[Federal Register Volume 85, Number 40 (Friday, February 28, 2020)]
[Rules and Regulations]
[Pages 11848-11857]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-03208]


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DEPARTMENT OF EDUCATION

34 CFR Part 361

[Docket ID ED-2019-OSERS-0140]


State Vocational Rehabilitation Services Program

AGENCY: Office of Special Education and Rehabilitative Services, U.S. 
Department of Education.

ACTION: Policy interpretation; request for comments.

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SUMMARY: The U.S. Department of Education (Department) issues this 
interpretation to clarify current policy and announce a change in 
policy regarding the use of Federal vocational rehabilitation (VR) 
funds reserved for pre-employment transition services.

DATES: This policy is effective February 28, 2020. We must receive your 
comments on or before March 30, 2020.

ADDRESSES: Submit your comments through the Federal eRulemaking Portal 
or via postal mail, commercial delivery, or hand delivery. We will not 
accept comments submitted by fax or by email or those submitted after 
the comment period. To ensure that we do not receive duplicate copies, 
please submit your comments only once. In addition, please include the 
Docket ID at the top of your comments.
     Federal eRulemaking Portal: Go to www.regulations.gov to 
submit your comments electronically. Information on using 
Regulations.gov, including instructions for accessing agency documents, 
submitting comments, and viewing the docket, is available on the site 
under ``How to use Regulations.gov.''
     Postal Mail, Commercial Delivery, or Hand Delivery. If you 
mail or deliver your comments about this notice of interpretation, 
address them to Carol Dobak, U.S. Department of Education, 400 Maryland 
Avenue SW, Room 5153, Potomac Center Plaza, Washington, DC 20202-5108.

    Privacy Note:
     The Department's policy for comments received from members of 
the public is to make these submissions available for public viewing 
in their entirety on the Federal eRulemaking Portal at 
www.regulations.gov. Therefore, commenters should be careful to 
include in their comments only information that they wish to make 
publicly available.


FOR FURTHER INFORMATION CONTACT: Carol Dobak, U.S. Department of 
Education, 400 Maryland Avenue SW, Room 5153, Potomac Center Plaza, 
Washington, DC 20202-5108. Telephone: (202) 245-7325. Email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Invitation to Comment

    We invite you to submit comments on this notice of interpretation. 
We will consider these comments in determining whether to take any 
future action.
    See ADDRESSES for instructions on how to submit comments.
    During and after the comment period, you may inspect all public 
comments about this interpretation by accessing Regulations.gov. You 
may also inspect the comments in person in Room 3W104, 400 Maryland 
Avenue SW, Washington, DC, between the hours of 8:30 a.m. and 4:00 
p.m., Eastern time, Monday through Friday of each week except Federal 
holidays. If you want to schedule time to inspect comments, please 
contact the person listed under FOR FURTHER INFORMATION CONTACT.
    Assistance to Individuals with Disabilities in Reviewing the 
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 record for this 
notice. If you want to schedule an appointment for this type of aid, 
please contact the person listed under FOR FURTHER INFORMATION CONTACT.
    The Department published a request for comments in the Federal 
Register on June 22, 2017, inviting the public to provide comments on 
identifying regulations and guidance for repeal, replacement, or 
modification. After extending the closing date from August 21, 2017 to 
September 20, 2017, the Rehabilitation Services Administration, within 
the Office of Special Education and Rehabilitative Services, received 
847 comments from the public. Of those comments, and others received 
since September 2017, approximately 30 included questions, suggestions, 
and implementation concerns regarding the statutory provision requiring 
States to provide pre-employment transition services.
    The Rehabilitation Act of 1973, as amended by title IV of the 
Workforce Innovation and Opportunity Act (Rehabilitation Act), requires 
States to reserve at least 15 percent of their VR program allotments to 
provide, or arrange for the provision of, pre-employment transition 
services to all students with disabilities in need of such services who 
are eligible or potentially eligible for the VR program. In response to 
the many questions and comments about the allowable use of the reserved 
funds for auxiliary aids and services and other VR services listed in 
the Rehabilitation Act, the Department issues this notice of 
interpretation to: (1) Clarify current policy regarding the use of 
Federal VR funds reserved for the provision of pre-employment 
transition services to pay for auxiliary aids and services needed by 
all students with disabilities in order to access or participate in 
required pre-employment transition services under section 113(b) of the 
Rehabilitation Act, and (2) announce a change in policy with respect to 
additional VR services needed by eligible students with disabilities 
that may be paid for with Federal VR grant funds reserved for the 
provision of pre-employment transition services and the circumstances 
under which those funds may be used to pay for those additional VR 
services.

Background

    The amendments to the Rehabilitation Act made by title IV of the 
Workforce Innovation and Opportunity Act (WIOA) place heightened 
emphasis on the provision of services to students and youth with 
disabilities to ensure that they have meaningful opportunities to 
receive the training and other services they need to achieve employment 
outcomes in competitive integrated employment. The Rehabilitation Act, 
as amended by WIOA, expands not only the population of students with 
disabilities who may receive services under the VR program but also the 
kinds of services the designated State units

[[Page 11849]]

(DSUs) may provide to these students with disabilities who are 
transitioning from school to postsecondary education and employment.
    Most notably, section 110(d)(1) of the Rehabilitation Act and 34 
CFR 361.65(a)(3)(i) require States to reserve at least 15 percent of 
their Federal VR grant for the provision of pre-employment transition 
services. Section 113(a) of the Rehabilitation Act and 34 CFR 361.48(a) 
require DSUs for the VR program to use the reserved funds to provide, 
or arrange for the provision of, pre-employment transition services to 
all students with disabilities in need of such services who are 
eligible or potentially eligible for services under the VR program.
    Section 113(b) of the Rehabilitation Act and 34 CFR 361.48(a)(2) 
list the five required pre-employment transition services that DSUs, in 
collaboration with local educational agencies (LEAs), must make 
available to students with disabilities in need of these services. 
These services are--
     Job exploration counseling;
     Work-based learning experiences, which may include in-
school or after school opportunities, or experience outside the 
traditional school setting (including internships), that are provided 
in an integrated environment to the maximum extent possible;
     Counseling on opportunities for enrollment in 
comprehensive transition or postsecondary educational programs at 
institutions of higher education;
     Workplace readiness training to develop social skills and 
independent living; and
     Instruction in self-advocacy, which may include peer 
mentoring.
    Pre-employment transition services represent the earliest set of 
services available for students with disabilities under the VR program, 
are short-term in nature, and are designed to help students identify 
career interests.
    For purposes of this notice of interpretation, the Department 
focuses its discussion on these five required pre-employment transition 
services because these are the only pre-employment transition services 
that DSUs provide directly to students with disabilities as defined in 
section 7(37) of the Rehabilitation Act and 34 CFR 361.5(c)(51).\1\
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    \1\ Section 113(c) of the Rehabilitation Act describes services 
that are systemic in nature, i.e., strategies the DSUs use in 
delivering pre-employment transition services, and section 113(d) 
describes the coordination activities for ensuring that students 
with disabilities receive the pre-employment transition services 
they need. This notice of interpretation does not address the pre-
employment transition services described in section 113(c) and (d) 
of the Rehabilitation Act because they are not applicable to this 
interpretation (see also 34 CFR 361.48(a)(3) and (4)).
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    Since implementation of the pre-employment transition services 
requirements, the Department has continued to receive comments from 
DSUs and other stakeholders regarding: (1)The need for further 
clarification about the extent to which funds reserved for the 
provision of pre-employment transition services may be used to pay for 
auxiliary aids and services; and (2) the ability of States to reserve 
and expend at least 15 percent of their VR grant allotments on the 
provision of pre-employment transition services under the Department's 
general interpretation of the statutory requirements related to the 
allowable use of funds. Specifically, DSUs and stakeholders have asked 
if funds reserved for pre-employment transition services may be used to 
cover the costs of auxiliary aids and services provided directly to 
students with disabilities as well as other VR services, such as 
transportation, tuition for postsecondary education, rehabilitation 
technology, and job coaching. The Department addresses these concerns 
in this notice of interpretation.

