[Federal Register Volume 80, Number 222 (Wednesday, November 18, 2015)]
[Notices]
[Pages 72052-72055]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-29437]


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DEPARTMENT OF EDUCATION


Notice Expanding an Experiment Under the Experimental Sites 
Initiative; Federal Student Financial Assistance Programs Under Title 
IV of the Higher Education Act of 1965, as Amended

AGENCY: Office of Postsecondary Education, Department of Education.

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ACTION: Notice.

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SUMMARY: The Secretary is expanding the Competency-Based Education 
experiment, which was announced in a previous Federal Register notice, 
to provide additional flexibility in how institutions provide Federal 
student aid to students who are enrolled in competency-based education 
programs, including providing waivers and modifications to statutory 
and regulatory requirements designed to support competency-based 
education programs that charge a flat fee for a period of time rather 
than charging by course or by competency. The expansion of the 
Competency-Based Education experiment provides two additional sets of 
waivers that are available to both institutions currently approved for 
the experiment and institutions that may be approved based on their 
submission of a letter of interest. These sets of waivers are described 
in this notice below, under ``The Experiment.''
    In a Federal Register notice published on July 31, 2014, the 
Secretary invited postsecondary educational institutions (institutions) 
that participate in the student financial assistance programs 
authorized under title IV of the Higher Education Act of 1965, as 
amended (HEA), to apply to participate in institutionally-based 
experiments, including the Competency-Based Education experiment, under 
the Experimental Sites Initiative (ESI).

DATES: Institutions that have not already received approval to 
participate in the Competency-Based Education experiment must submit a 
letter of interest following the instructions included in this notice. 
Letters of interest must be received by the Department no later than 
January 19, 2016 in order for an institution to receive priority to be 
considered for participation in the experiment. Letters received after 
January 19, 2016 may still, at the discretion of the Secretary, be 
considered for participation.
    The Department will contact those institutions that have already 
received approval to participate in the Competency-Based Education 
experiment to determine which of the three sets of waivers, discussed 
below in the ``The Experiment'' section of this notice, the institution 
wishes to apply to their competency-based education programs. Based 
upon each institution's response, the Department will amend the 
institution's Program Participation Agreement (PPA) to reflect the 
specific waivers and modifications to statutory or regulatory 
provisions included in the set of waivers chosen by the institution.

ADDRESSES: Letters of interest must be submitted by electronic mail to 
the following email address: [email protected]. The subject line 
of the email should read ``ESI 2015--Competency-Based Education.'' For 
formats and other required information, see ``Instructions for 
Submitting Letters of Interest'' under SUPPLEMENTARY INFORMATION.

FOR FURTHER INFORMATION CONTACT: Warren Farr, U.S. Department of 
Education, Federal Student Aid, 830 First Street NE., Washington, DC 
20002. Telephone: (202) 377-4380 or by email at: [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:

Instructions for Submitting Letters of Interest

    Letters of interest for the Competency-Based Education experiment 
should take the form of a PDF attachment to an email message as 
described in the ADDRESSES section of this notice. The letter of 
interest should be on institutional letterhead and be signed by at 
least two officials of the institution--one of these officials should 
be the institution's financial aid administrator, and the other should 
be an academic official of the institution who is familiar with the 
institution's competency-based educational programs. The letter of 
interest must include the institution's official name and Department of 
Education Office of Postsecondary Education Identification (OPEID), as 
well as a mailing address, email address, FAX number, and telephone 
number of a contact person at the institution. The letter should 
indicate which of the three sets of waivers, discussed below in the 
``The Experiment'' section of this notice, the institution wishes to 
apply to their competency-based education programs.

