For the reasons discussed in the preamble, the Secretary proposes to
amend parts 668, 673, 674, 675, 676, 682, 685, and 690 and to add a new
part 686 to title 34 of the Code of Federal Regulations as follows:

PART 668\--STUDENT ASSISTANCE GENERAL PROVISIONS

1\. The authority citation for part 668 continues to read as follows:

AUTHORITY: 20 U.S.C. 1001, 1002, 1003, 1085, 1088, 1091, 1092, 1094,
1099c, and 1099c-1, unless otherwise noted.

2\. Section 668.1 is amended by:

A. In paragraph (c)(10), removing the word "and" that appears after the
punctuation ";".

B. In paragraph (c)(11), removing the punctuation "." at the end of the
paragraph and adding, in its place, the words "; and".

C. Adding a new paragraph (12) to read as follows:

§668.1 Scope.

\* \* \* \* \*

(c) \* \* \*

\(12\) The Teacher Education Assistance for College and Higher Education
(TEACH) Grant program.

\* \* \* \* \*

3\. Section 668.2(b) is amended by adding, in alphabetical order, the
definitions of "Teacher Education Assistance for College and Higher
Education (TEACH) Grant program" and "TEACH Grant" to read as follows:

[§668.2 General definitions.]{.underline}

\* \* \* \* \*

\(b\) \* \* \*

[Teacher Education Assistance for College and Higher Education (TEACH)
Grant Program]{.underline}: A grant program authorized by title IV of
the HEA under which grants are awarded by an institution to students who
are completing, or intend to complete, coursework to begin a career in
teaching and who agree to serve for not less than four years as a
full-time, highly qualified, high-need field teacher in a low-income
school. If the recipient of a TEACH Grant does not complete four years
of qualified teaching service within eight years of completing the
course of study for which the TEACH Grant was received or otherwise
fails to meet the requirements of section 686.12, the amount of the
TEACH Grant converts into an unsubsidized Federal Direct Unsubsidized
Stafford/Ford Loan.

(Authority: 20 U.S.C. 1070g-2)

[TEACH Grant]{.underline}: A grant authorized under Title IV-A-9 of the
HEA and awarded to students in exchange for prospective teaching
service.

(Authority: 20 U.S.C. 1070g-2)

\* \* \* \* \*

4\. Also in Section 668.2(b), the definition of Undergraduate Student is
amended in paragraph (2) by:

A. Removing the word "and" following "(ACG) Program".

B. Adding ", and TEACH Grant Program" after "(SMART) Grant Program".

C. Adding "and 686.3(a)" after "690.6(c)(5),".

5\. Section 668.4(b)(1) is revised by removing the word "and" that
appears after "FSEOG," and adding ", and TEACH Grant" after "Perkins
Loan,".

6\. Section 668.8(h) is amended by:

A. In the subsection heading, adding "*TEACH Grant,*" after "*National
SMART Grant*".

B. Adding a new paragraph (3) to read as follows:

[§668.8 Eligible programs.]{.underline}

\* \* \* \* \*

\(h\) \* \* \*

\(3\) An educational program qualifies as an eligible program for
purposes of the TEACH Grant program only if the program is\--

\(i\) a teacher preparation program or a program in a high-need field in
accordance with 34 CFR 686.2(d); and

\(ii\) offered by a TEACH Grant-eligible institution as defined in 34
CFR 686.2(d).

(Authority: 20 U.S.C. 1070g and 1070g-1)

\* \* \* \* \*

7\. Section 668.19(a)(3) is amended by:

A. Removing the word "or" the first two times this word appears after
the acronym "ACG," and in each instance, adding the words ", or a TEACH
Grant" after "National SMART Grant".

B. Removing the word "or" the third time this word appears after the
acronym "ACG," and adding the words ", or TEACH Grant" after the third
appearance of "National SMART Grant".

8\. Section 668.21 is amended by:

A. In the section title, removing the word "and" following "ACG" adding
the words ", and TEACH Grant," after "National SMART Grant".

B. In paragraph (a)(1) by adding the words "TEACH Grant," immediately
after the word "FSEOG,".

9\. Section 668.22 is amended by:

A. In paragraph (a)(2), adding the words "TEACH Grant," immediately
after the words "National SMART Grant,".

B. In paragraph (i)(2), adding a new paragraph (i)(2)(v) to read as
follows:

[§668.22 Treatment of title IV funds when a student
withdraws]{.underline}.

\*\*\*\*\*

\(i\) \* \* \*

\(2\) \* \* \*

\(v\) TEACH Grants.

10\. Section 668.24 is amended by:

A. In the introductory text of paragraph (e)(1), removing the word "or"
which appears after "ACG".

B. In the introductory text of paragraph (e)(1), adding the words ", or
TEACH Grant" immediately in front of the word "Program".

C. Revising the authority citation to read as follows:

[§668.24 Record retention and examinations]{.underline}.

\* \* \* \* \*

(Authority: 20 U.S.C. 1070a, 1070a-1, 1070b, 1078, 1078-1, 1078-2,
1078-3, 1082, 1087, 1087a [et seq.]{.underline}, 1087cc, 1087hh, 1088,
1094, 1099c, 1141, 1232f; 42 U.S.C. 2753; and section 4 of Pub. L.
95-452, 92 Stat. 1101-1109)

11\. Section 668.26 is amended by:

A. In paragraph (d)(1), removing the word "or" the first time it appears
and adding the words ", or TEACH Grant" immediately after the words
"National SMART Grant".

B. In paragraph (e)(1), removing the word "and" the first time it
appears and adding the words ", and TEACH Grant" immediately after the
words "National SMART Grant".

12\. Section 668.32 is amended by:

A. In paragraph (c)(2)(ii), removing the word "and".

B. In paragraph (c)(3), adding the word "and" after the punctuation ";".

C. Adding a new paragraph (c)(4).

D. In paragraph (k)(8), removing the word "and".

E. Adding a new paragraph (k)(9).

The additions read as follows:

[§668.32 Student eligibility\--general.]{.underline}

\* \* \* \* \*

\(c\) \* \* \*

> \(4\) For the purposes of the TEACH Grant program\--
>
> \(i\) For an undergraduate student other than a student enrolled in a
> post-baccalaureate program, has not completed the requirements for a
> first baccalaureate degree; or

\(ii\) For the purposes of a student in a first post-baccalaureate
program, has not completed the requirements for a post-baccalaureate
program as described in 34 CFR 686.2(d).

\* \* \* \* \*

\(k\) \* \* \*

\(8\) 34 CFR 686.11 for the TEACH Grant program; and

\* \* \* \* \*

13\. Section 668.35 is amended by redesignating paragraph (g)(4) as
paragraph (g)(5) and adding a new paragraph (g)(4) to read as follows:

[§668.35 Student debts under the HEA and to the U.S.]{.underline}

\* \* \* \* \*

\(g\) \* \* \*

\(4\) A student is not liable for a TEACH Grant overpayment received in
an award year if\--

\(i\) The institution can eliminate that overpayment by adjusting
subsequent title IV, HEA program (other than Federal Pell Grant, ACG,
National SMART Grant, or TEACH Grant) payments in that same award year;
or

\(ii\) The institution cannot eliminate the overpayment under paragraph
(g)(4)(i) of this section but can eliminate that overpayment by
adjusting subsequent TEACH Grant payments in that same award year.

\* \* \* \* \*

14\. Section 668.138(a) is amended by:

A. Removing the word "or" the first time it appears.

B. Adding the words ", or TEACH Grant" immediately after the words
"National SMART Grant".

15\. Section 668.139(c) is amended by adding the words "TEACH Grant,"
immediately after the words "National SMART Grant,".

16\. Section 668.161(a)(3)(i) is amended by adding the words "TEACH
Grant," immediately after the words "National SMART Grant,".

17\. Section 668.162(d)(1) is amended by adding the words "TEACH Grant,"
immediately after the words "National SMART Grant,".

18\. Section 668.163 is amended by:

A. In paragraph (c)(2), adding the words "TEACH Grant," immediately
after the words "National SMART Grant,".

B. In paragraph (c)(3), adding the words "TEACH Grant," immediately
after the words "National SMART Grant,".

C. In paragraph (c)(4), adding the words "TEACH Grant," immediately
after the words "National SMART Grant,".

19\. Section 668.164 is amended by:

A. In paragraph (g)(1)(ii), by removing the word "and" after "FSEOG,"
and adding the words ", and TEACH Grant," immediately after the words
"Federal Perkins Loan,".

B. In subparagraph (g)(2)(ii)(A), removing the word "or" that appears
after the punctuation ";".

C. In subparagraph (g)(2)(ii)(B), removing the "." after the words "to
the student" and adding in its place "; or".

D. Adding a new subparagraph (g)(2)(ii)(C) to read as follows:

[§668.164 Disbursing funds]{.underline}.

\* \* \* \* \*

\(g\) \* \* \*

(2)(ii)(C) For an award under the TEACH Grant program, the institution
originates the award to the student.

20\. Section 668.183 is amended by:

A. In paragraph (b)(1), removing the word "Your" the first time it
appears and adding, in its place, the words "Except as provided in
paragraph (b)(3), your" at the beginning of the first sentence.

B. Adding a new paragraph (b)(3) to read as follows:

[§668.183 Calculating and applying cohort default rates]{.underline}.

\* \* \* \* \*

\(b\) \* \* \*

\(3\) A TEACH Grant that has been converted to a Direct Unsubsidized
loan is not considered for the purpose of calculating and applying
cohort default rates.