Policy Interpretation Clarification--Use of Reserved Funds for 
Providing Auxiliary Aids and Services to All Students With Disabilities 
Receiving Pre-Employment Transition Services

    Subsequent to the publication of the State Vocational 
Rehabilitation Services program; State Supported Employment Services 
program; and Limitations on Use of Subminimum Wage regulations in the 
Federal Register on August 19, 2016 (81 FR 55630) (August 2016 
regulations), it has been the Department's policy interpretation that 
DSUs may use funds reserved for the provision of pre-employment 
transition services to pay for auxiliary aids and services for students 
with disabilities with sensory and communicative disorders who need 
such aids and services in order to access or participate in pre-
employment transition services under section 113(b) of the 
Rehabilitation Act and 34 CFR 361.48(a)(2) (Rehabilitation Services 
Administration email to DSUs dated December 28, 2016: https://www2.ed.gov/policy/speced/guid/rsa/supporting/dear-director-letter-auxiliary-aids-and-services-12-28-2016.pdf). The Department made clear 
that DSUs may use the funds reserved under section 110(d)(1) of the 
Rehabilitation Act and 34 CFR 361.65(a)(3)(i) to pay for any auxiliary 
aids and services needed by any student with a disability with a 
sensory or communicative disorder who needs those services to access 
pre-employment transition services, regardless of whether the student 
has applied or been determined eligible for the VR program.
    As public entities, defined in section 12131 of the Americans with 
Disabilities Act (ADA), and as recipients of Federal funds, DSUs must 
ensure that no qualified individual with a disability is excluded from 
participation in or denied the benefits of services, programs, or 
activities on the basis of the individual's disability (section 12132 
of the ADA and section 504(a) of the Rehabilitation Act). Because 
section 113(a) of the Rehabilitation Act and 34 CFR 361.48(a) make 
clear that pre-employment transition services must be provided to all 
students with disabilities who need them, this means that both eligible 
and potentially eligible students with disabilities meet the essential 
eligibility requirements \2\ for pre-employment transition services 
under the VR program in accordance with section 113(a) of the 
Rehabilitation Act and thus are considered qualified individuals with 
disabilities for purposes of title II of the ADA and section 504 of the 
Rehabilitation Act (28 CFR 35.104; 34 CFR 104.3(l)(4)). Therefore, if 
any student with a disability requires an auxiliary aid or service to 
access or participate in any of the pre-employment transition services 
specified in section 113(b) of the Rehabilitation Act and 34 CFR 
361.48(a)(2), the DSU must pay for such costs if no other public entity 
is required to provide such aids or services.\3\
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    \2\ It is important to note that potentially eligible students 
with disabilities are eligible to receive pre-employment transition 
services pursuant to section 113(a) of the Rehabilitation Act. As 
such, they are considered qualified individuals under the ADA for 
the receipt of pre-employment transition services. It should not be 
construed that these students with disabilities have satisfied the 
eligibility requirements of section 102(a) of the Rehabilitation Act 
for all other VR services provided under section 103 of the 
Rehabilitation Act.
    \3\ Please see 34 CFR 361.53(a) for the related assurance that 
DSUs must include in the VR services portion of the Unified or 
Combined State Plan. See also Section 101(a)(8)(A)(i) of the 
Rehabilitation Act. Because DSUs must conduct a search for 
comparable services and benefits only when providing VR services to 
eligible individuals, they need not conduct such a search when 
providing pre-employment transition services and auxiliary aids and 
services to students with disabilities who have not applied or been 
determined eligible for VR services, but they would be required to 
do so for those students with disabilities who have been determined 
eligible under the VR program pursuant to section 102(a)(1) of the 
Rehabilitation Act. In addition, rehabilitation technology, 
including telecommunications, sensory, and other technological aids 
and devices, among other VR services, are exempt under Section 
101(a)(8)(A)(i) and 34 CFR 361.53(b)(5) from the determination of 
comparable services and benefits. Therefore, DSUs need not conduct a 
search for comparable services and benefits when providing auxiliary 
aids and services to either eligible or potentially eligible 
students with disabilities to the extent that these aids and 
services constitute ``rehabilitation technology'' as defined in 
Section 7(32) of the Rehabilitation Act and 34 CFR 361.5(c)(45), and 
are necessary for the student with a disability to participate in 
pre-employment transition services under section 113 of the 
Rehabilitation Act.

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[[Page 11850]]

