1

1 Team V – General and Non-Loan Issues

2 Issue Paper Number and Topic Page #

3 #1 Year-Round Pell 2

4 #2 Pell Grants and Children of Soldiers 10

5 #3 TEACH Grant Extenuating Circumstances 13

6 #4 Grants for Federal Work Study 20

7 #5 Conform the FWS rules to the Cash Management rules 27

8 #6 Definition of Community Service 34

9 #7 Flexible Use of Funds 37

10 #8 Work Colleges 43

11 #9 90/10 (Non-Title IV Revenue Requirement) 51

12 #10 Consumer Information 72

13 #11 Fire Safety Standards 88

14 #12 Missing Person Procedures 98

15 #13 Hate Crime Reporting 104

16 #14 Emergency Response and Evacuation Procedures 107

17 #15 Students with Intellectual Disabilities 113

18 #16 Readmission for Servicemembers 123

19 #17 Teach-Outs Requirements and Procedures 149

20 #18 Baccalaureate in “liberal arts” in Proprietary Schools 159

21 #19 Peer-to-Peer File Sharing 164

22 #20 Institutional Plans for Improving Academic Program 174

23 #21 LEAP Non-Federal Share 177

24 #22 Notification to Students of Source of LEAP Funds 180

25 #23 GAP: Program Activities – Partnerships 184

26 #24 GAP: Program Activities – Award 189

27 #25 GAP: Program Activities – Early Notification 194

28 #26 Applicability of LEAP Program Requirements in GAP 198

29 #27 Gap Allotment: Application 199

30 #28 GAP Allotment: Determination 204

31 #29 GAP – Matching 209

32 #30 GAP – Statutory and Regulatory Relief 214

33 #31 GAP – Estimated Financial Assistance 215

34
2

1 Issue Paper #1

2

3 Origin: HEOA

4 Issue: Receiving Up to Two Scheduled Federal Pell Grant 

5 Awards during a Single Award Year

6 Statutory cites: Section 401(b)(5)(A) of the HEA

7 Regulatory cites: §690.63, §690.64, §690.67 and §690.80

8 DCL GEN-08-12 cite: Pages 103-104

9 Summary of issue: The amendments made by the HEOA require that 

10 a student may receive up to two Federal Pell Grant Scheduled 

11 Awards during a single award year if the student is enrolled at 

12 least half-time for more than one academic year, more than two 

13 semesters, or the equivalent time during a single award year. 

14 The student must also be enrolled in a certificate, associate 

15 degree or baccalaureate degree program.

16 Updated information since 3/2-4 meetings:

17 Section 690.63 would be amended to provide instructions on 

18 how an institution calculates the Pell Grant payment for a 

19 payment period that may include the credit or clock hours and 

20 weeks of instructional time for both a first and second 

21 Scheduled Award. 

22 Section 690.64 would be amended to address the treatment of 

23 a payment period that occurs in two award years. Institutions 

24 would be required to assign a payment period that occurs in two 

25 award years to the award year the student receives the maximum 

26 payment for the payment period.

27 Section 690.67 would be amended to implement the 

28 requirements in section 401(b)(5)(A) of the HEA which allow a 
3

1 student to receive up to two Federal Pell Grant Scheduled Awards 

2 during a single award year. 

3 Section 690.80 would be amended to require the 

4 recalculation of a second Federal Pell Scheduled Award due to a 

5 change in the student's enrollment status.

6 Updated information since 4/14-16 meetings:

7 Section 690.63 would be amended to provide instructions on 

8 how an institution calculates the Pell Grant payment for a 

9 payment period that may include the credit or clock hours and 

10 weeks of instructional time for both a first and second 

11 Scheduled Award. 

12 Section 690.64 would be amended to address the treatment of 

13 a payment period that occurs in two award years. Institutions 

14 would assign the payment period to the award year with the 

15 highest payment based on the information available at the time 

16 the payment is initially calculated but would be required 

17 subsequently to recalculate the payment if the student would 

18 receive a larger payment by reassigning the payment to the other 

19 award year.

20 Section 690.67 would be amended to implement the 

21 requirements in section 401(b)(5)(A) of the HEA which allow a 

22 student to receive up to two Federal Pell Grant Scheduled Awards 

23 during a single award year. As amended, this section would 

24 provide that a student generally must complete the hours of the 

25 first academic year in the award year to receive a payment from 

26 a second Scheduled Award in the award year.

27 Proposals are withdrawn that would amend §690.80 to require 

28 the recalculation of a second Federal Pell Scheduled Award due 

29 to a change in the student's enrollment status.

30 Tentative agreement:
4

1 Regulatory language:

2 §690.63 Calculation of a Federal Pell Grant for a payment 

3 period.

4 * * * * * 

5 (h) Payment from two Scheduled Awards. (1) In a payment 

6 period, a student may receive a payment from the student‘s first 

7 Scheduled Award in the award year and the student‘s second 

8 Scheduled Award in the award year if--

9 (i) The student is an eligible student who meets the 

10 provisions of §690.67; and

11 (ii) The student‘s payment for the payment period is 

12 greater than the remaining balance of the first Scheduled Award.

13 (2) The student‘s payment for the payment period--

14 (i) Is calculated based on the total credit or clock hours 

15 and weeks of instructional time in the payment period; and 

16 (ii) Is the remaining amount of the first Scheduled Award 

17 plus an amount from the second Scheduled Award for the balance 

18 of the payment for the payment period.

19 §690.64 Calculation of a Federal Pell Grant for a payment 

20 period that occurs in two award years.

21 If a student enrolls in a payment period that is scheduled 

22 to occur in two award years--

23 (a) The entire payment period must be considered to occur 

24 within one award year;

25 (b)(1) An institution shall assign the payment period to 

26 the award year in which the student receives the greater payment 

27 for the payment period based on the information available at the 
5

1 time that the student‘s Federal Pell Grant is initially 

2 calculated of disbursement; and

3 (2) If, subsequent to the initial disbursementcalculation 

4 of the student‘s payment for the payment period, the institution 

5 determinesreceives information that the student would receive a 

6 greater payment for the payment period by reassigning the 

7 payment to a different award year, the institution maymust

8 reassign the payment to the award year providing the greater 

9 payment;

10 (c) Except as provided in paragraph (b) of this section,

11 Tthe institution shall place a payment period with more than six 

12 months scheduled to occur within one award year in that award 

13 year;

14 (d) If an institution places the payment period in the 

15 first award year, it shall pay a student with funds from the 

16 first award year; and

17 (e) If an institution places the payment period in the 

18 second award year, it shall pay a student with funds from the 

19 second award year. 

20 §690.67 Receiving up to two Scheduled Awards during a single 

21 award year.

22 (a) Eligibility. An institution shall award up to the 

23 full amount of a second Scheduled Award to a student in an award 

24 year if the student--

25 (a1) Has successfully completed the credit or clock hours 

26 of the first academic year in the award year Is enrolled at 

27 least as a half-time student in a payment period during which 

28 the student would be earning credit or clock hours applicable to 

29 a second academic year in the award year; and
6

1 (2) Is enrolled at least as a half-time student.

2 (b) Transfer student. (1) If a student transfers to an 

3 institution during an award year, the institution must--

4 (i) Determine the credit or clock hours earned at other 

5 institutions during the award year; and 

6 (ii) Must apply the credit or clock hours identified under 

7 paragraph (b)(1)(i) of this section in determining the student‘s 

8 eligibility for a second Scheduled Award.

9 (2) Except as provided in paragraph (b)(3) of this 

10 section, to determine the credit or clock hours earned at other 

11 institutions during the award year--

12 (i) The institution must assume that a student has 

13 completed the credit or clock hours in the first academic year 

14 of the award year if the first Scheduled Award was disbursed at 

15 other institutions during the award year; or

16 (ii) If less than the first Scheduled Award has been 

17 disbursed at other institutions during the award year, the 

18 institution must multiply the amount of the student‘s Scheduled 

19 Award disbursed at other institutions during the award year by 

20 the number of credit or clock hours in the institution‘s 

21 academic year and dividing the product of the multiplication by 

22 the amount of the Scheduled Award at the other institutions.

23 (3)(i) If an institution has information concerning the 

24 credit or clock hours earned by a student while attending other 

25 institutions, the institution must determine the credit or clock 

26 hours earned at other institutions based on this information. 

27 If the credit or clock hours earned at other institutions are 

28 proportionally a greater percentage of an academic year than the 

29 credit or clock hours determined under paragraph (b)(2) of this 

30 section, the institution shall rely on these hours in 
7

1 determining the credit or clock hours that the student has 

2 completed in the award year.

3 (ii) If an institution receives information described in 

4 paragraph (b)(3)(i) of this section in a payment period 

5 subsequent to a prior payment period in which the institution 

6 disbursed a payment of a second Scheduled Award in the award 

7 year based on the application of paragraph (b)(2) of this 

8 section, the institution is not required to apply the 

9 information to the prior payment period.

10 (4) An institution must attribute to the current award 

11 year any credit or clock hours earned at other institutions that 

12 were earned in a payment period that it determines was scheduled 

13 to occur in the prior award year and the current award year. 

14 (c) Special circumstances. (1) The financial aid 

15 administrator at a student‘s institution may waive the 

16 requirement in paragraph (a)(1) of this section, if the 

17 financial aid administrator--

18 (i) Determines that, in the period during which the first 

19 Scheduled Award was disbursed, the student was unable to 

20 complete the clock or credit hours in the student‘s first 

21 academic year in the award year due to circumstances beyond the 

22 student‘s control; and 

23 (ii) The determination is made and documented on an 

24 individual basis.

25 (2) For purposes of paragraph (c)(1) of this section, 

26 circumstances beyond a student‘s control--

27 (i) Include, but are not limited to, the student 

28 withdrawing from classes due to illness or being unable to 

29 register for classes necessary to complete his or her eligible 
8

1 program because those classes were not offered during that 

2 period; and

3 (ii) Do not include, for example, withdrawing to avoid a 

4 particular grade or instructor or failing to register for any 

5 reason for a necessary class that was offered during the period. 

6 (d) An institution may not determine the student‘s 

7 eligibility for a second Scheduled Award based on credit or 

8 clock hours, including credit or clock hours accepted on 

9 transfer, if the student received the credit or clock hours 

10 based on Advanced Placement (AP) programs, International 

11 Baccalaureate (IB) programs, testing out, life experience, or 

12 similar competency measures.

13 (Authority: U.S.C. )

14 (b) Has successfully completed the credit or clock hours 

15 of the first academic year in the award year, or would be 

16 completing the credit or clock hours of that academic year in 

17 the payment period for which he or she is receiving a payment 

18 from a second Scheduled Award in the award year.

19 §690.80 Recalculation of a Federal Pell Grant award.

20 * * * * * 

21 (b) Change in enrollment status. 

22 (1) * * *

23 (3) If the student‘s projected enrollment status changes 

24 at any time during a payment period in which the student 

25 receives a payment from a second Scheduled Award in an award 

26 year, the institution shall recalculate the student‘s payment 

27 for the payment period. The recalculation must take into 

28 account any changes in the student‘s cost of attendance.

29 Statutory Language: 
9

1 (6)(A) The Secretary may allow, on a case-by-case basis, a 

2 student to receive 2 Pell grants during a single award year, if—

3 (i) the student is enrolled full-time in an associate or 

4 baccalaureate degree program of study that is 2 years or longer 

5 at an eligible institution that is computed in credit hours; and

6 (ii) the student completes course work toward completion of 

7 an associate or baccalaureate degree that exceeds the 

8 requirements for a full academic year as defined by the 

9 institution.

10 (B) The Secretary shall promulgate regulations implementing 

11 this paragraph.

12 (5)(A) The Secretary shall award a student not more than 

13 two Federal Pell Grants during a single award year to permit 

14 such student to accelerate the student‘s progress toward a 

15 degree or certificate if the student is enrolled—

16 (i) on at least a half-time basis for a period of more than 

17 one academic year, or more than two semesters or an equivalent 

18 period of time, during a single award year; and

19 (ii) in a program of instruction at an institution of 

20 higher education for which the institution awards an associate 

21 or baccalaureate degree or a certificate.

22 (B) In the case of a student receiving more than one 

23 Federal Pell Grant in a single award year under subparagraph 

24 (A), the total amount of Federal Pell Grants awarded to such 

25 student for the award year may exceed the maximum basic grant 

26 level specified in the appropriate appropriations Act for such 

27 award year.

28
10

1 Issue Paper # 2

2 Origin: HEOA

3 Issue: Maximum Federal Pell Grant Award to Children of 

4 Soldiers

5 Statutory cites: Section 401(f)(4) of the HEA

6 Regulatory cites: §690.75

7 DCL GEN-08-12 cite: Pages 104-105

8 Summary of issue: The HEA as amended by the HEOA provides 

9 maximum Federal Pell Grant eligibility (an EFC of 0) for a 

10 student (1) whose parent or guardian was a member of the Armed 

11 Forces of the United States and died as a result of performing 

12 military service in Iraq or Afghanistan after September 11, 

13 2001, and (2) who was under 24 years old or enrolled in an 

14 institution of higher education at the time of the parent or 

15 guardian‘s death. These students are considered eligible for 

16 the maximum Federal Pell Grant award if they meet the 

17 requirements of section 401(c) of the HEA, as amended, regarding 

18 the period of eligibility for a grant. The HEOA further directs 

19 the Secretary of Veterans Affairs and the Secretary of Defense 

20 to provide necessary information to the Secretary of Education. 

21 This provision will not require any new questions on the FAFSA.

22 Updated information since 2/2-4 meetings:

23 Section 690.75 would be amended to implement the 

24 requirement in section 401(f)(4) of the HEA.

25 Updated Information since 3/14-16 meetings:

26 Section 690.75(e)(3) of the draft proposed regulations 

27 requires that a student have an expected family contribution 

28 that would make a student eligible for a Federal Pell Grant. 

29 This provision is removed. 
11

1 Tentative agreement:

2 Regulatory language:

3 §690.75 Determination of eligibility for payment.

4 * * *

5 (e) A student is considered to have an expected family 

6 contribution of zero if --

7 (1) The student‘s parent or guardian was a member of the 

8 Armed Forces of the United States and died as a result of 

9 performing military service in Iraq or Afghanistan after 

10 September 11, 2001; and

11 (2) At the time of the parent or guardian‘s death the 

12 student--

13 (i) Was under the age of 24; or

14 (ii) Was enrolled at an institution of higher education.;

15 and

16 (3) The student has an expected family contribution for an 

17 award year that is not greater than the maximum EFC that would 

18 qualify any student for a Federal Pell Grant in that award year.

19 Statutory Language:

20 (4)(A) Notwithstanding paragraph (1) or any other provision 

21 of this section, the expected family contribution of each 

22 student described in subparagraph (B) shall be deemed to be zero 

23 for the period during which each such student is eligible to 

24 receive a Federal Pell Grant under subsection (c).

25 (B) Subparagraph (A) shall apply to any student at an 

26 institution of higher education—

27 (i) whose parent or guardian was a member of the Armed 

28 Forces of the United States who died as a result of performing 
12

1 military service in Iraq or Afghanistan after September 11, 

2 2001; and

3 (ii) who was less than 24 years of age, or was enrolled as 

4 a full-time or part-time student at an institution of higher 

5 education, as of the time of the parent or guardian‘s death.

6 (C) Notwithstanding any other provision of law, the 

7 Secretary of Veterans Affairs and the Secretary of Defense, as 

8 appropriate, shall provide the Secretary of Education with 

9 information necessary to determine which students meet the 

10 requirements of subparagraph (B).

11
13

1 Issue Paper # 3

2 Origin: Higher Education Opportunity Act of 2008 

3 Issue: Extenuating Circumstances for Students Unable to 

4 Fulfill Service Obligation under the TEACH Grant 

5 Program 

6 Statutory cites: 420N(d)(2) of the HEA 

7 Regulatory cites: §§686.12, 686.41, and 686.42 

8 DCL GEN-08-12 cite: Page 106 

9 Summary of issue: The HEOA adds a new provision to the HEA that 

10 requires the Secretary to establish categories of extenuating 

11 circumstances under which a TEACH Grant recipient who is unable 

12 to fulfill all or part of his or her service obligation may be 

13 excused from fulfilling that portion of the service obligation.

14 Updated information since 3/2-4 meetings: 

15 Section 686.12(c)(1) currently allows creditable teaching 

16 service to apply to more than one service obligation. This 

17 section would be amended to also allow a suspension approved 

18 under §686.41 or a discharge granted under §686.42 to apply to 

19 more than one service obligation.

20 Section 686.41 would be amended to limit the suspension for 

21 a call or order to active duty status for a TEACH Grant 

22 recipient to three years. After the three-year period, a TEACH 

23 Grant recipient could apply for a discharge of his or her 

24 service obligation. This section would also be amended to allow 

25 a representative on behalf of a TEACH Grant recipient to apply 

26 for and submit the necessary documentation for a suspension of 

27 the TEACH Grant recipient‘s service obligation.
14

1 Section 686.42 would be amended to provide that a TEACH 

2 Grant recipient could apply for a discharge of a portion or all 

3 of his or her service obligation based on the number of years 

4 called or ordered to active duty status. This section would 

5 also be amended to allow a representative on behalf of a TEACH 

6 Grant recipient to apply for and submit the necessary 

7 documentation for a discharge of the TEACH Grant recipient‘s 

8 service obligation.

9 Tentative agreement:

10 Regulatory language:

11 §686.12 Agreement to Serve.

12 * * * * *

13 (c) Completion of more than one service obligation.

14 (1) A grant recipient must complete a service obligation 

15 for each program of study for which he or she received TEACH 

16 Grants. Each service obligation begins following the completion 

17 or other cessation of enrollment by the student in the TEACH 

18 Grant-eligible program for which the student received TEACH 

19 Grant funds. However, creditable teaching service, a suspension 

20 approved under §686.41(a)(2), or a military discharge granted 

21 under §686.42(c)(2) may apply to more than one service 

22 obligation.

23 * * * * *

24 §686.41 Periods of suspension.

25 (a)(1) A grant recipient who has completed or who has 

26 otherwise ceased enrollment in a TEACH Grant-eligible program 

27 for which he or she received TEACH Grant funds may request a 

28 suspension from the Secretary of the eight-year period for 

29 completion of the service obligation based on--
15

1 (i) Enrollment in a program of study for which the 

2 recipient would be eligible for a TEACH Grant or in a program of 

3 study that has been determined by a State to satisfy the 

4 requirements for certification or licensure to teach in the 

5 State's elementary or secondary schools;

6 (ii) A condition that is a qualifying reason for leave 

7 under the FMLA; or

8 (iii) A call or order to active duty status for more than 

9 30 days as a member of a reserve component of the Armed Forces 

10 named in 10 U.S.C. 10101, or service as a member of the National 

11 Guard on full-time National Guard duty, as defined in 10 U.S.C. 

12 101(d)(5), under a call to active service in connection with a 

13 war, military operation, or a national emergency.

14 (2) A grant recipient may receive a suspension described in 

15 paragraphs (a)(1)(i), (ii), and (iii) of this section in one16 year increments that--

17 (i) Does not exceed a combined total of three years under 

18 both paragraphs (a)(1)(i) and (ii) of this section; or

19 (ii) Does not exceed a total of three years under Ends upon 

20 the completion of the military service in paragraph (a)(1)(iii) 

21 of this section.

22 (b) A grant recipient, or his or her representative in the 

23 case of a grant recipient that qualifies under paragraph 

24 (a)(1)(iii) of this section, must apply for a suspension in 

25 writing on a form approved by the Secretary prior to being 

26 subject to any of the conditions under §686.43(a)(1) through 

27 (a)(5) that would cause the TEACH Grant to convert to a Federal 

28 Direct Unsubsidized Loan.

29 (c) A grant recipient, or his or her representative in the 

30 case of a grant recipient who qualifies under paragraph 
16

1 (a)(1)(iii) of this section, must provide the Secretary with 

2 documentation supporting the suspension request as well as 

3 current contact information including home address and telephone 

4 number.

5 * * * * *

6 §686.42 Discharge of agreement to serve.

7 (a) Death. If a grant recipient dies, the Secretary 

8 discharges the obligation to complete the agreement to serve 

9 based on an original or certified copy of the grant recipient's 

10 death certificate, an accurate and complete photocopy of the 

11 original or certified copy of the grant recipient's death 

12 certificate, or, on a case-by-case basis, reliable documentation 

13 acceptable to the Secretary.

14 (b) Total and permanent disability. (1) A grant recipient's 

15 agreement to serve is discharged if the recipient becomes 

16 totally and permanently disabled, as defined in 34 CFR 

17 682.200(b), and the grant recipient applies for and satisfies 

18 the eligibility requirements for a total and permanent 

19 disability discharge in accordance with 34 CFR 685.213.

20 (2) The eight-year time period in which the grant recipient

21 must complete the service obligation remains in effect during 

22 the conditional discharge period described in 34 CFR 

23 685.213(c)(2) unless the grant recipient is eligible for a 

24 suspension based on a condition that is a qualifying reason for 

25 leave under the FMLA in accordance with §686.41(a)(1)(ii)(D).

26 (3) Interest continues to accrue on each TEACH Grant 

27 disbursement unless and until the TEACH Grant recipient's 

28 agreement to serve is discharged.

29 (4) If the grant recipient satisfies the criteria for a 

30 total and permanent disability discharge during and at the end 
17

1 of the three-year conditional discharge period, the Secretary 

2 discharges the grant recipient's service obligation.

3 (5) If, at any time during or at the end of the three-year 

4 conditional discharge period, the Secretary determines that the 

5 grant recipient does not meet the eligibility criteria for a 

6 total and permanent disability discharge, the Secretary ends the 

7 conditional discharge period and the grant recipient is once 

8 again subject to the terms of the agreement to serve. 

9 (c) Military discharge. (1) A grant recipient who has 

10 completed or who has otherwise ceased enrollment in a TEACH 

11 Grant-eligible program for which he or she received TEACH Grant 

12 funds and has exceeded the period of time allowed under

13 §686.41(a)(2)(ii), may qualify for request in writing to the 

14 Secretary, a proportional discharge of his or her service 

15 obligation due to an extended call or order to active duty 

16 status. To apply for a military discharge, a grant recipient or 

17 his or her representative must submit a written request to the 

18 Secretary.

19 (2) A grant recipient described in paragraph (c)(1) of this 

20 section may receive a--

21 (i) One-year discharge of his or her service obligation if 

22 a call or order to active duty status is for more than three

23 years;

24 (ii) Two-year discharge of his or her service obligation if 

25 a call or order to active duty status is for more than four

26 years; 

27 (iii) Three-year discharge of his or her service obligation 

28 if a call or order to active duty status is for more than five

29 years; or
18

1 (iv) Full discharge of his or her service obligation if a 

2 call or order to active duty status is for six or more years.

3 (3) A grant recipient or his or her representative must 

4 provide the Secretary with--

5 (i) A written statement from the grant recipient's 

6 commanding or personnel officer certifying--

7 (A) That the grant recipient is on active duty in the Armed 

8 Forces of the United States;

9 (B) The date on which the grant recipient's service began; 

10 and

11 (C) The date on which the grant recipient's service is 

12 expected to end; or

13 (ii)(A) A copy of the grant recipient's official military 

14 orders; and

15 (B) A copy of the grant recipient's military 

16 identification.

17 (4) For the purpose of this section, the Armed Forces means 

18 the Army, Navy, Air Force, Marine Corps, and the Coast Guard.

19 (5) A grant recipient enlisted in a reserve component of 

20 the Armed Forces may qualify for a military discharge only for 

21 service on a full-time basis that is expected to last for a 

22 period of at least one year in length, as evidenced by official 

23 military orders, unless an order for national mobilization of 

24 reservists is issued.

25 (6) A grant recipient enlisted in the National Guard 

26 qualifies for a military discharge only while the grant 

27 recipient is on active duty status as a member of the U.S. Army 

28 or Air Force Reserves, and meets the requirements of paragraph 

29 (c)(5) of this section.
19

1 (7) Based on a request for a military discharge from the 

2 grant recipient or his or her representative, the Secretary will 

3 notify the grant recipient or his or her representative of the 

4 outcome of the discharge request. The Secretary will notify the 

5 grant recipient of the outcome of his or her request for a 

6 military discharge. For the portion on the service obligation 

7 that remains, the grant recipient must continue to fulfill his 

8 or her service obligation in accordance with §686.12.

9 Statutory Language:

10 (2) EXTENUATING CIRCUMSTANCES.—The Secretary shall 

11 establish, by regulation, categories of extenuating 

12 circumstances under which a recipient of a grant under this 

13 subpart who is unable to fulfill all or part of the recipient‘s 

14 service obligation may be excused from fulfilling that portion 

15 of the service obligation.

16
20

1 Issue Paper #4

2 Origin: HEOA

3 Issue: Grants for FWS Program 

4 Statutory cites: Section 443 of the HEA

5 Regulatory cites: §§ 675.18, 675.26

6 Summary of issue: The HEOA permits institutions to use FWS 

7 funds to compensate students employed in projects that teach 

8 civics in schools, raise awareness of government functions or 

9 resources, or increase civic participation.

10 In addition, the HEOA requires that, to the extent 

11 practicable, an institution must

12  Give priority to the employment of students participating 

13 in projects that educate or train the public about 

14 evacuation, emergency response, and injury prevention 

15 strategies relating to natural disasters, acts of 

16 terrorism, and other emergency situations; and

17  Ensure that any student compensated with these funds 

18 receives appropriate training to carry out the educational 

19 services required. 

20 Students performing these activities maybe paid for time 

21 spent in training and travel. Finally, the HEOA specifies that 

22 the Federal share of the compensation of FWS students may exceed 

23 75%. 

24 Updated information since 4/14-16 meetings: Tentative agreement 

25 was reach on the changes made to Section 675.18 would be amended 

26 to implement section 443 of the HEOA that promotes the use of 

27 FWS funds to employ students in community service projects, 

28 doing civic education and participation activities. When a 
21

1 school has students performing these projects, to the extent 

2 practicable it must give priority to the employment of students 

3 participating in projects that educate or train the public about 

4 evacuation, emergency response, and injury prevention strategies 

5 relating to natural disasters, acts of terrorism, and other 

6 emergency situations; and ensure that the students receive the 

7 appropriate training to carry out the educational services 

8 required. 

9 Section 675.26 would be amended to implement the 

10 requirements in section 443 to allow the Federal share of the 

11 compensation of FWS students to exceed 75%.

12 Tentative agreement: Yes

13 Regulatory language:

14 §675.18 Use of funds.

15 * * * * *

16 (f) * * *

17 (g) Community service. (1) For the 2000–2001 award year and 

18 subsequent award years, an institution must use at least seven 

19 percent of the sum of its initial and supplemental FWS 

20 allocations for an award year to compensate students employed in 

21 community service activities. In meeting this community service 

22 requirement, an institution must include at least one—

23 (i) Reading tutoring project that employs one or more FWS 

24 students as reading tutors for children who are preschool age or 

25 are in elementary school; or

26 (ii) Family literacy project that employs one or more FWS 

27 students in family lit0eracy activities.

28 (2) The Secretary may waive the requirements in paragraph 

29 (g)(1) of this section if the Secretary determines that an 
22

1 institution has demonstrated that enforcing the requirements in 

2 paragraph (g)(1) of this section would cause a hardship for 

3 students at the institution.

4 (3) To the extent practicable, in providing reading tutors 

5 for children under paragraph (g)(1)(i), an institution must—

6 (i) Give priority to the employment of students to tutor in 

7 reading in schools that are participating in a reading reform 

8 project that—

9 (A) Is designed to train teachers how to teach reading on 

10 the basis of scientifically-based research on reading; and

11 (B) Is funded under the Elementary and Secondary Education 

12 Act of 1965; and

13 (ii) Ensure that any student who is employed in a school 

14 participating in a reading reform project described in paragraph 

15 (g)(3)(i) of this section receives training from the employing 

16 school in the instructional practices used by the school.

17 (4)(i) In meeting the seven percent community service 

18 expenditure requirement in paragraph (g)(1) of this section, an 

19 institution may employ students to perform civic education and 

20 participation activities in projects that21 (A) Teach civics in schools;

22 (B) Raise awareness of government functions or resources; 

23 or

24 (C) Increase civic participation.

25 (ii) To the extent practicable, in providing civic 

26 education and participation activities under paragraph 

27 (g)(4)(i), an institution must-
23

1 (A) Give priority to the employment of students in projects 

2 that educate or train the public about evacuation, emergency 

3 response, and injury prevention strategies relating to natural 

4 disasters, acts of terrorism, and other emergency situations; 

5 and 

6 (B) Ensure that the students receive appropriate training 

7 to carry out the educational services required.

8 (h) Payment for time spent in training and travel. (1) For 

9 any award year, an institution may pay students for a reasonable 

10 amount of time spent for training that is directly related to 

11 FWS employment.

12 (2) Beginning with the 1999–2000 award year, an institution 

13 may pay students for a reasonable amount of time spent for 

14 travel that is directly related to employment in community 

15 service activities (including tutoring in reading and family 

16 literacy activities).

17 * * * * * 

18 §675.26 FWS Federal share limitations.

19 * * * * *

20 (d) For each award year, the Secretary authorizes a Federal 

21 share of 100 percent of the compensation earned by a student 

22 under this part if—

23 (1) The work performed by the student is for the 

24 institution itself, for a Federal, State, or local public 

25 agency, or for a private nonprofit organization; and

26 (2)(i) The institution in which the student is enrolled—

27 (A) Is designated as an eligible institution under—
24

1 (1) The Developing Hispanic-Serving Institutions Program 

2 (34 CFR part 606);

3 (2) The Strengthening Institutions Program, American Indian 

4 Tribally Controlled Colleges and Universities Program, or Alaska 

5 Native and Native Hawaiian-Serving Institutions Program (34 CFR 

6 part 607);

7 (3) The Strengthening Historically Black Colleges and 

8 Universities Program (34 CFR part 608); or

9 (4) The Strengthening Historically Black Graduate 

10 Institutions Program (34 CFR part 609); and

11 (B) Requests that increased Federal share as part of its 

12 regular FWS funding application for that year;

13 (ii) The student is employed as a reading tutor for 

14 preschool age children or children who are in elementary school;

15 (iii) The student is performing family literacy activities 

16 in a family literacy project that provides services to families 

17 with preschool age children or children who are in elementary 

18 school; or

19 (iv) The student is employed as a mathematics tutor for 

20 children who are in elementary school through the ninth grade.

21 (v) The student is employed in community service 

22 activities, performing civic education and participation 

23 activities in a project as defined in §675.18(g)(4). 

24 * * * * *

25 Statutory language:

26 (a) AGREEMENTS REQUIRED.—The Secretary is authorized to 

27 enter into agreements with institutions of higher education 

28 under which the Secretary will make grants to such institutions 
25

1 to assist in the operation of work-study programs as provided in 

2 this part.

3 (b) CONTENTS OF AGREEMENTS.—An agreement entered into 

4 pursuant to this section shall—

5 (1) provide for the operation by the institution of a 

6 program for the part-time employment, including internships, 

7 practical, or research assistantships as determined by the 

8 Secretary, of its students in work for the institution itself, 

9 work in community service or work in the public interest for a 

10 Federal, State, or local public agency or private nonprofit 

11 organization under an arrangement between the institution and 

12 such agency or organization, and such work—

13 (A) will not result in the displacement of employed workers 

14 or impair existing contracts for services;

15 (B) will be governed by such conditions of employment as 

16 will be appropriate and reasonable in light of such factors as 

17 type of work performed, geographical region, and proficiency of 

18 the employee;

19 (C) does not involve the construction, operation, or 

20 maintenance of so much of any facility as is used or is to be 

21 used for sectarian instruction or as a place for religious 

22 worship; and

23 (D) will not pay any wage to students employed under this 

24 subpart that is less than the current Federal minimum wage as 

25 mandated by section 6(a) of the Fair Labor Standards Act of 

26 1938;

27 (2) provide that funds granted an institution of higher 

28 education, pursuant to section 443, may be used only to make 

29 payments to students participating in work-study programs, 

30 except that—
26

1 (A) for fiscal year 2000 and succeeding fiscal years, an 

2 institution shall use at least 7 percent of the total amount of 

3 funds granted to such institution under this section for such 

4 fiscal year to compensate students employed in community 

5 service, and shall ensure that not less than 1 tutoring or 

6 family literacy project (as described in subsection (d)) is 

7 included in meeting the requirement of this subparagraph, except 

8 that the Secretary may waive this subparagraph if the Secretary 

9 determines that enforcing this subparagraph would cause hardship 

10 for students at the institution; and

11 (B) an institution may use a portion of the sums granted to 

12 it to meet administrative expenses in accordance with section 

13 489 of this Act, may use a portion of the sums granted to it to 

14 meet the cost of a job location and development program in 

15 accordance with section 446 of this part, and may transfer funds 

16 in accordance with the provisions of section 488 of this Act; 

17 * * * * *

18 (B) * * *

19 (3) FEDERAL SHARE.—The Federal share of the compensation of 

20 work-study students compensated under this subsection may exceed 

21 75 percent.

22 (e) CIVIC EDUCATION AND PARTICIPATION ACTIVITIES.—

23 (1) USE OF FUNDS.—Funds granted to an institution under 

24 this section may be used in accordance with such subsection to 

25 compensate (including compensation for time spent in training 

26 and travel directly related to civic education and participation 

27 activities) students employed in projects that—

28 (A) teach civics in schools;
27

1 (B) raise awareness of government functions or resources; 

2 or

3 (C) increase civic participation.

