[Federal Register Volume 59, Number 51 (Wednesday, March 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6127]
[[Page Unknown]]
[Federal Register: March 16, 1994]
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Part VII
Department of Education
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34 CFR Part 668
Student Assistance General Provisions; Final Rule
DEPARTMENT OF EDUCATION
34 CFR Part 668
RIN 1840-AB90
Student Assistance General Provisions
AGENCY: Department of Education.
ACTION: Final regulations.
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SUMMARY: The Secretary amends the Student Assistance General Provisions
regulations governing student eligibility under the Higher Education
Act of 1965, as amended (HEA). The regulations implement certain new
provisions of the Higher Education Amendments of 1992 and the Higher
Education Technical Amendments of 1993 that pertain to student
eligibility. The regulations also make technical corrections to the
final regulations published in the Federal Register on June 8, 1993
with regard to the applicability of Sec. 668.7(a)(1) to specific
programs set forth in title IV of the HEA (title IV, HEA). The purpose
of the regulations is to reduce the potential for abuse in the programs
authorized under the title IV, HEA programs by improving the accuracy
of the information used to assess a student's eligibility for these
programs. The regulations also clarify the Secretary's policy with
regard to the eligibility of incarcerated students, students studying
abroad, and students enrolled in telecommunications or correspondence
courses.
EFFECTIVE DATE: Subject to meeting the requirements of section 431(d)
of the General Education Provisions Act (20 U.S.C. 1232(d)), these
regulations take effect on July 1, 1994. When these regulations become
effective, they govern student eligibility for any title IV, HEA
program assistance that may be awarded to any student for award years
beginning with 1994-95.
FOR FURTHER INFORMATION CONTACT: Claude Denton, Program Specialist,
Student Eligibility and Verification Section, General Provisions
Branch, Division of Policy Development, U.S. Department of Education,
400 Maryland Avenue SW., (ROB-3, Room 4318), Washington, DC 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 a.m. and 8 p.m., Eastern
time, Monday through Friday.
SUPPLEMENTARY INFORMATION: The Student Assistance General Provisions
regulations implement requirements that apply to all institutions that
participate in the title IV, HEA student financial assistance programs.
The title IV, HEA student financial assistance programs include the
Federal Pell Grant, Federal Stafford Loan, Federal PLUS Loan, Federal
Supplemental Loans for Students (SLS), Federal Direct Student Loan
(Direct Loans), State Student Incentive Grant (SSIG), Federal Perkins
Loan, Federal Work-Study (FWS), and Federal Supplemental Educational
Opportunity Grant (FSEOG) programs. The last three programs are known
collectively as the ``campus-based programs.''
These regulations implement portions of the Higher Education
Amendments of 1992, Public Law 102-325, enacted July 23, 1992.
Regulatory implementation of this statute revises the Student
Assistance General Provisions (34 CFR part 668), which apply to all
students seeking assistance under the title IV, HEA programs. These
revisions seek to improve the efficiency of the title IV, HEA programs
and, by so doing, improve their capacity to enhance opportunities for
postsecondary education. Encouraging students to graduate from high
school and to pursue high quality postsecondary education are important
elements of the National Education Goals.
Waiver of Rulemaking
On June 8, 1993, the Secretary published final regulations in the
Federal Register, 58 FR 32188, that implement statutory changes, make
technical modifications, and enhance program integrity in the title IV,
HEA programs. As published, Sec. 668.7(a)(1) of those regulations
incorrectly states that an otherwise eligible student who is enrolled
for no longer than one twelve-month period as at least a half-time
student in a course of study necessary for enrollment in an eligible
program is eligible to receive assistance under the Stafford Loan,
PLUS, SLS, FWS, Federal Perkins Loan, or FDSL programs. Under section
484(b)(3) of the HEA, as amended by the Higher Education Technical
Amendments of 1993 (Technical Amendments)(Pub. L. 103-208, enacted
December 20, 1993), this student would be eligible to receive
assistance under the Stafford Loan, PLUS, SLS or FDSL programs only.
In addition, the Higher Education Amendments of 1992 amended
section 484(b)(4) of the HEA to provide that an otherwise eligible
student, who is enrolled or accepted for enrollment as at least a half-
time student at an eligible institution in a program necessary for a
professional credential or certification from a State that is required
for employment as a teacher in an elementary or secondary school in
that State, is now eligible to receive assistance under the FWS,
Federal Perkins Loan, or FDSL programs in addition to funds under the
Stafford Loan, PLUS, or SLS programs. Section 668.7(a)(1) has been
corrected to reflect the applicable statutory requirements. Until the
effective date of these regulations, the statutory requirements of
section 484(b) (3) and (4) of the HEA supersede Sec. 668.7(a)(1) as
published in the June 8, 1993 final regulations.
For purposes of this rulemaking, the Technical Amendments also
exempt students from three Pacific Island republics from the
requirement of providing social security numbers as a condition of
eligibility for title IV, HEA assistance. In addition, the Technical
Amendments provide for institutional authority to determine that a
social security number is correct without the need for a subsequent
review by the Secretary. In accordance with these statutory changes,
Secs. 668.7(a)(16) and 668.7(i) have been revised, respectively.