    The ADA's title II implementing regulations define ``auxiliary aids 
and services'' in 28 CFR 35.104. For purposes of the Department's 
policy interpretation, auxiliary aids and services ensure equal access 
to information, materials, services, and activities available to 
students with disabilities participating in pre-employment transition 
services. As such, expenditures incurred for the purchase or 
acquisition of auxiliary aids and services, including, for example, 
interpreter and reader services under section 103(a)(10) of the 
Rehabilitation Act and 34 CFR 361.48(b)(10) and (11), for students with 
disabilities needing such aids or services to access or participate in 
pre-employment transition services specified in section 113(b) of the 
Rehabilitation Act and 34 CFR 361.48(a)(2) constitute an allowable pre-
employment transition services cost. This is true for both potentially 
eligible and eligible students with disabilities.
    Because auxiliary aids and services necessary for students with 
disabilities to access or participate in pre-employment transition 
services are an allowable cost, DSUs may use funds reserved for 
providing pre-employment transition services to pay for those auxiliary 
aids and services for any student with a disability who needs them, 
regardless of whether they have applied and been determined eligible 
for VR services. For example, for a student who is deaf, DSUs could 
purchase interpreter services or video-based telecommunication products 
to ensure access to information and activities related to job 
exploration counseling or other pre-employment transition services. As 
another example, DSUs could purchase screen reader software programs to 
enable a student who is blind to access information on a computer 
during a work-based learning experience. DSUs could purchase the screen 
reader software for the student's personal laptop or for a laptop that 
would be available for other students needing the device. In these 
instances, it is important to note that the screen reader software for 
individuals who are blind or visually impaired, not the computer on 
which it is installed, meets the definition of ``auxiliary aids and 
services'' for purposes of the ADA and section 504 of the 
Rehabilitation Act and, as such, could be paid with funds reserved for 
the provision of pre-employment transition services. The Department 
addresses computers and other rehabilitation technology in a later 
discussion pertaining to section 103(a)(14) of the Rehabilitation Act 
and 34 CFR 361.48(b)(17).
    On the other hand, personal devices and services do not meet the 
definition of auxiliary aids and services under the ADA or section 504 
of the Rehabilitation Act. Personal devices and services include 
individually prescribed devices, such as prescription eyeglasses or 
hearing aids, readers for personal use or study, or services of a 
personal nature (28 CFR 35.135 and 34 CFR 104.44(d)(2)). If a student 
with a disability requires personal devices or services or individually 
prescribed assistive technology, the VR agency must determine whether 
the student meets the eligibility criteria of section 102(a) of the 
Rehabilitation Act and, if so, develop an IPE in partnership with the 
student pursuant to section 102(b) of the Rehabilitation Act for the 
provision of those additional services (see also 34 CFR 361.42(a)(1) 
and 361.45). DSUs must use funds reserved under section110(d)(1) of the 
Rehabilitation Act and 34 CFR 361.65(a)(3)(i) to pay for only pre-
employment transition services under section 113(b) and 34 CFR 
361.48(a)(2), auxiliary aids and services needed by any student with a 
disability to access or participate in those services, or other VR 
services necessary for an eligible student to receive pre-employment 
transition services as discussed elsewhere in this notice of 
interpretation. DSUs must pay for any other additional VR services 
using non-reserved VR funds.

Policy Interpretation--Use of Reserved Funds for Providing Certain 
Other VR Services for Eligible Students With Disabilities Receiving 
Pre-Employment Transition Services

    As explained here for purposes of this policy interpretation, which 
is separate and distinct from the policy clarification just described 
regarding auxiliary aids and services, DSUs may use the funds reserved 
under section 110(d)(1) of the Rehabilitation Act and 34 CFR 
361.65(a)(3)(i) to pay for those pre-employment transition services 
needed by eligible students with disabilities, plus any other VR 
service needed by those eligible students to benefit from pre-
employment transition services in accordance with an approved IPE. With 
respect to those students with disabilities who have not yet been 
determined eligible for the VR program (i.e., potentially eligible 
students with disabilities), DSUs may use the funds reserved under 
section 110(d)(1) of the Rehabilitation Act and 34 CFR 361.65(a)(3)(i) 
only to pay for those pre-employment transition services set forth in 
section 113 and 34 CFR 361.48(a), as well as for auxiliary aids and 
services needed to access or participate in pre-employment transition 
services, as described in Department guidance issued to date.
    Since the addition of the five required pre-employment transition 
services, the VR program can be characterized as providing a continuum 
of services, with pre-employment transition services being most 
beneficial to students with disabilities in the early stages of 
employment exploration. The Secretary is committed to ensuring that 
students with disabilities are held to high expectations and have the 
resources and supports needed to prepare them for success in 
postsecondary education or careers. Therefore, we believe that these 
services should be provided to the broadest population of students with 
disabilities to ensure that as many students with disabilities as 
possible are able to receive the services they need to prepare for 
postschool activities, including postsecondary education and 
employment. To that end, pre-employment transition services represent 
the earliest set of services available for students with disabilities 
under the VR program. These are short-term services designed to help 
students identify career interests.
    Transition services represent the next set of services on the 
continuum of VR services available to eligible individuals. Transition 
services, for eligible students \4\ with disabilities, provide for 
further development and pursuit of career interests with postsecondary 
education, vocational training, job search, job placement, job 
retention, job follow-up, and job follow-along services (section 
103(a)(4), (5), and (15) of the Rehabilitation Act and 34 CFR 
361.48(b)(6), (12), and (18)).
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    \4\ Although DSUs may provide transition and other VR services 
to youth with disabilities, as defined at section 7(42) of the 
Rehabilitation Act and 34 CFR 361.5(c)(58), the discussion in this 
notice of interpretation focuses solely on students with 
disabilities because pre-employment transition services are only 
available to those individuals who meet the definition of a 
``student with a disability'' at section 7(37) of the Rehabilitation 
Act and 34 CFR 361.5(c)(51).
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    Employment-related services to eligible individuals are next in the 
continuum of services. These services typically are provided once 
eligible

[[Page 11851]]

