55414 Federal Register / Vol. 74, No. 206 / Tuesday, October 27, 2009 / Rules and Regulations 

DEPARTMENT OF EDUCATION 

34 CFR Parts 600 and 602 

RIN 1840–AD00 

[Docket ID ED–2009–OPE–0009] 

Institutional Eligibility Under the 

Higher Education Act of 1965, as 

Amended, and the Secretary’s 

Recognition of Accrediting Agencies 

AGENCY: Office of Postsecondary 

Education, Department of Education. 

ACTION: Final rule. 

SUMMARY: The Secretary amends its 

regulations governing institutional 

eligibility and the Secretary’s 

recognition of accrediting agencies. The 

Secretary is amending these regulations 

to implement changes to the Higher 

Education Act of 1965, as amended 

(HEA), resulting from enactment of the 

Higher Education Reconciliation Act of 

2005 (HERA), and the Higher Education 

Opportunity Act (HEOA), and to clarify, 

improve, and update the current 

regulations. 

DATES: These regulations are effective 

July 1, 2010. 

FOR FURTHER INFORMATION CONTACT: Ann 

Clough, U.S. Department of Education, 

1990 K Street, NW., Room 8043, 

Washington, DC 20006–8542. 

Telephone: (202) 502–7484 or via the 

Internet at: ann.clough@ed.gov. 

If you use a telecommunications 

device for the deaf (TDD), call the 

Federal Relay Service (FRS), toll free, at 

1–800–877–8339. 

Individuals with disabilities can 

obtain this document in an accessible 

format (e.g., braille, large print, 

audiotape, or computer diskette) on 

request to the contact person listed in 

this section. 

SUPPLEMENTARY INFORMATION: On August 

6, 2009, the Secretary published a notice 

of proposed rulemaking (NPRM) for the 

regulations governing institutional 

eligibility and the Secretary’s 

recognition of accrediting agencies in 

the Federal Register (74 FR 39498). 

In the preamble to the NPRM, the 

Secretary discussed on page 39499 the 

major regulations proposed in that 

document to implement the changes 

made to the HEA by the HERA and the 

HEOA, including the following: 

• Amending §§ 600.2 and 602.3 to 

include the statutory definition of 

‘‘distance education’’, and adding a 

definition of ‘‘correspondence 

education’’ to § 600.3. 

• Amending § 602.3 to include a 

definition of a ‘‘direct assessment 

program’’, an instructional program that 

uses or recognizes direct assessment of 

a student’s learning in lieu of credit or 

clock hours. 

• Amending § 602.3 to include a 

definition of a ‘‘teach-out plan’’ and 

§ 602.24 to require agencies to require 

the institutions they accredit to submit 

a teach-out plan to the agency under 

certain circumstances. 

• Amending §§ 602.16, 602.17, 

602.18 and 602.27 to implement several 

new requirements pertaining to distance 

education and correspondence 

education. 

• Amending §§ 602.18, 602.23 and 

602.25 to expand due process 

requirements for agencies. 

• Amending § 602.24 to require 

agencies to confirm that institutions 

they accredit have transfer of credit 

policies. 

• Amending § 602.15 to require that 

accreditation team members be welltrained and knowledgeable about their 

responsibilities regarding distance 

education. 

• Amending § 602.19 to require that 

agencies monitor enrollment growth at 

institutions they accredit. 

• Amending § 602.26 to expand 

agency disclosure requirements. (See 

section 496(c)(7) of the HEA). 

In addition, on pages 39499 through 

39500 of the preamble to the NPRM, the 

Secretary discussed proposed changes 

to existing regulations governing 

institutional eligibility by amending the 

definition of ‘‘correspondence course’’ 

to be compatible with the new 

definition of ‘‘correspondence 

education’’ in the accrediting agency 

recognition regulations. 

Further, the Secretary discussed the 

following proposed changes to existing 

regulations governing the process for 

recognizing accrediting agencies: 

• Amending § 602.3 to include a 

definition of ‘‘recognition’’. 

• Amending §§ 602.15 and 602.27 to 

modify record-keeping and 

confidentiality requirements. 

• Amending subpart C by combining 

current subparts C and D into one 

subpart in order to streamline 

procedures for agency review; 

establishing the senior Department 

official as the deciding official, with 

appeal to the Secretary; and providing a 

list of various laws regarding public 

requests for information with which the 

Secretary must comply. 

• Amending § 602.22 to clarify 

existing requirements related to 

substantive change and add flexibility to 

accrediting agencies in granting prior 

approval of additional locations under 

specified circumstances. 

As the result of public comment, the 

final regulations contain a significant 

change in the due process provisions 

regarding appeals panels. In addition to 

these changes, these final regulations 

make a number of minor technical 

corrections and conforming changes. 

Changes that are statutory or that 

involve only minor technical 

corrections are generally not discussed 

in the Analysis of Comments and 

Changes section. 

Analysis of Comments and Changes 

The regulations in this document 

were developed through the use of 

negotiated rulemaking. Section 492 of 

the HEA requires that, before publishing 

any proposed regulations to implement 

programs under title IV of the HEA, the 

Secretary must obtain public 

involvement in the development of the 

proposed regulations. After obtaining 

advice and recommendations, the 

Secretary must conduct a negotiated 

rulemaking process to develop the 

proposed regulations. All proposed 

regulations must conform to agreements 

resulting from the negotiated 

rulemaking process unless the Secretary 

reopens that process or explains any 

departure from the agreements to the 

negotiated rulemaking participants. 

These regulations were published in 

proposed form on August 6, 2009, in 

conformance with the consensus of the 

negotiated rulemaking committee. 

Under the committee’s protocols, 

consensus meant that no member of the 

committee dissented from the agreedupon language. The Secretary invited 

comments on the proposed regulations 

by September 8, 2009. Twenty-one 

parties submitted comments. An 

analysis of the comments and the 

changes in the regulations since 

publication of the NPRM follows. 

We group major issues according to 

subject, with appropriate sections of the 

regulations referenced in parentheses. 

We discuss other substantive issues 

under the sections of the regulations to 

which they pertain. Generally, we do 

not address technical and other minor 

changes and suggested changes the law 

does not authorize the Secretary to 

make. We also do not address comments 

pertaining to issues that were not within 

the scope of the NPRM. 

Definitions 

Correspondence Course (§ 600.2) 

Comment: Several commenters 

expressed their support for the revised 

definition of ‘‘correspondence course’’ 

in 34 CFR 600.2, noting that it draws a 

useful distinction between this mode of 

educational delivery and distance 

education. 


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Discussion: We appreciate the 

commenters’ support. 

Changes: None. 

Compliance Report (§ 602.3) 

Comment: One commenter questioned 

the meaning of the phrase ‘‘demonstrate 

that the agency has addressed 

deficiencies specified’’ in the definition 

of ‘‘compliance report’’ in § 602.3. The 

commenter noted that ‘‘deficiencies’’ 

could range from an agency’s complaint 

procedure not including contact 

information to an agency’s finances 

being in precarious shape and 

questioned whether in all cases an 

agency would be expected to submit a 

compliance report. 

Discussion: The definition provides 

that a compliance report must address 

deficiencies that are specified in a 

decision letter from the senior 

Department official or the Secretary. 

The senior Department official or 

Secretary will make a judgment, based 

on the record and the recommendations 

of the Advisory Committee and staff, 

about what must be addressed in the 

compliance report. 

Changes: None. 

Recognition (§ 602.3) 

Comment: One commenter asked for 

further information about what the term 

‘‘effective’’ means in the phrase ‘‘is 

effective in its application of those 

criteria.’’ 

Discussion: The phrase ‘‘apply 

effectively’’ is taken directly from 

section 496(l) of the HEA and pertains 

to the Secretary’s recognition decision. 

‘‘Effective application’’ requires a 

demonstration on the part of the agency 

that it has followed through on its 

written policies and standards to 

provide, through its accrediting 

activities and each accrediting decision, 

a reliable judgment about the quality of 

postsecondary education. Under the 

statute, the Secretary is required to 

determine whether an agency is in 

compliance with the criteria for 

recognition. Compliance is determined 

based on a review of an agency’s 

policies and its effective application of 

those policies. The discussion regarding 

subpart C later in this preamble explains 

this concept more thoroughly. 

Changes: None. 

Other Major Issues 

Administrative and Fiscal 

Responsibilities (§ 602.15) 

Comment: Two commenters raised 

concerns about the potential for an 

increase in the volume of information 

an agency will have to maintain under 

§ 602.15(b)(2). This provision requires 

an agency to maintain records of all 

decisions made throughout an 

institution’s or program’s affiliation 

with the agency regarding the 

accreditation and preaccreditation of 

any institution or program and 

substantive changes, including all 

correspondence that is significantly 

related to those decisions. One of the 

commenters, while generally supporting 

the changes made to this section, 

requested that the Department strike the 

phrase ‘‘including all correspondence 

that is significantly related to those 

decisions;’’ and apply the requirement 

only to final agency determinations. The 

second commenter made a similar 

request. Another commenter, while 

supportive of the reduction in the 

amount of material an agency will have 

to retain over the long term, indicated 

that the description of which records 

must be retained was ambiguous. 

Another commenter raised a concern 

about the language in § 602.15(a)(2), 

regarding the requirement for an agency 

to ensure that those individuals 

conducting on-site reviews are 

adequately trained. The commenter 

stated that use of the word ‘‘trained’’ 

may lead to the Department establishing 

minimum standards for an acceptable 

training program. 

Discussion: An important change to 

this section of the regulations includes 

the change in timeframe (one full 

accreditation cycle) for which an agency 

must maintain records. Under current 

regulations, an agency must maintain 

complete and accurate records for the 

last two full accreditation or 

preaccreditation reviews of each 

institution or program it accredits. The 

amended § 602.15(b) requires the 

maintenance of records for only the last 

full accreditation or preaccreditation 

review. Additionally, the requirement 

that an agency maintain all decisions 

regarding the accreditation and 

preaccreditation of any institution or 

program, including all correspondence 

that is significantly related to those 

decisions, is not new; it has been in the 

regulations for a number of years. 

Similarly, although the current 

regulations do not explicitly mention 

documents relating to substantive 

change decisions, the requirement for 

agencies to maintain these documents 

exists under the regulatory requirement 

that agencies maintain all documents 

related to accrediting decisions and 

special reports. While the amended 

regulations now explicitly include a 

retention requirement for decisions 

relating to substantive changes, they 

create no additional burden, and the 

reduction in the number of cycles for 

which information must be maintained 

should significantly reduce the overall 

burden for agencies. 

Agencies must retain key records 

pertaining to each decision in order to 

fulfill their role as gatekeepers for 

Federal programs. Agencies have not 

always been able to provide the 

Department with information related to 

substantive changes. Given the 

significant increase in substantive 

changes over time, this documentation 

is critical. The Department does not 

agree that the description of the 

required documents is ambiguous, as an 

agency is fully aware of its requirements 

for accreditation, preaccreditation, and 

substantive change decisions and will 

be expected to retain those and the other 

required documents. 

Finally, the use of the word ‘‘trained’’ 

in § 602.15(a)(2) is not new. Current 

regulations contain the same 

requirement. The language in the new 

regulations makes clear that the training 

provided by the agency should be 

appropriate for the individual’s role. 

Changes: None. 

Accreditation and Preaccreditation 

Standards (§ 602.16) 

Comment: One commenter raised 

concerns about the effects of the 

statutory change on § 602.16(a)(1)(i). 

The statute allows an agency to apply 

different standards for different 

institutions and programs, established 

by the institution. The commenter 

expressed confusion about how this 

provision relates to existing regulatory 

language that an agency’s standards 

assess an institution’s or program’s 

success with respect to student 

achievement in relation to the 

institution’s mission and to the new 

statutory provision reflected in 

§ 602.16(f)(2). The commenter inquired 

whether an accrediting agency would be 

required to permit an institution to set 

its own standards for student 

achievement in light of a self-defined 

mission. For example, the commenter 

asked, would an agency have to permit 

an institution to set its own standards 

for job placement for an institution 

whose self-defined mission involves 

serving an economically challenged city 

or region? Further, the commenter asked 

whether an agency would be required to 

accept an institution’s demand that it 

apply different standards to one or more 

of an institution’s approved additional 

locations. A second commenter 

expressed ‘‘ardent support’’ of the 

revisions to §§ 602.16(a)(1)(i) and 

602.16(f). 

Discussion: As provided in 

§ 602.16(f)(1), an accrediting agency has 

the authority to set, with the 

involvement of its members, and to 


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apply accreditation standards for or to 

institutions or programs that seek 

review by the agency. This accrediting 

agency authority remains even if, as 

provided in § 602.16(f)(2), an institution 

develops and uses its own standards to 

demonstrate its success with respect to 

student achievement, which may be 

considered as part of any accreditation 

review. In that case, the accrediting 

agency would need to make a judgment 

about whether an institution developed 

and used reasonable standards to 

demonstrate its success with respect to 

student achievement. Likewise, an 

accrediting agency would not be 

required to accept an institution’s 

demand that it apply different standards 

to one or more of an institution’s 

approved locations. We appreciate the 

second commenter’s support. 

Changes: None. 

Distance Education and 

Correspondence Education (§ 602.17) 

Comment: None. 

Discussion: The Department 

determined that there was an error in 

§ 602.17(g)(1)(iii) with the use of the 

word ‘‘identification’’ in the phrase 

‘‘that are effective in verifying student 

identification.’’ The appropriate word to 

use in the phrase is ‘‘identity’’, not 

‘‘identification.’’ Verifying student 

identification is making certain that an 

ID card is not a fake. Verifying student 

identity is making certain that the 

student is who he or she is purporting 

to be. Under the statute, agencies are 

required to do the latter. 

Changes: Section 602.17(g)(1)(iii) has 

been amended by replacing the word 

‘‘identification’’ with the word 

‘‘identity’’. 

Comment: One commenter questioned 

whether the requirements proposed in 

§ 602.17 for verifying the identity of 

distance education and correspondence 

education students go far enough. The 

commenter noted a distinction between 

systems that verify the identity of an 

individual through the use of measures 

such as personal identification numbers 

(PINs), passwords, and knowledgebased questions, and those that 

authenticate an individual’s identity by 

means of anatomical or behavioral 

characteristics unique to the individual, 

such as fingerprints or unique patterns 

of movement. The commenter suggested 

that continued use of secure logins and 

passwords as the sole means of 

identification is inconsistent with the 

intent of the statutory change, and 

claimed that only biometric-based 

authentication can provide positive 

identification. The commenter 

described software that can be used to 

capture a student’s movements and 

create a unique biometric student 

identity that can be used to ensure that 

the person who registers for an online 

course is the person who does the work 

and receives the credit. A second 

commenter supported the proposed 

language and called the provision a 

common-sense rule. 

Discussion: The regulations governing 

verification of student identity were 

developed using information provided 

during the negotiated rulemaking 

discussions and the explanation of the 

new requirement that was included in 

the conference report accompanying the 

HEOA (H. Rep. 110–803, p. 567). In 

explaining the intent of the new 

statutory provision that agencies require 

institutions that offer distance education 

or correspondence education to have 

processes for establishing that the 

students who register for courses are the 

same students who complete the 

program and receive the credit, the 

conference report stated that institutions 

are expected to have security 

mechanisms, such as identification 

numbers or other pass code information, 

in place and to use them each time a 

student participates online. Therefore, 

the continued use of PINs and 

passwords is consistent with both the 

statutory language and the intent of the 

Congress. 

In the conference report, it is clear 

that Congress anticipated that as new 

identification technologies are 

developed and become more 

mainstream and less expensive, 

agencies and institutions would 

consider using them. For this reason, 

the regulations provide for the use of 

new technologies and practices that are 

effective in verifying the identity of 

students, in addition to methods such as 

secure logins, pass codes, and proctored 

examinations. There are at least two 

reasons for not mandating specific types 

of identity verification procedures in the 

regulations: Cost and availability. 