\* \* \* \* \*

PART 673\--GENERAL PROVISIONS FOR THE FEDERAL PERKINS LOAN PROGRAM,
FEDERAL WORK-STUDY PROGRAM, AND FEDERAL SUPPLEMENTAL EDUCATIONAL
OPPORTUNITY GRANT PROGRAM

21\. The authority citation for part 673 continues to read as follows:

AUTHORITY: 20 U.S.C. 421-429, 1070b-1070b-3, and 1087aa-1087ii; 42
U.S.C. 2751-2756b, unless otherwise noted.

22\. Section 673.5 is amended in paragraph (c)(2)(iii) by adding the
words "TEACH Grants," immediately after the words "the amounts of any"
and by removing the word "loan" which appears after the words "if the
sum of the".

PART 674\--FEDERAL PERKINS LOAN PROGRAM

23\. The authority citation for part 674 continues to read as follows:

AUTHORITY: 20 U.S.C. 1087aa-1087hh and 20 U.S.C. 421-429 unless
otherwise noted.

24\. Section 674.2(a) is amended by adding, in alphabetical order, the
terms "Teacher Education Assistance for College and Higher Education
(TEACH) Grant Program" and "TEACH Grant".

25\. Section 674.61(b)(2)(ii) is amended by adding the words "a new
TEACH Grant or" immediately after the words "does not receive".

PART 675\--FEDERAL WORK-STUDY PROGRAMS

26\. The authority citation for part 675 continues to read as follows:

AUTHORITY: 42 U.S.C. 2751-2756b, unless otherwise noted.

27\. Section 675.2(a) is amended by adding, in alphabetical order, the
terms "Teacher Education Assistance for College and Higher Education
(TEACH) Grant Program" and "TEACH Grant".

PART 676\--FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANT PROGRAM

28\. The authority citation for part 676 continues to read as follows:

AUTHORITY: 20 U.S.C. 1070b-1070b-3, unless otherwise noted.

29\. Section 676.2(a) is amended by adding, in alphabetical order, the
terms "Teacher Education Assistance for College and Higher Education
(TEACH) Grant Program" and "TEACH Grant".

PART 682\--FEDERAL FAMILY EDUCATION LOAN (FFEL) PROGRAM

30\. The authority citation for part 682 continues to read as follows:

AUTHORITY: 20 U.S.C 1071 to 1087-2, unless otherwise noted.

31\. Section 682.200 is amended by

A. Adding in alphabetical order in paragraph (a)(1), the terms "Teacher
Education Assistance for College and Higher Education (TEACH) Grant
Program" and "TEACH Grant".

B. In paragraph (2) of the definition of *Estimated Financial
Assistance*, adding the words "TEACH Grant," after the words "the
amounts of any" and removing the word "loan" immediately following the
words "if the sum of the".

32\. Section 682.204(c) is amended by adding before the "." the
following words ", except that any TEACH Grants that have been converted
to Direct Unsubsidized Loans are not counted against annual or any
aggregate loan limits under this section."

33\. Section 682.402(c)(1)(ii)(B) is amended by adding the words "a new
TEACH Grant or" immediately after the words "does not receive".

PART 685\--WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM

34\. The authority citation for part 685 continues to read as follows:

AUTHORITY: 20 U.S.C 1087a [et seq.]{.underline}, unless otherwise noted.

35\. Section 685.102(a)(1) is amended by adding in alphabetical order,
the terms "Teacher Education Assistance for College and Higher Education
(TEACH) Grant Program" and "TEACH Grant".

36\. In paragraph (2)(i) of the definition of *Estimated Financial
Assistance*, adding the words "TEACH Grant," after the words "the
amounts of any" and removing the word "loan" immediately following the
words "if the sum of the".

37\. Section 685.203(b) is amended by adding before the "." the words ",
except that any TEACH Grants that have been converted to Direct
Unsubsidized Loans are not counted against annual or any aggregate loan
limits under this section".

38\. Section 685.213(c)(2) is amended by adding the words "a new TEACH
Grant or" immediately after the words "does not receive".

\*\*\*\*\*

39\. A new part 686 is added to read as follows:

Subpart A\--Scope, Purpose and General Definitions

Sec.

1.  Scope and purpose.

2.  Definitions.

3.  Duration of student eligibility.

4.  Institutional participation.

5.  Enrollment status for regular and correspondence courses.

6.  Payment from more than one institution.

Subpart B\--Application Procedures

686.10 Application.

686.11 Eligibility to receive a grant.

686.12 Service agreement.

Subpart C\--Determination of Awards

686.20 Submission process and deadline for a SAR or ISIR.

686.21 Calculation of a grant.

686.22 Calculation of a grant for a payment period.

686.23 Calculation of a grant for a payment period that occurs in two
award years.

686.24 Transfer student: attendance at more than one institution during
an award year.

686.25 Correspondence study.

Subpart D\--Administration of Grant Payments

686.30 Scope.

686.31 Determination of eligibility for payment.

686.32 Counseling requirements.

686.33 Frequency of payment.

686.34 Liability for and recovery of TEACH Grant

> overpayments.

686.35 Re-determination of eligibility for TEACH Grant award.

686.36 Fiscal control and accounting procedures.

686.37 Institutional reporting requirements.

686.38 Maintenance and retention of records.

Subpart E\--Service and Repayment Obligations

686.40 Documenting the service obligation.

686.41 Periods of suspension.

686.42 Discharge of service agreement.

686.43 Obligation to repay the grant.

AUTHORITY: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}., unless
otherwise noted.

Subpart A---Scope, Purpose, and General Definitions

§686.1 Scope and purpose.

The TEACH Grant program awards grants to students, who intend to teach,
to help meet the cost of their postsecondary education. In exchange for
the grant, the student must agree to serve as a full-time teacher in a
high-need field, in a school serving low-income students for at least
four academic years within eight years of completing the program of
study for which the student received the grant. If the student does not
satisfy the service obligation, the amounts of the TEACH Grants received
are treated as a Federal Direct Unsubsidized Stafford Loan (Federal
Direct Unsubsidized Loan) and must be repaid with interest.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

§686.2 Definitions.

\(a\) Definitions for the following terms used in this part are in the
regulations for Institutional Eligibility under the Higher Education Act
of 1965, as amended, (HEA) 34 CFR part 600:

Award year

Clock hour

Correspondence course

Institution of higher education (institution)

Eligible institution

Regular student

Secretary

State

Title IV, HEA program

\(b\) Definitions for the following terms used in this part are in
subpart A of the Student Assistance General Provisions, 34 CFR part 668:

Academic year

Enrolled

Expected family contribution (EFC)

Full-time student

Graduate or professional student

Half-time student

HEA

Payment period

Three-quarter-time student

Undergraduate student

William D. Ford Federal Direct Loan (Direct Loan) Program

\(c\) Definitions for the following terms used in this part are in 34
CFR part 77:

Local educational agency (LEA)

State educational agency (SEA)

\(d\) Other terms used in this part are defined as follows:

[Academic year or its equivalent for elementary and]{.underline}

[secondary schools (elementary or secondary academic year)]{.underline}:

\(1\) One complete school year, or two complete and consecutive
half-years from different school years, excluding summer sessions, that
generally fall within a 12-month period.

\(2\) If a school has a year-round program of instruction, the Secretary
considers a minimum of nine consecutive months to be the equivalent of
an academic year.

[Annual award]{.underline}: The maximum TEACH Grant amount a student
would receive for enrolling as a full-time, three-quarter-time,
half-time, or less-than-half-time student and remaining in that
enrollment status for a year.

[Elementary school]{.underline}: A nonprofit institutional day or
residential school, including a public elementary charter school, that
provides elementary education, as determined under State law.

[Full-time teacher]{.underline}: A teacher who meets the standard used
by a State in defining full-time employment as a teacher. For an
individual teaching in more than one school, the determination of
full-time is based on the combination of all qualifying employment.

[High-need field]{.underline}: Includes the following:

\(1\) Bilingual education and English language acquisition.

\(2\) Foreign language.

\(3\) Mathematics.

\(4\) Reading specialist.

\(5\) Science.

\(6\) Special education.

\(7\) Another field documented as high-need by the Federal Government, a
State government or an LEA, and approved by the Secretary and listed in
the Department's annual Teacher Shortage Area Nationwide Listing
(Nationwide List) in accordance with 34 CFR 682.210(q).

[Highly-qualified]{.underline}: Has the meaning set forth in section
9101 of the Elementary and Secondary Education Act of 1965, as amended
(ESEA) or in section 602(10) of the Individuals With Disabilities
Education Act.

[Institutional Student Information Record (ISIR)]{.underline}: An
electronic record that the Secretary transmits to an institution that
includes an applicant's\--

\(1\) Personal identification information;

(2) Application data used to calculate the

applicant's EFC; and

> \(3\) EFC.
>
> [Numeric equivalent]{.underline}: (1) If an otherwise eligible

program measures academic performance using an alternative to standard
numeric grading procedures, the institution must develop and apply an
equivalency policy with a numeric scale for purposes of establishing
TEACH Grant eligibility. That institution's equivalency policy must be
in writing and available to students upon request and must include clear
differentiations of student performance to support a determination that
a student has performed at a level commensurate with at least a 3.25 GPA
on a 4.0 scale in that program.

\(2\) A grading policy that includes only "satisfactory/unsatisfactory",
"pass/fail", or other similar nonnumeric assessments qualifies as a
numeric equivalent only if\--

\(i\) The institution demonstrates that the "pass" or "satisfactory"
standard has the numeric equivalent of at least a 3.25 GPA on a 4.0
scale awarded in that program, or that a student's performance for tests
and assignments yielded a numeric equivalent of a 3.25 GPA on a 4.0
scale; and

\(ii\) For an eligible institution, the institution's equivalency policy
is consistent with any other standards the institution may have
developed for academic and other title IV, HEA program purposes, such as
graduate school applications, scholarship eligibility, and insurance
certifications, to the extent such standards distinguish among various
levels of a student's academic performance.

