95-29181. Student Assistance General Provisions  

  • [Federal Register Volume 60, Number 231 (Friday, December 1, 1995)]
    [Rules and Regulations]
    [Pages 61776-61788]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 95-29181]
    
    
    
    
    [[Page 61775]]
    
    _______________________________________________________________________
    
    Part V
    
    
    
    
    
    Department of Education
    
    
    
    
    
    _______________________________________________________________________
    
    
    
    34 CFR Part 668
    
    
    
    Student Assistance General Provisions; Final Rule
    
    Federal Register / Vol. 60, No. 231 / Friday, December 1, 1995 / 
    Rules and Regulations 
    
    [[Page 61776]]
    
    
    DEPARTMENT OF EDUCATION
    
    34 CFR Part 668
    
    RIN 1840-AB44
    
    
    Student Assistance General Provisions
    
    Agency: Department of Education.
    
    Action: Final rule.
    
    -----------------------------------------------------------------------
    
    SUMMARY: The Secretary amends the Student Assistance General 
    Provisions. These amendments are necessary to implement the Student 
    Right-to-Know Act, as amended by the Higher Education Amendments of 
    1991, and the Higher Education Technical Amendments of 1993. These 
    final regulations require an institution that participates in any 
    student financial assistance program under Title IV of the Higher 
    Education Act of 1965, as amended (title IV, HEA program) to disclose 
    information about graduation or completion rates to current and 
    prospective students. The final regulations also require an institution 
    that participates in any title IV, HEA program and awards athletically-
    related student aid to provide certain types of data regarding the 
    institution's student population, and the graduation or completion 
    rates of categories of student-athletes, to potential student-athletes, 
    and to the athletes' parents, coaches, and high school counselors.
    
    EFFECTIVE DATE: These regulations take effect on July 1, 1996, and 
    apply to the 1996-1997 and subsequent award years. However, affected 
    parties do not have to comply with the information requirements in 
    Sec. 668.41, Sec. 668.46, and Sec. 668.49 until the Department of 
    Education publishes in the Federal Register the control numbers 
    assigned by the Office of Management and Budget (OMB) to these 
    information collection requirements. Publication of the control numbers 
    notifies the public that OMB has approved these information 
    requirements under the Paperwork Reduction Act of 1995.
    
    FOR FURTHER INFORMATION CONTACT: Ms. Paula Husselmann or Mr. David 
    Lorenzo, U.S. Department of Education, 600 Independence Avenue, S.W., 
    Regional Office Building 3, Room 3053, Washington, D.C. 20202. 
    Telephone: (202) 708-7888. Individuals who use a telecommunications 
    device for the deaf (TDD) may call the Federal Information Relay 
    Service (FIRS) at 1-800-877-8339 between 8:00 a.m. and 8:00 p.m., 
    Eastern time Monday through Friday.
    
    SUPPLEMENTARY INFORMATION: The Student Assistance General Provisions 
    (34 CFR part 668) apply to all institutions that participate in the 
    student financial assistance programs authorized by Title IV of the 
    Higher Education Act of 1965 as amended (HEA). These final regulations 
    are necessary to implement changes to the HEA made by the Student 
    Right-to-Know Act, Pub. L. 101-542, as amended by the Higher Education 
    Technical Amendments of 1991, Pub. L. 102-26, and the Higher Education 
    Technical Amendments of 1993, Pub. L. 103-208. The Secretary published 
    a proposed rule on July 10, 1992 to implement the Student Right-to-Know 
    and Campus Security Act. Over three hundred commenters responded to 
    those proposed rules. Final regulations implementing the Campus 
    Security Act were published separately on April 29, 1994. A second 
    proposed rule addressing the Student Right-to-Know portion of Pub. L. 
    101-542 was published on September 21, 1995.
    
    Background
    
        The September 21, 1995 Notice of Proposed Rulemaking (NPRM) 
    contained regulations that would implement the Student Right-to-Know 
    portion of Pub. L. 101-542 for consumer information purposes only. In 
    that NPRM the Secretary emphasized that the proposed regulations were 
    meant to provide flexibility and create a minimum of burden to 
    institutions, while generating useful and comparable data for student 
    consumer information purposes. The Secretary's discussion and 
    solicitation of comments on these and related issues are contained in 
    60 FR 49156-49157.
        The September 21, 1995 NPRM also included a discussion of major 
    issues regarding the proposed regulations that will not be repeated 
    here. The following list summarizes those issues and identifies the 
    pages of the preamble to the NPRM on which a discussion of those issues 
    can be found.
        Disclosure of information on graduation or completion rates for the 
    general student population contained in Sec. 668.41(a) (page 49157).
        Disclosure of information on the general student population, and on 
    the completion or graduation rates of various categories of student 
    athletes, and the report of that information to the Secretary, 
    contained in Sec. 668.41(b) (page 49157).
        Issues concerning the definitions of ``full-time,'' ``normal 
    time,'' ``athletically-related student aid,'' and ``prospective 
    student,'' as contained in Sec. 668.41(a) (pages 49157-49158).
        Issues concerning the composition of students who make up the 
    denominator of the institution's graduation or completion rate 
    fraction, as contained in 668.46(a) (page 49158).
        Issues concerning the tracking of students, related to 
    Sec. 668.46(a) (page 49158).
        Issues concerning the latest dates on which institutions must 
    disclose their completion or graduation rate information, contained in 
    Sec. 668.46(a)(2) (pages 49158-49159).
        The students an institution may include in the numerator of its 
    completion or graduation rate fraction, and issues related to the 
    documentation of those students, as contained in Sec. 668.46(b) (pages 
    49159-49160).
        The students who may be excluded from the institution's calculation 
    of a completion or graduation rate, as contained in Sec. 668.46(b)(2) 
    (page 49160).
        The disclosure of the components of the numerator of the 
    institution's completion or graduation rate fraction, as contained in 
    Sec. 668.46(c) (page 49160).
        The provisions for waivers for institutions that are members of 
    athletic conferences or associations that provide substantially 
    comparable data, as contained in Sec. 668.46(d) (page 49160).
        The requirement that institutions that award athletically-related 
    student aid disclose data regarding the completion or graduation rates 
    of student athletes, and other general information, to a student 
    offered athletically-related student aid, and to his or her parents, 
    coaches, and high school counselors, and send a report of that data to 
    the Secretary, as contained in Sec. 668.49(a) (page 49160).
        The requirement that such institutions report and disclose that 
    data by July 1 of every year, beginning July 1, 1997, as contained in 
    Sec. 668.49(a) (page 49160).
        The kinds of general data to be reported and disclosed, and the 
    categories of students for whom completion or graduation rates are to 
    be calculated, reported, and disclosed, as contained in Sec. 668.41(a) 
    (pages 49160-49161).
        The definition of ``sport'', as contained in Sec. 668.49(a)(2) 
    (page 49161).
        The requirement that completion or graduation rates be calculated 
    in the same manner as specified in Sec. 668.46 (b) and (c), as 
    contained in Sec. 668.49(b).
        The provision that an institution, if it wishes, may provide 
    information to potential student-athletes and the Secretary regarding 
    the completion or graduation rate of students who transfer into the 
    institution, and the number of students who transfer out of the 
    institution, as contained in Sec. 668.49(c) (page 49161).
        The provision that allows institutions that are members of athletic 
    conferences 
    
    [[Page 61777]]
    or associations to obtain waivers if the conference or association of 
    which it is a member provides substantially comparable information, as 
    contained in Sec. 668.49(d) (page 49161).
    
    Summary of Changes From the Proposed Regulations
    
        The Secretary has added definitions of ``first-time freshman 
    students,'' ``certificate- or degree-seeking students,'' and 
    ``undergraduate students''. The Secretary has also changed the 
    definitions of ``full-time students'' and ``normal time''.
        The Secretary requires institutions to disclose information on 
    completion or graduation rates and transfer-out rates for the general 
    student body by the January 1 immediately following the expiration of 
    150% of normal time for the group of students on which the institution 
    bases its completion or graduation rate calculation.
        The Secretary requires an institution that offers a predominant 
    number of programs based on standard terms (semesters, trimesters, or 
    quarters) to establish a fall cohort, consisting of undergraduate 
    students who are enrolled as of October 15, or the end of the 
    institution's drop-add period, on which to calculate its completion or 
    graduation rate. The Secretary also requires such an institution to 
    count as an entering student an undergraduate student who is enrolled 
    at the institution as of October 15.
        The Secretary requires an institution that does not offer a 
    predominant number of programs based on standard terms (semesters, 
    trimesters, or quarters) to count as entering students all full-time 
    undergraduate students who enter the institution between July 1 and 
    June 30 for purposes of calculating its completion or graduation rate. 
    Such an institution will consider a student to have entered for these 
    purposes if the student attends at least one day of class.
        The Secretary requires an institution to count as an entering 
    student only first-time freshman students as defined in the 
    regulations. An institution may calculate a completion or graduation 
    rate or rates for students who transfer into the institution as 
    separate and supplemental rate or rates.
        The Secretary requires institutions to publish two rates: one, the 
    rate at which students complete or graduate, and the other, the rate at 
    which students transfer out of the institution.
        The Secretary allows institutions to count as completers those 
    students who complete a transfer preparatory program described in 
    Sec. 668.8(b)(1)(ii).
        The Secretary is dropping the proposal that would have allowed 
    institutions to count as completers those students still enrolled in 
    good standing in programs longer than the program on which the 
    institution bases its disclosure date.
        The Secretary will require documentation of a transfer in order for 
    an institution to count a student as a transfer-out, and will accept 
    such documentation as a certification letter, electronic certification, 
    confirmation of enrollment data from a legally-mandated tracking 
    system, or institutional data exchange information confirming that a 
    student has enrolled in another institution.
        The Secretary is clarifying that an institution that is covered by 
    waivers for substantially comparable data gathered by an athletic 
    association or conference must still comply with the information 
    dissemination provisions of the statute and these regulations.
        The Secretary is including a de minimus exception to the disclosure 
    requirements for the completion or graduation rates of student athletes 
    that allows institutions not to disclose those rates for categories 
    that include five or fewer students.
    