4 (2) PRIORITY FOR SCHOOLS.—To the extent practicable, an 

5 institution shall—

6 (A) give priority to the employment of students 

7 participating in projects that educate or train the public about 

8 evacuation, emergency response, and injury prevention strategies 

9 relating to natural disasters, acts of terrorism, and other 

10 emergency situations; and (B) ensure that any student 

11 compensated with the funds described in paragraph (1) receives 

12 appropriate training to carry out the educational services 

13 required.

14 (3) FEDERAL SHARE.—The Federal share of the compensation of 

15 work-study students compensated under this subsection may exceed 

16 75 percent.

17
28

1 Issue Paper #5

2 Origin: HEOA

3 Issue: Conform the FWS rules to the Cash Management Rules 

4 Statutory cites: None

5 Regulatory cites: §675.16

6 Summary of issue: Technical changes needed to conform the FWS 

7 rules with the cash management rules.

8 Updated information since 4/14-16 meetings: These changes would:

9 1. Provide for the $200 prior year charge for FWS just as 

10 it is for the other programs.

11 2. Provide that the FWS authorization may be on the same 

12 authorization form used for the other programs, instead of a 

13 separate form for FWS.

14 3. Provide for a single authorization for any title IV 

15 disbursements via EFT, including FWS. .

16 4. Provide that the school may require a bank account for 

17 FWS payments just as it does for other programs.

18 5. Apply the same concept of a stored-value card and other 

19 devises to FWS as exists for the other programs.

20 6. Provide for similar wording for authorizations and the 

21 cancellation of the authorizations for FWS as for the other 

22 programs.

23 Please note that because the FWS payments represent 

24 compensation, the institution needs an authorization to credit 

25 FWS funds to a student's account to pay for any charges 

26 including tuition and fees as well as room and board. This is 

27 different from the other programs. Under FWS, an institution 
29

1 cannot take compensation without an authorization or a legal 

2 garnishment of wages.

3 Tentative Agreement: Yes

4 Regulatory language:

5 §675.16 Payments to students.

6 (a) General. (1) An institution must follow the 

7 disbursement procedures in this section for paying a student his 

8 or her wages under the FWS Program instead of the disbursement 

9 procedures in 34 CFR 668.164(a), (b), and (d) through (g), and 

10 34 CFR 668.165. The institution must follow 34 CFR 668.164(c) 

11 on making direct FWS payments to students and 34 CFR 668.164(h) 

12 on handling the return of FWS funds that are not received or 

13 negotiated by a student. 

14 (2) An institution must pay a student FWS compensation at 

15 least once a month.

16 (3) Before an institution makes an initial disbursement of 

17 FWS compensation to a student for an award period, the 

18 institution must notify the student of the amount of funds the 

19 student is authorized to earn, and how and when the FWS 

20 compensation will be paid.

21 (4) Regardless of who employs the student, the institution 

22 is responsible for ensuring that the student is paid for work 

23 performed.

24 (5) A student‘s FWS compensation is earned when the 

25 student performs the work.

26 (6) An institution may pay a student after the student‘s 

27 last day of attendance for FWS compensation earned while he or 

28 she was in attendance at the institution.
30

1 (7) A correspondence student must submit his or her first 

2 completed lesson before receiving a payment.

3 (8) The institution may not obtain a student‘s power of 

4 attorney to authorize any disbursement of funds without prior 

5 approval from the Secretary.

6 (9) An institution makes a disbursement of FWS program 

7 funds on the date that the institution credits a student‘s 

8 account at the institution or pays a student directly with—

9 (i) Funds received from the Secretary; or

10 (ii) Institutional funds used in advance of receiving FWS 

11 program funds. 

12 (b) Crediting a student‘s account at the institution. (1) 

13 If the institution obtains the student‘s authorization described 

14 in paragraph (d) of this section, the institution may use the 

15 FWS funds to credit a student‘s account at the institution to 

16 satisfy—

17 (i) Current year charges for—

18 (A) Tuition and fees;

19 (B) Board, if the student contracts with the institution 

20 for board;

21 (C) Room, if the student contracts with the institution 

22 for room; and

23 (D) Other educationally related charges incurred by the 

24 student at the institution; and

25 (ii) Prior award year charges with the restriction 

26 provided in paragraph (b)(2) of this section for a total of not 

27 more than $200 for—

28 (A) Tuition and fees, room, or board; and 
31

1 (B) Other institutionally related charges incurred by the 

2 student at the institution.

3 (2) If the institution is using FWS funds in combination 

4 with other title IV, HEA program funds to credit a student‘s 

5 account at the institution to satisfy prior award year charges, 

6 a single $200 total prior award year charge limit applies to the 

7 use of all the title IV, HEA program funds for that purpose.

8 (c) Credit balances. Whenever an institution disburses 

9 FWS funds by crediting a student‘s account and the result is a 

10 credit balance, the institution must pay the credit balance 

11 directly to the student as soon as possible, but no later than 

12 14 days after the credit balance occurred on the account. 

13 (d) Student authorizations. (1) Except for the noncash 

14 contributions allowed under paragraphs (e)(2) and (e)(3) of this 

15 section, if an institution obtains written authorization from a 

16 student, the institution may—

17 (i) Use the student‘s FWS compensation to pay for charges 

18 described in paragraph (b) of this section that are included in 

19 that authorization; and

20 (ii) Except if prohibited by the Secretary under the 

21 reimbursement or cash monitoring payment method, hold on behalf 

22 of the student any FWS compensation that would otherwise be paid 

23 directly to the student under paragraph (c). 

24 (2) In obtaining the student‘s authorization to perform an 

25 activity described in paragraph (d)(1) of this section, an 

26 institution—

27 (i) May not require or coerce the student to provide that 

28 authorization;
32

1 (ii) Must allow the student to cancel or modify that 

2 authorization at any time; and

3 (iii) Must clearly explain how it will carry out that 

4 activity.

5 (3) A student may authorize an institution to carry out 

6 the activities described in paragraph (d)(1) of this section for 

7 the period during which the student is enrolled at the 

8 institution.

9 (4)(i) If a student modifies an authorization, the 

10 modification takes effect on the date the institution receives 

11 the modification notice.

12 (ii) If a student cancels an authorization to use his or 

13 her FWS compensation to pay for authorized charges under 

14 paragraph (b) of this section, the institution may use those 

15 funds to pay only those authorized charges incurred by the 

16 student before the institution received the notice.

17 (iii) If a student cancels an authorization to hold his or 

18 her FWS compensation under paragraph (d)(1)(ii) of this section,

19 the institution must pay those funds directly to the student as 

20 soon as possible, but no later than 14 days after the 

21 institution receives that notice.

22 (5) If an institution holds excess FWS compensation under 

23 paragraph (d)(1)(ii) of this section, the institution must—

24 (i) Identify the amount of funds the institution holds for 

25 each student in a subsidiary ledger account designed for that 

26 purpose;

27 (ii) Maintain, at all times, cash in its bank account in 

28 an amount at least equal to the amount of FWS compensation the 

29 institution holds for the student; and
33

1 (iii) Notwithstanding any authorization obtained by the 

2 institution under this paragraph, pay any remaining balances by 

3 the end of the institution‘s final FWS payroll period for an 

4 award year.

5 (e)(1) Timing of institutional share and noncash 

6 contributions. Except for the noncash contributions allowed 

7 under paragraph (e)(2) or (e)(3) of this section, an institution 

8 must pay the student its share of his or her FWS compensation at 

9 the same time it pays the Federal share.

10 (2) If an institution pays a student its FWS share for an 

11 award period in the form of tuition, fees, services, or 

12 equipment, it must pay that share before the student‘s final 

13 payroll period.

14 (3) If an institution pays its FWS share in the form of 

15 prepaid tuition, fees, services, or equipment for a forthcoming 

16 academic period, it must give the student a statement before the 

17 close of his or her final payroll period listing the amount of 

18 tuition, fees, services, or equipment earned.

19 34 CFR 668.161 Scope and purpose (Cash Management rules)

20 * * *

21 (a)(4) FWS Program. An institution must follow the 

22 disbursement procedures in 34 CFR 675.16 for paying a student 

23 his or her wages under the FWS Program instead of the 

24 disbursement procedures in §§668.164(a), (b), and (d) through 

25 (g), and 668.165.

26 * * * * *

27
34

1 Issue Paper #6

2 Origin: HEOA

3 Issue: Definition of Community Service 

4 Statutory cites: Section 441(c)(1) of the HEA

5 Regulatory cites: §675.2

6 Summary of issue: The HEOA expands the definition of community 

7 service to include the field of emergency preparedness and 

8 response. 

9 Updated information since 4/14-16 meetings: The committee 

10 reached tentative agreement on Section 675.2 amending to include 

11 emergency preparedness and response.

12 Tentative agreement: Yes

13 Regulatory language: 

14 675.2 Definitions

15 * * * * *

16 (b) The Secretary defines other terms used in this part as 

17 follows:

18 Community services: Services which are identified by an 

19 institution of higher education, through formal or informal 

20 consultation with local nonprofit, governmental, and community21 based organizations, as designed to improve the quality of life 

22 for community residents, particularly low-income individuals, or 

23 to solve particular problems related to their needs. These 

24 services include—

25 (1) Such fields as health care, child care (including child 

26 care services provided on campus that are open and accessible to 

27 the community), literacy training, education (including tutorial 

28 services), welfare, social services, transportation, housing and 
35

1 neighborhood improvement, public safety, emergency preparedness 

2 and response, crime prevention and control, recreation, rural 

3 development, and community improvement; 

4 (2) Work in service opportunities or youth corps as defined 

5 in section 101 of the National and Community Service Act of 

6 1990, and service in the agencies, institutions and activities 

7 designated in section 124(a) of that Act;

8 (3) Support services to students with disabilities, 

9 including students with disabilities who are enrolled at the 

10 institution; and

11 (4) Activities in which a student serves as a mentor for 

12 such purposes as—

13 (i) Tutoring;

14 (ii) Supporting educational and recreational activities; 

15 and

16 (iii) Counseling, including career counseling.

17 * * * * *

18 Statutory language: 

19 (c) COMMUNITY SERVICES.—For purposes of this part, the term 

20  ̳ ̳community services‘‘ means services which are identified by an 

21 institution of higher education, through formal or informal 

22 consultation with local nonprofit, governmental, and community23 based organizations, as designed to improve the quality of life 

24 for community residents, particularly low-income individuals, or 

25 to solve particular problems related to their needs, including—

26 (1) such fields as health care, child care (including child 

27 care services provided on campus that are open and accessible to 

28 the community), literacy training, education (including tutorial 

29 services), welfare, social services, transportation, housing and 
36

1 neighborhood improvement, public safety, emergency preparedness 

2 and response, crime prevention and control, recreation, rural 

3 development, and community improvement;

4 (2) work in a project, as defined in section 101(20) of the 

5 National and Community Service Act of 1990 (42 U.S.C. 

6 12511(20));

7 (3) support services to students with disabilities, 

8 including students with disabilities who are enrolled at the 

9 institution; and

10 (4) activities in which a student serves as a mentor for 

11 such purposes as—

12 (A) tutoring;

13 (B) supporting educational and recreational activities; and

14 (C) counseling, including career counseling.

15
37

1 Issue Paper #7

2 Origin: HEOA

3 Issue: Flexible Use of Funds 

4 Statutory cites: Section 445(d) of the HEA

5 Regulatory cites: §675.18

6 Summary of issue: The HEOA adds a provision under which an 

7 eligible institution located in any area affected by a major 

8 disaster, as determined by the Secretary, may make FWS payments 

9 to disaster-affected students. The FWS payments may be made for 

10 the period of time (not to exceed one academic year) in which 

11 the disaster affected students were prevented from fulfilling 

12 their work-study obligations for all or part of such academic 

13 year due to the major disaster.

14 Payments may be made in an amount equal to or less than the 

15 amount of FWS wages the students would have been paid had the 

16 students been able to complete the work obligation necessary to 

17 receive work-study funds. Payments may not be made to any 

18 student who was not eligible for work-study or was not 

19 completing the work obligation necessary to receive FWS funds 

20 prior to the major disaster. Any payments made must meet the 

21 FWS matching requirements, unless the Secretary waives the 

22 matching requirements.

23 The term ―disaster-affected student‖ means a student 

24 enrolled at an eligible institution who:

25 • received an FWS work-study award for the academic year 

26 during which a major disaster occurred;

27 • earned FWS wages from such eligible institution for such 

28 academic year prior to the disaster;
38

1 • was prevented from fulfilling the student‘s work-study 

2 obligation for all or part of such academic year due to such 

3 major disaster; and

4 • was unable to be reassigned to another work-study job.

5 The term ―major disaster‖ has the meaning as the term in 

6 section 102(2) of the Robert T. Stafford Disaster Relief and 

7 Emergency Assistance Act (42 U.S.C. 5122(2)): any natural 

8 catastrophe (including any hurricane, tornado, storm, high 

9 water, wind-driven water, tidal wave, tsunami, earthquake, 

10 volcanic eruption, landslide, mudslide, snowstorm, or drought), 

11 or, regardless of cause, any fire, flood, or explosion, in any 

12 part of the United States, which in the determination of the 

13 President causes damage of sufficient severity and magnitude to 

14 warrant major disaster assistance under this chapter to 

15 supplement the efforts and available resources of States, local 

16 governments, and disaster relief organizations in alleviating 

17 the damage, loss, hardship, or suffering caused thereby. 

18 Updated information since 4/14-16 meetings: The committee 

19 reached tentative agreement on the changes to Section 675.18 

20 would be amended to add the provisions under which an 

21 institution located in any affected area, as determined by the 

22 Secretary, may make FWS payments to disaster-affected students.

23 Tentative agreement: YES

24 Regulatory language: 

25 §675.18 Use of funds.

26 * * * * *

27 (g) Community service. (1) For the 2000–2001 award year and 

28 subsequent award years, an institution must use at least seven 

29 percent of the sum of its initial and supplemental FWS 
39

1 allocations for an award year to compensate students employed in 

2 community service activities. In meeting this community service 

3 requirement, an institution must include at least one—

4 (i) Reading tutoring project that employs one or more FWS 

5 students as reading tutors for children who are preschool age or 

6 are in elementary school; or

7 (ii) Family literacy project that employs one or more FWS 

8 students in family literacy activities.

9 (2) The Secretary may waive the requirements in paragraph 

10 (g)(1) of this section if the Secretary determines that an 

11 institution has demonstrated that enforcing the requirements in

12 paragraph (g)(1) of this section would cause a hardship for 

13 students at the institution.

14 (3) To the extent practicable, in providing reading tutors 

15 for children under paragraph (g)(1)(i), an institution must—

16 (i) Give priority to the employment of students to tutor in 

17 reading in schools that are participating in a reading reform 

18 project that—

19 (A) Is designed to train teachers how to teach reading on 

20 the basis of scientifically-based research on reading; and

21 (B) Is funded under the Elementary and Secondary Education 

22 Act of 1965; and

23 (ii) Ensure that any student who is employed in a school 

24 participating in a reading reform project described in paragraph 

25 (g)(3)(i) of this section receives training from the employing 

26 school in the instructional practices used by the school.

27 (h) Payment for time spent in training and travel. (1) For 

28 any award year, an institution may pay students for a reasonable 
40

1 amount of time spent for training that is directly related to 

2 FWS employment.

3 (2) Beginning with the 1999–2000 award year, an institution 

4 may pay students for a reasonable amount of time spent for 

5 travel that is directly related to employment in community 

6 service activities (including tutoring in reading and family 

7 literacy activities).

8 (i) Flexibility in the event of a major disaster. (1)

9 General. An institution located in any area affected by a major 

10 disaster may make FWS payments to disaster-affected students for 

11 the period of time (not to exceed the award period) in which the 

12 students were prevented from fulfilling their FWS obligations. 

13 The FWS payments--

14 (i) May be made to disaster-affected students for an 

15 amount equal to or less than the amount of FWS wages the 

16 students would have been paid had the students been able to 

17 complete the work obligation necessary to receive the funds.

18 (ii) May not be made to any student who was not eligible 

19 for FWS or was not completing the work obligation necessary to 

20 receive the funds, or had already separated from their

21 employment prior to the occurrence of the major disaster.

22 (iii) Must meet the matching requirements of §675.26, 

23 unless those requirements are waived by the Secretary.

24 (2) Definitions. The following definitions apply to this 

25 section:

26 (i) Disaster-affected student means a student enrolled at 

27 an institution who—

28 (A) Received an FWS award for the award period during 

29 which a major disaster occurred;
41

1 (B) Earned FWS wages from an institution for that award 

2 period;

3 (C) Was prevented from fulfilling his or her FWS 

4 obligation for all or part of the FWS award period because of 

5 the major disaster; and

6 (D) Was unable to be reassigned to another FWS job.

7 (ii) Major disaster is defined in section 102(2) of the 

8 Robert T. Stafford Disaster Relief and Emergency Assistance Act 

9 (42 U.S.C. 5122(2)).

10 Statutory language:

11 (c) FLEXIBLE USE OF FUNDS.—An eligible institution may, 

12 upon the request of a student, make payments to the student 

13 under this part by crediting the student‘s account at the 

14 institution or by making a direct deposit to the student‘s 

15 account at a depository institution. An eligible institution may 

16 only credit the student‘s account at the institution for (1) 

17 tuition and fees, (2) in the case of institutionally owned 

18 housing, room and board, and (3) other institutionally provided 

19 goods and services.

20 (d) FLEXIBILITY IN THE EVENT OF A MAJOR DISASTER.—

21 (1) IN GENERAL.—In the event of a major disaster, an 

22 eligible institution located in any area affected by such major 

23 disaster, as determined by the Secretary, may make payments 

24 under this part to disaster-affected students, for the period of 

25 time (not to exceed one academic year) in which the disaster26 affected students were prevented from fulfilling the students‘ 

27 work-study obligations as described in paragraph (2)(A)(iii), as 

28 follows: 
42

1 (A) Payments may be made under this part to disaster2 affected students in an amount equal to or less than the amount 

3 of wages such students would have been paid under this part had 

4 the students been able to complete the work obligation necessary 

5 to receive work study funds.

6 (B) Payments shall not be made to any student who was not 

7 eligible for work study or was not completing the work 

8 obligation necessary to receive work study funds under this part 

9 prior to the occurrence of the major disaster.

10 (C) Any payments made to disaster-affected students under 

11 this subsection shall meet the matching requirements of section 

12 443, unless such matching requirements are waived by the 

13 Secretary.

14 (2) DEFINITIONS.—In this subsection:

15 (A) The term  ̳disaster-affected student‘ means a student 

16 enrolled at an eligible institution who—

17 (i) received a work-study award under this section for the 

18 academic year during which a major disaster occurred; (ii) 

19 earned Federal work-study wages from such eligible institution 

20 for such academic year;

21 (iii) was prevented from fulfilling the student‘s work22 study obligation for all or part of such academic year due to 

23 such major disaster; and

24 (iv) was unable to be reassigned to another work-study job.

25 (B) The term  ̳major disaster‘ has the meaning given such 

26 term in section 102(2) of the Robert T. Stafford Disaster Relief 

27 and Emergency Assistance Act (42 U.S.C. 5122(2)).

28
43

1 Issue Paper #8

2 Origin: HEOA

3 Issue: Work Colleges 

4 Statutory cites: Section 448 of the HEA

5 Regulatory cites: §675.41

6 Summary of issue: The HEOA replaces the term ―work-learning‘‘ 

7 each place it appears with  ̳ ̳work-learning-service.‘‘

8 In addition, the definitions in section 448(e) of the HEA 

9 are revised as follows:

10 The term ―work college‖ means an eligible institution that:

11  has been a public or private nonprofit, four-year, degree12 granting institution with a commitment to community 

13 service;

14  has operated a comprehensive work-learning-service program 

15 for at least two years;

16  requires students, including at least one-half of all 

17 students who are enrolled on a full-time basis, to

18 participate in a comprehensive work-learning-service 

19 program for at least five hours each week, or at least 80 

20 hours during each period of enrollment, except summer 

21 school, unless the student is engaged in an institutionally 

22 organized or approved study abroad or externship program; 

23 and

24  provides students participating in the comprehensive work25 learning-service program with the opportunity to contribute 

26 to their education and to the welfare of the community as a 

27 whole.
44

1 The term ―comprehensive student work-learning-service program‖ 

2 means a student work-learning-service program that 

3  is an integral and stated part of the institution‘s 

4 educational philosophy and program;

5  requires participation of all resident students for 

6 enrollment and graduation;

7  includes learning objectives, evaluation, and a record of 

8 work performance as part of the student‘s college record;

9  provides programmatic leadership by college personnel at 

10 levels comparable to traditional academic programs;

11  recognizes the educational role of work-learning-service 

12 supervisors; and

13  includes consequences for nonperformance or failure in the 

14 work-learning-service program similar to the consequences 

15 for failure in the regular academic program.

16 Updated information since 4/14-16 meetings: The committee 

17 reached tentative agreement on Section 675.41 that would be 

18 amended to implement the requirement in section 448(e) of the 

19 HEOA to revise two definitions to clarify how institutions 

20 qualify as work colleges. The word ―service‖ is added after 

21 work-learning in subpart C as required. 

22 Tentative agreement: Yes

23 Regulatory language: 

24 §675.41 Special definitions.

25 The following definitions apply to this subpart:

26 (a) Work-college: The term ―work-college‖ means an eligible 

27 institution that-
45

1 (1) Is a public or private nonprofit, four-year, degree2 granting institution with a commitment to community service;

3 (2) Has operated a comprehensive work-learning-service

4 program for at least two years;

5 (3) Requires All resident students, including at least one6 half of all students who are enrolled on a full-time basis, 

7 reside on campus to participate in a comprehensive work8 learning-service program for at least five hours each week, or 

9 at least 80 hours during each period of enrollment, except 

10 summer school, unless the student is engaged in an 

11 institutionally organized or approved study abroad or externship 

12 program; and

13 (4) Provides students participating in the comprehensive 

14 work-learning service program with the opportunity to contribute 

15 to their education and to the welfare of the community as a 

16 whole.

17 (b) Comprehensive student work-learning-service program: A 

18 student work-learning-service program that—

19 (1) Is an integral and stated part of the institution's 

20 educational philosophy and program;

21 (2) Requires participation of all resident students for 

22 enrollment, participation, and graduation; 

23 (3) Includes learning objectives, evaluation, and a record 

24 of work performance as part of the student's college record;

25 (4) Provides programmatic leadership by college personnel 

26 at levels comparable to traditional academic programs;

27 (5) Recognizes the educational role of work-learning28 service supervisors; and
46

1 (6) Includes consequences for nonperformance or failure in 

2 the work-learning-service program similar to the consequences 

3 for failure in the regular academic program.

4 §675.43 Purpose

5 The purpose of the Work-Colleges program is to recognize, 

6 encourage, and promote the use of comprehensive work-learning7 service programs as a valuable educational approach when it is 

8 an integral part of the institution's educational program and a 

9 part of a financial plan that decreases reliance on grants and 

10 loans and to encourage students to participate in community 

11 service activities.

12 §675.44 Program Description

13 (a) An institution that satisfies the definition of ―work14 college‖ in §675.41(a) and wishes to participate in the Work15 Colleges program must apply to the Secretary at the time and in 

16 the manner prescribed by the Secretary.

17 (b) An institution may expend funds separately, or in 

18 combination with other eligible institutions, to provide work19 learning-service opportunities for currently enrolled students.

20 (c) For any given award year, Federal funds allocated and 

21 reallocated for that award year under sections 442 and 462 of 

22 the HEA may be transferred for the purpose of carrying out the 

23 Work-Colleges program to provide flexibility in strengthening 

24 the self-help-through-work element in financial aid packaging.

25 §675.45 Allowable Cost, Federal Share, and Institutional Share

26 (a) * * *

27 (1) Support the educational costs of qualified students 

28 through self-help payments or credits provided under the work-
47

1 learning-service program within the limits of part F of title IV 

2 of the HEA.

3 (2) Promote the work-learning-service experience as a tool 

4 of postsecondary education, financial self-help, and community 

5 service-learning opportunities.

6 (3) Carry out activities in sections 443 or 446 of the HEA.

7 (4) Administer, develop, and assess comprehensive work8 learning-service programs including—

9 (i) Community-based work-learning-service alternatives that 

10 expand opportunities for community service and career-related 

11 work; and

12 (5) Coordinate and carry out joint projects and activities 

13 to promote work service learning.

14 * * * * *

15 Statutory language:

16 (a) PURPOSE.—The purpose of this section is to recognize, 

17 encourage, and promote the use of comprehensive work-learning18 service programs as a valuable educational approach when it is 

19 an integral part of the institution‘s educational program and a 

20 part of a financial plan which decreases reliance on grants and 

21 loans.

22 (b) SOURCE AND USE FUNDS.—

23 (1) SOURCE OF FUNDS.—In addition to the sums appropriated 

24 under subsection (f), funds allocated to the institution under 

25 part C and part E of this title may be transferred for use under 

26 this section to provide flexibility in strengthening the self27 help-through-work element in financial aid packaging.
48

1 (2) ACTIVITIES AUTHORIZED.—From the sums appropriated 

2 pursuant to subsection (f), and from the funds available under 

3 paragraph (1), eligible institutions may, following approval of 

4 an application under subsection (c) by the Secretary—

5 (A) support the educational costs of qualified students 

6 through self-help payments or credits provided under the work7 learning-service program of the institution within the limits of 

8 part F of this title;

9 (B) promote the work-learning-service experience as a tool 

10 of postsecondary education, financial self-help and community 

11 service-learning opportunities;

12 (C) carry out activities described in section 443 or 446;

13 (D) be used for the administration, development and 

14 assessment of comprehensive work-learning- service programs, 

15 including—

16 (i) community-based work-learning-service alternatives that 

17 expand opportunities for community service and career-related 

18 work; and 

19 (ii) alternatives that develop sound citizenship, encourage 

20 student persistence, and make optimum use of assistance under 

21 this part in education and student development;

22 (E) coordinate and carry out joint projects and activities 

23 to promote work service learning; and

24 (F) carry out a comprehensive, longitudinal study of 

25 student academic progress and academic and career outcomes, 

26 relative to student self-sufficiency in financing their higher 

27 education, repayment of student loans, continued community 

28 service, kind and quality of service performed, and career 

29 choice and community service selected after graduation.
49

1 (c) APPLICATION.—Each eligible institution may submit an 

2 application for funds authorized by subsection (f) to use funds 

3 under subsection (b)(1) at such time and in such manner as the 

4 Secretary, by regulation, may reasonably require.

5 (d) MATCH REQUIRED.—Funds made available to work-colleges 

6 pursuant to this section shall be matched on a dollar-for-dollar 

7 basis from non-Federal sources.

8 (e) DEFINITIONS.—For the purpose of this section—

9 (1) the term  ̳work college‘ means an eligible institution 

10 that—

11 (A) has been a public or private nonprofit, four-year, 

12 degree-granting institution with a commitment to community 

13 service;

14 (B) has operated a comprehensive work-learning-service 

15 program for at least two years;

16 (C) requires students, including at least one-half of all 

17 students who are enrolled on a full-time basis, to participate 

18 in a comprehensive work-learning-service program for at least 

19 five hours each week, or at least 80 hours during each period of 

20 enrollment, except summer school, unless the student is engaged 

21 in an institutionally organized or approved study abroad or 

22 externship program; and

23 (D) provides students participating in the comprehensive 

24 work-learning-service program with the opportunity to contribute 

25 to their education and to the welfare of the community as a 

26 whole; and

27 (2) the term  ̳comprehensive student work-learning-service 

28 program‘ means a student work-learning-service program that—
50

1 (A) is an integral and stated part of the institution‘s 

2 educational philosophy and program;

3 (B) requires participation of all resident students for 

4 enrollment and graduation;

5 (C) includes learning objectives, evaluation, and a record 

6 of work performance as part of the student‘s college record;

7 (D) provides programmatic leadership by college personnel 

8 at levels comparable to traditional academic programs;

9 (E) recognizes the educational role of work-learning10 service supervisors; and

11 (F) includes consequences for nonperformance or failure in 

12 the work-learning-service program similar to the consequences 

13 for failure in the regular academic program.

14 (f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

15 to be appropriated to carry out this section such sums as may be 

16 necessary for fiscal year 2009 and each of the five succeeding 

17 fiscal years.

18
51

1 Issue Paper #9

2 Origin: HEOA

3 Issue: 90/10 (non-Title IV revenue requirement) 

4 Statutory cites: Section 487(d) of the HEA

5 Regulatory cites: §§600.5(a)(8), (d), (f), and (g); 

6 §668.23(d)(4)

7 DCL GEN-08-12 cite: Pages 68-69

8 Summary of issue: The HEOA moves the 90/10 Rule to the PPA 

9 from Title I of the HEA (the 90/10 Rule applies only to 

10 proprietary institutions and requires those institutions to 

11 derive at least 10 percent of their revenue from non-Title IV 

12 sources). As a result, an institution that now violates the 

13 90/10 Rule for one year would no longer lose its eligibility to 

14 participate in the Title IV programs. Instead, the 

15 institution‘s participation becomes provisional for two fiscal 

16 years. However, if the institution does not satisfy the 90/10 

17 Rule for two consecutive fiscal years, it loses its eligibility 

18 to participate in the Title IV programs for at least two fiscal 

19 years.

20 If an institution fails to satisfy the 90/10 Rule, the HEOA 

21 requires the Department to publicly disclose on the College 

22 Navigator Website the identity of that institution and the 

23 extent to which the institution failed to satisfy the rule. In 

24 addition, no later than July 1 of each year, the Secretary must 

25 submit to Congress a report that contains, for each proprietary 

26 institution, the amount and percentage of the institution‘s 

27 revenues from Title IV sources and non-Title IV sources, as 

28 provided by the institution in its audited financial statements.
52

1 In calculating the revenue percentage, the HEOA requires an 

2 institution to use the cash basis of accounting, except for 

3 loans made to students by the institution, and provides that any 

4 Title IV program funds that are disbursed or delivered to or on 

5 behalf of a student are presumed to pay the student‘s tuition, 

6 fees, or other institutional charges, unless the tuition, fees, 

7 or other charges are satisfied by:

8 ● grant funds from non-Federal public agencies or private 

9 sources independent of the institution;

10 ● funds provided under a contractual arrangement with a 

11 Federal, State, or local government agency for the purpose of 

12 providing job training to low-income individuals in need of that 

13 training;

14 ● funds used by a student from savings plans for educational 

15 expenses established by or on behalf of the student that qualify 

16 for special tax treatment under the Internal Revenue Code; and

17 ● institutional scholarships that count toward the 10 percent 

18 revenue requirement.

19 The HEOA specifies other sources of revenue that count 

20 toward the 10 percent requirement after applying the presumption 

21 that Title IV funds are used to pay the student‘s tuition, fees, 

22 and other institutional charges. Among the sources, an 

23 institution may count:

24 ● revenue earned from a non-Title IV program of study, as long 

25 as the program is approved by the State, accredited, or provides 

26 an industry-recognized credential or certificate;

27 ● institutional aid to students. For loans made to students by 

28 the institution from July 1, 2008, but before July 1, 2012, the 

29 net present value of the loans made during a fiscal year if the 

30 loans are evidenced by promissory notes, issued at intervals 
53

1 related to the institution‘s enrollment periods, and are subject 

2 to regular loan repayments and collections. For loans made on 

3 or after July 1, 2012, only the amount of loan repayments the 

4 institution receives during a fiscal year, excluding repayment 

5 on any loans for which the institution previously used the net 

6 present value in its 90/10 calculation.

7 For scholarships, only those provided by the institution in 

8 the form of monetary aid or tuition discounts based on the 

9 academic achievements or financial need of students, as long as 

10 the scholarships are disbursed during each fiscal year from an 

11 established restricted account, and only to the extent that 

12 funds in that account represent designated funds from an outside 

13 source or income earned on those funds; and

14 ● the proceeds of Unsubsidized Stafford Loans that exceed the 

15 loan limits which were in effect on May 6, 2008, the day before 

16 the enactment of the Ensuring Continued Access to Student Loans 

17 Act of 2008 (ECASLA). This provision applies to any 

18 Unsubsidized Stafford Loan received by a student on or after 

19 July 1, 2008, but before July 1, 2011.

20 The HEOA specifies the types or amounts of funds that are 

21 excluded from revenues under the 90/10 calculation. Excluded 

22 from revenues are: 

23 ● the amount of funds the institution received under the FWS 

24 Program, unless it used those funds to pay for a student‘s 

25 institutional charges;

26 ● the amount of funds the institution received under LEAP;

27 ● the amount of funds provided by the institution as matching 

28 funds under the Title IV programs;

29 ● the amount of funds provided by the institution for a Title 

30 IV program that are required to be refunded or returned; and
54

1 ● the amount charged for books, supplies, and equipment, 

2 unless the institution includes that amount as tuition, fees, or 

3 other institutional charges.

4 Updated information since 3/2-4 meetings:

5 The 90/10 requirements are removed from §600.5.

6 The PPA is amended by adding the 90/10 requirement.

7 A new section 668.28 is added to implement the statutory 

8 requirements.

9 A new Appendix C is added to illustrate the 90/10 

10 calculation.

11 Updated information since 4/14-16 meetings: 

12 The terms ―industry recognized credential‖ and 

13 ―institutional loan‖ are more fully described.