It is the practice of the Secretary to offer interested parties the
opportunity to comment on proposed regulations in accordance with
section 431(b)(2)(A) of the General Education Provisions Act (20 U.S.C.
1232(b)(2)(A)) and the Administrative Procedure Act, 5 U.S.C. 553.
However, since these changes merely incorporate statutory requirements
into the regulations and do not implement substantive policy, public
comment could have no effect. Therefore, the Secretary has determined
pursuant to 5 U.S.C. 553(b)(B) that public comment on the regulations
is unnecessary and contrary to the public interest.
Major Issues
On October 4, 1993, the Secretary published a notice of proposed
rulemaking (NPRM) in the Federal Register (58 FR 51712). The NPRM
included a discussion of the major issues surrounding the proposed
changes 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 may be found:
Amendment to General Definitions contained in Sec. 668.2 to add a
definition of the term ``output document'' to ensure consistent use of
the term throughout part 668 (page 51713);
Addition of provisions for a data match with the Selective Service
System and providing that a confirmation of Selective Service
registration on the student's application output document that is
submitted to the institution fulfills the Selective Service
registration requirement (page 51713);
Addition of a provision making incarcerated students ineligible to
receive assistance under the Federal Family Education Loan, Federal
Direct Student Loan, and Federal Perkins Loan programs (page 51713);
Addition of a provision requiring a student, as a condition of
eligibility for title IV, HEA assistance, to provide a social security
number (page 51714);
Addition of provisions for a data match with the Social Security
Administration to verify the accuracy of social security numbers
provided by students and institutional requirements related to this
verification (pages 51714-51715);
Addition of a provision making a student ineligible to receive
title IV, HEA assistance for a correspondence course unless the course
is part of a program leading to an associate, bachelor's, or graduate
degree (page 51715);
Addition of a provision establishing a methodology for calculating
the percentage of telecommunications and correspondence courses
delivered by the institution for the purpose of determining whether the
total number of telecommunications and correspondence courses exceeds
50 percent of all courses offered (page 51715); and
Addition of a provision clarifying that if a program of study
abroad is approved for credit by the home institution at which a
student is enrolled, the otherwise eligible student is eligible to
receive title IV, HEA assistance without regard to whether the study
abroad program is required as part of the student's degree program
(pages 51715-51716).
Section 668.7(i) has been revised, in response to public comments,
to provide for institutional verification of a student's social
security number if the institution has information that conflicts with
the Secretary's initial determination that the student's social
security number is accurate.
The Technical Amendments redesignated several provisions of HEA
section 484 and, accordingly, several references to that statutory
provision in these regulations have been revised.
Analysis of Comments and Changes
In response to the Secretary's invitation in the NPRM, 31 parties
submitted comments on the proposed regulations. An analysis of the
comments and of the changes in the regulations since 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.
Section 668.7 Eligible Student
Selective Service Registration Status
Comments: Several commenters supported the provision for a data
match with the Selective Service System and the provision that a
confirmation of Selective Service registration on the student's output
document that is submitted to the institution fulfills the requirement
to file a separate statement of compliance. One commenter recommended a
waiver of the Statement of Registration Status when a student presents
other documentation from the Selective Service System proving
registration. One commenter questioned the need for a 30-day period for
the student to collect and submit documentation to the institution to
support his claim of registration or exemption from registration, and
suggested that a statement from the student or a telephone call to the
Selective Service System would be equally effective and less burdensome
to the institution. One commenter requested that the Secretary address
the issues regarding students who failed to register with Selective
Service and are currently beyond the age of registration, veterans of
the Armed Forces who never registered, and aliens who missed the
opportunity to register. One commenter suggested that the data match
with the Selective Service System eliminates the need for a Statement
of Registration Status and recommended deletion of the Statement of
Registration Status from the student's output document. Another
commenter noted that section 484(n) of the HEA provides that an
institution may use data or documents to support the student's
registration, or exemption from registration, as a substitute for a
separate statement of compliance, but the commenter suggested that no
regulatory provisions exist, or are proposed, for waiver of the
Statement of Registration Status if the student submits documentation
proving that he is registered. Concern was also expressed by a
commenter that the 30-day minimum period allowed for the student to
submit a Statement of Registration Status imposes Selective Service
enforcement responsibilities on institutions. Another commenter
suggested that the Secretary stress in the preamble to these
regulations that the 30-day provision is a minimum requirement and that
institutions have the option of a later deadline. One commenter was
concerned about whether an institution can allow exceptions to the 30-
day deadline if an output document is submitted close to the end of an
award year and the 30-day period would extend beyond the end of the
award year, thereby precluding the student's eligibility for programs
without late disbursement provisions. Another commenter questioned
whether the 30-day period should begin at the time the institution
receives the student's output document, given the fact that many
institutions using electronic output documents receive the output
documents before the student receives them. One commenter requested
specific examples of what the Secretary would describe as clear and
unambiguous evidence of compliance with Selective Service registration
requirements, and suggested that the examples should include returned
Postal Service receipts from the Selective Service System. Another
commenter suggested that the Secretary add a provision to
Sec. 668.7(a)(13) to provide that if a student submits a Statement of
Registration Status claiming to be registered with Selective Service
and that claim is not confirmed by the data match, the student should
be required to present evidence from the Selective Service System to
resolve these conflicting sources of information. Several commenters
suggested that if the data match is out of service, the Secretary
should delay processing the student's application for title IV, HEA
assistance until the data match is again operational.