Different types of institutions have 

different levels of risk, and a technology 

that one institution considers necessary 

and affordable may be neither needed 

nor cost-effective at another institution. 

It would also be inappropriate for the 

Department to include specific 

institutional requirements in its 

regulations that govern the recognition 

of accrediting agencies. 

Changes: None. 

Due Process (§§ 602.18; 602.25) 

Comment: One commenter noted the 

addition to § 602.18, Ensuring 

consistency of decision making, of new 

paragraphs (a) and (e), which require 

agencies to have written specification of 

the requirements for accreditation that 

include clear standards for an 

institution or program to be accredited 

and to provide an institution or program 

with a detailed written report that 

clearly identifies any deficiencies in the 

institution’s or program’s compliance 

with the agency’s standards. This 

commenter asked about the standards 

and the reporting requirements for noncompliance that are envisioned under 

these paragraphs. The commenter asked 

whether consistency was expected 

among classrooms, programs, or 

campuses. 

Regarding the due process provisions 

set forth in § 602.25, several 

commenters recommended changes to 

the regulations governing appeals 

panels, specifically § 602.25(f)(1)(iii). A 

number of commenters provided 

alternate language. Many of the 

commenters recommended permitting 

the appeals panel to remand cases to the 

original decision-making body. Most of 

the commenters who made this 

suggestion wanted to delete the 

authority of the appeals panel to amend 

or reverse the adverse action of the 

original decision-making body; other 

commenters wanted the appeals panel 

to also have the authority to remand 

cases as a fourth option. In addition, 

most of the commenters who provided 

alternate language wanted to amend the 

language that requires the original 

decision-making body to act in a 

manner consistent with the appeals 

panel’s findings or decision, by 

requiring instead that the original 

decision-making body give deference or 

due consideration to the appeals panel’s 

decision. One commenter wanted to 

delete this language. 

The rationale provided to support the 

recommended changes varied, but there 

were several major points. Many 

commenters questioned the authority of 

the appeals panel to render a final 

decision. Several commenters suggested 

that the reading of the statute to imply 

that appeals panels have the authority to 

make final accreditation decisions 

rested solely on the lack of a comma in 

the language of the final bill. They 

claimed that the appeals panel was not 

intended to render a final adverse 

decision; rather, they claimed, the panel 

was to conduct a hearing prior to the 

final decision of the accrediting body. 

One commenter specifically stated that 

the new provisions for findings of 

appeals panels are not in the statute and 

expressed the view that the findings of 

the appeals panels would compete with 

the independent, decision-making role 

of agencies. 

One commenter opined that the new 

appeals panel provisions would create a 

problem because final accreditation 


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decisions may be made by an entity, an 

appeals panel, that is not recognized by 

the Secretary. Other commenters 

claimed that the new provision conflicts 

with regulatory provisions for 

recognition of accrediting agencies and 

said that neither the law nor the 

regulations provide for the Secretary to 

recognize appeals panels. A few 

commenters stated that requiring 

appeals panels to make decisions is 

inconsistent with the Department’s prior 

position that accreditation decisions 

may be made only by properly 

composed decision-making bodies 

recognized by the Department. Another 

commenter opined that the new 

provisions undermine the traditional 

purpose served by accrediting appeals 

and violate the independence of the 

accrediting body. 

Some commenters said the new 

requirements for appeals panels would 

impair the normal function of the 

accreditation process because even 

though accreditation decisions are based 

on a number of factors, an institution or 

program may appeal only one or two 

factors; thus, they claimed, even if those 

one or two findings are overturned, an 

adverse action may still be warranted. 

Other commenters said that an action to 

amend or reverse a decision can occur 

only if an appeals panel conducts a new 

substantive review, rather than a review 

of the decision-making process, and that 

appeals panels typically lack the 

expertise to assess content-specific 

compliance with accreditation 

standards. One commenter said that 

accrediting bodies do not produce a 

record that allows for reconsideration of 

matters of substance. Another 

commenter noted that because the 

original body conducts a significant 

amount of research and spends time 

making decisions, that body has an 

intimate and comprehensive 

understanding of the factual situation at 

hand and it would not be appropriate 

for an appeals panel to make a final 

decision. 

Commenters also expressed concern 

that decisions will be made by smaller 

and less diverse bodies, ones that 

typically meet infrequently and do not 

have the experience of the original 

decision-making body; that the new 

provision will create situations in which 

decisions of appeals panels may be 

inconsistent with other agency 

decisions; that the change to the 

regulations will lead to many 

unwarranted appeals; and that the 

change will require training of appeals 

panels. 

Several commenters supported 

allowing an appeals panel to remand a 

case to the original decision-making 

body. 

Several commenters referenced 

appellate court processes and suggested 

that some accrediting agencies might 

prefer that appeals panels remand cases 

back to the original decision-making 

body with instructions either for 

implementation of a decision or for the 

consideration of factors to be used to 

render a decision consistent with the 

appeals panel decision. 

One commenter said that providing 

the option to remand cases would 

provide more flexibility to agencies in 

developing their appeal process. This 

commenter suggested a change to 

provide agencies with the option of 

either giving appeals panels final 

decision-making authority or requiring 

that the appeals panel either affirm the 

original decision or remand the case. 

The commenter suggested that a remand 

could include a modification of the 

original decision. 

One commenter questioned whether 

reversal of a denial of recognition means 

that an appeals panel would be 

empowered to determine the period of 

accreditation. Another commenter 

appreciated the Department’s attempt to 

provide for implementation of the 

appeals panel’s decision by the original 

decision-making body, but said it was 

not clear what was meant by requiring 

that the original decision-making body’s 

action must be consistent with the 

appeals panel decision. One other 

commenter asked about the scope of 

authority retained by an accrediting 

agency that reserves the right to 

implement appeals panel decisions. 

One commenter requested that 

§ 602.25(h)(1)(iii), regarding 

reconsideration of adverse actions based 

solely on financial criteria, be deleted 

from the regulations, but cited no 

authority for the request. 

Discussion: It is important to note that 

the HEOA, in amending section 

496(a)(6) of the HEA, included the 

requirement for clear and consistent 

accreditation standards and 

specification of any deficiencies, in 

addition to providing additional 

requirements regarding the appeal 

process. Clear and consistent standards, 

which let institutions and programs 

know what they are being measured 

against, and detailed written 

descriptions of any deficiencies 

identified by the accrediting agency, are 

critical to providing an effective due 

process procedure. An agency is 

expected to apply its standards 

consistently across either the programs 

or the institutions it accredits, as 

applicable. 

The Department acknowledges that 

there are situations, such as reversal of 

a decision to withdraw accreditation, in 

which it is appropriate, and may be 

necessary, to involve the original 

decision-making body in a revised 

decision. Because of these situations, 

the Department agreed that agencies 

would have the option of giving the 

original decision-making bodies the 

responsibility to implement decisions, 

as long as the implementation was 

consistent with the appeals panel’s 

decision. However, several commenters 

made a persuasive argument that 

appeals panels should also have the 

option of remanding a case to the 

original decision-making body. 

Therefore, the language in the proposed 

regulations has been changed to give 

appeals panels the option of remanding 

cases. 

However, the Department is 

concerned that without making 

additional changes, the regulations 

would be ambiguous and subject to an 

interpretation that would allow agencies 

to write their procedures to provide that 

their appeals panels are authorized only 

to affirm a decision or order a remand. 

This reading would not be consistent 

with Congressional intent, as the appeal 

would then be simply an additional 

procedural step involving a body that 

has no ultimate authority to effect a 

change in the accrediting decision. 

Therefore, the language in the proposed 

regulations has been changed to specify 

that an appeals panel has and uses the 

authority to affirm, amend, or reverse 

adverse actions of the original decisionmaking body, and does not serve only 

an advisory or procedural role. The 

language regarding affirmation, reversal, 

or amendment reflects a straightforward 

reading of Congress’s directives to 

agencies to provide for appeals in front 

of a different decision-maker. 

The Department agrees with those 

commenters who note that the new 

regulations may necessitate changes in 

agency procedures and the structure of 

the appeals panels. To implement the 

HEOA, some agencies may need to seek 

recognition of their appeals panels. 

Appeals panels will need to meet the 

requirements for agency recognition, 

such as having a public member, as 

provided in §§ 602.14(b)(2) and 

602.15(a)(3). 

Under the HEOA, appeals panels are 

subject to a conflict of interest policy 

and may not include any current 

members of the underlying decisionmaking body that made the adverse 

decision. The Department reads these 

new provisions as reflecting 

Congressional intent that appeals panels 

be decision-making bodies that address 


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substantive matters, as necessary, not 

just matters relating to process. 

Therefore, the entire accreditation 

process, including accreditation 

decisions, must be well-documented. 

The Department recognizes that 

agencies may need to adopt new 

procedures for documenting decisions 

and to ensure that appeals panel 

members have knowledge of prior 

agency decisions so the panel’s actions 

and decisions are consistent with 

agency policies and requirements. 

Under § 602.15(a)(2), agencies also must 

provide sufficient training to appeals 

panel members to ensure that these 

members have the requisite background 

to make sound decisions. 

We disagree with the commenter who 

suggested that we remove 

§ 602.25(h)(1)(iii). This section is 

needed to implement the new statutory 

provision that an institution or program 

otherwise subject to a final adverse 

action may seek agency review of 

significant new financial information if 

it meets certain conditions, including 

that the review take place before a final 

adverse action that is based solely upon 

failure to meet financial criteria. 

Changes: Section 602.25(f)(1) has 

been amended by adding a new section 

602.25(f)(1)(iii) that requires appeals 

panels to have and use the authority to 

make decisions to affirm, amend, or 

reverse actions of the original decisionmaking body, and specifies that an 

appeals panel does not serve only an 

advisory or procedural role. Section 

602.25(f)(1)(iii) in the proposed 

regulations has been renumbered and 

amended to allow appeals panels the 

option of remanding the accrediting 

action to the original decision-making 

body. The amendments to this provision 

require that a decision to remand 

identify the specific issues to be 

addressed and that the original 

decision-making body must act in a 

manner consistent with the appeals 

panel’s decision or instructions. 

Monitoring and Reevaluation of 

Accredited Institutions and Programs 

(§ 602.19) 

Comment: Several commenters raised 

concerns about the monitoring 

provisions in § 602.19 and the impact 

the regulations would have on smaller 

accrediting agencies. These commenters 

requested that the regulations reflect the 

differences in size and scope of 

accreditors. One commenter noted that, 

although these regulations may have no 

real impact on agencies that recognize 

hundreds or thousands of institutions, 

an agency that recognizes 50 institutions 

may find them impossible to 

implement. Another commenter raised a 

different concern related to the scale of 

the monitoring required of accrediting 

agencies, stating that monitoring will 

not capture all non-compliance, and 

asked the Department to clarify its 

intent with these regulations. 

Still another commenter contended 

that the Department is exceeding its 

authority by requiring agencies to 

collect and analyze measures of student 

achievement, because the Department is 

not permitted to regulate student 

achievement. Another commenter asked 

for clarification about the 

implementation of the growth 

monitoring provisions contained in 

§ 602.19(e) of the regulations. 

Additionally, two commenters 

expressed support for the monitoring 

provisions contained in these 

regulations with one citing the ability of 

institutions to establish their own 

standards of student achievement and 

the other stating that these monitoring 

regulations will serve as a possible 

safeguard against waste, fraud, and 

abuse in the title IV student aid 

programs. 

Finally, one commenter raised a 

concern with the reporting requirement 

that applies to accrediting agencies that 

have added distance education or 

correspondence education to their scope 

of recognition by means of notification 

to the Department. The commenter 

asked if an institution that experiences 

an enrollment increase of distance 

education students from ten students to 

fifteen students must go through what 

the commenter described as an elaborate 

process. 

Discussion: These regulations 

recognize the need for flexibility raised 

by the commenters and provide this 

flexibility. The preamble to the NPRM 

addressed the Department’s desire to 

ensure flexibility for accrediting 

agencies in their monitoring of 

institutions and programs while meeting 

the intent of the law. These regulations 

reflect statutory requirements and 

provide for greater consistency in 

identifying noncompliant institutions 

and programs while also 

accommodating the differences that 

exist across institutions and programs. 

The Department recognizes that 

accrediting agencies and the institutions 

and programs they accredit are diverse. 

Therefore, in addition to providing a 

framework for monitoring, the 

Department requires each agency to 

demonstrate why the approaches it 

takes to monitoring and evaluating its 

accredited institutions or programs are 

effective given the particular 

circumstances. Moreover, we expect 

reasonable and prudent implementation 

of the statute and regulations by the 

agencies. For each institution or 

program accredited, an agency should 

consider factors such as the size of the 

institution or program, the number of 

students, the nature of the programs 

offered, past history, and other 

knowledge the agency has about that 

institution or program, including 

previous reviews. The regulatory 

language provides accrediting agencies 

with flexibility regarding their 

monitoring of institutions and programs 

and at the same time ensures they 

review and analyze key data and 

indicators. 

The Department does not agree that it 

is exceeding its authority by requiring 

an agency to monitor measures of 

student achievement. The Department is 

not specifying, defining, or prescribing 

the standards that accrediting agencies 

use to assess an institution’s success 

with respect to student achievement. 

Rather, student achievement is one of 

several areas that an agency must review 

when monitoring the institutions or 

programs it accredits. Further, under 

these regulations the approaches taken 

by the agency must be consistent with 

§ 602.16(f). This section provides that an 

agency is not restricted from setting and 

applying accreditation standards for or 

to institutions or programs seeking 

review and that an institution is not 

restricted from developing and using 

institutional standards to show its 

success with respect to student 

achievement, which achievement may 

be considered as part of any 

accreditation review. 

Finally, the growth monitoring 

provision in § 602.19(e) requires certain 

agencies to report to the Secretary 

information about any institution they 

accredit that experiences an increase in 

institutional headcount enrollment of 50 

percent or more within one institutional 

fiscal year, not a 50 percent increase in 

headcount enrollment in a particular 

program or particular educational 

delivery modality. It is important to 

note that § 602.19(e) only affects 

institutional accrediting agencies and 

predominantly programmatic 

accrediting agencies that accredit 

freestanding institutions that notify the 

Secretary of a change in scope of 

recognition to include distance 

education or correspondence education 

in accordance with § 602.27(a)(5). 

Changes: None. 

Operating Procedures All Agencies Must 

Have (§ 602.23) 

Comment: One commenter did not 

understand the rationale for the removal 

of the phrase ‘‘upon request’’ from 

§ 602.23(a), regarding making certain 

written materials and information 


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available to the public. The same 

commenter expressed support for the 

additional language added to the end of 

§ 602.23(c)(1), which seeks to ensure 

that institutions have sufficient 

opportunity to provide a response to a 

third-party complaint before an 

accrediting agency completes the review 

of the complaint and makes a decision. 

Discussion: The phrase ‘‘upon 

request’’ was removed in response to a 

statutory change. Section 496(a)(8) of 

the HEA requires agencies to make 

available to the public, upon request, a 

summary of any review resulting in a 

final accrediting decision involving 

denial, termination, or suspension of 

accreditation, together with the 

comments of the affected institution. 

Section 496(c)(7) of the HEA, which was 

added in the 2008 reauthorization, 

requires agencies to make available to 

the public a summary of agency or 

association actions, which includes a 

final denial, withdrawal, suspension, or 

termination of accreditation, and any 

findings made in connection with the 

action taken, together with the official 

comments of the affected institution. We 

consider the most recent language to 

reflect Congressional intent and, 

accordingly, made the provision of 

information to the public without a 

specific request for the information a 

regulatory requirement. We appreciate 

the support for the change to 

§ 602.23(c)(1). 