14 Loan amounts in excess of ECASLA loan limits are prorated 

15 by payment period.

16 If an institution uses the 50% NPV alternative, it may not 

17 sell the loans for two years after the loans entered repayment.

18 Tentative Agreement:

19 Regulatory language:

20 §600.5 Proprietary institution of higher education.

21 (a) * * *

22 (6) Is accredited; and

23 (7) Has been in existence for at least two years. ; and

24 (8) Has no more than 90 percent of its revenues derived 

25 from title IV, HEA program funds, as determined under paragraph 

26 (d) of this section.
55

1 (b)(1) The Secretary considers an institution to have been 

2 in existence for two years only if—

3 * * * * *

4 (d)(1) An institution satisfies the requirement contained 

5 in paragraph (a)(8) of this section by examining its revenues 

6 under the following formula for its latest complete fiscal year:

7 Title IV, HEA program funds the institution used to satisfy 

8 its students' tuition, fees, and other institutional charges to 

9 students

10 The sum of revenues including title IV, HEA program funds 

11 generated by the institution from: tuition, fees, and other 

12 institutional charges for students enrolled in eligible programs 

13 as defined in 34 CFR 668.8; and activities conducted by the 

14 institution, to the extent not included in tuition, fees, and 

15 other institutional charges, that are necessary for the 

16 education or training of its students who are enrolled in those 

17 eligible programs.

18 (2) An institution must use the cash basis of accounting 

19 when calculating the amount of title IV, HEA program funds in 

20 the numerator and the total amount of revenue generated by the 

21 institution in the denominator of the fraction contained in 

22 paragraph (d)(1) of this section.

23 (3) Under the cash basis of accounting—

24 (i) In calculating the amount of revenue generated by the 

25 institution from institutional loans, the institution must 

26 include only the amount of loan repayments received by the 

27 institution during the fiscal year; and

28 (ii) In calculating the amount of revenue generated by the 

29 institution from institutional scholarships, the institution 
56

1 must include only the amount of funds it disbursed during the 

2 fiscal year from an established restricted account and only to 

3 the extent that the funds in that account represent designated 

4 funds from an outside source or income earned on those funds.

5 (e) With regard to the formula contained in paragraph(d)(1) 

6 of this section—

7 (1) The institution may not include as title IV, HEA 

8 program funds in the numerator nor as revenue generated by the 

9 institution in the denominator—

10 (i) The amount of funds it received under the Federal Work11 Study (FWS) Program, unless the institution used those funds to 

12 pay a student's institutional charges in which case the FWS 

13 program funds used to pay those charges would be included in the 

14 numerator and denominator.

15 (ii) The amount of funds it received under the Leveraging 

16 Educational Assistance Partnership (LEAP) Program. (The LEAP 

17 Program was formerly called the State Student Incentive Grant or 

18 SSIG Program.);

19 (iii) The amount of institutional funds it used to match 

20 title IV, HEA program funds;

21 (iv) The amount of title IV, HEA program funds that must be 

22 refunded or returned under §668.22; or

23 (v) The amount charged for books, supplies, and equipment 

24 unless the institution includes that amount as tuition, fees, or 

25 other institutional charges.

26 (2) In determining the amount of title IV, HEA program 

27 funds received by the institution under the cash basis of 

28 accounting, except as provided in paragraph (e)(3) of this 

29 section, the institution must presume that any title IV, HEA 
57

1 program funds disbursed or delivered to or on behalf of a 

2 student will be used to pay the student's tuition, fees, or 

3 other institutional charges, regardless of whether the 

4 institution credits those funds to the student's account or pays 

5 those funds directly to the student, and therefore must include 

6 those funds in the numerator and denominator.

7 (3) In paragraph (e)(2) of this section, the institution 

8 may not presume that title IV, HEA program funds were used to 

9 pay tuition, fees, and other institutional charges to the extent 

10 that those charges were satisfied by—

11 (i) Grant funds provided by non-Federal public agencies, or 

12 private sources independent of the institution;

13 (ii) Funds provided under a contractual arrangement 

14 described in §600.7(d), or

15 (iii) Funds provided by State prepaid tuition plans.

16 (4) With regard to the denominator, revenue generated by 

17 the institution from activities it conducts, that are necessary 

18 for its students' education or training, includes only revenue 

19 from those activities that—

20 (i) Are conducted on campus or at a facility under the 

21 control of the institution;

22 (ii) Are performed under the supervision of a member of the 

23 institution's faculty; and

24 (iii) Are required to be performed by all students in a 

25 specific educational program at the institution.

26 (f) An institution must notify the Secretary within 90 days 

27 following the end of the fiscal year used in paragraph (d)(1) of 

28 this section if it fails to satisfy the requirement contained in 

29 paragraph (a)(8) of this section.
58

1 (g) If an institution loses its eligibility because it 

2 failed to satisfy the requirement contained in paragraph (a)(8) 

3 of this section, to regain its eligibility it must demonstrate 

4 compliance with all eligibility requirements for at least the 

5 fiscal year following the fiscal year used in paragraph (d)(1) 

6 of this section.

7 (hd) The Secretary does not recognize the accreditation of 

8 an institution unless the institution agrees to submit any 

9 dispute involving the final denial, withdrawal, or termination 

10 of accreditation to initial arbitration before initiating any 

11 other legal action.

12 * * * * *

13 §668.14 Program participation agreement.

14 * * *

15 (b) By entering into a program participation agreement, an 

16 institution agrees that—

17 * * *

18 (16) Reserved For a proprietary institution, the 

19 institution will derive at least ten 10 percent of its revenues 

20 for each fiscal year from sources other than title IV, HEA 

21 program funds, as provided in §668.28(a) and (b), or be subject 

22 to sanctions described in §668.28(c).);

23 * * * * *

24 §668.28 Non-title IV revenue (90/10).

25 (a) General Calculating the revenue percentage. (1)

26 Calculating the revenue percentage. A proprietary institution 

27 determines whether it satisfies the requirement in 

28 §668.14(b)(16) that at least ten10 percent of its revenue is 

29 derived from sources other than title IV, HEA program funds by 
59

1 using the formula in Aappendix C of this subpart to calculate 

2 its revenue percentage for its latest complete fiscal year. 

3 (2) Cash basis accounting. Except for institutional loans 

4 made to students under paragraph (a)(5)(i) of this section, the 

5 institution must use the cash basis of accounting in calculating 

6 its revenue percentage.

7 (3) Revenue generated from programs and activities. The 

8 institution must consider as revenue only those funds it 

9 generates from--

10 (i) Tuition, fees, and other institutional charges for 

11 students enrolled in eligible programs as defined in §668.8;

12 (ii) Activities conducted by the institution that are 

13 necessary for the education and training of its students 

14 provided those activities are--

15 (A) Conducted on campus or at a facility under the 

16 institution‘s control;

17 (B) Performed under the supervision of a member of the 

18 institution‘s faculty; and

19 (C) Required to be performed by all students in a specific 

20 educational program at the institution; and

21 (iii) Funds paid by a student, or on behalf of a student 

22 by a party other then the institution, for an education or 

23 training program that is not eligible under §668.8 if the

24 program—--

25 (A) Is approved or licensed by the appropriate State 

26 agency;

27 (B) Is accredited by an accrediting agency recognized by 

28 the Secretary under 34 CFR Ppart 602; or
60

1 (C) Provides an industry-recognized credential or

2 certification, or prepares students to take an examination for 

3 an industry-recognized credential or certification issued by an 

4 independent third party;

5 (D) Provides training needed for students to maintain

6 State licensing requirements; or

7 (E) Provides training needed for students to meet 

8 additional licensing requirements for specialized training for 

9 practitioners that already meet the general licensing 

10 requirements in that field.

11 (4) Application of funds. The institution must presume 

12 that any title IV, HEA program funds it disburses, or delivers, 

13 to or on behalf of a student will be used to pay the student‘s 

14 tuition, fees, or institutional charges, regardless of whether 

15 the institution credits the funds to the student‘s account or 

16 pays the funds directly to the student, except to the extent 

17 that the student‘s tuition, fees, or other charges are satisfied 

18 by—--

19 (i) Grant funds provided by non-Federal public agencies or 

20 private sources independent of the institution;

21 (ii) Funds provided under a contractual arrangement with a 

22 Federal, State, or local government agency for the purpose of 

23 providing job training to low-income individuals who need that 

24 training;

25 (iii) Funds used by a student from a savings plan for 

26 educational expenses established by or on behalf of the student 

27 if the saving plan qualifies for special tax treatment under the 

28 Internal Revenue Code of 1986; or

29 (iv) Institutional scholarships as provided under 

30 paragraph (a)(5)(iv) of this section.
61

1 (5) Revenue generated from institutional aid. The 

2 institution must include the following institutional aid as 

3 revenue:

4 (i) For loans made to students, including funds advanced 

5 to students under installment sales contracts, on or after July 

6 1, 2008 and prior to July 1, 2012, include as revenue the net 

7 present value of the loans made to students during the fiscal 

8 year, as calculated under paragraph (b) of this section, if the 

9 loans—--

10 (A) Are bona fide as evidenced by standalone repayment 

11 agreements between the students and the institution that are

12 enforceable promissory notes or installment sales contracts;

13 (B) Are issued at intervals related to the institution‘s 

14 enrollment periods; and

15 (C) Are subject to regular loan repayments and collections

16 by the institution; and

17 (D) Are separate from the enrollment contracts signed by 

18 the students.

19 (ii) For loans made to students before July 1, 2008, 

20 include as revenue only the amount of payments made on those 

21 loans that the institution received during the fiscal year;.

22 (iii) For loans made to students on or after July 1, 2012, 

23 include as revenue only the amount of payments made on those 

24 loans that the institution received during the fiscal year; and.

25 (iv) For scholarships provided by the institution in the 

26 form of monetary aid or tuition discount and based on the 

27 academic achievement or financial need of its students, include 

28 as revenue the amount disbursed to students during the fiscal 

29 year. The scholarships must be disbursed from an established 
62

1 restricted account and only to the extent that the funds in that 

2 account represent designated funds from an outside source or 

3 income earned on those funds.

4 (6) Revenue generated from loan funds in excess of loan 

5 limits prior to the Ensuring Continued Access to Student Loans 

6 Act of 2008 (ECASLA). For each student who receives an 

7 unsubsidized loan under the FFEL or Direct Loan programs on or 

8 after July 1, 2008 and prior to July 1, 2011, the amount of the 

9 loan disbursement for a payment period that exceeds the 

10 disbursement for which the student would have been eligible for 

11 that payment period under the loan limit in effect on the day 

12 prior to enactment of the ECASLA is included as revenue from a 

13 source other than title IV, HEA program funds but only to the 

14 extent that the excess amount pays for tuition, fees, or 

15 institutional charges remaining on the student‘s account after 

16 title IV, HEA program funds are applied. 

17 (7) Funds excluded from revenues. For the fiscal year, 

18 the institution does not include--

19 (i) The amount of Federal Work Study (FWS) wages paid 

20 directly to the student. However, if the institution credits 

21 the student‘s account with FWS funds, those funds are included 

22 as revenue;

23 (ii) The amount of funds received by the institution from 

24 a State under the LEAP, SLEAP, or GAP programs;

25 (iii) The amount of institutional funds used to match

26 title IV, HEA program funds;

27 (iv) The amount of title IV, HEA program funds refunded or 

28 returned under §668.22, including funds refunded or returned 

29 under paragraph (a)(6) of this section; or
63

1 (v) The amount the student is charged for books, supplies, 

2 and equipment unless the institution includes that amount as 

3 tuition, fees, or other institutional charges.

4 (b) Net Ppresent Vvalue (NPV). (1) As illustrated in 

5 Aappendix C of this subpart, an institution calculates the NPV 

6 of the loans it made under paragraph (a)(5)(i) of this section 

7 by—--

8 (i) Using the formula, NPV = sum of the discounted cash 

flows R

t/(1+i)t

9 , where--

10 (A) The variable ―i" is the discount rate. For purposes 

11 of this section, an institution must use the most recent annual 

12 inflation rate as the discount rate;

13 (B) The variable ―t‖ is time or period of the cash flow, 

14 in years, from the time the loan entered repayment; and

(C) The variable ―R

t

15 ‖ is the net cash flow at time or 

16 period t; and

17 (ii) Applying the NPV formula to From the loans made 

18 during the fiscal year by--

19 (A) If the loans have substantially the same repayment 

20 period, using that repayment period for the range of values of 

21 variable ―t”; or

22 (B) Grouping the loans by repayment period and using the 

23 repayment period for each group for the range of values of 

24 variable ―t‖; and

25 (C) For each group of loans, as applicable, multiplying 

26 the total annual payments due on the loans by the institution‘s 

27 loan collection rate (e.g., the total amount of payments 

28 collected divided by the total amount of payments due). The 
64

1 resulting amount is used for variable ―R‖ in each period ―t‖, 

2 for each group of loans that a NPV is calculated; or.

3 (2) Instead of performing the calculations in paragraph 

4 (b)(1) of this section, using 50 percent of the total amount of 

5 loans that the institution made during the fiscal year as the 

6 NPV. However, if the institution chooses to use this 50 percent 

7 calculation, the institution may not sell any of these loans 

8 until they have been in repayment for at least two years.

9 (c) Sanctions. If an institution does not derive at least 

10 ten10 percent of its revenue from sources other than title IV, 

11 HEA program funds--

12 (1) For two consecutive fiscal years, it loses its 

13 eligibility to participate in the title IV, HEA programs for at 

14 least two fiscal years. To regain eligibility, the institution 

15 must demonstrate that it complied with the State licensure and 

16 accreditation requirements under 34 CFR 600.5(a)(4) and (a)(6), 

17 and the financial responsibility requirements under subpart L of 

18 this part, for a minimum of two fiscal years after the fiscal 

19 year it became ineligible; or

20 (2) For any fiscal year, it becomes provisionally 

21 certified under §668.13(c)(1)(ii) for the two fiscal years after 

22 the fiscal year it failed to satisfy the revenue requirement. 

23 However, the institution‘s provisional certification terminates 

24 on--

25 (i) The expiration date of institution‘s program 

26 participation agreement that was in effect on the date the 

27 Secretary determined the institution failed this requirement; or 

28 (ii) The date the institution loses its eligibility to 

29 participate under paragraph (c)(1) of this section; and
65

1 (3) It must notify the Secretary no later than 45 days 

2 after the end of its fiscal year that it failed to meet this 

3 requirement. 

4 (Authority: )

5 §668.13 Certification procedures

6 * * *

7 (c) Provisional certification. (1)(i) The Secretary may 

8 provisionally certify an institution if—

9 (iA) The institution seeks initial participation in a Title 

10 IV, HEA program;

11 (iiB) The institution is an eligible institution that has 

12 undergone a change in ownership that results in a change in 

13 control according to the provisions of 34 CFR part 600;

14 (iiiC) The institution is a participating institution—

15 (1A) That is applying for a certification that the 

16 institution meets the standards of this subpart;

17 (2B) That the Secretary determines has jeopardized its 

18 ability to perform its financial responsibilities by not meeting 

19 the factors of financial responsibility under §668.15 or the 

20 standards of administrative capability under §668.16; and

21 (3C) Whose participation has been limited or suspended 

22 under subpart G of this part, or voluntarily enters into 

23 provisional certification;

24 (ivD) The institution seeks a renewal of participation in a 

25 Title IV, HEA program after the expiration of a prior period of 

26 participation in that program; or

27 (vE) The institution is a participating institution that 

28 was accredited or preaccredited by a nationally recognized 
66

1 accrediting agency on the day before the Secretary withdrew the 

2 Secretary's recognition of that agency according to the 

3 provisions contained in 34 CFR part 603.

4 (ii) A proprietary institution‘s certification 

5 automatically becomes provisional if it does not derive at least 

6 te10n percent of its revenue for any fiscal year from sources 

7 other than title IV, HEA program funds, as required under 

8 §668.14(b)(16).

9 Statutory language: 

10 (d) IMPLEMENTATION OF NON-TITLE IV REVENUE REQUIREMENT.—

11 (1) CALCULATION.—In making calculations under subsection 

12 (a)(24), a proprietary institution of higher education shall—

13 (A) use the cash basis of accounting, except in the case of 

14 loans described in subparagraph (D)(i) that are made by the 

15 proprietary institution of higher education;

16 (B) consider as revenue only those funds generated by the 

17 institution from—

18 (i) tuition, fees, and other institutional charges for 

19 students enrolled in programs eligible for assistance under this 

20 title;

21 (ii) activities conducted by the institution that are 

22 necessary for the education and training of the institution‘s 

23 students, if such activities are—

24 (I) conducted on campus or at a facility under the control 

25 of the institution;

26 (II) performed under the supervision of a member of the 

27 institution‘s faculty; and
67

1 (III) required to be performed by all students in a 

2 specific educational program at the institution; and

3 (iii) funds paid by a student, or on behalf of a student by 

4 a party other than the institution, for an education or training 

5 program that is not eligible for funds under this title, if the 

6 program—

7 (I) is approved or licensed by the appropriate State 

8 agency;

9 (II) is accredited by an accrediting agency recognized by 

10 the Secretary; or

11 (III) provides an industry-recognized credential or 

12 certification;

13 (C) presume that any funds for a program under this title 

14 that are disbursed or delivered to or on behalf of a student 

15 will be used to pay the student‘s tuition, fees, or other 

16 institutional charges, regardless of whether the institution 

17 credits those funds to the student‘s account or pays those funds 

18 directly to the student, except to the extent that the student‘s 

19 tuition, fees, or other institutional charges are satisfied by—

20 (i) grant funds provided by non-Federal public agencies or 

21 private sources independent of the institution;

22 (ii) funds provided under a contractual arrangement with a 

23 Federal, State, or local government agency for the purpose of 

24 providing job training to low-income individuals who are in need 

25 of that training;

26 (iii) funds used by a student from savings plans for 

27 educational expenses established by or on behalf of the student 

28 and which qualify for special tax treatment under the Internal 

29 Revenue Code of 1986; or
68

1 (iv) institutional scholarships described in subparagraph 

2 (D)(iii);

3 (D) include institutional aid as revenue to the school only 

4 as follows:

5 (i) in the case of loans made by a proprietary institution 

6 of higher education on or after July 1, 2008 and prior to July 

7 1, 2012, the net present value of such loans made by the 

8 institution during the applicable institutional fiscal year 

9 accounted for on an accrual basis and estimated in accordance 

10 with generally accepted accounting principles and related 

11 standards and guidance, if the loans—

12 (I) are bona fide as evidenced by enforceable promissory 

13 notes;

14 (II) are issued at intervals related to the institution‘s 

15 enrollment periods; and

16 (III) are subject to regular loan repayments and 

17 collections;

18 (ii) in the case of loans made by a proprietary institution 

19 of higher education on or after July 1, 2012, only the amount of 

20 loan repayments received during the applicable institutional 

21 fiscal year, excluding repayments on loans made and accounted 

22 for as specified in clause (i); and

23 (iii) in the case of scholarships provided by a proprietary 

24 institution of higher education, only those scholarships 

25 provided by the institution in the form of monetary aid or 

26 tuition discounts based upon the academic achievements or 

27 financial need of students, disbursed during each fiscal year 

28 from an established restricted account, and only to the extent 

29 that funds in that account represent designated funds from an 

30 outside source or from income earned on those funds;
69

1 (E) in the case of each student who receives a loan on or 

2 after July 1, 2008, and prior to July 1, 2011, that is 

3 authorized under section 428H or that is a Federal Direct 

4 Unsubsidized Stafford Loan, treat as revenue received by the 

5 institution from sources other than funds received under this 

6 title, the amount by which the disbursement of such loan 

7 received by the institution exceeds the limit on such loan in 

8 effect on the day before the date of enactment of the Ensuring 

9 Continued Access to Student Loans Act of 2008; and

10 (F) exclude from revenues—

11 (i) the amount of funds the institution received under part 

12 C, unless the institution used those funds to pay a student‘s 

13 institutional charges;

14 (ii) the amount of funds the institution received under 

15 subpart 4 of part A;

16 (iii) the amount of funds provided by the institution as 

17 matching funds for a program under this title;

18 (iv) the amount of funds provided by the institution for a 

19 program under this title that are required to be refunded or 

20 returned; and

21 (v) the amount charged for books, supplies, and equipment, 

22 unless the institution includes that amount as tuition, fees, or 

23 other institutional charges.

24 (2) SANCTIONS.—

25 (A) INELIGIBILITY.—A proprietary institution of higher 

26 education that fails to meet a requirement of subsection (a)(24) 

27 for two consecutive institutional fiscal years shall be 

28 ineligible to participate in the programs authorized by this 

29 title for a period of not less than two institutional fiscal 
70

1 years. To regain eligibility to participate in the programs 

2 authorized by this title, a proprietary institution of higher 

3 education shall demonstrate compliance with all eligibility and 

4 certification requirements under section 498 for a minimum of 

5 two institutional fiscal years after the institutional fiscal 

6 year in which the institution became ineligible.

7 (B) ADDITIONAL ENFORCEMENT.—In addition to such other means 

8 of enforcing the requirements of this title as may be available 

9 to the Secretary, if a proprietary institution of higher 

10 education fails to meet a requirement of subsection (a)(24) for 

11 any institutional fiscal year, then the institution‘s 

12 eligibility to participate in the programs authorized by this 

13 title becomes provisional for the two institutional fiscal years 

14 after the institutional fiscal year in which the institution 

15 failed to meet the requirement of subsection (a)(24), except 

16 that such provisional eligibility shall terminate—

17 (i) on the expiration date of the institution‘s program 

18 participation agreement under this subsection that is in effect 

19 on the date the Secretary determines that the institution failed 

20 to meet the requirement of subsection (a)(24); or

21 (ii) in the case that the Secretary determines that the 

22 institution failed to meet a requirement of subsection (a)(24) 

23 for two consecutive institutional fiscal years, on the date the 

24 institution is determined ineligible in accordance with 

25 subparagraph (A).

26 (3) PUBLICATION ON COLLEGE NAVIGATOR WEBSITE.—The Secretary 

27 shall publicly disclose on the College Navigator website—

28 (A) the identity of any proprietary institution of higher 

29 education that fails to meet a requirement of subsection 

30 (a)(24); and
71

1 (B) the extent to which the institution failed to meet such 

2 requirement.

3 (4) REPORT TO CONGRESS.—Not later than July 1, 2009, and 

4 July 1 of each succeeding year, the Secretary shall submit to 

5 the authorizing committees a report that contains, for each 

6 proprietary institution of higher education that receives 

7 assistance under this title, as provided in the audited 

8 financial statements submitted to the Secretary by each 

9 institution pursuant to the requirements of subsection (a)(24)—

10 (A) the amount and percentage of such institution‘s 

11 revenues received from sources under this title; and

12 (B) the amount and percentage of such institution‘s 

13 revenues received from other sources.

14

15
72

1 Issue Paper #10

2 Origin: HEOA

3 Issue: Consumer Information

4 Statutory cites: Section 485(a) of the HEA

5 Regulatory cites: 668.43(c)

6 DCL GEN-08-12 cite: Pages 95-96

7 Summary of issue: The HEOA expands the list of information that 

8 institutions are required to make available to prospective and 

9 enrolled students. In addition to the requirements listed in 

10 §485(a) of the HEA, institutions must now also include 

11 information on:

12 ● The placement of and types of employment obtained by 

13 graduates of the institutions‘ degree or certificate programs;

14 ● The types of graduate and professional education in which 

15 graduates of the institutions‘ four-year degree programs 

16 enrolled; and 

17 ● The retention rates of certificate or degree seeking first18 time full-time undergraduate students entering the 

19 institution.

20 The HEOA provides that the information in the first two 

21 bullets may be gathered from sources such as alumni surveys, 

22 student satisfaction surveys, the National Survey of Student 

23 Engagement, the Community College Survey of Student Engagement, 

24 State data systems, or other relevant sources.

25 The HEOA amends subparagraph (L) of section 485(a)(1) of 

26 the HEA regarding completion and graduation rates disclosed to 

27 exclude the completion or graduation rates of students who leave 

28 school to serve in the Armed Forces, on official church 
73

1 missions, or with a recognized foreign aid service of the 

2 Federal Government. In cases where these types of students

3 represent 20 percent or more of the certificate or degree4 seeking full-time undergraduate students at the institution, the 

5 institution may recalculate the completion or graduate rates of 

6 such students by excluding from the calculation the time period 

7 such students weren‘t enrolled due to their service in those 

8 categories. The same exclusions from reporting requirements are 

9 also reflected in amended section 485(e) of the HEA with respect 

10 to the disclosure of athletically related graduation rates.

11 The HEOA now also requires institutions to disaggregate 

12 completion and graduation rate data with respect to (1) existing 

13 section 485(a)(1)(L) of the HEA, which requires institutions to 

14 disclose the completion and graduation rate of certificate- or 

15 degree-seeking, full-time, undergraduate students; and (2) 

16 existing section 485(e) of the HEA, which requires institutions 

17 to disclose and submit annually to the Department completion or 

18 graduation rates for student-athletes. The data must be 

19 disaggregated based on gender, race/ethnicity and receipt of a 

20 Federal Pell Grant, receipt of a FFEL or Direct Loan (but not an 

21 unsubsidized Stafford or Federal Direct Unsubsidized Stafford) 

22 but not a Federal Pell Grant, and non- receipt of a Federal Pell 

23 Grant or Federal loans (other than an unsubsidized Stafford or 

24 Federal Direct Unsubsidized Stafford). The HEOA provides an 

25 exception where institutions may note instances where the 

26 statistical number is too small and would not yield 

27 statistically reliable information or would reveal personally 

28 identifiable information. These requirements will not apply to 

29 two-year degree-granting institutions until the 2011-2012 

30 academic year.

31
74

1 Updated information since 4/16:

2 We have 1) dropped the words ―on request‖ when describing 

3 general disclosure information that institutions must make 

4 available, 2) described the institution‘s placement data as 

5 ―information‖ instead of a ―rate,‖ and 3) dropped the reference 

6 to the National Survey of Student Engagement and the Community 

7 College Survey of Student Engagement as sources for data for 

8 placement in employment, and enrollment in graduate and 

9 professional education in 668.41 (d). With respect to the 

10 disaggregation of an institution‘s completion and graduation 

11 rate in 668.45, we have 1) clarified that a number of students 

12 who receive certain types of aid is insufficient to yield 

13 statistically reliable information if it is too small to be 

14 meaningful, and 2) specified that, in determining whether a 

15 student has received such aid, the institution will consider 

16 only whether the student has received the aid during the first 

17 year. And, in addressing the waiver for institutions that 

18 belong to an athletic association or conference that provides 

19 graduation and completion rate data, we have clarified that the 

20 waiver is only for the graduation and completion rate data. 

21 Tentative agreement:

22 Regulatory language:

23 §668.41 Reporting and disclosure of information.

24 * * *

25 (d) General disclosures for enrolled or prospective 

26 students. An institution must make available to any enrolled 

27 student or prospective student, on request, through appropriate 

28 publications, mailings or electronic media, information 

29 concerning—
75

1 (1) Financial assistance available to students enrolled in 

2 the institution (pursuant to §668.42);

3 (2) The institution (pursuant to §668.43); 

4 (3) The institution‘s retention rate (pursuant to §668.45). 

5 In the case of a request from a prospective student, the 

6 information must be made available prior to the student's 

7 enrolling or entering into any financial obligation with the 

8 institution;

9 (4) The institution's completion or graduation rate and, if 

10 applicable, its transfer-out rate (pursuant to §668.45). In the 

11 case of a request from a prospective student, the information 

12 must be made available prior to the student's enrolling or 

13 entering into any financial obligation with the institution;

14 (5) The institution‘s placement rate information. The 

15 placement of, and types of employment obtained by, graduates of 

16 the institution‘s degree or certificate programs. This 

17 information may be gathered from alumni surveys, student 

18 satisfaction surveys, the National Survey of Student Engagement, 

19 the Community College Survey of Student Engagement, State data 

20 systems, or other relevant sources, however the institution must 

21 disclose the source of the information; and

22 (6) The types of graduate and professional education in 

23 which graduates of the institution‘s four-year degree programs 

24 enroll. This information may be gathered from alumni surveys, 

25 student satisfaction surveys, the National Survey of Student 

26 Engagement, State data systems, or other relevant sources, 

27 however the institution must disclose the source of the 

28 information.

29 * * *
76

1 (g) Enrolled students, prospective students, and the 

2 public—report on athletic program participation rates and 

3 financial support data. (1)(i) An institution of higher 

4 education subject to §668.47 must, not later than October 15 of 

5 each year, make available on request to enrolled students, 

6 prospective students, and the public, the report produced 

7 pursuant to §668.47(c). The institution must make the report 

8 easily accessible to students, prospective students, and the 

9 public and must provide the report promptly to anyone who 

10 requests it.

11 (ii) The institution must provide notice to all enrolled 

12 students, pursuant to paragraph (c)(1) of this section, and 

13 prospective students of their right to request the report 

14 described in paragraph (g)(1) of this section. If the 

15 institution chooses to make the report available by posting the 

16 disclosure on an Internet website or an Intranet website, it 

17 must provide in the notice the exact electronic address at which 

18 the report is posted, a brief description of the report, and a 

19 statement that the institution will provide a paper copy of the 

20 report on request. For prospective students, the institution may 

21 not use an Intranet website for this purpose.

22 (2) An institution must submit the report described in 

23 paragraph (g)(1)(i) of this section to the Secretary within 15 

24 days of making it available to students, prospective students, 

25 and the public.

26 * * * * *

27 § 668.43 Institutional information. 

28 (a) Institutional information that the institution must 

29 make readily available upon request to enrolled and prospective 

30 students under this subpart includes, but is not limited to—
77

1 (1) The cost of attending the institution, including—

2 (i) Tuition and fees charged to full-time and part-time 

3 students;

4 (ii) Estimates of costs for necessary books and supplies;

5 (iii) Estimates of typical charges for room and board;

6 (iv) Estimates of transportation costs for students; and

7 (v) Any additional cost of a program in which a student is 

8 enrolled or expresses a specific interest;

9 (2) Any refund policy with which the institution is 

10 required to comply for the return of unearned tuition and fees 

11 or other refundable portions of costs paid to the institution;

12 (3) The requirements and procedures for officially 

13 withdrawing from the institution;

14 (4) A summary of the requirements under §668.22 for the 

15 return of title IV grant or loan assistance;

16 (5) The academic program of the institution, including—

17 (i) The current degree programs and other educational and 

18 training programs;

19 (ii) The instructional, laboratory, and other physical 

20 facilities which relate to the academic program; and

21 (iii) The institution's faculty and other instructional 

22 personnel;

23 (6) The names of associations, agencies or governmental 

24 bodies that accredit, approve, or license the institution and 

25 its programs and the procedures by which documents describing 

26 that activity may be reviewed under paragraph (b) of this 

27 section;
78

1 (7) A description of any special facilities and services 

2 available to disabled students;

3 (8) The titles of persons designated under §668.44 and 

4 information regarding how and where those persons may be 

5 contacted; and

6 (9) A statement that a student's enrollment in a program of 

7 study abroad approved for credit by the home institution may be 

8 considered enrollment at the home institution for the purpose of 

9 applying for assistance under the title IV, HEA programs.

10 (b) The institution must make available for review to any 

11 enrolled or prospective student, upon request, a copy of the 

12 documents describing the institution's accreditation, approval 

13 or licensing.

14 §668.45 Information on completion or graduation rates, transfer 

15 rates, and retention rates.

16 (a)(1) An institution annually must prepare the completion 

17 or graduation rate of its certificate- or degree-seeking, first18 time, full-time undergraduate students, as provided in paragraph 

19 (b) of this section, and the retention rate of its certificate 

20 or degree seeking, first-time, full-time undergraduate students 

21 as provided in paragraph (d).

22 (2) An institution that determines that its mission 

23 includes providing substantial preparation for students to 

24 enroll in another eligible institution must prepare the 

25 transfer-out rate of its certificate- or degree-seeking, first26 time, full-time undergraduate students, as provided in paragraph 

27 (c) of this section.

28 (3)(i) An institution that offers a predominant number of 

29 its programs based on semesters, trimesters, or quarters must 

30 base its completion or graduation rate, retention rate, and, if 
79

1 applicable, transfer-out rate on the cohort of first-time, 

2 certificate- or degree-seeking, full-time undergraduate students 

3 who enter the institution during the fall term of each year.

4 (ii) An institution not covered by the provisions of 

5 paragraph (a)(3)(i) of this section must base its completion or 

6 graduation rate, retention rate, and, if applicable, transfer7 out rate on the cohort of first-time, certificate- or degree8 seeking, full-time undergraduate students who enter the 

9 institution between September 1 of one year and August 31 of the 

10 following year.

11 (4)(i) An institution covered by the provisions of 

12 paragraph (a)(3)(i) of this section must count as an entering 

13 student a first-time undergraduate student who is enrolled as of 

14 October 15, the end of the institution's drop-add period, or 

15 another official reporting date as defined in §668.41(a).

16 (ii) An institution covered by paragraph (a)(3)(ii) of this 

17 section must count as an entering student a first-time 

18 undergraduate student who is enrolled for at least—

19 (A) 15 days, in a program of up to, and including, one year 

20 in length; or

21 (B) 30 days, in a program of greater than one year in 

22 length.