Discussion: Section 484(n) of the HEA requires the Secretary to
conduct a data base match with the Selective Service System for the
purpose of enforcing the Selective Service registration provisions of
section 113 of Public Law 97-252. Since the Secretary's participation
in this data match is mandatory, the institution's compliance with
section 2 of the Computer Matching and Privacy Protection Act of 1988
is also mandatory with respect to providing the student a minimum of 30
days to provide a Statement of Registration Status, or clear and
convincing evidence to the institution to support the student's claim
to have registered, or to be exempt from, Selective Service
registration. If the data match does not confirm that the student is
registered with Selective Service, the Secretary does not consider the
student's statement to be ``clear and convincing'' evidence, but
considers the institution's documented statement based on a telephone
conversation with an employee of the Selective Service System to meet
the ``clear and convincing'' standard. Returned Postal Service receipts
from the Selective Service System are also acceptable forms of
documentation. Regarding the recommendation for a waiver of the
Statement of Registration Status if evidence of registration is
submitted by the student, the Secretary notes that provisions for such
a waiver already exist in Sec. 668.33. However, the Secretary believes
that a revision to Sec. 668.7(a)(13)(ii) is needed to clarify that
Sec. 668.33 may require the student to file a Statement of Registration
Status or other evidence. With regard to veterans of the U.S. Armed
Forces who failed to register with the Selective Service System, the
Secretary recently issued final regulations (58 FR 32188, June 8, 1993)
that address this issue. Section 668.33(b) of the Student Assistance
General Provisions now provides that the student is not required to be
registered with the Selective Service System if the student ``served as
a member of one of the U.S. Armed Forces on active duty and received a
DD Form 214, ``Certificate of Release or Discharge from Active Duty''
showing military service with other than the reserve forces and
National Guard.'' Section 668.33(b) also provides that a student who
was required to be registered with the Selective Service System prior
to age 26, is now at least 26 years old or older, and claims to have
unknowingly failed to register with the Selective Service System must
demonstrate to the institution that he did not knowingly and willfully
fail to register with Selective Service. This requirement is satisfied
if the student obtains and presents to the institution an advisory
opinion from the Selective Service System that does not dispute the
student's claim that he did not knowingly and willfully fail to
register, and the institution does not have uncontroverted evidence
that the student knowingly and willfully failed to register. Section
668.33, as revised by the June 8, 1993 final regulations, also provides
for a waiver of the Statement of Registration Status if the student
submits to the institution documentation proving that he is registered.
With regard to the comment suggesting removal of the Statement of
Registration Status, the statute provides for use of documentation as a
substitute for the Statement of Registration Status only if the student
is able to submit such documentation. If the student claims to have
registered with Selective Service, or claims to be exempt from
registration, and does not have evidence to support such claims, the
Statement of Registration Status is an effective means of communicating
these claims to the institution. With regard to the comment that the
30-day period for the student to submit a Statement of Registration
Status forces institutions into an ``enforcement'' position of denying
title IV, HEA assistance based on institutionally-set deadlines, the
Secretary wishes to emphasize that the 30-day requirement is mandated
by the Computer Matching and Privacy Protection Act of 1988 and that
the provision establishes a minimum length of time, giving institutions
the option of setting a later deadline. Furthermore, the 30-day period
is intended to provide due process protection to an individual who may
be adversely affected by the results of a data match, and is not
intended to force the institution into denying title IV, HEA assistance
to students before the institution would otherwise be prepared to do
so. The Secretary also realizes that strict adherence to the 30-day
minimum period may create difficulties when the student's application
is being processed near the end of the award year, and supports the use
of institutional discretion in setting deadlines that conform to
existing statutory requirements and practical considerations regarding
the time needed to process title IV, HEA applications. With regard to
the comment concerning the beginning of the 30-day period for
institutions with electronic access to output documents, the 30-day
period should not begin until the student acknowledges to the
institution receipt of the output document containing information
relating to the results of the data match.
Changes: Section 668.7(a)(13)(ii) is revised to clarify that if the
student's Selective Service System status is not confirmed by the data
match, the student may be required to file a Statement of Registration
Status or other evidence as required by Sec. 668.33.
Incarcerated Students
Comments: One commenter requested clarification with respect to
whether a student meets the Secretary's definition of ``incarcerated''
if the student is furloughed during the day for the purpose of
attending classes and returns to confinement in a correctional
institution at night. Other commenters questioned whether an
incarcerated student should be allowed to receive his or her loan for a
period of attendance completed before the incarceration begins. One
commenter requested that the Secretary describe or reference
calculation and disbursement procedures for borrowers who have reduced
eligibility due to incarceration. Another commenter questioned whether
a student who is incarcerated at the beginning of an enrollment or
payment period and is subsequently released prior to the end of that
period should be considered eligible for the entire period.
