[Federal Register Volume 59, Number 156 (Monday, August 15, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-19869]
[[Page Unknown]]
[Federal Register: August 15, 1994]
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Part VI
Department of Education
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34 CFR Part 607
Strengthening Institutions Program; Final Rule
DEPARTMENT OF EDUCATION
34 CFR Part 607
RIN 1840-AB78
Strengthening Institutions Program
AGENCY: Department of Education.
ACTION: Final regulations.
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SUMMARY: The Secretary revises the regulations governing the
Strengthening Institutions Program. These final regulations are needed
to improve the functioning of the program and to implement changes made
to the program's authorizing statute, Title III, Part A, of the Higher
Education Act of 1965 (HEA), by the Higher Education Amendments of
1992, Pub. L. 102-325 (1992 Amendments) and the Higher Education
Technical Amendments of 1993, Pub. L. 103-208.
EFFECTIVE DATE: These regulations take effect either 45 days after
publication in the Federal Register or later if the Congress takes
certain adjournments. If you want to know the effective date of these
regulations, call or write the Department of Education contact person.
A document announcing the effective date will be published in the
Federal Register.
FOR FURTHER INFORMATION CONTACT:
Louis J. Venuto. Telephone: (202) 708-8839. 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 Strengthening Institutions Program
provides grants to institutions of higher education to improve their
academic programs, institutional management, and fiscal stability. The
purpose of the program is to increase the self-sufficiency of
participating institutions and to strengthen their capacity to make a
substantial contribution to the higher education resources of the
nation.
The Strengthening Institutions Program is an important part of
implementing the National Educational Goals. Specifically, the program
addresses Goal 5, that every adult American will possess the knowledge
and skills necessary to compete in a global economy and exercise the
rights and responsibilities of citizenship, by expanding educational
opportunities for students who attend the institutions that receive
assistance under this program.
On September 16, 1993, the Secretary published a notice of proposed
rulemaking (NPRM) in the Federal Register (58 FR 48478) to implement
changes made to the program by the 1992 Amendments, to more sharply
define institutional eligibility requirements, and to improve the
functioning of the program.
Analysis of Comments and Changes
In response to the Secretary's invitation in the NPRM, 212 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.
The issues are grouped according to sections of the proposed
regulations. Technical and other minor changes--and suggested changes
the Secretary is not legally authorized to make under the applicable
statutory authority--are not generally addressed.
Section 607.3(b) What is the enrollment of needy students?
--Sections 607.3(b) (3) and (4)
Comments: Under section 312(b)(1)(A) of the HEA, an institution
must have ``an enrollment of needy students'' to qualify as an eligible
institution under the Strengthening Institutions Program. Under section
312(c) of the HEA, an institution has an enrollment of needy students
if (1) at least 50 percent of its degree students receive need-based
student financial assistance; or (2) a substantial percentage of its
students receive Pell Grants. However, an institution that does not
satisfy this requirement can nevertheless qualify as an eligible
institution if the Secretary waives this requirement under section
352() of the HEA.
Prior to the Higher Education Amendments of 1992, section 352(a) of
the HEA required the Secretary to waive the ``needy student
requirement'' if the institution satisfied any one of the six criteria
established in section 352(a)(1) through (6). As a result of the 1992
Amendments, the Secretary now has discretion to waive the needy student
requirement if the institution satisfies any one of the six criteria
listed in that section. These six criteria are listed in Sec. 607.3(b)
of the program regulations.
In the NPRM, the Secretary proposed making the waiver criteria in
Sec. 607.3(b) (3) and (4) more explicit. Section 607.3(b)(3) of the
current regulations permits the Secretary to waive the needy student
enrollment requirement if an institution can demonstrate that it
substantially increases higher education opportunities for low-income
students who are also educationally disadvantaged, underrepresented in
higher education, or minorities. The Secretary considered quantifying
this requirement by requiring that an applicant demonstrate that its
enrollment of these students has increased by 200 or at least 20
percent, whichever is greater, at the end of three years in order to
get this waiver. The Secretary requested public comment on this
proposal. The Secretary also solicited comment on whether an
institution could automatically satisfy this requirement if these
students constitute at least 50 percent of an institution's total
enrollment.
Section 607.3(b)(4) of the current regulations permits the
Secretary to waive the needy student enrollment requirement if an
institution can demonstrate that it substantially increases the higher
education opportunities for individuals who reside in an area that is
not included in a ``metropolitan statistical area'' and who are
unserved by postsecondary institutions. The Secretary considered
quantifying this requirement by requiring that an applicant demonstrate
that its enrollment of these students has increased by 200 or at least
20 percent, whichever is greater, at the end of three years. The
Secretary requested public comment on this proposal. The Secretary also
solicited comment on whether an institution could automatically satisfy
this requirement if these students constitute at least 50 percent of an
institution's total enrollment.
Several commenters oppose the proposed changes to Secs. 607.3(b)
(3) and (4) and believe that an institution should continue to provide
whatever evidence it believes is appropriate to satisfy these waiver
criteria.
Commenters believe that institutions may be unable to achieve the
proposed increases in enrollment. First, commenters believe
demographics may prohibit many institutions from increasing their
enrollments of disadvantaged and unserved students by the numbers and
percentages in the proposed regulations. Second, one commenter fears
that nationwide decreases in enrollment of disadvantaged students may
prevent institutions from achieving the proposed increases in
enrollment. Third, commenters believe that small community colleges may
be unable to achieve the proposed increases in enrollment because the
students who attend these institutions often are not counted for
purposes of eligibility due to the fact that they often attend less
than half-time. Finally, commenters believe that large urban
institutions may be unable to achieve the proposed increases in
enrollment because of budgetary restraints that have forced many of
these institutions to freeze enrollments.
Several commenters believe that it may be difficult for small
institutions to document increases in enrollment. These commenters
believe that it is impossible for many small institutions, for example,
to provide counts by ethnicity of students currently being served and
to reconstruct counts from the base year.
Commenters oppose the emphasis on the quantity of students served,
rather than on the quality of services and benefits provided to these
students. Commenters fear that placing the emphasis in the number of
students enrolled will cause institutions to provide lower quality
services to a greater number of students.
One commenter believes that the proposed changes unfairly penalize
institutions that have already increased enrollment of disadvantaged
and unserved students and rewards those institutions with low
enrollments of these students.
One commenter opposes the proposed changes because they penalize
institutions that have decreasing numbers of students taking more
credit hours. The commenter believes that these institutions should not
be penalized because educational programs that encourage students to
take fewer credit hours have proven successful in promoting greater
student retention and success.
One commenter opposes the proposed change because it appears to
indicate a change in the program from one that was intended to provide
support to increase educational opportunities for needy students to one
that is intended to target a specific population. These commenters
believe this change is contrary to statutory intent.
Several commenters representing tribal institutions oppose the
proposed changes to Sec. 607.3(b)(3), which would require an
institution to show an increase in enrollment of disadvantaged students
by 200 or by at least 20 percent, since this would adversely affect
tribal institutions which do not focus on low-income enrollment. These
commenters, however, favor the other proposed change which would afford
automatic eligibility to institutions that enroll at least 50 percent
low-income minorities. Another commenter favors the proposed change in
its entirety. The Commenters believes that the proposed change would
encourage many state institutions to form a bridge with two-year tribal
colleges for the purpose of increasing their enrollment, and thus,
ensure educational opportunities for reservation tribal members.
Several commenters asked for certain clarifications of proposed
Sec. 607.3(b)(3). Several commenters inquire how ``low-income,''
``educational disadvantaged,'' ``underrepresented in higher
education,'' and ``minorities'' will be defined. Commenters
representing community colleges oppose any definition of ``low-income''
that is based on Pell eligibility since many students attending
community colleges are employed full-time and thus are not eligible for
Pell Grants. These commenters also state that many students are
reluctant to fill out federal financial assistance forms. Several
commenters also inquire how the 20 percent increase in enrollment of
disadvantaged students would be measured. One commenter asked if
California institutions could count a 20 percent increase in its
Educational Opportunity Program & Services enrollment as meeting that
standard.
