Title 34—Education--Volume 1
PART 606—DEVELOPING HISPANIC-SERVING INSTITUTIONS PROGRAM
§ 606.1   What is the Developing Hispanic-Serving Institutions Program?
The purpose of the Developing Hispanic-Serving Institutions Program is to provide grants to eligible institutions of higher education to—
(a) Expand educational opportunities for, and improve the academic attainment of, Hispanic students; and
(b) Expand and enhance the academic offerings, program quality, and institutional stability of colleges and universities that are educating the majority of Hispanic college students and helping large numbers of Hispanic students and other low-income individuals complete postsecondary degrees.
§ 606.2   What institutions are eligible to receive a grant under the Developing Hispanic-Serving Institutions Program?
(a) An institution of higher education is eligible to receive a grant under this part if—
(1) At the time of application, it has an enrollment of undergraduate full-time equivalent students that is at least 25 percent Hispanic students;
(2) It provides assurances that not less than 50 percent of its Hispanic students are low-income individuals;
(3) It has an enrollment of needy students as described in § 606.3(a), unless the Secretary waives this requirement under § 606.3(b);
(4) It has low average educational and general expenditures per full-time equivalent undergraduate student as described in § 606.4(a), unless the Secretary waives this requirement under § 606.4(c);
(5) It is legally authorized by the State in which it is located to be a junior college or to provide an educational program for which it awards a bachelor's degree; and
(6) It is accredited or preaccredited by a nationally recognized accrediting agency or association that the Secretary has determined to be a reliable authority as to the quality of education or training offered.
(b) A branch campus of a Hispanic-Serving institution is eligible to receive a grant under this part if—
(1) The institution as a whole meets the requirements of paragraphs (a)(3) through (a)(6) of this section; and
(2) The branch campus satisfies the requirements of paragraphs (a)(1) through (a)(4) of this section.
(c)(1) An institution that receives a grant under the Strengthening Institutions Program (34 CFR part 607) or the Strengthening Historically Black Colleges and Universities Program (34 CFR part 608) for a particular fiscal year is not eligible to receive a grant under this part for that same fiscal year, and may not relinquish its grant under those programs to secure a grant under this part.
(2) A Hispanic-Serving institution under this part may not concurrently receive grant funds under the Strengthening Institutions Program, Strengthening Historically Black Colleges and Universities Program, or Strengthening Historically Black Graduate Institutions Program.
§ 606.3   What is an enrollment of needy students?
(a) Except as provided in paragraph (b) of this section, for the purpose of § 606.2(a)(3), an applicant institution has an enrollment of needy students if in the base year—
(1) At least 50 percent of its degree students received student financial assistance under one or more of the following programs: Federal Pell Grant, Federal Supplemental Educational Opportunity Grant, Federal Work-Study, and Federal Perkins Loan; or
(2) The percentage of its undergraduate degree students who were enrolled on at least a half-time basis and received Federal Pell Grants exceeded the median percentage of undergraduate degree students who were enrolled on at least a half-time basis and received Federal Pell Grants at comparable institutions that offer similar instruction.
(b) The Secretary may waive the requirement contained in paragraph (a) of this section if the institution demonstrates that—
(1) The State provides more than 30 percent of the institution's budget and the institution charges not more than $99.00 for tuition and fees for an academic year;
(2) At least 30 percent of the students served by the institution in the base year were students from low-income families;
(3) The institution substantially increases the higher education opportunities for low-income students who are also educationally disadvantaged, underrepresented in postsecondary education, or minority students;
(4) The institution substantially increases the higher education opportunities for individuals who reside in an area that is not included in a “metropolitan statistical area” as defined by the Office of Management and Budget and who are unserved by other postsecondary institutions; or
(5) The institution will, if granted the waiver, substantially increase the higher education opportunities for Hispanic Americans.
(c) For the purpose of paragraph (b) of this section, the Secretary considers “low-income” to be an amount which does not exceed 150 percent of the amount equal to the poverty level as established by the United States Bureau of the Census.
(d) Each year, the Secretary notifies prospective applicants of the low-income figures through a notice published in the Federal Register.
§ 606.4   What are low educational and general expenditures?