[Payment data]{.underline}: An electronic record that is provided to the
Secretary by an institution showing student disbursement information.

[Post-baccalaureate program]{.underline}: A program of instruction for
individuals who have completed a baccalaureate degree, that\--

\(1\) Does not lead to a graduate degree;

\(2\) Consists of courses required by a State in order for a student to
receive a professional certification or licensing credential that is
required for employment as a teacher in an elementary school or
secondary school in that State, except that it does not include any
program of instruction offered by a TEACH Grant-eligible institution
that offers a baccalaureate degree in education; and

\(3\) Is treated as an undergraduate program of study for the purposes
of title IV of the HEA.

[Retiree]{.underline}: An individual who has decided to change his or
her occupation for any reason and who has expertise, as determined by
the institution, in a high-need field.

[Scheduled Award]{.underline}: The maximum amount of a TEACH Grant that
a full-time student could receive for a year.

[School serving low-income students (low-income school)]{.underline}: An
elementary or secondary school that\--

\(1\) Is in the school district of an LEA that is eligible for
assistance pursuant to title I of the ESEA;

\(2\) Has been determined by the Secretary to be a school in which more
than 30 percent of the school's total enrollment is made up of children
who qualify for services provided under title I of the ESEA; and

\(3\) Is listed in the Department's Annual Directory of Designated
Low-Income Schools for Teacher Cancellation Benefits. The Secretary
considers all elementary and secondary schools operated by the Bureau of
Indian Education (BIE) in the Department of the Interior or operated on
Indian reservations by Indian tribal groups under contract or grant with
the BIE to qualify as schools serving low-income students.

[Secondary school]{.underline}: A nonprofit institutional day or
residential school, including a public secondary charter school, that
provides secondary education, as determined under State law, except that
the term does not include any education beyond grade 12.

[Service agreement]{.underline}: An agreement under which the individual
receiving a TEACH Grant commits to meet the service obligation described
in §686.12 and to comply with notification and other provisions of the
agreement.

[Student Aid Report (SAR)]{.underline}: A report provided to an
applicant by the Secretary showing the amount of his or her expected
family contribution.

[TEACH Grant-eligible institution]{.underline}: An eligible institution
as defined in 34 CFR part 600 that, for purposes of the TEACH Grant
program, is one that meets financial responsibility standards
established in 34 CFR 668, subpart L and\--

\(1\) Provides a high-quality teacher preparation program at the
baccalaureate or master's degree level that\--

(i)(A) Is accredited by a specialized accrediting agency recognized by
the Secretary for the accreditation of professional teacher education
programs; or

\(B\) Is approved by a State and includes extensive pre-service clinical
experience, and provides either pedagogical coursework or assistance in
the provision of such coursework; and

\(ii\) Provides supervision and support services to teachers, or assists
in the provision of services to teachers, such as\--

\(A\) Identifying and making available information on effective teaching
skills or strategies;

\(B\) Identifying and making available information on effective
practices in the supervision and coaching of novice teachers; and

\(C\) Mentoring focused on developing effective teaching skills and
strategies;

\(2\) Provides a two-year program that\--

\(i\) Is acceptable for full credit in a baccalaureate teacher
preparation program of study offered by an institution described in
paragraph (1) of this definition, as demonstrated by the institutions;
or

\(ii\) Is acceptable for full credit in a baccalaureate degree program
in a high-need field at an institution described in paragraph (3) of
this definition, as demonstrated by the institutions;

\(3\) Offers a baccalaureate degree that, in combination with other
training or experience, will prepare an individual to teach in a
high-need field as defined in this part and has entered into an
agreement with an institution described in paragraphs (1) or (4) of this
definition to provide courses necessary for its students to begin a
career in teaching; or

\(4\) Provides a post-baccalaureate program of study.

[TEACH Grant-eligible program]{.underline}: An eligible program as
defined in 34 CFR 668.8 that is a program of study that prepares an
individual to teach in a high-need field and that leads to a
baccalaureate or master's degree, or is a post-baccalaureate program of
study. A two-year program of study that is acceptable for full credit
toward a baccalaureate degree is considered to be a program of study
that leads to a baccalaureate degree.

[Teacher]{.underline}: A person who provides direct classroom teaching
or classroom-type teaching in a non-classroom setting, including special
education teachers and reading specialists.

[Teacher preparation program]{.underline}: A State-approved course of
study, the completion of which signifies that an enrollee has met all
the State's educational or training requirements for initial
certification or licensure to teach in the State's elementary or
secondary schools. A teacher preparation program may be a regular
program or an alternative route to certification, as defined by the
State. For purposes of a TEACH Grant, the program must be provided by an
institution of higher education.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

§686.3 Duration of student eligibility.

\(a\) An undergraduate or post-baccalaureate student may receive the
equivalent of up to four Scheduled Awards during the period required for
the completion of the first undergraduate TEACH Grant-eligible
baccalaureate program of study and first post-baccalaureate program of
study combined.

\(b\) A graduate student is eligible to receive the equivalent of up to
two Scheduled Awards during the period required for the completion of a
TEACH Grant-eligible master's degree program of study.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

§686.4 Institutional participation.

\(a\) A TEACH Grant-eligible institution that offers one or more TEACH
Grant-eligible programs may elect to participate in the TEACH Grant
program.

\(b\) If an institution begins participation in the TEACH Grant program
during an award year, a student enrolled at and attending that
institution is eligible to receive a grant under this part for the
payment period during which the institution begins participation and any
subsequent payment period.

\(c\) If an institution ceases to participate in the TEACH Grant program
or becomes ineligible to participate in the TEACH Grant program during
an award year, a student who was attending the institution and who
submitted a SAR with an official EFC to the institution, or for whom the
institution obtained an ISIR with an official EFC, before the date the
institution became ineligible will receive a TEACH Grant for that award
year for\--

\(1\) The payment periods that the student completed before the
institution ceased participation or became ineligible to participate;
and

\(2\) The payment period in which the institution ceased participation
or became ineligible to participate.

\(d\) An institution that ceases to participate in the TEACH Grant
program or becomes ineligible to participate in the TEACH Grant program
must, within 45 days after the effective date of the loss of
eligibility, provide to the Secretary\--

\(1\) The name and other student identifiers as required by the
Secretary of each eligible student under §686.11 who, during the award
year, submitted a SAR with an official EFC to the institution or for
whom it obtained an ISIR with an official EFC before it ceased to
participate in the TEACH Grant program or became ineligible to
participate;

\(2\) The amount of funds paid to each student for that award year;

\(3\) The amount due each student eligible to receive a grant through
the end of the payment period during which the institution ceased to
participate in the TEACH Grant program or became ineligible to
participate; and

\(4\) An accounting of the TEACH Grant program expenditures for that
award year to the date of termination.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

§686.5 Enrollment status for regular and correspondence courses.

\(a\) If, in addition to regular coursework, a student takes
correspondence courses from either his or her own institution or another
institution having an arrangement for this purpose with the student's
institution, the correspondence work may be included in determining the
student's enrollment status to the extent permitted under paragraph (b)
of this section.

\(b\) Except as noted in paragraph (c) of this section, the
correspondence work that may be included in determining a student's
enrollment status is that amount of work that\--

\(1\) Applies toward a student's degree or post-baccalaureate program of
study or is remedial work taken by the student to help in his or her
TEACH Grant-eligible program;

\(2\) Is completed within the period of time required for regular
coursework; and

\(3\) Does not exceed the amount of a student's regular coursework for
the payment period for which enrollment status is being calculated.

(c)(1) Notwithstanding the limitation in paragraph (b)(3) of this
section, a student who would be a half-time student based solely on his
or her correspondence work is considered a half-time student unless the
calculation in paragraph (b) of this section produces an enrollment
status greater than half-time.

\(2\) A student who would be a less-than-half-time student based solely
on his or her correspondence work or a combination of correspondence
work and regular coursework is considered a less-than-half-time student.

\(d\) The following chart provides examples of the application of the
regulations set forth in this section. It assumes that the institution
defines full-time enrollment as 12 credits per term, making half-time
enrollment equal to six credits per term.

Under §686.5 No. of credit No. of credit Total course Enrollment

hours regular hours cor- load in credit status

work respondence hours to determine enrollment status

(b)(3) 3 3 6 Half-time.

(b)(3) 3 6 6 Half-time.

(b)(3) 3 9 6 Half-time.

(b)(3) 6 3 9 Three-quarter-time.

(b)(3) 6 6 12 Full-time.

(b)(3) and (c) 2 6 6 Half-time.

(c)\* Less-than-half-time.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\*Any combination of regular and correspondence work that is greater
than zero, but less than six hours.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

§686.6 Payment from more than one institution.

A student may not receive grant payments under this part concurrently
from more than one institution.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[Subpart B\--Application Procedures]{.underline}

[§686.10 Application]{.underline}.

\(a\) To receive a grant under this part, a student must\--

\(1\) Complete and submit an approved signed application, as designated
by the Secretary. A copy of this application is not acceptable;

\(2\) Complete and sign a service agreement and promise to repay; and

\(3\) Provide any additional information and assurances requested by the
Secretary.

\(b\) The student must submit an application to the Secretary by\--

\(1\) Sending the completed application to the Secretary; or

\(2\) Providing the application, signed by all appropriate family
members, to the institution which the student attends or plans to attend
so that the institution can transmit the application information to the
Secretary electronically.

\(c\) The student must provide the address of his or her residence.