Background

    The Secretary, under the Experimental Sites Initiative (ESI) 
authority of section 487A(b) of the HEA, published a Federal Register 
notice (79 FR 44429) dated July 31, 2014 (July 31, 2014, notice), 
inviting institutions to participate in four experiments that would 
waive certain statutory and regulatory requirements related to the 
title IV, HEA programs. One of those experiments was the Competency-
Based Education experiment.
    Under the Competency-Based Education experiment, the Secretary 
provided limited waivers of certain statutory and regulatory 
requirements to remove some of the time-based restrictions to the 
disbursement of student assistance under title IV of the HEA (title IV 
aid) so that funds are available to a student to pay institutional 
charges as the student progresses through a program at the student's 
own pace. Specifically, the Secretary allowed for the disbursement of 
title IV aid for direct costs as soon as the student completed a 
required number of competencies, regardless of how many weeks of 
instructional time have elapsed, and for disbursement of title IV aid 
for indirect costs at regular calendar intervals, regardless of how 
many competencies the student had completed, all within award maximums. 
The Secretary also modified the requirements for monitoring 
satisfactory academic progress to permit institutions to evaluate a 
student's pace in a competency-based education program by calculating 
competencies completed over calendar time, rather than by dividing the 
hours the student completed by the hours the student attempted. 
Detailed information regarding these requirements is provided in the 
Competency-Based Education Experiment Reference Guide, which is 
available at: https://experimentalsites.ed.gov/exp/guidance.html.
    In the July 31, 2014, notice, the Secretary described the 
application, selection, reporting, and evaluation requirements for the 
Competency-Based Education experiment. All of those requirements remain 
in effect regardless of which set of waivers, as described in this 
notice, is chosen by an institution.
    Since the publication of the July 31, 2014, notice, the Department 
has learned that there are challenges associated with the waivers 
discussed in that notice for institutions that charge students who are 
enrolled in competency-based programs a set amount for a defined period 
of time, as opposed to charging an amount for each competency. This is 
often referred to as a ``subscription period model.'' Some institutions 
have suggested that financial aid for programs that charge using 
subscription periods rather than by competency can be administered more 
effectively by using term-based disbursements, with flexibilities to 
allow students to begin and complete their competencies outside of the 
start and end dates of terms, rather than using a nonterm model as 
described in the July 31, 2014, notice.
    Other institutions stated that they were primarily interested in 
the satisfactory academic progress waivers

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noted in the July 31, 2014, notice and did not need the full set of 
waivers included in that notice.

Selection

    For institutions that, in response to this notice, submit letters 
of interest for the Competency-Based Education experiment, the 
Secretary's process for selecting participating institutions will 
remain the same as was described in the July 31, 2014, notice.

The Experiment

Background

    The Department's regulations at 34 CFR 668.4(a) and (b) describe 
requirements for payment periods for eligible programs that measure 
progress in credit hours and use standard or nonstandard terms. A term 
is a period during which all classes are scheduled to begin and end 
within a set timeframe.
    The Department's regulations for satisfactory academic progress at 
34 CFR 668.34 require institutions to measure a student's progress at 
least once annually, though an institution is permitted to check more 
often. Those regulations also require an institution to determine a 
student's academic progress pace by dividing the cumulative number of 
hours the student has successfully completed by the cumulative number 
of hours the student has attempted.
    Some institutions offering competency-based programs charge 
students using ``subscription periods,'' in which the institution 
charges the student a single fee for all of the student's competency-
based instruction during each subscription period. In some instances, 
students begin and complete a subscription period within the dates of 
the term. However, because competency-based programs are generally 
self-paced, the requirement under a term-based program that coursework 
must begin and end within the timeframe of the term is often a 
significant impediment to the students enrolled in such programs.