Commenters also request certain clarifications of both
Sec. 607.3(b) (3) and (4). Several commenters ask what is the basis for
requiring institutions to show increases of 200 or at least 20 percent,
rather than some other number or percent. Another commenter inquires
whether the ``end of three years'' has already occurred or whether it
is to occur in the future. One commenter also inquires about the
sanctions for failing to comply with a promise if the waiver provisions
are prospective. Several commenters inquire what type of student could
be counted as being included in the population identified in
Sec. 607.3(b) (3) and (4). These commenters ask whether the population
would include only full-time, degree-seeking students, or whether part-
time students would also be included.
One commenter requested that the Secretary remove ``whichever is
greater'' from proposed Sec. 607.3(b) (3) and (4). This commenter
suggests this change to allow a small college to be eligible under the
proposed regulations. Another commenter requests substituting
``whichever is less'' for ``whichever is greater'' in Sec. 607.3(b)(4)
for the same reason. Finally, another commenter suggests that the
Secretary change ``an area that is not included in a metropolitan
statistical area'' to ``rural area'' in proposed Sec. 607.3(b)(4).
Several commenters offer alternatives to proposed Sec. 607.3(b) (3)
and (4). Commenters suggest that the Secretary require institutions to
demonstrate that the enrollment of disadvantaged and unserved students
has increased at a rate that exceeds the national average enrollment
rate for that type of institution for the last three years for which
the Department has available statistics. These commenters believe that
this alternative would enable institutions to demonstrate that they are
exceeding the growth rate for needy students that is experienced by
similar institutions, i.e., two-year public, two-year private, four-
year public, and four-year private institutions. In addition, these
commenters believe that the comparison with like institutions is
consistent with the means used by the Department to measure whether
institutions meet the two eligibility criteria for the program. Another
commenter questions whether the Department's statistics are valid. This
commenter suggests that this alternative qualitative criterion also
evaluate or measure an institution's effectiveness in providing
improved or expanded services to students.
Another commenter suggests that the Secretary ask for documentation
of the institution's past and current efforts to increase enrollments,
rather than specify a numerical goal to be demonstrated. This commenter
feels it is unfair for the Secretary to initiate changes in services
and programs without also providing funds to support the implementation
of these changes.
Discussion: The Strengthening Institutions Program has only two
specific institutional eligibility requirements. One requires that an
eligible institution have an ``enrollment of needy students.'' An
institution may satisfy this requirement if it serves a ``substantial''
percentage of Pell Grant recipients.
To determine whether an institution serves a substantial percentage
of Pell Grant recipients, an institution must first determine the
percentage of Pell Grant recipients at the institution. The institution
calculates this rate by dividing the number of enrolled Pell Grant
recipients by the number of enrolled potential Pell Grant recipients,
i.e., degree students enrolled on at least a half-time basis.
For the last application cycle, the Secretary determined that an
institution served a substantial percentage of Pell Grant recipients if
the institution's percentage of potential Pell Grant recipients who
received Pell Grants was at least 28.18 percent for two-year public
institutions, 35.25 percent for two-year private institutions, 28.98
percent for four-year public institutions, and 29.07 percent for four-
year private institutions.
One of the waiver criteria requires an applicant to demonstrate
that it contributes substantially to increasing higher educational
opportunities for educating low-income students who are also minority
students, educationally disadvantaged, or underrepresented in higher
education. Another requires an applicant to substantially increase
higher education opportunities for individuals in rural or other
isolated areas which are unserved by postsecondary education. In the
preamble to the proposed regulations, the Secretary proposed
quantifying these increases. However, based upon public comments, the
Secretary will not require these quantifications in the final
regulations. Instead, the Secretary will develop a set of more specific
questions relating to these waiver provisions in the eligibility
application. The Secretary anticipates proposing standards for these
waiver provisions after undertaking a careful review of the information
received from these questions.
The definition of ``low-income student'' is included in
Sec. 607.3(c). The Secretary includes definitions of the terms
``minority student,'' a student who is ``educationally disadvantaged,''
and a student who is ``underrepresented in higher education.'' The
definition of ``educationally disadvantaged'' is adapted from the
definition of ``disadvantaged'' under the Vocational and Applied
Technology Education Programs--General Provisions (34 CFR 400.4(b)).
The definitions of ``minority student'' and ``underrepresented in
higher education'' mirror the definitions of these terms used in other
higher education program regulations. The definitions are intended to
clarify the meaning of these terms. The Secretary does not believe that
these definitions will impose any additional administrative burden on
parties affected by the regulations.
The Secretary has also reviewed the proposed alternative to require
institutions to demonstrate that the enrollment of the disadvantaged
and unserved students has increased at a rate that exceeds the national
average enrollment rate for that type of institution for the last three
years for which the Department has available statistics. This review
found that the data to establish these thresholds are not available,
and it would not be feasible to collect this data.
Changes: The Secretary revises Sec. 607.7(b) to add definitions of
``educationally disadvantaged,'' ``minority student,'' and
``underrepresented in higher education,'' The Secretary withdraws the
proposed numerical standards.
--Section 607.3(b)(5) and (6)
Comments: Section 607.3(b)(5) provides a waiver of the needy
student eligibility requirement if (1) An institution can demonstrate
that the institution is located on or within 50 miles of an Indian
reservation or a substantial population of Indians and (2) the
institution will, if granted the waiver, substantially increase higher
education opportunities for American Indians. Section 607.3(b)(6)
provides a waiver of the needy student eligibility requirement if an
institution can demonstrate that the institution will, if granted the
waiver, substantially increase the higher education opportunities for
Black Americans, Hispanic Americans, Native Americans, Asian Americans
or Pacific Islanders, including Native Hawaiians.
The Secretary proposed changing these two waiver provisions by
requiring an institution to provide a plan for increasing, during the
next three years, its enrollment of subject students by some number or
percent that would be the same for all institutions, and either
maintain or put in place special programs and services designed to
support these students. If an applicant for a waiver has applied for
and received a waiver under these criteria in a previous year, the
Secretary would base his decision to grant another waiver, in part, on
whether the institution did what it said it was going to do to get the
previous waiver. The Secretary requested comment on these proposals.
Several commenters believe that the proposed changes are non-
specific, complex, and bureaucratic. These commenters believe that the
plan ``to increase by some number or percent that would be the same for
all institutions'' is not sufficiently defined to provide guidance.
Several commenters believe the requirement that institutions ``put
in place special programs and services designed to support these
students'' is unnecessary since most institutions serving low-income
educationally disadvantaged students already have these programs in
place. One commenter opposes this proposed requirement on the grounds
that small community colleges do not have sufficient resources to
provide these services.
One commenter is concerned with the phrase ``that would be the same
for all institutions.'' This commenter believes that the Secretary
should not apply the same number of students to institutions of varying
sizes, and that it would be unjust to apply the same percentage to
institutions currently serving few needy students to institutions
currently serving a high percentage of these students.
One commenter supports a change that requires a plan to increase by
some number or percent that is based on the demographic setting of an
institution. Another commenter believes that the number or percentage
selected should be the same as that established for Secs. 607.3(b)(3)
and (4). Finally, several commenters suggest that an institution be
required to demonstrate that enrollment of the target group of students
has increased at a rate that exceeds the national average enrollment
for that type of institution for the last three years for which the
Department has available statistics.