Teach-Out Plans and Agreements 

(§ 602.24) 

Comment: Two commenters noted 

that agencies must require the 

institutions they accredit to submit a 

‘‘teach-out plan’’ to the agency under 

the circumstances specified in 

§ 602.24(c)(1) and expressed concern 

that agencies may have little or no 

ability to enforce such a requirement. 

One of these commenters stated that the 

requirement is unrealistic. The other 

commenter concluded that an agency 

must have a written policy to require 

plans from all institutions that meet the 

regulatory provisions, even institutions 

that do not participate in the title IV, 

HEA programs. Regarding ‘‘teach-out 

agreements,’’ one commenter asserted 

that the regulations specify that an 

agency may not approve an agreement 

unless it is with a qualified teach-out 

institution and characterized that 

requirement as a matter over which the 

accrediting agency may have no control. 

Two commenters supported the new 

teach-out provisions. The commenters 

noted that the regulations regarding 

‘‘teach-out plans’’ and ‘‘teach-out 

agreements’’ will benefit the affected 

students and the institutions serving 

those students, as well as protect both 

their interests and the interests of 

agencies and the Department. 

Discussion: The teach-out regulations 

reflect statutory provisions in section 

496(c)(3) of the HEA. The statute does 

not distinguish between participating 

and non-participating institutions with 

regard to teach-out plan policies. 

Therefore, agencies must have a policy 

to require ‘‘teach-out plans’’ from all 

institutions that meet one of the 

circumstances described, even if the 

institution at issue does not have a 

program participation agreement with 

the Department. The Department does 

not agree with the assertion that an 

agency may lack control over the 

approval of a ‘‘teach-out agreement.’’ 

The regulations specify that agencies 

must require the institutions they 

accredit and that enter into ‘‘teach-out 

agreements’’ to submit those agreements 

for approval. The agency has control 

over whether it approves a ‘‘teach-out 

agreement,’’ and the agency may 

approve a ‘‘teach-out agreement’’ only if 

the agreement complies with the 

requirements of § 602.24(c)(5). 

Changes: None. 

Transfer of Credit (§ 602.24) 

Comment: One commenter 

recommended deleting § 602.24(e)(2), 

which requires that agencies confirm 

that institutions have transfer of credit 

policies that include a statement of the 

criteria established by the institution 

regarding the transfer of credit earned at 

another institution of higher education. 

The commenter stated that conforming 

transfer of credit policies is impossible 

due to the variety of situations in which 

transfers of credit may arise. The 

commenter also said that requiring 

institutions to specify detailed transfer 

of credit criteria could inadvertently 

reduce student mobility. Another 

commenter supported the wording in 

the proposed regulations regarding 

public disclosure of transfer of credit 

policies. 

Discussion: Section 496(c)(7) of the 

HEA requires accrediting agencies to 

confirm that an institution has transfer 

of credit policies that include a 

statement of the criteria established by 

the institution regarding the transfer of 

credit earned at another institution. The 

regulations reflect this requirement, and 

we do not have the authority to modify 

the requirement. 

Changes: None. 

Other Information an Agency Must 

Provide the Department (§ 602.27) 

Comment: Several commenters 

expressed concern about § 602.27(b). 

This provision requires any agency that 

has a policy regarding notification to an 

institution or program of contact with 

the Department, as it pertains to 

information provided to the Secretary 

about an institution it accredits failing 

to meet its title IV program 

responsibilities or possibly engaging in 

fraud or abuse, to review on a case-bycase basis the need for confidentiality of 

the contact with the Department. This 

section also requires that, in the event 

the Department specifically requests the 

contact remain confidential, the agency 

consider that contact confidential. The 

commenters stated that failing to inform 

an institution of a contact or inquiry 

made by the Department adversely 

affects the relationship between the 

institution or program and the agency 

by undermining the trust relationship 

between the two. Another commenter 

raised a concern that the changes to 

§ 602.27(b), taken together with the 

authority provided the Department in 

§ 602.27(a)(7) to request information 

that may bear upon an institution’s 

compliance with its title IV program 

responsibilities, is inconsistent with the 

obligation of an agency to allow its 

institutions to respond to allegations 

made against them. Two commenters 

requested that § 602.27(b) be removed 

and another commenter requested that 

all of § 602.27 be removed. 

Discussion: The Department 

understands and respects the need for 

an honest and open exchange between 

an institution or program and its 

accreditor. During negotiated 

rulemaking the Department agreed to 

change its initial approach to this 

regulation, which would have 

prohibited an agency from having a 

policy providing notice to an institution 

when the agency was contacted by the 

Department. We do not agree that these 

regulations, as amended, undermine the 

relationship between the accreditor and 

its institutions or programs or that the 

language is inconsistent with an 

agency’s obligation to afford its 

institutions or programs an opportunity 

to respond to allegations. Rather, they 

honor that relationship by ensuring that, 

absent a specific request for 

confidentiality from the Department, an 

agency may notify an institution of 

inquiries it receives from the 

Department as long as the agency has 

concluded, based on a careful 

consideration of the circumstances, that 

disclosure is appropriate. Moreover, the 

Department also has a fiduciary 

responsibility to protect the Federal 

fiscal interest as well as the interest of 

students. These regulations ensure that 

the Federal fiscal interest is not put at 

risk by compromising the Department’s 


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investigations of potential fraud or 

abuse in the title IV programs. As a 

condition of participating in the title IV 

programs, each institution 

acknowledges the authority of the 

Department, accrediting agencies, and 

other gatekeepers to share information 

about the institution. 

Changes: None. 

Subpart C—The Recognition Process 

Comment: Several commenters asked 

for clarification about how Department 

staff will evaluate an agency’s effective 

application of its standards. One 

commenter expressed concern about the 

subjectivity of the evaluation and the 

lack of bright-line standards for 

Department staff to enforce. Another 

commenter asked for clarification about 

what constituted the submission of 

‘‘evidence, including documentation’’ 

under § 602.31(a)(2) and expressed 

concern that the requirement to provide 

evidence to Department staff could 

evolve into an unreasonable 

requirement for agencies. 

Discussion: The concept of ‘‘effective 

application’’ comes from section 496(l) 

of the HEA and is not new. It is 

discussed here alongside the provision 

of evidence because the two concepts 

are related. The phrase ‘‘effective 

application’’ in these new regulations 

replaces the phrase ‘‘performance with 

respect to the criteria’’ in the current 

regulations. The Department selected 

the phrase ‘‘effective application’’ based 

on its origin in the statute and its greater 

specificity in describing the standard for 

an agency’s compliance. The 

Department’s evaluation of an agency is 

based on a review of the evidence 

provided by the agency that it has 

compliant policies and standards and 

that it effectively applies those 

standards. 

Evidence is submitted primarily in 

the form of documentation that 

substantiates the agency’s claim that it 

effectively applies its standards. For 

example, agencies provide sample selfstudies and team reports to substantiate 

that they apply their policies for 

requiring an in-depth self-study and an 

on-site review of their institutions or 

programs. Evidence may also be in the 

form of direct observation by 

Department staff during its on-site 

reviews of an agency’s decision meeting 

or training session. Although testimony, 

written or oral, may accompany an 

agency’s application for initial or 

continued recognition, a description of 

processes alone does not meet the 

Department’s standard for evidence. 

This is illustrated in the example of an 

agency seeking initial recognition that 

provides evidence of policies and 

standards that appear to be compliant 

but that, upon further examination, are 

not effectively applied. Accordingly, 

review of whether agency standards are 

effectively applied is critical to ensure 

the quality of training and education 

offered by institutions and programs 

accredited by agencies that are 

recognized by the Secretary. 

The concept of ‘‘effective application’’ 

also allows for a reasonable degree of 

judgment in cases where a particular 

policy involves circumstances that do 

not occur with any regularity. For 

example, an agency may have compliant 

‘‘teach-out’’ policies, but its accredited 

institutions may never have had to 

submit a teach-out plan or agreement for 

approval by the agency. In this example, 

no evidence of application of standards 

would be necessary. 

The standard for evaluating an 

agency’s ‘‘effective application of 

standards’’ on the basis of ‘‘evidence, 

including documentation,’’ strikes a 

balance between the commenters’ 

concerns about the absence of brightline standards and the potential for 

unreasonable standards of evidence. 

Changes: None. 

Comment: One commenter objected to 

the entirety of subpart C and suggested 

that no changes be made to the current 

regulations. 

Discussion: Changes to subpart C were 

necessary to incorporate the new 

provisions of the HEA, including the 

procedures for review of agencies that 

have expanded their scope of 

recognition by notice, following receipt 

by the Department of information of an 

increase in headcount enrollment, and 

the authority of the National Advisory 

Committee on Institutional Quality and 

Integrity (‘‘NACIQI’’) in establishing the 

agenda. Other changes were necessary 

because the current regulations do not 

include procedures for review of 

applications for expansion of scope, 

procedures for review of agencies 

during the period of recognition, appeal 

procedures, and procedures for review 

of compliance reports defined under 

§ 602.3. Subpart C outlines and clarifies 

these procedures, making the 

Department’s review process more 

transparent and increasing due process 

for agencies. 

Changes: None. 

Comment: Several commenters raised 

concerns about § 602.31(f), which 

clarifies the limits on the Department’s 

ability to keep confidential records 

submitted to the Department for the 

purposes of agency recognition by the 

Secretary. Some commenters stated 

their belief that all information 

institutions provide to their accreditors 

is subject to public disclosure. Other 

commenters stated their belief that the 

regulations require all documents 

submitted to the Department to be 

available for public disclosure via the 

Freedom of Information Act (FOIA). 

Some commenters want the Department 

to change the regulations to permit 

Department review of necessary 

documents to occur at agency offices, 

instead of requiring submission of the 

documents to the Department. Another 

commenter suggested that documents be 

submitted to the Department and later 

returned to the agency without copies 

being made or maintained by the 

Department. 

Discussion: The commenters 

misunderstand the requirements of 

§ 602.31(f). The regulation applies to 

records the Department obtains during 

an agency’s recognition proceedings, not 

to all documents an institution submits 

to its accrediting agency. The 

Department must comply with the HEA, 

the FOIA, the Federal Advisory 

Committee Act (FACA), and other 

applicable laws. These regulations 

reference the most commonly invoked 

of public disclosure laws and state that 

an agency may designate or identify 

information that the agency believes in 

good faith is exempt from disclosure in 

the event of a FOIA request. The 

regulations also make clear that agencies 

should submit only those documents 

required for Department review or 

specifically requested by Department 

officials. 

The Department understands the need 

for confidentiality between institutions 

and accrediting agencies. However, it is 

necessary for the Department both to 

maintain a complete and accurate 

record of documents to substantiate its 

review, and to comply with FOIA and 

other disclosure laws. The regulations 

provide several methods an agency can 

use to make it less likely that sensitive 

information it provides in recognition 

proceedings about the institutions or 

programs it accredits will be publicly 

disclosed, including redacting 

information that would identify 

individuals or institutions that is not 

essential to the Department’s review of 

the agency. 

Changes: None. 

Executive Order 12866 

Regulatory Impact Analysis 

Under Executive Order 12866, the 

Secretary must determine whether the 

regulatory action is ‘‘significant’’ and 

therefore subject to the requirements of 

the Executive Order and subject to 

review by the Office of Management and 

Budget (OMB). Section 3(f) of Executive 

Order 12866 defines a ‘‘significant 


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regulatory action’’ as an action likely to 

result in a rule that may (1) have an 

annual effect on the economy of $100 

million or more, or adversely affect a 

sector of the economy, productivity, 

competition, jobs, the environment, 

public health or safety, or State, local or 

Tribal governments or communities in a 

material way (also referred to as an 

‘‘economically significant’’ rule); (2) 

create serious inconsistency or 

otherwise interfere with an action taken 

or planned by another agency; (3) 

materially alter the budgetary impacts of 

entitlement 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. 

Pursuant to the terms of the Executive 

Order, it has been determined that this 

final regulatory action will not have an 

annual effect on the economy of more 

than $100 million. Therefore, this action 

is not ‘‘economically significant’’ and 

not subject to OMB review under 

section 3(f)(1) of Executive Order 12866. 

Notwithstanding this determination, the 

Secretary has assessed the potential 

costs and benefits of this regulatory 

action and has determined that the 

benefits justify the costs. 

Need for Federal Regulatory Action 

As discussed in the proposed 

regulations, these regulations are 

needed to implement the provisions of 

the HEA, as amended. In particular, 

these regulations address the provisions 

related to the recognition of accrediting 

agencies by the Secretary. 

In addition, these regulations are 

needed to ensure that the Department 

fulfills its fiduciary responsibility 

regarding the appropriate use of Federal 

funds made available by the Department 

to institutions of higher education under 

title IV of the HEA. The Secretary grants 

recognition to accrediting agencies that 

are considered by the Department to be 

reliable authorities regarding the quality 

of education or training offered by the 

institutions or programs they accredit. 

Congress requires that an institution of 

higher education be accredited by an 

agency recognized by the Secretary in 

order to receive Federal funds 

authorized under title IV, HEA 

programs. 

Regulatory Alternatives Considered 

Alternatives to the regulations were 

considered as part of the rulemaking 

process. These alternatives were 

reviewed in detail in the preamble to 

the proposed regulations under both the 

Regulatory Impact Analysis and the 

Reasons sections accompanying the 

discussion of each proposed regulatory 

provision. To the extent that they were 

addressed in response to comments 

received on the proposed regulations, 

alternatives are also considered 

elsewhere in the preamble to these final 

regulations under the Discussion 

sections related to each provision. No 

comments were received related to the 

Regulatory Impact Analysis discussion 

of these alternatives. 

As discussed above in the Analysis of 

Comments and Changes section, the 

final regulations reflect statutory 

amendments included in the HEOA and 

one substantive revision made in 

response to public comments. The 

change did not result in revisions to cost 

estimates prepared for and discussed in 

the Regulatory Impact Analysis of the 

proposed regulations. 

Benefit-Cost Analysis 

Benefits 

The benefits of these final regulations 

include: ensuring that accrediting 

agencies are reliable authorities as to the 

quality of education or training offered 

by an institution or program they 

accredit; ensuring that the Department 

fulfills its fiduciary responsibility for 

institutional funding under title IV, 

HEA programs; and establishing 

consistency between statutory language 

and regulatory language. An additional 

benefit of the final regulations is 

providing accrediting agencies with 

greater clarity on regulations regarding 

the following: distance and 

correspondence education; accreditation 

team members; transfer of credit; teachout plan approval; definition of 

recognition; demonstration of 

compliance; recognition procedures, 

including procedures for NACIQI; direct 

assessment programs; monitoring; 

substantive change; record keeping and 

confidentiality; and due process and 

appeals. 

Costs 

These final regulations do not require 

accrediting agencies and institutions to 

develop new disclosures, materials, or 

accompanying dissemination processes. 

Other regulations generally require 

discrete changes in specific parameters 

associated with existing guidance rather 

than wholly new requirements. Overall, 

the Department believes that accrediting 

agencies wishing to continue to be 

recognized by the Secretary and 

institutions wishing to continue to 

participate in title IV, HEA programs 

have already absorbed most of the 

administrative costs related to 

implementing these final regulations. 

Marginal costs over this baseline are 

primarily related to one-time changes 

that are not expected to be significant. 

Elsewhere in this SUPPLEMENTARY

INFORMATION section we identify and 

explain burdens specifically associated 

with information collection 

requirements. See the heading 

Paperwork Reduction Act of 1995. 

Accounting Statement 

In Table 1, we have prepared an 

accounting statement showing the 

classification of the expenditures 

associated with the provisions of these 

final regulations. As shown in the table, 

the Department estimates that these 

final regulations will increase 

expenditure by accrediting agencies, 

institutions of higher education, and the 

Department by a total of $114,850. 