(a)(1) Except as provided in paragraph (b) of this section, for the purpose of § 606.2(a)(2), an applicant institution's average educational and general expenditures per full-time equivalent undergraduate student in the base year must be less than the average educational and general expenditures per full-time equivalent undergraduate student in that year of comparable institutions that offer similar instruction.
(2) For the purpose of paragraph (a)(1) of this section, the Secretary determines the average educational and general expenditure per full-time equivalent undergraduate student for institutions with graduate students that do not differentiate between graduate and undergraduate educational and general expenditures by discounting the graduate enrollment using a factor of 2.5 times the number of graduate students.
(b) Each year, the Secretary notifies prospective applicants through a notice in the Federal Register of the average educational and general expenditures per full-time equivalent undergraduate student at comparable institutions that offer similar instruction.
(c) The Secretary may waive the requirement contained in paragraph (a) of this section, if the Secretary determines, based upon persuasive evidence provided by the institution, that—
(1) The institution's failure to satisfy the criteria in paragraph (a) of this section was due to factors which, if used in determining compliance with those criteria, distorted that determination; and
(2) The institution's designation as an eligible institution under this part is otherwise consistent with the purposes of this part.
(d) For the purpose of paragraph (c)(1) of this section, the Secretary considers that the following factors may distort an institution's educational and general expenditures per full-time equivalent undergraduate student—
(1) Low student enrollment;
(2) Location of the institution in an unusually high cost-of-living area;
(3) High energy costs;
(4) An increase in State funding that was part of a desegregation plan for higher education; or
(5) Operation of high cost professional schools such as medical or dental schools.
§ 606.5   How does an institution apply to be designated an eligible institution?
(a) An institution applies to the Secretary to be designated an eligible institution under this part by first submitting an application to the Secretary in the form, manner, and time established by the Secretary. The application must contain—
(1) The information necessary for the Secretary to determine whether the institution satisfies the requirements of §§ 606.2, 606.3(a), and 606.4(a);
(2) Any waiver request under §§ 606.3(b) and 606.4(c); and
(3) Information or explanations justifying any requested waiver.
(b) An institution that wishes to receive a grant under this part must submit, as part of its application for that grant, an assurance that when it submits its application—
(1) Its enrollment of undergraduate full-time equivalent students is at least 25 percent Hispanic students; and
(2) Not less than 50 percent of its Hispanic students are low-income individuals.
§ 606.6   What regulations apply?
The following regulations apply to the Developing Hispanic-Serving Institutions Program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) [Reserved]
(2) 34 CFR part 75 (Direct Grant Programs), except 34 CFR 75.128(a)(2) and 75.129(a) in the case of applications for cooperative arrangements.
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) [Reserved]
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 606.
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
§ 606.7   What definitions apply?
(a) Definitions in EDGAR. The terms used in this part are defined in 34 CFR 77.1:
(b) The following definitions also apply to this part:
Accredited means the status of public recognition which a nationally recognized accrediting agency or association grants to an institution which meets certain established qualifications and educational standards.
Activity means an action that is incorporated into an implementation plan designed to meet one or more objectives. An activity is a part of a project and has its own budget that is approved to carry out the objectives of that subpart.
Base year means the second fiscal year preceding the fiscal year for which an institution seeks a grant under this part.
Branch campus means a unit of a college or university that is geographically apart from the main campus of the college or university and independent of that main campus. The Secretary considers a unit of a college or university to be independent of the main campus if the unit—
(1) Is permanent in nature;
(2) Offers courses for credit and programs leading to an associate or bachelor's degree; and
(3) Is autonomous to the extent that it has—
(i) Its own faculty and administrative or supervisory organization; and
(ii) Its own budgetary and hiring authority.
Comparable institutions that offer similar instruction means institutions that are being compared with an applicant institution and that fall within one of the following four categories—
(1) Public junior or community colleges;
(2) Private nonprofit junior or community colleges;
(3) Public institutions that offer an educational program for which they offer a bachelor's degree; or
(4) Private nonprofit institutions that offer an educational program for which they offer a bachelor's degree.
Cooperative arrangement means an arrangement to carry out allowable grant activities between an institution eligible to receive a grant under this part and another eligible or ineligible institution of higher education, under which the resources of the cooperating institutions are combined and shared to better achieve the purposes of this part and avoid costly duplication of effort.
