UNITED STATES DEPARTMENT OF EDUCATION

OFFICE OF POSTSECONDARY EDUCATION

Issue Paper 6: Certification Procedures

Session 2: February 14-18, 2022

Issue: Certification Procedures

Statutory cites: §498 of the Higher Education Act of 1965, as amended

Regulatory cites: 34 CFR 668.13, 668.14, 668.43

Proposed Regulations Redline

§ 668.13 Certification.

(a) Requirements for certification.

(1)

(i) The Secretary certifies an institution to participate in the title IV, HEA programs if the

institution qualifies as an eligible institution under 34 CFR part 600, meets the standards of this

subpart and 34 CFR part 668, subpart L, and satisfies the requirements of paragraph (a)(2) of this

section.

(ii) On application from the institution, the Secretary certifies a location of an institution that

meets the requirements of § 668.13(a)(1)(i) as a branch if it satisfies the definition of ‘‘branch’’

in 34 CFR 600.2.

(2) Except as provided in paragraph (a)(3) of this section, if an institution wishes to participate for the

first time in the title IV, HEA programs or has undergone a change in ownership that results in a change

in control as described in 34 CFR 600.31, the institution must require the following individuals to

complete title IV, HEA program training provided or approved by the Secretary no later than 12 months

after the institution executes its program participation agreement under § 668.14:

(i) The individual the institution designates under § 668.16(b)(1) as its title IV, HEA program

administrator.

(ii) The institution's chief administrator or a high-level institutional official the chief administrator

designates.

(3)

(i) An institution may request the Secretary to waive the training requirement for any individual

described in paragraph (a)(2) of this section.

(ii) When the Secretary receives a waiver request under paragraph (a)(3)(i) of this section, the

Secretary may grant or deny the waiver, require another institutional official to take the training, or

require alternative training.

(b) Period of participation.
Certification Procedures 2

(1) If the Secretary certifies that an institution meets the standards of this subpart, the Secretary also

specifies the period for which the institution may participate in a title IV, HEA program. An institution's

period of participation expires no more than six years after the date that the Secretary certifies that the

institution meets the standards of this subpart, except that -

(i) The period of participation for a private, for-profit foreign institution expires three years after

the date of the Secretary's certification; and

(ii) The Secretary may specify a shorter period.

(2) Provided that an institution has submitted an application for a renewal of certification that is

materially complete at least 90 days prior to the expiration of its current period of participation, the

institution's existing certification will be extended on a month-to-month basis following the expiration of

the institution's period of participation until the end of the month in which the Secretary issues a

decision on the application for recertification.

(3) In the event that the Secretary does not make a determination to grant or deny certification within

12 months of the expiration of its current period of participation, the institution will automatically be

granted renewal of certification, which may be provisional.

(c) Provisional certification.

(1)(i) The Secretary may provisionally certify an institution if -

(A) The institution seeks initial participation in a Title IV, HEA program;

(B) 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;

(C) The institution is a participating institution -

(1) That is applying for a certification that the institution meets the standards of this subpart;

(2) That the Secretary determines has jeopardized its ability to perform its financial

responsibilities by not meeting the factors of financial responsibility under § 668.15 and

subpart L of this part or the standards of administrative capability under § 668.16; and

(3) Whose participation has been limited or suspended under subpart G of this part, or

voluntarily enters into provisional certification;

(D) 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

(E) 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

Secretary's recognition of that agency according to the provisions contained in 34 CFR part

6023; or; or

(FB) The institution has received the same finding of noncompliance on more than one program

review or audit; or

(F) The institution is a participating institution that has been provisionally recertified under the

automatic recertification requirement in paragraph (b)(3) of this section. .
Certification Procedures 3

(ii) An institution’s certification automatically becomes provisional upon notification from the

Secretary if—

(A) The institution triggers one of the financial responsibility events under §668.171(c) or (d)

and, as a result, the Secretary requires the institution to post financial protection; or

(B) The institution has received the same finding of noncompliance on more than one program

review or audit; or

(BC) Any The institution or an owner or interest holder of the institution with control over that

institution, as defined in 34 CFR 600.31, also owns another institution with fines or liabilities

owed to the Department and is not making payments in accordance with an agreement to repay

that liability.

(iii) A proprietary institution's certification automatically becomes provisional at the start of a fiscal

year after it did not derive at least 10 percent of its revenue for its preceding fiscal year from

sources other than Title IV, HEA programfederal educational assistance funds, as required under §

668.14(b)(16).