Discussion: The Secretary is considering the definition of an
``incarcerated student'' in a separate proposed rulemaking published in
the Federal Register on February 10, 1994 (59 FR 6446-6465). Until that
rulemaking is effective, institutions are advised to seek the advice of
their own legal counsel with regard to compliance with section
484(b)(5) of the HEA, which makes incarcerated students ineligible to
receive assistance under the title IV, HEA loan programs. This comment
will be considered along with any others received during the comment
period applicable to that rulemaking. With regard to whether an
incarcerated student can receive a loan disbursement for a period of
attendance completed before incarceration, section 484(b)(5) of the HEA
precludes an incarcerated student from receiving a loan disbursement,
even if the disbursement would have applied toward a period of
attendance already completed. Calculations of eligibility for students
who become incarcerated during a payment period should be similar to
the calculations made with regard to cost of attendance for a borrower
who withdraws from the institution during the period. A student who is
incarcerated at the beginning of a payment period and is subsequently
released before the end of the payment period is eligible for
disbursement of loan funds provided that the disbursement is made after
release from incarceration and the student maintains an eligible
student status as provided in Sec. 668.7.
Changes: None.
Social Security Number
Comments: One commenter questioned the need for a social security
number data match, suggesting that institutions should be allowed to
maintain evidence of a correct social security number on file. Several
commenters expressed concern that title IV, HEA assistance may be
delayed to a student if the data match with the Social Security
Administration is out of service at the time the student's application
for title IV, HEA assistance is processed and the student is unable to
promptly provide evidence of a correct social security number. One
commenter suggested the use of several data elements as matching
criteria, including proper names, nicknames, abbreviated names, and
married names. One commenter questioned the Secretary's proposal to
resubmit the student's social security number for a final determination
if there is a possibility the data match could again be nonoperational.
Title IV, HEA assistance may be delayed, according to other commenters,
when institutions choose not to incur liability if a student provides
evidence of a correct social security number that differs from the
social security number originally submitted to the Secretary. Several
commenters suggested that the Secretary should issue a rejected output
document if the student's social security number is not confirmed, and
that responsibility for reconciliation of the nonconfirmed match should
be placed on the student and the Social Security Administration.
Several commenters suggested that, if the accuracy of a student's
social security number is not confirmed because the data match is not
in operation, the institution should assume that the social security
number provided by the student is correct until a subsequent data match
indicates that the social security number is incorrect, and that the
student should not be required to present evidence to prove the
accuracy of his or her social security number. One commenter asked the
Secretary for specific guidance on how to assist the student in
providing evidence and obtaining a final determination from the
Secretary with regard to the accuracy of the student's social security
number, and several commenters urged the Secretary to allow the
institutions to make this final determination. Another commenter
requested the opportunity to make a first disbursement without
liability if the student can provide evidence of an accurate social
security number. One commenter suggested that, once verification
confirms that the student's social security number is accurate and such
verification is documented in the student's file, no subsequent
verification of the student's social security number be required in
subsequent years. One commenter questioned whether corrections to the
student's social security number will cause a permanent change to the
student's record identification number, and whether the default data
match will be initiated based on the corrected social security number.
Several commenters suggested that a maximum turnaround time be allowed
for institutions to await a final determination from the Secretary with
regard to the accuracy of a student's social security number and that,
if a final determination is not received by the due date, that the
institution be allowed to disburse title IV, HEA funds. Several
commenters requested a thorough test of the matching data base to
prevent nonconfirmations of social security numbers because of name
changes, misspellings, and other typographical errors. One commenter
suggested that the institution should be allowed to require evidence of
an accurate social security number if the institution has information
that conflicts with the Secretary's confirmation that the student's
social security number is correct. One commenter recommended the
deletion of Sec. 668.7(i)(1), contending that there are no
circumstances in which the institution would be required to comply with
this provision. One commenter objected to any assignment of liability
to the institution in light of section 484(p)(4) of the HEA, which
prohibits the Secretary from taking any compliance, disallowance,
penalty, or other regulatory action against an institution with respect
to an error in a social security number, unless the error is the result
of institutional fraud. One commenter suggested that students who do
not meet the institutional deadline as proposed in Sec. 668.7(i)(3)(i)
should be ineligible for the period of enrollment during which they
applied for title IV, HEA assistance, not for the entire award year.