Degree student means a student who enrolls at an institution for the purpose of obtaining the degree, certificate, or other recognized educational credential offered by that institution.
Developmental program and services means new or improved programs and services, beyond those regularly budgeted, specifically designed to improve the self sufficiency of the school.
Educational and general expenditures means the total amount expended by an institution of higher education for instruction, research, public service, academic support (including library expenditures), student services, institutional support, scholarships and fellowships, operation and maintenance expenditures for the physical plant, and any mandatory transfers which the institution is required to pay by law.
Educationally disadvantaged means a college student who requires special services and assistance to enable them to succeed in higher education. The phrase includes, but is not limited to, students who come from—
(1) Economically disadvantaged families;
(2) Limited English proficiency families;
(3) Migrant worker families; or
(4) Families in which one or both of their parents have dropped out of secondary school.
Federal Pell Grant Program means the grant program authorized by title IV-A-1 of the HEA.
Federal Perkins Loan Program, formerly called the National Direct Student Loan Program, means the loan program authorized by title IV-E of the HEA.
Federal Supplemental Education Opportunity Grant Program means the grant program authorized by title IV-A-3 of the HEA.
Federal Work-Study Program means the part-time employment program authorized under title IV-C of the HEA.
Full-time equivalent students means the sum of the number of students enrolled full-time at an institution, plus the full-time equivalent of the number of students enrolled part time (determined on the basis of the quotient of the sum of the credit hours of all part-time students divided by 12) at such institution.
HEA means the Higher Education Act of 1965, as amended.
Hispanic student means a person of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish culture or origin, regardless of race.
Institution of higher education means an educational institution defined in section 101 of the HEA.
Junior or community college means an institution of higher education—
(1) That admits as regular students persons who are beyond the age of compulsory school attendance in the State in which the institution is located and who have the ability to benefit from the training offered by the institution;
(2) That does not provide an educational program for which it awards a bachelor's degree (or an equivalent degree); and
(3) That—
(i) Provides an educational program of not less than 2 years that is acceptable for full credit toward such a degree; or
(ii) Offers a 2-year program in engineering, mathematics, or the physical or biological sciences, designed to prepare a student to work as a technician or at the semiprofessional level in engineering, scientific, or other technological fields requiring the understanding and application of basic engineering, scientific, or mathematical principles of knowledge.
Low-income individual means an individual from a family whose taxable income for the preceding year did not exceed 150 percent of an amount equal to the poverty level determined by using criteria of poverty established by the Bureau of the Census.
Minority student means a student who is an Alaska Native, American Indian, Asian-American, Black (African-American), Hispanic American, Native Hawaiian, or Pacific Islander.
Nationally recognized accrediting agency or association means an accrediting agency or association that the Secretary has recognized to accredit or preaccredit a particular category of institution in accordance with the provisions contained in 34 CFR part 603. The Secretary periodically publishes a list of those nationally recognized accrediting agencies and associations in the Federal Register .
Operational programs and services means the regular, ongoing budgeted programs and services at an institution.
Preaccredited means a status that a nationally recognized accrediting agency or association, recognized by the Secretary to grant that status, has accorded an unaccredited institution that is progressing toward accreditation within a reasonable period of time.
Project means all the funded activities under a grant.
Self-sufficiency means the point at which an institution is able to survive without continued funding under the Developing Hispanic-Serving Institutions Program.
Underrepresented means proportionate representation as measured by degree recipients, that is less than the proportionate representation in the general population—
(1) As indicated by—
(i) The most current edition of the Department's Digest of Educational Statistics;
(ii) The National Research Council's Doctorate Recipients from United States Universities; or
(iii) Other standard statistical references, as announced annually in the Federal Register notice inviting applications for new awards under this program; or
(2) As documented by national survey data submitted to and accepted by the Secretary on a case-by-case basis.
§ 606.8   What is a comprehensive development plan and what must it contain?
(a) A comprehensive development plan is an institution's strategy for achieving growth and self-sufficiency by strengthening its—
(1) Academic programs;
(2) Institutional management; and
(3) Fiscal stability.
(b) The comprehensive development plan must include the following:
(1) An analysis of the strengths, weaknesses, and significant problems of the institution's academic programs, institutional management, and fiscal stability.