    Preparation of Final Regulations
    
        The Secretary has formulated these regulations in accordance with 
    Executive Order 12866, the Administration's initiative on regulatory 
    reinvention, and the Department's own Principles for Regulating.
        The Secretary believes that the Student Right-to-Know Act 
    establishes important consumer information disclosure standards for 
    institutions. In promulgating these regulations, the Secretary's goal 
    is to ensure that institutions provide consistent and useful 
    information on completion and graduation rates. With this information 
    in hand, the Secretary believes that prospective students, and 
    prospective student athletes, will be better able to make informed 
    choices when they choose a postsecondary institution.
        The Secretary believes that these final regulations strike an 
    appropriate balance between establishing a basic level of useful 
    consumer information for students, and keeping burden on institutions 
    to a minimum.
    
    Analysis of Comments
    
        In response to the Secretary's invitation in the September 21, 1995 
    NPRM, approximately 100 parties, including representatives of large and 
    small institutions, athletic associations, college and university 
    associations, associations of collegiate registrars and institutional 
    researchers, student advocacy groups, and student right-to-know 
    advocates, submitted comments on the proposed regulations. A summary of 
    those comments, and an analysis of changes in the regulations since the 
    publication of the NPRM, follows.
        Substantive issues are discussed under the section of the 
    regulations to which they pertain. Technical and other minor changes--
    and suggested changes the Secretary is not legally authorized to make 
    under the applicable statutory authority--are not addressed.
    
    General
    
        Comments: Some commenters agreed that the amount of flexibility 
    contained in the proposed rules was appropriate for the purpose of 
    providing consumer information. These commenters believed that the 
    added flexibility of these proposed rules reduced burden, reflected the 
    letter and spirit of the statute, or took into account changes in 
    technology. Some of these commenters maintained that nationwide 
    comparability of data should not be the most important factor in the 
    implementation of the statute, and expressed appreciation that these 
    proposed rules, unlike earlier proposals, recognized the diversity of 
    institutions of higher education. Other commenters agreed that the 
    level of flexibility was appropriate because the only relevant 
    comparisons to be made were within different sectors of the higher 
    education community, and that these proposed rules provided adequate 
    guidance to make such comparisons possible.
        Some commenters believed that any degree of flexibility defeated 
    the purpose of the statute in providing meaningful and useful consumer 
    information, and asked the Department to establish and require the use 
    of a standard federal methodology and a set of standard federal 
    definitions.
        A majority of commenters appreciated the Secretary's attempt to 
    provide flexibility, but believed the amount of flexibility contained 
    in the proposed rules did not serve well the consumer purpose of this 
    statute. These commenters maintained that the proposed rules would 
    result in the provision of inconsistent, incomparable data that would 
    be of little use to student consumers.
        Of these commenters, many believed that for reasons of 
    comparability and burden reduction, the final rules should require all 
    institutions to report according to the definitions and methods 
    contained in the forthcoming National Center for Education Statistics 
    (NCES) Integrated Postsecondary Education Data System (IPEDS) 
    Graduation Rate Survey (GRS). These 
    
    [[Page 61778]]
    commenters maintained that only a mandatory system would generate 
    meaningful, comparable, and useful consumer information, and that this 
    goal would be met with the least burden by requiring the use of the GRS 
    rather than the imposition of another, different methodology. These 
    commenters noted that all institutions would soon be required to report 
    to the NCES through the GRS.
        Many others asked that the Secretary give serious consideration to 
    following the recommendations of the report on graduation rates and 
    other statistics the Joint Commission on Accountability Reporting 
    (JCAR) is now developing. These commenters argued that (1) graduation 
    rate statistics alone are not meaningful consumer information, and that 
    the JCAR survey will provide better information in the form of 
    statistics on graduation, completion, transfers, advancement, and 
    persistence, and (2) the JCAR statistics are fair, consistent among all 
    institutions, and easy to calculate.
        A number of commenters asked that the GRS, the JCAR survey, or the 
    National Collegiate Athletic Association (NCAA) survey be approved as 
    ways of meeting the requirements of this statute. One commenter asked 
    that the IPEDS GRS be adopted as the model methodology. One commenter 
    asked that the Secretary implement final regulations that would provide 
    consistency among those reports and the report required by this 
    statute.
        Several commenters maintained that the simple model the Secretary 
    put forth would lead to meaningless or dishonest reporting, in that it 
    attempts to condense necessary information into a single statistic. One 
    of these commenters argued that the type of information needed for 
    student consumers was more complex than that required by other types of 
    consumers, and that such information could only be gathered by closely 
    scrutinizing an institution's mission and programs in the context of 
    the student's own interests, abilities, and willingness to complete a 
    program.
        Discussion: The Secretary continues to believe that the provision 
    of graduation rate data will provide meaningful information to student 
    consumers, and that a degree of flexibility is consonant with 
    generating useful consumer information. However, the Secretary has been 
    persuaded by the number and nature of comments that the degree of 
    flexibility contained in the proposed rules may present problems of 
    comparability.
        Therefore, based on these comments, the Secretary is making changes 
    to the final regulations that address problems of comparability. The 
    Secretary requires institutions to use the definitions of 
    ``certificate- or degree-seeking students,'' ``first time students,'' 
    and ``undergraduate students'' that are based on those definitions as 
    they are published in the IPEDS GRS Glossary, NCES 95-822. These 
    definitions have been changed slightly from the IPEDS definition to 
    conform to the statute, but are the functional equivalent of the IPEDS 
    definitions. Because institutions will in the future be required to 
    report these data according to these definitions under IPEDS, the 
    Secretary believes that using definitions based on the IPEDS 
    definitions that are slightly changed to fit the requirements of the 
    statute, will increase comparability without increasing burden.
        Also in the interests of comparability, the Secretary has removed 
    from the definitions the flexible definition of ``full-time students'' 
    included in the proposed rules. Institutions must instead use the 
    definition of ``full-time student'' as defined in Sec. 668.2 of the 
    Student Assistance General Provisions regulations. This definition that 
    is functionally equivalent to the definition found in the IPEDS 
    Glossary.
        In order to increase comparability and to decrease the possibility 
    that institutions will need to calculate duplicate graduation or 
    completion rates, the Department will work with organizations such as 
    the NCES, the JCAR, athletic conferences or associations, and state 
    agencies, or other organizations that are attempting to gather 
    completion or graduation rate data, to help those organizations develop 
    protocols that will generate data substantially comparable to the data 
    required by the statute and these regulations. If these organizations 
    do develop such protocols that meet the methodological and definitional 
    standards set by the statute and regulations, the Secretary will inform 
    institutions that the use of those protocols meet the requirements for 
    the compilation of these data under the statute and the regulations. 
    The Secretary, however, will not accept the protocols of these 
    organizations for these purposes, nor grant waivers to athletic 
    associations or conferences for their protocols, nor deem the protocols 
    of any organization or institution to be in compliance with the statute 
    and these regulations, if those protocols fail to incorporate the 
    provisions of the statute and regulations.
        Changes: Section 668.41(c) has been changed to include definitions 
    of ``degree- or certificate-seeking student'' and ``first-time freshman 
    student'' that are based on the definitions published by IPEDS. ``Full-
    time student'' is defined in accordance with the definition in 
    Sec. 668.2.
        Comments: Many commenters expressed concern that these proposed 
    rules would create another set of reporting criteria that institutions 
    must meet, in addition to other reports on the same topic now required 
    of institutions by the NCES, the NCAA, JCAR, and accrediting agencies, 
    and that therefore these proposed rules were overly burdensome. Some of 
    these commenters maintained that smaller institutions, which employ 
    small staffs, would find it impossible to meet any new reporting 
    requirements in addition to those which they must already meet. Some 
    commenters reported that their institutions already were collecting 
    information based on the NCAA model (in which completion or graduation 
    rates are calculated for a cohort of first-time, full-time, 
    baccalaureate students who enter an institution during the 
    institution's fall term), the model set forth in the 1991 Dear 
    Colleague letter, or another system, and that to force them to change 
    systems to comply with new regulations would be prohibitively expensive 
    and extremely burdensome. One commenter asked that the final rules not 
    differ significantly from the guidance provided by Dear Colleague 
    Letter GEN-91-27. One commenter reported that the flexibility of the 
    rules allowing institutions to set their own definitions would prevent 
    coordinating bodies from collecting information from groups of 
    institutions.
        One commenter believed that the provision of graduation rate 
    information as a regulatory issue was moot, given that several athletic 
    associations and news publications now provide statistics, and 
    expressed the belief that a regulatory system for providing this 
    information would only add to the current confusion.
        Discussion: The Secretary recognizes that the calculation of these 
    rates in different ways as required by different organizations would 
    represent a burden on institutions. However, the Secretary is bound by 
    statute to require that these rates be calculated and published, and 
    that they be calculated according to statutory requirements. Insofar as 
    is possible within the terms of the statute, the Secretary is providing 
    flexibility for institutions to report according to protocols by which 
    institutions will be required to calculate completion or graduation 
    rates in the future, notwithstanding these regulations, e.g., the IPEDS 
    GRS and the JCAR survey, as well as surveys by state agencies and the 
    NCAA. However, if any particular 
    
