FR Doc E6-18197
[Federal Register: November 1, 2006 (Volume 71, Number 211)]
[Rules and Regulations]
[Page 64401-64419]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01no06-22]
[[Page 64401]]
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Part IV
Department of Education
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34 CFR Parts 668, 690, and 691
Student Assistance General Provisions; Federal Pell Grant Program;
Academic Competitiveness Grant Program; and National Science and
Mathematics Access to Retain Talent Grant Program; Final Rule
[[Page 64402]]
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DEPARTMENT OF EDUCATION
34 CFR Parts 668, 690, and 691
RIN 1840-AC86
Student Assistance General Provisions; Federal Pell Grant
Program; Academic Competitiveness Grant Program; and National Science
and Mathematics Access to Retain Talent Grant Program
AGENCY: Office of Postsecondary Education, Department of Education.
ACTION: Final regulations.
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SUMMARY: The Secretary is adopting as final, with changes, interim
final regulations in: 34 CFR part 691 for the Academic Competitiveness
Grant (ACG) and National Science and Mathematics Access to Retain
Talent Grant (National SMART Grant) programs; 34 CFR part 668 (Student
Assistance General Provisions); and 34 CFR part 690 (Federal Pell Grant
Program). These final regulations are needed to implement provisions of
the Higher Education Act of 1965 (HEA), as amended by the Higher
Education Reconciliation Act of 2005 (HERA), Pub. L. 109-171, enacted
on February 8, 2006, 20 U.S.C. 1070a-1.
These final regulations for the ACG and National SMART Grant
programs specify the eligibility requirements for a student to apply
for and receive an award under these programs for the 2007-2008 award
year. For regulations that will take effect for the 2008-2009 award
year and subsequent award years, the Secretary intends to conduct
negotiated rulemaking, as required under section 492 of the HEA.
DATES: Effective Date: These final regulations are effective July 1,
2007.
Implementation Date: The Secretary has determined, in accordance
with section 482(c)(2)(A) of the HEA (20 U.S.C. 1089(c)(2)(A)), that
institutions of higher education (institutions), State educational
agencies (SEAs), and local educational agencies (LEAs) that administer
title IV, HEA programs may, at their discretion, choose to implement
all of the provisions of these final regulations on or after November
1, 2006, including for the 2006-2007 award year. For further
information, see ``Implementation Date of These Regulations'' under the
SUPPLEMENTARY INFORMATION section of this preamble.
FOR FURTHER INFORMATION CONTACT: Jacquelyn Butler, U.S. Department of
Education, 1990 K Street, NW., Room 8053, Washington, DC 20006-8544.
Telephone: (202) 502-7890. Sophia McArdle, U.S. Department of
Education, 1990 K Street, NW., Room 8019, Washington, DC 20006-8544.
Telephone: (202) 219-7078.
If you use a telecommunications device for the deaf (TDD), you may
call the Federal Relay Service (FRS) at 1-800-877-8339.
Individuals with disabilities may obtain this document in an
alternative format (e.g., Braille, large print, audiotape, or computer
diskette) on request to the contact person listed under FOR FURTHER
INFORMATION CONTACT.
SUPPLEMENTARY INFORMATION: On July 3, 2006, the Secretary published
interim final regulations (71 FR 37990) implementing the ACG and
National SMART Grant programs added to the HEA by the HERA. The interim
final regulations were effective on August 2, 2006. At the time the
interim final regulations were published, the Secretary requested
public comment on whether changes to the regulations were warranted.
The July 3, 2006, interim final regulations included a discussion
of the major issues covered by the regulations. The following list
summarizes those issues and identifies the pages of the preamble to the
July 3, 2006, interim final regulations on which a discussion of those
issues can be found:
The Secretary repeated in the ACG and National SMART Grant
regulations several definitions and sections from the Federal Pell
Grant Program regulations (71 FR 37990-37991).
The Secretary specified that only students who are United States
citizens are eligible to receive ACG and National SMART Grants (71 FR
37991).
The Secretary detailed the requirements for institutions to follow
when resolving overpayments to students under the ACG and National
SMART Grant programs (71 FR 37991).
The Secretary defined eligible major for purposes of the National
SMART Grant Program (71 FR 37991).
The Secretary defined eligible program for the ACG and National
SMART Grant programs (71 FR 37991).
The Secretary specified the duration of student eligibility for the
ACG and National SMART Grant programs by academic year (71 FR 37991).
The Secretary delineated the institutional participation
requirements, including a requirement that an institution that
participates in the Federal Pell Grant Program and offers an
educational program that is an eligible program for the ACG or National
SMART Grant programs, must participate in the ACG and National SMART
Grant programs (71 FR 37992).
The Secretary specified the circumstances under which
correspondence courses may be applied toward a student's full-time
enrollment status in a noncorrespondence study program (71 FR 37992).
The Secretary delineated the requirements for a student to attend
more than one institution and receive an ACG or National SMART Grant
(71 FR 37992).
The Secretary specified the procedures that a student must follow
when applying for an ACG or National SMART Grant (71 FR 37992).
The Secretary set forth the ACG and National SMART Grant general
student eligibility requirements (71 FR 37992).
The Secretary specified the application of an academic year to a
student's eligibility for an ACG and National SMART Grant (71 FR
37992).
The Secretary provided the grade point average (GPA) requirements
for receiving an ACG or National SMART Grant (71 FR 37993).
The Secretary provided the circumstances under which a student is
not eligible for an ACG in the student's first academic year of
enrollment if the student previously enrolled in a program of
undergraduate education (71 FR 37993-37994).
The Secretary specified the institutional requirements for
documenting a student's completion of a rigorous secondary school
program of study (71 FR 37994-37995).
The Secretary stated the student requirements for declaring an
eligible major in order to be eligible for a National SMART Grant (71
FR 37994).
The Secretary provided guidelines for recognizing a rigorous
secondary school program of study for ACG eligibility (71 FR 37994).
The Secretary delineated how eligible majors will be determined and
their duration for the National SMART Grant Program (71 FR 37995).
The Secretary specified how the maximum ACG and National SMART
Grants will be determined each year (71 FR 37995-37996).
The Secretary stipulated how ACG and National SMART Grant funds are
treated in relation to other aid received (71 FR 37996).
The Secretary detailed how an institution calculates an ACG or
National SMART Grant payment for a payment period (71 FR 37996).
The Secretary specified how an institution calculates an ACG or
National SMART Grant payment for a student who transfers from another
institution (71 FR 37996).
The Secretary detailed the requirements that govern an
[[Page 64403]]
institution's determination of a student's eligibility for a
disbursement of an ACG or National SMART Grant, including provisions
regarding changes in a student's GPA, payment prior to receipt of a
GPA, payments for nonterm self-paced programs, and, for National SMART
Grants, changes to a student's major (71 FR 37996-37997).
The Secretary specified how often an institution may pay a student
(71 FR 37997).
Implementation Date of These Regulations: Section 482(c) of the HEA
requires that regulations affecting programs under title IV of the HEA
be published in final form by November 1 prior to the start of the
award year (July 1) to which they apply. However, that section also
permits the Secretary to designate any regulations that an entity
subject to the regulations may choose to implement earlier and the
conditions under which the entity may implement the provisions early.
The Secretary is using the authority granted to her under section
482(c) to designate all of the regulations included in this document
for early implementation, beginning with the 2006-2007 award year, at
the discretion of each institution, SEA, and LEA.
Analysis of Comments and Changes
The regulations in this document were developed through the
analysis of comments received on the interim final regulations
published on July 3, 2006. The Secretary invited comments on the
interim final regulations, and we received 80 comments.
An analysis of the comments and of the changes in the regulations
since publication of the interim final regulations follows. We group
major issues according to subject, with appropriate sections of the
regulations referenced in parentheses. Generally, we do not address
technical and other minor changes.
General Comments
Comments: One commenter was concerned that the ACG and National
SMART Grant program requirements would intrude on the academic policies
of institutions with regard to credit accrual, calculation of GPA,
determinations of academic progress, the treatment of transferred
credits, and academic year standing. The commenter believed that
permitting institutions to follow current business processes and
practices would be in accord with current delivery systems and be clear
to students.
Discussion: The Secretary has no intention of interfering with
institutions' academic policies and administration. Many of the program
requirements about which the commenter is concerned are required by the
HEA. The program requirements in the regulations are necessary to
deliver ACGs and National SMART Grants to students and do not mandate
any changes in institutional academic policies or administration.
Changes: None.
Section 691.2 Definitions
Comments: Several commenters believed that the term Scheduled Award
is inappropriately applied to the ACG and National SMART Grant
programs. The commenters believed that the term is confusing because
the term relates to award year eligibility for Federal Pell Grants,
which are payable for part-time enrollment, but is being applied to
academic year eligibility for ACGs and National SMART Grants, which are
payable for full-time enrollment only. Some commenters acknowledged the
Secretary's need for a term that could be applied if the grants were
subject to ratable reduction, but suggested that the Secretary use a
different term. Others believed that the term would introduce
unnecessary complexity into the ratable reduction process.
Discussion: The Secretary believes that it is prudent to keep the
ACG and National SMART Grant programs as similar to the Federal Pell
Grant Program as possible within the constraints of the law. The
Secretary believes the term Scheduled Award is appropriately applied to
all three programs, as it refers to the amount a full-time student can
be awarded for a full academic year, as in the Federal Pell Grant
Program. Also, the term is appropriate as funds are allocated by award
year, and the Secretary establishes the maximum Scheduled Award for
that award year. Because the programs require only full-time enrollment
as an eligibility criterion, there will not be Payment and Disbursement
Schedules published as there are for the Federal Pell Grant Program,
but the concept of Scheduled Award does apply with regard to such
issues as remaining eligibility for transfer students and ratable
reductions.
Changes: None.
Comments: Several commenters believed that it was unclear whether
proprietary institutions could participate in the ACG and National
SMART Grant programs.
Discussion: Under the regulations, an otherwise eligible
proprietary institution that offers an eligible program as defined in
Sec. 691.2 may participate in the ACG and National SMART Grant
programs. Section 691.2 specifies that these regulations use the
definition of eligible institution in 34 CFR part 600. This definition
includes institutions of higher education, as defined in Sec. 600.4;
proprietary institutions, as defined in Sec. 600.5; and postsecondary
vocational institutions, as defined in Sec. 600.6.
Changes: None.
Comments: Several commenters believed that title IV-eligible
certificate programs should be included in the definition of an
eligible program. The commenters argued that, while the law provides
that a student must be enrolled or accepted for enrollment in a two- or
four-year degree granting institution to be eligible for an ACG, or in
a four-year degree granting institution to be eligible for a National
SMART Grant, it does not prohibit a student from receiving an ACG or
National SMART Grant for attending a certificate program offered by
such a degree-granting institution. Many commenters asserted that
certificate programs are just as important, if not more important, than
degree programs to the future economic growth of States and the nation,
and the students just as deserving of these grants as those enrolled in
degree programs. In addition, the commenters asserted that many
certificate programs attract the same caliber of students as those
enrolled in degree programs. Several commenters noted that many
students who initially seek certificates subsequently transfer into
degree programs. A few commenters suggested including in the definition
of eligible program certificate programs that are fully transferable
into baccalaureate degree programs and certificate programs that are
fully acceptable for credit toward an associate's degree. One commenter
believed that, if certificate programs were not considered eligible
outright, then the definition of an eligible program should include
one-year programs that are fully acceptable for credit toward an
associate's degree. The commenter asserted that, as with a two-year
program that is fully acceptable for credit toward a bachelor's degree,
the end result is an acceptable two- or four-year degree. One commenter
noted that the Department's position is counter to the longstanding
policy permitting an institution to designate a program as eligible for
all title IV programs.
Several commenters supported including in the definition of an
eligible program graduate degree programs that include at least three
academic years of undergraduate education. One commenter asked the
Secretary to clarify a student's eligibility for a National SMART Grant
if the student's
[[Page 64404]]
status has changed to graduate student because he or she is in the
fourth year of a graduate program that contains at least three
undergraduate years. One commenter believed that the definition of an
eligible program should not include a graduate degree program that
includes at least three academic years of undergraduate education. The
commenter noted that this interpretation appears broader than the
requirements for Federal Pell Grant eligibility for programs that
include a fifth year that counts toward a graduate degree program,
primarily education certification. The commenter suggested that the
regulations reference Sec. 668.8, which defines an eligible program
for other title IV, HEA eligibility.