students have identified their career interests, have further developed 
and pursued their career interests through postsecondary education and 
vocational training offered through transition services, and are 
pursuing specific employment outcomes. Employment-related services are 
identified in section 103(a) of the Rehabilitation Act and 34 CFR 
361.48(b) and are intended to assist the eligible individual with a 
disability in preparing for, securing, retaining, advancing in, or 
regaining an employment outcome that is consistent with the 
individual's unique strengths, resources, priorities, concerns, 
abilities, capabilities, interests, and informed choice.
    While a continuum of services across pre-employment transition 
services for students with disabilities, and transition services and 
employment-related services for eligible individuals who have IPEs, 
exists under the VR program, the five required pre-employment 
transition services are the only services available to potentially 
eligible students with disabilities.
    In the preamble to the Department's August 2016 regulations, the 
Department made clear that the term ``potentially eligible'' students 
with disabilities, for purposes of receiving pre-employment transition 
services, includes all students with disabilities (81 FR 55630, 55631, 
and 55690-55691). Students with disabilities do not need to apply and 
be determined eligible for the VR program to receive pre-employment 
transition services. However, these students may not receive any VR 
services other than pre-employment transition services until they 
apply, and are determined eligible, for VR services, and have an 
approved IPE (81 FR 55629 at 55691). On the other hand, eligible 
students with disabilities, that is, those students who have applied 
and been determined eligible for the VR program, are able to receive 
any VR services, including pre-employment transition services, 
necessary to assist them in achieving their employment outcome, so long 
as those services are identified on their IPEs in accordance with 
section 103(a) of the Rehabilitation Act (81 FR 55691).
    On May 21, 2014, the Congress of the United States released 
``Statement of the Managers to Accompany the Workforce Innovation and 
Opportunity Act.'' In its statement, Congress made clear that the title 
IV ``. . . amendments established a framework to ensure every young 
person with a disability, regardless of their level of disability, has 
the opportunity to experience competitive, integrated employment. The 
pre-employment transition services will provide young people with 
disabilities with the opportunity to develop their skills and to use 
supports, available through State VR programs to experience competitive 
integrated employment as they leave school and enter the workforce.'' 
The intent of Congress makes clear that the ``framework'' for VR 
services includes pre-employment transition services for all students 
with disabilities and other services and supports for eligible students 
with disabilities with an approved IPE to develop their skills and 
experience success when they enter the workforce.
    Section 110(d)(1) of the Rehabilitation Act and 34 CFR 
361.65(a)(3)(i) require each State to reserve at least 15 percent of 
its Federal VR grant for the provision of pre-employment transition 
services to students with disabilities. With this statutory provision, 
coupled with the ``Statement of the Managers to Accompany the Workforce 
Innovation and Opportunity Act,'' the Department interprets this 
requirement as meaning that DSUs may use these reserved funds to pay 
for other VR services under section 103(a) of the Rehabilitation Act 
and 34 CFR 361.48(b), in accordance with an approved IPE, that are 
necessary for an eligible student with a disability to participate in 
pre-employment transition services identified in section 113(b) of the 
Rehabilitation Act. This means that, for eligible students with 
disabilities, DSUs may use the reserved funds to pay for the pre-
employment transition services and any other VR services necessary for 
the eligible student to benefit from those pre-employment transition 
services in accordance with an approved IPE consistent with the 
requirements of section 103(a) of the Rehabilitation Act. However, for 
those students with disabilities who have not yet applied or been 
determined eligible for the VR program (i.e., potentially eligible 
students), the DSUs may use the reserved funds to pay only those costs 
incurred in providing the pre-employment transition services identified 
in section 113 of the Rehabilitation Act and 34 CFR 361.48(a), as well 
as auxiliary aids and services needed to access or participate in pre-
employment transition services, as described in guidance issued by the 
Department to date.
    Although section 113 of the Rehabilitation Act is unique in that it 
permits VR agencies to provide pre-employment transition services to 
students with disabilities who have not yet been determined eligible 
for the VR program, section 103(a) of the Rehabilitation Act does not 
contain the same flexibility. Section 103(a) of the Rehabilitation Act 
makes clear that all VR services provided under that section are 
provided under an approved IPE that is developed when an individual 
with a disability has applied and been determined eligible for the VR 
program in accordance with section 102 of the Rehabilitation Act (see 
also 34 CFR 361.42 and 361.48(b)).
    Section 102(b)(4)(A) of the Rehabilitation Act and 34 CFR 
361.46(a)(1) make clear that the IPE for a student with a disability 
need only contain a ``description of the student's projected postschool 
employment outcome,'' as opposed to a description of a specific 
employment outcome. Despite this flexibility available to States, the 
Department has observed through monitoring that these IPEs for students 
with disabilities are underutilized. Because DSUs can develop initial 
IPEs for eligible students with disabilities that are more general in 
nature, DSUs are able to provide additional supports and services to 
eligible students as necessary for students to benefit from pre-
employment transition services and activities and explore their career 
interests and, subsequently, refine the IPEs, through the amendment 
process under section 102(b)(3)(E) of the Rehabilitation Act and 34 CFR 
361.45(a)(6), to include a specific employment goal and the VR services 
necessary to achieve that goal, as appropriate. Eligible students with 
disabilities are able to access any other VR services needed to 
participate in pre-employment transition services (as discussed in more 
detail below) or other VR services that are unrelated to pre-employment 
transition services, none of which would be available to them without 
approved IPEs.
    This policy interpretation applies only to those students with 
disabilities who have been determined eligible for services under the 
VR program and who have an approved IPE. We recognize that some 
eligible students with disabilities may need certain VR services under 
section 103(a) of the Rehabilitation Act and 34 CFR 361.48(b) to fully 
benefit from pre-employment transition services under section 113(b) 
and 34 CFR 361.48(a)(2). Receiving other VR services and supports, 
along with the pre-employment transition services, enables eligible 
students with a disability to develop the skills to experience 
competitive, integrated employment as they leave school and enter the 
workforce. Therefore, the Department believes that allowing the funds 
reserved under section 110(d)(1) and 34 CFR 361.65(a)(3)(i) to be used 
to

[[Page 11852]]

pay for other VR services needed by eligible students with disabilities 
who have IPEs to benefit from pre-employment transition services is 
consistent with the ``Statement of the Managers to Accompany the 
Workforce Innovation and Opportunity Act'' and with the statutory 
purpose for the reservation of these funds.
    This interpretation regarding the use of the reserved funds for 
certain other VR services that are necessary for an eligible student 
with a disability to benefit from pre-employment transition services 
also is consistent with the Office of Management and Budget's Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
for Federal Awards (Uniform Guidance), codified at 2 CFR part 200. 
Specifically, 2 CFR 200.403(a) requires that costs paid from a Federal 
award must be allowable, meaning that they must be necessary, 
reasonable, and allocable to the award. Costs are reasonable if, in 
their nature and amount, they do not exceed that which would be 
incurred by a prudent person under the circumstances that existed at 
the time the decision was made to incur the cost (2 CFR 200.404). A 
cost is allocable to a Federal cost objective if the services are 
assignable to that cost objective in accordance with relative benefits 
received (2 CFR 200.405(a)). These fiscal requirements not only apply 
to costs incurred under the VR grant as a whole, but also to those 
costs incurred with the funds reserved under section 110(d)(1) of the 
Rehabilitation Act and 34 CFR 361.65(a)(3)(i). In other words, costs 
incurred with these reserved funds must be--

     Necessary for the provision or receipt of pre-
employment transition services;
     Reasonable, that is, those that a prudent person would 
agree are necessary for the provision or receipt of pre-employment 
transition services; and
     Allocable, that is, those that benefit the provision or 
receipt of pre-employment transition services.

