Team V – General and Non-Loan Issues 

Issue Paper Number and Topic Page # 

#1 Year-Round Pell 2 

#2 Pell Grants and Children of Soldiers 7 

#3 TEACH Grant Extenuating Circumstances 10 

#4 Grants for Federal Work Study 16 

#5 Conform the FWS rules to the Cash Management rules 24 

#6 Definition of Community Service 30 

#7 Flexible Use of Funds 33 

#8 Work Colleges 39 

#9 90/10 (Non-Title IV Revenue Requirement) 47 

#10 Consumer Information 67 

#11 Fire Safety Standards 80 

#12 Missing Person Procedures 91 

#13 Hate Crime Reporting 98 

#14 Emergency Response and Evacuation Procedures 103 

#15 Students with Intellectual Disabilities 109 

#16 Readmission for Servicemembers 124 

#17 Teach-Outs Requirements and Procedures 146 

#18 Baccalaureate in ―liberal arts‖ in Proprietary 

Schools 154 

#19 Peer-to-Peer File Sharing 159 

#20 Institutional Plans for Improving Academic 

Program 168 

#21 LEAP Non-Federal Share 171 

#22 Notification to Students of Source of 

LEAP Funds 173 

#23 GAP: Program Activities – Partnerships 177 

#24 GAP: Program Activities – Award 182 

#25 GAP: Program Activities – Early Notification 187 

#26 Applicability of LEAP Program Requirements in GAP 191 

#27 Gap Allotment: Application 192 

#28 GAP Allotment: Determination 197 

#29 GAP – Matching 202 

#30 GAP – Statutory and Regulatory Relief 207 

#31 GAP – Estimated Financial Assistance 208 
2 

Issue Paper #1

Origin: HEOA 

Issue: Receiving Up to Two Scheduled Federal Pell Grant 

Awards during a Single Award Year 

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

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

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

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

a student may receive up to two Federal Pell Grant Scheduled 

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

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

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

The student must also be enrolled in a certificate, associate 

degree or baccalaureate degree program. 

Updated information since 3/2-4 meetings:

Section 690.63 would be amended to provide instructions on 

how an institution calculates the Pell Grant payment for a 

payment period that may include the credit or clock hours and 

weeks of instructional time for both a first and second 

Scheduled Award. 

Section 690.64 would be amended to address the treatment of 

a payment period that occurs in two award years. Institutions 

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

award years to the award year the student receives the maximum 

payment for the payment period. 

Section 690.67 would be amended to implement the 

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

student to receive up to two Federal Pell Grant Scheduled Awards 

during a single award year. 

Section 690.80 would be amended to require the 

recalculation of a second Federal Pell Scheduled Award due to a 

change in the student's enrollment status. 

Tentative agreement: 

Regulatory language: 

§690.63 Calculation of a Federal Pell Grant for a payment 

period.

* * * * * 

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

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

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

Scheduled Award in the award year if--

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

provisions of §690.67; and

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

greater than the remaining balance of the first Scheduled Award.

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

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

and weeks of instructional time in the payment period; and 

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

plus an amount from the second Scheduled Award for the balance 

of the payment for the payment period.

§690.64 Calculation of a Federal Pell Grant for a payment 

period that occurs in two award years.

(a) If a student enrolls in a payment period that is 

scheduled to occur in two award years— 
4 

(1a) The entire payment period must be considered to occur 

within one award year.;

(2b)(1) An institution shall assign the payment period to 

the award year in which the student receives the greater payment 

for the payment period based on the information available at the 

time of disbursement The institution shall determine for each 

Federal Pell Grant recipient the award year in which the payment 

period will be placed subject to the restrictions set forth in 

paragraph (a)(3) of this section.;

(2) If, subsequent to the initial disbursement for the 

payment period, the institution determines that the student 

would receive a greater payment for the payment period by 

reassigning the payment to a different award year, the 

institution may reassign the payment to the award year providing 

the greater payment;

(3c) The institution shall place a payment period with 

more than six months scheduled to occur within one award year in 

that award year.;

(4d) If an institution places the payment period in the 

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

first award year.; and

(5e) If an institution places the payment period in the 

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

second award year. 

 (b) An institution may not make a payment which will result 

in the student receiving more than one Scheduled Award his or 

her Scheduled Federal Pell Grant for an award year. 

§690.67 Receiving up to two Scheduled Awards during a single 

award year.
5 

An institution shall award up to a second Scheduled Award 

to a student in an award year if the student--

(a) Is enrolled at least as a half-time student in a 

payment period during which the student would be earning credit 

or clock hours applicable to a second academic year in the award 

year; and

(b) Has successfully completed the credit or clock hours 

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

completing the credit or clock hours of that academic year in 

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

from a second Scheduled Award in the award year.

§690.80 Recalculation of a Federal Pell Grant award. 

* * * * * 

(b) Change in enrollment status. 

(1) * * * 

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

at any time during a payment period in which the student 

receives a payment from a second Scheduled Award in an award 

year, the institution shall recalculate the student‘s payment 

for the payment period. The recalculation must take into

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

Statutory Language: 

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

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

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

baccalaureate degree program of study that is 2 years or longer 

at an eligible institution that is computed in credit hours; and
6 

(ii) the student completes course work toward completion of 

an associate or baccalaureate degree that exceeds the 

requirements for a full academic year as defined by the 

institution.

(B) The Secretary shall promulgate regulations implementing 

this paragraph.

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

two Federal Pell Grants during a single award year to permit 

such student to accelerate the student‘s progress toward a 

degree or certificate if the student is enrolled—

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

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

period of time, during a single award year; and

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

higher education for which the institution awards an associate 

or baccalaureate degree or a certificate.

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

Federal Pell Grant in a single award year under subparagraph 

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

student for the award year may exceed the maximum basic grant 

level specified in the appropriate appropriations Act for such 

award year.
7 

Issue Paper # 2 

Origin: HEOA 

Issue: Maximum Federal Pell Grant Award to Children of 

Soldiers 

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

Regulatory cites: §690.75 

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

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

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

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

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

military service in Iraq or Afghanistan after September 11, 

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

institution of higher education at the time of the parent or 

guardian‘s death. These students are considered eligible for 

the maximum Federal Pell Grant award if they meet the 

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

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

the Secretary of Veterans Affairs and the Secretary of Defense 

to provide necessary information to the Secretary of Education. 

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

Updated information since 2/2-4 meetings:

Section 690.75 would be amended to implement the 

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

Tentative agreement: 

Regulatory language: 

§690.75 Determination of eligibility for payment.

* * * 
8 

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

contribution of zero if --

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

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

performing military service in Iraq or Afghanistan after 

September 11, 2001; 

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

student--

(i) Was under the age of 24; or

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

and

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

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

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

Statutory Language: 

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

of this section, the expected family contribution of each 

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

for the period during which each such student is eligible to 

receive a Federal Pell Grant under subsection (c).

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

institution of higher education—

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

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

military service in Iraq or Afghanistan after September 11, 

2001; and

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

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

education, as of the time of the parent or guardian‘s death.
9 

(C) Notwithstanding any other provision of law, the 

Secretary of Veterans Affairs and the Secretary of Defense, as 

appropriate, shall provide the Secretary of Education with 

information necessary to determine which students meet the 

requirements of subparagraph (B).
10 

Issue Paper # 3 

Origin: Higher Education Opportunity Act of 2008 

Issue: Extenuating Circumstances for Students Unable to 

Fulfill Service Obligation under the TEACH Grant 

Program 

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

Regulatory cites: §686.41 and §686.42 

DCL GEN-08-12 cite: Page 106 

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

requires the Secretary to establish categories of extenuating 

circumstances under which a TEACH Grant recipient who is unable 

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

excused from fulfilling that portion of the service obligation. 

Updated information since 3/2-4 meetings:

Section 686.41 would be amended to limit the suspension for 

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

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

Grant recipient could apply for a discharge of his or her 

service obligation. 

Section 686.42 would be amended to provide that a TEACH 

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

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

called or ordered to active duty status. 

Tentative agreement: 

Regulatory language: 

§686.41 Periods of suspension.

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

otherwise ceased enrollment in a TEACH Grant-eligible program 
11 

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

suspension from the Secretary of the eight-year period for 

completion of the service obligation based on-- 

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

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

study that has been determined by a State to satisfy the 

requirements for certification or licensure to teach in the 

State's elementary or secondary schools; 

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

under the FMLA; or 

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

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

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

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

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

war, military operation, or a national emergency. 

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

paragraphs (a)(1)(i), (ii) and (iii) of this section in one-year 

increments that-- 

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

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

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

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

of this section. 

(b) A grant recipient must apply for a suspension in 

writing on a form approved by the Secretary prior to being 

subject to any of the conditions under Sec. 686.43(a)(1) through 

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

Direct Unsubsidized Loan. 
12 

(c) A grant recipient must provide the Secretary with 

documentation supporting the suspension request as well as 

current contact information including home address and telephone 

number. 

§686.42 Discharge of agreement to serve.

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

discharges the obligation to complete the agreement to serve 

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

death certificate, an accurate and complete photocopy of the 

original or certified copy of the grant recipient's death 

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

acceptable to the Secretary. 

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

agreement to serve is discharged if the recipient becomes 

totally and permanently disabled, as defined in 34 CFR 

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

the eligibility requirements for a total and permanent 

disability discharge in accordance with 34 CFR 685.213. 

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

must complete the service obligation remains in effect during 

the conditional discharge period described in 34 CFR 

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

suspension based on a condition that is a qualifying reason for 

leave under the FMLA in accordance with Sec. 

686.41(a)(1)(ii)(D). 

(3) Interest continues to accrue on each TEACH Grant 

disbursement unless and until the TEACH Grant recipient's 

agreement to serve is discharged. 

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

total and permanent disability discharge during and at the end 
13 

of the three-year conditional discharge period, the Secretary 

discharges the grant recipient's service obligation. 

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

conditional discharge period, the Secretary determines that the 

grant recipient does not meet the eligibility criteria for a 

total and permanent disability discharge, the Secretary ends the 

conditional discharge period and the grant recipient is once 

again subject to the terms of the agreement to serve. 

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

completed or who has otherwise ceased enrollment in a TEACH 

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

funds and has exceeded the period of time allowed under 

§686.41(a)(2)(ii), may request in writing to the Secretary, a 

proportional discharge of his or her service obligation due to 

an extended call or order to active duty status.

(2) A grant recipient described in paragraph (c)(1) may 

receive a--

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

a call or order to active duty status is for more than 3 years;

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

a call or order to active duty status is for more than 4 years; 

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

if a call or order to active duty status is for more than 5 

years; or

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

call or order to active duty status is for 6 or more years.

(3) Documentation needed for a Military discharge. A grant 

recipient must provide the Secretary with--
14 

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

commanding or personnel officer certifying--

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

Forces of the United States;

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

and

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

expected to end; or

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

orders; and

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

identification.

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

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

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

the Armed Forces may qualify for a military discharge only for 

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

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

military orders, unless an order for national mobilization of 

reservists is issued.

(6) A grant recipient enlisted in the National Guard 

qualifies for a military discharge only while the grant 

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

or Air Force Reserves, and meets the requirements of paragraph 

(5) of this section.

(7) The Secretary will notify the grant recipient of the 

outcome of his or her request for a military discharge. For the 

portion on the service obligation that remains, the grant 
15 

recipient must continue to fulfill his or her service obligation 

in accordance with §686.12.

Statutory Language: 

(2) EXTENUATING CIRCUMSTANCES.—The Secretary shall 

establish, by regulation, categories of extenuating 

circumstances under which a recipient of a grant under this 

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

service obligation may be excused from fulfilling that portion 

of the service obligation.
16 

Issue Paper #4 

Origin: HEOA 

Issue: Grants for FWS Program 

Statutory cites: Section 443 of the HEA 

Regulatory cites: §§ 675.18, 675.26 

Summary of issue: The HEOA permits institutions to use FWS 

funds to compensate students employed in projects that teach 

civics in schools, raise awareness of government functions or 

resources, or increase civic participation. 

In addition, the HEOA requires that, to the extent 

practicable, an institution must 

 Give priority to the employment of students participating 

in projects that educate or train the public about 

evacuation, emergency response, and injury prevention 

strategies relating to natural disasters, acts of 

terrorism, and other emergency situations; and 

 Ensure that any student compensated with these funds 

receives appropriate training to carry out the educational 

services required. 

Students performing these activities maybe paid for time 

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

the Federal share of the compensation of FWS students may exceed 

75%. 

Updated information since 3/2-4 meetings: Section 675.18 would 

be amended to implement section 443 of the HEOA that promotes 

the use of FWS funds to employ students in community service 

projects, doing civic education and participation activities. 

When a school has students performing these projects, to the 
17 

extent practicable it must give priority to the employment of 

students participating in projects that educate or train the 

public about evacuation, emergency response, and injury 

prevention strategies relating to natural disasters, acts of 

terrorism, and other emergency situations; and ensure that the 

students receive the appropriate training to carry out the 

educational services required. 

Section 675.26 would be amended to implement the 

requirements in section 443 to allow the Federal share of the 

compensation of FWS students to exceed 75%. 

Tentative agreement: 

Regulatory language: 

§675.18 Use of funds. 

* * * * * 

(f) * * * 

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

subsequent award years, an institution must use at least seven 

percent of the sum of its initial and supplemental FWS 

allocations for an award year to compensate students employed in 

community service activities. In meeting this community service 

requirement, an institution must include at least one—

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

students as reading tutors for children who are preschool age or 

are in elementary school; or 

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

students in family lit0eracy activities. 

(2) The Secretary may waive the requirements in paragraph 

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

institution has demonstrated that enforcing the requirements in 
18 

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

students at the institution. 

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

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

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

reading in schools that are participating in a reading reform 

project that—

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

the basis of scientifically-based research on reading; and 

(B) Is funded under the Elementary and Secondary Education 

Act of 1965; and 

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

participating in a reading reform project described in paragraph 

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

school in the instructional practices used by the school. 

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

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

may employ students to perform civic education and participation 

activities in projects that- 

(A) Teach civics in schools;

(B) Raise awareness of government functions or resources; 

or

(C) Increase civic participation.

(ii) To the extent practicable, in providing civic 

education and participation activities under paragraph 

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

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

that educate or train the public about evacuation, emergency 
19 

response, and injury prevention strategies relating to natural 

disasters, acts of terrorism, and other emergency situations; 

and 

(B) Ensure that the students receive appropriate training 

to carry out the educational services required.

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

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

amount of time spent for training that is directly related to 

FWS employment. 

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

may pay students for a reasonable amount of time spent for 

travel that is directly related to employment in community 

service activities (including tutoring in reading and family 

literacy activities). 

* * * * * 

§675.26 FWS Federal share limitations. 

* * * * * 

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

share of 100 percent of the compensation earned by a student 

under this part if—

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

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

agency, or for a private nonprofit organization; and 

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

(A) Is designated as an eligible institution under—

(1) The Developing Hispanic-Serving Institutions Program 

(34 CFR part 606); 
20 

(2) The Strengthening Institutions Program, American Indian 

Tribally Controlled Colleges and Universities Program, or Alaska 

Native and Native Hawaiian-Serving Institutions Program (34 CFR 

part 607); 

(3) The Strengthening Historically Black Colleges and 

Universities Program (34 CFR part 608); or 

(4) The Strengthening Historically Black Graduate 

Institutions Program (34 CFR part 609); and 

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

regular FWS funding application for that year; 

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

preschool age children or children who are in elementary school; 

(iii) The student is performing family literacy activities 

in a family literacy project that provides services to families 

with preschool age children or children who are in elementary 

school; or 

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

children who are in elementary school through the ninth grade. 

(v) The student is employed in community service 

activities, performing civic education and participation 

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

* * * * * 

Statutory language:

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

enter into agreements with institutions of higher education 

under which the Secretary will make grants to such institutions 

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

this part.
21 

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

pursuant to this section shall—

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

program for the part-time employment, including internships, 

practical, or research assistantships as determined by the 

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

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

Federal, State, or local public agency or private nonprofit 

organization under an arrangement between the institution and 

such agency or organization, and such work—

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

or impair existing contracts for services;

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

will be appropriate and reasonable in light of such factors as 

type of work performed, geographical region, and proficiency of 

the employee;

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

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

used for sectarian instruction or as a place for religious 

worship; and

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

subpart that is less than the current Federal minimum wage as 

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

1938;

(2) provide that funds granted an institution of higher 

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

payments to students participating in work-study programs, 

except that—

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

institution shall use at least 7 percent of the total amount of 
22 

funds granted to such institution under this section for such 

fiscal year to compensate students employed in community 

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

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

included in meeting the requirement of this subparagraph, except 

that the Secretary may waive this subparagraph if the Secretary 

determines that enforcing this subparagraph would cause hardship 

for students at the institution; and

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

it to meet administrative expenses in accordance with section 

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

meet the cost of a job location and development program in 

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

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

* * * * * 

(B) * * * 

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

work-study students compensated under this subsection may exceed 

75 percent.

(e) CIVIC EDUCATION AND PARTICIPATION ACTIVITIES.—

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

this section may be used in accordance with such subsection to 

compensate (including compensation for time spent in training 

and travel directly related to civic education and participation 

activities) students employed in projects that—

(A) teach civics in schools;

(B) raise awareness of government functions or resources; 

or

(C) increase civic participation.
23 

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

institution shall—

(A) give priority to the employment of students 

participating in projects that educate or train the public about 

evacuation, emergency response, and injury prevention strategies 

relating to natural disasters, acts of terrorism, and other 

emergency situations; and (B) ensure that any student 

compensated with the funds described in paragraph (1) receives 

appropriate training to carry out the educational services 

required.

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

work-study students compensated under this subsection may exceed 

75 percent.
24 

Issue Paper #5 

Origin: HEOA 

Issue: Conform the FWS rules to the Cash Management Rules 

Statutory cites: None 

Regulatory cites: §675.16 

Summary of issue: Technical changes needed to conform the FWS 

rules with the cash management rules.

Updated information since 3/2-4 meetings: These changes would: 

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

it is for the other programs. 

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

authorization form used for the other programs, instead of a 

separate form for FWS. 

3. Provide for a single authorization for any title IV 

disbursements via EFT, including FWS. . 

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

FWS payments just as it does for other programs. 

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

devises to FWS as exists for the other programs. 

6. Provide for similar wording for authorizations and the 

cancellation of the authorizations for FWS as for the other 

programs. 

Please note that because the FWS payments represent 

compensation, the institution needs an authorization to credit 

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

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

different from the other programs. Under FWS, an institution 
25 

cannot take compensation without an authorization or a legal 

garnishment of wages. 

Tentative Agreement: 

Regulatory language:

§675.16 Payments to students. 

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

disbursement procedures in this section for paying a student his 

or her wages under the FWS Program instead of the disbursement 

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

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

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

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

negotiated by a student. 

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

least once a month. 

(3) Before an institution makes an initial disbursement of 

FWS compensation to a student for an award period, the 

institution must notify the student of the amount of funds the 

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

compensation will be paid. 

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

is responsible for ensuring that the student is paid for work 

performed. 

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

student performs the work. 

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

last day of attendance for FWS compensation earned while he or 

she was in attendance at the institution. 
26 

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

completed lesson before receiving a payment. 

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

attorney to authorize any disbursement of funds without prior 

approval from the Secretary. 

(9) An institution makes a disbursement of FWS program 

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

account at the institution or pays a student directly with—

(i) Funds received from the Secretary; or

(ii) Institutional funds used in advance of receiving FWS 

program funds. 

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

If the institution obtains the student‘s authorization described 

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

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

satisfy—

(i) Current year charges for—

(A) Tuition and fees; 

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

for board; 

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

for room; and 

(D) Other educationally related charges incurred by the 

student at the institution; and 

(ii) Prior award year charges with the restriction 

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

more than $200 for—

(A) Tuition and fees, room, or board; and 
27 

(B) Other institutionally related charges incurred by the 

student at the institution. 

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

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

account at the institution to satisfy prior award year charges, 

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

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

(c) Credit balances. Whenever an institution disburses 

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

credit balance, the institution must pay the credit balance 

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

14 days after the credit balance occurred on the account. 

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

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

section, if an institution obtains written authorization from a 

student, the institution may—

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

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

that authorization; and 

(ii) Except if prohibited by the Secretary under the 

reimbursement or cash monitoring payment method, hold on behalf 

of the student any FWS compensation that would otherwise be paid 

directly to the student under paragraph (c). 

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

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

institution—

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

authorization; 
28 

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

authorization at any time; and 

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

activity. 

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

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

the period during which the student is enrolled at the 

institution. 

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

modification takes effect on the date the institution receives 

the modification notice. 

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

her FWS compensation to pay for authorized charges under 

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

funds to pay only those authorized charges incurred by the 

student before the institution received the notice. 

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

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

the institution must pay those funds directly to the student as 

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

institution receives that notice. 

(5) If an institution holds excess FWS compensation under 

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

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

each student in a subsidiary ledger account designed for that 

purpose;

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

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

institution holds for the student; and 
29 

(iii) Notwithstanding any authorization obtained by the 

institution under this paragraph, pay any remaining balances by 

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

award year.

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

contributions. Except for the noncash contributions allowed 

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

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

the same time it pays the Federal share. 

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

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

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

payroll period. 

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

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

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

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

tuition, fees, services, or equipment earned. 

34 CFR 668.161 Scope and purpose (Cash Management rules) 

* * * 

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

disbursement procedures in 34 CFR 675.16 for paying a student 

his or her wages under the FWS Program instead of the 

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

(g), and 668.165. 

* * * * * 
30 

Issue Paper #6 

Origin: HEOA 

Issue: Definition of Community Service 

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

Regulatory cites: §675.2 

Summary of issue: The HEOA expands the definition of community 

service to include the field of emergency preparedness and 

response. 

Updated information since 3/2-4 meetings: Section 675.2 would 

be amended to include emergency preparedness and response. 

Tentative agreement: 

Regulatory language: 

675.2 Definitions 

* * * * *

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

follows:

Community services: Services which are identified by an 

institution of higher education, through formal or informal 

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

for community residents, particularly low-income individuals, or 

to solve particular problems related to their needs. These 

services include—

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

care services provided on campus that are open and accessible to 

the community), literacy training, education (including tutorial 

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

neighborhood improvement, public safety, emergency preparedness 
31 

and response, crime prevention and control, recreation, rural 

development, and community improvement; 

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

in section 101 of the National and Community Service Act of 

1990, and service in the agencies, institutions and activities 

designated in section 124(a) of that Act; 

(3) Support services to students with disabilities, 

including students with disabilities who are enrolled at the 

institution; and 

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

such purposes as—

(i) Tutoring; 

(ii) Supporting educational and recreational activities; 

and 

(iii) Counseling, including career counseling. 

* * * * * 

Statutory language: 

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

 ̳ ̳community services‘‘ means services which are identified by an 

institution of higher education, through formal or informal 

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

for community residents, particularly low-income individuals, or 

to solve particular problems related to their needs, including—

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

care services provided on campus that are open and accessible to 

the community), literacy training, education (including tutorial 

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

neighborhood improvement, public safety, emergency preparedness 
32 

and response, crime prevention and control, recreation, rural 

development, and community improvement; 

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

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

12511(20)); 

(3) support services to students with disabilities, 

including students with disabilities who are enrolled at the 

institution; and 

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

such purposes as—

(A) tutoring; 

(B) supporting educational and recreational activities; and 

(C) counseling, including career counseling. 
33 

Issue Paper #7 

Origin: HEOA 

Issue: Flexible Use of Funds 

Statutory cites: Section 445(d) of the HEA 

Regulatory cites: §675.18 

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

eligible institution located in any area affected by a major 

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

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

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

the disaster affected students were prevented from fulfilling 

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

year due to the major disaster. 

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

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

students been able to complete the work obligation necessary to 

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

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

completing the work obligation necessary to receive FWS funds 

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

FWS matching requirements, unless the Secretary waives the 

matching requirements. 

The term ―disaster-affected student‖ means a student 

enrolled at an eligible institution who: 

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

during which a major disaster occurred; 

• earned FWS wages from such eligible institution for such 

academic year prior to the disaster; 
34 

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

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

major disaster; and 

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

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

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

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

catastrophe (including any hurricane, tornado, storm, high 

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

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

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

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

President causes damage of sufficient severity and magnitude to 

warrant major disaster assistance under this chapter to 

supplement the efforts and available resources of States, local 

governments, and disaster relief organizations in alleviating 

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

Updated information since 3/2-4 meetings: Section 675.18 would 

be amended to add the provisions under which an institution 

located in any affected area, as determined by the Secretary, 

may make FWS payments to disaster-affected students. 

Tentative agreement: 

Regulatory language: 

§675.18 Use of funds. 

* * * * * 

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

subsequent award years, an institution must use at least seven 

percent of the sum of its initial and supplemental FWS 

allocations for an award year to compensate students employed in 
35 

community service activities. In meeting this community service 

requirement, an institution must include at least one—

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

students as reading tutors for children who are preschool age or 

are in elementary school; or 

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

students in family literacy activities. 

(2) The Secretary may waive the requirements in paragraph 

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

institution has demonstrated that enforcing the requirements in 

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

students at the institution. 

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

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

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

reading in schools that are participating in a reading reform 

project that—

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

the basis of scientifically-based research on reading; and 

(B) Is funded under the Elementary and Secondary Education 

Act of 1965; and 

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

participating in a reading reform project described in paragraph 

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

school in the instructional practices used by the school. 

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

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

amount of time spent for training that is directly related to 

FWS employment. 
36 

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

may pay students for a reasonable amount of time spent for 

travel that is directly related to employment in community 

service activities (including tutoring in reading and family 

literacy activities). 

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

(1) General. An institution located in any area affected 

by a major disaster may make FWS payments to disaster-affected 

students for the period of time (not to exceed the award period) 

in which the disaster-affected students were prevented from 

fulfilling their FWS obligations. The FWS payments-- 

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

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

students would have been paid had the students been able to 

complete the work obligation necessary to receive the funds.

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

for FWS or was not completing the work obligation necessary to 

receive the funds prior to the occurrence of the major disaster.

