic years in length, would continue to be 
considered a second-year student until he or she completes the program. 
An analysis of this alternative indicated it would increase program 
costs by $16 million over award years 2009-10 and 2010-11. Given the 
lack of an offset for these increased costs, the Department decided to 
make no change to the interim final regulations to adopt this 
alternative.

Transfers

    These 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 noncitizens, and students 
enrolled in certain certificate programs. The 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 will sunset. Funds for fiscal year 2010 will be used to

[[Page 61244]]

support the 2010-2011 award year. As noted in the Regulatory Impact 
Analysis in the interim final regulations, the Department estimates 
changes implemented through these regulations 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 noncitizens, 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.
    As noted in the Regulatory Impact Analysis in the interim final 
regulations, those changes, which are adopted as final through this 
notice, 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 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. These changes will 
increase Federal costs by the same amount.
    Because institutions of higher education affected by these 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. These final 
regulations reflect discrete changes in specific parameters associated 
with the Department's current regulations for these programs, rather 
than entirely new requirements. Some of these changes, such as those 
replacing ``academic year'' with ``year'' for the purposes of 
determining program eligibility, are expected to significantly simplify 
program administration. Overall, the Department believes entities 
continuing to participate in the Pell Grant, ACG, and National SMART 
Grant programs have already absorbed virtually all of the 
administrative costs related to implementing these final regulations. 
Marginal costs over this baseline are primarily related to one-time 
changes that are not expected to be significant.
    Elsewhere in this SUPPLEMENTARY INFORMATION section, we identify 
and 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 final regulations. 
As previously noted, the Department estimates changes implemented 
through these regulations will result in 538,000 additional awards 
totaling $448 million over award years 2009-2010 and 2010-2011. Thus, 
the Department estimates that the annualized monetized transfers from 
Federal grant payments to students will be $224 million for 2009-2011.

   Table 1--Accounting Statement: Classification of Estimated Savings
                              [In millions]
------------------------------------------------------------------------
                         Category                             Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............................         $224
------------------------------------------------------------------------

Regulatory Flexibility Act Certification

    The Secretary certifies that these final regulations will not have 
a significant economic impact on a substantial number of small 
entities. These 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.
    Based on revenue data from the Integrated Postsecondary Education 
Data System, less than 10 percent of the schools participating in the 
ACG and National SMART Grant programs meet the definition of ``small 
entities'' (279 out of 3,036). A primary factor limiting the number of 
small institutions in these programs is the requirement that only 
degree-granting institutions may offer ACG or SMART Grants. A 
disproportionate number of Title IV schools meeting the SBA definition 
are vocational institutions that do not offer degrees.
    The Department estimates these regulations will result in a net 
reduction in overall burden; most individual institutions are expected 
to see burden reduced as well. Due to data limitations, however, the 
Department was unable to develop burden estimates tailored specifically 
for small institutions. These institutions may be more likely to have 
unique problems, such as limited staff or technical resources, which 
could lead to greater than normal difficulties in implementing these 
regulations. In general, however, the Department believes that even for 
most small institutions, the impact of regulations that simplify 
program requirements or otherwise reduce burden will more than offset 
any additional burden associated with changes expected to increase the 
number of applicants. Given that, and the small number of affected 
entities meeting the SBA guidelines, the Department has determined that 
these final regulations do not impose significant new costs on a 
substantial number of 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 final regulations amend the eligibility requirements to receive 
an ACG or a National SMART Grant by removing several restrictive 
criteria. Prior to July 1, 2009, which was the effective date of this 
provision in the HEOA, only students who were U.S. citizens were 
eligible to receive an ACG or a National SMART Grant. Under these 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 
noncitizens 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 final regulations, students enrolled on at 
least a half-time or greater basis may be eligible to

[[Page 61245]]

receive an ACG or a National SMART Grant.
    The 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 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 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 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.
    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 final regulations will increase burden for 
States, private high schools, home schools, and individuals by 18,280 
hours, under new OMB Control Number 1845-0092.

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 final regulations do not require 
transmission of information that any other agency or authority of the 
United States gathers or makes available.

Electronic Access to This Document

    You may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or Adobe 
Portable Document Format (PDF) on the Internet at the following site: 
http://www.ed.gov/news/fedregister.
    To use PDF you must have Adobe Acrobat Reader, which is available 
free at this site. If you have questions about using PDF, call the U.S. 
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in 
the Washington, DC, area at (202) 512-1530.
    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: November 18, 2009.
Arne Duncan,
Secretary of Education.


0
For the reasons discussed in the preamble, the interim final 
regulations amending parts 668, 686, 690, and 691 of title 34 of the 
Code of Federal Regulations that were published in the Federal Register 
on May 1, 2009 (74 FR 20210) are adopted as final with the following 
changes:

PART 690--FEDERAL PELL GRANT PROGRAM

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

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



0
2. Section 690.63 is amended by revising paragraph (d)(1) to read as 
follows:


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

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

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

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


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

0
4. Section 691.2(d) is amended by revising paragraph (1) of the 
definition of ``Eligible program'' to read as follows:


Sec.  691.2  Definitions.

* * * * *
    (d) * * *
    Eligible program: * * *
    (1) For purposes of the ACG Program--
    (i) Is an undergraduate program of at least one academic year, but 
less than two academic years, in length that leads to a certificate at 
a two- or four-year degree-granting institution of higher education;

[[Page 61246]]

    (ii) Is an undergraduate program of at least two academic years in 
length that leads to a certificate at a two- or four-year degree-
granting institution of higher education;
    (iii) Leads to an associate's degree or a bachelor's degree;
    (iv) Is at least a two-academic-year program acceptable for full 
credit toward a bachelor's degree; or
    (v) Is a graduate degree program that includes at least three years 
of undergraduate education; or
* * * * *
[FR Doc. E9-28050 Filed 11-20-09; 8:45 am]
BILLING CODE 4000-01-P