Discussion: The Secretary has determined that because the HEA
limits eligibility to a student enrolled or accepted for enrollment in
a two- or four-year degree-granting institution, eligibility must be
limited to two- or four-year degree programs, as defined in Sec.
691.2. Therefore, certificate programs do not qualify as eligible
programs for ACGs. However, a student in a two-academic-year program
acceptable for full credit toward a bachelor's degree may qualify,
provided he or she meets other eligibility criteria. Because only
students attending four-year institutions are eligible for National
SMART Grants and a student must be enrolled in the third and fourth
academic years to be eligible, the Secretary believes that a student
must be enrolled in at least a bachelor's degree program to be eligible
for a National SMART Grant.
Section 401A(c)(3)(C) of the HEA, in defining the term eligible
student, refers to a student enrolled or accepted for enrollment in
specific years of a program of undergraduate education. Although a
graduate degree program that includes at least three years of
undergraduate education may be an eligible program for ACG and National
SMART Grant purposes, under section 401A(c) of the HEA, a student
enrolled in such a program is eligible for an ACG or National SMART
Grant only while the institution considers the student to be an
undergraduate student in accordance with the definition of
undergraduate student in Sec. 691.2. Once a student is considered to
be a graduate student, the student is no longer eligible for a National
SMART Grant.
With respect to the definition of an eligible program, it is
important to define eligibility for students enrolled in a program that
leads directly to a graduate degree without first awarding a bachelor's
degree. Students enrolled in these programs have a period of
undergraduate work for which they should be eligible for ACG and
National SMART Grant funds notwithstanding the fact that the programs
are structured differently than the typical separate degree programs
for undergraduate and graduate programs. For programs that start at the
undergraduate level and lead directly to a graduate degree without
defining when the student is considered an undergraduate and graduate
student, the definition in Sec. 691.5 allows eligible students to
receive the appropriate funds from these two grant programs.
Changes: None.
Section 691.6 Duration of Student Eligibility--Undergraduate Course of
Study
Comments: Many commenters objected to the Department's decision to
base the duration of eligibility on an academic year as defined for
purposes of the title IV, HEA programs, as measured in weeks of
instructional time and, for undergraduate programs, credit or clock
hours. These commenters stated that using the title IV, HEA definition
of academic year was administratively burdensome and unworkable. Some
commenters found the definition of academic year in part 691 to be
inconsistent with other uses of the term in administering title IV, HEA
programs. One commenter believed that only the credit hour portion of
the definition of academic year should be used. Commenters also were
concerned that a student's title IV, HEA academic year may not match
the student's grade level used in the other title IV, HEA programs such
as the FFEL and Direct Loan programs. The commenters recommended that
the Secretary rely on grade level progression as in the FFEL and Direct
Loan programs to determine the first, second, third, or fourth year of
a student's enrollment.
Discussion: Under section 401A(c)(3) of the HEA, a student is
eligible for an ACG in the student's ``first academic year of a program
of undergraduate education'' and ``second academic year of a program of
undergraduate education'' and for a National SMART Grant in the ``third
or fourth academic year of a program of undergraduate education.'' The
term academic year is defined in section 481(a)(2) of the HEA as
amended by the HERA and explicitly applies to all title IV, HEA
programs. The definition provides that an academic year contains a
minimum number of weeks of instructional time and a minimum number of
credit or clock hours. The Secretary has no flexibility to deviate from
this defined term.
Contrary to the assertions of some commenters, the Secretary
believes that the interpretation of the term academic year in the
regulations is not inconsistent with other title IV uses of the term.
For example, the HEA provisions governing loan limits provide greater
flexibility in this regard than does section 401A for ACGs and National
SMART Grants. Specifically, section 428(b)(1)(A) of the HEA sets loan
limits based on whether the student has ``successfully completed'' a
``year'' of a program of undergraduate education. The Secretary has
interpreted the term ``successfully completed the first year of a
program of undergraduate education'' in section 428 to relate to a
student's grade level, as determined by the institution. The Secretary
did not, in so doing, interpret the term academic year as referring to
the borrower's year in college. Instead, the Secretary interpreted the
entirely different phrase ``first year.'' The Secretary has no
flexibility to interpret section 401A in a similar fashion, because,
unlike section 428, section 401A specifically uses the statutorily
defined term academic year. The Secretary cannot limit the definition
to the credit hour provisions, as was suggested by the commenters,
because the statutory definition of academic year requires a minimum
number of weeks of instructional time, in addition to the completion of
a minimum number of credit or clock hours.
Changes: None.
Comments: Some commenters were concerned with the effect previous
enrollment in eligible programs at other institutions and the amount of
transfer credits accepted would have on a student's academic
progression. One commenter questioned whether academic progression was
based on attendance in each eligible program separately, or on the
student's attendance in all eligible programs at any institution.
Another commenter thought institutions should be allowed to count the
credits that are being accepted for a transfer student in the same way
credits are counted for other programs, rather than trying to monitor
previous credits differently for ACGs and National SMART Grants.
Discussion: For purposes of ACGs and National SMART Grants, a
student's academic progression is not based on the student's enrollment
in each eligible program separately, but rather is based on all
eligible programs in which a student has enrolled over the course of
the student's undergraduate education. An institution is responsible
for determining whether any previous enrollment by a student as
measured in
[[Page 64405]]
weeks of instructional time and hours affects the student's eligibility
for an academic year. If the student previously received an ACG or
National SMART Grant for an academic year, or a portion of an academic
year, an institution must consider the student to have completed an
eligible program through that academic year, or that portion of an
academic year, in weeks of instructional time and hours, unless the
institution has information to the contrary. For example, if an
institution accepts a transfer student who has received a first-year
ACG Scheduled Award, the institution must consider the student to have
completed his or her first year of ACG eligibility regardless of the
number of transfer credits the institution accepts. To the extent a
determination does not conflict with information related to grants
previously received, when determining the appropriate academic year for
a transfer student, the institution may rely on the transfer credits
accepted, along with the estimated number of weeks of instructional
time completed in proportion to the academic year of the student's
eligible program at the institution to which the student transferred.
Changes: The Secretary has amended Sec. 691.6(a) and (b) to
clarify that a student's academic year progression is based on
attendance in all eligible programs in which the student has enrolled
over the course of the student's undergraduate education.
Comments: Several commenters were concerned with the treatment of
Advanced Placement (AP) and International Baccalaureate (IB) credits
and transfer credits. One commenter sought clarification of the
treatment of AP and IB credits in relation to the requirement that a
student must successfully complete the hours of an academic year along
with the weeks of instructional time to progress to the next academic
year. Some commenters were concerned that including AP and IB credits,
along with transfer credits earned while enrolled in high school, would
discourage students from taking these courses in high school if they
resulted in a student being denied eligibility for a grant.
Discussion: AP or IB credits accepted toward a student's eligible
program count toward the completion of the hours of an academic year.
Because AP and IB credits are earned based on secondary school courses
and subsequent tests, there are no weeks of instructional time in
postsecondary education associated with these credits. A student must
successfully complete both measures of an academic year to progress to
the next academic year. A student who entered college with 24 semester
hours of AP credits toward an eligible program may be starting to earn
hours toward completing the second academic year but would still be in
the first academic year because, for purposes of an ACG or National
SMART Grant, no weeks of instructional time while enrolled in an
eligible program would have elapsed. Similarly, a student who entered
college with 24 semester hours earned as a nonregular student in an
undergraduate program while enrolled in high school, or possibly after
high school, would also be in the position of starting to earn the
second academic year of credits but would still be in the first
academic year, because, for purposes of an ACG or National SMART Grant,
no weeks of instructional time while enrolled in an eligible program
would have elapsed. As a result, students will not be discouraged from
enrolling in AP or IB courses in high school or in college courses as a
nonregular student while in high school because doing so would not
affect their eligibility for an ACG or National SMART Grant.
Changes: None.
Comment: One commenter recommended that ``grade level'' be
determined once at the beginning of each award year and that the
student maintain that level of eligibility for the year as long as the
student is full-time.
Discussion: The Secretary does not agree that the regulations
should be changed. Although a single annual determination may simplify
the programs' administration, it would deny an otherwise eligible
student an additional grant if the student progresses to another
academic year during the award year and qualifies for another Scheduled
Award.
Changes: None.
Section 691.7 Institutional Participation
Comments: Several commenters believed that the requirement that an
institution participate in the ACG and National SMART Grant programs in
order to continue its participation in the Federal Pell Grant Program
is an infringement on institutional autonomy and is not supported by
the statute. Commenters noted that even in the FFEL and Direct Loan
programs--where, similar to the Federal Pell Grant, ACG, and National
SMART Grant programs, one part of the law encompasses several
programs--institutional choice of participation is allowed. Several
commenters stated that it was their understanding that the longstanding
policy for the title IV, HEA programs allows an institution to
designate a particular educational program as eligible for all title IV
programs or only for some title IV, HEA programs and recommended that
the Secretary continue this policy. With so little lead time for
implementation, the commenters had concerns about the impact of the
mandatory participation on an institution's administrative capability.
Several commenters objected to the exclusion of an administrative
cost allowance for the ACG and National SMART Grant programs,
particularly because of the administrative burden of the required rapid
implementation. Some commenters believed that the Secretary was acting
inconsistently by disallowing the administrative cost allowance for the
ACG and National SMART Grant programs, as the Secretary apparently
otherwise considers the Federal Pell Grant, ACG and National SMART
Grant programs, all of which fall under subpart 1 of part A, to be
conjoined, and section 489(a) of the HEA requires the Secretary to pay
an administrative cost allowance ``equal to $5 for each student at that
institution who receives assistance under subpart 1 of part A.''
Discussion: The Secretary believes that requiring an institution to
participate in the ACG and National SMART Grant programs in order to
participate in the Federal Pell Grant Program when eligible programs
are offered at the institution is consistent with the statute's
requirement that the Secretary award grants to Pell-eligible students.
The Secretary believes that Congress intended that financially needy
students receive all of the grants to which they are entitled under the
HEA. Requiring institutional participation, thus, assures that students
otherwise eligible for ACGs and National SMART Grants receive their
awards.
The Secretary believes that the mandatory participation in the
Federal Pell Grant, ACG, and National SMART Grant programs is
distinguishable from the flexibility given to institutions to choose
whether to participate in the FFEL or Direct Loan Programs because
needy students may be eligible for both a Federal Pell Grant and an ACG
or a National SMART Grant concurrently, while students may only obtain
loans under either the FFEL program or Direct Loan program during a
term.
Under the HEA, an institution receives an administrative cost
allowance for each student receiving a Federal Pell Grant. Because
students receiving ACGs and National SMART Grants are receiving Federal
Pell Grants,
[[Page 64406]]
the institution does not receive an additional administrative cost
allowance.
Changes: None.
Section 691.11 Payments From More Than One Institution
Comments: Two commenters disagreed with the requirement that the
same school disburse Federal Pell Grant funds and ACG and National
SMART Grant funds when a student is attending more than one institution
under a written agreement.
Discussion: The Secretary believes that it is appropriate to
require that the same institution that administers a student's ACG or
SMART Grant award administer the student's Federal Pell Grant award,
because the programs are related in many ways. Several requirements
related to the administration of the Federal Pell Grant Program and the
ACG and National SMART Grant programs necessitate that the same
institution disburse funds from these programs.
Requirements such as that a student receive a Federal Pell Grant
disbursement in the same award year in which the student receives an
ACG or National SMART Grant, the requirement that an institution pay
only on the transaction that is the valid institutional student
information record (ISIR) (and only the institution paying the Federal
Pell Grant will know which ISIR is the valid one), and the requirements
related to reporting of verification records for the Federal Pell Grant
Program make this choice necessary. The Secretary is aware that there
may be a few situations in which a student is attending more than one
institution under a written agreement. However, based on these factors,
in the very limited circumstances in which different institutions would
choose to administer and disburse funds from different title IV, HEA
programs, the regulations under this section appropriately mandate that
the institution that chooses to disburse Federal Pell Grant Program
funds must also disburse the ACG and National SMART Grant funds.
Changes: None.
Section 691.12 Application
Comments: Several commenters recommended that the 2007-2008 Free
Application for Federal Student Aid (FAFSA) should request the
information for a student to self-identify that he or she has
successfully completed a rigorous secondary school program of study as
provided for in Sec. 691.12(b)(2).