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

unless those requirements are waived by the Secretary.

(2) Definitions. The following definitions apply to this 

section:

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

an institution who—

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

which a major disaster occurred;

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

period;
37 

(C) Was prevented from fulfilling his or her FWS 

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

the major disaster; and

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

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

Robert T. Stafford Disaster Relief and Emergency Assistance Act 

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

Statutory language: 

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

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

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

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

account at a depository institution. An eligible institution may 

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

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

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

goods and services. 

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

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

eligible institution located in any area affected by such major 

disaster, as determined by the Secretary, may make payments 

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

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

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

follows: 

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

of wages such students would have been paid under this part had 
38 

the students been able to complete the work obligation necessary 

to receive work study funds.

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

eligible for work study or was not completing the work 

obligation necessary to receive work study funds under this part 

prior to the occurrence of the major disaster.

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

this subsection shall meet the matching requirements of section 

443, unless such matching requirements are waived by the 

Secretary.

(2) DEFINITIONS.—In this subsection:

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

enrolled at an eligible institution who—

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

academic year during which a major disaster occurred; 

(ii) earned Federal work-study wages from such eligible 

institution for such academic year;

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

such major disaster; and

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

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

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

and Emergency Assistance Act (42 U.S.C. 5122(2)).
39 

Issue Paper #8 

Origin: HEOA 

Issue: Work Colleges 

Statutory cites: Section 448 of the HEA 

Regulatory cites: §675.41 

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

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

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

are revised as follows: 

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

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

service; 

 has operated a comprehensive work-learning-service program 

for at least two years; 

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

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

participate in a comprehensive work-learning-service 

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

hours during each period of enrollment, except summer 

school, unless the student is engaged in an institutionally 

organized or approved study abroad or externship program; 

and 

 provides students participating in the comprehensive worklearning-service program with the opportunity to contribute 

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

whole. 
40 

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

means a student work-learning-service program that 

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

educational philosophy and program; 

 requires participation of all resident students for 

enrollment and graduation; 

 includes learning objectives, evaluation, and a record of 

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

 provides programmatic leadership by college personnel at 

levels comparable to traditional academic programs; 

 recognizes the educational role of work-learning-service 

supervisors; and 

 includes consequences for nonperformance or failure in the 

work-learning-service program similar to the consequences 

for failure in the regular academic program. 

Updated information since 3/2-4 meetings: Section 675.41 would 

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

HEOA to revise two definitions to clarify how institutions 

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

work-learning in subpart C as required. 

Tentative agreement: 

Regulatory language: 

§675.41 Special definitions. 

The following definitions apply to this subpart: 

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

institution that-
41 

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

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

program for at least two years; 

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

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

at least 80 hours during each period of enrollment, except 

summer school, unless the student is engaged in an 

institutionally organized or approved study abroad or externship 

program; and 

(ii) The provision of services as an integral part of the 

institution's educational program and as part of the 

institution's educational philosophy; and

(4) Provides students participating in the comprehensive 

work-learning service program with the opportunity to contribute 

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

whole. 

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

student work-learning-service program that—

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

educational philosophy and program; 

(2) Requires participation of all resident students for 

enrollment, participation, and graduation; 

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

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

(4) Provides programmatic leadership by college personnel 

at levels comparable to traditional academic programs; 
42 

(5) Recognizes the educational role of work-learningservice supervisors; and 

(6) Includes consequences for nonperformance or failure in 

the work-learning-service program similar to the consequences 

for failure in the regular academic program. 

§675.43 Purpose

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

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

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

part of a financial plan that decreases reliance on grants and 

loans and to encourage students to participate in community 

service activities. 

§675.44 Program Description

(a) An institution that satisfies the definition of ―workcollege‖ in §675.41(a) and wishes to participate in the WorkColleges program must apply to the Secretary at the time and in 

the manner prescribed by the Secretary. 

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

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

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

reallocated for that award year under sections 442 and 462 of 

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

Work-Colleges program to provide flexibility in strengthening 

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

§675.45 Allowable Cost, Federal Share, and Institutional Share

(a) * * * 
43 

(1) Support the educational costs of qualified students 

through self-help payments or credits provided under the worklearning-service program within the limits of part F of title IV 

of the HEA. 

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

of postsecondary education, financial self-help, and community 

service-learning opportunities. 

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

(4) Administer, develop, and assess comprehensive worklearning-service programs including—

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

expand opportunities for community service and career-related 

work; and 

* * * * * 

Statutory language: 

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

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

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

part of a financial plan which decreases reliance on grants and 

loans.

(b) SOURCE AND USE FUNDS.—

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

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

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

this section to provide flexibility in strengthening the selfhelp-through-work element in financial aid packaging.

(2) ACTIVITIES AUTHORIZED.—From the sums appropriated 

pursuant to subsection (f), and from the funds available under 
44 

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

an application under subsection (c) by the Secretary—

(A) support the educational costs of qualified students 

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

part F of this title;

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

of postsecondary education, financial self-help and community 

service-learning opportunities;

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

(D) be used for the administration, development and 

assessment of comprehensive work-learning- service programs, 

including—

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

expand opportunities for community service and career-related 

work; and 

(ii) alternatives that develop sound citizenship, encourage 

student persistence, and make optimum use of assistance under 

this part in education and student development;

(E) coordinate and carry out joint projects and activities 

to promote work service learning; and

(F) carry out a comprehensive, longitudinal study of 

student academic progress and academic and career outcomes, 

relative to student self-sufficiency in financing their higher 

education, repayment of student loans, continued community 

service, kind and quality of service performed, and career 

choice and community service selected after graduation.

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

application for funds authorized by subsection (f) to use funds 
45 

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

Secretary, by regulation, may reasonably require.

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

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

basis from non-Federal sources.

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

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

that—

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

degree-granting institution with a commitment to community 

service;

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

program for at least two years;

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

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

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

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

enrollment, except summer school, unless the student is engaged 

in an institutionally organized or approved study abroad or 

externship program; and

(D) provides students participating in the comprehensive 

work-learning-service program with the opportunity to contribute 

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

whole; and

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

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

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

educational philosophy and program;
46 

(B) requires participation of all resident students for 

enrollment and graduation;

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

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

(D) provides programmatic leadership by college personnel 

at levels comparable to traditional academic programs;

(E) recognizes the educational role of work-learningservice supervisors; and

(F) includes consequences for nonperformance or failure in 

the work-learning-service program similar to the consequences 

for failure in the regular academic program.

(f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

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

necessary for fiscal year 2009 and each of the five succeeding 

fiscal years.
47 

Issue Paper #9 

Origin: HEOA 

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

Statutory cites: Section 487(d) of the HEA 

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

§668.23(d)(4) 

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

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

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

proprietary institutions and requires those institutions to 

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

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

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

participate in the Title IV programs. Instead, the 

institution‘s participation becomes provisional for two fiscal 

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

Rule for two consecutive fiscal years, it loses its eligibility 

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

years. 

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

requires the Department to publicly disclose on the College 

Navigator Website the identity of that institution and the 

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

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

submit to Congress a report that contains, for each proprietary 

institution, the amount and percentage of the institution‘s 

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

provided by the institution in its audited financial statements. 
48 

In calculating the revenue percentage, the HEOA requires an 

institution to use the cash basis of accounting, except for 

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

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

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

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

or other charges are satisfied by: 

● grant funds from non-Federal public agencies or private 

sources independent of the institution; 

● funds provided under a contractual arrangement with a 

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

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

training; 

● funds used by a student from savings plans for educational 

expenses established by or on behalf of the student that qualify 

for special tax treatment under the Internal Revenue Code; and 

● institutional scholarships that count toward the 10 percent

revenue requirement. 

The HEOA specifies other sources of revenue that count 

toward the 10 percent requirement after applying the presumption 

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

and other institutional charges. Among the sources, an 

institution may count: 

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

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

an industry-recognized credential or certificate; 

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

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

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

loans are evidenced by promissory notes, issued at intervals 
49 

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

to regular loan repayments and collections. For loans made on 

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

institution receives during a fiscal year, excluding repayment 

on any loans for which the institution previously used the net 

present value in its 90/10 calculation. 

For scholarships, only those provided by the institution in 

the form of monetary aid or tuition discounts based on the 

academic achievements or financial need of students, as long as 

the scholarships are disbursed during each fiscal year from an 

established restricted account, and only to the extent that 

funds in that account represent designated funds from an outside 

source or income earned on those funds; and 

● the proceeds of Unsubsidized Stafford Loans that exceed the 

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

the enactment of the Ensuring Continued Access to Student Loans 

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

Unsubsidized Stafford Loan received by a student on or after 

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

The HEOA specifies the types or amounts of funds that are 

excluded from revenues under the 90/10 calculation. Excluded 

from revenues are: 

● the amount of funds the institution received under the FWS 

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

institutional charges; 

● the amount of funds the institution received under LEAP;

● the amount of funds provided by the institution as matching 

funds under the Title IV programs; 

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

IV program that are required to be refunded or returned; and 
50 

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

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

other institutional charges. 

Updated information since 3/2-4 meetings: 

The 90/10 requirements are removed from §600.5. 

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

A new section 668.28 is added to implement the statutory 

requirements. 

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

calculation. 

Tentative Agreement: 

Regulatory language: 

§600.5 Proprietary institution of higher education. 

(a) * * * 

(6) Is accredited; and

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

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

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

(d) of this section.

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

in existence for two years only if—

* * * 

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

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

under the following formula for its latest complete fiscal year:
51 

 Title IV, HEA program funds the institution used to satisfy 

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

students

 The sum of revenues including title IV, HEA program funds 

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

institutional charges for students enrolled in eligible programs 

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

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

other institutional charges, that are necessary for the 

education or training of its students who are enrolled in those 

eligible programs.

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

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

the numerator and the total amount of revenue generated by the 

institution in the denominator of the fraction contained in 

paragraph (d)(1) of this section.

 (3) Under the cash basis of accounting—

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

institution from institutional loans, the institution must 

include only the amount of loan repayments received by the 

institution during the fiscal year; and

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

institution from institutional scholarships, the institution 

must include only the amount of funds it disbursed during the 

fiscal year from an established restricted account and only to 

the extent that the funds in that account represent designated 

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

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

of this section—
52 

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

program funds in the numerator nor as revenue generated by the 

institution in the denominator—

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

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

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

numerator and denominator.

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

Educational Assistance Partnership (LEAP) Program. (The LEAP 

Program was formerly called the State Student Incentive Grant or 

SSIG Program.);

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

title IV, HEA program funds;

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

refunded or returned under §668.22; or

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

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

other institutional charges.

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

funds received by the institution under the cash basis of 

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

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

program funds disbursed or delivered to or on behalf of a 

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

other institutional charges, regardless of whether the 

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

those funds directly to the student, and therefore must include 

those funds in the numerator and denominator.
53 

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

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

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

that those charges were satisfied by—

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

private sources independent of the institution;

 (ii) Funds provided under a contractual arrangement 

described in §600.7(d), or

 (iii) Funds provided by State prepaid tuition plans.

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

the institution from activities it conducts, that are necessary 

for its students' education or training, includes only revenue 

from those activities that—

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

control of the institution;

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

institution's faculty; and

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

specific educational program at the institution.

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

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

this section if it fails to satisfy the requirement contained in 

paragraph (a)(8) of this section.

 (g) If an institution loses its eligibility because it 

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

of this section, to regain its eligibility it must demonstrate 

compliance with all eligibility requirements for at least the 

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

of this section.
54 

(hd) The Secretary does not recognize the accreditation of 

an institution unless the institution agrees to submit any 

dispute involving the final denial, withdrawal, or termination 

of accreditation to initial arbitration before initiating any 

other legal action. 

§668.14 Program participation agreement. 

* * * 

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

institution agrees that—

* * * 

(16) Reserved For a proprietary institution, the 

institution will derive at least ten percent of its revenues for 

each fiscal year from sources other than title IV, HEA program 

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

sanctions described in §668.28(c).

* * * * * 

§668.28 Non-title IV revenue (90/10)

(a) Calculating the revenue percentage (1) A proprietary 

institution determines whether it satisfies the requirement in 

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

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

using the formula in Appendix C of this subpart to calculate its 

revenue percentage for its latest complete fiscal year. 

(2) Cash basis accounting. Except for institutional loans 

made to students under paragraph (a)(5)(i) of this section, the 

institution must use the cash basis of accounting in calculating 

its revenue percentage.
55 

(3) Revenue generated from programs and activities. The 

institution must consider as revenue only those funds it 

generates from—

(i) Tuition, fees, and other institutional charges for 

students enrolled in eligible programs as defined in §668.8;

(ii) Activities conducted by the institution that are 

necessary for the education and training of its students 

provided those activities are—

(A) Conducted on campus or at a facility under the 

institution‘s control;

(B) Performed under the supervision of a member of the 

institution‘s faculty; and

(C) Required to be performed by all students in a specific 

educational program at the institution; and

(ii) Funds paid by a student, or on behalf of a student by 

a party other then the institution, for an education or training 

program that is not eligible under §668.8 if the program—

(A) Is approved or licensed by the appropriate State 

agency;

(B) Is accredited by an accrediting agency recognized by 

the Secretary under 34 CFR Part 602; or

(C) Provides an industry-recognized credential or 

certification.

(4) Application of funds. The institution must presume 

that any title IV, HEA program funds it disburses, or delivers, 

to or on behalf of a student will be used to pay the student‘s 

tuition, fees, or institutional charges, regardless of whether 

the institution credits the funds to the student‘s account or 

pays the funds directly to the student, except to the extent 
56 

that the student‘s tuition, fees, or other charges are satisfied 

by—

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

private sources independent of the institution;

(ii) Funds provided under a contractual arrangement with a 

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

providing job training to low-income individuals who need that 

training;

(iii) Funds used by a student from a savings plan for 

educational expenses established by or on behalf of the student 

if the saving plan qualifies for special tax treatment under the 

Internal Revenue Code of 1986; or

(iv) Institutional scholarships as provided under paragraph 

(a)(5)(iv) of this section.

(5) Revenue generated from institutional aid. The 

institution must include the following institutional aid as 

revenue:

(i) For loans made to students on or after July 1, 2008 and

prior to July 1, 2012, include as revenue the net present value 

of the loans made to students during the fiscal year, as 

calculated under paragraph (b) of this section, if the loans—

(A) Are bona fide as evidenced by enforceable promissory 

notes or installment sales contracts;

(B) Are issued at intervals related to the institution‘s 

enrollment periods; and

(C) Are subject to regular loan repayments and collections;

(ii) For loans made to students before July 1, 2008, 

include as revenue only the amount of payments made on those 

loans that the institution received during the fiscal year;
57 

(iii) For loans made to students on or after July 1, 2012, 

include as revenue only the amount of payments made on those 

loans that the institution received during the fiscal year; and

(iv) For scholarships provided by the institution in the 

form of monetary aid or tuition discount and based on the 

academic achievement or financial need of its students, include 

as revenue the amount disbursed to students during the fiscal 

year. The scholarships must be disbursed from an established 

restricted account and only to the extent that the funds in that 

account represent designated funds from an outside source or 

income earned on those funds. 

(6) Revenue generated from loan funds in excess of loan 

limits prior to the Ensuring Continued Access to Student Loans 

Act of 2008 (ECASLA). For each student who receives an 

unsubsidized loan under the FFEL or Direct Loan programs on or 

after July 1, 2008 and prior to July 1, 2011, the amount of the 

loan disbursement that exceeds the loan limit in effect on the 

day prior to enactment of the ECASLA is included as revenue from 

a source other than title IV, HEA program funds but only to the 

extent that the excess amount pays for tuition, fees, or 

institutional charges remaining on the student‘s account after 

title IV, HEA program funds are applied. 

(7) Funds excluded from revenues. For the fiscal year, the 

institution does not include—

(i) The amount of Federal Work Study (FWS) wages paid 

directly to the student. However, if the institution credits 

the student‘s account with FWS funds, those funds are included 

as revenue;

(ii) The amount of funds received by the institution from a 

State under the LEAP, SLEAP, or GAP programs;
58 

(iii) The amount of institutional funds used to match title 

IV, HEA program funds;

(iv) The amount of title IV, HEA program funds refunded or 

returned under §668.22; or

(v) The amount the charged for books, supplies, and 

equipment unless the institution includes that amount as 

tuition, fees, or other institutional charges.

(b) Net Present Value (NPV). (1) As illustrated in Appendix 

C of this subpart, an institution calculates the NPV of the 

loans it made under paragraph (a)(5)(i) of this section by—

(i) Using the formula, NPV = sum of the discounted cash 

flows R

t/(1+i)t, where--

(A) ―i" is the discount rate. For purposes of this 

section, an institution must use the most recent annual 

inflation rate as the discount rate;

(B) ―t‖ is time or period of the cash flow, in years, from 

the time the loan entered repayment;

(C) ―R

t‖ is the net cash flow at time or period t; and

(ii) From the loans made during the fiscal year-

(A) If the loans have substantially the same repayment 

period, using that period for the range of values of variable

―t”; or

(B) Grouping the loans by repayment period and using the 

repayment period for each group for the range of values of 

variable ―t‖; and

(C) For each group of loans, as applicable, multiplying the 

total annual payments due on the loans by the institution‘s loan 

collection rate (e.g. the total amount of payments collected 
59 

divided by the total amount of payments due). The resulting 

amount is used for variable ―R‖ in each period ―t‖, for each 

group of loans that a NPV is calculated; or

(2) Instead of performing the calculations in paragraph 

(b)(1) of this section, using 50 percent of the total amount of 

loans that the institution made during the fiscal year as the 

NPV.

(c) Sanctions. If an institution does not derive at least 

ten percent of its revenue from sources other than title IV, HEA 

program funds--

(1) For two consecutive fiscal years, it loses its 

eligibility to participate in the title IV, HEA programs for at 

least two fiscal years. To regain eligibility, the institution 

must demonstrate that it complied with the State licensure and 

accreditation requirements under 34 CFR 600.5(a)(4) and (a)(6), 

and the financial responsibility requirements under subpart L of 

this part, for a minimum of two fiscal years after the fiscal 

year it became ineligible; or

(2) For any fiscal year, it becomes provisionally certified 

under §668.13(c)(1)(ii) for the two fiscal years after the 

fiscal year it failed to satisfy the revenue requirement. 

However, the institution‘s provisional certification terminates 

on--

(i) The expiration date of institution‘s program 

participation agreement that was in effect on the date the 

Secretary determined the institution failed this requirement; or 

(ii) The date the institution loses its eligibility to 

participate under paragraph (c)(1) of this section; and
60 

(3) It must notify the Secretary no later than 45 days 

after the end of its fiscal year that it failed to meet this 

requirement. 

§668.13 Certification procedures

* * * 

(c) Provisional certification. (1)(i) The Secretary may 

provisionally certify an institution if—

(iA) The institution seeks initial participation in a Title 

IV, HEA program; 

(iiB) The institution is an eligible institution that has 

undergone a change in ownership that results in a change in 

control according to the provisions of 34 CFR part 600; 

(iiiC) The institution is a participating institution—

(A) That is applying for a certification that the 

institution meets the standards of this subpart; 

(B) That the Secretary determines has jeopardized its 

ability to perform its financial responsibilities by not meeting 

the factors of financial responsibility under §668.15 or the 

standards of administrative capability under §668.16; and 

(C) Whose participation has been limited or suspended under 

subpart G of this part, or voluntarily enters into provisional 

certification; 

(ivD) The institution seeks a renewal of participation in a 

Title IV, HEA program after the expiration of a prior period of 

participation in that program; or 

(vE) The institution is a participating institution that 

was accredited or preaccredited by a nationally recognized 

accrediting agency on the day before the Secretary withdrew the 
61 

Secretary's recognition of that agency according to the 

provisions contained in 34 CFR part 603.

(ii) A proprietary institution‘s certification 

automatically becomes provisional if it does not derive at least 

ten percent of its revenue for any fiscal year from sources 

other than title IV, HEA program funds, as required under 

§668.14(b)(16).

Statutory language: 

(d) IMPLEMENTATION OF NON-TITLE IV REVENUE REQUIREMENT.—

(1) CALCULATION.—In making calculations under subsection 

(a)(24), a proprietary institution of higher education shall—

(A) use the cash basis of accounting, except in the case of 

loans described in subparagraph (D)(i) that are made by the 

proprietary institution of higher education;

(B) consider as revenue only those funds generated by the 

institution from—

(i) tuition, fees, and other institutional charges for 

students enrolled in programs eligible for assistance under this 

title;

(ii) activities conducted by the institution that are 

necessary for the education and training of the institution‘s 

students, if such activities are—

(I) conducted on campus or at a facility under the control 

of the institution;

(II) performed under the supervision of a member of the 

institution‘s faculty; and

(III) required to be performed by all students in a 

specific educational program at the institution; and
62 

(iii) funds paid by a student, or on behalf of a student by 

a party other than the institution, for an education or training 

program that is not eligible for funds under this title, if the 

program—

(I) is approved or licensed by the appropriate State 

agency;

(II) is accredited by an accrediting agency recognized by 

the Secretary; or

(III) provides an industry-recognized credential or 

certification;

(C) presume that any funds for a program under this title 

that are disbursed or delivered to or on behalf of a student 

will be used to pay the student‘s tuition, fees, or other 

institutional charges, regardless of whether the institution 

credits those funds to the student‘s account or pays those funds 

directly to the student, except to the extent that the student‘s 

tuition, fees, or other institutional charges are satisfied by—

(i) grant funds provided by non-Federal public agencies or 

private sources independent of the institution;

(ii) funds provided under a contractual arrangement with a 

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

providing job training to low-income individuals who are in need 

of that training;

(iii) funds used by a student from savings plans for 

educational expenses established by or on behalf of the student 

and which qualify for special tax treatment under the Internal 

Revenue Code of 1986; or

(iv) institutional scholarships described in subparagraph 

(D)(iii);
63 

(D) include institutional aid as revenue to the school only 

as follows:

(i) in the case of loans made by a proprietary institution 

of higher education on or after July 1, 2008 and prior to July 

1, 2012, the net present value of such loans made by the 

institution during the applicable institutional fiscal year 

accounted for on an accrual basis and estimated in accordance 

with generally accepted accounting principles and related 

standards and guidance, if the loans—

(I) are bona fide as evidenced by enforceable promissory 

notes;

(II) are issued at intervals related to the institution‘s 

enrollment periods; and

(III) are subject to regular loan repayments and 

collections;

(ii) in the case of loans made by a proprietary institution 

of higher education on or after July 1, 2012, only the amount of 

loan repayments received during the applicable institutional 

fiscal year, excluding repayments on loans made and accounted 

for as specified in clause (i); and

(iii) in the case of scholarships provided by a proprietary 

institution of higher education, only those scholarships 

provided by the institution in the form of monetary aid or 

tuition discounts based upon the academic achievements or 

financial need of students, disbursed during each fiscal year 

from an established restricted account, and only to the extent 

that funds in that account represent designated funds from an 

outside source or from income earned on those funds;

(E) in the case of each student who receives a loan on or 

after July 1, 2008, and prior to July 1, 2011, that is 
64 

authorized under section 428H or that is a Federal Direct 

Unsubsidized Stafford Loan, treat as revenue received by the 

institution from sources other than funds received under this 

title, the amount by which the disbursement of such loan 

received by the institution exceeds the limit on such loan in 

effect on the day before the date of enactment of the Ensuring 

Continued Access to Student Loans Act of 2008; and

(F) exclude from revenues—

(i) the amount of funds the institution received under part 

C, unless the institution used those funds to pay a student‘s 

institutional charges;

(ii) the amount of funds the institution received under 

subpart 4 of part A;

(iii) the amount of funds provided by the institution as 

matching funds for a program under this title;

(iv) the amount of funds provided by the institution for a 

program under this title that are required to be refunded or 

returned; and

(v) the amount charged for books, supplies, and equipment, 

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

other institutional charges.

(2) SANCTIONS.—

(A) INELIGIBILITY.—A proprietary institution of higher 

education that fails to meet a requirement of subsection (a)(24) 

for two consecutive institutional fiscal years shall be 

ineligible to participate in the programs authorized by this 

title for a period of not less than two institutional fiscal 

years. To regain eligibility to participate in the programs 

authorized by this title, a proprietary institution of higher 
65 

education shall demonstrate compliance with all eligibility and 

certification requirements under section 498 for a minimum of 

two institutional fiscal years after the institutional fiscal 

year in which the institution became ineligible.

(B) ADDITIONAL ENFORCEMENT.—In addition to such other means 

of enforcing the requirements of this title as may be available 

to the Secretary, if a proprietary institution of higher 

education fails to meet a requirement of subsection (a)(24) for 

any institutional fiscal year, then the institution‘s 

eligibility to participate in the programs authorized by this 

title becomes provisional for the two institutional fiscal years 

after the institutional fiscal year in which the institution 

failed to meet the requirement of subsection (a)(24), except 

that such provisional eligibility shall terminate—

(i) on the expiration date of the institution‘s program 

participation agreement under this subsection that is in effect 

on the date the Secretary determines that the institution failed 

to meet the requirement of subsection (a)(24); or

(ii) in the case that the Secretary determines that the 

institution failed to meet a requirement of subsection (a)(24) 

for two consecutive institutional fiscal years, on the date the 

institution is determined ineligible in accordance with 

subparagraph (A).

(3) PUBLICATION ON COLLEGE NAVIGATOR WEBSITE.—The Secretary 

shall publicly disclose on the College Navigator website—

(A) the identity of any proprietary institution of higher 

education that fails to meet a requirement of subsection 

(a)(24); and

(B) the extent to which the institution failed to meet such 

requirement.
66 

(4) REPORT TO CONGRESS.—Not later than July 1, 2009, and 

July 1 of each succeeding year, the Secretary shall submit to 

the authorizing committees a report that contains, for each 

proprietary institution of higher education that receives 

assistance under this title, as provided in the audited 

financial statements submitted to the Secretary by each 

institution pursuant to the requirements of subsection (a)(24)—

(A) the amount and percentage of such institution‘s 

revenues received from sources under this title; and

(B) the amount and percentage of such institution‘s 

revenues received from other sources.
67 

Issue Paper #10 

Origin: HEOA 

Issue: Consumer Information 

Statutory cites: Section 485(a) of the HEA 

Regulatory cites: 668.43(c) 

DCL GEN-08-12 cite: Pages 95-96 

Summary of issue: The HEOA expands the list of information that 

institutions are required to make available to prospective and 

enrolled students. In addition to the requirements listed in 

§485(a) of the HEA, institutions must now also include 

information on: 

● The placement of and types of employment obtained by 

graduates of the institutions‘ degree or certificate programs; 

● The types of graduate and professional education in which 

graduates of the institutions‘ four-year degree programs 

enrolled; and 

● The retention rates of certificate or degree seeking firsttime full-time undergraduate students entering the 

institution. 

