Part 668: General Provisions
This edition of the Compiled Title IV Regulations includes changes in effect beginning with the 2024-25 award year. Changes that became effective on July 1, 2023 are shown in red (added text) or black strikeout (deleted text). Changes that became effective on July 1, 2024, are shown in blue (added text) or blue strikeout (deleted text). Changes with multiple effective dates are shown in purple (multiple effective dates text).
View the Compiled Title IV Regulations Table of Contents.
Since published as a compilation through December 1994, the following amendments have been incorporated into part 668:
- Corrections of 6/30/95
- Equity in Athletics amendments of 11/29/95, except for appendices
- Ability to benefit (Subpart J) regulations of December 1, 1995
- Default reduction amendments of 12/1/95
- Regulatory relief amendments of 12/1/95
- Student Right-to-Know amendments of 12/1/95
- Technical corrections of 2/1/96
- Technical corrections of 6/12/96
- Technical amendments of 9/17/96
- Common provisions amendments of 11/27/96
- GEPA records amendments of 11/27/96
- EASI amendments of 11/29/96
- Improved oversight amendments of 11/29/96
- Financial oversight amendments of 11/25/97
- Technical amendments of 7/28/98
- Technical amendments of 7/29/98
- Amendments of 10/22/98
- Reauthorization amendments of 10/22/99
- Reauthorization amendments of 10/28/99
- Reauthorization amendments of 10/29/99
- Consumerism amendments of 11/1/99
- Default rate amendments of 11/1/99
- Return of funds amendments of 11/1/99
- Technical amendments of 6/22/00
- Default reduction amendments of 11/1/00
- Streamlining revisions of 11/1/00
- Adjustment of Civil Monetary Penalties for Inflation; Final Rule, 11/18/02
- Sex Crimes Prevention Act amendment of 10/31/02
- Burden reduction revisions of 11/1/02
- Technical corrections of 3/16/04
- ACG/SMART Grant interim final regulations of 7/3/06
- HERA amendments of 8/9/06
- HERA amendments of 11/1/06
- ACG/SMART revisions of 11/1/06
- Revisions of 11/1/07
- TEACH revisions of 6/23/08
- ACG/SMART interim final rules of 5/1/09
- HEOA amendments of 10/28/09
- HEOA amendments of 10/29/09
- Program Integrity revisions of 10/29/10 and Technical Corrections of 4/13/11
- Foreign Institutions—Federal Student Aid Programs revisions of 11/1/10
- Program Integrity technical amendments of 9/20/13
- Amendments of 11/1/13
- Amendments to implement changes made to the Clery Act by the VAWA of 2013; Final Rule of 10/20/14
- Program Integrity: Gainful Employment; Final Rule of 10/31/14
- Program Integrity: Gainful Employment; Technical Corrections of 12/4/14
- Student Assistance General Provisions, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program; Final Rule of 10/30/15
- Student Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education Loan Program, William D. Ford Federal Direct Loan Program, and Teacher Education Assistance for College and Higher Education Grant Program; Final Rule of 11/1/16
- Program Integrity and Improvement; Final Rule of 12/19/16
- Student Assistance General Provisions; Final Rule of 1/19/17
- Student Assistance General Provisions, Federal Perkins Loan Program, William D. Ford Federal Direct Loan Program, and Teacher Education Assistance for College and Higher Education Grant Program; Final Rule of 6/16/17
- Adjustment of Civil Monetary Penalties for Inflation; Final Rule; 1/16/18
- Student Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education Loan Program, William D. Ford Federal Direct Loan Program, and Teacher Education Assistance for College and Higher Education Grant Program; Final Rule of 2/14/18
- Program Integrity and Improvement; Final Rule of 7/3/18
- Adjustment of Civil Monetary Penalties for Inflation; Final Rule; 2/1/19
- Student Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education Loan Program, William D. Ford Federal Direct Loan Program, and Teacher Education Assistance for College and Higher Education Grant Program, Final Rule of 3/19/19
- Program Integrity: Gainful Employment, Final Rule of 7/1/19
- Student Assistance General Provisions, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program, Final Rule of 9/23/19
- Student Assistance General Provisions, The Secretary's Recognition of Accrediting Agencies, The Secretary's Recognition Procedures for State Agencies, Final Rule of 11/1/19
- Adjustment of Civil Monetary Penalties for Inflation; Final Rule; 1/14/20
- Eligibility of Students at Institutions of Higher Education for Funds Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Interim Final Rule of 6/17/20
- Distance Education and Innovation, Final Rule of 9/2/20
- Adjustment of Civil Monetary Penalties for Inflation; Final Rule; 2/3/21
- Eligibility To Receive Emergency Financial Aid Grants to Students Under the Higher Education Emergency Relief Programs, Final Rule of 5/14/21
- Adjustment of Civil Monetary Penalties for Inflation; Final Rule; 4/20/22
- Program, and William D. Ford Federal Direct Loan Program; Student Assistance General Provisions, The Secretary's Recognition of Accrediting Agencies, The Secretary's Recognition Procedures for State Agencies; Distance Education and Innovation; Corrections, Final Rule of 10/20/22
- Pell Grants for Prison Education Programs; Determining the Amount of Federal Education Assistance Funds Received by Institutions of Higher Education (90/10); Change in Ownership and Change in Control, Final Rule of 10/28/22
- Institutional Eligibility Under the Higher Education Act of 1965, as Amended; Student Assistance General Provisions; Federal Perkins Loan Program; Federal Family Education Loan Program; and William D. Ford Federal Direct Loan Program, Final Rule of 11/1/22
- Pell Grants for Prison Education Programs; Determining the Amount of Federal Education Assistance Funds Received by Institutions of Higher Education (90/10); Change in Ownership and Change in Control, Correction of 11/17/22
- Adjustment of Civil Monetary Penalties for Inflation; Final Rule of 1/30/23
- Pell Grants for Prison Education Programs; Determining the Amount of Federal Education Assistance Funds Received by Institutions of Higher Education (90/10); Change in Ownership and Change in Control, Final Rule; Correction, 3/28/23
- Financial Value Transparency and Gainful Employment, Final Rule of 10/10/23
- Financial Responsibility, Administrative Capability, Certification Procedures, Ability To Benefit (ATB), Final Rule of 10/31/23
Subpart A—General
668.5 Written arrangements to provide educational programs.
668.6 [Removed and Reserved]
668.7 [Removed and Reserved]
668.8 Eligible program.
668.10 Direct assessment programs.
Subpart B—Standards for Participation in Title IV, HEA Programs
668.11 Severability Scope.
668.12 Scope [Removed and reserved.]
668.13 Certification procedures.
668.14 Program participation agreement.
668.15 [Removed and reserved] Factors of financial responsibility.
668.16 Standards of administrative capability.
668.17 [Removed and Reserved]
668.18 Readmission requirements for servicemembers.
668.20 Limitations on remedial coursework that is eligible for Title IV, HEA program assistance.
668.22 Treatment of title IV funds when a student withdraws.
668.23 Compliance audits and audited financial statements.
668.24 Record retention and examinations.
668.25 Contracts between an institution and a third-party servicer.
668.26 End of an institution's participation in the Title IV, HEA programs.
668.27 Waiver of annual audit submission requirement.
668.28 Non-title IV revenue (90/10).
Appendix C to Subpart B of Part 668—90/10 Revenue Calculation
Subpart C—Student Eligibility
668.32 Student eligibility—general.
668.33 Citizenship and residency requirements.
668.34 Satisfactory academic progress.
668.35 Student debts under the HEA and to the U.S.
668.36 Social security number.
668.37 Selective Service registration.
668.38 Enrollment in telecommunications and correspondence courses.
668.40 Conviction for possession or sale of illegal drugs.
Subpart D—Student Consumer Information Services
668.41 Reporting and disclosure of information.
668.42 Financial assistance information.
668.43 Institutional information.
668.44 Availability of employees for information dissemination purposes.
668.45 Information on completion or graduation rates.
668.46 Institutional security policies and crime statistics.
668.47 Report on athletic program participation rates and financial support data.
668.48 Report on completion or graduation rates for student-athletes.
668.49 Institutional fire safety policies and fire statistics.
668.50 Institutional disclosures for distance or correspondence programs.
Subpart E—Verification and Updating of Student Aid Application Information
668.53 Policies and procedures.
668.54 Selection of an applicant's FAFSA information for verification.
668.56 Information to be verified.
668.57 Acceptable documentation.
668.59 Consequences of a change in an applicant's FAFSA information.
668.61 Recovery of funds from interim disbursements.
Subpart F—Misrepresentation
668.71 Scope and special definitions.
668.72 Nature of educational program.
668.73 Nature of financial charges.
668.74 Employability of graduates.
668.75 Omnission of fact. [Removed]
668.79 Severability.
Subpart G—Fine, Limitation, Suspension and Termination Proceedings
668.81 Scope of special definitions.
668.84 Fine proceedings.
668.85 Suspension proceedings.
668.86 Limitation or termination proceedings.
668.87 [Removed and Reserved] Borrower defense and recovery proceedings
668.89 Hearing.
668.90 Authority and responsibilities of the hearing official.
668.91 Initial and final decisions.
668.92 Filing of requests for hearings and appeals; confirmation of mailing and receipt dates.
668.96 Reimbursements, refunds and offsets.
668.97 Reinstatement after termination.
668.99 Interlocutory appeals to the Secretary from rulings of a hearing official.
668.100 Severability.
Subpart H—Appeal Procedures for Audit Determinations and Program Review Determinations
668.114 Notification of hearing.
668.115 Prehearing conference.
668.117 Authority and responsibilities of the hearing official.
668.118 Decision of the hearing official.
668.119 Appeal to the Secretary.
668.120 Decision of the Secretary.
668.121 Final decision of the Department.
668.122 Determination of filing, receipt, and submission dates.
668.124 Interlocutory appeals to the Secretary from rulings of a hearing official.
668.125 Proceedings to recover liabilities owned relating to approved borrower defenser claims.
Subpart I—Immigration-Status Confirmation
668.132 Institutional determinations of eligibility based on primary confirmation.
668.135 Institutional procedures for completing secondary confirmation.
668.139 Recovery of payments and loan disbursements to ineligible students.
Subpart J—Approval of Independently Administered Tests; Specification of Passing Score; Approval of State Process
668.143 [Reserved]
668.144 Application for test approval.
668.145 Test approval procedures.
668.146 Criteria for approving tests.
668.148 Additional criteria for the approval of certain tests.
668.150 Agreement between the Secretary and a test publisher or a State.
668.151 Administration of tests.
668.152 Administration of tests by assessment centers.
668.154 Institutional accountability.
668.155 [Reserved]
668.156 Approved State process.
668.157 Eligible career pathway program.
Subpart K—Cash Management
668.161 Scope and institutional responsibility.
668.163 Maintaining and accounting for funds.
668.165 Notices and authorizations.
Subpart L—Financial Responsibility
668.171 General.
668.172 Financial ratios.
668.173 Refund reserve standards.
668.175 Alternative standards and requirements.
Appendix A to Subpart L of Part 668—Ratio Methodology for Proprietary Institutions
Appendix B to Subpart L of Part 668—Ratio Methodology for Private Non-Profit Institutions
Subpart M—Two Year Cohort Default Rates
668.181 Purpose of this subpart.
668.182 Definitions of terms used in this subpart.
668.183 Calculating and applying cohort default rates.
668.184 Determining cohort default rates for institutions that have undergone a change in status.
668.186 Notice of your official cohort default rate.
668.188 Preventing evasion of the consequences of cohort default rates.
668.190 Uncorrected data adjustments.
668.192 Erroneous data appeals.
668.193 Loan servicing appeals.
668.194 Economically disadvantaged appeals.
668.195 Participation rate index appeals.
668.196 Average rates appeals.
668.197 Thirty-or-fewer borrowers appeals.
Appendix A to Subpart M of Part 668—Removed
Appendix B to Subpart M of Part 668—Removed
Subpart N—Cohort Default Rate
668.200 Purpose of this subpart.
668.201 Definitions of terms used in this subpart.
668.202 Calculating and applying cohort default rates.
668.203 Determining cohort default rates for institutions that have undergone a change in status.
668.205 Notice of your official cohort default rate.
668.207 Preventing evasion of the consequences of cohort default rates.
668.209 Uncorrected data adjustments.
668.211 Erroneous data appeals.
668.212 Loan servicing appeals.
668.213 Economically disadvantaged appeals.
668.214 Participation rate index appeals.
668.215 Average rates appeals.
668.216 Thirty-or-fewer borrowers appeals.
668.217 Default prevention plans.
Appendix A to Subpart N of Part 668—Sample Default Prevention Plan
Subpart O—Financial Assistance for Students With Intellectual Disabilities
Subpart P—Prison Education Programs[Added and Reserved]
668.234 Scope and purpose.
668.235 Definitions.
668.236 Eligible prison education program.
668.237 Accreditation requirements.
668.238 Application requirements.
668.239 Reporting requirements.
668.240 Limitation or termination of approval.
668.241 Best interest determination.
668.242 Transition to a prison education program.
Subpart Q—Financial Value Transparency. Removed and Reserved
668.401 Financial value transparency scope and purpose.
668.402 Financial value transparency framework.
668.403 Calculating D/E rates.
668.404 Calculating earnings premium measure.
668.405 Process for obtaining data and calculating D/E rates and earnings premium measure.
668.406 Determination of the D/E rates and earnings premium measure.
668.407 Student acknowledgments.
668.408 Reporting requirements.
668.409 Severability.
Subpart R—Aggressive and Deceptive Recruitment Tactics of Conduct Removed and Reserved
668.500 Scope and purpose.
668.501 Aggressive and deceptive recruitment tactics or conduct.
668.509 Severability.
Subpart S—Gainful Employment
668.601 Gainful employment (GE) scope and purpose.
668.602 Gainful employment criteria.
668.603 Ineligible GE programs.
668.604 Certification requirements for GE programs.
668.605 Student warnings.
668.606 Severability.
| Subpart A—General |
(a) This part establishes general rules that apply to an institution that participates in any student financial assistance program authorized by Title IV of the Higher Education Act of 1965, as amended (Title IV, HEA program). To the extent that an institution contracts with a third-party servicer to administer any aspect of the institution's participation in any Title IV, HEA program, the applicable rules in this part also apply to that servicer. An institution's use of a third-party servicer does not alter the institution's responsibility for compliance with the rules in this part.
(b) As used in this part, an "institution," unless otherwise specified, includes—
(1) An institution of higher education as defined in 34 CFR 600.4;
(2) A proprietary institution of higher education as defined in 34 CFR 600.5; and
(3) A postsecondary vocational institution as defined in 34 CFR 600.6.
(c) The Title IV, HEA programs include—
(1) The Federal Pell Grant Program (20 U.S.C. 1070a et seq.; 34 CFR part 690);
(2) The Academic Competitiveness Grant (ACG) Program (20 U.S.C. 1070a-1; 34 CFR part 691);
(3) The Federal Supplemental Educational Opportunity Grant (FSEOG) Program (20 U.S.C. 1070b et seq.; 34 CFR parts 673 and 676);
(4) The Leveraging Educational Assistance Partnership (LEAP) Program (20 U.S.C. 1070c et seq.; 34 CFR part 692);
(5) The Federal Stafford Loan Program (20 U.S.C. 1071 et seq.; 34 CFR part 682);
(6) The Federal PLUS Program (20 U.S.C. 1078-2; 34 CFR part 682);
(7) The Federal Consolidation Loan Program (20 U.S.C. 1078-3; 34 CFR part 682);
(8) The Federal Work-Study (FWS) Program (42 U.S.C. 2751 et seq.; 34 CFR parts 673 and 675);
(9) The William D. Ford Federal Direct Loan (Direct Loan) Program (20 U.S.C. 1087a et seq.; 34 CFR part 685);
(10) The Federal Perkins Loan Program (20 U.S.C. 1087aa et seq.; 34 CFR parts 673 and 674);
(11) The National Science and Mathematics Access to Retain Talent Grant (National SMART Grant) Program (20 U.S.C. 1070a-1; 34 CFR part 691); and
(12) The Teacher Education Assistance for College and Higher Education (TEACH) Grant program.
| Sec. 668.2 General definitions. |
(a) The following definitions are contained in the regulations for Institutional Eligibility under the Higher Education Act of 1965, as Amended, 34 CFR part 600:
(7) Direct assessment program.
(11) Federal Family Education Loan (FFEL) programs.
(14) Institution of higher education.
(16) Nationally recognized accrediting agency.
(18) One-year training program.
(19) Postsecondary vocational institution.
(21) Proprietary institution of higher education.
(22) Recognized equivalent of a high school diploma.
(b) The following definitions apply to all Title IV, HEA programs
Annual debt-to-earnings rate (annual D/E rate): The ratio of a program's program’s annual loan payment amount to the annual earnings of the students who completed the program, expressed as a percentage, as calculated under Sec. 668.403.
Campus-based programs: (1) The Federal Perkins Loan Program (34 CFR parts 673 and 674);
(2) The Federal Work-Study (FWS) Program (34 CFR parts 673 and 675); and
(3) The Federal Supplemental Educational Opportunity Grant (FSEOG) Program (34 CFR parts 673 and 676).
Classification of instructional program (CIP) code: A taxonomy of instructional program classifications and descriptions developed by the U.S. Department of Education’s National Center for Education Statistics (NCES). Specific programs offered by institutions are classified using a six-digit CIP code.
Cohort period: The set of award years used to identify a cohort of students who completed a program and whose debt and earnings outcomes are used to calculate debt-to-earnings rates and the earnings premium measure under subpart Q of this part. The Secretary uses a 2-year cohort period to calculate the debt-to-earnings rates and earnings premium measure for a program when the number of students (after exclusions identified in Secs. 668.403(e) and 668.404(c)) in the 2-year cohort period is 30 or more. The Secretary uses a 4- year cohort period to calculate the debt-to-earnings rates and earnings premium measure when the number of students completing the program in the two-year cohort period is fewer than 30 and when the number of students completing the program in the 4-year cohort period is 30 or more. The cohort period covers consecutive award years that are—
(1) For the 2-year cohort period—
(i) The third and fourth award years prior to the year for which the most recent data are available from the Federal agency with earnings data at the time the D/E rates and earnings premium measure are calculated, pursuant to Secs. 668.403 and 668.404; or
(ii) For a qualifying graduate program, the sixth and seventh award years prior to the year for which the most recent data are available from the Federal agency with earnings data at the time the D/E rates and earnings premium measure are calculated.
(2) For the four-year cohort period—
(i) The third, fourth, fifth, and sixth award years prior to the year for which the most recent data are available from the Federal agency with earnings data at the time the D/E rates and earnings premium measure are calculated, pursuant to Secs. 668.403 and 668.404; or
(ii) For a qualifying graduate program, the sixth, seventh, eighth, and ninth award years prior to the year for which the most recent earnings data are available from the Federal agency with earnings data at the time the D/E rates and earnings premium measure are calculated.
Credential level: The level of the academic credential awarded by an institution to students who complete the program. For the purposes of this part, the undergraduate credential levels are: undergraduate certificate or diploma, associate degree, bachelor’s degree, and post-baccalaureate certificate; and the graduate credential levels are master’s degree, doctoral degree, first-professional degree (e.g., MD, DDS, JD), and graduate certificate (including a postgraduate certificate).
Debt-to-earnings rates (D/E rates): The discretionary debt-to-earnings rate and annual debt-to-earnings rate as calculated under Sec. 668.403.
Defense loan: A loan made before July 1, 1972, under Title II of the National Defense Education Act of 1958.
Dependent student: Any student who does not qualify as an independent student (see Independent student).
Designated department official: An official of the Department of Education to whom the Secretary has delegated responsibilities indicated in this part.
Direct Loan Program loan: A loan made under the William D. Ford Federal Direct Loan Program.
Direct PLUS Loan: A loan made under the Federal Direct PLUS Program.
Direct Subsidized Loan: A loan made under the Federal Direct Stafford/Ford Loan Program.
Direct Unsubsidized Loan: A loan made under the Federal Direct Unsubsidized Stafford/Ford Loan Program.
Discretionary debt-to-earnings rate (discretionary D/E rate): The percentage of a program’s annual loan payment compared to the discretionary earnings of the students who completed the program, as calculated under Sec. 668.403.
Earnings premium: The amount by which the median annual earnings of students who recently completed a program exceed the earnings threshold, as calculated under Sec. 668.404. If the median annual earnings of recent completers is equal to the earnings threshold, the earnings premium is zero. If the median annual earnings of recent completers is less than the earnings threshold, the earnings premium is negative.
Earnings threshold: Based on data from the Census Bureau, the median earnings for working adults aged 25–34, who either worked during the year or indicated they were unemployed (i.e., not employed but looking for and available to work) when interviewed, with only a high school diploma (or recognized equivalent)—
(1) In the State in which the institution is located; or
(2) Nationally if fewer than 50 percent of the students in the progam are from the State where the institution is located or if the institution is a foreign institution.
Eligible career pathway program: A program that combines rigorous and high-quality education, training, and other services that—
(i) Align with the skill needs of industries in the economy of the State or regional economy involved;
(ii) Prepare an individual to be successful in any of a full range of secondary or postsecondary education options, including apprenticeships registered under the Act of August 16, 1937 (commonly known as the ‘‘National Apprenticeship Act’’; 50 Stat. 664, chapter 663; 29 U.S.C. 50 et seq.);
(iii) Include counseling to support an individual in achieving the individual’s education and career goals;
(iv) Include, as appropriate, education offered concurrently with and in the same context as workforce preparation activities and training for a specific occupation or occupational cluster;
(v) Organize education, training, and other services to meet the particular needs of an individual in a manner that accelerates the educational and career advancement of the individual to the extent practicable;
(vi) Enable an individual to attain a secondary school diploma or its recognized equivalent, and at least one recognized postsecondary credential; and
(vii) Help an individual enter or advance within a specific occupation or occupational cluster.
Eligible non-GE program: An educational program other than a gainful employment (GE) program offered by an institution and included in the institution’s participation in the title IV, HEA programs, identified by a combination of the institution’s six-digit Office of Postsecondary Education ID (OPEID) number, the program’s six-digit CIP code as assigned by the institution or determined by the Secretary, and the program’s credential level. Includes all coursework associated with the program’s credential level.
Enrolled: The status of a student who—
(1) Has completed the registration requirements (except for the payment of tuition and fees) at the institution that he or she is attending; or
(2) Has been admitted into an educational program offered predominantly by correspondence and has submitted one lesson, completed by him or her after acceptance for enrollment and without the help of a representative of the institution.
Expected family contribution (EFC): The amount, as determined under title IV, part F of the HEA, an applicant and his or her spouse and family are expected to contribute toward the applicant's cost of attendance.
Federal agency with earnings data: A Federal agency with which the Department enters into an agreement to access earnings data for the D/E rates and earnings threshold measure. The agency must have individual earnings data sufficient to match with title IV, HEA recipients who completed any eligible program during the cohort period and may include agencies such as the Treasury Department (including the Internal Revenue Service), the Social Security Administration (SSA), the Department of Health and Human Services (HHS), and the Census Bureau.
Federal Consolidation Loan program: The loan program authorized by Title IV-B, section 428C, of the HEA that encourages the making of loans to borrowers for the purpose of consolidating their repayment obligations, with respect to loans received by those borrowers, under the Federal Insured Student Loan (FISL) Program as defined in 34 CFR part 682, the Federal Stafford Loan, Federal PLUS (as in effect before October 17, 1986), Federal Consolidation Loan, Federal SLS, ALAS (as in effect before October 17, 1986), Federal Direct Student Loan, and Federal Perkins Loan programs, and under the Health Professions Student Loan (HPSL) Program authorized by subpart II of part C of Title VII of the Public Health Service Act, for Federal PLUS borrowers whose loans were made after October 17, 1986, and for Higher Education Assistance Loans (HEAL) authorized by subpart I of part A of Title VII of the Public Health Services Act.
Federal Direct PLUS Program: A loan program authorized by Title IV, Part D of the HEA that is one of the components of the Direct Loan Program. The Federal Direct PLUS Program provides loans to parents of dependent students attending schools that participate in the Direct Loan Program. The Federal Direct PLUS Program also provides loans to graduate or professional students attending schools that participate in the Direct Loan Program. The borrower is responsible for the interest that accrues during any period.
Federal Direct Stafford/Ford Loan Program: A loan program authorized by Title IV, Part D of the HEA that is one of the components of the Direct Loan Program. The Federal Direct Stafford/Ford Loan Program provides loans to undergraduate, graduate, and professional students attending schools that participate in the Direct Loan Program. The Secretary subsidizes the interest while the borrower is in an in-school, grace, or deferment period.
Federal Direct Unsubsidized Stafford/Ford Loan Program: A loan program authorized by Title IV, Part D of the HEA that is one of the components of the Direct Loan Program. The Federal Direct Unsubsidized Stafford/Ford Loan Program provides loans to undergraduate, graduate, and professional students attending schools that participate in the Direct Loan Program. The borrower is responsible for the interest that accrues during any period.
Federal Pell Grant Program: A grant program authorized by Title IV-A-1 of the HEA under which grants are awarded to help financially needy students meet the cost of their postsecondary education.
Federal Perkins loan: A loan made under Title IV-E of the HEA to cover the cost of attendance for a period of enrollment beginning on or after July 1, 1987, to an individual who on July 1, 1987, had no outstanding balance of principal or interest owing on any loan previously made under Title IV-E of the HEA.
Federal Perkins Loan program: The student loan program authorized by Title IV-E of the HEA after October 16, 1986. Unless otherwise noted, as used in this part, the Federal Perkins Loan Program includes the National Direct Student Loan Program and the National Defense Student Loan Program.
Federal PLUS loan: A loan made under the Federal PLUS Program.
Federal PLUS program: The loan program authorized by Title IV-B, section 428B, of the HEA, that encourages the making of loans to parents of dependent undergraduate students. Before October 17, 1986, the PLUS Program also provided for making loans to graduate, professional, and independent undergraduate students. Before July 1, 1993, the PLUS Program also provided for making loans to parents of dependent graduate students. Beginning July 1, 2006, the PLUS Program provides for making loans to graduate and professional students.
Federal SLS loan: A loan made under the Federal SLS Program.
Federal Stafford loan: A loan made under the Federal Stafford Loan Program.
Federal Stafford Loan program: The loan program authorized by Title IV-B (exclusive of sections 428A, 428B, and 428C) that encourages the making of subsidized Federal Stafford and unsubsidized Federal Stafford loans as defined in 34 CFR part 682 to undergraduate, graduate, and professional students.
Federal Supplemental Educational Opportunity Grant (FSEOG) program: The grant program authorized by Title IV-A-2 of the HEA.
Federal Supplemental Loans for Students (Federal SLS) program: The loan program authorized by Title IV-B, section 428A of the HEA, as in effect for periods of enrollment that began before July 1, 1994. The Federal SLS Program encourages the making of loans to graduate, professional, independent undergraduate, and certain dependent undergraduate students.
Federal Work Study (FWS) program: The part-time employment program for students authorized by Title IV-C of the HEA.
FFELP loan: A loan made under the FFEL programs.
Financial exigency: A status declared by an institution to a governmental entity or its accrediting agency representing severe financial distress that, absent significant reductions in expenditures or increases in revenue, reductions in administrative staff or faculty, or the elimination of programs, departments, or administrative units, could result in the closure of the institution.
Free application for Federal student aid (FAFSA): The student aid application provided for under section 483 of the HEA, which is used to determine an applicant's eligibility for the title IV, HEA programs.
Full-time student: An enrolled student who is carrying a full-time academic workload, as determined by the institution, under a standard applicable to all students enrolled in a particular educational program. The student's workload may include any combination of courses, work, research, or special studies that the institution considers sufficient to classify the student as a full-time student. For a term-based program that is not subscription-based, the student's workload may include repeating any coursework previously taken in the program; however, the workload may not include more than one repetition of a previously passed course. For an undergraduate student, an institution's minimum standard must equal or exceed one of the following minimum requirements, based on the type of program.
(1) For a program that measures progress in credit hours and uses standard terms (semesters, trimesters, or quarters), 12 semester hours or 12 quarter hours per academic term.
(2) For a program that measures progress in credit hours and does not use terms, 24 semester hours or 36 quarter hours over the weeks of instructional time in the academic year, or the prorated equivalent if the program is less than one academic year.
(3) For a program that measures progress in credit hours and uses nonstandard terms (terms other than semesters, trimesters or quarters) the number of credits determined by—
(i) Dividing the number of weeks of instructional time in the term by the number of weeks of instructional time in the program's academic year; and
(ii) Multiplying the fraction determined under paragraph (3)(i) of this definition by the number of credit hours in the program's academic year.
(4) For a program that measures progress in clock hours, 24 clock hours per week.
(5) A series of courses or seminars that equals 12 semester hours or 12 quarter hours in a maximum of 18 weeks.
(6) The work portion of a cooperative education program in which the amount of work performed is equivalent to the academic workload of a full-time student.
(7) For correspondence coursework—
(i) A full-time course loan must be commensurate with the requirements listed in paragraphs (1) through (6) of this definition; and
(ii) At least one-half of the coursework must be made up of non-correspondence coursework that meets one-half of the institution's requirement for full-time students.
(8) For a subscription-based program, completion of a full-time course load commensurate with the requirements in paragraphs (1), (3), and (5) through (7) of this definition.
Gainful employment program (GE program): An educational program offered by an institution under Sec. 668.8(c)(3) or (d) and identified by a combination of the institution’s six-digit OPEID number, the program’s six-digit CIP code as assigned by the institution or determined by the Secretary, and the program’s credential level.
Graduate or professional student: A student who—
(1) Is not receiving title IV aid as an undergraduate student for the same period of enrollment;
(2) Is enrolled in a program or course above the baccalaureate level or is enrolled in a program leading to a professional degree; and
(3) Has completed the equivalent of at least three years of full-time study either prior to entrance into the program or as part of the program itself.
Half-time student: (1) Except as provided in paragraph (2) of this definition, an enrolled student who is carrying a half-time academic workload, as determined by the institution, that amounts to at least half of the workload of the applicable minimum requirement outlined in the definition of a full-time student.
(2) A student enrolled solely in a program of study by correspondence who is carrying a workload of at least 12 hours of work per week, or is earning at least six credit hours per semester, trimester, or quarter. However, regardless of the work, no student enrolled solely in correspondence study is considered more than a half-time student.
HEA: The Higher Education Act of 1965, as amended.
Independent student: A student who qualifies as an independent student under section 480(d) of the HEA.
Initiating official: The designated department official authorized to begin an emergency action under 34 CFR 668.83.
Institutional grants and scholarships: Assistance that the institution or its affiliate controls or directs to reduce or offset the original amount of a student’s institutional costs and that does not have to be repaid. Typically, an institutional grant or scholarship includes a grant, scholarship, fellowship, discount, or fee waiver.
Institutional student information record (ISIR): An electronic record that the Secretary transmits to an institution that includes an applicant's—
Length of the program: The amount of time in weeks, months, or years that is specified in the institution’s catalog, marketing materials, or other official publications for a student to complete the requirements needed to obtain the degree or credential offered by the program.
Leveraging Educational Assistance Partnership (LEAP) Program: The grant program authorized by Title IV-A-4 of the HEA.
Metropolitan statistical area: A core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core.
National Defense Student Loan program: The student loan program authorized by Title II of the National Defense Education Act of 1958.
National Direct Student Loan (NDSL) program: The student loan program authorized by Title IV-E of the HEA between July 1, 1972, and October 16, 1986.
National Early Intervention Scholarship and Partnership (NEISP) program: The scholarship program authorized by Chapter 2 of subpart 1 of Title IV-A of the HEA.
National Science and Mathematics Access to Retain Talent Grant (National SMART Grant) Program: A grant program authorized by Title IV-A-1 of the HEA under which grants are awarded during the third and fourth academic years of study to eligible financially needy undergraduate students pursuing eligible majors in the physical, life, or computer sciences, mathematics, technology, or engineering, or foreign languages determined to be critical to the national security of the United States.
One-third of an academic year: A period that is at least one-third of an academic year as determined by an institution. At a minimum, one-third of an academic year must be a period that begins on the first day of classes and ends on the last day of classes or examinations and is a minimum of 10 weeks of instructional time during which, for an undergraduate educational program, a full-time student is expected to complete at least 8 semester or trimester hours or 12 quarter hours in an educational program whose length is measured in credit hours or 300 clock hours in an educational program whose length is measured in clock hours. For an institution whose academic year has been reduced under 668.3, one-third of an academic year is the pro-rated equivalent, as measured in weeks and credit or clock hours, of at least one-third of the institution's academic year.
Output document: The Student Aid Report (SAR), Electronic Student Aid Report (ESAR), or other document or automated data generated by the Department of Education's central processing system or Multiple Data Entry processing system as the result of the processing of data provided in a Free Application for Federal Student Aid (FAFSA).
Parent: A student's biological or adoptive mother or father or the student's stepparent, if the biological parent or adoptive mother or father has remarried at the time of application.
Participating institution: An eligible institution that meets the standards for participation in Title IV, HEA programs in subpart B and has a current program participation agreement with the Secretary.
Poverty Guideline: The Poverty Guideline for a single person in the continental United States, as published by the U.S. Department of Health and Human Services and available at https:// aspe.hhs.gov/poverty or its successor site.
Professional degree: A degree that signifies both completion of the academic requirements for beginning practice in a given profession and a level of professional skill beyond that normally required for a bachelor's degree. Professional licensure is also generally required. Examples of a professional degree include but are not limited to Pharmacy (Pharm.D.), Dentistry (D.D.S. or D.M.D.), Veterinary Medicine (D.V.M.), Chiropractic (D.C. or D.C.M.), Law (L.L.B. or J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine (D.O.), Podiatry (D.P.M., D.P., or Pod.D.), and Theology (M.Div., or M.H.L.).
Prospective student: An individual who has contacted an eligible institution for the purpose of requesting information about enrolling in a program or who has been contacted directly by the institution or by a third party on behalf of the institution about enrolling in a program.
Qualifying graduate program: (1) For the first three award years that the Secretary calculates debt-to-earnings rates and the earnings premium measure under subpart Q of this part (‘‘initial period’’), a graduate program—
(i) Whose students must complete required postgraduation training programs to obtain licensure in one of the following fields: medicine, osteopathy, dentistry, clinical psychology, marriage and family counseling, clinical social work, and clinical counseling; and
(ii) For which the institution attests, in the manner established by the Secretary, that—
(A) If necessary for licensure, the program is accredited by an accrediting agency that meets State requirements; and
(B) At least half of the program’s graduates obtain licensure in a State where the postgraduation training requirements apply.