    Under the Department's interpretation, the reserved funds may be 
used for costs associated with providing certain VR services to 
eligible students with disabilities, in accordance with approved IPEs, 
who need those services to benefit from pre-employment transition 
services, as well as the costs associated with the pre-employment 
transition services themselves. As such, these costs would be 
reasonable, necessary, and allocable to the funds reserved under 
section 110(d)(1) of the Rehabilitation Act and 34 CFR 361.65(a)(3)(i). 
If eligible students with disabilities need additional VR services that 
are not within the scope of pre-employment transition services and, 
thus, this interpretation, DSUs may still provide those services in 
accordance with the terms of the approved IPE. However, DSUs must 
provide those additional VR services with other VR funds that were not 
reserved under section 110(d)(1) of the Rehabilitation Act and 34 CFR 
361.65(a)(3)(i).
    In an effort to explain the application of this interpretation to 
the services outlined in section 103(a) of the Rehabilitation Act and 
34 CFR 361.48(b), we discuss each of those VR services in light of 
whether they are within the nature, scope, and purpose of any of the 
pre-employment transition services available under section 113(b) and 
34 CFR 361.48(a)(2) (i.e., are necessary, reasonable, and allocable) 
and, thus, may be paid with the funds reserved under section 110(d)(1) 
of the Rehabilitation Act and 34 CFR 361.65(a)(3)(i) if needed by an 
eligible student with a disability to benefit from pre-employment 
transition services. In so doing, we also explain that certain VR 
services outlined in section 103(a) of the Rehabilitation Act and 34 
CFR 361.48(b) fall outside the nature, scope, and purpose of pre-
employment transition services and, thus, those services are not 
reasonable or necessary for an eligible student with a disability to 
benefit from pre-employment transition services under section 113(b) of 
the Rehabilitation Act and 34 CFR 361.48(a)(2). Therefore, the costs 
for such services are not allocable to the provision of pre-employment 
transition services and may not be paid with the funds reserved under 
section 110(d)(1) and 34 CFR 361.65(a)(3)(i) for that purpose. Nothing 
in this interpretation affects the DSU's responsibility to search for 
comparable services and benefits, when required by section 101(a)(8) of 
the Rehabilitation Act and 34 CFR 361.53, before providing any of the 
VR services discussed herein.
    Through this interpretation, the following VR services in section 
103(a) of the Rehabilitation Act and 34 CFR 361.48(b) fall within the 
nature, scope, and purpose of pre-employment transition services when 
needed by an eligible student with a disability, in accordance with an 
approved IPE, to benefit from one or more of the pre-employment 
transition services described in section 113(b) of the Rehabilitation 
Act and 34 CFR 361.48(a)(2). As such, costs incurred in providing these 
other VR services are allocable to the funds reserved under section 
110(d)(1) of the Rehabilitation Act and 34 CFR 361.65(a)(3)(i). As 
discussed here, the examples of when DSUs may use the reserved funds to 
pay for additional services in section 103(a) of the Rehabilitation Act 
and 34 CFR 361.48(b), consistent with both the statutory purpose for 
these reserved funds and fiscal requirements of the Uniform Guidance, 
provide DSUs with significantly greater flexibility in delivering pre-
employment transition services to eligible students with disabilities 
than has been allowed under Department guidance issued to date, thereby 
increasing the availability of pre-employment transition services to 
these students.
    To the extent that a portion of the costs incurred for the 
additional VR services fall outside the nature, scope, and purpose of 
pre-employment transition services, DSUs must pay that portion with 
other VR program funds.
Assessment Services
    Section 103(a)(1) and 34 CFR 361.48(b)(2) permit DSUs to provide 
assessment services to eligible individuals to determine VR needs. 
These services are generally provided in the very early stages of the 
VR process with an eligible individual with a disability and, thus, are 
consistent with the nature, scope, and purpose of pre-employment 
transition services. As stated in the preamble to the August 2016 
regulations (81 FR at 55685), VR services are provided on a continuum, 
with pre-employment transition services being the earliest set of 
services available for students with disabilities. Given that the 
purpose of assessment services under section 103(a)(1) and 34 CFR 
361.48(b)(2) is to determine the VR needs of individuals with 
disabilities, it is reasonable that an eligible student with a 
disability would need further assessment services while engaging in any 
of the pre-employment transition services set forth at section 113(b) 
and 34 CFR 361.48(a)(2) to fully benefit from those activities.
Counseling and Guidance
    Section 103(a)(2) and 34 CFR 361.48(b)(3) permit DSUs to provide 
counseling and guidance services to eligible individuals throughout the 
VR process. These services are directly connected with the nature, 
scope, and purpose of two pre-employment transition services, 
specifically job exploration counseling (section 113(b)(1) and 34 CFR 
361.48(a)(2)(i)) and counseling on opportunities for enrollment in 
comprehensive transition and other postsecondary education programs at 
institutions of higher education (section 113(b)(3) and 34 CFR 
361.48(a)(2)(iii)). Given that counseling and guidance services are 
specifically listed among the pre-employment

[[Page 11853]]

transition services at section 113(b) and 34 CFR 361.48(a)(2), these 
services clearly fall within the nature, scope, and purpose of pre-
employment transition services. Therefore, it is reasonable that an 
eligible student with a disability could need these services in order 
to benefit from pre-employment transition services activities.
Referral Services
    Section 103(a)(3) and 34 CFR 361.48(b)(4) permit DSUs to provide 
referral services to eligible individuals with disabilities to secure 
needed services from other agencies throughout the VR process. While 
these services are not directly connected to any particular pre-
employment transition services activity described in section 113(b) and 
34 CFR 361.48(a)(2), section 113(a) of the Rehabilitation Act and 34 
CFR 361.48(a) make clear that the VR agency must provide, or arrange 
for the provision of, pre-employment transition services to students 
with disabilities in need of such services. The Rehabilitation Act 
clearly envisioned circumstances in which the DSU itself would not be 
able to provide the pre-employment transition services and would need 
to reach agreements with other entities to provide those services. As 
such, it is reasonable that an eligible student with a disability could 
need a referral in order to participate in one or more of the pre-
employment transition services set forth in section 113(b) of the 
Rehabilitation Act and 34 CFR 361.48(a)(2). In this circumstance, the 
referral services under section 103(a)(3) and 34 CFR 361.48(b)(4) for 
that eligible student with a disability would fall squarely within the 
nature, scope, and purpose of pre-employment transition services.
Maintenance
    Section 103(a)(7) and 34 CFR 361.48(b)(7) permit DSUs to provide 
maintenance to eligible individuals with disabilities to cover 
additional costs incurred while receiving VR services. DSUs may provide 
maintenance to eligible individuals with disabilities throughout the VR 
process, including during the early stages in the continuum of VR 
services. Maintenance is unique from most other VR services listed in 
section 103(a) and 34 CFR 361.48(b) because it must be provided in 
combination with another VR service, such as pre-employment transition 
services. It is reasonable that an eligible student with a disability 
who is participating in pre-employment transition services could incur 
additional costs to participate in those services (e.g., purchase of 
required clothing for a work-based learning experience under section 
113(b)(2) and 34 CFR 361.48(a)(2)(ii) or the purchase of a talking 
alarm clock to participate in workplace readiness training under 
section 113(b)(4) and 34 CFR 361.48(a)(2)(iv)). Therefore, to the 
extent an eligible student with a disability needs maintenance, in 
accordance with an approved IPE, to benefit from pre-employment 
transition services, then such maintenance services fall within the 
nature, scope, and purpose of pre-employment transition services. 
However, we clarify that it is not reasonable to provide maintenance 
services to all eligible students with disabilities in all 
circumstances with the use of the reserved funds under this 
interpretation. DSUs must ensure the costs incurred for maintenance are 
allocable to the pre-employment transition services that the eligible 
student with a disability is receiving, as opposed to other VR services 
that the student may be receiving simultaneously. For example, if the 
DSU agreed to pay for the fee for the eligible student to take a 
college entrance test preparatory course, this VR service would be 
beyond the nature, scope, and purpose of all of the pre-employment 
transition services described in section 113(b) and 34 CFR 361.48(a)(2) 
and, as such, would not be allocable to those services. In this 
example, the DSU must pay the costs incurred for maintenance with other 
VR program funds, not the funds reserved under section 110(d)(1) and 34 
CFR 361.65(a)(3)(i) for the provision of pre-employment transition 
services.
Transportation
    Section 103(a)(8) and 34 CFR 361.48(b)(8) permit DSUs to provide 
transportation services, including training in the use of public 
transportation, to eligible individuals with disabilities throughout 
the VR process. As with the maintenance services just described, DSUs 
must provide transportation services only in combination with another 
VR service, such as pre-employment transition services. It is 
reasonable that an eligible student with a disability who is 
participating in pre-employment transition services could need 
transportation services to benefit from any of the pre-employment 
transition services described in section 113(b) of the Rehabilitation 
Act and 34 CFR 361.48(a)(2) (e.g., to attend counseling sessions under 
section 113(b)(1) and (3) and 34 CFR 361.48(a)(2)(i) and (iii), work-
based learning experiences under section 113(b)(2) and 34 CFR 
361.48(a)(2)(ii), or self-advocacy training sessions under section 
113(b)(5) and 34 CFR 361.48(a)(2)(v)). It is also reasonable that an 
eligible student with a disability could need transportation to 
participate in workplace readiness training under section 113(b)(4) and 
34 CFR 361.48(a)(2)(iv) to learn how to travel independently in 
preparation for eventual employment. As such, to the extent an eligible 
student with a disability needs transportation services in accordance 
with an approved IPE to participate in any of the pre-employment 
transition services, the transportation services clearly fall within 
the nature, scope, and purpose of those pre-employment transition 
services. We clarify that it is not reasonable to provide all types of 
transportation services to all eligible students with disabilities with 
the use of the reserved funds under this interpretation. As with the 
maintenance services described earlier, DSUs must ensure the costs 
incurred for transportation services are allocable to the pre-
employment transition services that the eligible student with a 
disability is receiving, as opposed to other VR services that the 
eligible student may be receiving simultaneously. For example, if the 
DSU agreed to pay for a vehicle modification to make it more accessible 
for the eligible student with a disability while participating in pre-
employment transition services and other VR counseling services, as 
well as a dual enrollment program under the Individuals with 
Disabilities Education Act, the DSU must determine whether a prudent 
person would agree that the cost for the vehicle modification is 
reasonable as a cost associated with the pre-employment transition 
services the student is receiving and, if so, to what extent the cost 
is allocable to the pre-employment transition services activity. To 
make this determination, the DSU should take into account the duration 
of the pre-employment transition services that the eligible student 
with a disability is participating in to determine whether, or to what 
extent, the transportation cost in this circumstance would be allocable 
to the funds reserved under section 110(d)(1) and 34 CFR 
361.65(a)(3)(i) or whether this cost more appropriately should be paid 
with other VR program funds.
Personal Assistance Services
    Section 103(a)(9) and 34 CFR 361.48(b)(14) permit DSUs to provide 
personal assistance services to eligible individuals with disabilities 
when needed to participate in another VR service. As with maintenance 
and transportation services just described, DSUs may provide personal 
assistance