Discussion: With regard to the comment concerning the need for a
data match with the Social Security Administration, section 484(p) of
the HEA requires the Secretary, in cooperation with the Commissioner of
the Social Security Administration, to verify any social security
number provided by a student applying for title IV, HEA assistance. The
Secretary believes that a data match is the most efficient method of
accomplishing this task. The Secretary understands that a student with
a social security number that is not confirmed by the Secretary because
the data match is out of service may experience delays in title IV, HEA
assistance if he or she cannot promptly provide evidence of a correct
social security number. As a possible solution to this problem and to
reduce administrative burden on institutions, the Secretary considered
carefully the possibility of delaying the processing of applications
when the data match is out of service. Such delays would back up entire
batches of applications on subsequent processing days, however, and
would seriously compromise the efficiency of the processing system
during peak volume periods. The Secretary is confident that
interruptions in data match operations will be rare, that the data
match will provide virtually trouble-free, continuous service and that
the institution will very infrequently need to resubmit a social
security number because the data match is out of service. If the match
is out of service, however, the Secretary believes that the institution
should require documented evidence from the student of a correct social
security number and should make a determination that the student's
social security number is correct before disbursing title IV, HEA
assistance. With regard to the comment favoring the use of proper
names, nicknames, abbreviated names and married names as matching
criteria, the Secretary, in cooperation with staff at the Social
Security Administration, considered a number of possible data items
that are normally collected by the Social Security Administration, and
has determined that the student's name, date of birth, and social
security number are the three most useful matching elements. With
regard to the commenter who suggests that title IV, HEA assistance will
be delayed if the student's institution chooses not to incur liability
if the student provides evidence of a social security number that
differs from the social security number originally submitted to the
Secretary, section 484(p)(2) has been revised by the Higher Education
Technical Amendments of 1993 to accommodate this concern. According to
this revised statutory provision, if a student's social security number
is determined by the Secretary to be incorrect, the institution must
deny the student's eligibility for title IV, HEA assistance until such
time as the student provides documented evidence of a social security
number that is determined by the institution to be correct. The
Secretary will not impose any liability on the institution making this
determination if the student's social security number is subsequently
found to be incorrect, provided that the institution has not committed
fraud and the institution's determination is based on clear and
convincing evidence. The institution may make a determination that a
social security number is correct and disburse title IV, HEA assistance
to an otherwise eligible student even if the student is submitting a
social security number that differs from the social security number
originally submitted to the Secretary. If such a determination is made,
the institution will be required to report the new social security
number to the Secretary, and the Secretary will accept the new social
security number as accurate. This statutory change addresses the
concerns of commenters seeking guidance on how to provide evidence and
obtain a final determination from the Secretary with regard to a
student's social security number that has not been confirmed as
accurate by the data match. The institution has the authority to make a
determination with regard to the accuracy of a student's social
security number. Commenters urging the Secretary to allow the
institution to make a final determination, commenters seeking to make
disbursements without liability if the student can provide evidence of
an accurate social security number, and commenters suggesting a maximum
turnaround time for the Secretary's final determination have also had
their concerns addressed by this change. The Secretary agrees in
principle with the commenter who suggests that the Secretary should
issue a rejected output document if the student's social security
number is not confirmed. Rejected output documents are planned for
applications in which the social security number does not correspond
with a valid social security number in the Social Security
Administration data base. However, the Secretary plans to use the
output document to alert the institution to particular matching
criteria, such as the date of birth, that do not match corresponding
data in the Social Security Administration data base, rather than
rejecting the application for minor discrepancies. The Secretary is
interested in minimizing the burden on institutions wherever possible
in this process of reconciling nonconfirmed matches and solicits
comments from institutions at any time with regard to the technical
aspects of data match operations. However, the Secretary disagrees with
the commenter who would place responsibility for reconciliation of
nonconfirmed matches on the student and the Social Security
Administration. The institution retains primary responsibility for
ensuring that all students receiving title IV, HEA assistance are
eligible students in accordance with this section of the regulations.
The Secretary agrees with the commenter's suggestion that a verified
social security number should not need verification in subsequent
years, and will include the social security number as part of the
renewal application data items that are transferred from year to year.
With regard to the comment regarding use of the student's corrected
social security number as the student's record identification number
and for purposes of the default match, the Secretary will maintain both
social security numbers in the processing system but will automatically
rerun the default match for any corrected social security number. The
Secretary agrees with the commenter who suggests that the Social
Security Administration data base be tested to prevent nonconfirmations
due to name changes, misspellings, and other typographical errors, and
has begun such testing. However, the Secretary recognizes that the data
base is only as accurate as the data that is made available to it and
kept updated by individuals. The Secretary also agrees with the
commenter who suggests that the institution be allowed to require
evidence of an accurate social security number from the student if the
institution has information which conflicts with the Secretary's
determination from the data match that the student's social security
number is accurate. The Secretary does not agree with the commenter who
proposes the deletion of Sec. 668.7(i)(1), which prohibits an
institution from denying, delaying, reducing, or terminating a
student's eligibility for title IV, HEA assistance because social
security number verification is pending. This provision, also found in
section 484(p)(1) of the HEA, prevents delays in disbursements of title
IV, HEA assistance to students attending institutions that would
otherwise not disburse title IV, HEA assistance on the basis of their
own determinations that the student's social security number is
correct. For students whose social security numbers are not confirmed
as correct by the data match, section 484(p)(2) mandates a delay in
title IV, HEA disbursements until documented evidence of a correct
social security number is provided to the institution. However, once
this evidence is provided and the institution determines that the
social security number is correct, section 484(p)(1) prohibits any
further delays in title IV, HEA disbursements to otherwise eligible
students. The Secretary disagrees with the commenter who argues that
the Secretary cannot assign liability to an institution failing to
comply with the requirements of this section, on the basis that section
484(p)(4) of the HEA prohibits the Secretary from taking any
compliance, disallowance, penalty, or other regulatory action against
an institution with respect to an error in a social security number,
unless the error is the result of institutional fraud. The Secretary,
in accordance with this provision, will not take any of the
administrative actions mentioned in HEA section 484(p)(4) against an
institution that, notwithstanding compliance with this section, makes a
title IV, HEA disbursement to a student using an incorrect social
security number. However, section 484(p) does not prevent the Secretary
from holding an institution liable for any title IV, HEA disbursements
made in error to a student if the erroneous disbursements were caused
by the institution's failure to comply with the provisions of this
section.