TABLE 1—ESTIMATED EXPENDITURES

ASSOCIATED WITH THE PROVISIONS

OF FINAL REGULATIONS

Entity Costs 

U.S. Department of Education ..... $55,300 

Accrediting agencies and institutions of higher education .......... 59,550 

Total .............................................. 114,850 

Regulatory Flexibility Act Certification 

The Secretary certifies that these final 

regulations will not have a significant 

economic impact on a substantial 

number of small entities. These final 

regulations affect accrediting agencies 

and institutions of higher education that 

participate in title IV, HEA programs. 

The U.S. Small Business Administration 

(SBA) Size Standards define 

organizations as ‘‘small entities’’ if they 

are for-profit or nonprofit organizations 

with total annual revenue below 

$5,000,000 or if they are organizations 

controlled by governmental entities 

with populations below 50,000. 

A significant percentage of the 

accrediting agencies and institutions 

participating in title IV, HEA programs 

meet the definition of ‘‘small entities’’. 

The Department estimates that 

approximately 40 accrediting agencies 

and 2,310 postsecondary institutions 

meet the definition of ‘‘small entity’’. 

While these accrediting agencies and 

institutions fall within the SBA size 

guidelines, these final regulations do 

not impose significant new costs on 

these entities. Specific burden concerns 

are discussed in more detail elsewhere 

in this preamble, primarily in the 

Paperwork Reduction Act of 1995 

section. 


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Paperwork Reduction Act of 1995 

Sections 602.15, 602.19, 602.24, 

602.25, 602.26, 602.27, 602.31, and 

602.32 contain information collection 

requirements. Under the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

3507(d)), the Department has submitted 

a copy of these sections to OMB for its 

review. 

Section 602.15—Administrative and 

Fiscal Responsibilities 

The final regulations require 

accrediting agencies to demonstrate 

certain administrative responsibilities, 

including maintenance of all accrediting 

documentation for each institution or 

program the agency accredits from the 

last full accreditation or 

preaccreditation review and all 

documents regarding substantive change 

decisions. 

The Department has determined that 

this modification to the current 

document retention requirements 

reduces the administrative burden to 

maintenance of only one full 

accreditation or preaccreditation review. 

Although this represents a reduction of 

the burden on agencies under OMB 

Control Number 1840–0788, the 

reduced hours for maintaining only one 

complete review cycle are negligible 

because the agencies already collect the 

information. 

Section 602.19—Monitoring and 

Reevaluation of Accredited Institutions 

and Programs 

The final regulations require agencies 

to collect data to ensure that the 

institutions they accredit remain in 

compliance with their accrediting 

standards. Agencies must periodically 

collect and analyze key data and 

indicators, identified by the agency, 

including, but not limited to, fiscal 

information and measures of student 

achievement. 

In addition, the final regulations 

require agencies to annually monitor the 

enrollment growth of institutions or 

programs they accredit. 

The final regulations also require 

accrediting agencies that expanded their 

scope to include distance education or 

correspondence education by notice to 

the Secretary to monitor enrollment 

growth of the institutions they accredit 

that offer distance education or 

correspondence education. These 

agencies must report to the Department, 

within 30 days, any institution that 

experiences enrollment growth of 50 

percent or more during a fiscal year. The 

regulation only affects institutional 

accrediting agencies and programmatic 

accrediting agencies that accredit 

freestanding institutions that currently 

do not have distance education in their 

scope of recognition. 

The Department estimates that the 

final monitoring regulations will 

increase burden on accrediting agencies 

by a total of 182 hours under OMB 

Control Number 1840–0788. 

Section 602.24—Additional Procedures 

Certain Institutional Accreditors Must 

Have 

The final regulations mandate that an 

accrediting agency require an institution 

it accredits to submit a teach-out plan 

for approval by the accrediting agency if 

any of following events occurs: The 

Department initiates an emergency 

action against an institution, or an 

action by the Secretary to limit, 

suspend, or terminate an institution 

participating in any title IV, HEA 

program; the accrediting agency acts to 

withdraw, terminate, or suspend the 

accreditation or preaccreditation of the 

institution; the institution notifies the 

agency that it intends to cease 

operations entirely or close a location 

that provides one hundred percent of at 

least one program; or a State licensing 

or authorizing agency notifies the 

agency that an institution’s license or 

legal authorization to provide an 

educational program has been or will be 

revoked. If the teach-out plan requires a 

teach-out agreement, the regulations 

identify the components of the teach-out 

agreement. 

The Department estimates that the 

requirements related to submission of 

teach-out plans in the final regulations 

will place an additional burden on 70 

institutions each year for a total of 280 

hours under OMB Control Number 

1840–0788. 

Section 602.25—Due Process 

The final regulations provide for an 

institution’s or program’s right to appeal 

any adverse accrediting agency action 

before an appeals panel that is subject 

to a conflict of interest policy and does 

not contain members of the underlying 

decision-making body. An institution or 

program is provided a right for the 

review of new financial information, if 

it meets certain conditions, before the 

accrediting agency takes a final adverse 

action. 

The Department estimates that the 

appeals process in the final regulations 

will increase the burden on accrediting 

agencies by 3,050 hours under OMB 

Control Number 1840–0788. 

Section 602.26—Notification of 

Accrediting Decisions 

The final regulations require agencies 

to provide a written notice to the 

Secretary of any final decision that is 

considered by the agency to be an 

adverse action and of final decisions 

withdrawing, suspending, revoking, or 

terminating an institution’s or program’s 

accreditation or preaccreditation. 

Agencies are also required to make 

available to the Secretary and the public 

a statement regarding the reasons for 

withdrawing, suspending, revoking, or 

terminating an institution’s or program’s 

accreditation or preaccreditation. The 

statement must include either the 

official comments from the affected 

institution or program regarding that 

decision or evidence that the affected 

institution or program was offered the 

opportunity to provide comments. 

The Department has determined that 

the notification requirements in the 

final regulations do not represent any 

additional burden on accrediting 

agencies under OMB Control Number 

1840–0788. 

Section 602.27—Other Information an 

Agency Must Provide the Department 

The final regulations require an 

accrediting agency to provide to the 

Secretary a copy of any annual report it 

prepares, an updated directory of its 

accredited institutions and programs, 

any proposed changes to its policies, 

procedures, or accreditation standards 

that might alter its scope of recognition 

or compliance with the Criteria for 

Recognition, and a notification if it is 

changing its scope of recognition to 

include distance education or 

correspondence education. Further, if 

requested by the Secretary, an agency 

must provide a summary of the major 

accrediting activities conducted during 

the year. The final regulations also 

require an accrediting agency to provide 

to the Department, if the Secretary 

requests, any information regarding an 

institution’s compliance with its title IV, 

HEA program responsibilities. The final 

regulations remove the requirement for 

institutional accrediting agencies, and 

programmatic accrediting agencies that 

accredit freestanding institutions, to 

submit an application to the Department 

if an agency wishes to add distance 

education or correspondence education 

to its scope of recognition; the final 

regulations only require agencies to 

notify the Department that its scope has 

been changed to include distance 

education or correspondence education. 

The Department estimates the 

reporting burden on accrediting 

agencies will be reduced by 300 hours 

under OMB Control Number 1840–0788. 


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Section 602.31—Agency Submissions to 

the Department 

The final regulations require 

accrediting agencies to submit an 

application for recognition or renewal of 

recognition at the end of the period of 

recognition granted by the Secretary, 

generally every five years, and clarify 

what documents should be provided 

with an agency’s application for 

recognition. The application must 

demonstrate that the agency complies 

with the Department’s Criteria for 

Recognition as defined in CFR 34 part 

602. The final regulations also specify 

that accrediting agencies that wish to 

expand their scope of recognition must 

submit an application to the Secretary 

and describe the contents of the 

application. They further require 

agencies to provide a compliance report 

when it has been determined that they 

do not fully comply with the criteria for 

recognition or are ineffective in 

applying those criteria. In order for the 

Secretary to determine that agencies are 

reliable authorities regarding the quality 

of education or training offered by their 

accredited institutions or programs, 

agencies must demonstrate that they 

fully comply with 34 part 602, subpart 

B. Therefore, although no requirement 

to submit a compliance report exists in 

the current regulations, the language 

reflects the existing practice of the 

Department. 

The final regulations also require 

agencies that notify the Department that 

they are changing their scope of 

recognition to include distance 

education or correspondence education 

to annually monitor enrollment growth 

of the institutions they accredit that 

offer distance education. Agencies must 

submit a report to the Department for 

each institution that reports a 50 percent 

or higher increase of headcount 

enrollment during a fiscal year. The 

report must address the capacity of each 

institution to accommodate significant 

growth in enrollment and to maintain 

educational quality; the circumstances 

that led to the growth; and any other 

applicable information affecting 

compliance with the regulation. This 

provision of the final regulations will 

only affect the 15 institutional 

accrediting agencies and programmatic 

accrediting agencies that accredit 

freestanding institutions that currently 

do not have distance education in their 

scope of recognition. 

The Department estimates that the 

requirements for submitting information 

to the Department in the final 

regulations will increase the burden on 

accrediting agencies by 60 hours under 

OMB Control Number 1840–0788. 

Section 602.32—Procedures for 

Department Review of Applications for 

Recognition or for Change in Scope, 

Compliance Reports, and Increases in 

Enrollment 

The final regulations require the 

Department to forward to the agency a 

draft analysis of an agency’s application 

for recognition that includes any 

identified areas of non-compliance, the 

proposed recognition recommendation, 

and a copy of all third-party comments 

that the Department received. The 

agency will then provide a written 

response to the draft staff analysis and 

the third-party comments. The current 

regulations also require that the 

Department invite accrediting agencies 

to provide a written response to all draft 

analyses developed by Department staff 

as well as all third-party comments 

received by the Department. 

The procedures for the review of 

applications in the final regulations will 

not impose a new reporting burden on 

agencies under OMB Control Number 

1840–0788. 

Collection of Information 

Consistent with the discussion in this 

Paperwork Reduction Act of 1995 

section, the following chart describes 

the sections of the final regulations 

involving information collections, the 

information being collected, and the 

collections that the Department has 

submitted or will submit to the Office of 

Management and Budget for approval 

and public comment under the 

Paperwork Reduction Act of 1995. 

Regulatory 

section Information section Collection 

602.15 ................ Accrediting agencies must demonstrate certain administrative responsibilities, including maintenance of all accrediting documentation for each institution from 

the last full accreditation or preaccreditation review. Previously, agencies were 

required to maintain this information covering the previous two accreditation or 

preaccreditation reviews. Although the current regulation does not explicitly 

mention documents relating to substantive change decisions, the requirement 

for agencies to maintain these documents was covered under the current regulation’s requirement to maintain all documents related to accrediting decisions 

and special reports. A substantive change request would be considered a special report that had to be submitted to the agency for a decision. Further, an 

agency’s decision regarding the substantive change request was, in fact, an accreditation decision and was reflected in a decision letter that either allowed the 

substantive change to be covered under the agency’s grant of accreditation or 

denied the request and did not allow the change to be covered under the agency’s grant of accreditation. Section 496(c)(1) of the HEA.

OMB 1840–0788—Although this represents a reduction of the burden on 

agencies under OMB Control Number 

1840–0788, since the agencies already collect the information, the reduced hours for maintaining only one 

complete review cycle is negligible. 

602.19(b) ........... Agencies must collect data to ensure that the institutions or programs they accredit remain in compliance with their accrediting standards. The final regulations clarify the language in the current regulations regarding the data agencies 

should collect to ensure that institutions and programs remain in compliance 

with their accrediting standards. Section 496(a)(4)(A) of the HEA.

OMB 1840–0788—There is no additional 

paperwork burden associated with this 

section of the regulation. 

602.19(c) ........... Agencies must monitor the enrollment growth of institutions each year. The final 

regulations represent a change in the information that accrediting agencies 

must collect. They require that agencies collect information to monitor enrollment growth for the institutions or programs that they accredit. Section 

496(c)(2) of the HEA.

OMB 1840–0788—It is estimated that 

this regulation would increase the burden to the 61 recognized accrediting 

agencies by 122 hours. 


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Regulatory 

section Information section Collection 

602.19(e) ........... Accrediting agencies that expand their scope to include distance education or 

correspondence education by notice to the Secretary must monitor enrollment 

growth of institutions that offer distance education or correspondence education 

and report to the Department, within 30 days, any institution that experiences 

enrollment growth of 50 percent or more during a fiscal year. Section 496(q) of 

the HEA.

OMB 1840–0788—It is estimated that 

this regulation would increase the burden for 15 of the remaining recognized agencies by 60 hours if all decided to include distance education in 

their scope of recognition in the future. 

602.24 ................ Institutions are required to submit a teach-out plan to their accrediting agency. 

Approximately 70 institutions per year will be required to do so. Most of the institutions and locations that close offer only one or two programs. For some institutions, the plan will be very simple: The institution will teach out its students. 

For other institutions, preparing a plan may involve doing some research to determine what nearby schools offer similar programs but in most cases, the institution will already know, as the nearby schools will have been their competitors. 

In a few cases, more work may be needed to develop a plan. Given the wide 

variety of situations, our best estimate is that the average amount of time needed to complete a plan is four hours. Therefore, the total amount of time is 280 

hours (70 institutions x 4 hours).

OMB 1840–0788—It is estimated that 

this regulation would increase the burden on 70 institutions each year for a 

total of 280 hours. 

602.25(f) ............ The final regulations provide institutions and programs with a right to appeal any 

adverse accrediting agency action before an appeals panel that is subject to a 

conflict of interest policy and does not contain members of the underlying decision-making body.

Agencies are already required to have an appeal process; the negligible burden 

is estimated to be 610 hours, which is based on 61 accrediting agencies x 10 

hours.

OMB 1840–0788—It is estimated that 

this regulation would increase the burden on 61 accrediting agencies primarily in the first year of implementation for a total of 610 hours. 

602.25(h) ........... The final regulations provide institutions and programs with a right to seek review 

of new financial information, if it meets current provisions, before the accrediting agency takes a final adverse action. The estimated burden is associated 

primarily with implementing the regulation in the initial year as agencies establish new procedures. The time is estimated to be 2440 hours, based on 61 accrediting agencies x 40 hours.

OMB 1840–0788—It is estimated that 

this regulation would increase the burden on 61 accrediting agencies primarily in the first year of implementation for a total of 2440 hours. 

602.26(b) ........... Agencies must provide a written notice to the Secretary of any final decision that 

is considered by the agency to be an adverse action as well as final decisions 

withdrawing, suspending, revoking, or terminating an institution’s or program’s 

accreditation or preaccreditation. Section 496(c)(7) of the HEA.

OMB 1840–0788—There is no additional 

paperwork burden associated with this 

section of the regulation. 

602.26(d) ........... Agencies are required to make available to the Secretary and the public a statement regarding the reasons for withdrawing, suspending, revoking, or terminating an institution’s or program’s accreditation or preaccreditation. The statement must include any comments that affected institutions or programs want to 

make with regard to that decision or evidence that the institution or program 

was offered the opportunity to provide official comments. The final regulations 

clarify the requirements and add a requirement that the statement must provide 

evidence that an institution or program was offered an opportunity to provide 

comments if no comments were received. Section 496(c)(7) of the HEA.

OMB 1840–0788—There is no additional 

paperwork burden associated with this 

section of the regulation. 