\(d\) For each award year, the Secretary, through publication in the
[Federal Register]{.underline}, establishes deadline dates for
submitting to the Department the application and additional information
and for making corrections to the information provided.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.11 Eligibility to receive a grant]{.underline}.

\(a\) [Undergraduate, post-baccalaureate, and graduate
students]{.underline}. (1) Except as provided in paragraph (b) of this
section, a student who meets the requirements of 34 CFR part 668,
subpart C, is eligible to receive a TEACH Grant if the student\--

\(i\) Has submitted a completed application;

\(ii\) Has signed a service agreement as required under §686.12;

\(iii\) Is enrolled in a TEACH Grant-eligible institution in a TEACH
Grant-eligible program;

\(iv\) Is completing coursework and other requirements necessary to
begin a career in teaching or plans to complete such coursework and
requirements prior to graduating; and

\(v\) Has obtained\--

\(A\) If the student is in the first year of a program of undergraduate
education as determined by the institution\--

([1]{.underline}) A final cumulative secondary school grade point
average (GPA) upon graduation of at least 3.25 on a 4.0 scale, or the
numeric equivalent; or

([2]{.underline}) A cumulative GPA of at least 3.25 on a 4.0 scale, or
the numeric equivalent, based on courses taken at the institution
through the most-recently completed payment period;

\(B\) If the student is beyond the first year of a program of
undergraduate education as determined by the institution, a cumulative
undergraduate GPA of at least 3.25 on a 4.0 scale, or the numeric
equivalent, through the most-recently completed payment period;

\(C\) If the student is a graduate student during the first payment
period, a cumulative undergraduate GPA of at least 3.25 on a 4.0 scale,
or the numeric equivalent;

\(D\) If the student is a graduate student beyond the first payment
period, a cumulative graduate GPA of at least 3.25 on a 4.0 scale, or
the numeric equivalent, through the most-recently completed payment
period; or

\(E\) A score above the 75^th^ percentile of scores achieved by all
students taking the test during the period the student took the test on
at least one of the batteries from a nationally-normed standardized
undergraduate, graduate, or post-baccalaureate admissions test, except
that such test may not include a placement test.

(2)(i) An institution must document the student's secondary school GPA
under §686.11(a)(1)(v)(A) using\--

\(A\) Documentation provided directly to the institution by the
cognizant authority; or

\(B\) Documentation from the cognizant authority provided by the
student.

\(ii\) A cognizant authority includes, but is not limited to\--

\(A\) An LEA;

\(B\) An SEA or other State agency; or

\(C\) A public or private secondary school.

\(iii\) A home-schooled student's parent or guardian is the cognizant
authority for purposes of providing the documentation of a home-schooled
student's secondary school GPA.

\(iv\) If an institution has reason to believe the documentation
provided by a student under paragraph (a)(2)(i)(B) of this section is
inaccurate or incomplete, the institution must confirm the student's
grades by using documentation provided directly to the institution by
the cognizant authority.

\(b\) [Current or former teachers or retirees]{.underline}. A student
who has submitted a completed application and meets the requirements of
34 CFR part 668, subpart C, is eligible to receive a TEACH Grant if the
student\--

\(1\) Has signed a service agreement as required under §686.12;

\(2\) Is a current teacher or retiree who is applying for a grant to
obtain a master's degree or is or was a teacher who is pursuing
certification through a high-quality alternative certification route;
and

\(3\) Is enrolled in a TEACH Grant-eligible institution in a TEACH
Grant-eligible program during the period required for the completion of
a master's degree.

\(c\) [Transfer students]{.underline}. If a student transfers from one
institution to the current institution and does not qualify under
§686.11(a)(1)(v)(E), the current institution must determine that
student's eligibility for a TEACH Grant for the first payment period
using either the method described in paragraph (c)(1) of this section or
the method described in paragraph (c)(2) of this section, whichever
method coincides with the current institution's academic policy. For an
eligible student who transfers to an institution that\--

\(1\) Does not incorporate grades from coursework that it accepts on
transfer into the student's GPA at the current institution, the current
institution, for the courses accepted upon transfer\--

\(i\) Must calculate the student's GPA for the first payment period of
enrollment using the grades earned by the student in the coursework from
any prior postsecondary institution that it accepts; and

\(ii\) Must, for all subsequent payment periods, apply its academic
policy and not incorporate the grades from the coursework that it
accepts on transfer into the GPA at the current institution; or

\(2\) Incorporates grades from the coursework that it accepts on
transfer into the student's GPA at the current institution, the current
institution must use the grades assigned to the coursework accepted by
the current institution as the student's cumulative GPA to determine
eligibility for the first payment period of enrollment and all
subsequent payment periods in accordance with its academic policy.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.12 Service agreement]{.underline}.

\(a\) [General]{.underline}. A student who meets the eligibility
requirements in §686.11 may receive a TEACH Grant only after he or she
signs a service agreement provided by the Secretary and receives
counseling in accordance with §686.32.

\(b\) [Contents of the service agreement]{.underline}. The service
agreement provides that, for each TEACH Grant-eligible program for which
the student received TEACH Grant funds, the grant recipient must fulfill
a service obligation by performing creditable teaching service by\--

\(1\) Serving as a full-time teacher for a total of not less than four
elementary or secondary academic years within eight calendar years after
completing the program or otherwise ceasing to be enrolled in the
program for which the recipient received the TEACH Grant\--

\(i\) In a low-income school;

\(ii\) As a highly-qualified teacher; and

\(iii\) In a high-need field in the majority of classes taught during
each elementary and secondary academic year.

\(2\) Submitting, upon completion of each year of service, documentation
of the service in the form of a certification by a chief administrative
officer of the school; and

\(3\) Complying with the terms, conditions, and other requirements
consistent with §§686.40-686.43 that the Secretary determines to be
necessary.

\(c\) [Completion of more than one service obligation]{.underline}.

\(1\) A grant recipient must complete a service obligation for each
program of study for which he or she received TEACH Grants. Each service
obligation begins following the completion or other cessation of
enrollment by the student in the TEACH Grant-eligible program for which
the student received TEACH grant funds. However, creditable teaching
service may apply to more than one service obligation.

\(2\) A grant recipient may request a suspension, in accordance with
§686.41, of the eight-year time period in paragraph (b)(1) of this
section.

\(d\) [Majoring and serving in a high-need field]{.underline}. A grant
recipient who completes a TEACH Grant-eligible program in a field that
is listed in the Nationwide List cannot satisfy his or her service
obligation to teach in that high-need field unless the high-need field
in which he or she has prepared to teach is listed in the Nationwide
List for the State in which the grant recipient begins teaching at the
time the recipient begins teaching in that field.

\(e\) [Repayment for failure to complete service
obligation]{.underline}. If a grant recipient fails or refuses to carry
out the required service obligation described in paragraph (b) of this
section, the TEACH Grants received by the recipient must be repaid and
will be treated as a Federal Direct Unsubsidized Loan, with interest
accruing from the date of each TEACH Grant disbursement, in accordance
with applicable sections of subpart B of 34 CFR part 685.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

# Subpart C\--Determination of Awards

[§686.20 Submission process and deadline for a SAR or ISIR]{.underline}.

\(a\) [Submission process]{.underline}. (1) Except as provided in
paragraph (a)(2) of this section, an institution must disburse a TEACH
Grant to a student who is eligible under §686.11 and is otherwise
qualified to receive that disbursement and electronically transmit
disbursement data to the Secretary for that student if\--

\(i\) The student submits a SAR with an official EFC to the institution;
or

\(ii\) The institution obtains an ISIR with an official EFC for the
student.

\(2\) In determining a student's eligibility to receive a grant under
this part, an institution is entitled to assume that the SAR information
or ISIR information is accurate and complete except under the conditions
set forth in 34 CFR 668.16(f).

\(b\) [SAR or ISIR deadline]{.underline}. Except as provided in 34 CFR
668.164(g), for a student to receive a grant under this part in an award
year, the student must submit the relevant parts of the SAR with an
official EFC to his or her institution or the institution must obtain an
ISIR with an official EFC by the earlier of\--

\(1\) The last date that the student is still enrolled and eligible for
payment at that institution; or

\(2\) By the deadline date established by the Secretary through
publication of a notice in the [Federal Register]{.underline}.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.21 Calculation of a grant]{.underline}.

(a)(1)(i) The Scheduled Award for a TEACH Grant for an eligible student
is \$4,000.

\(ii\) Each Scheduled Award remains available to an eligible student
until the \$4,000 is disbursed.

(2)(i) The aggregate amount that a student may receive in TEACH Grants
for undergraduate and post-baccalaureate study may not exceed \$16,000.

\(ii\) The aggregate amount that a student may receive in TEACH grants
for a master's degree may not exceed \$8,000.

> \(b\) The annual award for\--
>
> \(1\) A full-time student is \$4,000;
>
> \(2\) A three-quarter-time student is \$3,000;
>
> \(3\) A half-time student is \$2,000; and
>
> \(4\) A less-than-half-time student is \$1,000.

\(c\) Except as provided in paragraph (d) of this section, the amount of
a student's grant under this part, in combination with the other student
financial assistance available to the student, including the amount of a
Federal Pell Grant for which the student is eligible, may not exceed the
student's cost of attendance at a TEACH Grant-eligible institution.
Other student financial assistance is estimated financial assistance as
defined in 34 CFR 673.5(c).

\(d\) A TEACH Grant may replace a student's EFC, but the amount of the
grant that exceeds the student's EFC is considered estimated financial
assistance as defined in 34 CFR 673.5(c).

