[Federal Register Volume 86, Number 169 (Friday, September 3, 2021)]
[Rules and Regulations]
[Pages 49478-49480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19141]


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DEPARTMENT OF EDUCATION

34 CFR Part 600

[Docket ID ED-2018-OPE-0076]
RIN 1840-AD38


Distance Education and Innovation; Correction

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Correcting amendments.

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SUMMARY: On September 2, 2020, the Department of Education (Department) 
published in the Federal Register a final

[[Page 49479]]

rule to amend the general, establishing eligibility, maintaining 
eligibility, and losing eligibility sections of the Institutional 
Eligibility regulations issued under the Higher Education Act of 1965, 
as amended (HEA), related to distance education and innovation, as well 
as the Student Assistance General Provisions regulations issued under 
the HEA (Distance Education and Innovation Rule). This document 
corrects the text in the regulations.

DATES: This correction is effective on September 3, 2021.

FOR FURTHER INFORMATION CONTACT: Gregory Martin at (202) 453-7535 or 
<a href="/cdn-cgi/l/email-protection#8fc8fdeae8e0fdf6a1c2eefdfbe6e1cfeaeba1e8e0f9"><span class="__cf_email__" data-cfemail="3a7d485f5d55484314775b484e53547a5f5e145d554c">[email protected]</span></a>.
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.

SUPPLEMENTARY INFORMATION: The Department's Distance Education and 
Innovation Rule, published in the Federal Register on September 2, 2020 
(85 FR 54742), contained an error in the amendatory language that 
resulted in the deletion of 34 CFR 600.20(f), (g), and (h). This 
correction restores those paragraphs.

Waiver of Proposed Rulemaking and Negotiated Rulemaking

    In accordance with the Administrative Procedure Act, 5 U.S.C. 553, 
the Department generally offers interested parties the opportunity to 
comment on proposed regulations. However, the actions in this document 
merely correct a technical error, and thus, the Department has 
determined that publication of a proposed rule is unnecessary under 5 
U.S.C. 553(b)(B).
    In addition, under section 492 of the HEA (20 U.S.C. 1098a), all 
regulations proposed by the Department for programs authorized under 
title IV of the HEA are subject to negotiated rulemaking requirements. 
Section 492(b)(2) of the HEA provides that negotiated rulemaking may be 
waived for good cause when doing so would be ``impracticable, 
unnecessary, or contrary to the public interest.'' There is likewise 
good cause to waive the negotiated rulemaking requirement in this case, 
since, as explained above, notice and comment rulemaking is 
unnecessary.
    Accessible Format: On request to the program contact person listed 
under FOR FURTHER INFORMATION CONTACT, individuals with disabilities 
can obtain this document in an accessible format. The Department will 
provide the requestor with an accessible format that may include Rich 
Text Format (RTF) or text format (txt), a thumb drive, an MP3 file, 
braille, large print, audiotape, or compact disc, or other accessible 
format.
    Electronic Access to This Document: The official version of this 
document is the document published in the Federal Register. You may 
access the official edition of the Federal Register and the Code of 
Federal Regulations at www.govinfo.gov. At this site you can view this 
document, as well as all other documents of this Department published 
in the Federal Register, in text or Portable Document Format (PDF). To 
use PDF you must have Adobe Acrobat Reader, which is available free at 
the site.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.

List of Subjects in 34 CFR Part 600

    Colleges and universities, Grant programs--education, Loan 
programs--education, Reporting and recordkeeping requirements, Student 
aid, Vocational education.

Michelle Asha Cooper,
Acting Assistant Secretary for Postsecondary Education.
    Accordingly, the Secretary corrects 34 CFR part 600 by making the 
following correcting amendment:

PART 600--INSTITUTIONAL ELIGIBILITY UNDER THE HIGHER EDUCATION ACT 
OF 1965, AS AMENDED

0
1. The authority citation for part 600 continues to read as follows:

    Authority: 20 U.S.C. 1001, 1002, 1003, 1088, 1091, 1094, 1099b, 
and 1099c, unless otherwise noted.


0
2. Section 600.20 is amended by adding paragraphs (f) through (h) and a 
parenthetical OMB approval note to read as follows:


Sec.  600.20  Notice and application procedures for establishing, 
reestablishing, maintaining, or expanding institutional eligibility and 
certification.

