[Federal Register Volume 86, Number 196 (Thursday, October 14, 2021)]
[Proposed Rules]
[Pages 57094-57097]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-21496]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 21

RIN 2900-AQ89


State Approving Agency Jurisdiction Rule

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend 
existing regulations to clarify State Approving Agencies' (SAA) 
jurisdiction for approval of online distance learning courses and 
distinguish such courses from ``traditional classroom'' resident 
training courses and independent study-resident training courses (also 
known as ``hybrid'' courses), which are typically a combination of 
online and traditional training. Additionally, VA seeks to clarify SAA 
authority and jurisdiction with regard to approval and disapproval of 
any course, or licensing or certification test, and to clarify the 
adjudicatory outcomes available to an SAA when reviewing an approval 
application for any type of course (i.e., approval, denial of an 
application for approval, suspension of approval, or withdrawal of 
approval).

DATES: Comments must be received by VA on or before December 13, 2021.

ADDRESSES: Comments may be submitted through www.Regulations.gov. 
Comments should indicate that they are submitted in response to RIN 
2900-AQ89_State Approving Agency Jurisdiction Rule. Comments received 
will be available at regulations.gov for public viewing, inspection or 
copies.

FOR FURTHER INFORMATION CONTACT: Cheryl Amitay, Chief, Policy and 
Regulation Development Staff (225C), Education Service, Department of 
Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 20420, (202) 
461-9800. (This is not a toll-free telephone number.)

SUPPLEMENTARY INFORMATION: Currently, for purposes of determining SAA 
jurisdiction, VA's regulation divides courses into residential courses 
offered in the same state as the state in which the educational 
institution is located, 38 CFR 21.4250(a)(1), residential courses

[[Page 57095]]