Changes: If there is a determination by the Secretary that the
social security number provided by a student to an institution is
incorrect, Sec. 668.7(i) is revised to allow an institution to
determine that a student's social security number is correct based on
documented evidence. If the institution verifies the accuracy of a
social security number that differs from the social security number
originally provided to the Secretary, the institution is required to
report the correct social security number to the Secretary. Section
668.7(i)(2) is also revised to require an institution to collect
evidence of a correct social security number if the institution has
information that conflicts with the Secretary's determination that the
student's social security number is correct.
Enrollment in Correspondence or Telecommunications Courses
Comments: One commenter suggested that the Secretary clarify that a
student's ineligibility for title IV, HEA assistance because of the
student's enrollment in a correspondence course not leading to a degree
extends only to that course, and that the same student may be eligible
for title IV, HEA assistance if he or she is enrolled in degree program
courses. The same commenter inquired as to whether a student enrolled
in a telecommunications course that is being categorized as a
correspondence course for purposes of HEA section 484(l)(1) is also
counted as a correspondence student for purposes of HEA section
481(a)(3).
One commenter questioned whether a course taught through live,
interactive telephone transmission qualifies as a telecommunications
course. One commenter requested clarification with regard to whether
the Secretary's use of the phrase ``part of an educational program'' in
Sec. 668.7(a)(15) refers to part of the student's academic program or
part of the curriculum of the institution. One commenter questioned
whether students enrolled in residential degree programs who enroll in
additional correspondence courses for purposes of certification or
licensure would be eligible for title IV, HEA assistance. The same
commenter inquired as to whether an aid officer can deny funding
applicable to correspondence programs provided at another institution
with which a consortium agreement exists. One commenter suggested that
the Secretary should institute a waiver procedure which would allow
certain institutions to waive the 50 percent standard provided in
Sec. 668.7(j). One commenter requested that the Secretary define the
term ``correspondence.''
Discussion: The Secretary agrees with the commenter's presumption
that a student enrolled in a telecommunications or correspondence
course that is not part of a degree program is ineligible for title IV,
HEA assistance only to the extent that he or she is enrolled in
ineligible courses. An otherwise eligible student who is enrolled in
both degree program coursework and non-degree correspondence courses
continues to be eligible for title IV, HEA assistance to offset the
costs of the degree program courses. With regard to the applicability
of the 50 percent standard to HEA section 481(a)(3), the Secretary
wishes to emphasize that the calculation of the percentage of
telecommunications and correspondence courses provided for in
Sec. 668.7(j) is applicable only to Sec. 668.7(j), and does not apply
to the standard set for percentage of students enrolled in
correspondence courses in HEA section 481(a)(3). With regard to the
question concerning use of the phrase ``part of a program'' in
Sec. 668.7(a)(15), the phrase refers to the student's academic program,
which must lead to an associate, bachelor's, or graduate degree. A
student enrolled in correspondence courses for the purpose of attaining
certification or licensure is not eligible for title IV, HEA assistance
for those courses, but may be eligible to receive title IV, HEA
assistance for other correspondence courses in a degree program. With
regard to the comment concerning consortium agreements, the aid officer
may deny title IV, HEA assistance to a student for any correspondence
courses that do not meet degree-seeking requirements, including
correspondence courses taken by consortium agreement at another
institution. With regard to whether a course taught through live,
interactive telephone transmission is a telecommunications course, the
Secretary notes that HEA section 484(m)(4) defines
``telecommunications'' as ``the use of television, audio, or computer
transmission, including open broadcast, closed circuit, cable,
microwave, or satellite, audio conferencing, computer conferencing, or
video cassettes or discs, except that such term does not include a
course that is delivered using video cassette or disc recordings at
such institution and that is not delivered in person to other students
of that institution.'' Since the definition encompasses audio or
computer conferencing, a course taught through interactive telephone
transmissions must be considered a telecommunications course. With
regard to the comment requesting a waiver procedure, the Secretary has
no authority to prescribe procedures for waiving any of the provisions
in HEA section 484. With regard to a definition of ``correspondence,''
the Secretary is considering a definition of ``correspondence course''
in a separate proposed rulemaking published in the Federal Register on
February 10, 1994 (59 FR 6446-6465). Until that separate rulemaking is
published as final regulations, the commenter may refer to Sec. 600.2
of the Institutional Eligibility regulations, which defines a ``program
of study by correspondence'' as ``an educational program offered
principally by mail by an institution. Under this type of program, the
institution prepares lesson materials and mails them to the student in
a sequential and logical order. The student completes the lessons and
mails them back to the institution within a specified period of time.
