[Federal Register Volume 77, Number 106 (Friday, June 1, 2012)]
[Notices]
[Pages 32612-32621]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-13232]


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DEPARTMENT OF EDUCATION


Proposed Priorities; Gaining Early Awareness and Readiness for 
Undergraduate Programs; College Savings Account Research Demonstration 
Project

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Notice.

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    Overview Information:

Catalog of Federal Domestic Assistance (CFDA) Numbers: 84.334.

    Proposed Priorities: Gaining Early Awareness and Readiness for 
Undergraduate Programs (GEAR UP)--College Savings Account Research 
Demonstration Project
SUMMARY: The Assistant Secretary for Postsecondary Education proposes 
priorities for a research demonstration project for recipients of new 
GEAR UP State awards in Fiscal Year (FY) 2011 or FY 2012. Through these 
priorities, the Department of Education (Department) seeks to determine 
the effectiveness of pairing federally supported college savings 
accounts with GEAR UP activities as part of an overall college access 
and success strategy.

DATES: We must receive your comments on or before July 2, 2012.

ADDRESSES: Address all comments about this notice to James Davis, U.S. 
Department of Education, 1990 K Street NW., Room 7007, Washington, DC 
20006-8513.
    If you prefer to send your comments by email, use the following 
address: [email protected]. You must include the term ``GEAR UP 
Proposed Priorities'' in the subject line of your electronic message.

FOR FURTHER INFORMATION CONTACT: James Davis: (202) 502-7802; or, by 
email: [email protected].
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.

SUPPLEMENTARY INFORMATION:
    Invitation to Comment: We invite you to submit comments regarding 
this notice. To ensure that your comments have maximum effect in 
developing the notice of final priorities, we urge you to identify 
clearly the specific proposed priority that each comment addresses.
    We invite you to assist us in complying with the specific 
requirements of Executive Orders 12866 and 13563 and their overall 
requirement of reducing regulatory burden that might result from these 
proposed priorities. Please let us know of any further ways we could 
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 this notice in room 7007, 1990 K Street NW., Washington, 
DC, between the hours of 8:30 a.m. and 4:00 p.m., Washington, DC time, 
Monday through Friday of each week except Federal holidays.

[[Page 32613]]

    Assistance to Individuals with Disabilities in Reviewing the 
Rulemaking Record: On request we will provide an appropriate 
accommodation or auxiliary aid to an individual with a disability who 
needs assistance to review the comments or other documents in the 
public rulemaking record for this notice. If you want to schedule an 
appointment for this type of accommodation or auxiliary aid, please 
contact the person listed under FOR FURTHER INFORMATION CONTACT.
    Purpose of Program: The GEAR UP program is a discretionary grant 
program that provides financial support for academic and related 
support services to eligible low-income students, including English 
learners and students with disabilities, to enable them to obtain a 
secondary school diploma and to prepare for and succeed in 
postsecondary education.
    Program Authority: 20 U.S.C. 1070a-21-1070a-28.
    Applicable Program Regulations: 34 CFR part 694.

Proposed Priorities

Background

Introduction
    Research suggests that students with savings accounts may be up to 
seven times more likely to attend college, even when controlling for 
other factors (Elliot, Jung, and Friedline, 2010: http://csd.wustl.edu/Publications/Documents/WP10-01.pdf). Yet 25 percent of U.S. households 
(and 50 percent of Black and Hispanic households) are unbanked or 
underbanked, meaning that they either do not have a Federally insured 
deposit account or that they have an account but still rely on costly 
alternative financial services. Young adults are disproportionately 
unbanked and underbanked (www.economicinclusion.gov). At the same time, 
a lack of financial literacy and indicators thereof-- such as 
overestimating the price of college, not applying for Federal student 
aid, and borrowing expensive private education loans before exhausting 
lower cost Federal student loan alternatives--are a major roadblock on 
the path to college access, affordability, and success for too many 
students and families (http://www2.ed.gov/legislation/FedRegister/announcements/2010-3/072610c.html). Partially as a result of these 
findings, the Secretary of Education and the Chairmen of the Federal 
Deposit Insurance Corporation and the National Credit Union 
Administration announced, in November 2010, a new interagency agreement 
to increase partnerships among schools, financial institutions, and 
other stakeholders to help students gain access to deposit accounts, 
learn about money, and save for college. The Department's press 
statement on this partnership can be found at: www.ed.gov/news/press-releases/fdic-and-ncua-chairs-join-education-secretary-announce-partnership-promote-finan, and the Secretary's recently recorded video 
encouraging participation at: http://www.youtube.com/watch?v=uxOoXeOkh_w. Section 404D(b)(10)(E) of the Higher Education 
Act of 1965, as amended (HEA), expressly authorizes GEAR UP program 
grantees to design projects that promote participating students' 
secondary school completion and enrollment in postsecondary education 
by means that include promotion of financial literacy and economic 
literacy education or counseling. The FY 2011 GEAR UP application 
included an invitational priority for financial access and college 
savings accounts. Although no favorable consideration was promised or 
granted in the review process to applicants that chose to address this 
priority, nearly two thirds of the 66 successful applicants included it 
in their proposals (http://www.ed.gov/news/press-releases/new-gear-grants-awarded-help-more-275000-middle-schoolers-get-pathway-success-co). In response to strong interest in this invitational priority and 
the Secretary's desire to expand the Nation's knowledge base on the 
relationship between asset-building strategies and education outcomes 
for students, the Department is proposing priorities for a competition 
through which the Department intends to award approximately $8.7 
million in FY 2012 and additional FY 2013 GEAR UP funds, if necessary, 
for a college savings account research demonstration project.
Effectiveness of the Use of College Savings Accounts
    Prior research suggests a need for improved financial literacy and 
asset building strategies geared toward college enrollment, but there 
is no conclusive evidence about the effectiveness of these strategies. 
Many low-income families do not understand that they may be eligible 
for financial aid and, therefore, do not apply (see, for example, Baum 
and Payea 2011).
    Although knowledge about financial aid is important, it appears 
that low-income families may need to be educated about the importance 
of college savings. Even low-income families that apply for and receive 
financial aid for postsecondary education often face substantial out-
of-pocket college costs. The average out-of-pocket cost for low-income 
students enrolled full-time in a public four-year institution in 
academic year 2007-08 was $10,400 per year (National Center for 
Education Statistics, December 2010).
    Federal and State tax policies provide incentives to families to 
save for college; contributions to Coverdell Education Savings Accounts 
and State 529 Plans (qualified tuition programs created by section 529 
of the tax code) are often deductible on State income taxes, returns 
accrued on the investments are mostly free from Federal taxes, and 
distributions for the beneficiaries' college costs are tax exempt. In 
addition, 15 States now provide seed money or matching funds for 
moderate- and low-income families that contribute to State 529 
plans.\1\ Despite these incentives, participation rates in college 
savings plans are relatively low, especially among middle- and lower-
income families. Previous research also shows that 90 percent of 
families with college savings plans have college degrees and that the 
median income of families with these plans was $100,000 (Dynarski, 2004 
and Ma, 2004). One survey found that only 36 percent of families with 
incomes less than $30,000 per year had college savings (Sallie Mae, 
2010).
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    \1\ Information obtained in January 2012 from 
www.savingsforcollege.com, using options ``compare by features, 
program match on contributions.''
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    Given the low participation rates in college savings plans for low-
income families, education about financial planning for college and 
financial incentives to encourage saving may be an important part of 
any college savings intervention. The Saving for Education, 
Entrepreneurship, and Downpayment (SEED) for Oklahoma Kids 
demonstration offered initial deposit and matching funds for State 529 
plan accounts for a randomly selected group of infants born in Oklahoma 
in 2007. Their parents were more likely to open and deposit funds in 
State 529 plan accounts than a randomly selected control group not 
offered the seed and matching funds. In addition, low-income parents 
with greater financial literacy were more likely to open the savings 
accounts than those with less financial literacy (Nam, Lim, Clancy, 
Zager, and Sherraden, 2011; Huang, Nam, Sherraden, 2012).
    While there are and have been efforts to test savings and education 
outcomes associated with State 529 college savings plans and other 
college savings accounts (Long and Bettinger, 2011; the