(2)(i) After the initial period, the graduate programs that are on the list described in paragraph (2)(ii) of this definition and for which the Secretary has received an attestation that meets the requirements in paragraph (1)(ii) of this definition.
(ii) For the first award year following the initial period, and every three years thereafter, using publicly available information and information received in response to a request for information, the Secretary publishes in the Federal Register a list of graduate degree fields (based on their credential level and CIP codes) that may contain qualifying graduate programs by identifying fields—
(A) That lead to a graduate (master’s, first-professional, or doctoral) degree;
(B) For which the Department determines that graduates must complete a required postgraduate training program that takes, on average, three or more years to complete; and
(C) For which, based on College Scorecard data, the Secretary determines that a majority of programs with the same credential level and CIP code have outlier earnings growth. An individual program has outlier earnings growth if the percent change in median earnings between its earnings measured one or three years post-completion and its earnings measured either five or ten years post-completion is more than two standard deviations above the average earnings growth for other programs with the same credential level.
(3) For the purpose of this definition, a ‘‘required postgraduation training program’’ is a supervised training program that—
(i) Requires the student to hold a degree in one of the listed fields in paragraph (1)(i) of this definition or one of the fields identified in the list described in paragraph (2)(ii) of this definition; and
(ii) Must be completed before the student may be licensed by a State and board certified for professional practice or service.
Show-cause official: The designated department official authorized to conduct a show-cause proceeding for an emergency action under 34 CFR 668.83.
Student: For the purposes of subparts Q and S of this part and of Sec 668.43(d), an individual who received title IV, HEA program funds for enrolling in the program.
Student aid report (SAR): A report provided to an applicant by the Secretary showing his or her FAFSA information and the amount of his or her EFC.
Subscription-based program: A standard or nonstandard-term program in which the institution charges a student for each term on a subscription basis with the expectation that the student completes a specified number of credit hours (or the equivalent) during that term. Coursework in a subscription-based program is not required to begin or end within a specific timeframe in each term. Students in subscription-based programs must complete a cumulative number of credit hours (or the equivalent) during or following the end of each term before receiving subsequent disbursements of title IV, HEA program funds. An institution establishes an enrollment status (for example, full-time or half-time) that will apply to a student throughout the student's enrollment in the program, except that a student may change his or her enrollment status no more often than once per academic year. The number of credit hours (or the equivalent) a student must complete before receiving subsequent disbursements is calculated by—
(1) Determining for each term the number of credit hours (or the equivalent) associated with the institution's minimum standard for the student's enrollment status (for example, full-time, three-quarter time, or half-time) for that period commensurate with paragraph (8) in the definition of "full-time student," adjusted for less than full-time students in light of the definitions of "half-time student" and "three-quarter time student," and adjusted to at least one credit (or the equivalent) for a student who is enrolled less than half-time; and
(2) Adding together the number of credit hours (or the equivalent) determined under paragraph (1) for each term in which the student was enrolled in and attended that program, excluding the current and most recently attended terms.
Teacher Education Assistance for College and Higher Education (TEACH) Grant Program: A grant program authorized by title IV of the HEA under which grants are awarded by an institution to students who are completing, or intend to complete, coursework to begin a career in teaching and who agree to serve for not less than four years as a full-time, highly-qualified teacher in a high-need field in a low-income school. If the recipient of a TEACH Grant does not complete four years of qualified teaching service within eight years of completing the course of study for which the TEACH Grant was received or otherwise fails to meet the requirements of 34 CFR 686.12, the amount of the TEACH Grant converts into a Federal Direct Unsubsidized Loan.
Substantially similar program: For the purposes of subpart Q and S of this part, a program is substantially similar to another program if the two programs share the same four-digit CIP code. The Secretary presumes a program is not substantially similar to another program if the two programs have different four- digit CIP codes, but the institution must provide an explanation of how the new program is not substantially similar to the ineligible or voluntarily discontinued program with its certification under Sec. 668.604.
TEACH Grant: A grant authorized under title IV–A–9 of the HEA and awarded to students in exchange for prospective teaching service.
Third-party servicer: (1) An individual or a State, or a private, profit or nonprofit organization that enters into a contract with an eligible institution to administer, through either manual or automated processing, any aspect of the institution's participation in any Title IV, HEA program. The Secretary considers administration of participation in a Title IV, HEA program to—
(i) Include performing any function required by any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, or any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA, such as, but not restricted to—
(A) Processing student financial aid applications;
(C) Determining student eligibility and related activities;
(E) Processing output documents for payment to students;
(F) Receiving, disbursing, or delivering Title IV, HEA program funds, excluding lock-box processing of loan payments and normal bank electronic fund transfers;
(G) Conducting activities required by the provisions governing student consumer information services in subpart D of this part;
(H) Preparing and certifying requests for advance or reimbursement funding;
(I) Loan servicing and collection;
(J) Preparing and submitting notices and applications required under 34 CFR part 600 and subpart B of this part; and
(K) Preparing a Fiscal Operations Report and Application to Participate (FISAP);
(ii) Exclude the following functions—
(A) Publishing ability-to-benefit tests;
(B) Performing functions as a Multiple Data Entry Processor (MDE);
(C) Financial and compliance auditing;
(D) Mailing of documents prepared by the institution;
(E) Warehousing of records; and
(F) Providing computer services or software; and
(iii) Notwithstanding the exclusions referred to in paragraph (1)(ii) of this definition, include any activity comprised of any function described in paragraph (1)(i) of this definition.
(2) For purposes of this definition, an employee of an institution is not a third-party servicer. The Secretary considers an individual to be an employee if the individual—
(i) Works on a full-time, part-time, or temporary basis;
(ii) Performs all duties on site at the institution under the supervision of the institution;
(iii) Is paid directly by the institution;
(iv) Is not employed by or associated with a third-party servicer; and
(v) Is not a third-party servicer for any other institution.
Three-quarter time student: An enrolled student who is carrying a three-quarter-time academic workload, as determined by the institution, that amounts to at least three quarters of the work of the applicable minimum requirement outlined in the definition of a full-time student.
Two-thirds of an academic year: A period that is at least two-thirds of an academic year as determined by an institution. At a minimum, two-thirds of an academic year must be a period that begins on the first day of classes and ends on the last day of classes or examinations and is a minimum of 20 weeks of instructional time during which, for an undergraduate educational program, a full-time student is expected to complete at least 16 semester or trimester hours or 24 quarter hours in an educational program whose length is measured in credit hours or 600 clock hours in an educational program whose length is measured in clock hours. For an institution whose academic year has been reduced under 668.3, two-thirds of an academic year is the pro-rated equivalent, as measured in weeks and credit or clock hours, of at least two-thirds of the institution's academic year.
Undergraduate student: (1) A student who is enrolled in an undergraduate course of study that usually does not exceed four years, or is enrolled in a longer program designed to lead to a degree at the baccalaureate level. For purposes of 34 CFR 690.6(c)(5) students who have completed a baccalaureate program of study and who are subsequently completing a State-required teacher certification program are treated as undergraduates.
(2) In addition to meeting the definition in paragraph (1) of this definition, a student is only considered an undergraduate for purposes of the Federal Supplemental Educational Opportunity Grant (FSEOG) Program, the Federal Pell Grant Program, the Academic Competitiveness Grant (ACG) Program, National Science and Mathematics Access to Retain Talent (SMART) Grant Program, and TEACH Grant program if the student has not yet earned a baccalaureate or professional degree. However, for purposes of 34 CFR 690.6(c)(5) and 686.3(a) students who have completed a baccalaureate program of study and who are subsequently completing a State-required teacher certification program are treated as undergraduates.
(3) For purposes of dual degree programs that allow individuals to complete a bachelor's degree and either a graduate or professional degree within the same program, a student is considered an undergraduate student for at least the first three years of that program.
(4) A student enrolled in a four to five year program designed to lead to an undergraduate degree. A student enrolled in a program of any other, longer length is considered an undergraduate student for only the first four years of that program.
U.S. citizen or national: (1) A citizen of the United States; or
(2) A person defined in the Immigration and Nationality Act, 8 U.S.C. 1101(a)(22), who, though not a citizen of the United States, owes permanent allegiance to the United States.
Valid institutional student information record (valid ISIR): An ISIR on which all the information reported on a student's FAFSA is accurate and complete as of the date the application is signed.
Valid student aid report (valid SAR): A student aid report on which all of the information reported on a student's FAFSA is accurate and complete as of the date the application is signed.
William D. Ford Federal Direct Loan (Direct Loan) Program: The loan program authorized by Title IV, Part D of the HEA.
| Sec. 668.3 Academic year. |
(a) General. Except as provided in paragraph (c) of this section, an academic year for a program of study must include—
(1)(i) For a program offered in credit hours, a minimum of 30 weeks of instructional time; or
(ii) For a program offered in clock hours, a minimum of 26 weeks of instructional time; and
(2) For an undergraduate educational program, an amount of instructional time whereby a full-time student is expected to complete at least —
(i) Twenty-four semester or trimester credit hours or 36 quarter credit hours for a program measured in credit hours; or
(ii) 900 clock hours for a program measured in clock hours.
(b) Definitions. For purposes of paragraph (a) of this section—
(1) A week is a consecutive seven-day period;
(2) A week of instructional time is any week in which–
(i) At least one day of regularly scheduled instruction or examinations occurs or, after the last scheduled day of classes for a term or payment period, at least one day of study for final examinations occurs; or
(ii)(A) In a program offered using asynchronous coursework through distance education or correspondence courses, the institution makes available the instructional materials, other resources, and instructor support necessary for academic engagement and completion of course objectives; and
(B) In a program using asynchronous coursework through distance education, the institution expects enrolled students to perform educational activities demonstrating academic engagement during the week; and
(3) Instructional time does not include any scheduled breaks and activities not included in the definition of "academic engagement" in 34 CFR 600.2, or periods of orientation or counseling.
(c) Reduction in the length of an academic year. (1) Upon the written request of an institution, the Secretary may approve, for good cause, an academic year of 26 through 29 weeks of instructional time for educational programs offered by the institution if the institution offers a two-year program leading to an associate degree or a four-year program leading to a baccalaureate degree.
(2) An institution's written request must—
(i) Identify each educational program for which the institution requests a reduction, and the requested number of weeks of instructional time for that program;
(ii) Demonstrate good cause for the requested reductions; and
(iii) Include any other information that the Secretary may require to determine whether to grant the request.
(3)(i) The Secretary approves the request of an eligible institution for a reduction in the length of its academic year if the institution has demonstrated good cause for granting the request and the institution's accrediting agency and State licensing agency have approved the request.
(ii) If the Secretary approves the request, the approval terminates when the institution's program participation agreement expires. The institution may request an extension of that approval as part of the recertification process.
| Sec. 668.4 Payment period. |
(a) Payment periods for an eligible program that measures progress in credit hours and uses standard terms or nonstandard terms that are substantially equal in length. For a student enrolled in an eligible program that measures progress in credit hours and uses standard terms (semesters, trimesters, or quarters), or for a student enrolled in an eligible program that measures progress in credit hours and uses nonstandard terms that are substantially equal in length, the payment period is the academic term.
(b) Payment periods for an eligible program that measures progress in credit hours and uses nonstandard terms that are not substantially equal in length. For a student enrolled in an eligible program that measures progress in credit hours and uses nonstandard terms that are not substantially equal in length—
(1) For Pell Grant, ACG, National SMART Grant, FSEOG, Perkins Loan, and TEACH Grant program funds, the payment period is the academic term;
(2) For FFEL and Direct Loan program funds—
(i) For a student enrolled in an eligible program that is one academic year or less in length—
(A) The first payment period is the period of time in which the student successfully completes half of the number of credit hours in the program and half of the number of weeks of instructional time in the program; and
(B) The second payment period is the period of time in which the student successfully completes the program; and
(ii) For a student enrolled in an eligible program that is more than one academic year in length—
(A) For the first academic year and any subsequent full academic year—
(1) The first payment period is the period of time in which the student successfully completes half of the number of credit hours in the academic year and half of the number of weeks of instructional time in the academic year; and
(2) The second payment period is the period of time in which the student successfully completes the academic year;
(B) For any remaining portion of an eligible program that is more than half an academic year but less than a full academic year in length—
(1) The first payment period is the period of time in which the student successfully completes half of the number of credit hours in the remaining portion of the program and half of the number of weeks of instructional time remaining in the program; and
(2) The second payment period is the period of time in which the student successfully completes the remainder of the program; and
(C) For any remaining portion of an eligible program that is not more than half an academic year, the payment period is the remainder of the program.
(c) Payment periods for an eligible program that measures progress in credit hours and does not have academic terms or for a program that measures progress in clock hours. (1) For a student enrolled in an eligible program that is one academic year or less in length—
(i) The first payment period is the period of time in which the student successfully completes half of the number of credit hours or clock hours, as applicable, in the program and half of the number of weeks of instructional time in the program; and
(ii) The second payment period is the period of time in which the student successfully completes the program or the remainder of the program.
(2) For a student enrolled in an eligible program that is more than one academic year in length—
(i) For the first academic year and any subsequent full academic year—
(A) The first payment period is the period of time in which the student successfully completes half of the number of credit hours or clock hours, as applicable, in the academic year and half of the number of weeks of instructional time in the academic year; and
(B) The second payment period is the period of time in which the student successfully completes the academic year;
(ii) For any remaining portion of an eligible program that is more than half an academic year but less than a full academic year in length—
(A) The first payment period is the period of time in which the student successfully completes half of the number of credit hours or clock hours, as applicable, in the remaining portion of the program and half of the number of weeks of instructional time remaining in the program; and
(B) The second payment period is the period of time in which the student successfully completes the remainder of the program; and
(iii) For any remaining portion of an eligible program that is not more than half an academic year, the payment period is the remainder of the program.
(3) For purposes of paragraphs (c)(1) and (c)(2) of this section, if an institution is unable to determine when a student has successfully completed half of the credit hours or clock hours in a program, academic year, or remainder of a program, the student is considered to begin the second payment period of the program, academic year, or remainder of a program at the later of the date, as determined by the institution, on which the student has successfully completed—
(i) Half of the academic coursework in the program, academic year, or remainder of the program; or
(ii) Half of the number of weeks of instructional time in the program, academic year, or remainder of the program.
(d) Application of the cohort default rate exemption. Notwithstanding paragraphs (a), (b), and (c) of this section, if 34 CFR 682.604(c)(10) or 34 CFR 685.301(b)(8) applies to an eligible program that measures progress in credit hours and uses nonstandard terms, an eligible program that measures progress in credit hours and does not have academic terms, or an eligible program that measures progress in clock hours, the payment period for purposes of FFEL and Direct Loan funds is the loan period for those portions of the program to which 34 CFR 682.604(c)(10) or 34 CFR 685.301(b)(8) applies.
(e) Excused absences. For purposes of this section, in determining whether a student successfully completes the clock hours in a payment period, an institution may include clock hours for which the student has an excused absence (i.e., an absence that a student does not have to make up) if—
(1) The institution has a written policy that permits excused absences; and
(2) The number of excused absences under the written policy for purposes of this paragraph (e) does not exceed the lesser of—
(i) The policy on excused absences of the institution's accrediting agency or, if the institution has more than one accrediting agency, the agency designated under 34 CFR 600.11(b);
(ii) The policy on excused absences of any State agency that licenses the institution or otherwise legally authorizes the institution to operate in the State; or
(iii) Ten percent of the clock hours in the payment period.
(f) Re-entry within 180 days. If a student withdraws from a program described in paragraph (c) of this section during a payment period and then reenters the same program within 180 days, the student remains in that same payment period when he or she returns and, subject to conditions established by the Secretary or by the FFEL lender or guaranty agency, is eligible to receive any title IV, HEA program funds for which he or she was eligible prior to withdrawal, including funds that were returned by the institution or student under the provisions of Sec. 668.22.
(g) Re-entry after 180 days or transfer. (1) Except as provided in paragraph (g)(3) of this section, and subject to the conditions of paragraph (g)(2) of this section, an institution calculates new payment periods for the remainder of a student's program based on paragraph (c) of this section, for a student who withdraws from a program described in paragraph (c) of this section, and—
(i) Reenters that program after 180 days,
(ii) Transfers into another program at the same institution within any time period, or
(iii) Transfers into a program at another institution within any time period.
(2) For a student described in paragraph (g)(1) of this section—
(i) For the purpose of calculating payment periods only, the length of the program is the number of credit hours and the number of weeks of instructional time, or the number of clock hours and the number of weeks of instructional time, that the student has remaining in the program he or she enters or reenters; and
(ii) If the remaining hours and weeks constitute half of an academic year or less, the remaining hours constitute one payment period.
(3) Notwithstanding the provisions of paragraph (g)(1) of this section, an institution may consider a student who transfers into another program at the same institution to remain in the same payment period if—
(i) The student is continuously enrolled at the institution;
(ii) The coursework in the payment period the student is transferring out of is substantially similar to the coursework the student will be taking when he or she first transfers into the new program;
(iii) The payment periods are substantially equal in length in weeks of instructional time and credit hours or clock hours, as applicable;
(iv) There are little or no changes in institutional charges associated with the payment period to the student; and
(v) The credits from the payment period the student is transferring out of are accepted toward the new program.
(h) Definitions. For purposes of this section—
(1) Terms are substantially equal in length if no term in the program is more than two weeks of instructional time longer than any other term in that program; and
(2) A student successfully completes credit hours or clock hours if the institution considers the student to have passed the coursework associated with those hours.
| Sec. 668.5 Written arrangements to provide educational programs. |
(a) Written arrangements between eligible institutions. (1) Except as provided in paragraph (a)(2) of this section, if an eligible institution enters into a written arrangement with another eligible institution, or with a consortium of eligible institutions, under which the other eligible institution or consortium provides part of the educational program to students enrolled in the first institution, the Secretary considers that educational program to be an eligible program if the educational program offered by the institution that grants the degree, certificate, or other recognized educational credential otherwise satisfies the requirements of Sec. 668.8.
(2) If the written arrangement is between two or more eligible institutions that are owned or controlled by the same individual, partnership, or corporation, the Secretary considers the educational program to be an eligible program if the educational program offered by the institution that grants the degree, certificate, or other recognized educational credit otherwise satisfies the requirements of Sec. 668.8.
(b) Written arrangements for study-abroad. Under a study abroad program, if an eligible institution enters into a written arrangement under which an institution in another country, or an organization acting on behalf of an institution in another country, provides part of the educational program of students enrolled in the eligible institution, the Secretary considers that educational program to be an eligible program if it otherwise satisfies the requirements of paragraphs (c)(1) through (c)(3) of this section.
(c) Written arrangements between an eligible institution and an ineligible institution or organization. Except as provided in paragraph (d) of this section, if an eligible institution enters into a written arrangement with an institution or organization that is not an eligible institution under which the ineligible institution or organization provides part of the educational program of students enrolled in the eligible institution, the Secretary considers that educational program to be an eligible program if—
(1) The ineligible institution or organization has not—
(i) Had its eligibility to participate in the title IV, HEA programs terminated by the Secretary;
(ii) Voluntarily withdrawn from participation in the title IV, HEA programs under a termination, show-cause, suspension, or similar type proceeding initiated by the institution's State licensing agency, accrediting agency, guarantor, or by the Secretary;
(iii) Had its certification to participate in the title IV, HEA programs revoked by the Secretary;
(iv) Had its application for recertification to participate in the title IV, HEA programs denied by the Secretary; or
(v) Had its application for certification to participate in the title IV, HEA programs denied by the Secretary;
(2) The educational program offered by the institution that grants the degree, certificate, or other recognized education credential otherwise satisfies the requirements of Sec. 668.8; and
(3)(i) The ineligible institution or organization provides 25 percent or less of the educational program, including in accordance with 34 CFR 602.22(b)(4); or
(ii)(A) The ineligible institution or organization provides more than 25 percent but less than 50 percent of the educational program, in accordance with 34 CFR 602.22(a)(1)(ii)(J);
(B) The eligible institution and the ineligible institution or organization are not owned or controlled by the same individual, partnership, or corporation; and
(C) The eligible institution's accrediting agency or, if the institution is a public postsecondary vocational educational institution, the State agency listed in the Federal Register in accordance with 34 CFR part 603, has specifically determined that the institution's arrangement meets the agency's standards for executing a written arrangement with an ineligible institution or organization.
(d) Administration of title IV, HEA programs. (1) If an institution enters into a written arrangement as described in paragraph (a), (b), or (c) of this section, or provides coursework as provided in (h)(2) of this section, except as provided in paragraph (d)(2) of this section, the institution at which the student is enrolled as a regular student must determine the student's eligibility for title IV, HEA program funds, and must calculate and disburse those funds to that student.
(2) In the case of a written arrangement between eligible institutions, the institutions may agree in writing to have any eligible institution in the written arrangement make those calculations and disbursements, and the Secretary does not consider that institution to be a third-party servicer for that arrangement.
(3) The institution that calculates and disburses a student's title IV, HEA program assistance under paragraph (d)(1) or (d)(2) of this section must—
(i) Take into account all the hours in which the student enrolls at each institution that apply to the student's degree or certificate when determining the student's enrollment status and cost of attendance; and
(ii) Maintain all records regarding the student's eligibility for and receipt of title IV, HEA program funds.
(e) Information made available to students. If an institution enters into a written arrangement described in paragraph (a), (b), or (c) of this section, the institution must provide the information described in Sec. 668.43(a)(12) to enrolled and prospective students.
(f) Workforce responsiveness. Nothing in this or any other section in this part prohibits an institution utilizing written arrangements from aligning or modifying its curriculum or academic requirements in order to meet the recommendations or requirements of industry advisory boards that include employers who hire program graduates, widely recognized industry standards and organizations, or industry-recognized credentialing bodies, including making governance or decision-making changes as an alternative to allowing or requiring faculty control or approval or integrating industry-recognized credentials into existing degree programs.
(g) Calculation of percentage of program. When determining the percentage of the program that is provided by an ineligible institution or organization under paragraph (c) of this section, the institution divides the number of semester, trimester, or quarter credit hours, clock hours, or the equivalent that are provided by the ineligible organization or organizations by the total number of semester, trimester, or quarter credit hours, clock hours, or the equivalent required for completion of the program. A course is provided by an ineligible institution or organization if the organization with which the institution has a written arrangement has authority over the design, administration, or instruction in the course, including, but not limited to—
(1) Establishing the requirements for successful completion of the course;
(2) Delivering instruction in the course; or
(3) Assessing student learning.
(h) Non-applicability to other interactions with outside entities. Written arrangements are not necessary for, and the limitations in this section do not apply to—
(1) Acceptance by the institution of transfer credits or use of prior learning assessment or other non-traditional methods of providing academic credit; or
(2) The internship or externship portion of a program if the internship or externship is governed by accrediting agency standards, or, in the case of an eligible foreign institution, the standards of an outside oversight entity, such as an accrediting agency or government entity, that require the oversight and supervision of the institution, where the institution is responsible for the internship or externship and students are monitored by qualified institutional personnel.
| Sec. 668.6 [Removed and Reserved] |
| Sec. 668.8 Eligible program. |
(a) General. An eligible program is an educational program that—
(1) Is provided by a participating institution; and
(2) Satisfies the other relevant requirements contained in this section.
(b) Definitions. For purposes of this section—
(1) The Secretary considers the "equivalent of an associate degree" to be—
(ii) The successful completion of at least a two-year program that is acceptable for full credit toward a bachelor's degree and qualifies a student for admission into the third year of a bachelor's degree program;
(2) A week is a consecutive seven-day period; and
(3)(i) The Secretary considers that an institution provides one week of instructional time in an academic program during any week the institution provides at least one day of regularly scheduled instruction or examinations, or, after the last scheduled day of classes for a term or a payment period, at least one day of study for final examinations.
(ii) Instructional time does not include any vacation periods, homework, or periods of orientation or counseling.
(c) Institution of higher education. An eligible program provided by an institution of higher education must—
(1) Lead to an associate, bachelor's, professional, or graduate degree;
(2) Be at least a two-academic-year program that is acceptable for full credit toward a bachelor's degree; or
(3) Be at least a one-academic-year training program that leads to a certificate, or other nondegree recognized credential, and prepares students for gainful employment in a recognized occupation.
(d) Proprietary institution of higher education and postsecondary vocational institution. An eligible program provided by a proprietary institution of higher education or postsecondary vocational institution—
(1)(i) Must require a minimum of 15 weeks of instruction, beginning on the first day of classes and ending on the last day of classes or examinations;
(ii) Must be at least 600 clock hours, 16 semester or trimester hours, or 24 quarter hours;
(iii) Must provide undergraduate training that prepares a student for gainful employment in a recognized occupation; and
(iv) May admit as regular students persons who have not completed the equivalent of an associate degree;
(i) Require a minimum of 10 weeks of instruction, beginning on the first day of classes and ending on the last day of classes or examinations;
(ii) Be at least 300 clock hours, 8 semester or trimester hours, or 12 quarter hours;
(iii) Provide training that prepares a student for gainful employment in a recognized occupation; and
(iv)(A) Be a graduate or professional program; or
(B) Admit as regular students only persons who have completed the equivalent of an associate degree;
(3) For purposes of the FFEL and Direct Loan programs only, must—
(i) Require a minimum of 10 weeks of instruction, beginning on the first day of classes and ending on the last day of classes or examinations;
(ii) Be at least 300 clock hours but less than 600 clock hours;
(iii) Provide undergraduate training that prepares a student for gainful employment in a recognized occupation;
(iv) Admit as regular students some persons who have not completed the equivalent of an associate degree; and
(v) Satisfy the requirements of paragraph (e) of this section; or
(4) For purposes of a proprietary institution of higher education only, is a program leading to a baccalaureate degree in liberal arts, as defined in 34 CFR 600.5(e), that—
(i) Is provided by an institution that is accredited by a recognized accrediting agency or association that was defined as a regional accrediting agency or association on October 1, 2007, and has held such accreditation since October 1, 2007, or earlier; and
(ii) The institution has provided continuously since January 1, 2009.
(e) Qualitative factors. (1) An educational program that satisfies the requirements of paragraphs (d)(3)(i) through (iv) of this section qualifies as an eligible program only if—
(i) The program has a substantiated completion rate of at least 70 percent, as calculated under paragraph (f) of this section;
(ii) The program has a substantiated placement rate of at least 70 percent, as calculated under paragraph (g) of this section;
(iii) The institution can demonstrate reasonable program length, in accordance with Sec. 668.14(b)(26); and
(iv) The program has been in existence for at least one year. The Secretary considers an educational program to have been in existence for at least one year only if an institution has been legally authorized to provide, and has continuously provided, the program during the 12 months (except for normal vacation periods and, at the discretion of the Secretary, periods when the institution closes due to a natural disaster that directly affects the institution or the institution's students) preceding the date on which the institution applied for eligibility for that program.
(2) An institution shall substantiate the calculation of its completion and placement rates by having the certified public accountant who prepares its audit report required under Sec. 668.23 report on the institution's calculation based on performing an attestation engagement in accordance with the Statements on Standards for Attestation Engagements of the American Institute of Certified Public Accountants (AICPA).
(f) Calculation of completion rate. An institution shall calculate its completion rate for an educational program for any award year as follows:
(1) Determine the number of regular students who were enrolled in the program during the award year.
(2) Subtract from the number of students determined under paragraph (f)(1) of this section, the number of regular students who, during that award year, withdrew from, dropped out of, or were expelled from the program and were entitled to and actually received, in a timely manner a refund of 100 percent of their tuition and fees.
(3) Subtract from the total obtained under paragraph (f)(2) of this section the number of students who were enrolled in the program at the end of that award year.
(4) Determine the number of regular students who, during that award year, received within 150 percent of the published length of the educational program the degree, certificate, or other recognized educational credential awarded for successfully completing the program.
(5) Divide the number determined under paragraph (f)(4) of this section by the total obtained under paragraph (f)(3) of this section.
(g) Calculation of placement rate. (1) An institution shall calculate its placement rate for an educational program for any award year as follows:
(i) Determine the number of students who, during the award year, received the degree, certificate, or other recognized educational credential awarded for successfully completing the program.
(ii) Of the total obtained under paragraph (g)(1)(i) of this section, determine the number of students who, within 180 days of the day they received their degree, certificate, or other recognized educational credential, obtained gainful employment in the recognized occupation for which they were trained or in a related comparable recognized occupation and, on the date of this calculation, are employed, or have been employed, for at least 13 weeks following receipt of the credential from the institution.
(iii) Divide the number of students determined under paragraph (g)(1)(ii) of this section by the total obtained under paragraph (g)(1)(i) of this section.
(2) An institution shall document that each student described in paragraph (g)(1)(ii) of this section obtained gainful employment in the recognized occupation for which he or she was trained or in a related comparable recognized occupation. Examples of satisfactory documentation of a student's gainful employment include, but are not limited to—
(i) A written statement from the student's employer;
(ii) Signed copies of State or Federal income tax forms; and
(iii) Written evidence of payments of Social Security taxes.
(h) Eligibility for Federal Pell Grant, ACG, National SMART Grant, TEACH Grant, and FSEOG programs. In addition to satisfying other relevant provisions of this section—
(1) An educational program qualifies as an eligible program for purposes of the Federal Pell Grant Program only if the educational program is an undergraduate program or a postbaccalaureate teacher certificate or licensing program as described in 34 CFR 690.6(c);
(2) An educational program qualifies as an eligible program for purposes of the ACG, National SMART Grant, and FSEOG Programs only if the educational program is an undergraduate program; and
(3) An educational program qualifies as an eligible program for purposes of the TEACH Grant program if it satisfies the requirements of the definition of TEACH Grant-eligible program in 34 CFR 686.2(d).
(i) Flight training. In addition to satisfying other relevant provisions of this section, for a program of flight training to be an eligible program, it must have a current valid certification from the Federal Aviation Administration.
(j) English as a second language (ESL). (1) In addition to satisfying the relevant provisions of this section, an educational program that consists solely of instruction in ESL qualifies as an eligible program if—
(i) The institution admits to the program only students who the institution determines need the ESL instruction to use already existing knowledge, training, or skills; and
(ii) The program leads to a degree, certificate, or other recognized educational credential.
(2) An institution shall document its determination that ESL instruction is necessary to enable each student enrolled in its ESL program to use already existing knowledge, training, or skills with regard to the students that it admits to its ESL program under paragraph (j)(1)(i) of this section.
(3) An ESL program that qualifies as an eligible program under this paragraph is eligible for purposes of the Federal Pell Grant Program only.
(k) Undergraduate educational program in credit hours. If an institution offers an undergraduate educational program in credit hours, the institution must use the formula contained in paragraph (l) of this section to determine whether that program satisfies the requirements contained in paragraph (c)(3) or (d) of this section, and the number of credit hours in that educational program for purposes of the Title IV, HEA programs, unless—
(1) The program is at least two academic years in length and provides an associate degree, a bachelor's degree, a professional degree, or an equivalent degree as determined by the Secretary; or
(2) Each course within the program is acceptable for full credit toward completion of an eligible program offered by the institution that provides an associate degree, bachelor's degree, professional degree, or equivalent degree as determined by the Secretary provided that—
(i) The eligible program requires at least two academic years of study; and
(ii) The institution can demonstrate that least one student graduated from the program during the current award year or the two preceding award years.
(l) Formula. For purposes of determining whether a program described in paragraph (h) of this section satisfies the requirements contained in paragraph (c)(3) or (d) of this section, and the number of credit hours in that educational program for the purposes of the title IV, HEA programs—
(1) A semester or trimester hour must include at least 30 clock hours of instruction; and
(2) A quarter hour must include at least 20 clock hours of instruction.
(m) An otherwise eligible program that is offered in whole or in part through telecommunications is eligible for title IV, HEA program purposes if the program is offered by an institution, other than a foreign institution, that has been evaluated and is accredited for its effective delivery of distance education programs by an accrediting agency or association that—
(1) Is recognized by the Secretary under subpart 2 of part H of the HEA; and
(2) Has accreditation of distance education within the scope of its recognition.
(n) Other eligible programs.For title IV, HEA program purposes, eligible program includes a direct assessment program approved by the Secretary under Sec. 668.10, and a comprehensive transition and postsecondary program approved by the Secretary under Sec. 668.232, and an eligible prison education program under subpart P of this part .
| Sec. 668.9 Relationship between clock hours and semester, trimester, or quarter hours in calculating Title IV, HEA program assistance. |
(a) In determining the amount of Title IV, HEA program assistance that a student who is enrolled in a program described in Sec. 668.8(k) is eligible to receive, the institution shall apply the formula contained in Sec. 668.8(l) to determine the number of semester, trimester, or quarter hours in that program, if the institution measures academic progress in that program in semester, trimester, or quarter hours.
(b) Notwithstanding paragraph (a) of this section, a public or private nonprofit hospital-based school of nursing that awards a diploma at the completion of the school's program of education is not required to apply the formula contained in Sec. 668.8(l) to determine the number of semester, trimester, or quarter hours in that program for purposes of calculating Title IV, HEA program assistance.
| Sec. 668.10 Direct assessment programs. |
(a)(1) A direct assessment program is a program that, in lieu of credit hours or clock hours as a measure of student learning, utilizes direct assessment of student learning, or recognizes the direct assessment of student learning by others. The assessment must be consistent with the accreditation of the institution or program utilizing the results of the assessment.
(2) Direct assessment of student learning means a of a student's knowledge, skills, and abilities designed to provide evidence of the student's proficiency in the relevant subject area.
(3) An institution must establish a methodology to reasonably equate each module in the direct assessment program to either credit hours or clock hours. This methodology must be consistent with the requirements of the institution's accrediting agency or State approval agency.
(4) All regulatory requirements in this chapter that refer to credit or clock hours as a measurement apply to direct assessment programs according to whether they use credit or clock hour equivalencies, respectively.
(5) A direct assessment program that is not consistent with the requirements of the institution's accrediting agency or State approval agency is not an eligible program as provided under Sec. 668.8. In order for any direct assessment program to qualify as an eligible program, the accrediting agency must have—
(i) Evaluated the program based on the agency's accreditation standards and criteria, and included it in the institution's grant of accreditation or preaccreditation; and
(ii) Reviewed and approved the institution's claim of each direct assessment program's equivalence in terms of credit or clock hours.