(2) A delineation of the institution's goals for its academic programs, institutional management, and fiscal stability, based on the outcomes of the analysis described in paragraph (b)(1) of this section.
(3) Measurable objectives related to reaching each goal and timeframes for achieving the objectives.
(4) Methods and resources that will be used to institutionalize practices and improvements developed under the proposed project.
(5) Its five year plan to improve its services to Hispanic and other low-income students.
§ 606.9   What are the type, duration, and limitations in the awarding of grants under this part?
(a)(1) Under this part, the Secretary may award planning grants and two types of development grants, individual development grants and cooperative arrangement development grants.
(2) Planning grants may be awarded for a period not to exceed one year.
(3) Either type of development grant may be awarded for a period of five years.
(b)(1) An institution that received an individual development grant of five years may not subsequently receive another individual development grant for a period of two years from the date on which the five-year grant terminates.
(2) A cooperative arrangement grant is not considered to be an individual development grant under paragraph (b)(1) of this section.
§ 606.10   What activities may and may not be carried out under a grant?
(a) Planning grants. Under a planning grant, a grantee shall formulate—
(1) A comprehensive development plan described in § 606.8; and
(2) An application for a development grant.
(b) Development grants—allowable activities. Under a development grant, except as provided in paragraph (c) of this section, a grantee shall carry out activities that implement its comprehensive development plan and hold promise for strengthening the institution. Activities that may be carried out include, but are not limited to—
(1) Purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional and research purposes.
(2) Construction, maintenance, renovation, and improvement in classrooms, libraries, laboratories, and other instructional facilities.
(3) Support of faculty exchanges, faculty development, curriculum development, academic instruction, and faculty fellowships to assist in attaining advanced degrees in the fellow's field of instruction.
(4) Purchase of library books, periodicals, and other educational materials, including telecommunications program material.
(5) Tutoring, counseling, and student service programs designed to improve academic success.
(6) Funds management, administrative management, and acquisition of equipment for use in strengthening funds management.
(7) Joint use of facilities, such as laboratories and libraries.
(8) Establishing or improving a development office to strengthen or improve contributions from alumni and the private sector.
(9) Establishing or improving an endowment fund, provided the grantee uses no more than 20 percent of its grant funds for this purpose and at least matches those grant funds with non-Federal funds.
(10) Creating or improving facilities for Internet or other distance learning academic instruction capabilities, including purchase or rental of telecommunications technology equipment or services.
(11) Establishing or enhancing a program of teacher education designed to qualify students to teach in public elementary or secondary schools.
(12) Establishing community outreach programs that will encourage elementary school and secondary school students to develop the academic skills and the interest to pursue postsecondary education.
(13) Expanding the number of Hispanic and other underrepresented graduate and professional students that can be served by the institution by expanding courses and institutional resources.
(14) Other activities that contribute to carrying out the purposes of this program.
(c) Development grants—unallowable activities. A grantee may not carry out the following activities or pay the following costs under a development grant:
(1) Activities that are not included in the grantee's approved application.
(2) Activities that are inconsistent with any State plan for higher education that is applicable to the institution, including, but not limited to, a State plan for desegregation of higher education.
(3) Activities or services that constitute religious instruction, religious worship, or proselytization.
(4) Activities provided by a school or department of divinity. For the purpose of this provision, a “school or department of divinity” means an institution, or a department of an institution, whose program is solely to prepare students to become ministers of religion or to enter into some other religious vocation.
(5) Developing or improving non-degree or non-credit courses other than basic skills development courses.
(6) Developing or improving community-based or community services programs, unless the program provides academic-related experiences or academic credit toward a degree for degree students, or, unless it is a program or services to encourage elementary and secondary school students to develop the academic skills and the interest to pursue postsecondary education.
(7) Purchase of standard office equipment, such as furniture, file cabinets, bookcases, typewriters, or word processors.
(8) Payment of any portion of the salary of a president, vice president, or equivalent officer who has college-wide administrative authority and responsibility at an institution to fill a position under the grant such as project coordinator or activity director.
(9) Costs of organized fund-raising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred solely to raise capital or obtain contributions.
(10) Costs of student recruitment such as advertisements, literature, and college fairs.