[[Page 32614]]

SEED for Oklahoma Kids Demonstration), further research is necessary. 
The demonstration project that the Department is proposing in this 
notice would be the first of its kind: A rigorous, randomized, and 
controlled evaluation of the effect of providing students with college 
savings accounts in the context of comprehensive educational support 
services provided by GEAR UP grantees. The proposed evaluation would 
involve using a lottery to select one-half of the schools within each 
participating grant to be ``treatment schools'' that offer the services 
described in the already approved GEAR UP application in addition to 
GEAR UP supported savings accounts, financial incentives, and financial 
counseling (treatment services). The other one-half of the schools in 
each participating grant will be selected by lottery to be ``control 
schools'' that offer services described in the already approved GEAR UP 
application with no savings accounts, additional financial incentives, 
or additional counseling intervention. The impact of the college 
savings account intervention---above and beyond usual GEAR UP 
services--will be measured by comparing outcomes of students enrolled 
in treatment and control group schools.
    Under this research demonstration project, the Department is 
proposing two priorities.

Background

Proposed Priority 1: Funding Eligibility
    Under Proposed Priority 1, the Department would limit demonstration 
project eligibility for funding to current State GEAR UP grantees that 
received new awards in FY 2011 or FY 2012, that select participating 
students beginning not later than seventh grade using the cohort 
approach (see section 404B(d)(1) of the HEA), and that have their 
cohort of students entering the ninth grade in the 2013-2014 academic 
year.
    We would limit eligible State applicants to those whose current 
GEAR UP projects select participants using the cohort approach because 
we understand that these State GEAR UP grantees may readily arrange to 
have participating schools' or Local Educational Agencies' (LEAs') 
directory information provided to account administrators or trustees to 
assist with establishing and managing savings accounts for GEAR UP 
students. Conversely, we are concerned that permitting State GEAR UP 
grantees using a priority-student method of selecting participating 
GEAR UP students (see section 404D(c) of the HEA) will lead to such 
substantial effort and cost of providing requisite information on 
individual students to the account administrators or trustees as to 
seriously undermine the research demonstration project itself. This is 
because, under the Family Educational Rights and Privacy Act (FERPA) 
and its implementing regulations (20 U.S.C. 1232g and 34 CFR part 99), 
since not all students in the grade are eligible to receive GEAR UP 
services, LEAs and schools may not disclose their ''directory 
information'' because the receipt of GEAR UP services is not itself 
``directory information.'' Thus, under FERPA, the disclosure of 
personally identifiable information from the education records of a 
subgroup of students receiving GEAR UP services to the account 
administrator or trustee in order to assist with establishing and 
managing any savings account, whether funded with Federal GEAR UP funds 
or private funds, would require prior, written, parental consent.
    Under this priority, GEAR UP State grantees that use the cohort 
approach and that wish to participate in this project must demonstrate 
their willingness, capacity, and comprehensive plan to carry out the 
college savings account and financial counseling intervention and 
participate in the rigorous evaluation, as described in this notice. 
Accordingly, each applicant must list in its application multiple GEAR 
UP high schools that serve at least 50 GEAR UP participants who will be 
in 9th grade during the 2013-2014 academic year, identify the names of 
the GEAR UP high schools expected to participate in the demonstration, 
and identify the number of GEAR UP participants at each school expected 
to be in 9th grade during the 2013-2014 academic year.
    Under this proposed priority, to be eligible for funding, an 
applicant may not currently be implementing a systematic college 
savings program that provides matching funds for deposits in college 
savings accounts held on behalf of GEAR UP participants in high schools 
included in this demonstration project. We are proposing to limit 
eligibility in this manner because the demonstration project will not 
provide a valid test of the benefits of these accounts if schools 
assigned by lottery to the control group are already implementing 
college savings accounts for GEAR UP students.
    We note that because of the limited funds available, it is not 
possible to use Federal GEAR UP dollars to provide seed funding and 
savings matches to all students served by GEAR UP State grants. The 
limited number of possible recipients of seed funding and savings 
matches for these savings accounts, however, allows for a control 
group, which is an essential feature of a rigorous study. Under the 
study design, created by the Department's Institute of Education 
Sciences, States and the Federal government will be able to rely on 
evidence developed to inform future policy decisions about college 
readiness and success, financial decision-making, and savings 
accounts--whether that means scaling up savings account programs or 
conducting further research.
    The Department intends to rank eligible applicant States according 
to scores assigned by non-Federal reviewers using the Department's 
general selection criteria in 34 CFR 75.210. The number of States 
selected to receive awards will depend on the number of schools and 
students served by each State GEAR UP program in the demonstration 
project. Unless the need to achieve the correct sample size requires 
the Department to select applicants out of order, the Department 
intends to select States, one after another, beginning with the 
highest-ranked State as scored by non-Federal reviewers until there is 
a total across the selected States of 20,000 students who are enrolled 
in the 9th grade in fall 2013.
Proposed Priority 2: College Savings Accounts Research and 
Demonstration Project
    The lynchpin of this priority is the premise that the combination 
of supported personal savings accounts and associated financial 
incentives and counseling will have a positive effect on a variety of 
measures of college readiness and financial well-being, such as the 
amount of savings available to support postsecondary education, 
attitudes about the ability to attend and afford college, academic 
readiness as measured by participation and performance in college-
preparatory courses, postsecondary education enrollment, financial 
literacy and decision-making, and student borrowing and work decisions.
    This proposed priority thus has two main components. The first 
describes the requirements for establishing, operating, and having 
students participate in college savings accounts and financial 
counseling. The second describes the research evaluation that will be 
conducted to assess the effect of providing these college savings 
accounts and related financial counseling to students and their 
parents.
College Savings Accounts and Financial Counseling
    Under this demonstration project, approximately 10,000 low-income

