99-27673. Student Assistance General Provisions  

  • [Federal Register Volume 64, Number 204 (Friday, October 22, 1999)]
    [Rules and Regulations]
    [Pages 57356-57359]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 99-27673]
    
    
    
    [[Page 57355]]
    
    _______________________________________________________________________
    
    Part VI
    
    
    
    
    
    Department of Education
    
    
    
    
    
    _______________________________________________________________________
    
    
    
    34 CFR Part 668
    
    
    
    Student Assistance General Provisions; Final Rule
    
    Federal Register / Vol. 64, No. 204 / Friday, October 22, 1999 / 
    Rules and Regulations
    
    [[Page 57356]]
    
    
    
    DEPARTMENT OF EDUCATION
    
    34 CFR Part 668
    
    RIN 1845-AA07
    
    
    Student Assistance General Provisions
    
    AGENCY: Department of Education.
    
    ACTION: Final regulations.
    
    -----------------------------------------------------------------------
    
    SUMMARY: We amend the regulations governing student eligibility for the 
    student financial assistance programs authorized under title IV of the 
    Higher Education Act of 1965, as amended (title IV, HEA programs). 
    These programs include the Federal Pell Grant Program, the campus-based 
    programs (Federal Perkins Loan, Federal Work-Study (FWS), and Federal 
    Supplemental Educational Opportunity Grant (FSEOG) Programs), the 
    William D. Ford Federal Direct Loan (Direct Loan) Program, the Federal 
    Family Education Loan (FFEL) Program, and the Leveraging Educational 
    Assistance Partnership (LEAP) Program (formerly called the State 
    Student Incentive Grant (SSIG) Program). The regulations implement 
    changes made to the Higher Education Act of 1965, as amended (HEA), by 
    the Higher Education Amendments of 1998 (Public Law 105-244, enacted 
    October 7, 1998) (1998 Amendments).
    
    DATES: These regulations are effective July 1, 2000.
        Implementation Date: The changes to Secs. 668.32 and 668.38 reflect 
    statutory provisions that already are in effect. Institutions may use 
    these regulations prior to July 1, 2000 as guidance in complying with 
    those statutory provisions.
    
    FOR FURTHER INFORMATION CONTACT: Lloyd Horwich, U.S. Department of 
    Education, 400 Maryland Avenue, S.W., ROB-3, Room 3045, Washington, 
    D.C. 20202-5344. Telephone (202) 708-8242. If you use a 
    telecommunications device for the deaf (TDD), you may call the Federal 
    Information Relay Service (FIRS) at 1-800-877-8339.
        Individuals with disabilities may obtain this document in an 
    alternate format (e.g., Braille, large print, audiotape, or computer 
    diskette) on request to the contact person listed in the preceding 
    paragraph.
    
    SUPPLEMENTARY INFORMATION: On July 16, 1999, we published a notice of 
    proposed rulemaking (NPRM) in the Federal Register (64 FR 38504) 
    proposing to amend the regulations governing student eligibility for 
    the title IV, HEA programs. In the preamble to the NPRM, we discussed 
    the following proposed changes:
         Amending Sec. 668.32(e) to allow a student who completes a 
    secondary school education in a home school that is treated as a home 
    school or private school under State law to be eligible to receive 
    title IV, HEA program funds.
         Amending Sec. 668.32(h) to provide that a student file his 
    or her Statement of Educational Purpose with the Department.
         Amending Sec. 668.32(k)(7) to reflect the name-change of 
    the SSIG program to the LEAP program.
         Amending Sec. 668.32 by adding as Sec. 668.32(l) a cross-
    reference to the student eligibility criteria concerning drug 
    convictions described in proposed Sec. 668.40.
         Amending Sec. 668.38 to provide the conditions under which 
    a student enrolled in telecommunications courses will not be considered 
    enrolled in correspondence courses.
         Adding Sec. 668.40 to provide the conditions under which a 
    student who has been convicted under Federal or State law of possession 
    or sale of illegal drugs will be ineligible to receive title IV, HEA 
    program funds.
        There are no significant differences between the NPRM and these 
    final regulations, except that these final regulations clarify the 
    status under Sec. 668.40 of determinations or adjudications for 
    possession or sale of illegal drugs arising out of a juvenile 
    proceeding.
    