The HEOA provides that the information in the first two 

bullets may be gathered from sources such as alumni surveys, 

student satisfaction surveys, the National Survey of Student 

Engagement, the Community College Survey of Student Engagement, 

State data systems, or other relevant sources. 

The HEOA amends subparagraph (L) of section 485(a)(1) of 

the HEA regarding completion and graduation rates disclosed to 

exclude the completion or graduation rates of students who leave 

school to serve in the Armed Forces, on official church 
68 

missions, or with a recognized foreign aid service of the 

Federal Government. In cases where these types of students 

represent 20 percent or more of the certificate or degreeseeking fulltime undergraduate students at the institution, the 

institution may recalculate the completion or graduate rates of 

such students by excluding from the calculation the time period 

such students weren‘t enrolled due to their service in those 

categories. The same exclusions from reporting requirements are 

also reflected in amended section 485(e) of the HEA with respect 

to the disclosure of athletically related graduation rates. 

The HEOA now also requires institutions to disaggregate 

completion and graduation rate data with respect to (1) existing 

section 485(a)(1)(L) of the HEA, which requires institutions to 

disclose the completion and graduation rate of certificate- or 

degreeseeking, full-time, undergraduate students; and (2) 

existing section 485(e) of the HEA, which requires institutions 

to disclose and submit annually to the Department completion or 

graduation rates for student-athletes. The data must be 

disaggregated based on gender, race/ethnicity and receipt of a 

Federal Pell Grant, receipt of a FFEL or Direct Loan (but not an 

unsubsidized Stafford or Federal Direct Unsubsidized Stafford) 

but not a Federal Pell Grant, and non- receipt of a Federal Pell 

Grant or Federal loans (other than an unsubsidized Stafford or 

Federal Direct Unsubsidized Stafford). The HEOA provides an 

exception where institutions may note instances where the 

statistical number is too small and would not yield 

statistically reliable information or would reveal personally 

identifiable information. These requirements will not apply to 

two-year degree-granting institutions until the 2011-2012 

academic year. 
69 

Updated information since 3/2-4: 

We have added information on retention rates, placement 

rates, and graduate programs into which an institution‘s 

graduates enroll, to the general disclosures that institutions 

must make to students and prospective students under §668.41. 

Further, we have added transfer and retention rate information 

to §668.45, and addressed the need to disaggregate completion 

and graduation rates in a number of ways in that same section, 

as required by the statute. And we have addressed the statutory 

recalculation option (for completion and graduation) related to 

students who leave school to serve in the Armed Forces, on 

church missions, or with a Federal foreign aid service. 

Tentative agreement: 

Regulatory language: 

§668.41 Reporting and disclosure of information. 

* * * 

(d) General disclosures for enrolled or prospective 

students. An institution must make available to any enrolled 

student or prospective student, on request, through appropriate 

publications, mailings or electronic media, information 

concerning—

(1) Financial assistance available to students enrolled in 

the institution (pursuant to §668.42); 

(2) The institution (pursuant to §668.43); and

(3) The institution‘s retention rate (pursuant to §668.45). 

In the case of a request from a prospective student, the 

information must be made available prior to the student's 

enrolling or entering into any financial obligation with the 

institution;
70 

(34) The institution's completion or graduation rate and, 

if applicable, its transfer-out rate (pursuant to §668.45). In 

the case of a request from a prospective student, the 

information must be made available prior to the student's 

enrolling or entering into any financial obligation with the 

institution;.

(5) The institution‘s placement rate. The placement of,

and types of employment obtained by, graduates of the 

institution‘s degree or certificate programs. This information 

may be gathered from alumni surveys, student satisfaction 

surveys, the National Survey of Student Engagement, the 

Community College Survey of Student Engagement, State data 

systems, or other relevant sources; and

(6) The types of graduate and professional education in 

which graduates of the institution‘s four-year degree programs 

enroll. This information may be gathered from alumni surveys, 

student satisfaction surveys, the National Survey of Student 

Engagement, State data systems, or other relevant sources.

* * * * * 

§668.45 Information on completion or graduation rates, transfer 

rates, and retention rates.

(a)(1) An institution annually must prepare the completion 

or graduation rate of its certificate- or degree-seeking, firsttime, full-time undergraduate students, as provided in paragraph 

(b) of this section, and the retention rate of its certificate 

or degree seeking, first-time, full-time undergraduate students 

as provided in paragraph (d)..

(2) An institution that determines that its mission 

includes providing substantial preparation for students to 

enroll in another eligible institution must prepare the 
71 

transfer-out rate of its certificate- or degree-seeking, firsttime, full-time undergraduate students, as provided in paragraph 

(c) of this section. 

(3)(i) An institution that offers a predominant number of 

its programs based on semesters, trimesters, or quarters must 

base its completion or graduation rate, retention rate, and, if 

applicable, transfer-out rate calculations, on the cohort of 

first-time, certificate- or degree-seeking, full-time 

undergraduate students who enter the institution during the fall 

term of each year. 

(ii) An institution not covered by the provisions of 

paragraph (a)(3)(i) of this section must base its completion or 

graduation rate, retention rate, and, if applicable, transferout rate calculations, on the group cohort of first-time,

certificate- or degree-seeking, full-time undergraduate students 

who enter the institution between September 1 of one year and 

August 31 of the following year. 

(iii) For purposes of the completion or graduation rate 

and, if applicable, transfer-out rate calculations required in 

paragraph (a) of this section, an institution must count as 

entering students only first-time undergraduate students, as 

defined in §668.41(a).

(4)(i) An institution covered by the provisions of 

paragraph (a)(3)(i) of this section must count as an entering 

student a first-time undergraduate student who is enrolled as of 

October 15, the end of the institution's drop-add period, or 

another official reporting date as defined in §668.41(a). 

(ii) An institution covered by paragraph (a)(3)(ii) of this 

section must count as an entering student a first-time 

undergraduate student who is enrolled for at least—
72 

(A) 15 days, in a program of up to, and including, one year 

in length; or 

(B) 30 days, in a program of greater than one year in 

length. 

(5) An institution must make available its completion or 

graduation rate, retention rate, and, if applicable, transferout rate, no later than the July 1 immediately following the 12-

month period ending August 31 during which 150% of the normal 

time for completion or graduation has elapsed for all of the 

students in the group on which the institution bases its 

completion or graduation rate, retention rate, and, if 

applicable, transfer-out rate calculations. 

(6)(i) Completion or graduation rate information must be 

disaggregated by gender, by each major racial and ethnic 

subgroup, by recipients of a Federal Pell Grant, by recipients

of a Federal Family Education Loan or a Federal Direct Loan 

(other than an Unsubsidized Stafford Loan made under the Federal 

Family Education Loan Program or a Federal Direct Unsubsidized

Stafford Loan) who did not receive a Federal Pell Grant, and by 

recipients of neither a Federal Pell Grant nor a Federal Family 

Education Loan or a Federal Direct Loan (other than an 

Unsubsidized Stafford Loan made under the Federal Family 

Education Loan Program or a Federal Direct Unsubsidized Stafford 

Loan)if the number of students in such group or with such status 

is sufficient to yield statistically reliable information and 

reporting will not reveal personally identifiable information 

about an individual student. If such number is not sufficient 

for such purpose, then the institution shall note that the 

institution enrolled too few of such students to so disclose or 

report with confidence and confidentiality.
73 

(ii) The requirement in (6)(i) of this paragraph shall not 

apply to two-year, degree-granting institutions of higher 

education until academic year 2011-2012.

(b) In calculating the completion or graduation rate under 

paragraph (a)(1) of this section, an institution must count as 

completed or graduated—

(1) Students who have completed or graduated by the end of 

the 12-month period ending August 31 during which 150% of the 

normal time for completion or graduation from their program has 

lapsed; and 

(2) Students who have completed a program described in 

§668.8(b)(1)(ii), or an equivalent program, by the end of the 

12-month period ending August 31 during which 150% of normal 

time for completion from that program has lapsed. 

(c) In calculating the transfer-out rate under paragraph 

(a)(2) of this section, an institution must count as transfersout students who, by the end of the 12-month period ending 

August 31 during which 150% of the normal time for completion or 

graduation from the program in which they were enrolled has 

lapsed, have not completed or graduated but have subsequently 

enrolled in any program of an eligible institution for which its 

program provided substantial preparation.

(d) In calculating the retention rate under paragraph 

(a)(1) of this section, except as noted in paragraph (e) of this 

section, an institution must use the definition of a retention 

rate used by the Integrated Postsecondary Education Data System 

(IPEDS), which indicates that the retention rate is ―a measure 

of the rate at which students persist in their educational 

program at an institution, expressed as a percentage.‖ For 

four-year institutions , this is the percentage of first-time 
74 

bachelors (or equivalent) degree-seeking undergraduates from the 

previous fall who are again enrolled in the current fall. For 

all other institutions this is the percentage of first-time 

degree/certificate-seeking students from the previous fall who 

either re-enrolled or successfully completed their program by 

the current fall.

(de) For the purpose of calculating a completion or 

graduation rate, and a transfer-out rate, and a retention rate,

an institution may exclude students who—

(1) Exclude students who --

(1i) Have left school to serve in the Armed Forces; 

(2ii) Have left school to serve on official church 

missions; 

(3iii) Have left school to serve with a foreign aid service 

of the Federal Government, such as the Peace Corps; 

(4iv) Are totally and permanently disabled; or 

(5v) Are deceased.; or

(2) In cases where the students described in paragraphs 

(e)(1)(i) through (iv) of this paragraph represent 20 percent or 

more of the certificate- or degree-seeking, full-time, 

undergraduate students at the institution, recalculate the 

completion or graduation rates of those students by adding to 

the 150% time-frame they normally have to complete or graduate, 

as described in paragraph (b) of this section, the time period 

the students were not enrolled due to their service in the Armed 

Forces, on official church missions, or with a recognized 

foreign aid service of the Federal Government. 

(ef)(1) The Secretary grants a waiver of the requirements 

of this section to any institution that is a member of an 
75 

athletic association or conference that has voluntarily 

published completion or graduation rate data, or has agreed to 

publish data, that the Secretary determines are substantially 

comparable to the completion or graduation rate data required by 

this section. 

(2) An institution that receives a waiver of the 

requirements of this section must still comply with the 

requirements of §668.41(d)(3) and (f). 

(3) An institution, or athletic association or conference 

applying on behalf of an institution, that seeks a waiver under 

paragraph (ef)(1) of this section must submit a written 

application to the Secretary that explains why it believes the 

data the athletic association or conference publishes are 

accurate and substantially comparable to the information 

required by this section. 

(fg) In addition to calculating the completion or 

graduation rate and the retention rate required by paragraph 

(a)(1) of this section, an institution may, but is not required 

to—

(1) Calculate a completion or graduation rate for students 

who transfer into the institution; 

(2) Calculate a completion or graduation rate, and, 

transfer-out rate, and a retention rate for students described 

in paragraphs (de)(1) through (4) of this section; and 

(3) Calculate a transfer-out rate as specified in paragraph 

(c) of this section, if the institution determines that its 

mission does not include providing substantial preparation for 

its students to enroll in another eligible institution. 

§668.48 Report on completion or graduation rates for studentathletes. 
76 

* * * 

(b) The provisions of §668.45 (a), (b), (c), and (de) apply 

for purposes of calculating the completion or graduation rates 

and, if applicable, transfer-out rates required under paragraphs 

(a)(1)(iii) through (vi) of this section. 

* * * * * 

Statutory Language: 

SEC. 485 INSTITUTIONAL AND FINANCIAL ASSISTANCE INFORMATION FOR 

STUDENTS. 

(a) INFORMATION DISSEMINATION ACTIVITIES.—

(1) Each eligible institution participating in any program 

under this title shall carry out information dissemination 

activities for prospective and enrolled students (including 

those attending or planning to attend less than full time) 

regarding the institution and all financial assistance under 

this title. The information required by this section shall be 

produced and be made readily available upon request, through 

appropriate publications, mailings, and electronic media, to an 

enrolled student and to any prospective student. Each eligible 

institution shall, on an annual basis, provide to all enrolled 

students a list of the information that is required to be 

provided by institutions to students by this section and section 

444 of the General Education Provisions Act (also referred to as 

the Family Educational Rights and Privacy Act of 1974), together 

with a statement of the procedures required to obtain such 

information. The information required by this section shall 

accurately describe—

* * * * * 
77 

(R) the placement in employment of, and types of employment 

obtained by, graduates of the institution‘s degree or 

certificate programs, gathered from such sources as alumni 

surveys, student satisfaction surveys, the National Survey of 

Student Engagement, the Community College Survey of Student 

Engagement, State data systems, or other relevant sources;

(S) the types of graduate and professional education in 

which graduates of the institution‘s four-year degree programs 

enrolled, gathered from such sources as alumni surveys, student 

satisfaction surveys, the National Survey of Student Engagement, 

State data systems, or other relevant sources;

* * * * * 

(U) the retention rate of certificate- or degree-seeking, 

first-time, full-time, undergraduate students entering such 

institution; and

* * * * * 

(3) In calculating the completion or graduation rate under 

subparagraph (L) of paragraph (1) of this subsection or under 

subsection (e), a student shall be counted as a completion or 

graduation if, within 150 percent of the normal time for 

completion of or graduation from the program, the student has 

completed or graduated from the program, or enrolled in any 

program of an eligible institution for which the prior program 

provides substantial preparation. The information required to be 

disclosed under such subparagraph—

(A) shall be made available by July 1 each year to enrolled 

students and prospective students prior to the students 

enrolling or entering into any financial obligation; and 

(B) shall cover the one-year period ending on August 31 of 

the preceding year. 
78 

(4) For purposes of this section, institutions may exclude 

from the information disclosed in accordance with subparagraph 

(L) of paragraph (1) the completion or graduation rates of 

students who leave school to serve in the armed services, on 

official church missions, or with a recognized foreign aid 

service of the Federal Government.

(4) For purposes of this section, institutions may—

(A) exclude from the information disclosed in accordance 

with subparagraph (L) of paragraph (1) the completion or 

graduation rates of students who leave school to serve in the 

Armed Forces, on official church missions, or with a recognized 

foreign aid service of the Federal Government; or 

(B) in cases where the students described in subparagraph 

(A) represent 20 percent or more of the certificate- or degreeseeking, full-time, undergraduate students at the institution, 

recalculate the completion or graduation rates of such students 

by excluding from the calculation described in paragraph (3) the 

time period such students were not enrolled due to their service 

in the Armed Forces, on official church missions, or with a 

recognized foreign aid service of the Federal Government.

(5) The Secretary shall permit any institution of higher 

education that is a member of an athletic association or 

athletic conference that has voluntarily published completion or 

graduation rate data or has agreed to publish data that, in the 

opinion of the Secretary, is substantially comparable to the 

information required under this subsection, to use such data to 

satisfy the requirements of this subsection; and 

(6) Each institution may provide supplemental information 

to enrolled and prospective students showing the completion or 

graduation rate for students described in paragraph (4) or for 
79 

students transferring into the institution or information 

showing the rate at which students transfer out of the 

institution. 

(7)(A)(i) Subject to clause (ii), the information 

disseminated under paragraph (1)(L), or reported under 

subsection (e), shall be disaggregated by gender, by each major 

racial and ethnic subgroup, by recipients of a Federal Pell 

Grant, by recipients of a loan made under part B or D (other 

than a loan made under section 428H or a Federal Direct 

Unsubsidized Stafford Loan) who did not receive a Federal Pell 

Grant, and by recipients of neither a Federal Pell Grant nor a 

loan made under part B or D (other than a loan made under 

section 428H or a Federal Direct Unsubsidized Stafford Loan), if 

the number of students in such subgroup or with such status is 

sufficient to yield statistically reliable information and 

reporting will not reveal personally identifiable information 

about an individual student. If such number is not sufficient 

for such purposes, then the institution shall note that the 

institution enrolled too few of such students to so disclose or 

report with confidence and confidentiality.

(ii) The requirements of clause (i) shall not apply to twoyear, degree-granting institutions of higher education until 

academic year 2011-2012.
80 

Issue Paper # 11 

Origin: HEOA 

Issue: Disclosure of Fire Safety Standards and Measures 

Statutory cites: Section 485(i) of the HEA 

Regulatory cites: §668.41 and §668.49 

DCL GEN-08-12 cite: Pages 99-100 

Summary of issue: The HEOA requires that all Title IV eligible 

institutions that participate in any Title IV program and that 

maintain on-campus student housing facilities publish an annual 

fire safety report. 

This report must contain information about campus fire 

safety practices and standards, including: 

 Statistics for each on-campus housing facility, during the 

most recent calendar years for which data are available, 

concerning each of the following: 

o The number of fires and the cause of each fire; 

o The number of injuries related to each fire that 

result in treatment at a medical facility; 

o The number of deaths related to each fire; and 

o The value of property damage caused by each fire. 

 A description of each on-campus student housing facility 

fire safety and sprinkler system; 

 The number of regular mandatory supervised fire drills; 

 The policies or rules on portable electrical appliances, 

smoking, open flames (such as candles); 

 The procedures for evacuation; 
81 

 The policies regarding fire safety education and training 

programs provided to students, faculty, and staff; and 

 Plans for future improvements in fire safety, if determined 

necessary by the institution. 

Institutions participating in any Title IV programs must 

submit a copy of the statistics required in the first bullet to 

the Secretary on an annual basis. Furthermore, institutions 

must create and maintain a log of all fires in on-campus student 

housing facilities, including the nature, date, time, and 

general location of each fire, and prepare and submit annual 

reports to the campus community on those fires. 

Updated information since 3/2-4 meetings: Section 668.41(e) 

would be amended to require that the publication of the annual 

fire safety report mirror that of the annual security report. A 

new §668.49 would be added to implement the requirements in 

section 485(i) of the HEA regarding institutional fire safety 

policies and fire statistics. Paragraph (a) defines additional 

terms that apply to the new section, including  ̳cause of fire,‘ 

 ̳fire,‘  ̳fire drill,‘  ̳fire-related injury,‘  ̳fire-related 

death,‘  ̳fire safety system,‘ and  ̳value of property damage.‘ 

Definitions were taken when available from the National Fire 

Incident Reporting System in order to maintain consistency 

across definitions. Paragraphs (b) and (c) describe the 

information that an institution must include in the annual fire 

safety report, as required by the statute, as well as the 

statistics that an institution must report to the campus 

community and to the Secretary. Paragraph (d) clarifies that an 

institution may choose to combine its annual fire safety report 

with the annual security report; however, it must be clear to 

the reader that both reports are included. If an institution 

does not combine the reports, a direct link must be provided in 
82 

each report to the other report so that it is easy for consumers 

to find and compare information. Paragraph (e) describes 

requirements for the campus fire log, which mirrors the crime 

log required in §668.46(f). 

Tentative Agreement: 

Regulatory Language: 

§668.41 Reporting and disclosure of information.

* * *

(e) Annual security report and annual fire safety report –

(1) Enrolled students and current employees – annual security 

report and annual fire safety report. By October 1 of each year, 

an institution must distribute, to all enrolled students and 

current employees, its annual security report described in 

§668.46(b), and its annual fire safety report described in 

§668.49(b), through appropriate publications and mailings, 

including-- 

* * * 

(e)(2) Enrolled students – annual security report and 

annual fire safety report. If an institution chooses to 

distribute its annual security report or its annual fire safety 

report to enrolled students by posting the disclosure on an 

Internet website or an Intranet website, the institution must 

comply with the requirements of paragraph (c)(2) of this 

section. 

(e)(3) Current employees – annual security report and 

annual fire safety report. If an institution chooses to 

distribute its annual security report or its annual fire safety 

report to current employees by posting the disclosure on an 

Internet website or an Intranet website, the institution must, 
83 

by October 1 of each year, distribute to all current employees a 

notice that includes a statement of the report‘s availability, 

the exact electronic address at which the report is posted, a 

brief description of the report‘s contents, and a statement that 

the institution will provide a paper copy of the report upon 

request. 

(e)(4) Prospective students and prospective employees –

annual security report and annual fire safety report. For each 

of the reports, tThe institution must provide a notice to 

prospective students and prospective employees that includes a 

statement of the report‘s availability, a description of its 

contents, and an opportunity to request a copy. An institution 

must provide its annual security report and/or its annual fire 

safety report, upon request, to a prospective students or 

prospective employee. If the institution chooses to provide its 

annual security report or its annual fire safety report to 

prospective students and prospective employees by posting the 

disclosure on an Internet website, the notice described in this 

paragraph must include the exact electronic address at which the 

report is posted, a brief description of the report, and a 

statement that the institution will provide a paper copy of the 

report upon request. 

(e)(5) Submission to the Secretary – annual security report 

and annual fire safety report. Each year, by the date and in a 

form specified by the Secretary, an institution must submit the 

statistics required by §668.46(c) and §668.49(c) to the 

Secretary. 

* * * * * 

§668.49 Institutional fire safety policies and fire statistics.

(a) Additional definitions that apply to this section.
84 

Cause of fire: The cause of ignition of a fire, as defined 

in the National Fire Incident Reporting System Complete 

Reference Guide.

Fire: Any instance of open flame or other burning in a 

place not intended to contain the burning.

Fire drill: A supervised practice of a mandatory evacuation 

of a building for a fire. 

Fire-related injury: Any instance in which a person is 

injured as a result of a fire, including injuries from natural 

or accidental causes sustained while involved in the activities 

of fire control, attempting rescue, or escaping from the dangers 

of the fire. This may include students, faculty, staff, 

visitors, firefighters, or any other person injured as a result 

of a fire.

Fire-related death: Any instance in which a person is 

killed as a result of a fire, including deaths from natural or 

accidental causes sustained while involved in the activities of 

fire control, attempting rescue, or escaping from the dangers of 

a fire. Deaths also include people who die within 1 year 

because of injuries sustained from the fire.

Fire safety system: Any mechanism or system related to the 

detection of a fire, the warning resulting from a fire, or the

control of a fire. This may include a sprinkler system, fire 

detection devices, stand-alone smoke alarms, devices that alert 

one to the presence of a fire, such as horns, bells, or strobe 

lights; smoke-control and reduction mechanisms; and fire doors 

and walls that reduce the spread of a fire.

Value of Property Damage: The estimated value of the loss 

of the structure and contents, in terms of the cost of 

replacement in like kind and quantity. This estimate should 
85 

include contents damaged by fire, smoke, water, and overhaul; 

however, it does not include indirect loss, such as business 

interruption. 

(b) Annual fire safety report. An institution that 

maintains any on-campus student housing facility must prepare an 

annual fire safety report that contains, at a minimum, the 

following information:

(1) The fire statistics described in paragraph (c) of this 

section;

(2) A description of each on-campus student housing 

facility fire safety and sprinkler system, including the type, 

age, design, area covered, activation sensitivity, and other 

pertinent information;

(3) The number of fire drills;

(4) The policies or rules on portable electrical 

appliances, smoking, and open flames in a student housing 

facility;

(5) The procedures for evacuation in the case of a fire;

(6) A list of the titles of each person or organization to 

which students and employees should report a fire; 

(7) The policies regarding fire safety education and 

training programs provided to the students, faculty, and staff; 

and

(8) Plans for future improvements in fire safety, if 

determined necessary by the institution.

(c) Fire statistics. (1) An institution must report 

statistics for each on-campus housing facility, for the three 

most recent calendar years for which data are available, 

concerning- 
86 

(i) The number of fires and the cause of each fire;

(ii) The number of injuries related to a fire that resulted 

in treatment at a medical facility, including at an on-campus 

health center;

(iii) The number of deaths related to a fire; and

(iv) The value of property damage caused by a fire.

(2) An institution is required to submit a copy of the 

statistics in paragraph (1) to the Secretary on an annual basis.

(d) Publication of the annual fire safety report. (1) An 

institution must publish and distribute its annual fire safety 

report in accordance with paragraph (e) of this section. 

(2) An institution may publish its annual fire safety 

report concurrently with its annual security report only if the 

title of the report clearly states that the report contains both 

the annual security report and the annual fire safety report. 

If an institution chooses to publish the annual fire safety 

report separately from the annual security report, it must 

include information in each of the two reports about where or 

how to directly access the other.

(e) Fire log. (1) An institution that maintains on-campus 

student housing facilities must maintain a written, easily 

understood fire log that records, by the date that the fire was 

reported, any fire that occurred in an on-campus student housing 

facility. This log must include the nature, date, time and 

general location of each fire.

(2) An institution must make an entry or an addition to an 

entry to the log within two business days, as defined under 

§668.46(a), of the report of the information to the campus fire 

department.
87 

(3) An institution must make the fire log for the most 

recent 60-day period open to public inspection during normal 

business hours. The institution must make any portion of the 

log older than 60 days available within two business days of a 

request for public inspection.

(4) An institution must make an annual report to the campus 

community on the fires recorded in the fire log. This report 

may be included as a part of the annual fire safety report.