Description

    In response to the above, the Secretary is expanding the current 
Competency-Based Education experiment to provide two additional sets of 
statutory and regulatory waivers. Institutions must choose a single set 
of waivers from among the three sets available that will apply to all 
of the competency-based education programs that it includes under the 
experiment. The sets of waivers are as follows:
    (1) Split Disbursement: This set of waivers includes all of the 
disbursement, satisfactory academic progress, and Return of Title IV 
Funds waivers described in the July 31, 2014, notice and explained in 
the Competency-Based Education Experiment Reference Guide.
    (2) Satisfactory Academic Progress Only: A second set of waivers 
will include only the waivers to the satisfactory academic progress 
requirements described in the July 31, 2014, notice and explained in 
the Competency-Based Education Experiment Reference Guide.
    (3) Subscription Period Disbursement: The third set of waivers is 
intended for institutions offering competency-based programs using 
subscription periods and is described below.
    Under the Subscription Period Disbursement set of waivers, the 
institution may include in its determination of a student's enrollment 
status competencies that begin prior to the start of the subscription 
period, as long as it does not include those competencies in enrollment 
status for two different payment periods. Institutions will disburse 
title IV aid based on the student's anticipated enrollment for a 
subscription period (which is equivalent to a payment period) rather 
than requiring completion of a specific number of competencies prior to 
making subsequent disbursements of title IV aid. While an institution 
will determine a student's title IV aid amounts based on the student's 
anticipated enrollment status, the institution will be required to 
perform a satisfactory academic progress evaluation for the student at 
the end of each subscription period (payment period) to ensure that the 
student has completed the appropriate number of competencies in that 
payment period, given the student's enrollment status.
    Program Eligibility: An institution participating in the 
Competency-Based Education experiment could choose to use the 
Subscription Period Disbursement set of waivers only if it charges 
students in a competency-based education program using subscription 
periods, as described above.
    Payment Periods: Subscription periods under this set of waivers 
will be considered to be term-based payment periods, as payment periods 
are defined under 34 CFR 668.4(a) and (b). Institutions disbursing 
under this set of waivers will generally follow existing rules for 
standard and nonstandard terms, as appropriate, except that nonstandard 
terms that are not substantially equal will have the same payment 
periods for Direct Loans as they do for Pell Grants, with similar 
proration based on the length of the payment period.
    Enrollment Status: For each payment period, students will be 
assigned by the institution an enrollment status (full-time, half-time, 
three-quarter time, less than half-time) based on the student's 
expected enrollment in and completion of competencies for the payment 
period. After consulting with the student, the institution will 
determine the student's enrollment status based on a realistic 
assessment by the institution of the number of competencies that the 
student will complete during the payment period. However, unlike under 
existing regulations for standard and nonstandard term programs, an 
institution will not be permitted to count a unique competency or 
course toward a student's enrollment status for more than one payment 
period.
    In addition, under this set of waivers, a student's enrollment 
status may not be changed for title IV purposes once it has been 
established for the payment period, except that an institution must 
increase a student's enrollment status to reflect any competencies 
completed by the student during the payment period that were not 
originally assigned to that payment period or to a previous payment 
period. If the additional competencies that were completed in the 
payment period were expected to be completed in a subsequent payment 
period(s), an adjustment to the student's enrollment status for that 
subsequent payment period(s) is required.
    For Pell Grant purposes, students will still be required to begin 
working on at least the number of competencies used in the 
determination of the student's enrollment status for each payment 
period. Therefore, to use this set of waivers, an institution must have 
a mechanism for determining that a student has been participating in a 
competency during a payment period.
    Satisfactory Academic Progress: As in the Split Disbursement set of 
waivers, the Subscription Period Disbursement set of waivers will 
modify the statutory and regulatory requirements for monitoring 
satisfactory academic progress so that an institution will be required 
to evaluate a student's pace by using competencies completed over 
calendar time, rather than by dividing a student's completed credit 
hours by attempted credit hours. However, two additional requirements 
will be added for institutions using Subscription Period Disbursement.
    First, the institution must evaluate a student's satisfactory 
academic progress after every subscription period (payment period), 
rather than at least once annually, even if the program is more than 
one academic year in length.