    Discussion of Student Financial Assistance Regulations Development 
    Process
    
        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, we obtain public involvement in the development of the 
    proposed regulations. After obtaining advice and recommendations, we 
    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 we reopen that 
    process or explain any departure from the agreements to the negotiated 
    rulemaking participants.
        These regulations were published in proposed form on July 16, 1999 
    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 agreed-upon language. We 
    invited comments on the proposed regulations by September 14, 1999, and 
    18 comments were received. An analysis of the comments and of the 
    changes in the proposed regulations follows.
        We discuss 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 us to 
    make.
    
    Analysis of Comments and Changes
    
    Section 668.32  Student Eligibility-General
    
    Home-schooled students
        Comments: A number of commenters specifically supported our 
    statement in the NPRM that a student who completes a secondary school 
    education in a home school setting that is treated as a home school or 
    private school under State law simply must satisfy the home-school 
    completion requirements of the State in which the student was home 
    schooled to be eligible for title IV, HEA program funds.
        Changes: None.
        Comments: A number of commenters specifically supported our 
    statement in the NPRM that the Secretary will allow a home-schooled 
    student to self-certify his or her eligibility in the same way a high 
    school graduate or General Equivalency Degree (GED) recipient may.
        Changes: None.
        Comments: The Department should clarify the meaning of ``exemption 
    from compulsory attendance requirements under State law'' in proposed 
    Sec. 668.32(e)(4)(ii).
        Discussion: ``Exemption from compulsory attendance requirements 
    under State law,'' means that the State does not consider a home-
    schooled student to be in violation of the State's truancy laws.
        Changes: None.
        Comments: The Department should clarify whether home-schooled 
    students must take an ability-to-benefit test to be eligible to receive 
    Title IV, HEA program funds under proposed Sec. 668.32(e).
        Discussion: Home-schooled students who satisfy the requirements of 
    Sec. 668.32(e)(4) are eligible to receive title IV, HEA program funds. 
    They are not required to take an ability-to-benefit test.
        Changes: None.
    
    Section 668.38  Enrollment in Telecommunications and Correspondence 
    Courses
    
        Comments: The Department should clarify the status under proposed 
    Sec. 668.38 of students enrolled in telecommunications courses at 
    institutions described in section
    
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    521(4)(C) of the Carl D. Perkins Vocational and Applied Technology 
    Education Act.
        Discussion: Students enrolled in telecommunications courses at 
    institutions described in section 521(4)(C) of the Carl D. Perkins 
    Vocational and Applied Technology Education Act are considered to be 
    enrolled in correspondence courses.
        Changes: None.
    