Discussion: The Secretary agrees that this information should be
included on the FAFSA to the extent practicable. The 2007--2008
electronic FAFSA form (FAFSA on the Web) collects this information, and
students are able to provide the necessary information as a part of the
application. More than 90 percent of all students apply electronically
using FAFSA on the Web or through their institutions. The small
minority of applicants using a paper FAFSA currently receive
notification by mail or, if an e-mail address is provided, an e-mail
that the student may call a toll-free telephone number or go to a web
site to provide the necessary information. The 2007-2008 FAFSA has
already been approved by OMB under the Paperwork Reduction Act, but we
will consider future improvements to the paper FAFSA during the next
clearance cycle.
Changes: None.
Comments: Two commenters recommended that the regulations clarify
that an institution has the authority to request additional application
information, similar to the Secretary's authority.
Discussion: Under section 483(a) of the HEA only the Secretary has
the authority to require a student to provide information concerning
the student's need and eligibility for the title IV, HEA programs, and
the Secretary is required to collect the student's information on the
FAFSA. Institutions may not use any additional application data
collection beyond the FAFSA to determine a student's title IV
eligibility. However, an institution does have the authority under 34
CFR 668.16(f) and 668.54(a)(3) of the Student Assistance General
Provisions to require a student to provide any information or
documentation necessary to resolve any concerns regarding a student's
eligibility or application information as well as the authority to
require documentation directly from a cognizant authority regarding the
completion of a rigorous secondary school program of study under Sec.
691.15(b)(2)(ii). The Secretary does not believe that these authorities
need to be repeated in Sec. 691.12.
Changes: None.
Comments: One commenter recommended that all application
requirements appear only in the Federal Pell Grant regulations to
eliminate the possibility of conflicting language.
Discussion: Section 691.12, while similar to the Federal Pell Grant
Program regulations when possible, does include provisions specific
only to the ACG and National SMART Grant programs. The Secretary
believes that regulations specific to the ACG and National SMART Grant
programs should not be included in the Federal Pell Grant Program
regulations, as it may cause confusion.
Changes: None.
Section 691.15 Eligibility To Receive a Grant
Citizenship
Comments: Several commenters objected to the requirement that
students must be U.S. citizens in order to qualify for an ACG or
National SMART Grant. One commenter stated that preventing permanent
residents from receiving a National SMART Grant excludes from
consideration more than twenty percent of Federal Pell Grant recipients
who are majoring in the National SMART Grant fields of study.
Discussion: Section 401A(c)(1) of the HEA specifies that only U.S.
citizens are eligible for ACG and National SMART Grants. The Secretary
does not have the authority to change this requirement through
regulations.
Changes: None.
Federal Pell Grant Eligibility
Comments: A number of commenters objected to the requirement that
an eligible student must be receiving a Federal Pell Grant disbursement
for the same payment period in which he or she will receive the ACG or
National SMART Grant. They stated that the statute only requires that a
student be eligible for a Federal Pell Grant, not receiving a Federal
Pell Grant for the same payment period. These commenters believed that
the Secretary exceeded her statutory authority and arbitrarily denied a
Federal entitlement to otherwise eligible students. The commenters were
especially concerned about eligibility for payment periods that cross
award years, pointing out that there are various situations in which
students who attend college year-round may have exhausted their Federal
Pell Grant eligibility yet still have remaining eligibility for an ACG
or National SMART Grant. For these Pell-eligible students who have
already received a full scheduled Federal Pell Grant award, the receipt
of an ACG or National SMART Grant may be of critical importance. In
addition, some students attending low-cost institutions may have
substantial outside scholarship assistance that reduces their need and
resultant ACG or National SMART Grant during the regular fall through
spring academic calendar, but may have unmet need during the summer
term. Some commenters suggested that it would be more reasonable to
define Federal Pell Grant eligibility for this purpose in terms of an
expected family contribution (EFC) within the range for
[[Page 64407]]
a Federal Pell Grant award for the award year in which the payment
period is placed.
Discussion: The Secretary agrees with the commenters that students
should not have to receive a Federal Pell Grant during the same payment
period to be eligible for an ACG or National SMART Grant. Rather,
students who would otherwise be eligible for an ACG or National SMART
Grant award but have already exhausted their Federal Pell Grant
eligibility for the award year should be eligible to receive an ACG or
National SMART Grant award as long as they received a Federal Pell
Grant in the same award year.
Change: Section 691.15(a)(2) has been revised to require that a
student receive a Federal Pell Grant in the same award year, rather
than the same payment period, to be eligible for an ACG or National
SMART Grant. The Secretary has made conforming changes in Sec. Sec.
691.65(a)(2) and 691.80(a) to reflect this change in the ACG and
National SMART Grant student eligibility requirements. In addition, the
Secretary has also made conforming changes to Subpart E of the Student
Assistance General Provisions on verification of student aid
application information by amending 34 CFR 668.51, 668.52, 668.54,
668.55, 668.58, 668.59, 668.60, and 668.61. These changes are necessary
to clarify that these sections apply to the ACG and National SMART
Grant programs to ensure the synchronous administration of these
programs.
Full-Time Enrollment
Comments: One commenter expressed concern that the ACG and National
SMART Grant regulations do not serve nontraditional students. The
commenter believed that assistance from these programs should be
available to students who enroll less than full-time.
Discussion: Section 401A(c) of the HEA requires that a student must
be enrolled full-time in order to be eligible to receive assistance
under the ACG and National SMART Grant programs. The Secretary does not
have the authority to change this requirement through regulations.
Changes: None.
Rigorous Secondary School Program of Study Eligibility
Comments: One commenter asked whether a student who has completed
his or her secondary school coursework in December but who graduated
after January 1, 2005, or 2006, is eligible for an ACG. Another
commenter was concerned that students who are not of traditional
college age would not be eligible for an ACG.
Discussion: The requirement that a student have successfully
completed a rigorous secondary school program of study after January 1,
2006, for a first-year student and after January 1, 2005, for a second-
year student in order to receive an ACG is in section 401A(c)(3) of the
HEA. The Secretary interprets the statute as requiring a student to
have graduated in order to complete a rigorous secondary school program
of study. For example, if a student completed the coursework of a
rigorous secondary school program in December 2005, but actually
graduated from the program after January 1, 2006, the student is
eligible to receive a first year ACG. Although in the early years of
the ACG program eligible students will be of traditional college age,
as time goes by, students who are not of traditional college age may
establish eligibility provided they have completed a rigorous secondary
school program of study after the dates provided in the statute.
Changes: None.
Grade Point Average
Comments: Several commenters claimed that how and when to compute a
cumulative GPA is confusing. One commenter wanted clarification on
whether GPA for the student's eligible program meant cumulative GPA,
major GPA, or something else. This commenter suggested removing the
reference to eligible program if the Secretary intended a cumulative
GPA computation. Some commenters supported the Secretary's
interpretation of the GPA calculation for National SMART Grant
eligibility in Sec. 691.15(c)(3). One commenter pointed out that, for
National SMART Grants, the Secretary did not follow the language from
section 401A(c)(3)(C)(ii) of the HEA, which provides that GPA is
determined in the coursework required for the major, but instead
required GPA to be determined for the coursework required for a
student's eligible program. The commenter supported the burden
reduction in this case, but objected to the regulatory approach.
Another commenter believed that the GPA for ACGs should be defined the
same way it is for National SMART Grants. Yet another commenter
indicated that, for National SMART Grants, institutions should have the
flexibility to review academic major and GPA no more frequently than is
required by institutions to monitor students under their Satisfactory
Academic Progress (SAP) policy, so as to align these two academically
related monitoring policies.
Discussion: As discussed in the preamble to the interim final
regulations, the Secretary believes that a student's GPA for purposes
of eligibility for the ACG and National SMART Grant programs should be
calculated using the same standards that are used to calculate GPA for
other academic and title IV purposes at the institution. The Secretary
does not believe scores on tests in AP, IB, or College Level
Examination (CLEP) programs should be converted to grades for any
purpose under the ACG or National SMART Grant programs. For National
SMART Grants in particular, the Secretary believes that the student
must meet the GPA requirement based on all courses required for the
student's eligible program, not just those required for the eligible
major. The Secretary believes this approach is appropriate because it
minimizes institutional burden when determining whether a student meets
the GPA requirement and is in accord with other title IV, HEA program
requirements related to GPAs. GPA cannot be computed the same way for
the ACG Program as it is for the National SMART Grant Program because
section 401A(c)(3) of the HEA requires a student to meet the necessary
GPA only at the end of the student's first academic year for an ACG,
but throughout the student's third and fourth academic years for a
National SMART Grant.
The Secretary believes that the monitoring requirements for SAP
would not be adequate to determine eligibility for an ACG or National
SMART Grant based on cumulative GPA. Under Sec. 668.32(f), although a
student may be making satisfactory progress according to the
institution's published SAP standards under Sec. 668.16(e), and if
applicable, under Sec. 668.34, these standards allow a student to
maintain a GPA below the 3.0 (on a 4.0 scale) GPA required to be
eligible for an ACG or National SMART Grant. In addition, Sec.
668.16(e)(4) provides that an institution must determine whether a
student is making satisfactory progress at the end of each increment,
which must not exceed the lesser of one academic year or one-half the
published length of the program. In contrast, section 401A(c)(3)(C)(ii)
of the HEA requires that a student meet the GPA requirement throughout
the student's third and fourth academic year. Review of a student's GPA
under the standards set forth in Sec. 668.16(e) would not ensure that
a student is meeting the requirements of the National SMART Grant
Program.
Changes: None.
[[Page 64408]]
Transfer Student GPA
Comments: We received several comments related to the GPA of
transfer students. One commenter supported the Secretary's
interpretation for transfer GPA calculations. Another commenter asked
for clarification on how to treat GPA in the case of transfer students
who are admitted for summer and then take a 3-credit summer course.
Three commenters requested an option to use the GPA earned at prior
colleges as the indicator of sufficient academic performance for
payment for the first term at the new college to determine eligibility
for an ACG or National SMART Grant because, at many colleges, it would
require a significant reengineering of the business process to
calculate a GPA based solely on courses accepted toward the program.
The commenters believed that cumulative GPA from other institutions
should sufficiently demonstrate academic achievement. Another commenter
questioned the fairness of the transfer hours GPA policy. The commenter
was concerned that students who do poorly at the first institution
could transfer to gain ACG or National SMART Grant eligibility, because
only the hours accepted by the new institution would be considered and
all poor grades excluded. The student who does poorly and stays at the
first institution would not be eligible, but the student who transfers
could be.
Discussion: The interim final regulations explain that, in the case
of a transfer student, for the first payment period, institutions must
rely on the grades of the courses from the prior institution accepted
toward the student's eligible program. Transfer credits that were
awarded through programs such as AP, IB, or CLEP programs should not be
converted to grades to determine a student's GPA for purposes of
eligibility for an ACG or National SMART Grant in the student's initial
payment period after transferring. Once a student has the grades for a
payment period at the new institution for coursework taken toward the
eligible program, the institution may use the GPA calculated from those
grades only, unless there is an institutional policy that a student's
GPA at the new institution include transfer grades. While the Secretary
agrees that cumulative GPA from a prior institution does serve as an
academic performance indicator, the purpose of calculating GPA based
solely on coursework accepted toward the eligible program is to ensure
student eligibility for the ACG or National SMART Grant programs.
Because this GPA calculation is used solely to determine a student's
eligibility under these programs for the initial payment period of
enrollment, there is no intrusion into institutional grading policy by
the Secretary. Finally, the Secretary believes that the transfer hours
GPA requirement in Sec. 691.15(d) of the interim final regulations is
an equitable means of establishing a transfer student's eligibility.
Students who perform poorly overall will likely still transfer in a GPA
that is below 3.0. Thus, these students would not be significantly more
likely to receive a grant than a student who did poorly but stayed at
the same institution.
Changes: None.
Comments: One commenter asked the Secretary to clarify whether an
institution is required to follow its standards for academic and title
IV, HEA program purposes to determine a transfer student's GPA once it
has established eligibility using grades in coursework that the
institution accepts for the student's first payment period. For
example, if an institution normally does not use grades on transferred
credit for SAP or other purposes, does the institution have the option
of using such grades for ACG and National SMART Grant recipients only?
Discussion: An institution's policies for the administration of the
title IV, HEA programs generally must be the same for all title IV, HEA
programs. An institution may not establish a SAP policy that treats
grades on transferred credits one way for ACG and National SMART Grant
recipients, but another way for recipients of other title IV aid.