[[Page 32615]]

students served by selected GEAR UP State grants would receive 
approximately $200 in seed funding that would be placed into personal 
savings accounts held for these students in trust, pending their 
graduation from high school and enrollment in a college or university. 
Matching funds would also be available to encourage students, their 
families, their parents' employers, community-based organizations, 
religious organizations, and others to contribute further to students' 
accounts.
    More specifically, a successful applicant would use GEAR UP funds 
awarded under this competition to provide $200 as an initial deposit in 
each GEAR UP student's account as well as match contributions for each 
student up to $10 every month for a maximum of four years. Thus, a 
student who receives the maximum match would finish high school with at 
least $1,160 in a personal college savings account--the $200 Federal 
seed, plus $480 in personal contributions, plus $480 in Federal 
matching funds. A successful applicant also would be required to 
maximize the benefit of the matching funds by providing periodic 
opportunities for the student to make ``catch-up'' deposits. To protect 
the integrity of the evaluation, a successful applicant would not be 
permitted to provide additional seed or matching funding to students 
participating in the GEAR UP college savings research demonstration 
project.
    An applicant would be required to limit student eligibility to 
receive college savings accounts, financial incentives to encourage 
saving, and financial counseling (which would be above and beyond any 
counseling provided to all GEAR UP students) to only those students 
enrolled in the 9th grade in one of the randomly selected treatment 
high schools (as described in the Research Evaluation section of this 
priority) in the fall of 2013. Any Federal GEAR UP funds that remain in 
the student's account six years after the student's scheduled 
completion of secondary school must be returned to the Department.
    Each successful applicant would be required to maintain all Federal 
GEAR UP funds in a single ``notional'' account that permits returning 
unused Federal GEAR UP funds to the Department as described in the 
Proposed Priority 2: College Savings Accounts Research Demonstration 
Project section of this notice, separate from any non-Federal funds, 
and to keep track of the amount of Federal GEAR UP seed and matching 
funds and accrued interest earned by each student. The non-Federal 
funds would be maintained separately by the account administrator, as 
described below. While Federal and non-Federal funds would be in 
separate accounts, each student with these accounts would be able to 
experience them as having a single account in that the student would 
see the account balance as reflecting both the total amount of Federal 
funds earned as well as any non-Federal funds in the account.
    Each successful applicant would be required to designate a savings 
account trustee to manage the account funds and a savings account 
administrator to hold the account funds. Applicants that do not 
identify the savings account trustee and savings account administrator 
must identify the process by which these entities would be selected. 
The savings account trustee would oversee the accounts held by the 
savings account administrator and approve withdrawals and other account 
activities, such as transfers of non-Federal funds to other persons, if 
permitted. Notwithstanding any existing title IV regulation, qualified 
withdrawals of Federal and non-Federal funds would not count toward 
Federal student aid eligibility. The trustee would need to be a State 
agency, such as a State Department of Treasury, Office of the Governor, 
Lieutenant Governor, or Comptroller, a tax-exempt non-profit 
organization or foundation, or for-profit organization or business with 
demonstrated expertise and experience in successfully managing 
financial services. The purpose of requiring the participation of the 
trustee would be to ensure that Federal funds are only spent on 
qualified educational expenses, as that term is used in section 404E of 
the HEA upon a student's enrollment in an institution of higher 
education eligible to participate in student financial assistance under 
Title IV of the HEA.
    The savings account administrator would be required to hold account 
funds, accept deposits, and issue qualified withdrawals. The account 
administrator would need to be a Federally or State regulated financial 
institution, such as an investment firm that manages a State's 529 plan 
or a Federally insured bank or credit union that partners with the 
State to administer proposed GEAR UP savings accounts.
    The savings account trustee and savings account administrator would 
need to be separate and distinct entities, not part of the same 
organization, with the exception that both trustee and administrator 
could be part of or affiliated with the State government but in 
different agencies.
    During the grant project period, modest administrative fees, not to 
exceed one percent of account balances, could be paid to the savings 
account trustee and administrator with Federal GEAR UP funds to cover 
expenses related to the GEAR UP college savings account demonstration 
project.
    If awarded a grant, the applicant would be required to develop 
rules on when withdrawals would and would not be permissible (i.e., 
rules on qualified withdrawals) and on transfers of non-Federal funds 
to other persons. For example, a State could prohibit withdrawals of 
non-Federal, individual contributions for what the applicant determines 
to be a non-qualified expense unless the account holder reaches a 
specified age. Alternatively, a State could offer a savings plan with 
existing disbursement rules, such as 529 plans or Coverdell plans, or 
it could determine its own rules in consultation with the account 
administrator and account trustee. Since, as described in the College 
Savings Accounts and Financial Counseling section of this notice 
(paragraph (d) Withdrawal and Transfer of Federal Funds), withdrawals 
for non-qualified uses would forfeit the associated Federal match, the 
applicant also would need to establish for the account trustee the 
conditions under which funds can be withdrawn for qualified uses, 
transferred to other persons such as siblings, or accessed at a 
particular age. The rules developed by a successful applicant would 
have to require at least that the account trustee oversee all qualified 
withdrawals and transfers.
    States would also need to provide participating students and 
families in the schools whose students are selected for savings 
accounts and related financial counseling (the ``treatment schools''; 
see the following subsection Research evaluation) with general and 
targeted savings account and related financial counseling designed to 
help them understand the benefits of saving for college, encourage them 
to save, increase their understanding of relevant mathematical and 
financial concepts, and prepare them to make sound financial decisions. 
To ensure GEAR UP or school staff are sufficiently prepared to provide 
this counseling, the applicant would need to agree to identify highly 
qualified individuals to provide the counseling and require counselors 
to participate in Department-provided professional development for GEAR 
UP or school staff.
    Lastly, section 404C(b) of the HEA requires that unless the State 
has received a waiver under section 404C(b)(2), a State receiving a 
GEAR UP program award must provide not less than 50 percent of the 
costs of each