The program may include a required period of residential training.''
Changes: None.
Program of Study Abroad
Comments: One commenter questioned whether the Secretary intends to
limit the eligibility of permanent resident aliens and other noncitizen
students seeking assistance under the Federal Family Education Loan
Program for the purpose of enrolling in study abroad programs. One
commenter asked for clarification concerning the circumstances under
which an aid officer could approve a study abroad course that is not
part of the student's degree program.
Discussion: Permanent resident aliens and other noncitizens who are
determined to be eligible students for purposes of Sec. 668.7(a)(4)(ii)
and part 668, Subpart I, and are otherwise eligible, are not prohibited
from enrolling in study abroad programs. With regard to the approval of
a study abroad course that is not part of a degree program, this
provision ensures that an eligible student may receive title IV, HEA
assistance for any study abroad course that is approved for credit at
an eligible institution, and that the course need not be required for
completion of a specific degree. For example, an otherwise eligible
student pursuing a degree in mathematics may receive title IV, HEA
assistance for an elective course in art history taken abroad, provided
that the art history course is approved for credit by the eligible
institution toward the student's graduation.
Changes: None.
Executive Order 12866
These final 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 this regulatory action.
The potential costs associated with the final regulations are those
resulting from statutory requirements and those determined by the
Secretary to be necessary for administering this program effectively
and efficiently. Burdens specifically associated with information
collection requirements, if any, are identified and explained elsewhere
in this preamble under the heading Paperwork Reduction Act of 1980.
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.
Paperwork Reduction Act of 1980
These regulations have been examined under the Paperwork Reduction
Act of 1980 and have been found to contain no information collection
requirements.
Assessment of Educational Impact
In the notice of proposed rulemaking, the Secretary requested
comments on whether the proposed regulations would require transmission
of information that is being gathered by or is available from any other
agency or authority of the United States.
Based on the response to the proposed rules and on its own review,
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, Student aid.
Dated: February 2, 1994.
Richard W. Riley,
Secretary of Education.
(Catalog of Federal Domestic Assistance Numbers: Federal
Supplemental Opportunity Grant Program, 84.007; Federal Stafford
Loan Program, 84.032; Federal PLUS Loan Program, 84.032; Federal
Work-Study Program, 84.033; Federal Perkins Loan Program, 84.038;
Federal Pell Grant Program, 84.063; State Student Incentive Grant
Program, 84.069; Early Intervention Scholarship Program, 84.272)
The Secretary amends part 668 of title 34 of the Code of Federal
Regulations as follows:
PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS
1. The authority citation for part 668 continues to read as
follows:
Authority: 20 U.S.C. 1085, 1088, 1091, 1092, 1094, and 1141,
unless otherwise noted.
2. Section 668.2, paragraph (b) is amended by adding in
alphabetical order a new definition for ``Output document'' to read as
follows:
Sec. 668.2 General definitions.
* * * * *
(b) * * *
Output document: The Student Aid Report (SAR), Electronic Student
Aid Report (ESAR), other document or automated data generated by the
Department of Education's central processing system as the result of
processing the data provided in a Free Application for Federal Student
Aid (FAFSA) or multiple data entry application.
* * * * *
3. Section 668.7 is amended by revising paragraph (a)(1)(ii) and
adding a new paragraph (a)(1)(iii); revising paragraph (a)(8); removing
the word ``and'' at the end of paragraph (a)(11)(vii); removing the
period at the end of paragraph (a)(12), and adding, in its place, a
semicolon; and by adding new paragraphs (a)(13), (a)(14), (a)(15),
(a)(16), (i), (j), and (k) to read as follows:
Sec. 668.7 Eligible student.