23 (5) An institution must make available its completion or 

24 graduation rate, retention rate, and, if applicable, transfer25 out rate, no later than the July 1 immediately following the 12-

26 month period ending August 31 during which 150% of the normal 

27 time for completion or graduation has elapsed for all of the 

28 students in the group on which the institution bases its 

29 completion or graduation rate, retention rate, and, if 

30 applicable, transfer-out rate.
80

1 (6)(i) Completion or graduation rate information must be 

2 disaggregated by gender, by each major racial and ethnic 

3 subgroup, by recipients of a Federal Pell Grant, by recipients 

4 of a Federal Family Education Loan or a Federal Direct Loan 

5 (other than an Unsubsidized Stafford Loan made under the Federal 

6 Family Education Loan Program or a Federal Direct Unsubsidized 

7 Stafford Loan) who did not receive a Federal Pell Grant, and by 

8 recipients of neither a Federal Pell Grant nor a Federal Family 

9 Education Loan or a Federal Direct Loan (other than an 

10 Unsubsidized Stafford Loan made under the Federal Family 

11 Education Loan Program or a Federal Direct Unsubsidized Stafford 

12 Loan)if the number of students in such group or with such status 

13 is sufficient to yield statistically reliable information and 

14 reporting will not reveal personally identifiable information 

15 about an individual student. If such number is not sufficient 

16 for such purpose, i.e., is too small to be meaningful, then the 

17 institution shall note that the institution enrolled too few of 

18 such students to so disclose or report with confidence and 

19 confidentiality. 

20 (ii) With respect to the requirement in (6)(i) of this 

21 paragraph to disaggregate the completion or graduation rate 

22 information by the receipt or non receipt of Federal student 

23 aid, students shall be considered to have received the aid in 

24 question only if they received such aid in the first year of 

25 their enrollment in their program. 

26 (iii) The requirement in (6)(i) of this paragraph shall not 

27 apply to two-year, degree-granting institutions of higher 

28 education until academic year 2011-2012.

29 (b) In calculating the completion or graduation rate under 

30 paragraph (a)(1) of this section, an institution must count as 

31 completed or graduated—
81

1 (1) Students who have completed or graduated by the end of 

2 the 12-month period ending August 31 during which 150% of the 

3 normal time for completion or graduation from their program has 

4 lapsed; and

5 (2) Students who have completed a program described in 

6 §668.8(b)(1)(ii), or an equivalent program, by the end of the 

7 12-month period ending August 31 during which 150% of normal 

8 time for completion from that program has lapsed.

9 (c) In calculating the transfer-out rate under paragraph 

10 (a)(2) of this section, an institution must count as transfers11 out students who, by the end of the 12-month period ending 

12 August 31 during which 150% of the normal time for completion or 

13 graduation from the program in which they were enrolled has 

14 lapsed, have not completed or graduated but have subsequently 

15 enrolled in any program of an eligible institution for which its 

16 program provided substantial preparation.

17 (d) In calculating the retention rate under paragraph 

18 (a)(1) of this section, except as noted in paragraph (e) of this 

19 section, an institution must use the definition of a retention 

20 rate used by the Integrated Postsecondary Education Data System 

21 (IPEDS), which indicates that the retention rate is ―a measure 

22 of the rate at which students persist in their educational 

23 program at an institution, expressed as a percentage.‖ For 

24 four-year institutions , this is the percentage of first-time 

25 bachelors (or equivalent) degree-seeking undergraduates from the 

26 previous fall who are again enrolled in the current fall. For 

27 all other institutions this is the percentage of first-time 

28 degree/certificate-seeking students from the previous fall who 

29 either re-enrolled or successfully completed their program by 

30 the current fall.
82

1 (e) For the purpose of calculating a completion or 

2 graduation rate, a transfer-out rate, and a retention rate, an 

3 institution may 

4 (1) Exclude students who --

5 (i) Have left school to serve in the Armed Forces;

6 (ii) Have left school to serve on official church missions;

7 (iii) Have left school to serve with a foreign aid service 

8 of the Federal Government, such as the Peace Corps;

9 (iv) Are totally and permanently disabled; or

10 (v) Are deceased; or

11 (2) In cases where the students described in paragraphs 

12 (e)(1)(i) through (iv) of this paragraph represent 20 percent or 

13 more of the certificate- or degree-seeking, full-time, 

14 undergraduate students at the institution, recalculate the 

15 completion or graduation rates of those students by adding to 

16 the 150% time-frame they normally have to complete or graduate, 

17 as described in paragraph (b) of this section, the time period 

18 the students were not enrolled due to their service in the Armed 

19 Forces, on official church missions, or with a recognized 

20 foreign aid service of the Federal Government. 

21 (f)(1) The Secretary grants a waiver of the requirements of 

22 this section dealing with completion and graduation rate data to 

23 any institution that is a member of an athletic association or 

24 conference that has voluntarily published completion or 

25 graduation rate data, or has agreed to publish data, that the 

26 Secretary determines are substantially comparable to the 

27 completion or graduation rate data required by this section. 
83

1 (2) An institution that receives a waiver of the 

2 requirements of this section must still comply with the 

3 requirements of §668.41(d)(3) and (f).

4 (3) An institution, or athletic association or conference 

5 applying on behalf of an institution, that seeks a waiver under 

6 paragraph (f)(1) of this section must submit a written 

7 application to the Secretary that explains why it believes the 

8 data the athletic association or conference publishes are 

9 accurate and substantially comparable to the information 

10 required by this section.

11 (g) In addition to calculating the completion or graduation 

12 rate and the retention rate required by paragraph (a)(1) of this 

13 section, an institution may, but is not required to—

14 (1) Calculate a completion or graduation rate for students 

15 who transfer into the institution;

16 (2) Calculate a completion or graduation rate,, , and a 

17 retention rate for students described in paragraphs (e)(1) 

18 through (4) of this section; and

19 (3) Calculate a transfer-out rate as specified in paragraph 

20 (c) of this section, if the institution determines that its 

21 mission does not include providing substantial preparation for 

22 its students to enroll in another eligible institution.

23 §668.48 Report on completion or graduation rates for student24 athletes.

25 * * *

26 (b) The provisions of §668.45 (a), (b), (c), and (e) apply 

27 for purposes of calculating the completion or graduation rates 

28 and, if applicable, transfer-out rates required under paragraphs 

29 (a)(1)(iii) through (vi) of this section.
84

1 * * * * *

2 Statutory Language:

3 SEC. 485 INSTITUTIONAL AND FINANCIAL ASSISTANCE INFORMATION FOR 

4 STUDENTS.

5 (a) INFORMATION DISSEMINATION ACTIVITIES.—

6 (1) Each eligible institution participating in any program 

7 under this title shall carry out information dissemination 

8 activities for prospective and enrolled students (including 

9 those attending or planning to attend less than full time) 

10 regarding the institution and all financial assistance under 

11 this title. The information required by this section shall be 

12 produced and be made readily available upon request, through 

13 appropriate publications, mailings, and electronic media, to an 

14 enrolled student and to any prospective student. Each eligible 

15 institution shall, on an annual basis, provide to all enrolled 

16 students a list of the information that is required to be 

17 provided by institutions to students by this section and section 

18 444 of the General Education Provisions Act (also referred to as 

19 the Family Educational Rights and Privacy Act of 1974), together 

20 with a statement of the procedures required to obtain such 

21 information. The information required by this section shall 

22 accurately describe—

23 * * * * *

24 (R) the placement in employment of, and types of employment 

25 obtained by, graduates of the institution‘s degree or 

26 certificate programs, gathered from such sources as alumni 

27 surveys, student satisfaction surveys, the National Survey of 

28 Student Engagement, the Community College Survey of Student 

29 Engagement, State data systems, or other relevant sources;
85

1 (S) the types of graduate and professional education in 

2 which graduates of the institution‘s four-year degree programs 

3 enrolled, gathered from such sources as alumni surveys, student 

4 satisfaction surveys, the National Survey of Student Engagement, 

5 State data systems, or other relevant sources;

6 * * * * * 

7 (U) the retention rate of certificate- or degree-seeking, 

8 first-time, full-time, undergraduate students entering such 

9 institution; and

10 * * * * *

11 (3) In calculating the completion or graduation rate under 

12 subparagraph (L) of paragraph (1) of this subsection or under 

13 subsection (e), a student shall be counted as a completion or 

14 graduation if, within 150 percent of the normal time for 

15 completion of or graduation from the program, the student has 

16 completed or graduated from the program, or enrolled in any 

17 program of an eligible institution for which the prior program 

18 provides substantial preparation. The information required to be 

19 disclosed under such subparagraph—

20 (A) shall be made available by July 1 each year to enrolled 

21 students and prospective students prior to the students 

22 enrolling or entering into any financial obligation; and

23 (B) shall cover the one-year period ending on August 31 of 

24 the preceding year.

25 (4) For purposes of this section, institutions may exclude 

26 from the information disclosed in accordance with subparagraph 

27 (L) of paragraph (1) the completion or graduation rates of 

28 students who leave school to serve in the armed services, on 

29 official church missions, or with a recognized foreign aid 

30 service of the Federal Government.
86

1 (4) For purposes of this section, institutions may—

2 (A) exclude from the information disclosed in accordance 

3 with subparagraph (L) of paragraph (1) the completion or 

4 graduation rates of students who leave school to serve in the 

5 Armed Forces, on official church missions, or with a recognized 

6 foreign aid service of the Federal Government; or 

7 (B) in cases where the students described in subparagraph 

8 (A) represent 20 percent or more of the certificate- or degree9 seeking, full-time, undergraduate students at the institution, 

10 recalculate the completion or graduation rates of such students 

11 by excluding from the calculation described in paragraph (3) the 

12 time period such students were not enrolled due to their service 

13 in the Armed Forces, on official church missions, or with a 

14 recognized foreign aid service of the Federal Government.

15 (5) The Secretary shall permit any institution of higher 

16 education that is a member of an athletic association or 

17 athletic conference that has voluntarily published completion or 

18 graduation rate data or has agreed to publish data that, in the 

19 opinion of the Secretary, is substantially comparable to the 

20 information required under this subsection, to use such data to 

21 satisfy the requirements of this subsection; and 

22 (6) Each institution may provide supplemental information 

23 to enrolled and prospective students showing the completion or 

24 graduation rate for students described in paragraph (4) or for 

25 students transferring into the institution or information 

26 showing the rate at which students transfer out of the 

27 institution.

28 (7)(A)(i) Subject to clause (ii), the information 

29 disseminated under paragraph (1)(L), or reported under 

30 subsection (e), shall be disaggregated by gender, by each major 
87

1 racial and ethnic subgroup, by recipients of a Federal Pell 

2 Grant, by recipients of a loan made under part B or D (other 

3 than a loan made under section 428H or a Federal Direct 

4 Unsubsidized Stafford Loan) who did not receive a Federal Pell 

5 Grant, and by recipients of neither a Federal Pell Grant nor a 

6 loan made under part B or D (other than a loan made under 

7 section 428H or a Federal Direct Unsubsidized Stafford Loan), if 

8 the number of students in such subgroup or with such status is 

9 sufficient to yield statistically reliable information and 

10 reporting will not reveal personally identifiable information 

11 about an individual student. If such number is not sufficient 

12 for such purposes, then the institution shall note that the 

13 institution enrolled too few of such students to so disclose or 

14 report with confidence and confidentiality.

15 (ii) The requirements of clause (i) shall not apply to two16 year, degree-granting institutions of higher education until 

17 academic year 2011-2012.

18

19
88

1 Issue Paper # 11

2 Origin: HEOA

3 Issue: Disclosure of Fire Safety Standards and Measures

4 Statutory cites: Section 485(i) of the HEA

5 Regulatory cites: §668.41 and §668.49

6 DCL GEN-08-12 cite: Pages 99-100

7 Summary of issue: The HEOA requires that all Title IV eligible 

8 institutions that participate in any Title IV program and that 

9 maintain on-campus student housing facilities publish an annual 

10 fire safety report, maintain a fire log, and report fire 

11 statistics to the Secretary.

12 Updated Information since 4/14-16 meetings: We have clarified in 

13 §668.41(e)(1) that only institutions with an on-campus student 

14 housing facility are required to distribute an annual fire 

15 safety report. We moved a paragraph describing how an 

16 institution may publish its annual fire safety report 

17 independently of its annual security report from §668.49 to 

18 §668.41. We clarified that publication of the annual fire 

19 safety report must begin by October 1, 2010 in §668.49(b). This 

20 date mirrors that of the annual security report. Finally, we 

21 clarified that the policies for fire safety education should 

22 include educating students and employees about the procedures to 

23 report a fire in §668.49(b)(6).

24

25 Regulatory language:

26 §668.41 Reporting and disclosure of information.

27 * * * * *

28 (e) Annual security report and annual fire safety report –
89

1 (1) Enrolled students and current employees – annual 

2 security report and annual fire safety report. By October 1 of 

3 each year, an institution must distribute, to all enrolled 

4 students and current employees, its annual security report 

5 described in §668.46(b), and, if the institution maintains an 

6 on-campus student housing facility, its annual fire safety 

7 report described in §668.49(b), through appropriate publications 

8 and mailings, including--

9 (2) Enrolled students – annual security report and annual 

10 fire safety report. If an institution chooses to distribute 

11 either its annual security report or annual fire safety report

12 to enrolled students by posting the disclosure or disclosures on 

13 an Internet Web site or an Intranet Web site, the institution 

14 must comply with the requirements of paragraph (c)(2) of this 

15 section.

16 (3) Current employees – annual security report and annual 

17 fire safety report. If an institution chooses to distribute 

18 either its annual security report or its annual fire safety 

19 report to current employees by posting the disclosure or 

20 disclosures on an Internet Web site or an Intranet Web site, the 

21 institution must, by October 1 of each year, distribute to all 

22 current employees a notice that includes a statement of the 

23 report‘s availability, the exact electronic address at which the 

24 report is posted, a brief description of the report‘s contents, 

25 and a statement that the institution will provide a paper copy 

26 of the report upon request.

27 (4) Prospective students and prospective employees – annual 

28 security report and annual fire safety report. For each of the 

29 reports, tThe institution must provide a notice to prospective 

30 students and prospective employees that includes a statement of 

31 the report‘s availability, a description of its contents, and an 
90

1 opportunity to request a copy. An institution must provide its 

2 annual security report or its and annual fire safety report, 

3 upon request, to a prospective student or prospective employee. 

4 If the institution chooses to provide either its annual security 

5 report or its annual fire safety report to prospective students 

6 and prospective employees by posting the disclosure on an 

7 Internet Web site, the notice described in this paragraph must 

8 include the exact electronic address at which the report is 

9 posted, a brief description of the report, and a statement that 

10 the institution will provide a paper copy of the report upon 

11 request.

12 (5) Submission to the Secretary – annual security report 

13 and annual fire safety report. Each year, by the date and in a 

14 form specified by the Secretary, an institution must submit the 

15 statistics required by §668.46(c) and §668.49(c) to the 

16 Secretary.

17 (6) Publication of the annual fire safety report. In 

18 complying with section 668.41(e), aAn institution may publish 

19 its annual fire safety report concurrently with its annual 

20 security report only if the title of the report clearly states 

21 that the report contains both the annual security report and the 

22 annual fire safety report. If an institution chooses to publish 

23 the annual fire safety report separately from the annual 

24 security report, it must include information in each of the two 

25 reports about how to directly access the other report.

26 * * * * *

27 §668.49 Institutional fire safety policies and fire statistics.

28 (a) Additional definitions that apply to this section.
91

1 Cause of fire: The cause of ignition of a fire, as defined 

2 in the National Fire Incident Reporting System Complete 

3 Reference Guide. 

4 Cause of fire: The factor or factors that give rise to a 

5 fire. The causal factor may be, but is not limited to, the 

6 result of an intentional or unintentional action, mechanical 

7 failure, or act of nature.

8 Fire: Any instance of open flame or other burning in a 

9 place or manner not intended to contain the burning.

10 Fire drill: A supervised practice of a mandatory evacuation 

11 of a building for a fire. 

12 Fire-related injury: Any instance in which a person is 

13 injured as a result of a fire, including an injuriesy sustained

14 from a natural or accidental causes, sustained while involved in 

15 the activities of fire control, attempting rescue, or escaping 

16 from the dangers of the fire. Theis term person may include 

17 students, faculty, staff, visitors, firefighters, or any other 

18 persons injured as a result of a fire individuals.

19 Fire-related death: Any instance in which a person is

20 (1) Is killed as a result of a fire, including deaths

21 resulting from a natural or accidental causes sustained while 

22 involved in the activities of fire control, attempting rescue, 

23 or escaping from the dangers of a fire; or

24 (2) Deaths also include people who die Dies within one year 

25 of injuries sustained as a result of the fire.

26 Fire safety system: Any mechanism or system related to the 

27 detection of a fire, the warning resulting from a fire, or the 

28 control of a fire. This may include system includes sprinkler 

29 systems or other fire extinguishing systems, fire detection 
92

1 devices, stand-alone smoke alarms, devices that alert one to the 

2 presence of a fire, such as horns, bells, or strobe lights; 

3 smoke-control and reduction mechanisms; and fire doors and walls 

4 that reduce the spread of a fire.

5 Value of Property Damage: The estimated value of the loss 

6 of the structure and contents, in terms of the cost of 

7 replacement in like kind and quantity. This estimate should 

8 include contents damaged by fire, and related damages caused by

9 smoke, water, and overhaul; however, it does not include 

10 indirect loss, such as business interruption. 

11 (b) Annual fire safety report. Beginning by October 1, 

12 2010, aAn institution that maintains any on-campus student 

13 housing facility must prepare an annual fire safety report that 

14 contains, at a minimum, the following information:

15 (1) The fire statistics described in paragraph (c) of this 

16 section.

17 (2) A description of each on-campus student housing 

18 facility fire safety system. and sprinkler system. including the 

19 type, age, design, area overed, activation sensitivity, and

20 other pertinent information;

21 (3) The number of fire drills held during the previous 

22 calendar year.

23 (4) The institution‘s policies or rules on portable 

24 electrical appliances, smoking, and open flames in a student 

25 housing facility. 

26 (5) The institution‘s procedures for student housing

27 evacuation in the case of a fire.

28 (6) For purposes of including a fire in the statistics in 

29 the annual fire safety report, a list of the titles of each 
93

1 person or organization to which students and employees reported 

2 that a fire occurred. 

3 (67) The policies regarding fire safety education and 

4 training programs provided to the students, faculty, and staff. 

5 In these policies, the institution must describe the procedures 

6 that students and employees should follow in the case of a fire, 

7 including the titles of the persons to whom they should report 

8 that a fire occurred.

9 (78) Plans for future improvements in fire safety, if 

10 determined necessary by the institution.

11 (c) Fire statistics. (1) An institution must report 

12 statistics for each on-campus student housing facility, for the 

13 three most recent calendar years for which data are available, 

14 concerning15 (i) The number of fires and the cause of each fire;

16 (ii) The number of injuries related to a fire that resulted 

17 in treatment at a medical facility, including at an on-campus 

18 health center;

19 (iii) The number of deaths related to a fire; and

20 (iv) The value of property damage caused by a fire.

21 (2) An institution is required to submit a copy of the 

22 fire statistics in paragraph (c)(1) of this section to the 

23 Secretary on an annual basis.

24 (d) Publication of the annual fire safety report. (1) An 

25 institution must publish and distribute its annual fire safety 

26 report in accordance with paragraph (e) of this section. 

27 (2) An institution may publish its annual fire safety 

28 report concurrently with its annual security report only if the 

29 title of the report clearly states that the report contains both 
94

1 the annual security report and the annual fire safety report. 

2 If an institution chooses to publish the annual fire safety 

3 report separately from the annual security report, it must 

4 include information in each of the two reports about where or 

5 how to directly access the other. (Moved to 668.41(e))

6 (ed) Fire log. (1) An institution that maintains on-campus 

7 student housing facilities must maintain a written, easily 

8 understood fire log that records, by the date that the fire was 

9 reported, any fire that occurred in an on-campus student housing 

10 facility. This log must include the nature, date, time and 

11 general location of each fire.

12 (2) An institution must make an entry or an addition to an 

13 entry to the log within two business days, as defined under 

14 §668.46(a), of the receipt of the information. of the report of 

15 the information to the campus fire department.

16 (3) An institution must make the fire log for the most 

17 recent 60-day period open to public inspection during normal 

18 business hours. The institution must make any portion of the 

19 log older than 60 days available within two business days of a 

20 request for public inspection.

21 (4) An institution must make an annual report to the campus 

22 community on the fires recorded in the fire log. This report

23 requirement may be included in satisfied by the annual fire 

24 safety report described in paragraph (b) of this section.

25 Statutory Language:

26 (i) DISCLOSURE OF FIRE SAFETY STANDARDS AND MEASURES.—

27 (1) ANNUAL FIRE SAFETY REPORTS ON STUDENT HOUSING 

28 REQUIRED.—Each eligible institution participating in any program 

29 under this title that maintains on-campus student housing 

30 facilities shall, on an annual basis, publish a fire safety 
95

1 report, which shall contain information with respect to the 

2 campus fire safety practices and standards of that institution, 

3 including—

4 (A) statistics concerning the following in each on-campus 

5 student housing facility during the most recent calendar years 

6 for which data are available:

7 (i) the number of fires and the cause of each fire;

8 (ii) the number of injuries related to a fire that result 

9 in treatment at a medical facility;

10 (iii) the number of deaths related to a fire; and

11 (iv) the value of property damage caused by a fire;

12 (B) a description of each on-campus student housing 

13 facility fire safety system, including the fire sprinkler 

14 system;

15 (C) the number of regular mandatory supervised fire drills;

16 (D) policies or rules on portable electrical appliances, 

17 smoking, and open flames (such as candles), procedures for 

18 evacuation, and policies regarding fire safety education and 

19 training programs provided to students, faculty, and staff; and

20 (E) plans for future improvements in fire safety, if 

21 determined necessary by such institution.

22 (2) REPORT TO THE SECRETARY.—Each eligible institution 

23 participating in any program under this title shall, on an 

24 annual basis, submit to the Secretary a copy of the statistics 

25 required to be made available under paragraph (1)(A).

26 (3) CURRENT INFORMATION TO CAMPUS COMMUNITY.—Each eligible 

27 institution participating in any program under this title shall—
96

1 (A) make, keep, and maintain a log, recording all fires in 

2 on-campus student housing facilities, including the nature, 

3 date, time, and general location of each fire; and

4 (B) make annual reports to the campus community on such 

5 fires.

6 (4) RESPONSIBILITIES OF THE SECRETARY.—The Secretary shall—

7 (A) make the statistics submitted under paragraph (1)(A) to 

8 the Secretary available to the public; and

9 (B) in coordination with nationally recognized fire 

10 organizations and representatives of institutions of higher 

11 education, representatives of associations of institutions of 

12 higher education, and other organizations that represent and 

13 house a significant number of students—

14 (i) identify exemplary fire safety policies, procedures, 

15 programs, and practices, including the installation, to the 

16 technical standards of the National Fire Protection Association, 

17 of fire detection, prevention, and protection technologies in 

18 student housing, dormitories, and other buildings;

19 (ii) disseminate the exemplary policies, procedures, 

20 programs and practices described in clause (i) to the 

21 Administrator of the United States Fire Administration;

22 (iii) make available to the public information concerning 

23 those policies, procedures, programs, and practices that have 

24 proven effective in the reduction of fires; and

25 (iv) develop a protocol for institutions to review the 

26 status of their fire safety systems.

27 (5) RULES OF CONSTRUCTION.—Nothing in this subsection shall 

28 be construed to—
97

1 (A) authorize the Secretary to require particular policies, 

2 procedures, programs, or practices by institutions of higher 

3 education with respect to fire safety, other than with respect 

4 to the collection, reporting, and dissemination of information 

5 required by this subsection;

6 (B) affect section 444 of the General Education Provisions 

7 Act (the Family Educational Rights and Privacy Act of 1974) or 

8 the regulations issued under section 264 of the Health Insurance 

9 Portability and Accountability Act of 1996 (42 U.S.C. 1320d–2 

10 note);

11 (C) create a cause of action against any institution of 

12 higher education or any employee of such an institution for any 

13 civil liability; or

14 (D) establish any standard of care.

15 (6) COMPLIANCE REPORT.—The Secretary shall annually report 

16 to the authorizing committees regarding compliance with this 

17 subsection by institutions of higher education, including an up18 to-date report on the Secretary‘s monitoring of such compliance.

19 (7) EVIDENCE.—Notwithstanding any other provision of law, 

20 evidence regarding compliance or noncompliance with this 

21 subsection shall not be admissible as evidence in any proceeding 

22 of any court, agency, board, or other entity, except with 

23 respect to an action to enforce this subsection.

24
98

1 Issue Paper #12

2

3 Origin: HEOA

4 Issue: Missing Person Procedures

5 Statutory cites: Section 485(j) of the HEA

6 Regulatory cites: §668.41, §668.46(b)(14) and §668.46(h) 

7 DCL GEN-08-12 cite: Pages 100-101

8 Summary of issue: The HEOA requires Title IV eligible 

9 institutions that provide on-campus housing to establish, for 

10 students who reside in on-campus student housing, both a missing 

11 student notification policy that allows students to 

12 confidentially register a contact person and missing student 

13 notification procedures.

14 Updated information since 4/14-16 meeting: We clarified that the 

15 term an on-campus student housing facility is located on campus, 

16 as defined in 668.46(a). We also added language clarifying that 

17 only authorized campus officials may access students‘ 

18 confidential missing student contact information in 

19 §668.46(h)(1)(iv).

20 Regulatory Language:

21 §668.41 Reporting and disclosure of information.

22 (a) Definitions. The following definitions apply to this 

23 subpart:

24 * * *

25 On-Campus Student Housing Facility: A dormitory or other 

26 residential facility for students that is located on an 

27 institution‘s campus, as defined in 668.46(a).

28 * * * * *
99

1 §668.46 Institutional security policies and crime statistics.

2 (a) Additional definitions that apply to this section.

3 * * *

4 Test: Regularly scheduled drills, exercises, and 

5 appropriate follow-through activities, designed for assessment 

6 and evaluation of emergency plans and capabilities.

7 * * *

8 (b) Annual security report. An institution must prepare 

9 an annual security report that contains, at a minimum, the 

10 following information:

11 * * *

12 (13) Beginning with the annual security report distributed 

13 by October 1, 2010, a statement of policy regarding emergency 

14 response and evacuation procedures, as described in paragraph 

15 (g) of this section; and

16 (14) Beginning with the annual security report distributed 

17 by October 1, 2010, a statement of policy regarding missing 

18 person student notification procedures, as described in 

19 paragraph (h) of this section.

20 * * * * *

21 (h) Missing person student notification policies and 

22 procedures. 

23 (1) An institution that provides any on-campus student 

24 housing facility must include a statement of policy regarding 

25 missing student notification procedures in its annual security 

26 report. This statement must --

27 (i) Indicate a list of titles of the persons or 

28 organizations to which students and employees students, 
100

1 employees, or other individuals should report that a student has 

2 been missing for 24 hours; 

3 (ii) Require that any official missing person student

4 report must be referred immediately to the institution‘s police 

5 or campus security department, or, in the absence of a sworn law 

6 enforcement officer, an institutional police or campus security 

7 department, to the local law enforcement agency that has 

8 jurisdiction in the area;

9 (iii) Contain an option for each student living in an on10 campus student housing facility to identify a contact person or 

11 persons whom the institution shall notify if the student is 

12 determined missing by the campus security or police department,

13 institutional police or campus security department, or the local 

14 law enforcement agency; 

15 (iv) Advise students that their contact information will be 

16 registered confidentially, and that this information will be 

17 accessible only to authorized campus officials;

18 (v) Advise students that if they are under 18 years of age 

19 and not emancipated, the institution must notify a custodial 

20 parent or guardian when the student is missing, in addition to 

21 any additional contact person designated by the student; and

22 (vi) Advise students that, regardless of whether they name 

23 a contact person, unless the local law enforcement agency was 

24 the entity that made the determination that a student is 

25 missing, the institution will notify the local law enforcement 

26 agency that the student is missing.

27 (2) The procedures that the institution must will follow 

28 when a student who resides in an on-campus student housing 

29 facility is determined to have been missing for 24 hours include 

30 —-
101

1 (i) If the student has designated a contact person, the 

2 institution will notify notifying that contact person within 24 

3 hours;

4 (ii) If the student is under 18 years of age and is not 

5 emancipated, the institution will notify notifying the student‘s 

6 custodial parent or guardian and any other designated contact 

7 person within 24 hours; and

8 (iii) Regardless of whether the student has identified a contact 

9 person, is above the age of 18, or is an emancipated minor, the 

10 institution will inform informing the local law enforcement 

11 agency that has jurisdiction in the area that the student is 

12 missing within 24 hours.

13 Statutory Language:

14 (j) MISSING PERSON PROCEDURES.—

15 (1) OPTION AND PROCEDURES.—Each institution of higher 

16 education that provides on-campus housing and participates in 

17 any program under this title shall—

18 (A) establish a missing student notification policy for 

19 students who reside in on-campus housing that—

20 (i) informs each such student that such student has the 

21 option to identify an individual to be contacted by the 

22 institution not later than 24 hours after the time that the 

23 student is determined missing in accordance with official 

24 notification procedures established by the institution under 

25 subparagraph (B);

26 (ii) provides each such student a means to register 

27 confidential contact information in the event that the student 

28 is determined to be missing for a period of more than 24 hours;
102

1 (iii) advises each such student who is under 18 years of 

2 age, and not an emancipated individual, that the institution is 

3 required to notify a custodial parent or guardian not later 24 

4 hours after the time that the student is determined to be 

5 missing in accordance with such procedures;

6 (iv) informs each such residing student that the 

7 institution will notify the appropriate law enforcement agency 

8 not later than 24 hours after the time that the student is 

9 determined missing in accordance with such procedures; and

10 (v) requires, if the campus security or law enforcement 

11 personnel has been notified and makes a determination that a 

12 student who is the subject of a missing person report has been 

13 missing for more than 24 hours and has not returned to the 

14 campus, the institution to initiate the emergency contact 

15 procedures in accordance with the student‘s designation; and

16 (B) establish official notification procedures for a 

17 missing student who resides in on-campus housing that—

18 (i) includes procedures for official notification of 

19 appropriate individuals at the institution that such student has 

20 been missing for more than 24 hours;

21 (ii) requires any official missing person report relating 

22 to such student be referred immediately to the institution‘s 

23 police or campus security department; and

24 (iii) if, on investigation of the official report, such 

25 department determines that the missing student has been missing 

26 for more than 24 hours, requires—

27 (I) such department to contact the individual identified by 

28 such student under subparagraph (A)(i);
103

1 (II) if such student is under 18 years of age, and not an 

2 emancipated individual, the institution to immediately contact 

3 the custodial parent or legal guardian of such student; and

4 (III) if subclauses (I) or (II) do not apply to a student 

5 determined to be a missing person, inform the appropriate law 

6 enforcement agency.

7 (2) RULE OF CONSTRUCTION.—Nothing in this subsection shall 

8 be construed—

9 (A) to provide a private right of action to any person to 

10 enforce any provision of this subsection; or

11 (B) to create a cause of action against any institution of 

12 higher education or any employee of the institution for any 

13 civil liability.

14
104

1 Issue Paper # 13

2

3 Origin: HEOA

4 Issue: Hate Crime Reporting

5 Statutory cites: Section 485(f) of the HEA

6 Regulatory cites: §668.46(c)(3)

7 DCL GEN-08-12 cite: Page 98

8 Summary of issue: The HEOA expands the list of crimes that 

9 institutions must include in hate crime statistics reported to 

10 the Department to also include larceny-theft, simple assault, 

11 intimidation, and destruction/damage/vandalism of property.

12 Updated information since 4/14-16 meeting: The crimes 

13 definitions appendix contains the newly added definitions of the 

14 crimes added for the purposes of hate crime reporting, as well 

15 as definitions of crimes previously included in Appendix D of 

16 part 668 that have been updated since the last time that these 

17 regulations were negotiated.

18 Tentative agreement: YES

19 Regulatory language: 

20 668.46 Institutional security policies and crime statistics.

21 * * * * *

22 (c) * * *

23 (3) Reported crimes if a hate crime. An institution must 

24 report, by category of prejudice, the following crimes reported 

25 to local police agencies or to a campus security authority that 

26 manifest evidence that the victim was intentionally selected 

27 because of the victim‘s actual or perceived race, gender, 

28 religion, sexual orientation, ethnicity, or disability:
105

1 (i) Any crime it reports pursuant to paragraphs (c)(1)(i) 

2 through (vii) of this section.

3 (ii) The crimes of larceny-theft, simple assault, 

4 intimidation, and destruction/damage/or vandalism of property.

5 (iii) Any other crime involving bodily injury. 