(11) Services to high school students, unless they are services to encourage such students to develop the skills and the interest to pursue postsecondary education.
(12) Instruction in the institution's standard courses as indicated in the institution's catalog.
(13) Costs for health and fitness programs, transportation, and day care services.
(14) Student activities such as entertainment, cultural, or social enrichment programs, publications, social clubs, or associations.
(15) Activities that are operational in nature rather than developmental in nature.
(d) Endowment funds. If a grantee uses part of its grant funds to establish or increase an endowment fund, it must comply with the provisions of §§ 628.3, 628.6, 628.10, and 628.41 through 628.47 of this chapter with regard to the use of those funds, except—
(1) The definition of the term “endowment fund income” in § 628.6 of this chapter does not apply. For the purposes of this paragraph (d), “endowment fund income” means an amount equal to the total value of the fund, including fund appreciation and retained interest and dividends, minus the endowment fund corpus;
(2) Instead of the requirement in § 628.10(a) of this chapter, the grantee institution must match each dollar of Federal grant funds used to establish or increase an endowment fund with one dollar of non-Federal funds; and
(3) Instead of the requirements in § 628.41(a)(3) through (a)(5) and the introductory text in § 628.41(b) and § 628.41(b)(2) and (b)(3) of this chapter, if a grantee institution decides to use any of its grant funds for endowment purposes, it must match those grant funds immediately with non-Federal funds when it places those funds into its endowment fund.
§ 606.11   Severability.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
§ 606.12   What must be included in individual development grant applications?
In addition to the information needed by the Secretary to determine whether the institution should be awarded a grant under the funding criteria contained in subpart C, an application for a development grant must include—
(a) The institution's comprehensive development plan;
(b) A description of the relationship of each activity for which grant funds are requested to the relevant goals and objectives of its plan;
(c) A description of any activities that were funded under previous development grants awarded under the Developing Hispanic-Serving Institutions Program that expired within five years of when the development grant will begin and the institution's justification for not completing the activities under the previous grant, if applicable;
(d) If the applicant is applying to carry out more than one activity—
(1) A description of those activities that would be a sound investment of Federal funds if funded separately;
(2) A description of those activities that would be a sound investment of Federal funds only if funded with the other activities; and
(3) A ranking of the activities in preferred funding order.
§ 606.13   What must be included in cooperative arrangement grant applications?
(a)(1) Institutions applying for a cooperative arrangement grant shall submit only one application for that grant regardless of the number of institutions participating in the cooperative arrangement.
(2) The application must include the names of each participating institution, the role of each institution, and the rationale for each eligible participating institution's decision to request grant funds as part of a cooperative arrangement rather than as an individual grantee.
(b) If the application is for a development grant, the application must contain—
(1) Each participating institution's comprehensive development plan;
(2) The information required under § 606.11; and
(3) An explanation from each eligible participating institution of why participation in a cooperative arrangement grant rather than performance under an individual grant will better enable it to meet the goals and objectives of its comprehensive development plan at a lower cost.
(4) The name of the applicant for the group that is legally responsible for—
(i) The use of all grant funds; and
(ii) Ensuring that the project is carried out by the group in accordance with Federal requirements.
§ 606.14   How many applications for a development grant may an institution submit?
In any fiscal year, an institution of higher education may—
(a) Submit an application for an individual development grant; and
(b) Be part of a cooperative arrangement application.
§ 606.20   How does the Secretary choose applications for funding?
(a) The Secretary evaluates an application on the basis of the criteria in—
(1) Sections 606.21 and 606.23 for a planning grant; and
(2) Sections 606.22, 606.23, 600.24, and 606.25 for a development grant.
(b) The Secretary informs applicants of the maximum possible score for each criterion in the application package or in a notice published in the Federal Register .
(c)(1) The Secretary considers funding an application for a planning grant that meets the requirements under § 606.21.
(2) The Secretary considers funding an application for a development grant that—
(i) Is submitted with a comprehensive development plan that satisfies all the elements required of such a plan under § 606.8; and
(ii) In the case of an application for a cooperative arrangement grant, demonstrates that the grant will enable each eligible participant to meet the goals and objectives of its comprehensive development plan better and at a lower cost than if each eligible participant were funded individually.