[[Page 32616]]

year's project from State, local, institutional or private funds. See 
also 34 C.F.R. Sec.  694.7 through Sec.  694.9. For purposes of this 
non-Federal match requirement, the Department proposes to treat grants 
awarded under this research demonstration project as supplementing a 
State's regular GEAR UP award, albeit for a defined purpose.
Research Evaluation
    The proposed evaluation would require 10,000 students to receive 
the services described in the already approved, regular State GEAR UP 
application as well as GEAR UP supported savings accounts, financial 
incentives, and financial counseling (treatment services). An 
additional 10,000 students will serve as a control group and receive 
services described in the already approved, regular State GEAR UP 
application with no savings accounts, additional financial incentives, 
or additional counseling intervention. While, for purposes of the 
evaluation methodology, each of the participating schools would need to 
serve at least 50 GEAR UP participants who will be in 9th grade during 
the 2013-2014 academic year, the goal is to attain a sample of 
approximately 100 schools, each serving an average of 200 students 
enrolled in 9th grade. Thus, under this proposed priority, each 
applicant would need to agree to the random assignment by the 
evaluation contractor of one-half of the high schools to receive 
treatment services (treatment schools) and one-half to be in the 
control group (control schools).
    In addition to any other GEAR UP services offered by these schools, 
treatment schools must offer to GEAR UP participants who are in the 9th 
grade in the 2013-14 academic year the college savings account and 
counseling intervention described in the College Savings Account and 
Financial Counseling section of this priority. States receiving grants 
under this competition must continue to offer the matching funds and 
counseling to GEAR UP students in treatment schools through the 
students' expected dates of high school graduation in spring 2017. The 
remainder of the identified high schools will be control schools that 
will not offer the college savings accounts and counseling intervention 
but will continue to offer regular GEAR UP services.
    The evaluation will examine the effect of the college savings 
account and counseling intervention on student and family behaviors and 
their attitudes associated with attending college. The evaluation will 
also provide descriptive information on the implementation of the 
college savings account and counseling intervention. To ensure that the 
evaluation contractor has the information needed to conduct this 
examination, this priority would require applicants and those local 
educational agency and school officials submitting letters of support, 
as described below, to agree to participate in the data collection 
conducted by the Department's evaluator, which will include, among 
other items, surveys of State project directors and staff regarding 
implementation of the project and surveys of students and parents about 
their participation in GEAR UP program activities in general and other 
college savings programs. The Department's evaluator also will collect 
certain information about students in the treatment schools and control 
schools and data on the college savings accounts established under this 
project.
    An applicant is also required to distribute letters to parents or 
guardians notifying them about plans for administration of the student 
survey by the evaluator and the release of designated ``directory 
information'' from the education records of the student to the savings 
account administrator, the savings account trustee, or both, as needed 
to establish and manage the college savings accounts, along with a form 
that allows parents or guardians to opt out of participation in the 
savings accounts. (The Department will provide a sample parent/guardian 
letter and opt out form.)
    The LEAs in the applications must take steps to allow for student 
information to be shared in compliance with Federal law with the 
savings account administrator, the savings account trustee, or both, as 
needed to establish and manage the college savings accounts. Under the 
provisions of FERPA and its implementing regulations, each of the LEAs 
in the application or schools therein must have provided public notice 
that the district or school has designated as ``directory information'' 
under FERPA the student's name, grade level, address, and date of 
birth. The purpose of requiring that this information be designated as 
``directory information'' under FERPA is to allow both college savings 
accounts--the ``notional'' account that contains the Federal GEAR UP 
funds and the account that contains family or other private savings--to 
be established, if possible, through disclosure of this information to 
the savings account administrator, the savings account trustee, or 
both. We do not believe that a school or LEA would need to disclose 
students' Social Security numbers or other personally identifiable 
information from the students' education records that has not been 
designated as directory information to establish college savings 
accounts; however, we recognize that at some point students or their 
parents may be required to provide a Social Security Number or other 
Taxpayer Identification Number to the account administrator and/or 
trustee for tax purposes, that having such a requirement may depend on 
the type of account opened and whether the funds in that account are 
Federal or private, and that, under FERPA, a school or LEA may not 
disclose a Social Security Number to the account administrator and/or 
trustee without prior, written, parental consent. We invite comments 
from the public on this topic.
    We also request public comment on the merits and drawbacks of 
different types of college savings accounts that States would employ to 
implement the College Savings Accounts and Financial Counseling section 
of this notice. In particular:
    Should the notice of final priorities for this program require a 
certain type of account for all students across all participating GEAR 
UP programs?
    Is there any arrangement under which college savings accounts that 
involve only Federal funds and college savings accounts that would also 
involve private funds may be established without need for a parent's or 
child's Social Security Number or other Taxpayer Identification Number?
    When finalizing this requirement, we will take into consideration 
the public comments we receive on these issues.
    In addition, in accordance with FERPA, if any parents or guardians 
of a student have opted out of the disclosure of this ``directory 
information,'' the school or LEA will not provide ``directory 
information'' on that student to the savings account administrator or 
the savings account trustee and that student will not have a savings 
account with GEAR UP seed money opened in his or her name, unless the 
parent or guardian of that student provides consent under 34 CFR 99.30.
    To ensure there is adequate support for the applicant's 
participation in this research demonstration project, we are also 
proposing that a State include in its application--
     Letters from both the relevant State Educational Agency 
(SEA), or other State agency that is the GEAR UP grantee, and 
participating LEAs agreeing to provide the relevant data to the 
Department's evaluator, including rosters of students and their 
administrative records for students in both the treatment group and the 
control

[[Page 32617]]

group in order to permit an evaluation of this Federally-supported 
education program;
     A letter from the principal of each high school identified 
in the application agreeing to participate in all aspects of the 
evaluation and grant; and
     A letter from the superintendent of each LEA overseeing 
the schools in the evaluation, agreeing to (1) cooperate in all aspects 
of the evaluation, including random assignment of schools, allowing the 
GEAR UP program to offer the college savings account and counseling 
intervention, and (2) ensure that the LEA or schools in the LEA have 
publically designated as ``directory information'' student's names, 
addresses, grade levels, and dates of birth so that this information 
can be provided, assuming that the parents and guardians have not opted 
out of the disclosure of their child's ``directory information,'' to 
the savings account administrator, the savings account trustee, or both 
to assist with establishing and managing the college savings accounts 
for students in the treatment schools that are in the 9th grade in 
2013-2014 academic year.
    Moreover, while we intend, if possible, that the provision of 
school or LEA directory information to the account administrator, 
trustee, or both would be sufficient to establish the student savings 
accounts, we understand that different schools and LEAs may define 
directory information differently and have differing policies for its 
disclosure. Therefore, the LEA superintendent's letter of support would 
also need to include--
     An assurance that the LEA has in place, or will have in 
place by July 1, 2013, directory information policies that allow for 
student information, including the student's name, grade level, 
address, and date of birth, to be shared in compliance with Federal law 
with the savings account administrator, the savings account trustee, or 
both, as needed to assist with establishing and managing the college 
savings accounts.