(b)(1) An institution that wishes to offer a direct assessment program must apply to the Secretary to have its direct assessment program or programs determined to be eligible programs for title IV, HEA program purposes. Following the Secretary's initial approval of a direct assessment program, additional direct assessment programs at an equivalent or lower academic level may be determined to be eligible without further approvals from the Secretary except as required by 34 CFR 600.10(c)(1)(iii), 600.20(c)(1), or 600.21(a), as applicable, if such programs are consistent with the institution's accreditation or its State approval agency.
(2) The institution's direct assessment application must provide information satisfactory to the Secretary that includes—
(i) A description of the educational program, including the educational credential offered (degree level or certificate) and the field of study;
(ii) A description of how the direct assessment program is structured, including information about how and when the institution determines on an individual basis what each student enrolled in the program needs to learn and how the institution excludes from consideration of a student's eligibility for title IV, HEA program funds any credits or competencies earned on the basis of prior learning;
(iii) A description of how learning is assessed and how the institution assists students in gaining the knowledge needed to pass the assessments;
(iv) The number of semester, trimester, or quarter credit hours, or clock hours, that are equivalent to the amount of student learning being directly assessed for the certificate or degree;
(v) The methodology the institution uses to determine the number of credit or clock hours to which the program or programs are equivalent; and
(vi) Documentation from the institution's accrediting agency or State approval agency indicating that the agency has evaluated the institution's offering of direct assessment program(s) and has included the program(s) in the institution's grant of accreditation and approval documentation from the accrediting agency or State approval agency indicating agreement with the institutions methodology for determining the direct assessment program's equivalence in terms of credit or clock hours.
(vii) Notwithstanding paragraphs (a) and (b) of this section, no program offered by a foreign institution that involves direct assessment will be considered to be an eligible program under Sec. 668.8.
(c) A direct assessment program may use learning resources (e.g., courses or portions of courses) that are provided by entities other than the institution providing the direct assessment program without regard to the limitations on contracting for part of an educational program in Sec. 668.5(c)(3).
(d) Title IV, HEA program funds may be used to support instruction provided, or overseen, by the institution, except for the portion of the program that the student is awarded based on prior learning.
(e) Unless an institution has received initial approval from the Secretary to offer direct assessment programs, and the institution's offering of direct assessment coursework is consistent with the institution's accreditation and State authorization, if applicable, title IV, HEA program funds may not be used for—
(1) The course of study described in Sec. 668.32(a)(1)(ii) and (iii) and (a)(2)(i)(B), if offered using direct assessment; or
(2) Remedial coursework described in Sec. 668.20, if offered using direct assessment.
(f) Student progress in a direct assessment program may be measured using a combination of—
(1) Credit hours and credit hour equivalencies; or
(2) Clock hours and clock hour equivalencies.
| Subpart B—Standards for Participation in Title IV, HEA Programs |
If any provision of this part or its application to any person, act, or practice is held invalid, the remainder of the part or the application of its provisions to any person, act, or practice will not be affected thereby.
(a) This subpart establishes standards that an institution must meet in order to participate in any Title IV, HEA program.
(b) Noncompliance with these standards by an institution already participating in any Title IV, HEA program or with applicable standards in this subpart by a third-party servicer that contracts with the institution may subject the institution or servicer, or both, to proceedings under subpart G of this part. These proceedings may lead to any of the following actions:
(3) The limitation, suspension, or termination of the participation of the institution in a Title IV, HEA program.
(4) The limitation, suspension, or termination of the eligibility of the servicer to contract with any institution to administer any aspect of the institution's participation in a Title IV, HEA program.
Sec. 668.12 [Removed and Reserved]
| Sec. 668.13 Certification procedures. |
(a) Requirements for certification. (1)(i) The Secretary certifies an institution to participate in the title IV, HEA programs if the institution qualifies as an eligible institution under 34 CFR part 600, meets the standards of this subpart and 34 CFR part 668, subpart L, and satisfies the requirements of paragraph (a)(2) of this section.
(ii) On application from the institution, the Secretary certifies a location of an institution that meets the requirements of Sec. 668.13(a)(1)(i) as a branch if it satisfies the definition of "branch" in 34 CFR 600.2.
(2) Except as provided in paragraph (a)(3) of this section, if an institution wishes to participate for the first time in the title IV, HEA programs or has undergone a change in ownership that results in a change in control as described in 34 CFR 600.31, the institution must require the following individuals to complete title IV, HEA program training provided or approved by the Secretary no later than 12 months after the institution executes its program participation agreement under Sec. 668.14:
(i) The individual the institution designates under Sec. 668.16(b)(1) as its title IV, HEA program administrator.
(ii) The institution's chief administrator or a high level institutional official the chief administrator designates.
(3)(i) An institution may request the Secretary to waive the training requirement for any individual described in paragraph (a)(2) of this section.
(ii) When the Secretary receives a waiver request under paragraph (a)(3)(i) of this section, the Secretary may grant or deny the waiver, require another institutional official to take the training, or require alternative training.
(b) Period of participation. (1) If the Secretary certifies that an institution meets the standards of this subpart, the Secretary also specifies the period for which the institution may participate in a title IV, HEA program. An institution's period of participation expires six years after the date that the Secretary certifies that the institution meets the standards of this subpart, except that—
(i) The period of participation for a private, for profit foreign institution expires three years after the date of the Secretary's certification; and
(ii) The Secretary may specify a shorter period.
(2) Provided that an institution has submitted an application for a renewal of certification that is materially complete at least 90 days prior to the expiration of its current period of participation, the institution's existing certification will be extended on a month to month basis following the expiration of the institution's period of participation until the end of the month in which the Secretary issues a decision on the application for recertification.
(3) In the event that the Secretary does not make a determination to grant or deny certification within 12 months of the expiration of its current period of participation, the institution will automatically be granted renewal of certification, which may be provisional.
(c) Provisional certification. (1)(i) The Secretary may provisionally certify an institution if—
(A) The institution seeks initial participation in a Title IV, HEA program;
(B) The institution is an eligible institution that has undergone a change in ownership that results in a change in control according to the provisions of 34 CFR part 600;
(C) The institution is a participating institution that is applying for a renewal of certification—
(1) That the Secretary determines has jeopardized its ability to perform its financial responsibilities by not meeting the factors of financial responsibility under subpart L of this part or the standards of administrative capability under Sec. 668.16; is applying for a certification that the institution meets the standards of this subpart;
(2) Whose participation has been limited or suspended under subpart G of this part; or That the Secretary determines has jeopardized its ability to perform its financial responsibilities by not meeting the factors of financial responsibility under Sec. 668.15 and subpart L of this part or the standards of administrative capability under Sec. 668.16; and
(3) That voluntarily enters into provisional certification; Whose participation has been limited or suspended under subpart G of this part, or voluntarily enters into provisional certification;
(D) The institution seeks to be reinstated to participate in a title IV, HEA program after a prior period of participation in that program ended; a renewal of participation in a Title IV, HEA program after the expiration of a prior period of participation in that program;
(E) The institution is a participating institution that was accredited or preaccredited by a nationally recognized accrediting agency on the day before the Secretary withdrew the Secretary's recognition of that agency according to the provisions contained in 34 CFR part 602; or
(F) The Secretary has determined that the institution is at risk of closure; or The institution is a participating institution that has been provisionally recertified under the automatic recertification requirement in paragraph (b)(3) of this section.
(G) The institution is under the provisional certification alternative of subpart L of this part.
(ii) An institution’s certification becomes provisional upon notification from the Secretary if—
(A) The institution triggers one of the financial responsibility events under Sec. 668.171(c) or (d) and, as a result, the Secretary requires the institution to post financial protection; or
(B) Any owner or interest holder of the institution with control over that institution, as defined in 34 CFR 600.31, also owns another institution with fines or liabilities owed to the Department and is not making payments in accordance with an agreement to repay that liability.
(iii)(ii) A proprietary institution's certification automatically becomes provisional at the start of a fiscal year if after it did not derive at least 10 percent of its revenue for its preceding fiscal year from sources other than Federal educational assistance Title IV, HEA program funds, as required under Sec. 668.14(b)(16).
(2) If the Secretary provisionally certifies an institution, the Secretary also specifies the period for which the institution may participate in a Title IV, HEA program. Except as provided in paragraphs (c) (3) and (4) of this section or subpart L of this part, a provisionally certified institution's period of participation expires—
(i) Not later than the end of the first complete award year following the date on which the Secretary provisionally certified the institution for its initial certification; under paragraph (c)(1)(A) of this section;
(ii) Not later than the end of the third complete award year following the date on which the Secretary provisionally certified an the institution for reasons— under paragraphs (c)(1)(i)(B), (C), and (D) or paragraph (c)(1)(ii) of this section; and
(A) Related to substantial liabilities owed or potentially owed to the Department for discharges related to borrower defense to repayment or false certification, or arising from claims under consumer protection laws; or
(B) As a result of a change in ownership, recertification, reinstatement, automatic recertification, or a failure under Sec. 668.14(b)(32); and
(iii) If the Secretary provisionally certified the institution under paragraph (c)(1)(i)(E) of this section, not later than 18 months after the date that the Secretary withdrew recognition from the institution's nationally recognized accrediting agency.
(3) Notwithstanding the maximum periods of participation provided for in paragraph (c)(2) of this section, if the Secretary provisionally certifies an institution, the Secretary may specify a shorter period of participation for that institution.
(4) For the purposes of this section, "provisional certification" means that the Secretary certifies that an institution has demonstrated to the Secretary's satisfaction that the institution—
(i) Is capable of meeting the standards of this subpart within a specified period; and
(ii) Is able to meet the institution's responsibilities under its program participation agreement, including compliance with any additional conditions specified in the institution's program participation agreement that the Secretary requires the institution to meet in order for the institution to participate under provisional certification.
(d) Revocation of provisional certification. (1) If, before the expiration of a provisionally certified institution's period of participation in a Title IV, HEA program, the Secretary determines that the institution is unable to meet its responsibilities under its program participation agreement, the Secretary may revoke the institution's provisional certification for participation in that program.
(2)(i) If the Secretary revokes the provisional certification of an institution under paragraph (d)(1) of this section, the Secretary sends the institution a notice by certified mail, return receipt requested. The Secretary also may transmit the notice by other, more expeditious means, if practical.
(ii) The revocation takes effect on the date that the Secretary transmits mails the notice to the institution.
(iii) The notice states the basis for the revocation, the consequences of the revocation to the institution, and that the institution may request the Secretary to reconsider the revocation. The consequences of a revocation are described in Sec. 668.26.
(3)(i) An institution may request reconsideration of a revocation under this section by submitting to the Secretary, within 20 days of the institution's receipt of the Secretary's notice, written evidence that the revocation is unwarranted. The institution must file the request with the Secretary by hand-delivery, mail, or electronic transmission.
(ii) The filing date of the request is the date on which the request is—
(C) Sent by electronic transmission.
(iii) Documents filed by electronic transmission must be transmitted to the Secretary in accordance with instructions provided by the Secretary in the notice of revocation.
(4)(i) The designated department official making the decision concerning an institution's request for reconsideration of a revocation is different from, and not subject to supervision by, the official who initiated the revocation of the institution's provisional certification. The deciding official promptly considers an institution's request for reconsideration of a revocation and notifies the institution, by certified mail, return receipt requested, of the final decision. The Secretary also may transmit the notice by other, more expeditious means, if practical.
(ii) If the Secretary determines that the revocation is warranted, the Secretary's notice informs the institution that the institution may apply for reinstatement of participation only after the later of the expiration of—
(A) Eighteen months after the effective date of the revocation; or
(B) A debarment or suspension of the institution under Executive Order (E.O.) 12549 (3 CFR, 1986 comp., p. 189) or the Federal Acquisition Regulations, 48 CFR part 9, subpart 9.4.
(iii) If the Secretary determines that the revocation of the institution's provisional certification is unwarranted, the Secretary's notice informs the institution that the institution's provisional certification is reinstated, effective on the date that the Secretary's original revocation notice was mailed, for a specified period of time.
(5) The mailing date of a notice of revocation or a request for reconsideration of a revocation is the date evidenced on the original receipt of mailing from the U.S. Postal Service or another service that provides delivery confirmation for that document.
(e) Supplementary performance measures. In determining whether to certify, or condition the participation of, an institution under this section and Sec. 668.14, the Secretary may consider the following, among other information at the program or institutional level:
(1) Withdrawal rate. The percentage of students who withdrew from the institution within 100 percent or 150 percent of the published length of the program.
(2) Educational and pre-enrollment expenditures. The amounts the institution spent on instruction and instructional activities, academic support, and support services, compared to the amounts spent on recruiting activities, advertising, and other pre-enrollment expenditures.
(3) Licensure pass rate. If a program is designed to meet educational requirements for a specific professional license or certification that is required for employment in an occupation, and the institution is required by an accrediting agency or State to report passage rates for the licensure exam for the program, such passage rates.
| Sec. 668.14 Program participation agreement. |
(a)(1) An institution may participate in any Title IV, HEA program, other than the LEAP and NEISP programs, only if the institution enters into a written program participation agreement with the Secretary, on a form approved by the Secretary. A program participation agreement conditions the initial and continued participation of an eligible institution in any Title IV, HEA program upon compliance with the provisions of this part, the individual program regulations, and any additional conditions specified in the program participation agreement that the Secretary requires the institution to meet.
(2) An institution's program participation agreement applies to each branch campus and other location of the institution that meets the applicable requirements of this part unless otherwise specified by the Secretary.
(3) An institution’s program participation agreement must be signed by—
(i) An authorized representative of the institution; and
(ii) For a proprietary or private nonprofit institution, an authorized representative of an entity with direct or indirect ownership of the institution if that entity has the power to exercise control over the institution. The Secretary considers the following as examples of circumstances in which an entity has such power:
(A) If the entity has at least 50 percent control over the institution through direct or indirect ownership, by voting rights, by its right to appoint board members to the institution or any other entity, whether by itself or in combination with other entities or natural persons with which it is affiliated or related, or pursuant to a proxy or voting or similar agreement.
(B) If the entity has the power to block significant actions.
(C) If the entity is the 100 percent direct or indirect interest holder of the institution.
(D) If the entity provides or will provide the financial statements to meet any of the requirements of 34 CFR 600.20(g) or (h) or subpart L of this part.
(b) By entering into a program participation agreement, an institution agrees that—
(1) It will comply with all statutory provisions of or applicable to Title IV of the HEA, all applicable regulatory provisions prescribed under that statutory authority, and all applicable special arrangements, agreements, and limitations entered into under the authority of statutes applicable to Title IV of the HEA, including the requirement that the institution will use funds it receives under any Title IV, HEA program and any interest or other earnings thereon, solely for the purposes specified in and in accordance with that program;
(2) As a fiduciary responsible for administering Federal funds, if the institution is permitted to request funds under a Title IV, HEA program advance payment method, the institution will time its requests for funds under the program to meet the institution's immediate Title IV, HEA program needs;
(3) It will not request from or charge any student a fee for processing or handling any application, form, or data required to determine a student's eligibility for, and amount of, Title IV, HEA program assistance;
(4) It will establish and maintain such administrative and fiscal procedures and records as may be necessary to ensure proper and efficient administration of funds received from the Secretary or from students under the Title IV, HEA programs, together with assurances that the institution will provide, upon request and in a timely manner, information relating to the administrative capability and financial responsibility of the institution to—
(ii) A guaranty agency, as defined in 34 CFR part 682, that guarantees loans made under the Federal Stafford Loan and Federal PLUS programs for attendance at the institution or any of the institution's branch campuses or other locations;
(iii) The nationally recognized accrediting agency that accredits or preaccredits the institution or any of the institution's branch campuses, other locations, or educational programs;
(iv) The State agency that legally authorizes the institution and any branch campus or other location of the institution to provide postsecondary education; and
(v) In the case of a public postsecondary vocational educational institution that is approved by a State agency recognized for the approval of public postsecondary vocational education, that State agency;
(5) It will comply with the provisions of subpart L of this part Sec. 668.15 relating to factors of financial responsibility;
(6) It will comply with the provisions of Sec. 668.16 relating to standards of administrative capability;
(7) It will submit reports to the Secretary and, in the case of an institution participating in the Federal Stafford Loan, Federal PLUS, or the Federal Perkins Loan Program, to holders of loans made to the institution's students under that program at such times and containing such information as the Secretary may reasonably require to carry out the purpose of the Title IV, HEA programs;
(8) It will not provide any statement to any student or certification to any lender in the case of an FFEL Program loan, or origination record to the Secretary in the case of a Direct Loan Program loan that qualifies the student or parent for a loan or loans in excess of the amount that the student or parent is eligible to borrow in accordance with sections 425(a), 428(a)(2), 428(b)(1)(A) and (B), 428B, 428H, and 455(a) of the HEA;
(9) It will comply with the requirements of subpart D of this part concerning institutional and financial assistance information for students and prospective students;
(10) In the case of an institution that advertises job placement rates as a means of attracting students to enroll in the institution, the institution will make available to prospective students, at or before the time that those students apply for enrollment—
(i) The most recent available data concerning employment statistics, graduation statistics, and any other information necessary to substantiate the truthfulness of the advertisements; and
(ii) Relevant State licensing requirements of the State in which the institution is located for any job for which the course of instructionis designed to prepare those prospective students, as provided in Sec. 668.43(a)(5)(v);
(11) In the case of an institution participating in the FFEL program, the institution will inform all eligible borrowers, as defined in 34 CFR part 682, enrolled in the institution about the availability and eligibility of those borrowers for State grant assistance from the State in which the institution is located, and will inform borrowers from another State of the source of further information concerning State grant assistance from that State;
(12) It will provide the certifications described in paragraph (c) of this section;
(13) In the case of an institution whose students receive financial assistance pursuant to section 484(d) of the HEA, the institution will make available to those students a program proven successful in assisting students in obtaining the recognized equivalent of a high school diploma;
(14) It will not deny any form of Federal financial aid to any eligible student solely on the grounds that the student is participating in a program of study abroad approved for credit by the institution;
(15)(i) Except as provided under paragraph (b)(15)(ii) of this section, the institution will use a default management plan approved by the Secretary with regard to its administration of the FFEL or Direct Loan programs, or both for at least the first two years of its participation in those programs, if the institution—
(A) Is participating in the FFEL or Direct Loan programs for the first time; or
(B) Is an institution that has undergone a change of ownership that results in a change in control and is participating in the FFEL or Direct Loan programs.
(ii) The institution does not have to use an approved default management plan if—
(A) The institution, including its main campus and any branch campus, does not have a cohort default rate in excess of 10 percent; and
(B) The owner of the institution does not own and has not owned any other institution that had a cohort default rate in excess of 10 percent while that owner owned the institution.
(16) For a proprietary institution, the institution will derive at least 10 percent of its revenues for each fiscal year from sources other than Federal funds, Title IV, HEA program funds, as provided in Sec. 668.28(a), and (b), or be subject to sanctions described in Sec. 668.28(c);
(17) The Secretary, guaranty agencies and lenders as defined in 34 CFR part 682, nationally recognized accrediting agencies, Federal agencies, the Secretary of Veterans Affairs, State agencies recognized under 34 CFR part 603 for the approval of public postsecondary vocational education, and State agencies that legally authorize institutions and branch campuses or other locations of institutions to provide postsecondary education, and State attorneys general have the authority to share with each other any information pertaining to the institution's eligibility for or participation in the Title IV, HEA programs or any information on fraud and abuse,or other violations of law;
(i) Employ in a capacity that involves the administration of the Title IV, HEA programs or the receipt of funds under those programs, an individual who has been: convicted of, or has pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, or local government funds, or has been administratively or judicially determined to have committed fraud or any other material violation of law involving Federal, State, or local government funds;
(A) Convicted of, or pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, or local government funds;
(B) Administratively or judicially determined to have committed fraud or any other material violation of law involving Federal, State, or local government funds;
(C) An owner, director, officer, or employee who exercised substantial control over an institution, or a direct or indirect parent entity of an institution, that owes a liability for a violation of a title IV, HEA program requirement and is not making payments in accordance with an agreement to repay that liability; or
(D) A ten-percent-or-higher equity owner, director, officer, principal, executive, or contractor at an institution in any year in which the institution incurred a loss of Federal funds in excess of five percent of the participating institution’s annual title IV, HEA program funds; or
(ii) Contract with an institution, or third-party servicer, individual, agency, or organization that has, or whose owners, officers or employees have— that has been terminated under section 432 of the HEA for a reason involving the acquisition, use, or expenditure of Federal, State, or local government funds, or that has been administratively or judicially determined to have committed fraud or any other material violation of law involving Federal, State, or local government funds; or
(A) Been convicted of, or pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, or local government funds;
(B) Been administratively or judicially determined to have committed fraud or any other material violation of law involving Federal, State, or local government funds;
(C) Had its participation in the title IV programs terminated, certification revoked, or application for certification or recertification for participation in the title IV programs denied;
(D) Been an owner, director, officer, or employee who exercised substantial control over an institution, or a direct or indirect parent entity of an institution, that owes a liability for a violation of a title IV, HEA program requirement and is not making payments in accordance with an agreement to repay that liability; or
(E) Been a 10 percent-or-higher equity owner, director, officer, principal, executive, or contractor affiliated with another institution in any year in which the other institution incurred a loss of Federal funds in excess of 5 percent of the participating institution’s annual title IV, HEA program funds;
(iii) Contract with or employ any individual, agency, or organization that has been, or whose officers or employees have been—
(A) Convicted of, or pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, or local government funds; or
(B) Administratively or judicially determined to have committed fraud or any other material violation of law involving Federal, State, or local government funds;
(19) It will complete, in a timely manner and to the satisfaction of the Secretary, surveys conducted as a part of the Integrated Postsecondary Education Data System (IPEDS) or any other Federal collection effort, as designated by the Secretary, regarding data on postsecondary institutions;
(20) In the case of an institution that is co-educational and has an intercollegiate athletic program, it will comply with the provisions of Sec. 668.48;
(21) It will not impose any penalty, including, but not limited to, the assessment of late fees, the denial of access to classes, libraries, or other institutional facilities, or the requirement that the student borrow additional funds for which interest or other charges are assessed, on any student because of the student's inability to meet his or her financial obligations to the institution as a result of the delayed disbursement of the proceeds of a Title IV, HEA program loan due to compliance with statutory and regulatory requirements of or applicable to the Title IV, HEA programs, or delays attributable to the institution;
(22)(i) It will not provide any commission, bonus, or other incentive payment based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid, to any person or entity who is engaged in any student recruitment or admission activity, or in making decisions regarding the award of title IV, HEA program funds.
(A) The restrictions in paragraph (b)(22) of this section do not apply to the recruitment of foreign students residing in foreign countries who are not eligible to receive Federal student assistance.
(B) For the purpose of paragraph (b)(22) of this section, an employee who receives multiple adjustments to compensation in a calendar year and is engaged in any student enrollment or admission activity or in making decisions regarding the award of title IV, HEA program funds is considered to have received such adjustments based upon success in securing enrollments or the award of financial aid if those adjustments create compensation that is based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid.
(ii) Notwithstanding paragraph (b)(22)(i) of this section, eligible institutions, organizations that are contractors to eligible institutions, and other entities may make—
(A) Merit-based adjustments to employee compensation provided that such adjustments are not based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid; and
(B) Profit-sharing payments so long as such payments are not provided to any person or entity engaged in student recruitment or admission activity or in making decisions regarding the award of title IV, HEA program funds.
(iii) As used in paragraph (b)(22) of this section,
(A) Commission, bonus, or other incentive payment means a sum of money or something of value, other than a fixed salary or wages, paid to or given to a person or an entity for services rendered.
(B) Securing enrollments or the award of financial aid means activities that a person or entity engages in at any point in time through completion of an educational program for the purpose of the admission or matriculation of students for any period of time or the award of financial aid to students.
(1) These activities include contact in any form with a prospective student, such as, but not limited to—contact through preadmission or advising activities, scheduling an appointment to visit the enrollment office or any other office of the institution, attendance at such an appointment, or involvement in a prospective student's signing of an enrollment agreement or financial aid application.
(2) These activities do not include making a payment to a third party for the provision of student contact information for prospective students provided that such payment is not based on—
(i) Any additional conduct or action by the third party or the prospective students, such as participation in preadmission or advising activities, scheduling an appointment to visit the enrollment office or any other office of the institution or attendance at such an appointment, or the signing, or being involved in the signing, of a prospective student's enrollment agreement or financial aid application; or
(ii) The number of students (calculated at any point in time of an educational program) who apply for enrollment, are awarded financial aid, or are enrolled for any period of time, including through completion of an educational program.
(C) Entity or person engaged in any student recruitment or admission activity or in making decisions about the award of financial aid means—
(1) With respect to an entity engaged in any student recruitment or admission activity or in making decisions about the award of financial aid, any institution or organization that undertakes the recruiting or the admitting of students or that makes decisions about and awards title IV, HEA program funds; and
(2) With respect to a person engaged in any student recruitment or admission activity or in making decisions about the award of financial aid, any employee who undertakes recruiting or admitting of students or who makes decisions about and awards title IV, HEA program funds, and any higher level employee with responsibility for recruitment or admission of students, or making decisions about awarding title IV, HEA program funds.
(D) Enrollment means the admission or matriculation of a student into an eligible institution.
(23) It will meet the requirements established pursuant to part H of Title IV of the HEA by the Secretary and nationally recognized accrediting agencies;
(24) It will comply with the requirements of Sec. 668.22;
(i) Improperly spent or unspent funds received under the Title IV, HEA programs, including any funds administered by a third-party servicer; and
(ii) Returns of title IV, HEA program funds that the institution or its servicer may be required to make;
(26) If an educational program offered by the institution on or after July 1, 2024, is required to prepare a student for gainful employment in a recognized occupation, the institution must—
(i) Establish the need for the training for the student to obtain employment in the recognized occupation for which the program prepares the student; and
(ii) Demonstrate a reasonable relationship between the length of the program and entry level requirements for the recognized occupation for which the program prepares the student by limiting the number of hours in the program to . The Secretary considers the relationship to be reasonable if the number of clock hours provided in the program does not exceed the greater of—
(A) The required minimum number of clock hours, credit hours, or the equivalent required for training in the recognized occupation for which the program prepares the student, as established by the State in which the institution is located, if the State has established such a requirement One hundred and fifty percent of the minimum number of clock hours required for training in the recognized occupation for which the program prepares the student, as established by the State in which the institution is located, if the State has established such a requirement, or as established by any Federal agency; or
(B) Another State’s required minimum number of clock hours, credit hours, or the equivalent required for training in the recognized occupation for which the program prepares the student, if the institution documents, with substantiation by a certified public accountant who prepares the institution’s compliance audit report as required under Sec. 668.23 that— The minimum number of clock hours required for training in the recognized occupation for which the program prepares the student as established in a State adjacent to the State in which the institution is located; and
(1) A majority of students resided in that State while enrolled in the program during the most recently completed award year;
(2) A majority of students who completed the program in the most recently completed award year were employed in that State; or
(3) The other State is part of the same metropolitan statistical area as the institution’s home State and a majority of students, upon enrollment in the program during the most recently completed award year, stated in writing that they intended to work in that other State; and
(iii) Notwithstanding paragraph (a)(26)(ii) of this section, the program length limitation does not apply for occupations where the State entry level requirements include the completion of an associate or higher-level degree; or where the program is delivered entirely through distance education or correspondence courses; Provide for that program the certification required in Sec. 668.414.
(27) In the case of an institution participating in a Title IV, HEA loan program, the institution—
(i) Will develop, publish, administer, and enforce a code of conduct with respect to loans made, insured or guaranteed under the Title IV, HEA loan programs in accordance with 34 CFR 601.21; and
(ii) Must inform its officers, employees, and agents with responsibilities with respect to loans made, insured or guaranteed under the Title IV, HEA loan programs annually of the provisions of the code required under paragraph (b)(27) of this section;
(28) For any year in which the institution has a preferred lender arrangement (as defined in 34 CFR 601.2(b)), it will at least annually compile, maintain, and make available for students attending the institution, and the families of such students, a list in print or other medium, of the specific lenders for loans made, insured, or guaranteed under title IV of the HEA or private education loans that the institution recommends, promotes, or endorses in accordance with such preferred lender arrangement. In making such a list, the institution must comply with the requirements in 34 CFR 682.212(h) and 34 CFR 601.10;
(29)(i) It will, upon the request of an enrolled or admitted student who is an applicant for a private education loan (as defined in 34 CFR 601.2(b)), provide to the applicant the self-certification form required under 34 CFR 601.11(d) and the information required to complete the form, to the extent the institution possesses such information, including—
(A) The applicant's cost of attendance at the institution, as determined by the institution under part F of title IV of the HEA;
(B) The applicant's estimated financial assistance, including amounts of financial assistance used to replace the expected family contribution as determined by the institution in accordance with title IV, for students who have completed the Free Application for Federal Student Aid; and
(C) The difference between the amounts under paragraphs (b)(29)(i)(A) and (29)(i)(B) of this section, as applicable.
(ii) It will, upon the request of the applicant, discuss with the applicant the availability of Federal, State, and institutional student financial aid;
(i) Has developed and implemented written plans to effectively combat the unauthorized distribution of copyrighted material by users of the institution's network, without unduly interfering with educational and research use of the network, that include—
(A) The use of one or more technology-based deterrents;
(B) Mechanisms for educating and informing its community about appropriate versus inappropriate use of copyrighted material, including that described in Sec. 668.43(a)(10);
(C) Procedures for handling unauthorized distribution of copyrighted material, including disciplinary procedures; and
(D) Procedures for periodically reviewing the effectiveness of the plans to combat the unauthorized distribution of copyrighted materials by users of the institution's network using relevant assessment criteria. No particular technology measures are favored or required for inclusion in an institution's plans, and each institution retains the authority to determine what its particular plans for compliance with paragraph (b)(30) of this section will be, including those that prohibit content monitoring; and
(ii) Will, in consultation with the chief technology officer or other designated officer of the institution—
(A) Periodically review the legal alternatives for downloading or otherwise acquiring copyrighted material;
(B) Make available the results of the review in paragraph (b)(30)(ii)(A) of this section to its students through a Web site or other means; and
(C) To the extent practicable, offer legal alternatives for downloading or otherwise acquiring copyrighted material, as determined by the institution; and
(31) The institution will submit a teach-out plan to its accrediting agency in compliance with 34 CFR 602.24(c) and the standards of the institution's accrediting agency. The institution will update its teach-out plan upon the occurrence of any of the following events:
(i) The Secretary initiates the limitation, suspension, or termination of the participation of an institution in any Title IV, HEA program under 34 CFR 600.41 or subpart G of this part or initiates an emergency action under Sec. 668.83.
(ii) The institution's accrediting agency acts to withdraw, terminate, or suspend the accreditation or preaccreditation of the institution.
(iii) The institution's State licensing or authorizing agency revokes the institution's license or legal authorization to provide an educational program.
(iv) The institution intends to close a location that provides 100 percent of at least one program.
(v) The institution otherwise intends to cease operations.
(32) In each State in which: the institution is located; students enrolled by the institution in distance education or correspondence courses are located, as determined at the time of initial enrollment in accordance with 34 CFR 600.9(c)(2); or for the purposes of paragraphs (b)(32)(i) and (ii) of this section, each student who enrolls in a program on or after July 1, 2024, and attests that they intend to seek employment, the institution must determine that each program eligible for title IV, HEA program funds—
(i) Is programmatically accredited if the State or a Federal agency requires such accreditation, including as a condition for employment in the occupation for which the program prepares the student, or is programmatically pre-accredited when programmatic pre-accreditation is sufficient according to the State or Federal agency;
(ii) Satisfies the applicable educational requirements for professional licensure or certification requirements in the State so that a student who enrolls in the program, and seeks employment in that State after completing the program, qualifies to take any licensure or certification exam that is needed for the student to practice or find employment in an occupation that the program prepares students to enter; and
(iii) Complies with all State laws related to closure, including record retention, teach-out plans or agreements, and tuition recovery funds or surety bonds;
(33) It will not withhold official transcripts or take any other negative action against a student related to a balance owed by the student that resulted from an error in the institution’s administration of the title IV, HEA programs, or any fraud or misconduct by the institution or its personnel;
(34) Upon request by a student, the institution will provide an official transcript that includes all the credit or clock hours for payment periods—
(i) In which the student received Title IV, HEA funds; and
(ii) For which all institutional charges were paid or included in an agreement to pay at the time the request is made; and
(35) It will not maintain policies and procedures to encourage, or that condition institutional aid or other student benefits in a manner that induces, a student to limit the amount of Federal student aid, including Federal loan funds, that the student receives, except that the institution may provide a scholarship on the condition that a student forego borrowing if the amount of the scholarship provided is equal to or greater than the amount of Federal loan funds that the student agrees not to borrow.
(c) In order to participate in any Title IV, HEA program (other than the LEAP and NEISP programs), the institution must certify that it—
(1) Has in operation a drug abuse prevention program that the institution has determined to be accessible to any officer, employee, or student at the institution; and
(2)(i) Has established a campus security policy in accordance with section 485(f) of the HEA; and
(ii) Has complied with the disclosure requirements of 668.47 as required by section 485(f) of the HEA.
(d)(1) The institution, if located in a State to which section 4(b) of the National Voter Registration Act (42 U.S.C. 1973gg-2(b)) does not apply, will make a good faith effort to distribute a mail voter registration form, requested and received from the State, to each student enrolled in a degree or certificate program and physically in attendance at the institution, and to make those forms widely available to students at the institution.
(2) The institution must request the forms from the State 120 days prior to the deadline for registering to vote within the State. If an institution has not received a sufficient quantity of forms to fulfill this section from the State within 60 days prior to the deadline for registering to vote in the State, the institution is not liable for not meeting the requirements of this section during that election year.
(3) This paragraph applies to elections as defined in section 301(1) of the Federal Election Campaign Act of 1971 (2 U.S.C. 431(1)), and includes the election for Governor or other chief executive within such State.
(e) If an institution is provisionally certified, the Secretary may apply such conditions as are determined to be necessary or appropriate to the institution, including, but not limited to—
(1) For an institution that the Secretary determines may be at risk of closure— A program participation agreement becomes effective on the date that the Secretary signs the agreement.
(i) Submission of an acceptable teachout plan or agreement to the Department, the State, and the institution’s recognized accrediting agency; and
(ii) Submission to the Department of an acceptable records retention plan that addresses title IV, HEA records, including but not limited to student transcripts, and evidence that the plan has been implemented;
(2) For an institution that the Secretary determines may be at risk of closure, that is teaching out or closing, or that is not financially responsible or administratively capable, the release of holds on student transcripts; A new program participation agreement supersedes any prior program participation agreement between the Secretary and the institution.