\(e\) In determining a student's payment for a payment period, an
institution must include\--

\(1\) In accordance with 34 CFR 668.20, any noncredit or reduced credit
courses that an institution determines are necessary\--

\(i\) To help a student be prepared for the pursuit of a first
undergraduate baccalaureate or post-baccalaureate degree or certificate;
or

\(ii\) In the case of English language instruction, to enable the
student to utilize already existing knowledge, training, or skills; and

\(2\) In accordance with 34 CFR 668.5, a student's participation in a
program of study abroad if it is approved for credit by the home
institution at which the student is enrolled.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.22 Calculation of a grant for a payment period]{.underline}.

\(a\) [Eligibility for payment formula]{.underline}. (1) [Programs using
standard terms with at least 30 weeks of instructional
time]{.underline}. A student's grant for a payment period is calculated
under paragraphs (b) or (d) of this section if\--

\(i\) The student is enrolled in an eligible program that\--

(A) Measures progress in credit hours;

\(B\) Is offered in semesters, trimesters, or quarters; and

(C)(1) For an undergraduate student, requires the student to enroll for
at least 12 credit hours in each term in the award year to qualify as a
full-time student; or

\(2\) For a graduate student, each term in the award year meets the
minimum full-time enrollment status established by the institution for a
semester, trimester, or quarter; and

\(ii\) The program uses an academic calendar that provides at least 30
weeks of instructional time in\--

\(A\) Two semesters or trimesters in the fall through the following
spring, or three quarters in the fall, winter, and spring, none of which
overlaps any other term (including a summer term) in the program; or

\(B\) Any two semesters or trimesters, or any three quarters where\--

([1]{.underline}) The institution starts its terms for different cohorts
of students on a periodic basis ([e]{.underline}.[g]{.underline}.,
monthly);

([2]{.underline}) The program is offered exclusively in semesters,
trimesters, or quarters; and

([3]{.underline}) Students are not allowed to be enrolled simultaneously
in overlapping terms and must stay with the cohort in which they start
unless they withdraw from a term (or skip a term) and reenroll in a
subsequent term.

\(2\) [Programs using standard terms with less than 30 weeks of
instructional time]{.underline}. A student's payment for a payment
period is calculated under paragraph (c) or (d) of this section if\--

\(i\) The student is enrolled in an eligible program that\--

\(A\) Measures progress in credit hours;

\(B\) Is offered in semesters, trimesters, or quarters;

(C)(*1*) For an undergraduate student, requires the student to enroll in
at least 12 credit hours in each term in the award year to qualify as a
full-time student; or

(*2*) For a graduate student, each term in the award year meets the
minimum full-time enrollment status established by the institution for a
semester, trimester, or quarter; and

\(D\) Is not offered with overlapping terms; and

\(ii\) The institution offering the program\--

\(A\) Provides the program using an academic calendar that includes two
semesters or trimesters in the fall through the following spring, or
three quarters in the fall, winter, and spring; and

\(B\) Does not provide at least 30 weeks of instructional time in the
terms specified in paragraph (a)(2)(ii)(A) of this section.

\(3\) [Other programs using terms and credit hours]{.underline}. A
student's payment for a payment period is calculated under paragraph (d)
of this section if the student is enrolled in an eligible program
that\--

\(i\) Measures progress in credit hours; and

\(ii\) Is offered in academic terms other than those described in
paragraphs (a)(1) and (a)(2) of this section.

\(4\) [Programs not using terms or using clock hours]{.underline}. A
student's payment for any payment period is calculated under paragraph
(e) of this section if the student is enrolled in an eligible program
that\--

\(i\) Is offered in credit hours but is not offered in academic terms;
or

\(ii\) Is offered in clock hours.

\(5\) [Programs for which an exception to the academic year definition
has been granted under 34 CFR 668.3]{.underline}. If an institution
receives a waiver from the Secretary of the 30 weeks of instructional
time requirement under 34 CFR 668.3, an institution may calculate a
student's payment for a payment period using the following
methodologies:

\(i\) If the program is offered in terms and credit hours, the
institution uses the methodology in\--

\(A\) Paragraph (b) of this section provided that the program meets all
the criteria in paragraph (a)(1) of this section, except that in lieu of
meeting the requirements in paragraph (a)(1)(ii)(B) of this section, the
program provides at least the same number of weeks of instructional time
in the terms specified in paragraph (a)(1)(ii)(A) of this section as are
in the program's academic year; or

\(B\) Paragraph (d) of this section.

\(ii\) The institution uses the methodology described in paragraph (e)
of this section if the program is offered in credit hours without terms.

\(b\) [Programs using standard terms with at least 30 weeks of
instructional time]{.underline}. The payment for a payment period,
[i]{.underline}.[e]{.underline}., an academic term, for a student in a
program using standard terms with at least 30 weeks of instructional
time in two semesters or trimesters or in three quarters as described in
paragraph (a)(1)(ii) of this section, is calculated by\--

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

\(2\) Based upon that enrollment status, determining his or her annual
award; and

\(3\) Dividing the amount described in paragraph (b)(2) of this section
by\--

\(i\) Two at institutions using semesters or trimesters or three at
institutions using quarters; or

\(ii\) The number of terms over which the institution chooses to
distribute the student's annual award if\--

\(A\) An institution chooses to distribute all of the student's annual
award determined under paragraph (b)(2) of this section over more than
two terms at institutions using semesters or trimesters or more than
three quarters at institutions using quarters; and

\(B\) The number of weeks of instructional time in the terms, including
the additional term or terms, equals the weeks of instructional time in
the program's academic year.

\(c\) [Programs using standard terms with less than 30 weeks of
instructional time]{.underline}. The payment for a payment period,
[i]{.underline}.[e]{.underline}., an academic term, for a student in a
program using standard terms with less than 30 weeks of instructional
time in two semesters or trimesters or in three quarters as described in
paragraph (a)(2)(ii)(A) of this section, is calculated by\--

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

\(2\) Based upon that enrollment status, determining his or her annual
award;

\(3\) Multiplying his or her annual award determined under paragraph
(c)(2) of this section by the following fraction as applicable:

\(i\) In a program using semesters or trimesters\--

The number of weeks of instructional time offered in

[the program in the fall and spring semesters or trimesters]{.underline}

The number of weeks in the program's academic year

\(ii\) In a program using quarters\--

The number of weeks of instructional time offered in

[the program in the fall, winter, and spring quarters]{.underline}

The number of weeks in the program's academic year

; and

(4)(i) Dividing the amount determined under paragraph (c)(3) of this
section by two for programs using semesters or trimesters or three for
programs using quarters; or

\(ii\) Dividing the student's annual award determined under paragraph
(c)(2) of this section by the number of terms over which the institution
chooses to distribute the student's annual award if\--

\(A\) An institution chooses to distribute all of the student's annual
award determined under paragraph (c)(2) of this section over more than
two terms for programs using semesters or trimesters or more than three
quarters for programs using quarters; and

\(B\) The number of weeks of instructional time in the terms, including
the additional term or terms, equals the weeks of instructional time in
the program's academic year definition.

\(d\) [Other programs using terms and credit hours]{.underline}. The
payment for a payment period, [i]{.underline}.[e]{.underline}., an
academic term, for a student in a program using terms and credit hours,
other than those described in paragraphs (a)(1) or (2) of this section,
is calculated by\--

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

\(2\) Based upon that enrollment status, determining his or her annual
award; and

\(3\) Multiplying his or her annual award determined under paragraph
(d)(2) of this section by the following fraction:

[The number of weeks of instructional time in the term]{.underline}

The number of weeks of instructional time in the program's academic year

\(e\) [Programs using credit hours without terms or clock
hours.]{.underline} The payment for a payment period for a student in a
program using credit hours without terms or using clock hours is
calculated by multiplying the Scheduled Award by the lesser of\--

\(1\)

  -----------------------------------------------------------------------
  The number of credit or clock hours in the payment period

  The number of credit or clock hours in the program's academic year
  -----------------------------------------------------------------------

; or

\(2\)

+-----------------------------------------------------------------------+
| The number of weeks of instructional time in the payment period       |
+-----------------------------------------------------------------------+
| The number of weeks of instructional time in the program's academic   |
|                                                                       |
| year                                                                  |
+-----------------------------------------------------------------------+

\(f\) [Maximum disbursement]{.underline}. A single disbursement may not
exceed 50 percent of an award determined under paragraph (d) or (e) of
this section. If a payment for a payment period calculated under
paragraphs (d) or (e) of this section would require the disbursement of
more than 50 percent of a student's annual award in that payment period,
the institution must make at least two disbursements to the student in
that payment period. The institution may not disburse an amount that
exceeds 50 percent of the student's annual award until the student has
completed the period of time in the payment period that equals, in terms
of weeks of instructional time, 50 percent of the weeks of instructional
time in the program's academic year.

\(g\) [Minimum payment]{.underline}. No payment for a payment period as
determined under this section or §686.25 may be less than \$25.

\(h\) [Definition of academic year]{.underline}. For purposes of this
section and §686.25, an institution must define an academic year\--

\(1\) For each of its TEACH Grant-eligible undergraduate programs of
study, including post-baccalaureate programs of study, in terms of the
number of credit or clock hours and weeks of instructional time in
accordance with the requirements of 34 CFR 668.3; and

\(2\) For each of its TEACH Grant-eligible master's degree programs of
study in terms of the number of weeks of instructional time in
accordance with the requirements of 34 CFR 668.3 and the minimum number
of credit or clock hours a full-time student would be expected to
complete in the weeks of instructional time of the program's academic
year.