Proposed Priorities

    Under 34 CFR 75.105(c), the Secretary proposes the following 
priorities for a research demonstration project to determine the 
effectiveness of implementing college savings accounts and providing 
financial counseling in conjunction with other GEAR UP activities as 
part of an overall college access and success strategy. These proposed 
priorities are as follows:
Proposed Priority 1: Funding Eligibility
    To meet this priority, an applicant must--
    (a) Have received a new GEAR UP State grant in FY 2011 or FY 2012 
that supports activities in multiple high schools, each of which must 
serve at least 50 GEAR UP participants who will be in 9th grade during 
the 2013-2014 academic year;
    (b) Use the cohort approach (see section 404B(d)(1) of the HEA) to 
select participating GEAR UP students; and
    (c) Identify in its application the names of the GEAR UP high 
schools expected to participate in the demonstration and the number of 
GEAR UP participants expected to be in 9th grade during the 2013-2014 
academic year at each GEAR UP school identified.
Proposed Priority 2: College Savings Accounts Research Demonstration 
Project
    To meet this priority, and as described in the College Savings 
Accounts and Financial Counseling section of this priority, an 
applicant must submit in its application a comprehensive plan for 
providing (1) students in the GEAR UP high schools identified by the 
applicant with safe and affordable deposit accounts at federally 
insured banks, credit unions, or other institutions that offer safe and 
affordable financial services consistent with provisions of this 
Priority, and (2) financial incentives to encourage saving and related 
financial counseling to students and parents.
    An applicant also must agree in its application to participate in 
an evaluation of this college savings account demonstration project 
that will examine the effect of college savings accounts and counseling 
on student and family behaviors and attitudes associated with college 
enrollment, as described in the Research Evaluation section of this 
priority. The Department's Institute of Education Sciences (IES) in 
partnership with the Office of Postsecondary Education (OPE) will 
oversee the evaluation, which will be conducted by an IES evaluation 
contractor.

I. College Savings Accounts and Financial Counseling

    The applicant must describe in its application its plan for 
implementing college savings accounts and financial counseling, 
including how it will, preferably at the time of application, but no 
later than in time to have all savings accounts operational before the 
start of the 2013-2014 school year--

(a) Student Savings Accounts

    (1) In partnership with a financial institution, provide students 
with an account that allows saving in an interest-bearing, Federally 
insured deposit account, U.S. Government Treasury securities, or a 
fully guaranteed savings option within a 529 College Savings plan. 
Accounts may also present students and families with investment options 
that present risks in exchange for the potential for larger returns but 
that are in no way guaranteed.
    (2) Ensure that Federal funds are maintained in a single 
``notional'' account that is in fact separate from any non-Federal 
funds, tracks the amount of Federal GEAR UP seed and matching funds and 
accrued interest earned by each student, permits each student to see 
both the Federal funds and associated interest earned as well as any 
non-Federal funds in a single account statement, and is invested only 
in federally insured vehicles or U.S. Treasury securities;
    (3) Ensure that the non-Federal investments are in U.S. Government 
Treasury securities or a low- or no-fee age-based fund unless the 
parents or student choose otherwise;
    (4) Open savings accounts for students in automatic or nearly 
automatic fashion and describe how the savings account enrollment 
approach entails or approximates an automatic enrollment framework. 
Automatic enrollment means parents and students are not required to opt 
into the account, but may opt out of it. If parents and students take 
no action, the account is opened. Action is required to decline 
participation.

    Note: Applicants are also encouraged to propose automatic 
savings options, such as automatic payroll deductions by parents of 
participating students.

    (5) Ensure that individual deposits could be made easily and at no 
cost by the student, the student's parents, or others on the student's 
behalf; that deposits would be able to be made online, including on 
mobile devices, in person at convenient locations, and by mail; and 
that account information would be viewable online, including on mobile 
devices; and
    (6) Ensure that funds are held in the name of the account trustee 
described in paragraph (k) of part I of this priority with the 
participating students named as beneficiaries.

(b) Federal Seed and Matching

    Provide for Federal seed and matching of Federal funds in student 
savings accounts for students in participating treatment high schools 
as follows:
    (1) Within two weeks of the beginning of students' 9th grade school 
year in the

[[Page 32618]]

fall of 2013, seed each student's account with $200 in Federal GEAR UP 
funding.
    (2) Each month, for every contribution up to $10 beyond the initial 
seed amount the student or family deposits into the student's account, 
deposit an additional equal size contribution up to $10 of Federal GEAR 
UP funding into the account, for a maximum of $120 in Federal matching 
funds each year for a maximum of four years.
    (3) Notwithstanding the monthly cap on contributions referenced in 
paragraph two above, once per quarter during each calendar year during 
the project period, on a date approved by the Department, offer 
students and parents a two-week catch-up period if the student has not 
earned the maximum monthly match for that year and encourage students 
and families to make contributions at least sufficient to earn up to 
the maximum Federal match.
    (4) Ensure that if, at the end of each calendar year, the student 
has not exhausted the Federal match, any unearned matching funds would 
no longer be available to that student or to the applicant and would be 
returned to the Department.

(c) Non-Federal Seed and Matching

    Not provide additional seed or matching funding from GEAR UP or 
non-GEAR UP resources to participating students.