Changes: None.
Prior Enrollment in a Postsecondary Educational Program
Comments: Several commenters believed that students who attended
postsecondary programs while completing high school should be
considered first-year students for ACG eligibility purposes. Two
commenters noted that some colleges offer the opportunity for a high
school student to earn an associate's degree while completing high
school. One commenter stated that it was possible for some of these
students to enroll in college programs that only accept some of the
credits the student has earned while in high school and, given the
institution's definition of an academic year, the student may qualify
as a first-year student. The commenter believed that, if the
institution was treating the student as a first-year student, the
student should be eligible for a first-year ACG.
One commenter asked the Secretary to clarify whether a student who
attended a postsecondary institution as part of a State-recognized
dual-enrollment program is considered to have been enrolled as a
regular student for purposes of determining prior enrollment. A few
commenters asked for clarification of the Secretary's policy on prior
enrollment. One commenter requested clarification as to whether a
student who earned an associate's degree at the same time as he or she
earned a high school diploma would be eligible for a second-year ACG,
provided the transfer credits were less than what would be required to
establish the student as a junior. The commenter also wanted to know if
the same student would be eligible for a first-year ACG if he or she
did not earn the associate's degree, and the transfer credits were less
than what would be required to establish the student as a sophomore.
Several commenters believed these final regulations should reflect
guidance from the Department that prior enrollment in an undergraduate
program after completion of high school would not affect a student's
first year eligibility for an ACG and asked the Secretary to specify an
effective date for this guidance.
Discussion: The Secretary agrees that the regulations should be
clarified to reflect that only enrollment as a regular student in an
eligible program while in secondary school disqualifies a student from
receiving a first-year ACG in the student's first academic year of
postsecondary education. Under the Department's interpretation of
section 401A(c)(3)(A), the term ``previously'' in the phrase
``previously enrolled in a program of undergraduate education'' in
section 401A(c)(3)(A)(ii) relates to completion of a rigorous secondary
school program of study in section 401A(c)(3)(A)(i).
A student is considered to have been previously enrolled in an
eligible program if the student was admitted into that program as a
regular student while still enrolled in a secondary school program of
study. A regular student is a person who is enrolled or accepted for
enrollment at a postsecondary educational institution for the purpose
of obtaining a degree, certificate, or other recognized postsecondary
educational credential offered by that institution. Therefore, a high
school student who was enrolled in a dual-enrollment program with the
purpose of obtaining an associate's degree is considered to have been
enrolled as a regular student, whether the student actually earned the
associate's degree or not. Thus, the student was previously enrolled in
an eligible program of undergraduate education and is not eligible for
a first-
[[Page 64409]]
year ACG. Such a student may be eligible for a second-year ACG if his
or her transfer credits were less than what would be required to
establish the student as enrolled for the student's third title IV, HEA
academic year. However, if an otherwise eligible student took courses
that were part of an associate's degree program, but was not enrolled
for the purpose of obtaining the associate's degree (i.e., was not a
regular student), the student would be eligible for a first-year ACG.
Changes: Section 691.15(b)(1)(ii)(B) has been revised to clarify
that a student is not eligible for a first-year ACG if the student was
previously enrolled as a regular student in an eligible program while
still enrolled in a secondary school program of study.
Documenting Completion of a Rigorous Secondary School Program of Study
Comments: Many commenters expressed concern that the requirements
for determining and documenting a student's completion of a rigorous
secondary school program of study are too onerous. Several commenters
asserted that it is unduly burdensome for institutions to determine by
means of a postgraduation high school transcript whether a student has
met the definition of a rigorous secondary school program of study
under Sec. 691.16(d). Commenters noted that this requirement will be a
substantial new undertaking for institutions and they will have to come
up with the resources or processes to comply.
Several commenters noted that many community colleges do not
collect high school transcripts as part of their admissions process;
instead, they use testing to determine readiness. Other commenters
noted that the transcripts they are evaluating for ACGs reflect only
six or seven semesters of high school coursework. These commenters were
concerned that there would be a problem with the timing of admissions
decisions and initial financial aid package offers, which occur in the
winter or spring prior to enrollment in the fall, because there may be
uncertainty about whether a student would complete a rigorous secondary
school program of study. The commenters proposed several options to
ameliorate the burden of documenting completion of a rigorous secondary
school program of study. The commenters suggested adding an option for
defining a rigorous secondary school program of study that could be
applied at the midpoint of a student's final year in high school,
noting that this option would provide greater assurance that the
initial financial aid award package for the student would materialize
for the student when the final high school transcripts are reviewed and
also would provide some measure of administrative ease for colleges
when evaluating the final secondary school transcripts. One commenter
noted that, in the few cases when the student substantially deviates
from the level of academic achievement on the partial transcript,
institutions could withdraw the admissions offer. In addition, one
commenter suggested adding an option to define a rigorous secondary
school program of study as a total of 16 subject years of study within
the five defined subject areas. The commenter noted that this
definition would reflect a higher subject year count than the current
minimum course requirements and a broader curriculum than the AP and IB
option demonstrates by requiring certain scores in only two courses.
The commenter believed that this alternative would be acceptable if
coupled with confirmation of graduation and successful completion of
senior year courses. Similarly, one commenter asked that an institution
whose academic policy required the same coursework from all admitted
students that the Secretary requires for rigorous secondary school
programs of study under Sec. 691.16(d) be permitted to assume that an
otherwise-eligible student had completed a rigorous secondary school
program of study, without requiring the institution to retrieve and
review every transcript.
One commenter requested clarification as to whether there is a
minimum score required for rigorous programs like AP and, if so,
whether it is the minimum required by, for example, the institution or
the State. Finally, one commenter asked for clarification as to whether
it is necessary to have documentation such as for AP scores in the
Financial Aid office or if maintaining documentation at the Admissions
or Registrar's Office would be acceptable.
Discussion: The Secretary believes the current regulations
appropriately balance statutory requirements with institutional burdens
raised by commenters. While the Secretary agrees that there is a
concern with respect to the timing of the availability of complete high
school transcripts and admissions and financial aid package offers for
first-year ACGs, section 401A(c)(3)(A)(i) and (c)(3)(B)(i) of the HEA
requires a student to complete, and graduate from, a rigorous secondary
school program of study in order to be eligible for an ACG. The
Secretary believes that a rigorous secondary school program of study
continues through a student's fourth year of high school.
Institutions do not always withdraw admissions offers when a
student's final high school transcript differs significantly from the
partial transcript. In the case of an ACG, the purpose of the
transcript is to document the completion of a rigorous secondary school
program of study. The Secretary does not regulate the admissions
standards of postsecondary institutions. When a student substantially
deviates from the level of academic achievement on the partial
transcript, the Secretary cannot regulate to require institutions to
withdraw their admissions offers. The Secretary's concern, for purposes
of awarding an ACG, would be that the transcript documented the
student's completion of a rigorous secondary school program of study.
While institutions are responsible for maintaining documentation at
the institution, no specific location is required. If an institution
requires the same coursework that the Secretary requires for a rigorous
secondary school program of study from an admitted student, and the
financial aid office is certain that the transcript or equivalent
document confirming completion of a rigorous secondary school program
of study is kept at the admissions office or some other part of the
institution, it could assume a student met the rigorous secondary
school program of study criterion.
Finally, it should be noted that the minimum scores for AP exams
were published in Sec. 691.16(d)(5) of the interim final regulations.
Changes: None.
Declaring an Eligible Major
Comments: One commenter believed that the Federal Government should
not insert itself into the process of determining when a student
declares a major as this action usurps an institution's prerogative to
establish its own academic requirements. Another commenter requested
clarification on how to document intent to declare an eligible major
and how to determine when a student is no longer displaying an intent
to declare an eligible major. One commenter suggested that, when an
institution's academic requirements do not allow a student to declare
an eligible major in time to qualify for a National SMART Grant, the
student should be allowed to meet the declaration of eligible major
requirement by enrolling in the courses deemed by the institution to be
consistent with fulfilling the requirements of an intended eligible
major and declaring an intention to
[[Page 64410]]
complete a major in an eligible field of study.
Discussion: The Secretary does not agree that the regulations
intrude on an institution's prerogative to establish its own academic
requirements. In addition, the Secretary believes that documentation of
intent to declare an eligible major should be determined by
institutional policy. The regulations permit a student to fulfill the
requirement that he or she declare an eligible major by enrolling in
the courses deemed by the institution to be consistent with fulfilling
the requirements of an intended eligible major and declaring an
intention to complete a major in an eligible field of study if that is
the institutional policy.
Changes: None.
Section 691.16 Recognition of a Rigorous Secondary School Program of
Study
Comments: A few commenters supported the multiple options for
demonstrating completion of a rigorous secondary school program of
study, while other commenters believed that additional secondary school
programs of study should be recognized as rigorous. One commenter
believed that the recognized State secondary school programs of study
should be the single standard for a rigorous secondary school program
of study, as it would greatly reduce the administrative burden for
institutions. A few commenters believed that the minimum course
requirements in Sec. 691.16(d)(2) are too strict and would unfairly
eliminate from eligibility students who should be eligible for an ACG.
Two commenters believed that some students who meet their admissions
requirements but who do not or cannot take the required courses in high
school should not be eliminated from eligibility. For example, one
commenter noted that advanced students who reduce their high school
classes, such as English, during their last year of high school to take
college classes may not qualify, even though their secondary school
programs of study were quite rigorous. Another commenter gave the
example of a student who otherwise qualified as a student who had
completed a rigorous secondary school program of study, but who
attended a high school that did not offer physics.
One commenter believed that the Secretary should ensure that all
approved State programs use wording consistent with the minimum course
requirements under Sec. 691.16(d)(2) to the extent possible so that
institutions will know that differences are not just semantic. For
example, the commenter questioned whether a particular State standard
requiring three years of math (at the algebra I level or higher) is
intended to be different from the Federal standard requiring three
years of math (including algebra I and a higher level course such as
algebra II, geometry, or data analysis and statistics). A few
commenters were concerned with the lack of uniformity in secondary
school course descriptions, noting that States often combine courses
into one general course; such as combining algebra I and geometry into
a math I course offered over two academic years. The commenters
believed that it is unreasonable to expect an institution to be
familiar with the graduation requirements for all school districts in
order to determine whether a student's courses meet the definition of a
rigorous secondary school program of study.
One commenter believed that the rigorous secondary school programs
of study established by States and recognized by the Secretary should
not be revised annually as significant changes would create confusion
for students and undue burden for institutions.
Discussion: Section 401A(f) of the HEA requires the Secretary to
recognize at least one rigorous secondary school program of study in
each State. As there is no statutory requirement for States to submit
programs for recognition, the Secretary believed it was necessary to
develop additional options for completion of a rigorous secondary
school program of study that would ensure that students in each State
have the opportunity to qualify for an ACG. The Secretary believes that
the breadth of the options provides the vast majority of students for
whom this grant program was intended with sufficient means to
demonstrate eligibility for an ACG. To the extent that these options do
not provide sufficient means to demonstrate eligibility, the Secretary
encourages individuals, high schools, and postsecondary institutions to
work together with States so that States may submit additional or
revised programs for recognition. As for an advanced student who
reduces his or her high school classes to take college classes, the
Secretary reminds commenters that completion of college courses that
meet the minimum course requirements for a rigorous secondary school
program of study count toward completion of a rigorous secondary school
program of study if they are accepted toward the student's high school
diploma.
The Secretary understands the commenters' concerns with
inconsistent wording in State programs and a lack of clarity of course
descriptions. However, the Secretary does not believe that it is
appropriate to establish a national standard for the wording of State
submissions of rigorous secondary school programs of study or course
descriptions and recommends that concerns with consistency of wording
be taken up with States and secondary schools.
The Secretary believes it is imperative that there be an annual
opportunity for States to submit changes to their rigorous programs of
study because, to the extent that these changes result in a more
rigorous program of study, students from that State graduating in that
year would be held to the new standard when applying for an ACG. If,
however, these changes result in a less rigorous program of study, the
Secretary may deny recognition if the Secretary determines the level of
rigor has fallen below the HEA's intended level.
Changes: None.