Discussion: The Secretary believes that some commenters may have
misunderstood the proposed changes to Sec. 607.3(b)(5) and (6). The
Secretary did not intend to offer any specific regulatory language
change in the preamble. In particular, the Secretary did not intend to
propose regulatory language that would require a institution to provide
a plan for increasing, during the next three years, its enrollment of
subject students by ``some number or percent that would be the same for
all institutions.'' Rather, the Secretary was soliciting public comment
on this concept, specifically on what percentages and numbers may be
appropriate for these waiver provisions.
Nevertheless, as in Sec. 607.3(b)(3) and (4), the Secretary has
determined, based upon the thoughtful public comment received, not to
require these quantifications in the final regulations. Instead, the
Secretary will develop a set of more specific questions relating to
these waiver provisions in the eligibility application. The Secretary
anticipates proposing standards for these waiver provisions after
undertaking a careful review of the information received from these
questions.
Changes: None.
Section 607.4(c) What are low educational and general expenditures?
Comments: Several commenters oppose the proposal that would limit a
waiver of the educational and general expenditure eligibility (E&G)
requirement to institutions that do not obtain waivers of the
enrollment of needy students requirement. Commenters believe that the
two waiver provisions are independent, and waivers should be allowed
for both. One commenter is concerned that institutions with high cost,
high technology programs will be prevented from participating if they
do not receive a waiver of the E&G eligibility requirement even if they
receive a waiver of the needy student requirement. This commenter
states that institutions with a large number of continuing education
students or college preparatory students may have higher costs per
student since these students are not eligible to be counted as full-
time equivalent students. Another commenter is concerned that the
proposed change would mean that institutions located in metropolitan
areas with high costs of living would be eliminated because their
expenditures per student generally reflect the economic conditions of
their geographic area. This commenter also fears that small rural
institutions that provide a wide range of costly services to
economically disadvantaged students would also be denied access to the
program.
Several commenters request that the Secretary consider requiring
better documentation from institutions using the waiver provisions
rather than precluding an institution from receiving both types of
waivers. One commenter suggests requiring an institution to (1) Provide
a longitudinal enrollment history to explain why there is currently a
reduction in enrollment to demonstrate low enrollment; (2) provide
comparable data of similar institutions on size and mission with
regards to salaries, energy costs, and facilities management to
demonstrate the high cost of the living area; and (3) to fully explain
the reasoning behind its low students to faculty ratio where an
institution is operating a high cost program (e.g., technology or
medical program).
One commenter requests clarification of what is ``persuasive
evidence'' by the institution that (1) It has low student enrollment;
and (2) the institution is located in a high cost-of-living area. The
commenter also requests a definition of ``a high cost-of-living area''
which would pay up to 33 percent higher costs to bring goods and
services to isolated, rural areas. The commenter believes this
definition provides a more equitable and less arbitrary means of
measuring this requirement.
Discussion: The Secretary agrees that applicants should continue to
be allowed to request waivers of both the needy student and educational
and general expenditures requirements. The Secretary believes that both
waivers are necessary to account for the different conditions (e.g.,
urban versus rural areas) that may exist among institutions. Therefore,
a change is not necessary in the current regulations.
The Secretary notes that both types of waivers have their own
separate set of waiver options. If applicants are unable to meet both
the needy student and educational and general expenditures
requirements, then they must develop two separate waiver narratives
addressing the specific criteria for each waiver.
The Secretary agrees with the comments and suggestions recommending
that applicants provide appropriate waiver documentation. Because
institutional demographics differ due to size, control, location, and
structure and function, the regulations have not been written to detail
the correct or acceptable narrative response. Rather, the Secretary
believes that applicants should retain the flexibility, within the
broad terms of the waiver options, to develop narratives containing
specific evidence that meets the requirement but is developed according
to the institution's unique circumstances. In fact, many of the
commenters' suggestions are some of the elements used by applicants to
justify their waiver narratives.
Changes: None.
Section 607.8 What is a comprehensive development plan and what must
it contain?
Comments: Several commenters believe that the Secretary should
further clarify how a comprehensive development plan (CDP) differs from
activity required under a project plan. These commenters also suggest
eliminating the points awarded to the CDP, require that it not exceed
10 pages, and establish a page limit for the number of pages for each
activity narrative.
One commenter believes that the present nine elements of the CDP
should not be revised. The commenter believes that the present nine
areas keep the proposal within bounds in planning and carrying out an
activity.
One commenter inquires whether additional information will be
required under the CDP or requested in the application package. For
example, the commenter inquires whether an applicant would be required
to provide background information regarding the student population
served by the institution, the mission of the institution, and other
information needed to give the reader a context in which to read the
remainder of the plan, activity narratives, and its request for funds.
One commenter suggests that the application further stipulate that
the CDP address the strengthens and weaknesses of the institution as a
result of an analysis of the external and internal trends and
assumptions identified within the institutional environment. This
commenter also suggests that the guidelines reinforce participation in
the planning process by developing a guideline requiring the
description of the planning process and an evaluative criterion worth
three points assessing the extent to which the process is sound,
systematic, participatory, and likely to return in a viable
institutional plan.
Discussion: Although there is a correlation between the CDP and the
description of activities in the project plan, they are not in any way
identical. Section 351(b)(1) of the HEA requires the applicant to set
forth a CDP to strengthen the institution's academic quality,
institutional management, financial stability, and otherwise provide
for institutional self-sufficiency and growth. The CDP provides a full
description of the applicant's overall plan for achieving growth and
self-sufficiency. This description is centered on a discussion of the
institution's current analysis of its strengths and weaknesses as well
as its long-range goals and objectives. The activity narratives,
meanwhile, explain the rationale for each strategy designed to address
the problems and weaknesses described in the CDP.
In the NPRM, the Secretary reduced the factors to be specifically
addressed in the CDP. The elimination of several factors, including the
assumptions statement, timeframes, resource requirements, and the
separate evaluation of the CDP, is designed to focus the narrative on
only the most important issues related to institutional planning. The
assumptions statement, which is based on an analysis of external and
internal trends projected to affect the institution's future, was
eliminated in the NPRM as an element of the CDP because evaluators
found it difficult to assign quality points to future estimates.
Applicants, however, may find it useful to continue this exercise as
part of their overall planning.
The reduction of CDP factors will have the effect of streamlining
the plan, and, thereby, reduce the number of pages needed to respond.
Further, the weighted points assigned to the four required factors
represent the importance the Secretary places on each factor. Moreover,
the Secretary does not agree that the CDP should not be scored. The
Secretary believes that the quality of an institution's plan is
essential to determining funding decisions and must, therefore, be
evaluated.
The Secretary encourages applicants to describe briefly their
student populations, their institutional mission, and generally provide
helpful background information about their institution as a way of
introducing their institutions to evaluators. This additional
information is not evaluated and can be provided in a few pages.
Although the Secretary has always strongly encouraged applicants to
provide only the information needed to respond to the selection
criteria, the Secretary does not believe it is necessary or useful to
enforce a limit on the number of CDP and activity narrative pages.
Chages: None.
Section 607.10 What activities may and may not be carried out under a
grant?
--Section 607.10(b) Development grants; allowable activities
Comments: One commenter suggests that the Secretary add a provision
to proposed Sec. 607.10(b) that the listed activities are examples only
and do not represent priorities of the Secretary. Second, this
commenter believes that the list of suggested activities should be
updated at least every five years.
One commenter believes that the list of eligible activities should
include activities that support regional accreditation or
reaccreditation.
Finally, one commenter opposes proposed Sec. 607.10(b)(1)(iii),
which includes as an allowable activity faculty development that
provides faculty the skills and knowledge needed to acquire terminal
degrees that are required to obtain or retain accreditation of an
academic program or department. The commenter believes that providing
funding to finance terminal degrees for faculty members will chiefly
benefit a few select individuals rather than assist a college in
achieving long-range institutional goals.
Discussion: The listed examples are illustrative--not exhaustive.