602.27(a) ........... Every agency must provide to the Secretary a copy of any annual report it prepares, an updated directory of its accredited institutions and programs, any proposed changes in an agency’s policies procedures or accreditation standards 

that might alter its scope of recognition or compliance with the Criteria for Recognition, and a notification if it is changing its scope of recognition to include 

distance education or correspondence education. Further, if requested by the 

Secretary, agencies must provide a summary of the major accrediting activities 

conducted during the year. The final regulations also require agencies to provide to the Department, if the Secretary requests, any information regarding an 

institution’s compliance with its title IV, HEA program responsibilities. Although 

the final regulations primarily clarify language that is in the current regulations, 

the changes would impact the reporting requirement regarding adding distance 

education or correspondence education to an agency’s scope of recognition. 

The final regulations would remove the requirement for institutional accrediting 

agencies to submit an application to the Department if an agency wished to 

add distance education or correspondence education to its scope of recognition 

and only require agencies to notify the Department that its scope has been 

changed to include distance education or correspondence education. Sections 

496(a)(4) and 487(a)(15) of the HEA.

OMB 1840–0788—It is estimated that 

burden on the 15 agencies that would 

be affected by the final regulations 

would be reduced by 300 hours if all 

the agencies decided to add distance 

education or correspondence education to their scope of recognition. 

602.31(a) ........... Accrediting agencies must submit an application for recognition or renewal of recognition at the end of the period of recognition granted by the Secretary, generally every five years. The application must demonstrate that the agency complies with the Department’s Criteria for Recognition as defined in CFR 34 part 

602. The final regulations clarify what documents should be provided with an 

agency’s application for recognition. Section 496(d) of the HEA.

OMB 1840–0788—There is no additional 

paperwork burden associated with this 

section of the regulation. 


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Federal Register / Vol. 74, No. 206 / Tuesday, October 27, 2009 / Rules and Regulations 55425 

Regulatory 

section Information section Collection 

602.31(b) ........... Accrediting agencies that wish to expand their scope of recognition must submit 

an application to the Secretary. The requirement does not place any additional 

reporting burden on accrediting agencies since the current regulations also require the submission of an application when an agency seeks to expand its 

scope of recognition. Section 496(a)(4)(B) of the HEA.

OMB 1840–0788—There is no additional 

paperwork burden associated with this 

section of the regulation. 

602.31(c) ........... Accrediting agencies must provide a compliance report when it has been determined that they do not fully comply with the criteria for recognition or are ineffective in applying those criteria. In order for the Secretary to determine that 

agencies are reliable authorities regarding the quality of education or training 

offered through by their accredited institutions or programs, agencies must 

demonstrate that they fully comply with 34 part 602 subpart B. Therefore, while 

the requirement to submit a compliance report is not identified in the current 

regulation, the final regulations place in writing what has been the practice of 

the Department in order to comply with Higher Education Act, as amended. 

Sections 496(a) and (c) of the HEA.

OMB 1840–0788—There is no additional 

paperwork burden associated with this 

section of the regulation. 

602.31(d) ........... Agencies that notify the Department that they are changing their scope of recognition to include distance education or correspondence education must annually monitor enrollment growth of the institutions they accredit that offer distance education and submit a report to the Department for each institution that 

reports a 50 percent or higher increase of headcount enrollment during a fiscal 

year. The report must address the capacity of each institution to accommodate 

significant growth in enrollment and to maintain educational quality; the circumstances that led to the growth; and any other applicable information affecting compliance with the regulation. These final regulations would only affect the 

15 institutional accrediting agencies and programmatic accrediting agencies 

that accredit freestanding institutions that currently do not have distance education in their scope of recognition. Section 496(a)(4)(B) and (q) of the HEA.

OMB 1840–0788—It is estimated that 

this regulation would increase the burden of 15 of the remaining recognized 

agencies by 60 hours if all decided to 

include distance education in their 

scope of recognition in the future. 

Based on prior experiences with institutions experiencing significant growth, 

the burden is estimated to apply to 3 

institutions per year. 

602.32 ................ The Department forwards to the agency a draft analysis of an agency’s application for recognition that includes any identified areas of non-compliance, the 

proposed recognition recommendation, and a copy of all third-party comments 

that the Department received. The agency could then provide a written response to the draft staff analysis and the third-party comments. The final regulations simplify the language of the current regulations, which also require the 

Department to invite accrediting agencies to provide a written response to all 

draft analyses developed by Department staff as well as all third-party comments received by the Department. Section 496(o) of the HEA.

OMB 1840–0788—There is no additional 

paperwork burden associated with this 

section of the regulation. 

Assessment of Educational Impact 

In the NPRM, we requested comments 

on whether the proposed regulations 

would require transmission of 

information that any other agency or 

authority of the United States gathers or 

makes available. 

Based on the response to the NPRM 

and on our review, we have determined 

that these final regulations do not 

require transmission of information that 

any other agency or authority of the 

United States gathers or makes 

available. 

Electronic Access to This Document 

You may view this document, as well 

as all other Department of Education 

documents published in the Federal 

Register, in text or Adobe Portable 

Document Format (PDF) on the Internet 

at the following site: http://www.ed.gov/ 

news/fedregister. 

To use PDF you must have Adobe 

Acrobat Reader, which is available free 

at this site. If you have questions about 

using PDF, call the U.S. Government 

Printing Office (GPO), toll free, at 1– 

888–293–6498; or in the Washington, 

DC, area at (202) 512–1530. 

Note: The official version of this document 

is the document published in the Federal 

Register. Free Internet access to the official 

edition of the Federal Register and the Code 

of Federal Regulations is available on GPO 

Access at: http://www.gpoaccess.gov/nara/ 

index.html. 

(Catalog of Federal Domestic Assistance 

Number does not apply.) 

List of Subjects in 34 CFR Parts 600 and 

602 

Colleges and universities, Education, 

Reporting and recordkeeping 

requirements. 

Dated: October 15, 2009. 

Arne Duncan, 

Secretary of Education. 

■ For the reasons discussed in the 

preamble, the Secretary amends parts 

600 and 602 of title 34 of the Code of 

Federal Regulations as follows: 

PART 600—INSTITUTIONAL 

ELIGIBILITY UNDER THE HIGHER 

EDUCATION ACT OF 1965, AS 

AMENDED 

■ 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. 

■ 2. Section 600.2 is amended by: 

■ A. Revising the definition of 

Correspondence course. 

■ B. Adding in alphabetical order a new 

definition of Distance education. 

■ C. Removing the definition of 

Telecommunications course. 

The addition and revision read as 

follows: 

§ 600.2 Definitions. 

* * * * * 

Correspondence course: (1) A course 

provided by an institution under which 

the institution provides instructional 

materials, by mail or electronic 

transmission, including examinations 

on the materials, to students who are 

separated from the instructor. 

Interaction between the instructor and 

student is limited, is not regular and 

substantive, and is primarily initiated 

by the student. Correspondence courses 

are typically self-paced. 

(2) If a course is part correspondence 

and part residential training, the 

Secretary considers the course to be a 

correspondence course. 


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(3) A correspondence course is not 

distance education. 

* * * * * 

Distance education means education 

that uses one or more of the 

technologies listed in paragraphs (1) 

through (4) of this definition to deliver 

instruction to students who are 

separated from the instructor and to 

support regular and substantive 

interaction between the students and 

the instructor, either synchronously or 

asynchronously. The technologies may 

include— 

(1) The internet; 

(2) One-way and two-way 

transmissions through open broadcast, 

closed circuit, cable, microwave, 

broadband lines, fiber optics, satellite, 

or wireless communications devices; 

(3) Audio conferencing; or 

(4) Video cassettes, DVDs, and CD– 

ROMs, if the cassettes, DVDs, or CD– 

ROMs are used in a course in 

conjunction with any of the 

technologies listed in paragraphs (1) 

through (3) of this definition. 

* * * * * 

PART 602—THE SECRETARY’S 

RECOGNITION OF ACCREDITING 

AGENCIES 

■ 3. The authority citation for part 602 

continues to read as follows: 

Authority: 20 U.S.C. 1099b, unless 

otherwise noted. 

■ 4. Section 602.3 is amended by: 

■ A. Adding in alphabetical order a new 

definition of Compliance report. 

■ B. Adding in alphabetical order a new 

definition of Correspondence education. 

■ C. Adding in alphabetical order a new 

definition of Designated Federal 

Official. 

■ D. Adding in alphabetical order a new 

definition of Direct assessment program. 

■ E. Revising the definition of Distance 

education. 

■ F. Adding in alphabetical order a new 

definition of Recognition. 

■ G. Revising paragraph (5) of the 

definition of Scope of recognition. 

■ H. Revising the definition of Teachout agreement. 

■ I. Adding in alphabetical order a new 

definition of Teach-out plan. 

The additions and revisions read as 

follows: 

§ 602.3 What definitions apply to this part? 

* * * * * 

Compliance report means a written 

report that the Department requires an 

agency to file to demonstrate that the 

agency has addressed deficiencies 

specified in a decision letter from the 

senior Department official or the 

Secretary. 

Correspondence education means: 

(1) Education provided through one or 

more courses by an institution under 

which the institution provides 

instructional materials, by mail or 

electronic transmission, including 

examinations on the materials, to 

students who are separated from the 

instructor. 

(2) Interaction between the instructor 

and the student is limited, is not regular 

and substantive, and is primarily 

initiated by the student. 

(3) Correspondence courses are 

typically self-paced. 

(4) Correspondence education is not 

distance education. 

Designated Federal Official means the 

Federal officer designated under section 

10(f) of the Federal Advisory Committee 

Act, 5 U.S.C. Appdx. 1. 

Direct assessment program means an 

instructional program that, in lieu of 

credit hours or clock hours as a measure 

of student learning, utilizes direct 

assessment of student learning, or 

recognizes the direct assessment of 

student learning by others, and meets 

the conditions of 34 CFR 668.10. For 

title IV, HEA purposes, the institution 

must obtain approval for the direct 

assessment program from the Secretary 

under 34 CFR 668.10(g) or (h) as 

applicable. As part of that approval, the 

accrediting agency must— 

(1) Evaluate the program(s) and 

include them in the institution’s grant of 

accreditation or preaccreditation; and 

(2) Review and approve the 

institution’s claim of each direct 

assessment program’s equivalence in 

terms of credit or clock hours. 

Distance education means education 

that uses one or more of the 

technologies listed in paragraphs (1) 

through (4) of this definition to deliver 

instruction to students who are 

separated from the instructor and to 

support regular and substantive 

interaction between the students and 

the instructor, either synchronously or 

asynchronously. The technologies may 

include— 

(1) The internet; 

(2) One-way and two-way 

transmissions through open broadcast, 

closed circuit, cable, microwave, 

broadband lines, fiber optics, satellite, 

or wireless communications devices; 

(3) Audio conferencing; or 

(4) Video cassettes, DVDs, and CD– 

ROMs, if the cassettes, DVDs, or CD– 

ROMs are used in a course in 

conjunction with any of the 

technologies listed in paragraphs (1) 

through (3) of this definition. 

* * * * * 

Recognition means an unappealed 

determination by the senior Department 

official under § 602.36, or a 

determination by the Secretary on 

appeal under § 602.37, that an 

accrediting agency complies with the 

criteria for recognition listed in subpart 

B of this part and that the agency is 

effective in its application of those 

criteria. A grant of recognition to an 

agency as a reliable authority regarding 

the quality of education or training 

offered by institutions or programs it 

accredits remains in effect for the term 

granted except upon a determination 

made in accordance with subpart C of 

this part that the agency no longer 

complies with the subpart B criteria or 

that it has become ineffective in its 

application of those criteria. 

* * * * * 

Scope of recognition or scope * * * 

(5) Coverage of accrediting activities 

related to distance education or 

correspondence education. 

* * * * * 

Teach-out agreement means a written 

agreement between institutions that 

provides for the equitable treatment of 

students and a reasonable opportunity 

for students to complete their program 

of study if an institution, or an 

institutional location that provides one 

hundred percent of at least one program 

offered, ceases to operate before all 

enrolled students have completed their 

program of study. 

Teach-out plan means 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 teachout agreement between institutions. 

* * * * * 

■ 5. Section 602.15 is amended by: 

■ A. Revising paragraph (a)(2). 

■ B. In paragraph (b)(1), removing the 

word ‘‘two’’ and removing the letter ‘‘s’’ 

from the word ‘‘reviews’’ the first time 

it appears. 

■ C. Revising paragraph (b)(2). 

The revisions read as follows: 

§ 602.15 Administrative and fiscal 

responsibilities. 

* * * * * 

(a) * * * 

(2) Competent and knowledgeable 

individuals, qualified by education and 

experience in their own right and 

trained by the agency on their 

responsibilities, as appropriate for their 

roles, regarding the agency’s standards, 

policies, and procedures, to conduct its 

on-site evaluations, apply or establish 


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its policies, and make its accrediting 

and preaccrediting decisions, including, 

if applicable to the agency’s scope, their 

responsibilities regarding distance 

education and correspondence 

education; 

* * * * * 

(b) * * * 

(2) All decisions made throughout an 

institution’s or program’s affiliation 

with the agency regarding the 

accreditation and preaccreditation of 

any institution or program and 

substantive changes, including all 

correspondence that is significantly 

related to those decisions. 

* * * * * 

■ 6. Section 602.16 by amended by: 

■ A. Revising paragraph (a)(1)(i). 

■ B. Redesignating paragraphs (c) and 

(d) as paragraphs (d) and (e), 

respectively. 

■ C. Adding new paragraphs (c) and (f). 

The additions and revision read as 

follows: 

§ 602.16 Accreditation and 

preaccreditation standards. 

(a) * * * 

(1) * * * 

(i) Success with respect to student 

achievement in relation to the 

institution’s mission, which may 

include different standards for different 

institutions or programs, as established 

by the institution, including, as 

appropriate, consideration of State 

licensing examinations, course 

completion, and job placement rates. 

* * * * * 

(c) If the agency has or seeks to 

include within its scope of recognition 

the evaluation of the quality of 

institutions or programs offering 

distance education or correspondence 

education, the agency’s standards must 

effectively address the quality of an 

institution’s distance education or 

correspondence education in the areas 

identified in paragraph (a)(1) of this 

section. The agency is not required to 

have separate standards, procedures, or 

policies for the evaluation of distance 

education or correspondence education. 

* * * * * 

(f) Nothing in paragraph (a) of this 

section restricts— 

(1) An accrediting agency from 

setting, with the involvement of its 

members, and applying accreditation 

standards for or to institutions or 

programs that seek review by the 

agency; or 

(2) An institution from developing 

and using institutional standards to 

show its success with respect to student 

achievement, which achievement may 

be considered as part of any 

accreditation review. 

* * * * * 

■ 7. Section 602.17 is amended: 

■ A. In paragraph (e), by removing the 

word ‘‘and’’ at the end of the paragraph. 

■ B. In paragraph (f)(2), by removing the 

punctuation ‘‘.’’ and adding, in its place, 

the words ‘‘; and’’. 

■ C. By adding a new paragraph (g). 

The addition reads as follows: 

§ 602.17 Application of standards in 

reaching an accrediting decision. 

* * * * * 

(g) Requires institutions that offer 

distance education or correspondence 

education to have processes in place 

through which the institution 

establishes that the student who 

registers in a distance education or 

correspondence education course or 

program is the same student who 

participates in and completes the course 

or program and receives the academic 

credit. The agency meets this 

requirement if it— 

(1) Requires institutions to verify the 

identity of a student who participates in 

class or coursework by using, at the 

option of the institution, methods such 

as— 

(i) A secure login and pass code; 

(ii) Proctored examinations; and 

(iii) New or other technologies and 

practices that are effective in verifying 

student identity; and 

(2) Makes clear in writing that 

institutions must use processes that 

protect student privacy and notify 

students of any projected additional 

student charges associated with the 

verification of student identity at the 

time of registration or enrollment. 

* * * * * 

■ 8. Section 602.18 is amended by: 

■ A. Revising the introductory text. 