Comments: A few commenters questioned whether coursework taken
prior to high school counts toward the minimum course requirements
under Sec. 691.16(d)(2). Specifically, one commenter asked whether a
student who is otherwise eligible under Sec. 691.16(d)(2), and who
took a foreign language in 8th grade but did not take one later is
eligible for an ACG.
Another commenter noted that many students take algebra I prior to
high school; therefore, it does not appear on the student's high school
transcript. The commenter asked the Secretary to clarify under what
circumstances such a student can be considered to have completed
algebra I for the minimum mathematics course requirements under Sec.
691.16(d)(2). In particular, the commenter wanted to know if an
institution may assume that a student has completed algebra I if it is
not included on the transcript, but geometry, algebra II, or calculus
are included.
Discussion: If a student completed the secondary school curriculum
in a school system in which the high school does not include other
secondary school grades, e.g., the high school does not include grade
eight or nine, institutions should use their normal processes for
determining whether coursework completed in earlier grades is included.
However, an institution may make certain assumptions, as appropriate,
based on its knowledge of a school system's curriculum. For example, if
a high school transcript covering only grades 10-12 shows completion of
three years of English, the institution may assume that the student
completed a year of English in the ninth grade.
[[Page 64411]]
Changes: None.
Comments: One commenter recommended that the minimum science course
requirements in Sec. 691.16(d)(2) be changed to recognize other
challenging science coursework. The commenter believed that a student
who completed physical science in ninth grade, biology in tenth grade,
environmental science in eleventh grade and anatomy and physiology in
twelfth grade should be considered to have met the minimum science
course requirement.
Discussion: The Secretary believes that the minimum coursework
requirements in the regulation are appropriate. These standards are
patterned after the recommendations for the essentials of a strong
curriculum in the National Commission on Excellence in Education's
report, A Nation at Risk: The Imperative for Educational Reform
available on the Department's Web site at http://www.ed.gov/pubs/NatAtRisk/index.html.
As previously noted, to the extent that these
options do not provide sufficient means to demonstrate eligibility, the
Secretary encourages individuals, high schools, and postsecondary
institutions to work together with States so that States may submit
additional or revised programs for recognition.
Changes: None.
Comments: One commenter recommended that an exception be made to
the foreign language course requirement under Sec. 691.16(d)(2) for
students with physical limitations such as hearing loss. The commenter
noted that, because of language deficits that accompany hearing loss,
most deaf students do not take languages other than English as a part
of their secondary programs, and few schools for the deaf require or
encourage foreign language as a part of their curriculum. The commenter
added that even if American Sign Language (ASL) meets the definition of
a foreign language, most deaf students are already ASL users and do not
need to study it in secondary school.
Discussion: While the Secretary understands the concerns raised by
the commenters, she believes that a change to this requirement is
unnecessary. The Secretary considers one year of ASL to meet the
requirement of one year of a language other than English necessary to
meet the minimum course requirements under Sec. 691.16(d)(2). Also, as
stated previously, the Secretary believed it was necessary to develop
additional options for completion of a rigorous secondary school
program of study that would ensure that students in States that did not
submit programs for recognition have the opportunity to qualify for an
ACG. The Secretary believes that the breadth of the options, including
participation in honors programs established by States or completion of
AB or IB courses and the earning of a minimum score on the exams for
those courses, provides the vast majority of students for whom this
grant program was intended with sufficient means to demonstrate
eligibility for the ACG.
Changes: None.
Comments: One commenter questioned whether students attending an
institution with a ``bridging year'' program and completing their
senior year of high school at the postsecondary institution would be
eligible for a second year ACG if they do not receive a high school
diploma, but instead earn a General Education Development (GED)
certificate. One commenter believed that the Department was
interpreting the regulations to mean that a student who obtains a GED
is automatically ineligible for an ACG or National SMART Grant simply
because he or she has obtained a GED. The commenter noted that some
home-schooled students, who otherwise qualify as having completed a
rigorous secondary school program of study, are advised to take the GED
to meet college admission requirements. The commenter asked the
Department to make clear that such students who obtain the GED are not
automatically ineligible.
Discussion: A student who obtained a GED is not automatically
ineligible for an ACG or National SMART Grant. However, a student who
obtains a GED in lieu of a high school diploma cannot use the GED,
alone, to demonstrate completion of a rigorous secondary school program
of study. The Department believes that completion of a GED program
alone does not demonstrate the academic achievement of a rigorous
secondary school program of study. Such a student can nonetheless
qualify for an ACG with a GED by completing one of the rigorous
secondary school programs of study recognized under Sec. 691.16.
Changes: None.
Comments: Two commenters asked the Department to clarify which
level of IB examination, standard or higher, a student must take to
qualify for an ACG. One commenter believed that the regulations confuse
the IB Diploma program with a stand-alone IB course. The commenter
believed that the regulations should be changed to make clear that a
student is considered to have completed a rigorous secondary school
program of study if he or she completes and achieves the required
minimum score for the exam on at least two IB courses, whether or not
they are part of an IB Diploma Program.
Discussion: A score of ``4'' or higher on either the standard level
or higher level IB examination for at least two IB courses meets the
exam portion of the IB standard for completion of a rigorous secondary
school program of study. The Secretary agrees that a student who
completes and achieves the required minimum score for the exam on at
least two IB courses, whether or not they are part of an IB Diploma
Program, should be considered to have completed a rigorous secondary
school program of study.
Changes: Section 691.16(d)(4) has been changed to clarify that a
student who completes and achieves the required minimum score for the
exam on at least two IB courses, whether or not they are part of an IB
Diploma Program, is considered to have completed a rigorous secondary
school program of study.
Comments: One commenter believed that high scores on standardized
achievement tests, such as the SAT and ACT, should be recognized as a
rigorous secondary school program of study. The commenters believed
that this recognition would be consistent with the inclusion of
completion of IB or AP courses with high test scores as rigorous
programs because they establish that a student has attained a level of
ability in completing his or her secondary school program that is
commensurate with completing a rigorous secondary school program of
study. The commenter believed that this proposal would reduce burden on
institutions, as these test scores are readily accessible. The
commenter believed that States and test owners could work together to
determine the qualifying test score.
Discussion: The Secretary does not agree that high scores on
standardized achievement tests should be recognized as a rigorous
secondary school program of study. Unlike the IB and AP tests, there
are no specific courses or curriculum that correspond to the standard
achievement tests. The Secretary believes that both components are
necessary to demonstrate that a student has successfully completed a
rigorous secondary school program of study.
Changes: None.
Section 691.17 Determination of Eligible Majors
Comments: Several commenters whose institutions do not offer
programs in the eligible majors were concerned that their institutions
were excluded from the National SMART Grant Program. In one case, the
institution
[[Page 64412]]
offered majors with concentrations in the eligible fields. The
commenter requested clarification on whether students in these types of
programs would be eligible. In another case, the institution offered
intensive instruction in math and science as part of a liberal arts
degree. Two commenters from this institution requested that this
institution be included among eligible institutions and one of these
commenters also requested an alternative means for students whose
institution does not offer eligible majors to qualify.
Discussion: Section 401A(c)(3)(C) of the HEA requires a student to
pursue a major in the physical, life, or computer sciences,
mathematics, technology, or engineering (as determined by the Secretary
pursuant to regulations); or a critical foreign language in order to be
eligible for a National SMART Grant. No alternative categories of
majors are indicated in the HEA, and the Secretary does not have the
authority to provide alternative categories through regulations in
those cases where ineligible majors include concentrations in eligible
fields or where liberal arts degrees do not provide eligible majors but
do include some intensive instruction in eligible fields.
Changes: None.
Comments: Several commenters addressed the determination of
eligible majors. One commenter expressed concern that a number of
scientific fields were omitted and that the eligible languages were too
narrowly identified for purposes of available undergraduate majors.
Another commenter was concerned that Evolutionary Biology was omitted
from the eligible majors list. One commenter was concerned that
teaching degrees in the science and math fields were not included in
the list of eligible majors. Another commenter suggested taking a more
thorough look at the majors, especially in areas of national need, such
as nursing and public health. Yet another commenter was concerned about
the consultation process and thought that the Department should consult
directly with organizations such as the National Academy of Sciences
and other professional scientific organization to receive input on the
determination of eligible majors.
One commenter recommended that, if the Department was unable to
supply the list of eligible majors by February 1 preceding the academic
year for which determinations of eligibility must be made, the
Department should permit an institution to use the current list for
first-time determinations of National SMART Grant eligibility. One
commenter requested clarification on whether a student would still be
eligible for a National SMART Grant if that student's major is removed
from the list of approved majors at any time subsequent to the
student's first National SMART Grant payment, when the student's
payment was based on the student's intent to declare an eligible major
as described in Sec. 691.15(c)(2)(i)(B). Finally, one commenter
requested clarification on an institution's responsibility to ensure
that qualifying majors are being actively pursued.
Discussion: Section 401A(c)(3)(C) of the HEA specifies that a
student must pursue a major in the physical, life, or computer
sciences, mathematics, technology, or engineering (as determined by the
Secretary pursuant to regulations); or a critical foreign language in
order to be eligible for a National SMART Grant. Evolutionary Biology
was omitted from the original list of eligible majors in error; a
revised list including this major and Exercise Physiology, which was
also omitted in error, has been posted.
The list of eligible majors will be reviewed annually; however,
section 401A(c)(3)(C)(i)(II) of the HEA only requires consultation on
the list of critical foreign languages with the Director of National
Intelligence. The current list of critical foreign languages was
developed in consultation with the Director of National Intelligence as
required.
The Secretary will continue to identify a list of eligible majors,
including critical foreign languages, annually for an award year to
ensure that the most current information is used and will publish the
list in time for institutions to plan awards accordingly. Because a
student's intent to declare an eligible major as described in Sec.
691.15(c)(2)(i)(B) serves as a proxy for actually declaring an eligible
major until the declaration is permitted by an institution, under Sec.
691.17(c) a student would still be eligible if a student's major is
removed from the list of approved majors at any time subsequent to the
student's first National SMART Grant payment, when the student's
payment was based on the student's intent to declare an eligible major
as described in Sec. 691.15(c)(2)(i)(B) as well as when the student's
payment was based on a declared eligible major under Sec.
691.15(c)(2)(i)(A). Finally, it is the institution's responsibility to
ensure that qualifying majors are being actively pursued. The
institution is responsible for ensuring this active pursuit of eligible
majors and may use any institutional process that it chooses to
document this intent.
Changes: None.
Section 691.61 Submission Process and Deadline for a Student Aid Report
or Institutional Student Information Record
Comments: One commenter noted that Sec. 691.61(b) cross-referenced
Sec. Sec. 668.60 and 668.164 and that conforming changes were made to
Sec. 668.164, but that Sec. 668.60 was not amended to include the ACG
and National SMART Grant programs. Therefore, the commenter stated that
it is unclear which provisions of Sec. 668.60 apply to the ACG and
National SMART Grant programs.
Discussion: The Secretary agrees that the requirements in Sec.
668.60 that apply to the ACG and National SMART Grant programs need
clarification.
Changes: Section 668.60 is revised to clarify how it applies to the
ACG and National SMART Grant programs.
Comments: One commenter stated that Sec. 691.61(a) appears to
place the responsibility on institutions to review the record of all
FAFSA filers to identify eligible students rather than just those FAFSA
filers identified by the Secretary as potentially eligible students.
The commenter suggested that the institution should be allowed to rely
on information on the Student Aid Report (SAR) or ISIR as to whether
the student is potentially eligible to receive an ACG or National SMART
Grant. That is, if the student's SAR or ISIR does not indicate that the
student is potentially eligible to receive an ACG or National SMART
Grant, the institution would not be required to check its own records
or take any other action to determine whether the student is
potentially eligible. Rather, the institution could assume that the
student is not eligible for the ACG or National SMART Grant and take no
further action.
Discussion: To implement the ACG Program, the Secretary has
instituted procedures for students to self-identify that they have
completed a rigorous secondary school program of study and
institutions, at their option, may generally rely on this self-
identification process. Most potentially eligible students will have
had an opportunity to self-identify through the FAFSA (application)
process on this matter and will have a positive indication on their SAR
or ISIR with regard to completion of a rigorous secondary school
program of study. Under Sec. 691.61, an institution is allowed to rely
on the information on a student's SAR or ISIR as to whether the student
is potentially eligible for an ACG, unless the institution has
[[Page 64413]]
information from another source indicating that the student is
potentially eligible. For example, if a student whose SAR or ISIR does
not indicate potential eligibility for the ACG (because the student has
not yet self-certified as to his or her completion of a rigorous
secondary school program of study) informs the institution that he or
she has completed such a secondary school program of study, and is thus
potentially eligible for the ACG, then the institution must follow up
on that information and determine whether the student is eligible for
the ACG.