However, the list of examples reflect section 311(b)(3) of the HEA,
which provides that special consideration shall be given to
applications from institutions that propose to engage in these
activities. The Secretary believes that the intent to list these
activities as examples is clear under Sec. 607.10(b) since that section
states that the allowable activities ``include, but are not limited''
to those listed. Therefore, the Secretary does not believe any change
is necessary.
The listed activities are normally updated when the HEA is
authorized, or about every five years.
The Secretary believes that the allowable activities under section
311(b)(3) of the HEA include efforts to maintain institutional
accreditation. The Secretary believes that these efforts are
supportable by Title III funding because efforts to achieve self-
sufficiency would be severely hampered by an institution's loss of
accreditation.
In a few instances, institutions apply for faculty development
funds to enable faculty to obtain advanced or terminal degrees to
maintain institutional accreditation. In these cases, the Secretary
believes that the greater benefit accrues to the institution by
maintaining its accreditation.
Changes: None.
--Section 607.10(c) Development grants; unallowable activities
Comments: One commenter opposes proposed Sec. 607.10(c)(5), which
prohibits the use of grant funds for developing and improving non-
degree or non-credit courses other than basic skills development
courses. The commenter is concerned that vocational certificate courses
will be unallowable. The commenter believes that these courses provide
many students attending community colleges with the flexibility to
shift majors if needed, and to better match ability to educational
targets.
The same commenter also opposes proposed Sec. 607.10(c)(7) which
prohibits the use of grant funds to purchase standard office equipment,
such as furniture, file cabinets, bookcases, typewriters, or word
processors. The commenter suggests adding the phrase ``other than
limited typewriters or word processors for the Project Director's
office.'' The commenter states that in many developing institutions
capital equipment is not available, even though they can find furniture
on campus to set up the director's office.
Several commenters oppose proposed Sec. 607.10(c)(8). These
commenters believe that deans should be permitted to fill the position
of project coordinator or activity director for Title III programs and
to receive program funding as part of their salaries. These commenters
believe that college deans do not serve as top-level administrators,
but rather as first-line supervisors in the areas of instruction and
student services. Commenters believe deans have the greatest expertise
to handle the duties of Title III management or direction of an
activity most effectively. Another commenter believes that this
restriction constitutes an unwarranted intrusion into the autonomy of
the institution and that the decision regarding who should be the
project director should be made by the institution and the Secretary
during grant negotiations, rather than be the subject of regulation.
One commenter opposes proposed Sec. 607.10(c)(9) which prohibits
grant funds from being used for costs of organized fund-raising. The
commenter believes that fund-raising is necessary to broaden an
institution's funding base.
Discussion: The Secretary includes courses leading to a certificate
or another recognized educational credential as a ``degree'' course;
thus, the development of courses leading to a certificate or other
recognized educational credential offered by the institution is an
allowable program cost. The prohibition on the use of grant funds to
support non-degree or non-credit courses (e.g., courses offered in the
evening or on weekends that are designed to provide instruction in
self-improvement or constructive use of leisure time) is intended to
focus grant funds upon developmental activities most central to the
college's mission. The Secretary notes, however, that grant funds may
be used to support basic skills developmental courses that are intended
to provide the requisite skills in reading, math, and writing to
students who are marginal in their ability to persist in college.
The Secretary believes that the prohibition in Sec. 607.10(c)(7) on
the use of grant funds to purchase standard office equipment, such as
furniture, file cabinets, bookcases, typewriters, or word processors,
is necessary. The Secretary believes that grant funds may be used to
purchase necessary equipment support on developmental activities,
rather than on the purchase of this kind of operational equipment.
The Secretary views the position of Dean as one that has college-
wide administrative authority and responsibilities. The Secretary
continues to believe that payment of Strengthening Institutions Program
funds to support that position supplants institutional funds. However,
the Secretary understands that certain institutional officials are
called ``Dean'' but do not have college-wide administrative authority
and responsibilities. The Secretary does not object to these officials
serving as key officials in a Strengthening Institutions Program and
being paid with grant funds for their work on the federally funded
project. Therefore, the Secretary has revised the regulation to include
among the allowable activities the ``payment of any portion of the
salary of a dean, with proper justification, to fill a position under
the project such as project coordinator or activity director.'' Proper
justification includes evidence that the position entitled ``Dean'' is
not considered to be one that has college-wide administrative authority
and responsibilities.
The Secretary prohibits the use of grant funds for operational
purposes such as fund raising. The Secretary believes this restriction
is necessary to focus program funding on developmental activities.
Changes: The Secretary revises the regulations by adding
Sec. 607.10(b)(7) to include among the allowable activities the payment
of any portion of the salary of a dean, with proper justification, to
fill a position under the project such as project coordinator or
activity director. For purposes of this paragraph, proper justification
includes evidence that the position entitled ``Dean'' is not one that
has college-wide administrative authority and responsibility. The
Secretary revises Sec. 607.10(c)(8) by removing the word ``dean.''
Section 607.11 What must be included in individual development grant
applications?
Comments: If grant funds are requested to continue or complete the
activities, the Secretary proposed that an applicant for a development
grant include a description of the activities funded under a prior
grant. The Secretary also proposed that, if grant funds are requested
for these purposes, the institution provide a justification for not
completing the activities under the previous grant. One commenter
suggests deleting the phrase ``if grant funds are requested to complete
the activities.'' This commenter believes that institutions should
justify not having completed prior activities regardless of whether
they are requesting funds to complete or continue the activities. The
commenter believes that this is necessary to ensure accountability for
past short-falls.
One commenter believes that the proposed change is unnecessary and
would only require additional paperwork. The commenter believes that
this information could be adequately contained in a former grantee's
final performance report. Several commenters believe that the wording
of the proposed change needs to be clarified to reflect that the only
institutions required to report Part A grants that expired during the
past five years are those that failed to complete any activities under
those grants. Commenters state that, unless there are incomplete
activities, there is no need for applicants to have the additional
burden of reporting on past grants. Commenters suggest adding
``uncompleted activities'' for ``activities'' in proposed
Sec. 607.11(c) to clarify this point.
One commenter suggests that, if the Secretary opts to require all
institutions to report any grants that expired within the past five
years, applicants also be required to report whether an external
consultant assisted in writing the applications and whether an external
consultant has been paid to assist in writing the application being
submitted to the current competition. The commenter believes that this
would allow a reader to make a more fully informed judgment about
institutional capabilities.
One commenter believes the meaning of uncompleted activities needs
to be clarified. This commenter also believes that new proposals should
include a brief abstract of all completed activities of the previous
five years.
Discussion: The Secretary agrees with the first commenter that
institutions applying for new funds should justify not having completed
prior activities regardless of whether they are requesting funds to
complete or continue those activities.
To determine the impact of grant funds under the program goal of
assisting institutions progress towards growth and self-sufficiency,
the Secretary believes that grantees and former grantees must provide
evaluation and assessment information to allow the Secretary to make
more informed funding decisions. Some of this information can be
obtained from continuation application status reports as well as final
performance reports. However, as many as five years may have passed
from the end of an institution's last grant in which time, changed
circumstances and events may influence the next application. Hence,
this updating in the new application is necessary. The Secretary also
believes that this information is needed for all previously funded
activities, regardless of whether they are completed or uncompleted,
under Sec. 607.11(c).
The use of external consultants to assist institutions in the
preparation of applications or during the implementation of a funded
project is a known practice. The Secretary does not believe, however,
that requiring applicants to report the use of a consultant who has
been paid to assist with the preparation of an application will allow a
reviewer to make more fully informed judgment about institutional
capabilities.
The Secretary defines uncompleted activities as those that had
unmet objectives during the period of program funding, and are
subsequently not completed by the institution after funding ended.
Changes: The Secretary revises Sec. 607.11(c) to require
institutions to justify not having completed activities regardless of
whether they are requesting funds to complete or continue the
activities. The Secretary deletes ``if grant funds are requested to
complete or continue the activities'' in Sec. 607.11(c).