\(i\) [Payment period completing a Scheduled Award]{.underline}. In a
payment period, if a student is completing a Scheduled Award, the
student's payment for the payment period\--

\(1\) Is calculated based on the total credit or clock hours and weeks
of instructional time in the payment period; and

\(2\) Is the remaining amount of the Scheduled Award being completed
plus an amount from the next Scheduled Award, if available, up to the
payment for the payment period.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.23 Calculation of a grant for a payment period that occurs in two
award years]{.underline}.

If a student enrolls in a payment period that is scheduled to occur in
two award years\--

\(a\) The entire payment period must be considered to occur within one
award year;

\(b\) The institution must determine for each TEACH Grant recipient the
award year in which the payment period will be placed subject to the
restriction set forth in paragraph (c) of this section;

\(c\) The institution must place a payment period with more than six
months scheduled to occur within one award year in that award year;

\(d\) If the institution places the payment period in the first award
year, it must pay a student with funds from the first award year; and

\(e\) If the institution places the payment period in the second award
year, it must pay a student with funds from the second award year.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.24 Transfer student: attendance at more than one institution
during an award year]{.underline}.

\(a\) If a student who receives a TEACH Grant at one institution
subsequently enrolls at a second institution, the student may receive a
grant at the second institution only if\--

\(1\) The student submits a SAR with an official EFC to the second
institution; or

\(2\) The second institution obtains an ISIR with an official EFC.

\(b\) The second institution must calculate the student's award in
accordance with §686.22 or §686.25.

\(c\) The second institution may pay a TEACH Grant only for that period
in which a student is enrolled in a TEACH Grant-eligible program at that
institution.

\(d\) The student's TEACH Grant for each payment period is calculated
according to the procedures in §§686.22 or 686.25 unless the remaining
balance of the Scheduled Award at the second institution is the balance
of the student's last Scheduled Award and is less than the amount the
student would normally receive for that payment period.

\(e\) A transfer student must repay any amount received in an award year
that exceeds the amount which he or she was eligible to receive.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.25 Correspondence study]{.underline}.

\(a\) An institution calculates a TEACH Grant for a payment period for a
student in a program of study offered by correspondence courses without
terms, but not including any residential component, by\--

\(1\) Using the half-time annual award; and

\(2\) Multiplying the half-time annual award by the lesser of\--

\(i\)

  -----------------------------------------------------------------------
  The number of credit or clock hours in the payment period

  The number of credit or clock hours in the program's academic year
  -----------------------------------------------------------------------

; or

\(ii\)

  -----------------------------------------------------------------------
  The number of weeks of instructional time in the payment period

  The number of weeks of instructional time in the program's academic
  year
  -----------------------------------------------------------------------

\(b\) For purposes of paragraph (a) of this section\--

\(1\) An academic year as measured in credit or clock hours must consist
of two payment periods\--

\(i\) The first payment period must be the period of time in which the
student completes the lesser of the first half of his or her academic
year or program; and

\(ii\) The second payment period must be the period of time in which the
student completes the lesser of the second half of the academic year or
program; and

(2)(i) The institution must make the first payment to a student for an
academic year, as calculated under paragraph (a) of this section, after
the student submits 25 percent of the lessons or otherwise completes 25
percent of the work scheduled for the program or the academic year,
whichever occurs last; and

\(ii\) The institution must make the second payment to a student for an
academic year, as calculated under (a) of this section, after the
student submits 75 percent of the lessons or otherwise completes 75
percent of the work scheduled for the program or the academic year,
whichever occurs last.

\(c\) In a program of correspondence study offered by correspondence
courses using terms but not including any residential component\--

\(1\) The institution must prepare a written schedule for submission of
lessons that reflects a workload of at least 30 hours of preparation per
semester hour or 20 hours of preparation per quarter hour during the
term;

(2)(i) If the student is enrolled in at least six credit hours that
commence and are completed in that term, the half-time annual award is
used; or

\(ii\) If the student is enrolled in less than six credit hours that
commence and are completed in that term the less-than-half-time annual
award is used;

\(3\) A payment for a payment period is calculated using the formula in
§686.22(d) except that paragraphs (c) (1) and (2) of this section are
used in lieu of paragraphs §686.22(d) (1) and (2), respectively; and

\(4\) The institution must make the payment to a student for a payment
period after that student completes 50 percent of the lessons or
otherwise completes 50 percent of the work scheduled for the term,
whichever occurs last.

\(d\) Payments for periods of residential training must be calculated
under §686.22(d) if the residential training is offered using terms and
credit hours or under §686.22(e) if the residential training is offered
using credit hours without terms or clock hours.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[Subpart D\--Administration of Grant Payments]{.underline}

[§686.30 Scope]{.underline}.

This subpart deals with TEACH Grant Program administration by a TEACH
Grant-eligible institution.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.31 Determination of eligibility for payment]{.underline}.

\(a\) For each payment period, an institution may pay a grant under this
part to an eligible student only after it determines that the student\--

\(1\) Is eligible under §686.11;

\(2\) Has completed the relevant counseling required in §686.32;

\(3\) Has signed a service agreement as described in §686.12;

\(4\) Is enrolled in a TEACH Grant-eligible program; and

\(5\) If enrolled in a credit-hour program without terms or a clock-hour
program, has completed the payment period as defined in 34 CFR 668.4 for
which he or she has been paid a grant.

(b)(1) If an institution determines at the beginning of a payment period
that a student is not maintaining satisfactory progress, but changes
that determination before the end of the payment period, the institution
may pay a TEACH Grant to the student for the entire payment period.

\(2\) If an institution determines at the beginning of a payment period
that a student enrolled in a TEACH Grant-eligible program is not
maintaining the required GPA for a TEACH Grant under §686.11 or is not
pursuing a career in teaching, but changes that determination before the
end of the payment period, the institution may pay a TEACH Grant to the
student for the entire payment period.

\(c\) If an institution determines at the beginning of a payment period
that a student is not maintaining satisfactory progress or the necessary
GPA for a TEACH Grant under §686.11 or is not pursuing a career in
teaching, but changes that determination after the end of the payment
period, the institution may not pay the student a TEACH Grant for that
payment period or make adjustments in subsequent payments to compensate
for the loss of aid for that period.

\(d\) An institution may make one disbursement for a payment period to
an otherwise eligible student if\--

(1)(i) The student's final high school GPA is not yet available; or

\(ii\) The student's cumulative GPA through the prior payment period
under §686.11 is not yet available; and

\(2\) The institution assumes liability for any overpayment if the
student fails to meet the required GPA to qualify for the disbursement.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.32 Counseling requirements]{.underline}.

\(a\) [Initial counseling]{.underline}. (1) An institution must ensure
that initial counseling is conducted with each TEACH Grant recipient
prior to making the first disbursement of the grant.

\(2\) The initial counseling must be in person, by audiovisual
presentation, or by interactive electronic means. In each case, the
institution must ensure that an individual with expertise in title IV,
HEA programs is reasonably available shortly after the counseling to
answer the student's questions. As an alternative, in the case of a
student enrolled in a correspondence program of study or a study-abroad
program of study approved for credit at the home institution, the
student may be provided with written counseling materials before the
grant is disbursed.

\(3\) The initial counseling must\--

\(i\) Explain the terms and conditions of the TEACH Grant service
agreement as described in §686.12;

\(ii\) Provide the student with information about how to identify
low-income schools and documented high-need fields;

\(iii\) Inform the grant recipient that, in order for the teaching to
count towards the service obligation, the high-need field in which he or
she has prepared to teach must be\--

\(A\) One of the six high-need fields listed in §686.2; or

\(B\) A high-need field listed in the Nationwide List at the time and
for the State in which the grant recipient begins teaching in that
field.

\(iv\) Inform the grant recipient of the opportunity to request a
suspension of the eight-year period for completion of the service
agreement and the conditions under which a suspension may be granted in
accordance with §686.41;

\(v\) Explain to the student that conditions, such as conviction of a
felony, could preclude the student from completing the service
obligation;

\(vi\) Emphasize to the student that if the student fails or refuses to
complete the service obligation contained in the service agreement or
any other condition of the service agreement\--

([A]{.underline}) The TEACH Grant must be repaid as a Federal Direct
Unsubsidized Loan; and

([B]{.underline}) The TEACH Grant recipient will be obligated to repay
the full amount of each grant and the accrued interest from each
disbursement date;

\(vii\) Explain the circumstances, as described in §686.43, under which
a TEACH Grant will be converted to a Federal Direct Unsubsidized Loan;

\(viii\) Emphasize that, once a TEACH Grant is converted to a Federal
Direct Unsubsidized Loan, it cannot be reconverted to a grant;

\(ix\) Review for the grant recipient information on the availability of
the Department's Student Loan Ombudsman's office;

\(x\) Describe the likely consequences of loan default, including
adverse credit reports, garnishment of wages, Federal offset, and
litigation; and

\(xi\) Inform the student of sample monthly repayment amounts based on a
range of student loan indebtedness.

\(b\) [Subsequent counseling]{.underline}. (1) If a student receives
more than one TEACH Grant, the institution must ensure that the student
receives additional counseling prior to the first disbursement of each
subsequent TEACH Grant award.

\(2\) Subsequent counseling may be in person, by audiovisual
presentation, or by interactive electronic means. In each case, the
institution must ensure that an individual with expertise in title IV,
HEA programs is reasonably available shortly after the counseling to
answer the student's questions. As an alternative, in the case of a
student enrolled in a correspondence program of study or a study-abroad
program of study approved for credit at the home institution, the
student may be provided with written counseling materials before the
grant is disbursed.