    [[Page 61779]]
    organization on this list fails to develop protocols that accord with 
    the statute and these regulations, the Secretary cannot simply waive 
    the requirements of this statute or change the specifics of the 
    statutory calculation to fit those circumstances. Institutions must 
    calculate and publish these rates, and do so in accordance with the 
    statute and regulations.
        With regard to the particular case of the GRS survey to be 
    conducted by the NCES, the Secretary appreciates that while the 
    Statement of Educational Impact contained below is technically correct 
    in maintaining that no agency of the federal government is currently 
    gathering this information, commenters were concerned that the 
    forthcoming NCES GRS and these regulations may in the future require 
    institutions to submit the same types of information, compiled in 
    different ways, to the Federal Government. Because the NCES is a 
    federal entity, the Secretary will insure that the results of future 
    NCES GRS surveys will be acceptable for purposes of this statute and 
    these regulations.
        The Secretary also notes that the definitions and suggested 
    protocols included in these final regulations substantially mirror the 
    provisions of Dear Colleague Letter GEN-91-27.
        Changes: None.
        Comments: Several commenters suggested that the Secretary encourage 
    institutions to supply additional information to place their graduation 
    rate reports in context, as a way of providing greater comparability 
    and usefulness without significantly increasing burden. One commenter 
    asked that all institutions be required to provide such contextual 
    information.
        Discussion: The Secretary strongly encourages institutions to 
    provide contextual information. There is, however, no statutory 
    authority to require institutions to provide such information.
        Changes: None.
        Comments: Several commenters asked that the disclosure requirements 
    for short-term programs at proprietary schools regarding job placement, 
    licensure requirement, and licensure pass rate information that had 
    been previously included in the Student Assistance General Provisions 
    regulations be reinstated as part of these final regulations. One of 
    these commenters argued that the types of students who enter these 
    programs tended to be the consumers most in need of information and 
    protection. This commenter maintained that such provisions would embody 
    the spirit and intent of both the statute and other Congressional 
    commentary on consumer information issues regarding short-term 
    programs. This commenter also recommended that the information 
    generated by such requirements be reported to a government agency to be 
    compiled and published.
        Discussion: Because these provisions are no longer included in the 
    statute, the Secretary will not include them in these regulations.
        Changes: None.
    
    Section 668.41  Information Disclosure
    
        Comments: Several commenters proposed that the Department mandate 
    the Campus Security model for the placement of this information in 
    publications. These commenters maintained that this model was not 
    burdensome.
        Several commenters opposed the Campus Security model. Several 
    commenters opposed any regulation of the placement of this information, 
    besides the general requirement that it be published in publications 
    that students and prospective students receive. These commenters 
    maintained that each individual institution was the best judge of where 
    such information be published. One commenter believed that no 
    regulation was necessary so long as institutions provided the 
    information before the student entered into any financial obligation. 
    One commenter asked that nonbinding guidance rather than regulations be 
    promulgated in this matter. One commenter objected to the Campus 
    Security model as now formulated in the regulations, in that it 
    requires the distribution of information.
        One commenter asked that the Department mandate publication in the 
    institution's catalog or other similar publication that provides 
    meaningful context to this information. One commenter maintained that 
    trade schools be required to publish this information in their catalog. 
    One commenter asked that the Secretary clarify that publication in a 
    catalog or other such publication meets the requirements of the 
    statute.
        One commenter maintained that the requirement to make this 
    information available through publications and mailing to prospective 
    students would be overly burdensome. This commenter argued that general 
    availability through literature racks and provision upon request should 
    be deemed as fulfilling the requirements of this statute.
        Discussion: The Secretary agrees that the level of specificity 
    contained in the Campus Security model of disclosure need not apply to 
    these regulations. The Secretary believes that such publications as 
    catalogs, admission literature, or other similar types of publication 
    are appropriate places for this material. Because the statute requires 
    that this material be available in ``appropriate mailings,'' the 
    Secretary disagrees that the mere maintenance of this material in 
    literature racks would satisfy the requirements of the statute.
        Changes: None.
        Comments: One commenter maintained that the suggestion that 
    institutions also provide this information to secondary schools and 
    guidance counselors was too expensive and burdensome.
        Discussion: The Secretary will not require institutions to provide 
    this information automatically to secondary schools and guidance 
    counselors, but strongly encourages institutions to provide this 
    information on request to parties such as guidance counselors.
        Changes: None.
        Comments: One commenter asked for a clarification of the standard 
    that students have this information before they enter into ``financial 
    obligation,'' and inquired whether payment of an application fee would 
    count as a financial obligation, as opposed, for example, to the 
    payment of tuition. This commenter argued that if the former were the 
    case, insurmountable problems would arise, since some students apply 
    for admission without first contacting the institution.
        Discussion: The Secretary interprets ``financial obligation'' to 
    mean any agreement that obliges the student to pay significant sums of 
    money. This would include, for example, tuition or room and board 
    deposits, advance payments for tuition, room and board, and books and 
    supplies. The Secretary does not interpret the tacit agreement to pay 
    an application fee when submitting an application to fall within the 
    scope of ``financial obligation'' as that term is used in the statute.
        Changes: None.
    
    Section 668.41  Disclosures of Information on Student-Athletes
    
        Comments: One commenter asked the Secretary to reformulate the 
    requirement that institutions provide the graduation rate data for 
    athletes to the student's parents, given that locating and providing 
    materials to both parents in cases of separation or divorce was very 
    burdensome. This commenter recommended that the relevant language be 
    changed to indicate that provision of these data to a single parent or 
    a guardian, when appropriate, would satisfy this requirement.
        Several commenters asked that only general guidelines regarding the 
    medium in which the information is transmitted be promulgated, as 
    
    [[Page 61780]]
    institutions are attempting to move away from paper formats to 
    electronic means of transmitting and disseminating information.
        Discussion: The Secretary interprets this provision of the statute 
    to require the notification of the parent who acts as the student's 
    guardian.
        The Secretary agrees that general guidelines will allow 
    institutions flexibility in adapting to technological changes, and 
    believes the regulatory text is consistent with that intent. However, 
    the Secretary also believes that institutions should have paper copies 
    available for parties who do not have electronic access.
        Changes: None.
    
    Definitions
    
        Comments: Most commenters requested the Secretary to require the 
    use of standard definitions. Their reasoning was to ensure uniformity, 
    comparability among institutions, and ease of understanding for the 
    consumer of this information. The commenters stated that flexibility 
    with many of the definitions proposed in the NPRM is undesirable 
    because it will produce noncomparable data that would be confusing to 
    the consumer.
        Most of the commenters recommended that the regulations require the 
    use of IPEDS definitions. The commenters explained that institutions 
    are already familiar with these definitions, that they are already 
    being used by the Secretary, and they would not require additional 
    classifications of students beyond those already used. As such, these 
    definitions would significantly reduce burden on institutions.
        A much smaller number of commenters appreciated the flexibility 
    provided by the NPRM to use varying definitions so long as the 
    definitions were part of the information disclosed. A considerable 
    number of commenters recommended that the Secretary require the 
    definitions used by JCAR. JCAR also uses some of the IPEDS definitions. 
    In particular, most commenters recommended the IPEDS definitions for 
    the following terms: full-time, certificate or degree-seeking, first-
    time freshman student, and undergraduate student.
        Discussion: Upon reviewing the comments, the Secretary agrees that 
    statutory definitions of key terms will increase comparability and 
    benefit consumers. The Secretary also agrees that any definitions 
    promulgated in these regulations should be definitions with which 
    institutions are already familiar.
        Changes: Particular changes to the ``definitions'' section of these 
    regulations are addressed below.
        Comments: A majority of commenters argued that the amount of 
    flexibility in these proposed rules with regard to the definition of 
    ``normal time'' would result in incomparable data. Many of these 
    commenters asked that the sector (less than two year, two year, and 
    four year) definitions promulgated by IPEDS be placed in the 
    regulations. Many others asked that the JCAR definitions of catalog 
    award-time, extended award-time, and eventual award-time be adopted as 
    mandatory definitions.
        One commenter believed that defining ``normal time'' as ``minimal 
    time'' is inappropriate, given the number of students who enter 
    institutions with a large number of credits by means such as Advanced 
    Placement Tests and summer sessions, as well as the number of students 
    who take overloads and independent study courses. This commenter 
    believed that normal time instead be defined as ``designated completion 
    time.'' One commenter maintained that normal time should be the 
    advertised time to graduation or completion published in an 
    institution's advising worksheets, catalog, or similar publications, 
    and that if the institution does not publish such information, that 
    normal time for that institution be one year (twelve months) for a 
    certificate program, two years (twenty-four months) for an associate 
    degree, and four years (forty-eight months) for a bachelor's degree.
        One commenter supported the use of normal time rather than average 
    time, because the latter would tend to change. One commenter supported 
    the definition of normal time as minimal time to complete or graduate 
    from a certificate or degree program, but asked that this be clarified 
    to exclude summer terms.
        Several commenters supported the use of some type of ``average'' 
    time rather than minimal time as the definition of normal time, given 
    that outside factors, such as family commitments, work time, and 
    availability of funds, affect the time students need to graduate or 
    complete. These commenters suggested that institutions be permitted to 
    determine ``normal time'' using other means, for example, measuring the 
    ``normal time'' to completion experienced by the most recent cohort of 
    students, or using sampling techniques of student populations. One 
    commenter believed that the concept of normal time itself as used in 
    the statute and defined in these regulations was a misnomer, given that 
    students now routinely switch between full-time and part-time status, 
    and are affected by a whole range of non-academic factors.
        Several commenters believed that the definition of normal time 
    should not include the term full-time, given that full-time represents 
    only a minimum number, not a particular number, and so two students who 
    take different full-time loads would have different normal times to 
    graduation or completion. One commenter believed that the definition of 
    normal time could contain the term full-time only if the latter term 
    was clarified to mean the greater of the institution's definition of 
    full-time, or the title IV, HEA definition of full-time.
        Several commenters asked the Department to mandate that 
    institutions report their definition of normal time as part of their 
    graduation rate report.
        Discussion: The Secretary agrees that the term ``normal time'' 
    should not include the term ``full-time'' because the meaning of the 
    term ``full-time'' with regard to academic workloads may vary from 
    student to student.
        The Secretary agrees with the commenters who concurred that 
    ``normal time'' not be defined to mean ``average time.'' The Secretary 
    believes that Congress meant to address such issues as stop outs, work, 
    remediation, and other factors when it set the time for graduation or 
    completion at 150% of normal time. The Secretary also believes that 
    Congress meant ``normal time'' itself to be the standard, traditional 
    time to degree, e.g., four years for a bachelor's degree, two years for 
    an associate degree, and the scheduled time for clock hour programs. 
    The Secretary agrees that to make these points clear, the definition of 
    ``normal time'' in the regulations should make reference to an 
    institution's catalog time. The Secretary also agrees to include the 
    specific time in standard terms (semesters, trimesters, or quarters, 
    not including summer terms) to completion that have been traditionally 
    associated with degrees. The Secretary acknowledges that measuring time 
    to completion in standard terms (semesters, trimesters, or quarters) 
    rather than months for degree programs is a change from earlier 
    guidance, but believes this change is necessary in order for this 
    information to be provided in a timely fashion. Time to completion 
    measured in months, for example, for a four year institution, would end 
    after the July 30 date for completors or graduates to count, and would 
    therefore delay disclosure for up to 15 months after the end of the 
    students' 150% of normal time, given the change to the January 1 
    disclosure date discussed below. Measured in standard terms, the data 
    will only be six 
    