offered in one state by an educational institution located in a 
different state, Sec.  21.4250(a)(2), and courses offered by 
independent study or correspondence, Sec.  21.4250(a)(3). Current Sec.  
21.4250(a)(3) provides that if an educational institution offers a 
program through independent study or by correspondence, only the SAA 
for the State where the school's main campus is located may approve the 
course for VA training. This rule, however, does not explicitly address 
online distance learning courses. Some stakeholders have thus 
erroneously concluded that this rule does not address the appropriate 
SAA of jurisdiction for online distance learning programs. VA views 
online distance learning as a subset of courses offered through 
independent study and, therefore, views current Sec.  21.4250(a)(3) as 
controlling which SAA has jurisdiction to approve a course offered via 
online distance learning, i.e., the SAA for the State in which the 
school's main campus is located has exclusive jurisdiction over the 
approval of online distance learning programs.
    The relationship between independent study and online distance 
learning is further clarified in 38 CFR 21.4267(b). VA defines 
independent study in that section for the purposes of educational 
assistance programs as a program that ``consists of a prescribed 
program of study with provision for interaction between the student and 
[instructor] . . . through use of communications technology, including 
. . . videoconferencing, computer technology (to include electronic 
mail), and other electronic means'' and is ``offered without any 
regularly scheduled, conventional classroom or laboratory sessions.'' 
38 CFR 21.4267(b)(1)(i) and (ii). The definition provided for 
independent study encompasses distance learning in VA's view, which 
includes courses offered online. Therefore, online distance learning is 
currently classified as independent study for the purposes of VA 
educational assistance programs. Consequently, when current Sec.  
21.4250(a)(3) states that the SAA for the State where the educational 
institution's main campus is located is the SAA of jurisdiction for the 
approval of independent study program, it is likewise stating that such 
SAA is the SAA of jurisdiction for the approval of online distance 
learning programs.
    Nevertheless, stakeholders have informed VA that the connection 
between ``independent study'' in Sec.  21.4250(a)(3) and the definition 
of that term in Sec.  21.4267(b)(1), which incorporates online distance 
learning, is not apparent to them. Therefore, even though Sec.  
21.4250(a)(3) already addresses the appropriate SAA jurisdictional 
rules for independent study in VA's view, and Sec.  21.4267(b)(1)(i) 
and (ii) appropriately classifies online distance learning as 
independent study for the purposes of VA educational assistance, VA 
proposes to amend Sec.  21.4250(a)(3) to explicitly include the term 
``online distance learning.'' Such an amendment would not substantively 
change the current definitions. Rather, it is proposed to curtail 
confusion among some SAAs and educational institutions while 
maintaining the status quo.
    Furthermore, we propose to also include the qualifier ``solely'' to 
the type of courses addressed in our proposed amendment to Sec.  
21.4250(a)(3). The qualifier ``solely'' is appropriate and preferable 
to avoid confusion regarding jurisdiction for SAA evaluation of any 
training that is not solely through independent study (including online 
distance learning), correspondence, or any combination of independent 
study (including online distance learning) and correspondence. Unless 
training is offered ``solely'' via independent study (including online 
distance learning), correspondence, or any combination of independent 
study (including online distance learning) and correspondence, it is 
addressed in either Sec.  21.4250(a)(1), or (2). Current paragraph 
(a)(1) addresses ``traditional classroom'' resident training and 
independent study-resident training, also known as ``hybrid'' training, 
which VA considers resident training for the purpose of VA approval 
when the resident training is offered in the same state in which the 
educational institution is located. Current and proposed paragraph 
(a)(2) addresses residential courses offered in one state by an 
educational institution located in a different state and ``hybrid'' 
training when the resident training is offered in one state by an 
educational institution located in a different state. VA defined 
``resident training'' and ``independent study-resident training'' for 
purposes of the Selected Reserve Educational Assistance Program in 38 
CFR 21.7520(b)(22) and (12), respectively, but generally understands 
those terms as they are defined in that section. The distinction 
between courses offered exclusively by independent study and those 
offered in part by independent study is also addressed in Sec.  
21.4267. Section 21.4267(b)(1) defines courses offered ``entirely by 
independent study,'' while Sec.  21.4267(b)(2) defines courses offered 
``in part by independent study.'' VA intends for Sec.  21.4250(a)(1) or 
(2) to control jurisdiction unless the course is offered exclusively 
through independent study (including online distance learning), 
correspondence, or a combination of independent study (including online 
distance learning) and correspondence. If offered solely via 
independent study (including online distance learning), correspondence, 
or a combination of these methods, only the SAA for the state where the 
educational institution's main campus is located may approve 
independent study (including online distance learning), correspondence, 
and courses provided via a combination of independent study (including 
online distance learning) and correspondence, in accordance with Sec.  
21.4250(a)(3).
    Additionally, current Sec.  21.4250(b)(3), titled ``Failure to 
act,'' states that an SAA can respond to a school's application for 
program approval by issuing a notice to the school that the SAA does 
not intend to act on the school's application, and the school may, 
instead, request approval from the Secretary. Issuance of such a notice 
is not a program denial but rather serves as an attempted abdication of 
the SAA's prescribed role in 38 U.S.C. 3672(a)(1) and for which SAAs 
are reimbursed under 38 U.S.C. 3674(a)(1). Therefore, VA proposes to 
remove this exception and to require an SAA with jurisdiction to 
approve or disapprove any course for which a VA beneficiary seeks to 
use his or her VA educational benefits. However, expressly eliminating 
the authority of an SAA to take no action on an application arguably 
creates ambiguity as to what an SAA should do when a school submits an 
incomplete, insufficient, or otherwise unapprovable application, or 
when the SAA lacks jurisdiction to make a determination on the 
application. In those cases, the SAA should deny the application--an 
implicit authority VA views as naturally and obviously arising as the 
alternative to the explicit authority to approve an application. While 
SAAs already have this authority in VA's view, some SAAs have expressed 
a belief that they lack the authority to issue a denial of approval 
because that term is not specifically mentioned in any regulatory 
section.
    To remove any potential ambiguity, VA proposes to amend Sec.  
21.4250(b) by removing the language currently following the heading 
``State approving agencies'' and adding language to explicitly list 
``Approval of an Application for Approval,'' ``Denial of an Application 
for Approval,'' ``Suspension of Approval,'' and ``Withdrawal of 
Approval'' as the four types of decision an SAA is authorized

[[Page 57096]]