■ B. Redesignating paragraphs (a), (b), 

and (c) as paragraphs (b), (c), and (d), 

respectively. 

■ C. In newly redesignated paragraph 

(c), removing the word ‘‘and’’ at the end 

of the paragraph. 

■ D. In newly redesignated paragraph 

(d), removing the punctuation ‘‘.’’ and 

adding, in its place, the words ‘‘; and’’. 

■ E. Adding new paragraphs (a) and (e). 

The additions and revision read as 

follows: 

§ 602.18 Ensuring consistency in decisionmaking. 

The agency must consistently apply 

and enforce standards that respect the 

stated mission of the institution, 

including religious mission, and that 

ensure that the education or training 

offered by an institution or program, 

including any offered through distance 

education or correspondence education, 

is of sufficient quality to achieve its 

stated objective for the duration of any 

accreditation or preaccreditation period 

granted by the agency. The agency 

meets this requirement if the agency— 

(a) Has written specification of the 

requirements for accreditation and 

preaccreditation that include clear 

standards for an institution or program 

to be accredited; 

* * * * * 

(e) Provides the institution or program 

with a detailed written report that 

clearly identifies any deficiencies in the 

institution’s or program’s compliance 

with the agency’s standards. 

* * * * * 

■ 9. Section 602.19 is amended by: 

■ A. Revising paragraph (b). 

■ B. Adding new paragraphs (c), (d), and 

(e). 

The revision and additions read as 

follows: 

§ 602.19 Monitoring and reevaluation of 

accredited institutions and programs. 

* * * * * 

(b) The agency must demonstrate it 

has, and effectively applies, a set of 

monitoring and evaluation approaches 

that enables the agency to identify 

problems with an institution’s or 

program’s continued compliance with 

agency standards and that takes into 

account institutional or program 

strengths and stability. These 

approaches must include periodic 

reports, and collection and analysis of 

key data and indicators, identified by 

the agency, including, but not limited 

to, fiscal information and measures of 

student achievement, consistent with 

the provisions of § 602.16(f). This 

provision does not require institutions 

or programs to provide annual reports 

on each specific accreditation criterion. 

(c) Each agency must monitor overall 

growth of the institutions or programs it 

accredits and, at least annually, collect 

headcount enrollment data from those 

institutions or programs. 

(d) Institutional accrediting agencies 

must monitor the growth of programs at 

institutions experiencing significant 

enrollment growth, as reasonably 

defined by the agency. 

(e) Any agency that has notified the 

Secretary of a change in its scope in 

accordance with § 602.27(a)(5) must 

monitor the headcount enrollment of 

each institution it has accredited that 

offers distance education or 

correspondence education. If any such 

institution has experienced an increase 

in headcount enrollment of 50 percent 

or more within one institutional fiscal 

year, the agency must report that 


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information to the Secretary within 30 

days of acquiring such data. 

* * * * * 

■ 10. Section 602.22 is amended by: 

■ A. In paragraph (a)(2)(iii), removing 

the words ‘‘, in either content’’ and 

adding, in their place, the words ‘‘from 

the existing offerings of educational 

programs,’’. 

■ B. In paragraph (a)(2)(iv), removing 

the words ‘‘courses or’’, adding the 

words ‘‘of study’’ after the word 

‘‘programs’’ the first time it appears, and 

removing the word ‘‘above’’ and adding, 

in its place, the words ‘‘different from’’. 

■ C. Revising paragraph (a)(2)(vii). 

■ D. Adding new paragraphs (a)(2)(viii), 

(a)(2)(ix), and (a)(2)(x). 

■ E. Adding a new paragraph (a)(3). 

■ F. Revising paragraph (b). 

■ G. Revising paragraph (c), 

introductory text. 

■ H. In paragraph (c)(2), adding the 

words ‘‘a representative sample of’’ 

immediately after the words ‘‘visits to’’. 

The additions and revisions read as 

follows: 

§ 602.22 Substantive change. 

(a) * * * 

(2) * * * 

(vii) If the agency’s accreditation of an 

institution enables the institution to 

seek eligibility to participate in title IV, 

HEA programs, the entering into a 

contract under which an institution or 

organization not certified to participate 

in the title IV, HEA programs offers 

more than 25 percent of one or more of 

the accredited institution’s educational 

programs. 

(viii)(A) If the agency’s accreditation 

of an institution enables it to seek 

eligibility to participate in title IV, HEA 

programs, the establishment of an 

additional location at which the 

institution offers at least 50 percent of 

an educational program. The addition of 

such a location must be approved by the 

agency in accordance with paragraph (c) 

of this section unless the accrediting 

agency determines, and issues a written 

determination stating that the 

institution has— 

(1) Successfully completed at least 

one cycle of accreditation of maximum 

length offered by the agency and one 

renewal, or has been accredited for at 

least ten years; 

(2) At least three additional locations 

that the agency has approved; and 

(3) Met criteria established by the 

agency indicating sufficient capacity to 

add additional locations without 

individual prior approvals, including at 

a minimum satisfactory evidence of a 

system to ensure quality across a 

distributed enterprise that includes— 

(i) Clearly identified academic 

control; 

(ii) Regular evaluation of the 

locations; 

(iii) Adequate faculty, facilities, 

resources, and academic and student 

support systems; 

(iv) Financial stability; and 

(v) Long-range planning for 

expansion. 

(B) The agency’s procedures for 

approval of an additional location, 

pursuant to paragraph (a)(2)(viii)(A) of 

this section, must require timely 

reporting to the agency of every 

additional location established under 

this approval. 

(C) Each agency determination or 

redetermination to preapprove an 

institution’s addition of locations under 

paragraph (a)(2)(viii)(A) of this section 

may not exceed five years. 

(D) The agency may not preapprove 

an institution’s addition of locations 

under paragraph (a)(2)(viii)(A) of this 

section after the institution undergoes a 

change in ownership resulting in a 

change in control as defined in 34 CFR 

600.31 until the institution 

demonstrates that it meets the 

conditions for the agency to preapprove 

additional locations described in this 

paragraph. 

(E) The agency must have an effective 

mechanism for conducting, at 

reasonable intervals, visits to a 

representative sample of additional 

locations approved under paragraph 

(a)(2)(viii)(A) of this section. 

(ix) The acquisition of any other 

institution or any program or location of 

another institution. 

(x) The addition of a permanent 

location at a site at which the institution 

is conducting a teach-out for students of 

another institution that has ceased 

operating before all students have 

completed their program of study. 

(3) The agency’s substantive change 

policy must define when the changes 

made or proposed by an institution are 

or would be sufficiently extensive to 

require the agency to conduct a new 

comprehensive evaluation of that 

institution. 

(b) The agency may determine the 

procedures it uses to grant prior 

approval of the substantive change. 

However, these procedures must specify 

an effective date, which is not 

retroactive, on which the change is 

included in the program’s or 

institution’s accreditation. An agency 

may designate the date of a change in 

ownership as the effective date of its 

approval of that substantive change if 

the accreditation decision is made 

within 30 days of the change in 

ownership. Except as provided in 

paragraph (c) of this section, these 

procedures may, but need not, require a 

visit by the agency. 

(c) Except as provided in paragraph 

(a)(2)(viii)(A) of this section, if the 

agency’s accreditation of an institution 

enables the institution to seek eligibility 

to participate in title IV, HEA programs, 

the agency’s procedures for the approval 

of an additional location where at least 

50 percent of an educational program is 

offered must provide for a 

determination of the institution’s fiscal 

and administrative capacity to operate 

the additional location. In addition, the 

agency’s procedures must include— 

* * * * * 

■ 11. Section 602.23 is amended by: 

■ A. Revising paragraph (a) introductory 

text. 

■ B. Revising paragraph (c)(1). 

The revisions read as follows: 

§ 602.23 Operating procedures all 

agencies must have. 

(a) The agency must maintain and 

make available to the public written 

materials describing— 

* * * * * 

(c) * * * 

(1) Review in a timely, fair, and 

equitable manner any complaint it 

receives against an accredited 

institution or program that is related to 

the agency’s standards or procedures. 

The agency may not complete its review 

and make a decision regarding a 

complaint unless, in accordance with 

published procedures, it ensures that 

the institution or program has sufficient 

opportunity to provide a response to the 

complaint; 

* * * * * 

■ 12. Section 602.24 is amended by: 

■ A. Revising paragraph (c). 

■ B. Adding new paragraphs (d) and (e). 

The addition and revision read as 

follows: 

§ 602.24 Additional procedures certain 

institutional accreditors must have. 

* * * * * 

(c) Teach-out plans and agreements. 

(1) The agency must require an 

institution it accredits or preaccredits to 

submit a teach-out plan to the agency 

for approval upon the occurrence of any 

of the following events: 

(i) The Secretary notifies the agency 

that the Secretary has initiated an 

emergency action against an institution, 

in accordance with section 487(c)(1)(G) 

of the HEA, or an action to limit, 

suspend, or terminate an institution 

participating in any title IV, HEA 

program, in accordance with section 

487(c)(1)(F) of the HEA, and that a 

teach-out plan is required. 


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(ii) The agency acts to withdraw, 

terminate, or suspend the accreditation 

or preaccreditation of the institution. 

(iii) The institution notifies the 

agency that it intends to cease 

operations entirely or close a location 

that provides one hundred percent of at 

least one program. 

(iv) A State licensing or authorizing 

agency notifies the agency that an 

institution’s license or legal 

authorization to provide an educational 

program has been or will be revoked. 

(2) The agency must evaluate the 

teach-out plan to ensure it provides for 

the equitable treatment of students 

under criteria established by the agency, 

specifies additional charges, if any, and 

provides for notification to the students 

of any additional charges. 

(3) If the agency approves a teach-out 

plan that includes a program that is 

accredited by another recognized 

accrediting agency, it must notify that 

accrediting agency of its approval. 

(4) The agency may require an 

institution it accredits or preaccredits to 

enter into a teach-out agreement as part 

of its teach-out plan. 

(5) The agency must require an 

institution it accredits or preaccredits 

that enters into a teach-out agreement, 

either on its own or at the request of the 

agency, to submit that teach-out 

agreement for approval. The agency may 

approve the teach-out agreement only if 

the agreement is between institutions 

that are accredited or preaccredited by 

a nationally recognized accrediting 

agency, is consistent with applicable 

standards and regulations, and provides 

for the equitable treatment of students 

by ensuring that— 

(i) The teach-out institution has the 

necessary experience, resources, and 

support services to— 

(A) Provide an educational program 

that is of acceptable quality and 

reasonably similar in content, structure, 

and scheduling to that provided by the 

institution that is ceasing operations 

either entirely or at one of its locations; 

and 

(B) Remain stable, carry out its 

mission, and meet all obligations to 

existing students; and 

(ii) The teach-out institution 

demonstrates that it can provide 

students access to the program and 

services without requiring them to move 

or travel substantial distances and that 

it will provide students with 

information about additional charges, if 

any. 

(d) Closed institution. If an institution 

the agency accredits or preaccredits 

closes without a teach-out plan or 

agreement, the agency must work with 

the Department and the appropriate 

State agency, to the extent feasible, to 

assist students in finding reasonable 

opportunities to complete their 

education without additional charges. 

(e) Transfer of credit policies. The 

accrediting agency must confirm, as part 

of its review for initial accreditation or 

preaccreditation, or renewal of 

accreditation, that the institution has 

transfer of credit policies that— 

(1) Are publicly disclosed in 

accordance with § 668.43(a)(11); and 

(2) Include a statement of the criteria 

established by the institution regarding 

the transfer of credit earned at another 

institution of higher education. 

* * * * * 

■ 13. Section 602.25 is revised to read 

as follows: 

§ 602.25 Due process. 

The agency must demonstrate that the 

procedures it uses throughout the 

accrediting process satisfy due process. 

The agency meets this requirement if 

the agency does the following: 

(a) Provides adequate written 

specification of its requirements, 

including clear standards, for an 

institution or program to be accredited 

or preaccredited. 

(b) Uses procedures that afford an 

institution or program a reasonable 

period of time to comply with the 

agency’s requests for information and 

documents. 

(c) Provides written specification of 

any deficiencies identified at the 

institution or program examined. 

(d) Provides sufficient opportunity for 

a written response by an institution or 

program regarding any deficiencies 

identified by the agency, to be 

considered by the agency within a 

timeframe determined by the agency, 

and before any adverse action is taken. 

(e) Notifies the institution or program 

in writing of any adverse accrediting 

action or an action to place the 

institution or program on probation or 

show cause. The notice describes the 

basis for the action. 

(f) Provides an opportunity, upon 

written request of an institution or 

program, for the institution or program 

to appeal any adverse action prior to the 

action becoming final. 

(1) The appeal must take place at a 

hearing before an appeals panel that— 

(i) May not include current members 

of the agency’s decision-making body 

that took the initial adverse action; 

(ii) Is subject to a conflict of interest 

policy; 

(iii) Does not serve only an advisory 

or procedural role, and has and uses the 

authority to make the following 

decisions: to affirm, amend, or reverse 

adverse actions of the original decisionmaking body; and 

(iv) Affirms, amends, reverses, or 

remands the adverse action. A decision 

to affirm, amend, or reverse the adverse 

action is implemented by the appeals 

panel or by the original decision-making 

body, at the agency’s option. In a 

decision to remand the adverse action to 

the original decision-making body for 

further consideration, the appeals panel 

must identify specific issues that the 

original decision-making body must 

address. In a decision that is 

implemented by or remanded to the 

original decision-making body, that 

body must act in a manner consistent 

with the appeals panel’s decisions or 

instructions. 

(2) The agency must recognize the 

right of the institution or program to 

employ counsel to represent the 

institution or program during its appeal, 

including to make any presentation that 

the agency permits the institution or 

program to make on its own during the 

appeal. 

(g) The agency notifies the institution 

or program in writing of the result of its 

appeal and the basis for that result. 

(h)(1) The agency must provide for a 

process, in accordance with written 

procedures, through which an 

institution or program may, before the 

agency reaches a final adverse action 

decision, seek review of new financial 

information if all of the following 

conditions are met: 

(i) The financial information was 

unavailable to the institution or program 

until after the decision subject to appeal 

was made. 

(ii) The financial information is 

significant and bears materially on the 

financial deficiencies identified by the 

agency. The criteria of significance and 

materiality are determined by the 

agency. 

(iii) The only remaining deficiency 

cited by the agency in support of a final 

adverse action decision is the 

institution’s or program’s failure to meet 

an agency standard pertaining to 

finances. 

(2) An institution or program may 

seek the review of new financial 

information described in paragraph 

(h)(1) of this section only once and any 

determination by the agency made with 

respect to that review does not provide 

a basis for an appeal. 

(Authority: 20 U.S.C. 1099b) 

■ 14. Section 602.26 is amended: 

■ A. In paragraph (b)(2), by removing 

the punctuation ‘‘;’’ and adding, in its 

place, the punctuation ‘‘.’’. 

■ B. By adding a new paragraph (b)(3). 

■ C. In paragraph (c), by removing the 

words ‘‘(b)(1) and (b)(2)’’ and adding, in 


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their place, the words ‘‘(b)(1), (b)(2), and 

(b)(3)’’. 

■ D. Revising paragraph (d). 

The addition and revision read as 

follows: 

§ 602.26 Notification of accrediting 

decisions. 

* * * * * 

(b) * * * 

(3) A final decision to take any other 

adverse action, as defined by the 

agency, not listed in paragraph (b)(2) of 

this section; 

* * * * * 

(d) For any decision listed in 

paragraph (b)(2) of this section, makes 

available to the Secretary, the 

appropriate State licensing or 

authorizing agency, and the public, no 

later than 60 days after the decision, a 

brief statement summarizing the reasons 

for the agency’s decision and the official 

comments that the affected institution 

or program may wish to make with 

regard to that decision, or evidence that 

the affected institution has been offered 

the opportunity to provide official 

comment; 

* * * * * 

■ 15. Section 602.27 is revised to read 

as follows: 

§ 602.27 Other information an agency 

must provide the Department. 