(d) Withdrawal and Transfer of Federal Funds

    Provide for the withdrawal and transfer of Federal GEAR UP funds as 
follows:
    (1) The applicant must ensure that withdrawals of Federal GEAR UP 
funds are made only upon approval of the savings account trustee and 
are only made from the account to eligible students, or to an 
institution of higher education on behalf of a student upon that 
student's enrollment in an HEA title IV-eligible institution of higher 
education for the purposes of paying for tuition, fees, course 
materials, living expenses, and other covered educational expenses as 
defined in the HEA.
    (2) An account trustee may not withdraw Federal GEAR UP funds for 
non-qualified purposes and may not transfer them to other individuals. 
If this rule is broken, the Department may require the applicant to 
terminate its relationship with the trustee and select a different 
entity to serve as savings account trustee. The initial trustee may be 
subject to penalties for misuse of Federal funds.

(e) Withdrawal and Transfer of Non-Federal Funds

    Establish rules for the withdrawal and transfer of non-Federal 
funds, which must include a requirement that any withdrawal or transfer 
of non-Federal funds must be overseen by the account trustee. A 
withdrawal of non-Federal funds from the savings account for non-
qualified purposes will result in a removal of Federal matching funds 
that have been contributed on behalf of the student if the amount of 
non-Federal funds remaining in the account after the non-qualified 
withdrawal is less than the total amount of Federal matching funds 
contributed (not including the $200 Federal seed).
    For example, if student and parent contributions total $140, 
Federal GEAR UP matches total $120, and the student withdraws $50 in 
non-Federal funds for non-qualified purposes, then $30 in Federal GEAR 
UP matching funds earned up until that point would be removed from the 
account because the amount of non-Federal funds remaining in the 
account after the non-qualified withdrawal--$90--is $30 less than the 
amount of Federal matching funds contributed. The Federal matching 
funds could be earned back in catch-up periods during that same year. 
The $200 seed money provided with Federal GEAR UP funds will not be 
removed from the account.

(f) Student Eligibility

    Establish student eligibility to receive Federal GEAR UP funds as 
seed and match for GEAR UP student savings accounts as follows:
    (1) Students must be enrolled in the 9th grade in one of the 
randomly selected treatment high schools (as described in the Research 
Evaluation section of this priority) in the fall of 2013.
    (2) If a student does not use funds in the student's account within 
six years of his or her scheduled completion of secondary school, the 
undisbursed Federal GEAR UP funds must be returned to the Department.
    (3) Students who transfer from a GEAR UP high school to a non-GEAR 
UP high school during the project period will continue to remain 
eligible for the matching funds from the grantee.

(g) Financial Counseling

    Provide general and targeted (that is, specific to each 
individual's account and financial circumstances) savings account and 
financial counseling to students in the treatment group and to their 
parents. Counseling should encourage regular saving and prepare 
students and their families to make informed financial decisions about 
college and other matters. Counseling must include at least 12 hours 
per year of counseling for students and at least biannual counseling 
meetings for parents, which must include a review of the contributions 
to the account and any interest accrued. The counseling must be in 
addition to, and may not serve as, the financial aid, financial 
literacy, or college savings counseling already provided as part of 
regular GEAR UP services.

(h) Staff Professional Development and Coordination With the Department

    (1) Agree to participate in Department-provided professional 
development for the GEAR UP or school staff who will deliver the 
financial planning and counseling described in paragraph (g) of part I 
of this priority.
    (2) Ensure that the project director of the project participates in 
a meeting in Washington, DC, in the fall of 2012 to discuss the 
logistical and administrative issues in setting up the college savings 
accounts.

(i) Site Coordination

    Designate a site coordinator for each GEAR UP high school that 
participates in the demonstration and describe the role of the 
coordinator and to whom he or she will be accountable. The site 
coordinators in schools that are randomly selected to provide college 
savings accounts and financial counseling (treatment schools) have 
responsibility, exercised consistent with the State's plan and approved 
project application, for ensuring that their schools meet all 
requirements for participating in the college savings demonstration 
project. Coordinators must, for example, ensure that college savings 
accounts are opened and seeded within two weeks of the start of 9th 
grade, that related financial counseling and coaching are provided to 
participating students and parents, and that schools cooperate with 
data collection for the evaluation. (See the Research Evaluation 
section of this priority for further information on selection of the 
treatment schools). Site coordinators in schools that are not 
participating in the college savings account and counseling 
intervention (control schools) must ensure that their schools cooperate 
with the data collection for the evaluation.

(j) Savings Account Administrator

    Select a savings account administrator to hold the account funds, 
accept deposits, and issue qualified withdrawals. The applicant must

[[Page 32619]]

identify the account administrator in the application or describe the 
process by which the account administrator will be selected.
    The account administrator must be able to fulfill its role until 
all Federal funds have been disbursed or returned to the Department. 
During the grant project period, modest administrative fees, not to 
exceed one percent of account balances, could be paid to the savings 
account administrator with Federal GEAR UP funds to cover expenses 
related to the GEAR UP college savings account demonstration project.

(k) Savings Account Trustee

    Select a savings account trustee to manage the account funds and 
approve withdrawals and other account activities. The account trustee 
must have demonstrated experience in successfully managing financial 
services. The applicant must identify the account trustee in the 
application or describe the process by which the account trustee will 
be selected.
    The account trustee must be able to fulfill its role until all 
Federal funds have been disbursed or returned to the Department. The 
account trustee may not be a student's parent or other individual, and 
must be separate and distinct from the account administrator. The 
trustee must be a State agency, such as a State Department of Treasury, 
Office of the Governor, Lieutenant Governor, or Comptroller, a tax-
exempt non-profit organization or foundation, or for-profit 
organization or business with demonstrated expertise and experience in 
successfully managing financial services. During the grant project 
period, modest administrative fees, not to exceed one percent of 
account balances, could be paid to the savings account trustee with 
Federal GEAR UP funds to cover expenses related to the GEAR UP college 
savings account demonstration project.
(l) Grantee Coordinator
    Specify a person or persons at the State and LEA level who will 
administer and coordinate all components of the demonstration, 
including provision of services provided by the GEAR UP high schools, 
monitoring the rules established for and activities carried out by the 
savings account administrators and trustees including distribution of 
letters, notifying parents or guardians about the administration of the 
student survey by the evaluator and about the release of designated 
``directory information'' from the education records of the student to 
the savings account administrator, the savings account trustee, or 
both, as needed to assist with establishing and managing the college 
savings accounts, and distributing forms enabling parents or guardians 
to opt out of participation in the research demonstration project. (The 
Department will provide a sample parent/guardian letter and opt out 
form.) The grantee coordinator must also include aggregate information 
about the college savings account demonstration project in the 
grantee's annual performance report to the Department, including the 
number of accounts opened and the total amount of Federal GEAR UP 
matching funds deposited on behalf of students. The grantee coordinator 
must also respond to the evaluators' annual request for information on 
individual student accounts, including the timing and amounts of 
disbursements of seed and matching funds, and the student's name, 
address, and date of birth.