to make under 38 U.S.C. 3672 and 3679. VA does not view this change as 
substantive in nature but, rather, is making the change to clarify 
existing authority based on stakeholder feedback.
    Additionally, VA proposes to amend 38 CFR 21.4259 to include the 
new phrasing for the denial of an application in proposed Sec.  
21.4250(b). VA proposes to amend Sec.  21.4259(a) to explicitly state 
that an SAA may deny an application when the program either fails to 
satisfy any approval criterion or when the program is outside the SAA's 
jurisdiction. VA proposes to include, in proposed Sec.  21.4259(a)(3) 
and (b), denial of an application for approval in the list of reasons 
for which an SAA must send a notification of decision to the 
educational institution and VA, respectively. Additionally, VA proposes 
to amend Sec.  21.4259(b) to explicitly state that the notification to 
VA must set forth the reasons for such denial, suspension, or 
withdrawal. Under 38 U.S.C. 3672(a) an SAA must notify VA of its 
reasons for disapproval of a previously approved course. VA intends to 
explicitly apply the requirement under 38 U.S.C. 3672(a) to every SAA 
action that may negatively impact a student's ability to use GI Bill 
benefits at a particular educational institution. The language 
requiring the SAA to set forth reasons for adverse approval action is 
being moved from current Sec.  21.4250(b)(2), which contains vital 
notification requirements, to proposed Sec.  21.4259(a)(3) and (b) 
because it appears to better fit with proposed Sec.  21.4259. We 
propose to include a cross-reference in Sec.  21.4250(b)(2) to indicate 
that requirements for an SAA's notice of denial, suspension, or 
withdrawal is covered in Sec.  21.4259(a)(3) and (b). VA further 
proposes to relocate the sentence, ``It is incumbent upon the State 
approving agency to determine the conduct of courses and to take 
immediate appropriate action in each case in which it is found that the 
conduct of a course in any manner fails to comply with the requirements 
for approval,'' in a revised form, from current Sec.  21.4259(a)(3) to 
proposed Sec.  21.4259(a)(2) as a matter of style, not to have any 
substantive effect.
    Lastly, VA would remove the term ``disapproval'' from Sec.  21.4259 
and replace it with the terms ``Denial of an Application for Approval'' 
and ``Withdrawal of Approval'' as applicable. VA interprets, as it 
always had, its authority to disapprove courses in 38 U.S.C. 3679 as 
including authority to deny applications for approval, suspend 
approvals, and withdraw approvals. This non-substantive change would 
provide consistency in the terminology used throughout proposed Sec.  
21.4259 and proposed Sec.  21.4250(b).
    In the interest of properly assisting SAAs in effectively and 
efficiently administering VA education benefits approval standards and 
resolve confusion expressed by some SAAs in recent years regarding how 
to respond to educational institutions seeking approval of strictly 
online distance learning training courses, it is necessary for VA to 
make these regulatory amendments. Additionally, these amendments would 
help ensure course approvals or denials are made by the correct SAA and 
to provide appropriate guidance regarding the denial of an application 
for approval.

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
The Office of Information and Regulatory Affairs has determined that 
this rule is not a significant regulatory action under Executive Order 
12866. The Regulatory Impact Analysis associated with this rulemaking 
can be found as a supporting document at www.regulations.gov.

Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed rule would not 
have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act (5 
U.S.C. 601-612). VA has determined there are no small entities involved 
with the approval of online distance learning courses or any 
involvement with administering VA's educational benefits. Therefore, 
pursuant to 5 U.S.C. 605(b), the initial and final regulatory 
flexibility analysis requirements of 5 U.S.C. 603 and 604 do not apply.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. This proposed rule would have no such 
effect on State, local, and tribal governments, or on the private 
sector.

Paperwork Reduction Act

    Although this action contains provisions constituting collections 
of information at 38 CFR 21.4250 and 21.4259 under the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501-3521), no new or proposed revised 
collections of information are associated with this proposed rule. The 
information collection requirements for Sec. Sec.  21.4250 and 21.4259 
are currently approved by the Office of Management and Budget (OMB) and 
have been assigned OMB control number 2900-0051.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for 
the programs affected by this document are 64.027, Post-9/11 Veterans 
Educational Assistance; 64.028, Post-9/11 Veterans Educational 
Assistance; 64.032, Montgomery GI Bill Selected Reserve; Reserve 
Educational Assistance Program; 64.117, Survivors and Dependents 
Educational Assistance; 64.120, Post-Vietnam Era Veterans' Educational 
Assistance; 64.124, All-Volunteer Force Educational Assistance.

List of Subjects in 38 CFR Part 21

    Administrative practice and procedure, Armed forces, Civil rights, 
Claims, Colleges and universities, Conflict of interests, Defense 
Department, Education, Employment, Grant programs--education, Grant 
programs--veterans, Health care, Loan programs--education, Loan 
programs--veterans, Manpower training programs, Reporting and 
recordkeeping requirements, Schools, Travel and transportation 
expenses, Veterans, Vocational education, and Vocational 
rehabilitation.