Outside of the eligibility requirements common to both the ACG and
the National SMART Grant programs found in Sec. 691.15(a), i.e., the
general eligibility requirements from 34 CFR part 668, subpart C; U.S.
citizenship; receiving a Federal Pell Grant; and being enrolled full-
time, the primary eligibility requirements for receipt of a National
SMART Grant relate to pursuit of an eligible major and having the
requisite GPA. Information about these eligibility factors will not be
found on the SAR or ISIR. Thus, for the National SMART Grant Program,
there is not the same issue of determining eligibility for students who
do not have eligibility information on their SAR or ISIR as there is
for the ACG Program. However, it should be noted that an institution
does have to determine whether its students meet the eligibility
requirements for the National SMART Grant Program, including which of
its students are in eligible majors, and award those students, if
otherwise eligible, a National SMART Grant.
Changes: None.
Section 691.62 Calculation of a Grant
Ratable Reduction
Comments: Two commenters expressed concern over the potential for
ratable reductions to the awards. One of the commenters inquired as to
when award maximums would be considered final for the year. The other
commenter offered multiple suggestions for avoiding ratable reductions.
Discussion: Section 401A(d)(1)(B)(ii) of the HEA requires the
Secretary to ratably reduce the maximum grant amounts for both programs
when the funds available for a given award year are less than the
amount needed to fund full awards for all eligible students. The
Secretary establishes the ACG and National SMART Grant Scheduled Awards
based on the availability of funds appropriated and the anticipated
number of eligible students. Scheduled Awards for the ACG and National
SMART Grant programs will be announced annually in conjunction with the
announcement of Scheduled Award amounts for the Federal Pell Grant
Program. Historically, these announcements have occurred between
December and February prior to the beginning of the award year.
The Secretary uses multiple data sources to best predict the number
of eligible recipients for the ACG and National SMART Grant programs
and will monitor disbursements from both programs based on current year
reports received from postsecondary institutions. Every effort will be
made to avoid ratable reductions. However, if ratable reductions are
necessary, the Secretary will notify the community promptly of the new
Scheduled Awards and the procedures for ratably reducing the ACG and
National SMART Grant awards.
Changes: None.
Packaging
Comments: Several commenters objected to the requirement that the
amount of an ACG or National SMART Grant for an academic year, in
combination with the student's EFC and any other student financial
assistance available to the student, cannot exceed the student's cost
of attendance for that academic year. One commenter suggested that
grants from both programs be awarded, similar to Federal Pell Grants,
without regard to either the student's financial need or the amount of
other student financial assistance received. Another commenter proposed
that the grants be allowed to replace EFC, but not to exceed the
student's cost of attendance when combined with other student financial
assistance received.
An additional set of commenters requested that a $300 overaward
threshold be added to the ACG and National SMART Grant programs,
similar to the threshold allowed under Sec. 673.5(d) for the campus-
based programs. One of these commenters also believed that there is
confusion over which definition of estimated financial assistance
applies to the ACG and National SMART Grant programs. Yet another
commenter requested that Chapter 31 veterans' education benefits be
excluded from all definitions of estimated financial assistance.
Discussion: The Secretary believes that the packaging requirement
is appropriate. As noted in the preamble to the interim final
regulations, ACGs and National SMART Grants are need-based grants in
that the HEA requires recipients to be eligible for Federal Pell
Grants. Section 471 of the HEA defines the amount of need of any
student as cost of attendance minus EFC minus estimated financial
assistance. Need-based grant assistance cannot replace a family's
expected contribution toward a student's postsecondary expenses.
The overaward threshold allowed under the campus-based programs
exists to assist institutions with the variations of earnings under the
Federal Work-Study program and the estimates institutions must make in
projecting utilization of Federal Perkins Loan and Federal Supplemental
Educational Opportunity Grant funds as well as the bearing of
collections on the availability of funds under the Federal Perkins Loan
Program. Because these issues do not exist for the ACG and National
SMART Grant programs, an overaward threshold is not necessary.
Regarding the confusion over which definition of estimated
financial assistance applies to the ACG and National SMART Grant
programs, the Secretary agrees that the differences among the three
definitions can cause confusion. Because the definitions in Sec. Sec.
682.200(b) and 685.102(b) have exclusions based on statutory language
that does not apply to the ACG and National SMART Grant programs, we
intend to modify the language in Sec. 691.62(c) to reference the
definition of estimated financial assistance in Sec. 673.5(c).
Chapter 31 veterans' education benefits may not be excluded from
the definition of estimated financial assistance because there is no
statutory basis for exclusion of Chapter 31 benefits. Section
428(a)(2)(C)(ii) authorizes only Chapter 30 veterans' education
benefits and AmeriCorps benefits and awards to be excluded when
determining subsidized loan eligibility. Further, when determining a
student's eligibility for an ACG or National SMART Grant, an
institution may exclude from estimated financial assistance any portion
of a subsidized Federal Stafford Loan that is equal to or less than the
amount of the student's Chapter 30 veterans' education benefits and
AmeriCorps education awards or post-service benefits.
Changes: Section 691.62(c) has been revised to provide that other
student financial assistance is estimated financial assistance as
defined in Sec. 673.5(c).
Section 691.63 Calculation of a Grant for a Payment Period
Comments: One commenter suggested that the Department review the
Federal Pell Grant formulas (and thus, these formulas in Sec. 691.63)
to simplify the payment period calculations. The commenter also asked
the Secretary to
[[Page 64414]]
consider revising the academic year definition for clock hour programs
from 30 weeks to 26 weeks due to the change made by the HERA.
Discussion: Given the time constraints associated with the
development of regulations resulting from the enactment of the HERA
(especially with respect to the implementation of the ACG and the
National SMART Grant programs), the Secretary does not believe that it
would be prudent to attempt to change formulas used in the calculation
of grants for the Federal Pell Grant, the ACG, and the National SMART
Grant programs at this time. While such a review and possible revision
of those formulas may prove to be beneficial at a later time, the
Secretary believes that, since the formulas have been used for a long
time and are familiar to the financial aid community, it would be
unwise to revise them now when the aid community already has to deal
with the changes resulting from the HERA.
To reflect the change made by the HERA, a change to the definition
of an academic year for programs offered in clock hours was made in
previously published regulations. Section 668.3 now contains a
definition of an academic year that provides that 26 weeks of
instructional time is the minimum number of weeks of instructional time
in an academic year for a clock hour program, while retaining 30 weeks
of instructional time as the minimum number of weeks of instructional
time for a credit hour program. That definition also retains the
provision that, under certain conditions, the Secretary may approve an
academic year with a minimum of 26 weeks of instructional time for a
credit-hour program.
Changes: None.
Comments: One commenter believed that the determination of
enrollment status is an eligibility criterion and not a factor in the
calculation of the grant payment and that for payments for payment
periods calculated under Sec. 691.63(d), commonly referred to as
Formula 3, it would seem much simpler just to direct the institution to
use the same enrollment status determined for a Federal Pell Grant to
determine eligibility for an ACG or National SMART Grant award. The
commenter suggested that a cross-reference to the Federal Pell Grant
Program regulations could be used to determine a student's enrollment
status for an ACG or National SMART Grant.
Discussion: The Secretary believes that the public will benefit
from a complete set of regulations to implement the ACG and National
SMART Grant programs, rather than providing cross-references to the
Federal Pell Grant Program regulations throughout the ACG and National
SMART Grant regulations.
Changes: None.
Section 691.75 Determination of Eligibility for Payment
Comments: With respect to the institution's determination about
whether a student is pursuing an eligible major at the beginning of a
payment period, one commenter suggested changing ``is no longer
pursuing a required major'' in Sec. 691.75(b)(3) to ``is not pursuing
a required major'' to cover not only those situations in which the
student had at one time (before the beginning of the payment period)
been pursuing an eligible major, but stopped doing so, but also
situations in which the student had never pursued, and is still not
pursuing, an eligible major.
Discussion: The Secretary agrees with the commenter's suggestion.
With this change, all situations in which the institution determines
that the student is not pursuing a required major at the beginning of
the payment period will be covered. Then, as the regulations go on to
address, if the institution reverses a determination before the end of
the payment period, the institution may pay the student a National
SMART Grant for the entire payment period.
Changes: Section 691.75(b)(3) and (c) has been revised to change
``is no longer pursuing a required major'' to ``is not pursuing a
required major.''
Comments: One commenter asked how the financial aid office should
deal with eligibility for a student for a National SMART Grant if the
student was one hour short of being a junior at the beginning of one
term, but reached junior status by the next term. The commenter asked
if the aid office should start paying such a National SMART Grant in
the middle of the academic year. The commenter also asked whether the
aid office should pay a student for the spring and summer terms only,
if the student does not have at least a 3.0 GPA before fall starts but
does before spring. The commenter also asked about the National SMART
Grant eligibility of a student who changed to an ineligible major. The
commenter asked whether the aid office would stop paying the student at
the point at which the student changed to an ineligible major or would
retroactively take the National SMART Grant away from the student
entirely.
Another commenter asked what should be done if a student has a 3.0
GPA when the fall term starts but drops below that average after (the
previous term's) grades are posted. The commenter also wanted to know
what would happen if the student's GPA was back up to at least 3.0 by
the spring term. Another commenter asked how grades of incomplete are
to be considered with respect to the GPA requirement. Another commenter
asked for clarification of how an institution should determine GPA and
academic year level when the institution first becomes aware of a
student's prior postsecondary attendance after the student's transfer
credits for fall attendance (for which no aid was received) are
received late in the spring semester.
Finally, several commenters raised an issue related to eligible
students who, in fact, did meet during the payment period in question
with the eligibility requirements for an ACG or a National SMART Grant
associated with the GPA or with the declaration of an eligible major,
but for whom the institution erred when it determined that the students
failed to meet those requirements and did not discover its mistake
until after the end of that payment period. The commenters suggested
that these students should receive a grant for the completed payment
period.
Discussion: Section 691.75 addresses the factors that an
institution must consider to determine that a student is eligible each
time it makes a payment to a student of an ACG and a National SMART
Grant. Section 691.75(a)(1) provides that the institution has to
determine that the student meets the eligibility criteria listed in
Sec. 691.15. For a National SMART Grant, one of those eligibility
criteria is that the student be in the third or fourth academic year of
an eligible program. (Note that the third academic year of the
student's program is not necessarily synonymous with the junior year of
the student's program.) Nevertheless, if the student is one hour short
of starting his or her third academic year at the beginning of a term
(e.g., the fall term), but begins the third academic year by the next
term (the spring term) (presumably at the beginning of that term), then
the student, if otherwise eligible, qualifies for a National SMART
Grant for that spring term. The student would not qualify for a
National SMART Grant payment for the fall term in this example but may
qualify for any remaining second-academic-year ACG eligibility for this
fall term. The institution would start paying the National SMART Grant
in the middle of the institution's year, i.e., at the beginning of the
spring term. This issue is further clarified in Sec. 691.63(h), which
[[Page 64415]]
provides that, in the case of a payment period with two academic years,
an institution must calculate the payment for the payment period using
the ACG or National SMART Grant Scheduled Award of the academic year
being completed.
With regard to a student who does not have at least a 3.0 GPA (for
the first academic year for a second-year ACG, and for the most
recently completed payment period in the student's eligible program for
a National SMART Grant) before fall starts, but does before spring,
Sec. 691.75(b)(2) and (3) indicates that the student, if otherwise
eligible, can receive an ACG or National SMART Grant for the entire
fall term if the institution determines that the student has the
required minimum 3.0 GPA before the end of the fall term. On the other
hand, if the institution does not make the determination that the
student has at least a 3.0 GPA until after the end of the fall term,
then, under Sec. 691.75(c), the student cannot receive an ACG or
National SMART Grant for the fall term.
With respect to an eligible student who is receiving a National
SMART Grant, but then changes to an ineligible major (and does not
change back to an eligible major), the institution may not make any
additional National SMART Grant payments (for the payment period in
which the change of majors took place or for future payment periods) to
the student once the student has changed to the ineligible major,
regardless of whether that change is made at the end of a payment
period or during the payment period. However, any payments that were
made to an eligible student before he or she changed to an ineligible
major are legitimate payments and do not have to be repaid.