(a) The agency must submit to the 

Department— 

(1) A copy of any annual report it 

prepares; 

(2) A copy, updated annually, of its 

directory of accredited and 

preaccredited institutions and programs; 

(3) A summary of the agency’s major 

accrediting activities during the 

previous year (an annual data 

summary), if requested by the Secretary 

to carry out the Secretary’s 

responsibilities related to this part; 

(4) Any proposed change in the 

agency’s policies, procedures, or 

accreditation or preaccreditation 

standards that might alter its— 

(i) Scope of recognition, except as 

provided in paragraph (a)(5) of this 

section; or 

(ii) Compliance with the criteria for 

recognition; 

(5) Notification that the agency has 

expanded its scope of recognition to 

include distance education or 

correspondence education as provided 

in section 496(a)(4)(B)(i)(I) of the HEA. 

Such an expansion of scope is effective 

on the date the Department receives the 

notification; 

(6) The name of any institution or 

program it accredits that the agency has 

reason to believe is failing to meet its 

title IV, HEA program responsibilities or 

is engaged in fraud or abuse, along with 

the agency’s reasons for concern about 

the institution or program; and 

(7) If the Secretary requests, 

information that may bear upon an 

accredited or preaccredited institution’s 

compliance with its title IV, HEA 

program responsibilities, including the 

eligibility of the institution or program 

to participate in title IV, HEA programs. 

(b) If an agency has a policy regarding 

notification to an institution or program 

of contact with the Department in 

accordance with paragraph (a)(6) or 

(a)(7) of this section, it must provide for 

a case-by-case review of the 

circumstances surrounding the contact, 

and the need for the confidentiality of 

that contact. Upon a specific request by 

the Department, the agency must 

consider that contact confidential. 

(Authority: 20 U.S.C. 1099b) 

■ 16. Subpart C is revised to read as 

follows: 

Subpart C—The Recognition Process 

Application and Review by Department Staff 

Sec. 

602.30 Activities covered by recognition 

procedures. 

602.31 Agency submissions to the 

Department. 

602.32 Procedures for Department review of 

applications for recognition or for change 

in scope, compliance reports, and 

increases in enrollment. 

602.33 Procedures for review of agencies 

during the period of recognition. 

Review by the National Advisory Committee 

on Institutional Quality and Integrity 

602.34 Advisory Committee meetings. 

602.35 Responding to the Advisory 

Committee’s recommendation. 

Review and Decision by the Senior 

Department Official 

602.36 Senior Department official’s 

decision. 

Appeal Rights and Procedures 

602.37 Appealing the senior Department 

official’s decision to the Secretary. 

602.38 Contesting the Secretary’s final 

decision to deny, limit, suspend, or 

terminate an agency’s recognition. 

Subpart C—The Recognition Process 

Application and Review by Department 

Staff 

§ 602.30 Activities covered by recognition 

procedures. 

Recognition proceedings are 

administrative actions taken on any of 

the following matters: 

(a) Applications for initial or 

continued recognition submitted under 

§ 602.31(a). 

(b) Applications for an expansion of 

scope submitted under § 602.31(b). 

(c) Compliance reports submitted 

under § 602.31(c). 

(d) Reviews of agencies that have 

expanded their scope of recognition by 

notice, following receipt by the 

Department of information of an 

increase in headcount enrollment 

described in § 602.19(e). 

(e) Staff analyses identifying areas of 

non-compliance based on a review 

conducted under § 602.33. 

(Authority: 20 U.S.C. 1099b) 

§ 602.31 Agency submissions to the 

Department. 

(a) Applications for recognition or 

renewal of recognition. An accrediting 

agency seeking initial or continued 

recognition must submit a written 

application to the Secretary. Each 

accrediting agency must submit an 

application for continued recognition at 

least once every five years, or within a 

shorter time period specified in the final 

recognition decision. The application 

must consist of— 

(1) A statement of the agency’s 

requested scope of recognition; 

(2) Evidence, including 

documentation, that the agency 

complies with the criteria for 

recognition listed in subpart B of this 

part and effectively applies those 

criteria; and 

(3) Evidence, including 

documentation, of how an agency that 

includes or seeks to include distance 

education or correspondence education 

in its scope of recognition applies its 

standards in evaluating programs and 

institutions it accredits that offer 

distance education or correspondence 

education. 

(b) Applications for expansions of 

scope. An agency seeking an expansion 

of scope by application must submit a 

written application to the Secretary. The 

application must— 

(1) Specify the scope requested; 

(2) Include documentation of 

experience in accordance with 

§ 602.12(b); and 

(3) Provide copies of any relevant 

standards, policies, or procedures 

developed and applied by the agency 

and documentation of the application of 

these standards, policies, or procedures. 

(c) Compliance reports. If an agency is 

required to submit a compliance report, 

it must do so within 30 days following 

the end of the period for achieving 

compliance as specified in the decision 

of the senior Department official or 

Secretary, as applicable. 

(d) Review following an increase in 

headcount enrollment. If an agency that 


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has notified the Secretary in writing of 

its change in scope to include distance 

education or correspondence education 

in accordance with § 602.27(a)(5) 

reports an increase in headcount 

enrollment in accordance with 

§ 602.19(e) for an institution it accredits, 

or if the Department notifies the agency 

of such an increase at one of the 

agency’s accredited institutions, the 

agency must, within 45 days of 

reporting the increase or receiving 

notice of the increase from the 

Department, as applicable, submit a 

report explaining— 

(1) How the agency evaluates the 

capacity of the institutions or programs 

it accredits to accommodate significant 

growth in enrollment and to maintain 

educational quality; 

(2) The specific circumstances 

regarding the growth at the institution(s) 

or programs(s) that triggered the review 

and the results of any evaluation 

conducted by the agency; and 

(3) Any other information that the 

agency deems appropriate to 

demonstrate the effective application of 

the criteria for recognition or that the 

Department may require. 

(e) Consent to sharing of information. 

By submitting an application for 

recognition, the agency authorizes 

Department staff throughout the 

application process and during any 

period of recognition— 

(1) To observe its site visits to one or 

more of the institutions or programs it 

accredits or preaccredits, on an 

announced or unannounced basis; 

(2) To visit locations where agency 

activities such as training, review and 

evaluation panel meetings, and decision 

meetings take place, on an announced 

or unannounced basis; 

(3) To obtain copies of all documents 

the staff deems necessary to complete its 

review of the agency; and 

(4) To gain access to agency records, 

personnel, and facilities. 

(f) Public availability of agency 

records obtained by the Department. (1) 

The Secretary’s processing and decision 

making on requests for public disclosure 

of agency materials reviewed under this 

part are governed by the Freedom of 

Information Act, 5 U.S.C. 552; the Trade 

Secrets Act, 18 U.S.C. 1905; the Privacy 

Act of 1974, as amended, 5 U.S.C 552a; 

the Federal Advisory Committee Act, 5 

U.S.C. Appdx. 1; and all other 

applicable laws. In recognition 

proceedings, agencies may— 

(i) Redact information that would 

identify individuals or institutions that 

is not essential to the Department’s 

review of the agency; 

(ii) Make a good faith effort to 

designate all business information 

within agency submissions that the 

agency believes would be exempt from 

disclosure under exemption 4 of the 

Freedom of Information Act (FOIA), 5 

U.S.C. 552(b)(4). A blanket designation 

of all information contained within a 

submission, or of a category of 

documents, as meeting this exemption 

will not be considered a good faith effort 

and will be disregarded; 

(iii) Identify any other material the 

agency believes would be exempt from 

public disclosure under FOIA, the 

factual basis for the request, and any 

legal basis the agency has identified for 

withholding the document from 

disclosure; and 

(iv) Ensure documents submitted are 

only those required for Department 

review or as requested by Department 

officials. 

(2) The Secretary processes FOIA 

requests in accordance with 34 CFR part 

5 and makes all documents provided to 

the Advisory Committee available to the 

public. 

(Authority: 20 U.S.C. 1099b) 

§ 602.32 Procedures for Department 

review of applications for recognition or for 

change in scope, compliance reports, and 

increases in enrollment. 

(a) After receipt of an agency’s 

application for initial or continued 

recognition, or change in scope, or an 

agency’s compliance report, or an 

agency’s report submitted under 

§ 602.31(d), Department staff publishes 

a notice of the agency’s application or 

report in the Federal Register inviting 

the public to comment on the agency’s 

compliance with the criteria for 

recognition and establishing a deadline 

for receipt of public comment. 

(b) The Department staff analyzes the 

agency’s application for initial or 

renewal of recognition, compliance 

report, or report submitted under 

§ 602.31(d) to determine whether the 

agency satisfies the criteria for 

recognition, taking into account all 

available relevant information 

concerning the compliance of the 

agency with those criteria and in the 

agency’s effectiveness in applying the 

criteria. The analysis of an application 

for recognition and, as appropriate, of a 

compliance report, or of a report 

required under § 602.31(d), includes— 

(1) Observations from site visit(s), on 

an announced or unannounced basis, to 

the agency or to a location where agency 

activities such as training, review and 

evaluation panel meetings, and decision 

meetings take place and to one or more 

of the institutions or programs it 

accredits or preaccredits; 

(2) Review of the public comments 

and other third-party information the 

Department staff receives by the 

established deadline, and the agency’s 

responses to the third-party comments, 

as appropriate, as well as any other 

information Department staff assembles 

for purposes of evaluating the agency 

under this part; and 

(3) Review of complaints or legal 

actions involving the agency. 

(c) The Department staff analyzes the 

materials submitted in support of an 

application for expansion of scope to 

ensure that the agency has the requisite 

experience, policies that comply with 

subpart B of this part, capacity, and 

performance record to support the 

request. 

(d) Department staff’s evaluation of an 

agency may also include a review of 

information directly related to 

institutions or programs accredited or 

preaccredited by the agency relative to 

their compliance with the agency’s 

standards, the effectiveness of the 

standards, and the agency’s application 

of those standards. 

(e) If, at any point in its evaluation of 

an agency seeking initial recognition, 

Department staff determines that the 

agency fails to demonstrate compliance 

with the basic eligibility requirements 

in §§ 602.10 through 602.13, the staff— 

(1) Returns the agency’s application 

and provides the agency with an 

explanation of the deficiencies that 

caused staff to take that action; and 

(2) Recommends that the agency 

withdraw its application and reapply 

when the agency can demonstrate 

compliance. 

(f) Except with respect to an 

application that has been returned or is 

withdrawn under paragraph (e) of this 

section, when Department staff 

completes its evaluation of the agency, 

the staff— 

(1) Prepares a written draft analysis of 

the agency; 

(2) Sends the draft analysis including 

any identified areas of non-compliance 

and a proposed recognition 

recommendation, and all supporting 

documentation, including all third-party 

comments the Department received by 

the established deadline, to the agency; 

(3) Invites the agency to provide a 

written response to the draft analysis 

and proposed recognition 

recommendation and third-party 

comments, specifying a deadline that 

provides at least 30 days for the 

agency’s response; 

(4) Reviews the response to the draft 

analysis the agency submits, if any, and 

prepares the written final analysis. The 

final analysis includes a recognition 


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recommendation to the senior 

Department official, as the Department 

staff deems appropriate, including, but 

not limited to, a recommendation to 

approve, deny, limit, suspend, or 

terminate recognition, require the 

submission of a compliance report and 

continue recognition pending a final 

decision on compliance, approve or 

deny a request for expansion of scope, 

or revise or affirm the scope of the 

agency; and 

(5) Provides to the agency, no later 

than seven days before the Advisory 

Committee meeting, the final staff 

analysis and any other available 

information provided to the Advisory 

Committee under § 602.34(c). 

(g) The agency may request that the 

Advisory Committee defer acting on an 

application at that Advisory Committee 

meeting if Department staff fails to 

provide the agency with the materials 

described, and within the timeframes 

provided, in paragraphs (f)(3) and (f)(5) 

of this section. If the Department staff’s 

failure to send the materials in 

accordance with the timeframe 

described in paragraph (f)(3) or (f)(5) of 

this section is due to the failure of the 

agency to submit reports to the 

Department, other information the 

Secretary requested, or its response to 

the draft analysis, by the deadline 

established by the Secretary, the agency 

forfeits its right to request a deferral of 

its application. 

(Authority: 20 U.S.C. 1099b) 

§ 602.33 Procedures for review of 

agencies during the period of recognition. 

(a) Department staff may review the 

compliance of a recognized agency with 

the criteria for recognition at any time— 

(1) At the request of the Advisory 

Committee; or 

(2) Based on any information that, as 

determined by Department staff, appears 

credible and raises issues relevant to 

recognition. 

(b) The review may include, but need 

not be limited to, any of the activities 

described in § 602.32(b) and (d). 

(c) If, in the course of the review, and 

after provision to the agency of the 

documentation concerning the inquiry 

and consultation with the agency, 

Department staff notes that one or more 

deficiencies may exist in the agency’s 

compliance with the criteria for 

recognition or in the agency’s effective 

application of those criteria, it— 

(1) Prepares a written draft analysis of 

the agency’s compliance with the 

criteria of concern. The draft analysis 

reflects the results of the review, and 

includes a recommendation regarding 

what action to take with respect to 

recognition. Possible recommendations 

include, but are not limited to, a 

recommendation to limit, suspend, or 

terminate recognition, or require the 

submission of a compliance report and 

to continue recognition pending a final 

decision on compliance; 

(2) Sends the draft analysis including 

any identified areas of non-compliance, 

and a proposed recognition 

recommendation, and all supporting 

documentation to the agency; and 

(3) Invites the agency to provide a 

written response to the draft analysis 

and proposed recognition 

recommendation, specifying a deadline 

that provides at least 30 days for the 

agency’s response. 

(d) If, after review of the agency’s 

response to the draft analysis, 

Department staff concludes that the 

agency has demonstrated compliance 

with the criteria for recognition, the staff 

notifies the agency in writing of the 

results of the review. If the review was 

requested by the Advisory Committee, 

staff also provides the Advisory 

Committee with the results of the 

review. 

(e) If, after review of the agency’s 

response to the draft analysis, 

Department staff concludes that the 

agency has not demonstrated 

compliance, the staff— 

(1) Notifies the agency that the draft 

analysis will be finalized for 

presentation to the Advisory Committee; 

(2) Publishes a notice in the Federal 

Register including, if practicable, an 

invitation to the public to comment on 

the agency’s compliance with the 

criteria in question and establishing a 

deadline for receipt of public comment; 

(3) Provides the agency with a copy of 

all public comments received and, if 

practicable, invites a written response 

from the agency; 

(4) Finalizes the staff analysis as 

necessary to reflect its review of any 

agency response and any public 

comment received; and 

(5) Provides to the agency, no later 

than seven days before the Advisory 

Committee meeting, the final staff 

analysis and a recognition 

recommendation and any other 

information provided to the Advisory 

Committee under § 602.34(c). 

(f) The Advisory Committee reviews 

the matter in accordance with § 602.34. 

(Authority: 20 U.S.C. 1099b) 

Review by the National Advisory 

Committee on Institutional Quality and 

Integrity 

§ 602.34 Advisory Committee meetings. 

(a) Department staff submits a 

proposed schedule to the Chairperson of 

the Advisory Committee based on 

anticipated completion of staff analyses. 

(b) The Chairperson of the Advisory 

Committee establishes an agenda for the 

next meeting and, in accordance with 

the Federal Advisory Committee Act, 

presents it to the Designated Federal 

Official for approval. 