Statutory Language: 

(i) DISCLOSURE OF FIRE SAFETY STANDARDS AND MEASURES.—

(1) ANNUAL FIRE SAFETY REPORTS ON STUDENT HOUSING 

REQUIRED.—Each eligible institution participating in any program 

under this title that maintains on-campus student housing 

facilities shall, on an annual basis, publish a fire safety 

report, which shall contain information with respect to the 

campus fire safety practices and standards of that institution, 

including—

(A) statistics concerning the following in each on-campus 

student housing facility during the most recent calendar years 

for which data are available:

(i) the number of fires and the cause of each fire;

(ii) the number of injuries related to a fire that result 

in treatment at a medical facility;

(iii) the number of deaths related to a fire; and

(iv) the value of property damage caused by a fire;

(B) a description of each on-campus student housing 

facility fire safety system, including the fire sprinkler 

system;
88 

(C) the number of regular mandatory supervised fire drills;

(D) policies or rules on portable electrical appliances, 

smoking, and open flames (such as candles), procedures for 

evacuation, and policies regarding fire safety education and 

training programs provided to students, faculty, and staff; and

(E) plans for future improvements in fire safety, if 

determined necessary by such institution.

(2) REPORT TO THE SECRETARY.—Each eligible institution 

participating in any program under this title shall, on an 

annual basis, submit to the Secretary a copy of the statistics 

required to be made available under paragraph (1)(A).

(3) CURRENT INFORMATION TO CAMPUS COMMUNITY.—Each eligible 

institution participating in any program under this title shall—

(A) make, keep, and maintain a log, recording all fires in 

on-campus student housing facilities, including the nature, 

date, time, and general location of each fire; and

(B) make annual reports to the campus community on such 

fires.

(4) RESPONSIBILITIES OF THE SECRETARY.—The Secretary shall—

(A) make the statistics submitted under paragraph (1)(A) to 

the Secretary available to the public; and

(B) in coordination with nationally recognized fire 

organizations and representatives of institutions of higher 

education, representatives of associations of institutions of 

higher education, and other organizations that represent and 

house a significant number of students—

(i) identify exemplary fire safety policies, procedures, 

programs, and practices, including the installation, to the 

technical standards of the National Fire Protection Association, 
89 

of fire detection, prevention, and protection technologies in 

student housing, dormitories, and other buildings;

(ii) disseminate the exemplary policies, procedures, 

programs and practices described in clause (i) to the 

Administrator of the United States Fire Administration;

(iii) make available to the public information concerning

those policies, procedures, programs, and practices that have 

proven effective in the reduction of fires; and

(iv) develop a protocol for institutions to review the 

status of their fire safety systems.

(5) RULES OF CONSTRUCTION.—Nothing in this subsection shall 

be construed to—

(A) authorize the Secretary to require particular policies, 

procedures, programs, or practices by institutions of higher 

education with respect to fire safety, other than with respect 

to the collection, reporting, and dissemination of information 

required by this subsection;

(B) affect section 444 of the General Education Provisions 

Act (the Family Educational Rights and Privacy Act of 1974) or 

the regulations issued under section 264 of the Health Insurance 

Portability and Accountability Act of 1996 (42 U.S.C. 1320d–2 

note);

(C) create a cause of action against any institution of 

higher education or any employee of such an institution for any 

civil liability; or

(D) establish any standard of care.

(6) COMPLIANCE REPORT.—The Secretary shall annually report 

to the authorizing committees regarding compliance with this 
90 

subsection by institutions of higher education, including an upto-date report on the Secretary‘s monitoring of such compliance.

(7) EVIDENCE.—Notwithstanding any other provision of law, 

evidence regarding compliance or noncompliance with this 

subsection shall not be admissible as evidence in any proceeding 

of any court, agency, board, or other entity, except with 

respect to an action to enforce this subsection.
91 

Issue Paper #12 

Origin: HEOA 

Issue: Missing Person Procedures 

Statutory cites: Section 485(j) of the HEA 

Regulatory cites: §668.41, §668.46(b)(14) and §668.46(h) 

DCL GEN-08-12 cite: Pages 100-101 

Summary of issue: The HEOA requires Title IV eligible 

institutions that provide on-campus housing to establish a 

missing student notification policy for students who reside in 

on-campus housing. 

This policy must: 

 Inform each student of the option to identify a contact 

person whom the institution may notify in the case that the 

student is determined missing, according to the 

institution‘s official notification procedures described 

below; 

 Provide each student a means to register this confidential 

contact information; 

 Advise each student who is under 18 years of age, and is 

not an emancipated individual, that if the student is 

determined missing, then the institution must notify a 

custodial parent or guardian within 24 hours; and 

 Require the institution to initiate the emergency contact 

procedures in accordance with the student‘s designation if 

the campus security or law enforcement entity has been 

notified and has determined that such student has been 

missing for more than 24 hours and has not returned to 

campus. 
92 

Section 485(j) of the HEA also requires that institutions 

establish notification procedures for a missing student who 

resides in on-campus housing that: 

 Includes procedures for official notification that a 

student has been missing for more than 24 hours to the 

appropriate individuals at the institution; 

 Requires any official missing person report regarding such 

student to be referred immediately to the institution‘s 

police or campus security department; and 

 Requires, if the campus security department determines that 

such student has in fact been missing for more than 24 

hours, that the department notify the appropriate 

individuals: 

- If the missing student has identified a contact in 

accordance with the first bullet above, then such 

individual should be notified. 

- If the missing student is under 18 and not 

emancipated, then the department must immediately 

notify such student‘s custodial parent or legal 

guardian. 

- If neither of the preceding two scenarios applies to a 

student determined to be a missing person, then the 

department will inform the appropriate law enforcement 

agency. 

Updated information since 3/2-4 meetings: Sections 668.41(a) 

and 668.46 would be amended to define additional terms that 

apply to subpart D, including  ̳student housing facility‘ and 

 ̳test.‘ Section 668.46 would be further amended to require an 

institution to include its missing person notification 
93 

procedures in the annual security report. New paragraph (h) 

would be added to explain the required elements in a statement 

of policy regarding missing person notification procedures, 

including the option of students in on-campus housing to 

identify a contact person in the case that they are determined 

missing, contact information for reporting a missing person, and 

notification procedures. 

Tentative Agreement: 

Regulatory Language: 

§668.41 Reporting and disclosure of information.

(a) Definitions. The following definitions apply to this 

subpart: 

* * * 

Student Housing Facility: A dormitory or other residential 

facility for students.

* * * * * 

§668.46 Institutional security policies and crime statistics

(a) Additional definitions that apply to this section.

* * * 

Test: Regularly scheduled drills, exercises, and 

appropriate follow-through activities, designed for assessment 

and evaluation of emergency plans and capabilities.

* * * 

(b) Annual security report. An institution must prepare 

an annual security report that contains, at a minimum, the 

following information: 

* * * 
94 

(13) Beginning with the annual security report distributed 

by October 1, 2010, a statement of policy regarding emergency 

response and evacuation procedures, as described in paragraph 

(g); and

(14) Beginning with the annual security report distributed 

by October 1, 2010, a statement of policy regarding missing 

person notification procedures, as described in paragraph (h).

* * * 

(h) Missing person notification policies and procedures. 

(1) An institution that provides any on-campus student 

housing facility must include a statement of policy regarding 

missing student notification procedures in its annual security 

report. This statement must:

(i) Indicate the person or organization to which students 

and employees should report that a student has been missing for 

24 hours; 

(ii) Require that any official missing person report must 

be referred immediately to the institution‘s police or campus 

security department, or, in the absence of a sworn law 

enforcement officer, to the local law enforcement agency that 

has jurisdiction in the area;

(iii) Contain an option for each student living in an oncampus student housing facility to identify a contact person or 

persons whom the institution shall notify if the student is 

determined missing by the campus security or police department, 

or the local law enforcement agency. 

(iv) Advise students that their contact information will be 

registered confidentially.
95 

(v) Advise students that if they are under 18 years of age 

and not emancipated, the institution must notify a custodial 

parent or guardian when the student is missing, and.

(vi) Advise students that, regardless of whether they name 

a contact person, unless the local law enforcement agency was 

the entity that made the determination that a student is 

missing, the institution will notify the local law enforcement 

agency that the student is missing.

(2) The procedures that the institution will follow when a 

student is determined to have been missing for 24 hours include—

(i) If the student has designated a contact person, the 

institution will notify that contact person within 24 hours. 

(ii) If the student is under 18 years of age and is not 

emancipated, the institution will notify the student‘s custodial 

parent or guardian within 24 hours.

(iii) Regardless of whether the student has identified a 

contact person, is above the age of 18, or is an emancipated 

minor, the institution will inform the local law enforcement 

agency that has jurisdiction in the area within 24 hours. 

Statutory Language: 

(j) MISSING PERSON PROCEDURES.—

(1) OPTION AND PROCEDURES.—Each institution of higher 

education that provides on-campus housing and participates in 

any program under this title shall—

(A) establish a missing student notification policy for 

students who reside in on-campus housing that—

(i) informs each such student that such student has the 

option to identify an individual to be contacted by the 

institution not later than 24 hours after the time that the 
96 

student is determined missing in accordance with official 

notification procedures established by the institution under 

subparagraph (B);

(ii) provides each such student a means to register 

confidential contact information in the event that the student 

is determined to be missing for a period of more than 24 hours;

(iii) advises each such student who is under 18 years of 

age, and not an emancipated individual, that the institution is 

required to notify a custodial parent or guardian not later 24 

hours after the time that the student is determined to be 

missing in accordance with such procedures;

(iv) informs each such residing student that the 

institution will notify the appropriate law enforcement agency 

not later than 24 hours after the time that the student is 

determined missing in accordance with such procedures; and

(v) requires, if the campus security or law enforcement 

personnel has been notified and makes a determination that a 

student who is the subject of a missing person report has been 

missing for more than 24 hours and has not returned to the 

campus, the institution to initiate the emergency contact 

procedures in accordance with the student‘s designation; and

(B) establish official notification procedures for a 

missing student who resides in on-campus housing that—

(i) includes procedures for official notification of 

appropriate individuals at the institution that such student has 

been missing for more than 24 hours;

(ii) requires any official missing person report relating 

to such student be referred immediately to the institution‘s 

police or campus security department; and
97 

(iii) if, on investigation of the official report, such 

department determines that the missing student has been missing 

for more than 24 hours, requires—

(I) such department to contact the individual identified by 

such student under subparagraph (A)(i);

(II) if such student is under 18 years of age, and not an 

emancipated individual, the institution to immediately contact 

the custodial parent or legal guardian of such student; and

(III) if subclauses (I) or (II) do not apply to a student 

determined to be a missing person, inform the appropriate law 

enforcement agency.

(2) RULE OF CONSTRUCTION.—Nothing in this subsection shall 

be construed—

(A) to provide a private right of action to any person to 

enforce any provision of this subsection; or

(B) to create a cause of action against any institution of 

higher education or any employee of the institution for any 

civil liability.
98 

Issue Paper # 13 

Origin: HEOA 

Issue: Hate Crime Reporting 

Statutory cites: Section 485(f) of the HEA 

Regulatory cites: §668.46(c)(3) 

DCL GEN-08-12 cite: Page 98 

Summary of issue: The HEOA expands the list of crimes that 

institutions must include in hate crime statistics reported to 

the Department. 

Under the HEA, institutions are required to report 

statistics on criminal offenses occurring on campus, in or on 

noncampus buildings or property, and on public property during 

the most recent calendar year, and during the 2 preceding 

calendar years for which data are available. Section 

485(f)(1)(F)(i) currently lists the crimes that must be 

reported, including: 

- Murder; 

- Sex offenses, forcible or nonforcible; 

- Robbery; 

- Aggravated assault; 

- Burglary; 

- Motor vehicle theft; 

- Manslaughter; 

- Arson; and 
99 

- Arrests or persons referred for campus disciplinary action 

for liquor law violations, drug-related violations, and 

weapons possession. 

Additionally, §485(f)(1)(F)(ii) requires institutions to 

report hate crimes, or crimes that are perpetrated against a 

victim intentionally because of the actual or perceived race, 

gender, religion, sexual orientation, ethnicity, or disability 

of the victim. HEOA section 488(e) requires institutions to 

report hate crime statistics that include, in addition to the 

types of crimes listed above, larceny-theft, simple assault, 

intimidation, and destruction, damage, or vandalism of property, 

as well as other crimes involving bodily injury to any person. 

Updated Information since 3/2-4 meetings: The additional crimes 

would be added to §668.46(c)(3) and the definitions in the 

Appendix A to Subpart D of part 668 – Crime Definitions in 

Accordance with the Federal Bureau of Investigation‘s Uniform 

Crime Reporting Program. The definitions will follow those in 

the FBI Hate Crime Data Collection Guidelines. 

Tentative agreement: 

Regulatory Language: 

(c)(3) Reported crimes if a hate crime. An institution 

must report, by category of prejudice, the following crimes 

reported to local police agencies or to a campus security 

authority that manifest evidence that the victim was 

intentionally selected because of the victim‘s actual or 

perceived race, gender, religion, sexual orientation, ethnicity, 

or disability:

(i) Any crime it reports pursuant to paragraphs (c)(1)(i) 

through (vii) of this section;
100 

(ii) The crimes of larceny-theft, simple assault, 

intimidation, and destruction, damage, or vandalism of property; 

and

(iii) Any other crime involving bodily injury. 

* * * * * 

Appendix A to Subpart D of part 668 – Crime Definitions in 

Accordance with the Federal Bureau of Investigation‘s Uniform 

Crime Reporting Program

Larceny-theft (except motor vehicle theft)

The unlawful taking, carrying, leading, or riding away of 

property from the possession or constructive possession of 

another. Attempted larcenies are included.

Simple assault

An unlawful physical attack by one person upon another 

where neither the offender displays a weapon, nor the victim 

suffers obvious severe or aggravated bodily injury involving 

apparent broken bones, loss of teeth, possible internal injury, 

severe laceration, or loss of consciousness.

Intimidation

To unlawfully place another person in reasonable fear of 

bodily harm through the use of threatening words and/or other 

conduct, but without displaying a weapon or subjecting the 

victim to actual physical attack.

Destruction, Damage, or Vandalism of Property

To willfully or maliciously destroy, damage, deface, or 

otherwise injure real or personal property without the consent 

of the owner or the person having custody or control of it.
101 

Statutory Language: 

(f) DISCLOSURE OF CAMPUS SECURITY POLICY AND CAMPUS CRIME 

STATISTICS.—(1) Each eligible institution participating in any 

program under this title, other than a foreign institution 

higher education shall on August 1, 1991, begin to collect the 

following information with respect to campus crime statistics 

and campus security policies of that institution, and beginning 

September 1, 1992, and each year thereafter, prepare, publish, 

and distribute, through appropriate publications or mailings, to 

all current students and employees, and to any applicant for 

enrollment or employment upon request, an annual security report 

containing at least the following information with respect to 

the campus security policies and campus crime statistics of that 

institution: 

* * * * * 

(F) Statistics concerning the occurrence on campus, in or 

on noncampus buildings or property, and on public property 

during the most recent calendar year, and during the 2 preceding 

calendar years for which data are available—

(i) of the following criminal offenses reported to campus 

security authorities or local police agencies: 

(I) murder; 

(II) sex offenses, forcible or nonforcible; 

(III) robbery; 

(IV) aggravated assault; 

(V) burglary; 

(VI) motor vehicle theft; 

(VII) manslaughter; 
102 

(VIII) arson; and 

(IX) arrests or persons referred for campus disciplinary 

action for liquor law violations, drug-related violations, and 

weapons possession; and 

(ii) of the crimes described in subclauses (I) through 

(VIII) of clause (i), of larceny-theft, simple assault, 

intimidation, and destruction, damage, or vandalism of property, 

and of other crimes involving bodily injury to any person, in 

which the victim is intentionally selected because of the actual 

or perceived race, gender, religion, sexual orientation, 

ethnicity, or disability of the victim that are reported to 

campus security authorities or local police agencies, which data 

shall be collected and reported according to category of 

prejudice. 
103 

Issue Paper # 14 

Origin: HEOA 

Issue: Reporting Emergency Response and Evacuation Procedures 

Statutory cites: Section 485(f) of the HEA 

Regulatory cites: §668.46(a), §668.46(b)(13), §668.46(e), and 

§668.46(g) 

DCL GEN-08-12 cite: Page 98 

Summary of issue: The HEOA expands the list of information that 

institutions are required to include in the annual security 

report. Under section 485(f)(J) of the HEA, institutions must 

include a statement of emergency response and evacuation 

procedures, describing how the institution will immediately 

notify the campus community upon the confirmation of a 

significant emergency or dangerous situation involving an 

immediate threat to the health or safety of students or staff 

occurring on the campus, unless the notification will compromise 

efforts to contain the emergency. 

―Campus‖ is defined in 34 C.F.R. §668.46 as:

 Any building or property owned or controlled by an 

institution within the same reasonably contiguous area 

and used by the institution in direct support of, or in a 

manner related to, the institution‘s educational 

purposes, including residence halls; and 

 Any building or property that is within or reasonably 

contiguous to the area identified above that is owned by 

the institution but controlled by another person, is 
104 

frequently used by students, and supports institutional 

purposes (such as a food or other retail vendor). 

Institutions are required to both publicize the emergency 

response and evacuation procedures to students and staff, and 

test the emergency response and evacuation procedures on an 

annual basis. 

Updated information since 3/2-4 meetings: To implement the 

requirements in 485(f) of the HEA, §668.46(a) would be amended 

to include the definition of a  ̳test,‘ and §668.46(b) would be 

amended to require an institution to include a statement of 

policy regarding emergency response and evacuation procedures in 

its annual security report. Section 668.46(e) would be amended 

to clarify that the emergency notification provisions are 

separate from the timely warning provisions. New paragraph (g) 

would be added to §668.46 that outlines the required elements in 

this statement of policy, including (1) procedures to 

immediately notify the campus community in the case of an 

emergency, (2) the officials responsible for specific duties in 

the case of an emergency, (3) plans to train relevant officials, 

(4) procedures to notify parents, and (5) plans to test the 

policy and procedures. 

Tentative agreement: 

Regulatory language: 

§668.46 Institutional security policies and crime statistics

(a)Additional definitions that apply to this section.

* * * 

Test: Regularly scheduled drills, exercises, and 

appropriate follow-through activities, designed for assessment 

and evaluation of emergency plans and capabilities.
105 

* * * * * 

(b) Annual security report. An institution must prepare 

an annual security report that contains, at a minimum, the 

following information: 

* * * 

(13) Beginning with the annual security report distributed 

by October 1, 2010, a statement of policy regarding emergency 

response and evacuation procedures, as described in paragraph 

(g) of this section; and

(14) Beginning with the annual security report distributed 

by October 1, 2010, a statement of policy regarding missing 

person notification procedures, as described in paragraph (h) of 

this section.

* * * 

(e) Timely warning. (1) An institution must, in a manner 

that is timely and will aid in the prevention of similar crimes, 

report to the campus community on crimes that are –

(i) Described in paragraph (c)(1) and (3) of this section; 

(ii) Reported to campus security authorities as identified 

under the institution‘s statement of current campus policies 

pursuant to paragraph (b)(2) of this section or local police 

agencies; and 

(iii) Considered by the institution to represent a threat 

to students and employees. 

(2) An institution is not required to provide a timely 

warning with respect to crimes reported to a pastoral or 

professional counselor. 
106 

(3) The timely warning requirement does not apply in the 

circumstances covered under paragraph (g) of this section. In 

the case that there is an immediate threat to the health or 

safety of students or employees occurring on campus, as 

described in paragraph (g)(1) of this section, an institution‘s 

emergency notification procedures will supplant a timely warning 

communication.

* * * 

(g) Emergency Response and Evacuation Procedures. An 

institution must include a statement of policy regarding its 

emergency response and evacuation procedures in the annual 

security report. This statement must include --

(1) Procedures to immediately notify the campus community 

upon the confirmation of a significant emergency or dangerous 

situation involving an immediate threat to the health or safety 

of students or employees occurring on the campus. 

(2) The positions of the individuals who will--

(i) Confirm that there is a significant emergency or 

dangerous situation as described in (g)(1) of this paragraph;

(ii) Determine the content of the notification;

(iii) Determine when to send the notification; and

(iv) Initiate the notification system.

(3) Plans to ensure that the officials in (g)(2) of this 

paragraph are appropriately trained to carry out these duties.

(4) Procedures to notify parents and families in an 

emergency situation and provide accurate, timely information.

(5) Plans to conduct a test of the emergency response and 

evacuation procedures on at least an annual basis.
107 

(i) A test may be announced or unannounced, but it must be 

conducted at a time when most of the students, faculty, and 

staff are expected to be present on campus.

(ii) An institution must document each test, including the 

date, time, and whether it was announced or unannounced. 

Statutory Language: 

(f) DISCLOSURE OF CAMPUS SECURITY POLICY AND CAMPUS CRIME 

STATISTICS.—(1) Each eligible institution participating in any 

program under this title, other than a foreign institution 

higher education shall on August 1, 1991, begin to collect the 

following information with respect to campus crime statistics 

and campus security policies of that institution, and beginning 

September 1, 1992, and each year thereafter, prepare, publish, 

and distribute, through appropriate publications or mailings, to 

all current students and employees, and to any applicant for 

enrollment or employment upon request, an annual security report 

containing at least the following information with respect to 

the campus security policies and campus crime statistics of that 

institution: 

* * * * *

(J) A statement of current campus policies regarding 

immediate emergency response and evacuation procedures, 

including the use of electronic and cellular communication (if 

appropriate), which policies shall include procedures to—

(i) immediately notify the campus community upon the 

confirmation of a significant emergency or dangerous situation 

involving an immediate threat to the health or safety of 

students or staff occurring on the campus, as defined in 

paragraph (6), unless issuing a notification will compromise 

efforts to contain the emergency;
108 

(ii) publicize emergency response and evacuation procedures 

on an annual basis in a manner designed to reach students and 

staff; and

(iii) test emergency response and evacuation procedures on 

an annual basis.
109 

Issue Paper #15 

Origin: HEOA 

Issue: Financial Assistance for individuals with intellectual 

disabilities 

Statutory cites: Sections 484(s) and 760 of the HEA 

Regulatory cites: §600.2, §600.4, §600.5, 600.6, §668.8, 

§600.32, §668.43, §668 new subpart O 

DCL GEN-08-12 cite: Pages 94-95, 163-164 

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

expand eligibility for funding under the Federal Pell Grant, 

FSEOG, and FWS programs to students with intellectual 

disabilities. 

As defined in §760 of the HEA, a student with an 

intellectual disability is a student with mental retardation or 

a cognitive impairment, characterized by significant limitations 

in intellectual and cognitive functioning and adaptive behavior, 

as expressed in conceptual, social and practical adaptive 

skills. Further, such a student is currently, or was formerly, 

eligible for a free appropriate public education under the 

Intellectual with Disabilities Education Act. 

Under section 484(s) of the HEA, a student with an 

intellectual disability may receive Federal financial assistance 

to attend a comprehensive transition and postsecondary program 

for students with intellectual disabilities (defined in section 

760 of the HEA). Such a program is a degree, certificate, or 

non-degree program that: 

 Is offered by an institution of higher education; 
110 

 Is designed to support students with intellectual 

disabilities who seek to continue academic, career and 

technical, and independent living instruction to prepare 

for gainful employment; 

 Includes an advising and curriculum structure; 

 Requires attendees to participate on at least a half-time 

basis, as determined by the institution; and 

 Focuses on academic components, which may occur through 

one or more of the following activities: 

o Regular enrollment in credit-bearing courses with 

nondisabled students offered by the institution; 

o Auditing or participation in courses with 

nondisabled students offered by the institution for 

which the student does not receive regular academic 

credit; 

o Enrollment in noncredit-bearing, nondegree courses 

with nondisabled students; or 

o Participation in internships or work-based trainings 

in settings with nondisabled students.

The HEA now specifies that the eligibility requirements for 

financial assistance under the Pell, FSEOG, and FWS programs for 

a student with an intellectual disability differ from the 

eligibility requirements for a student who does not have an 

intellectual disability. In particular, the provision that a 

student achieve satisfactory progress under §484(a) and 484(c) 

of the HEA, and the provision that a student demonstrate the 

ability to benefit, under §484(d)(1), (2), (3), and (4) are not 

applicable in new §485(s). To be eligible for financial 

assistance, a student with an intellectual disability must: 
111 

 Be enrolled or accepted for enrollment in a comprehensive 

transition and postsecondary program for students with 

intellectual disabilities at an institution of higher 

education; 

 Be maintaining satisfactory progress, as determined by 

the institution; and 

● Meet the student eligibility requirements in §§484(a)(3), 

(4), (5), and (6). Under these provisions, a student 

must not be in default on any Federal student loans, must 

have filed a FAFSA form, must be a United States citizen 

or national, and, if the student was convicted of fraud 

in obtaining funds under this title, must have completed 

the repayment of such funds. 

With the exception of provisions surrounding Need Analysis, 

the Secretary may waive any statutory provisions governing the 

Pell Grant, FSEOG, and FWS programs, and any institutional 

eligibility provisions to ensure that eligible students and such 

comprehensive transition and postsecondary programs for students 

with intellectual disabilities remain eligible for Title IV 

program funds. 

Updated information since 3/2-4 meetings: Section 600.2 would be 

amended to include a comprehensive transition and postsecondary 

program that does not lead to an academic, professional, 

vocational degree, a certificate, or another recognized 

educational credential in the definition of an educational 

program. Sections 600.4, 600.5, 600.6 related to institutional 

eligibility would be amended to ensure that an institution will 

still be an eligible institution of higher education for the 

purposes of title IV, HEA programs if it offers a comprehensive 

transition and postsecondary program. Sections 668.8 and 668.32 
112 

would be amended to direct the reader to new subpart O of part 

668 for the requirements for program and student eligibility for 

a comprehensive transition and postsecondary program for 

students with intellectual disabilities. Section 668.43 would 

be updated to ensure that institutions include any facilities 

and services for students with intellectual disabilities in its 

description of available facilities and services for disabled 

students. 

A new subpart O in part 668 would be added to implement the 

provisions in 484(s) and 760 of the HEA. The new sections will 

describe the scope and purpose of the sections; define the 

applicable terms, including  ̳comprehensive transition and 

postsecondary program,‘  ̳free appropriate public education,‘ and 

 ̳student with an intellectual disability;‘ and describe the

requirements for program and student eligibility. The new 

section would include waivers that ensure that these students 

remain eligible for funding under only the Federal Pell Grant, 

FSEOG, and Federal-Work Study programs, including that a student 

does not need to have a high school diploma or have passed an 

ability-to-benefit test and does not need to be enrolled for the 

purpose of obtaining a degree or certificate. 