    [[Page 61781]]
    months old by the December 1 disclosure date.
        With regard to completion or graduation rate, or transfer-out rate 
    calculations based on ``extended catalog time'' (more than 150% of 
    normal time), the statute does not require that such rates be 
    calculated or disclosed. Institutions may always disclose such rates as 
    supplemental information.
        Changes: A definition of ``normal time,'' based on the JCAR 
    definition of normal time, has been inserted in Sec. 668.41(c), which 
    defines normal time as the time necessary for a student to complete all 
    requirements for a degree or certificate according to an institution's 
    catalog. This is typically 4 years (8 semesters or trimesters, or 12 
    quarters, excluding summer terms) for a bachelor's degree, 2 years (4 
    semesters or trimesters, or 6 quarters, excluding summer terms) for an 
    associate's degree, and the scheduled times for certificate programs.
        Comments: A majority of commenters believed that the degree of 
    flexibility permitted institutions to define full-time would lead to 
    non-comparable data. Most of these commenters supported the mandatory 
    use of the IPEDS definition of full-time.
        Several commenters supported the proposed regulatory definition. 
    One commenter asked that an institution be required to disclose any 
    differences between its definition of full-time for academic purposes 
    and its definition of full-time for tuition purposes. Several 
    commenters asked that the Secretary require institutions to publish 
    their definitions with their graduation rate data.
        Discussion: Upon further consideration, the Secretary agrees with 
    the commenters who asked that a definition of ``full-time'' be included 
    in the regulations. Because the definition of ``full-time'' in 
    Sec. 668.2 is familiar to all institutions, was the definition provided 
    in Dear Colleague Letter GEN-91-27, and is functionally the same as the 
    IPEDS definition of ``full-time,'' the Secretary applies that 
    definition to this section of the regulations. The Secretary believes 
    that for these reasons referring to this definition in the regulations 
    will increase comparability and decrease potential confusion.
        Changes: The definition of ``full-time student'' has been removed 
    from Sec. 668.41(c). Institutions are required to use the definition of 
    ``full-time student'' found in Sec. 668.2.
        Comments: Most commenters recommended the use of the first-time 
    freshman student definition under IPEDS. This definition provides for a 
    student attending any institution for the first time at the 
    undergraduate level; this includes students enrolled in the fall term 
    who attended college for the first time in the prior summer term, and 
    also includes students who entered with advanced standing.
        Discussion: The Secretary agrees with the commenters that for 
    reasons of comparability, consistency, and burden reduction, the 
    regulations should mandate the use of a particular definition of 
    ``first-time freshman student,'' and that the definition should be the 
    IPEDS' definition or its functional equivalent. Promulgating such a 
    definition will ensure consistency of data among institutions, and is 
    less burdensome to institutions because institutions are already 
    familiar with the IPEDS definitions.
        Changes: Section 668.41(c) has been changed to require institutions 
    to use a definition of ``first-time freshman student'' that is based on 
    the IPEDS definition found in the IPEDS Glossary, NCES 95-22.
        Comments: Many commenters asked that the IPEDS definition of 
    ``undergraduate student'' be included in the final regulations.
        Discussion: For reasons of consistency and familiarity, the 
    Secretary agrees to include the IPEDS definition of ``undergraduate 
    student'' in the final regulations.
        Changes: The definition of ``undergraduate student'' as found in 
    the IPEDS Glossary, NCES95-822, has been added to Sec. 668.41(c).
    
    Section 668.46  Information on Completion or Graduation Rates and 
    Transfer-Out Rates
    
        Comments: Many commenters objected to the October 1 disclosure date 
    for this information. In general these commenters maintained that the 
    amount of time between June 30 and October 1 was insufficient for 
    institutions to calculate these graduation rates. Several of these 
    commenters maintained that the statute provided institutions with one 
    year between the point in time when a group's 150% of normal time 
    elapsed and the required disclosure date. Several other commenters 
    suggested disclosure dates in the November or December immediately 
    following the elapse of 150% of normal time.
        Discussion: The Secretary agrees to allow a disclosure date in the 
    next calendar year following the expiration of 150% of normal time. 
    However, in the interest of consumers, the Secretary believes that this 
    date should be the earliest possible. Therefore, the Secretary changes 
    the disclosure date to the first January 1 following the expiration of 
    150% of normal time for the entire group of students on which the 
    institution bases its completion or graduation rate calculation.
        Changes: Section 668.46(a)(5) has been changed to require that an 
    institution, beginning with the group of students who enter the 
    institution on or after July 1, 1996, disclose this information no 
    later than the January 1 immediately following the point in time that 
    150% of normal time has elapsed for the entire group of students on 
    which the institution bases its completion or graduation rate, and 
    every January 1 thereafter.
        Comments: Most commenters recommended that the Secretary require 
    the use of a snapshot approach for tracking students, that is, taking a 
    snapshot of a cohort that does not change for the entire length of the 
    analysis. Electronically, this methodology means comparing only two 
    files. For institutions that will make calculations from paper records, 
    the ``snapshot'' methodology requires looking at records from only two 
    academic years. The commenters explained that a snapshot methodology 
    will limit the requirement to comparison of a cohort's file for only 
    two years--at the time of entry and at the time of disclosure. The 
    commenters' concern is that continuous tracking would be an added and 
    unnecessary burden on institutions. The commenters also indicated that 
    the snapshot methodology is sufficient to produce the required 
    information under the statute. Very few commenters supported the 
    concept of tracking individual students.
        Discussion: The Secretary agrees that a snapshot methodology is 
    appropriate for purposes of these regulations. To help institutions 
    implement this methodology, the Secretary is adjusting other elements 
    of the methodology, such as the characterization of an entering 
    student.
        Changes: None.
        Comments: The commenters almost unanimously recommended that the 
    Secretary require the use of a fall cohort to calculate an 
    institution's graduation rate. Most institutions' believe that students 
    entering in this term will be a representative sample of students 
    entering during the entire year. Institutions argue that using the same 
    methodology will produce more consistent and comparable data. The 
    commenters stated that using a full-year cohort would dramatically 
    increase data tracking and reporting burden on institutions. Moreover, 
    use of the fall cohort methodology is consistent with both the IPEDS 
    GRS under development and the JCAR methodology, and many 
    