    Section 668.40  Suspension of eligibility for drug-related offenses
    
        Comments: The Department should clarify that the provisions of 
    Sec. 668.40 apply only to a student's eligibility for title IV, HEA 
    program funds for award years beginning on or after July 1, 2000.
        Discussion: The provisions of Sec. 668.40 apply only to a student's 
    eligibility for title IV, HEA program funds for award years beginning 
    on or after July 1, 2000. However, convictions that occur before July 
    1, 2000 may affect a student's eligibility for title IV, HEA program 
    funds as of July 1, 2000. For example, a student convicted for the 
    first time for possession of a controlled substance on February 1, 2000 
    will be ineligible from July 1, 2000 (the effective date of the 
    regulations) until February 1, 2001 (one year from the date of 
    conviction).
        Changes: None.
        Comments: Clarify whether a conviction for multiple counts of 
    possession or multiple counts of sale is considered a single 
    conviction.
        Discussion: A conviction for multiple counts of possession or 
    multiple counts of sale is considered a single conviction. Also, a 
    determination or adjudication arising out of a juvenile proceeding is 
    not a conviction for purposes of this regulation.
        Changes: Section 668.40(a)(2) is changed to reflect the above 
    clarification concerning juvenile violations.
        Comments: The Department should clarify the meaning of 
    ``indefinite'' under Secs. 668.40(b)(1)(iii) and (b)(2)(ii), concerning 
    the ineligibility period of a student convicted three or more times for 
    possession of illegal drugs or two or more times for sale of illegal 
    drugs.
        Discussion: For purposes of this regulation, ``indefinite'' means 
    permanent, unless (1) the student completes an approved drug 
    rehabilitation program described in Sec. 668.40(d) or (2) convictions 
    are reversed, set aside, or removed from the student's record so that 
    the student has fewer than three convictions for possession and fewer 
    than two convictions for sale remaining on his or her record, in which 
    case the student's ineligibility period would be determined by the 
    number and type of remaining convictions.
        Changes: None.
        Comments: An institution should not be required to be involved in 
    determining a student's eligibility for title IV, HEA program funds 
    under this regulation.
        Discussion: We will not require institutions to question their 
    applicants for title IV, HEA program funds about drug convictions. We 
    intend to use the aid application process--the Free Application for 
    Federal Student Aid (FAFSA) and the Student Aid Report (SAR)--to 
    collect the necessary information from applicants. However, we will 
    encourage students to notify their financial aid office if their 
    eligibility status changes.
        Changes: None.
        Comments: An institution should not be liable for funds disbursed 
    to a student when the student is ineligible under this regulation and 
    the institution is not aware the student is ineligible.
        Discussion: An institution will not be liable for funds disbursed 
    to a student who is ineligible under this regulation if the institution 
    is unaware at the time of disbursement that the student is ineligible.
        Changes: None.
        Comments: Students who regain their eligibility under this 
    regulation during a payment or enrollment period should be eligible for 
    aid for the entire payment period (in the case of Pell Grants, FSEOG, 
    FWS, or Perkins Loans) or the entire enrollment period (in the case of 
    Direct or FFEL Loans). Similarly, students who lose their eligibility 
    during a payment or enrollment period should not forego funds until the 
    beginning of the next payment or enrollment period.
        Discussion: Students who regain eligibility under this regulation 
    during a payment period will be eligible to receive Pell Grants, FSEOG, 
    FWS, or Perkins Loans for the entire payment period, and will be 
    eligible to receive Direct or FFEL Loans for the entire enrollment 
    period.
        However, students who lose eligibility during a payment period will 
    be immediately ineligible to receive subsequent disbursements of any 
    title IV, HEA program funds, and will be required to repay any title 
    IV, HEA program funds that they receive after losing their eligibility. 
    Those students will not be considered to have been ineligible for funds 
    disbursed to them prior to their loss of eligibility. Institutions will 
    not have to recalculate students' awards on a pro-rata basis.
        Changes: None.
        Comments: Students should be allowed to self-certify both their 
    eligibility under this regulation for title IV, HEA program funds and 
    the renewal of their eligibility during a payment period.
        Discussion: We will allow students to self-certify their 
    eligibility for title IV, HEA program funds on the FAFSA or SAR. We 
    also will allow institutions to disburse funds to students who regain 
    eligibility during a payment period or enrollment period, based on 
    students' self-certification to the institution. Students may not self-
    certify their eligibility based on projected eligibility dates (i.e., 
    students who will regain eligibility during a payment period may not 
    self-certify at the beginning of the payment period that they are 
    eligible, even though as discussed above, students who regain 
    eligibility during a payment period will be eligible to receive funds 
    for the entire payment period or enrollment period, as appropriate), 
    nor may institutions disburse funds based on projected eligibility 
    dates, but institutions will not be responsible for verifying the 
    accuracy of students' self-certifications.
        Changes: None.
        Comments: The regulation should not be overly restrictive in 
    defining what is an acceptable drug rehabilitation program.
        Discussion: We agree, and believe that Sec. 668.40(d) addresses 
    this concern.
        Changes: None.
        Comments: The Department should provide individualized advice to 
    students on the meaning of this regulation.
        Discussion: We will provide guidance to students and institutions 
    over the coming months concerning this regulation.
        Changes: None.
    