Tentative Agreement: 

Regulatory Language: 

§600.2 Definitions.

* * * * * 

Educational program: (1) A legally authorized postsecondary 

program of organized instruction or study that: 

(1) Leads to an academic, professional, or vocational 

degree, or certificate, or other recognized educational 
113 

credential, or is a comprehensive transition and postsecondary 

program, as described in subpart O of part 668; and 

(2) May, in lieu of credit hours or clock hours as a 

measure of student learning, utilize direct assessment of 

student learning, or recognize the direct assessment of student 

learning by others, if such assessment is consistent with the 

accreditation of the institution or program utilizing the 

results of the assessment and with the provisions of §668,10. 

* * * * * 

§600.4 Institution of higher education.

* * * 

(a)(4)(ii) That is at least a two-academic-year program 

acceptable for full credit toward a baccalaureate degree; or 

(a)(4)(iii) That is at least a one-academic-year training 

program that leads to a certificate, degree, or other recognized 

educational credential and prepares students for gainful 

employment in a recognized occupation; and

* * * 

(a)(5) (ii) Approved by a State agency listed in the 

FEDERAL REGISTER in accordance with 34 CFR part 603, if the 

institution is a public postsecondary vocational educational 

institution that seeks to participate only in Federal assistance 

programs; and.

(6) May admit students with intellectual disabilities to a 

comprehensive transition and postsecondary program, as provided 

in subpart O of part 668.

* * * * * 

§600.5 Proprietary institution of higher education.
114 

* * * 

(a)(5) Provides an eligible program of training, as defined 

in 34 CFR 668.8, to prepare students for gainful employment in a 

recognized occupation; 

* * * 

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

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

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

(d) of this section; and.

(9) May admit students with intellectual disabilities to a 

comprehensive transition and postsecondary program, as provided 

in subpart O of part 668. 

* * * * * 

§600.6 Postsecondary vocational institution.

* * * 

(a)(4) Provides an eligible program of training, as defined 

in 34 CFR 668.8, to prepare students for gainful employment in a 

recognized occupation; 

(a)(5)(ii) Approved by a State agency listed in the FEDERAL 

REGISTER in accordance with 34 CFR part 603, if the institution 

is a public postsecondary vocational educational institution 

that seeks to participate only in Federal assistance programs;

and 

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

(7) May admit students with intellectual disabilities to a 

comprehensive transition and postsecondary program, as provided 

in subpart O of part 668.

* * * * * 
115 

§668.8 Eligible program.

* * *

(n) For title IV, HEA program purposes, the term eligible 

program includes a direct assessment program approved by the 

Secretary under 34 CFR 668.10 and a comprehensive transition and 

postsecondary program approved by the Secretary under 34 CFR 

668.232.

§668.32 Student Eligibility – general.

A student is eligible to receive title IV, HEA program 

assistance if the student –

(a)(1)(i) Except as provided in paragraph (n), is a regular 

student enrolled, or accepted for enrollment, in an eligible 

program at an eligible institution; 

* * * 

(k) * * * 

(9) 34 CFR 686.22 for the TEACH Grant program; and

(l) Is not ineligible under §668.40; and

(m) In the case of a student who has been convicted of, or 

has pled nolo contender or guilty to, a crime involving fraud in 

obtaining title IV, HEA program assistance, has completed the 

repayment of such assistance to: 

(1) The Secretary; or 

(2) The holder, in the case of a title IV, HEA program 

loan.; and

(n) Is enrolled in a comprehensive transition and 

postsecondary program under subpart O of this part and meets the 

student eligibility criteria in that subpart.
116 

* * * * * 

§668.43 Institutional information.

* * * 

(a)(7) A description of the services and facilities any 

special facilities and services available to students with 

disabilities disabled students, including students with 

intellectual disabilities as defined in Subpart O of this part;

* * * * * 

§668 Subpart O – Financial Assistance for Students with 

Intellectual Disabilities

§668.230 Scope and purpose. 

This subpart establishes rules that apply to an institution 

that offers comprehensive transition and postsecondary programs 

to students with intellectual disabilities. Students enrolled 

in these programs are eligible for Federal financial assistance 

under the Federal Pell, FSEOG, and Federal Work Study programs. 

Except for provisions related to needs analysis, the Secretary 

may waive any title IV, HEA program requirement related to the 

Federal Pell Grant, FSEOG, and FWS programs or institutional 

eligibility, to ensure that students with intellectual 

disabilities remain eligible for funds under these assistance 

programs. However, unless provided in this subpart or 

subsequently waived by the Secretary, students with intellectual 

disabilities and institutions that offer comprehensive 

transition and postsecondary programs are subject to the same 

rules and procedures that otherwise apply to title IV, HEA 

program participants. 

§668.231 Definitions. 
117 

Comprehensive Transition and Postsecondary Program means a 

degree, certificate, non-degree, or non-certificate program 

that-- 

(1) Is offered by a participating institution; 

(2) Is delivered to students physically attending the 

institution; 

(3) Is designed to support students with intellectual 

disabilities who seek to continue academic, career and 

technical, and independent living instruction, and to prepare 

students for gainful employment; 

(4) Includes an advising and curriculum structure; 

(5) Requires students with intellectual disabilities to be 

enrolled on at least a half-time basis, as determined by the 

institution; and 

(6) Requires students with intellectual disabilities to be 

engaged academically by-- 

(i) Taking credit-bearing courses with students without 

disabilities; 

(ii) Auditing or otherwise participating in courses with 

students without disabilities for which the student does not 

receive regular academic credit; 

(iii) Taking noncredit-bearing, nondegree courses with 

nondisabled students; or 

(iv) Participating in internships or work-based training in 

settings with individuals without disabilities. 

Free Appropriate Public Education (FAPE) is defined in 34 

CFR 300.17. 

Student with an Intellectual Disability means a student –
118 

(1) With mental retardation or a cognitive impairment 

characterized by significant limitations in-- 

(i) Intellectual and cognitive functioning, and 

(ii) Adaptive behavior as expressed in conceptual, social, 

and practical adaptive skills; and 

(2) Who is currently, or was formerly, eligible for a free 

appropriate public education under the Individuals with 

Disabilities Education Act (20 U.S.C. 1401), including a student 

who was home-schooled or attended private school. 

§668.232 Program eligibility.

An institution that offers a comprehensive transition and 

postsecondary program must apply to the Secretary to have the 

program determined to be an eligible program. The institution 

applies under the provisions for adding an educational program 

in 34 CFR 600.20, and must include in its application-- 

(a) A description of the comprehensive transition and 

postsecondary program that addresses all of the components of 

the program, as defined in §668.231; 

(b) Its policy for determining whether a student enrolled 

in the program is making satisfactory academic progress; 

(c) The number of weeks of instructional time, the number 

of semester or quarter credit hours, clock hours, or, in the 

case of a non-credit or reduced credit course, the equivalent 

credit hours in the program, and the number of those hours 

needed to be a full-time and half-time student; 

(d) A description of the educational credential offered 

(degree or certificate) or outcome expected of students enrolled 

in the program; 
119 

(e) A copy of the letter or notice sent to the 

institution‘s accrediting agency informing the agency of its 

comprehensive transition and postsecondary program. The letter 

or notice must include a description of how the institution will 

evaluate the program based on the standards established by the 

institution for success with respect to student achievement; and 

(f) Any other information the Secretary may require. 

§668.233 Student eligibility.

A student with an intellectual disability is eligible to 

receive Federal Pell, FSEOG, and Federal Work Study program 

assistance under this subpart if—

(a) The student satisfies the general student eligibility 

requirements under §668.32, except for the requirements in 

paragraphs (a), (e), and (f) of that section. With regard to 

these exceptions, a student-- 

(1) Does not have to be enrolled for the purpose of 

obtaining a degree or certificate; 

(2) Is not required to have a high school diploma, a 

recognized equivalent of a high school diploma, or have passed 

an ability to benefit test; and 

(3) Is making satisfactory progress according to the 

institution‘s published standards for students enrolled in its 

comprehensive transition and postsecondary programs; 

(b) The student is enrolled on at least a half-time basis, 

as determined by the institution, in a comprehensive transition 

and postsecondary program approved by the Secretary; and 

(c) The institution obtains documentation establishing that 

the student has an intellectual disability. Acceptable 

documentation includes-- 
120 

(1) A documented comprehensive and individualized psychoeducational evaluation and diagnosis by a psychologist or other 

qualified professional; 

(2) A record of the disability from a local educational 

agency that describes the eligibility of the student to receive 

services through the Individuals with Disabilities Education 

Act, or 

(3) A record of the disability from a government agency, 

such as a vocational rehabilitation agency, that describes the 

abilities and limitations of the student. 

Statutory Language: 

HEA section 484 

(s) STUDENTS WITH INTELLECTUAL DISABILITIES.—

(1) DEFINITIONS.—In this subsection the terms 

 ̳comprehensive transition and postsecondary program for students 

with intellectual disabilities‘ and  ̳student with an 

intellectual disability‘ have the meanings given the terms in 

section 760.

(2) REQUIREMENTS.—Notwithstanding subsections (a), (c), and 

(d), in order to receive any grant or work assistance under 

section 401, subpart 3 of part A, or part C, a student with an 

intellectual disability shall—

(A) be enrolled or accepted for enrollment in a 

comprehensive transition and postsecondary program for students 

with intellectual disabilities at an institution of higher 

education;

(B) be maintaining satisfactory progress in the program as 

determined by the institution, in accordance with standards 

established by the institution; and
121 

(C) meet the requirements of paragraphs (3), (4), (5), and 

(6) of subsection (a).

(3) AUTHORITY.—Notwithstanding any other provision of law 

unless such provision is enacted with specific reference to this 

section, the Secretary is authorized to waive any statutory 

provision applicable to the student financial assistance 

programs under section 401, subpart 3 of part A, or part C 

(other than a provision of part F related to such a program), or 

any institutional eligibility provisions of this title, as the 

Secretary determines necessary to ensure that programs enrolling 

students with intellectual disabilities otherwise determined to 

be eligible under this subsection may receive such financial 

assistance.

(4) REGULATIONS.—Notwithstanding regulations applicable to 

grant or work assistance awards made under section 401, subpart 

3 of part A, and part C (other than a regulation under part F 

related to such an award), including with respect to eligible 

programs, instructional time, credit status, and enrollment 

status as described in section 481, the Secretary shall 

promulgate regulations allowing programs enrolling students with 

intellectual disabilities otherwise determined to be eligible 

under this subsection to receive such awards.

HEA Section 760 

In this part:

1) COMPREHENSIVE TRANSITION AND POSTSECONDARY PROGRAM FOR 

STUDENTS WITH INTELLECTUAL DISABILITIES. – The term 

 ̳comprehensive transition and postsecondary program for students 

with intellectual disabilities‘ means a degree, certificate, or 

nondegree program that is--

(A) offered by an institution of higher education;
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(B) designed to support students with intellectual 

disabilities who are seeking to continue academic, career, and 

technical, and independent living instruction at an institution 

of higher education in order to prepare for gainful employment;

(C) includes an advising and curriculum structure; and 

(D) requires students with intellectual disabilities to 

participate on not less than a half-time basis, as determined by 

the institution, with such participation focusing on academic 

components and occurring through one or more of the following 

activities:

(i) Regular enrollment in credit-bearing courses with 

nondisabled students offered by the institution;

(ii) Auditing or participating in courses with non-disabled 

students offered by the institution for which the student does 

not receive regular academic credit;

(iii) Enrollment in noncredit-bearing, nondegree courses 

with nondisabled students;

(iv) Participation in internships or work-based training in 

settings with nondisabled students.

(2) STUDENT WITH AN INTELLECTUAL DISABILITY. – The term 

 ̳student with an intellectual disability‘ means a student –

(A) with mental retardation or a cognitive impairment, 

characterized by significant limitations in--

(i) intellectual and cognitive functioning; and 

(ii) adaptive behavior as expressed in conceptual, social, 

and practical adaptive skills; and
123 

(B) who is currently, or was formerly, eligible for a free 

appropriate public education under the Individuals with 

Disabilities Education Act.
124 

Issue Paper #16 

Origin: HEOA 

Issue: Readmission requirements for servicemembers 

Statutory cites: Section 484C of the HEA 

Regulatory cites: New §668.18 

DCL GEN-08-12 cite: Pages 63-65 

Summary of issue: Effective August 14, 2008, an institution 

may not deny readmission to a servicemember of the uniformed 

services for reasons relating to that service. In addition, a 

student who is readmitted to an institution under this section 

must be readmitted with the same academic status as the student 

had when he or she last attended the institution. An affected 

servicemember is any individual who is a member of, applies to 

be a member of, or performs, has performed, applies to perform, 

or has the obligation to perform, service in the uniformed 

services. This applies to service in the uniformed services, 

whether voluntary or involuntary, on active duty in the Armed 

Forces, including service as a member of the National Guard or 

Reserve, for a period of more than 30 days under a call or order 

to active duty of more than 30 days. 

Any student whose absence from an institution of higher 

education is necessitated by reason of service in the uniformed 

services is entitled to readmission if 

 the student (or an appropriate officer of the Armed Forces 

or official of the Department of Defense) gives advance 

written or verbal notice of such service to the appropriate 

official at the institution; 

 the cumulative length of the absence and of all previous 

absences from that institution of higher education by 
125 

reason of service in the uniformed services does not exceed 

five years; and 

 except as otherwise provided in this section, the student 

submits a notification of intent to reenroll in the 

institution. 

However, no advance notice by the student is required if 

the giving of such notice is precluded by military necessity, 

such as a mission, operation, exercise, or requirement that is 

classified; or a pending or ongoing mission, operation, 

exercise, or requirement that may be compromised or otherwise 

adversely affected by public knowledge. In addition, any 

student (or an appropriate officer of the Armed Forces or 

official of the Department of Defense) who did not give advance 

notice of service to the appropriate official at the institution 

may meet the notice requirement by submitting, at the time the 

student seeks readmission, an attestation to the student‘s 

institution that the student performed service in the uniformed 

services that necessitated the student‘s absence from the 

institution. 

When determining the cumulative length of the student‘s 

absence for service, the period of service does not include any 

service 

 that is required, beyond five years, to complete an initial 

period of obligated service; 

 during which the student was unable to obtain orders 

releasing the student from a period of service in the 

uniformed services before the expiration of the five-year 

period and the inability to obtain those orders was through 

no fault of the student; or 
126 

 performed by a member of the Armed Forces (including the 

National Guard and Reserves) who is 

o ordered to or retained on active duty under section 

688, 12301(a), 12301(g), 12302, 12304, or 12305 of 

Title 10, U.S.C., or under section 331, 332, 359, 360, 

367, or 712 of Title 14, U.S.C.; 

o ordered to or retained on active duty (other than for 

training) under any provision of law because of a war 

or national emergency declared by the President or the 

Congress; 

o ordered to active duty (other than for training) in 

support of an operational mission for which personnel 

have been ordered to active duty under section 12304 

of Title 10, U.S.C.; 

o ordered to active duty in support of a critical 

mission or requirement of the Armed Forces (including 

the National Guard or Reserve); or 

o called into Federal service as a member of the 

National Guard under chapter 15 of Title 10, U.S.C., 

or section 12406 of Title 10, U.S.C. 

An affected servicemember must, upon the completion of a 

period of service in the uniformed services, notify the 

institution of his or her intent to return to the institution 

not later than three years after the completion of the period of 

service. However, a student who is hospitalized for or 

convalescing from an illness or injury incurred in or aggravated 

during the performance of service in the uniformed services must 

notify the institution of his or her intent to return to the 

institution not later than two years after the end of the period 

that is necessary for recovery from such illness or injury. A 
127 

student who fails to apply for readmission within the required 

period does not automatically forfeit eligibility for 

readmission to the institution, but is subject to the 

institution‘s established leave of absence policy and general 

practices. 

A student who submits an application for readmission to an 

institution must provide to the institution documentation to 

establish that 

 the student has not exceeded the specified service 

limitations; and 

 the student‘s eligibility for readmission has not been 

terminated. 

An institution may not delay or attempt to avoid a 

readmission of a student under this section by demanding 

documentation that does not exist, or is not readily available, 

at the time of readmission. 

A student‘s eligibility for readmission to an institution 

under this section by reason of such student‘s service in the 

uniformed services terminates upon the occurrence of any of the 

following events: 

 a separation of such person from the Armed Forces 

(including the National Guard and reserves) with a 

dishonorable or bad conduct discharge;

 a dismissal of such person permitted under section 1161(a) 

of Title 10, U.S.C.; or 

 a dropping of such person from the rolls pursuant to 

section 1161(b) of Title 10, U.S.C. 
128 

These provisions were based on the provisions of the 

Uniformed Services Employment and Reemployment Rights Act 

(USERRA). 

Title 10 of the U.S.C. can be accessed at 

http://www.access.gpo.gov/uscode/title10/title10.html 

Title 14 of the U.S.C. can be accessed at 

http://www.access.gpo.gov/uscode/title14/title14.html

Note: The HEOA also added a provision to the HEA at section 

131(f) which, effective August 14, 2009, requires the Secretary 

to coordinate with the Secretary of Defense and the Secretary of 

Veterans Affairs to create a searchable website within the 

Federal student financial aid website that, in addition to 

containing information about all Federal and State student 

financial assistance, must contain information about the 

readmission requirements under section 484C of the HEA and other 

student services for which members of the Armed Forces may be 

eligible. In addition, the Secretary is required to work with 

the Secretary of Defense and the Secretary of Veterans Affairs 

to make the availability of the Armed Forces information website 

widely known to members of the Armed Forces, institutions of 

higher education, and the general public. The Department does 

not plan to expand on this provision in regulations and, 

therefore, has not included it as a provision that will be 

negotiated. 

Updated information since 3/2-4 meetings: 

General 

Section 668.18(a) would include the general requirements of 

the statute that an institution may not deny readmission to a 

servicemember, but must readmit the servicemember with the same 
129 

academic status as the student had when the student was last 

admitted to the institution. The regulations would specify that 

the institution must admit the student promptly, and define what 

it means to ―promptly readmit‖ a student. Section 668.18(a) 

would also specify what it means to readmit a person with the 

same academic status. 

In the case of a student who is not prepared to resume the 

program at the point where he or she left off, §668.18(a) would 

require the institution to make reasonable efforts to help the 

student become prepared including, but not limited to, providing 

refresher courses at no extra cost. The institution would not 

be required to readmit the student if, after reasonable efforts 

by the institution, the student is still not prepared to resume 

the program at the point where he or she left off. 

Section 668.18(a) would clarify that the requirements of 

this section apply to an institution even if that institution 

has undergone a change of ownership since the student ceased 

attendance. 

Finally, §668.18(a) would make clear that the provisions of 

this section supersede any State law or other requirement that 

reduce, limit, or eliminate any right or benefit provided by 

this section. 

Service in the uniformed services 

Section 668.18(b) would delineate what service in the 

uniformed services means for purposes of this section. This 

section would expand upon the statutory language to clarify that 

service in the uniformed services includes active duty for 

training and full-time National Guard duty under Federal 

authority (i.e, not National Guard service under authority of 

State law). In addition, the regulations would specify that 
130 

qualifying service must be for more than 30 consecutive days 

under a call or order to active duty of more than 30 consecutive

days. 

Readmission procedures 

Section 668.18(c) would list the conditions under which an 

institution must readmit a servicemember. The regulations would 

require an institution to designate one or more offices for the 

purpose of receiving advance notice from students of their 

absence from the institution necessitated by service in the 

uniformed services, and notice from students of an intent to 

return to the institution. The regulations would make clear 

that advance notice must be provided by the student as far in 

advance as is reasonable under the circumstances. However such 

notice would not need to follow any particular format, nor would 

a student have to indicate as part of the notice whether the 

student intends to return to the institution. Also, the 

regulations would make clear that an institution may not set a 

brightline deadline for submission of any such notice, but must 

judge the timeliness of submission by the facts of a particular 

case. As such notice may be provided by an appropriate officer 

of the Armed Forces, the regulations would clarify who an 

―appropriate officer‖ is. Section 668.18(c) would also provide 

that a student‘s notice of intent to return may be provided 

orally or in writing, as specified in the statute for advance 

notice from students of their absence from the institution 

necessitated by service in the uniformed services. The notice 

of intent to return would not need to follow any particular 

format. 

Exceptions to advance notice 
131 

Section 668.18(d) would restate the statutory language for 

exceptions to advance notice. 

Cumulative length of absence 

Section 668.18(e) would list the types of service that are 

not included in the cumulative length of the student‘s absence, 

including a brief description of the types of services 

referenced in titles 10 and 14 of the United States Code. 

Notification of Intent to Reenroll 

Section 668.18(f) would restate the statutory provision 

providing that a student who fails to apply for readmission 

within the required periods does not automatically forfeit 

eligibility for readmission to the institution, but is subject 

to the institution‘s established leave of absence policy and 

general practices. 

Documentation 

Section 668.18(g) would list the documentation that a 

student must submit with an application for readmission. The 

regulations would list several types of documentation that 

satisfy the documentation requirements, making clear that the 

types of documentation available or necessary will vary from 

case to case. 

Termination of readmission eligibility 

Section 668.18(f) would list the circumstances under which 

a student‘s eligibility for readmission to an institution would 

be terminated, including a brief description of the types of 

circumstances referenced in title 10 of the United States Code. 

Tentative agreement: 

Regulatory language: 
132 

[The whole section is new. The mark-up shows changes 

to/expansion on the statutory requirements of the HEOA.] 

Section 668.18 Readmission requirements for servicemembers. 

(a) General. (1) An institution may not deny readmission 

to a person who is a member of, applies to be a member of, 

performs, has performed, applies to perform, or has an 

obligation to perform, service in the uniformed services on the 

basis of that membership, application for membership, 

performance of service, application for service, or obligation. 

(2)(i) An institution must promptly readmit to the 

institution a person described in paragraph (a)(1) of this 

section with the same academic status as the student had when 

the student last attended the institution or was last admitted 

to the institution, but did not begin attendance. 

(ii) ―Promptly readmit‖ means as soon as practicable under 

the circumstances of each case. Absent unusual circumstances, 

the individual must be readmitted into the next class or classes 

in the student‘s program beginning after the individual provides 

notice of his or her intent to reenroll, unless the individual 

requests a later date of readmission.

(iii) To readmit a person with the same academic status 

means that the institution admits the student—

(A) To the same program to which he or she was last 

admitted by the institution or, if that exact program is no 

longer offered, the program that is most similar to that 

program; 

(B) At the same enrollment status that the student last 

held at the institution;
133 

(C) With the same number of completed credit hours or 

clock hours;

(D) With the same student status (e.g., if the student was 

on probation when he or she last attended the institution, the 

student is readmitted in a probation status); 

(E) With the same institutional charges that would have 

been charged had the student been continuously enrolled; and

(F) With the same satisfactory academic progress status.

(iv)(A) If institution determines that the student is not 

prepared to resume the program with the same academic status at 

the point where the student left off, the institution must make 

reasonable efforts to help the student become prepared 

including, but not limited to, providing refresher courses at no 

extra cost. The institution is not required to readmit the 

student on his or her return from service if he or she is not, 

after reasonable efforts by the institution, prepared to resume 

the program at the point where he or she left off.

(B)(I) ―Reasonable efforts‖ means actions that do not 

place an undue hardship on the institution.

(II) ―Undue hardship‖ means an action requiring 

significant difficulty or expense.

(C) The institution carries the burden to prove by a 

preponderance of the evidence that the student is not prepared 

to resume the program with the same academic status at the point 

where the student left off, after the institution makes 

reasonable efforts to help the student become prepared.

(3) This provision applies to an institution that has 

continued in operation since the student ceased attending, 
134 

notwithstanding any changes of ownership of the institution 

since the student ceased attendance. 

(4) The requirements of this section supersede any State 

law (including any local law or ordinance), contract, agreement, 

policy, plan, practice, or other matter that reduces, limits, or 

eliminates in any manner any right or benefit provided by this 

section.

(b) Service in the uniformed services. For purposes of 

this section, service in the uniformed services means service, 

whether voluntary or involuntary, in the Armed Forces, including 

such service by a member of the National Guard or Reserve, on 

active duty, active duty for training, or full-time National 

Guard duty under Federal authority, for a period of more than 30 

consecutive days under a call or order to active duty of more 

than 30 consecutive days.

(c) Readmission procedures. (1) Any student whose absence 

from an institution is necessitated by reason of service in the 

uniformed services shall be entitled to readmission to the 

institution if—

(i) Except as provided in paragraph (d) of this section, 

the student (or an appropriate officer of the Armed Forces or 

official of the Department of Defense) gives advance oral or 

written or verbal notice of such service to an office designated 

by the appropriate official at the institution, providing such 

notice as far in advance as is reasonable under the 

circumstances; 

(ii) The cumulative length of the absence and of all 

previous absences from that institution by reason of service in 

the uniformed services, including only the time the student 
135 

spends actually performing service in the uniformed services,

does not exceed five years; 

(iii) Except as provided in paragraph (f) of this section, 

the student gives oral or written noticefies the institution of 

his or her intent to return to an office designated by the 

institution—

(A) For a student who completes a period of service in the 

uniformed services, not later than three years after the 

completion of the period of service; or 

(B) For a student who is hospitalized for or convalescing 

from an illness or injury incurred in or aggravated during the 

performance of service in the uniformed services, two years 

after the end of the period that is necessary for recovery from 

such illness or injury. 

(2)(i) An institution must designate one or more offices 

at the institution that a student may readily contact to provide 

notification of service required by paragraph (c)(1)(i) of this 

section and notification of intent to return required by 

paragraph (c)(1)(iii) of this section.

(ii) An institution may not require that the notice 

provided by the student under paragraph (c)(1)(i) or (c)(1)(iii) 

of this section follow any particular format.