When a student has a 3.0 GPA when the fall term begins, but that
GPA at that time does not include grades from the previous term, the
institution may not have all of the information it needs to determine
whether the student is eligible for an ACG or National SMART Grant. For
the ACG for the second academic year of the student's eligible program,
the HEA requires that the student have at least a 3.0 GPA for the first
academic year of his or her eligible program. For the National SMART
Grant, the requirement is that the student have at least a 3.0 GPA for
his or her courses in the eligible program up through the most recently
completed payment period (term in this example). For either program, if
there are courses that have been taken in the previous term that are
part of the coursework for which the student must have at least a 3.0
GPA and grades for those courses are not yet available, Sec. 691.75(d)
provides that the institution may make one interim disbursement for a
payment period. However, when those grades become available, they must
be factored into the GPA. At that time, if the student does not have
the required GPA, the payment made by the institution before the
student's GPA could be calculated becomes an overpayment that must be
repaid by the institution. These provisions would apply, as well, to
any applicable coursework for which the student initially received a
grade of incomplete.
If information about a student's transfer of credit from another
institution comes to the institution's attention late in, or after, a
term, the institution may have already made a determination of
eligibility that did not consider that information. If that information
affects a student's GPA or academic year level and thus could affect
the student's eligibility for an ACG or National SMART Grant, the
institution must factor it into its determination of the student's
eligibility and take appropriate action.
Regarding erroneous determinations by an institution that, for a
particular payment period, an otherwise eligible student did not have
the required GPA or had not declared an eligible major, if such a
student in fact had satisfied those requirements during that payment
period, that student would be eligible for a payment of the applicable
grant regardless of whether the institution discovered its mistake
before or after the completion of that payment period.
Section 691.78 Method of Disbursement--By Check or Credit to a
Student's Account
Comments: Several commenters noted that Sec. 691.78(b), which
addresses the return of funds paid to a student who leaves the
institution before the first day of classes, seems duplicative of Sec.
668.21. In addition, the commenters also found references to award year
in Sec. 691.78(c) confusing, as ACG and National SMART Grant awards
are determined on an academic year basis.
Discussion: The Secretary agrees that Sec. 691.78(b) is redundant.
The use of the term ``award year'' in Sec. 691.78(c) is appropriate
even though a particular student's eligibility is determined based on
the student's completion of an academic year not an award year. Funds
for the ACG and National SMART Grant are appropriated for an award
year, which is separate and distinct from the eligibility
determination. The language in Sec. 691.78(c) addresses what actions
must occur when delivering funds to a student during an award year.
Changes: The Secretary has removed Sec. 691.78(b) and made a
conforming change by removing the provision from Sec. 690.78 of the
Federal Pell Grant Program regulations.
Section 691.80 Redeterminations of Eligibility for a Grant Award
Comments: One commenter asked the Secretary to clarify how ACG and
National SMART Grant funds should be handled if a student receives the
funds prior to dropping to a less than full-time enrollment status.
Specifically, the commenter wanted to know whether the institution must
remove the funds from the student's account, or prorate the funds as an
institution would be required to do with Federal Pell Grant funds.
Discussion: According to Sec. 691.80(b), when there is a change in
the student's enrollment status, the institution's policy for
recalculating awards takes effect. For example, an institution's policy
may establish a recalculation date at the end of its drop-add period
(also known as a census date) by which the student's enrollment status
for the term will be finalized. The enrollment status is, thus, defined
as the number of credit hours the student is enrolled in at the census
date. Under such a policy, if a student was enrolled full-time at the
beginning of the term but, by the census date, the student had dropped
to half-time enrollment status, the institution must use the half-time
enrollment status to determine eligibility for the ACG or National
SMART Grant. Because the HEA requires full-time enrollment, the student
in this example would not be eligible for the ACG or National SMART
Grant for that term, and any ACG or National SMART Grant funds
disbursed for that term would have to be repaid by the student. On the
other hand, if the student dropped below full-time enrollment after the
recalculation date, his or her ACG or National SMART Grant award would
be based upon full-time enrollment.
Situations in which information is received after a determination
of eligibility has been made are governed by Sec. 668.16(f), which
states that an institution must identify and resolve discrepancies that
arise from the institution's receipt of any information that has
bearing on a student's eligibility for funds under the title IV, HEA
programs. If that information affects the amounts and or types of title
IV aid the student is receiving or may be eligible to receive, the
institution must take appropriate actions.
Changes: None.
[[Page 64416]]
Section 691.83 Submission of Reports
Comments: Several commenters asked the Secretary to clarify whether
the Secretary intends to include the academic year level of a grant in
the payment data submitted by institutions. The commenters noted that,
without this information in the National Student Loan Data System
(NSLDS), an institution would not know whether a transfer student had
already received grant funds at a given award level, as the grant level
will not always be apparent from the award (for example, if the grant
amount has been reduced to avoid an overaward).
Discussion: In addition to data similar to what is submitted to the
Secretary through the Common Origination and Disbursement (COD) system,
institutions will also provide the academic year for the award for both
the ACG and National SMART Grant programs. This information will be
available to institution through the NSLDS, which will reflect the
academic year completed by the student.
Institutions will also provide information on the rigorous
secondary school program of study that was used to confirm eligibility
for an ACG and the student's academic major (using CIP codes) for a
National SMART Grant. Specifications for this COD reporting has been
posted to the Department's Information for Financial Aid Professionals
Web site.
Changes: None.
Executive Order 12866
Regulatory Impact Analysis
Under Executive Order 12866, the Secretary must determine whether
this regulatory action is ``significant'' and therefore subject to the
requirements of the Executive Order and subject to review by the OMB.
Under section 3(f) of Executive Order 12866, the order defines a
``significant regulatory action'' as an action that is likely to result
in a rule (1) having an annual effect on the economy of $100 million or
more, or adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or State, local or tribal governments or communities (also
referred to as ``economically significant''); (2) creating serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order.
Pursuant to the terms of the Executive Order, it has been
determined that this regulatory action will have an annual effect on
the economy of more than $100 million. Therefore, this action is
``economically significant'' and subject to OMB review under section
3(f)(4) of Executive Order 12866. The Secretary accordingly has
assessed the potential costs and benefits of this regulatory action and
has determined that the benefits justify the costs.
Need for Federal Regulatory Action
As noted above, these final regulations are needed to implement two
programs created in the HERA. The ACG program provides need-based
grants to encourage students to complete rigorous secondary school
programs of study. The National SMART Grant Program provides need-based
grants to encourage students to major in certain scientific and
technical fields or foreign languages deemed vital to national
security. Section 401A(c)(3)(B)(ii) and (3)(C)(ii) of the HEA
specifically requires the Secretary of Education to issue regulations
implementing these programs.
The Secretary had limited discretion in implementing these grant
programs; the number of recipients and aid awarded is largely driven by
statutory eligibility requirements such as that students be eligible to
receive a Federal Pell Grant, be United States citizens, attend two-or
four-year degree-granting institutions on a full-time basis, and, in
some cases, maintain a 3.0 GPA. The Secretary has exercised discretion
in the areas of program eligibility relating to the definition of a
rigorous secondary school program of study in the case of the ACG
Program and, for the National SMART Grant Program, the definition of
qualifying fields of study. In both these cases, the Secretary has
regulated to reflect clear congressional intent.
Benefits
By facilitating the implementation of these new programs, these
final regulations will support the provision of over $4 billion in
need-based student aid over the next five years. The ACG Program will
benefit society by providing an incentive for students to complete a
rigorous secondary school program of study, which research indicates
increases the likelihood of successful completion of postsecondary
education. The National SMART Grant Program will encourage students to
major in technical fields or critical foreign languages. In the case of
technical fields, these majors will benefit both national and
individual competitiveness, increasing the nation's economic security.
With respect to foreign languages, increases in the number of fluent
speakers of Arabic, Farsi, Uzbek, and other critical languages would
broaden understanding of important cultures and contribute
significantly to ongoing efforts to combat international terrorism. In
addition, awards under both programs serve to reduce a student's net
cost of education. Research indicates that reduction in a student's
cost of education correlates with increased student persistence and
degree attainment. Data consistently show that postsecondary degree
holders have substantially higher lifetime earnings than high school
graduates.
Costs
These programs are supported with $4.5 billion in mandatory
appropriations: $790 million for fiscal year 2006, $850 million for
fiscal year 2007, $920 million for fiscal year 2008, $960 million for
2009, and $1,010 million for 2010. Funds not expended in one year may
be carried forward to support awards in the subsequent year. If the
estimated number of recipients exceeds the available funding for a
given fiscal year, award levels would be ratably reduced.
Table 1.--Estimated Program Participation
----------------------------------------------------------------------------------------------------------------
Total amount
Estimated Estimated avg. of aid awarded
number of award (expected) (in
recipients millions)
----------------------------------------------------------------------------------------------------------------
Award Year 2006-2007:
AC Grants--1st year......................................... 310,000 $657 $200
AC Grants--2nd year......................................... 110,000 1,245 140
National SMART Grants--3rd year............................. 40,000 3,718 150
[[Page 64417]]
National SMART Grants--4th year............................. 40,000 3,875 160
Award Year 2007-2008:
AC Grants--1st year......................................... 330,000 682 230
AC Grants--2nd year......................................... 130,000 1,255 160
National SMART Grants-- 3rd year............................ 40,000 3,718 150
National SMART Grants--4th year............................. 40,000 3,875 160
----------------------------------------------------------------------------------------------------------------
The average awards displayed in Table 1 are less than the statutory
maximum awards due to the cost of attendance limit on ACG and National
SMART Grant awards. In addition, average awards also reflect students
who are eligible for an ACG or National SMART Grant for less than the
full award year. Figures in Table 1 may not add due to rounding.
Because these programs are title IV, HEA programs and eligibility
for these programs is linked to Federal Pell Grant eligibility,
participating institutions must already meet Federal student aid
institutional eligibility requirements. In addition, the delivery
system and many program operational requirements for the new programs
are patterned after those that institutions are already using for
Federal Pell Grants. Accordingly, institutions wishing to participate
in the new programs have already absorbed most of the administrative
costs related to implementing these final regulations. Marginal costs
over this baseline are primarily related to initial, and ongoing
eligibility determinations are minimal. Most data needed to make these
determinations, such as student citizenship, full-time status, major,
and GPA, are generally already available to institutions.
In response to the public comment on the interim final regulations,
the Department has made changes in these final regulations. The only
significant change with economic impact is to permit students to
receive an ACG or National SMART Grant for a payment period during
which they are not receiving a Federal Pell Grant. This change will
enable 32,000 more students to receive grants in 2006. It will also
increase the cost of the programs by $27 million in 2006 and by $145
million between 2006-2010. The Secretary requested comments on the
regulatory impact analysis in the interim final regulations, but
received none.
Assumptions, Limitations, and Data Sources
Because these final regulations largely restate statutory
requirements that would be self-implementing in the absence of
regulatory action, cost estimates provided above reflect a prestatutory
baseline in which the ACG and National SMART Grant programs do not
exist. Given the limited data available, estimates for 2007-2008 do not
assume program benefits will induce increased student participation.
Costs have been quantified for only two years because the Secretary
plans to revise these final regulations through negotiated rule-making,
after which more comprehensive cost analyses for subsequent years will
be developed.
In developing these estimates, data from the 2004 National
Postsecondary Student Aid Survey was used to derive the percentage of
students meeting initial eligibility requirements for ACG and National
SMART Grant awards, including enrollment status, Federal Pell Grant
eligibility, citizenship, academic major, and GPA. The 1994 National
Education Longitudinal Study, 1996 Beginning Postsecondary Student
Survey, and 2000 National Assessment of Educational Progress High
School Transcript Study were used to derive the percentage of students
otherwise eligible for an ACG who had successfully completed a rigorous
secondary school program of study. All these studies were conducted by
the National Center for Education Statistics.
Regulatory Alternatives Considered
In defining eligibility requirements, particularly those related to
rigorous secondary school programs of study, these final regulations
strike a balance between complete State discretion, which could create
confusion and regional inequalities and result in overly generous
criteria that dramatically reduce award levels, and an overly
prescriptive national determination that would significantly alter the
traditional State role in determining secondary school curricula.