(m) Directory Information Policies

    Include only districts or schools that will have directory 
information policies in place prior to July 1, 2013, that allow for 
student information to be shared in compliance with Federal law with 
the savings account administrator, the savings account trustee, or 
both, as needed to establish and manage the college savings accounts. 
Under the provisions of FERPA and its implementing regulations (20 
U.S.C. 1232g and 34 CFR part 99), each of the LEAs or schools in the 
application must have provided public notice that the district or 
schools have designated as ``directory information'' under FERPA the 
student's name, address, grade level, and date of birth. In addition, 
in accordance with FERPA, if any parents or guardians of a student has 
opted out of the disclosure of this ``directory information,'' the 
school or LEA will not provide the ``directory information'' for that 
student to the savings account administrator, the savings account 
trustee, or both, as needed to assist with establishing the college 
savings accounts, and savings accounts with GEAR UP seed money will not 
be opened in his or her name, unless the parent or guardian of that 
student provides consent under 34 CFR 99.30.

(n) Grantee Non-Federal Match Requirement

    Meet the statutory non-Federal match requirement (see section 
404C(b) of the HEA.)

    Note: A State grantee would meet the statutory match requirement 
tied to these additional research demonstration project funds 
through any ``over-matched'' non-Federal funds it already is 
committed to providing under its regular GEAR UP application. A 
State that would need to provide other non-Federal funds in order to 
meet the statutory match requirement tied to GEAR UP funds provided 
for research demonstration project would need to include with its 
application a budget of how it proposed to do so. Contributions of 
students, families, parents' employers, community-based 
organizations, religious organizations, and others to student 
savings account could be treated as a matching contribution, but, if 
during any project year these private contributions to savings 
account were less than anticipated, a State would have to ensure by 
the end of each project year that it had met the annual matching 
requirement through other non-Federal contributions to this project 
or the regular GEAR UP activities.

(o) Budget

    Provide a budget and budget narrative with projected charges of 
Federal GEAR UP funds and any non-Federal matching contributions, that 
describes the expected costs of implementing the proposed project, 
including provision of payment to the account administrator, the 
account trustee, or both of reasonable costs for managing the savings 
accounts according to requirements of this section.

II. Research Evaluation

    The applicant must describe in its application its agreement to the 
following:
    (a) Random Assignment of Schools. An applicant must--
    (1) Agree to a random assignment by the evaluation contractor of 
one-half of the high schools identified in its application to for their 
students to receive treatment services (treatment schools). In addition 
to any GEAR UP services offered at these schools, GEAR UP projects must 
offer, at these treatment schools, the college savings account and 
financial counseling intervention in accordance with priority 1 
(Funding Eligibility). The students in the remainder of the high 
schools (control schools) will not receive the college savings account 
and financial counseling intervention but will continue to receive 
regular GEAR UP services.
    (2) Agree not to offer a program that provides seed or matching 
funds for college savings accounts in the control schools for the 
duration of the GEAR UP grant.
    (b) Data Collection. (1) The applicant and the LEA(s) and GEAR UP 
high schools that would like to implement college savings accounts 
(some of which will become control schools) must agree to participate 
in the data collection conducted by the Department's evaluator, which 
will include the following:

[[Page 32620]]

    (i) Two surveys of GEAR UP project directors at the SEA or LEA 
level and site coordinators at each school about the implementation of 
the college savings account and counseling intervention, including the 
extent to which the college savings account counseling was provided in 
the treatment schools and counseling and other services were provided 
under the GEAR UP grant in both treatment and control schools;
    (ii) Two surveys of GEAR UP students about their participation in 
GEAR UP program activities and other college access programs; their 
expectations about college enrollment and costs; their knowledge about 
college savings and financial aid; their financial literacy; their 
plans for enrollment in college-preparatory courses; and their 
financial behaviors, including the extent to which they are saving for 
college;
    (iii) Two surveys of parents of students participating in the GEAR 
UP program, in a form that will be comprehensible to parents of English 
language learners, about their participation in GEAR UP program 
activities and other college access programs; their expectations about 
their child's college enrollment and costs; their knowledge about 
college savings and financial aid; their financial literacy; and their 
financial decisions, including the extent to which they are saving for 
college;
    (iv) For treatment schools, data on the extent to which their staff 
attend the required professional development;
    (v) For both treatment and control schools, rosters of all GEAR UP 
participants who are in the 9th grade in fall 2013, including the names 
of the students, and other identifying information (such as their dates 
of birth, zip codes, or district or school identification numbers) that 
will enable the Department's evaluator to request the administrative 
records from the State or LEA about the appropriate students;
    (vi) Access to the appropriate State or LEA school administrative 
records, which will be used to measure student characteristics and 
achievement prior to the 9th grade, student attendance, course taking 
patterns, and credits in grades 9-12 for students in the treatment and 
control schools;
    (viii) From the grantee, annual information on individual student 
accounts, including the timing and amounts of disbursements of seed and 
matching funds, and the student's name, address, and date of birth.
    (c) Letters of Support. Each applicant must include in its 
application the following:
    (1) Letters of support from the relevant LEAs. Unless the SEA 
agrees in the application to provide this same data on its own, these 
letters of support also must contain the LEA's agreement to provide the 
relevant school records data to the evaluation contractor, including 
the following school records data for GEAR UP participants who are 
enrolled in the 9th grade in the treatment schools and control schools 
in the fall 2013, regardless of whether the student has continued to be 
enrolled in his or her original high school:
    (i) Scores on State or district-administrated assessments of 
reading and math for the 7th and 8th grades and high school years;
    (ii) High school attendance;
    (iii) High school courses in which the student was enrolled and 
grades and credits received for those courses;
    (iv) Demographic information such as gender, race/ethnicity, 
parents' educational attainment, English proficiency, and the extent to 
which a language other than English is spoken at home;
    (v) Whether the student is certified as eligible for free or 
reduced price lunch through the National School Lunch Program; and
    (vi) Whether the student has an individualized education program.
    (2) A letter from the principal of each high school identified in 
the application agreeing to participate in all aspects of the 
evaluation and grant, including:
    (i) Random assignment of the high school;
    (ii) If randomly selected to implement the intervention, allowing 
the GEAR UP program to offer the college savings account and counseling 
intervention to eligible GEAR UP participants at the principal's high 
school; and
    (iii) Regardless of whether a school is in the treatment or control 
group, provision to the evaluation contractor of rosters of GEAR UP 
participants who are in the 9th grade in fall 2013, including 
identifying information (such as student names, dates of birth, zip 
codes, or district or school identification numbers) that will enable 
the contractor to request the administrative records from the State or 
LEA about the appropriate students.
    (3) Letter from the superintendent of each LEA overseeing the 
schools in the evaluation, agreeing to all aspects of the evaluation 
and grant, including--
    (i) Random assignment of the high schools;
    (ii) If randomly selected to implement the intervention, an 
agreement allowing the State GEAR UP program to offer the college 
savings account and financial counseling to eligible GEAR UP 
participants consistent with the priorities and requirements in this 
notice; and
    (iii) Regardless of whether the schools are in the treatment or 
control group, an agreement to provide to the evaluation contractor 
rosters of GEAR UP participants who are in the 9th grade in fall 2013, 
including identifying information (such as student names, dates of 
birth, zip codes, or district or school identification numbers) that 
will enable the contractor to request the administrative records from 
the State or LEA about the appropriate students.
    (iv) An agreement to have district or school directory information 
policies in place prior to July 1, 2013 that allow for student 
information to be shared in compliance with Federal law with the 
savings account administrator, the savings account trustee, or both, as 
needed to establish and manage the college savings accounts. Under the 
provisions of the FERPA and its implementing regulations, each of the 
LEAs in the application or schools therein must have provided public 
notice that the district or school has designated as ``directory 
information'' under FERPA the student's name, grade level, address, and 
date of birth. In addition, in accordance with FERPA, if any parents or 
guardians of a student has opted out of the disclosure of this student 
directory information, the school or LEA will not provide ``directory 
information'' on that student to the savings account administrator or 
the savings account trustee and savings accounts with GEAR UP seed 
money will not be opened in his or her name, unless the parent or 
guardian of that student provides consent under 34 CFR 99.30.
    Types of Priorities:
    When inviting applications for a competition using one or more 
priorities, we designate the type of each priority as absolute, 
competitive preference, or invitational through a notice in the Federal 
Register. The effect of each type of priority follows:
    Absolute priority: Under an absolute priority, we consider only 
applications that meet the priority (34 CFR 75.105(c)(3)).
    Competitive preference priority: Under a competitive preference 
priority, we give competitive preference to an application by (1) 
awarding additional points, depending on the extent to which the 
application meets the priority (34 CFR 75.105(c)(2)(i)); or (2) 
selecting an application that meets the priority over an application of 
comparable merit that does not meet the priority (34 CFR 
75.105(c)(2)(ii)).

