[Federal Register Volume 72, Number 79 (Wednesday, April 25, 2007)]
[Rules and Regulations]
[Pages 20425-20428]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-7810]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 21

RIN 2900-AL43


Administration of VA Educational Benefits--Centralized 
Certification

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document adopts as a final rule a proposed rule amending 
Department of Veterans Affairs (VA) rules governing certification of 
enrollment in approved courses for the training of veterans and other 
eligible persons under the education benefit programs VA administers. 
Under this rule, educational institutions with multi-state campuses may 
submit certifications to VA from a centralized location.

DATES: This final rule is effective June 25, 2007.

FOR FURTHER INFORMATION CONTACT: Lynn M. Nelson, Education Advisor, 
Veterans Benefits Administration, Department of Veterans Affairs 
(225C), 810 Vermont Avenue, NW., Washington, DC 20420, 202-273-7187.

SUPPLEMENTARY INFORMATION: In a document published in the Federal 
Register on February 22, 2006 (71 FR 9052), VA proposed a rule that 
would amend subpart D of 38 CFR part 21 regarding approval criteria for 
branches and extensions of educational institutions. VA is adopting as 
final the proposed rule with only minor non-substantive changes. The 
rule permits educational institutions with multi-state campuses to 
submit required certifications to VA from a centralized location 
(centralized certification).
    Interested persons were given 60 days to submit comments on the 
proposed rule. VA addresses the comments below.

I. Background

    VA initially published a notice of proposed rulemaking (NPRM) in 
the Federal Register on June 30, 2003 (68 FR 38657), proposing to amend 
VA regulations to permit centralized certification of courses. VA 
received several comments concerning the NPRM. Many of the comments 
opposing the proposed amendments came from individual State Approving 
Agencies (SAA), and a national association of SAAs. VA contracts with 
SAAs to perform course approval functions under 38 U.S.C. chapter 36. 
Based on the comments received, VA withdrew the initial NPRM and 
published a new NPRM taking into consideration all the comments 
received. (The new NPRM was published in the Federal Register on 
February 22, 2006 (71 FR 9052) for comment.)

II. Favorable Comments on NPRM Published February 22, 2006

    VA received four favorable comments. Two were from educational 
institutions, one was from a national association of SAAs, and one was 
from an individual SAA.
    One commenter, the national association, supported the proposed 
rule and commended VA for addressing the issues raised in response to 
the prior NPRM. In addition, the commenter requested that VA amend 
proposed 38 CFR 21.4266(f)(3) to add a requirement for teaching 
locations that do not have a certifying official present. Specifically, 
the commenter requested that VA require the educational institution's 
designated employee, who has access to VA's Internet-based educational 
certification application for purposes of providing certification 
information to VA, to also have access to other records the SAA may 
require. The commenter suggested that the designated employee should 
also have access to and provide academic records information to 
veterans, servicemembers, reservists or other eligible persons. 
(Another SAA individually submitted a similar comment.)
    While VA understands the commenter's concern, we did not make the 
recommended change in this final rule because VA already has a 
regulation (38 CFR 21.4209) that requires educational institutions to 
make certain records available for review by VA and duly authorized 
Government representatives, such as SAAs. Since Sec.  21.4209 presently 
requires institutions to make the records available, VA believes that 
the change suggested by the commenter is unnecessary. If the 
educational institution does not make the required records available, 
Sec.  21.4209(e) provides that such failure is grounds for 
discontinuing the payment of educational assistance allowance (or 
special training allowance). An institution that does not comply would 
also be subject to losing approval of its courses for veterans' 
training.

III. Unfavorable Comments on the NPRM Published February 22, 2006

    One commenter, a State veterans affairs office, opposed the NPRM 
speculating that the amendments would be a step backward in maintaining 
the quality of education and veteran education services and would lead 
to a decline in service to veterans. As stated in the preamble of the 
NPRM at 71 FR 9052, 9053-9058, and despite the commenter's concerns, VA 
has no evidence that service would diminish if schools submitted 
certifications from a central location.
    In contrast to the above commenter's critical comment, we also 
received favorable comments from school officials asserting that 
centralization would improve service to veteran students. These 
officials stated that they could maintain a better trained staff if 
they were permitted to centralize their