6 [See Crime Appendix for updated and newly added definitions to 

7 Appendix D of part 668]

8

9 Statutory Language:

10 (f) DISCLOSURE OF CAMPUS SECURITY POLICY AND CAMPUS CRIME 

11 STATISTICS.—(1) Each eligible institution participating in any 

12 program under this title, other than a foreign institution 

13 higher education shall on August 1, 1991, begin to collect the 

14 following information with respect to campus crime statistics 

15 and campus security policies of that institution, and beginning 

16 September 1, 1992, and each year thereafter, prepare, publish, 

17 and distribute, through appropriate publications or mailings, to 

18 all current students and employees, and to any applicant for 

19 enrollment or employment upon request, an annual security report 

20 containing at least the following information with respect to 

21 the campus security policies and campus crime statistics of that 

22 institution:

23 * * * * *

24 (F) Statistics concerning the occurrence on campus, in or 

25 on noncampus buildings or property, and on public property 

26 during the most recent calendar year, and during the 2 preceding 

27 calendar years for which data are available—

28 (i) of the following criminal offenses reported to campus 

29 security authorities or local police agencies:
106

1 (I) murder;

2 (II) sex offenses, forcible or nonforcible;

3 (III) robbery;

4 (IV) aggravated assault;

5 (V) burglary;

6 (VI) motor vehicle theft;

7 (VII) manslaughter;

8 (VIII) arson; and

9 (IX) arrests or persons referred for campus disciplinary 

10 action for liquor law violations, drug-related violations, and 

11 weapons possession; and

12 (ii) of the crimes described in subclauses (I) through 

13 (VIII) of clause (i), of larceny-theft, simple assault, 

14 intimidation, and destruction, damage, or vandalism of property, 

15 and of other crimes involving bodily injury to any person, in 

16 which the victim is intentionally selected because of the actual 

17 or perceived race, gender, religion, sexual orientation, 

18 ethnicity, or disability of the victim that are reported to 

19 campus security authorities or local police agencies, which data 

20 shall be collected and reported according to category of 

21 prejudice.

22
107

1 Issue Paper # 14

2

3 Origin: HEOA

4 Issue: Reporting Emergency Response and Evacuation Procedures

5 Statutory cites: Section 485(f) of the HEA

6 Regulatory cites: §668.46(a), §668.46(b)(13), §668.46(e), and 

7 §668.46(g)

8 DCL GEN-08-12 cite: Page 98

9 Summary of issue: The HEOA requires institutions to include a 

10 statement of emergency response and evacuation procedures in the 

11 annual security report that describes how the institution will 

12 immediately notify the campus community upon the confirmation of 

13 a significant emergency or dangerous situation involving an 

14 immediate threat to the health or safety of students or staff 

15 occurring on the campus, unless the notification will compromise 

16 efforts to contain the emergency. 

17 ―Campus‖ is defined in 34 C.F.R. §668.46 as:

18  Any building or property owned or controlled by an 

19 institution within the same reasonably contiguous area 

20 and used by the institution in direct support of, or in a 

21 manner related to, the institution‘s educational 

22 purposes, including residence halls; and

23  Any building or property that is within or reasonably 

24 contiguous to the area identified above that is owned by 

25 the institution but controlled by another person, is 

26 frequently used by students, and supports institutional 

27 purposes (such as a food or other retail vendor).

28
108

1 Updated information since 4/14-16 meeting: We have clarified the 

2 distinction between a timely warning and an emergency 

3 notification in §668.46(e)(3) to say that if an institution 

4 follows its emergency notification procedures, it does not also 

5 have to do a timely warning based on the same circumstances; 

6 however, an institution must provide adequate follow-up 

7 information to the community as needed. We have also clarified 

8 in §668.46(g)(2)(ii) that an emergency notification may be sent 

9 to a segment or segments of the population if appropriate. We 

10 have added requirements that an institution include 1) a 

11 statement that it will not delay and take into account only the 

12 safety of the community in determining the content of the 

13 notification and initiating the system (668.46(g)(3)) and 2) a 

14 statement of procedures to provide information to the larger 

15 community (668.46(g)(5))

16 Regulatory language:

17 §668.46 Institutional security policies and crime statistics

18 (a)Additional definitions that apply to this section.

19 * * * * *

20 Test: Regularly scheduled drills, exercises, and 

21 appropriate follow-through activities, designed for assessment 

22 and evaluation of emergency plans and capabilities.

23 * * * * *

24 (b) Annual security report. An institution must prepare 

25 an annual security report that contains, at a minimum, the 

26 following information:

27 * * * * *

28 (13) Beginning with the annual security report distributed 

29 by October 1, 2010, a statement of policy regarding emergency 
109

1 response and evacuation procedures, as described in paragraph 

2 (g) of this section.

3 (14) Beginning with the annual security report distributed 

4 by October 1, 2010, a statement of policy regarding missing 

5 person notification procedures, as described in paragraph (h) of 

6 this section.

7 * * *

8 (e) Timely warning and emergency notification. (1) An 

9 institution must, in a manner that is timely and will aid in the 

10 prevention of similar crimes, report to the campus community on 

11 crimes that are –

12 (i) Described in paragraph (c)(1) and (3) of this section;

13 (ii) Reported to campus security authorities as identified 

14 under the institution‘s statement of current campus policies 

15 pursuant to paragraph (b)(2) of this section or local police 

16 agencies; and

17 (iii) Considered by the institution to represent a threat 

18 to students and employees.

19 (2) An institution is not required to provide a timely 

20 warning with respect to crimes reported to a pastoral or 

21 professional counselor.

22 (3) If there is an immediate threat to the health or safety 

23 of students or employees occurring on campus, as described in 

24 paragraph (g)(1) of this section, an institution must follow its 

25 emergency notification procedures. An institution that follows 

26 its emergency notification procedures is not required to issue a 

27 timely warning based on the same circumstances; however, the 

28 institution must provide adequate follow-up information to the 

29 community as needed. 
110

1 (3) The timely warning requirement does not apply in the 

2 circumstances covered under paragraph (g) of this section. In 

3 the case that there is an immediate threat to the health or 

4 safety of students or employees occurring on campus, as 

5 described in paragraph (g)(1) of this section, an institution‘s 

6 emergency notification procedures will supplant a timely warning 

7 communication.

8 * * * 

9 (g) Emergency Response and Evacuation Procedures. An 

10 institution must include a statement of policy regarding its 

11 emergency response and evacuation procedures in the annual 

12 security report. This statement must include --

13 (1) Procedures to immediately notify the campus community 

14 upon the confirmation of a significant emergency or dangerous 

15 situation involving an immediate threat to the health or safety 

16 of students or employees occurring on the campus.

17 (2) The positions of the individuals who will—

18 (2) A description of the process the institution will use 

19 to:

20 (i) Confirm that there is a significant emergency or 

21 dangerous situation as described in paragraph (g)(1) of this 

22 section;

23 (ii) Determine the appropriate segment or segments of the 

24 campus community to receive a notification;

25 (iii) Determine the content of the notification; and

26 (iii) Determine when to send the notification;

27 (iv) Initiate the notification system.
111

1 (3) Plans to ensure that the officials in (g)(2) of this 

2 paragraph are appropriately trained to carry out these duties.

3 (3) A statement that the institution will, without delay, 

4 and taking into account only the safety of the community, 

5 determine the content of the notification and initiate the 

6 notification system.

7 (4) A list of the titles of the person(s) or 

8 organization(s) responsible for carrying out the actions 

9 described in paragraph (g)(2) of this section.

10 (4) Procedures to notify parents and families in an 

11 emergency situation and provide accurate, timely information.

12 (5) Procedures for disseminating emergency information to 

13 the larger community.

14 (6) Procedures Plans to test the emergency response and 

15 evacuation procedures on at least an annual basis.

16 (i) A test may be announced or unannounced. but it must be 

17 conducted at a time when most of the students, faculty, and 

18 staff are expected to be present on campus.

19 (ii) At least annually, tThe institution must publicize its 

20 emergency response and evacuation procedures as part of in 

21 conjunction with at least one test per calendar year.

22 (iii) An institution must document each test, including a 

23 description of the exercise, the date, time, and whether it was 

24 announced or unannounced. 

25 (7) A statement that, unless issuing a notification will 

26 compromise efforts to contain the emergency, the institution 

27 will follow its emergency notification procedures in any 

28 situation that presents an immediate threat to the health or 

29 safety of students or employees occurring on campus. 
112

1 Statutory Language:

2 (f) DISCLOSURE OF CAMPUS SECURITY POLICY AND CAMPUS CRIME 

3 STATISTICS.—(1) Each eligible institution participating in any 

4 program under this title, other than a foreign institution 

5 higher education shall on August 1, 1991, begin to collect the 

6 following information with respect to campus crime statistics 

7 and campus security policies of that institution, and beginning 

8 September 1, 1992, and each year thereafter, prepare, publish, 

9 and distribute, through appropriate publications or mailings, to 

10 all current students and employees, and to any applicant for 

11 enrollment or employment upon request, an annual security report 

12 containing at least the following information with respect to 

13 the campus security policies and campus crime statistics of that 

14 institution:

15 * * * * *

16 (J) A statement of current campus policies regarding 

17 immediate emergency response and evacuation procedures, 

18 including the use of electronic and cellular communication (if 

19 appropriate), which policies shall include procedures to—

20 (i) immediately notify the campus community upon the 

21 confirmation of a significant emergency or dangerous situation 

22 involving an immediate threat to the health or safety of 

23 students or staff occurring on the campus, as defined in 

24 paragraph (6), unless issuing a notification will compromise 

25 efforts to contain the emergency;

26 (ii) publicize emergency response and evacuation procedures 

27 on an annual basis in a manner designed to reach students and 

28 staff; and

29 (iii) test emergency response and evacuation procedures on 

30 an annual basis.

31
113

1 Issue Paper #15

2 Origin: HEOA

3 Issue: Financial Assistance for individuals with intellectual 

4 disabilities

5 Statutory cites: Sections 484(s) and 760 of the HEA

6 Regulatory cites: §600.2, §600.4, §600.5, 600.6, §668.8, 

7 §600.32, §668.43, §668 new subpart O

8 DCL GEN-08-12 cite: Pages 94-95, 163-164

9 Summary of issue: The HEOA adds a provision to the HEA to 

10 expand eligibility for funding under the Federal Pell Grant, 

11 FSEOG, and FWS programs to students with intellectual 

12 disabilities. 

13 Updated information since 4/14-16 meeting: We have added new 

14 paragraph (6) to the definition of a comprehensive transition 

15 and postsecondary program in §668.231 to clarify that these 

16 programs must provide opportunities for students with 

17 intellectual disabilities to participate in coursework and other 

18 activities with students without disabilities. We have also 

19 modified §668.233(c) to make it clear that documentation is 

20 needed both to establish cognitive impairment and current or 

21 former eligibility for a free appropriate public education in 

22 order to meet the definition of a  ̳student with an intellectual 

23 disability.‘ 

24 Regulatory language:

25 §600.2 Definitions.

26 * * * * *

27 Educational program: (1) A legally authorized postsecondary 

28 program of organized instruction or study that:
114

1 (i) Leads to an academic, professional, or vocational 

2 degree, or certificate, or other recognized educational 

3 credential, or is leads to an outcome or outcomes established by 

4 the institution for students enrolled in a comprehensive 

5 transition and postsecondary program, as described in subpart O 

6 of part 668 34 CFR part 668, subpart O; and

7 (ii) May, in lieu of credit hours or clock hours as a 

8 measure of student learning, utilize direct assessment of 

9 student learning, or recognize the direct assessment of student 

10 learning by others, if such assessment is consistent with the 

11 accreditation of the institution or program utilizing the 

12 results of the assessment and with the provisions of §668.10.

13 * * * * *

14 §600.4 Institution of higher education.

15 * * *

16 (a)(4)(ii) That is at least a two-academic-year program 

17 acceptable for full credit toward a baccalaureate degree; or

18 (iii) That is at least a one-academic-year training program 

19 that leads to a certificate, degree, or other recognized 

20 educational credential and prepares students for gainful 

21 employment in a recognized occupation; and

22 * * *

23 (5) * * *

24 (ii) Approved by a State agency listed in the FEDERAL 

25 REGISTER in accordance with 34 CFR part 603, if the institution 

26 is a public postsecondary vocational educational institution 

27 that seeks to participate only in Federal assistance programs; 

28 and.
115

1 (6) May admit students with intellectual disabilities to a 

2 comprehensive transition and postsecondary program, as provided 

3 in subpart O of part 668 34 CFR part 668, subpart O.

4 * * * * *

5 §600.5 Proprietary institution of higher education.

6 * * *

7 (a)(5) Provides an eligible program of training, as defined 

8 in 34 CFR 668.8, to prepare students for gainful employment in a 

9 recognized occupation; 

10 * * *

11 (a)(7) Has been in existence for at least two years; and

12 (8) Has no more than 90 percent of its revenues derived 

13 from title IV, HEA program funds, as determined under paragraph 

14 (d) of this section; and.

15 (9) May admit students with intellectual disabilities to a 

16 comprehensive transition and postsecondary program, as provided 

17 in 34 CFR part 668, subpart O. 

18 * * * * *

19 §600.6 Postsecondary vocational institution.

20 * * * * *

21 (a)(4) Provides an eligible program of training, as defined 

22 in 34 CFR 668.8, to prepare students for gainful employment in a 

23 recognized occupation; 

24 (5) * * *

25 (ii) Approved by a State agency listed in the FEDERAL 

26 REGISTER in accordance with 34 CFR part 603, if the institution 

27 is a public postsecondary vocational educational institution 
116

1 that seeks to participate only in Federal assistance programs;

2 and

3 (6) Has been in existence for at least two years; and. 

4 (7) May admit students with intellectual disabilities to a 

5 comprehensive transition and postsecondary program, as provided 

6 in subpart O of part 668 34 CFR part 668, subpart O.

7 * * * * *

8 §668.8 Eligible program.

9 * * *

10 (n) For title IV, HEA program purposes, the term eligible 

11 program includes a direct assessment program approved by the 

12 Secretary under 34 CFR §668.10 and a comprehensive transition 

13 and postsecondary program approved by the Secretary under 34 CFR

14 §668.232.

15 §668.32 Student eligibility--general.

16 A student is eligible to receive title IV, HEA program 

17 assistance if the student –

18 (a)(1)(i) Except as provided in paragraph (n) of this 

19 section, is a regular student enrolled, or accepted for 

20 enrollment, in an eligible program at an eligible institution;

21 * * * * *

22 (k) * * *

23 (9) 34 CFR 686.22 for the TEACH Grant program; and

24 (l) Is not ineligible under §668.40; and

25 (m) In the case of a student who has been convicted of, or 

26 has pled nolo contender or guilty to, a crime involving fraud in 
117

1 obtaining title IV, HEA program assistance, has completed the 

2 repayment of such assistance to:

3 (1) The Secretary; or

4 (2) The holder, in the case of a title IV, HEA program 

5 loan.; and

6 (n) Is enrolled in a comprehensive transition and 

7 postsecondary program under subpart O of this part and meets the 

8 student eligibility criteria in that subpart.

9 * * * * *

10 §668.43 Institutional information.

11 * * *

12 (a)(7) A description of the services and facilities any 

13 special facilities and services available to students with 

14 disabilities disabled students, including students with 

15 intellectual disabilities as defined in subpart O of this part;

16 * * * * * 

17 Subpart O--Financial Assistance for Students With 

18 Intellectual Disabilities

19 §668.230 Scope and purpose.

20 This subpart establishes rules regulations that apply to an 

21 institution that offers comprehensive transition and 

22 postsecondary programs to students with intellectual 

23 disabilities. Students enrolled in these programs are eligible 

24 for Federal financial assistance under the Federal Pell, FSEOG, 

25 and Federal Work Study programs. Except for provisions related 

26 to needs analysis, the Secretary may waive any title IV, HEA 

27 program requirement related to the Federal Pell Grant, FSEOG, 

28 and FWS programs or institutional eligibility, to ensure that 
118

1 students with intellectual disabilities remain eligible for 

2 funds under these assistance programs. However, unless provided 

3 in this subpart or subsequently waived by the Secretary, 

4 students with intellectual disabilities and institutions that 

5 offer comprehensive transition and postsecondary programs are 

6 subject to the same rules regulations and procedures that 

7 otherwise apply to title IV, HEA program participants. 

8 (Authority: )

9 §668.231 Definitions. 

10 The following definitions apply to this subpart:

11 Comprehensive transition and postsecondary program means a

12 degree, certificate, non-degree, or non-certificate program 

13 that--

14 (1) Is offered by a participating institution;

15 (2) Is delivered to students physically attending the 

16 institution; 

17 (3) Is designed to support students with intellectual 

18 disabilities who are seeking to continue academic, career and 

19 technical, and independent living instruction at an institution 

20 of higher education in order to prepare for gainful employment;

21 (4) Includes an advising and curriculum structure; 

22 (5) Requires students with intellectual disabilities to be 

23 enrolled participate on at least a half-time basis, and, as 

24 determined by the institution, engaged academically by --– in 

25 one or more of the following activities:

26 (i) Taking credit-bearing courses with students without 

27 disabilities;
119

1 (ii) Auditing or otherwise participating in courses with 

2 students without disabilities for which the student does not 

3 receive regular academic credit;

4 (iii) Taking noncredit-bearing, nondegree courses with 

5 students without disabilities; or

6 (iv) Participating in internships or work-based training in 

7 settings with individuals without disabilities; and

8 (6) Provides students with intellectual disabilities with 

9 opportunities to participate in inclusive activities and

10 coursework and other activities with students without 

11 disabilities.

12 Free appropriate public education (FAPE) is defined in 34 

13 CFR 300.17.

14 Student with an intellectual disability means a student-–

15 (1) With mental retardation or a cognitive impairment 

16 characterized by significant limitations in--

17 (i) Intellectual and cognitive functioning; and

18 (ii) Adaptive behavior as expressed in conceptual, social, 

19 and practical adaptive skills; and and

20 (2) Who is currently, or was formerly, eligible for a free 

21 appropriate public education (FAPE), as defined in 34 CFR 

22 300.17, under the Individuals with Disabilities Education Act 

23 (20 U.S.C. 1401), including a student who was determined 

24 eligible for services under FAPE but was home-schooled or 

25 attended private school.

26 (Authority: )
120

1 §668.232 Program eligibility.

2 An institution that offers a comprehensive transition and 

3 postsecondary program must apply to the Secretary to have the 

4 program determined to be an eligible program. The institution 

5 applies under the provisions in 34 CFR 600.20 for adding an 

6 educational program in 34 CFR 600.20, and must include in its 

7 application--

8 (a) A description of the comprehensive transition and 

9 postsecondary program that addresses all of the components of 

10 the program, as defined in §668.231, including a detailed 

11 description of the instructional content of the academic and 

12 non-academic courses or components of the program; 

13 (b) The institution‘s Its policy for determining whether a 

14 student enrolled in the program is making satisfactory academic 

15 progress;

16 (c) The number of weeks of instructional time in the 

17 program, the number of semester or quarter credit hours, clock 

18 hours, or, in the case of a non-credit or reduced credit course, 

19 the equivalent credit or clock hours in the program, and the 

20 number of those hours needed to be a full-time and half-time 

21 student;

22 (d) A description of the educational credential offered 

23 (e.g., degree or certificate) or identified outcome or outcomes 

24 expected of students enrolled in the program established by the 

25 institution for all students enrolled in the program;

26 (e) A copy of the letter or notice sent to the 

27 institution‘s accrediting agency informing the agency of its 

28 comprehensive transition and postsecondary program. The letter 

29 or notice must include a description of the items in paragraphs 

30 (a) through (d) of this section; and. how the institution will 
121

1 evaluate the program based on the standards established by the 

2 institution for success with respect to student achievement--

3 (f) Any other information the Secretary may require.

4 (Authority: )

5 §668.233 Student eligibility.

6 A student with an intellectual disability is eligible to 

7 receive Federal Pell, FSEOG, and Federal Work Study program 

8 assistance under this subpart if--

9 (a) The student satisfies the general student eligibility 

10 requirements under §668.32, except for the requirements in 

11 paragraphs (a), (e), and (f) of that section. With regard to 

12 these exceptions, a student--

13 (1) Does not have to be enrolled for the purpose of 

14 obtaining a degree or certificate; 

15 (2) Is not required to have a high school diploma, a 

16 recognized equivalent of a high school diploma, or have passed 

17 an ability to benefit test; and 

18 (3) Is making satisfactory progress according to the 

19 institution‘s published standards for students enrolled in its 

20 comprehensive transition and postsecondary programs; 

21 (b) The student is enrolled on at least a half-time basis, 

22 as determined by the institution, in a comprehensive transition 

23 and postsecondary program approved by the Secretary; and

24 (c) The institution obtains a record from a local 

25 educational agency that the student is or was eligible for a 

26 free appropriate public education under the Individuals with 

27 Disabilities Education Act; and
122

1 (cd) The institution obtains documentation establishing 

2 that the student has an intellectual disability. Acceptable 

3 documentation includes--

4 (1) A documented comprehensive and individualized psycho5 educational evaluation and diagnosis of an intellectual 

6 disability by a psychologist or other qualified professional; or

7 (2) A record of the disability from a local or State 

8 educational agency, or government agency, such as the Social 

9 Security Administration or a vocational rehabilitation agency, 

10 that describes the abilities and limitations of the student

11 which identifies the intellectual disability. 

12 (Authority: )

13
123

1 Issue Paper #16

2 Origin: HEOA

3 Issue: Readmission requirements for servicemembers

4 Statutory cites: Section 484C of the HEA

5 Regulatory cites: New §668.18

6 DCL GEN-08-12 cite: Pages 63-65

7 Summary of issue: Effective August 14, 2008, an institution 

8 may not deny readmission to a servicemember of the uniformed 

9 services for reasons relating to that service. In addition, a 

10 student who is readmitted to an institution under this section 

11 must be readmitted with the same academic status as the student 

12 had when he or she last attended the institution. An affected 

13 servicemember is any individual who is a member of, applies to 

14 be a member of, or performs, has performed, applies to perform, 

15 or has the obligation to perform, service in the uniformed 

16 services. This applies to service in the uniformed services, 

17 whether voluntary or involuntary, on active duty in the Armed 

18 Forces, including service as a member of the National Guard or 

19 Reserve, for a period of more than 30 days under a call or order 

20 to active duty of more than 30 days. 

21 Any student whose absence from an institution of higher 

22 education is necessitated by reason of service in the uniformed 

23 services is entitled to readmission if

24  the student (or an appropriate officer of the Armed Forces 

25 or official of the Department of Defense) gives advance 

26 written or verbal notice of such service to the appropriate 

27 official at the institution;

28  the cumulative length of the absence and of all previous 

29 absences from that institution of higher education by 
124

1 reason of service in the uniformed services does not exceed 

2 five years; and

3  except as otherwise provided in this section, the student 

4 submits a notification of intent to reenroll in the 

5 institution.

6 However, no advance notice by the student is required if 

7 the giving of such notice is precluded by military necessity, 

8 such as a mission, operation, exercise, or requirement that is 

9 classified; or a pending or ongoing mission, operation, 

10 exercise, or requirement that may be compromised or otherwise 

11 adversely affected by public knowledge. In addition, any 

12 student (or an appropriate officer of the Armed Forces or 

13 official of the Department of Defense) who did not give advance 

14 notice of service to the appropriate official at the institution 

15 may meet the notice requirement by submitting, at the time the 

16 student seeks readmission, an attestation to the student‘s 

17 institution that the student performed service in the uniformed 

18 services that necessitated the student‘s absence from the 

19 institution.

20 When determining the cumulative length of the student‘s 

21 absence for service, the period of service does not include any 

22 service

23  that is required, beyond five years, to complete an initial 

24 period of obligated service;

25  during which the student was unable to obtain orders

26 releasing the student from a period of service in the 

27 uniformed services before the expiration of the five-year 

28 period and the inability to obtain those orders was through 

29 no fault of the student; or
125

1  performed by a member of the Armed Forces (including the 

2 National Guard and Reserves) who is

3 o ordered to or retained on active duty under section 

4 688, 12301(a), 12301(g), 12302, 12304, or 12305 of 

5 Title 10, U.S.C., or under section 331, 332, 359, 360, 

6 367, or 712 of Title 14, U.S.C.;

7 o ordered to or retained on active duty (other than for 

8 training) under any provision of law because of a war 

9 or national emergency declared by the President or the 

10 Congress;

11 o ordered to active duty (other than for training) in 

12 support of an operational mission for which personnel 

13 have been ordered to active duty under section 12304 

14 of Title 10, U.S.C.;

15 o ordered to active duty in support of a critical 

16 mission or requirement of the Armed Forces (including 

17 the National Guard or Reserve); or

18 o called into Federal service as a member of the 

19 National Guard under chapter 15 of Title 10, U.S.C., 

20 or section 12406 of Title 10, U.S.C.

21 An affected servicemember must, upon the completion of a 

22 period of service in the uniformed services, notify the 

23 institution of his or her intent to return to the institution 

24 not later than three years after the completion of the period of 

25 service. However, a student who is hospitalized for or 

26 convalescing from an illness or injury incurred in or aggravated 

27 during the performance of service in the uniformed services must 

28 notify the institution of his or her intent to return to the 

29 institution not later than two years after the end of the period 

30 that is necessary for recovery from such illness or injury. A 
126

1 student who fails to apply for readmission within the required 

2 period does not automatically forfeit eligibility for 

3 readmission to the institution, but is subject to the 

4 institution‘s established leave of absence policy and general 

5 practices.

6 A student who submits an application for readmission to an 

7 institution must provide to the institution documentation to 

8 establish that

9  the student has not exceeded the specified service 

10 limitations; and

11  the student‘s eligibility for readmission has not been 

12 terminated.

13 An institution may not delay or attempt to avoid a 

14 readmission of a student under this section by demanding 

15 documentation that does not exist, or is not readily available, 

16 at the time of readmission.

17 A student‘s eligibility for readmission to an institution 

18 under this section by reason of such student‘s service in the

19 uniformed services terminates upon the occurrence of any of the 

20 following events:

21  a separation of such person from the Armed Forces 

22 (including the National Guard and reserves) with a 

23 dishonorable or bad conduct discharge;

24  a dismissal of such person permitted under section 1161(a) 

25 of Title 10, U.S.C.; or

26  a dropping of such person from the rolls pursuant to 

27 section 1161(b) of Title 10, U.S.C.
127

1 These provisions were based on the provisions of the 

2 Uniformed Services Employment and Reemployment Rights Act 

3 (USERRA).

4 Title 10 of the U.S.C. can be accessed at

5 http://www.access.gpo.gov/uscode/title10/title10.html

6 Title 14 of the U.S.C. can be accessed at

7 http://www.access.gpo.gov/uscode/title14/title14.html

8 Note: The HEOA also added a provision to the HEA at section 

9 131(f) which, effective August 14, 2009, requires the Secretary 

10 to coordinate with the Secretary of Defense and the Secretary of 

11 Veterans Affairs to create a searchable website within the 

12 Federal student financial aid website that, in addition to 

13 containing information about all Federal and State student 

14 financial assistance, must contain information about the 

15 readmission requirements under section 484C of the HEA and other 

16 student services for which members of the Armed Forces may be 

17 eligible. In addition, the Secretary is required to work with 

18 the Secretary of Defense and the Secretary of Veterans Affairs 

19 to make the availability of the Armed Forces information website 

20 widely known to members of the Armed Forces, institutions of 

21 higher education, and the general public. The Department does 

22 not plan to expand on this provision in regulations and, 

23 therefore, has not included it as a provision that will be 

24 negotiated.

25 Updated information since 3/2-4 meetings: 

26 General

27 Section 668.18(a) would include the general requirements of 

28 the statute that an institution may not deny readmission to a 

29 servicemember, but must readmit the servicemember with the same 
128

1 academic status as the student had when the student was last 

2 admitted to the institution. The regulations would specify that 

3 the institution must admit the student promptly, and define what 

4 it means to ―promptly readmit‖ a student. Section 668.18(a) 

5 would also specify what it means to readmit a person with the 

6 same academic status.

7 In the case of a student who is not prepared to resume the 

8 program at the point where he or she left off, §668.18(a) would 

9 require the institution to make reasonable efforts to help the 

10 student become prepared including, but not limited to, providing 

11 refresher courses at no extra cost. The institution would not 

12 be required to readmit the student if, after reasonable efforts 

13 by the institution, the student is still not prepared to resume 

14 the program at the point where he or she left off.

15 Section 668.18(a) would clarify that the requirements of 

16 this section apply to an institution even if that institution 

17 has undergone a change of ownership since the student ceased 

18 attendance.

19 Finally, §668.18(a) would make clear that the provisions of 

20 this section supersede any State law or other requirement that 

21 reduce, limit, or eliminate any right or benefit provided by 

22 this section.

23 Service in the uniformed services

24 Section 668.18(b) would delineate what service in the 

25 uniformed services means for purposes of this section. This 

26 section would expand upon the statutory language to clarify that 

27 service in the uniformed services includes active duty for 

28 training and full-time National Guard duty under Federal 

29 authority (i.e, not National Guard service under authority of 

30 State law). In addition, the regulations would specify that 
129

1 qualifying service must be for more than 30 consecutive days 

2 under a call or order to active duty of more than 30 consecutive

3 days.

4 Readmission procedures

5 Section 668.18(c) would list the conditions under which an 

6 institution must readmit a servicemember. The regulations would 

7 require an institution to designate one or more offices for the 

8 purpose of receiving advance notice from students of their 

9 absence from the institution necessitated by service in the 

10 uniformed services, and notice from students of an intent to 

11 return to the institution. The regulations would make clear 

12 that advance notice must be provided by the student as far in 

13 advance as is reasonable under the circumstances. However such 

14 notice would not need to follow any particular format, nor would 

15 a student have to indicate as part of the notice whether the 

16 student intends to return to the institution. Also, the 

17 regulations would make clear that an institution may not set a 

18 brightline deadline for submission of any such notice, but must 

19 judge the timeliness of submission by the facts of a particular 

20 case. As such notice may be provided by an appropriate officer 

21 of the Armed Forces, the regulations would clarify who an 

22 ―appropriate officer‖ is. Section 668.18(c) would also provide 

23 that a student‘s notice of intent to return may be provided 

24 orally or in writing, as specified in the statute for advance 

25 notice from students of their absence from the institution 

26 necessitated by service in the uniformed services. The notice 

27 of intent to return would not need to follow any particular 

28 format. 

29 Exceptions to advance notice
130

1 Section 668.18(d) would restate the statutory language for 

2 exceptions to advance notice.

3 Cumulative length of absence

4 Section 668.18(e) would list the types of service that are 

5 not included in the cumulative length of the student‘s absence, 

6 including a brief description of the types of services 

7 referenced in titles 10 and 14 of the United States Code.

8 Notification of Intent to Reenroll

9 Section 668.18(f) would restate the statutory provision 

10 providing that a student who fails to apply for readmission 

11 within the required periods does not automatically forfeit 

12 eligibility for readmission to the institution, but is subject 

13 to the institution‘s established leave of absence policy and 

14 general practices.

15 Documentation

16 Section 668.18(g) would list the documentation that a 

17 student must submit with an application for readmission. The 

18 regulations would list several types of documentation that 

19 satisfy the documentation requirements, making clear that the 

20 types of documentation available or necessary will vary from 

21 case to case.

22 Termination of readmission eligibility

23 Section 668.18(f) would list the circumstances under which 

24 a student‘s eligibility for readmission to an institution would 

25 be terminated, including a brief description of the types of 

26 circumstances referenced in title 10 of the United States Code.

27 Updated information since 4/14-16 meetings: 

28 General
131

1 Section 668.18(a)(2)(i) would clarify that an institution 

2 must promptly readmit an individual who was last admitted to the 

3 institution, but did not begin attendance if the reason the 

4 individual did not begin attendance was because of the 

5 individual‘s membership, application for membership, performance 

6 of service, application for service or obligation to perform 

7 service. Section 668.18(a)(2)(ii) would clarify that, 

8 generally, an institution would be required to readmit a student 

9 into the next class or classes in the student‘s program unless 

10 the student requests a later date of admission, or unusual 

11 circumstances require the institution to admit the student at a 

12 later date. The phrase ―absent unusual circumstances‖ in the 

13 last draft referred to when the institution would readmit the 

14 student, not to whether the institution would readmit the 

15 student. Whether the institution must readmit the student is 

16 addressed in §668.18(a)(2)(iv). 

17 The following changes were made to §668.18(a)(2)(iii), 

18 which specifies what it means to readmit a person with the same 

19 academic status:

20  Clarification that an institution may readmit a student to a 

21 different program if the student requests or agrees to 

22 admission to the different program (to address concerns that 

23 the regulations would not allow an institution to readmit a 

24 student to a different program, even if the student wanted to 

25 change programs);

26  Clarification that an institution is not required to readmit a 

27 student with the same enrollment status if the student 

28 requests or agrees to admission at a different enrollment 

29 status;

30  Clarification that an institution is not required to readmit a 
132

1 student with the same number of completed credit hours or 

2 clock hours if the student is readmitted to a different 

3 program to which the hours are not transferable;

4  Use of the term ―academic standing‖ instead of ―student 

5 status‖ and the inclusion of satisfactory academic progress as 

6 an example of academic standing;

7  For the first academic year in which the student returns, if 

8 the student is readmitted to the same program, an institution 

9 would have to readmit the student with the same institutional 

10 charges that the student was or would have been assessed for 

11 the academic year during which the student left the 

12 institution. For subsequent academic years, the institution 

13 could charge the student the same charges that other students 

14 in the program are charged. Also, if the student is admitted 

15 to a different program, the institution could charge the 

16 student the same charges that other students in the program 

17 are charged; and

18  If equipment is required in lieu of equipment the student paid 

19 for when the student was previously enrolled, the institution 

20 must provide the new equipment to the student at no cost.