(iii) The notice provided by the student under paragraph 

(c)(1)(i) of this section—

(A) May not be subject to any brightline rule for 

timeliness; timeliness must be determined by the facts in any 

particular case; and

(B) Does not need to indicate whether the student intends 

to return to the institution.
136 

(iv) For purposes of paragraph (c)(1)(i) of this section, 

an ―appropriate officer‖ is a commissioned, warrant, or 

noncommissioned officer authorized to give such notice by the 

military service concerned. 

(d) Exceptions to advance notice. (1) No notice is 

required under paragraph (c)(1)(i) of this section if the giving 

of such notice is precluded by military necessity, such as—

(i) A mission, operation, exercise, or requirement that is 

classified; or 

(ii) A pending or ongoing mission, operation, exercise, or 

requirement that may be compromised or otherwise adversely 

affected by public knowledge; or 

(2) Any student (or an appropriate officer of the Armed 

Forces or official of the Department of Defense) who did not 

give advance written or verbal notice of service to the 

appropriate official at the institution in accordance with 

paragraph (c)(1) of this section may meet the notice requirement 

by submitting, at the time the student seeks readmission, an 

attestation to the institution that the student performed 

service in the uniformed services that necessitated the 

student‘s absence from the institution.

(e) Cumulative length of absence. For purposes of 

paragraph (c)(1)(ii) of this section, a student‘s cumulative 

length of absence from an institution does not include any 

service—

(1) That is required, beyond five years, to complete an 

initial period of obligated service; 

(2) During which the student was unable to obtain orders 

releasing the student from a period of service in the uniformed 
137 

services before the expiration of the five-year period and such 

inability was through no fault of the student; or 

(3) Performed by a member of the Armed Forces (including 

the National Guard and Reserves) who is—

(i) Ordered to or retained on active duty under section 

688, 12301(a), 12301(g), 12302, 12304, or 12305 of title 10, 

United States Code, or under section 331, 332, 359, 360, 367, or 

712 of title 14, United States Code;--

(A) 10 U.S.C. 688 (involuntary active duty by a military 

retiree);

(B) 10 U.S.C. 12301(a) (involuntary active duty in 

wartime);

(C) 10 U.S.C. 12301(g) (retention on active duty while in 

captive status);

(D) 10 U.S.C. 12302 (involuntary active duty during a 

national emergency for up to 24 months);

(E) 10 U.S.C. 12304 (involuntary active duty for an 

operational mission for up to 270 days);

(F) 10 U.S.C. 12305 (involuntary retention on active duty 

of a critical person during time of crisis or other specific 

conditions);

(G) 14 U.S.C. 331 (involuntary active duty by retired Coast 

Guard officer);

(H) 14 U.S.C. 332 (voluntary active duty by retired Coast

Guard officer);

(I) 14 U.S.C. 359 (involuntary active duty by retired Coast 

Guard enlisted member);

(J) 14 U.S.C. 360 (voluntary active duty by retired Coast 
138 

Guard enlisted member);

(K) 14 U.S.C. 367 (involuntary retention of Coast Guard 

enlisted member on active duty); and

(L) 14 U.S.C. 712 (involuntary active duty by Coast Guard 

Reserve member for natural or man-made disasters).

(ii) Ordered to or retained on active duty (other than for 

training) under any provision of law because of a war or 

national emergency declared by the President or the Congress, as 

determined by the Secretary concerned; 

(iii) Ordered to active duty (other than for training) in 

support, as determined by the Secretary concerned, of an 

operational mission for which personnel have been ordered to 

active duty under section 12304 of title 10, United States Code; 

(iv) Ordered to active duty in support, as determined by 

the Secretary concerned, of a critical mission or requirement of 

the Armed Forces (including the National Guard or Reserve); or 

(v) Called into Federal service as a member of the 

National Guard under chapter 15 of title 10, United States Code, 

or section 12406 of title 10, United States Code (i.e., called 

to respond to an invasion, danger of invasion, rebellion, danger 

of rebellion, insurrection, or the inability of the President 

with regular forces to execute the laws of the United States). 

(f) Notification of intent to reenroll. A student who 

fails to apply for readmission within the periods described in 

paragraph (c)(1)(iii) of this section does not automatically 

forfeit eligibility for readmission to the institution, but is 

subject to the institution‘s established leave of absence policy 

and general practices. 
139 

(g) Documentation. (1) A student who submits an 

application for readmission to an institution under paragraph 

(c)(1)(iii) of this section shall provide to the institution 

documentation to establish that—

(i) The student has not exceeded the service limitation in 

paragraph (c)(1)(ii) of this section; and 

(ii) The student‘s eligibility for readmission has not 

been terminated due to an exception in paragraph (h) of this 

section. 

(2)(i) Documents that satisfy the requirements of paragraph 

(g)(1) of this section include, but are not limited to, the 

following:

(A) DD (Department of Defense) 214 Certificate of Release 

or Discharge from Active Duty;

(B) Copy of duty orders prepared by the facility where the 

orders were fulfilled carrying an endorsement indicating 

completion of the described service;

(C) Letter from the commanding officer of a Personnel 

Support Activity or someone of comparable authority;

(D) Certificate of completion from military training 

school;

(E) Discharge certificate showing character of service;

(F) Copy of extracts from payroll documents showing periods 

of service; and

(G) Letter from National Disaster Medical System (NDMS) 

Team Leader or Administrative Officer verifying dates and times 

of NDMS training or Federal activation.
140 

(ii) The types of documents that are necessary to establish 

eligibility for readmission will vary from case to case. Not all 

of these documents are available or necessary in every instance 

to establish readmission eligibility.

(3) An institution may not delay or attempt to avoid a 

readmission of a student under this section by demanding 

documentation that does not exist, or is not readily available, 

at the time of readmission. 

(h) Termination of readmission eligibility. A student‘s 

eligibility for readmission to an institution under this section 

by reason of such student‘s service in the uniformed services 

terminates upon the occurrence of any of the following events—

(1) A separation of such person from the Armed Forces 

(including the National Guard and Reserves) with a dishonorable 

or bad conduct discharge; 

(2) A dismissal of such person a commissioned officer

permitted under section 1161(a) of title 10, United States Code

by sentence of a general court-martial; in commutation of a 

sentence of a general court-martial; or, in time of war, by 

order of the President; or

(3) A dropping of such person a commissioned officer from 

the rolls pursuant to section 1161(b) of title 10, United States 

Code due to absence without authority for at least three months; 

separation by reason of a sentence to confinement adjudged by a

court-martial; or, a sentence to confinement in a Federal or 

State penitentiary or correctional institution. 

Statutory Language: 

SEC. 484C. READMISSION REQUIREMENTS FOR SERVICEMEMBERS.

(a) DEFINITION OF SERVICE IN THE UNIFORMED SERVICES.—
141 

In this section, the term  ̳service in the uniformed services‘ 

means service (whether voluntary or involuntary) on active duty 

in the Armed Forces, including such service by a member of the 

National Guard or Reserve, for a period of more than 30 days 

under a call or order to active duty of more than 30 days.

(b) DISCRIMINATION AGAINST STUDENTS WHO SERVE IN THE 

UNIFORMED SERVICES PROHIBITED.—A person who is a member of, 

applies to be a member of, performs, has performed, applies to 

perform, or has an obligation to perform, service in the 

uniformed services shall not be denied readmission to an 

institution of higher education on the basis of that membership, 

application for membership, performance of service, application 

for service, or obligation.

(c) READMISSION PROCEDURES.—

(1) IN GENERAL.—Any student whose absence from an 

institution of higher education is necessitated by reason of 

service in the uniformed services shall be entitled to 

readmission to the institution of higher education if—

(A) the student (or an appropriate officer of the Armed 

Forces or official of the Department of Defense) gives advance 

written or verbal notice of such service to the appropriate 

official at the institution of higher education;

(B) the cumulative length of the absence and of all 

previous absences from that institution of higher education by 

reason of service in the uniformed services does not exceed five 

years; and

(C) except as otherwise provided in this section, the 

student submits a notification of intent to reenroll in the 

institution of higher education in accordance with the 

provisions of paragraph (4).
142 

(2) EXCEPTIONS.—

(A) MILITARY NECESSITY.—No notice is required under 

paragraph (1)(A) if the giving of such notice is precluded by 

military necessity, such as—

(i) a mission, operation, exercise, or requirement that is 

classified; or

(ii) a pending or ongoing mission, operation, exercise, or 

requirement that may be compromised or otherwise adversely 

affected by public knowledge.

(B) FAILURE TO GIVE ADVANCE NOTICE.—Any student (or an 

appropriate officer of the Armed Forces or official of the 

Department of Defense) who did not give advance written or 

verbal notice of service to the appropriate official at the 

institution of higher education in accordance with paragraph 

(1)(A) may meet the notice requirement by submitting, at the 

time the student seeks readmission, an attestation to the 

student‘s institution of higher education that the student 

performed service in the uniformed services that necessitated 

the student‘s absence from the institution of higher education.

(3) APPLICABILITY.—This section shall apply to a student 

who is absent from an institution of higher education by reason 

of service in the uniformed services if such student‘s 

cumulative period of service in the Armed Forces (including the 

National Guard or Reserve), with respect to the institution of 

higher education for which a student seeks readmission, does not 

exceed five years, except that any such period of service shall 

not include any service—

(A) that is required, beyond five years, to complete an 

initial period of obligated service;
143 

(B) during which such student was unable to obtain orders 

releasing such student from a period of service in the uniformed 

services before the expiration of such five year period and such 

inability was through no fault of such student; or

(C) performed by a member of the Armed Forces (including 

the National Guard and Reserves) who is—

(i) ordered to or retained on active duty under section 

688, 12301(a), 12301(g), 12302, 12304, or 12305 of title 10, 

United States Code, or under section 331, 332, 359, 360, 367, or 

712 of title 14, United States Code;

(ii) ordered to or retained on active duty (other than for 

training) under any provision of law because of a war or 

national emergency declared by the President or the Congress, as 

determined by the Secretary concerned;

(iii) ordered to active duty (other than for training) in 

support, as determined by the Secretary concerned, of an 

operational mission for which personnel have been ordered to 

active duty under section 12304 of title 10, United States Code;

(iv) ordered to active duty in support, as determined by 

the Secretary concerned, of a critical mission or requirement of 

the Armed Forces (including the National Guard or Reserve); or

(v) called into Federal service as a member of the National 

Guard under chapter 15 of title 10, United States Code, or 

section 12406 of title 10, United States Code.

(4) NOTIFICATION OF INTENT TO RETURN.—

(A) IN GENERAL.—Except as provided in subparagraph (B), a 

student referred to in subsection (a) shall, upon the completion 

of a period of service in the uniformed services, notify the 

institution of higher education of the student‘s intent to 
144 

return to the institution not later than three years after the 

completion of the period of service.

(B) HOSPITALIZATION OR CONVALESCENCE.—A student who is 

hospitalized for or convalescing from an illness or injury 

incurred in or aggravated during the performance of service in 

the uniformed services shall notify the institution of higher 

education of the student‘s intent to return to the institution 

not later than two years after the end of the period that is 

necessary for recovery from such illness or injury.

(C) SPECIAL RULE.—A student who fails to apply for 

readmission within the period described in this section shall 

not automatically forfeit such eligibility for readmission to 

the institution of higher education, but shall be subject to the 

institution of higher education‘s established leave of absence 

policy and general practices.

(5) DOCUMENTATION.—

(A) IN GENERAL.—A student who submits an application for 

readmission to an institution of higher education under this 

section shall provide to the institution of higher education 

documentation to establish that—

(i) the student has not exceeded the service limitations 

established under this section; and

(ii) the student‘s eligibility for readmission has not been 

terminated due to an exception in subsection (d).

(B) PROHIBITED DOCUMENTATION DEMANDS.—An institution of 

higher education may not delay or attempt to avoid a readmission 

of a student under this section by demanding documentation that 

does not exist, or is not readily available, at the time of 

readmission.
145 

(6) NO CHANGE IN ACADEMIC STATUS.—A student who is 

readmitted to an institution of higher education under this 

section shall be readmitted with the same academic status as 

such student had when such student last attended the institution 

of higher education.

(d) EXCEPTION FROM READMISSION ELIGIBILITY.—A student‘s 

eligibility for readmission to an institution of higher 

education under this section by reason of such student‘s service 

in the uniformed services terminates upon the occurrence of any 

of the following events:

(1) A separation of such person from the Armed Forces (including 

the National Guard and Reserves) with a dishonorable or bad 

conduct discharge.

(2) A dismissal of such person permitted under section 

1161(a) of title 10, United States Code.

(3) A dropping of such person from the rolls pursuant to 

section 1161(b) of title 10, United States Code.
146 

Issue Paper #17 

Origin: HEOA 

Issue: Institutional requirements for teach-outs/eligibility 

and certification procedures-treatment of teach-outs 

Statutory cites: Sections 487(f) and 498 of the HEA 

Regulatory cites: §600.20 and §668.14 

DCL GEN-08-12 cite: Pages 72 and 74 

Summary of issue: Effective August 14, 2008, section 487(f) of 

the HEA provides that, whenever the Secretary initiates an 

action to limit, suspend, or terminate (LS or T) an 

institution‘s participation in any Title IV program or initiates 

an emergency action against an institution, the institution must 

prepare a teach-out plan for submission to its accrediting 

agency. The teach-out plan must be prepared in accordance with 

section 496(c)(6) of the HEA [mistakenly cited as section 

496(c)(4) in the HEA] and any applicable Title IV regulations or 

accrediting agency standards. A ―teach-out plan‖ is defined as 

a written plan that provides for equitable treatment of students 

if an institution ceases to operate before all students have 

completed their program of study. Currently, the regulations 

governing the Secretary‘s recognition of accrediting agencies 

define a ―teach-out agreement‖ as a written agreement between 

institutions that provides for the equitable treatment of 

students if one of those institutions stops offering an 

educational program before all students enrolled in that program 

have completed the program (§602.3). Consideration should be 

given to developing one definition for all Title IV regulations. 

Also effective August 14, 2008, section 498 of the HEA 

provides that a location of a closed institution is eligible as 

an additional location of another institution for the purpose of 
147 

conducting a teach-out if the teach-out is approved by the 

institution‘s accrediting agency. The institution that conducts 

the teachout under this provision is permitted to establish a 

permanent additional location at the closed institution without 

having to satisfy the requirements for additional locations in 

sections 102(b)(1)(E) and 102(c)(1))(C) of the HEA--i.e., that a 

proprietary institution or a postsecondary vocational 

institution must have been in existence for two years to be 

eligible--and without assuming the liabilities of the closed 

institution. 

Note: One of the four new accrediting agency operating 

procedures added by the HEOA at section 496(c)(3) of the HEA 

requires accrediting agencies to approve teach-out plans 

submitted by institutions they accredit if the Department 

notifies the agency of an action against an institution in 

accordance with section 487(f) of the HEA; if the institution‘s 

accreditation is withdrawn, terminated or suspended; or if the 

institution intends to cease operations. This provision is 

being negotiated by Team III—Accreditation. 

Updated information since 3/2-4 meetings: Section 668.14 would 

be amended to implement the requirement in section 487(f) of the 

HEA. In addition to the requiring an institution to submit a 

teach out plan (which would be defined in §600.2) to its 

accrediting agency whenever the Secretary initiates an LS or T 

or an emergency action against the institution, as required by 

statute, an institution would be required to submit a teach out 

plan when (1) the institution‘s accrediting agency acts to 

withdraw, terminate, or suspend the accreditation of the 

institution; or (2) the institution otherwise intends to cease 

operations. 
148 

Section 600.32 would implement section 498(k) of the HEA to 

provide that an institution that conducts a teach out for a 

closed institution whenever the Secretary initiates an LS or T 

or an emergency action against the institution may apply to have 

that site approved as an additional location, if the teach out 

plan was approved by the closed institution‘s accrediting 

agency. If the Department approves the institution to add the 

additional location, the ―two-year rule‖ would not apply to the 

additional location, and the institution would not assume the 

liabilities of the closed institution. As a condition for 

approval, the Department may require that payments from the 

institution conducting the teach out to the owners of the closed 

institution, or related parties, be used to pay any liabilities 

owed by the closed institution. 

Tentative agreement:

Regulatory language: 

§600.2 General definitions.

The following definitions apply to terms used in this part: 

* * * 

Teach-out plan: A written plan developed by an institution 

that provides for the equitable treatment of students if an 

institution, or an institutional location that provides one 

hundred percent of at least one program, ceases to operate 

before all students have completed their program of study, and 

may include, if required by the institution‘s accrediting 

agency, a teach-out agreement between institutions.

§600.32 Eligibility of additional locations.

(a) Except as provided in paragraphs (b) and (c) and (d) of 

this section, to qualify as an eligible location, an additional 
149 

location of an eligible institution must satisfy the applicable 

requirements of this section and §§600.4, 600.5, 600.6, 600.8, 

and 600.10. 

(b) To qualify as an eligible location, an additional 

location is not required to satisfy the two-year requirement of 

§§600.5(a)(7) or 600.6(a)(6), unless—

(1) The location was a facility of another institution that 

has closed or ceased to provide educational programs for a 

reason other than a normal vacation period or a natural disaster 

that directly affects the institution or the institution's 

students; 

(2) The applicant institution acquired, either directly 

from the institution that closed or ceased to provide 

educational programs, or through an intermediary, the assets at 

the location; and 

(3) The institution from which the applicant institution 

acquired the assets of the location—

(i) Owes a liability for a violation of an HEA program 

requirement; and 

(ii) Is not making payments in accordance with an agreement 

to repay that liability. 

(c) Notwithstanding paragraph (b) of this section, an 

additional location is not required to satisfy the two-year 

requirement of §600.5(a)(7) or §600.6(a)(6) if the applicant 

institution agrees—

(1) To be liable for all improperly expended or unspent 

title IV, HEA program funds received by the institution that has 

closed or ceased to provide educational programs; 
150 

(2) To be liable for all unpaid refunds owed to students 

who received title IV, HEA program funds; and 

(3) To abide by the policy of the institution that has 

closed or ceased to provide educational programs regarding 

refunds of institutional charges to students in effect before 

the date of the acquisition of the assets of the additional 

location for the students who were enrolled before that date. 

(d)(1) An institution that conducts a teach out at a site 

of a closed institution may apply to have that site approved as 

an additional location if—

(i) The closed institution ceased operations as result of 

an action taken by the Secretary to limit, suspend, or terminate 

the institution‘s participation under 34 CFR 600.41 or subpart G 

of this part, or a result of an emergency action taken by the 

Secretary under §668.83; and

(ii) The teach-out plan required under §668.14(b)(26) is

approved by the closed institution‘s accrediting agency. 

(2)(i) An institution that conducts a teach-out and is 

approved to add an additional location described in paragraph 

(d)(1) of this section—

(A) Is not required to meet the two-year requirement of 

§600.5(a)(7) or §600.6(a)(6) for the additional location 

described in paragraph (d)(1) of this section; and

(B) Is not required to assume the liabilities of the 

closed institution as required by paragraph (c)(1) and (c)(2) of 

this section.

(ii) As a condition for approving an additional location 

under paragraph (d)(1) of this section, the Secretary may 

require that payments from the institution conducting the teach 
151 

out to the owners or related parties of the closed institution, 

are used to satisfy any liabilities owed by the closed 

institution.

(de) For purposes of this section, an ―additional 

location‖ is a location of an institution that was not 

designated as an eligible location in the eligibility 

notification provided to an institution under §600.21. 

§668.14 Program participation agreement. 

* * * * 

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

institution agrees that—

* * * 

(26) In the event the Secretary initiates the limitation, 

suspension, or termination of the participation of an 

institution in any Title IV, HEA program under 34 CFR 600.41 or 

subpart G of this part or initiates an emergency action under 

§668.83, the institution‘s accrediting agency acts to withdraw, 

terminate, or suspend the accreditation of the institution, or 

the institution otherwise intends to cease operations, the 

institution will submit a teach-out plan to its accrediting 

agency in compliance with 34 CFR 602.24(c), and the standards of 

the institution‘s accrediting agency.

Statutory language: 

Section 487. Program participation agreements.

* * * * * 

(f) INSTITUTIONAL REQUIREMENTS FOR TEACH-OUTS.—

(1) IN GENERAL.—In the event the Secretary initiates the 

limitation, suspension, or termination of the participation of 
152 

an institution of higher education in any program under this 

title under the authority of subsection (c)(1)(F) or initiates 

an emergency action under the authority of subsection (c)(1)(G) 

and its prescribed regulations, the Secretary shall require that 

institution to prepare a teach-out plan for submission to the 

institution‘s accrediting agency or association in compliance 

with section 496(c)(4) [should be 496(c)(6)], the Secretary‘s 

regulations on teachout plans, and the standards of the 

institution‘s accrediting agency or association.

(2) TEACH-OUT PLAN DEFINED.—In this subsection, the term 

 ̳teach-out plan‘ means a written plan that provides for the 

equitable treatment of students if an institution of higher 

education ceases to operate before all students have completed 

their program of study, and may include, if required by the 

institution‘s accrediting agency or association, an agreement 

between institutions for such a teach-out plan.

Section 498. Eligibility and certification procedures. 

* * * * * 

(k) TREATMENT OF TEACH-OUTS AT ADDITIONAL LOCATIONS.—

(1) IN GENERAL.—A location of a closed institution of 

higher education shall be eligible as an additional location of 

an eligible institution of higher education, as defined pursuant 

to regulations of the Secretary, for the purposes of a teachout 

described in section 487(f), if such teach-out has been approved 

by the institution‘s accrediting agency.

(2) SPECIAL RULE.—An institution of higher education that 

conducts a teach-out through the establishment of an additional 

location described in paragraph (1) shall be permitted to 

establish a permanent additional location at a closed 

institution and shall not be required—
153 

(A) to meet the requirements of sections 102(b)(1)(E) and 

102(c)(1)(C) for such additional location; or

(B) to assume the liabilities of the closed institution.

(for reference purposes) 

Section 496. Recognition of accrediting agency or association. 

* * * * * 

(c) OPERATING PROCEDURES REQUIRED—No accrediting agency or 

association may be recognized by the Secretary as a reliable 

authority as to the quality of education or training offered by 

an institution seeking to participate in the programs authorized 

under this title, unless the agency or association—

* * * 

(3) requires an institution to submit for approval to the 

accrediting agency a teach-out plan upon the occurrence of any 

of the following events:

(A) the Department notifies the accrediting agency of an 

action against the institution pursuant to section 487(f);

(B) the accrediting agency acts to withdraw, terminate, or 

suspend the accreditation of the institution; or

(C) the institution notifies the accrediting agency that 

the institution intends to cease operations;

* * * 

(4)(6) requires that teach-out agreements among 

institutions are subject to the approval by the accrediting 

agency or association consistent with standards promulgated by 

such agency or association; 
154 

Issue paper #18 

Origin: HEOA 

Issue: Definition of baccalaureate ―liberal arts‖ programs 

offered by proprietary schools 

Statutory cites: Section 102(b) of the HEA 

Regulatory cites: §600.5 

DCL GEN-08-12 cite: Pages 23-24

Summary of issue: Effective July 1, 2010, the definition of 

―proprietary institution of higher education‖ is amended to add 

institutions that provide a program leading to a baccalaureate 

degree in liberal arts that the institution has provided since 

January 1, 2009, so long as the institution has been accredited 

by a recognized regional accreditation agency or organization 

since October 1, 2007, or earlier. 

As the language in section 102(b)(1)(A)(i) of the HEA is 

not new, in Dear Colleague letter GEN-08-12, the Department 

noted that this change does not affect the eligibility of 

current programs or alter the method used by the Secretary in 

determining the ―recognized occupations‖ as required by section 

102(b)(1)(A)(i) of the HEA.

Dear Colleague letter GEN-08-12 also noted that, pending 

negotiated rulemaking, the Secretary will regard a program as 

satisfying the "liberal arts" term of the statute if the 

Secretary determines, and the institution's recognized regional 

accreditation agency or organization affirms, that it is a 

general instructional program in the liberal arts subjects, the 

humanities disciplines, or the general curriculum, falling 

within one or more of the following generally-accepted 

instructional categories comprising such programs, but including 
155 

only instruction in regular programs, and excluding 

independently-designed programs, individualized programs, and 

unstructured studies: 

 a program that is a structured combination of the arts, 

biological and physical sciences, social sciences, and 

humanities, emphasizing breadth of study; 

 an undifferentiated program that includes instruction in the 

general arts or general science; 

 a program that focuses on combined studies and research in the 

humanities subjects as distinguished from the social and 

physical sciences, emphasizing languages, literatures, art, 

music, philosophy and religion; and 

 any single instructional program in liberal arts and sciences, 

general studies and humanities not listed above. 

Updated information since 3/2-4 meetings: Section 600.5 would 

be amended to add to the definition of ―proprietary institution 

of higher education‖ institutions that provide a program leading 

to a baccalaureate degree in liberal arts that the institution 

has provided since January 1, 2009, so long as the institution 

has been accredited by a recognized regional accreditation 

agency or organization since October 1, 2007, or earlier. In 

addition, a new paragraph (i) would be added to §600.5 to 

include a definition of a ―program leading to a baccalaureate 

degree in liberal arts.‖ The definition would require that the 

institution's recognized regional accreditation agency or 

organization determine that the program is a general 

instructional program in the liberal arts subjects, the 

humanities disciplines, or the general curriculum, falling 

within one or more generally-accepted instructional categories 

comprising such programs. The categories are from the U.S. 
156 

Department of Education‘s National Center for Education 

Statistics‘ (NCES) Classification of Instructional Programs 

(CIP), the federal government statistical standard on 

instructional program classifications. Specifically, the 

instructional categories are from the description of CIP 24, 

Liberal Arts and Sciences, General Studies and Humanities, 

except that it excludes independently-designed programs, 

individualized programs, and unstructured studies. 

Tentative agreement: 

Regulatory language: 

§600.5 Proprietary institution of higher education.