[[Page 11854]]

services only in combination with another VR service, such as pre-
employment transition services. It is reasonable that an eligible 
student with a disability, particularly a student with a significant 
disability, who is participating in pre-employment transition services 
could need personal assistance services in order to participate in 
those services (e.g., personal assistance services during a work-based 
learning experience under section 113(b)(2) and 34 CFR 
361.48(a)(2)(ii)). Therefore, to the extent an eligible student with a 
disability needs personal assistance services, in accordance with an 
approved IPE, to participate in pre-employment transition services, 
such personal assistance services fall within the nature, scope, and 
purpose of pre-employment transition services. We clarify that, as with 
the maintenance and transportation services just described, only those 
personal assistance services identified in an IPE directly related to 
the eligible student with a disability's participation in pre-
employment transition services are allocable and, thus, could be paid 
with the reserved funds. DSUs must pay for all other personal 
assistance services needed by the eligible student with other VR 
program funds.
Rehabilitation Teaching & Orientation and Mobility Services
    Section 103(a)(11) and 34 CFR 361.48(b)(11) permit DSUs to provide 
rehabilitation teaching services and orientation and mobility services 
to eligible individuals who are blind. These services, particularly the 
orientation and mobility services, also are offered as pre-employment 
transition services, namely ``workplace readiness'' training under 
section 113(b)(4) of the Rehabilitation Act and 34 CFR 361.48(a)(2). 
Therefore, it is reasonable and allocable to pre-employment transition 
services activities for a DSU to use funds reserved under section 
110(d)(1) of the Rehabilitation Act and 34 CFR 361.65(a)(3)(i) to pay 
for these services in the event an eligible student with a disability 
needs them, in accordance with an approved IPE, to benefit from pre-
employment transition services. Because these services actually 
constitute workplace readiness training under section 113(b)(4) and 34 
CFR 361.48(a)(2)(iv), the services under section 103(a)(11) and 34 CFR 
361.48(b)(11) clearly fall within the scope, nature, and purpose of 
pre-employment transition services.
Rehabilitation Technology
    Section 103(a)(14) and 34 CFR 361.48(b)(17) permit DSUs to provide 
eligible individuals with disabilities rehabilitation technology 
throughout the VR process when needed and identified on an approved 
IPE. It is reasonable that an eligible student with a disability, 
especially a student with a significant disability, could need 
rehabilitation technology to benefit from pre-employment transition 
services, particularly those involving work-based learning experiences 
under section 113(b)(2) and 34 CFR 361.48(a)(2)(ii), workplace 
readiness training under section 113(b)(4) and 34 CFR 361.48(a)(2)(iv), 
and self-advocacy training under section 113(b)(5) and 34 CFR 
361.48(a)(2)(v). For example, an eligible student with a disability may 
need an electronic device (that does not constitute an auxiliary aid or 
service as discussed elsewhere in this notice of interpretation) to 
participate in one of the pre-employment transition services training 
activities. In other words, without the rehabilitation technology, the 
eligible student with a disability might not be able to participate in 
the pre-employment transition services activity. Under this 
circumstance, the rehabilitation technology falls within the nature, 
scope, and purpose of pre-employment transition services under section 
113(b) of the Rehabilitation Act and 34 CFR 361.48(a)(2) and, thus, is 
allocable to those services. However, DSUs must ensure that the costs 
incurred for the rehabilitation technology are needed by the eligible 
student with a disability to participate in pre-employment transition 
services, as opposed to other VR services the eligible student might be 
participating in simultaneously. Pursuant to 2 CFR 200.403 through 
200.405, the DSUs may use the funds reserved under section 110(d)(1) of 
the Rehabilitation Act and 34 CFR 361.65(a)(3)(i) to pay for the costs 
of rehabilitation technology that is reasonably allocable to the pre-
employment transition services activities of the eligible student with 
a disability. The DSU must use other VR funds to pay for the portion of 
the cost, or the entire cost if applicable, that is not allocable to 
the pre-employment transition services activities.
Pre-Employment Transition Services Under Section 103(a)
    Section 103(a)(15) and 34 CFR 361.48(b)(18) permit DSUs to provide 
transition services, including pre-employment transition services, to 
eligible students with disabilities. For purposes of this 
interpretation, we discuss transition services separately in a later 
section. This discussion focuses solely on the pre-employment 
transition services available under section 103(a)(15) and 34 CFR 
361.48(b)(18). As with the orientation and mobility services discussed 
above, these pre-employment transition services are at the core of the 
nature, scope, and purpose of the pre-employment transition services 
provided under section 113(b) of the Rehabilitation Act and 34 CFR 
361.48(a)(2). Therefore, it is reasonable and allocable to pre-
employment transition services activities for a DSU to use funds 
reserved under section 110(d)(1) of the Rehabilitation Act and 34 CFR 
361.65(a)(3)(i) to pay for these services in the event an eligible 
student with a disability needs them, in accordance with an approved 
IPE, to participate in pre-employment transition services under section 
113(b) and 34 CFR 361.48(a)(2).
Family Services
    Section 103(a)(19) and 34 CFR 361.48(b)(9) permit the DSU to 
provide services to family members of an eligible individual with a 
disability when these services are necessary for the eligible 
individual to achieve an employment outcome. As with certain other 
services (i.e., maintenance, transportation, and personal assistance 
services), services to the family, by their very nature, must be 
provided in combination with another VR service, such as pre-employment 
transition services. Given that pre-employment transition services 
represent the earliest set of services available to students with 
disabilities under the VR program, it is reasonable that a family 
member could need services to enable the eligible student with a 
disability to benefit from pre-employment transition services. For 
example, the parent or guardian may need transportation services to 
accompany the eligible student with a disability to his or her pre-
employment transition services activities or the parent or guardian may 
need language interpreter services in order to understand consent forms 
that he or she might need to sign on behalf of the underage eligible 
student with a disability participating in pre-employment transition 
services. In such circumstances, the services to family members clearly 
fall within the nature, scope, and purpose of the pre-employment 
transition services provided under section 113(b) of the Rehabilitation 
Act and 34 CFR 361.48(a)(2), thereby making the costs incurred for such 
services allocable to pre-employment transition services.