(a) * * *
(1) * * *
(ii) For purposes of the Stafford Loan, PLUS, SLS, or Federal
Direct Student Loan Program, enrolled for no longer than one twelve-
month period as at least a half-time student in a course of study
necessary for enrollment in an eligible program; or
(iii) For purposes of the Stafford Loan, PLUS, SLS, CWS, Perkins
Loan, or Federal Direct Student Loan Program, enrolled or accepted for
enrollment as at least a half-time student at an eligible institution
in a program necessary for a professional credential or certification
from a State that is required for employment as a teacher in an
elementary or secondary school in that State;
* * * * *
(8) In accordance with the requirements of Sec. 668.32, has filed a
Statement of Educational Purpose;
* * * * *
(13) Has filed--
(i) An output document confirming registration with Selective
Service by providing the results of a data match with the Selective
Service System; or
(ii) In the absence of confirmation as provided in paragraph
(a)(13)(i) of this section and within a deadline to be set by the
institution of no less than 30 days from the date the institution
receives the output document, a Statement of Registration Status or
other evidence in accordance with Sec. 668.33;
(14) For purposes of the FFEL, Federal Direct Student Loan, and
Federal Perkins Loan programs, is not an incarcerated student at the
time funds are delivered or disbursed;
(15) Is, if enrolled in a telecommunications or correspondence
course, enrolled in a telecommunications or correspondence course that
is part of an educational program leading to an associate, bachelor's,
or graduate degree; and
(16) Except for residents of the Republic of the Marshall Islands,
the Federated States of Micronesia, or the Republic of Palau, has a
correct social security number that has been verified in accordance
with the requirements of paragraph (i) of this section;
* * * * *
(i) Social security number. The Secretary verifies a social
security number provided by a student to an eligible institution and
shall enforce the following conditions:
(1) An institution shall not deny, reduce, delay or terminate a
student's eligibility for assistance under the title IV, HEA programs
because social security number verification is pending;
(2) If the institution receives an output document from a student
indicating that the Secretary has determined that the student's social
security number is correct, the institution shall not require the
student to produce other evidence to confirm that the student's social
security number is correct, unless the institution--
(i) Has documentation that conflicts with the social security
number status reported on the output document; or
(ii) Has reason to believe the output document is incorrect.
(3) If the institution receives an output document from a student
indicating that the Secretary has determined that the social security
number provided to the institution by the student is incorrect, or that
the Secretary was unable to confirm that the social security number
provided to the institution by the student is correct, the
institution--
(i) Shall provide the student an opportunity, within a deadline of
at least 30 days from the date the institution receives the output
document, to provide clear and convincing evidence to verify that the
student has a correct social security number; and
(ii) May disburse any combination of title IV, HEA program funds,
employ the student under the Federal Work-Study Program, or certify a
Federal Stafford, Federal PLUS, Federal SLS, or Federal Direct Student
loan application for the student upon making, based on the evidence
provided for in paragraph (i)(3)(i) of this section, a determination
that the social security number provided by the otherwise eligible
student to the institution is correct; and
(iii) Shall report the student's correct social security number to
the Secretary if the correct social security number differs from the
social security number previously reported by the student to the
Secretary.
(4) If a student fails to submit the documentation by the deadline
established in accordance with paragraph (i)(3)(i) of this section, the
institution may not disburse to the student, or certify the student as
eligible for, any title IV, HEA program funds for that period of
enrollment or award year; employ the student under the Federal Work-
Study Program; or certify a Federal Stafford, Federal PLUS, Federal
Direct Student Loan, or Federal SLS loan application for the student
for that period of enrollment.
(5) If the Secretary determines that the social security number
provided to an eligible institution by a student is incorrect, and the
institution has not made a determination under paragraph (i)(3) of this
section, and a loan has been guaranteed for the student under the
Federal Family Education Loan Program, the institution shall notify and
instruct the lender and guaranty agency making and guaranteeing the
loan, respectively, to cease further disbursements of the loan, until
the Secretary or the institution determines that the social security
number provided by the student is correct, but the guaranty shall not
be voided or otherwise nullified with respect to disbursements made
before the date that the lender and the guaranty agency receive the
notice.
(6) Nothing in this section shall permit the Secretary to take any
compliance, disallowance, penalty or other regulatory action against--
(i) Any institution of higher education with respect to any error
in a social security number, unless the error was the result of fraud
on the part of the institution; or
(ii) Any student with respect to any error in a social security
number, unless the error was a result of fraud on the part of the
student.
(j) Special provisions regarding telecommunications and
correspondence courses. (1) A student enrolled in an educational
program at an eligible institution (other than an institution that
meets the definition in section 521(4)(C) of the Carl D. Perkins
Vocational and Applied Technology Education Act) that is offered in
whole or in part through telecommunications and leads to a recognized
associate, bachelor's, or graduate degree conferred by the institution
is not enrolled in correspondence courses unless the total amount of
telecommunications and correspondence courses at the institution equals
or exceeds 50 percent of all courses delivered at that institution.
(2) The percentage provided in paragraph (j)(1) of this section is
calculated by comparing the total number of correspondence and
telecommunications courses delivered during the preceding award year
with the total number of all courses delivered during that award year.
If an institution delivers the same course in person, by
telecommunications, or by correspondence, the Secretary considers each
delivery of the course by the institution to be a separate course for
purposes of this calculation.
(3) A student is subject to reduced eligibility for title IV, HEA
assistance if the financial aid administrator determines under the
discretionary authority provided in section 479A of the HEA that the
student's telecommunications instruction results in a substantially
reduced cost of attendance to the student.
(k) Program of study abroad. (1) An otherwise eligible student who
is engaged in a program of study abroad is eligible to receive title
IV, HEA assistance if--
(i) The student maintains enrollment in an eligible institution
during his or her program of study abroad; and
(ii) The eligible institution approves the program of study abroad
for academic credit at the eligible institution.
(2) The study abroad program need not be required as part of the
student's degree program.
Sec. 668.131 [Amended]
4. Section 668.131 is amended by removing the definition of Output
document.
[FR Doc. 94-6127 Filed 3-15-94; 8:45 am]
BILLING CODE 4000-01-P