(c) Before the Advisory Committee 

meeting, Department staff provides the 

Advisory Committee with— 

(1) The agency’s application for 

recognition or for expansion of scope, 

the agency’s compliance report, or the 

agency’s report submitted under 

§ 602.31(d), and supporting 

documentation; 

(2) The final Department staff analysis 

of the agency developed in accordance 

with § 602.32 or § 602.33, and any 

supporting documentation; 

(3) At the request of the agency, the 

agency’s response to the draft analysis; 

(4) Any written third-party comments 

the Department received about the 

agency on or before the established 

deadline; 

(5) Any agency response to third-party 

comments; and 

(6) Any other information Department 

staff relied upon in developing its 

analysis. 

(d) At least 30 days before the 

Advisory Committee meeting, the 

Department publishes a notice of the 

meeting in the Federal Register inviting 

interested parties, including those who 

submitted third-party comments 

concerning the agency’s compliance 

with the criteria for recognition, to make 

oral presentations before the Advisory 

Committee. 

(e) The Advisory Committee considers 

the materials provided under paragraph 

(c) of this section in a public meeting 

and invites Department staff, the 

agency, and other interested parties to 

make oral presentations during the 

meeting. A transcript is made of all 

Advisory Committee meetings. 

(f) The written motion adopted by the 

Advisory Committee regarding each 

agency’s recognition will be made 

available during the Advisory 

Committee meeting. The Department 

will provide each agency, upon request, 

with a copy of the motion on 

recognition at the meeting. Each agency 

that was reviewed will be sent an 

electronic copy of the motion relative to 

that agency as soon as practicable after 

the meeting. 

(g) After each meeting of the Advisory 

Committee at which a review of 

agencies occurs, the Advisory 

Committee forwards to the senior 

Department official its recommendation 

with respect to each agency, which may 

include, but is not limited to, a 


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recommendation to approve, deny, 

limit, suspend, or terminate recognition, 

to grant or deny a request for expansion 

of scope, to revise or affirm the scope of 

the agency, or to require the agency to 

submit a compliance report and to 

continue recognition pending a final 

decision on compliance. 

(Authority: 20 U.S.C. 1099b) 

§ 602.35 Responding to the Advisory 

Committee’s recommendation. 

(a) Within ten days following the 

Advisory Committee meeting, the 

agency and Department staff may 

submit written comments to the senior 

Department official on the Advisory 

Committee’s recommendation. The 

agency must simultaneously submit a 

copy of its written comments, if any, to 

Department staff. Department staff must 

simultaneously submit a copy of its 

written comments, if any, to the agency. 

(b) Comments must be limited to— 

(1) Any Advisory Committee 

recommendation that the agency or 

Department staff believes is not 

supported by the record; 

(2) Any incomplete Advisory 

Committee recommendation based on 

the agency’s application; and 

(3) The inclusion of any 

recommendation or draft proposed 

decision for the senior Department 

official’s consideration. 

(c)(1) Neither the Department staff nor 

the agency may submit additional 

documentary evidence with its 

comments unless the Advisory 

Committee’s recognition 

recommendation proposes finding the 

agency noncompliant with, or 

ineffective in its application of, a 

criterion or criteria for recognition not 

identified in the final Department staff 

analysis provided to the Advisory 

Committee. 

(2) Within ten days of receipt by the 

Department staff of an agency’s 

comments or new evidence, if 

applicable, or of receipt by the agency 

of the Department staff’s comments, 

Department staff, the agency, or both, as 

applicable, may submit a response to 

the senior Department official. 

Simultaneously with submission, the 

agency must provide a copy of any 

response to the Department staff. 

Simultaneously with submission, 

Department staff must provide a copy of 

any response to the agency. 

(Authority: 20 U.S.C. 1099b) 

Review and Decision by the Senior 

Department Official 

§ 602.36 Senior Department official’s 

decision. 

(a) The senior Department official 

makes a decision regarding recognition 

of an agency based on the record 

compiled under §§ 602.32, 602.33, 

602.34, and 602.35 including, as 

applicable, the following: 

(1) The materials provided to the 

Advisory Committee under § 602.34(c). 

(2) The transcript of the Advisory 

Committee meeting. 

(3) The recommendation of the 

Advisory Committee. 

(4) Written comments and responses 

submitted under § 602.35. 

(5) New evidence submitted in 

accordance with § 602.35(c)(1). 

(6) A communication from the 

Secretary referring an issue to the senior 

Department official’s consideration 

under § 602.37(e). 

(b) In the event that statutory 

authority or appropriations for the 

Advisory Committee ends, or there are 

fewer duly appointed Advisory 

Committee members than needed to 

constitute a quorum, and under 

extraordinary circumstances when there 

are serious concerns about an agency’s 

compliance with subpart B of this part 

that require prompt attention, the senior 

Department official may make a 

decision in a recognition proceeding 

based on the record compiled under 

§ 602.32 or § 602.33 after providing the 

agency with an opportunity to respond 

to the final staff analysis. Any decision 

made by the senior Department official 

absent a recommendation from the 

Advisory Committee may be appealed to 

the Secretary as provided in § 602.37. 

(c) Following consideration of an 

agency’s recognition under this section, 

the senior Department official issues a 

recognition decision. 

(d) Except with respect to decisions 

made under paragraph (f) or (g) of this 

section and matters referred to the 

senior Department official under 

§ 602.37(e) or (f), the senior Department 

official notifies the agency in writing of 

the senior Department official’s decision 

regarding the agency’s recognition 

within 90 days of the Advisory 

Committee meeting or conclusion of the 

review under paragraph (b) of this 

section. 

(e) The senior Department official’s 

decision may include, but is not limited 

to, approving, denying, limiting, 

suspending, or terminating recognition, 

granting or denying an application for 

an expansion of scope, revising or 

affirming the scope of the agency, or 

continuing recognition pending 

submission and review of a compliance 

report under §§ 602.32 and 602.34 and 

review of the report by the senior 

Department official under this section. 

(1)(i) The senior Department official 

approves recognition if the agency 

complies with the criteria for 

recognition listed in subpart B of this 

part and if the agency effectively applies 

those criteria. 

(ii) If the senior Department official 

approves recognition, the recognition 

decision defines the scope of 

recognition and the recognition period. 

The recognition period does not exceed 

five years, including any time during 

which recognition was continued to 

permit submission and review of a 

compliance report. 

(iii) If the scope or period of 

recognition is less than that requested 

by the agency, the senior Department 

official explains the reasons for 

approving a lesser scope or recognition 

period. 

(2)(i) Except as provided in paragraph 

(e)(3) of this section, if the agency either 

fails to comply with the criteria for 

recognition listed in subpart B of this 

part, or to apply those criteria 

effectively, the senior Department 

official denies, limits, suspends, or 

terminates recognition. 

(ii) If the senior Department official 

denies, limits, suspends, or terminates 

recognition, the senior Department 

official specifies the reasons for this 

decision, including all criteria the 

agency fails to meet and all criteria the 

agency has failed to apply effectively. 

(3)(i) Except as provided in paragraph 

(e)(3)(ii) of this section, if a recognized 

agency fails to demonstrate compliance 

with or effective application of a 

criterion or criteria, but the senior 

Department official concludes that the 

agency will demonstrate or achieve 

compliance with the criteria for 

recognition and effective application of 

those criteria within 12 months or less, 

the senior Department official may 

continue the agency’s recognition, 

pending submission by the agency of a 

compliance report, review of the report 

under §§ 602.32 and 602.34, and review 

of the report by the senior Department 

official under this section. In such a 

case, the senior Department official 

specifies the criteria the compliance 

report must address, and a time period, 

not longer than 12 months, during 

which the agency must achieve 

compliance and effectively apply the 

criteria. The compliance report 

documenting compliance and effective 

application of criteria is due not later 

than 30 days after the end of the period 

specified in the senior Department 

official’s decision. 


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(ii) If the record includes a 

compliance report, and the senior 

Department official determines that an 

agency has not complied with the 

criteria for recognition, or has not 

effectively applied those criteria, during 

the time period specified by the senior 

Department official in accordance with 

paragraph (e)(3)(i) of this section, the 

senior Department official denies, 

limits, suspends, or terminates 

recognition, except, in extraordinary 

circumstances, upon a showing of good 

cause for an extension of time as 

determined by the senior Department 

official and detailed in the senior 

Department official’s decision. If the 

senior Department official determines 

good cause for an extension has been 

shown, the senior Department official 

specifies the length of the extension and 

what the agency must do during it to 

merit a renewal of recognition. 

(f) If the senior Department official 

determines, based on the record, that a 

decision to deny, limit, suspend, or 

terminate an agency’s recognition may 

be warranted based on a finding that the 

agency is noncompliant with, or 

ineffective in its application of, a 

criterion or criteria of recognition not 

identified earlier in the proceedings as 

an area of noncompliance, the senior 

Department official provides— 

(1) The agency with an opportunity to 

submit a written response and 

documentary evidence addressing the 

finding; and 

(2) The staff with an opportunity to 

present its analysis in writing. 

(g) If relevant and material 

information pertaining to an agency’s 

compliance with recognition criteria, 

but not contained in the record, comes 

to the senior Department official’s 

attention while a decision regarding the 

agency’s recognition is pending before 

the senior Department official, and if the 

senior Department official concludes the 

recognition decision should not be 

made without consideration of the 

information, the senior Department 

official either— 

(1)(i) Does not make a decision 

regarding recognition of the agency; and 

(ii) Refers the matter to Department 

staff for review and analysis under 

§ 602.32 or § 602.33, as appropriate, and 

consideration by the Advisory 

Committee under § 602.34; or 

(2)(i) Provides the information to the 

agency and Department staff; 

(ii) Permits the agency to respond to 

the senior Department official and the 

Department staff in writing, and to 

include additional evidence relevant to 

the issue, and specifies a deadline; 

(iii) Provides Department staff with an 

opportunity to respond in writing to the 

agency’s submission under paragraph 

(g)(2)(ii) of this section, specifying a 

deadline; and 

(iv) Issues a recognition decision 

based on the record described in 

paragraph (a) of this section, as 

supplemented by the information 

provided under this paragraph. 

(h) No agency may submit 

information to the senior Department 

official, or ask others to submit 

information on its behalf, for purposes 

of invoking paragraph (g) of this section. 

Before invoking paragraph (g) of this 

section, the senior Department official 

will take into account whether the 

information, if submitted by a third 

party, could have been submitted in 

accordance with § 602.32(a) or 

§ 602.33(e)(2). 

(i) If the senior Department official 

does not reach a final decision to 

approve, deny, limit, suspend, or 

terminate an agency’s recognition before 

the expiration of its recognition period, 

the senior Department official 

automatically extends the recognition 

period until a final decision is reached. 

(j) Unless appealed in accordance 

with § 602.37, the senior Department 

official’s decision is the final decision of 

the Secretary. 

(Authority: 20 U.S.C. 1099b) 

Appeal Rights and Procedures 

§ 602.37 Appealing the senior Department 

official’s decision to the Secretary. 

(a) The agency may appeal the senior 

Department official’s decision to the 

Secretary. Such appeal stays the 

decision of the senior Department 

official until final disposition of the 

appeal. If an agency wishes to appeal, 

the agency must— 

(1) Notify the Secretary and the senior 

Department official in writing of its 

intent to appeal the decision of the 

senior Department official, no later than 

ten days after receipt of the decision; 

(2) Submit its appeal to the Secretary 

in writing no later than 30 days after 

receipt of the decision; and 

(3) Provide the senior Department 

official with a copy of the appeal at the 

same time it submits the appeal to the 

Secretary. 

(b) The senior Department official 

may file a written response to the 

appeal. To do so, the senior Department 

official must— 

(1) Submit a response to the Secretary 

no later than 30 days after receipt of a 

copy of the appeal; and 

(2) Provide the agency with a copy of 

the senior Department official’s 

response at the same time it is 

submitted to the Secretary. 

(c) Neither the agency nor the senior 

Department official may include in its 

submission any new evidence it did not 

submit previously in the proceeding. 

(d) On appeal, the Secretary makes a 

recognition decision, as described in 

§ 602.36(e). If the decision requires a 

compliance report, the report is due 

within 30 days after the end of the 

period specified in the Secretary’s 

decision. The Secretary renders a final 

decision after taking into account the 

senior Department official’s decision, 

the agency’s written submissions on 

appeal, the senior Department official’s 

response to the appeal, if any, and the 

entire record before the senior 

Department official. The Secretary 

notifies the agency in writing of the 

Secretary’s decision regarding the 

agency’s recognition. 

(e) The Secretary may determine, 

based on the record, that a decision to 

deny, limit, suspend, or terminate an 

agency’s recognition may be warranted 

based on a finding that the agency is 

noncompliant with, or ineffective in its 

application with respect to, a criterion 

or criteria for recognition not identified 

as an area of noncompliance earlier in 

the proceedings. In that case, the 

Secretary, without further consideration 

of the appeal, refers the matter to the 

senior Department official for 

consideration of the issue under 

§ 602.36(f). After the senior Department 

official makes a decision, the agency 

may, if desired, appeal that decision to 

the Secretary. 

(f) If relevant and material 

information pertaining to an agency’s 

compliance with recognition criteria, 

but not contained in the record, comes 

to the Secretary’s attention while a 

decision regarding the agency’s 

recognition is pending before the 

Secretary, and if the Secretary 

concludes the recognition decision 

should not be made without 

consideration of the information, the 

Secretary either— 

(1)(i) Does not make a decision 

regarding recognition of the agency; and 

(ii) Refers the matter to Department 

staff for review and analysis under 

§ 602.32 or § 602.33, as appropriate, and 

review by the Advisory Committee 

under § 602.34; and consideration by 

the senior Department official under 

§ 602.36; or 

(2)(i) Provides the information to the 

agency and the senior Department 

official; 

(ii) Permits the agency to respond to 

the Secretary and the senior Department 

official in writing, and to include 

additional evidence relevant to the 

issue, and specifies a deadline; 

(iii) Provides the senior Department 

official with an opportunity to respond 

in writing to the agency’s submission 


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Federal Register / Vol. 74, No. 206 / Tuesday, October 27, 2009 / Rules and Regulations 55435 

under paragraph (f)(2)(ii) of this section, 

specifying a deadline; and 

(iv) Issues a recognition decision 

based on all the materials described in 

paragraphs (d) and (f) of this section. 

(g) No agency may submit information 

to the Secretary, or ask others to submit 

information on its behalf, for purposes 

of invoking paragraph (f) of this section. 

Before invoking paragraph (f) of this 

section, the Secretary will take into 

account whether the information, if 

submitted by a third party, could have 

been submitted in accordance with 

§ 602.32(a) or § 602.33(e)(2). 

(h) If the Secretary does not reach a 

final decision on appeal to approve, 

deny, limit, suspend, or terminate an 

agency’s recognition before the 

expiration of its recognition period, the 

Secretary automatically extends the 

recognition period until a final decision 

is reached. 

(Authority: 20 U.S.C. 1099b) 

§ 602.38 Contesting the Secretary’s final 

decision to deny, limit, suspend, or 

terminate an agency’s recognition. 

An agency may contest the Secretary’s 

decision under this part in the Federal 

courts as a final decision in accordance 

with applicable Federal law. Unless 

otherwise directed by the court, a 

decision of the Secretary to deny, limit, 

suspend, or terminate the agency’s 

recognition is not stayed during an 

appeal in the Federal courts. 

(Authority: 20 U.S.C. 1099b) 

Subpart D—[Removed] 

■ 17. Subpart D, consisting of §§ 602.40 

through 602.45, is removed. 

Subpart E—[Redesignated as Subpart 

D] 

■ 18. Subpart E, consisting of § 602.50, 

is redesignated as subpart D. 

[FR Doc. E9–25186 Filed 10–26–09; 8:45 am] 

BILLING CODE 4000–01–P 


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