[[Page 32621]]

    Invitational priority: Under an invitational priority, we are 
particularly interested in applications that meet the priority. 
However, we do not give an application that meets the priority a 
preference over other applications (34 CFR 75.105(c)(1)).
    Final Priorities:
    We will announce the final priorities in a notice in the Federal 
Register. We will determine the final priorities after considering 
responses to this notice and other information available to the 
Department. This notice does not preclude us from proposing additional 
priorities subject to meeting applicable rulemaking requirements.

    Note:
     This notice does not solicit applications. In any year in which 
we choose to use one or more of these priorities, we invite 
applications through a notice in the Federal Register.

Executive Orders 12866 and 13563

Regulatory Impact Analysis

    Under Executive Order 12866, the Secretary must determine whether 
this regulatory action is ``significant'' and therefore subject to the 
requirements of the Executive order and subject to review by 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.
    This proposed regulatory action is not a significant regulatory 
action subject to review by OMB under section 3(f) of Executive Order 
12866.
    We have also reviewed these priorities under Executive Order 13563, 
which supplements and explicitly reaffirms the principles, structures, 
and definitions governing regulatory review established in Executive 
Order 12866. To the extent permitted by law, Executive Order 13563 
requires that an agency--
    (1) Propose or adopt regulations only on a reasoned determination 
that their benefits justify their costs (recognizing that some benefits 
and costs are difficult to quantify);
    (2) Tailor its regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives and taking into 
account--among other things and to the extent practicable--the costs of 
cumulative regulations;
    (3) In choosing among alternative regulatory approaches, select 
those approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity);
    (4) To the extent feasible, specify performance objectives, rather 
than the behavior or manner of compliance a regulated entity must 
adopt; and
    (5) Identify and assess available alternatives to direct 
regulation, including economic incentives--such as user fees or 
marketable permits--to encourage the desired behavior, or provide 
information that enables the public to make choices.
    Executive Order 13563 also requires an agency ``to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible.'' The Office of 
Information and Regulatory Affairs of OMB has emphasized that these 
techniques may include ``identifying changing future compliance costs 
that might result from technological innovation or anticipated 
behavioral changes.''
    We are issuing these proposed priorities only on a reasoned 
determination that the benefits justify the costs. In choosing among 
alternative regulatory approaches, we selected those approaches that 
maximize net benefits. The Department believes that this proposed 
regulatory action is consistent with the principles in Executive Order 
13563.
    We also have determined that this regulatory action would not 
unduly interfere with State, local, and tribal governments in the 
exercise of their governmental functions.
    In accordance with both Executive orders, the Department has 
assessed the potential costs and benefits of this regulatory action. 
The potential costs associated with this proposed regulatory action are 
those resulting from statutory requirements and those we have 
determined as necessary for administering this program effectively and 
efficiently. The potential benefits are those resulting from the 
provision of college savings accounts, financial incentives, and 
financial counseling to 10,000 GEAR UP students and parents, and the 
evidence gained about the effect of providing these in the context of 
GEAR UP support services.
    Intergovernmental Review: This program is 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.
    Accessible Format: Individuals with disabilities can obtain this 
document in an accessible format (e.g., braille, large print, 
audiotape, or compact disc) on request to the program contact person 
listed under FOR FURTHER INFORMATION CONTACT.
    Electronic Access to This Document: 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 via the Federal Digital System 
at: www.gpo.gov/fdsys. At this site you can view this document, as well 
as all other documents of this Department published in the Federal 
Register, in text or Adobe Portable Document Format (PDF). To use PDF 
you must have Adobe Acrobat Reader, which is available free at the 
site. You may also access documents of the Department published in the 
Federal Register by using the article search feature at: 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.

    Dated: May 25, 2012.
Eduardo M. Ochoa,
Assistant Secretary for Postsecondary Education.
[FR Doc. 2012-13232 Filed 5-31-12; 8:45 am]
BILLING CODE 4000-01-P