Issue Paper 

Proposed Regulatory Language 

 Team IV – GEAR UP 

Origin: HEOA Sec. 404(a)(2) 

 

Issue: Priority 

Statutory cites: HEA Sec. 404A(b)(3) 

Regulatory cites: 34 CFR 694.15 

Summary of issue: The HEOA gives a priority in funding to entities that (1) have carried 

out successful GEAR UP programs prior to enactment of the HEOA, (2) have a prior, 

demonstrated commitment to early intervention, leading to college access through 

collaboration and replication of successful strategies, and 3) ensure that students served 

by GEAR UP programs prior to the enactment of the HEA continue to receive services 

through the completion of secondary school. Under previous regulations, the Secretary 

could choose to provide priority to applicants in Empowerment Zones or to partnerships 

that award scholarships. 

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Issue Paper 

Proposed Regulatory Language 

 Team IV – GEAR UP 

Origin: HEOA Sec. 404(b)

 

Issue: Funding Rules

Statutory cites: HEA Section 404B(a) 

Regulatory cites: To be determined

Summary of issue: The HEOA requires the Secretary to award at least 33 percent of the 

GEAR UP appropriation to States; at least 33 percent to partnerships; and to award the 

remainder “taking into consideration the number, quality, and promise of applications for 

the grants” and, to the extent practicable, the geographic distribution of grants and the 

distribution of grants between urban and rural applicants. The HEA has always required 

the distribution of at least 33 percent of funds to States and to partnerships. The language 

regarding how the remaining funds are distributed is new. 

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Issue Paper 

Proposed Regulatory Language 

 Team IV – GEAR UP 

Origin: HEOA Sec. 404(a)(2) 

 

Issue: Duration of awards

Statutory cites: HEA Sec. 404A(b)(2) 

Regulatory cites: 

Summary of issue: Previously, GEAR UP grants were awarded for a period of up to six 

years. The HEOA provides authority for grantees to apply for an optional seventh year of 

funding. The purpose of the new seventh year is to provide services at an institution of 

higher education to follow students through their first year of college attendance. 

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Issue Paper 

Proposed Regulatory Language 

 Team IV – GEAR UP 

Origin: HEOA Sec. 404(a)(3)

 

Issue: Revised Definition of Partnerships

Statutory cites: HEA Sec. 404A(c)(2) 

Regulatory cites: To be determined

Summary of issue: The HEOA changed the definition of an “eligible entity” to include 

a partnership consisting of 1) one or more local education agencies and 2) one or more 

degree granting institutions of higher education. Partnerships may include not less than 

two other community organizations or entities. A previous requirement that partnerships 

must include one or more elementary or secondary schools was eliminated. 

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Issue Paper 

Proposed Regulatory Language 

 Team IV – GEAR UP 

Origin: HEOA Sec. 404C(c)(3)

 

Issue: Changes to Matching Requirements

Statutory cites: HEA Sec. 404C(b) 

Regulatory cites: 34 CFR 694.7

Summary of issue: Generally, GEAR UP grantees are required to match one dollar of 

non-federal funds for every federal dollar awarded. The HEOA makes a number of 

changes to the GEAR UP matching requirement. Previously, grantees were expected to 

meet matching requirements each year. The HEOA provides that grantees can meet their 

matching requirements over the entire life of the grant if they make “substantial progress” 

in meeting the matching requirements each year. The HEOA also expands the types of 

contributions that can be considered part of the matching funds to include the costs of 

administering a scholarship program under the grant-funded project. 

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Issue Paper 

Proposed Regulatory Language 

 Team IV – GEAR UP 

Origin: HEOA Sec. 404(c)(3)(C)

 

Issue: Waiver of Matching Requirements 

Statutory cites: HEA Sec. 404C(b)(2) 

Regulatory cites: 34 CFR 694.7(b)(2) 

Summary of issue: Under the HEA as previously authorized, the Secretary could, under 

certain circumstances, modify the percentage match requirement applicable to a 

partnership. The HEOA retains this provision, and also authorizes the Secretary to 

approve the following types of requests for reduction in match: (1) requests made at the 

time of an application, if the applicant demonstrates a significant economic hardship that 

precludes it from meeting the match requirement, (2) requests from partnership applicants 

to count contributions to scholarship funds established under section 404E on a two to 

one basis, or (3) requests made by a grantee demonstrating that the matching funds 

identified in an approved application are no longer available and the grantee has 

exhausted all reserves for replacing them. 

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Issue Paper 

Proposed Regulatory Language 

 Team IV – GEAR UP 

Origin: HEOA Sec. 404(d) 

Issue: Required and Allowable Activities 

Statutory cites: HEA Sec. 404D 

Regulatory cites: To be determined

Summary of issue: The HEOA modifies the GEAR UP program by distinguishing 

between certain activities and services that projects must provide and optional activities 

that projects may offer. Prior to the new law, projects could choose from a number of 

allowable activities and services. 

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Issue Paper 

Proposed Regulatory Language 

 Team IV – GEAR UP 

Origin: HEOA Sec. 404(e)

 

Issue: Scholarship Component/Funds Held in Reserve for 

Scholarships 

Statutory cites: HEA Sec. 404E 

Regulatory cites: 34 CFR 694.10

Summary of issue: The HEOA requires State grantees to hold in reserve funds for 

scholarships for eligible students in an amount that is not less than the minimum 

scholarship amount multiplied by the number of students that the State estimates will 

enroll in an institution of higher education. The State must make these funds available to 

eligible students who meet certain benchmarks. These scholarships are portable and may 

be used outside the State in which the GEAR UP program is located. Grantees are also 

required by the HEOA to provide information on the eligibility requirements for 

scholarships to all participating students upon the students’ entry into the programs 

assisted under this chapter. 

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Issue Paper 

Proposed Regulatory Language 

 Team IV – GEAR UP 

Origin: HEOA Sec. 404(e)(5) 

 

Issue: Redistribution or Return of Unused Scholarship 

Funds/Reporting on Scholarship Monies after the Grant 

Period 

Statutory cites: HEA Sec. 404E(e)(4)(A) 

Regulatory cites: To be determined

Summary of issue: Previously, the HEA was silent as to the disposition of unused 

scholarship funds after the closure of a GEAR UP grant. The HEOA specifies that 

grantees may redistribute any unused funds not distributed to eligible students within six 

years of their completion of high school to other eligible students. The HEOA also 

requires State grantees to return to the Secretary any remaining scholarships funds to be 

redistributed by the Secretary to other grantees. 

In order for the Secretary to implement this provision, grantees may need to report on 

their scholarship funds after the completion of their grant award periods. At present, 

grantees have no accountability or reporting responsibilities to the federal government 

after the grants close. 

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 Issue Paper 

Proposed Regulatory Language 

 Team IV – GEAR UP 

Origin: HEOA Sec. 404(b)(1) 

 

Issue: Continuity of Student Services

Statutory cites: HEA Sec. 404B(d)(1)(C) 

Regulatory cites: To be determined

Summary of issue: The HEOA requires the Secretary to require eligible entities to 

continue to provide services to students who received services under a previous GEAR 

UP grant award but have not yet completed the 12th grade. Under the GEAR UP 

program, grantees may choose to add new cohorts (grade levels) of students each year of 

a grant and there is no minimum grade level at which services may begin. Accordingly, 

grants can end before students have completed high school. The HEOA requires eligible 

entities to provide services to those students through the 12th grade. Prior to the new law, 

there was no provision for grantees to serve students from a previous grant.