21 In addition to not requiring an institution to readmit a 

22 student if, after making reasonable efforts to help a student 

23 become prepared to resume a program, the student is not prepared 

24 to resume the program, §668.18(a)(2)(iv) would not require an 

25 institution to readmit a student if, after making reasonable 

26 efforts to enable a student to complete a program, the student 

27 will not be able to complete the program. This section would 

28 also clarify that an institution would not be required to 

29 readmit a student if there are no reasonable efforts the 

30 institution can take to prepare the student to resume the 
133

1 program at the point where he or she left off or to enable the 

2 student to complete the program.

3 Allowing the student to retake a pretest at no extra cost 

4 has been added as an example of a possible reasonable effort an 

5 institution must make to enable a student to resume a program.

6 Service in the uniformed services

7 A change was not made to include National Guard duty under 

8 State authority. As with the USERRA, National Guard service 

9 under authority of State law is not protected by section 484C of 

10 the HEA.

11 Readmission procedures

12 Section 668.18(c) continues to provide that a student‘s 

13 notice of intent to return may be provided orally or in writing. 

14 However, the preamble would make clear that the purpose of this 

15 provision is to prevent an institution from denying readmission 

16 of a student solely because the student did not notify the 

17 institution of his or her intent to return in writing. It is 

18 not anticipated that the student‘s readmission will be a 

19 paperless transaction. Note that the student must provide the 

20 institution with the documents required by §668.18(g) to 

21 demonstrate his or her eligibility for readmission under this 

22 section. 

23 Tentative agreement: No

24 Regulatory language:

25 [The whole section is new. The mark-up shows changes 

26 to/expansion on the statutory requirements of the HEOA.]

27 §668.18 Readmission requirements for servicemembers.

28 (a) General. (1) An institution may not deny readmission 

29 to a person who is a member of, applies to be a member of, 
134

1 performs, has performed, applies to perform, or has an 

2 obligation to perform, service in the uniformed services on the 

3 basis of that membership, application for membership, 

4 performance of service, application for service, or obligation 

5 to perform service.

6 (2)(i) An institution must promptly readmit to the 

7 institution a person described in paragraph (a)(1) of this 

8 section with the same academic status as the student had when 

9 the student last attended the institution or was last admitted 

10 to the institution, but did not begin attendance because of that 

11 membership, application for membership, performance of service, 

12 application for service, or obligation to perform service.

13 (ii) ―Promptly readmit‖ means as soon as practicable under 

14 the circumstances of each case. Absent unusual circumstances, 

15 the individual must be that the institution must readmitted the 

16 student into the next class or classes in the student‘s program 

17 beginning after the individualstudent provides notice of his or 

18 her intent to reenroll, unless the individualstudent requests a 

19 later date of readmission or unusual circumstances require the 

20 institution to admit the student at a later date.

21 (iii) To readmit a person with the ―same academic status‖

22 means that the institution admits the student--

23 (A) To the same program to which he or she was last 

24 admitted by the institution or, if that exact program is no 

25 longer offered, the program that is most similar to that 

26 program, unless the student requests or agrees to admission to a 

27 different program; 

28 (B) At the same enrollment status that the student last 

29 held at the institution, unless the student requests or agrees 

30 to admission at a different enrollment status;
135

1 (C) With the same number of completed credit hours or 

2 clock hours completed previously by the student, unless the 

3 student is readmitted to a different program to which the 

4 completed credit hours or clock hours are not transferable;

5 (D) With the same student status academic standing (e.g., 

6 with the same satisfactory academic progress statusif the 

7 student was on probation when he or she last attended the 

8 institution, the student is readmitted in a probation status)the 

9 student previously had; 

10 (E)(1) If the student is readmitted to the same program, 

11 for the first academic year in which the student returns, 

12 assesses the same institutional charges that the student was or 

13 would have been assessed for the academic year during which the 

14 student left the institutionWith the same institutional charges 

15 that would have been charged had the student been continuously 

16 enrolled; or

17 (2) If the student is admitted to a different program, and 

18 for subsequent academic years for a student admitted to the same 

19 program, assesses no more than the institutional charges that 

20 other students in the program are assessed for that academic 

21 year; and

22 (F) Waives charges for equipment required in lieu of 

23 equipment the student paid for when the student was previously 

24 enrolled. With the same satisfactory academic progress status.

25 (iv)(A) If the institution determines that the student is 

26 not prepared to resume the program with the same academic status 

27 at the point where the student left off, or will not be able to 

28 complete the program, the institution must make reasonable 

29 efforts to help the student become prepared or to enable the 

30 student to complete the program including, but not limited to, 
136

1 providing refresher courses at no extra cost and allowing the 

2 student to retake a pretest at no extra cost. 

3 (B) The institution is not required to readmit the student 

4 on his or her return if--

5 (1) He or she is not, aAfter reasonable efforts by the 

6 institution, the institution determines that the student is not

7 prepared to resume the program at the point where he or she left 

8 off;

9 (2) After reasonable efforts by the institution, the 

10 institution determines that the student is unable to complete 

11 the program; or

12 (3) The institution determines that there are no 

13 reasonable efforts the institution can take to prepare the 

14 student to resume the program at the point where he or she left 

15 off or to enable the student to complete the program;

16 (BC)(I1) ―Reasonable efforts‖ means actions that do not 

17 place an undue hardship on the institution.

18 (II2) ―Undue hardship‖ means an action requiring 

19 significant difficulty or expense.

20 (CD) The institution carries the burden to prove by a 

21 preponderance of the evidence that the student is not prepared 

22 to resume the program with the same academic status at the point 

23 where the student left off, or that the student will not be able 

24 to complete the program, after the institution makes reasonable 

25 efforts to help the student become prepared.

26 (3) This provision section applies to an institution that 

27 has continued in operation since the student ceased attending or 

28 was last admitted to the institution but did not begin 
137

1 attendance, notwithstanding any changes of ownership of the 

2 institution since the student ceased attendance.

3 (4) The requirements of this section supersede any State 

4 law (including any local law or ordinance), contract, agreement, 

5 policy, plan, practice, or other matter that reduces, limits, or 

6 eliminates in any manner any right or benefit provided by this 

7 section.

8 (b) Service in the uniformed services. For purposes of 

9 this section, service in the uniformed services means service, 

10 whether voluntary or involuntary, in the Armed Forces, including 

11 such service by a member of the National Guard or Reserve, on 

12 active duty, active duty for training, or full-time National 

13 Guard duty under Federal authority, for a period of more than 30 

14 consecutive days under a call or order to active duty of more 

15 than 30 consecutive days.

16 (c) Readmission procedures. (1) Any student whose 

17 absence from an institution is necessitated by reason of service 

18 in the uniformed services shall be entitled to readmission to 

19 the institution if--

20 (i) Except as provided in paragraph (d) of this section, 

21 the student (or an appropriate officer of the Armed Forces or 

22 official of the Department of Defense) gives advance oral or 

23 written or verbal notice of such service to an office designated 

24 by the appropriate official at the institution, and 

25 providesproviding such notice as far in advance as is reasonable 

26 under the circumstances;

27 (ii) The cumulative length of the absence and of all 

28 previous absences from that institution by reason of service in 

29 the uniformed services, including only the time the student 
138

1 spends actually performing service in the uniformed services,

2 does not exceed five years; and

3 (iii) Except as provided in paragraph (f) of this section, 

4 the student gives oral or written noticefies the institution of 

5 his or her intent to return to an office designated by the 

6 institution--

7 (A) For a student who completes a period of service in the 

8 uniformed services, not later than three years after the 

9 completion of the period of service; or

10 (B) For a student who is hospitalized for or convalescing 

11 from an illness or injury incurred in or aggravated during the 

12 performance of service in the uniformed services, two years 

13 after the end of the period that is necessary for recovery from 

14 such illness or injury.

15 (2)(i) An institution must designate one or more offices 

16 at the institution that a student may readily contact to provide 

17 notification of service required by paragraph (c)(1)(i) of this 

18 section and notification of intent to return required by 

19 paragraph (c)(1)(iii) of this section.

20 (ii) An institution may not require that the notice 

21 provided by the student under paragraph (c)(1)(i) or (c)(1)(iii) 

22 of this section follow any particular format.

23 (iii) The notice provided by the student under paragraph 

24 (c)(1)(i) of this section--

25 (A) May not be subject to any brightline rule for 

26 timeliness; timeliness must be determined by the facts in any 

27 particular case; and

28 (B) Does not need to indicate whether the student intends 

29 to return to the institution.
139

1 (iv) For purposes of paragraph (c)(1)(i) of this section, 

2 an ―appropriate officer‖ is a commissioned, warrant, or 

3 noncommissioned officer authorized to give such notice by the 

4 military service concerned. 

5 (d) Exceptions to advance notice. (1) No notice is 

6 required under paragraph (c)(1)(i) of this section if the giving 

7 of such notice is precluded by military necessity, such as--

8 (i) A mission, operation, exercise, or requirement that is 

9 classified; or

10 (ii) A pending or ongoing mission, operation, exercise, or 

11 requirement that may be compromised or otherwise adversely 

12 affected by public knowledge; or

13 (2) Any student (or an appropriate officer of the Armed 

14 Forces or official of the Department of Defense) who did not 

15 give advance written or verbaloral notice of service to the 

16 appropriate official at the institution in accordance with 

17 paragraph (c)(1) of this section may meet the notice requirement 

18 by submitting, at the time the student seeks readmission, an 

19 attestation to the institution that the student performed 

20 service in the uniformed services that necessitated the 

21 student‘s absence from the institution.

22 (e) Cumulative length of absence. For purposes of 

23 paragraph (c)(1)(ii) of this section, a student‘s cumulative 

24 length of absence from an institution does not include any 

25 service--

26 (1) That is required, beyond five years, to complete an 

27 initial period of obligated service;

28 (2) During which the student was unable to obtain orders 

29 releasing the student from a period of service in the uniformed 
140

1 services before the expiration of the five-year period and such 

2 inability was through no fault of the student; or

3 (3) Performed by a member of the Armed Forces (including 

4 the National Guard and Reserves) who is--

5 (i) Ordered to or retained on active duty under section 

6 688, 12301(a), 12301(g), 12302, 12304, or 12305 of title 10, 

7 United States Code, or under section 331, 332, 359, 360, 367, or 

8 712 of title 14, United States Code;--

9 (A) 10 U.S.C. 688 (involuntary active duty by a military 

10 retiree);

11 (B) 10 U.S.C. 12301(a) (involuntary active duty in 

12 wartime);

13 (C) 10 U.S.C. 12301(g) (retention on active duty while in 

14 captive status);

15 (D) 10 U.S.C. 12302 (involuntary active duty during a 

16 national emergency for up to 24 months);

17 (E) 10 U.S.C. 12304 (involuntary active duty for an 

18 operational mission for up to 270 days);

19 (F) 10 U.S.C. 12305 (involuntary retention on active duty 

20 of a critical person during time of crisis or other specific 

21 conditions);

22 (G) 14 U.S.C. 331 (involuntary active duty by retired 

23 Coast Guard officer);

24 (H) 14 U.S.C. 332 (voluntary active duty by retired Coast 

25 Guard officer);

26 (I) 14 U.S.C. 359 (involuntary active duty by retired 

27 Coast Guard enlisted member);

28 (J) 14 U.S.C. 360 (voluntary active duty by retired Coast 
141

1 Guard enlisted member);

2 (K) 14 U.S.C. 367 (involuntary retention of Coast Guard 

3 enlisted member on active duty); andor

4 (L) 14 U.S.C. 712 (involuntary active duty by Coast Guard 

5 Reserve member for natural or man-made disasters);

6 (ii) Ordered to or retained on active duty (other than for 

7 training) under any provision of law because of a war or 

8 national emergency declared by the President or the Congress, as 

9 determined by the Secretary concerned;

10 (iii) Ordered to active duty (other than for training) in 

11 support, as determined by the Secretary concerned, of an 

12 operational mission for which personnel have been ordered to 

13 active duty under section 12304 of title 10, United States Code;

14 (iv) Ordered to active duty in support, as determined by 

15 the Secretary concerned, of a critical mission or requirement of 

16 the Armed Forces (including the National Guard or Reserve); or

17 (v) Called into Federal service as a member of the 

18 National Guard under chapter 15 of title 10, United States Code, 

19 or section 12406 of title 10, United States Code (i.e., called 

20 to respond to an invasion, danger of invasion, rebellion, danger 

21 of rebellion, insurrection, or the inability of the President 

22 with regular forces to execute the laws of the United States). 

23 (f) Notification of intent to reenroll. A student who 

24 fails to apply for readmission within the periods described in 

25 paragraph (c)(1)(iii) of this section does not automatically 

26 forfeit eligibility for readmission to the institution, but is 

27 subject to the institution‘s established leave of absence policy 

28 and general practices.
142

1 (g) Documentation. (1) A student who submits an 

2 application for readmission to an institution under paragraph 

3 (c)(1)(iii) of this section shall provide to the institution 

4 documentation to establish that--

5 (i) The student has not exceeded the service limitation in 

6 paragraph (c)(1)(ii) of this section; and

7 (ii) The student‘s eligibility for readmission has not 

8 been terminated due to an exception in paragraph (h) of this 

9 section.

10 (2)(i) Documents that satisfy the requirements of 

11 paragraph (g)(1) of this section include, but are not limited 

12 to, the following:

13 (A) DD (Department of Defense) 214 Certificate of Release 

14 or Discharge from Active Duty;.

15 (B) Copy of duty orders prepared by the facility where the 

16 orders were fulfilled carrying an endorsement indicating 

17 completion of the described service;.

18 (C) Letter from the commanding officer of a Personnel 

19 Support Activity or someone of comparable authority;.

20 (D) Certificate of completion from military training 

21 school;.

22 (E) Discharge certificate showing character of service;.

23 (F) Copy of extracts from payroll documents showing 

24 periods of service;.

25 (G) Letter from National Disaster Medical System (NDMS) 

26 Team Leader or Administrative Officer verifying dates and times 

27 of NDMS training or Federal activation.
143

1 (ii) The types of documents that are necessary to 

2 establish eligibility for readmission will vary from case to 

3 case. Not all of these documents are available or necessary in 

4 every instance to establish readmission eligibility.

5 (3) An institution may not delay or attempt to avoid a 

6 readmission of a student under this section by demanding 

7 documentation that does not exist, or is not readily available, 

8 at the time of readmission.

9 (h) Termination of readmission eligibility. A student‘s 

10 eligibility for readmission to an institution under this section 

11 by reason of such student‘s service in the uniformed services 

12 terminates upon the occurrence of any of the following events:

13 (1) A separation of such person from the Armed Forces 

14 (including the National Guard and Reserves) with a dishonorable 

15 or bad conduct discharge.

16 (2) A dismissal of such person a commissioned officer

17 permitted under section 1161(a) of title 10, United States Code

18 by sentence of a general court-martial; in commutation of a 

19 sentence of a general court-martial; or, in time of war, by 

20 order of the President; or.

21 (3) A dropping of such person a commissioned officer from 

22 the rolls pursuant to section 1161(b) of title 10, United States 

23 Code due to absence without authority for at least three months; 

24 separation by reason of a sentence to confinement adjudged by a 

25 court-martial; or, a sentence to confinement in a Federal or 

26 State penitentiary or correctional institution.

27 Statutory Language:

28 SEC. 484C. READMISSION REQUIREMENTS FOR SERVICEMEMBERS.

29 (a) DEFINITION OF SERVICE IN THE UNIFORMED SERVICES.—
144

1 In this section, the term  ̳service in the uniformed services‘ 

2 means service (whether voluntary or involuntary) on active duty 

3 in the Armed Forces, including such service by a member of the 

4 National Guard or Reserve, for a period of more than 30 days 

5 under a call or order to active duty of more than 30 days.

6 (b) DISCRIMINATION AGAINST STUDENTS WHO SERVE IN THE 

7 UNIFORMED SERVICES PROHIBITED.—A person who is a member of, 

8 applies to be a member of, performs, has performed, applies to 

9 perform, or has an obligation to perform, service in the 

10 uniformed services shall not be denied readmission to an 

11 institution of higher education on the basis of that membership, 

12 application for membership, performance of service, application 

13 for service, or obligation.

14 (c) READMISSION PROCEDURES.—

15 (1) IN GENERAL.—Any student whose absence from an 

16 institution of higher education is necessitated by reason of 

17 service in the uniformed services shall be entitled to 

18 readmission to the institution of higher education if—

19 (A) the student (or an appropriate officer of the Armed 

20 Forces or official of the Department of Defense) gives advance 

21 written or verbal notice of such service to the appropriate 

22 official at the institution of higher education;

23 (B) the cumulative length of the absence and of all 

24 previous absences from that institution of higher education by 

25 reason of service in the uniformed services does not exceed five 

26 years; and

27 (C) except as otherwise provided in this section, the 

28 student submits a notification of intent to reenroll in the 

29 institution of higher education in accordance with the 

30 provisions of paragraph (4).
145

1 (2) EXCEPTIONS.—

2 (A) MILITARY NECESSITY.—No notice is required under 

3 paragraph (1)(A) if the giving of such notice is precluded by 

4 military necessity, such as—

5 (i) a mission, operation, exercise, or requirement that is 

6 classified; or

7 (ii) a pending or ongoing mission, operation, exercise, or 

8 requirement that may be compromised or otherwise adversely 

9 affected by public knowledge.

10 (B) FAILURE TO GIVE ADVANCE NOTICE.—Any student (or an 

11 appropriate officer of the Armed Forces or official of the 

12 Department of Defense) who did not give advance written or 

13 verbal notice of service to the appropriate official at the 

14 institution of higher education in accordance with paragraph 

15 (1)(A) may meet the notice requirement by submitting, at the 

16 time the student seeks readmission, an attestation to the

17 student‘s institution of higher education that the student 

18 performed service in the uniformed services that necessitated 

19 the student‘s absence from the institution of higher education.

20 (3) APPLICABILITY.—This section shall apply to a student 

21 who is absent from an institution of higher education by reason 

22 of service in the uniformed services if such student‘s 

23 cumulative period of service in the Armed Forces (including the 

24 National Guard or Reserve), with respect to the institution of 

25 higher education for which a student seeks readmission, does not 

26 exceed five years, except that any such period of service shall 

27 not include any service—

28 (A) that is required, beyond five years, to complete an 

29 initial period of obligated service;
146

1 (B) during which such student was unable to obtain orders 

2 releasing such student from a period of service in the uniformed 

3 services before the expiration of such five year period and such 

4 inability was through no fault of such student; or

5 (C) performed by a member of the Armed Forces (including 

6 the National Guard and Reserves) who is—

7 (i) ordered to or retained on active duty under section 

8 688, 12301(a), 12301(g), 12302, 12304, or 12305 of title 10, 

9 United States Code, or under section 331, 332, 359, 360, 367, or 

10 712 of title 14, United States Code;

11 (ii) ordered to or retained on active duty (other than for 

12 training) under any provision of law because of a war or 

13 national emergency declared by the President or the Congress, as 

14 determined by the Secretary concerned;

15 (iii) ordered to active duty (other than for training) in 

16 support, as determined by the Secretary concerned, of an 

17 operational mission for which personnel have been ordered to 

18 active duty under section 12304 of title 10, United States Code;

19 (iv) ordered to active duty in support, as determined by 

20 the Secretary concerned, of a critical mission or requirement of 

21 the Armed Forces (including the National Guard or Reserve); or

22 (v) called into Federal service as a member of the National 

23 Guard under chapter 15 of title 10, United States Code, or 

24 section 12406 of title 10, United States Code.

25 (4) NOTIFICATION OF INTENT TO RETURN.—

26 (A) IN GENERAL.—Except as provided in subparagraph (B), a 

27 student referred to in subsection (a) shall, upon the completion 

28 of a period of service in the uniformed services, notify the 

29 institution of higher education of the student‘s intent to 
147

1 return to the institution not later than three years after the 

2 completion of the period of service.

3 (B) HOSPITALIZATION OR CONVALESCENCE.—A student who is 

4 hospitalized for or convalescing from an illness or injury 

5 incurred in or aggravated during the performance of service in 

6 the uniformed services shall notify the institution of higher 

7 education of the student‘s intent to return to the institution 

8 not later than two years after the end of the period that is 

9 necessary for recovery from such illness or injury.

10 (C) SPECIAL RULE.—A student who fails to apply for 

11 readmission within the period described in this section shall 

12 not automatically forfeit such eligibility for readmission to 

13 the institution of higher education, but shall be subject to the 

14 institution of higher education‘s established leave of absence 

15 policy and general practices.

16 (5) DOCUMENTATION.—

17 (A) IN GENERAL.—A student who submits an application for 

18 readmission to an institution of higher education under this 

19 section shall provide to the institution of higher education 

20 documentation to establish that—

21 (i) the student has not exceeded the service limitations 

22 established under this section; and

23 (ii) the student‘s eligibility for readmission has not been 

24 terminated due to an exception in subsection (d).

25 (B) PROHIBITED DOCUMENTATION DEMANDS.—An institution of 

26 higher education may not delay or attempt to avoid a readmission 

27 of a student under this section by demanding documentation that 

28 does not exist, or is not readily available, at the time of 

29 readmission.
148

1 (6) NO CHANGE IN ACADEMIC STATUS.—A student who is 

2 readmitted to an institution of higher education under this 

3 section shall be readmitted with the same academic status as 

4 such student had when such student last attended the institution 

5 of higher education.

6 (d) EXCEPTION FROM READMISSION ELIGIBILITY.—A student‘s 

7 eligibility for readmission to an institution of higher 

8 education under this section by reason of such student‘s service 

9 in the uniformed services terminates upon the occurrence of any 

10 of the following events:

11 (1) A separation of such person from the Armed Forces (including 

12 the National Guard and Reserves) with a dishonorable or bad 

13 conduct discharge.

14 (2) A dismissal of such person permitted under section 

15 1161(a) of title 10, United States Code.

16 (3) A dropping of such person from the rolls pursuant to 

17 section 1161(b) of title 10, United States Code.

18
149

1 Issue Paper #17

2 Origin: HEOA

3 Issue: Institutional requirements for teach-outs/eligibility 

4 and certification procedures-treatment of teach-outs

5 Statutory cites: Sections 487(f) and 498 of the HEA

6 Regulatory cites: §600.20 and §668.14

7 DCL GEN-08-12 cite: Pages 72 and 74

8 Summary of issue: Effective August 14, 2008, section 487(f) of 

9 the HEA provides that, whenever the Secretary initiates an 

10 action to limit, suspend, or terminate (LS or T) an 

11 institution‘s participation in any Title IV program or initiates 

12 an emergency action against an institution, the institution must 

13 prepare a teach-out plan for submission to its accrediting 

14 agency. The teach-out plan must be prepared in accordance with 

15 section 496(c)(6) of the HEA [mistakenly cited as section 

16 496(c)(4) in the HEA] and any applicable Title IV regulations or 

17 accrediting agency standards. A ―teach-out plan‖ is defined as 

18 a written plan that provides for equitable treatment of students 

19 if an institution ceases to operate before all students have 

20 completed their program of study. Currently, the regulations 

21 governing the Secretary‘s recognition of accrediting agencies 

22 define a ―teach-out agreement‖ as a written agreement between 

23 institutions that provides for the equitable treatment of 

24 students if one of those institutions stops offering an 

25 educational program before all students enrolled in that program 

26 have completed the program (§602.3). Consideration should be 

27 given to developing one definition for all Title IV regulations. 

28 Also effective August 14, 2008, section 498 of the HEA 

29 provides that a location of a closed institution is eligible as 

30 an additional location of another institution for the purpose of 
150

1 conducting a teach-out if the teach-out is approved by the 

2 institution‘s accrediting agency. The institution that conducts 

3 the teachout under this provision is permitted to establish a 

4 permanent additional location at the closed institution without 

5 having to satisfy the requirements for additional locations in 

6 sections 102(b)(1)(E) and 102(c)(1))(C) of the HEA--i.e., that a 

7 proprietary institution or a postsecondary vocational 

8 institution must have been in existence for two years to be 

9 eligible--and without assuming the liabilities of the closed 

10 institution.

11 Note: One of the four new accrediting agency operating 

12 procedures added by the HEOA at section 496(c)(3) of the HEA

13 requires accrediting agencies to approve teach-out plans 

14 submitted by institutions they accredit if the Department 

15 notifies the agency of an action against an institution in 

16 accordance with section 487(f) of the HEA; if the institution‘s 

17 accreditation is withdrawn, terminated or suspended; or if the 

18 institution intends to cease operations. This provision is 

19 being negotiated by Team III—Accreditation.

20 Updated information since 3/2-4 meetings: Section 668.14 would 

21 be amended to implement the requirement in section 487(f) of the 

22 HEA. In addition to the requiring an institution to submit a 

23 teach out plan (which would be defined in §600.2) to its 

24 accrediting agency whenever the Secretary initiates an LS or T 

25 or an emergency action against the institution, as required by 

26 statute, an institution would be required to submit a teach out 

27 plan when (1) the institution‘s accrediting agency acts to 

28 withdraw, terminate, or suspend the accreditation of the 

29 institution; or (2) the institution otherwise intends to cease 

30 operations. 
151

1 Section 600.32 would implement section 498(k) of the HEA to 

2 provide that an institution that conducts a teach out for a 

3 closed institution whenever the Secretary initiates an LS or T 

4 or an emergency action against the institution may apply to have 

5 that site approved as an additional location, if the teach out 

6 plan was approved by the closed institution‘s accrediting 

7 agency. If the Department approves the institution to add the 

8 additional location, the ―two-year rule‖ would not apply to the 

9 additional location, and the institution would not assume the 

10 liabilities of the closed institution. As a condition for 

11 approval, the Department may require that payments from the 

12 institution conducting the teach out to the owners of the closed 

13 institution, or related parties, be used to pay any liabilities 

14 owed by the closed institution.

15 Updated information since 4/14-16 meetings: Section 

16 600.32(d)(2)(i)(C) would provide that, if the Department 

17 approves an institution‘s application to add an additional 

18 location, the institution would not assume the cohort default 

19 rate of the closed institution, except that changes to the 

20 regulations have been added to ensure that this provision is not 

21 used by an institution to circumvent an undesirable cohort 

22 default rate, or to attempt to transfer a site between related 

23 parties without carrying forward the closed institution‘s 

24 liabilities.

25 Changes have been made to §668.14(b)(26) to conform with 

26 the proposed implementation of section 496(c)(3) of the HEA 

27 (which requires accrediting agencies to require institutions to 

28 submit a teach-out plan for approval upon the occurrence of 

29 certain events) by the negotiating committee addressing 

30 accreditation issues. Specifically, the following occurrence of 

31 events were added to the list of events in §668.14(b)(26) that 
152

1 would require an institution to submit a teach-out plan to its 

2 accrediting agency: 

3  The institution‘s State licensing or authorizing agency 

4 revokes the institution‘s license or legal authorization to 

5 provide an educational program. 

6  The institution intends to close a location that provides 

7 100 percent of at least one program.

8 Tentative agreement: No

9 Regulatory language:

10 §600.2 General definitions.

11 The following definitions apply to terms used in this part:

12 * * * * * 

13 Teach-out plan: A written plan developed by an institution 

14 that provides for the equitable treatment of students if an 

15 institution, or an institutional location that provides 100 

16 percent of at least one program, ceases to operate before all 

17 students have completed their program of study, and may include, 

18 if required by the institution‘s accrediting agency, a teach-out 

19 agreement between institutions.

20 * * * * *

21 §600.32 Eligibility of additional locations.

22 (a) Except as provided in paragraphs (b), and (c), and (d)

23 of this section, to qualify as an eligible location, an 

24 additional location of an eligible institution must satisfy the 

25 applicable requirements of this section and §§600.4, 600.5, 

26 600.6, 600.8, and 600.10.
153

1 (b) To qualify as an eligible location, an additional 

2 location is not required to satisfy the two-year requirement of 

3 §§600.5(a)(7) or 600.6(a)(6), unless—

4 (1) The location was a facility of another institution that 

5 has closed or ceased to provide educational programs for a 

6 reason other than a normal vacation period or a natural disaster 

7 that directly affects the institution or the institution's 

8 students;

9 (2) The applicant institution acquired, either directly 

10 from the institution that closed or ceased to provide 

11 educational programs, or through an intermediary, the assets at 

12 the location; and

13 (3) The institution from which the applicant institution 

14 acquired the assets of the location—

15 (i) Owes a liability for a violation of an HEA program 

16 requirement; and

17 (ii) Is not making payments in accordance with an agreement 

18 to repay that liability.

19 (c) Notwithstanding paragraph (b) of this section, an 

20 additional location is not required to satisfy the two-year 

21 requirement of §600.5(a)(7) or §600.6(a)(6) if the applicant 

22 institution agrees—

23 (1) To be liable for all improperly expended or unspent 

24 title IV, HEA program funds received by the institution that has 

25 closed or ceased to provide educational programs;

26 (2) To be liable for all unpaid refunds owed to students 

27 who received title IV, HEA program funds; and

28 (3) To abide by the policy of the institution that has 

29 closed or ceased to provide educational programs regarding 
154

1 refunds of institutional charges to students in effect before 

2 the date of the acquisition of the assets of the additional 

3 location for the students who were enrolled before that date.

4 (d)(1) An institution that conducts a teach-out at a site 

5 of a closed institution may apply to have that site approved as 

6 an additional location if--

7 (i) The closed institution ceased operations as result of 

8 an action taken by the Secretary to limit, suspend, or terminate 

9 the institution‘s participation under §600.41 or subpart G of 

10 this part, or a result of an emergency action taken by the 

11 Secretary under 34 CFR 668.83; and

12 (ii) The teach-out plan required under 34 CFR 668.14(b)(26) 

13 is approved by the closed institution‘s accrediting agency. 

14 (2)(i) An institution that conducts a teach-out and is 

15 approved to add an additional location described in paragraph 

16 (d)(1) of this section--

17 (A) Is not requiredDoes not have to meet the two-year 

18 requirement of §600.5(a)(7) or §600.6(a)(6) for the additional 

19 location described in paragraph (d)(1) of this section; and

20 (B) Is not required responsible for any to assume the

21 liabilities of the closed institution as required by provided 

22 under paragraph (c)(1) and (c)(2) of this section if the 

23 institutions are not related parties and there is no commonality 

24 of ownership or management between the institutions, as 

25 described in 34 CFR 668.188(b) and 34 CFR 668.207(b).; and

26 (C) Will not have the default rate of the closed 

27 institution included in the calculation of its default rate, as 

28 would otherwise be required under 34 CFR 668.184 and 34 CFR 

29 668.203, if the institutions are not related parties and there 

30 is no commonality of ownership or management between the 
155

1 institutions, as described in 34 CFR 668.188(b) and 34 CFR 

2 668.207(b).

3 (ii) As a condition for approving an additional location 

4 under paragraph (d)(1) of this section, the Secretary may 

5 require that payments from the institution conducting the teach6 out to the owners or related parties of the closed institution, 

7 are used to satisfy any liabilities owed by the closed 

8 institution.

9 (de) For purposes of this section, an ―additional 

10 location‖ is a location of an institution that was not 

11 designated as an eligible location in the eligibility 

12 notification provided to an institution under §600.21.

13 §668.14 Program participation agreement.

14 * * * * *

15 (b) By entering into a program participation agreement, an 

16 institution agrees that—

17 * * *

18 (26) The institution will submit a teach-out plan to its 

19 accrediting agency in compliance with 34 CFR 602.24(c), and the 

20 standards of the institution‘s accrediting agency upon the 

21 occurrence of any of the following events:

22 (i) In the event tThe Secretary initiates the limitation, 

23 suspension, or termination of the participation of an 

24 institution in any title IV, HEA program under 34 CFR 600.41 or 

25 subpart G of this part or initiates an emergency action under 

26 §668.83.

27 (ii) The institution‘s accrediting agency acts to 

28 withdraw, terminate, or suspend the accreditation or 

29 preaccreditation of the institution.
156

1 (iii) The institution‘s State licensing or authorizing 

2 agency revokes the institution‘s license or legal authorization 

3 to provide an educational program. 

4 (iv) The institution intends to close a location that 

5 provides 100 percent of at least one program.

6 (v) The institution otherwise intends to cease operations, 

7 the institution will submit a teach-out plan to its accrediting 

8 agency in compliance with 34 CFR 602.24(c), and the standards of 

9 the institution‘s accrediting agency.

10 * * * * *

11 Statutory language:

12 Section 487. Program participation agreements.

13 * * * * *

14 (f) INSTITUTIONAL REQUIREMENTS FOR TEACH-OUTS.—

15 (1) IN GENERAL.—In the event the Secretary initiates the 

16 limitation, suspension, or termination of the participation of 

17 an institution of higher education in any program under this 

18 title under the authority of subsection (c)(1)(F) or initiates 

19 an emergency action under the authority of subsection (c)(1)(G) 

20 and its prescribed regulations, the Secretary shall require that 

21 institution to prepare a teach-out plan for submission to the 

22 institution‘s accrediting agency or association in compliance 

23 with section 496(c)(4) [should be 496(c)(6)], the Secretary‘s 

24 regulations on teachout plans, and the standards of the 

25 institution‘s accrediting agency or association.

26 (2) TEACH-OUT PLAN DEFINED.—In this subsection, the term 

27  ̳teach-out plan‘ means a written plan that provides for the 

28 equitable treatment of students if an institution of higher 

29 education ceases to operate before all students have completed 
157

1 their program of study, and may include, if required by the 

2 institution‘s accrediting agency or association, an agreement 

3 between institutions for such a teach-out plan.