(3) Restrictions or limitations on the addition of new programs or locations;
(4) Restrictions on the rate of growth, new enrollment of students, or title IV, HEA volume in one or more programs;
(5) Restrictions on the institution providing a teach-out on behalf of another institution;
(6) Restrictions on the acquisition of another participating institution, which may include, in addition to any other required financial protection, the posting of financial protection in an amount determined by the Secretary but not less than 10 percent of the acquired institution’s title IV, HEA volume for the prior fiscal year;
(7) Additional reporting requirements, which may include, but are not limited to, cash balances, an actual and protected cash flow statement, student rosters, student complaints, and interim unaudited financial statements;
(8) Limitations on the institution entering into a written arrangement with another eligible institution or an ineligible institution or organization for that other eligible institution or ineligible institution or organization to provide between 25 and 50 percent of the institution’s educational program under Sec. 668.5(a) or (c); and
(9) For an institution found to have engaged in substantial misrepresentations to students, engaged in aggressive recruiting practices, or violated incentive compensation rules, requirements to hire a monitor and to submit marketing and other recruiting materials (e.g., call scripts) for the review and approval of the Secretary; and
(10) Reporting to the Department, no later than 21 days after an institution receives from any local, State, Tribal, Federal, or foreign government or government entity a civil investigative demand, a subpoena, a request for documents or information, or other formal inquiry that is related to the marketing or recruitment of prospective students, the awarding of Federal financial aid for enrollment at the school, or the provision of educational services for which Federal aid is provided.
(f) If a proprietary institution seeks to convert to nonprofit status following a change in ownership, the following conditions will apply to the institution following the change in ownership, in addition to any other conditions that the Secretary may deem appropriate:
(1) The institution must continue to meet the requirements under Sec. 668.28(a) until the Department has accepted, reviewed, and approved the institution’s financial statements and compliance audits that cover two complete consecutive fiscal years in which the institution meets the requirements of paragraph (b)(16) of this section under its new ownership, or until the Department approves the institution’s request to convert to nonprofit status, whichever is later. Except as provided in paragraphs (g) and (h) of this section, the Secretary terminates a program participation agreement through the proceedings in subpart G of this part.
(2) The institution must continue to meet the gainful employment requirements of subpart S of this part until the Department has accepted, reviewed, and approved the institution’s financial statements and compliance audits that cover two complete consecutive fiscal years under its new ownership, or until the Department approves the institution’s request to convert to nonprofit status, whichever is later. An institution may terminate a program participation agreement.
(3) The institution must submit regular and timely reports on agreements entered into with a former owner of the institution or a natural person or entity related to or affiliated with the former owner of the institution, so long as the institution participates as a nonprofit institution. If the Secretary or the institution terminates a program participation agreement under paragraph (f) of this section, the Secretary establishes the termination date.
(4) The institution may not advertise that it operates as a nonprofit institution for the purposes of title IV, HEA until the Department approves the institution’s request to convert to nonprofit status.
(g) If an institution is initially certified as a nonprofit institution, or if it has undergone a change in ownership and seeks to convert to nonprofit status, the following conditions will apply to the institution upon initial certification or following the change in ownership, in addition to any other conditions that the Secretary may deem appropriate: An institution's program participation agreement automatically expires on the date that—
(1) The institution must submit reports on accreditor and State authorization agency actions and any new servicing agreements within 10 business days of receipt of the notice of the action or of entering into the agreement, as applicable, until the Department has accepted, reviewed, and approved the institution’s financial statements and compliance audits that cover two complete consecutive fiscal years following initial certification, or two complete fiscal years after a change in ownership, or until the Department approves the institution’s request to convert to nonprofit status, whichever is later. The institution changes ownership that results in a change in control as determined by the Secretary under 34 CFR part 600; or
(2) The institution must submit a report and copy of the communications from the Internal Revenue Service (IRS) or any State or foreign country related to tax-exempt or nonprofit status within 10 business days of receipt so long as the institution participates as a nonprofit institution. The institution's participation ends under the provisions of Sec. 668.26(a) (1), (2), (4), or (7).
(h) An institution's program participation agreement no longer applies to or covers a location of the institution as of the date on which that location ceases to be a part of the participating institution.
| Sec. 668.15 [Removed and Reserved] Factors of financial responsibility. |
(a) General. To begin and to continue to participate in any Title IV, HEA program, an institution must demonstrate to the Secretary that the institution is financially responsible under the requirements established in this section.
(b) General standards of financial responsibility. In general, the Secretary considers an institution to be financially responsible only if it—
(1) Is providing the services described in its official publications and statements;
(2) Is providing the administrative resources necessary to comply with the requirements of this subpart;
(3) Is meeting all of its financial obligations, including but not limited to—
(i) Refunds that it is required to make; and
(ii) Repayments to the Secretary for liabilities and debts incurred in programs administered by the Secretary;
(4) Is current in its debt payments. The institution is not considered current in its debt payments if—
(i) The institution is in violation of any existing loan agreement at its fiscal year end, as disclosed in a note to its audited financial statement; or
(ii) the institution fails to make a payment in accordance with existing debt obligations for more than 120 days, and at least one creditor has filed suit to recover those funds;
(5) Except as provided in paragraph (d) of this section, in accordance with procedures established by the Secretary, submits to the Secretary an irrevocable letter of credit, acceptable and payable to the Secretary equal to 25 percent of the total dollar amount of Title IV, HEA program refunds paid by the institution in the previous fiscal year;
(6) Has not had, as part of the audit report for the institution's most recently completed fiscal year—
(i) A statement by the accountant expressing substantial doubt about the institution's ability to continue as a going concern; or
(ii) A disclaimed or adverse opinion by the accountant;
(7) For a for-profit institution—
(i)(A) Demonstrates at the end of its latest fiscal year, an acid test ratio of at least 1:1. For purposes of this section, the acid test ratio shall be calculated by adding cash and cash equivalents to current accounts receivable and dividing the sum by total current liabilities. The calculation of the acid test ratio shall exclude all unsecured or uncollateralized related party receivables;
(B) Has not had operating losses in either or both of its two latest fiscal years that in sum result in a decrease in tangible net worth in excess of 10 percent of the institution's tangible net worth at the beginning of the first year of the two-year period. The Secretary may calculate an operating loss for an institution by excluding from net income: extraordinary gains or losses; income or losses from discontinued operations; prior period adjustment; and, the cumulative effect of changes in accounting principle. For purposes of this section, the calculation of tangible net worth shall exclude all assets defined as intangible in accordance with generally accepted accounting principles; and
(C) Had, for its latest fiscal year, a positive tangible net worth. In applying this standard, a positive tangible net worth occurs when the institution's tangible assets exceed its liabilities. The calculation of tangible net worth shall exclude all assets classified as intangible in accordance with the generally accepted accounting principles; or
(ii) Demonstrates to the satisfaction of the Secretary that it has currently issued and outstanding debt obligations that are (without insurance, guarantee, or credit enhancement) listed at or above the second highest rating level of credit quality given by a nationally recognized statistical rating organization;
(8) For a nonprofit institution—
(i)(A) Prepares a classified statement of financial position in accordance with generally accepted accounting principles or provides the required information in notes to the audited financial statements;
(B) Demonstrates at the end of its latest fiscal year, an acid test ratio of at least 1:1. For purposes of this section, the acid test ratio shall be calculated by adding cash and cash equivalents to current accounts receivable and dividing the sum by total current liabilities. The calculation of the acid test ratio shall exclude all unsecured or uncollateralized related party receivables.
(C)(1) Has, at the end of its latest fiscal year, a positive unrestricted current fund balance or positive unrestricted net assets. In calculating the unrestricted current fund balance or the unrestricted net assets for an institution, the Secretary may include funds that are temporarily restricted in use by the institution's governing body that can be transferred to the current unrestricted fund or added to net unrestricted assets at the discretion of the governing body; or
(2) Has not had, an excess of current fund expenditures over current fund revenues over both of its 2 latest fiscal years that results in a decrease exceeding 10 percent in either the unrestricted current fund balance or the unrestricted net assets at the beginning of the first year of the 2-year period. The Secretary may exclude from net changes in fund balances for the operating loss calculation: Extraordinary gains or losses; income or losses from discontinued operations; prior period adjustment; and the cumulative effect of changes in accounting principle. In calculating the institution's unrestricted current fund balance or the unrestricted net assets, the Secretary may include funds that are temporarily restricted in use by the institution's governing body that can be transferred to the current unrestricted fund or added to net unrestricted assets at the discretion of the governing body; or
(ii) Demonstrates to the satisfaction of the Secretary that it has currently issued and outstanding debt obligations which are (without insurance, guarantee, or credit enhancement) listed at or above the second highest rating level of credit quality given by a nationally recognized statistical rating organization.
(i) Has its liabilities backed by the full faith and credit of a State, or by an equivalent governmental entity;
(ii) Has a positive current unrestricted fund balance if reporting under the Single Audit Act;
(iii) Has a positive unrestricted current fund in the State's Higher Education Fund, as presented in the general purpose financial statements;
(iv) Submits to the Secretary, a statement from the State Auditor General that the institution has, during the past year, met all of its financial obligations, and that the institution continues to have sufficient resources to meet all of its financial obligations; or
(v) Demonstrates to the satisfaction of the Secretary that it has currently issued and outstanding debt obligations which are (without insurance, guarantee, or credit enhancement) listed at or above the second highest rating level of credit quality given by a nationally recognized statistical rating organization.
(c) Past performance of an institution or persons affiliated with an institution. An institution is not financially responsible if—
(1) A person who exercises substantial control over the institution or any member or members of the person's family alone or together—
(i)(A) Exercises or exercised substantial control over another institution or a third-party servicer that owes a liability for a violation of a Title IV, HEA program requirement; or
(B) Owes a liability for a violation of a Title IV, HEA program requirement; and
(ii) That person, family member, institution, or servicer does not demonstrate that the liability is being repaid in accordance with an agreement with the Secretary; or
(i) Been limited, suspended, terminated, or entered into a settlement agreement to resolve a limitation, suspension, or termination action initiated by the Secretary or a guaranty agency (as defined in 34 CFR part 682) within the preceding five years;
(A) An audit finding, during its two most recent audits of its conduct of the Title IV, HEA programs, that resulted in the institution's being required to repay an amount greater than five percent of the funds that the institution received under the Title IV, HEA programs for any award year covered by the audit; or
(B) A program review finding, during its two most recent program reviews, of its conduct of the Title IV, HEA programs that resulted in the institution's being required to repay an amount greater than five percent of the funds that the institution received under the Title IV, HEA programs for any award year covered by the program review;
(iii) Been cited during the preceding five years for failure to submit acceptable audit reports required under this part or individual Title IV, HEA program regulations in a timely fashion; or
(iv) Failed to resolve satisfactorily any compliance problems identified in program review or audit reports based upon a final decision of the Secretary issued pursuant to subpart G or subpart H of this part.
(d) Exceptions to the general standards of financial responsibility. (1)(i) An institution is not required to meet the standard in paragraph (b)(5) of this section if the Secretary determines that the institution—
(A)(1) Is located in, and is legally authorized to operate within, a State that has a tuition recovery fund that is acceptable to the Secretary and ensures that the institution is able to pay all required refunds; and
(2) Contributes to that tuition recovery fund.
(B) Has its liabilities backed by the full faith and credit of the State, or by an equivalent governmental entity; or
(C) As determined under paragraph (g) of this section, demonstrates, to the satisfaction of the Secretary, that for each of the institution's two most recently completed fiscal years, it has made timely refunds to students in accordance with Sec. 668.22(j), and that it has met or exceeded all of the financial responsibility standards in this section that were in effect for the corresponding periods during the two-year period.
(ii) In evaluating an application to approve a State tuition recovery fund to exempt its participating schools from the federal cash reserve requirements, the Secretary will consider the extent to which the State tuition recovery fund:
(A) Provides refunds to both in-state and out-of-state students;
(B) Allocates all refunds in accordance with the order delineated in Sec. 668.22(i); and
(C) Provides a reliable mechanism for the State to replenish the fund should any claims arise that deplete the funds assets.
(2) The Secretary considers an institution to be financially responsible, even if the institution is not otherwise financially responsible under paragraphs (b)(1) through (4) and (b)(6) through (9) of this section, if the institution—
(i) Submits to the Secretary an irrevocable letter of credit that is acceptable and payable to the Secretary equal to not less than one-half of the Title IV, HEA program funds received by the institution during the last complete award year for which figures are available; or
(ii) Establishes to the satisfaction of the Secretary, with the support of a financial statement submitted in accordance with paragraph (e) of this section, that the institution has sufficient resources to ensure against its precipitous closure, including the ability to meet all of its financial obligations (including refunds of institutional charges and repayments to the Secretary for liabilities and debts incurred in programs administered by the Secretary). The Secretary considers the institution to have sufficient resources to ensure against precipitous closure only if—
(A) The institution formerly demonstrated financial responsibility under the standards of financial responsibility in its preceding audited financial statement (or, if no prior audited financial statement was requested by the Secretary, demonstrates in conjunction with its current audit that it would have satisfied this requirement), and that its most recent audited financial statement indicates that—
(1) All taxes owed by the institution are current;
(2) The institution's net income, or a change in total net assets, before extraordinary items and discontinued operations, has not decreased by more than 10 percent from the prior fiscal year, unless the institution demonstrates that the decreased net income shown on the current financial statement is a result of downsizing pursuant to a management-approved business plan;
(3) Loans and other advances to related parties have not increased from the prior fiscal year unless such increases were secured and collateralized, and do not exceed 10 percent of the prior fiscal year's working capital of the institution;
(4) The equity of a for-profit institution, or the total net assets of a non-profit institution, have not decreased by more than 10 percent of the prior year's total equity;
(5) Compensation for owners or other related parties (including bonuses, fringe benefits, employee stock option allowances, 401k contributions, deferred compensation allowances) has not increased from the prior year at a rate higher than for all other employees;
(6) The institution has not materially leveraged its assets or income by becoming a guarantor on any new loan or obligation on behalf of any related party;
(7) All obligations owed to the institution by related parties are current, and that the institution has demanded and is receiving payment of all funds owed from related parties that are payable upon demand. For purposes of this section, a person does not become a related party by attending an institution as a student;
(B) There have been no material findings in the institution's latest compliance audit of its administration of the Title IV HEA programs; and
(C) There are no pending administrative or legal actions being taken against the institution by the Secretary, any other Federal agency, the institution's nationally recognized accrediting agency, or any State entity.
(3) An institution is not required to meet the acid test ratio in paragraph (b)(7)(i)(A) or (b)(8)(i)(B) of this section if the institution is an institution that provides a 2-year or 4-year educational program for which the institution awards an associate or baccalaureate degree that demonstrates to the satisfaction of the Secretary that—
(i) There is no reasonable doubt as to its continued solvency and ability to deliver quality educational services;
(ii) It is current in its payment of all current liabilities, including student refunds, repayments to the Secretary, payroll, and payment of trade creditors and withholding taxes; and
(iii) It has substantial equity in institution-occupied facilities, the acquisition of which was the direct cause of its failure to meet the acid test ratio requirement.
(4) The Secretary may determine an institution to be financially responsible even if the institution is not otherwise financially responsible under paragraph (c)(1) of this section if—
(i) The institution notifies the Secretary, in accordance with 34 CFR 600.30, that the person referenced in paragraph (c)(1) of this section exercises substantial control over the institution; and
(ii)(A) The person repaid to the Secretary a portion of the applicable liability, and the portion repaid equals or exceeds the greater of—
(1) The total percentage of the ownership interest held in the institution or third-party servicer that owes the liability by that person or any member or members of that person's family, either alone or in combination with one another;
(2) The total percentage of the ownership interest held in the institution or servicer that owes the liability that the person or any member or members of the person's family, either alone or in combination with one another, represents or represented under a voting trust, power of attorney, proxy, or similar agreement; or
(3) Twenty-five percent, if the person or any member of the person's family is or was a member of the board of directors, chief executive officer, or other executive officer of the institution or servicer that owes the liability, or of an entity holding at least a 25 percent ownership interest in the institution that owes the liability;
(B) The applicable liability described in paragraph (c)(1) of this section is currently being repaid in accordance with a written agreement with the Secretary; or
(C) The institution demonstrates why—
(1) The person who exercises substantial control over the institution should nevertheless be considered to lack that control; or
(2) The person who exercises substantial control over the institution and each member of that person's family nevertheless does not or did not exercise substantial control over the institution or servicer that owes the liability.
(f) Definitions and terms. For the purposes of this section—
(1)(i) An "ownership interest" is a share of the legal or beneficial ownership or control of, or a right to share in the proceeds of the operation of, an institution, institution's parent corporation, a third-party servicer, or a third-party servicer's parent corporation.
(ii) The term "ownership interest" includes, but is not limited to—
(A) An interest as tenant in common, joint tenant, or tenant by the entireties;
(iii) The term "ownership interest" does not include any share of the ownership or control of, or any right to share in the proceeds of the operation of—
(A) A mutual fund that is regularly and publicly traded;
(B) An institutional investor; or
(C) A profit-sharing plan, provided that all employees are covered by the plan;
(2) The Secretary generally considers a person to exercise substantial control over an institution or third-party servicer, if the person—
(i) Directly or indirectly holds at least a 25 percent ownership interest in the institution or servicer;
(ii) Holds, together with other members of his or her family, at least a 25 percent ownership interest in the institution or servicer;
(iii) Represents, either alone or together with other persons, under a voting trust, power of attorney, proxy, or similar agreement one or more persons who hold, either individually or in combination with the other persons represented or the person representing them, at least a 25 percent ownership in the institution or servicer; or
(iv) Is a member of the board of directors, the chief executive officer, or other executive officer of—
(A) The institution or servicer; or
(B) An entity that holds at least a 25 percent ownership interest in the institution or servicer; and
(3) The Secretary considers a member of a person's family to be a parent, sibling, spouse, child, spouse's parent or sibling, or sibling's or child's spouse.
(g) Two-year performance requirement. (1) The Secretary considers an institution to have satisfied the requirements in paragraph (d)(1)(C) of this section if the independent certified public accountant, or government auditor who conducted the institution's compliance audits for the institution's two most recently completed fiscal years, or the Secretary or a State or guaranty agency that conducted a review of the institution covering those fiscal years—
(i)(A) For either of those fiscal years, did not find in the sample of student records audited or reviewed that the institution made late refunds to 5 percent or more of the students in that sample. For purposes of determining the percentage of late refunds under this paragraph, the auditor or reviewer must include in the sample only those title IV, HEA program recipients who received or should have received a refund under Sec. 668.22; or
(B) The Secretary considers the institution to have satisfied the conditions in paragraph (g)(1)(i)(A) of this section if the auditor or reviewer finds in the sample of student records audited or reviewed that the institution made only one late refund to a student in that sample; and
(ii) For either of those fiscal years, did not note a material weakness or a reportable condition in the institution's report on internal controls that is related to refunds.
(2) If the Secretary or a State or guaranty agency finds during a review conducted of the institution that the institution no longer qualifies for an exemption under paragraph (d)(1)(C) of this section, the institution must—
(i) Submit to the Secretary the irrevocable letter of credit required in paragraph (b)(5) of this section no later than 30 days after the Secretary or State or guaranty agency notifies the institution of that finding; and
(ii) Notify the Secretary of the guaranty agency or State that conducted the review.
(3) If the auditor who conducted the institution's compliance audit finds that the institution no longer qualifies for an exemption under paragraph (d)(1)(C) of this section, the institution must submit to the Secretary the irrevocable letter of credit required in paragraph (b)(5) of this section no later than 30 days after the date the institution's compliance audit must be submitted to the Secretary.
(h) Foreign institutions. The Secretary makes a determination of financial responsibility for a foreign institution on the basis of financial statements submitted under Sec. 668.23(h).
| Sec. 668.16 Standards of administrative capability. |
To begin and to continue to participate in any Title IV, HEA program, an institution must shall demonstrate to the Secretary that the institution is capable of adequately administering that program under each of the standards established in this section. The Secretary considers an institution to have that administrative capability if the institution—
(a) Administers the Title IV, HEA programs in accordance with all statutory provisions of or applicable to Title IV of the HEA, all applicable regulatory provisions prescribed under that statutory authority, and all applicable special arrangements, agreements, and limitations entered into under the authority of statutes applicable to Title IV of the HEA;
(b)(1) Designates a capable individual to be responsible for administering all the Title IV, HEA programs in which it participates and for coordinating those programs with the institution's other Federal and non-Federal programs of student financial assistance. The Secretary considers an individual to be "capable" under this paragraph if the individual is certified by the State in which the institution is located, if the State requires certification of financial aid administrators. The Secretary may consider other factors in determining whether an individual is capable, including, but not limited to, the individual's successful completion of Title IV, HEA program training provided or approved by the Secretary, and previous experience and documented success in administering the Title IV, HEA programs properly;
(2) Uses an adequate number of qualified persons to administer the Title IV, HEA programs in which the institution participates. The Secretary considers the following factors to determine whether an institution uses an adequate number of qualified persons—
(i) The number and types of programs in which the institution participates;
(ii) The number of applications evaluated;
(iii) The number of students who receive any student financial assistance at the institution and the amount of funds administered;
(iv) The financial aid delivery system used by the institution;
(v) The degree of office automation used by the institution in the administration of the Title IV, HEA programs;
(vi) The number and distribution of financial aid staff; and
(vii) The use of third-party servicers to aid in the administration of the Title IV, HEA programs;
(3) Communicates to the individual designated to be responsible for administering Title IV, HEA programs, all the information received by any institutional office that bears on a student's eligibility for Title IV, HEA program assistance; and
(4) Has written procedures for or written information indicating the responsibilities of the various offices with respect to the approval, disbursement, and delivery of Title IV, HEA program assistance and the preparation and submission of reports to the Secretary;
(c)(1) Administers Title IV, HEA programs with adequate checks and balances in its system of internal controls; and
(2) Divides the functions of authorizing payments and disbursing or delivering funds so that no office has responsibility for both functions with respect to any particular student aided under the programs. For example, the functions of authorizing payments and disbursing or delivering funds must be divided so that for any particular student aided under the programs, the two functions are carried out by at least two organizationally independent individuals who are not members of the same family, as defined in 668.15, or who do not together exercise substantial control, as defined in 668.15, over the institution;
(d)(1) Establishes and maintains records required under this part and the individual Title IV, HEA program regulations; and
(2)(i) Reports annually to the Secretary on any reasonable reimbursements paid or provided by a private education lender or group of lenders as described under section 140(d) of the Truth in Lending Act (15 U.S.C. 1631(d)) to any employee who is employed in the financial aid office of the institution or who otherwise has responsibilities with respect to education loans, including responsibilities involving the selection of lenders, or other financial aid of the institution, including—
(A) The amount for each specific instance of reasonable expenses paid or provided;
(B) The name of the financial aid official, other employee, or agent to whom the expenses were paid or provided;
(C) The dates of the activity for which the expenses were paid or provided; and
(D) A brief description of the activity for which the expenses were paid or provided.
(ii) Expenses are considered to be reasonable if the expenses—
(A) Meet the standards of and are paid in accordance with a State government reimbursement policy applicable to the entity; or
(B) Meet the standards of and are paid in accordance with the applicable Federal cost principles for reimbursement, if no State policy that is applicable to the entity exists.
(iii) The policy must be consistently applied to an institution's employees reimbursed under this paragraph;
(e) For purposes of determining student eligibility for assistance under a title IV, HEA program, establishes, publishes, and applies reasonable standards for measuring whether an otherwise eligible student is maintaining satisfactory progress in his or her educational program. The Secretary considers an institution's standards to be reasonable if the standards are in accordance with the provisions specified in Sec. 668.34.
(f) Develops and applies an adequate system to identify and resolve discrepancies in the information that the institution receives from different sources with respect to a student's application for financial aid under Title IV, HEA programs. In determining whether the institution's system is adequate, the Secretary considers whether the institution obtains and reviews—
(1) All student aid applications, need analysis documents, Statements of Educational Purpose, Statements of Registration Status, and eligibility notification documents presented by or on behalf of each applicant;
(2) Any documents, including any copies of State and Federal income tax returns, that are normally collected by the institution to verify information received from the student or other sources; and
(3) Any other information normally available to the institution regarding a student's citizenship, previous educational experience, documentation of the student's social security number, or other factors relating to the student's eligibility for funds under the Title IV, HEA programs;
(g) Refers to the Office of Inspector General of the Department of Education for investigation—
(1) After conducting the review of an application provided for under paragraph (f) of this section, any credible information indicating that an applicant for Title IV, HEA program assistance may have engaged in fraud or other criminal misconduct in connection with his or her application. The type of information that an institution must refer is that which is relevant to the eligibility of the applicant for Title IV, HEA program assistance, or the amount of the assistance. Examples of this type of information are—
(i) False claims of independent student status;
(ii) False claims of citizenship;
(iii) Use of false identities;
(iv) Forgery of signatures or certifications; and
(v) False statements of income; and
(2) Any credible information indicating that any employee, third-party servicer, or other agent of the institution that acts in a capacity that involves the administration of the Title IV, HEA programs, or the receipt of funds under those programs, may have engaged in fraud, misrepresentation, conversion or breach of fiduciary responsibility, or other illegal conduct involving the Title IV, HEA programs. The type of information that an institution must refer is that which is relevant to the eligibility and funding of the institution and its students through the Title IV, HEA programs;
(h) Provides adequate financial aid counseling with clear and accurate information to eligible students who apply for Title IV, HEA program assistance. In determining whether an institution provides adequate counseling, the Secretary considers whether its counseling and financial aid communications advise students and families to accept the most beneficial types of financial assistance available to them and includes information regarding—
(1) The cost of attendance of the institution as defined under section 472 of the HEA, including the individual components of those costs and a total of the estimated costs that will be owed directly to the institution, for students, based on their attendance status;
(2)(1) The source and amount of each type of aid offered;
(3) The net price, as determined by subtracting total grant or scholarship aid included in paragraph (h)(2) of this section from the cost of attendance in paragraph (h)(1) of this section;
(4)(2) The method by which aid is determined and disbursed, delivered, or applied to a student's account; and
(5)(3) The rights and responsibilities of the student with respect to enrollment at the institution and receipt of financial aid, including. This information includes the institution's refund policy, the requirements for the treatment of title IV, HEA program funds when a student withdraws under Sec. 668.22, its standards of satisfactory progress, and other conditions that may alter the student's aid package;
(i) Has provided all program and fiscal reports and financial statements required for compliance with the provisions of this part and the individual program regulations in a timely manner;
(j) Shows no evidence of significant problems that affect, as determined by the Secretary, the institution's ability to administer a Title IV, HEA program and that are identified in—
(1) Reviews of the institution conducted by the Secretary, the Department of Education's Office of Inspector General, nationally recognized accrediting agencies, guaranty agencies as defined in 34 CFR part 682, the State agency or official by whose authority the institution is legally authorized to provide postsecondary education, or any other law enforcement agency; or
(2) Any findings made in any criminal, civil, or administrative proceeding;
(k)(1) Is not, and has not been— does not have any principal or affiliate of the institution (as those terms are defined in 34 CFR part 85) that is—
(i)(1) Debarred or suspended under Executive Order (E.O.) 12549 (3 CFR, 1986 Comp., p. 189) or the Federal Acquisition Regulations (FAR), 48 CFR part 9, subpart 9.4; or
(ii)(2) Engaging in any activity that is a cause under 2 CFR 180.700 or 180.800, as adopted at 2 CFR 3485.12, 34 CFR 85.305 or 85.405 for debarment or suspension under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4; and
(2) Does not have any principal or affiliate of the institution (as those terms are defined in 2 CFR parts 180 and 3485), or any individual who exercises or previously exercised substantial control over the institution as defined in Sec. 668.174(c)(3), who—
(i) Has been convicted of, or has pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, Tribal, or local government funds, or has been administratively or judicially determined to have committed fraud or any other material violation of law involving those funds; or
(ii) Is a current or former principal or affiliate (as those terms are defined in 2 CFR parts 180 and 3485), or any individual who exercises or exercised substantial control as defined in Sec. 668.174(c)(3), of another institution whose misconduct or closure contributed to liabilities to the Federal Government in excess of 5 percent of its title IV, HEA program funds in the award year in which the liabilities arose or were imposed;
(l) For an institution that seeks initial participation in a Title IV, HEA program, does not have more than 33 percent of its undergraduate regular students withdraw from the institution during the institution's latest completed award year. The institution must count all regular students who are enrolled during the latest completed award year, except those students who, during that period—
(1) Withdrew from, dropped out of, or were expelled from the institution; and
(2) Were entitled to and actually received in a timely manner, a refund of 100 percent of their tuition and fees;
(m)(1) Has a cohort default rate—
(i) That is less than 25 percent for each of the three most recent fiscal years during which rates have been issued, to the extent those rates are calculated under subpart M of this part;
(ii) On or after 2014, that is less than 30 percent for at least two of the three most recent fiscal years during which the Secretary has issued rates for the institution under subpart N of this part; and
(iii) As defined in 34 CFR 674.5, on loans made under the Federal Perkins Loan Program to students for attendance at that institution that does not exceed 15 percent;
(i) If However, if the Secretary determines that an institution's administrative capability is impaired solely because the institution fails to comply with paragraph (m)(1) of this section, and the institution is not subject to a loss of eligibility under Secs. 668.187(a) or 668.206(a), the Secretary allows the institution to continue to participate in the Title IV, HEA programs. In such a case, the Secretary may provisionally certify the institution in accordance with Sec. 668.13(c) except as provided in paragraphs (m)(2)(ii), (m)(2)(iii), (m)(2)(iv), and (m)(2)(v) of this section.
(ii) An institution that fails to meet the standard of administrative capability under paragraph (m)(1)(ii) of this section based on two cohort default rates that are greater than or equal to 30 percent but less than or equal to 40 percent is not placed on provisional certification under paragraph (m)(2)(i) of this section if it—
(A) If it has timely filed a request for adjustment or appeal under Secs. 668.209, Sec. 668.210, or Sec. 668.212 with respect to the second such rate, and the request for adjustment or appeal is either pending or succeeds in reducing the rate below 30 percent; or
(B) Has If it has timely filed an appeal under Sec. 668.213 after receiving the second such rate, and the appeal is either pending or successful; or
(C)(1) Has If it has timely filed a participation rate index challenge or appeal under Sec. 668.204(c) or Sec. 668.214 with respect to from either or both of the two rates, and the challenge or appeal is either pending or successful; or
(2) If the second rate is the most recent draft rate, and the institution has timely filed a participation rate challenge to that draft rate that is either pending or successful; .
(iii) The institution may appeal the loss of full participation in a Title IV, HEA program under paragraph (m)(2)(i) of this section by submitting an erroneous data appeal in writing to the Secretary in accordance with and on the grounds specified in Secs. 668.192 or Sec. 668.211 as applicable;
(iv) If the institution has 30 or fewer borrowers in the three most recent cohorts of borrowers used to calculate its cohort default rate under subpart N of this part, we will not provisionally certify it solely based on cohort default rates; and
(v) If a rate that would otherwise potentially subject the institution to provisional certification under paragraphs (m)(1)(ii) and (m)(2)(i) of this section is calculated as an average rate, we will not provisionally certify it solely based on cohort default rates;
(n) Has not been subject to a significant negative action or a finding as by a State or Federal agency, a court, or an accrediting agency, where the basis of the action is repeated or unresolved, such as non-compliance with a prior enforcement order or supervisory directive, and the institution has not lost eligibility to participate in another Federal educational assistance program due to an administrative action against the institution; Does not otherwise appear to lack the ability to administer the Title IV, HEA programs competently;
(o) Participates in the electronic processes that the Secretary—
(1) Provides at no substantial charge to the institution; and
(2) Identifies through a notice published in the Federal Register; and
(p) Develops and follows adequate procedures to evaluate the validity of a student's high school diploma completion if the institution or the Secretary has reason to believe that the high school diploma is not valid or was not obtained from an entity that provides secondary school education, consistent with the following requirements:.
(1) Adequate procedures to evaluate the validity of a student’s high school diploma must include—
(i) Obtaining documentation from the high school that confirms the validity of the high school diploma, including at least one of the following—
(B) Written descriptions of course requirements; or
(C) Written and signed statements by principals or executive officers at the high school attesting to the rigor and quality of coursework at the high school;
(ii) If the high school is regulated or overseen by a State agency, Tribal agency, or Bureau of Indian Education, confirming with, or receiving documentation from that agency that the high school is recognized or meets requirements established by that agency; and
(iii) If the Secretary has published a list of high schools that issue invalid high school diplomas, confirming that the high school does not appear on that list; and
(2) A high school diploma is not valid if it—
(i) Did not meet the applicable requirements established by the appropriate State agency, Tribal agency, or Bureau of Indian Education in the State where the high school is located;
(ii) Has been determined to be invalid by the Department, the appropriate State agency in the State where the high school was located, or through a court proceeding; or
(iii) Was obtained from an entity that requires little or no secondary instruction or coursework to obtain a high school diploma, including through a test that does not meet the requirements for a recognized equivalent of a high school diploma under 34 CFR 600.2;
(q) Provides adequate career services to eligible students who receive Title IV, HEA program assistance. In determining whether an institution provides adequate career services, the Secretary considers—
(1) The share of students enrolled in programs designed to prepare students for gainful employment in a recognized occupation;
(2) The number and distribution of career services staff;
(3) The career services the institution has promised to its students; and
(4) The presence of institutional partnerships with recruiters and employers who regularly hire graduates of the institution;
(r) Provides students, within 45 days of successful completion of other required coursework, geographically accessible clinical or externship opportunities related to and required for completion of the credential or licensure in a recognized occupation;
(s) Disburses funds to students in a timely manner that best meets the students’ needs. The Secretary does not consider the manner of disbursements to be consistent with students’ needs if, among other conditions—
(1) The Secretary is aware of multiple valid and relevant student complaints;
(2) The institution has high rates of withdrawals attributable to delays in disbursements;
(3) The institution has delayed disbursements until after the point at which students have earned 100 percent of their eligibility for Title IV, HEA funds, in accordance with the return to Title IV, HEA requirements in Sec. 668.22; or
(4) The institution has delayed disbursements with the effect of ensuring the institution passes the 90/10 ratio;
(t) Offers gainful employment (GE) programs subject to subpart S of this part and at least half of its total Title IV, HEA funds in the most recent award year are not from programs that are ‘‘failing’’ under subpart S of this part;
(u) Does not engage in substantial misrepresentations, as defined in subpart F of this part, or aggressive and deceptive recruitment tactics or conduct, including as defined in subpart R of this part; and
(v) Does not otherwise appear to lack the ability to administer the Title IV, HEA programs competently.
| Sec. 668.18 Readmission requirements for servicemembers. |
(a) General. (1) An institution may not deny readmission to a person who is a member of, applies to be a member of, performs, has performed, applies to perform, or has an obligation to perform, service in the uniformed services on the basis of that membership, application for membership, performance of service, application for service, or obligation to perform service.