§ 606.21   What are the selection criteria for planning grants?
The Secretary evaluates an application for a planning grant on the basis of the criteria in this section.
(a) Design of the planning process. The Secretary reviews each application to determine the quality of the planning process that the applicant will use to develop a comprehensive development plan and an application for a development grant based on the extent to which—
(1) The planning process is clearly and comprehensively described and based on sound planning practice;
(2) The president or chief executive officer, administrators and other institutional personnel, students, and governing board members systematically and consistently will be involved in the planning process;
(3) The applicant will use its own resources to help implement the project; and
(4) The planning process is likely to achieve its intended results.
(b) Key personnel. The Secretary reviews each application to determine the quality of key personnel to be involved in the project based on the extent to which—
(1) The past experience and training of key personnel such as the project coordinator and persons who have key roles in the planning process are suitable to the tasks to be performed; and
(2) The time commitments of key personnel are adequate.
(c) Project Management. The Secretary reviews each application to determine the quality of the plan to manage the project effectively based on the extent to which—
(1) The procedures for managing the project are likely to ensure effective and efficient project implementation; and
(2) The project coordinator has sufficient authority, including access to the president or chief executive officer, to conduct the project effectively.
(d) Budget. The Secretary reviews each application to determine the extent to which the proposed project costs are necessary and reasonable.
§ 606.22   What are the selection criteria for development grants?
The Secretary evaluates an application for a development grant on the basis of the criteria in this section.
(a) Quality of the applicant's comprehensive development plan. The extent to which—
(1) The strengths, weaknesses, and significant problems of the institution's academic programs, institutional management, and fiscal stability are clearly and comprehensively analyzed and result from a process that involved major constituencies of the institution;
(2) The goals for the institution's academic programs, institutional management, and fiscal stability are realistic and based on comprehensive analysis;
(3) The objectives stated in the plan are measurable, related to institutional goals, and, if achieved, will contribute to the growth and self-sufficiency of the institution; and
(4) The plan clearly and comprehensively describes the methods and resources the institution will use to institutionalize practice and improvements developed under the proposed project, including, in particular, how operational costs for personnel, maintenance, and upgrades of equipment will be paid with institutional resources.
(b) Quality of activity objectives. The extent to which the objectives for each activity are—
(1) Realistic and defined in terms of measurable results; and
(2) Directly related to the problems to be solved and to the goals of the comprehensive development plan.
(c) Quality of implementation strategy. The extent to which—
(1) The implementation strategy for each activity is comprehensive;
(2) The rationale for the implementation strategy for each activity is clearly described and is supported by the results of relevant studies or projects; and
(3) The timetable for each activity is realistic and likely to be attained.
(d) Quality of key personnel. The extent to which—
(1) The past experience and training of key professional personnel are directly related to the stated activity objectives; and
(2) The time commitment of key personnel is realistic.
(e) Quality of project management plan. The extent to which—
(1) Procedures for managing the project are likely to ensure efficient and effective project implementation; and
(2) The project coordinator and activity directors have sufficient authority to conduct the project effectively, including access to the president or chief executive officer.
(f) Quality of evaluation plan. The extent to which—
(1) The data elements and the data collection procedures are clearly described and appropriate to measure the attainment of activity objectives and to measure the success of the project in achieving the goals of the comprehensive development plan; and
(2) The data analysis procedures are clearly described and are likely to produce formative and summative results on attaining activity objectives and measuring the success of the project on achieving the goals of the comprehensive development plan.
(g) Budget. The extent to which the proposed costs are necessary and reasonable in relation to the project's objectives and scope.
§ 606.23   What special funding consideration does the Secretary provide?
(a) If funds are available to fund only one additional planning grant and each of the next fundable applications has received the same number of points under § 606.20 or 606.21, the Secretary awards additional points, as provided in the application package or in a notice published in the Federal Register, to any of those applicants that—
(1) Has an endowment fund of which the current market value, per full-time equivalent enrolled student, is less than the average current market value of the endowment funds, per full-time equivalent enrolled student, at similar type institutions; or
(2) Has expenditures for library materials per full-time equivalent enrolled student which are less than the average expenditure for library materials per full-time equivalent enrolled student at similar type institutions.