\(3\) Subsequent counseling must\--

\(i\) Review the terms and conditions of the TEACH Grant service
agreement as described in §686.12;

\(ii\) Emphasize to the student that if the student fails or refuses to
complete the service obligation contained in the service agreement or
any other condition of the service agreement\--

\(A\) The TEACH Grant must be repaid as a Federal Direct Unsubsidized
Loan; and

\(B\) The TEACH Grant recipient will be obligated to repay the full
amount of the grant and the accrued interest from the disbursement date;

\(iii\) Explain the circumstances, as described in §686.43, under which
a TEACH Grant will be converted to a Federal Direct Unsubsidized Loan;

\(iv\) Emphasize that, once a TEACH Grant is converted to a Federal
Direct Unsubsidized Loan, it cannot be reconverted to a grant; and

\(v\) Review for the grant recipient information on the availability of
the Department's Student Loan Ombudsman's office.

\(c\) [Exit counseling]{.underline}. (1) An institution must ensure that
exit counseling is conducted with each grant recipient before he or she
ceases to attend the institution at a time determined by the
institution.

\(2\) The exit counseling must be in person, by audiovisual
presentation, or by interactive electronic means. In each case, the
institution must ensure that an individual with expertise in title IV,
HEA programs is reasonably available shortly after the counseling to
answer the grant recipient's questions. As an alternative, in the case
of a grant recipient enrolled in a correspondence program of study or a
study-abroad program of study approved for credit at the home
institution, the grant recipient may be provided with written counseling
materials within 30 days after he or she completes the program.

\(3\) Within 30 days of learning that a grant recipient has withdrawn
from the institution without the institution's knowledge, or from a
TEACH Grant-eligible program, or failed to complete exit counseling as
required, exit counseling must be provided either in-person, through
interactive electronic means, or by mailing written counseling materials
to the grant recipient's last known address.

\(4\) The exit counseling must\--

\(i\) Inform the grant recipient of the four-year service obligation
that must be completed within the first eight calendar years after
completing a TEACH Grant-eligible program in accordance with §686.12;

\(ii\) Inform the grant recipient of the opportunity to request a
suspension of the eight-year period for completion of the service
agreement and the conditions under which a suspension may be granted in
accordance with §686.41;

\(iii\) Provide the grant recipient with information about how to
identify low-income schools and documented high-need fields;

\(iv\) Inform the grant recipient that, in order for the teaching to
count towards the service obligation, the high-need field in which he or
she has prepared to teach must be\--

\(A\) One of the six high-need fields listed in §686.2; or

\(B\) A high-need field listed in the Nationwide List at the time and
for the State in which the grant recipient begins teaching in that
field.

\(v\) Explain that the grant recipient will be required to submit to the
Secretary each year written documentation of his or her status as a
highly-qualified teacher in a high-need field at a low-income school or
of his or her intent to complete the four-year service requirement until
the date that the service requirement has been met or the date that the
grant becomes a loan, whichever occurs first;

\(vi\) Explain the circumstances, as described in §686.43, under which a
TEACH Grant will be converted to a Federal Direct Unsubsidized Loan;

\(vii\) Emphasize that once a TEACH Grant is converted to a Federal
Direct Unsubsidized Loan it cannot be reconverted to a grant;

\(viii\) Inform the grant recipient of the average anticipated monthly
repayment amount based on a range of student loan indebtedness if the
grants convert to Federal Direct Unsubsidized Loans;

\(ix\) Review for the grant recipient available repayment options if the
TEACH Grant converts to a Federal Direct Unsubsidized Loan including the
standard repayment, extended repayment, graduated repayment,
income-contingent and income-based repayment plans, and loan
consolidation;

\(x\) Suggest debt-management strategies to the grant recipient that
would facilitate repayment if the TEACH Grant converts to a Federal
Direct Unsubsidized Loan;

\(xi\) Explain to the grant recipient how to contact the Secretary;

\(xii\) Describe the likely consequences of loan default, including
adverse credit reports, garnishment of wages, Federal offset, and
litigation;

\(xiii\) Review for the grant recipient the conditions under which he or
she may defer or forbear repayment, obtain a full or partial discharge,
or receive teacher loan forgiveness if the TEACH Grant converts to a
Federal Direct Unsubsidized Loan;

\(xiv\) Review for the grant recipient information on the availability
of the Department's Student Loan Ombudsman's office; and

\(xv\) Inform the grant recipient of the availability of title IV loan
information in the National Student Loan Data System (NSLDS).

\(5\) If exit counseling is conducted through interactive electronic
means, an institution must take reasonable steps to ensure that each
grant recipient receives the counseling materials and participates in
and completes the exit counseling.

\(d\) [Compliance]{.underline}. The institution must maintain
documentation substantiating the institution's compliance with this
section for each TEACH Grant recipient.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.33 Frequency of payment]{.underline}.

\(a\) In each payment period, an institution may pay a student at such
times and in such installments as it determines will best meet the
student's needs.

\(b\) The institution may pay funds in one lump sum for all the prior
payment periods for which the student was eligible under §686.11 within
the award year as long as the student has signed the service agreement
prior to disbursement of the TEACH Grant. The student's enrollment
status must be determined according to work already completed.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.34 Liability for and recovery of TEACH Grant
overpayments]{.underline}.

(a)(1) Except as provided in paragraphs (a)(2) and (3) of this section,
a student is liable for any TEACH Grant overpayment made to him or her.

\(2\) The institution is liable for a TEACH Grant overpayment if the
overpayment occurred because the institution failed to follow the
procedures set forth in this part or in 34 CFR part 668. The institution
must restore an amount equal to the overpayment to its TEACH Grant
account.

\(3\) A student is not liable for, and the institution is not required
to attempt recovery of or refer to the Secretary, a TEACH Grant
overpayment if the amount of the overpayment is less than \$25 and is
not a remaining balance.

(b)(1) Except as provided in paragraph (a)(3) of this section, if an
institution makes a TEACH Grant overpayment for which it is not liable,
it must promptly send a written notice to the student requesting
repayment of the overpayment amount. The notice must state that failure
to make that repayment, or to make arrangements satisfactory to the
holder of the overpayment debt to repay the overpayment, makes the
student ineligible for further title IV, HEA program funds until final
resolution of the TEACH Grant overpayment.

\(2\) If a student objects to the institution's TEACH Grant overpayment
determination, the institution must consider any information provided by
the student and determine whether the objection is warranted.

\(c\) Except as provided in paragraph (a)(3) of this section, if the
student fails to repay a TEACH Grant overpayment or make arrangements
satisfactory to the holder of the overpayment debt to repay the TEACH
Grant overpayment, after the institution has taken the action required
by paragraph (b) of this section, the institution must refer the
overpayment to the Secretary for collection in accordance with
procedures required by the Secretary. After referring the TEACH Grant
overpayment to the Secretary under this section, the institution need
make no further efforts to recover the overpayment.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.35 Re-determination of eligibility for TEACH Grant
award]{.underline}.

\(a\) [Change in enrollment status]{.underline}*.* (1) If the student's
enrollment status changes from one academic term to another academic
term within the same award year, the institution must recalculate the
TEACH Grant award for the new payment period taking into account any
changes in the cost of attendance.

(2)(i) If the student's projected enrollment status changes during a
payment period after the student has begun attendance in all of his or
her classes for that payment period, the institution may (but is not
required to) establish a policy under which the student's award for the
payment period is recalculated. Any such recalculations must take into
account any changes in the cost of attendance. In the case of an
undergraduate or post-baccalaureate program of study, if such a policy
is established, it must be the same policy that the institution
established under §690.80(b) for the Federal Pell Grant Program and it
must apply to all students in the TEACH Grant-eligible program.

\(ii\) If a student's projected enrollment status changes during a
payment period before the student begins attendance in all of his or her
classes for that payment period, the institution must recalculate the
student's enrollment status to reflect only those classes for which he
or she actually began attendance.

\(b\) [Change in cost of attendance]{.underline}. If the student's cost
of attendance changes at any time during the award year and his or her
enrollment status remains the same, the institution may, but is not
required to, establish a policy under which the student's award for the
payment period is recalculated. If such a policy is established, it must
apply to all students in the TEACH Grant-eligible program.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.36 Fiscal control and accounting procedures]{.underline}.

\(a\) An institution must follow the provisions for maintaining general
fiscal records in this section and in 34 CFR 668.24(b).

\(b\) An institution must maintain funds received under this section in
accordance with the requirements in 34 CFR 668.164.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.37 Institutional reporting requirements]{.underline}.

\(a\) An institution must provide to the Secretary information about
each TEACH Grant recipient that includes but is not limited to\--

\(1\) The student's eligibility for a grant, as determined in accordance
with §§686.11 and 686.19;

\(2\) The student's TEACH Grant amounts; and

\(3\) The anticipated and actual disbursement date or dates and
disbursement amounts of the TEACH Grant funds.

\(b\) An institution must submit the initial disbursement record for a
TEACH Grant to the Secretary no later than 30 days following the date of
the initial disbursement. The institution must submit subsequent
disbursement records, including adjustment and cancellation records, to
the Secretary no later than 30 days following the date the disbursement,
adjustment, or cancellation is made.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.38 Maintenance and retention of records]{.underline}.

\(a\) An institution must follow the record retention and examination
provisions in this section and in 34 CFR 668.24.

\(b\) For any disputed expenditures in any award year for which the
institution cannot provide records, the Secretary determines the final
authorized level of expenditures.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[Subpart E\--Service and Repayment Obligations]{.underline}

[§686.40 Documenting the service obligation]{.underline}.

\(a\) Except as provided in §§686.41 and 686.42, within 120 days of
completing or otherwise ceasing enrollment in a program of study for
which a TEACH Grant was received, the grant recipient must confirm to
the Secretary in writing that\--

\(1\) He or she is employed as a full-time teacher in accordance with
the terms and conditions of the service agreement described in §686.12;
or

\(2\) He or she is not yet employed as a full-time teacher but intends
to meet the terms and conditions of the service agreement described in
§686.12.