(2)(i) An institution must promptly readmit to the institution a person described in paragraph (a)(1) of this section with the same academic status as the student had when the student last attended the institution or was last admitted to the institution, but did not begin attendance because of that membership, application for membership, performance of service, application for service, or obligation to perform service.
(ii) "Promptly readmit" means that the institution must readmit the student into the next class or classes in the student's program beginning after the student provides notice of his or her intent to reenroll, unless the student requests a later date of readmission or unusual circumstances require the institution to admit the student at a later date.
(iii) To readmit a person with the "same academic status" means that the institution admits the student—
(A) To the same program to which he or she was last admitted by the institution or, if that exact program is no longer offered, the program that is most similar to that program, unless the student requests or agrees to admission to a different program;
(B) At the same enrollment status that the student last held at the institution, unless the student requests or agrees to admission at a different enrollment status;
(C) With the same number of credit hours or clock hours completed previously by the student, unless the student is readmitted to a different program to which the completed credit hours or clock hours are not transferable;
(D) With the same academic standing (e.g., with the same satisfactory academic progress status) the student previously had; and
(E)(1) If the student is readmitted to the same program, for the first academic year in which the student returns, assessing—
(i) The tuition and fee charges that the student was or would have been assessed for the academic year during which the student left the institution; or
(ii) Up to the amount of tuition and fee charges that other students in the program are assessed for that academic year, if veterans' education benefits, as defined in section 480(c) of the HEA, or other servicemember education benefits, will pay the amount in excess of the tuition and fee charges assessed for the academic year in which the student left the institution; or
(2) If the student is admitted to a different program, and for subsequent academic years for a student admitted to the same program, assessing no more than the tuition and fee charges that other students in the program are assessed for that academic year.
(iv)(A) If the institution determines that the student is not prepared to resume the program with the same academic status at the point where the student left off, or will not be able to complete the program, the institution must make reasonable efforts at no extra cost to the student to help the student become prepared or to enable the student to complete the program including, but not limited to, providing refresher courses at no extra cost to the student and allowing the student to retake a pretest at no extra cost to the student.
(B) The institution is not required to readmit the student on his or her return if—
(1) After reasonable efforts by the institution, the institution determines that the student is not prepared to resume the program at the point where he or she left off;
(2) After reasonable efforts by the institution, the institution determines that the student is unable to complete the program; or
(3) The institution determines that there are no reasonable efforts the institution can take to prepare the student to resume the program at the point where he or she left off or to enable the student to complete the program.
(C)(1) "Reasonable efforts" means actions that do not place an undue hardship on the institution.
(2) "Undue hardship" means an action requiring significant difficulty or expense when considered in light of the overall financial resources of the institution and the impact otherwise of such action on the operation of the institution.
(D) The institution carries the burden to prove by a preponderance of the evidence that the student is not prepared to resume the program with the same academic status at the point where the student left off, or that the student will not be able to complete the program.
(3) This section applies to an institution that has continued in operation since the student ceased attending or was last admitted to the institution but did not begin attendance, notwithstanding any changes of ownership of the institution since the student ceased attendance.
(4) The requirements of this section supersede any State law (including any local law or ordinance), contract, agreement, policy, plan, practice, or other matter that reduces, limits, or eliminates in any manner any right or benefit provided by this section for the period of enrollment during which the student resumes attendance, and continuing so long as the institution is unable to comply with such requirements through other means.
(b) Service in the uniformed services. For purposes of this section, service in the uniformed services means service, whether voluntary or involuntary, in the Armed Forces, including service by a member of the National Guard or Reserve, on active duty, active duty for training, or full-time National Guard duty under Federal authority, for a period of more than 30 consecutive days under a call or order to active duty of more than 30 consecutive days.
(c) Readmission procedures. (1) Any student whose absence from an institution is necessitated by reason of service in the uniformed services shall be entitled to readmission to the institution if—
(i) Except as provided in paragraph (d) of this section, the student (or an appropriate officer of the Armed Forces or official of the Department of Defense) gives advance oral or written notice of such service to an office designated by the institution, and provides such notice as far in advance as is reasonable under the circumstances;
(ii) The cumulative length of the absence and of all previous absences from that institution by reason of service in the uniformed services, including only the time the student spends actually performing service in the uniformed services, does not exceed five years; and
(iii) Except as provided in paragraph (f) of this section, the student gives oral or written notice of his or her intent to return to an office designated by the institution—
(A) For a student who completes a period of service in the uniformed services, not later than three years after the completion of the period of service; or
(B) For a student who is hospitalized for or convalescing from an illness or injury incurred in or aggravated during the performance of service in the uniformed services, not later than two years after the end of the period that is necessary for recovery from such illness or injury.
(2)(i) An institution must designate one or more offices at the institution that a student may contact to provide notification of service required by paragraph (c)(1)(i) of this section and notification of intent to return required by paragraph (c)(1)(iii) of this section.
(ii) An institution may not require that the notice provided by the student under paragraph (c)(1)(i) or (c)(1)(iii) of this section follow any particular format.
(iii) The notice provided by the student under paragraph (c)(1)(i) of this section—
(A) May not be subject to any rule for timeliness; timeliness must be determined by the facts in any particular case; and
(B) Does not need to indicate whether the student intends to return to the institution.
(iv) For purposes of paragraph (c)(1)(i) of this section, an "appropriate officer" is a commissioned, warrant, or noncommissioned officer authorized to give such notice by the military service concerned.
(d) Exceptions to advance notice. (1) No notice is required under paragraph (c)(1)(i) of this section if the giving of such notice is precluded by military necessity, such as—
(i) A mission, operation, exercise, or requirement that is classified; or
(ii) A pending or ongoing mission, operation, exercise, or requirement that may be compromised or otherwise adversely affected by public knowledge.
(2) Any student (or an appropriate officer of the Armed Forces or official of the Department of Defense) who did not give advance written or oral notice of service to the appropriate official at the institution in accordance with paragraph (c)(1) of this section may meet the notice requirement by submitting, at the time the student seeks readmission, an attestation to the institution that the student performed service in the uniformed services that necessitated the student's absence from the institution.
(e) Cumulative length of absence. For purposes of paragraph (c)(1)(ii) of this section, a student's cumulative length of absence from an institution does not include any service—
(1) That is required, beyond five years, to complete an initial period of obligated service;
(2) During which the student was unable to obtain orders releasing the student from a period of service in the uniformed services before the expiration of the five-year period and such inability was through no fault of the student; or
(3) Performed by a member of the Armed Forces (including the National Guard and Reserves) who is—
(i) Ordered to or retained on active duty under—
(A) 10 U.S.C. 688 (involuntary active duty by a military retiree);
(B) 10 U.S.C. 12301(a) (involuntary active duty in wartime);
(C) 10 U.S.C. 12301(g) (retention on active duty while in captive status);
(D) 10 U.S.C. 12302 (involuntary active duty during a national emergency for up to 24 months);
(E) 10 U.S.C. 12304 (involuntary active duty for an operational mission for up to 270 days);
(F) 10 U.S.C. 12305 (involuntary retention on active duty of a critical person during time of crisis or other specific conditions);
(G) 14 U.S.C. 331 (involuntary active duty by retired Coast Guard officer);
(H) 14 U.S.C. 332 (voluntary active duty by retired Coast Guard officer);
(I) 14 U.S.C. 359 (involuntary active duty by retired Coast Guard enlisted member);
(J) 14 U.S.C. 360 (voluntary active duty by retired Coast Guard enlisted member);
(K) 14 U.S.C. 367 (involuntary retention of Coast Guard enlisted member on active duty); or
(L) 14 U.S.C. 712 (involuntary active duty by Coast Guard Reserve member for natural or man-made disasters);
(ii) Ordered to or retained on active duty (other than for training) under any provision of law because of a war or national emergency declared by the President or the Congress, as determined by the Secretary concerned;
(iii) Ordered to active duty (other than for training) in support, as determined by the Secretary concerned, of an operational mission for which personnel have been ordered to active duty under section 12304 of title 10, United States Code;
(iv) Ordered to active duty in support, as determined by the Secretary concerned, of a critical mission or requirement of the Armed Forces (including the National Guard or Reserve); or
(v) Called into Federal service as a member of the National Guard under chapter 15 of title 10, United States Code, or section 12406 of title 10, United States Code (i.e., called to respond to an invasion, danger of invasion, rebellion, danger of rebellion, insurrection, or the inability of the President with regular forces to execute the laws of the United States).
(f) Notification of intent to reenroll. A student who fails to apply for readmission within the periods described in paragraph (c)(1)(iii) of this section does not automatically forfeit eligibility for readmission to the institution, but is subject to the institution's established leave of absence policy and general practices.
(g) Documentation. (1) A student who submits an application for readmission to an institution under paragraph (c)(1)(iii) of this section shall provide to the institution documentation to establish that—
(i) The student has not exceeded the service limitation in paragraph (c)(1)(ii) of this section; and
(ii) The student's eligibility for readmission has not been terminated due to an exception in paragraph (h) of this section.
(2)(i) Documents that satisfy the requirements of paragraph (g)(1) of this section include, but are not limited to, the following:
(A) DD (Department of Defense) 214 Certificate of Release or Discharge from Active Duty.
(B) Copy of duty orders prepared by the facility where the orders were fulfilled carrying an endorsement indicating completion of the described service.
(C) Letter from the commanding officer of a Personnel Support Activity or someone of comparable authority.
(D) Certificate of completion from military training school.
(E) Discharge certificate showing character of service.
(F) Copy of extracts from payroll documents showing periods of service.
(G) Letter from National Disaster Medical System (NDMS) Team Leader or Administrative Officer verifying dates and times of NDMS training or Federal activation.
(ii) The types of documents that are necessary to establish eligibility for readmission will vary from case to case. Not all of these documents are available or necessary in every instance to establish readmission eligibility.
(3) An institution may not delay or attempt to avoid a readmission of a student under this section by demanding documentation that does not exist, or is not readily available, at the time of readmission.
(h) Termination of readmission eligibility. A student's eligibility for readmission to an institution under this section by reason of such student's service in the uniformed services terminates upon the occurrence of any of the following events:
(1) A separation of such person from the Armed Forces (including the National Guard and Reserves) with a dishonorable or bad conduct discharge.
(2) A dismissal of a commissioned officer permitted under section 1161(a) of title 10, United States Code by sentence of a general court-martial; in commutation of a sentence of a general court-martial; or, in time of war, by order of the President.
(3) A dropping of a commissioned officer from the rolls pursuant to section 1161(b) of title 10, United States Code due to absence without authority for at least three months; separation by reason of a sentence to confinement adjudged by a court-martial; or, a sentence to confinement in a Federal or State penitentiary or correctional institution.
| Sec. 668.19 Financial aid history. |
(a) Before an institution may disburse title IV, HEA program funds to a student who previously attended another eligible institution, the institution must use information it obtains from the Secretary, through the National Student Loan Data System (NSLDS) or its successor system, to determine—
(1) Whether the student is in default on any title IV, HEA program loan;
(2) Whether the student owes an overpayment on any title IV, HEA program grant or Federal Perkins Loan;
(3) For the award year for which a Federal Pell Grant, an ACG, a National SMART Grant, or a TEACH Grant is requested, the student's Scheduled Federal Pell Grant, ACG, National SMART Grant, or a TEACH Grant Award and the amount of Federal Pell Grant, ACG, National SMART Grant, or TEACH Grant funds disbursed to the student;
(4) The outstanding principal balance of loans made to the student under each of the title IV, HEA loan programs; and
(5) For the academic year for which title IV, HEA aid is requested, the amount of, and period of enrollment for, loans made to the student under each of the title IV, HEA loan programs.
(b)(1) If a student transfers from one institution to another institution during the same award year, the institution to which the student transfers must request from the Secretary, through NSLDS, updated information about that student so it can make the determinations required under paragraph (a) of this section; and
(2) The institution may not make a disbursement to that student for seven days following its request, unless it receives the information from NSLDS in response to its request or obtains that information directly by accessing NSLDS, and the information it receives allows it to make that disbursement.
| Sec. 668.20 Limitations on remedial coursework that is eligible for Title IV, HEA program assistance. |
(a) A noncredit or reduced credit remedial course is a course of study designed to increase the ability of a student to pursue a course of study leading to a certificate or degree.
(1) A noncredit remedial course is one for which no credit is given toward a certificate or degree; and
(2) A reduced credit remedial course is one for which reduced credit is given toward a certificate or degree.
(b) Except as provided in paragraphs (c) and (d) of this section, in determining a student's enrollment status and cost of attendance, an institution shall include any noncredit or reduced credit remedial course in which the student is enrolled. The institution shall attribute the number of credit or clock hours to a noncredit or reduced credit remedial course by—
(1) Calculating the number of classroom and homework hours required for that course;
(2) Comparing those hours with the hours required for nonremedial courses in a similar subject; and
(3) Giving the remedial course the same number of credit or clock hours it gives the nonremedial course with the most comparable classroom and homework requirements.
(c) In determining a student's enrollment status under the Title IV, HEA programs or a student's cost of attendance under the campus-based, FFEL, and Direct Loan programs, an institution may not take into account any noncredit or reduced credit remedial course if—
(1) That course is part of a program of instruction leading to a high school diploma or the recognized equivalent of a high school diploma, even if the course is necessary to enable the student to complete a degree or certificate program;
(2) The educational level of instruction provided in the noncredit or reduced credit remedial course is below the level needed to pursue successfully the degree or certificate program offered by that institution after one year in that remedial course; or
(3) Except for a course in English as a second language, the educational level of instruction provided in that course is below the secondary level. For purposes of this section, the Secretary considers a course to be below the secondary level if any of the following entities determine that course to be below the secondary level:
(i) The State agency that legally authorized the institution to provide postsecondary education.
(ii) In the case of an accredited or preaccredited institution, the nationally recognized accrediting agency or association that accredits or preaccredits the institution.
(iii) In the case of a public postsecondary vocational institution that is approved by a State agency recognized for the approval of public postsecondary vocational education, the State agency recognized for the approval of public postsecondary vocational education that approves the institution.
(d) Except as set forth in paragraph (f) of this section, an institution may not take into account more than one academic year's worth of noncredit or reduced credit remedial coursework in determining—
(1) A student's enrollment status under the Title IV, HEA programs; and
(2) A student's cost of attendance under the campus-based, FFEL, and Direct Loan programs.
(e) One academic year's worth of noncredit or reduced credit remedial coursework is equivalent to—
(1) Thirty semester or 45 quarter hours; or
(f) Courses in English as a second language do not count against the one-year academic limitation contained in paragraph (d) of this section.
| Sec. 668.21 Treatment of title IV grant and loan funds if the recipient does not begin attendance at the institution. |
(a) If a student does not begin attendance in a payment period or period of enrollment—
(1) The institution must return all title IV, HEA program funds that were credited to the student's account at the institution or disbursed directly to the student for that payment period or period of enrollment, for Federal Perkins Loan, FSEOG, TEACH Grant, Federal Pell Grant, ACG, and National SMART Grant program funds; and
(2) For FFEL and Direct Loan funds—
(i)(A) The institution must return all FFEL and Direct Loan funds that were credited to the student's account at the institution for that payment period or period of enrollment; and
(B) The institution must return the amount of payments made directly by or on behalf of the student to the institution for that payment period or period of enrollment, up to the total amount of the loan funds disbursed;
(ii) For remaining amounts of FFEL or Direct Loan funds disbursed directly to the student for that payment period or period of enrollment, including funds that are disbursed directly to the student by the lender for a study-abroad program in accordance with Sec. 682.207(b)(1)(v)(C)(1) or for a student enrolled in a foreign school in accordance with Sec. 682.207(b)(1)(v)(D), the institution is not responsible for returning the funds, but must immediately notify the lender or the Secretary, as appropriate, when it becomes aware that the student will not or has not begun attendance so that the lender or Secretary will issue a final demand letter to the borrower in accordance with 34 CFR 682.412 or 34 CFR 685.211, as appropriate; and
(iii) Notwithstanding paragraph (a)(2)(ii) of this section, if an institution knew that a student would not begin attendance prior to disbursing FFEL or Direct Loan funds directly to the student for that payment period or period of enrollment (e.g., the student notified the institution that he or she would not attend, or the institution expelled the student), the institution must return those funds.
(b) The institution must return those funds for which it is responsible under paragraph (a) of this section to the respective title IV, HEA program as soon as possible, but no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance.
(c) For purposes of this section, the Secretary considers that a student has not begun attendance in a payment period or period of enrollment if the institution is unable to document the student's attendance at any class during the payment period or period of enrollment.
(d) In accordance with procedures established by the Secretary or FFEL Program lender, an institution returns title IV, HEA funds timely if—
(1) The institution deposits or transfers the funds into the bank account it maintains under Sec. 668.163 as soon as possible, but no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance;
(2) The institution initiates an electronic funds transfer (EFT) as soon as possible, but no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance;
(3) The institution initiates an electronic transaction, as soon as possible, but no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance, that informs an FFEL lender to adjust the borrower's loan account for the amount returned; or
(4) The institution issues a check as soon as possible, but no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance. An institution does not satisfy this requirement if—
(i) The institution's records show that the check was issued more than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance; or
(ii) The date on the cancelled check shows that the bank used by the Secretary or FFEL Program lender endorsed that check more than 45 days after the date that the institution becomes aware that the student will not or has not begun attendance.
| Sec. 668.22 Treatment of title IV funds when a student withdraws. |
(a) General. (1) When a recipient of title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of title IV grant or loan assistance that the student earned as of the student's withdrawal date in accordance with paragraph (e) of this section.
(2)(i) Except as provided in paragraphs (a)(2)(ii) and (a)(2)(iii) of this section, a student is considered to have withdrawn from a payment period or period of enrollment if—
(A) In the case of a program that is measured in credit hours, the student does not complete all the days in the payment period or period of enrollment that the student was scheduled to complete;
(B) In the case of a program that is measured in clock hours, the student does not complete all of the clock hours and weeks of instructional time in the payment period or period of enrollment that the student was scheduled to complete;
(C) For a student in a standard or nonstandard-term program, excluding a subscription-based program, the student is not scheduled to begin another course within a payment period or period of enrollment for more than 45 calendar days after the end of the module the student ceased attending, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section or
(D) For a student in a non-term program or a subscription-based program, the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section.
(ii)(A) Notwithstanding paragraph (a)(2)(i) of this section—
(1) A student who completes all the requirements for graduation from his or her program before completing the days or hours in the period that he or she was scheduled to complete is not considered to have withdrawn;
(2) In a program offered in modules, a student is not considered to have withdrawn if the student successfully completes—
(i) One module that includes 49 percent or more of the number of days in the payment period, excluding scheduled breaks of five or more consecutive days and all days between modules;
(ii) A combination of modules that when combined contain 49 percent or more of the number of days in the payment period, excluding scheduled breaks of five or more consecutive days and all days between modules; or
(iii) Coursework equal to or greater than the coursework required for the institution's definition of a half-time student under Sec. 668.2 for the payment period;
(3) For a payment period or period of enrollment in which courses in the program are offered in modules—
(i) A student is not considered to have withdrawn if the institution obtains written confirmation from the student at the time that would have been a withdrawal of the date he or she will attend a module that begins later in the same payment period or period of enrollment; and
(ii) For standard and nonstandard-term programs, excluding subscription-based programs, that module begins no later than 45 calendar days after the end of the module the student ceased attending;
(4) For a subscription-based program, a student is not considered to have withdrawn if the institution obtains written confirmation from the student at the time that would have been a withdrawal of the date that he or she will resume attendance, and that date occurs within the same payment period or period of enrollment and is no later than 60 calendar days after the student ceased attendance; and
(5) For a non-term program, a student is not considered to have withdrawn if the institution obtains written confirmation from the student at the time that would have been a withdrawal of the date that he or she will resume attendance, and that date is no later than 60 calendar days after the student ceased attendance.
(B) If an institution has obtained the written confirmation of future attendance in accordance with paragraph (a)(2)(ii)(A) of this section—
(1) A student may change the date of return that begins later in the same payment period or period of enrollment, provided that the student does so in writing prior to the return date that he or she had previously confirmed;
(2) For standard and nonstandard-term programs, excluding subscription-based programs the later module that he or she will attend begins no later than 45 calendar days after the end of module the student ceased attending; and
(3) For non-term and subscription-based programs, the student's program permits the student to resume attendance no later than 60 calendar days after the student ceased attendance.
(C) If an institution obtains written confirmation of future attendance in accordance with paragraph (a)(2)(ii)(A) and, if applicable, (a)(2)(ii)(B) of this section, but the student does not return as scheduled—
(1) The student is considered to have withdrawn from the payment period or period of enrollment; and
(2) The student's withdrawal date and the total number of calendar days in the payment period or period of enrollment would be the withdrawal date and total number of calendar days that would have applied if the student had not provided written confirmation of a future date of attendance in accordance with paragraph (a)(2)(ii)(A) of this section.
(iii)(A) If a student withdraws from a term-based credit-hour program offered in modules during a payment period or period of enrollment and reenters the same program prior to the end of the period, subject to conditions established by the Secretary, the student is eligible to receive any title IV, HEA program funds for which he or she was eligible prior to withdrawal, including funds that were returned by the institution or student under the provisions of this section, provided the student's enrollment status continues to support the full amount of those funds.
(B) In accordance with Sec. 668.4(f), if a student withdraws from a clock-hour or non-term credit hour program during a payment period or period of enrollment and then reenters the same program within 180 calendar days, the student remains in that same period when he or she returns and, subject to conditions established by the Secretary, is eligible to receive any title IV, HEA program funds for which he or she was eligible prior to withdrawal, including funds that were returned by the institution or student under the provisions of this section.
(3) For purposes of this section, "title IV grant or loan assistance" includes only Direct Loan, Federal Pell Grant, Iraq and Afghanistan Service Grant, TEACH Grant, and FSEOG programs, not including the non-Federal share of FSEOG awards if an institution meets its FSEOG matching share by the individual recipient method or the aggregate method.
(4) If the total amount of title IV grant or loan assistance, or both, that the student earned as calculated under paragraph (e)(1) of this section is less than the amount of title IV grant or loan assistance that was disbursed to the student or on behalf of the student in the case of a PLUS loan, as of the date of the institution's determination that the student withdrew—
(i) The difference between these amounts must be returned to the title IV programs in accordance with paragraphs (g) and (h) of this section in the order specified in paragraph (i) of this section; and
(ii) No additional disbursements may be made to the student for the payment period or period of enrollment.
(5) If the total amount of title IV grant or loan assistance, or both, that the student earned as calculated under paragraph (e)(1) of this section is greater than the total amount of title IV grant or loan assistance, or both, that was disbursed to the student or on behalf of the student in the case of a PLUS loan, as of the date of the institution's determination that the student withdrew, the difference between these amounts must be treated as a post-withdrawal disbursement in accordance with paragraph (a)(6) of this section and Sec. 668.164(i).
(6)(i) A post-withdrawal disbursement must be made from available grant funds before available loan funds.
(ii)(A) If outstanding charges exist on the student's account, the institution may credit the student's account up to the amount of outstanding charges in accordance with Sec. 668.164(c) with all or a portion of any—
(1) Grant funds that make up the post-withdrawal disbursement; and
(2) Loan funds that make up the post-withdrawal disbursement only after obtaining confirmation from the student or parent in the case of a parent PLUS loan, that they still wish to have the loan funds disbursed in accordance with paragraph (a)(6)(iii) of this section.
(B)(1) The institution must disburse directly to a student any amount of a post-withdrawal disbursement of grant funds that is not credited to the student's account. The institution must make the disbursement as soon as possible, but no later than 45 days after the date of the institution's determination that the student withdrew, as defined in paragraph (l)(3) of this section.
(2) The institution must offer to disburse directly to a student, or parent in the case of a parent PLUS loan, any amount of a post-withdrawal disbursement of loan funds that is not credited to the student's account, in accordance with paragraph (a)(6)(iii) of this section.
(3) The institution must make a direct disbursement of any loan funds that make up the post-withdrawal disbursement only after obtaining the student's, or parent's in the case of a parent PLUS loan, confirmation that the student or parent still wishes to have the loan funds disbursed in accordance with paragraph (a)(6)(iii) of this section.
(iii)(A) The institution must provide within 30 days of the date of the institution's determination that the student withdrew, as defined in paragraph (l)(3) of this section, a written notification to the student, or parent in the case of parent PLUS loan, that—
(1) Requests confirmation of any post-withdrawal disbursement of loan funds that the institution wishes to credit to the student's account in accordance with paragraph (a)(6)(ii)(A)(2) of this section, identifying the type and amount of those loan funds and explaining that a student, or parent in the case of a parent PLUS loan, may accept or decline some or all of those funds;
(2) Requests confirmation of any post-withdrawal disbursement of loan funds that the student, or parent in the case of a parent PLUS loan, can receive as a direct disbursement, identifying the type and amount of these title IV funds and explaining that the student, or parent in the case of a parent PLUS loan, may accept or decline some or all of those funds;
(3) Explains that a student, or parent in the case of a parent PLUS loan, who does not confirm that a post-withdrawal disbursement of loan funds may be credited to the student's account may not receive any of those loan funds as a direct disbursement unless the institution concurs;
(4) Explains the obligation of the student, or parent in the case of a parent PLUS loan, to repay any loan funds he or she chooses to have disbursed; and
(5) Advises the student, or parent in the case of a parent PLUS loan, that no post-withdrawal disbursement of loan funds will be made, unless the institution chooses to make a post-withdrawal disbursement based on a late response in accordance with paragraph (a)(6)(iii)(C) of this section, if the student or parent in the case of a parent PLUS loan, does not respond within 14 days of the date that the institution sent the notification, or a later deadline set by the institution.
(B) The deadline for a student, or parent in the case of a parent PLUS loan, to accept a post-withdrawal disbursement under paragraph (a)(6)(iii)(A) of this section must be the same for both a confirmation of a direct disbursement of the post-withdrawal disbursement of loan funds and a confirmation of a post-withdrawal disbursement of loan funds to be credited to the student's account;
(C) If the student, or parent in the case of a parent PLUS loan, submits a timely response that confirms that they wish to receive all or a portion of a direct disbursement of the post-withdrawal disbursement of loan funds, or confirms that a post-withdrawal disbursement of loan funds may be credited to the student's account, the institution must disburse the funds in the manner specified by the student, or parent in the case of a parent PLUS loan, as soon as possible, but no later than 180 days after the date of the institution's determination that the student withdrew, as defined in paragraph (l)(3) of this section.
(D) If a student, or parent in the case of a parent PLUS loan, submits a late response to the institution's notice requesting confirmation, the institution may make the post-withdrawal disbursement of loan funds as instructed by the student, or parent in the case of a parent PLUS loan (provided the institution disburses all the funds accepted by the student, or parent in the case of a parent PLUS loan), or decline to do so.
(E) If a student, or parent in the case of a parent PLUS loan, submits a late response to the institution and the institution does not choose to make the post-withdrawal disbursement of loan funds, the institution must inform the student, or parent in the case of a parent PLUS loan, in writing of the outcome of the post-withdrawal disbursement request.
(F) If the student, or parent in the case of a parent PLUS loan, does not respond to the institution's notice, no portion of the post-withdrawal disbursement of loan funds that the institution wishes to credit to the student's account, nor any portion of loan funds that would be disbursed directly to the student, or parent in the case of a parent PLUS loan, may be disbursed.
(iv) An institution must document in the student's file the result of any notification made in accordance with paragraph (a)(6)(iii) of this section of the student's right to cancel all or a portion of loan funds or of the student's right to accept or decline loan funds, and the final determination made concerning the disbursement.
(b) Withdrawal date for a student who withdraws from an institution that is required to take attendance. (1) For purposes of this section, for a student who ceases attendance at an institution that is required to take attendance, including a student who does not return from an approved leave of absence, as defined in paragraph (d) of this section, or a student who takes a leave of absence that does not meet the requirements of paragraph (d) of this section, the student's withdrawal date is the last date of academic attendance as determined by the institution from its attendance records.
(2) An institution must document a student's withdrawal date determined in accordance with paragraph (b)(1) of this section and maintain the documentation as of the date of the institution's determination that the student withdrew, as defined in paragraph (l)(3) of this section.
(3)(i) An institution is required to take attendance if—
(A) An outside entity (such as the institution's accrediting agency or a State agency) has a requirement that the institution take attendance;
(B) The institution itself has a requirement that its instructors take attendance; or
(C) The institution or an outside entity has a requirement that can only be met by taking attendance or a comparable process, including, but not limited to, requiring that students in a program demonstrate attendance in the classes of that program, or a portion of that program.
(ii) If, in accordance with paragraph (b)(3)(i) of this section, an institution is required to take attendance or requires that attendance be taken for only some students, the institution must use its attendance records to determine a withdrawal date in accordance with paragraph (b)(1) of this section for those students.
(iii)(A) If, in accordance with paragraph (b)(3)(i) of this section, an institution is required to take attendance, or requires that attendance be taken, for a limited period, the institution must use its attendance records to determine a withdrawal date in accordance with paragraph (b)(3)(i) of this section for that limited period.
(B) A student in attendance the last time attendance is required to be taken during the limited period identified in paragraph (b)(3)(iii)(A) of this section who subsequently stops attending during the payment period will be treated as a student for whom the institution was not required to take attendance.
(iv) If an institution is required to take attendance or requires that attendance be taken, on only one specified day to meet a census reporting requirement, the institution is not considered to take attendance.
(c) Withdrawal date for a student who withdraws from an institution that is not required to take attendance. (1) For purposes of this section, for a student who ceases attendance at an institution that is not required to take attendance, the student's withdrawal date is—
(i) The date, as determined by the institution, that the student began the withdrawal process prescribed by the institution;
(ii) The date, as determined by the institution, that the student otherwise provided official notification to the institution, in writing or orally, of his or her intent to withdraw;
(iii) If the student ceases attendance without providing official notification to the institution of his or her withdrawal in accordance with paragraph (c)(1)(i) or (c)(1)(ii) of this section, the mid-point of the payment period (or period of enrollment, if applicable);
(iv) If the institution determines that a student did not begin the institution's withdrawal process or otherwise provide official notification (including notice from an individual acting on the student's behalf) to the institution of his or her intent to withdraw because of illness, accident, grievous personal loss, or other such circumstances beyond the student's control, the date that the institution determines is related to that circumstance;
(v) If a student does not return from an approved leave of absence as defined in paragraph (d) of this section, the date that the institution determines the student began the leave of absence; or
(vi) If a student takes a leave of absence that does not meet the requirements of paragraph (d) of this section, the date that the student began the leave of absence.
(2)(i)(A) An institution may allow a student to rescind his or her official notification to withdraw under paragraph (c)(1)(i) or (ii) of this section by filing a written statement that he or she is continuing to participate in academically-related activities and intends to complete the payment period or period of enrollment.
(B) If the student subsequently ceases to attend the institution prior to the end of the payment period or period of enrollment, the student's rescission is negated and the withdrawal date is the student's original date under paragraph (c)(1)(i) or (ii) of this section, unless a later date is determined under paragraph (c)(3) of this section.
(ii) If a student both begins the withdrawal process prescribed by the institution and otherwise provides official notification of his or her intent to withdraw in accordance with paragraphs (c)(1)(i) and (c)(1)(ii) of this section respectively, the student's withdrawal date is the earlier date unless a later date is determined under paragraph (c)(3) of this section.
(3) Notwithstanding paragraphs (c)(1) and (2) of this section, an institution that is not required to take attendance may use as the student's withdrawal date a student's last date of attendance at an academically-related activity provided that the institution documents that the activity is academically related and documents the student's attendance at the activity.
(4) An institution must document a student's withdrawal date determined in accordance with paragraphs (c)(1), (2), and (3) of this section and maintain the documentation as of the date of the institution's determination that the student withdrew, as defined in paragraph (l)(3) of this section.
(5)(i) "Official notification to the institution" is a notice of intent to withdraw that a student provides to an office designated by the institution.
(ii) An institution must designate one or more offices at the institution that a student may readily contact to provide official notification of withdrawal.
(d) Approved leave of absence. (1) For purposes of this section (and, for a title IV, HEA program loan borrower, for purposes of terminating the student's in-school status), an institution does not have to treat a leave of absence as a withdrawal if it is an approved leave of absence. A leave of absence is an approved leave of absence if—
(i) The institution has a formal policy regarding leaves of absence;
(ii) The student followed the institution's policy in requesting the leave of absence;
(iii) The institution determines that there is a reasonable expectation that the student will return to the school;
(iv) The institution approved the student's request in accordance with the institution's policy;
(v) The leave of absence does not involve additional charges by the institution;
(vi) The number of days in the approved leave of absence, when added to the number of days in all other approved leaves of absence, does not exceed 180 days in any 12-month period;
(vii) Except for a clock hour or non-term credit hour program, or a subscription-based program, upon the student's return from the leave of absence, the student is permitted to complete the coursework he or she began prior to the leave of absence; and
(viii) If the student is a title IV, HEA program loan recipient, the institution explains to the student, prior to granting the leave of absence, the effects that the student's failure to return from a leave of absence may have on the student's loan repayment terms, including the exhaustion of some or all of the student's grace period.
(2) If a student does not resume attendance at the institution at or before the end of a leave of absence that meets the requirements of this section, the institution must treat the student as a withdrawal in accordance with the requirements of this section.
(3) For purposes of this paragraph—
(i) The number of days in a leave of absence is counted beginning with the first day of the student's initial leave of absence in a 12-month period.
(ii) A "12-month period" begins on the first day of the student's initial leave of absence.
(iii) An institution's leave of absence policy is a "formal policy" if the policy—
(A) Is in writing and publicized to students; and
(B) Requires students to provide a written, signed, and dated request, that includes the reason for the request, for a leave of absence prior to the leave of absence. However, if unforeseen circumstances prevent a student from providing a prior written request, the institution may grant the student's request for a leave of absence, if the institution documents its decision and collects the written request at a later date.