4 Section 498. Eligibility and certification procedures.

5 * * * * *

6 (k) TREATMENT OF TEACH-OUTS AT ADDITIONAL LOCATIONS.—

7 (1) IN GENERAL.—A location of a closed institution of 

8 higher education shall be eligible as an additional location of 

9 an eligible institution of higher education, as defined pursuant 

10 to regulations of the Secretary, for the purposes of a teachout 

11 described in section 487(f), if such teach-out has been approved 

12 by the institution‘s accrediting agency.

13 (2) SPECIAL RULE.—An institution of higher education that 

14 conducts a teach-out through the establishment of an additional 

15 location described in paragraph (1) shall be permitted to 

16 establish a permanent additional location at a closed 

17 institution and shall not be required—

18 (A) to meet the requirements of sections 102(b)(1)(E) and 

19 102(c)(1)(C) for such additional location; or

20 (B) to assume the liabilities of the closed institution.

21 (for reference purposes)

22 Section 496. Recognition of accrediting agency or association.

23 * * * * *

24 (c) OPERATING PROCEDURES REQUIRED—No accrediting agency or 

25 association may be recognized by the Secretary as a reliable 

26 authority as to the quality of education or training offered by 

27 an institution seeking to participate in the programs authorized 

28 under this title, unless the agency or association—
158

1 * * *

2 (3) requires an institution to submit for approval to the 

3 accrediting agency a teach-out plan upon the occurrence of any 

4 of the following events:

5 (A) the Department notifies the accrediting agency of an 

6 action against the institution pursuant to section 487(f);

7 (B) the accrediting agency acts to withdraw, terminate, or 

8 suspend the accreditation of the institution; or

9 (C) the institution notifies the accrediting agency that 

10 the institution intends to cease operations;

11 * * *

12 (4)(6) requires that teach-out agreements among 

13 institutions are subject to the approval by the accrediting 

14 agency or association consistent with standards promulgated by 

15 such agency or association;

16
159

1 Issue paper #18

2 Origin: HEOA

3 Issue: Definition of baccalaureate ―liberal arts‖ programs 

4 offered by proprietary schools

5 Statutory cites: Section 102(b) of the HEA

6 Regulatory cites: §600.5

7 DCL GEN-08-12 cite: Pages 23-24

8 Summary of issue: Effective July 1, 2010, the definition of 

9 ―proprietary institution of higher education‖ is amended to add 

10 institutions that provide a program leading to a baccalaureate 

11 degree in liberal arts that the institution has provided since 

12 January 1, 2009, so long as the institution has been accredited 

13 by a recognized regional accreditation agency or organization 

14 since October 1, 2007, or earlier. 

15 As the language in section 102(b)(1)(A)(i) of the HEA is 

16 not new, in Dear Colleague letter GEN-08-12, the Department 

17 noted that this change does not affect the eligibility of 

18 current programs or alter the method used by the Secretary in 

19 determining the ―recognized occupations‖ as required by section 

20 102(b)(1)(A)(i) of the HEA.

21 Dear Colleague letter GEN-08-12 also noted that, pending 

22 negotiated rulemaking, the Secretary will regard a program as 

23 satisfying the "liberal arts" term of the statute if the 

24 Secretary determines, and the institution's recognized regional 

25 accreditation agency or organization affirms, that it is a 

26 general instructional program in the liberal arts subjects, the 

27 humanities disciplines, or the general curriculum, falling 

28 within one or more of the following generally-accepted 

29 instructional categories comprising such programs, but including 
160

1 only instruction in regular programs, and excluding 

2 independently-designed programs, individualized programs, and 

3 unstructured studies:

4  a program that is a structured combination of the arts, 

5 biological and physical sciences, social sciences, and 

6 humanities, emphasizing breadth of study;

7  an undifferentiated program that includes instruction in the 

8 general arts or general science;

9  a program that focuses on combined studies and research in the 

10 humanities subjects as distinguished from the social and 

11 physical sciences, emphasizing languages, literatures, art, 

12 music, philosophy and religion; and

13  any single instructional program in liberal arts and sciences, 

14 general studies and humanities not listed above.

15 Updated information since 3/2-4 meetings: Section 600.5 would 

16 be amended to add to the definition of ―proprietary institution 

17 of higher education‖ institutions that provide a program leading 

18 to a baccalaureate degree in liberal arts that the institution 

19 has provided since January 1, 2009, so long as the institution 

20 has been accredited by a recognized regional accreditation 

21 agency or organization since October 1, 2007, or earlier. In 

22 addition, a new paragraph (i) would be added to §600.5 to 

23 include a definition of a ―program leading to a baccalaureate 

24 degree in liberal arts.‖ The definition would require that the 

25 institution's recognized regional accreditation agency or 

26 organization determine that the program is a general 

27 instructional program in the liberal arts subjects, the 

28 humanities disciplines, or the general curriculum, falling 

29 within one or more generally-accepted instructional categories 

30 comprising such programs. The categories are from the U.S. 
161

1 Department of Education‘s National Center for Education 

2 Statistics‘ (NCES) Classification of Instructional Programs 

3 (CIP), the federal government statistical standard on

4 instructional program classifications. Specifically, the 

5 instructional categories are from the description of CIP 24, 

6 Liberal Arts and Sciences, General Studies and Humanities, 

7 except that it excludes independently-designed programs, 

8 individualized programs, and unstructured studies.

9 Updated information since 4/14-16 meetings: None

10 Tentative agreement: Yes

11 Regulatory language:

12 §600.5 Proprietary institution of higher education.

13 (a) A proprietary institution of higher education is an 

14 educational institution that—

15 (1) Is not a public or private nonprofit educational 

16 institution;

17 (2) Is in a State;

18 (3) Admits as regular students only persons who—

19 (i) Have a high school diploma;

20 (ii) Have the recognized equivalent of a high school 

21 diploma; or

22 (iii) Are beyond the age of compulsory school attendance 

23 in the State in which the institution is physically located;

24 (4) Is legally authorized to provide an educational 

25 program beyond secondary education in the State in which the 

26 institution is physically located;
162

1 (5)(i) Provides an eligible program of training, as 

2 defined in 34 CFR 668.8, to prepare students for gainful 

3 employment in a recognized occupation; or

4 (ii)(A) Provides a program leading to a baccalaureate 

5 degree in liberal arts, as defined in paragraph (i) of this 

6 section, and has provided that program since January 1, 2009; 

7 and

8 (B) Is accredited by a recognized regional accrediting 

9 agency or association, and has continuously held such 

10 accreditation since October 1, 2007, or earlier;

11 * * * * *

12 (i) For purposes of this section, a ―program leading to a 

13 baccalaureate degree in liberal arts‖ is a program that the 

14 institution's recognized regional accreditation agency or 

15 organization determines, is a general instructional program in 

16 the liberal arts subjects, the humanities disciplines, or the 

17 general curriculum, falling within one or more of the following 

18 generally-accepted instructional categories comprising such 

19 programs, but including only instruction in regular programs, 

20 and excluding independently-designed programs, individualized 

21 programs, and unstructured studies:

22 (1) A program that is a structured combination of the 

23 arts, biological and physical sciences, social sciences, and 

24 humanities, emphasizing breadth of study.

25 (2) An undifferentiated program that includes instruction 

26 in the general arts or general science.

27 (3) A program that focuses on combined studies and 

28 research in the humanities subjects as distinguished from the 

29 social and physical sciences, emphasizing languages, 

30 literatures, art, music, philosophy and religion.
163

1 (4) Any single instructional program in liberal arts and 

2 sciences, general studies and humanities not listed above in 

3 paragraph (i)(1) through (i)(3) of this section.

4 Statutory Language:

5 Section 102. Definition of institution of higher education for 

6 purposes of Title IV programs.

7 * * * * *

8 (b) PROPRIETARY INSTITUTION OF HIGHER EDUCATION.—

9 (1) PRINCIPAL CRITERIA.—For the purpose of this section, 

10 the term  ̳ ̳proprietary institution of higher education‘‘ means a 

11 school that—

12 (A) provides an eligible program of training to prepare 

13 students for gainful employment in a recognized occupation;

14 (A)(i) provides an eligible program of training to prepare 

15 students for gainful employment in a recognized occupation; or

16 (ii)(I) provides a program leading to a baccalaureate 

17 degree in liberal arts, and has provided such a program since 

18 January 1, 2009; and

19 (II) is accredited by a recognized regional accrediting 

20 agency or association, and has continuously held such 

21 accreditation since October 1, 2007, or earlier;

22

23

24

25

26
164

1 Issue Paper #19

2 Origin: HEOA

3 Issue: Peer-to-peer file sharing/copyrighted material

4 Statutory cites: Section 485(a) and 487 of the HEA

5 Regulatory cites: §668.14 and §668.43

6 DCL GEN-08-12 cite: Pages 72 and 95

7 Summary of issue: Effective August 14, 2008, the HEOA adds a 

8 new requirement to section 487 of the HEA (Program Participation 

9 Agreement) under which an institution must certify that it has 

10 developed plans to effectively combat the unauthorized 

11 distribution of copyrighted material (including through the use 

12 of a variety of technology-based deterrents) and will, to the 

13 extent practicable, offer alternatives to illegal downloading or 

14 peer-to-peer distribution of intellectual property, as 

15 determined by the institution in consultation with the chief 

16 technology officer or other designated officer of the 

17 institution.

18 In addition, as part of the required information an 

19 institution must make available to prospective and enrolled 

20 students the HEOA adds new subparagraph (P) to section 485(a)(1) 

21 of the HEA to require a description of institutional policies 

22 and sanctions related to copyright infringement. This 

23 description includes (1) an annual disclosure that explicitly 

24 informs students that unauthorized distribution of copyrighted 

25 material, including peer-to-peer file sharing, may subject the 

26 students to civil and criminal liabilities; (2) a summary of the 

27 penalties for violation of Federal copyright laws; and (3) the 

28 institution‘s policies with respect to unauthorized peer-to-peer 

29 file sharing, including disciplinary actions that are taken 

30 against students who engage in unauthorized distribution of 
165

1 copyrighted materials using the institution‘s information 

2 technology system. This provision is also effective August 14, 

3 2008.

4 Updated information since 3/2-4 meetings: 

5 Generally, in drafting these proposed regulations, the 

6 Department sought to stay as close as possible to the actual 

7 language of the statute. In recognition of the diversity among 

8 institutions and evolving technology, we chose not to mandate in 

9 regulation the use of specific technologies or measures. At the 

10 same time, we sought to give meaning to the statute in a way 

11 that provides clarity so that institutions understand what is 

12 expected of them to comply with these provisions. 

13 Program participation agreement

14 Section 668.14(b)(27)(i) would implement section 

15 487(a)(29)(A) of the HEA to require an institution, as a 

16 condition of participation in a Title IV program, to agree that 

17 it has developed and implemented plans to effectively combat the 

18 unauthorized distribution of copyrighted material by users of 

19 the institution‘s network without unduly interfering with the 

20 educational and research use of the network. 

21 The proposed language reflects general agreement by the 

22 subcommittee that the plan should include the use of technology23 based deterrents, an educational component, a description of the 

24 institution‘s procedures for handling copyright infringement, 

25 and a required periodic review of the plan. Institutions would 

26 not be required to use specific types of technology-based 

27 deterrents. To assist with implementation, the four categories 

28 of technology-based deterrents listed in the conference report 

29 to the HEOA could be listed in the preamble to the regulations. 

30 Institutions would be required to demonstrate the effectiveness 
166

1 of their plan by using measureable criteria. Institutions would 

2 be allowed to determine the most appropriate measure or 

3 measures. 

4 Section 668.14(b)(27)(ii) would implement section 

5 487(a)(29)(B) of the HEA, requiring that institutions, in 

6 consultation with the chief technology officer or other 

7 designated officer of the institution, to the extent 

8 practicable, offer legal alternatives to illegal downloading or 

9 otherwise acquiring copyrighted material. The proposed language 

10 also reflects general agreement among the subcommittee members 

11 that institutions (1) be required to periodically review the 

12 legal alternatives for downloading or otherwise acquiring 

13 copyrighted material and (2) provide the results of the review.

14 Consumer information

15 The Department is proposing to implement section 

16 485(a)(1)(P) of the HEA by using, as much as practicable, the 

17 existing framework and definitions found in current regulations. 

18 As the statute requires that most institutional information be 

19 made readily available upon request to prospective and enrolled 

20 students, rather than provided to them on a one-to-one basis, 

21 information regarding institutional policies and sanctions 

22 related to copyright infringement would be handled in the same 

23 manner (i.e., included in the list of institutional information 

24 provided upon request pursuant to §668.43). This information 

25 would be required to (1) explicitly inform enrolled and 

26 prospective students that unauthorized distribution of 

27 copyrighted material, including peer-to-peer file sharing, may 

28 subject a student to civil and criminal liabilities; (2) include 

29 a summary of the penalties for violation of Federal copyright 

30 laws; and (3) delineate the institution‘s policies with respect 

31 to unauthorized peer-to-peer file sharing, including 
167

1 disciplinary actions that are taken against students who engage 

2 in illegal downloading or unauthorized distribution of 

3 copyrighted materials using the institution‘s information 

4 technology system. As the statute does not require disclosure 

5 of this information to employees of the institution, this would 

6 not be mandated in the regulations. However, institutions could 

7 choose to make such information available to employees and the 

8 general public.

9 As current §668.41(c) requires an institution to provide to 

10 enrolled students an annual notice containing a list and brief 

11 description of the consumer information it must disclose and the 

12 procedures for obtaining this consumer information, an 

13 institution would be required to add to this list the fact that 

14 it must make readily available information regarding 

15 institutional policies and sanctions related to copyright 

16 infringement. Per the current definition of ―notice‖ in 

17 §668.41(a), institutions must provide this annual notice on a 

18 one-to-one basis through a direct individual notice to each 

19 enrolled student. This notice must be made through an 

20 appropriate mailing or publication, including direct mailing 

21 through the U.S. Postal Service, campus mail or electronic mail. 

22 Posting on Internet or Intranet websites does not constitute 

23 notice. If the institution discloses the consumer information 

24 by posting the information on a website, it must include in the 

25 notice the exact electronic address at which the information is 

26 posted, and a statement that the institution will provide a 

27 paper copy of the information on request.

28 The current definition of ―prospective student‖ in 

29 §668.41(a) would be used—i.e., an individual who has contacted 

30 an eligible institution requesting information concerning 

31 admission to that institution.
168

1 Updated information since 4/14-16 meetings: The changes to the 

2 proposed regulatory language reflect the proposal that was 

3 presented to the full committee by the Peer-to-Peer 

4 subcommittee, on which tentative agreement was reached by the 

5 full committee. The changes:

6  Clarify that an institution‘s plans must include one or 

7 more technology-based deterrents;

8  Clarify that an institution may comply with the requirement 

9 that its plans include mechanisms for educating and 

10 informing its community about appropriate versus 

11 inappropriate use of copyrighted material by complying with 

12 the consumer information provisions related to copyright 

13 infringement in §668.43(a)(10), but may choose to do more;

14  Replace the term, ―copyright infringement‖ with the term 

15 ―unauthorized distribution of copyrighted material‖ for 

16 consistency;

17  Replace the requirement that an institution‘s plans include 

18 procedures for periodically reviewing the effectiveness of 

19 the plans based on measureable criteria, with the 

20 requirement that an institution‘s plan include procedures 

21 for periodically reviewing the effectiveness of the plans 

22 using relevant assessment criteria; 

23  Remove the examples of measureable criteria and state that 

24 no particular technology measures are favored or required 

25 for inclusion in an institution‘s plans, and that each 

26 institution retains the authority to determine what its 

27 particular plans for compliance will be, including those 

28 that prohibit content monitoring; and
169

1  Remove the requirement that an institution make available 

2 to its employees the results of its periodic review of 

3 legal alternatives for downloading or otherwise acquiring 

4 copyrighted material.

5 As a part of this agreement, it was acknowledged that 

6 institutions will need guidance on various aspects of these 

7 regulations, including deterrent technologies, the components of 

8 effective plans, mechanisms for educating and informing 

9 communities and so forth. The Department has agreed to address 

10 various of these issues in the preamble to the regulations. The 

11 entertainment industry and higher education community have 

12 agreed to work collaboratively to provide further guidance in 

13 the future.

14 Tentative agreement: Yes

15 Regulatory language:

16 §668.14 Program participation agreement.

17 * * * * *

18 (b) By entering into a program participation agreement, an 

19 institution agrees that—

20 * * *

21 (3027) The institution--

22 (i) Has developed and implemented written plans to 

23 effectively combat the unauthorized distribution of copyrighted 

24 material by users of the institution‘s network, without unduly 

25 interfering with educational and research use of the network, 

26 that include--

27 (A) The use of one or more technology-based deterrents; 
170

1 (B) Mechanisms for educating and informing its community 

2 about appropriate versus inappropriate use of copyrighted 

3 material, including that described in §668.43(a)(10);

4 (C) Procedures for handling unauthorized distribution of 

5 copyrighted material copyright infringements, including 

6 disciplinary procedures; and

7 (D) Procedures for periodically reviewing the 

8 effectiveness of the plans to combat the unauthorized 

9 distribution of copyrighted materials by users of the 

10 institution‘s network based on measureable using relevant 

11 assessment criteria. No particular technology measures are 

12 favored or required for inclusion in an institution‘s plans, and 

13 each institution retains the authority to determine what its 

14 particular plans for compliance with paragraph (b)(30) of this 

15 section will be, including those that prohibit content 

16 monitoring which may include the number of copyright 

17 infringement notices received and the rate of recidivism.

18 (ii) Will, in consultation with the chief technology 

19 officer or other designated officer of the institution--

20 (A) Periodically review the legal alternatives for 

21 downloading or otherwise acquiring copyrighted material; 

22 (B) Make available the results of the review in paragraph 

23 (b)(3027)(ii)(A) to its students, and employees through a Web 

24 site and/or[We are not allowed to include slashes in regulatory 

25 text.] other means; and

26 (C) To the extent practicable, offer legal alternatives 

27 for downloading or otherwise acquiring copyrighted material, as 

28 determined by the institution.

29 * * * * *
171

1 §668.43 Institutional information.

2 (a) Institutional information that the institution must 

3 make readily available upon request to enrolled and prospective 

4 students under this subpart includes, but is not limited to—

5 * * *

6 (8) The titles of persons designated under §668.44 and 

7 information regarding how and where those persons may be 

8 contacted; and

9 (9) A statement that a student's enrollment in a program 

10 of study abroad approved for credit by the home institution may 

11 be considered enrollment at the home institution for the purpose 

12 of applying for assistance under the title IV, HEA programs.; 

13 and

14 (10) Institutional policies and sanctions related to 

15 copyright infringement, including--

16 (i) A statement that explicitly informs the its students 

17 that unauthorized distribution of copyrighted material, 

18 including unauthorized peer-to-peer file sharing, may subject 

19 the students to civil and criminal liabilities;

20 (ii) A summary of the penalties for violation of Federal 

21 copyright laws; and

22 (iii) A description of the institution‘s policies with 

23 respect to unauthorized peer-to-peer file sharing, including 

24 disciplinary actions that are taken against students who engage 

25 in illegal downloading or unauthorized distribution of 

26 copyrighted materials using the institution‘s information 

27 technology system.

28 Statutory language:

29 SEC. 485. Institutional and Financial Assistance for Students.
172

1 (a) INFORMATION DISSEMINATION ACTIVITIES.—

2 (1) Each eligible institution participating in any program 

3 under this title shall carry out information dissemination 

4 activities for prospective and enrolled students (including 

5 those attending or planning to attend less than full time) 

6 regarding the institution and all financial assistance under 

7 this title. The information required by this section shall be 

8 produced and be made readily available upon request, through 

9 appropriate publications, mailings, and electronic media, to an 

10 enrolled student and to any prospective student. Each eligible 

11 institution shall, on an annual basis, provide to all enrolled 

12 students a list of the information that is required to be 

13 provided by institutions to students by this section and section 

14 444 of the General Education Provisions Act (also referred to as 

15 the Family Educational Rights and Privacy Act of 1974), together 

16 with a statement of the procedures required to obtain such 

17 information. The information required by this section shall 

18 accurately describe—

19 * * *

20 (P) institutional policies and sanctions related to 

21 copyright infringement, including—

22 (i) an annual disclosure that explicitly informs students 

23 that unauthorized distribution of copyrighted material, 

24 including unauthorized peer-to-peer file sharing, may subject 

25 the students to civil and criminal liabilities;

26 (ii) a summary of the penalties for violation of Federal 

27 copyright laws; and

28 (iii) a description of the institution‘s policies with 

29 respect to unauthorized peer-to-peer file sharing, including 

30 disciplinary actions that are taken against students who engage 
173

1 in unauthorized distribution of copyrighted materials using the 

2 institution‘s information technology system;

3 Section 487. Program participation agreements.

4 * * * * *

5 (a) REQUIRED FOR PROGRAMS OF ASSISTANCE; CONTENTS.—In order 

6 to be an eligible institution for the purposes of any program 

7 authorized under this title, an institution must be an 

8 institution of higher education or an eligible institution (as

9 that term is defined for the purpose of that program) and shall, 

10 except with respect to a program under subpart 4 of part A, 

11 enter into a program participation agreement with the Secretary. 

12 The agreement shall condition the initial and continuing 

13 eligibility of an institution to participate in a program upon 

14 compliance with the following requirements:

15 * * *

16 (29) The institution certifies that the institution—

17 (A) has developed plans to effectively combat the 

18 unauthorized distribution of copyrighted material, including 

19 through the use of a variety of technology-based deterrents; and

20 (B) will, to the extent practicable, offer alternatives to 

21 illegal downloading or peer-to-peer distribution of intellectual 

22 property, as determined by the institution in consultation with 

23 the chief technology officer or other designated officer of the 

24 institution.

25
174

1 Issue Paper #20

2 Origin: HEOA

3 Issue: Institutional plans for improving the academic program

4 Statutory cites: Section 485(a) of the HEA

5 Regulatory cites: §668.43 

6 DCL GEN-08-12 cite: Page 95

7 Summary of issue: As part of the required information an 

8 institution must make available to prospective and enrolled 

9 students, the HEOA adds to the existing description of the 

10 academic program any plans the institution has for improving the 

11 academic program. This provision was effective August 14, 2008.

12 Updated information since 3/2-4 meetings: Section 668.43 would 

13 be amended to add to the institutional information that an 

14 institution must make readily available upon request to enrolled 

15 and prospective students any plans by the institution for 

16 improving the academic program of the institution.

17 Updated information since 4/14-16 meetings: Preamble language 

18 will state that an institution determines what a ―plan‖ is, 

19 including when a plan becomes a plan.

20 Tentative agreement: Yes

21 Regulatory language:

22 §668.43 Institutional information.

23 (a) Institutional information that the institution must 

24 make readily available upon request to enrolled and prospective 

25 students under this subpart includes, but is not limited to—

26 * * *

27 (5) The academic program of the institution, including—
175

1 (i) The current degree programs and other educational and 

2 training programs;

3 (ii) The instructional, laboratory, and other physical 

4 facilities which relate to the academic program; and

5 (iii) The institution's faculty and other instructional 

6 personnel; and

7 (iv) Any plans by the institution for improving the 

8 academic program of the institution;

9 * * * * *

10 Statutory Language:

11 SEC. 485. Institutional and Financial Assistance for Students.

12 (a) INFORMATION DISSEMINATION ACTIVITIES.—

13 (1) Each eligible institution participating in any program 

14 under this title shall carry out information dissemination 

15 activities for prospective and enrolled students (including 

16 those attending or planning to attend less than full time) 

17 regarding the institution and all financial assistance under 

18 this title. The information required by this section shall be 

19 produced and be made readily available upon request, through 

20 appropriate publications, mailings, and electronic media, to an 

21 enrolled student and to any prospective student. Each eligible 

22 institution shall, on an annual basis, provide to all enrolled 

23 students a list of the information that is required to be 

24 provided by institutions to students by this section and section 

25 444 of the General Education Provisions Act (also referred to as 

26 the Family Educational Rights and Privacy Act of 1974), together 

27 with a statement of the procedures required to obtain such 

28 information. The information required by this section shall 

29 accurately describe—
176

1 * * *

2 (G) the academic program of the institution, including (i) 

3 the current degree programs and other educational and training 

4 programs, (ii) the instructional, laboratory, and other physical 

5 plant facilities which relate to the academic program, and

6 program, (iii) the faculty and other instructional personnel, 

7 and (iv) any plans by the institution for improving the academic 

8 program of the institution;

9
177

1 Issue Paper # 21

2 Origin: HEOA

3 Issue: Leveraging Educational Assistance Partnership (LEAP) 

4 Program Non-Federal Share

5 Statutory cites: Section 415C(b)(10) of the HEA

6 Regulatory cites: §692.10

7 DCL GEN-08-12 cite: None

8 Summary of issue: The HEA as amended by the HEOA provides that 

9 the non-Federal share of the amount of student grants or work10 study jobs under the LEAP Program must be from State funds for 

11 the program and no longer requires the non-Federal share to come 

12 from a direct appropriation of State funds. 

13 Updated information since 4/14-16 meetings:

14 The amendments to §692.10 would delete references to State funds 

15 being appropriated funds and would make technical corrections to 

16 reflect that multiple programs are funded under this part.

17 Tentative agreement: Yes.

18 Regulatory Language:

19 §692.10 How does the Secretary allot funds to the States?
178

1 (a)(1) The Secretary allots to each State participating in 

2 the LEAP program an amount which bears the same ratio to the 

3 Federal LEAP funds appropriated as the number of students in 

4 that State who are ―deemed eligible‖ to participate in the 

5 State's LEAP program bears to the total number of students in 

6 all States who are ―deemed eligible‖ to participate in the LEAP 

7 program, except that no State may receive less than it received 

8 in fiscal year 1979 for the programs under this part.

9 (2) For the programs under this part, Iif the Federal LEAP 

10 funds appropriated for a fiscal year are not sufficient to allot 

11 to each State the amount of Federal LEAP funds it received in 

12 fiscal year 1979, the Secretary allots to each State an amount 

13 which bears the same ratio to the amount of Federal LEAP funds 

14 appropriated as the amount of Federal LEAP funds that State 

15 received in fiscal year 1979 bears to the amount of Federal LEAP

16 funds all States received in fiscal year 1979 for the programs 

17 under this part.

18 (b) For the purpose of paragraph (a)(1) of this section, 

19 the Secretary determines the number of students ―deemed 

20 eligible‖ to participate in a State's LEAP Program by dividing 

21 the amount of that State's LEAP expenditures, including both its 

22 Federal allotment and the State-appropriated funds matching the 

23 allotment, by the average grant award per student of all 

24 participating States. The Secretary determines the ―average 

25 grant award per student‖ by dividing the total number of student 

26 recipients for all States into the total amount of LEAP 

27 expenditures for all States, including both the Federal 

28 allotments and the State-appropriated funds matching those 

29 allotments. In making this determination, the Secretary uses 

30 the most current available data reported by each State.

31
179

1 Statutory Language:

2 (10) For any academic year beginning after June 30, 1987, 

3 provides the non-Federal share of the amount of student grants 

4 or work-study jobs under this subpart through a direct 

5 appropriation of state funds for the program under this subpart; 

6 and

7
180

1 Issue Paper # 22

2 Origin: HEOA

3 Issue: Notification to Students of Source of LEAP Grant 

4 Funding

5 Statutory cites: Section 415C(b)(11) of the HEA

6 Regulatory cites: §692.21

7 DCL GEN-08-12 cite: Page 110

8 Summary of issue: The HEA as amended by the HEOA requires the 

9 State program to notify eligible students that grants are (1) 

10 LEAP Grants and (2) are funded by the Federal Government, the 

11 State, and, for LEAP Grants to students made under GAP, other 

12 contributing partners.

13 Updated information since 3/14-16 meetings:

14 The draft proposed regulations generally reflect the statutory 

15 language. The Department is committed to discussing in the 

16 preamble that the intent is to provide maximum flexibility to 

17 States in implementing this provision.

18 Tentative agreement: Yes.

19 Regulatory Language: 

20 §692.21 What requirements must be met by a State program?

21 To receive a payment under the LEAP Program for any fiscal 

22 year, a State must have a program that—

23 (a) Is administered by a single State agency; 

24 (b) Provides assistance only to students who meet the 

25 eligibility requirements in §692.40;

26 (c) Provides that assistance under this program to a full27 time student will not be more than the lesser of $12,500 5,000
181

1 or the student‘s cost of attendance under section 472 of the HEA 

2 for each academic year;

3 (d) Provides for the selection of students to receive 

4 assistance on the basis of substantial financial need determined 

5 annually by the State on the basis of standards that the State 

6 establishes and the Secretary approves;

7 (e) Provides that no student or parent shall be charged a 

8 fee that is payable to an organization other than the State for 

9 the purpose of collecting data to make a determination of 

10 financial need in accordance with paragraph (d) of this section;

11 (f) Provides that all public or private nonprofit 

12 institutions of higher education and all postsecondary 

13 vocational institutions in the State are eligible to participate 

14 unless that participation is in violation of—

15 (1) The constitution of the State; or

16 (2) A State statute that was enacted before October 1, 

17 1978;

18 (g) Provides that, if a State awards grants to independent 

19 students or to students who are less-than-full-time students 

20 enrolled in an institution, a reasonable portion of the State's 

21 allocation must be awarded to those students;

22 (h) Provides that—

23 (1) The State will pay an amount for grants and work-study 

24 jobs under this part for each fiscal year that is not less than 

25 the payment to the State under this part for that fiscal year; 

26 and

27 (2) The amount that the State expends during a fiscal year 

28 for grants and work-study jobs under the LEAP Program represents 

29 an additional amount for grants and work-study jobs for students 
182

1 attending institutions over the amount expended by the State for 

2 those activities during the fiscal year two years prior to the 

3 fiscal year in which the State first received funds under the 

4 LEAP Program;

5 (i) Provides for State expenditures under the State program 

6 of an amount that is not less than--

7 (1) The average annual aggregate expenditures for the 

8 preceding three fiscal years; or

9 (2) The average annual expenditure per full-time equivalent 

10 student for those years;

11 (j) Provides that, to the extent practicable, the 

12 proportion of the funds awarded to independent students in the 

13 LEAP Program shall be the same proportion of funds awarded to 

14 independent students as is in the State program or programs of 

15 which the State's LEAP Program is a part; and 

16 (k) Notifies eligible students that the grants are—

17 (1) Leveraging Educational Assistance Partnership Grants; 

18 and

19 (2) Funded by the Federal Government, the State, and, where 

20 applicable, other contributing partners; and

21 (kl) Provides for reports to the Secretary that are 

22 necessary to carry out the Secretary's functions under the LEAP 

23 Program.

24 Statutory Language:

25 (11) provides notification to eligible students that such 

26 grants are—

27 (A) Leveraging Educational Assistance Partnership Grants; 

28 and
183

1 (B) funded by the Federal Government, the State, and, where 

2 applicable, other contributing partners.

3
184

1 Issue Paper #23

2 Origin: HEOA

3 Issue: GAP Program Activities: Partnerships

4 Statutory cites: Section 415E(c)(4) and (d) of the HEA

5 Regulatory cites: §§692.94, 692.100, 692.101, and 692.111

6 DCL GEN-08-12 cite: Page 113

7 Summary of issue:

8 Partnership

9 Each State receiving an allotment must use the funds to 

10 establish a partnership to award LEAP Grants under GAP to 

11 eligible low-income students in order to increase the amount of 

12 financial assistance these students receive under these programs 

13 for undergraduate education expenses.

14 Roles of Partners

15 State agency

16 A State agency that is in a partnership receiving a GAP 

17 allotment serves as the primary administrative unit for the 

18 partnership. The State agency:

19  provides or coordinates non-Federal share funds and 

20 coordinates activities among partners; 

21  encourages each institution of higher education in the 

22 State to participate in the partnership; 

23  makes determinations and early notifications of 

24 assistance; 

25  annually reports to the Secretary on the partnership‘s 

26 progress in meeting the purpose of GAP; and 
185

1  may provide early information and intervention, 

2 mentoring, or outreach programs.

3 Degree-granting institution of higher education

4 An institution in a partnership:

5  must recruit and admit participating qualified students 

6 and provide such additional institutional grant aid to 

7 participating students as agreed to with the State 

8 agency; 

9  must provide support services to students who receive 

10 LEAP Grants under GAP and are enrolled at the 

11 institution; 

12  must assist the State in the identification of eligible 

13 students and the dissemination of early notifications of 

14 assistance as agreed to with the State agency; and 

15  may provide funding for early information and 

16 intervention, mentoring, or outreach programs or provide 

17 such services directly.

18 Early intervention programs

19 An early information and intervention, mentoring, or 

20 outreach program that is in a partnership must provide direct 

21 services, support, and information to participating students.

22 Philanthropic organization or private corporation

23 A philanthropic organization or private corporation that is 

24 in a partnership must provide funds for LEAP Grants under GAP 

25 for participating students or provide funds or support for early 

26 information and intervention, mentoring, or outreach programs.