\(b\) If a grant recipient is performing full-time teaching service in
accordance with the service agreement, or service agreements if more
than one agreement exists, the grant recipient must, upon completion of
each of the four required elementary or secondary academic years of
teaching service, provide to the Secretary documentation of that
teaching service on a form approved by the Secretary and certified by
the chief administrative officer of the school in which the grant
recipient is teaching. The documentation must show that the grant
recipient is teaching in a low-income school. If the school at which the
grant recipient is employed meets the requirements of a low-income
school in the first year of the grant recipient's four elementary or
secondary academic years of teaching and the school fails to meet those
requirements in subsequent years, those subsequent years of teaching
qualify for purposes of this section for that recipient.

(c)(1) In addition to the documentation requirements in paragraph (b) of
this section, the documentation must show that the grant recipient\--

\(i\) Taught a majority of classes during the period being certified in
any of the high-need fields of mathematics, science, a foreign language,
bilingual education, English language acquisition, special education, or
as a reading specialist; or

\(ii\) Taught a majority of classes during the period being certified in
a State in another high-need field designated by that State and listed
in the Nationwide List, except that teaching service does not satisfy
the requirements of the service agreement if that teaching service is in
a geographic region of a State or in a specific grade level not
associated with a high-need field of a State designated in the
Nationwide List as having a shortage of elementary or secondary school
teachers.

\(2\) If a grant recipient begins qualified full-time teaching service
in a State in a high-need field designated by that State and listed in
the Nationwide List and in subsequent years that high-need field is no
longer designated by the State in the Nationwide List, the grant
recipient will be considered to continue to perform qualified full-time
teaching service in a high-need field of that State and to continue to
fulfill the service obligation.

\(d\) Documentation must also provide evidence that the grant recipient
is a highly-qualified teacher.

\(e\) For purposes of completing the service requirement, the elementary
or secondary academic year may be counted as one of the grant
recipient's four complete elementary or secondary academic years if the
grant recipient completes at least one-half of the elementary or
secondary academic year and the grant recipient's school employer
considers the grant recipient to have fulfilled his or her contract
requirements for the elementary or secondary academic year for the
purposes of salary increases, tenure, and retirement if the grant
recipient is unable to complete an elementary or secondary academic year
due to\--

\(1\) A condition that is covered under the Family and Medical Leave Act
of 1993 (FMLA) (29 U.S.C. 2654) that is limited to\--

\(i\) The birth of a son or daughter of the grant recipient in order to
care for the son or daughter;

\(ii\) The placement of a son or daughter with the grant recipient for
adoption or foster care;

\(iii\) Caring for the spouse, or a son, daughter, or parent of the
grant recipient, if the spouse, son, daughter, or parent has a serious
health condition; or

\(iv\) A serious health condition that makes the grant recipient unable
to perform the functions of the position as a teacher; or

\(2\) A call or order to active duty status for more than 30 days as a
member of a reserve component of the Armed Forces named in section 10101
of title 10, United States Code, or service as a member of the National
Guard on full-time National Guard duty, as defined in section 101(d)(5)
of title 10, United States Code, under a call to active service in
connection with a war, military operation, or a national emergency.

\(f\) A grant recipient who taught in more than one qualifying school
during an elementary or secondary academic year and demonstrates that
the combined teaching service was the equivalent of full-time, as
supported by the certification of one or more of the chief
administrative officers of the schools involved, is considered to have
completed one elementary or secondary academic year of qualifying
teaching.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.41 Periods of suspension]{.underline}.

(a)(1) The grant recipient who has completed or who has otherwise ceased
enrollment in a TEACH Grant-eligible program for which he or she
received TEACH grant funds may request a suspension from the Secretary
of the eight-year period for completion of the service obligation based
on\--

\(i\) Enrollment in a program of study for which the recipient would be
eligible for a TEACH Grant or in a program of study that has been
determined by a State to satisfy the requirements for certification or
licensure to teach in the State's elementary or secondary schools;

\(ii\) A condition that is covered under FMLA which is limited to\--

\(A\) The birth of a son or daughter of the grant recipient in order to
care for the son or daughter;

\(B\) The placement of a son or daughter with the grant recipient for
adoption or foster care;

\(C\) Caring for the spouse, or a son, daughter, or parent of the grant
recipient, if the spouse, son, daughter, or parent has a serious health
condition; or

\(D\) A serious health condition that makes the grant recipient unable
to perform the functions of the position as a teacher; or

\(iii\) A call or order to active duty status for more than 30 days as a
member of a reserve component of the Armed Forces named in section 10101
of title 10, United States Code, or service as a member of the National
Guard on full-time National Guard duty, as defined in section 101(d)(5)
of title 10, United States Code, under a call to active service in
connection with a war, military operation, or a national emergency.

\(2\) A grant recipient may receive a suspension described in paragraph
(a)(1)(i) and (ii) of this section in one-year increments that\--

\(i\) Does not exceed a combined total of three years under both
paragraphs (a)(1)(i) and (ii) of this section; or

\(ii\) Ends upon the completion of the military service in paragraph
(a)(1)(iii) of this section.

\(b\) The grant recipient must apply for a suspension in writing on a
form approved by the Secretary within six months of completing or
otherwise ceasing enrollment in a TEACH Grant-eligible program, or if
the grant recipient has already begun teaching service in fulfillment of
the service obligation, within six months of the date he or she stops
teaching.

\(c\) The grant recipient must provide the Secretary with documentation
supporting the suspension request as well as current contact information
including home address and telephone number.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.42 Discharge of service agreement]{.underline}.

\(a\) [Death]{.underline}. If a grant recipient dies, the Secretary
discharges the obligation to complete the service agreement based on an
original or certified copy of the grant recipient's death certificate,
an accurate and complete photocopy of the original or certified copy of
the grant recipient's death certificate, or, on a case-by-case basis,
reliable documentation acceptable to the Secretary.

\(b\) [Total and permanent disability]{.underline}. (1) A grant
recipient's service agreement is discharged if the recipient becomes
totally and permanently disabled, as defined in 34 CFR 682.200(b), and
the grant recipient applies for and satisfies the eligibility
requirements for a total and permanent disability discharge in
accordance with 34 CFR 685.213.

\(2\) The eight-year time period in which the grant recipient must
complete the service obligation remains in effect during the conditional
discharge period described in 34 CFR 685.213(c)(2) unless the grant
recipient is eligible for a suspension based on the FMLA in accordance
with §686.41(a)(1)(ii)(D).

\(3\) Interest continues to accrue on each TEACH Grant disbursement
unless and until the TEACH Grant recipient's service agreement is
discharged.

\(4\) If the grant recipient satisfies the criteria for a total and
permanent disability discharge during and at the end of the three-year
conditional discharge period, the []{.mark}Secretary discharges the
grant recipient's service obligation.

\(5\) If, at any time during or at the end of the three-year conditional
discharge period, the Secretary determines that the grant recipient does
not meet the eligibility criteria for a total and permanent disability
discharge, the Secretary ends the conditional discharge period and the
grant recipient is once again subject to the terms of the service
agreement.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

[§686.43 Obligation to repay the grant]{.underline}.

\(a\) The TEACH Grant amounts disbursed to the recipient will be
converted into a Federal Direct Unsubsidized Loan, with interest
accruing from the date that each grant disbursement was made and be
collected by the Secretary in accordance with the relevant provisions of
subpart A of 34 CFR part 685 if\--

\(1\) The grant recipient, regardless of enrollment status, requests
that the TEACH Grant be converted into a Federal Direct Unsubsidized
Loan because he or she has decided not to teach in a qualified school or
field or for any other reason;

\(2\) Within 120 days of ceasing enrollment in the institution prior to
completing the TEACH Grant-eligible program, the grant recipient has
failed to notify the Secretary in accordance with §686(a);

\(3\) Within one year of ceasing enrollment in the institution prior to
completing the TEACH Grant-eligible program, the grant recipient has
not\--

\(i\) Been determined eligible for a suspension of the eight-year period
for completion of the service obligation as provided in §686.41;

\(ii\) Re-enrolled in a TEACH Grant-eligible program; or

\(iii\) Begun creditable teaching service as described in §686.12(b);

\(4\) The grant recipient completes the course of study for which a
TEACH Grant was received and does not actively confirm to the Secretary,
at least annually, his or her intention to satisfy the service
agreement; or

\(5\) The grant recipient has completed the TEACH Grant-eligible program
but has failed to begin or maintain qualified employment within the
timeframe that would allow that individual to complete the service
obligation within the number of years required under §686.12.

\(b\) A TEACH Grant that converts to a loan, and is treated as a Federal
Direct Unsubsidized Loan, is not counted against the grant recipient's
annual or any aggregate Stafford Loan limits.

\(c\) A grant recipient whose TEACH Grant has been converted to a
Federal Direct Unsubsidized Loan \--

\(1\) Enters repayment immediately;

\(2\) Is eligible for all of the benefits of the Direct Loan Program;
and

\(3\) Is not eligible for any grace period.

\(d\) A TEACH Grant that is converted to a Federal Direct Unsubsidized
Loan cannot be reconverted to a grant.

(Authority: 20 U.S.C. 1070g [et]{.underline} [seq]{.underline}.)

> PART 690\--FEDERAL PELL GRANT PROGRAM

(Authority: 20 U.S.C. XXXX)

40\. The authority citation for part 690 continues to read as follows:

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

41\. Section 690.2(b) is amended by adding, in alphabetical order, the
terms "Teacher Education Assistance for College and Higher Education
(TEACH) Grant Program" and "TEACH Grant".