    [[Page 61782]]
    institutions and state-level agencies have already developed data 
    systems using the fall cohort methodology recommended by Dear Colleague 
    Letter GEN-91-27. A number of institutions opposed extrapolation to a 
    full-year rate; a small number supported such extrapolation. Some 
    institutions believe flexibility should be given to institutions for 
    whom a fall cohort is not representative.
        Discussion: The Secretary accepts the commenters' assertion that 
    the use of a fall cohort is the best approach for some institutions, 
    namely standard term-based (semester, trimester, quarter) institutions, 
    which primarily commented on this issue. To be a standard term-based 
    institution for these purposes, the institution must offer 
    predominantly standard term-based programs, that is, greater than 50% 
    of its programs must be term-based. In order to accommodate 
    institutions for whom a fall cohort may not suffice, the regulations 
    require the use of a year-long cohort (July 1-June 30) for institutions 
    that do not operate on a standard term basis.
        Changes: Section 668.46(a)(2) has been added to require 
    institutions that offer a predominant number of semester, trimester, or 
    quarter based programs to use a fall cohort of students entering 
    between every July 1 and October 15. An institution using a snapshot 
    methodology may use a census date of October 15 or another appropriate 
    date to identify that cohort. Institutions that do not have a 
    predominant number of programs based on standard semesters, trimesters, 
    and quarters must use a year-long cohort of students who enter between 
    every July 1 and June 30. The Secretary believes this is a reasonable 
    differentiation because most non-term based institutions are 
    proprietary schools, and the Secretary understands that these 
    institutions are now required by their accrediting agencies to track 
    all their students.
        Comments: All commenters who addressed the concept of an entering 
    student's attendance for at least one day of class opposed the 
    proposal. The commenters explained that many students register, add and 
    drop courses, and withdraw after the first day of class. Moreover, 
    institutions generally use an enrollment date or census date to record 
    a snapshot of their enrollment. Typically this date is at least ten 
    days to thirty-five days after the beginning of a term; some states 
    mandate the actual census date. The commenters indicated that, 
    realistically, institutions simply do not have mechanisms to know if a 
    student attends only one day of class. Therefore, the commenters feel 
    the Secretary should refer institutions to the definition of entering 
    (or first-time) student under the IPEDS Fall Enrollment Survey (the 
    count of students by the NCES that counts the number of students 
    enrolled as of October 15 for the purpose of providing annual 
    projections of college enrollment for the NCES publications Condition 
    of Education and The Digest of Education). As previously indicated, 
    institutions are generally familiar with these definitions.
        Discussion: The Secretary is concerned by the issues raised by the 
    commenters, in part because it is important for other parts of the 
    regulations governing the title IV, HEA programs (e.g., refunds) that 
    institutions know when students withdraw or drop out of an institution. 
    However, given the number and nature of the comments received on this 
    issue, the Secretary agrees that it will reduce burden and increase 
    comparability to require institutions to use the enrollment date 
    (October 15) set by the IPEDS Fall Enrollment Survey, or the end of the 
    institution's drop-add period, for purposes of identifying an entering 
    student for institutions that are required by these regulations to use 
    a fall cohort.
        For institutions that use a year-long cohort, an entering student 
    is a student who attends at least one day of class. The Secretary 
    believes that this differentiation among schools on this issue is 
    logical since non-term based schools are better able to track their 
    students from the first day because such institutions do not have drop-
    add periods.
        Changes: A change has been made in Sec. 668.46(a) that mandates 
    institutions that offer a predominant number of programs based on 
    semesters, trimesters, or quarters to base their calculations on the 
    students who enter during the institution's fall term, beginning July 
    1, 1996. An entering student shall be considered to have entered for 
    these purposes if that entering student is enrolled as of October 15 or 
    the end of the institution's drop-add period. All other institutions 
    must count all students who enter between every July 1 and June 30, and 
    attend at least one day of class, beginning July 1, 1996.
        Comments: The primary concern raised by the commenters concerning 
    the definition of entering students was the treatment of students 
    transferring into an institution. Almost unanimously the commenters 
    favored a separate cohort and graduation rate for these students. The 
    commenters believed that including students who transfer into colleges 
    and universities in the same cohort with first-time freshman students 
    will lead to inconsistent and noncomparable data among institutions, 
    because institutions evaluate transfer students differently and at 
    different times, and different levels of credit may be awarded for 
    different curriculum choices. Some commenters recommended that the 
    progress of transfers-in should be accounted for by using a snapshot 
    methodology at 150% of the normal time to complete from their time of 
    entrance into the new institution. That is, their status should be 
    measured at the time of entry and at the time of disclosure and be 
    reported separately. Other commenters noted that the inclusion of 
    transfers-in with first-time freshman students requires a continuing 
    adjustment to the entering cohort. This approach would violate the 
    snapshot methodology recommended by so many commenters. Moreover, some 
    commenters believe that such a methodology complicates the 
    calculations, creates a burden on the institutions, and ultimately 
    confuses the consumer. Other commenters note that separate reporting 
    for first-time freshman students and transfers-in is consistent with 
    established tracking methodologies in the states, which for the most 
    part concentrate on tracking first-time freshmen.
        Discussion: In response to the commenters' concerns, the Secretary 
    has reconsidered the position taken in the NPRM and excludes from the 
    definition of ``entering'' students those students who transfer into an 
    institution. The Secretary will now consider reporting on students who 
    transfer into an institution to be an optional disclosure for Student 
    Right-to-Know purposes. If an institution does choose to establish a 
    cohort of transfers-in, the calculation of the completion or graduation 
    rate of these students must be separate from the calculation of the 
    completion or graduation rate of the first-time cohort, and the two 
    rates must be published and labeled as two separate rates.
        Changes: Section 668.46(a) is revised to make optional and separate 
    the reporting on students transferring into an institution.
        Comments: Many commenters urged the Secretary to consider adopting 
    the JCAR methodology, which includes the disclosure of completion or 
    graduation rates, and other information, on part-time as well as full-
    time undergraduate students. These commenters maintained that 
    information on part-time students was necessary to meet the needs of a 
    large number of student consumers who do not fit into the traditional 
    category of full-time students. 
    
    [[Page 61783]]
    
        Discussion: The statute only requires that institutions compile and 
    disclose information on full-time, certificate- or degree-seeking 
    undergraduate students. Institutions may always disclose completion or 
    graduation rates and other information on part-time students or other 
    types of students as supplemental information.
        Changes: None.
        Comments: Many commenters recommended that the Secretary not 
    consider students who transfer to a new institution to be completers. 
    These commenters believed that considering transfers-out to be 
    completers is inaccurate because an individual could be counted as a 
    completer by two separate institutions. These commenters also asserted 
    that students who transfer out of an institution are not equivalent to 
    completers, since their final outcome is unknown.
        Many other commenters recommended that the Secretary should 
    regulate what types of documentation the Secretary will accept to 
    define ``substantial preparation.'' Moreover, these commenters 
    recommended that the Secretary not define substantial preparation 
    because these definitions would place a burden on institutions, since 
    they would require evaluation of transfer credits at entry, an uncommon 
    practice in higher education. The absence of a standard practice for 
    evaluating transfer credits and the varying definitions of academic 
    standing minimizes the comparability of data from one institution to 
    another and introduces the possibility of data manipulation. Both 
    produce poor consumer information in the eyes of these commenters.
        Some commenters appreciated the flexibility to allow transfers-out 
    in good standing to be completers and request that the institutions be 
    allowed to define good standing.
        A number of commenters consider a request for a transcript an 
    insufficient indicator of students' transfer behavior; transcript 
    requests do not provide the necessary certification, as they are 
    generated for many reasons unrelated to a student's intent to transfer.
        Some commenters indicate that surveys are also insufficient. Such 
    estimates introduce considerable uncertainty and variation in the data. 
    Other commenters support the idea of surveys as a viable means of 
    dealing with this statutory requirement.
        Many commenters recommended that the regulations allow one of four 
    types of documentation that a student has transferred to another 
    institution. First, a certification letter or document from the 
    registrar of the receiving institution that a student is enrolled is 
    evidence of transfer. Second, an electronic certification, such as a 
    SPEEDE/ExPRESS or a secure e-mail message, from the registrar of the 
    receiving institution is evidence of transfer. Third, the confirmation 
    of enrollment data from a legally-mandated, statewide or regional 
    tracking system (or shared information from such systems) is evidence 
    of transfer. Fourth, other documentation of enrollment at the receiving 
    institution, such as institutional data exchanges of students enrolled 
    as of the official enrollment date, is evidence of transfer. Some 
    commenters requested that the Secretary specify these means of evidence 
    in the regulations. A number of commenters believed that enrollment at 
    a new institution alone is evidence of substantial preparation. 
    Further, institutions should be permitted to use a variety of sources 
    for this rate, without being required to have documented proof of 
    transfer on a student-by-student basis. It must be emphasized that an 
    approximate rate is more useful to the student than a rate which is 
    clearly underrepresented because of difficulties in student-by-student 
    data collection and documentation.
        Most commenters urged the Secretary to adopt separate reporting of 
    completion and transfer-out rates if it is legally necessary to address 
    transfers-out. The resulting statistics represent distinct pieces of 
    consumer information depending upon an entering student's own 
    objective. The commenters indicate that combining these rates into a 
    single statistic will not help students make the choices that actually 
    face them.
        Many of the commenters petitioned the Secretary to work with the 
    academic community to devise procedures which would facilitate the 
    transfer of data among institutions which chose to participate in such 
    data transfer mechanisms. A significant number of commenters 
    recommended that the Secretary consider the method employed by the GRS 
    because of its flexibility in reporting students who transfer out of an 
    institution. Some commenters recommended that transfers-out be 
    considered completers if they are ``transfer-ready.'' In other words, 
    if the student enrolled in a transfer preparation program had achieved 
    a certain grade point average and completed a certain number of 
    credits, the student could be considered to have received ``substantial 
    preparation'' and therefore, be ``transfer-ready.'' This student, the 
    commenters maintained, is a completer.
        Discussion: The Secretary agrees that combining graduates with 
    transfers-out in a single rate will lead to confusing and sometimes 
    misleading information. Therefore, the Secretary requires that 
    institutions publish separately its transfer-out rate.
        The Secretary recognizes the variety of serious problems associated 
    with the statutory provision that transfers-out be reported. Because 
    the provision is mandated by law, institutions may not ignore it. 
    However, the Secretary wishes to provide institutions with flexibility 
    to address transfers-out. Therefore, consistent with the treatment of 
    transfers-out in the GRS, an institution is only required to report on 
    those students the institution knows have transferred to another 
    institution.
        For the reasons cited by the commenters, the Secretary agrees that 
    merely requesting a transcript is insufficient evidence of transfer. 
    There must be reasonable evidence of a transfer in order for an 
    institution to consider a student a transfer-out. The four examples of 
    valid documentation suggested by many of the commenters have been 
    incorporated into the regulations per their request.
        Moreover, in order to resolve the conflict between the transfer-out 
    provision and the particular mission of community colleges in preparing 
    students for transfer to other institutions, these regulations provide 
    that institutions that offer transfer preparatory programs as described 
    in Sec. 668.8(b)(1)(ii) may consider a student who is ``transfer-
    ready'' to be a completer. A transfer-ready student is a student who 
    has successfully completed his or her transfer program.
        With respect to the Student Right-to-Know Act disclosures, in 
    response to the commenters' concerns, an institution must disclose the 
    transfer-out rate separately from its graduation rate, but may provide 
    additional information that combines the completion or graduation rate 
    with its transfer-out rate.
        Changes: A change has been made in Sec. 668.46(c) that mandates 
    that institutions report their transfer-out rate separately. Section 
    668.46(c) has also been changed to require an institution to document 
    that a student has transferred to another institution, and provides 
    examples of the types of documentation necessary to document a 
    transfer-out.
        A change has been made to Sec. 668.46(b) which allows an 
    institution to count in its completion or graduation rate a student who 
    has successfully completed a transfer-preparatory program as described 
    in Sec. 668.8(b)(1)(ii).
        Comments: Some commenters believe the use of a persistence rate for 
    programs longer than the predominant 
    