27 Updated information since 4/14-16 meetings:

28 See attachment: SLEAP and GAP Draft Regulations.
186

1 Tentative agreement: Yes.

2

3 Regulatory Language:

4 See §692.94 on page 2 of Appendix A.

5 See §692.100 on page 2-3 of Appendix A.

6 See §692.101 on page 4 of Appendix A.

7 See §692.111 on page 5-7 of Appendix A.

8 Statutory Language:

9 (c) * * *

10 * * * * *

11 (4) ROLES OF PARTNERS.—

12 (A) STATE AGENCY.—A State agency that is in a partnership 

13 receiving an allotment under this section—

14 (i) shall—

15 (I) serve as the primary administrative unit for the 

16 partnership;

17 (II) provide or coordinate non-Federal share funds, and 

18 coordinate activities among partners;

19 (III) encourage each institution of higher education in the 

20 State to participate in the partnership;

21 (IV) make determinations and early notifications of 

22 assistance as described under subsection (d)(2); and

23 (V) annually report to the Secretary on the partnership‘s 

24 progress in meeting the purpose of this section; and

25 (ii) may provide early information and intervention, 

26 mentoring, or outreach programs.
187

1 (B) DEGREE-GRANTING INSTITUTIONS OF HIGHER EDUCATION.—A 

2 degree-granting institution of higher education that is in a 

3 partnership receiving an allotment under this section—

4 (i) shall—

5 (I) recruit and admit participating qualified students and 

6 provide such additional institutional grant aid to participating 

7 students as agreed to with the State agency;

8 (II) provide support services to students who receive 

9 grants for access and persistence under this section and are 

10 enrolled at such institution; and

11 (III) assist the State in the identification of eligible 

12 students and the dissemination of early notifications of 

13 assistance as agreed to with the State agency; and

14 (ii) may provide funding for early information and 

15 intervention, mentoring, or outreach programs or provide such 

16 services directly.

17 (C) PROGRAMS.—An early information and intervention, 

18 mentoring, or outreach program that is in a partnership 

19 receiving an allotment under this section shall provide direct 

20 services, support, and information to participating students.

21 (D) PHILANTHROPIC ORGANIZATION OR PRIVATE CORPORATION.— A 

22 philanthropic organization or private corporation that is in a 

23 partnership receiving an allotment under this section shall 

24 provide funds for grants for access and persistence for 

25 participating students, or provide funds or support for early 

26 information and intervention, mentoring, or outreach programs.

27 (d) AUTHORIZED ACTIVITIES.—

28 (1) IN GENERAL.—
188

1 (A) ESTABLISHMENT OF PARTNERSHIP.—Each State receiving an 

2 allotment under this section shall use the funds to establish a 

3 partnership to award grants for access and persistence to 

4 eligible low-income students in order to increase the amount of 

5 financial assistance such students receive under this subpart 

6 for undergraduate education expenses.

7
189

1 Issue paper #24

2 Origin: HEOA

3 Issue: GAP Program Activities: Awards

4 Statutory cites: Section 415E(d) of the HEA

5 Regulatory cites: §§692.111(b) and 692.120

6 DCL GEN-08-12 cite: Page 114

7 Summary of issue: 

8 LEAP Grant under GAP amount

9 The amount of a LEAP Grant under GAP awarded by a State to 

10 a student must be not less than the average undergraduate 

11 tuition and mandatory fees at the public institutions of higher 

12 education in the State where the student resides that are of the 

13 same type of institution as the institution of higher education 

14 the student attends minus other Federal and State aid the 

15 student receives.

16 Institutions of higher education

17 A State receiving a GAP allotment may restrict the use of 

18 LEAP Grants under GAP by awarding the grants only to students 

19 attending institutions of higher education that are 

20 participating in the partnership. If a State provides LEAP 

21 Grants not awarded under GAP to students attending institutions 

22 of higher education located in another State, grants awarded 

23 under GAP may be used at institutions of higher education 

24 located in another State.

25 Student eligibility

26 A student must meet one of the following:
190

1  The student meets at least two of the following criteria, 

2 with priority given to students meeting all of the 

3 following criteria:

4 o has an EFC equal to zero, as determined under the 

5 Title IV need analysis, or a comparable alternative 

6 based upon the State‘s approved criteria for LEAP; 

7 o qualifies for the State‘s maximum undergraduate award 

8 for LEAP; or

9 o is participating in, or has participated in, a 

10 Federal, State, institutional, or community early 

11 information and intervention, mentoring, or outreach 

12 program, as recognized by the State agency 

13 administering LEAP and GAP.

14  The student is receiving, or has received, a LEAP Grant 

15 under GAP, and is compliant with the requirements for the 

16 duration of an award.

17 Grant award

18 Once a student, including those students who have received 

19 an early notification from the State, applies for admission to 

20 an institution that is a partner in the partnership, files a 

21 FAFSA and any related State form, and is determined by the State 

22 to meet the student eligibility requirements in the prior 

23 section, the State must issue the student a preliminary award 

24 certificate for a LEAP Grant under GAP with estimated award 

25 amounts and inform the student that payment of the grant award 

26 amounts is subject to certification of enrollment and award 

27 eligibility by the student‘s institution of higher education.

28 Duration of an award
191

1 An eligible student who receives a LEAP Grant under GAP 

2 receives an award for each year of the student‘s undergraduate 

3 education in which the student remains eligible for assistance 

4 under Title IV, including meeting the Title IV satisfactory 

5 academic progress standards, and remains financially eligible as 

6 determined by the State, except that the State may impose 

7 reasonable time limits to degree completion. 

8 Updated information since 4/14-16 meetings:

9 See attachment: SLEAP and GAP Draft Regulations.

10 Tentative agreement: Yes.

11 Regulatory Language:

12 See §692.111(b) on page 5 of Appendix A.

13 See §692.120 on page 8-9 of Appendix A.

14 Statutory Language: 

15 (d) AUTHORIZED ACTIVITIES.—

16 (1) IN GENERAL.—

17 (A) * * *

18 (B) AMOUNT OF GRANTS.—The amount of a grant for access and 

19 persistence awarded by a State to a student under this section 

20 shall be not less than—

21 (i) the average undergraduate tuition and mandatory fees at 

22 the public institutions of higher education in the State where 

23 the student resides that are of the same type of institution as 

24 the institution of higher education the student attends; minus

25 (ii) other Federal and State aid the student receives.

26 (C) SPECIAL RULES.—
192

1 (i) PARTNERSHIP INSTITUTIONS.—A State receiving an 

2 allotment under this section may restrict the use of grants for 

3 access and persistence under this section by awarding the grants 

4 only to students attending institutions of higher education that 

5 are participating in the partnership.

6 (ii) OUT-OF-STATE INSTITUTIONS.—If a State provides grants 

7 through another program under this subpart to students attending 

8 institutions of higher education located in another State, 

9 grants awarded under this section may be used at institutions of 

10 higher education located in another State.

11 (2) ***

12 (3) ELIGIBILITY.—In determining which students are eligible 

13 to receive grants for access and persistence, the State shall 

14 ensure that each such student complies with the following 

15 subparagraph (A) or (B):

16 (A) Meets not less than two of the following criteria, with 

17 priority given to students meeting all of the following 

18 criteria:

19 (i) Has an expected family contribution equal to zero, as 

20 determined under part F, or a comparable alternative based upon 

21 the State‘s approved criteria in section 415C(b)(4).

22 (ii) Qualifies for the State‘s maximum undergraduate award, 

23 as authorized under section 415C(b).

24 (iii) Is participating in, or has participated in, a 

25 Federal, State, institutional, or community early information 

26 and intervention, mentoring, or outreach program, as recognized 

27 by the State agency administering activities under this section.
193

1 (B) Is receiving, or has received, a grant for access and 

2 persistence under this section, in accordance with paragraph 

3 (5).

4 (4) GRANT AWARD.—Once a student, including those students 

5 who have received early notification under paragraph (2) from 

6 the State, applies for admission to an institution that is a 

7 partner in the partnership, files a Free Application for Federal 

8 Student Aid and any related State form, and is determined 

9 eligible by the State under paragraph (3), the State shall—

10 (A) issue the student a preliminary award certificate for a 

11 grant for access and persistence with estimated award amounts; 

12 and

13 (B) inform the student that payment of the grant for access 

14 and persistence award amounts is subject to certification of 

15 enrollment and award eligibility by the institution of higher 

16 education.

17 (5) DURATION OF AWARD.—An eligible student who receives a 

18 grant for access and persistence under this section shall 

19 receive such grant award for each year of such student‘s 

20 undergraduate education in which the student remains eligible 

21 for assistance under this title, including pursuant to section 

22 484(c), and remains financially eligible as determined by the 

23 State, except that the State may impose reasonable time limits 

24 to degree completion.

25
194

1 Issue Paper #25

2 Origin: HEOA

3 Issue: GAP Program Activities: Early Notification

4 Statutory cites: Section 415E(d)(2) of the HEA

5 Regulatory cites: §692.111(d)

6 DCL GEN-08-12 cite: Pages 114-115

7 Summary of issue: Each State receiving a GAP allotment must 

8 annually notify low-income students in grades seven through 12 

9 in the State, and their families, of their potential eligibility 

10 for student financial assistance, including a LEAP Grant under 

11 GAP, to attend an institution of higher education. 

12 The notice must include:

13  Information about early information and intervention, 

14 mentoring, or outreach programs available to the student;

15  Information that a student‘s eligibility for a LEAP Grant 

16 under GAP is enhanced through participation in an early 

17 information and intervention, mentoring, or outreach 

18 program;

19  An explanation that student and family eligibility for, 

20 and participation in, other Federal means-tested programs 

21 may indicate eligibility for a LEAP Grant under GAP and 

22 other student aid programs;

23  A nonbinding estimate of the total amount of financial 

24 aid that a low-income student with a similar income level 

25 may expect to receive, including an estimate of the 

26 amount of a LEAP Grant under GAP and an estimate of the 

27 amount of grants, loans, and all other available types of 
195

1 aid from the major Federal and State financial aid 

2 programs;

3  An explanation that the eligibility requirements a 

4 student must meet to be eligible for a LEAP Grant under 

5 GAP including graduating from secondary school and 

6 enrolling in a partner institution or an eligible out-of7 State institution;

8  Information on any additional requirements (such as a 

9 student pledge detailing student responsibilities) that 

10 the State may impose for receipt of a LEAP Grant under 

11 GAP; and

12  Instructions on how to apply for a LEAP Grant under GAP 

13 and an explanation that a student must file a FAFSA to be 

14 eligible for a LEAP Grant under GAP and assistance from 

15 other Federal and State financial aid programs.

16 The notification may include a disclaimer that LEAP Grants 

17 under GAP are contingent on (a) a student‘s financial 

18 eligibility at the time of the student‘s enrollment at an 

19 institution of higher education; (b) the annual Federal and 

20 State spending for higher education; and (c) other aid received 

21 by the student at the time of the student‘s enrollment at an 

22 institution of higher education.

23 Updated information since 4/14-16 meetings:

24 See attachment: SLEAP and GAP Draft Regulations.

25 Tentative agreement: Yes.

26 Regulatory Language:

27 See §692.111(d) on page 6 of Appendix A.

28 Statutory Language:
196

1 (2) EARLY NOTIFICATION.—

2 (A) IN GENERAL.—Each State receiving an allotment under 

3 this section shall annually notify low-income students in grades 

4 seven through 12 in the State, and their families, of their 

5 potential eligibility for student financial assistance, 

6 including an access and persistence grant, to attend an 

7 institution of higher education.

8 (B) CONTENT OF NOTICE.—The notice under subparagraph (A)—

9 (i) shall include—

10 (I) information about early information and intervention, 

11 mentoring, or outreach programs available to the student;

12 (II) information that a student‘s eligibility for a grant 

13 for access and persistence is enhanced through participation in 

14 an early information and intervention, mentoring, or outreach 

15 program;

16 (III) an explanation that student and family eligibility 

17 for, and participation in, other Federal means-tested programs 

18 may indicate eligibility for a grant for access and persistence 

19 and other student aid programs;

20 (IV) a nonbinding estimate of the total amount of financial 

21 aid that a low-income student with a similar income level may 

22 expect to receive, including an estimate of the amount of a 

23 grant for access and persistence and an estimate of the amount 

24 of grants, loans, and all other available types of aid from the 

25 major Federal and State financial aid programs;

26 (V) an explanation that in order to be eligible for a grant 

27 for access and persistence, at a minimum, a student shall—

28 (aa) meet the requirement under paragraph (3);

29 (bb) graduate from secondary school; and
197

1 (cc) enroll at an institution of higher education—

2 (AA) that is a partner in the partnership; or

3 (BB) with respect to which attendance is permitted under 

4 subsection (d)(1)(C)(ii);

5 (VI) information on any additional requirements (such as a 

6 student pledge detailing student responsibilities) that the 

7 State may impose for receipt of a grant for access and 

8 persistence under this section; and

9 (VII) instructions on how to apply for a grant for access 

10 and persistence and an explanation that a student is required to 

11 file a Free Application for Federal Student Aid authorized under 

12 section 483(a) to be eligible for such grant and assistance from 

13 other Federal and State financial aid programs; and

14 (ii) may include a disclaimer that grant awards for access 

15 and persistence are contingent on— 

16 (I) a determination of the student‘s financial eligibility 

17 at the time of the student‘s enrollment at an institution of 

18 higher education that is a partner in the partnership or 

19 qualifies under subsection (d)(1)(C)(ii);

20 (II) annual Federal and State spending for higher 

21 education; and

22 (III) other aid received by the student at the time of the 

23 student‘s enrollment at such institution of higher education.

24
198

1 Issue paper #26

2 Origin: HEOA

3 Issue: Applicability of LEAP Program Requirements

4 Statutory cites: Section 415E(g) of the HEA

5 Regulatory cites: §§692.94(a)(4), 692.100(h) and 692.110

6 DCL GEN-08-12 cite: Page 110

7 Summary of issue: The HEOA provides that LEAP Program 

8 requirements will apply to GAP to the extent that they are not 

9 inconsistent with GAP requirements.

10 Updated information since 4/14-16 meetings:

11 See attachment: SLEAP and GAP Draft Regulations.

12 Tentative agreement: Yes.

13 Regulatory Language:

14 See §692.94(a)(4) on page 2 of Appendix A.

15 See §692.100(h) on page 4 of Appendix A.

16 See §692.110 on pages 4-5 of Appendix A.

17 Statutory Language:

18 (g) APPLICABILITY RULE.—The provisions of this subpart that 

19 are not inconsistent with this section shall apply to the 

20 program authorized by this section.

21

22
199

1 Issue Paper #27

2 Origin: HEOA

3 Issue: GAP Allotment: Application

4 Statutory cites: Section 415E(c) of the HEA

5 Regulatory cites: §§692.94 and 692.100 

6 DCL GEN-08-12 cite: Pages 112-113

7 Summary of issue: To receive a GAP allotment, a State must 

8 submit an application at such time, in such manner, and 

9 containing such information as the Secretary may require.

10 An application on behalf of a partnership that must include 

11 the following information:

12  A description of the State‘s plan for using the allotted 

13 funds.

14  An assurance that the State will provide matching funds, 

15 in cash or in-kind, from State, institutional, 

16 philanthropic, or private funds, of not less than 33.33 

17 percent of the cost of carrying out the program. A State 

18 that uses non-Federal funds to create or expand 

19 partnerships, in which partners match State funds for 

20 student scholarships, may apply the matching funds from 

21 those entities toward fulfilling the State‘s matching 

22 non-Federal share.

23  An assurance that the State will use Federal GAP funds to 

24 supplement, and not supplant, Federal and State funds 

25 available for carrying out the activities under Title IV 

26 of the HEA.

27  An assurance that early information and intervention, 

28 mentoring, or outreach programs exist within the State or 
200

1 that there is a plan to make these programs widely 

2 available.

3  A description of the organizational structure that the 

4 State has in place to administer the program, including a 

5 description of how the State will compile information on 

6 degree completion of students receiving grants under this 

7 section.

8  A description of the steps the State will take to ensure 

9 that students who receive a LEAP Grant under GAP persist 

10 to degree completion.

11  An assurance that the State has a method in place, such 

12 as acceptance of the Title IV automatic zero EFC, to 

13 identify eligible low-income students and award State 

14 grant aid to such students.

15  An assurance that the State will provide notification to 

16 eligible low-income students that grants under GAP are 

17 LEAP Grants and are funded by the Federal Government and 

18 the State, and, where applicable, other contributing 

19 partners. 

20 The State agency that submits an application for GAP must 

21 be the same agency that submits an application for LEAP.

22 A State agency must apply in partnership with:

23  At least one public and one private degree-granting 

24 institution of higher education that are located in the 

25 State, if applicable;

26  New or existing early information and intervention, 

27 mentoring, or outreach programs located in the State; and 
201

1  At least one philanthropic organization located in, or 

2 that provides funding in, the State or private 

3 corporation located in, or that does business in, the 

4 State.

5 Updated information since 4/14-16 meetings:

6 See attachment: SLEAP and GAP Draft Regulations.

7 Tentative agreement: Yes.

8

9 Regulatory Language:

10 See §692.94 on page 2 of Appendix A.

11 See §692.100 on pages 2-4 of Appendix A.

12 Statutory Language:

13 (c) Application for Allotment.--

14 (1) In general.--

15 (A) Submission.--A State that desires to receive an 

16 allotment under this section on behalf of a partnership 

17 described in paragraph (3) shall submit an application to the 

18 Secretary at such time, in such manner, and containing such 

19 information as the Secretary may require.

20 (B) Content.--An application submitted under subparagraph 

21 (A) shall include the following:

22 (i) A description of the State's plan for using the 

23 allotted funds.

24 (ii) An assurance that the State will provide matching 

25 funds, in cash or in kind, from State, institutional, 

26 philanthropic, or private funds, of not less than 33.33 percent 

27 of the cost of carrying out the activities under subsection (d). 
202

1 The State shall specify the methods by which matching funds will 

2 be paid. A State that uses non-Federal funds to create or expand 

3 partnerships with entities described in subsection (a)(1), in 

4 which such entities match State funds for student scholarships, 

5 may apply such matching funds from such entities toward 

6 fulfilling the State's matching obligation under this clause.

7 (iii) An assurance that the State will use funds provided 

8 under this section to supplement, and not supplant, Federal and 

9 State funds available for carrying out the activities under this 

10 title.

11 (iv) An assurance that early information and intervention, 

12 mentoring, or outreach programs exist within the State or that 

13 there is a plan to make such programs widely available.

14 (v) A description of the organizational structure that the 

15 State has in place to administer the activities under subsection 

16 (d), including a description of how the State will compile 

17 information on degree completion of students receiving grants 

18 under this section.

19 (vi) A description of the steps the State will take to 

20 ensure that students who receive grants under this section 

21 persist to degree completion.

22 (vii) An assurance that the State has a method in place, 

23 such as acceptance of the automatic zero expected family 

24 contribution determination described in section 479(c), to 

25 identify eligible low-income students and award State grant aid 

26 to such students.

27 (viii) An assurance that the State will provide 

28 notification to eligible low-income students that grants under 

29 this section are--
203

1 (I) Leveraging Educational Assistance Partnership Grants; 

2 and 

3 (II) funded by the Federal Government and the State, and, 

4 where applicable, other contributing partners.

5 (2) State agency.--The State agency that submits an 

6 application for a State under section 415C(a) shall be the same 

7 State agency that submits an application under paragraph (1) for 

8 such State.

9 (3) Partnership.--In applying for an allotment under this 

10 section, the State agency shall apply for the allotment in 

11 partnership with--

12 (A) not less than one public and one private degree13 granting institution of higher education that are located in the 

14 State, if applicable;

15 (B) new or existing early information and intervention, 

16 mentoring, or outreach programs located in the State; and

17 (C) not less than one--

18 (i) philanthropic organization located in, or that provides 

19 funding in, the State; or

20 (ii) private corporation located in, or that does business 

21 in, the State.

22
204

1 Issue Paper #28

2 Origin: HEOA

3 Issue: GAP Allotment: Determination

4 Statutory cites: Section 415E(b), 415E(g), and 415B of the 

5 HEA

6 Regulatory cites: §692.110

7 DCL GEN-08-12 cite: Page 111

8 Summary of issue: The Secretary makes an allotment to each 

9 State that submits an application to meet the costs of the 

10 Federal share of the State‘s GAP program.

11 Under section 415(g) of the HEA, LEAP provisions that are 

12 not inconsistent with GAP program requirements apply to GAP. 

13 Section 415B of the HEA sets forth the allotment formula for the 

14 subpart.

15 In making a continuation award for a State that continues 

16 to meet the specifications in the State‘s approved application, 

17 the Secretary makes an allotment to the State that is not less 

18 than the allotment made to the State in the previous year.

19 The Secretary gives priority to a State that applies for an 

20 allotment in partnerships with degree-granting institutions 

21 whose combined full-time enrollment represents a majority of all 

22 students attending institutions of higher education in the 

23 State.

24 Updated information since 4/14-16 meetings:

25 See attachment: SLEAP and GAP Draft Regulations.

26 Tentative agreement: Yes.

27 Regulatory Language:
205

1 See subpart B, §692.70 on page 1 of Appendix A.

2 See §692.110 on pages 4-5 of Appendix A.

3 Statutory Language: 

4 SEC. 4415E

5 * * * * * 

6 (b) Allotments to States.--

7 (1) In general.--

8 (A) Authorization.--From sums reserved under section 

9 415A(b)(2) for each fiscal year, the Secretary shall make an 

10 allotment to each State that submits an application for an 

11 allotment in accordance with subsection (c) to enable the State 

12 to pay the Federal share, as described in paragraph (2), of the 

13 cost of carrying out the activities under subsection (d).

14 (B) Determination of allotment.--In making allotments under 

15 subparagraph (A), the Secretary shall consider the following:

16 (i) Continuation of award.--If a State continues to meet 

17 the specifications established in such State's application under 

18 subsection (c), the Secretary shall make an allotment to such 

19 State that is not less than the allotment made to such State for 

20 the previous fiscal year.

21 (ii) Priority.--The Secretary shall give priority in making 

22 allotments to States that meet the requirements described in 

23 paragraph (2)(B)(ii).

24 (2) Federal share.—

25 (A) In general.--The Federal share of the cost of carrying 

26 out the activities under subsection (d) for any fiscal year 

27 shall not exceed 66.66 percent.
206

1 (B) Different percentages.--The Federal share under this 

2 section shall be determined in accordance with the following:

3 (i) The Federal share of the cost of carrying out the 

4 activities under subsection (d) shall be 57 percent if a State 

5 applies for an allotment under this section in partnership with 

6 any number of degree-granting institutions of higher education 

7 in the State whose combined full-time enrollment represents less 

8 than a majority of all students attending institutions of higher 

9 education in the State, and--

10 (I) philanthropic organizations that are located in, or 

11 that provide funding in, the State; or

12 (II) private corporations that are located in, or that do 

13 business in, the State.

14 (ii) The Federal share of the cost of carrying out the 

15 activities under subsection (d) shall be 66.66 percent if a 

16 State applies for an allotment under this section in partnership 

17 with any number of degree-granting institutions of higher 

18 education in the State whose combined full-time enrollment 

19 represents a majority of all students attending institutions of 

20 higher education in the State, and--

21 (I) philanthropic organizations that are located in, or 

22 that provide funding in, the State; or

23 (II) private corporations that are located in, or that do 

24 business in, the State.

25 (C) Non-federal share.--

26 (i) In general.--The non-Federal share under this section 

27 may be provided in cash or in kind, fairly evaluated.
207

1 (ii) In-kind contribution.--For the purpose of calculating 

2 the non-Federal share under this subparagraph, an in-kind 

3 contribution is a non-cash contribution that--

4 (I) has monetary value, such as the provision of--

5 (aa) room and board; or

6 (bb) transportation passes; and

7 (II) helps a student meet the cost of attendance at an 

8 institution of higher education.

9 (iii) Effect on need analysis.--For the purpose of 

10 calculating a student's need in accordance 

11 with part F, an in-kind contribution described in clause (ii) 

12 shall not be considered an asset or income of the student or the 

13 student's parent.

14 * * * * *

15 (g) APPLICABILITY RULE.—The provisions of this subpart that 

16 are not inconsistent with this section shall apply to the 

17 program authorized by this section.

18 SEC. 415B. [20 U.S.C. 1070c–1] ALLOTMENT AMONG STATES.

19 (a) ALLOTMENT BASED ON NUMBER OF ELIGIBLE STUDENTS IN 

20 ATTENDANCE.—

21 (1) From the sums appropriated pursuant to section 

22 415A(b)(1) and not reserved under section 415A(b)(2) for any 

23 fiscal year, the Secretary shall allot to each State an amount 

24 which bears the same ratio to such sums as the number of 

25 students who are deemed eligible in such State for participation 

26 in the grant program authorized by this subpart bears to the 

27 total number of such students in all the States, except that no 

28 State shall receive less than the State received for fiscal year 

29 1979.
208

1 (2) For the purpose of this subsection, the number of 

2 students who are deemed eligible in a State for participation in 

3 the grant program authorized by this subpart, and the number of 

4 such students in all the States, shall be determined for the 

5 most recent year for which satisfactory data are available.

6 (b) REALLOTMENT.—The amount of any State‘s allotment under 

7 subsection (a) for any fiscal year which the Secretary 

8 determines will not be required for such fiscal year for the 

9 leveraging educational assistance partnership program of that 

10 State shall be available for reallotment from time to time, on 

11 such dates during such year as the Secretary may fix, to other 

12 States in proportion to the original allotments to such States 

13 under such part for such year, but with such proportionate 

14 amount for any of such States being reduced to the extent it 

15 exceeds the sum the Secretary estimates such State needs and 

16 will be able to use for such year for carrying out the State 

17 plan. The total of such reductions shall be similarly reallotted 

18 among the States whose proportionate amounts were not so 

19 reduced. Any amount reallotted to a State under this part 

20 during a year from funds appropriated pursuant to section 

21 415A(b)(1) shall be deemed part of its allotment under 

22 subsection (a) for such year.

23 (c) ALLOTMENTS SUBJECT TO CONTINUING COMPLIANCE.—The 

24 Secretary shall make payments for continuing incentive grants 

25 only to States which continue to meet the requirements of 

26 section 415C(b).

27
209

1 Issue Paper #29

2 Origin: HEOA

3 Issue: Matching

4 Statutory cites: 415E(b)(2), (h), and (i) of the HEA

5 Regulatory cites: §692.113

6 DCL GEN-08-12 cite: Pages 111-112

7 Summary of issue:

8 Matching funds

9 A State may provide the non-Federal share in cash or in10 kind, fairly evaluated. An in-kind contribution is a noncash 

11 contribution that has monetary value, such as the provision of 

12 room and board or transportation passes, and helps a student 

13 meet the cost of attendance at an institution of higher 

14 education. 

15 Non-Federal share

16 The Federal share of the program costs may not exceed 66.66 

17 percent. 

18 The Federal share of the program costs in a State is 57 

19 percent in the case of a State that is in partnership with 

20 degree-granting institutions of higher education in the State 

21 whose combined fulltime enrollment represents less than a 

22 majority of all students attending institutions in the State and 

23 with philanthropic organizations that are located in, or that 

24 provide funding in, the State or private corporations that are 

25 located in, or that do business in, the State. 

26 The Federal share of the program costs in a State is 66.66 

27 percent in the case of a State that is in partnership with 

28 degree-granting institutions of higher education in the State 
210

1 whose combined full-time enrollment represents a majority of all 

2 students attending institutions in the State and with 

3 philanthropic organizations that are located in, or that provide 

4 funding in, the State or private corporations that are located 

5 in, or that do business in, the State.

6 Maintenance-of-effort requirement

7 Each State receiving a GAP allotment for a fiscal year must 

8 provide the Secretary with an assurance that the aggregate 

9 amount expended per student or the aggregate expenditures by the 

10 State, from funds derived from non-Federal sources, for 

11 activities authorized for GAP for the preceding fiscal year were 

12 not less than the amount expended per student or the aggregate 

13 expenditure by the State for the activities for the second 

14 preceding fiscal year.

15 Base-year requirement

16 Notwithstanding the maintenance-of-effort requirement, for 

17 purposes of determining a State‘s share of the cost of the GAP 

18 program activities, the State must consider only those 

19 expenditures from non-Federal sources that exceed the State‘s 

20 total expenditures for need-based grants, scholarships, and 

21 work-study assistance for fiscal year 1999 (including any such 

22 assistance provided under LEAP and GAP).

23 Updated information since 4/14-16 meetings:

24 See attachment: SLEAP and GAP Draft Regulations.

25 Tentative agreement: Yes.

26 Regulatory Language:

27 See §692.113 on pages 7-8 of Appendix A.

28 Statutory Language:
211

1 (b) * * *

2 (2) FEDERAL SHARE.—

3 (A) IN GENERAL.—The Federal share of the cost of carrying 

4 out the activities under subsection (d) for any fiscal year 

5 shall not exceed 66.66 percent.

6 (B) DIFFERENT PERCENTAGES.—The Federal share under this 

7 section shall be determined in accordance with the following:

8 (i) The Federal share of the cost of carrying out the 

9 activities under subsection (d) shall be 57 percent if a State 

10 applies for an allotment under this section in partnership with 

11 any number of degree-granting institutions of higher education 

12 in the State whose combined full-time enrollment represents less 

13 than a majority of all students attending institutions of higher 

14 education in the State, and—

15 (I) philanthropic organizations that are located in, or 

16 that provide funding in, the State; or

17 (II) private corporations that are located in, or that do 

18 business in, the State.

19 (ii) The Federal share of the cost of carrying out the 

20 activities under subsection (d) shall be 66.66 percent if a 

21 State applies for an allotment under this section in partnership 

22 with any number of degree-granting institutions of higher 

23 education in the State whose combined full-time enrollment 

24 represents a majority of all students attending institutions of 

25 higher education in the State, and—

26 (I) philanthropic organizations that are located in, or 

27 that provide funding in, the State; or

28 (II) private corporations that are located in, or that do 

29 business in, the State.
212

1 (C) NON-FEDERAL SHARE.—

2 (i) IN GENERAL.—The non-Federal share under this section 

3 may be provided in cash or in kind, fairly evaluated.

4 (ii) IN-KIND CONTRIBUTION.—For the purpose of calculating 

5 the non-Federal share under this subparagraph, an in-kind 

6 contribution is a non-cash contribution that—

7 (I) has monetary value, such as the provision of—

8 (aa) room and board; or

9 (bb) transportation passes; and

10 (II) helps a student meet the cost of attendance at an 

11 institution of higher education.

12 (iii) EFFECT ON NEED ANALYSIS.—For the purpose of 

13 calculating a student‘s need in accordance with part F, an in14 kind contribution described in clause (ii) shall not be 

15 considered an asset or income of the student or the student‘s 

16 parent.

17 * * * * *

18 (h) MAINTENANCE OF EFFORT REQUIREMENT.—Each State receiving 

19 an allotment under this section for a fiscal year shall provide 

20 the Secretary with an assurance that the aggregate amount 

21 expended per student or the aggregate expenditures by the State, 

22 from funds derived from non-Federal sources, for the authorized 

23 activities described in subsection (d) for the preceding fiscal 

24 year were not less than the amount expended per student or the 

25 aggregate expenditure by the State for the activities for the 

26 second preceding fiscal year.

27 (i) SPECIAL RULE.—Notwithstanding subsection (h), for 

28 purposes of determining a State‘s share of the cost of the 

29 authorized activities described in subsection (d), the State 
213

1 shall consider only those expenditures from non-Federal sources 

2 that exceed the State‘s total expenditures for need-based 

3 grants, scholarships, and work-study assistance for fiscal year 

4 1999 (including any such assistance provided under this 

5 subpart).

6
214

1 Issue Paper #30

2 Origin: HEOA

3 Issue: Statutory and regulatory relief

4 Statutory cites: 415E(f) of the HEA

5 Regulatory cites: §692.130

6 DCL GEN-08-12 cite: Page 115

7 Summary of issue: The Secretary may grant, upon the request of 

8 an institution of higher education that is in a partnership with 

9 a 66.66 percent Federal share, a waiver for such institution 

10 from statutory or regulatory requirements that inhibit the 

11 ability of the institution to successfully and efficiently 

12 participate in the activities of the partnership.

13 Updated information since 4/14-16 meetings:

14 See attachment: SLEAP and GAP Draft Regulations.

15 Tentative agreement: Yes.

16 Regulatory Language:

17 See §692.130 on page 9 of Appendix A.

18 Statutory Language:

19 (f) STATUTORY AND REGULATORY RELIEF FOR INSTITUTIONS OF 

20 HIGHER EDUCATION.—The Secretary may grant, upon the request of 

21 an institution of higher education that is in a partnership 

22 described in subsection (b)(2)(B)(ii) and that receives an 

23 allotment under this section, a waiver for such institution from 

24 statutory or regulatory requirements that inhibit the ability of 

25 the institution to successfully and efficiently participate in 

26 the activities of the partnership.

27
215

1 Issue Paper #31

2 Origin: HEOA

3 Issue: Estimated financial assistance

4 Statutory cites: 415E(b)(2)(C)(iii) of the HEA

5 Regulatory cites: None

6 DCL GEN-08-12 cite: Page 112

7 Summary of issue: For purposes of calculating a student‘s need 

8 in accordance with title IV, part F of the HEA, an in-kind 

9 contribution is not considered an asset or income of the student 

10 or the student‘s parent.

11 Updated information since 4/14-16 meetings:

12 See attachment: SLEAP and GAP Draft Regulations.

13 Tentative agreement: Yes.

14 Regulatory Language:

15 None.

16 Statutory Language:

17 (iii) EFFECT ON NEED ANALYSIS.—For the purpose of 

18 calculating a student‘s need in accordance with part F, an in19 kind contribution described in clause (ii) shall not be 

20 considered an asset or income of the student or the student‘s 

21 parent.