[[Page 20426]]

certification activities. Employees who serve as certifying officials 
at smaller campuses often have other duties and, thus, do not 
specialize in VA certifications. The officials maintained that their 
designated employees could specialize in those duties and better serve 
VA beneficiaries if they could centralize the schools' certifications.
    In opposing the rule, the State commenter suggested that an SAA's 
oversight powers might be impaired by the rule. The commenter cited as 
an example of an oversight issue, an educational institution with 
interstate campuses that used inappropriate teaching methods and 
unqualified faculty. The SAA withdrew approval for the courses in the 
State and notified other SAAs that had campuses of the same educational 
institution in their states. The other SAAs conducted reviews and also 
withdrew approval for VA educational beneficiaries' training. SAAs use 
current law to appropriately disapprove courses upon discovering 
problems that cannot be corrected by an educational institution. Under 
this rule, the SAA would still be able to oversee and provide 
assistance to the various teaching locations within the State. If the 
educational institution in the commenter's example submitted 
certifications from one central location or separately from each State, 
the SAA could still withdraw approval of the teaching locations in the 
State and notify the other SAAs just as they have in the past under 
current law. This rule does not remove or change an institution's 
present ability to approve or disapprove courses. It merely allows an 
educational institution the flexibility of submitting VA certifications 
electronically from one central location.
    The commenter also expressed concern that certification documents 
would not be available to the SAA if an educational institution 
submitted certifications for campuses in the State from another State. 
In 38 CFR 21.4266(f)(3), we require that educational institutions, 
which centralize their certifying official functions, must designate 
employees at teaching locations without a certifying official to 
provide certification information to eligible persons, VA, and SAAs 
using VA's Internet-based education certification application. If an 
educational institution in Texas, with branches in Wisconsin and 
Maryland, submits all certifications from Texas, the educational 
institution's designated employees in each of those States, will have 
access to the relevant certification information.
    Another commenter expressed concern that administrative records 
would not be available to the centralized certifying official. However, 
Sec.  21.4266(f)(3)(iv) provides that the certifying official has full 
access to the administrative records and accounts required by Sec.  
21.4209 for each student attending the teaching location(s) for which 
the certifying official has been designated responsibility. The State 
commenter also suggested that the State's SAA cannot be held 
contractually accountable for operations outside its borders. However, 
nothing in this rule would hold any SAA accountable for actions at a 
branch in another state. The only new provision is that an educational 
institution may submit VA certifications from a central location if it 
chooses to do so.
    VA made no substantive changes to the NPRM published February 22, 
2006, based on the comments.

Paperwork Reduction Act

    This final rule contains provisions that constitute collections of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521) in Sec.  21.4266(f). The collections are approved under Office of 
Management and Budget control number 2900-0073. We display the control 
number under the applicable regulation text in this final rule.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in an expenditure by 
State, local, or tribal governments, in the aggregate or by the private 
sector, of $100 million or more (adjusted annually for inflation) in 
any given year. This proposed rule would have no such effect on State, 
local, or tribal governments, or the private sector.

Executive Order 12866

    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, when regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety, 
and other advantages; distributive impacts; and equity). The Executive 
Order classifies a ``significant regulatory action,'' requiring review 
by the Office of Management and Budget (OMB) unless OMB waives such 
review, as any regulatory action that is likely to result in a rule 
that may: (1) Have an annual effect on the economy of $100 million or 
more or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities; (2) create a serious inconsistency or otherwise interfere 
with an action taken or planned by another agency; (3) materially alter 
the budgetary impact of entitlements, grants, user fees, or loan 
programs or the rights and obligations of recipients thereof; or (4) 
raise novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in the Executive 
Order.
    The economic, interagency, budgetary, legal, and policy 
implications of this final rule have been examined and it has been 
determined to be a significant regulatory action under the Executive 
Order because it is likely to result in a rule that may raise novel 
legal or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in the Executive Order.