(b) If funds are available to fund only one additional development grant and each of the next fundable applications has received the same number of points under § 606.20 or 606.22, the Secretary awards additional points, as provided in the application package or in a notice published in the Federal Register, to any of those applicants that—
(1) Has an endowment fund of which the current market value, per full-time equivalent enrolled student, is less than the average current market value of the endowment funds, per full-time equivalent enrolled student, at comparable institutions that offer similar instruction;
(2) Has expenditures for library materials per full-time equivalent enrolled student that are less than the average expenditures for library materials per full-time equivalent enrolled student at comparable institutions that offer similar instruction; or
(3) Propose to carry out one or more of the following activities—
(i) Faculty development;
(ii) Funds and administrative management;
(iii) Development and improvement of academic programs;
(iv) Acquisition of equipment for use in strengthening management and academic programs;
(v) Joint use of facilities; and
(vi) Student services.
(c) As used in this section, an “endowment fund” does not include any fund established or supported under 34 CFR part 628.
(d) Each year, the Secretary provides prospective applicants with the average market value of endowment funds and the average expenditure of library materials per full-time equivalent student.
(e) The Secretary gives priority to each application that contains satisfactory evidence that the applicant has entered into or will enter into a collaborative arrangement with at least one local educational agency or community-based organization to provide that agency or organization with assistance (from funds other than funds provided under this part) in—
(1) Reducing the dropout rates of Hispanic students;
(2) Improving rates of academic achievement of Hispanic students; and
(3) Increasing the rates at which Hispanic high school graduates enroll in higher education.
§ 606.24   How does the Secretary use an applicant's performance under a previous development grant when awarding a development grant?
(a)(1) In addition to evaluating an application under the selection criteria in § 606.22, the Secretary evaluates an applicant's performance under any previous development grant awarded under the Developing Hispanic-Serving Institutions Program that expired within five years of the year when the development grant will begin.
(2) The Secretary evaluates whether the applicant fulfilled, or is making substantial progress toward fulfilling, the goals and objectives of the previous grant, including, but not limited to, the applicant's success in institutionalizing practices developed and improvements made under the grant.
(3) The Secretary bases the evaluation of the applicant's performance on information contained in—
(i) Performance and evaluation reports submitted by the applicant;
(ii) Audit reports submitted on behalf of the applicant; and
(iii) Other information obtained by the Secretary, including reports prepared by the Department.
(b) If the Secretary initially determines that the applicant did not fulfill the goals and objectives of a previous grant or is not making substantial progress towards fulfilling those goals and objectives, the Secretary affords the applicant the opportunity to respond to that initial determination.
(c) If the Secretary determines that the applicant did not fulfill the goals and objectives of a previous grant or is not making substantial progress towards fulfilling those goals and objectives, the Secretary may—
(1) Decide not to fund the applicant; or
(2) Fund the applicant but impose special grant terms and conditions, such as specific reporting and monitoring requirements.
§ 606.25   What priority does the Secretary use in awarding cooperative arrangement grants?
Among applications for cooperative arrangement grants, the Secretary gives priority to proposed cooperative arrangements that are geographically and economically sound, or will benefit the institutions applying for the grant.
§ 606.30   What are allowable costs and what are the limitations on allowable costs?
(a) Allowable costs. Except as provided in paragraphs (b) and (c) of this section, a grantee may expend grant funds for activities that are related to carrying out the allowable activities included in its approved application.
(b) Supplement and not supplant. Grant funds shall be used so that they supplement and, to the extent practical, increase the funds that would otherwise be available for the activities to be carried out under the grant and in no case supplant those funds.
(c) Limitations on allowable costs. A grantee may not use an indirect cost rate to determine allowable costs under its grant.
§ 606.31   How does a grantee maintain its eligibility?
(a) A grantee shall maintain its eligibility under the requirements in § 606.2, except for § 606.2(a)(3) and (4), for the duration of the grant period.
(b) The Secretary reviews an institution's application for a continuation award to ensure that—
(1) The institution continues to meet the eligibility requirements described in paragraph (a) of this section; and
(2) The institution is making substantial progress toward achieving the objectives described in its grant application including, if applicable, the institution's success in institutionalizing practices and improvements developed under the grant.