(2) If the Secretary provisionally certifies an institution, the Secretary also specifies the period for which

the institution may participate in a Title IV, HEA program. Except as provided in paragraphs (c) (3) and

(4) of this section, a provisionally certified institution's period of participation expires -

(i) Not later than the end of the first complete award year following the date on which the

Secretary provisionally certified the institution under paragraph (c)(1)(i)(A) of this section;

(ii) Not later than the end of the second complete award year following the date on which the

Secretary provisionally certified an institution that had been fully certified for reasons related to

substantial liabilities owed or potentially owed to the Department for discharges related to

borrower defense to repayment or false certification, or for other consumer protection concerns

as identified by the Secretary;

(iii) Not later than the end of the third complete award year following the date on which the

Secretary provisionally certified the institution under paragraphs (c)(1)(i)(B), (C), and (D), and (F)

(iii), (iii), (iv) or (c)(1)(ii)(e)(2) of this section; and

(ivii) If the Secretary provisionally certified the institution under paragraph (c)(1)(iv)(E) of this

section, not later than 18 months after the date that the Secretary withdrew recognition from the

institution’s nationally recognized accrediting agency.

(3) Notwithstanding the maximum periods of participation provided for in paragraph (c)(2) of this

section, if the Secretary provisionally certifies an institution, the Secretary may specify a shorter period

of participation for that institution.

(4) For the purposes of this section, “provisional certification” means that the Secretary certifies that an

institution has demonstrated to the Secretary's satisfaction that the institution -

(i) Is capable of meeting the standards of this subpart within a specified period; and

(ii) Is able to meet the institution's responsibilities under its program participation agreement,

including compliance with any additional conditions specified in the institution's program

participation agreement that the Secretary requires the institution to meet in order for the

institution to participate under provisional certification.
Certification Procedures 4

(d) Revocation of provisional certification.

(1) If, before the expiration of a provisionally certified institution's period of participation in a Title IV,

HEA program, the Secretary determines that the institution is unable to meet its responsibilities under

its program participation agreement, the Secretary may revoke the institution's provisional certification

for participation in that program.

(2)

(i) If the Secretary revokes the provisional certification of an institution under paragraph (d)(1) of

this section, the Secretary sends the institution a notice by certified mail, return receipt requested.

The Secretary also may transmit the notice by other, more expeditious means, if practical.

(ii) The revocation takes effect on the date that the Secretary mails transmits the notice to the

institution.

(iii) The notice states the basis for the revocation, the consequences of the revocation to the

institution, and that the institution may request the Secretary to reconsider the revocation. The

consequences of a revocation are described in § 668.26.

(3)

(i) An institution may request reconsideration of a revocation under this section by submitting to

the Secretary, within 20 days of the institution's receipt of the Secretary's notice, written evidence

that the revocation is unwarranted. The institution must file the request with the Secretary by

hand-delivery, mail, or facsimile electronic transmission.

(ii) The filing date of the request is the date on which the request is -

(A) Hand-delivered;

(B) Mailed; or

(C) Sent by facsimile electronic transmission.

(iii) Documents filed by electronic transmission must be transmitted to the Secretary in accordance

with instructions provided by the Secretary in the notice of revocation.

(iv) The Secretary discourages the use of facsimile transmission for documents longer than five

pages.

(4)

(i) The designated department official making the decision concerning an institution's request for

reconsideration of a revocation is different from, and not subject to supervision by, the official who

initiated the revocation of the institution's provisional certification. The deciding official promptly

considers an institution's request for reconsideration of a revocation and notifies the institution, by

certified mail, return receipt requested, of the final decision. The Secretary also may transmit the

notice by other, more expeditious means, if practical.

(ii) If the Secretary determines that the revocation is warranted, the Secretary's notice informs the

institution that the institution may apply for reinstatement of participation only after the later of

the expiration of -

(A) Eighteen months after the effective date of the revocation; or
Certification Procedures 5

(B) A debarment or suspension of the institution under Executive Order (E.O.) 12549 (3 CFR,

1986 comp., p. 189) or the Federal Acquisition Regulations, 48 CFR part 9, subpart 9.4.

(iii) If the Secretary determines that the revocation of the institution's provisional certification is

unwarranted, the Secretary's notice informs the institution that the institution's provisional

certification is reinstated, effective on the date that the Secretary's original revocation notice was

mailed, for a specified period of time.

(5) The mailing date of a notice of revocation or a request for reconsideration of a revocation is the date

evidenced on the original receipt of mailing from the U.S. Postal Service or another service that provides

delivery confirmation for that document.

§ 668.14 Program participation agreement.

(a)

(1) An institution may participate in any Title IV, HEA program, other than the LEAP and NEISP programs,

only if the institution enters into a written program participation agreement with the Secretary, on a

form approved by the Secretary. A program participation agreement conditions the initial and continued

participation of an eligible institution in any Title IV, HEA program upon compliance with the provisions

of this part, the individual program regulations, and any additional conditions specified in the program

participation agreement that the Secretary requires the institution to meet.