Regulatory Flexibility Act

    The Secretary of Veterans Affairs hereby certifies that this rule 
will not have a significant economic impact on a substantial number of 
small entities as they are defined in the Regulatory Flexibility Act, 5 
U.S.C. 601-612. Existing VA regulations do not permit educational 
institutions with multi-state campuses to centralize their certifying 
official functions. Some educational institutions with multi-state 
campuses requested VA expand current regulations to permit them to 
centralize their certifying official functions. Since this rule will 
affect only those educational institutions that choose to centralize 
their certifying official functions, centralizing such functions would 
be at the option of the educational institution that wants to 
consolidate its certifying functions. Those institutions believe 
centralizing their functions will allow them to better manage and 
allocate their resources.
    The economic effect on small entities would essentially entail a 
cost savings associated with the consolidation of certifying functions. 
By centralizing the functions, the institutions desiring this option 
say they could dedicate less full-time employees to the centralizing 
duties and at the same time have those employees specialize. According 
to officials of educational institutions interested in centralizing, 
their training costs would be reduced by having a centralized staff 
dedicated to VA certification and serving veterans. The option in this 
rule, which would liberalize current regulations to permit centralized 
certification functions, would not impact a substantial number

[[Page 20427]]

of small entities. Of the 6,900 post-secondary educational institutions 
approved by Department of Education for Title IV funds, only three of 
those institutions commented on the proposed rule. Less than 10 
educational institutions have expressed interest in centralized 
certification, but those that have are very interested in the change 
that would allow them the option. Pursuant to 5 U.S.C. 605(b), this 
rule, therefore, is exempt from the initial and final regulatory 
flexibility analyses requirements of sections 603 and 604.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for 
the programs affected by this rule are: 64.117, Survivors and 
Dependents Educational Assistance; 64.120, Post-Vietnam Era Veterans' 
Educational Assistance; and 64.124, All-Volunteer Force Educational 
Assistance. This proposed rule also affects the Montgomery GI Bill-
Selected Reserve program and the Reserve Educational Assistance 
program. There are no Catalog of Federal Domestic Assistance numbers 
for the Montgomery GI Bill-Selected Reserve or the Reserve Educational 
Assistance program.

List of Subjects in 38 CFR Part 21

    Administrative practice and procedure, Armed forces, Civil rights, 
Claims, Colleges and universities, Conflict of interests, Education, 
Employment, Grant programs--education, Grant programs--veterans, Health 
care, Loan programs--education, Loan programs--veterans, Manpower 
training programs, Reporting and recordkeeping requirements, Schools, 
Travel and transportation expenses, Veterans, Vocational education, 
Vocational rehabilitation.

    Approved: March 19, 2007.
R. James Nicholson,
Secretary of Veterans Affairs.

0
For the reasons stated in the preamble, the Department of Veterans 
Affairs amends 38 CFR part 21 (subpart D) as follows:

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

Subpart D--Administration of Educational Assistance Programs

0
1. The authority citation for part 21, subpart D, continues to read as 
follows:

    Authority: 10 U.S.C. 2141 note, ch. 1606; 38 U.S.C. 501(a), chs. 
30, 32, 34, 35, 36, unless otherwise noted.

0
2. Revise Sec.  21.4266 to read as follows:


Sec.  21.4266  Approval of courses at a branch campus or extension.

    (a) Definitions. The following definitions apply to the terms used 
in this section.
    (1) Administrative capability means the ability to maintain all 
records and accounts that Sec.  21.4209 requires.
    (2) Certifying official means a representative of an educational 
institution designated to provide VA with the reports and 
certifications that Sec. Sec.  21.4203, 21.4204, 21.5810, 21.5812, 
21.7152, and 21.7652 require.
    (3) Main campus means the location where the primary teaching 
facilities of an educational institution are located. If an educational 
institution has only one teaching location, that location is its main 
campus. If it is unclear which of the educational institution's 
teaching facilities is primary, the main campus is the location of the 
primary office of its Chief Executive Officer.
    (4) Branch campus means a location of an educational institution 
that--
    (i) Is geographically apart from and operationally independent of 
the main campus of the educational institution;
    (ii) Has its own faculty, administration and supervisory 
organization; and
    (iii) Offers courses in education programs leading to a degree, 
certificate, or other recognized education credential.
    (5) Extension means a location of an educational institution that 
is geographically apart from and is operationally dependent on the main 
campus or a branch campus of the educational institution.

(Authority: 38 U.S.C. 3675, 3676, 3684)


    (b) State approving agency jurisdiction. (1) The State approving 
agency for the State where a residence course is being taught has 
jurisdiction over approval of that course for VA education benefit 
purposes.
    (2) The fact that the location where the educational institution is 
offering the course may be temporary will not serve to change 
jurisdictional authority.
    (3) The fact that the main campus of the educational institution 
may be located in another State from that in which the course is being 
taught will not serve to change jurisdictional authority.