* * * * *
    (f) Disbursement rules related to applications. (1)(i) Except as 
provided under paragraph (f)(1)(ii) of this section and 34 CFR 668.26, 
if an institution submits an application under paragraph (b)(2)(i) of 
this section because its participation period is scheduled to expire, 
after that expiration date the institution may not disburse title IV, 
HEA program funds to students attending that institution until the 
institution receives the Secretary's notification that the institution 
is again eligible to participate in those programs.
    (ii) An institution described in paragraph (f)(1)(i) of this 
section may disburse title IV, HEA program funds to its students if the 
institution submits to the Secretary a materially complete renewal 
application in accordance with the provisions of 34 CFR 668.13(b)(2), 
and has not received a final decision from the Department on that 
application.
    (2)(i) Except as provided under paragraph (f)(2)(ii) of this 
section and 34 CFR 668.26, if a private nonprofit, private for-profit, 
or public institution submits an application under paragraph (b)(2)(ii) 
or (iii) of this section because it has undergone or will undergo a 
change in ownership that results in a change of control or a change in 
status, the institution may not disburse title IV, HEA program funds to 
students attending that institution after the change of ownership or 
status until the institution receives the Secretary's notification that 
the institution is eligible to participate in those programs.
    (ii) An institution described in paragraph (f)(2)(i) of this 
section may disburse title IV, HEA program funds to its students if the 
Secretary issues a provisional extension of certification under 
paragraph (g) of this section.
    (3) If an institution must apply to the Secretary under paragraphs 
(c)(1) through (4) of this section, the institution may not disburse 
title IV, HEA program funds to students attending the subject location, 
program, or branch until the institution receives the Secretary's 
notification that the location, program, or branch is eligible to 
participate in the title IV, HEA programs.
    (4) If an institution applies to the Secretary under paragraph 
(c)(5) of this section to convert an eligible location to a branch 
campus, the institution may continue to disburse title IV, HEA program 
funds to students attending that eligible location.
    (5) If an institution does not apply to the Secretary to obtain the 
Secretary's approval of a new location, program, increased level of 
program offering, or branch, and the location, program, or branch does 
not qualify as an eligible location, program, or branch of that 
institution under this part and 34 CFR part 668, the institution is 
liable for all title IV, HEA program funds it disburses to students 
enrolled at that location or branch or in that program.
    (g) Application for provisional extension of certification. (1) If 
a private nonprofit institution, a private for-profit institution, or a 
public institution

[[Page 49480]]

participating in the title IV, HEA programs undergoes a change in 
ownership that results in a change of control as described in Sec.  
600.31, the Secretary may continue the institution's participation in 
those programs on a provisional basis, if the institution under the new 
ownership submits a ``materially complete application'' that is 
received by the Secretary no later than 10 business days after the day 
the change occurs.
    (2) For purposes of this section, a private nonprofit institution, 
a private for-profit institution, or a public institution submits a 
materially complete application if it submits a fully completed 
application form designated by the Secretary supported by--
    (i) A copy of the institution's State license or equivalent 
document that--as of the day before the change in ownership--authorized 
or will authorize the institution to provide a program of postsecondary 
education in the State in which it is physically located;
    (ii) A copy of the document from the institution's accrediting 
association that--as of the day before the change in ownership--granted 
or will grant the institution accreditation status, including approval 
of any non-degree programs it offers;
    (iii) Audited financial statements of the institution's two most 
recently completed fiscal years that are prepared and audited in 
accordance with the requirements of 34 CFR 668.23; and
    (iv) Audited financial statements of the institution's new owner's 
two most recently completed fiscal years that are prepared and audited 
in accordance with the requirements of 34 CFR 668.23, or equivalent 
information for that owner that is acceptable to the Secretary.
    (h) Terms of the extension. (1) If the Secretary approves the 
institution's materially complete application, the Secretary provides 
the institution with a provisional Program Participation Agreement 
(PPA). The provisional PPA extends the terms and conditions of the 
program participation agreement that were in effect for the institution 
before its change of ownership.
    (2) The provisional PPA expires on the earlier of--
    (i) The date on which the Secretary signs a new program 
participation agreement;
    (ii) The date on which the Secretary notifies the institution that 
its application is denied; or
    (iii) The last day of the month following the month in which the 
change of ownership occurred, unless the provisions of paragraph (h)(3) 
of this section apply.
    (3) If the provisional PPA will expire under the provisions of 
paragraph (h)(2)(iii) of this section, the Secretary extends the 
provisional PPA on a month-to-month basis after the expiration date 
described in paragraph (h)(2)(iii) of this section if, prior to that 
expiration date, the institution provides the Secretary with--
    (i) A ``same day'' balance sheet showing the financial position of 
the institution, as of the date of the ownership change, that is 
prepared in accordance with Generally Accepted Accounting Principles 
(GAAP) published by the Financial Accounting Standards Board and 
audited in accordance with Generally Accepted Government Auditing 
Standards (GAGAS) published by the U.S. General Accounting Office;
    (ii) If not already provided, approval of the change of ownership 
from the State in which the institution is located by the agency that 
authorizes the institution to legally provide postsecondary education 
in that State;
    (iii) If not already provided, approval of the change of ownership 
from the institution's accrediting agency; and
    (iv) A default management plan unless the institution is exempt 
from providing that plan under 34 CFR 668.14(b)(15).

(Approved by the Office of Management and Budget under control 
number 1845-0012)

[FR Doc. 2021-19141 Filed 9-2-21; 8:45 am]
BILLING CODE 4000-01-P


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