The U.S. Department of Education will hold the third and final round of negotiated rulemaking on the ACG and SMART Grant programs from April 16-18. The Department hopes to achieve a consensus among negotiators on proposed regulatory language for the programs.

Based on the second round of negotiations, the Department has proposed additional changes to parts of the draft proposed regulatory language issued at the last negotiated rulemaking session. On other issues the Department has not made changes and indicates whether the negotiated rulemaking committee has reached a tentative agreement.

Below is a list of the issues considered during the second round. The list shows whether the Department has made further changes to the draft proposed language, and whether negotiators reached a tentative agreement. Each item also includes a link to more comprehensive information, including the Department's summary of the issue and the draft proposed language showing changes. Some of the attached files also include the official amendatory language that will appear in the upcoming Notice of Proposed Rulemaking.

Please submit comments, concerns, or observations to negreg@nasfaa.org no later than 12:00 p.m. EDT on Sunday, April 15. (We will accept later comments but cannot guarantee that negotiators will see them in time to have any impact.) We are sorry for the short turn-around time but we need to submit your comments, concerns, or observations to the NegReg participants by this Monday April 16th in advance of their meetings."

Academic Year Progression

Changes Proposed

Tentative Agreement: No

Concerns continued to be raised concerning the impact of the academic year progression on student eligibility and on the difficulties for institutions administering the grant programs. Negotiators continued to favor multiple options for institutions to determine the weeks of instructional time completed by a student. However, they objected to the restriction that an institution must not consider weeks of instructional time based on credits accepted towards the student's eligible program that the student earns from Advance Placement programs, International Baccalaureate programs, testing out, life experience, or other similarly earned credits or credits earned while not enrolled as a regular student in an ACG or National SMART Grant eligible program. These credits are earned while not enrolled in an ACG or National SMART Grant eligible program and therefore do not have weeks of instructional time in an ACG or National SMART Grant eligible program associated with them.

Negotiators also favored allowing a school to choose, on a student-by-student basis, which options it would use to establish student's weeks of instructional time instead of requiring that one of these options or an exact determination be used for all students enrolled in an eligible program.

Click here for the Department's summary of the issue and the draft proposed rule language.

Rigorous Secondary School Programs - Recognition

Changes Proposed

Tentative Agreement: No

A discussion paper delineating three options for rigorous secondary school programs of study and two options for documenting a rigorous program was provided to the negotiators. In general, negotiators appeared to favor the current regulations. The third option under rigorous programs - aligning rigor to the coursework admission requirements of the state's most selective public university - was seen as too limiting to states, although negotiators understood that aligning rigor with higher education requirements was important. Group members favored the idea of allowing states to put forth rigorous secondary school programs of study in the future. There was also some discussion around the validity of the AP/IB option and whether other vendors should be added if this option was retained.

For documentation of rigorous programs in relation to data flow of eligible students in the second option, there was some concern that states would be unable to provide information to Federal Student Aid in time to process awards.

Click here for the Department's summary of the issue and the draft proposed rule language.

Interpreting Prior Enrollment, Dual Enrollment, And Early College Programs

Changes Proposed

Tentative Agreement: Yes

A proposed change to narrow the scope of the disqualification provision in the statute was presented to the negotiators as discussed during the prior negotiating session.

Click here for the Department's summary of the issue and the draft proposed rule language.

Mandatory Participation

No Change

Tentative Agreement: Yes

Although there was one concern with the additional administrative burden this requirement would place on institutions with a small population of eligible students, there was overwhelming support to maintain the current requirement that an institution that participates in the federal Pell Grant Program must also participate in the ACG and National SMART Grant programs. This provision helps ensure that students with the most need receive additional Federal funding to offset the rising cost of higher education.

Click here for the Department's summary of the issue.

Eligibility Of Certificate Programs For ACG

No Change

Tentative Agreement: No

Some members of the committee wanted further consideration for students enrolled in certificate programs to qualify for this grant. One option was to only allow certificate programs that lead to an associate's degree. Another option was to allow students enrolled in certificate programs that transfer into a two- or four-year degree program within the same award year to qualify. Still another option was a two-tier approach that would first award to eligible students enrolled in degree programs and any remaining funds would go to students enrolled in certificate programs.

The Department maintained that if the definition of an eligible program is modified to include certificate programs, the increase in the number of potentially eligible students could have budgetary implications. Depending upon the availability of funds in an award year, the Secretary may be required to ratably reduce the ACG or National SMART Grant Scheduled Awards to ensure that all students who are eligible receive a grant.

Click here for the Department's summary of the issue.

Requirement That Federal Pell Grants And ACG Or National SMART Grants Be Disbursed At The Same Institution

No Change

Tentative Agreement: Yes

Since the administration of the ACG and National SMART Grant programs is inextricably linked to the Federal Pell Grant Program, it is logical to require the same institution that administers the Federal Pell Grant Program also to administer the ACG and National SMART Grant programs in a consortium arrangement. The discussion among the negotiators supported the current regulatory language.