    Executive Order 12866
    
        Under Executive Order 12866, we have assessed the potential costs 
    and benefits of this regulatory action. The potential costs associated 
    with this regulatory action are those resulting from statutory 
    requirements and those we have determined are necessary to administer 
    this program effectively and efficiently.
        In assessing the potential costs and benefits of this regulatory 
    action--both quantitative and qualitative--we have determined that the 
    benefits justify the costs. We have also determined that this 
    regulatory action would not unduly interfere with State, local, and 
    tribal governments in the exercise of their governmental functions.
    
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        We summarized the potential costs and benefits of this regulatory 
    action in the preamble to the NPRM.
    
    Paperwork Reduction Act of 1995
    
        These proposed regulations do not contain any information 
    collection requirements.
    
    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 in text or Adobe Portable Document 
    Format (PDF) on the Internet at the following sites:
    
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    http://www.ed.gov/legislation/HEA/rulemaking/
    http://ifap.ed.gov/csb__html/fedlreg.htm
    
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        Note: The official version of this document is the document 
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    (Catalog of Federal Domestic Assistance numbers: 84.007 Federal 
    Supplemental Educational Opportunity Grant Program; 84.032 
    Consolidation Program; 84.032 Federal Stafford Loan Program; 84.032 
    Federal PLUS Program; 84.032 Federal Supplemental Loans for Students 
    Program; 84.033 Federal Work-Study Program; 84.038 Federal Perkins 
    Loan Program; 84.063 Federal Pell Grant Program; 84.069 LEAP; and 
    84.268 William D. Ford Federal Direct Loan Programs)
    
    List of Subjects in 34 CFR Part 668
    
        Administrative practice and procedure, Colleges and universities, 
    Student aid, Reporting and recordkeeping requirements.
    
        Dated: October 18, 1999.
    Richard W. Riley,
    Secretary of Education.
    
        The Secretary amends part 668 of title 34 of the Code of Federal 
    Regulations as follows:
    
    PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS
    
        1. The authority citation for part 668 is amended to read as 
    follows:
    
        Authority: 20 U.S.C. 1001, 1002, 1003, 1085, 1088, 1091, 1092, 
    1094, 1099c, and 1099c-1, unless otherwise noted.
    
        2. Section 668.32 is amended as follows:
        A. In paragraph (e)(2), by removing ``or'';
        B. In paragraph (e)(3), by adding ``or'' after the semi-colon;
        C. By adding a new paragraph (e)(4) to read as follows;
        D. In paragraph (h), by removing ``, or in the case of a loan made 
    under the FFEL Program, with the lender'';
        E. In paragraph (j), by removing the ``and'' after the semi-colon;
        F. In paragraph (k)(7), by removing ``SSIG'' and adding in its 
    place, ``LEAP,'' by removing the period at the end of the paragraph and 
    adding in its place a semi-colon, and adding ``and'' after the semi-
    colon; and
        G. By adding paragraph (l) to read as follows.
    
    
    Sec. 668.32  Student eligibility--general.
    
    * * * * *
        (e) * * *
        (4) Was home-schooled, and either--
        (i) Obtained a secondary school completion credential for home 
    school (other than a high school diploma or its recognized equivalent) 
    provided for under State law; or
        (ii) If State law does not require a home-schooled student to 
    obtain the credential described in paragraph (e)(4)(i) of this section, 
    has completed a secondary school education in a home school setting 
    that qualifies as an exemption from compulsory attendance requirements 
    under State law;
    * * * * *
        (1) Is not ineligible under Sec. 668.40.
    * * * * *
        3. Section 668.38 is amended by revising paragraph (b) to read as 
    follows:
    
    
    Sec. 668.38  Enrollment in telecommunications and correspondence 
    courses.
    