(a) A proprietary institution of higher education is an 

educational institution that—

(1) Is not a public or private nonprofit educational 

institution; 

(2) Is in a State; 

(3) Admits as regular students only persons who—

(i) Have a high school diploma; 

(ii) Have the recognized equivalent of a high school 

diploma; or 

(iii) Are beyond the age of compulsory school attendance 

in the State in which the institution is physically located; 

(4) Is legally authorized to provide an educational 

program beyond secondary education in the State in which the 

institution is physically located; 

(5)(i) Provides an eligible program of training, as 

defined in 34 CFR 668.8, to prepare students for gainful 

employment in a recognized occupation; or
157 

(ii)(A) Provides a program leading to a baccalaureate 

degree in liberal arts, as defined in paragraph (i) of this 

section, and has provided that program since January 1, 2009; 

and

(B) Is accredited by a recognized regional accrediting 

agency or association, and has continuously held such 

accreditation since October 1, 2007, or earlier;

* * * 

(i) For purposes of this section, a ―program leading to a 

baccalaureate degree in liberal arts‖ is a program that the 

institution's recognized regional accreditation agency or 

organization determines, is a general instructional program in 

the liberal arts subjects, the humanities disciplines, or the 

general curriculum, falling within one or more of the following 

generally-accepted instructional categories comprising such 

programs, but including only instruction in regular programs, 

and excluding independently-designed programs, individualized 

programs, and unstructured studies--

(1) A program that is a structured combination of the 

arts, biological and physical sciences, social sciences, and 

humanities, emphasizing breadth of study;

(2) An undifferentiated program that includes instruction 

in the general arts or general science;

(3) A program that focuses on combined studies and 

research in the humanities subjects as distinguished from the 

social and physical sciences, emphasizing languages, 

literatures, art, music, philosophy and religion; and

(4) Any single instructional program in liberal arts and 

sciences, general studies and humanities not listed above.
158 

Statutory Language: 

Section 102. Definition of institution of higher education for 

purposes of Title IV programs. 

* * * * * 

(b) PROPRIETARY INSTITUTION OF HIGHER EDUCATION.—

(1) PRINCIPAL CRITERIA.—For the purpose of this section, 

the term  ̳ ̳proprietary institution of higher education‘‘ means a 

school that—

(A) provides an eligible program of training to prepare 

students for gainful employment in a recognized occupation;

(A)(i) provides an eligible program of training to prepare 

students for gainful employment in a recognized occupation; or

(ii)(I) provides a program leading to a baccalaureate 

degree in liberal arts, and has provided such a program since 

January 1, 2009; and

(II) is accredited by a recognized regional accrediting 

agency or association, and has continuously held such 

accreditation since October 1, 2007, or earlier;
159 

Issue Paper #19 

Origin: HEOA 

Issue: Peer-to-peer file sharing/copyrighted material 

Statutory cites: Section 485(a) and 487 of the HEA 

Regulatory cites: §668.14 and §668.43 

DCL GEN-08-12 cite: Pages 72 and 95

Summary of issue: Effective August 14, 2008, the HEOA adds a 

new requirement to section 487 of the HEA (Program Participation 

Agreement) under which an institution must certify that it has 

developed plans to effectively combat the unauthorized 

distribution of copyrighted material (including through the use 

of a variety of technology-based deterrents) and will, to the 

extent practicable, offer alternatives to illegal downloading or 

peer-to-peer distribution of intellectual property, as 

determined by the institution in consultation with the chief 

technology officer or other designated officer of the 

institution. 

In addition, as part of the required information an 

institution must make available to prospective and enrolled 

students the HEOA adds new subparagraph (P) to section 485(a)(1) 

of the HEA to require a description of institutional policies 

and sanctions related to copyright infringement. This 

description includes (1) an annual disclosure that explicitly 

informs students that unauthorized distribution of copyrighted 

material, including peer-to-peer file sharing, may subject the 

students to civil and criminal liabilities; (2) a summary of the 

penalties for violation of Federal copyright laws; and (3) the 

institution‘s policies with respect to unauthorized peer-to-peer 

file sharing, including disciplinary actions that are taken 

against students who engage in unauthorized distribution of 
160 

copyrighted materials using the institution‘s information 

technology system. This provision is also effective August 14, 

2008. 

Updated information since 3/2-4 meetings: 

Generally, in drafting these proposed regulations, the 

Department sought to stay as close as possible to the actual 

language of the statute. In recognition of the diversity among 

institutions and evolving technology, we chose not to mandate in 

regulation the use of specific technologies or measures. At the 

same time, we sought to give meaning to the statute in a way 

that provides clarity so that institutions understand what is 

expected of them to comply with these provisions. 

Program participation agreement 

Section 668.14(b)(27)(i) would implement section 

487(a)(29)(A) of the HEA to require an institution, as a 

condition of participation in a Title IV program, to agree that 

it has developed and implemented plans to effectively combat the 

unauthorized distribution of copyrighted material by users of 

the institution‘s network without unduly interfering with the 

educational and research use of the network. 

The proposed language reflects general agreement by the 

subcommittee that the plan should include the use of technologybased deterrents, an educational component, a description of the 

institution‘s procedures for handling copyright infringement, 

and a required periodic review of the plan. Institutions would 

not be required to use specific types of technology-based 

deterrents. To assist with implementation, the four categories 

of technology-based deterrents listed in the conference report 

to the HEOA could be listed in the preamble to the regulations. 

Institutions would be required to demonstrate the effectiveness 
161 

of their plan by using measureable criteria. Institutions would 

be allowed to determine the most appropriate measure or 

measures. 

Section 668.14(b)(27)(ii) would implement section 

487(a)(29)(B) of the HEA, requiring that institutions, in 

consultation with the chief technology officer or other 

designated officer of the institution, to the extent 

practicable, offer legal alternatives to illegal downloading or 

otherwise acquiring copyrighted material. The proposed language 

also reflects general agreement among the subcommittee members 

that institutions (1) be required to periodically review the 

legal alternatives for downloading or otherwise acquiring 

copyrighted material and (2) provide the results of the review. 

Consumer information 

The Department is proposing to implement section 

485(a)(1)(P) of the HEA by using, as much as practicable, the 

existing framework and definitions found in current regulations. 

As the statute requires that most institutional information be 

made readily available upon request to prospective and enrolled 

students, rather than provided to them on a one-to-one basis, 

information regarding institutional policies and sanctions 

related to copyright infringement would be handled in the same 

manner (i.e., included in the list of institutional information 

provided upon request pursuant to §668.43). This information 

would be required to (1) explicitly inform enrolled and 

prospective students that unauthorized distribution of 

copyrighted material, including peer-to-peer file sharing, may 

subject a student to civil and criminal liabilities; (2) include 

a summary of the penalties for violation of Federal copyright 

laws; and (3) delineate the institution‘s policies with respect 

to unauthorized peer-to-peer file sharing, including 
162 

disciplinary actions that are taken against students who engage 

in illegal downloading or unauthorized distribution of 

copyrighted materials using the institution‘s information 

technology system. As the statute does not require disclosure 

of this information to employees of the institution, this would 

not be mandated in the regulations. However, institutions could 

choose to make such information available to employees and the 

general public. 

As current §668.41(c) requires an institution to provide to 

enrolled students an annual notice containing a list and brief 

description of the consumer information it must disclose and the 

procedures for obtaining this consumer information, an 

institution would be required to add to this list the fact that 

it must make readily available information regarding 

institutional policies and sanctions related to copyright 

infringement. Per the current definition of ―notice‖ in 

§668.41(a), institutions must provide this annual notice on a 

one-to-one basis through a direct individual notice to each 

enrolled student. This notice must be made through an 

appropriate mailing or publication, including direct mailing 

through the U.S. Postal Service, campus mail or electronic mail. 

Posting on Internet or Intranet websites does not constitute 

notice. If the institution discloses the consumer information 

by posting the information on a website, it must include in the 

notice the exact electronic address at which the information is 

posted, and a statement that the institution will provide a 

paper copy of the information on request. 

The current definition of ―prospective student‖ in 

§668.41(a) would be used—i.e., an individual who has contacted 

an eligible institution requesting information concerning 

admission to that institution. 
163 

Tentative agreement: 

Regulatory language: 

§668.14 Program participation agreement.

* * * * * 

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

institution agrees that—

* * * 

(27) The institution—

(i) Has developed and implemented written plans to 

effectively combat the unauthorized distribution of copyrighted 

material by users of the institution‘s network, without unduly 

interfering with educational and research use of the network, 

that include—

(A) The use of technology-based deterrents; 

(B) Mechanisms for educating and informing its community 

about appropriate versus inappropriate use of copyrighted 

material; 

(C) Procedures for handling copyright infringements, 

including disciplinary procedures; and

(D) Procedures for periodically reviewing the 

effectiveness of the plan to combat the unauthorized 

distribution of copyrighted materials by users of the 

institutions network based on measureable criteria which may 

include the number of copyright infringement notices received 

and the rate of recidivism.

(ii) Will, in consultation with the chief technology 

officer or other designated officer of the institution —
164 

(A) Periodically review the legal alternatives for 

downloading or otherwise acquiring copyrighted material; 

(B) Make available the results of the review in paragraph 

(b)(27)(ii)(A) to its students, and employees through a website 

and/or other means; and

(C) To the extent practicable, offer legal alternatives 

for downloading or otherwise acquiring copyrighted material, as 

determined by the institution.

§668.43 Institutional information.

(a) Institutional information that the institution must 

make readily available upon request to enrolled and prospective 

students under this subpart includes, but is not limited to—

* * * 

(8) The titles of persons designated under §668.44 and 

information regarding how and where those persons may be 

contacted; and

(9) A statement that a student's enrollment in a program 

of study abroad approved for credit by the home institution may 

be considered enrollment at the home institution for the purpose 

of applying for assistance under the title IV, HEA programs.

and;

(10) Institutional policies and sanctions related to 

copyright infringement, including—

(i) A statement that explicitly informs the students that 

unauthorized distribution of copyrighted material, including 

unauthorized peer-to-peer file sharing, may subject the students 

to civil and criminal liabilities;

(ii) A summary of the penalties for violation of Federal 

copyright laws; and
165 

(iii) A description of the institution‘s policies with 

respect to unauthorized peer-to-peer file sharing, including 

disciplinary actions that are taken against students who engage 

in illegal downloading or unauthorized distribution of 

copyrighted materials using the institution‘s information 

technology system. 

Statutory language: 

SEC. 485. Institutional and Financial Assistance for Students. 

(a) INFORMATION DISSEMINATION ACTIVITIES.—

(1) Each eligible institution participating in any program 

under this title shall carry out information dissemination 

activities for prospective and enrolled students (including 

those attending or planning to attend less than full time) 

regarding the institution and all financial assistance under 

this title. The information required by this section shall be 

produced and be made readily available upon request, through 

appropriate publications, mailings, and electronic media, to an 

enrolled student and to any prospective student. Each eligible 

institution shall, on an annual basis, provide to all enrolled 

students a list of the information that is required to be 

provided by institutions to students by this section and section 

444 of the General Education Provisions Act (also referred to as 

the Family Educational Rights and Privacy Act of 1974), together 

with a statement of the procedures required to obtain such 

information. The information required by this section shall 

accurately describe—

* * * 

(P) institutional policies and sanctions related to 

copyright infringement, including—
166 

(i) an annual disclosure that explicitly informs students 

that unauthorized distribution of copyrighted material, 

including unauthorized peer-to-peer file sharing, may subject 

the students to civil and criminal liabilities;

(ii) a summary of the penalties for violation of Federal 

copyright laws; and

(iii) a description of the institution‘s policies with 

respect to unauthorized peer-to-peer file sharing, including 

disciplinary actions that are taken against students who engage 

in unauthorized distribution of copyrighted materials using the 

institution‘s information technology system;

Section 487. Program participation agreements.

* * * * * 

(a) REQUIRED FOR PROGRAMS OF ASSISTANCE; CONTENTS.—In order 

to be an eligible institution for the purposes of any program 

authorized under this title, an institution must be an 

institution of higher education or an eligible institution (as 

that term is defined for the purpose of that program) and shall, 

except with respect to a program under subpart 4 of part A, 

enter into a program participation agreement with the Secretary. 

The agreement shall condition the initial and continuing 

eligibility of an institution to participate in a program upon 

compliance with the following requirements: 

* * * 

(29) The institution certifies that the institution—

(A) has developed plans to effectively combat the 

unauthorized distribution of copyrighted material, including 

through the use of a variety of technology-based deterrents; and
167 

(B) will, to the extent practicable, offer alternatives to 

illegal downloading or peer-to-peer distribution of intellectual 

property, as determined by the institution in consultation with

the chief technology officer or other designated officer of the 

institution.
168 

Issue Paper #20 

Origin: HEOA 

Issue: Institutional plans for improving the academic program 

Statutory cites: Section 485(a) of the HEA 

Regulatory cites: §668.43 

DCL GEN-08-12 cite: Page 95 

Summary of issue: As part of the required information an 

institution must make available to prospective and enrolled 

students, the HEOA adds to the existing description of the 

academic program any plans the institution has for improving the 

academic program. This provision was effective August 14, 2008. 

Updated information since 3/2-4 meetings: Section 668.43 would 

be amended to add to the institutional information that an 

institution must make readily available upon request to enrolled 

and prospective students any plans by the institution for 

improving the academic program of the institution. 

Tentative agreement: 

Regulatory language: 

§668.43 Institutional information.

(a) Institutional information that the institution must 

make readily available upon request to enrolled and prospective 

students under this subpart includes, but is not limited to—

* * * 

(5) The academic program of the institution, including—

(i) The current degree programs and other educational and 

training programs; 
169 

(ii) The instructional, laboratory, and other physical 

facilities which relate to the academic program; and

(iii) The institution's faculty and other instructional 

personnel; and

(iv) Any plans by the institution for improving the 

academic program of the institution.

Statutory Language: 

SEC. 485. Institutional and Financial Assistance for Students. 

(a) INFORMATION DISSEMINATION ACTIVITIES.—

(1) Each eligible institution participating in any program 

under this title shall carry out information dissemination 

activities for prospective and enrolled students (including 

those attending or planning to attend less than full time) 

regarding the institution and all financial assistance under 

this title. The information required by this section shall be 

produced and be made readily available upon request, through 

appropriate publications, mailings, and electronic media, to an 

enrolled student and to any prospective student. Each eligible 

institution shall, on an annual basis, provide to all enrolled 

students a list of the information that is required to be 

provided by institutions to students by this section and section 

444 of the General Education Provisions Act (also referred to as 

the Family Educational Rights and Privacy Act of 1974), together 

with a statement of the procedures required to obtain such 

information. The information required by this section shall 

accurately describe—

* * * 

(G) the academic program of the institution, including (i) 

the current degree programs and other educational and training 
170 

programs, (ii) the instructional, laboratory, and other physical 

plant facilities which relate to the academic program, and

program, (iii) the faculty and other instructional personnel, 

and (iv) any plans by the institution for improving the academic 

program of the institution; 
171 

Issue Paper # 21 

Origin: HEOA 

Issue: Leveraging Educational Assistance Partnership (LEAP) 

Program Non-Federal Share 

Statutory cites: Section 415C(b)(10) of the HEA 

Regulatory cites: §692.10 

DCL GEN-08-12 cite: None

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

the non-Federal share of the amount of student grants or workstudy jobs under the LEAP Program must be from State funds for 

the program and no longer requires the non-Federal share to come 

from a direct appropriation of State funds. 

Updated information since 3/2-4 meetings:

Tentative agreement:

Regulatory Language:

§692.10 How does the Secretary allot funds to the States?

(a)(1) The Secretary allots to each State participating in 

the LEAP program an amount which bears the same ratio to the 

Federal LEAP funds appropriated as the number of students in 

that State who are ―deemed eligible‖ to participate in the 

State's LEAP program bears to the total number of students in 

all States who are ―deemed eligible‖ to participate in the LEAP 

program, except that no State may receive less than it received 

in fiscal year 1979 for the programs under this part. 

(2) For the programs under this part, Iif the Federal LEAP 

funds appropriated for a fiscal year are not sufficient to allot 

to each State the amount of Federal LEAP funds it received in 

fiscal year 1979, the Secretary allots to each State an amount 
172 

which bears the same ratio to the amount of Federal LEAP funds 

appropriated as the amount of Federal LEAP funds that State 

received in fiscal year 1979 bears to the amount of Federal LEAP

funds all States received in fiscal year 1979 for the programs 

under this part. 

(b) For the purpose of paragraph (a)(1) of this section, 

the Secretary determines the number of students ―deemed 

eligible‖ to participate in a State's LEAP Program by dividing 

the amount of that State's LEAP expenditures, including both its 

Federal allotment and the State-appropriated funds matching the 

allotment, by the average grant award per student of all 

participating States. The Secretary determines the ―average 

grant award per student‖ by dividing the total number of student 

recipients for all States into the total amount of LEAP 

expenditures for all States, including both the Federal 

allotments and the State-appropriated funds matching those 

allotments. In making this determination, the Secretary uses 

the most current available data reported by each State. 

Statutory Language: 

(10) For any academic year beginning after June 30, 1987, 

provides the non-Federal share of the amount of student grants 

or work-study jobs under this subpart through a direct 

appropriation of state funds for the program under this subpart; 

and
173 

Issue Paper # 22 

Origin: HEOA 

Issue: Notification to Students of Source of LEAP Grant 

Funding 

Statutory cites: Section 415C(b)(11) of the HEA 

Regulatory cites: §692.21 

DCL GEN-08-12 cite: Page 110 

Summary of issue: The HEA as amended by the HEOA requires the 

State program to notify eligible students that grants are (1) 

LEAP Grants and (2) are funded by the Federal Government, the 

State, and, for LEAP Grants to students made under GAP, other 

contributing partners.

Updated information since 3/2-4 meetings:

Tentative agreement:

Regulatory Language: 

§692.21 What requirements must be met by a State program? 

To receive a payment under the LEAP Program for any fiscal 

year, a State must have a program that—

(a) Is administered by a single State agency; 

(b) Provides assistance only to students who meet the 

eligibility requirements in §692.40; 

(c) Provides that assistance under this program to a fulltime student will not be more than the lesser of $12,500 5,000

or the student‘s cost of attendance under section 472 of the HEA 

for each academic year; 

(d) Provides for the selection of students to receive 

assistance on the basis of substantial financial need determined 
174 

annually by the State on the basis of standards that the State 

establishes and the Secretary approves; 

(e) Provides that no student or parent shall be charged a 

fee that is payable to an organization other than the State for 

the purpose of collecting data to make a determination of 

financial need in accordance with paragraph (d) of this section; 

(f) Provides that all public or private nonprofit 

institutions of higher education and all postsecondary 

vocational institutions in the State are eligible to participate 

unless that participation is in violation of—

(1) The constitution of the State; or 

(2) A State statute that was enacted before October 1, 

1978; 

(g) Provides that, if a State awards grants to independent 

students or to students who are less-than-full-time students 

enrolled in an institution, a reasonable portion of the State's 

allocation must be awarded to those students; 

(h) Provides that—

(1) The State will pay an amount for grants and work-study 

jobs under this part for each fiscal year that is not less than 

the payment to the State under this part for that fiscal year; 

and 
175 

(2) The amount that the State expends during a fiscal year 

for grants and work-study jobs under the LEAP Program represents 

an additional amount for grants and work-study jobs for students 

attending institutions over the amount expended by the State for 

those activities during the fiscal year two years prior to the 

fiscal year in which the State first received funds under the 

LEAP Program; 

(i) Provides for State expenditures under the State program 

of an amount that is not less than-- 

(1) The average annual aggregate expenditures for the 

preceding three fiscal years; or 

(2) The average annual expenditure per full-time equivalent 

student for those years; 

(j) Provides that, to the extent practicable, the 

proportion of the funds awarded to independent students in the 

LEAP Program shall be the same proportion of funds awarded to 

independent students as is in the State program or programs of 

which the State's LEAP Program is a part; and 

(k) Notifies eligible students that the grants are—

(1) Leveraging Educational Assistance Partnership Grants; 

and 

(2) Funded by the Federal Government, the State, and, where 

applicable, other contributing partners; and 

(kl) Provides for reports to the Secretary that are 

necessary to carry out the Secretary's functions under the LEAP 

Program.

Statutory Language: 

(11) provides notification to eligible students that such 

grants are—
176 

(A) Leveraging Educational Assistance Partnership Grants; 

and

(B) funded by the Federal Government, the State, and, where 

applicable, other contributing partners.
177 

Issue Paper #23

Origin: HEOA 

Issue: GAP Program Activities: Partnerships 

Statutory cites: Section 415E(c)(4) and (d) of the HEA 

Regulatory cites: §§692.94, 692.100, 692.101, and 692.111 

DCL GEN-08-12 cite: Page 113 

Summary of issue: 

Partnership 

Each State receiving an allotment must use the funds to 

establish a partnership to award LEAP Grants under GAP to 

eligible low-income students in order to increase the amount of 

financial assistance these students receive under these programs 

for undergraduate education expenses. 

Roles of Partners 

State agency

A State agency that is in a partnership receiving a GAP 

allotment serves as the primary administrative unit for the 

partnership. The State agency: 

 provides or coordinates non-Federal share funds and 

coordinates activities among partners; 

 encourages each institution of higher education in the 

State to participate in the partnership; 

 makes determinations and early notifications of 

assistance; 

 annually reports to the Secretary on the partnership‘s 

progress in meeting the purpose of GAP; and 
178 

 may provide early information and intervention, 

mentoring, or outreach programs. 

Degree-granting institution of higher education

An institution in a partnership: 

 must recruit and admit participating qualified students 

and provide such additional institutional grant aid to 

participating students as agreed to with the State 

agency; 

 must provide support services to students who receive 

LEAP Grants under GAP and are enrolled at the 

institution; 

 must assist the State in the identification of eligible 

students and the dissemination of early notifications of 

assistance as agreed to with the State agency; and 

 may provide funding for early information and 

intervention, mentoring, or outreach programs or provide 

such services directly. 

Early intervention programs

An early information and intervention, mentoring, or 

outreach program that is in a partnership must provide direct 

services, support, and information to participating students. 

Philanthropic organization or private corporation

A philanthropic organization or private corporation that is 

in a partnership must provide funds for LEAP Grants under GAP 

for participating students or provide funds or support for early 

information and intervention, mentoring, or outreach programs. 

Updated information since 3/2-4 meetings:

Tentative agreement:
179 

Regulatory Language:

See §692.94 on page 2 of Appendix A. 

See §692.100 on page 2-3 of Appendix A. 

See §692.101 on page 4 of Appendix A. 

See §692.111 on page 5-7 of Appendix A.

Statutory Language: 

(c) * * *

* * * * *

(4) ROLES OF PARTNERS.—

(A) STATE AGENCY.—A State agency that is in a partnership 

receiving an allotment under this section—

(i) shall—

(I) serve as the primary administrative unit for the 

partnership;

(II) provide or coordinate non-Federal share funds, and 

coordinate activities among partners;

(III) encourage each institution of higher education in the 

State to participate in the partnership;

(IV) make determinations and early notifications of 

assistance as described under subsection (d)(2); and

(V) annually report to the Secretary on the partnership‘s 

progress in meeting the purpose of this section; and

(ii) may provide early information and intervention, 

mentoring, or outreach programs.

(B) DEGREE-GRANTING INSTITUTIONS OF HIGHER EDUCATION.—A 

degree-granting institution of higher education that is in a 

partnership receiving an allotment under this section—
180 

(i) shall—

(I) recruit and admit participating qualified students and 

provide such additional institutional grant aid to participating 

students as agreed to with the State agency;

(II) provide support services to students who receive 

grants for access and persistence under this section and are 

enrolled at such institution; and

(III) assist the State in the identification of eligible 

students and the dissemination of early notifications of 

assistance as agreed to with the State agency; and

(ii) may provide funding for early information and 

intervention, mentoring, or outreach programs or provide such 

services directly.

(C) PROGRAMS.—An early information and intervention, 

mentoring, or outreach program that is in a partnership 

receiving an allotment under this section shall provide direct 

services, support, and information to participating students.

(D) PHILANTHROPIC ORGANIZATION OR PRIVATE CORPORATION.— A 

philanthropic organization or private corporation that is in a 

partnership receiving an allotment under this section shall 

provide funds for grants for access and persistence for 

participating students, or provide funds or support for early 

information and intervention, mentoring, or outreach programs.

(d) AUTHORIZED ACTIVITIES.—

(1) IN GENERAL.—

(A) ESTABLISHMENT OF PARTNERSHIP.—Each State receiving an 

allotment under this section shall use the funds to establish a 

partnership to award grants for access and persistence to 

eligible low-income students in order to increase the amount of 
181 

financial assistance such students receive under this subpart 

for undergraduate education expenses.
182 

Issue paper #24 

Origin: HEOA 

Issue: GAP Program Activities: Awards 

Statutory cites: Section 415E(d) of the HEA 

Regulatory cites: §§692.111(b) and 692.120 

DCL GEN-08-12 cite: Page 114 

Summary of issue: 

LEAP Grant under GAP amount 

The amount of a LEAP Grant under GAP awarded by a State to 

a student must be not less than the average undergraduate 

tuition and mandatory fees at the public institutions of higher 

education in the State where the student resides that are of the 

same type of institution as the institution of higher education 

the student attends minus other Federal and State aid the 

student receives. 

Institutions of higher education 

A State receiving a GAP allotment may restrict the use of 

LEAP Grants under GAP by awarding the grants only to students 

attending institutions of higher education that are 

participating in the partnership. If a State provides LEAP 

Grants not awarded under GAP to students attending institutions 

of higher education located in another State, grants awarded 

under GAP may be used at institutions of higher education 

located in another State. 

Student eligibility 

A student must meet one of the following: 
183 

 The student meets at least two of the following criteria, 

with priority given to students meeting all of the 

following criteria: 

o has an EFC equal to zero, as determined under the 

Title IV need analysis, or a comparable alternative 

based upon the State‘s approved criteria for LEAP; 

o qualifies for the State‘s maximum undergraduate award 

for LEAP; or 

o is participating in, or has participated in, a 

Federal, State, institutional, or community early 

information and intervention, mentoring, or outreach 

program, as recognized by the State agency 

administering LEAP and GAP. 

 The student is receiving, or has received, a LEAP Grant 

under GAP, and is compliant with the requirements for the 

duration of an award. 