Section 607.13 How many applications for a development grant may an
institution submit?
Comments: The Secretary proposed to prevent an institution from
submitting an individual development grant application and a
cooperative grant application in the same year. Several commenters
oppose this proposed change, stating that, although cooperative
arrangements grants may be funded with funds under Part A of Title III
of the HEA, they are described under Part D of Title III of the HEA,
and institutions should not be prohibited from participating in both
types of grants simultaneously. Commenters also believe that individual
development grants and cooperative arrangement grants serve different
purposes. Many commenters request that, if the Secretary implements the
proposed change, institutions currently receiving funds under the
program be grandfathered so that the new requirement is phased in only
for new grant applications.
Several commenters request that proposed Sec. 607.13 be revised to
allow an institution with an approved multi-year development grant from
prior year's competition to be part of a cooperative arrangement
application in a subsequent fiscal year.
One commenter requests that the definition of ``grantee'' be
clearly defined. The commenter believes it is unclear whether
individual institutions participating under cooperative arrangement
grant would become eligible to apply for an individual development
grant after they are phased out of the cooperative arrangement grant or
whether the units participating in the cooperative arrangement are
deemed ``grantees'' during the full term of the grant. The commenter
believes that the term ``grantee'' should be clearly defined so that
individual academic units participating in a cooperative arrangement
grant of a university system may be eligible for an individual
development grant (after a one-year wait-out period) after being phased
out of the cooperative arrangement.
Discussion: Prior to its amendment by the Higher Education
Technical Amendments of 1993, section 313(b) of the HEA provided that,
``In awarding grants under this part, the Secretary shall give priority
to applicants who are not already receiving a grant under this part.''
The Higher Education Technical Amendments of 1993 added the following
exception to that section: ``except that a grant made under section
354(a)(1) shall not be considered a grant under this part.'' Section
354(a)(1) authorizes the Secretary to fund ``cooperative arrangement''
grants.
Given the funding history of the Strengthening Institutions
Program, and the funding priority contained in section 313(b) of the
HEA before its amendment, it was exceedingly unlikely that an applicant
would have been able to receive both a cooperative arrangement grant
and an individual development grant in the same year. Therefore, the
Secretary proposed in Sec. 607.13 that an institution could apply for
only one type of grant. However, as a result of the amendment to
section 313(b) of the HEA, the Secretary has eliminated that limitation
in Sec. 607.13.
Changes: The Secretary revises Sec. 607.13 to provide that in any
fiscal year, an institution of higher education may submit both an
application for an individual development grant and be part of a
cooperative arrangement application.
Section 607.20 How does the Secretary choose applications for funding?
Comments: Several commenters believe that institutions receiving a
cooperative arrangement grant should have priority for funding. These
commenters believe that it is unfair to apply the requirements in
section 313(b) of the 1992 Amendments retroactively.
Several commenters believe that a recipient of a Title III planning
grant be allowed to apply for a development grant.
Discussion: As discussed in the preceding section regarding
Sec. 607.13, as a result of the amendment to section 313(b) of the HEA,
an institution that is a recipient of a cooperative arrangement grant
is not a ``grantee under this part,'' and thus does not fall into a
lower priority under that section. As a result, a recipient of a
cooperative arrangement grant may apply for and receive an individual
development grant. The Secretary has amended Sec. 607.20(b) to clarify
this change. On the other hand, a recipient of a planning grant under
the program is a grantee under this part, and the limitation of section
313(b) will continue to apply to such a grantee.
Changes: The Secretary revises proposed Sec. 607.20(b) by
redesignating Sec. 607.20(b) as Sec. 607.20(b)(1) and by adding a new
Sec. 607.20(b)(2) that provides, for purposes of determining priority
for funding under Sec. 607.20(b)(1), that an institution that is a
recipient of a cooperative arrangement grant is not a grantee under his
part.
Section 607.22 What are the selection criteria for development grants?
Comments: One commenter recommends moving proposed
Sec. 607.8(b)(4), which requires an institution to include in its CDP
its methods and resources that will be used to institutionalize
practices and improvements developed under the proposed project, to the
selection criteria in Sec. 607.22.
One commenter suggests that the Secretary retain the present
selection criteria for development grants.
One commenter believes that proposed Sec. 607.22(c)(2) needs to be
clarified.The commenter is unsure whether ``relevant studies or
projects'' are those the applicant institution must carry out prior to
the application or are carried out by other institutions or individuals
whose results have been made available in the professional literature
to the field of the proposed activity.
One commenter requests that the Secretary reinforce in proposed
Sec. 607.22(a) participation by faculty and staff in the planning
process in the development of the CDP. The commenter suggests that the
description of the planning process and evaluative criteria be worth
three points, assessing the extent to which the process is sound,
systematic, participatory, and likely to result in a viable
institutional plan. The commenter suggests that the points for the
planning process be reallocated from the criteria in proposed
Sec. 607.22(a)(4).
Discussion: The Secretary believes that the institutionalization
plan element is appropriately placed in Sec. 607.8. The applicant's
capacity to assume and maintain the costs of strengthening the
academic, management, and fiscal conditions at the institution after
program funds are terminated is a key indicator of achieving growth and
self-sufficiency. Therefore, the description of the
institutionalization plan is an important and necessary element of
Sec. 607.8. Accordingly, the quality of the institutionalization plan
is included in Sec. 607.22(a)(4) as a factor in determining the overall
quality of development grant applications.
In the NPRM, the Secretary has refocused the emphasis and point
value for the CDP, implementation strategy, evaluation, and budget,
because these four factors embody the purpose of the program. The
revised selection criteria retained in these final regulations will
hopefully enable applicants to develop cohesive applications that
respond to the program purpose. The Secretary also believes that the
revised selection criteria will have a positive impact on the review
process, because readers will better understand these four areas in the
overall context of the program, and how they should evaluate them.
Applicants are not required to participate in the relevant studies
or projects cited in Sec. 607.22(c)(2). However, applicants are
required to ``defend'' their implementation strategy for each activity
by citing the results of relevant studies and projects and the
potential for success in using the results to address the problems and
weaknesses identified in development grant applications.
The applicant's institutionalization plan in Sec. 607.22(a)(4)
differs significantly from an institution's planning process that
results in a viable institutional plan. What is being evaluated in
Sec. 607.22(a)(4) is the applicant's plan to assume and maintain the
costs of the activities developed under the proposed project when Title
III funds are terminated, not its institutional planning process. To
incorporate language to require applicants to describe their
institutional planning initiatives would run counter to the purpose of
development grant applications.
The Secretary does not view the description of the
institutionalization plan as a function of the project management
section in Sec. 607.22(e). Project management involves the routine
procedures and lines of authority to ensure that the project is
conducted effectively. Since the issue of institutionalization
correlates with institutional growth and self-sufficiency, it is
appropriately contained in Sec. 607.22(a)(4).
Changes: None.
Section 607.24 How does the Secretary use an applicant's performance
under a previous development grant when awarding a development grant?
Comments: Several commenters believe that an institution should not
be allowed to informally demonstrate that it failed to meet the goals
and objectives listed in its CDP. Commenters believe that every
proceeding should be formally administered to maintain the credibility
of the process.
One commenter requests that institutions receiving multi-year
grants be able to request modifications of their objectives or
equipment specifications for cause during the funding period. The
commenter believes that this would encourage institutions to establish
innovative goals rather than conservative goals for its program.
One commenter suggests deleting proposed Sec. 607.24. The commenter
does not believe this requirement can be properly administered given
the Department's inability to collect meaningful data relating to grant
projects.
Discussion: The Secretary did not intend to imply that a grantee
may not formally demonstrate that it met the goals and objectives
listed in its CDP. A grantee may make this showing formally under 34
CFR 75.720(b).