Click here for the Department's summary of the issue.

Grade Point Average (GPA) - Transfer Students

Changes were made to determining the GPAs of transfer students for both programs.

Tentative Agreement: No

Negotiators requested clarification regarding the GPA for transfers who are SMART-Grant eligible. Alternative wording was used to strengthen the clarification of numeric equivalent.

For ACG, the proposed changes provide that, in the case of a transfer student who has completed the first academic year upon transfer, the GPA to qualify for a second-year ACG is the cumulative GPA at the end of the first academic year calculated using the grades from coursework accepted by the current institution from all prior postsecondary institutions. For the transfer student who has not completed the first academic year upon transfer, the GPA is the combined GPA of the coursework from all prior postsecondary institutions accepted by the current school combined with the grades from coursework earned at the current school that complete the first academic year.

For National SMART Grants, the structure of the regulatory language was changed for clarity, and the section regarding a student who transfers with no credits accepted was deleted as it was not applicable to SMART Grant eligible students and should have been deleted previously. For consistency and clarity, the phrase "into the eligible program" was added.

Click here for the Department's summary of the issue and the draft proposed rule language.

GPA - Coursework

No Change

Tentative Agreement: Yes

The GPA associated with eligible coursework is intended to cover any ACG-eligible program coursework for the ACG program and any coursework applicable to an eligible program leading to a degree in a SMART-eligible major for the National SMART Grant program. The community generally agreed that there was appropriate understanding of what coursework was applicable when determining eligibility for each of the programs.

Click here for the Department's summary of the issue.

GPA - Timing Of Calculation

Change Proposed

Tentative Agreement: No

A change was made to strengthen the clarification of "numeric equivalent." The community expressed concern about the differences in timing of GPA calculations between the two programs and the strict term-by-term review of cumulative GPA for the National SMART Grants. In addition, clarification was requested for what was meant by "or the equivalent" when discussing a GPA of at least 3.0 or higher on a 4.0 scale.

Click here for the Department's summary of the issue and the draft proposed rule language.

GPA - Eligibility For Disbursement

No Change

Tentative Agreement: Yes

The community agreed that the existing regulatory language provided appropriate flexibility for changes in GPA within a payment period.

Click here for the Department's summary of the issue.

Eligible Majors And CIP Codes Expansion

No Change

Tentative Agreement: Yes

Draft regulations in context were presented to the negotiators. There were no further concerns from the negotiators.

Click here for the Department's summary of the issue and the draft proposed rule language and the draft Federal Register instructions for amendatory language.

Institutional Flexibility In Determining Timing Of Student Declaration Of Eligible Major

No Change

Tentative Agreement: Yes

The Department provided a transparent procedure to validate student intent to declare an eligible major. Validation of student intent is determined to consist of two components: a written declaration of intent provided by the student; and written documentation of institutional monitoring of student coursework progression in the student's intended eligible major. The two components together document student intent to declare an eligible major.

Click here for the Department's summary of the issue and the draft proposed rule language and the draft Federal Register instructions for amendatory language.

Completion Of A Rigorous Secondary School Program Of Study

Changes Proposed

Tentative Agreement: No

One negotiator wanted the regulations to indicate that home-schooled students could also obtain a high school diploma as proof that he/she completed a secondary school education. Another negotiator felt that the Department did not clarify in the regulations what is meant by successfully completed a rigorous secondary school program of study but confused matters more by adding a graduating requirement. Negotiator felt that a tentative agreement on clarifying what successful completion of a rigorous secondary school program of study could not be reached because it was too closely tied to changes being made relating to who defines rigor and that both issues must be reviewed simultaneously.

Click here for the Department's summary of the issue and the draft proposed rule language.

Departmental Monitoring Of Student Disbursements

No Change

Tentative Agreement: Not Applicable

Federal Student Aid (FSA) is interested in using departmental monitoring of students to help identify systems changes that may be needed to assist schools in administering the ACG and National SMART Grant Programs. Beginning with the 2007-08 processing year, FSA has instituted some systems changes to help institutions track ACG/SMART eligibility. New definitions have been added to the National Student Loan Data System (NSLDS) to ensure that the system will not edit on the grade level discrepancy that could occur in a student's record between loans and ACG/SMART grants. As part of its systems development, FSA is researching whether ACG and SMART disbursements will be included on all future Pell Multiple Reporting Records (MRRs). Also, FSA is evaluating adding comment codes regarding a student's remaining eligibility for an ACG or National SMART Grant for the 2008-09 application processing year as well as whether to add a COD data element to indicate what percentage of remaining eligibility a student has for an academic level. Currently, FSA does not plan to track ACG/SMART denial reasons and will therefore not require schools to submit this information.

Click here for the Department's summary of the issue.

Posted 04/13/07 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.