(2) An institution's program participation agreement applies to each branch campus and other location

of the institution that meets the applicable requirements of this part unless otherwise specified by the

Secretary.

(3) An institution’s program participation agreement must be signed by—

(i) An authorized representative of the institution; and

(ii) For a proprietary or private nonprofit institution, by an authorized representative of an

entity with direct or indirect ownership of the institution if that entity has the power to exercise

control over the institution. The Secretary considers the following as examples of circumstances

in which an entity has such power--:

(A) If the entity has at least 50 percent control over the institution through direct or

indirect ownership, by voting rights, or by its right to appoint board members to the

institution or any other entity, whether by itself or in combination with other entities or

natural persons with which it is affiliated or related, or pursuant to a proxy or voting or

similar agreement.;

(B) If the entity has the power to block significant actions.;

(C) If the entity is the 100 percent direct or indirect interest holder of the institution.; or

(D) If the entity provides or will provide the financial statements to meet any of the

requirements of 34 CFR 600.20(g) or, (h), or sSubpart L of this part.

(b) By entering into a program participation agreement, an institution agrees that -

* * *
Certification Procedures 6

(5) It will comply with the provisions of § 668.15 Subpart L relating to factors of financial responsibility;

* * *

(17) The Secretary, guaranty agencies and lenders as defined in 34 CFR part 682, nationally recognized

accrediting agencies, the Secretary of Veterans AffairsFederal agencies, State agencies recognized

under 34 CFR part 603 for the approval of public postsecondary vocational education, and State

agencies that legally authorize institutions and branch campuses or other locations of institutions to

provide postsecondary education, and State attorneys general have the authority to share with each

other any information pertaining to the institution's eligibility for or participation in the Title IV, HEA

programs or any information on fraud, and abuse, or other violations of law;

* * *

(26) If an educational program offered by the institution is required to prepare a student for gainful

employment in a recognized occupation, the institution must -

(i) Demonstrate a reasonable relationship between the length of the program and entry level

requirements for the recognized occupation for which the program prepares the student.

Effective [one year from the effective date of these regulations], tThe Secretary considers the

relationship to be reasonable if the number of clock hours provided in the program does not

exceed the greater lesser of -

(A) One hundred and fifty percent of tThe minimum number of clock hours required for

training in the recognized occupation for which the program prepares the student, as

established by the State in which the institution is located, if the State has established

such a requirement, or as established by any Federal agency; or

(B) If at least half of States license the recognized occupation for which the program

prepares students, tThe national median of the minimum number of clock hours

required for training in the recognized occupation for which the program prepares the

student as established in thosea States, as determined by the Secretary and published in

a notice in the Federal Register adjacent to the State in which the institution is located;

and

(ii) Establish the need for the training for the student to obtain employment in the recognized

occupation for which the program prepares the student;

* * *

(32) In each State in which the institution is located or in which students enrolled by the institution are

located - the institution is otherwise required to obtain State approval under 34 CFR 600.9

(i) The institution must ensure that each program—

(A) Ensure that each program iIs programmatically accredited, if such accreditation is required by

the State or a Federal agencya Federal governmental entity or by a governmental entity in the

State; and

(B) Ensure that each program s To the best extent practicable, satisfies the applicable

educational prerequisites for professional licensure or certification requirements in the State so

that a student who completes the
Certification Procedures 7

program and seeks employment in that State qualifies to take any licensure or certification

exam that is required for the student to practice or find employment in an occupation that the

program prepares students to enter.

(ii) If an institution is unable to satisfy the requirements in (i)(B), the institution must adhere to 

the disclosure requirements in 34 CFR part 668.43(a)(5)(v) and 34 CFR part 668.43(c).

* * *

(e) If an institution is provisionally certified, the Secretary may apply such conditions as are determined

to be appropriate to the institution, including –

(1) For an institution that the Secretary determines may be at risk of closure—

(i) Submission of an acceptable teach-out plan or agreement to the Department, to the State,

and to the institution’s recognized accrediting agency;

(ii) Submission of an acceptable records retention plan, including but not limited to student

transcripts and other title IV, HEA records, to the Department and evidence that the plan has

been implemented; and

(iii) The release of holds on student transcripts over a de minimis amount, and the release of all

holds on student transcripts in the event of a closure;

(2) Restrictions on the addition of new programs or locations;

(3) Restrictions on the rate of growth in enrollment of students or of Title IV volume;

(4) Restrictions on the institution providing a teach-out on behalf of another institution;