The Secretary is aware that every effort at institutional change
may not be successful. In this regard, the Secretary allows minor
modifications to a project to improve measurability of objectives and
provide for more realistic outcomes if a change would improve the
chances for success. The Secretary, however, would not permit
modifications that propose to add new activities or that change the
project's scope.
The Secretary determines whether an applicant successfully achieved
the goals and objectives of its previous development grant based on
performance reports, and any other similar reports such as audit or
monitoring reports.
Changes: None.
Section 607.25 What priority does the Secretary use in awarding
cooperative arrangement grants?
Comments: One commenter opposes Sec. 607.25 if the priority given
by the Secretary to cooperative arrangement applications means that
additional points would be awarded to these applications.
Discussion: The Secretary does not intend to award additional
points to cooperative arrangement applications. Rather, the Secretary
intends to give priority among cooperative arrangement grant
applications only if applications are of comparable merit. In these
circumstances, priority would be afforded to those applications that
meet the statutory conditions in section 354(b) of the Act. These
statutory conditions require that the cooperative arrangement be
geographically and economically sound or that it will benefit the
applicant institutions.
In determining whether the cooperative arrangement is
geographically sound, the Secretary considers the proximity of the
institutions, and how their locations would impact on the potential
success of the proposed project. To determine the economic soundness of
the cooperative arrangement, the Secretary considers whether the
institutions avoid costly duplicative efforts by sharing their
resources for developing and managing the proposed project. Finally,
the Secretary determines how the cooperative arrangement will benefit
the applicant institutions by looking for evidence that demonstrates
how the proposed project will enable all the participating institutions
to alleviate the significant problems affecting their academic
programs, institutional management, and fiscal stability.
Changes: None.
Other Comments
Comments: Several commenters urge the Secretary to hold
Strengthening Institutions Program competitions every other year rather
than every year, with high scoring applications that are not funded in
the first year to be funded by rank order in the second year. These
commenters believe that this change would reduce the paperwork burden
of grantees, allow for increased attention of program managers, and
provide for considerable cost savings in the administration of the
program. Commenters differed on what would define a high scoring
application. Some commenters suggest a high ranking application would
be one that received a score of at least 90 points. Others believe that
this cut-off is arbitrary.
Discussion: While these comments are not directed to any of the
proposed regulations, the Secretary is pleased to receive suggestions
that relate to potential improvements in the administration of the
program. The Secretary, therefore, will consider these comments under
the overall Federal government-wide effort to create a government that
works better and costs less.
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. 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.
Intergovernmental Review
This program is subject to the requirements of Executive Order
12372 and the regulations in 34 CFR Part 79. The objective of the
Executive order is to foster an intergovernmental partnership and a
strengthened federalism by relying on processes developed by State and
local governments for coordination and review of proposed Federal
financial assistance.
In accordance with the order, this document is intended to provide
early notification of the Secretary's specific plans and actions for
this program.
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 607
College and universities, Grant program-education, Reporting and
recordkeeping requirements.
Dated: April 12, 1994.
(Catalog of Federal Domestic Assistance Number 84.031A--
Strengthening Institutions Program)
Richard W. Riley,
Secretary of Education.
The Secretary amends Part 607 of Title 34 of the Code of Federal
Regulations as follows:
PART 607--STRENGTHENING INSTITUTIONS PROGRAM
1. The authority citation for Part 607 is revised to read as
follows:
Authority: 20 U.S.C. 1057-1059c, 1066-1069f, unless otherwise
noted.
2. Section 607.1 is revised to read as follows:
Sec. 607.1 What is the strengthening institutions program?
The purpose of the Strengthening Institutions Program is to provide
grants to eligible institutions of higher education to improve their
academic programs, institutional management, and fiscal stability in
order to increase their self-sufficiency and strengthen their capacity
to make a substantial contribution to the higher education resources of
the Nation.
(Authority: 20 U.S.C. 1057)
3. Section 607.2 is revised to read as follows:
Sec. 607.2 What institutions are eligible to receive a grant under the
strengthening institutions program?
(a) Except as provided in paragraphs (b) and (c) of this section,
an institution of higher education is eligible to receive a grant under
the Strengthening Institutions Program if--
(1) It has an enrollment of needy students as described in
Sec. 607.3(a), unless the Secretary waives this requirement under
Sec. 607.3(b);
(2) It has low average educational and general expenditures per
full-time equivalent undergraduate student as described in
Sec. 607.4(a), unless the Secretary waives this requirement under
Sec. 607.4(c).
(3) It is legally authorized by the State in which it is located to
be a junior college or to provide an educational program for which it
awards a bachelor's degree; and
(4) It is accredited or preaccredited by a nationally recognized
accrediting agency or association that the Secretary has determined to
be a reliable authority as to the quality of education or training
offered.
(b) A branch campus of an institution of higher education, if the
institution as a whole meets the requirements of paragraphs (a)(1)
through (4) of this section, is eligible to receive a grant under the
Strengthening Institutions Program even if, by itself, it does not
satisfy the requirements of paragraphs (a)(3) and (a)(4) of this
section, although the branch must meet the requirements of paragraphs
(a)(1) and (a)(2) of this section.
(c) For the purpose of paragraphs (b) and (c) of this section, an
institution's enrollment consists of a head count of its entire student
body.
(d) An institution that qualifies for a grant under the
Strengthening Historically Black Colleges and Universities Program (34
CFR Part 608) or the Hispanic-Serving Institution Program (20 U.S.C.
1059c) and receives a grant under either of these programs for a
particular fiscal year is not eligible to receive a grant under the
Strengthening Institutions Program for that same fiscal year.
(Authority: 20 U.S.C. 1058, 1059c)
4. Section 607.4 is revised to read as follows:
Sec. 607.4 What are low educational and general expenditures
(a)(1) Except as provided in paragraph (b) of this section, for the
purpose of Sec. 6072(a)(2), an applicant institution's average
educational and general expenditures per full-time equivalent
undergraduate student in the base year must be less than the average
educational and general expenditures per full-time equivalent
undergraduate student of comparable institutions that offer similar
institution in that year.
(2) For the purpose of paragraph (a)(1) of this section, the
Secretary determines the average educational and general expenditure
per FTE undergraduate student for institutions with graduate students
that do not differentiate between graduate and undergraduate E&G
expenditures by discounting the graduate enrollment using a factor of
2.5 times the number of graduate students.
(b) Each year, the Secretary notifies prospective applicants
through a notice in the Federal Register of the average educational and
general expenditures per full-time equivalent undergraduate student at
comparable institutions that offer similar instruction.
(c) The Secretary may waive the requirement contained in paragraph
(a) of this section, if the Secretary determines, based upon persuasive
evidence provided by the institution, that--
(1) The institution's failure to satisfy the criteria in paragraph
(a) of this section was due to factors which, if used in determining
compliance with those criteria, distorted that determination; and
(2) The institution's designation as an eligible institution under
this part is otherwise consistent with the purposes of this part.
(d) For the purpose of paragraph (c)(1) of this section, the
Secretary considers that the following factors may distort an
institution's educational and general expenditures per full-time
equivalent undergraduate student--
(1) Low student enrollment;
(2) Location of the institution in an unusually high cost-of-living
area;
(3) High energy costs;
(4) An increase in State funding that was part of a desegregation
plan for higher education; or
(5) Operation of high cost professional schools such as medical or
dental schools.
(Authority: 20 U.S.C. 1058 and 1067)
5. Section 607.6 is revised to read as follows:
Sec. 607.6 What regulations apply?
The following regulations apply to the Strengthening Institutions
Program:
(a) The Education Department General Administrative Regulations
(EDGAR) as follows:
(1) 34 CFR Part 74 (Administration of Grants to Institutions of
Higher Education, Hospitals, and Nonprofit Organizations).