[[Page 11855]]

Coaching Services
    Finally, with respect to those services in section 103(a) of the 
Rehabilitation Act that fall within the nature, scope, and purpose of 
pre-employment transition services described in section 113(b) and 34 
CFR 361.48(a)(2), the Secretary notes that section 103(a) is not an 
exhaustive list of services (34 CFR 361.48(b)(21)). DSUs may provide 
any service that an eligible individual needs to achieve an employment 
outcome in accordance with an approved IPE. In the context of pre-
employment transition services, one such service is coaching services 
for eligible students with disabilities participating in work-based 
learning experiences under section 113(b)(2) and 34 CFR 
361.48(a)(2)(ii). These coaches perform similar functions as job 
coaches do in supported employment settings by assisting the eligible 
student with a disability to perform the tasks assigned during the 
work-based learning experiences. While these particular coaching 
services are not specifically listed in section 103(a), they would be 
considered allowable VR services under section 103(a) and 34 CFR 
361.48(b)(21) if needed by an eligible student with a disability, in 
accordance with an approved IPE, to participate in pre-employment 
transition services. Given that pre-employment transition services are 
among the earliest sets of services available to students with 
disabilities, it is reasonable to expect that these eligible students 
may need extra assistance through coaching services to participate in 
these activities. In such circumstances, these coaching services 
clearly fall within the nature, scope, and purpose of pre-employment 
transition services, particularly work-based learning experiences under 
section 113(b)(2) and 34 CFR 361.48(a)(2)(ii), and, thus, would be 
allocable to those services.
Allocability of Certain Portions of VR Services
    Next, the Secretary believes that the following VR services, set 
forth in section 103(a) and 34 CFR 361.48(b), have aspects of those 
services that fall within the nature, scope, and purpose of pre-
employment transition services when needed by an eligible student with 
a disability, in accordance with an approved IPE, to benefit from one 
or more of the pre-employment transition services described in section 
113(b) of the Rehabilitation Act and 34 CFR 361.48(a)(2). In the narrow 
circumstances described in this notice of interpretation, costs 
incurred for certain portions of the following services could be 
allocable to pre-employment transition services under the right set of 
facts; therefore, in these circumstances, DSUs may pay these costs with 
the funds reserved under section 110(d)(1) of the Rehabilitation Act 
and 34 CFR 361.65(a)(3)(i). However, most aspects of the following 
services fall outside the nature, scope, and purpose of pre-employment 
transition services and, thus, are not allocable to those services. In 
those more common circumstances, DSUs may not use funds reserved under 
section 110(d)(1) and 34 CFR 361.65(a)(3)(i) to pay for those costs.
Vocational and Other Training Services
    Section 103(a)(5) and 34 CFR 361.48(b)(6) permit DSUs to provide 
vocational and other training services, including books, tools, and 
other training materials, for eligible individuals in accordance with 
an approved IPE. This provision also permits DSUs to pay for 
postsecondary education tuition, so long as maximum efforts have been 
made to obtain grant assistance. Before discussing these services, the 
Secretary notes that pre-employment transition services are intended to 
be an early set of exploration services for students with disabilities 
that are ``designed to help students with disabilities to begin to 
identify career interests that will be further explored through 
additional [VR] services, such as transition services. Following the 
continuum, transition services represent the next set of [VR] services 
available to students with disabilities. They are outcome-oriented and 
promote movement from school to post-school activities, including 
postsecondary education, vocational training, and competitive 
integrated employment. As such, transition services may include job-
related services, such as job search and placement assistance, job 
retention services, follow-up services, and follow-along services based 
on the needs of the individual'' (81 FR at 55685). Given the clear 
nature, scope, and purpose of pre-employment transition services as a 
very early set of career interest and exploration services for students 
with disabilities, the services available under section 103(a)(5) and 
34 CFR 361.48(b)(6) are predominately outside that scope. In fact, most 
of the services fit squarely within the vocational training purpose of 
transition services for those individuals transitioning from school to 
a specific employment outcome, as described by the Department at 81 FR 
at 55685 and, thus, are not allocable to pre-employment transition 
services. However, an eligible student with a disability could need a 
book, tool, or other training material to participate in pre-employment 
transition services, specifically a work-based learning experience 
under section 113(b)(2) and 34 CFR 361.48(a)(2)(ii). While a DSU could 
use section 103(a)(7) of the Rehabilitation Act and 34 CFR 361.48(b)(7) 
as the authority to pay for the book, tool, or training material since 
it would be an additional cost incurred as a result of the 
participation in the pre-employment transition services, the DSU also 
could use the authority of section 103(a)(5) and 34 CFR 361.48(b)(6) to 
pay the costs of the service. To the extent the book, tool, or training 
material is necessary for the eligible student with a disability to 
participate in the work-based learning experience under section 
113(b)(2) and 34 CFR 361.48(a)(2)(ii), such service and associated cost 
would be allocable to pre-employment transition services.
Advanced Training
    Section 103(a)(18) and 34 CFR 361.48(b)(6) permit DSUs to encourage 
eligible individuals to pursue advance training in the fields of 
science, technology, engineering, or mathematics (including computer 
science), law, medicine, or business. To the extent that a VR counselor 
or other provider of pre-employment transition services discusses these 
postsecondary options while discussing all opportunities for enrollment 
in comprehensive transition and other postsecondary education programs 
at institutions of higher education under section 113(b)(3) and 34 CFR 
361.48(a)(2)(iii), the service under section 103(a)(18) and 34 CFR 
361.48(b)(6) is squarely within the nature, scope, and purpose of pre-
employment transition services. As such, the service is allocable to 
pre-employment transition services and could be paid for with funds 
reserved for that purpose. However, to the extent that the DSU 
encourages the advanced training under section 103(a)(18) by paying 
tuition at a postsecondary institution, such service is outside the 
nature, scope, and purpose of pre-employment transition services and, 
thus, is not allocable to those services. Once the eligible student has 
identified this career path and started postsecondary education, the 
service is one that enables the individual to transition from school to 
a specific employment outcome, as described at 81 FR at 55685, not 
simply to explore career interests through pre-employment transition 
services activities.