(Authority: 38 U.S.C. 3672)


    (c) Approving a course offered by a branch campus or an extension 
of an educational institution. Before approving a course or a program 
of education offered at a branch campus or an extension of an 
educational institution, the State approving agency must ensure that--
    (1) Except as provided in paragraph (d) of this section, each 
location where the course or program is offered has administrative 
capability; and
    (2) Except as provided in paragraph (f) of this section, each 
location where the course or program is offered has a certifying 
official on site.

(Authority: 38 U.S.C. 3672)


    (d) Exceptions to the requirement that administrative capability 
exist at each location. (1) A State approving agency may approve a 
course or program offered by a branch campus that does not have its own 
administrative capability if--
    (i) The main campus of the educational institution within the same 
State maintains a centralized recordkeeping system that includes all 
records and accounts that Sec.  21.4209 requires for each student 
attending the branch campus without administrative capability. These 
records may be originals, certified copies, or in an electronically 
formatted record keeping system; and
    (ii) The main campus can identify the records of students at the 
branch campus for which it maintains centralized records.
    (2) The State approving agency may approve a course or program 
offered by an extension that does not have its own administrative 
capability if--
    (i) The extension and the main campus or branch campus it is 
dependent on are located within the same State;
    (ii) The main campus or branch campus the extension is dependent on 
has administrative capability for the extension; and
    (iii) The State approving agency combines the approval of the 
course(s) offered by the extension with the approval of the courses 
offered by the main campus or branch campus the extension is dependent 
on.
    (e) Combined approval. The State approving agency may combine the 
approval of courses offered by an extension of an educational 
institution with the approval of the main campus or the branch campus 
that the extension is dependent on, if the extension is within the same 
State as the campus it is dependent on. Combining the approval of 
courses offered by an extension, with the approval of courses offered 
by the main campus or branch campus the extension is dependent on, does 
not negate the minimum period of operation requirements in Sec.  
21.4251 for courses that do not lead to a standard college degree 
offered by an extension of a proprietary educational institution. The 
State approving agency will list the

[[Page 20428]]

extension and courses approved on the notice of approval sent to the 
educational institution pursuant to Sec.  21.4258 of this part.
    (f) Exceptions to the requirement that each location where the 
course or program is offered must have a certifying official on site. 
Exceptions to the requirement in paragraph (c) of this section, that 
each location with an approved course or program of education must have 
a certifying official on site, will be permitted for--
    (1) Extensions of an educational institution when the State 
approving agency combines the approval of the courses offered by the 
extension with a branch campus or main campus. (See paragraph (e) of 
this section.)
    (2) Educational institutions with more than one campus within the 
same State if the main campus--
    (i) Maintains a centralized recordkeeping system. (See paragraph 
(d)(1) of this section.);
    (ii) Has administrative capability for the branch campus (or branch 
campuses) within the same State; and
    (iii) Centralizes its certifying official function at the main 
campus.
    (3) Educational institutions with multi-state campuses when an 
educational institution wants to centralize its certifying official 
function into one or more locations if:
    (i) The educational institution submits all required reports and 
certifications that Sec. Sec.  21.4203, 21.4204, 21.5810, 21.5812, 
21.7152, and 21.7652 require via electronic submission through VA's 
Internet-based education certification application;
    (ii) The educational institution designates an employee, at each 
teaching location of the educational institution that does not have a 
certifying official present, to serve as a point-of-contact for 
veterans, servicemembers, reservists, or other eligible persons; the 
certifying official(s); the State approving agency of jurisdiction; and 
VA. The designated employee must have access (other than to transmit 
certifications) to VA's Internet-based education certification 
application to provide certification information to veterans, 
servicemembers, reservists, or other eligible persons, State approving 
agency representatives, and VA representatives;
    (iii) Each certifying official uses the VA facility code for the 
location that has administrative capability for the teaching location 
where the student is training when submitting required reports and 
certifications to VA; and
    (iv) Each certifying official has full access to the administrative 
records and accounts that Sec.  21.4209 requires for each student 
attending the teaching location(s) for which the certifying official 
has been designated responsibility. These records may be originals, 
certified copies, or in an electronically formatted record keeping 
system.

(Authority: 38 U.S.C. 3672)



(The Office of Management and Budget has approved the information 
collection requirements in this section under control number 2900-0073)

[FR Doc. E7-7810 Filed 4-24-07; 8:45 am]
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