(2) 34 CFR Part 75 (Direct Grant Programs), except 34 CFR
75.128(a)(2) and 75.129(a) in the case of applications for cooperative
arrangements.
(3) 34 CFR Part 77 (Definitions that Apply to Department
Regulations).
(4) 34 CFR Part 79 (Intergovernmental Review of Department of
Education Programs and Activities).
(5) 34 CFR Part 82 (New Restrictions on Lobbying).
(6) 34 CFR Part 85 (Governmentwide Debarment and Suspension
(Nonprocurement) and Governmentwide Requirements for Drug-Free
Workplace (Grants)).
(7) 34 CFR Part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this Part 607.
(Authority: 20 U.S.C. 1057)
6. Section 607.7 is amended by removing the word ``Project'' from
the list in paragraph (a) and by removing the definition of
``Strengthening Program,'' adding new definitions of ``Educationally
disadvantaged,'' ``Minority student,'' and ``Underrepresented'' in
alphabetical order, and revising the definition of ``Activity'' in
paragraph (b) to read as follows:
Sec. 607.7 What definitions apply?
* * * * *
(b) * * *
Activity means an action that is incorporated into an
implementation plan designed to meet one or more objectives. An
activity is a part of a project and has its own budget that is approved
to carry out the objectives of that subpart.
* * * * *
Educationally disadvantaged means a college student who requires
special services and assistance to enable them to succeed in higher
education. The phrase includes, but is not limited to, students who
come from--
(1) Economically disadvantaged families;
(2) Limited English proficiency families;
(3) Migrant worker families; or
(4) Families in which one or both of their parents have dropped out
of secondary school.
* * * * *
Minority student means a student who is Alaskan Native, American
Indian, Asian-American, Black (African-American), Hispanic American,
Native Hawaiian, or Pacific Islander.
* * * * *
Underrepresented means proportionate representation as measured by
degree recipients, that is less than the proportionate representation
in the general population--
(1) As indicated by--
(i) The most current edition of the Department's Digest of
Educational Statistics;
(ii) The National Research Council's Doctorate Recipients from
United States Universities; or
(iii) Other standard statistical references, as announced annually
in the Federal Register notice inviting applications for new awards
under this program; or
(2) As documented by national survey data submitted to and accepted
by the Secretary on a case-by-case basis.
* * * * *
7. Section 607.8 is revised to read as follows:
Sec. 607.8 What is a comprehensive development plan and what must it
contain?
(a) A comprehensive development plan is an institution's strategy
for achieving growth and self-sufficiency by strengthening its--
(1) Academic programs;
(2) Institutional management; and
(3) Fiscal stability.
(b) The comprehensive development plan must include the following:
(1) An analysis of the strengths, weaknesses, and significant
problems of the institution's academic programs, institutional
management, and fiscal stability.
(2) A delineation of the institution's goals for its academic
programs, institutional management, and fiscal stability, based on the
outcomes of the analysis described in paragraph (b)(1) of this section.
(3) Measurable objectives related to reaching each goal and
timeframes for achieving the objectives.
(4) Methods and resources that will be used to institutionalize
practices and improvements developed under the proposed project.
(Authority: 20 U.S.C. 1066)
8. Section 607.9 is amended by revising paragraph (a)(3) to read as
follows:
Sec. 607.9 What are the type, duration, and limitations in the
awarding of grants under this part?
* * * * *
(a) * * *
(3) Either type of development grant may be awarded for a period of
five years.
* * * * *
9. Section 607.10 is amended by revising paragraphs (b) and (c) to
read as follows:
Sec. 607.10 What activities may and may not be carried out under a
grant?
* * * * *
(b) Development grants--allowable activities. Under a development
grant, except as provided in paragraph (c) of this section, a grantee
shall carry out activities that implement its comprehensive development
plan and hold promise for strengthening the institution. Activities
that may be carried out include, but are not limited to--
(1) Faculty development that provides faculty with the skills and
knowledge needed to--
(i) Develop academic support services, including advising and
mentoring students;
(ii) Develop academic programs or methodology, including computer-
assisted instruction, that strengthen the academic quality of the
institution; or
(iii) Acquire terminal degrees that are required to obtain or
retain accreditation of an academic program or department;
(2) Funds and administrative management that will improve the
institution's ability to--
(i) Manage financial resources in an efficient and effective
manner; and
(ii) Collect, access, and use information about the institution's
operations for improved decisionmaking;
(3) Developing and improving academic programs that enable the
institution to--
(i) Develop new academic programs or new program options that show
promise for increased student enrollment;
(ii) Provide new technology or methodology to increase student
success and retention or to retain accreditation; or
(iii) Improve curriculum or methodology for existing academic
programs to stabilize or increase student enrollment;
(4) Acquiring equipment for use in strengthening management and
academic programs to achieve objectives such as those described in
paragraphs (b)(2) and (b)(3) of this section;
(5) Establishing or increasing the joint use of facilities such as
libraries and laboratories to--
(i) Eliminate the distance and high cost associated with providing
academic programs and academic support; or
(ii) Provide clinical experience that is part of an approved
academic program at off-campus locations; or
(6) Developing or improving student services to provide--
(i) New or improved methods to deliver student services, including
counseling, tutoring, and instruction in basic skills; or
(ii) Improved strategies to train student services personnel.
(7) Payment of any portion of the salary of a dean, with proper
justification, to fill a position under the project such as project
coordinator or activity director. For purposes of this paragraph,
proper justification includes evidence that the position entitled
``Dean'' is not one that has college-wide administrative authority and
responsibility.
(c) Development grants--unallowable activities. A grantee may not
carry out the following activities or pay the following costs under a
development grant:
(1) Activities that are not included in the grantee's approved
application.
(2) Activities that are inconsistent with any State plan for higher
education that is applicable to the institution, including, but not
limited to, a State plan for desegregation of higher education.
(3) Activities or services that relate to sectarian instruction or
religious worship.
(4) Activities provided by a school or department of divinity. For
the purpose of this provision, a ``school or department of divinity''
means an institution, or a department of an institution, whose program
is specifically for the education of students to prepare them to become
ministers of religion or to enter into some other religious vocation or
to prepare them to teach theological subjects.
(5) Developing or improving non-degree or non-credit courses other
than basic skills development courses.
(6) Developing or improving community-based or community services
programs, unless the program provides academic-related experiences or
academic credit toward a degree for degree students.
(7) Purchase of standard office equipment, such as furniture, file
cabinets, bookcases, typewriters, or word processors.
(8) Payment of any portion of the salary of a president, vice
president, or equivalent officer who has college-wide administrative
authority and responsibility at an institution to fill a position under
the grant such as project coordinator or activity director.
(9) Costs of organized fund-raising, including financial campaigns,
endowment drives, solicitation of gifts and bequests, and similar
expenses incurred solely to raise capital or obtain contributions.
(10) Costs of student recruitment such as advertisements,
literature, and college fairs.
(11) Services to high school students.
(12) Instruction in the institution's standard courses as indicated
in the institution's catalog.
(13) Costs for health and fitness programs, transportation, and day
care services.
(14) Student activities such as entertainment, cultural, or social
enrichment programs, publications, social clubs, or associations.
(15) Activities that are operational in nature rather than
developmental in nature.
(Authority: 20 U.S.C. 1057, 1069c)
10. Section 607.11 is amended by revising paragraph (c) to read as
follows:
Sec. 607.11 What must be included in individual development grant
applications?
* * * * *
(c) A description of any activities that were funded under previous
development grants awarded under the Strengthening Institutions of
Special Needs Program that expired within five years of when the
development grant will begin and the institution's justification for
not completing the activities under the previous grant;
* * * * *
11. Section 607.12 is amended by adding a new paragraph (b)(4) to
read as follows:
Sec. 607.12 What must be included in cooperative arrangement grant
applications?