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    Second, the institution must evaluate a student's pace using two 
separate measures:
    (1) The student's progress for the payment period immediately prior 
to the evaluation, calculated using the number of credit hours or 
equivalents completed over the number of credit hours or equivalents 
included in the student's enrollment status for that payment period; 
and
    (2) The student's cumulative rate of progress, calculated by 
dividing the aggregate number of credit hours or equivalents completed 
as of the end of the payment period by the total number of credit hours 
or equivalents expected to be completed as of the end of that payment 
period in order for the student to complete the program within the 
maximum timeframe. The maximum timeframe is based on the published 
length of the program, expressed in calendar time (i.e., weeks, months, 
years).
    To make satisfactory academic progress under the payment period 
measure, a student must complete the minimum number of credit hours or 
equivalents associated with the enrollment status that was assigned to 
the student for the payment period under review. For example, if an 
institution's definition of a ``full-time academic workload'' in a 
competency-based education program is 12 semester hours and a student 
enrolled in that program is assigned a full-time enrollment status in a 
payment period, the student would need to complete competencies with an 
equivalent of at least 12 semester hours in that payment period to make 
satisfactory academic progress. Similarly, if a student in the same 
program is assigned a half-time enrollment status in a payment period, 
the student would need to complete at least 6 semester hours in that 
payment period in order to make satisfactory academic progress.
    For its evaluation of a student's cumulative rate of progress, the 
institution could use different standards for students on different 
enrollment tracks--for example, there could be a different maximum 
timeframe for a student on a half-time enrollment track, for whom the 
normal time for completion of the program is longer than for a student 
on a full-time enrollment track.
    If a student fails either of the two satisfactory academic progress 
evaluations, the student will have failed to make satisfactory academic 
progress and will, based on the institution's satisfactory academic 
progress policies, either be assigned to a financial aid warning period 
or immediately lose eligibility for title IV funds. Institutions will 
have the same flexibility to establish options for appeals, probation 
periods, and academic plans as they do under the current regulations.
    Return of title IV Funds (R2T4): Under the Subscription Period 
Disbursement set of waivers, R2T4 calculations will be required, and 
will follow the normal requirements under 34 CFR 668.22 when a student 
withdraws.

Waivers

    For all of the competency-based education programs that it offers 
under the experiment, the institution must select one of the following 
sets of waivers.
    (1) Split Disbursement:
     This set of waivers was described in the July 31, 2014, 
notice and explained in the Competency-Based Education Experiment 
Reference Guide.
    (2) Satisfactory Academic Progress Only:
     This set of waivers includes only the waivers to the 
satisfactory academic progress requirements described in the July 31, 
2014, notice and explained in the Competency-Based Education Experiment 
Reference Guide.
    (3) Subscription Period Disbursement:
     34 CFR 668.4(a), to the extent that the regulation 
requires the coursework undertaken within a standard term or a 
nonstandard term to begin within the term start and end dates.
     34 CFR 668.4(b), to the extent that the regulation 
requires the coursework undertaken within a nonstandard term to begin 
within the term start and end dates.
     HEA section 484(c) and 34 CFR 668.34(a)(3)(ii), 
(a)(5)(ii), and (b), related to the timeframe when the institution must 
determine whether a student is making satisfactory academic progress 
and the method by which an institution must calculate the pace of a 
student's academic progression.
     34 CFR 685.303(d)(5), to the extent that the regulations 
provide that Direct Loan proceeds must be disbursed in substantially 
equal installments. The modification will require the institution to 
make disbursements of Direct Loan funds in accordance with the 
provisions of the Pell Grant program under the same rules used in the 
calculation of disbursement amounts in the Pell Grant program under 34 
CFR 690.63.
     34 CFR 690.80(b)(2)(i), which permits an institution to 
recalculate a student's enrollment status during a payment period after 
the student has begun all of the coursework for the payment period.
    All other provisions and regulations of the title IV student 
assistance programs will remain in effect.
    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 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.
    Delegation of Authority: The Secretary of Education has delegated 
authority to Jamienne S. Studley, Deputy Under Secretary, to perform 
the functions and duties of the Assistant Secretary for Postsecondary 
Education.

    Program Authority: HEA, section 487A(b); 20 U.S.C. 1094a(b).

    Dated: November 13, 2015.
Jamienne S. Studley,
Deputy Under Secretary.
[FR Doc. 2015-29437 Filed 11-17-15; 8:45 am]
 BILLING CODE 4000-01-P