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved this 
document on September 14, 2021, and authorized the undersigned to sign 
and submit the document to the Office of the Federal Register for 
publication

[[Page 57097]]

electronically as an official document of the Department of Veterans 
Affairs.

Jeffrey M. Martin,
Assistant Director, Office of Regulation Policy & Management, Office of 
the Secretary, Department of Veterans Affairs.

    For the reasons stated in the preamble, VA proposes to amend 38 CFR 
part 21 as set forth below:

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

Subpart D--Administration of Educational Assistance Programs

0
1. The authority citation for part 21, subpart D continues to read as 
follows:

    Authority: 10 U.S.C. 2141 note, ch. 1606; 38 U.S.C. 501(a), chs. 
30, 32, 33, 34, 35, 36, and as noted in specific sections.

0
2. Amend Sec.  21.4250 by revising paragraphs (a)(2) and (3), revising 
in paragraph (b) the introductory text following the paragraph heading, 
revising paragraph (b)(2), and removing paragraph (b)(3) to read as 
follows:


Sec.  21.4250  Course and licensing and certification test approval; 
jurisdiction and notices.

    (a) * * *
* * * * *
    (2) If an educational institution with a main campus in a State 
offers a resident course not located in the same State, only the State 
approving agency for the State where the educational institution's main 
campus is located may approve the course for VA training. If the State 
approving agency chooses to approve a resident course (other than a 
flight course) not leading to a standard college degree, it must also 
approve the class schedules of that course.
    (3) If an educational institution offers a course solely by 
independent study as defined in Sec.  21.4267(b)(1), which includes 
online distance learning, solely by correspondence, as addressed in 
Sec.  21.4256, or solely by a combination of independent study and 
correspondence, only the State approving agency for the State where the 
educational institution's main campus is located may approve the course 
for VA training.
* * * * *
    (b) * * * State approving agencies may make four types of 
decisions: Approval of an Application for Approval; Denial of an 
Application for Approval; Suspension of Approval; and Withdrawal of 
Approval.
    (1) * * *
    (2) Notice of denial, suspension, or withdrawal. See Sec.  
21.4259(a)(3) and (b).
* * * * *
0
3. Revise Sec.  21.4259 to read as follows:


Sec.  21.4259  Denial of an Application for Approval, Suspension of 
Approval, or Withdrawal of Approval.

    (a)(1) A State approving agency may deny an application for 
approval of any course, or licensing or certification test, after 
reviewing the application and determining that either:
    (i) The course, or licensing or certification test, fails to meet 
any of the requirements for approval; or
    (ii) The State approving agency lacks jurisdiction under Sec.  
21.4250.
    (2) With respect to any approved course, or licensing or 
certification test, it is incumbent upon the State approving agency to 
determine whether the course continues to comply with the requirements 
for approval and to take immediate appropriate action in each case in 
which the evidence of record establishes that the conduct of a course 
fails to comply with the requirements for approval. If so found, the 
State approving agency:
    (i) Will suspend the approval of a course for new enrollments, or 
approval of a licensing or certification test, for a period not to 
exceed 60 days to allow the institution to correct any deficiencies; or
    (ii) Will immediately withdraw the approval of the course, or 
licensing or certification test, if any of the requirements for 
approval that are not being met cannot be corrected within a period of 
60 days.
    (3) Upon denying an application for approval, or suspending or 
withdrawing an approval, the State approving agency will notify the 
educational institution by certified or registered letter with a return 
receipt secured (38 U.S.C. 3679). The notification will set forth the 
reasons for such denial, suspension, or withdrawal.
    (b) Each State approving agency will immediately notify VA of each 
course, or licensing or certification test, for which it has denied an 
application for approval, or suspended or withdrawn the approval, and 
set forth the reasons for such action.
    (c) VA will deny an application for approval, or suspend or 
withdraw the approval, of courses, or licensing or certification tests, 
under conditions specified in paragraph (a) of this section where it 
functions for the State approving agency. See Sec.  21.4150(c).
    (d) VA will immediately notify the respective State approving 
agency, if applicable, in each case VA suspends or withdraws approval 
of any school under 38 U.S.C. chapter 31.


(The Office of Management and Budget has approved the information 
collection provisions in this section under control number 2900-0051)

(Authority: 38 U.S.C. 3672, 3679, 3689)

[FR Doc. 2021-21496 Filed 10-13-21; 8:45 am]
BILLING CODE 8320-01-P