(e) Calculation of the amount of title IV assistance earned by the student.
(1) General. The amount of title IV grant or loan assistance that is earned by the student is calculated by—
(i) Determining the percentage of title IV grant or loan assistance that has been earned by the student, as described in paragraph (e)(2) of this section; and
(ii) Applying this percentage to the total amount of title IV grant or loan assistance that was disbursed (and that could have been disbursed, as defined in paragraph (l)(1) of this section) to the student, or on the student's behalf, for the payment period or period of enrollment as of the student's withdrawal date.
(2) Percentage earned. The percentage of title IV grant or loan assistance that has been earned by the student is—
(i) Equal to the percentage of the payment period or period of enrollment that the student completed (as determined in accordance with paragraph (f) of this section) as of the student's withdrawal date, if this date occurs on or before—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) Sixty percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program that is measured in clock hours; or
(ii) 100 percent, if the student's withdrawal date occurs after—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) Sixty percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours.
(3) Percentage unearned. The percentage of title IV grant or loan assistance that has not been earned by the student is calculated by determining the complement of the percentage of title IV grant or loan assistance earned by the student as described in paragraph (e)(2) of this section.
(4) Total amount of unearned title IV assistance to be returned. The unearned amount of title IV assistance to be returned is calculated by subtracting the amount of title IV assistance earned by the student as calculated under paragraph (e)(1) of this section from the amount of title IV aid that was disbursed to the student as of the date of the institution's determination that the student withdrew.
(5) Use of payment period or period of enrollment. (i) The treatment of title IV grant or loan funds if a student withdraws must be determined on a payment period basis for a student who attended a standard term-based (semester, trimester, or quarter) educational program.
(ii)(A) The treatment of title IV grant or loan funds if a student withdraws may be determined on either a payment period basis or a period of enrollment basis for a student who attended a non-term based educational program or a nonstandard term-based educational program.
(B) An institution must consistently use either a payment period or period of enrollment for all purposes of this section for each of the following categories of students who withdraw from the same non-term based or nonstandard term-based educational program:
(1) Students who have attended an educational program at the institution from the beginning of the payment period or period of enrollment.
(2) Students who re-enter the institution during a payment period or period of enrollment.
(3) Students who transfer into the institution during a payment period or period of enrollment.
(iii) For a program that measures progress in credit hours and uses nonstandard terms that are not substantially equal in length, if the institution uses the payment period to determine the treatment of title IV grant or loan funds for a category of students found in paragraph (e)(5)(ii)(B) of this section, the institution must—
(A)(1) For students in the category who are disbursed or could have been disbursed aid using both the payment period definition in Sec. 668.4(b)(1) and the payment period definition in Sec. 668.4(b)(2), use the payment period during which the student withdrew that ends later; and
(2) If in the payment period that ends later there are funds that have been or could have been disbursed from overlapping payment periods, the institution must include in the return calculation any funds that can be attributed to the payment period that ends later; and
(B) For students in the category who are disbursed or could have been disbursed aid using only the payment period definition in Sec. 668.4(b)(1) or the payment period definition in Sec. 668.4(b)(2), use the payment period definition for which title IV, HEA program funds were disbursed for a student's calculation under this section.
(f) Percentage of payment period or period of enrollment completed. (1) For purposes of paragraph (e)(2)(i) of this section, the percentage of the payment period or period of enrollment completed is determined—
(i) In the case of a program that is measured in credit hours, by dividing the total number of calendar days in the payment period or period of enrollment into the number of calendar days completed in that period as of the student's withdrawal date; and
(ii)(A) In the case of a program that is measured in clock hours, by dividing the total number of clock hours in the payment period or period of enrollment into the number of clock hours scheduled to be completed as of the student's withdrawal date.
(B) The scheduled clock hours used must be those established by the institution prior to the student's beginning class date for the payment period or period of enrollment and must be consistent with the published materials describing the institution's programs, unless the schedule was modified prior to the student's withdrawal.
(C) The schedule must have been established in accordance with requirements of the accrediting agency and the State licensing agency, if such standards exist.
(2)(i) The total number of calendar days in a payment period or period of enrollment includes all days within the period that the student was scheduled to complete, except that scheduled breaks of at least five consecutive days are excluded from the total number of calendar days in a payment period or period of enrollment and the number of calendar days completed in that period.
(ii) The total number of calendar days in a payment period or period of enrollment does not include—
(A) Days in which the student was on an approved leave of absence; or
(B) For a payment period or period of enrollment in which any courses in the program are offered in modules, any scheduled breaks of at least five consecutive days when the student is not scheduled to attend a module or other course offered during that period of time.
(g) Return of unearned aid, responsibility of the institution. (1) The institution must return, in the order specified in paragraph (i) of this section, the lesser of—
(i) The total amount of unearned title IV assistance to be returned as calculated under paragraph (e)(4) of this section; or
(ii) An amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of title IV grant or loan assistance that has not been earned by the student, as described in paragraph (e)(3) of this section.
(2) For purposes of this section, "institutional charges" are tuition, fees, room and board (if the student contracts with the institution for the room and board) and other educationally-related expenses assessed by the institution.
(3) If, for a non-term program an institution chooses to calculate the treatment of title IV assistance on a payment period basis, but the institution charges for a period that is longer than the payment period, "total institutional charges incurred by the student for the payment period" is the greater of—
(i) The prorated amount of institutional charges for the longer period; or
(ii) The amount of title IV assistance retained for institutional charges as of the student's withdrawal date.
(h) Return of unearned aid, responsibility of the student. (1) After the institution has allocated the unearned funds for which it is responsible in accordance with paragraph (g) of this section, the student must return assistance for which the student is responsible in the order specified in paragraph (i) of this section.
(2) The amount of assistance that the student is responsible for returning is calculated by subtracting the amount of unearned aid that the institution is required to return under paragraph (g) of this section from the total amount of unearned title IV assistance to be returned under paragraph (e)(4) of this section.
(3) The student (or parent in the case of funds due to a parent PLUS Loan) must return or repay, as appropriate, the amount determined under paragraph (h)(1) of this section to—
(i) Any title IV loan program in accordance with the terms of the loan; and
(ii) Any title IV grant program as an overpayment of the grant; however, a student is not required to return the following—
(A) The portion of a grant overpayment amount that is equal to or less than 50 percent of the total grant assistance that was disbursed (and that could have been disbursed, as defined in paragraph (l)(1) of this section) to the student for the payment period or period of enrollment.
(B) With respect to any grant program, a grant overpayment amount, as determined after application of paragraph (h)(3)(ii)(A) of this section, of 50 dollars or less that is not a remaining balance.
(4)(i) A student who owes an overpayment under this section remains eligible for title IV, HEA program funds through and beyond the earlier of 45 days from the date the institution sends a notification to the student of the overpayment, or 45 days from the date the institution was required to notify the student of the overpayment if, during those 45 days the student—
(A) Repays the overpayment in full to the institution;
(B) Enters into a repayment agreement with the institution in accordance with repayment arrangements satisfactory to the institution; or
(C) Signs a repayment agreement with the Secretary, which will include terms that permit a student to repay the overpayment while maintaining his or her eligibility for title IV, HEA program funds.
(ii) Within 30 days of the date of the institution's determination that the student withdrew, an institution must send a notice to any student who owes a title IV, HEA grant overpayment as a result of the student's withdrawal from the institution in order to recover the overpayment in accordance with paragraph (h)(4)(i) of this section.
(iii) If an institution chooses to enter into a repayment agreement in accordance with paragraph (h)(4)(i)(B) of this section with a student who owes an overpayment of title IV, HEA grant funds, it must—
(A) Provide the student with terms that permit the student to repay the overpayment while maintaining his or her eligibility for title IV, HEA program funds; and
(B) Require repayment of the full amount of the overpayment within two years of the date of the institution's determination that the student withdrew.
(iv) An institution must refer to the Secretary, in accordance with procedures required by the Secretary, an overpayment of title IV, HEA grant funds owed by a student as a result of the student's withdrawal from the institution if—
(A) The student does not repay the overpayment in full to the institution, or enter a repayment agreement with the institution or the Secretary in accordance with paragraph (h)(4)(i) of this section within the earlier of 45 days from the date the institution sends a notification to the student of the overpayment, or 45 days from the date the institution was required to notify the student of the overpayment;
(B) At any time the student fails to meet the terms of the repayment agreement with the institution entered into in accordance with paragraph (h)(4)(i)(B) of this section; or
(C) The student chooses to enter into a repayment agreement with the Secretary.
(v) A student who owes an overpayment is ineligible for title IV, HEA program funds—
(A) If the student does not meet the requirements in paragraph (h)(4)(i) of this section, on the day following the 45-day period in that paragraph; or
(B) As of the date the student fails to meet the terms of the repayment agreement with the institution or the Secretary entered into in accordance with paragraph (h)(4)(i) of this section.
(vi) A student who is ineligible under paragraph (h)(4)(v) of this section regains eligibility if the student and the Secretary enter into a repayment agreement.
(5) The Secretary may waive grant overpayment amounts that students are required to return under this section if the withdrawals on which the returns are based are withdrawals by students—
(i) Who were residing in, employed in, or attending an institution of higher education that is located in an area in which the President has declared that a major disaster exists, in accordance with section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170);
(ii) Whose attendance was interrupted because of the impact of the disaster on the student or institution; and
(iii) Whose withdrawal occurred within the award year during which the designation occurred or during the next succeeding award year.
(i) Order of return of title IV funds. (1) Loans. Unearned funds returned by the institution or the student, as appropriate, in accordance with paragraph (g) or (h) of this section respectively, must be credited to outstanding balances on title IV loans made to the student or on behalf of the student for the payment period or period of enrollment for which a return of funds is required. Those funds must be credited to outstanding balances for the payment period or period of enrollment for which a return of funds is required in the following order:
(i) Unsubsidized Federal Direct Stafford loans.
(ii) Subsidized Federal Direct Stafford loans.
(iii) Federal Direct PLUS received on behalf of the student.
(2) Remaining funds. If unearned funds remain to be returned after repayment of all outstanding loan amounts, the remaining excess must be credited to any amount awarded for the payment period or period of enrollment for which a return of funds is required in the following order:
(ii) Iraq and Afghanistan Service Grants.
(j) Timeframe for the return of title IV funds. (1) An institution must return the amount of title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (l)(3) of this section. The timeframe for returning funds is further described in Sec. 668.173(b).
(2) For an institution that is not required to take attendance, an institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the—
(i) Payment period or period of enrollment, as appropriate, in accordance with paragraph (e)(5) of this section;
(ii) Academic year in which the student withdrew; or
(iii) Educational program from which the student withdrew.
(k) Consumer information. An institution must provide students with information about the requirements of this section in accordance with Sec. 668.43.
(l) Definitions. For purposes of this section—
(1) Title IV grant or loan funds that "could have been disbursed" are determined in accordance with the late disbursement provisions in Sec. 668.164(j).
(2) A "period of enrollment" is the academic period established by the institution for which institutional charges are generally assessed (i.e. length of the student's program or academic year).
(3) The "date of the institution's determination that the student withdrew" for an institution that is not required to take attendance is—
(i) For a student who provides notification to the institution of his or her withdrawal, the student's withdrawal date as determined under paragraph (c) of this section or the date of notification of withdrawal, whichever is later;
(ii) For a student who did not provide notification of his of her withdrawal to the institution, the date that the institution becomes aware that the student ceased attendance;
(iii) For a student who does not return from an approved leave of absence, the earlier of the date of the end of the leave of absence or the date the student notifies the institution that he or she will not be returning to the institution; or
(iv) For a student whose rescission is negated under paragraph (c)(2)(i)(B) of this section, the date the institution becomes aware that the student did not, or will not, complete the payment period or period of enrollment.
(v) For a student who takes a leave of absence that is not approved in accordance with paragraph (d) of this section, the date that the student begins the leave of absence.
(4) A "recipient of title IV grant or loan assistance" is a student for whom the requirements of Sec. 668.164(j)(2) have been met.
(5) Terms are "substantially equal in length" if no term in the program is more than two weeks of instructional time longer than any other term in that program.
(6) A program is "offered in modules" if the program uses a standard term or nonstandard-term academic calendar, is not a subscription-based program, and a course or courses in the program do not span the entire length of the payment period or period of enrollment.
(7)(i) "Academic attendance" and "attendance at an academically-related activity" must include academic engagement as defined under 34 CFR Sec. 600.2.
(ii) A determination of "academic attendance" or "attendance at an academically-related activity" must be made by the institution; a student's certification of attendance that is not supported by institutional documentation is not acceptable.
(8) A program is a nonstandard-term program if the program is a term-based program that does not qualify under 34 CFR 690.63(a)(1) or (a)(2) to calculate Federal Pell Grant payments under 34 CFR 690.63(b) or (c).
(9) A student in a program offered in modules is scheduled to complete the days in a module if the student's coursework in that module was used to determine the amount of the student's eligibility for title IV, HEA funds for the payment period or period of enrollment.
| Sec. 668.23 Compliance audits and audited financial statements. |
(a) General. (1) Independent auditor. For purposes of this section, the term "independent auditor" refers to an independent certified public accountant or a government auditor. To conduct an audit under this section, a government auditor must meet the Government Auditing Standards qualification and independence standards, including standards related to organizational independence.
(2) Institutions. An institution that participates in any title IV, HEA program must at least annually have an independent auditor conduct a compliance audit of its administration of that program and an audit of the institution's general purpose financial statements.
(3) Third-party servicers. Except as provided under this part or 34 CFR part 682, with regard to complying with the provisions under this section a third-party servicer must follow the procedures contained in the audit guides developed by and available from the Department of Education's Office of Inspector General. A third-party servicer is defined under Sec. 668.2 and 34 CFR 682.200.
(4) Submission deadline. Except as provided by the Single Audit Act, Chapter 75 of title 31, United States Code, an institution must submit annually to the Department Secretary its compliance audit and its audited financial statements by the date tht is the earlier of— no later than six months after the last day of the institution's fiscal year.
(i) Thirty days after the later of the date of the auditor’s report for the compliance audit and the date of the auditor’s report for the audited financial statements; or
(ii) Six months after the last day of the institution’s fiscal year.
(5) Audit submission requirements. In general, the Department Secretary considers the compliance audit and audited financial statement submission requirements of this section to be satisfied by an audit conducted in accordance with 2 CFR part 200, the Office of Management and Budget Circular A-133, "Audits of States, Local Governments, and Non-Profit Organizations", or the audit guides developed by and available from the Department of Education's Inspector General, whichever is applicable to the entity, and provided that the Federal student aid functions performed by that entity are covered in the submission. (Both OMB circulars are available by calling OMB's Publication Office at (202) 395-7332, or they can be obtained in electronic form on the OMB Home Page (http://www.whitehouse.gov).
(b) Compliance audits for institutions. (1) An institution's compliance audit must cover, on a fiscal year basis, all title IV, HEA program transactions, and must cover all of those transactions that have occurred since the period covered by the institution's last compliance audit.
(2) The compliance audit required under this section must be conducted in accordance with—
(i) The general standards and the standards for compliance audits contained in the U.S. General Accounting Office's (GAO's) Government Auditing Standards. (This publication is available from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402); and
(ii) Procedures for audits contained in audit guides developed by, and available from, the Department of Education's Office of Inspector General.
(3) The Secretary may require an institution to provide a copy of its compliance audit report to guaranty agencies or eligible lenders under the FFEL programs, State agencies, the Secretary of Veterans Affairs, or nationally recognized accrediting agencies.
(c) Compliance audits for third-party servicers. (1) A third-party servicer that administers title IV, HEA programs for institutions does not have to have a compliance audit performed if—
(i) The servicer contracts with only one institution; and
(ii) The audit of that institution's administration of the title IV, HEA programs involves every aspect of the servicer's administration of that program for that institution.
(2) A third-party servicer that contracts with more than one participating institution may submit a compliance audit report that covers the servicer's administration of the title IV, HEA programs for all institutions with which the servicer contracts.
(3) A third-party servicer must submit annually to the Secretary its compliance audit no later than six months after the last day of the servicer's fiscal year.
(4) The Secretary may require a third-party servicer to provide a copy of its compliance audit report to guaranty agencies or eligible lenders under the FFEL programs, State agencies, the Secretary of Veterans Affairs, or nationally recognized accrediting agencies.
(d) Audited financial statements. (1) General. To enable the Department Secretary to make a determination of financial responsibility, an institution must, to the extent requested by the Department Secretary, submit to the Department Secretary a set acceptable of financial statements for its latest complete fiscal year (or such fiscal years as requested by the Department or required by this part), as well as any other documentation the Department Secretary deems necessary to make that determination. For fiscal years beginning on or after July 1, 2024, financial Financial statements submitted to the Department Secretary must match the fiscal year end of the entity’s annual return(s) filed with the IRS. Financial statements submitted to the Department must include the Supplemental Schedule required under Sec. 667.172(a) and Section 2 of appendicies Appendix A and B to subpart L on this part, and must be prepared on an accrual basis in accordance with generally accepted accounting principles (GAAP), and audited by an independent auditor in accordance with generally accepted government auditing standards (GAGAS), issued by the Comptroller General of the United States and other guidance contained in 2 CFR Part 200 ̶ Uniform Administration Requirements, Cost Principles, And Audit Requirements for Federal Awards; or in audit guides developed by, and available from, the Department of Education's Office of Inspector General, whichever is applicable to the entity, and provided that the Federal student aid functions performed by that entity are covered in the submission. As part of these financial statements, the institution must include a detailed description of related entities based on the definition of a related entity as set forth in Accounting Standards Codification (ASC) 850. The disclosure requirements under this this this paragraph (d)(1) provision extend beyond those of ASC 850 to include all related parties and a level of detail that would enable to Department Secretary to readily identify the related party. Such information may include, but is not limited to, the name, location and a description of the related entity including the nature and amount of any transactions between the related party and the institution, financial or otherwise, regardless of when they occurred. If there are no related party transactions during the audited fiscal year or related party outstanding balances reported in the financial statements, then management must add a note to the financial statements to disclose this fact.
(2) Submission of additional financial information statements. (i) In To the extent requested by the Secretary in determining whether an institution is financially responsible, the Department Secretary may also require the submission of audited consolidated financial statements, audited full consolidating financial statements, audited combined financial statements or the audited financial statements of one or more related parties that have the ability, either individually or collectively, to significantly influence or control the institution, as determined by the Department Secretary.
(ii) For a domestic or foreign institution that is owned directly or indirectly by any foreign entity holding at least a 50 percent voting or equity interest in the institution, the institution must provide documentation of the entity’s status under the law of the jurisdiction under which the entity is organized, including, at a minimum, the date of organization, a current certificate of good standing, and a copy of the authorizing statute for such entity status. The institution must also provide documentation that is equivalent to articles of organization and bylaws and any current operating or shareholders’ agreements. The Department may also require the submission of additional documents related to the entity’s status under the foreign jurisdiction as needed to assess the entity’s financial status. Documents must be translated into English.
(3) Disclosure of Federal Title IV, HEA program revenue. A proprietary institution must disclose in a footnote to its audited financial statement audit the percentage of its revenues derived from the Federal Title IV, HEA program funds that the institution received during the fiscal year covered by that audit. The revenue percentage must be calculated in accordance with Sec. 668.28. The institution must also report in the footnote the dollar amount of the numerator and denominator of its 90/10 ratio as well as the individual revenue amounts identified in section 2 of appendix C to this subpart B of part 668.
(4) Audited financial statements for third-party servicers. A third-party servicer that enters into a contract with a lender or guaranty agency to administer any aspect of the lender's or guaranty agency's programs, as provided under 34 CFR part 682, must submit annually an audited financial statement. This financial statement must be prepared on an accrual basis in accordance with generally accepted accounting principles, and audited by an independent auditor in accordance with generally accepted government auditing standards and other guidance contained in audit guides issued by the Department of Education's Office of Inspector General.
(e) Access to records. (1) An institution or a third-party servicer that has a compliance or financial statement audit conducted under this section must—
(i) Give the Secretary and the Inspector General access to records or other documents necessary to review that audit, including the right to obtain copies of those records or documents; and
(ii) Require an individual or firm conducting the audit to give the Secretary and the Inspector General access to records, audit work papers, or other documents necessary to review that audit, including the right to obtain copies of those records, work papers, or documents.
(2) An institution must give the Secretary and the Inspector General access to records or other documents necessary to review a third-party servicer's compliance or financial statement audit, including the right to obtain copies of those records or documents.
(f) Determination of liabilities. (1) Based on the audit finding and the institution's or third-party servicer's response, the Secretary determines the amount of liability, if any, owed by the institution or servicer and instructs the institution or servicer as to the manner of repayment.
(2) If the Secretary determines that a third-party servicer owes a liability for its administration of an institution's title IV, HEA programs, the servicer must notify each institution under whose contract the servicer owes a liability of that determination. The servicer must also notify every institution that contracts with the servicer for the same service that the Secretary determined that a liability was owed.
(g) Repayments. (1) An institution or third-party servicer that must repay funds under the procedures in this section shall repay those funds at the direction of the Secretary within 45 days of the date of the Secretary's notification, unless—
(i) The institution or servicer files an appeal under the procedures established in subpart H of this part; or
(ii) The Secretary permits a longer repayment period.
(2) Notwithstanding paragraphs (f) and (g)(1) of this section—
(i) If an institution or third-party servicer has posted surety or has provided a third-party guarantee and the Secretary questions expenditures or compliance with applicable requirements and identifies liabilities, then the Secretary may determine that deferring recourse to the surety or guarantee is not appropriate because—
(A) The need to provide relief to students or borrowers affected by the act or omission giving rise to the liability outweighs the importance of deferring collection action until completion of available appeal proceedings; or
(B) The terms of the surety or guarantee do not provide complete assurance that recourse to that protection will be fully available through the completion of available appeal proceedings; or
(ii) The Secretary may use administrative offset pursuant to 34 CFR part 30 to collect the funds owed under the procedures of this section.
(3) If, under the proceedings in subpart H, liabilities asserted in the Secretary's notification, under paragraph (e)(1) of this section, to the institution or third-party servicer are upheld, the institution or third-party servicer must repay those funds at the direction of the Secretary within 30 days of the final decision under subpart H of this part unless—
(i) The Secretary permits a longer repayment period; or
(ii) The Secretary determines that earlier collection action is appropriate pursuant to paragraph (g)(2) of this section.
(4) An institution is held responsible for any liability owed by the institution's third-party servicer for a violation incurred in servicing any aspect of that institution's participation in the title IV, HEA programs and remains responsible for that amount until that amount is repaid in full.
(h) Audit submission requirements for foreign institutions. (1) Audited financial statements. (i) The Secretary waives for that fiscal year the submission of audited financial statements if the institution is a foreign public or nonprofit institution that received less than $500,000 in U.S. title IV program funds during its most recently completed fiscal year, unless that foreign public or nonprofit institution is in its initial provisional period of participation, and received title IV program funds during that fiscal year, in which case the institution must submit, in English, audited financial statements prepared in accordance with generally accepted accounting principles of the institution's home country.
(ii) Except as provided in paragraph (h)(1)(iii) of this section, a foreign institution that received $500,000 or more in U.S. title IV program funds during its most recently completed fiscal year must submit, in English, for each most recently completed fiscal year in which it received title IV program funds, audited financial statements prepared in accordance with generally accepted accounting principles of the institution's home country along with corresponding audited financial statements that meet the requirements of paragraph (d) of this section.
(iii) In lieu of making the submission required by paragraph (h)(1)(ii) of this section, a public or private nonprofit institution that received—
(A) $500,000 or more in U.S. title IV program funds, but less than $3,000,000 in U.S. title IV program funds during its most recently completed fiscal year, may submit for that year, in English, audited financial statements prepared in accordance with the generally accepted accounting principles of the institution's home country, and is not required to submit the corresponding audited financial statements that meet the requirements of paragraph (d) of this section;
(B) At least $3,000,000, but less than $10,000,000 in U.S. title IV, program funds during its most recently completed fiscal year, must submit in English, for each most recently completed fiscal year, audited financial statements prepared in accordance with the generally accepted accounting principles of the institution's home country along with corresponding audited financial statements that meet the requirements of paragraph (d) of this section, except that an institution that continues to receive at least $3,000,000 but less than $10,000,000, in U.S. title IV funds during its most recently completed fiscal year may omit the audited financial statements that meet the requirements of paragraph (d) of this section for up to two consecutive years following the submission of audited financial statements that meet the requirements of paragraph (d) of this section.
(2) Compliance audits. A foreign institution's compliance audit must cover, on a fiscal year basis, all title IV, HEA program transactions, and must cover all of those transactions that have occurred since the period covered by the institution's last compliance audit. A compliance audit that is due under this paragraph must be submitted no later than six months after the last day of the institution's fiscal year, and must meet the following requirements:
(i) If the foreign institution received $500,000 or more in U.S. dollars in title IV, HEA program funds during its most recently completed fiscal year, it must submit a standard compliance audit for that prior fiscal year that is performed in accordance with audit guides developed by, and available from, the Department of Education's Office of Inspector General, together with an alternative compliance audit or audits prepared in accordance with paragraph (h)(2)(ii) of this section for any preceding fiscal year or years in which the foreign institution received less than $500,000 in U.S. dollars in title IV, HEA program funds and for which a compliance audit has not already been submitted;
(ii) If the foreign institution received less than $500,000 U.S. in title IV, HEA program funds for its most recently completed fiscal year, it must submit an alternative compliance audit for that prior fiscal year that is performed in accordance with audit guides developed by, and available from, the Department of Education's Office of Inspector General, except as noted in paragraph (h)(2)(iii) of this section.
(iii) If so notified by the Secretary, a foreign institution may submit an alternative compliance audit performed in accordance with audit guides developed by, and available from, the Department of Education's Office of Inspector General, that covers a period not to exceed three of the institution's consecutive fiscal years if such audit is submitted either no later than six months after the last day of the most recent fiscal year, or contemporaneously with a standard compliance audit timely submitted under paragraph (h)(2)(i) or (h)(3)(ii) of this section for the most recently completed fiscal year, and if the following conditions are met:
(A) The institution received less than $500,000 in title IV, HEA program funds for its most recently completed fiscal year.
(B) The institution has timely submitted acceptable compliance audits for two consecutive fiscal years, and following such submission, has no history of late submission since then.
(C) The institution is fully certified.
(3)(i) Exceptions. Notwithstanding the provisions of paragraphs (h)(1)(i) and (h)(1)(iii) of this section, the Secretary may issue a letter to a foreign institution that identifies problems with its financial condition or financial reporting and requires the submission of audited financial statements in the manner specified by the Secretary.
(ii) Notwithstanding the provisions of paragraphs (h)(2)(ii) and (h)(2)(iii) of this section, the Secretary may issue to a foreign institution a letter that identifies problems with its administrative capability or compliance reporting that may require the compliance audit to be performed at a higher level of engagement, and may require the compliance audit to be submitted annually.
(i) Incorporation by reference. The material listed in this paragraph (i) is incorporated by reference into this section with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. This incorporation by reference (IBR) material is available for inspection at U.S. Department of Education and at the National Archives and Records Administration (NARA). Contact U.S. Department of Education at: Office of the General Counsel, 400 Maryland Avenue SW, room 2C–136, Washington DC 20202; phone: (202) 401–6000; https://www2.ed.gov/about/offices/list/ogc/index.html?src=oc. For information on the availability of this material at NARA, contact the Office of the Federal Register—email: [email protected]; website: www.archives.gov/federalregister/cfr/ibr-locations.html. The material may be obtained from the Financial Accounting Standards Board (FASB), 401 Merritt 7, P.O. Box 5116, Norwalk, CT 06856–5116; (203) 847–0700; www.fasb.org.
(1) Accounting Standards Codification (ASC) 850, Related Party Disclosures, Updated through September 10, 2018.
| Sec. 668.24 Record retention and examinations. |
(a) Program records. An institution shall establish and maintain, on a current basis, any application for title IV, HEA program funds and program records that document—
(1) Its eligibility to participate in the title IV, HEA programs;
(2) The eligibility of its educational programs for title IV, HEA program funds;
(3) Its administration of the title IV, HEA programs in accordance with all applicable requirements;
(4) Its financial responsibility, as specified in this part;
(5) Information included in any application for title IV, HEA program funds; and
(6) Its disbursement and delivery of title IV, HEA program funds.
(b) Fiscal records. (1) An institution shall account for the receipt and expenditure of title IV, HEA program funds in accordance with generally accepted accounting principles.
(2) An institution shall establish and maintain on a current basis—
(i) Financial records that reflect each HEA, title IV program transaction; and
(ii) General ledger control accounts and related subsidiary accounts that identify each title IV, HEA program transaction and separate those transactions from all other institutional financial activity.
(c) Required records. (1) The records that an institution must maintain in order to comply with the provisions of this section include but are not limited to—
(i) The Student Aid Report (SAR) or Institutional Student Information Record (ISIR) used to determine eligibility for title IV, HEA program funds;
(ii) Application data submitted to the Secretary, lender, or guaranty agency by the institution on behalf of the student or parent;
(iii) Documentation of each student's or parent borrower's eligibility for title IV, HEA program funds;
(iv) Documentation relating to each student's or parent borrower's receipt of title IV, HEA program funds, including but not limited to documentation of—
(A) The amount of the grant, loan, or FWS award; its payment period; its loan period, if appropriate; and the calculations used to determine the amount of the grant, loan, or FWS award;
(B) The date and amount of each disbursement or delivery of grant or loan funds, and the date and amount of each payment of FWS wages;
(C) The amount, date, and basis of the institution's calculation of any refunds or overpayments due to or on behalf of the student, or the treatment of title IV, HEA program funds when a student withdraws; and
(D) The payment of any overpayment or the return of any title IV, HEA program funds to the title IV, HEA program fund, a lender, or the Secretary, as appropriate;
(v) Documentation of and information collected at any initial or exit loan counseling required by applicable program regulations;
(vi) Reports and forms used by the institution in its participation in a title IV, HEA program, and any records needed to verify data that appear in those reports and forms; and
(vii) Documentation supporting the institution's calculations of its completion or graduation rates under Secs. 668.46 and 668.49.
(2) In addition to the records required under this part—
(i) Participants in the Federal Perkins Loan Program shall follow procedures established in 34 CFR 674.19 for documentation of repayment history for that program;
(ii) Participants in the FWS Program shall follow procedures established in 34 CFR 675.19 for documentation of work, earnings, and payroll transactions for that program; and
(iii) Participants in the FFEL Program shall follow procedures established in 34 CFR 682.610 for documentation of additional loan record requirements for that program.
(d) General. (1) An institution shall maintain required records in a systematically organized manner.
(2) An institution shall make its records readily available for review by the Secretary or the Secretary's authorized representative at an institutional location designated by the Secretary or the Secretary's authorized representative.
(3) An institution may keep required records in hard copy or in microform, computer file, optical disk, CD-ROM, or other media formats, provided that—
(i) Except for the records described in paragraph (d)(3)(ii) of this section, all record information must be retrievable in a coherent hard copy format or in other media formats acceptable to the Secretary;
(ii) An institution shall maintain the Student Aid Report (SAR) or Institutional Student Information Record (ISIR) used to determine eligibility for title IV, HEA program funds in the format in which it was received by the institution, except that the SAR may be maintained in an imaged media format;
(iii) Any imaged media format used to maintain required records must be capable of reproducing an accurate, legible, and complete copy of the original document, and, when printed, this copy must be approximately the same size as the original document;
(iv) Any document that contains a signature, seal, certification, or any other image or mark required to validate the authenticity of its information must be maintained in its original hard copy or in an imaged media format; and
(v) Participants in the Federal Perkins Loan Program shall follow procedures established in 34 CFR 674.19 for maintaining the original promissory notes and repayment schedules for that program.
(4) If an institution closes, stops providing educational programs, is terminated or suspended from the title IV, HEA programs, or undergoes a change of ownership that results in a change of control as described in 34 CFR 600.31, it shall provide for—
(i) The retention of required records; and
(ii) Access to those records, for inspection and copying, by the Secretary or the Secretary's authorized representative, and, for a school participating in the FFEL Program, the appropriate guaranty agency.
(e) Record retention. Unless otherwise directed by the Secretary—
(1) An institution shall keep records relating to its administration of the Federal Perkins Loan, FWS, FSEOG, Federal Pell Grant, ACG, National SMART Grant, or TEACH Grant Program for three years after the end of the award year for which the aid was awarded and disbursed under those programs, provided that an institution shall keep—
(i) The Fiscal Operations Report and Application to Participate in the Federal Perkins Loan, FSEOG, and FWS Programs (FISAP), and any records necessary to support the data contained in the FISAP, including "income grid information," for three years after the end of the award year in which the FISAP is submitted; and
(ii) Repayment records for a Federal Perkins loan, including records relating to cancellation and deferment requests, in accordance with the provisions of 34 CFR 674.19;
(2)(i) An institution shall keep records relating to a student or parent borrower's eligibility and participation in the FFEL or Direct Loan Program for three years after the end of the award year in which the student last attended the institution; and
(ii) An institution shall keep all other records relating to its participation in the FFEL or Direct Loan Program, including records of any other reports or forms, for three years after the end of the award year in which the records are submitted; and
(3) An institution shall keep all records involved in any loan, claim, or expenditure questioned by a title IV, HEA program audit, program review, investigation, or other review until the later of—
(i) The resolution of that questioned loan, claim, or expenditure; or
(ii) The end of the retention period applicable to the record.
(f) Examination of records. (1) An institution that participates in any title IV, HEA program and the institution's third-party servicer, if any, shall cooperate with an independent auditor, the Secretary, the Department of Education's Inspector General, the Comptroller General of the United States, or their authorized representatives, a guaranty agency in whose program the institution participates, and the institution's accrediting agency, in the conduct of audits, investigations, program reviews, or other reviews authorized by law.
(2) The institution and servicer must cooperate by—
(i) Providing timely access, for examination and copying, to requested records, including but not limited to computerized records and records reflecting transactions with any financial institution with which the institution or servicer deposits or has deposited any title IV, HEA program funds, and to any pertinent books, documents, papers, or computer programs; and
(ii) Providing reasonable access to personnel associated with the institution's or servicer's administration of the title IV, HEA programs for the purpose of obtaining relevant information.