(5) Restrictions on the acquisition of another participating institution, which may include the posting of

financial surety protection in an amount determined by the Secretary but not less than 10 percent of the

acquired institution’s Title IV volume for the prior fiscal year. This suretyfinancial protection is in

addition to any other required suretyfinancial protection;

(6) Additional reporting requirements, which may include, but are not limited to, cash balances, an

actual and protected cash flow statement, student rosters, student complaints, and interim unaudited

financial statements;

(7) Limitations on the institution entering into a written arrangement with another eligible institution or

an ineligible institution or organization for that other eligible institution or ineligible institution or

organization to provide between 25 and 50 percent of the institution’s educational program under

§668.5(a) or (c);

(8) For an institution alleged or found to have engaged in misrepresentations to students, engaged in

aggressive recruiting practices, or violated incentive compensation rules, requirements to submit

marketing and other recruiting materials for the review and approval of the Secretary; and

(9) Such other conditions as the Secretary deems necessary or appropriate.

(f) If a proprietary institution seeks to convert to nonprofit status following a change in ownership, the

following conditions will apply to the institution following the change in ownership, in addition to any

other conditions that the Secretary may deem appropriate—

(1) The institution must continue to meet the requirements under §668.28(a) and §668.28(b) until the

Department has accepted, reviewed, and approved the institution's financial statements and

Commented [EG1]: Added this language just to make 

sure it is clear that there is still a responsibility on an 

institution to communicate clearly with their current and 

prospective students regarding their programs. 
Certification Procedures 8

compliance audits that cover two complete consecutive fiscal years in which the institution meets the

requirements of §668.14(b)(16) with passing 90/10 reporting under its new ownership, or until the

Department approves the institution’s request to convert to nonprofit status, whichever is later;

(2) The institution must continue to meet the gainful employment requirements of sSubpart Q of this

part until the Department has accepted, reviewed, and approved the institution's financial statements

and compliance audits that cover two complete consecutive fiscal years under its new ownership, or

until the Department approves the institution’s request to convert to nonprofit status, whichever is

later; and

(3) The institution will be required tomust submit regular and timely reports on agreements entered into

with its former for-profit owner or affiliated or related persons or entities, so long as the institution

participates as a nonprofit institution; and

(4) The institution may not advertise that it operates as a nonprofit institution for the purposes of Title

IV until the Department approves the institution’s request to convert to nonprofit status.

(g) If an institution is initially certified as a nonprofit institution, or if it has undergone a change of

ownership and seeks to convert to nonprofit status, the following conditions will apply to the institution

upon initial certification or following the change in ownership, in addition to any other conditions that

the Secretary may deem appropriate:

(1) The institution will be required tomust submit regular and timely reports on accreditor and Sstate

authorization agency actions and any new servicing agreements within 10 business days until the

Department has accepted, reviewed, and approved the institution's financial statements and

compliance audits that cover two complete consecutive fiscal years following initial certification, or two

complete fiscal years under its new ownership or until the Department approves the institution’s

request to convert to nonprofit status, whichever is later; and

(2) The institution will be required tomust submit regular and timely reports on communications from

the Internal Revenue Service or any Sstate or foreign country related to tax-exempt or nonprofit status

within 10 business days so long as the institution participates as a nonprofit institution.

(he)

(1) A program participation agreement becomes effective on the date that the Secretary signs the

agreement.

(2) A new program participation agreement supersedes any prior program participation agreement

between the Secretary and the institution.

(if)

(1) Except as provided in paragraphs (ig) and (kh) of this section, the Secretary terminates a program

participation agreement through the proceedings in subpart G of this part.

(2) An institution may terminate a program participation agreement.

(3) If the Secretary or the institution terminates a program participation agreement under paragraph (fi)

of this section, the Secretary establishes the termination date.
Certification Procedures 9

(jg) An institution's program participation agreement automatically expires on the date that -

(1) The institution changes ownership that results in a change in control as determined by the Secretary

under 34 CFR part 600; or

(2) The institution's participation ends under the provisions of § 668.26(a) (1), (2), (4), or (7).

(kh) An institution's program participation agreement no longer applies to or covers a location of the

institution as of the date on which that location ceases to be a part of the participating institution.

§ 668.43 Institutional information.

(a) Institutional information that the institution must make readily available 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;

(ii) The instructional, laboratory, and other physical facilities which relate to the academic

program;

(iii) The institution's faculty and other instructional personnel; and

(iv) Any plans by the institution for improving the academic program of the institution, upon a

determination by the institution that such a plan exists; and

(v) If an educational program is designed to meet educational requirements for a specific

professional license or certification that is required for employment in an occupation, or is

advertised as meeting such requirements, a list of all States where the institution offers the

program and where the program meets such requirements and a list of all States where it does

not meet such requirements.

Last updated 2/4/2022