Grant award 

Once a student, including those students who have received 

an early notification from the State, applies for admission to 

an institution that is a partner in the partnership, files a 

FAFSA and any related State form, and is determined by the State 

to meet the student eligibility requirements in the prior 

section, the State must issue the student a preliminary award 

certificate for a LEAP Grant under GAP with estimated award 

amounts and inform the student that payment of the grant award 

amounts is subject to certification of enrollment and award 

eligibility by the student‘s institution of higher education. 

Duration of an award 
184 

An eligible student who receives a LEAP Grant under GAP 

receives an award for each year of the student‘s undergraduate 

education in which the student remains eligible for assistance 

under Title IV, including meeting the Title IV satisfactory 

academic progress standards, and remains financially eligible as 

determined by the State, except that the State may impose 

reasonable time limits to degree completion. 

Updated information since 3/2-4 meetings:

Tentative agreement:

Regulatory Language:

See §692.111(b) on page 5 of Appendix A. 

See §692.120 on page 8-9 of Appendix A. 

Statutory Language: 

(d) AUTHORIZED ACTIVITIES.—

(1) IN GENERAL.—

(A) * * *

(B) AMOUNT OF GRANTS.—The amount of a grant for access and 

persistence awarded by a State to a student under this section 

shall be not less than—

(i) the average undergraduate tuition and mandatory fees at 

the public institutions of higher education in the State where 

the student resides that are of the same type of institution as 

the institution of higher education the student attends; minus

(ii) other Federal and State aid the student receives.

(C) SPECIAL RULES.—

(i) PARTNERSHIP INSTITUTIONS.—A State receiving an 

allotment under this section may restrict the use of grants for 
185 

access and persistence under this section by awarding the grants 

only to students attending institutions of higher education that 

are participating in the partnership.

(ii) OUT-OF-STATE INSTITUTIONS.—If a State provides grants 

through another program under this subpart to students attending 

institutions of higher education located in another State, 

grants awarded under this section may be used at institutions of 

higher education located in another State.

(2) ***

(3) ELIGIBILITY.—In determining which students are eligible 

to receive grants for access and persistence, the State shall 

ensure that each such student complies with the following 

subparagraph (A) or (B):

(A) Meets not less than two of the following criteria, with 

priority given to students meeting all of the following 

criteria:

(i) Has an expected family contribution equal to zero, as 

determined under part F, or a comparable alternative based upon 

the State‘s approved criteria in section 415C(b)(4).

(ii) Qualifies for the State‘s maximum undergraduate award, 

as authorized under section 415C(b).

(iii) Is participating in, or has participated in, a 

Federal, State, institutional, or community early information 

and intervention, mentoring, or outreach program, as recognized 

by the State agency administering activities under this section.

(B) Is receiving, or has received, a grant for access and 

persistence under this section, in accordance with paragraph 

(5).
186 

(4) GRANT AWARD.—Once a student, including those students 

who have received early notification under paragraph (2) from 

the State, applies for admission to an institution that is a 

partner in the partnership, files a Free Application for Federal 

Student Aid and any related State form, and is determined 

eligible by the State under paragraph (3), the State shall—

(A) issue the student a preliminary award certificate for a 

grant for access and persistence with estimated award amounts; 

and

(B) inform the student that payment of the grant for access 

and persistence award amounts is subject to certification of 

enrollment and award eligibility by the institution of higher 

education.

(5) DURATION OF AWARD.—An eligible student who receives a 

grant for access and persistence under this section shall 

receive such grant award for each year of such student‘s 

undergraduate education in which the student remains eligible 

for assistance under this title, including pursuant to section 

484(c), and remains financially eligible as determined by the 

State, except that the State may impose reasonable time limits 

to degree completion.
187 

Issue Paper #25 

Origin: HEOA 

Issue: GAP Program Activities: Early Notification 

Statutory cites: Section 415E(d)(2) of the HEA 

Regulatory cites: §692.111(d) 

DCL GEN-08-12 cite: Pages 114-115 

Summary of issue: Each State receiving a GAP allotment must 

annually notify low-income students in grades seven through 12 

in the State, and their families, of their potential eligibility 

for student financial assistance, including a LEAP Grant under 

GAP, to attend an institution of higher education. 

The notice must include: 

 Information about early information and intervention, 

mentoring, or outreach programs available to the student; 

 Information that a student‘s eligibility for a LEAP Grant 

under GAP is enhanced through participation in an early 

information and intervention, mentoring, or outreach 

program; 

 An explanation that student and family eligibility for, 

and participation in, other Federal means-tested programs 

may indicate eligibility for a LEAP Grant under GAP and 

other student aid programs; 

 A nonbinding estimate of the total amount of financial 

aid that a low-income student with a similar income level 

may expect to receive, including an estimate of the 

amount of a LEAP Grant under GAP and an estimate of the 

amount of grants, loans, and all other available types of 
188 

aid from the major Federal and State financial aid 

programs; 

 An explanation that the eligibility requirements a 

student must meet to be eligible for a LEAP Grant under 

GAP including graduating from secondary school and 

enrolling in a partner institution or an eligible out-ofState institution; 

 Information on any additional requirements (such as a 

student pledge detailing student responsibilities) that 

the State may impose for receipt of a LEAP Grant under 

GAP; and 

 Instructions on how to apply for a LEAP Grant under GAP 

and an explanation that a student must file a FAFSA to be 

eligible for a LEAP Grant under GAP and assistance from 

other Federal and State financial aid programs. 

The notification may include a disclaimer that LEAP Grants 

under GAP are contingent on (a) a student‘s financial 

eligibility at the time of the student‘s enrollment at an 

institution of higher education; (b) the annual Federal and 

State spending for higher education; and (c) other aid received 

by the student at the time of the student‘s enrollment at an 

institution of higher education. 

Updated information since 3/2-4 meetings:

Tentative agreement:

Regulatory Language:

See §692.111(d) on page 6 of Appendix A. 

Statutory Language: 

(2) EARLY NOTIFICATION.—
189 

(A) IN GENERAL.—Each State receiving an allotment under 

this section shall annually notify low-income students in grades 

seven through 12 in the State, and their families, of their 

potential eligibility for student financial assistance, 

including an access and persistence grant, to attend an 

institution of higher education.

(B) CONTENT OF NOTICE.—The notice under subparagraph (A)—

(i) shall include—

(I) information about early information and intervention, 

mentoring, or outreach programs available to the student;

(II) information that a student‘s eligibility for a grant 

for access and persistence is enhanced through participation in 

an early information and intervention, mentoring, or outreach 

program;

(III) an explanation that student and family eligibility 

for, and participation in, other Federal means-tested programs 

may indicate eligibility for a grant for access and persistence 

and other student aid programs;

(IV) a nonbinding estimate of the total amount of financial 

aid that a low-income student with a similar income level may 

expect to receive, including an estimate of the amount of a 

grant for access and persistence and an estimate of the amount 

of grants, loans, and all other available types of aid from the 

major Federal and State financial aid programs;

(V) an explanation that in order to be eligible for a grant 

for access and persistence, at a minimum, a student shall—

(aa) meet the requirement under paragraph (3);

(bb) graduate from secondary school; and

(cc) enroll at an institution of higher education—
190 

(AA) that is a partner in the partnership; or

(BB) with respect to which attendance is permitted under 

subsection (d)(1)(C)(ii);

(VI) information on any additional requirements (such as a 

student pledge detailing student responsibilities) that the 

State may impose for receipt of a grant for access and 

persistence under this section; and

(VII) instructions on how to apply for a grant for access 

and persistence and an explanation that a student is required to 

file a Free Application for Federal Student Aid authorized under 

section 483(a) to be eligible for such grant and assistance from 

other Federal and State financial aid programs; and

(ii) may include a disclaimer that grant awards for access 

and persistence are contingent on— 

(I) a determination of the student‘s financial eligibility 

at the time of the student‘s enrollment at an institution of 

higher education that is a partner in the partnership or 

qualifies under subsection (d)(1)(C)(ii);

(II) annual Federal and State spending for higher 

education; and

(III) other aid received by the student at the time of the 

student‘s enrollment at such institution of higher education.
191 

Issue paper #26 

Origin: HEOA 

Issue: Applicability of LEAP Program Requirements 

Statutory cites: Section 415E(g) of the HEA 

Regulatory cites: §§692.94(a)(4), 692.100(h) and 692.110 

DCL GEN-08-12 cite: Page 110 

Summary of issue: The HEOA provides that LEAP Program 

requirements will apply to GAP to the extent that they are not 

inconsistent with GAP requirements. 

Updated information since 3/2-4 meetings:

Tentative agreement:

Regulatory Language:

See §692.94(a)(4) on page 2 of Appendix A. 

See §692.100(h) on page 4 of Appendix A. 

See §692.110 on pages 4-5 of Appendix A. 

Statutory Language: 

(g) APPLICABILITY RULE.—The provisions of this subpart that 

are not inconsistent with this section shall apply to the 

program authorized by this section.
192 

Issue Paper #27 

Origin: HEOA 

Issue: GAP Allotment: Application 

Statutory cites: Section 415E(c) of the HEA 

Regulatory cites: §§692.94 and 692.100 

DCL GEN-08-12 cite: Pages 112-113 

Summary of issue: To receive a GAP allotment, a State must 

submit an application at such time, in such manner, and 

containing such information as the Secretary may require. 

An application on behalf of a partnership that must include 

the following information: 

 A description of the State‘s plan for using the allotted 

funds. 

 An assurance that the State will provide matching funds, 

in cash or in-kind, from State, institutional, 

philanthropic, or private funds, of not less than 33.33 

percent of the cost of carrying out the program. A State 

that uses non-Federal funds to create or expand 

partnerships, in which partners match State funds for 

student scholarships, may apply the matching funds from 

those entities toward fulfilling the State‘s matching 

non-Federal share. 

 An assurance that the State will use Federal GAP funds to 

supplement, and not supplant, Federal and State funds 

available for carrying out the activities under Title IV 

of the HEA. 

 An assurance that early information and intervention, 

mentoring, or outreach programs exist within the State or 
193 

that there is a plan to make these programs widely 

available. 

 A description of the organizational structure that the 

State has in place to administer the program, including a 

description of how the State will compile information on 

degree completion of students receiving grants under this 

section. 

 A description of the steps the State will take to ensure 

that students who receive a LEAP Grant under GAP persist 

to degree completion. 

 An assurance that the State has a method in place, such 

as acceptance of the Title IV automatic zero EFC, to 

identify eligible low-income students and award State 

grant aid to such students. 

 An assurance that the State will provide notification to 

eligible low-income students that grants under GAP are 

LEAP Grants and are funded by the Federal Government and 

the State, and, where applicable, other contributing 

partners. 

The State agency that submits an application for GAP must 

be the same agency that submits an application for LEAP. 

A State agency must apply in partnership with: 

 At least one public and one private degree-granting 

institution of higher education that are located in the 

State, if applicable; 

 New or existing early information and intervention, 

mentoring, or outreach programs located in the State; and 
194 

 At least one philanthropic organization located in, or 

that provides funding in, the State or private 

corporation located in, or that does business in, the 

State. 

Updated information since 3/2-4 meetings:

Tentative agreement:

Regulatory Language:

See §692.94 on page 2 of Appendix A. 

See §692.100 on pages 2-4 of Appendix A. 

Statutory Language: 

(c) Application for Allotment.--

(1) In general.--

(A) Submission.--A State that desires to receive an 

allotment under this section on behalf of a partnership 

described in paragraph (3) shall submit an application to the 

Secretary at such time, in such manner, and containing such 

information as the Secretary may require.

(B) Content.--An application submitted under subparagraph 

(A) shall include the following:

(i) A description of the State's plan for using the 

allotted funds.

(ii) An assurance that the State will provide matching 

funds, in cash or in kind, from State, institutional, 

philanthropic, or private funds, of not less than 33.33 percent 

of the cost of carrying out the activities under subsection (d). 

The State shall specify the methods by which matching funds will 

be paid. A State that uses non-Federal funds to create or expand 

partnerships with entities described in subsection (a)(1), in 
195 

which such entities match State funds for student scholarships, 

may apply such matching funds from such entities toward 

fulfilling the State's matching obligation under this clause.

(iii) An assurance that the State will use funds provided 

under this section to supplement, and not supplant, Federal and 

State funds available for carrying out the activities under this 

title.

(iv) An assurance that early information and intervention, 

mentoring, or outreach programs exist within the State or that 

there is a plan to make such programs widely available.

(v) A description of the organizational structure that the 

State has in place to administer the activities under subsection 

(d), including a description of how the State will compile

information on degree completion of students receiving grants 

under this section.

(vi) A description of the steps the State will take to 

ensure that students who receive grants under this section 

persist to degree completion.

(vii) An assurance that the State has a method in place, 

such as acceptance of the automatic zero expected family 

contribution determination described in section 479(c), to 

identify eligible low-income students and award State grant aid 

to such students.

(viii) An assurance that the State will provide 

notification to eligible low-income students that grants under 

this section are--

(I) Leveraging Educational Assistance Partnership Grants; 

and 
196 

(II) funded by the Federal Government and the State, and, 

where applicable, other contributing partners.

(2) State agency.--The State agency that submits an 

application for a State under section 415C(a) shall be the same 

State agency that submits an application under paragraph (1) for 

such State.

(3) Partnership.--In applying for an allotment under this 

section, the State agency shall apply for the allotment in 

partnership with--

(A) not less than one public and one private degreegranting institution of higher education that are located in the 

State, if applicable;

(B) new or existing early information and intervention, 

mentoring, or outreach programs located in the State; and

(C) not less than one--

(i) philanthropic organization located in, or that provides 

funding in, the State; or

(ii) private corporation located in, or that does business 

in, the State.
197 

Issue Paper #28 

Origin: HEOA 

Issue: GAP Allotment: Determination 

Statutory cites: Section 415E(b), 415E(g), and 415B of the 

HEA 

Regulatory cites: §692.110

DCL GEN-08-12 cite: Page 111 

Summary of issue: The Secretary makes an allotment to each 

State that submits an application to meet the costs of the 

Federal share of the State‘s GAP program.

Under section 415(g) of the HEA, LEAP provisions that are 

not inconsistent with GAP program requirements apply to GAP. 

Section 415B of the HEA sets forth the allotment formula for the 

subpart. 

In making a continuation award for a State that continues 

to meet the specifications in the State‘s approved application, 

the Secretary makes an allotment to the State that is not less 

than the allotment made to the State in the previous year. 

The Secretary gives priority to a State that applies for an 

allotment in partnerships with degree-granting institutions 

whose combined full-time enrollment represents a majority of all 

students attending institutions of higher education in the 

State. 

Updated information since 3/2-4 meetings:

Tentative agreement:

Regulatory Language: 

See subpart B, §692.70 on page 1 of Appendix A. 
198 

See §692.110 on pages 4-5 of Appendix A. 

Statutory Language: 

SEC. 4415E

* * * * * 

(b) Allotments to States.--

(1) In general.--

(A) Authorization.--From sums reserved under section 

415A(b)(2) for each fiscal year, the Secretary shall make an 

allotment to each State that submits an application for an 

allotment in accordance with subsection (c) to enable the State 

to pay the Federal share, as described in paragraph (2), of the 

cost of carrying out the activities under subsection (d).

(B) Determination of allotment.--In making allotments under 

subparagraph (A), the Secretary shall consider the following:

(i) Continuation of award.--If a State continues to meet 

the specifications established in such State's application under 

subsection (c), the Secretary shall make an allotment to such 

State that is not less than the allotment made to such State for 

the previous fiscal year.

(ii) Priority.--The Secretary shall give priority in making 

allotments to States that meet the requirements described in 

paragraph (2)(B)(ii).

(2) Federal share.— 

(A) In general.--The Federal share of the cost of carrying 

out the activities under subsection (d) for any fiscal year 

shall not exceed 66.66 percent.

(B) Different percentages.--The Federal share under this 

section shall be determined in accordance with the following:
199 

(i) The Federal share of the cost of carrying out the 

activities under subsection (d) shall be 57 percent if a State 

applies for an allotment under this section in partnership with 

any number of degree-granting institutions of higher education 

in the State whose combined full-time enrollment represents less 

than a majority of all students attending institutions of higher 

education in the State, and--

(I) philanthropic organizations that are located in, or 

that provide funding in, the State; or

(II) private corporations that are located in, or that do 

business in, the State.

(ii) The Federal share of the cost of carrying out the 

activities under subsection (d) shall be 66.66 percent if a 

State applies for an allotment under this section in partnership 

with any number of degree-granting institutions of higher 

education in the State whose combined full-time enrollment 

represents a majority of all students attending institutions of 

higher education in the State, and--

(I) philanthropic organizations that are located in, or 

that provide funding in, the State; or

(II) private corporations that are located in, or that do 

business in, the State.

(C) Non-federal share.--

(i) In general.--The non-Federal share under this section 

may be provided in cash or in kind, fairly evaluated.

(ii) In-kind contribution.--For the purpose of calculating 

the non-Federal share under this subparagraph, an in-kind 

contribution is a non-cash contribution that--

(I) has monetary value, such as the provision of--
200 

(aa) room and board; or

(bb) transportation passes; and

(II) helps a student meet the cost of attendance at an 

institution of higher education.

(iii) Effect on need analysis.--For the purpose of 

calculating a student's need in accordance 

with part F, an in-kind contribution described in clause (ii) 

shall not be considered an asset or income of the student or the 

student's parent.

* * * * *

(g) APPLICABILITY RULE.—The provisions of this subpart that 

are not inconsistent with this section shall apply to the 

program authorized by this section. 

SEC. 415B. [20 U.S.C. 1070c–1] ALLOTMENT AMONG STATES. 

(a) ALLOTMENT BASED ON NUMBER OF ELIGIBLE STUDENTS IN 

ATTENDANCE.—

(1) From the sums appropriated pursuant to section 

415A(b)(1) and not reserved under section 415A(b)(2) for any 

fiscal year, the Secretary shall allot to each State an amount 

which bears the same ratio to such sums as the number of 

students who are deemed eligible in such State for participation 

in the grant program authorized by this subpart bears to the 

total number of such students in all the States, except that no 

State shall receive less than the State received for fiscal year 

1979. 

(2) For the purpose of this subsection, the number of 

students who are deemed eligible in a State for participation in 

the grant program authorized by this subpart, and the number of 
201 

such students in all the States, shall be determined for the 

most recent year for which satisfactory data are available. 

(b) REALLOTMENT.—The amount of any State‘s allotment under 

subsection (a) for any fiscal year which the Secretary 

determines will not be required for such fiscal year for the 

leveraging educational assistance partnership program of that 

State shall be available for reallotment from time to time, on 

such dates during such year as the Secretary may fix, to other 

States in proportion to the original allotments to such States 

under such part for such year, but with such proportionate 

amount for any of such States being reduced to the extent it 

exceeds the sum the Secretary estimates such State needs and 

will be able to use for such year for carrying out the State 

plan. The total of such reductions shall be similarly reallotted 

among the States whose proportionate amounts were not so 

reduced. Any amount reallotted to a State under this part 

during a year from funds appropriated pursuant to section 

415A(b)(1) shall be deemed part of its allotment under 

subsection (a) for such year. 

(c) ALLOTMENTS SUBJECT TO CONTINUING COMPLIANCE.—The 

Secretary shall make payments for continuing incentive grants 

only to States which continue to meet the requirements of 

section 415C(b). 
202 

Issue Paper #29 

Origin: HEOA 

Issue: Matching 

Statutory cites: 415E(b)(2), (h), and (i) of the HEA 

Regulatory cites: §692.113 

DCL GEN-08-12 cite: Pages 111-112 

Summary of issue: 

Matching funds 

A State may provide the non-Federal share in cash or inkind, fairly evaluated. An in-kind contribution is a noncash 

contribution that has monetary value, such as the provision of 

room and board or transportation passes, and helps a student 

meet the cost of attendance at an institution of higher 

education. 

Non-Federal share 

The Federal share of the program costs may not exceed 66.66 

percent. 

The Federal share of the program costs in a State is 57 

percent in the case of a State that is in partnership with 

degree-granting institutions of higher education in the State 

whose combined fulltime enrollment represents less than a 

majority of all students attending institutions in the State and 

with philanthropic organizations that are located in, or that 

provide funding in, the State or private corporations that are 

located in, or that do business in, the State. 

The Federal share of the program costs in a State is 66.66 

percent in the case of a State that is in partnership with 

degree-granting institutions of higher education in the State 
203 

whose combined full-time enrollment represents a majority of all 

students attending institutions in the State and with 

philanthropic organizations that are located in, or that provide 

funding in, the State or private corporations that are located 

in, or that do business in, the State. 

Maintenance-of-effort requirement

Each State receiving a GAP allotment for a fiscal year must 

provide the Secretary with an assurance that the aggregate 

amount expended per student or the aggregate expenditures by the 

State, from funds derived from non-Federal sources, for 

activities authorized for GAP for the preceding fiscal year were 

not less than the amount expended per student or the aggregate 

expenditure by the State for the activities for the second 

preceding fiscal year. 

Base-year requirement 

Notwithstanding the maintenance-of-effort requirement, for 

purposes of determining a State‘s share of the cost of the GAP 

program activities, the State must consider only those 

expenditures from non-Federal sources that exceed the State‘s 

total expenditures for need-based grants, scholarships, and 

work-study assistance for fiscal year 1999 (including any such 

assistance provided under LEAP and GAP). 

Updated information since 3/2-4 meetings:

Tentative agreement:

Regulatory Language:

See §692.113 on pages 7-8 of Appendix A. 

Statutory Language: 

(b) * * *
204 

(2) FEDERAL SHARE.—

(A) IN GENERAL.—The Federal share of the cost of carrying 

out the activities under subsection (d) for any fiscal year 

shall not exceed 66.66 percent.

(B) DIFFERENT PERCENTAGES.—The Federal share under this 

section shall be determined in accordance with the following:

(i) The Federal share of the cost of carrying out the 

activities under subsection (d) shall be 57 percent if a State 

applies for an allotment under this section in partnership with 

any number of degree-granting institutions of higher education 

in the State whose combined full-time enrollment represents less 

than a majority of all students attending institutions of higher 

education in the State, and—

(I) philanthropic organizations that are located in, or 

that provide funding in, the State; or

(II) private corporations that are located in, or that do 

business in, the State.

(ii) The Federal share of the cost of carrying out the 

activities under subsection (d) shall be 66.66 percent if a 

State applies for an allotment under this section in partnership 

with any number of degree-granting institutions of higher 

education in the State whose combined full-time enrollment 

represents a majority of all students attending institutions of 

higher education in the State, and—

(I) philanthropic organizations that are located in, or 

that provide funding in, the State; or

(II) private corporations that are located in, or that do 

business in, the State.

(C) NON-FEDERAL SHARE.—
205 

(i) IN GENERAL.—The non-Federal share under this section 

may be provided in cash or in kind, fairly evaluated.

(ii) IN-KIND CONTRIBUTION.—For the purpose of calculating 

the non-Federal share under this subparagraph, an in-kind 

contribution is a non-cash contribution that—

(I) has monetary value, such as the provision of—

(aa) room and board; or

(bb) transportation passes; and

(II) helps a student meet the cost of attendance at an 

institution of higher education.

(iii) EFFECT ON NEED ANALYSIS.—For the purpose of 

calculating a student‘s need in accordance with part F, an inkind contribution described in clause (ii) shall not be 

considered an asset or income of the student or the student‘s 

parent.

* * * * *

(h) MAINTENANCE OF EFFORT REQUIREMENT.—Each State receiving 

an allotment under this section for a fiscal year shall provide 

the Secretary with an assurance that the aggregate amount 

expended per student or the aggregate expenditures by the State, 

from funds derived from non-Federal sources, for the authorized 

activities described in subsection (d) for the preceding fiscal 

year were not less than the amount expended per student or the 

aggregate expenditure by the State for the activities for the 

second preceding fiscal year.

(i) SPECIAL RULE.—Notwithstanding subsection (h), for 

purposes of determining a State‘s share of the cost of the 

authorized activities described in subsection (d), the State 

shall consider only those expenditures from non-Federal sources 
206 

that exceed the State‘s total expenditures for need-based 

grants, scholarships, and work-study assistance for fiscal year 

1999 (including any such assistance provided under this 

subpart).
207 

Issue Paper #30 

Origin: HEOA 

Issue: Statutory and regulatory relief 

Statutory cites: 415E(f) of the HEA 

Regulatory cites: §692.130

DCL GEN-08-12 cite: Page 115 

Summary of issue: The Secretary may grant, upon the request of 

an institution of higher education that is in a partnership with 

a 66.66 percent Federal share, a waiver for such institution 

from statutory or regulatory requirements that inhibit the 

ability of the institution to successfully and efficiently 

participate in the activities of the partnership. 

Updated information since 3/2-4 meetings:

Tentative agreement:

Regulatory Language:

See §692.130 on page 9 of Appendix A. 

Statutory Language: 

(f) STATUTORY AND REGULATORY RELIEF FOR INSTITUTIONS OF 

HIGHER EDUCATION.—The Secretary may grant, upon the request of 

an institution of higher education that is in a partnership 

described in subsection (b)(2)(B)(ii) and that receives an 

allotment under this section, a waiver for such institution from 

statutory or regulatory requirements that inhibit the ability of 

the institution to successfully and efficiently participate in 

the activities of the partnership.
208 

Issue Paper #31 

Origin: HEOA 

Issue: Estimated financial assistance 

Statutory cites: 415E(b)(2)(C)(iii) of the HEA 

Regulatory cites: None 

DCL GEN-08-12 cite: Page 112 

Summary of issue: For purposes of calculating a student‘s need 

in accordance with title IV, part F of the HEA, an in-kind 

contribution is not considered an asset or income of the student 

or the student‘s parent.

Updated information since 3/2-4 meetings:

Tentative agreement:

Regulatory Language:

None. 

Statutory Language: 

(iii) EFFECT ON NEED ANALYSIS.—For the purpose of 

calculating a student‘s need in accordance with part F, an inkind contribution described in clause (ii) shall not be 

considered an asset or income of the student or the student‘s 

parent.