(3) The Secretary considers that an institution or servicer has failed to provide reasonable access to personnel under paragraph (f)(2)(ii) of this section if the institution or servicer—
(i) Refuses to allow those personnel to supply all relevant information;
(ii) Permits interviews with those personnel only if the institution's or servicer's management is present; or
(iii) Permits interviews with those personnel only if the interviews are tape recorded by the institution or servicer.
(4) Upon request of the Secretary, or a lender or guaranty agency in the case of a borrower under the FFEL Program, an institution or servicer promptly shall provide the requester with any information the institution or servicer has respecting the last known address, full name, telephone number, enrollment information, employer, and employer address of a recipient of title IV funds who attends or attended the institution.
| Sec. 668.25 Contracts between an institution and a third-party servicer. |
(a) An institution may enter into a written contract with a third-party servicer for the administration of any aspect of the institution's participation in any Title IV, HEA program only to the extent that the servicer's eligibility to contract with the institution has not been limited, suspended, or terminated under the proceedings of subpart G of this part.
(b) Subject to the provisions of paragraph (d) of this section, a third-party servicer is eligible to enter into a written contract with an institution for the administration of any aspect of the institution's participation in any Title IV, HEA program only to the extent that the servicer's eligibility to contract with the institution has not been limited, suspended, or terminated under the proceedings of subpart G of this part.
(c) In a contract with an institution, a third-party servicer shall agree to—
(1) Comply with all statutory provisions of or applicable to Title IV of the HEA, all regulatory provisions prescribed under that statutory authority, and all special arrangements, agreements, limitations, suspensions, and terminations entered into under the authority of statutes applicable to Title IV of the HEA, including the requirement to use any funds that the servicer administers under any Title IV, HEA program and any interest or other earnings thereon solely for the purposes specified in and in accordance with that program;
(2) Refer to the Office of Inspector General of the Department of Education for investigation any information indicating there is reasonable cause to believe that the institution might have engaged in fraud or other criminal misconduct in connection with the institution's administration of any Title IV, HEA program or an applicant for Title IV, HEA program assistance might have engaged in fraud or other criminal misconduct in connection with his or her application. Examples of the type of information that must be referred are—
(i) False claims by the institution for Title IV, HEA program assistance;
(ii) False claims of independent student status;
(iii) False claims of citizenship;
(v) Forgery of signatures or certifications;
(vi) False statements of income; and
(vii) Payment of any commission, bonus, or other incentive payment based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid to any person or entity engaged in any student recruitment or admission activity or in making decisions regarding the award of title IV, HEA program funds.
(3) Be jointly and severally liable with the institution to the Secretary for any violation by the servicer of any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, and any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA;
(4) In the case of a third-party servicer that disburses funds (including funds received under the Title IV, HEA programs) or delivers Federal Stafford Loan Program proceeds to a student—
(i) Confirm the eligibility of the student before making that disbursement or delivering those proceeds. This confirmation must include, but is not limited to, any applicable information contained in the records required under Sec. 668.24; and
(ii) Calculate and return any unearned title IV, HEA program funds to the title IV, HEA program accounts and the student's lender, as appropriate, in accordance with the provisions of Secs. 668.21 and 668.22, and applicable program regulations; and
(5) If the servicer or institution terminates the contract, or if the servicer stops providing services for the administration of a Title IV, HEA program, goes out of business, or files a petition under the Bankruptcy Code, return to the institution all—
(i) Records in the servicer's possession pertaining to the institution's participation in the program or programs for which services are no longer provided; and
(ii) Funds, including Title IV, HEA program funds, received from or on behalf of the institution or the institution's students, for the purposes of the program or programs for which services are no longer provided.
(d) A third-party servicer may not enter into a written contract with an institution for the administration of any aspect of the institution's participation in any Title IV, HEA program, if—
(1)(i) The servicer has been limited, suspended, or terminated by the Secretary within the preceding five years;
(ii) The servicer has had, during the servicer's two most recent audits of the servicer's administration of the Title IV, HEA programs, an audit finding that resulted in the servicer's being required to repay an amount greater than five percent of the funds that the servicer administered under the Title IV, HEA programs for any award year; or
(iii) The servicer has been cited during the preceding five years for failure to submit audit reports required under Title IV of the HEA in a timely fashion; and
(2)(i) In the case of a third-party servicer that has been subjected to a termination action by the Secretary, either the servicer, or one or more persons or entities that the Secretary determines (under the provisions of Sec. 668.15) exercise substantial control over the servicer, or both, have not submitted to the Secretary financial guarantees in an amount determined by the Secretary to be sufficient to satisfy the servicer's potential liabilities arising from the servicer's administration of the Title IV, HEA programs; and
(ii) One or more persons or entities that the Secretary determines (under the provisions of Sec. 668.15) exercise substantial control over the servicer have not agreed to be jointly or severally liable for any liabilities arising from the servicer's administration of the Title IV, HEA programs and civil and criminal monetary penalties authorized under Title IV of the HEA.
(e)(1)(i) An institution that participates in a Title IV, HEA program shall notify the Secretary within 10 days of the date that—
(A) The institution enters into a new contract or significantly modifies an existing contract with a third-party servicer to administer any aspect of that program;
(B) The institution or a third-party servicer terminates a contract for the servicer to administer any aspect of that program; or
(C) A third-party servicer that administers any aspect of the institution's participation in that program stops providing services for the administration of that program, goes out of business, or files a petition under the Bankruptcy Code.
(ii) The institution's notification must include the name and address of the servicer.
(2) An institution that contracts with a third-party servicer to administer any aspect of the institution's participation in a Title IV, HEA program shall provide to the Secretary, upon request, a copy of the contract, including any modifications, and provide information pertaining to the contract or to the servicer's administration of the institution's participation in any Title IV, HEA program.
| Sec. 668.26 End of an institution's participation in the Title IV, HEA programs. |
(a) An institution's participation in a Title IV, HEA program ends on the date that—
(1) The institution closes or stops providing educational programs for a reason other than a normal vacation period or a natural disaster that directly affects the institution or the institution's students;
(2) The institution loses its institutional eligibility under 34 CFR part 600;
(3) The institution's participation is terminated under the proceedings in subpart G of this part;
(4) The institution's period of participation, as specified under Sec. 668.13, expires, or the institution's provisional certification is revoked under Sec. 668.13;
(5) The institution's program participation agreement is terminated or expires under Sec. 668.14;
(6) The institution's participation ends under subpart M of this part; or
(7) The Secretary receives a notice from the appropriate State postsecondary review entity designated under 34 CFR part 667 that the institution's participation should be withdrawn.
(b) If an institution's participation in a Title IV, HEA program ends, the institution shall—
(1) Immediately notify the Secretary of that fact;
(2) Submit to the Secretary within 45 days after the date that the participation ends—
(i) All financial, performance, and other reports required by appropriate Title IV, HEA program regulations; and
(ii) A letter of engagement for an independent audit of all funds that the institution received under that program, the report of which shall be submitted to the Secretary within 45 days after the date of the engagement letter;
(3) Inform the Secretary of the arrangements that the institution has made for the proper retention and storage for a minimum of three years of all records concerning the administration of that program;
(4) If the institution's participation in the Federal Perkins Loan Program ended, inform the Secretary of how the institution will provide for the collection of any outstanding loans made under that program;
(5) If the institution's participation in the LEAP Program ended—
(i) Inform immediately the State in which the institution is located of that fact; and
(ii) Notwithstanding paragraphs (c) through (e) of this section, follow the instructions of that State concerning the end of that participation;
(6) If the institution's participation in all the Title IV, HEA programs ended, inform the Secretary of how the institution will provide for the collection of any outstanding loans made under the National Defense/Direct Student Loan programs; and
(7) Continue to comply with the requirements of Sec. 668.22 for the treatment of title IV, HEA program funds when a student withdraws.
(c) If an institution closes or stops providing educational programs for a reason other than a normal vacation period or a natural disaster that directly affects the institution or the institution's students, the institution shall—
(1) Return to the Secretary, or otherwise dispose of under instructions from the Secretary, any unexpended funds that the institution has received under the Title IV, HEA programs for attendance at the institution, less the institution's administrative allowance, if applicable; and
(2) Return to the appropriate lenders any Federal Stafford Loan program proceeds that the institution has received but not delivered to, or credited to the accounts of, students attending the institution.
(d)(1) An institution may use funds that it has received under the Federal Pell Grant, ACG, National SMART Grant, or TEACH Grant Program or a campus-based program or request additional funds from the Secretary, under conditions specified by the Secretary, if the institution does not possess sufficient funds, to satisfy any unpaid commitment made to a student under that Title IV, HEA program only if—
(i) The institution's participation in that Title IV, HEA program ends during a payment period;
(ii) The institution continues to provide, from the date that the participation ends until the scheduled completion date of that payment period, educational programs to otherwise eligible students enrolled in the formerly eligible programs of the institution;
(iii) The commitment was made prior to the end of the participation; and
(iv) The commitment was made for attendance during that payment period or a previously completed payment period.
(2) An institution may credit to a student's account or deliver to the student the proceeds of a disbursement of a Federal Family Education Loan Programs loan to satisfy any unpaid commitment made to the student under the Federal Family Education Loan Programs only if—
(i) The institution's participation in that Title IV, HEA program ends during a period of enrollment;
(ii) The institution continues to provide, from the date that the participation ends until the scheduled completion date of that period of enrollment, educational programs to otherwise eligible students enrolled in the formerly eligible programs of the institution;
(iii) The loan was made for attendance during that period of enrollment.
(iv) The proceeds of the first disbursement of the loan were delivered to the student or credited to the student's account prior to the end of the participation.
(3) An institution may use funds that it has received under the Direct Loan Program or request additional funds from the Secretary, under conditions specified by the Secretary, if the institution does not possess sufficient funds, to credit to a student's account or disburse to the student the proceeds of a Direct Loan Program loan only if—
(i) The institution's participation in the Direct Loan Program ends during a period of enrollment;
(ii) The institution continues to provide, from the date that the participation ends until the scheduled completion date of that period of enrollment, educational programs to otherwise eligible students enrolled in the formerly eligible programs of the institution;
(iii) The loan was made for attendance during that period of enrollment; and
(iv) The proceeds of the first disbursement of the loan were delivered to the student or credited to the student's account prior to the end of the participation.
(e)(1) Notwithstanding the requirements of any other provision in this section, with agreement from the institution's accrediting agency and State, the Secretary may permit an institution to continue to originate, award, or disburse funds under a Title IV, HEA program for no more than 120 days following the date of a final, nonappealable decision by an accrediting agency to withdraw, suspend, or terminate accreditation, by a State authorizing agency to remove State authorization, or by the Secretary to end the institution's participation in title IV, HEA programs if—
(i) The institution has notified the Secretary of its plans to conduct an orderly closure in accordance with any applicable requirements of its accrediting agency;
(ii) As part of the institution's orderly closure, it is performing a teach-out that has been approved by its accrediting agency;
(iii) The institution agrees to abide by the conditions of the program participation agreement that was in effect on the date of the decision under paragraph (e)(1), except that it will originate, award, or disburse funds under that agreement only to enrolled students who can complete the program within 120 days of the decision under paragraph (e)(1) or who can transfer to a new institution; and
(iv) The institution presents the Secretary with acceptable written assurances that—
(A) The health and safety of the institution's students are not at risk;
(B) The institution has adequate financial resources to ensure that instructional services remain available to students during the teach-out; and
(C) The institution is not subject to probation or its equivalent, or adverse action by the institution's State authorizing body or accrediting agency, except as provided in paragraph (e)(1).
(2) An institution is prohibited from engaging in misrepresentation, consistent with 34 CFR part 668 subpart F and consistent with 34 CFR part 685 subpart B, about the nature of its teachout plans, teach-out agreements, and transfer of credit.
(f) For the purposes of this section—
(1) A commitment under the Federal Pell Grant, ACG, National SMART Grant, and TEACH Grant programs occurs when a student is enrolled and attending the institution and has submitted a valid Student Aid Report to the institution or when an institution has received a valid institutional student information report; and
(2) A commitment under the campus-based programs occurs when a student is enrolled and attending the institution and has received a notice from the institution of the amount that he or she can expect to receive and how and when that amount will be paid.
| Sec. 668.27 Waiver of annual audit submission requirement. |
(a) General. (1) At the request of an institution, the Secretary may waive the annual audit submission requirement for the period of time contained in paragraph (b) of this section if the institution satisfies the requirements contained in paragraph (c) of this section and posts a letter of credit in the amount determined in paragraph (d) of this section.
(2) An institution requesting a waiver must submit an application to the Secretary at such time and in such manner as the Secretary prescribes.
(3) The first fiscal year for which an institution may request a waiver is the fiscal year in which it submits its waiver request to the Secretary.
(b) Waiver period. (1) If the Secretary grants the waiver, the institution need not submit its compliance or audited financial statement until six months after—
(i) The end of the third fiscal year following the fiscal year for which the institution last submitted a compliance audit and audited financial statement; or
(ii) The end of the second fiscal year following the fiscal year for which the institution last submitted compliance and financial statement audits if the award year in which the institution will apply for recertification is part of the third fiscal year.
(2) The Secretary does not grant a waiver if the award year in which the institution will apply for recertification is part of the second fiscal year following the fiscal year for which the institution last submitted compliance and financial statement audits.
(3) When an institution must submit its next compliance and financial statement audits under paragraph (b)(1) of this section—
(i) The institution must submit a compliance audit that covers the institution's administration of the title IV, HEA programs for the period for each fiscal year for which an audit did not have to be submitted as a result of the waiver, and an audited financial statement for its last fiscal year; and
(ii) The auditor who conducts the audit must audit the institution's annual determinations for the period subject to the waiver that it satisfied the 90/10 rule in Sec. 600.5 and the other conditions of institutional eligibility in Sec. 600.7 and Sec. 668.8(e)(2), and disclose the results of the audit of the 90/10 rule for each year in accordance with Sec. 668.23(d)(4).
(c) Criteria for granting the waiver. The Secretary grants a waiver to an institution if the institution—
(1) Is not a foreign institution;
(2) Did not disburse $200,000 or more of title IV, HEA program funds during each of the two completed award years preceding the institution's waiver request;
(3) Agrees to keep records relating to each award year in the unaudited period for two years after the end of the record retention period in Sec. 668.24(e) for that award year;
(4) Has participated in the title IV, HEA programs under the same ownership for at least three award years preceding the institution's waiver request;
(5) Is financially responsible under Sec. 668.171, and does not rely on the alternative standards of Sec. 668.175 to participate in the title IV, HEA programs;
(6) Is not on the reimbursement or cash monitoring system of payment;
(7) Has not been the subject of a limitation, suspension, fine, or termination proceeding, or emergency action initiated by the Department or a guarantee agency in the three years preceding the institution's waiver request;
(8) Has submitted its compliance audits and audited financial statements for the previous two fiscal years in accordance with and subject to Sec. 668.23, and no individual audit disclosed liabilities in excess of $10,000; and
(9) Submits a letter of credit in the amount determined in paragraph (d) of this section, which must remain in effect until the Secretary has resolved the audit covering the award years subject to the waiver.
(d) Letter of credit amount. For purposes of this section, the letter of credit amount equals 10 percent of the amount of title IV, HEA program funds the institution disbursed to or on behalf of its students during the award year preceding the institution's waiver request.
(e) Rescission of the waiver. (1) The Secretary rescinds the waiver if the institution—
(i) Disburses $200,000 or more of title IV, HEA program funds for an award year;
(ii) Undergoes a change in ownership that results in a change of control; or
(iii) Becomes the subject of an emergency action or a limitation, suspension, fine, or termination action initiated by the Department or a guarantee agency.
(2) If the Secretary rescinds a waiver, the rescission is effective on the last day of the fiscal year in which the rescission takes place.
(f) Renewal. An institution may request a renewal of its waiver when it submits its audits under paragraph (b) of this section. The Secretary grants the waiver if the audits and other information available to the Secretary show that the institution continues to satisfy the criteria for receiving that waiver.
| Sec. 668.28 Non-title IV revenue (90/10). |
(a) General. (1) Calculating the revenue percentage. A proprietary institution meets the requirement in Sec. 668.14(b)(16) that at least 10 percent of its revenue is derived from sources other than Federal Title IV, HEA program funds by using the formula in appendix C of this subpart to calculate its revenue percentage for its latest complete fiscal year. For purposes of this section—
(i) For any fiscal year beginning on or after January 1, 2023, Federal funds used to calculate the revenue percentage include title IV, HEA program funds and any other educational assistance funds provided by a Federal agency directly to an institution or a student including the Federal portion of any grant funds provided by or administered by a non-Federal agency, except for non-title IV Federal funds provided directly to a student to cover expenses other than tuition, fees, and other institutional charges. The Secretary identifies the Federal agency and the other educational assistance funds provided by that agency in a notice published in the Federal Register, with updates to that list published as needed.
(ii) For any fiscal year beginning prior to January 1, 2023, Federal funds are limited to title IV, HEA program funds.
(2) Disbursement rule. An institution must use the cash basis of accounting in calculating its revenue percentage by— Cash basis accounting. Except for institutional loans made to students under paragraph (a)(5)(i) of this section, the institution must use the cash basis of accounting in calculating its revenue percentage.
(i) For each eligible student, counting the amount of Federal funds the institution received to pay tuition, fees, and other institutional charges during its fiscal year—
(A) Directly from an agency identified under paragraph (a)(1)(i) of this section; and
(B) Paid by a student who received Federal funds; and
(ii) For each eligible student, counting the amount of title IV, HEA program funds the institution received to pay tuition, fees, and other institutional charges during its fiscal year. However, before the end of its fiscal year, the institution must—
(A) Request funds under the advanced payment method in Sec. 668.162(b)(2) or the heightened cash mnitoring method in Sec. 668.162(d)(1) that the students are eligible to receive and make any disbursements to those students by the end of the fiscal year; or
(B) For institutions under the reimbursement or heightened cash monitoring methods in Sec. 668.162(c) or (d)(2), make disbursements to those students by the end of the fiscal year and report as Federal funds in the revenue calculations the funds that the students are eligible to receive before requesting funds.
(3) Revenue generated from programs and activities. The institution must consider as revenue only those funds it generates from—
(i) Tuition, fees, and other institutional charges for students enrolled in eligible programs as defined in Sec. 668.8;
(ii) Activities conducted by the institution that are necessary for the education and training of its students provided those activities are—
(A) Conducted on campus or at a facility under the institution's control;
(B) Performed under the supervision of a member of the institution's faculty; and
(C) Required to be performed by all students in a specific educational program at the institution; and
(D) Related directly to services performed by students; and
(iii) Funds paid by a student, or on behalf of a student by a party unrelated to other than the institution, its owners, or affiliates, for an education or training program that is not eligible under Sec. 668.8 and that does not include any courses offered in an eligible program. The non-eligible education or training program must be provided by the institution, and taught by one of its instructors, at its main campus or one of its approved additional locations, at another school facility approved by the appropriate State agency or accrediting agency, or at an employer facility. The institution may not count revenue from a non-eligible education or training program for which it merely provides facilities for test preparation courses, acts as a proctor, or oversees a course of self-study. The program must if the program—
(A) Be Is approved or licensed by the appropriate State agency;
(B) Be Is accredited by an accrediting agency recognized by the Secretary under 34 CFR part 602;
(C) Provides an industry-recognized credential or certification, or prepares students to take an examination for an industry-recognized credential or certification; issued by an independent third party;
(D) Provides training needed for students to maintain State licensing requirements; or
(E) Provides training needed for students to meet additional licensing requirements for specialized training for practitioners who that already meet the general licensing requirements in that field.
(4) Application of funds. The institution must presume that any Federal Title IV, HEA program funds it disburses, or delivers to, to or on behalf of a student, or determines was provided to a student by another Federal source, will be used to pay the student's tuition, fees, or institutional charges up to the amount of those Federal funds if a student makes a payment to the institution, regardless of whether the institution credits the funds to the student's account or pays the funds directly to the student, except to the extent that the student's tuition, fees, or other charges are satisfied by—
(i) Grant funds provided by —non-Federal public agencies or private sources independent of the institution;
(A) Non-Federal that do not include Federal or institutional funds, unless the Federal portion of those grant funds can be determined, and that portion of Federal funds is included as Federal funds under this section. If the Federal funds cannot be determined no amount of the grant funds may be included under this section;
(B) Private sources unrelated to the institution, its owners, or affiliates;
(ii) Funds provided under a contractual arrangement with the institution and a Federal, State, or local government agency for the purpose of providing job training to low-income individuals who need that training;
(iii) Funds used by a student from a savings plan for educational expenses established by or on behalf of the student if the saving plan qualifies for special tax treatment under the Internal Revenue Code of 1986; or
(iv) Institutional scholarships that meet the requirements in paragraph (a)(5)(iv) of this section.
(5) Revenue generated from institutional aid. The institution may must include the following institutional aid as revenue:
(i) For loans made to students and credited in full to the students' accounts at the institution and used to satisfy tuition, fees, and other institutional charges, the principal payments made on those loans by current or former students that the institution received during the fiscal year, on or after July 1, 2008 and prior to July 1, 2012, include as revenue the net present value of the loans made to students during the fiscal year, as calculated under paragraph (b) of this section, if the loans are—
(A) Bona Are bona fide as evidenced by standalone repayment agreements between the students and the institution that are enforceable promissory notes;
(B) Issued Are issued at intervals related to the institution's enrollment periods;
(C) Subject Are subject to regular loan repayments and collections by the institution; and
(D) Separate Are separate from the enrollment contracts signed by the students.
(ii) Funds from an income share agreement or any other alternative financing agreement in which the agreement is with the institution only or with any entity or individual in the institution’s ownership tree, or with any common ownership of the institution and the entity providing the funds, or if the entity or another entity with common ownership has any other relationships or agreements with the institution, provided that— For loans made to students before July 1, 2008, include as revenue only the amount of payments made on those loans that the institution received during the fiscal year.
(A) The institution clearly identifies the student's institutional charges, and those charges are the same or less than the stated rate for institutional charges;
(B) The agreement clearly identifies the maximum time and maximum amount a student would be required to pay, including the implied or imputed interest rate and any fees and revenue generated for a related third-party, the institution, or any entity described in paragraph (a)(5)(ii) introductory text, for that maximum time period; and
(C) All payments are applied with a portion allocated to the return of capital and a portion allocated to profit. Revenue, interest, and fees are not included in the calculation.
(iii) For loans made to students on or after July 1, 2012, include as revenue only the amount of payments made on those loans that the institution received during the fiscal year.
(iii)(iv) For scholarships provided by the institution in the form of monetary aid or tuition discount and based on the academic achievement or financial need of its students, include as revenue the amount disbursed to students during the fiscal year. The scholarships must be disbursed from an established restricted account and may be included as revenue only to the extent that the funds in the account represent— only to the extent that the funds in that account represent designated funds from an outside source or income earned on those funds.
(A) Designated funds from an outside source that is unrelated to the institution, its owners, or its affiliates; or
(B) Income earned on those funds.
(6) Revenue generated from loan funds in excess of loan limits prior to the Ensuring Continued Access to Student Loans Act of 2008 (ECASLA). For each student who receives an unsubsidized loan under the FFEL or Direct Loan programs on or after July 1, 2008 and prior to July 1, 2011, the amount of the loan disbursement for a payment period that exceeds the disbursement for which the student would have been eligible for that payment period under the loan limit in effect on the day prior to enactment of the ECASLA is included and deemed to be revenue from a source other than Title IV, HEA program funds but only to the extent that the excess amount pays for tuition, fees, or institutional charges remaining on the student's account after other Title IV, HEA program funds are applied.
(6)(7) Funds excluded from revenues. For the fiscal year, the institution does not include—
(i) The amount of Federal Work Study (FWS) wages paid directly to the student. However, if the institution credits the student's account with FWS funds, those funds are included as revenue;
(ii) The amount of funds received by the institution from a State under the LEAP, Special Leveraging Educational Assistance Partnership (SLEAP), or Grants for Access and Persistence (GAP) programs;
(iii) The amount of institutional funds used to match Federal education assistance Title IV, HEA program funds;
(iv) The amount of Federal education assistance Title IV, HEA program funds refunded or returned under Sec. 668.22. If any funds from the loan disbursement used in the return calculation under Sec. 668.22 were counted as non-title IV revenue under paragraph (a)(6) of this section, the amount of Title IV, HEA program funds refunded to students or returned to the Secretary under Sec. 668.22 or required to be returned under the applicable program; is considered to consist of pre-ECASLA loan amounts and loan amounts in excess of the loan limits prior to ECASLA in the same proportion to the loan disbursement; or
(v) The amount the student is charged for books, supplies, and equipment unless the institution includes that amount as tuition, fees, or other institutional charges.
(vi) Any amount from the proceeds of the factoring or sale of accounts receivable or institutional loans, regardless of whether the loans were sold with or without recourse;
(vii) Any amount from the sale of an income share agreement or other financing agreement; or
(viii) Any funds, including loans, provided by a third party related to the institution, its owners, or affiliates to a student in any form.
(b)[Reserved] Removed and reserved.
(c) Sanctions. If an institution does not derive at least 10 percent of its revenue from sources other than Federal Title IV, HEA program funds—
(1) For two consecutive fiscal years, it loses its eligibility to participate in the Title IV, HEA programs for at least two fiscal years. To regain eligibility, the institution must demonstrate that it complied with the State licensure and accreditation requirements under 34 CFR 600.5(a)(4) and (a)(6), and the financial responsibility requirements under subpart L of this part, for a minimum of two fiscal years after the fiscal year it became ineligible; or
(2) For any fiscal year, it becomes provisionally certified under Sec. 668.13(c)(1)(ii) for the two fiscal years after the fiscal year it failed to satisfy the revenue requirement in this section. However, the institution's provisional certification terminates on—
(i) The expiration date of the institution's program participation agreement that was in effect on the date the Secretary determined the institution failed this requirement of this section; or
(ii) The date the institution loses its eligibility to participate under paragraph (c)(1) of this section.; and
(3) For any fiscal year, it must notify students of the possibility of loss of title IV eligibility; It must notify the Secretary no later than 45 days after the end of its fiscal year that it failed to meet this requirement.
(4) For any fiscal year, it must report the failure no later than 45 days after the end of its fiscal year, or immediately thereafter if subsequent information is obtained that shows an institution incorrectly determined that it passed the revenue requirement in this section for the prior fiscal year; and
(5) It is liable for any title IV, HEA program funds it disburses after the last day of the fiscal year it becomes ineligible to participate in the title IV, HEA program under paragraph (c)(1) of this section, excluding any funds the institution was entitled to disburse under Sec. 668.26.
| Sec. 668.29 Severability. |
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
| Appendix A to Subpart B of Part 668—Standards for Audit of Governmental Organizations, Programs, Activities, and Functions (GAO) |
Note: This appendix previously appeared in the General Provisions regulations as Appendix B to Part 668. Effective 7/1/01, it is redesignated as shown here.
Part III Chapter 3—Independence
(a) The Third general standard for governmental auditing is: In matters relating to the audit work, the audit organization and the individual auditors shall maintain an independent attitude.
(b) This standard places upon the auditor and the audit organization the responsibility for maintaining sufficient independence so that their opinions, conclusions, judgments, and recommendations will be impartial. If the auditor is not sufficiently independent to produce unbiased opinions, conclusions, and judgments, he should state in a prominent place in the audit report his relationship with the organization or officials being audited.*1*
*1* If the auditor is not fully independent because he or she is an employee of the audited entity, it will be adequate disclosure to so indicate. If the auditor is a practicing certified public accountant, his or her conduct should be governed by the AICPA "Statements on Auditing Procedure."
(c) The auditor should consider not only whether his or her own attitude and beliefs permit him or her to be independent but also whether there is anything about his or her situation which would lead others to question his or her independence. Both situations deserve consideration since it is important not only that the auditor be, in fact, independent and impartial but also that other persons will consider him or her so.
(d) There are three general classes of impairments that the auditor needs to consider; these are personal, external, and organizational impairments. If one or more of these are of such significance as to affect the auditor's ability to perform his or her work and report its results impartially, he or she should decline to perform the audit or indicate in the report that he or she was not fully independent.
Personal Impairments
There are some circumstances in which an auditor cannot be impartial because of his or her views or his or her personal situation. These circumstances might include:
1. Relationships of an official, professional, and/or personal nature that might cause the auditor to limit the extent or character of the inquiry, to limit disclosure, or to weaken his or her findings in any way.
2. Preconceived ideas about the objective or quality of a particular operation or personal likes or dislikes of individuals, groups, or objectives of a particular program.
3. Previous involvement in a decisionmaking or management capacity in the operations of the governmental entity or program being audited.
4. Biases and prejudices, including those induced by political or social convictions, which result from employment in or loyalty to a particular group, entity, or level of government.
5. Actual or potential restrictive influence when the auditor performs preaudit work and subsequently performs a post audit.
6. Financial interest, direct or indirect, in an organization or facility which is benefiting from the audited programs.
External Impairments
External factors can restrict the audit or impinge on the auditor's ability to form independent and objective opinions and conclusions. For example, under the following conditions either the audit itself could be adversely affected or the auditor would not have complete freedom to make an independent judgment.*2*
*2* Some of these situations may constitute justifiable limitations on the scope of the work. In such cases the limitation should be identified in the auditor's report.
1. Interference or other influence that improperly or imprudently eliminates, restricts, or modifies the scope or character of the audit.
2. Interference with the selection or application of audit procedures or the selection of activities to be examined.
3. Denial of access to such sources of information as books, records, and supporting documents or denial of opportunity to obtain explanations by officials and employees of the governmental organizations, program, or activity under audit.
4. Interference in the assignment of personnel to the audit task.
5. Retaliatory restrictions placed on funds or other resources dedicated to the audit operation.
6. Activity to overrule or significantly influence the auditor's judgment as to the appropriate content of the audit report.
7. Influences that place the auditor's continued employment in jeopardy for reasons other than competency or the need for audit services.
8. Unreasonable restriction on the time allowed to competently complete an audit assignment.
Organizational Impairments
(a) The auditor's independence can be affected by his or her place within the organizational structure of governments. Auditors employed by Federal, State, or local government units may be subject to policy direction from superiors who are involved either directly or indirectly in the government management process. To achieve maximum independence such auditors and the audit organization itself not only should report to the highest practicable echelon within their government but should be organizationally located outside the line-management function of the entity under audit.
(b) These auditors should also be sufficiently removed from political pressures to ensure that they can conduct their auditing objectively and can report their conclusions completely without fear of censure. Whenever feasible they should be under a system which will place decisions on compensation, training, job tenure, and advancement on a merit basis.
(c) When independent public accountants or other independent professionals are engaged to perform work that includes inquiries into compliance with applicable laws and regulations, efficiency and economy of operations, or achievement of program results, they should be engaged by someone other than the officials responsible for the direction of the effort being audited. This practice removes the pressure that may result if the auditor must criticize the performance of those by whom he or she was engaged. To remove this obstacle to independence, governments should arrange to have auditors engaged by officials not directly involved in operations to be audited.
| Appendix B to Subpart B of Part 668—Appendix I, Standards for Audit of Governmental Organizations, Programs, Activities, and Functions (GAO) |
Note: This appendix previously appeared in the General Provisions regulations as Appendix C to Part 668. Effective 7/1/01, it is redesignated as shown here.
Qualifications of Independent Auditors Engaged by Governmental Organizations
(a) When outside auditors are engaged for assignments requiring the expression of an opinion on financial reports of governmental organizations, only fully qualified public accountants should be employed. The type of qualifications, as stated by the Comptroller General, deemed necessary for financial audits of governmental organizations and programs is quoted below:
"Such audits shall be conducted * * * by independent certified public accountants or by independent licensed public accountants, licensed on or before December 31, 1970, who are certified or licensed by a regulatory authority of a State or other political subdivision of the United States: Except that independent public accountants licensed to practice by such regulatory authority after December 31, 1970, and persons who although not so certified or licensed, meet, in the opinion of the Secretary, standards of education and experience representative of the highest prescribed by the licensing authorities of the several States which provide for the continuing licensing of public accountants and which are prescribed by the Secretary in appropriate regulations may perform such audits until December 31, 1975; Provided, That if the Secretary deems it necessary in the public interest, he may prescribe by regulations higher standards than those required for the practice of public accountancy by the regulatory authorities of the States."*3*
*3* Letter (B-148144, September 15, 1970) from the Comptroller General to the heads of Federal departments and agencies. The reference to "Secretary" means the head of the department or agency.
(b) The standards for examination and evaluation require consideration of applicable laws and regulations in the auditor's examination. The standards for reporting require a statement in the auditor's report regarding any significant instances of noncompliance disclosed by his or her examination and evaluation work. What is to be included in this statement requires judgment. Significant instances of noncompliance, even those not resulting in legal liability to the audited entity, should be included. Minor procedural noncompliance need not be disclosed.
(c) Although the reporting standard is generally on an exception basis—that only noncompliance need be reported—it should be recognized that governmental entities often want positive statements regarding whether or not the auditor's tests disclosed instances of noncompliance. This is particularly true in grant programs where authorizing agencies frequently want assurance in the auditor's report that this matter has been considered. For such audits, auditors should obtain an understanding with the authorizing agency as to the extent to which such positive comments on compliance are desired. When coordinated audits are involved, the audit program should specify the extent of comments that the auditor is to make regarding compliance.