[[Page 11856]]

VR Services Not Allocable to Pre-Employment Transition Services
    Lastly, the Secretary believes that the following VR services, set 
forth in section 103(a) and 34 CFR 361.48(b), are not allocable to pre-
employment transition services in section 113(b) of the Rehabilitation 
Act and 34 CFR 361.48(a)(2) because they are beyond the nature, scope, 
and purpose of those services. As such, these services are not 
allocable to pre-employment transition services, meaning that DSUs may 
not use funds reserved under section 110(d)(1) and 34 CFR 
361.65(a)(3)(i) to pay for those costs even if provided to eligible 
students with disabilities who are also participating in pre-employment 
transition services.
Transition Related Services
    Sections 103(a)(4), (5), (15), and (18) permit DSUs to provide 
eligible individuals with a variety of transition-related services in 
accordance with an approved IPE (see also 34 CFR 361.48(b)(6) and 
(12)). As discussed earlier, pre-employment transition services 
represent the earliest set of services available for students with 
disabilities. These are short-term services designed to help students 
identify career interests. In contrast, transition services represent 
the next set of services on the continuum of VR services to eligible 
individuals. During the receipt of transition services, eligible 
students with disabilities further develop and pursue their career 
interests with postsecondary education, vocational training, job 
search, job placement, job retention, job follow-up, and job follow-
along services. By their very nature, transition-related services are 
beyond the nature, scope, and purpose of pre-employment transition 
services set forth at section 113(b) and 34 CFR 361.48(a)(2). For this 
reason, these services, with narrow exceptions described previously, 
are not allocable to pre-employment transition services. As such, DSUs 
may not use funds reserved under section 110(d)(1) and 34 CFR 
361.65(a)(3)(i) to pay for these costs. Rather, they must use other VR 
program funds to pay these costs.
Medical Services
    Section 103(a)(6) and 34 CFR 361.48(b)(5) permit DSUs to provide 
certain medical services to eligible individuals, in accordance with an 
approved IPE, under certain circumstances. Medical services are beyond 
the nature, scope, and purpose of all the pre-employment transition 
services described in section 113(b) of the Rehabilitation Act and 34 
CFR 361.48(a)(2). While it is possible that an eligible student with a 
disability could need such a service, it is not reasonable to believe 
that the need was tied solely to the student's participation in pre-
employment transition services. Rather, it is most likely that the need 
is more general and associated with the eligible student with a 
disability's VR program as a whole, but not limited to the pre-
employment transition services. As such, the service is not allocable 
to pre-employment transition services and DSUs must pay for the service 
with other VR program funds.
Employment-Related Services
    Sections 103(a)(12), (13), (16), (17), and (20) permit the DSU to 
provide various employment-related services to eligible individuals 
(see also 34 CFR 361.48(b)(13), (15), (16), (19), and (20)). These 
services are next in the continuum of services, once eligible students 
have identified their career interests through pre-employment 
transition services and further developed and pursued them through 
postsecondary education and vocational training offered through 
transition services that assist them in transitioning from school to 
specific employment outcomes. These employment-related services are 
well beyond the continuum of services available as pre-employment 
transition services and are directly tied to specific occupations. For 
this reason, these services are beyond the nature, scope, and purpose 
of pre-employment transition services described in section 113(b) and 
34 CFR 361.48(a)(2). Thus, they are not allocable to those services. 
DSUs must use other VR program funds to pay the costs associated with 
providing these services.

Conclusion

    Through this notice of interpretation, the Secretary clarifies that 
DSUs may use VR funds reserved under section 110(d)(1) of the 
Rehabilitation Act and 34 CFR 361.65(a)(3)(i) to pay for auxiliary aids 
and services needed by all students with disabilities (i.e., both 
eligible and potentially eligible students with disabilities) who have 
sensory and communicative disorders to access or participate in pre-
employment transition services. In addition, the Secretary explains 
that DSUs may use the reserved funds to pay for pre-employment 
transition services needed by eligible students with disabilities and 
certain other VR services in section 103(a) of the Rehabilitation Act 
and 34 CFR 361.48(b) needed by those eligible students to benefit from 
pre-employment transition services in accordance with an approved IPE. 
Although the Department understands that pre-employment transition 
services are available for all students with disabilities, not just 
those determined eligible for the VR program, this interpretation 
permitting the use of the reserved funds for certain VR services other 
than pre-employment transition services is applicable only to those 
students with disabilities who are receiving pre-employment transition 
services, who have been determined eligible for the VR program, and who 
have an approved IPE. Under this interpretation, DSUs may use the funds 
reserved under section 110(d)(1) of the Rehabilitation Act and 34 CFR 
361.65(a)(3)(i) to pay for those pre-employment transition services 
needed by eligible students with disabilities in accordance with an 
approved IPE, plus any other VR service needed by eligible students to 
benefit from pre-employment transition services. With respect to those 
students with disabilities who have not yet been determined eligible 
for the VR program (i.e., potentially eligible students with 
disabilities), DSUs may use the funds reserved under section 110(d)(1) 
of the Rehabilitation Act and 34 CFR 361.65(a)(3)(i) only to pay for 
those pre-employment transition services set forth in section 113 and 
34 CFR 361.48(a), as well as for auxiliary aids and services needed by 
those students to access or participate in pre-employment transition 
services, as described in Department guidance issued to date. The 
Secretary believes this interpretation is consistent with the 
``Statement of the Managers to Accompany the Workforce Innovation and 
Opportunity Act,'' the statutory purpose for the reservation of these 
Federal VR funds, and the fiscal requirements of OMB's Uniform 
Guidance.
    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. You may 
access the official edition of the Federal Register and the Code of 
Federal Regulations at www.govinfo.gov. 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 portable document format (PDF). To 
use PDF you must have Adobe Acrobat Reader, which is available free at 
the site.

[[Page 11857]]

    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.

Mark Schultz,
Delegated the authority to perform the functions and duties of the 
Assistant Secretary for the Office of Special Education and 
Rehabilitative Services.
[FR Doc. 2020-03208 Filed 2-27-20; 8:45 am]
BILLING CODE 4000-01-P