* * * * *
(b) * * *
(4) The name of the applicant for the group that is legally
responsible for--
(i) The use of all grant funds; and
(ii) Ensuring that the project is carried out by the group in
accordance with Federal requirements.
* * * * *
12. Section 607.13 is revised to read as follows:
Sec. 607.13 How many applications for a development grant may an
institution submit?
In any fiscal year, an institution of higher education may--
(a) Submit an application for an individual development grant; and
(b) Be part of a cooperative arrangement application.
(Authority: 20 U.S.C. 1057, 1069)
13. Section 607.20 is revised to read as follows:
Sec. 607.20 How does the Secretary choose applications for funding?
(a) The Secretary evaluates an application on the basis of the
criteria in--
(1) Sections 607.21 and 607.23 for a planning grant; and
(2) Sections 607.22, 607.23, and 607.25 for a development grant.
(b) (1) With regard to applicants that satisfy the requirements of
paragraph (d) of this section, for each fiscal year, the Secretary
awards development grants to applicants that are not, or were not,
grantees under this part during the fiscal year, before the Secretary
awards a development grant to any applicant that is or was a grantee
under this part during the fiscal year.
(2) For purposes of paragraph (b)(1) of this section, an
institution that is a recipient of a cooperative arrangement grant is
not a grantee under this part.
(c) (1) The Secretary awards up to 100 points for the criteria in
Sec. 607.21 and up to 100 points for the criteria in Sec. 607.22.
(2) The maximum possible score for each complete criterion is in
parentheses.
(d) (1) The Secretary considers funding an application for a
planning grant that scores at least 50 points under Sec. 607.21.
(2) The Secretary considers funding an application for a
development grant that--
(i) Scores at least 50 points under Sec. 607.22;
(ii) Is submitted with a comprehensive development plan that
satisfies all the elements required of such a plan under Sec. 607.8;
and
(iii) In the case of an application for a cooperative arrangement
grant, demonstrates that the grant will enable each eligible
participant to meet the goals and objectives of its comprehensive
development plan better and at a lower cost than if each eligible
participant were funded individually.
(Authority: 20 U.S.C. 1057-1059, 1066-1069f)
14. Section 607.22 is revised to read as follows:
Sec. 607.22 What are the selection criteria for development grants?
The Secretary uses the following criteria to evaluate applications
for development grants:
(a) Quality of the applicant's comprehensive development plan.
(Total: 30 points) The extent to which--
(1) The strengths, weaknesses, and significant problems of the
institution's academic programs, institutional management, and fiscal
stability are clearly and comprehensively analyzed and result from a
process that involved major constituencies of the institution. (12
points);
(2) The goals for the institution's academic programs,
institutional management, and fiscal stability are realistic and based
on comprehensive analysis. (5 points);
(3) The objectives stated in the plan are measurable, related to
institutional goals, and, if achieved, will contribute to the growth
and self-sufficiency of the institution (5 points);
(4) The plan clearly and comprehensively describes the methods and
resources the institution will use to institutionalize practice and
improvements developed under the proposed project, including, in
particular, how operational costs for personnel, maintenance, and
upgrades of equipment will be paid with institutional resources (8
points).
(b) Quality of activity objectives. (Total: 10 points) The extent
to which the objectives for each activity are--
(1) Realistic and defined in terms of measurable results (5
points); and
(2) Directly related to the problems to be solved and to the goals
of the comprehensive development plan (5 points).
(c) Quality of implementation strategy. (Total: 25 points) The
extent to which--
(1) The implementation strategy for each activity is comprehensive
(10 points);
(2) The rationale for the implementation strategy for each activity
is clearly described and is supported by the results of relevant
studies or projects (10 points); and
(3) The timetable for each activity is realistic and likely to be
attained (5 points).
(d) Quality of key personnel. (Total: 10 points) The extent to
which--
(1) The past experience and training of key professional personnel
are directly related to the stated activity objectives (7 points); and
(2) The time commitment of key personnel is realistic (3 points).
(e) Quality of project management plan. (Total: 10 points) The
extent to which--
(1) Procedures for managing the project are likely to ensure
efficient and effective project implementation (5 points); and
(2) The project coordinator and activity directors have sufficient
authority to conduct the project effectively, including access to the
president or chief executive officer (5 points).
(f) Quality of evaluation plan. (Total: 10 points) The extent to
which--
(1) The data elements and the data collection procedures are
clearly described and appropriate to measure the attainment of activity
objectives and to measure the success of the project in achieving the
goals of the comprehensive development plan (5 points); and
(2) The data analysis procedures are clearly described and are
likely to produce formative and summative results on attaining activity
objectives and measuring the success of the project on achieving the
goals of the comprehensive development plan (5 points).
(g) Budget. (Total: 5 points) The extent to which the proposed
costs are necessary and reasonable in relation to the project's
objectives and scope.
(Approved by the Office of Management and Budget under control
number 1840-0114)
(Authority: 20 U.S.C. 1057-1059, 1066-1069f)
15. Section 607.23 is amended by removing paragraph (c), and
redesignating paragraphs (d) and (e) as paragraphs (c) and (d),
respectively.
16. A new Sec. 607.24 is added to Subpart C to read as follows:
Sec. 607.24 How does the Secretary use an applicant's performance
under a previous development grant when awarding a development grant?
(a) (1) In addition to evaluating an application under the
selection criteria in Sec. 607.22, the Secretary evaluates an
applicant's performance under any previous development grant awarded
under Strengthening Institutions and Special Needs Programs that
expired within five years of the year when the development grant will
begin.
(2) The Secretary evaluates whether the applicant fulfilled, or is
making substantial progress toward fulfilling, the goals and objectives
of the previous grant, including, but not limited to, the applicant's
success in institutionalizing practices developed and improvements made
under the grant.
(3) The Secretary bases the evaluation of the applicant's
performance on information contained in--
(i) Performance and evaluation reports submitted by the applicant;
(ii) Audit reports submitted on behalf of the applicant; and
(iii) Other information obtained by the Secretary, including
reports prepared by the Department.
(b) If the Secretary initially determines that the applicant did
not fulfill the goals and objectives of a previous grant or is not
making substantial progress towards fulfilling those goals and
objectives, the Secretary affords the applicant the opportunity to
respond to that initial determination.
(c) If the Secretary determines that the applicant did not fulfill
the goals and objectives of a previous grant or is not making
substantial progress towards fulfilling those goals and objectives, the
Secretary may--
(1) Decide not to fund the applicant; or
(2) Fund the applicant but impose special grant terms and
conditions, such as specific reporting and monitoring requirements.
(Authority: 20 U.S.C. 1066)
17. A new Sec. 607.25 is added to Subpart C to read as follows:
Sec. 607.25 What priority does the Secretary use in awarding
cooperative arrangement grants?
Among applications for cooperative arrangement grants, the
Secretary gives priority to proposed cooperative arrangements that are
geographically and economically sound, or will benefit the institutions
applying for the grant.
(Authority: 20 U.S.C. 1057, 1069)
18. Section 607.31 is revised to read as follows:
Sec. 607.31 How does a grantee maintain its eligibility?
(a) A grantee shall maintain its eligibility under the requirements
in Sec. 607.2, except for Sec. 607.2(a) (1) and (2), for the duration
of the grant period.
(b) The Secretary reviews an institution's application for a
continuation award to ensure that--
(1) The institution continues to meet the eligibility requirements
described in paragraph (a) of this section; and
(2) The institution is making substantial progress toward achieving
the objectives set forth in its grant application including, if
applicable, the institution's success in institutionalizing practices
and improvements developed under the grant.
(Authority: 20 U.S.C. 1057-1059b, 1066-1069f)
[FR Doc. 94-19869 Filed 8-12-94; 8:45 am]
BILLING CODE 4000-01-M