    [[Page 61784]]
    program is necessary because it shows recognition that not all programs 
    are defined in the same way among all institutions. Other commenters 
    believe that persistence rates should not be allowed to substitute for 
    graduation rates in any cases because an institution cannot determine 
    whether a persister will graduate. These commenters believe that 
    counting persisters as completers distorts the graduation rate. These 
    commenters therefore believe that students who are enrolled in a 
    program that is longer than the program on which the institution bases 
    its disclosure, should not be counted as completers. These commenters 
    recommended use of the GRS.
        Other commenters recommended that institutions be given an option 
    of calculating a persistence rate until they are able to calculate a 
    graduation rate.
        Discussion: While the Secretary is concerned that graduation rates 
    be disclosed as early as is legally possible so that students may 
    receive current information, the Secretary has been persuaded by the 
    commenters that any type of equation of persisters with graduates is 
    misleading. Therefore, the Secretary has eliminated the proposal that 
    an institution consider students in good standing who are enrolled in 
    programs longer than the predominant programs' length as completers for 
    the purpose of disclosing its graduation or completion rate.
        As for the disclosure of a persistence rate in general, either 
    before a disclosure date, or at the disclosure date, an institution may 
    disclose such a rate as supplemental information, but must clearly mark 
    the rate as a persistence rate.
        Changes: A change has been made to Sec. 668.46(b) that eliminates 
    the inclusion of students persisting in programs longer than the 
    program on which the disclosure date is based as completers.
        Comments: Most commenters support the cohort's exclusion of 
    students who die or become permanently and totally disabled. A number 
    of commenters pointed out the small number of these students would have 
    little effect on graduation rates.
        Some commenters expressed serious concern that the graduation rates 
    at institutions with a significant number of legal exclusions may 
    appear artificially low. For example, an institution with a large 
    percentage of its students who serve on church missions will report a 
    low graduation rate if those students do not complete within the 
    statutory time frame. Many commenters objected to the statutory 
    exclusions and believe that any post-hoc adjustment of the cohort based 
    on subsequent student behavior will affect comparability of data. These 
    commenters recommend use of the GRS to allow reporting these students 
    as not enrolled if the time of reporting coincides with the time of the 
    special circumstance, and separate statistics for students who have 
    left the institution for various reasons, e.g., performing church 
    missions, joining the Armed Forces, etc. One commenter argued that in 
    order to be excluded, the student must leave school for the express 
    purpose of joining the Armed Forces, going on a church mission, etc., 
    and not just subsequently join such an endeavor after leaving school 
    for another reason.
        Discussion: In response to the commenters' support, the regulations 
    retain the exclusions for students who die or become totally and 
    permanently disabled.
        The Secretary appreciates the concerns raised regarding the other 
    statutory exclusions, such as church missionary activity. However, the 
    Secretary is unable to extend the time frame within which graduation or 
    completion may take place for the student to be counted as a completor 
    or graduate in the institution's completion or graduation rate, because 
    this time frame (150% of normal time) is a statutory provision. An 
    institution, however, may choose to deal with the difficulties of this 
    situation in several ways. It could explain the reasons why only a few 
    students are in its cohort, if it excludes these students through the 
    statutory provisions. Or it could include these students in its cohort, 
    and supplement the required calculation with additional information on 
    the graduation rate of those students when an extended time frame is 
    applied. The Secretary encourages institutions to provide supplementary 
    information and data concerning these and other limitations of its 
    graduation rate disclosure.
        The Secretary also agrees that a student must leave the institution 
    due to one of the circumstances described in Sec. 668.46(d) in order to 
    be excluded from the denominator of the completion or graduation rate 
    fraction.
        Changes: None.
        Comments: Most commenters recommended that institutions not report 
    a single graduation rate number based on a ratio of completers, 
    transfers and persisters. Institutions strongly recommend the reporting 
    of separate rates for graduates, students still enrolled, transfers-
    out, transfers-in and students not enrolled or graduated. The 
    commenters believe that combining these rates will lead to a 
    meaningless statistic.
        Discussion: As noted above, the Secretary has dropped the proposal 
    that institutions be allowed to count students persisting in programs 
    longer than the program on which the institution bases its disclosure 
    date as completers. The Secretary also mandates a separate completion 
    or graduation rate, and a separate transfer-out rate. Therefore, the 
    provisions in the proposed Sec. 668.46(c) that required the break out 
    of the different factors of the institution's graduation or completion 
    rate have been eliminated.
        As noted above, an institution may also supply supplemental 
    information describing the transfer rate of the students who transfer 
    into the institution. It may also publish supplemental information 
    describing the rate of those who complete or graduate when combined 
    with the rate of those students who transferred-out.
        Changes: Section 668.46(c) is revised as described above.
        Comments: Several commenters supported the provisions that allow 
    the Secretary to waive the requirements of Secs. 668.46 and 668.49 if 
    an athletic association or conference of which it is a member satisfies 
    the Secretary that it compiles and publishes substantially comparable 
    data. Some of these commenters asked that the standard process for 
    obtaining a waiver be published with the final regulations. One of 
    these commenters also expressed the belief that the granting of the 
    waiver should be pro forma. One of these commenters asked that an 
    institution that is a member of such an athletic association or 
    conference be allowed to maintain, publish, and distribute its own set 
    of data as well. One commenter asked that an athletic conference or 
    association be allowed to apply on behalf of all its members at once, 
    rather than for each institution individually.
        One commenter asked that state higher education agencies be given 
    the opportunity to request similar waivers for their member 
    institutions. This commenter argued that such additional waivers would 
    not result in any more incomparability than would already be generated 
    under the flexible rules the Secretary is proposing.
        Several commenters argued that the Secretary should not give 
    institutions the opportunity to obtain a waiver. These commenters 
    maintained that in the interests of accurate and comparable consumer 
    information, the Department recognize only the GRS as an acceptable 
    method for gathering this information, and that athletic associations 
    or conferences not be allowed to determine the methodology by which any 
    of these data is gathered. 
    
    [[Page 61785]]
    
        Several commenters asked that waivers granted to institutions for 
    substantially comparable data supplied to athletic conferences or 
    associations not exempt those institutions from the requirement to 
    supply information to students, prospective students, the public, or 
    high school counselors and coaches, as stipulated in Secs. 668.41(a)(3) 
    and 668.41(b).
        One commenter asked that small institutions be allowed to request 
    waivers exempting them entirely from these regulations. This commenter 
    argued that small denominators in graduation rate fractions would lead 
    to huge variances in rates from year to year. If waivers could not be 
    granted, this commenter asked that such institutions be permitted to 
    report data for several years together in order to cure this problem.
        Discussion: The statute provides institutions the opportunity to 
    ask for waivers through their athletic conferences or associations. The 
    Secretary does not have the authority to remove this opportunity, or to 
    withhold waivers to associations or conferences that submit 
    applications that meet reasonable criteria. The Secretary will not 
    approve waivers if the application does not specify that the 
    methodology by which the conference or association is to gather these 
    data meets the criteria set forth by the statute and these regulations. 
    The Secretary believes that these approval criteria will provide 
    comparable data between those institutions that report according to 
    athletic association or conference protocols, and those that do not.
        As noted above, the Secretary will also consider the protocols of 
    state higher education agencies or other associations as acceptable 
    methodologies if those protocols meet the requirements set by the 
    statute and these regulations.
        The statute is clear in requiring that all institutions that 
    participate in any title IV, HEA program must comply with the 
    requirements for supplying completion or graduation rate information 
    and transfer-out rate information for their undergraduate populations, 
    and that all institutions that participate in any title IV, HEA program 
    and award athletically-related student aid must comply with the 
    requirements to supply information on their general student population 
    and the completion or graduation rate and transfer-out rate of their 
    student-athletes. The statute only allows waivers for substantially 
    comparable data submitted to an athletic conference or association. It 
    does not empower the Secretary either to exempt an institution from 
    these requirements, or to allow institutions to make these disclosures 
    and reports on any but an annual basis.
        In response to the concerns of small schools, institutions are 
    always able to provide additional information, such as prior years' 
    data, and explanations of factors affecting their completion or 
    graduation rates.
        The Secretary does not construe the statute to prohibit 
    institutions from compiling and publishing these data even if its 
    athletic conference or association has successfully requested waivers 
    on its behalf, so long as the institution generates the information in 
    compliance with the requirements of the statute, these regulations, and 
    other Departmental guidance regarding acceptable protocols.
        The Secretary agrees with the commenter that the successful 
    application for waivers of data collection requirements on behalf of an 
    institution by an athletic association or conference does not also 
    exempt that institution from supplying this information to the parties 
    identified in the statute. Institutions that obtain such waivers must 
    still comply with the information dissemination requirements set by 
    Sec. 668.41.
        The Secretary will publish at a later date the procedures by which 
    an athletic association or conference may request waivers for its 
    member institutions.
        Changes: A change has been made to Sec. 668.46(e) that clarifies 
    that an institution that obtains waivers through its athletic 
    association or conference for the generation of this data must still 
    comply with the provisions of Sec. 668.41.
    