    * * * * *
        (b)(1) For purposes of this section, a student enrolled in a 
    telecommunications course at an institution of higher education is not 
    enrolled in a correspondence course, if--
        (i) The student is enrolled in a program that leads to a 
    certificate for a program of study of 1 year or longer, or an 
    associate, bachelor, or graduate degree; and
        (ii) The number of telecommunications and correspondence courses 
    the institution offered during its latest completed award year was 
    fewer than 50 percent of all the courses the institution offered during 
    that same year.
        (2) For purposes of paragraph (b)(1) of this section, an 
    institution of higher education is one--
        (i) That is not an institute or school described in section 
    521(4)(C) of the Carl D. Perkins Vocational and Applied Technology Act; 
    and
        (ii) At which at least 50 percent of the programs of study offered 
    by the institution during its latest completed award year led to an 
    associate, bachelor, or graduate degree.
        (3) For purposes of paragraph (b)(1)(ii) of this section, the 
    institution must calculate the number of courses using the provisions 
    contained in 34 CFR 600.7(b)(2).
        4. Section 668.40 is added to read as follows:
        Sec. 668.40 Conviction for possession or sale of illegal drugs.
        (a)(1) A student is ineligible to receive title IV, HEA program 
    funds if the student has been convicted of an offense involving the 
    possession or sale of illegal drugs for the period described in 
    paragraph (b) of this section. However, the student may regain 
    eligibility before that period expires under the conditions described 
    in paragraph (c) of this section.
        (2) For purposes of this section, a conviction means only a 
    conviction that is on a student's record. A conviction that was 
    reversed, set aside, or removed from the student's record is not 
    relevant for purposes of this section, nor is a determination or 
    adjudication arising out of a juvenile proceeding.
        (3) For purposes of this section, an illegal drug is a controlled 
    substance as defined by section 102(6) of the Controlled Substances Act 
    (21 U.S.C. 801(6)), and does not include alcohol or tobacco.
        (b)(1) Possession. Except as provided in paragraph (c) of this 
    section, if a student has been convicted--
        (i) Only one time for possession of illegal drugs, the student is 
    ineligible to receive title IV, HEA program funds for one year after 
    the date of conviction;
        (ii) Two times for possession of illegal drugs, the student is 
    ineligible to receive title IV, HEA program funds for two years after 
    the date of the second conviction; or
    
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        (iii) Three or more times for possession of illegal drugs, the 
    student is ineligible to receive title IV, HEA program funds for an 
    indefinite period after the date of the third conviction.
        (2) Sale. Except as provided in paragraph (c) of this section, if a 
    student has been convicted--
        (i) Only one time for sale of illegal drugs, the student is 
    ineligible to receive title IV, HEA program funds for two years after 
    the date of conviction; or
        (ii) Two or more times for sale of illegal drugs, the student is 
    ineligible to receive Title IV, HEA program funds for an indefinite 
    period after the date of the second conviction.
        (c) If a student successfully completes a drug rehabilitation 
    program described in paragraph (d) of this section after the student's 
    most recent drug conviction, the student regains eligibility on the 
    date the student successfully completes the program.
        (d) A drug rehabilitation program referred to in paragraph (c) of 
    this section is one which--
        (1) Includes at least two unannounced drug tests; and
        (2)(i) Has received or is qualified to receive funds directly or 
    indirectly under a Federal, State, or local government program;
        (ii) Is administered or recognized by a Federal, State, or local 
    government agency or court;
        (iii) Has received or is qualified to receive payment directly or 
    indirectly from a Federally- or State-licensed insurance company; or
        (iv) Is administered or recognized by a Federally- or State-
    licensed hospital, health clinic or medical doctor.
    
    (Authority: 20 U.S.C. 1091(r))
    
    [FR Doc. 99-27673 Filed 10-21-99; 8:45 am]
    BILLING CODE 4000-01-U
    
    
    

Document Information

Effective Date:
7/1/2000
Published:
10/22/1999
Department:
Education Department
Entry Type:
Rule
Action:
Final regulations.
Document Number:
99-27673
Dates:
These regulations are effective July 1, 2000.
Pages:
57356-57359 (4 pages)
RINs:
1845-AA07
PDF File:
99-27673.pdf
CFR: (5)
34 CFR 668.32(e)(4)
34 CFR 668.32(e)(4)(ii)
34 CFR 668.32
34 CFR 668.38
34 CFR 668.40