More specifically, in considering the definition of a rigorous
secondary school program of study, the Secretary considered a variety
of combinations of coursework and other possible measures. For example,
at the time of the release of the President's fiscal year 2007 budget,
preliminary estimates assumed a rigorous program of study would consist
of four English, three social science, three science, three
mathematics, and two foreign language courses. Under this scenario, an
estimated 439,000 students would receive $400 million in ACG awards in
2006-2007--compared with $340 million to 420,000 students under these
final regulations. In subsequently considering the recognition of
rigorous secondary school programs, the Secretary determined it would
be more appropriate to include as one option secondary school programs
of study with specific coursework requirements, such as, for
mathematics, algebra I and a higher level course such as algebra II,
geometry, or data analysis and statistics, and for science, at least
two years with one year each of biology, chemistry or physics, as well
as an advanced or honors program. In addition, the Secretary included
students who complete secondary school programs and receive specified
scores on the Advanced Placement or International Baccalaureate
examinations. The latter provisions offer additional flexibility to
individual students attending private or home schools.
This approach is consistent with the programs' statutory purpose of
creating incentives for certain student behaviors. To achieve this
purpose, the grant level must be large enough to provide a meaningful
incentive, yet at the same time, program flexibility must be sufficient
to allow States and participating institution to recognize broad
differences in secondary school and higher education academic
structures.
Elsewhere in this SUPPLEMENTARY INFORMATION section we identify and
explain burdens specifically associated
[[Page 64418]]
with information collection requirements. See the heading Paperwork
Reduction Act of 1995.
Accounting Statement
As required by OMB Circular A-4 (available at http:www.Whitehouse.gov/omb/Circulars/a004/a-4.pdf
), in Table 2 below, we
have prepared an accounting statement showing the classification of the
expenditures associated with the provisions of these final regulations.
This table provides our best estimate of the increase in Federal
student aid payments as a result of these final regulations. All
expenditures are classified as transfers to postsecondary students.
Table 2.--Accounting Statement: Classification of Estimated Expenditures
[in millions]
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............ $694.
From Whom To Whom? Federal Government To
Postsecondary Students.
------------------------------------------------------------------------
Paperwork Reduction Act of 1995
We received no comments on the Paperwork Reduction Act portion of
the interim final rule.
OMB has approved the information collection requests identified in
the interim final regulations and has assigned the following numbers to
the collection of information in these final regulations: 1845-0001,
1845-0039, 1845-0078.
Intergovernmental Review
This program is subject to Executive Order 12372 and the
regulations in 34 CFR part 79. One of the objectives of the Executive
order is to foster an intergovernmental partnership and a strengthened
federalism. The Executive order relies on processes developed by State
and local governments for coordination and review of proposed Federal
financial assistance.
This document provides early notification of our specific plans and
actions for this program.
Assessment of Educational Impact
Based on our own review, we have determined that these final
regulations do not require transmission of information that any other
agency or authority of the United States gathers or makes available.
Electronic Access to This Document
You may view this document, as well as all other Department of
Education documents published in the Federal Register, in text or Adobe
Portable Document Format (PDF) on the Internet at the following site:
http://www.ed.gov/news/Fedregister.
To use PDF you must have Adobe Acrobat Reader, which is available
free at this site. If you have questions about using PDF, call the U.S.
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in
the Washington, DC, area at (202) 512-1530.
Note: The official version of this document is the document
published in the Federal Register. Free Internet access to the
official edition of the Federal Register and the Code of Federal
Regulations is available on GPO Access at: http://www.gpoaccess.gov/[fxsp0
]nara/[fxsp0]index.html.
(Catalog of Federal Domestic Assistance Numbers: 84.375 Academic
Competitiveness Grants; 84.376 National SMART Grants)
List of Subjects in 34 CFR Parts 668, 690, and 691
Colleges and universities, Elementary and secondary education,
Grant programs--education, Student aid.
Dated: October 25, 2006.
Margaret Spellings,
Secretary of Education.
0
For the reasons discussed in the preamble, the Secretary amends parts
668, 690, and 691 of title 34 of the Code of Federal Regulations as
follows:
PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS
0
1. The authority citation for part 668 continues to read as follows:
Authority: 20 U.S.C. 1001, 1002, 1003, 1085, 1088, 1091, 1092,
1094, 1099c, and 1099c-1, unless otherwise noted.
Sec. 668.2 [Amended]
0
2. Section 668.2 is amended in paragraph (b) in the definition of
``Valid institutional student information report'' by removing the word
``report'' and adding in its place the word ``record'' each place it
appears.
Sec. 668.51 [Amended]
0
3. Section 668.51 is amended in paragraph (a) by adding the words
``ACG, National SMART Grant,'' immediately after the words ``Federal
Pell Grant,''.
0
4. Section 668.52 is amended by:
0
A. Revising the definition of ``Institutional student information
report''.
0
B. Revising the definition of ``Student aid application.''
The revisions read as follows:
Sec. 668.52 Definitions.
* * * * *
Institutional student information record as defined in 34 CFR 690.2
and 691.2 for purposes of the Federal Pell Grant, ACG, National SMART
Grant, Federal Perkins Loan, FWS, FSEOG, Federal Stafford Loan, and
William D. Ford Federal Direct Loan programs.
Student aid application means an application approved by the
Secretary and submitted by a person to have his or her EFC determined
under the Federal Pell Grant, ACG, National SMART Grant, Federal
Perkins Loan, FWS, FSEOG, Federal Stafford Loan, or William D. Ford
Federal Direct Loan programs.
* * * * *
Sec. 668.54 [Amended]
0
5. Section 668.54 is amended in paragraph (a)(2)(i) by adding the words
``ACG, National SMART Grant,'' immediately after the words ``Federal
Pell Grant,''.
Sec. 668.55 [Amended]
0
6. Section 668.55 is amended by:
0
A. In the introductory text to paragraph (c), adding the words ``ACG,
National SMART Grant,'' immediately after the words ``Federal Pell
Grant,''.
0
B. In paragraph (c)(1), adding the words ``, ACG, National SMART
Grant,'' immediately after the words ``Federal Pell Grant''.
0
C. In paragraph (c)(2), adding the words ``, ACG, National SMART
Grant,'' immediately after the words ``Federal Pell Grant''; and by
removing the punctuation ``,'' after the word ``campus-based''.
Sec. 668.58 [Amended]
0
7. Section 668.58 is amended by:
0
A. In paragraph (a)(1)(i), adding the words ``, ACG, National SMART
Grant,'' immediately after the words ``Federal Pell Grant''.
0
B. In paragraph (a)(2)(i), adding the words ``ACG, National SMART
Grant, or'' immediately after the words ``Federal Pell Grant,''.
0
C. In paragraph (a)(2)(ii)(A), adding the words ``ACG, National SMART
Grant,'' immediately after the words ``Federal Pell Grant,''.
Sec. 668.59 [Amended]
0
8. Section 668.59 is amended by:
0
A. In the introductory text to paragraph (a), removing the words
``Federal Pell Grant Program'' and adding, in their place, the words
``Federal Pell Grant, ACG, and National SMART Grant programs''.
[[Page 64419]]
0
B. In paragraph (a)(1)(i), adding the words ``, ACG, or National SMART
Grant'' immediately after the words ``Federal Pell Grant''.
0
C. In paragraph (a)(2) introductory text, adding the words ``, ACG, or
National SMART Grant'' immediately after the words ``Federal Pell
Grant''.
0
D. In the introductory text to paragraph (b), removing the words
``Federal Pell Grant Program'' and adding, in their place, the words
``Federal Pell Grant, ACG, and National SMART Grant programs''.
0
E. In paragraph (b)(1), adding the words ``, ACG, or National SMART
Grant'' immediately after the words ``Federal Pell Grant''.
0
F. In paragraph (b)(2)(i)(B), adding the words ``, ACG, or National
SMART Grant'' immediately after the words ``Federal Pell Grant''.
0
G. In paragraph (b)(2)(ii)(A), adding the words ``, ACG, or National
SMART Grant'' immediately after the words ``Federal Pell Grant''.
Sec. 668.60 [Amended]
0
9. Section 668.60 is amended by:
0
A. In the introductory text to paragraph (c), removing the words
``Federal Pell Grant Program'' and adding, in their place, the words
``Federal Pell Grant, ACG, and National SMART Grant programs''.
0
B. In paragraph (c)(1), adding the words ``and 691.61'' immediately
after the regulatory citation ``690.61''.
0
C. In paragraph (c)(2)(i), adding the words ``, ACG, or National SMART
Grant'' immediately after the words ``Federal Pell Grant''.
0
D. In paragraph (c)(2)(ii), adding the words ``, ACG, or National SMART
Grant'' immediately after the words ``Federal Pell Grant''.
0
E. In paragraph (d) by adding the words ``ACG, or National SMART Grant
program assistance,'' immediately after the words ``Federal Pell
Grant,''.
Sec. 668.61 [Amended]
0
10. Section 668.61 is amended in paragraph (a)(2)(ii)(B) by adding the
words ``ACG, National SMART Grant,'' immediately after the words
``Federal Pell Grant,''.
PART 690--FEDERAL PELL GRANT PROGRAM
0
11. The authority citation for part 690 continues to read as follows:
Authority: 20 U.S.C. 1070a, unless otherwise noted.
Sec. 690.78 [Amended]
0
12. Section 690.78 is amended by removing paragraph (b) and
redesignating paragraph (c) as paragraph (b).
PART 691--ACADEMIC COMPETITIVENESS GRANT (ACG) AND NATIONAL SCIENCE
AND MATHEMATICS ACCESS TO RETAIN TALENT GRANT (NATIONAL SMART
GRANT) PROGRAMS
0
13. The authority citation for part 691 continues to read as follows:
Authority: 20 U.S.C. 1070a-1, unless otherwise noted.
0
14. Section 691.6 is amended by revising paragraphs (a) and (b) to read
as follows:
Sec. 691.6 Duration of student eligibility--undergraduate course of
study.
(a) A student is eligible to receive up to one ACG Scheduled Award
during each of the student's first and second academic years of
enrollment over the course of the student's undergraduate education in
all eligible programs as defined in Sec. 691.2(d).
(b) A student is eligible to receive up to one National SMART Grant
Scheduled Award during each of the student's third and fourth academic
years of enrollment over the course of the student's undergraduate
education in all eligible programs as defined in Sec. 691.2(d).
* * * * *
0
15. Section 691.15 is amended by:
0
A. In paragraph (a)(2), removing the words ``for the same payment
period'' and adding, in their place, the words ``in the same award
year''.
0
B. Revising paragraph (b)(1)(ii)(B).
0
C. In paragraph (b)(1)(iii)(C), removing the words ``at least''.
0
D. In paragraph (c)(3), removing the words ``at least''.
The revision reads as follows:
Sec. 691.15 Eligibility to receive a grant.
* * * * *
(b) * * *
(1) * * *
(ii) * * *
(B) Has not previously been enrolled as a regular student in an
eligible program while enrolled in high school;
* * * * *
0
16. Section 691.16 is amended in paragraph (d)(4) by removing the words
``in the'' and adding, in their place, the words ``from an''.
Sec. 691.62 [Amended]
0
17. Section 691.62 is amended in paragraph (c) by removing the
regulatory citations ``, 682.200(b), and 685.102(b)''.
Sec. 691.65 [Amended]
0
18. Section 691.65 is amended in paragraph (a)(2) by removing the words
``for the same payment period'' and adding, in their place, the words
``in the same award year''.
Sec. 691.75 [Amended]
0
19. Section 691.75 is amended by:
0
A. In paragraph (b)(3), removing the words ``is no longer pursuing''
and adding, in their place, the words ``is not pursuing''.
0
B. In paragraph (c), removing the words ``is no longer pursuing'' and
adding, in their place, the words ``is not pursuing''.
Sec. 691.78 [Amended]
0
20. Section 691.78 is amended by removing paragraph (b) and
redesignating paragraph (c) as paragraph (b).
0
21. Section 691.80(a) is revised to read as follows:
Sec. 691.80 Redetermination of eligibility for a grant award.
(a) Change in receipt of Federal Pell Grant. If, after the
beginning of an award year, a student otherwise eligible for an ACG or
a National SMART Grant begins or ceases to receive a Federal Pell Grant
in that award year, the institution must redetermine the student's
eligibility for an ACG or a National SMART Grant in that award year.
* * * * *
[FR Doc. E6-18197 Filed 10-31-06; 8:45 am]
BILLING CODE 4000-01-P