    Section 668.49  Graduation or Completion Rate and Transfer-out Rates of 
    Student-athletes
    
        Comments: Several commenters expressed concern over the July 1, 
    1997 reporting date for the data on graduation and completion rates of 
    student athletes. These commenters contended that requiring 
    institutions to meet this date would entail gathering information on 
    students who had entered as far back as 1993, and because institutions 
    who were not members of the NCAA are not tracking those students, the 
    result would be inaccurate and flawed data, as well as a heavy burden 
    on those institutions. These commenters believed that the tracking of 
    these students should begin with the students entering after July 30, 
    1996, and that the Department not require the first report to be 
    compiled and issued until after the 150% of the time for graduation or 
    completion for that group of students has elapsed.
        Discussion: The Secretary appreciates the concerns of these 
    commenters with regard to the issue of disclosing completion or 
    graduation rates for students entering before July 1, 1996.
        With regard to the students on which institutions must compile 
    completion or graduation rate information, the Secretary will not 
    require institutions to provide this information for students who enter 
    before July 1, 1996, subject to the regulatory provisions regarding the 
    provision of average rates for previous years. However, the Secretary 
    is aware that a large number of schools will have in hand data on 
    students entering prior to that date as a result of complying with the 
    requirements of organizations such as the NCAA. The Secretary strongly 
    encourages those institutions to report those data.
        All institutions must disclose the information other than the 
    completion or graduation rate data required by this section beginning 
    July 1, 1997. Institutions affected by these regulations must disclose 
    the information on completion or graduation rates for student-athletes 
    beginning on the July 1 immediately following the expiration of 150% of 
    normal time for the group of students entering on or after July 1, 1996 
    on which the institution bases its completion or graduation rate, in 
    accordance with Sec. 668.46(a)(2).
        The Secretary also wishes to clarify that the disclosure and 
    reporting date for this information is the July 1 of the calendar year 
    following the expiration of the 150% of normal time for the students 
    whose graduation or completion rate performance is measured. 
    Institutions thus will not be required to disclose this information for 
    approximately one year after the expiration of the 150% period. The 
    Secretary encourages institutions to disclose earlier, for example, 
    along with the January 1 disclosures for non-student athletes.
        Changes: None.
        Comments: Several comments expressed concern that the level of 
    detail the statute requires regarding the gender and race of athletes 
    within particular sports will result in the possibility that particular 
    students will be identifiable from the data an institution reports. 
    These commenters contended that such a situation would violate the 
    privacy provisions of the Buckley Amendment (Family Educational Rights 
    and Privacy Act), and therefore asked that the Department allow 
    institutions to leave blank those categories in their reports in which 
    the status of a very few students (less than five) would be reported. 
    
    [[Page 61786]]
    
        Discussion: The Secretary agrees with the commenters, and will not 
    require institutions to report this information if five or fewer 
    students are involved. The institution must supply a note stating that 
    the disclosure was not made due to privacy concerns.
        Changes: A change has been made in Sec. 668.49 to add a provision 
    that an institution need not disclose a completion or graduation rate 
    or a transfer-out rate for categories that include five or fewer 
    students.
        Comments: Several commenters supported the provision that the same 
    cohort of students be the subject of the reports in both Secs. 668.46 
    and 668.49.
        Discussion: The Secretary appreciates these commenters' support.
        Changes: None.
        Comments: Several commenters noted the absence of a definition of 
    the term ``athlete'' in the proposed rules, and maintained that such a 
    definition should be supplied in the final rules in order for the 
    regulations to generate comparable data among institutions. One of 
    these commenters inquired whether the term referred only to athletes 
    who receive athletically-related student aid, whether it would include 
    only participants in intercollegiate athletic sports, and how long 
    participants need participate before being deemed ``athletes.''
        Discussion: The Secretary does not agree that it is necessary to 
    define the term ``athlete.'' The Secretary notes that the statutory 
    term ``athletically-related student aid'' governs the selection of 
    students upon whose performance completion or graduation rates are 
    reported, and to whom information on performance is provided. The 
    Secretary believes that for the purposes of the information required by 
    Sec. 668.49(a)(1)(ii), students who receive athletically-related 
    student aid are all students who receive that aid at any time during 
    the previous reporting year. For purposes of Sec. 668.49(a)(1)(iv), 
    entering students who receive athletically-related student aid are 
    those students who receive athletically-related student aid for any 
    period of time between July 1 and June 30 of their entering year. The 
    Secretary notes that this is a methodology similar to that now employed 
    for these purposes by the NCAA.
        Changes: None.
    
    Executive Order 12866
    
        These regulations have been reviewed in accordance with Executive 
    Order 12866. Under the terms of the order the Secretary has assessed 
    the potential costs and benefits of the regulatory action.
        The potential costs associated with the regulations are those 
    resulting from statutory requirements and those determined by the 
    Secretary to be necessary for administering this program effectively 
    and efficiently.
        In assessing the potential costs and benefits--both quantitative 
    and qualitative--of these regulations, the Secretary has determined 
    that the benefits of the regulations justify the costs.
        The Secretary has also determined that this regulatory action does 
    not unduly interfere with State, local, and tribal government in the 
    exercise of their governmental functions.
    
    Summary of Potential Costs and Benefits
    
        The potential costs and benefits of these final regulations are 
    discussed elsewhere in this preamble under the following heading: 
    Analysis of Comment and Changes.
    
    Paperwork Reduction Act of 1995
    
        Sections 668.41, 668.46 and 668.49 all contain information 
    collection requirements. As required by the Paperwork Reduction Act of 
    1995, the Department of Education has submitted a copy of these 
    sections to the Office of Management and Budget (OMB) for review.
    
    Collection of Information: Student Right-to-Know
    
        These regulations affect the following types of entities eligible 
    to participate in the Title IV, HEA programs: Educational institutions 
    that are public or nonprofit institutions, and businesses and other 
    for-profit institutions.
        Institutions of higher education that participate in title IV, HEA 
    programs will need and use the information required by these 
    regulations to meet the eligibility requirements for participation in 
    those programs that were added by the Student Right-to-Know Act.
        Section 668.41--Institutions must make available to students and 
    potential students information on the completion or graduation rates 
    and transfer out rates of the general full-time undergraduate 
    population.
        Institutions that award athletically-related student aid must 
    provide the potential student athlete, and his or her parents, coaches, 
    and high school counselor information on the completion or graduation 
    rates and transfer-out rates of student-athletes. Institutions must 
    also provide a copy of this information to the Secretary. The Secretary 
    needs and uses this report to fulfill statutory requirements under the 
    Student Right-to-Know Act to publish that information broken down by 
    institution and athletic conference.
        Section 668.46--The information to be collected includes the 
    completion or graduation rate, and the transfer-out rate of full-time, 
    certificate- or degree-seeking undergraduate students entering the 
    institution.
        Section 668.49--The information to be collected includes the number 
    of students attending the institution who received athletically related 
    student aid, broken down by race and gender; the completion or 
    graduation rate and transfer-out rate of full-time, certificate-or 
    degree-seeking undergraduate students broken down by race and gender; 
    the completion or graduation rate and transfer-out rate of full-time, 
    certificate- or degree-seeking undergraduate students who received 
    athletically related student aid, broken down by race and gender with 
    each sport; and the average graduation or completion rate and transfer-
    out rate of full-time, certificate- or degree-seeking undergraduate 
    students for the four most recent graduating or completing classes, 
    broken down by race and gender.
        Information is to be collected and disclosed once each year for 
    institutions covered by Secs. 668.41(a) and 668.46, and collected, 
    disclosed, and reported to the Secretary once each year for 
    institutions covered by Secs. 668.41(b) and 668.49. Annual public 
    reporting and recordkeeping burden is estimated to average 24.5 hours 
    for each response for 8,000 respondents for Sec. 668.46 and 24.5 hours 
    for each response for 1,800 respondents for Sec. 668.49. Thus the total 
    annual reporting and recordkeeping burden for this collection is 
    estimated to be 240,100 hours. These hours include the time needed for 
    searching existing data sources and gathering, maintaining, and 
    disclosing the data.
        OMB is required to make a decision concerning the collections of 
    information contained in these final regulation between 30 and 60 days 
    after publication of this document in the Federal Register. Therefore, 
    a comment is best assured of having its full effect if OMB receives it 
    within 30 days of publication.
        Organizations and individuals desiring to submit comments on the 
    information collection requirements should direct them to the Office of 
    Information and Regulatory Affairs, OMB, Room 10235, New Executive 
    Office Building, Washington, DC 20503; Attention: Desk Officer for U.S. 
    Department of Education. 
    
    [[Page 61787]]
    
    
    Regulatory Flexibility Certification
    
        The Secretary certifies that these regulations will not have a 
    significant economic impact on a substantial number of small entities. 
    Small entities affected by these regulations are small institutions of 
    higher education.
    
    Assessment of Educational Impact
    
        In the Notice of Proposed Rulemaking, the Secretary solicited 
    comments on whether the proposed regulations would require transmission 
    of information that is being gathered by or is available from any other 
    agency of the United States.
        Based on the response to the proposed rule, the Department has 
    determined that the regulations in this document do not require 
    transmission of information that is being gathered by or is available 
    from any other agency or authority of the United States.
    
    List of Subjects in 34 CFR Part 668
    
        Administrative practice and procedure, Colleges and universities, 
    Consumer protection, Education, Grant programs-- education, Loan 
    programs-- education, Reporting and recordkeeping requirements, Student 
    aid.
    
    (Catalog of Federal Domestic Assistance Numbers: 84.007 Federal 
    Supplemental Educational Opportunity Grant 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 Perkins Loan Program; 84.063 Federal Pell Grant 
    Program; 84.069 Federal State Student Incentive Grant Program; 
    84.268 Federal Direct Student Loan Program; and 84.272 National 
    Early Intervention Scholarship and Partnership Program.)
    
        Dated: November 24, 1995.
    Richard W. Riley,
    Secretary of Education.
    
    PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS
    
        1. The authority citation for part 668 continues to read as 
    follows:
    
        Authority: 20 U.S.C. 1085, 1088, 1091, 1092, 1094, 1099c and 
    1141, unless otherwise noted.
    
        2. Section 668.41 is amended by adding a new paragraph (a)(3); 
    redesignating paragraph (b) as paragraph (c) and revising the 
    redesignated paragraph (c); and by adding new paragraph (b) to read as 
    follows:
    
    
    Sec. 668.41  Scope and special definitions.
    
        (a) * * *
        (3) The institution's completion or graduation rate and its 
    transfer-out rate, produced in accordance with Sec. 668.46.
        (b)(1) Each institution participating in any title IV, HEA program, 
    when it offers a potential student-athlete athletically-related student 
    aid, shall provide to the potential student-athlete, and his or her 
    parents, high school coach, and guidance counselor, the information on 
    completion and graduation rates, transfer-out rates, and other data 
    produced in accordance with Sec. 668.49.
        (2) The institution shall also submit to the Secretary the report 
    produced in accordance with Sec. 668.49 by July 1, 1997 and by every 
    July 1 every year thereafter.
        (c) The following definitions apply to this subpart:
        Athletically-related student aid means any scholarship, grant, or 
    other form of financial assistance, offered by an institution, the 
    terms of which require the recipient to participate in a program of 
    intercollegiate athletics at the institution.
        Certificate or degree-seeking student means a student enrolled in a 
    course of credit who is recognized by the institution as seeking a 
    degree or certificate.
        First-time freshman student means an entering freshman who has 
    never attended any institution of higher education. Includes a student 
    enrolled in the fall term who attended a postsecondary institution for 
    the first time in the prior summer term, and a student who entered with 
    advanced standing (college credit earned before graduation from high 
    school).
        Normal time is the amount of time necessary for a student to 
    complete all requirements for a degree or certificate according to the 
    institution's catalog. This is typically four years (8 semesters or 
    trimesters, or 12 quarters, excluding summer terms) for a bachelor's 
    degree in a standard term-based institution, two years (4 semesters or 
    trimesters, or 6 quarters, excluding summer terms) for an associate 
    degree in a standard term-based institution, and the various scheduled 
    times for certificate programs.
        Prospective students means individuals who have contacted an 
    eligible institution requesting information concerning admission to 
    that institution.
        Undergraduate students, for purposes of this section only, means 
    students enrolled in a 4- or 5-year bachelor's degree program, an 
    associate's degree program, or a vocational or technical program below 
    the baccalaureate.
    
    (Authority: 20 U.S.C. 1092)
    
        3. Section 668.46 is added to subpart D, to read as follows:
    
    
    Sec. 668.46  Information on completion or graduation rates.
    
        (a)(1) An institution shall prepare annually information regarding 
    the completion or graduation rate and the transfer-out rate of the 
    certificate- or degree-seeking, full-time undergraduate students 
    entering that institution on or after July 1, 1996.
        (2)(i) An institution that offers a predominant number of programs 
    based on semesters, trimesters, or quarters shall base its completion 
    or graduation rate and transfer-out rate calculations on the group of 
    certificate- or degree-seeking, full-time undergraduate students who 
    enter the institution during the fall term.
        (ii) An institution not covered by the provisions of paragraph 
    (a)(2)(i) of this section shall base its completion or graduation rate 
    and transfer-out rate calculations on the group of certificate- or 
    degree-seeking, full-time undergraduate students who enter the 
    institution between every July 1st of one year and June 30th of the 
    following year.
        (3)(i) For purposes of the completion or graduation rate and 
    transfer-out rate calculations required in paragraph (a)(1) of this 
    section, an institution shall count as entering students only first-
    time freshman students, as defined in Sec. 668.41(c).
        (ii) An institution may also calculate the completion or graduation 
    rate of students who transfer into the institution as a separate, 
    supplemental rate.
        (4)(i) An institution covered by the provisions of paragraph 
    (a)(2)(i) of this section shall count as an entering student a first-
    time freshman student who is enrolled as of October 15, or the end of 
    the institution's drop-add period.
        (ii) An institution covered by the provisions of paragraph 
    (a)(2)(ii) of this section shall count as an entering student a first-
    time freshman student who has attended at least one day of class.
        (5)(i) Beginning with the group of students who enter the 
    institution between July 1, 1996 and June 30, 1997, an institution 
    shall disclose its completion or graduation rate and transfer-out rate 
    information no later than the January 1 immediately following the point 
    in time that 150% of the normal time for completion or graduation has 
    elapsed for all of the students in the group on which the institution 
    bases its completion or graduation rate and transfer-out rate 
    calculations.
        (ii) An institution shall disclose no later than January 1 each 
    year thereafter its completion or graduation rate information for each 
    succeeding group 
    
    [[Page 61788]]
    of students who completed or graduated within 150% of the normal time 
    for completion or graduation from their programs as of June 30 of the 
    preceding year.
        (b) In calculating the completion or graduation rate under 
    paragraph (a) of this section, an institution shall count as completed 
    or graduated--
        (1) Students who have completed or graduated within 150% of the 
    normal time for completion or graduation from their program;
        (2) Students who have completed a transfer program as described in 
    Sec. 668.8(b)(1)(ii) within 150% of normal time for completion from 
    that program may be counted as completers.
        (c)(1) In calculating the transfer-out rate under section paragraph 
    (a) of this section, an institution shall count as students who have 
    transferred out those students who, within 150% of the normal time for 
    completion or graduation from the program in which the student was 
    enrolled, subsequently enroll in any program of an eligible institution 
    for which the prior program provides substantial preparation;
        (2) An institution shall document that its program provided 
    substantial preparation to a student by obtaining a copy of any of the 
    following:
        (i) Certification letter from the receiving institution stating 
    that a student is enrolled in that institution;
        (ii) Electronic certification from the receiving institution 
    stating that a student is enrolled in that institution;
        (iii) Confirmation of enrollment data from a legally-authorized 
    statewide or regional tracking system (or shared information from those 
    systems) confirming that a student has enrolled in another institution;
        (iv) Institutional data exchange information confirming that a 
    student as enrolled in another institution; or
        (v) An equivalent level of documentation.
        (d) For the purpose of calculating a completion or graduation rate 
    and a transfer-out rate, an institution may exclude from the 
    calculation of its completion or graduation rate and its transfer-out 
    rate students who--
        (1) Have left school to serve in the Armed Forces;
        (2) Have left school to serve on official church missions;
        (3) Have left school to serve with a foreign aid service of the 
    Federal Government, such as the Peace Corps; or
        (4) Are deceased, or totally and permanently disabled.
        (e)(1) The Secretary grants a waiver of the requirements of this 
    section to any institution that is a member of an athletic association 
    or conference that has voluntarily published completion or graduation 
    rate data, or has agreed to publish data, that the Secretary determines 
    are substantially comparable to the data required by this section.
        (2) An institution that receives a waiver of the requirements of 
    this section must still comply with the requirements of 
    Secs. 668.41(a)(3) and 668.41(b) of this subpart.
        (3) An institution, or athletic association or conference applying 
    on behalf of an institution that seeks a waiver under paragraph (e)(1) 
    of this section shall submit a written application to the Secretary 
    that explains why it believes the data the athletic association or 
    conference publishes are accurate and substantially comparable to the 
    information required by this section.
    
    (Authority: 20 U.S.C. 1092)
    
        4. Section 668.49 is added to subpart D, to read as follows:
    
    
    Sec. 668.49  Report on completion or graduation rates for student-
    athletes.
    
        (a)(1) By July 1, 1997, and by every July 1 every year thereafter, 
    each institution that is attended by students receiving athletically-
    related student aid shall produce an annual report containing the 
    following information:
        (i) The number of students, categorized by race and gender, who 
    attended that institution during the year prior to the submission of 
    the report.
        (ii) The number of students described in paragraph (a)(1)(i) of 
    this section who received athletically-related student aid, categorized 
    by race and gender within each sport.
        (iii) The completion or graduation rate and transfer-out rate of 
    all the entering, certificate- or degree-seeking, full-time, 
    undergraduate students described in Sec. 668.46(a) (1), (2), (3) and 
    (4).
        (iv) The completion or graduation rate and transfer-out rate of the 
    entering students described in Sec. 668.46(a) (1), (2), (3)and (4) who 
    received athletically-related student aid, categorized by race and 
    gender within each sport.
        (v) The average completion or graduation rate and transfer-out rate 
    for the four most recent completing or graduating classes of entering 
    students described in Sec. 668.46(a) (2), (3), and (4) categorized by 
    race and gender. If an institution has completion or graduation rates 
    and transfer-out rates for fewer than four of those classes, it shall 
    disclose the average rate of those classes for which it has rates.
        (2) For purposes of this section, sport means--
        (i) Basketball;
        (ii) Football;
        (iii) Baseball;
        (iv) Cross-country and track combined; and
        (v) All other sports combined.
        (3) If a category of students identified in paragraph (a)(1)(iv) 
    above contains five or fewer students, the institution need not 
    disclose information on that category of students.
        (b) The provisions of Sec. 668.46 (a), (b) and (c) apply for 
    purposes of calculating the completion or graduation rates and 
    transfer-out rates required under paragraphs (a)(1)(iii), (a)(1)(iv), 
    and (a)(1)(v) of this section.
        (c) Each institution of higher education described in paragraph (a) 
    of this section may also provide to students and the Secretary 
    supplemental information containing--
        (1) The graduation or completion rate of the students who 
    transferred into the institution; and
        (2) The number of students who transferred out of the institution.
        (d) Section 668.46(d) applies for purposes of this section.
    
    (Authority: 20 U.S.C. 1092)
    
    [FR Doc. 95-29181 Filed 11-30-95; 8:45 am]
    BILLING CODE 4000-01-P