(d) When noncompliance is reported, the auditor should place the findings in proper perspective. The extent of instances of noncompliance should be related to the number of cases examined to provide the reader with a basis for judging the prevalence of noncompliance.
| Appendix C to Subpart B of Part 668—90/10 Revenue Calculation |
|
SAMPLE STUDENT ACCOUNT LEDGER |
||||||||
|
Line |
Date |
Charge/Payment |
Memo |
Debit |
Credit |
Balance |
||
|
1........ |
12/31/2021 |
Federal Direct Loan........ |
..................................... |
....................... |
1,000.00 |
(1,000.00) |
||
|
2........ |
1/1/2022 |
Tuition and Fees............. |
..................................... |
17,000.00 |
....................... |
16,000.00 |
||
|
3........ |
2/1/2022 |
Cash Payment................ |
..................................... |
....................... |
175.00 |
15,825.00 |
||
|
4........ |
2/1/2022 |
Federal Funds 1.............. |
..................................... |
....................... |
2,000.00 |
13,825.00 |
||
|
5........ |
2/1/2022 |
FSEOG........................... |
(Fed. 375/Inst. 125)...... |
....................... |
500.00 |
13,325.00 |
||
|
6........ |
5/1/2022 |
Cash Payment................ |
(Federal funds 3).......... |
....................... |
500.00 |
12,825.00 |
||
|
7........ |
7/1/2022 |
Federal Pell Grant........... |
..................................... |
....................... |
1,700.00 |
11,125.00 |
||
|
8........ |
7/1/2022 |
Institutional Scholarship. |
..................................... |
....................... |
500.00 |
10,625.00 |
||
|
9........ |
7/1/2022 |
Federal Direct Loan........ |
..................................... |
....................... |
1,500.00 |
|
||
|
10....... |
7/1/2022 |
Cash Payment................ |
(Federal funds 4).......... |
....................... |
3,700.00 |
9,125.00 |
||
|
11....... |
8/1/2022 |
Federal Funds 2.............. |
..................................... |
....................... |
3,725.00 |
5,425.00 |
||
|
12....... |
9/1/2022 |
City Grant........................ |
..................................... |
....................... |
2,200.00 |
1,700.00 |
||
|
13....... |
9/1/2022 |
Refund Check................. |
..................................... |
500.00 |
....................... |
(500.00) |
||
|
|
||||||||
|
Line item in the sample |
|
Amount in the sample |
||||||
|
Funds Applied First |
||||||||
|
12 ................ |
Grant funds for the student from non-Federal public agencies or private sources independent of the institution. |
2,200.00 |
||||||
|
|
Funds provided for the student under a contractual arrangement with a Federal, State, or local government agency for the purpose of providing job training to low-income individuals. |
|
||||||
|
|
Funds used by a student from savings plans for educational expenses established by or on behalf of the student that qualify for special tax treatment under the Internal Revenue Code. |
|
||||||
|
8 |
Qualified institutional scholarships disbursed to the student....................................................... |
500.00 |
||||||
|
|
Adjustment: If the amount of Total Funds Applied First is more than Tuition and Fees, then Adjusted Total Funds Applied First is reduced by the amount over Tuition and Fees. |
|
||||||
|
Total Funds Applied First............................................................................................................................... |
2,700.00 |
|||||||
|
|
Title IV Aid |
|
||||||
|
1 .................. |
Prior Year Title IV Carried Over Credit Balance ......................................................................... |
1,000.00 |
||||||
|
9 .................. |
Federal Direct Loan .................................................................................................................... |
1,500.00 |
||||||
|
7 .................. |
Federal Pell Grant ...................................................................................................................... |
1,700.00 |
||||||
|
5 .................. |
FSEOG (subject to matching reduction) ($500 - $375 FSEOG and $125 Institutional Match) |
500.00 |
||||||
|
Line item in the sample |
|
Amount in the sample |
||||||
|
5 ..................
|
Adjustment: The amount of FSEOG funds disbursed to a student and the amount of FWS funds credited to the student’s account are reduced by the amount of the institutional matching funds. |
̶ 125.00
|
||||||
|
|
Adjustment: If the amount of Adjusted Total Funds Applied First + Total Student Title IV Revenue is more than Tuition and Fees, then Adjusted Total Student Title IV Revenue is reduced by the amount over Tuition and Fees. |
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Adjustment: If Title IV funds are returned for a student under Sec. 668.22, then Student Title IV Revenue is reduced by the amount returned. |
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Adjusted Total Title IV Aid.............................................................................................................................. |
4,575.00 |
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Other Federal Funds Paid Directly to the Institution |
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4 .................. |
Federal Funds 1 ......................................................................................................................... |
2,000.00 |
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11 ................ |
Federal Funds 2 ......................................................................................................................... |
3,725.00 |
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Adjustment: If the amount of Adjusted Total Funds Applied First + Adjusted Total Student Title IV Revenue + Total Other Federal Funds Paid Directly to the Institution is more than Tuition and Fees, then Adjusted Total Other Federal Funds Paid Directly to the Institution is reduced by the amount over Tuition and Fees. |
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Adjusted Total Other Federal Funds Paid Directly to the Institution ............................................................. |
5,725.00 |
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Other Federal Funds Paid to Student |
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6 .................. |
Federal Funds 3 ......................................................................................................................... |
500.00 |
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10 ................ |
Federal Funds 4 ......................................................................................................................... |
3,700.00 |
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Adjustment: If the amount of Adjusted Funds Applied First + Adjusted Student Title IV Revenue + Adjusted Total Other Federal Funds Paid Directly to the Institution + Total Other Federal Funds Paid Directly to Student is more than Tuition and Fees, then Adjusted Federal Funds Paid Directly to Student is reduced by the amount over Tuition and Fees. |
̶ 200.00
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Adjusted Total Other Federal Funds Paid Directly to Student ...................................................................... |
4,000.00 |
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Cash Payments |
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3 .................. |
Student payments ...................................................................................................................... |
175.00 |
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5 ..................
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Adjustment: The amount of FSEOG funds disbursed to a student and the amount of FWS funds credited to the student’s account are added to cash for the institutional matching funds. |
125.00
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Adjustment: If the amount of Adjusted Total Funds Applied First + Adjusted Total Student Title IV Revenue + Adjusted Total Other Federal Funds Paid Directly to the Institution + Adjusted Total Other Federal Funds Paid to Student + Total Cash and Other Non- Title Payments are more than Tuition and Fees, then Adjusted Total Cash and Other Non-Title Payments is reduced by the amount over. |
̶ 300.00
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Tuition and Fees ......................................................................................................................... |
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Adjusted Total Cash and Other Non-Title IV Aid ........................................................................................... |
0 |
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Adjusted Total |
17,000.00.
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SECTION 2—REVENUE BY SOURCE—ONE STUDENT EXAMPLE |
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Line item in the sample |
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Amount disbursed |
Adjusted amount |
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Student Title IV Revenue |
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1 ........................ |
Title IV Credit Balance Carried Over from Prior Year ........................ |
1,000.00 |
1,000.00 |
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9 ........................ |
Federal Direct Loan ........................................................................... |
1,500.00 |
1,500.00 |
|
7 ........................ |
Federal Pell Grant .............................................................................. |
1,700.00 |
1,700.00 |
|
5........................ |
FSEOG (federal portion only) ............................................................ |
375.00 |
375.00 |
|
Total Student Title IV Revenue ................................................................................... |
4,575.00 |
4,575.00 |
|
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Federal Funds Paid Directly to the Institution |
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6 ........................ |
Federal Funds 1 ............................................................................... |
2,000.00 |
2,000.00 |
|
10 ...................... |
Federal Funds 2 ............................................................................... |
3,725.00 |
3,725.00 |
|
Total Student Federal Funds Paid Directly to the Institution ............................ |
5,725.00 |
5,725.00 |
|
|
Student Federal Funds Paid Directly to the Student |
|||
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4 ........................ |
Federal Funds 3 ................................................................................. |
500.00 |
500.00 |
|
11 ...................... |
Federal Funds 4 ................................................................................. |
3,700.00 |
3,700.00 |
|
13 ...................... |
Refunds Paid to Student .................................................................... |
............................. |
̶ 200.00 |
|
Adjusted Student Federal Funds Paid Directly to Student ......................................... |
4,200.00 |
4,000.00 |
|
|
Adjusted Student Federal Revenue ....................................................................... |
14,500.00 |
14,300.00 |
|
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Student Non-Federal Revenue |
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12 ...................... |
Grant funds for the student from non-Federal public agencies or private sources independent of the institution. |
2,200.00 |
2,200.00 |
|
8 ........................ |
Institutional scholarships disbursed to the student .......................... |
500.00 |
500.00 |
|
3,5,13................. |
Student payments ............................................................................ |
300.00 |
0 |
|
Student Non-Title IV Revenue .............................................................................. |
3,000.00 |
2,700.00 |
|
|
Total Federal and Non-Federal Revenue ....................................................... |
17,500.00 |
17,000.00 |
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SECTION 2—REVENUE BY SOURCE—CALCULATION |
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Amount disbursed |
Adjusted Amount |
|
|
Student Title IV Revenue |
|||
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Title IV Credit Balance Carried Over from Prior Year ......................................................... |
45,000.00 |
45,000.00 |
|
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Federal Direct Loan ............................................................................................................ |
1,500,000.00 |
1,500,000.00 |
|
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Federal Pell Grant .............................................................................................................. |
400,700.00 |
400,700.00 |
|
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FSEOG (subject to matching reduction) ............................................................................. |
11,500.00 |
8,625.00 |
|
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Total Student Title IV Revenue ................................................................................... |
1,957,200.00 |
1,954,325.00 |
|
|
Refunds Paid to Students ................................................................................................... |
|
̶ 35,500.00 |
|
|
Student Federal Funds Paid Directly to Student |
|||
|
Federal Funds 3 .................................................................................................................. |
50,000.00 |
50,000.00 |
|
|
Federal Funds 4 .................................................................................................................. |
3,700.00 |
3,700.00 |
|
|
Total Student Federal Funds Paid Directly to Student .................................................... |
53,700.00 |
53,700.00 |
|
|
Refunds Paid to Student ..................................................................................................... |
............................. |
̶ 200.00 |
|
|
Adjusted Student Federal Funds Paid Directly to Student .................................................. |
53,700.00 |
53,500.00 |
|
|
Adjusted Student Federal Revenue .................................................................................... |
3,575,625.00 |
3,517,050.00 |
|
|
Adjusted Student Title IV Revenue ..................................................................................... |
1,957,200.00 |
1,918,825.00 |
|
|
Federal Funds Paid Directly to the Institution |
|||
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Federal Funds 1 .................................................................................................................. |
200,000.00 |
200,000.00 |
|
|
Federal Funds 2 .................................................................................................................. |
1,355,725.00 |
1,355,725.00 |
|
|
Federal Portion of Other Funds .......................................................................................... |
9,000.00 |
9,000.00 |
|
|
Total Student Federal Funds Paid Directly to the Institution ........................................... |
1,564,725.00 |
1,564,725.00 |
|
|
Refunds Paid to Students ……………………………..………………………………………... |
............................. |
̶ 20,000.00 |
|
|
Adjusted Student Title IV Federal Funds Paid Directly to the Institution …………………… |
1,564,725.00 |
1,544,725.00 |
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Revenue From Other Sources (Totals for the Fiscal Year) |
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Activities conducted by the institution that are necessary for education and training …….. |
25,000.00 |
25,000.00 |
|
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Funds paid to the institution by, or on behalf of, students for education and training in qualified non-Title IV eligible programs ……………………………………………………... |
143,000.00 |
143,000.00 |
|
|
Revenue from Other Sources …………………………………..………………….……... |
168,000.00 |
168,000.00 |
|
|
Adjusted Non-Federal Revenue and Revenue from Other Sources ……………………….. |
587,800.00 |
559,500.00 |
|
|
Total Federal and Non-Federal Revenue ……………………………………………….. |
4,163,425.00 |
4,076,550.00 |
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|
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Student non-Federal revenue |
Amount |
Adjusted amount |
|
|
Grant funds for the student from non-Federal public agencies or private sources independent of the institution. |
|
|
|
|
—State Grant (9.0451 percent Federal Funds) .................................................................. |
99,500.00 |
90,500.00 |
|
|
—ABC Scholarship ............................................................................................................. |
500.00 |
500.00 |
|
|
Funds provided for the student under a contractual arrangement with a Federal, State, or local government agency for the purpose of providing job training to low-income individuals. |
|
|
|
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Funds used by a student from savings plan for educational expenses established by or on behalf of the student that qualify for special tax treatment under the Internal Revenue Code. |
|
|
|
|
Qualified institutional scholarships disbursed to the student .............................................. |
500.00 |
500.00 |
|
|
Student payments |
|
|
|
|
—Third Party Loans ............................................................................................................ |
50,000.00 |
50,000.00 |
|
|
—Third Party Loans-related Party/Institutional Loans ........................................................ |
107,000.00 |
100,000.00 |
|
|
—ISA Institutional or Related Party .................................................................................... |
37,000.00 |
25,000.00 |
|
|
—ISA .................................................................................................................................. |
75,000.00 |
75,000.00 |
|
|
|
Amount |
Adjusted amount |
|
|
—Student Cash .................................................................................................................. |
50,300.00 |
50,300.00 |
|
|
Student Non-Title IV Revenue .................................................................................... |
419,800.00 |
391,800.00 |
|
|
Refunds Paid to Student ..................................................................................................... |
|
̶ 300.00 |
|
|
Adjusted Non-Federal Revenue ................................................................................. |
419,800.00 |
391,500.00 |
|
|
Numerator 3,517,050. |
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Denominator 4,076,550 = 86.27 percent. |
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SECTION 3—CALCULATING THE REVENUE PERCENTAGE |
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Σ Adjusted Student Federal Revenue * ÷ Σ Adjusted Student Federal Revenue + Σ Adjusted Non-Federal Revenue and Revenue from Other Sources = 90/10 Revenue Percentage. |
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* Adjusted Student Federal Revenue = Adjusted Student Title IV Revenue + Adjusted Other Federal Funds Paid Directly to the Institution + Adjusted Other Federal Funds Paid Directly to Student |
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Σ Adjusted Student Federal Revenue = The sum of the amounts of all Federal funds, as adjusted, for each student at the institution during the fiscal year to whom the institution disbursed Title IV Aid and Other Federal Funds and Federal funds that students directly receive. |
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Σ Adjusted Non-Federal Revenue = The sum of the amounts of items applied first and adjusted cash payments for each student at the institution during the fiscal year whose non-Federal funds were used to pay all or some of those student’s Tuition and Fee charges. |
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Section 1: Sample Student Account at the Institution/Funds Applied in Priority Order
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Section 2: Revenue by Source
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Section 3: Calculating the Revenue Percentage
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Adjustments to Student Title IV Revenue
1. The amount of FSEOG funds disbursed to a student (Item 10) and the amount of FWS funds credited to the student's account (Item 11) are reduced by the amount of the institutional matching funds (see Item 10 in Section 2 of the example).
2. If the amount of Funds Applied First (Item 6) + Student Title IV Revenue (Item 17) is more than Tuition and Fees (Item 1), then Student Title IV Revenue (Item 17) is reduced by the amount over Tuition and Fees (Item 1) (see Item 18 in Section 2 of the example).
3. If Title IV funds are returned for a student under 34 CFR 668.22, then Student Title IV Revenue is reduced by the amount returned.
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Adjustments to Student Non-Title IV Revenue
An Unsubsidized loan over the pre-ECSALA loan limit (Item 13) and any Student Payments (Item 14) count as Student Non-Title IV Revenue only for the amount needed to cover Tuition and Fees (Item 1) that are not paid by Funds Applied First (Item 6) and funds under Student Title IV Revenue (Item 19) (see Items 13 and 14 in Section 2 of the example.
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Total Revenue from Other Sources
Activities conducted by the institution that are necessary for education and training (Item 21) = Total revenue generated by the institution from these activities during the fiscal year
Funds paid to the institution by, or on behalf of, students for education and training in qualified non-Title IV eligible programs (Item 22) = Total revenue generated by the institution from these programs during the fiscal year
The Net Present Value (NPV) of institutional loans disbursed to students (Item 23)
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Section 4: Calculating the Net present Value
NPV = ?Rt/(1+i)t
An institution makes a total of $125,000 in 3-year loans at 8.5% and a total of $75,000 in 4-year loans at 8.5%. The Discount rate is 3%.
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NPV or Sum of the discounted cash flows for 3-year loans = 80348.87
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NPV or Sum of the discounted cash flows for 4-year loans = 49474.81
Total NPV for all loans = 129818.68
*Expected cash flow represents the total amount of payments due on the loans for the fiscal year.
| Subpart C—Student Eligibility |
This subpart contains rules by which a student establishes eligibility for assistance under the title IV, HEA programs. In order to qualify as an eligible student, a student must meet all applicable requirements in this subpart.
Sec. 668.32 Student eligibility—general.
A student is eligible to receive Title IV, HEA program assistance if the student either meets all of the requirements in paragraphs (a) through (m) of this section or meets the requirement in paragraph (n) of this section as follows:
(a)(1)(i) Is a regular student enrolled, or accepted for enrollment, in an eligible program at an eligible institution;
(ii) For purposes of the FFEL and Direct Loan programs, is enrolled for no longer than one twelve-month period in a course of study necessary for enrollment in an eligible program; or
(iii) For purposes of the Federal Perkins Loan, FWS, FFEL, and Direct Loan programs, is enrolled or accepted for enrollment as at least a half-time student at an eligible institution in a program necessary for a professional credential or certification from a State that is required for employment as a teacher in an elementary or secondary school in that State; and
(2) For purposes of the ACG, National SMART Grant, FFEL, and Direct Loan programs, is at least a half-time student.
(b) Is not enrolled in either an elementary or secondary school.
(c)(1) For purposes of the ACG, National SMART Grant, and FSEOG programs, does not have a baccalaureate or first professional degree;
(2) For purposes of the Federal Pell Grant Program—
(i)(A) Does not have a baccalaureate or first professional degree; or
(B) Is enrolled in a post-baccalaureate teacher certificate or licensing program as described in 34 CFR 690.6(c); and
(ii) If the student is a confined or incarcerated individual as defined in 34 CFR 600.2, is enrolled in an eligible prison education program as defined in Sec. 668.236; Is not incarcerated in a Federal or State penal institution;
(3) For purposes of the Federal Perkins Loan, FFEL, and Direct Loan programs, is not incarcerated; and
(4) For the purposes of the TEACH Grant program—
(i) For an undergraduate student other than a student enrolled in a post-baccalaureate program, has not completed the requirements for a first baccalaureate degree; or
(ii) For the purposes of a student in a first post-baccalaureate program, has not completed the requirements for a post-baccalaureate program as described in 34 CFR 686.2(d).
(d) Satisfies the citizenship and residency requirements contained in Sec. 668.33 and subpart I of this part.
(e)(1) Has a high school diploma or its recognized equivalent;
(2) Has obtained a passing score specified by the Secretary on an independently administered test in accordance with subpart J of this part, and either—;
(i) Was first enrolled in an eligible program before July 1, 2012; or
(ii) Is enrolled in an eligible career pathway program as defined in Sec. 668.2;
(3) Is enrolled in an eligible institution that participates in a State "process" approved by the Secretary under subpart J of this part, and either— ;
(i) Was first enrolled in an eligible program before July 1, 2012; or
(ii) Is enrolled in an eligible career pathway program as defined in Sec. 668.2;
(4) Was home-schooled, and either—
(i) Obtained a secondary school completion credential for home school (other than a high school diploma or its recognized equivalent) provided for under State law; or
(ii) If State law does not require a home-schooled student to obtain the credential described in paragraph (e)(4)(i) of this section, has completed a secondary school education in a home school setting that qualifies as an exemption from compulsory attendance requirements under State law; or
(5) Has been determined by the institution to have the ability to benefit from the education or training offered by the institution based on the satisfactory completion of 6 semester hours, 6 trimester hours, 6 quarter hours, or 225 clock hours that are applicable toward a degree or certificate offered by the institution, and either—.
(i) Was first enrolled in an eligible program before July 1, 2012; or
(ii) Is enrolled in an eligible career pathway program as defined in Sec. 668.2;
(f) Maintains satisfactory academic progress in his or her course of study according to the institution's published standards of satisfactory academic progress that meet the requirements of Sec. 668.34.
(g) Except as provided in Sec. 668.35—
(1) Is not in default, and certifies that he or she is not in default, on a loan made under any title IV, HEA loan program;
(2) Has not obtained loan amounts that exceed annual or aggregate loan limits made under any title IV, HEA loan program;
(3) Does not have property subject to a judgment lien for a debt owed to the United States; and
(4) Is not liable for a grant or Federal Perkins loan overpayment. A student receives a grant or Federal Perkins loan overpayment if the student received grant or Federal Perkins loan payments that exceeded the amount he or she was eligible to receive; or if the student withdraws, that exceeded the amount he or she was entitled to receive for non-institutional charges.
(h) Files a Statement of Educational Purpose in accordance with the instructions of the Secretary.
(i) Has a correct social security number as determined under Sec. 668.36, except that this requirement does not apply to students who are residents of the Federated States of Micronesia, Republic of the Marshall Islands, or the Republic of Palau.
(j) Satisfies the Selective Service registration requirements contained in Sec. 668.37, and, if applicable, satisfies the requirements of Sec. 668.38 and Sec. 668.39 involving enrollment in telecommunication and correspondence courses and a study abroad program, respectively.
(k) Satisfies the program specific requirements contained in—
(1) 34 CFR 674.9 for the Federal Perkins Loan program;
(2) 34 CFR 675.9 for the FWS program;
(3) 34 CFR 676.9 for the FSEOG program;
(4) 34 CFR 682.201 for the FFEL programs;
(5) 34 CFR 685.200 for the William D. Ford Federal Direct Loan programs;
(6) 34 CFR 690.75 for the Federal Pell Grant program;
(7) 34 CFR 691.75 for the ACG and National SMART Grant programs;
(8) 34 CFR 692.40 for the LEAP program; and
(9) 34 CFR 686.11 for the TEACH Grant program.
(l) Is not ineligible under Sec. 668.40.
(m) In the case of a student who has been convicted of, or has pled nolo contendere or guilty to, a crime involving fraud in obtaining title IV, HEA program assistance, has completed the repayment of such assistance to:
(2) The holder, in the case of a title IV, HEA program loan.
(n) Is enrolled in a comprehensive transition and postsecondary program under subpart O of this part and meets the student eligibility criteria in that subpart.
| Sec. 668.33 Citizenship and residency requirements. |
(a) Except as provided in paragraph (b) of this section, to be eligible to receive title IV, HEA program assistance, a student must—
(1) Be a citizen or national of the United States; or
(2) Provide evidence from the U.S. Immigration and Naturalization Service that he or she—
(i) Is a permanent resident of the United States; or
(ii) Is in the United States for other than a temporary purpose with the intention of becoming a citizen or permanent resident;
(b)(1) A citizen of the Federated States of Micronesia, Republic of the Marshall Islands, or the Republic of Palau is eligible to receive funds under the FWS, FSEOG, and Federal Pell Grant programs if the student attends an eligible institution in a State, or a public or nonprofit private eligible institution of higher education in those jurisdictions.
(2) A student who satisfies the requirements of paragraph (a) of this section is eligible to receive funds under the FWS, FSEOG, and Federal Pell Grant programs if the student attends a public or nonprofit private eligible institution of higher education in the Federated States of Micronesia, Republic of the Marshall Islands, or the Republic of Palau.
(c)(1) If a student asserts that he or she is a citizen of the United States on the Free Application for Federal Student Aid (FAFSA), the Secretary attempts to confirm that assertion under a data match with the Social Security Administration. If the Social Security Administration confirms the student's citizenship, the Secretary reports that confirmation to the institution and the student.
(2) If the Social Security Administration does not confirm the student's citizenship assertion under the data match with the Secretary, the student can establish U.S. citizenship by submitting documentary evidence of that status to the institution. Before denying title IV, HEA assistance to a student for failing to establish citizenship, an institution must give a student at least 30 days notice to produce evidence of U.S. citizenship.
| Sec. 668.34 Satisfactory academic progress. |
(a) Satisfactory academic progress policy. An institution must establish a reasonable satisfactory academic progress policy for determining whether an otherwise eligible student is making satisfactory academic progress in his or her educational program and may receive assistance under the title IV, HEA programs. The Secretary considers the institution's policy to be reasonable if—
(1) The policy is at least as strict as the policy the institution applies to a student who is not receiving assistance under the title IV, HEA programs;
(2) The policy provides for consistent application of standards to all students within categories of students, e.g., full-time, part-time, undergraduate, and graduate students, and educational programs established by the institution;
(3) The policy provides that a student's academic progress is evaluated—
(i) At the end of each payment period if the educational program is either one academic year in length or shorter than an academic year; or
(ii) For all other educational programs, at the end of each payment period or at least annually to correspond with the end of a payment period;
(4)(i) The policy specifies the grade point average (GPA) that a student must achieve at each evaluation, or if a GPA is not an appropriate qualitative measure, a comparable assessment measured against a norm; and
(ii) If a student is enrolled in an educational program of more than two academic years, the policy specifies that at the end of the second academic year, the student must have a GPA of at least a "C" or its equivalent, or have academic standing consistent with the institution's requirements for graduation;
(i) For all programs, the maximum timeframe as defined in paragraph (b) of this section; and
(ii) For a credit hour program using standard or nonstandard terms that is not a subscription-based program, the pace, measured at each evaluation, at which a student must progress through his or her educational program to ensure that the student will complete the program within the maximum timeframe, calculated by either dividing the cumulative number of hours the student has successfully completed by the cumulative number of hours the student has attempted or by determining the number of hours that the student should have completed by the evaluation point in order to complete the program within the maximum timeframe. In making this calculation, the institution is not required to include remedial courses.
(6) The policy describes how a student's GPA and pace of completion are affected by course incompletes, withdrawals, or repetitions, or transfers of credit from other institutions. Credit hours from another institution that are accepted toward the student's educational program must count as both attempted and completed hours;
(7) Except as provided in paragraphs (c) and (d) of this section, the policy provides that, at the time of each evaluation, a student who has not achieved the required GPA, or who is not successfully completing his or her educational program at the required pace, is no longer eligible to receive assistance under the title IV, HEA programs;
(8) If the institution places students on financial aid warning, or on financial aid probation, as defined in paragraph (b) of this section, the policy describes these statuses and that—
(i) A student on financial aid warning may continue to receive assistance under the title IV, HEA programs for one payment period despite a determination that the student is not making satisfactory academic progress. Financial aid warning status may be assigned without an appeal or other action by the student; and
(ii) A student on financial aid probation may receive title IV, HEA program funds for one payment period. While a student is on financial aid probation, the institution may require the student to fulfill specific terms and conditions such as taking a reduced course load or enrolling in specific courses. At the end of one payment period on financial aid probation, the student must meet the institution's satisfactory academic progress standards or meet the requirements of the academic plan developed by the institution and the student to qualify for further title IV, HEA program funds;
(9) If the institution permits a student to appeal a determination by the institution that he or she is not making satisfactory academic progress, the policy describes—
(i) How the student may reestablish his or her eligibility to receive assistance under the title IV, HEA programs;
(ii) The basis on which a student may file an appeal: The death of a relative, an injury or illness of the student, or other special circumstances; and
(iii) Information the student must submit regarding why the student failed to make satisfactory academic progress, and what has changed in the student's situation that will allow the student to demonstrate satisfactory academic progress at the next evaluation;
(10) If the institution does not permit a student to appeal a determination by the institution that he or she is not making satisfactory academic progress, the policy must describe how the student may reestablish his or her eligibility to receive assistance under the title IV, HEA programs; and
(11) The policy provides for notification to students of the results of an evaluation that impacts the student's eligibility for title IV, HEA program funds.
(b) Definitions. The following definitions apply to the terms used in this section:
Appeal. Appeal means a process by which a student who is not meeting the institution's satisfactory academic progress standards petitions the institution for reconsideration of the student's eligibility for title IV, HEA program assistance.
Financial aid probation. Financial aid probation means a status assigned by an institution to a student who fails to make satisfactory academic progress and who has appealed and has had eligibility for aid reinstated.
Financial aid warning. Financial aid warning means a status assigned to a student who fails to make satisfactory academic progress at an institution that evaluates academic progress at the end of each payment period.
Maximum timeframe. Maximum timeframe means—
(1) For an undergraduate program measured in credit hours, a period that is no longer than 150 percent of the published length of the educational program, as measured in credit hours, or expressed in calendar time;
(2) For an undergraduate program measured in clock hours, a period that is no longer than 150 percent of the published length of the educational program, as measured by the cumulative number of clock hours the student is required to complete and expressed in calendar time; and
(3) For a graduate program, a period defined by the institution that is based on the length of the educational program.
(c) Institutions that evaluate satisfactory academic progress at the end of each payment period. (1) An institution that evaluates satisfactory academic progress at the end of each payment period and determines that a student is not making progress under its policy may nevertheless disburse title IV, HEA program funds to the student under the provisions of paragraph (c)(2), (c)(3), or (c)(4) of this section.
(2) For the payment period following the payment period in which the student did not make satisfactory academic progress, the institution may—
(i) Place the student on financial aid warning, and disburse title IV, HEA program funds to the student; or
(ii) Place a student directly on financial aid probation, following the procedures outlined in paragraph (d)(2) of this section and disburse title IV, HEA program funds to the student.
(3) For the payment period following a payment period during which a student was on financial aid warning, the institution may place the student on financial aid probation, and disburse title IV, HEA program funds to the student if—
(i) The institution evaluates the student's progress and determines that student did not make satisfactory academic progress during the payment period the student was on financial aid warning;
(ii) The student appeals the determination; and
(iii)(A) The institution determines that the student should be able to meet the institution's satisfactory academic progress standards by the end of the subsequent payment period; or
(B) The institution develops an academic plan for the student that, if followed, will ensure that the student is able to meet the institution's satisfactory academic progress standards by a specific point in time.
(4) A student on financial aid probation for a payment period may not receive title IV, HEA program funds for the subsequent payment period unless the student makes satisfactory academic progress or the institution determines that the student met the requirements specified by the institution in the academic plan for the student.
(d) Institutions that evaluate satisfactory academic progress annually or less frequently than at the end of each payment period. (1) An institution that evaluates satisfactory academic progress annually or less frequently than at the end of each payment period and determines that a student is not making progress under its policy may nevertheless disburse title IV, HEA program funds to the student under the provisions of paragraph (d)(2) or (d)(3) of this section.
(2) The institution may place the student on financial aid probation and may disburse title IV, HEA program funds to the student for the subsequent payment period if—
(i) The institution evaluates the student and determines that the student is not making satisfactory academic progress;
(ii) The student appeals the determination; and
(iii)(A) The institution determines that the student should be able to be make satisfactory academic progress during the subsequent payment period and meet the institution's satisfactory academic progress standards at the end of that payment period; or
(B) The institution develops an academic plan for the student that, if followed, will ensure that the student is able to meet the institution's satisfactory academic progress standards by a specific point in time.
(3) A student on financial aid probation for a payment period may not receive title IV, HEA program funds for the subsequent payment period unless the student makes satisfactory academic progress or the institution determines that the student met the requirements specified by the institution in the academic plan for the student.
| Sec. 668.35 Student debts under the HEA and to the U.S. |
(a) A student who is in default on a loan made under a title IV, HEA loan program may nevertheless be eligible to receive title IV, HEA program assistance if the student—
(1) Repays the loan in full; or
(2) Except as limited by paragraph (c) of this section—
(i) Makes arrangements, that are satisfactory to the holder of the loan and in accordance with the individual title IV, HEA loan program regulations, to repay the loan balance; and
(ii) Makes at least six consecutive monthly payments under those arrangements.
(b) A student who is subject to a judgment for failure to repay a loan made under a title IV, HEA loan program may nevertheless be eligible to receive title IV, HEA program assistance if the student—
(1) Repays the debt in full; or
(2) Except as limited by paragraph (c) of this section—
(i) Makes repayment arrangements that are satisfactory to the holder of the debt; and
(ii) Makes at least six consecutive, voluntary monthly payments under those arrangements. Voluntary payments are those payments made directly by the borrower, and do not include payments obtained by Federal offset, garnishment, or income or asset execution.
(c) A student who reestablishes eligibility under either paragraph (a)(2) of this section or paragraph (b)(2) of this section may not reestablish eligibility again under either of those paragraphs.
(d) A student who is not in default on a loan made under a title IV, HEA loan program, but has inadvertently obtained loan funds under a title IV, HEA loan program in an amount that exceeds the annual or aggregate loan limits under that program, may nevertheless be eligible to receive title IV, HEA program assistance if the student—
(1) Repays in full the excess loan amount; or
(2) Makes arrangements, satisfactory to the holder of the loan, to repay that excess loan amount.
(e) Except as provided in 34 CFR 668.22(h), a student who receives an overpayment under the Federal Perkins Loan Program, or under a title IV, HEA grant program, may nevertheless be eligible to receive title IV, HEA program assistance if —
(1) The student pays the overpayment in full;
(2) The student makes arrangements satisfactory to the holder of the overpayment debt to pay the overpayment;
(3) The overpayment amount is less than $25 and is neither a remaining balance nor a result of the application of the overaward threshold in 34 CFR 673.5(d); or
(4) The overpayment is an amount that a student is not required to return under the requirements of Sec. 668.22(h)(3)(ii)(B).
(f) A student who has property subject to a judgement lien for a debt owed to the United States may nevertheless be eligible to receive title IV, HEA program assistance if the student—
(2) Makes arrangements, satisfactory to the United States, to pay the debt.
(g) (1) A student is not liable for a Federal Pell Grant overpayment received in an award year if the institution can eliminate that overpayment by adjusting subsequent Federal Pell Grant payments in that same award year.
(2) A student is not liable for an ACG overpayment received in an award year if—
(i) The institution can eliminate that overpayment by adjusting subsequent title IV, HEA program (other than Federal Pell Grant, ACG, or National SMART Grant) payments in that same award year; or
(ii) The institution cannot eliminate the overpayment under paragraph (g)(2)(i) of this section but can eliminate that overpayment by adjusting subsequent ACG payments in that same award year.
(3) A student is not liable for a National SMART Grant overpayment received in an award year if—
(i) The institution can eliminate that overpayment by adjusting subsequent title IV, HEA program (other than Federal Pell Grant, ACG, or National SMART Grant) payments in that same award year; or
(ii) The institution cannot eliminate the overpayment under paragraph (g)(3)(i) of this section but can eliminate that overpayment by adjusting subsequent National SMART Grant payments in that same award year.
(4) A student is not liable for a TEACH Grant overpayment received in an award year if—
(i) The institution can eliminate that overpayment by adjusting subsequent title IV, HEA program (other than Federal Pell Grant, ACG, National SMART Grant, or TEACH Grant) payments in that same award year; or
(ii) The institution cannot eliminate the overpayment under paragraph (g)(4)(i) of this section but can eliminate that overpayment by adjusting subsequent TEACH Grant payments in that same award year.
(5) A student is not liable for a FSEOG or LEAP overpayment or Federal Perkins loan overpayment received in an award year if the institution can eliminate that overpayment by adjusting subsequent title IV, HEA program (other than Federal Pell Grant) payments in that same award year.
(h) A student who otherwise is in default on a loan made under a title IV, HEA loan program, or who otherwise owes an overpayment on a title IV, HEA program grant or Federal Perkins loan, is not considered to be in default or owe an overpayment if the student—
(1) Obtains a judicial determination that the debt has been discharged or is dischargeable in bankruptcy; or
(2) Demonstrates to the satisfaction of the holder of the debt that—
(i) When the student filed the petition for bankruptcy relief, the loan, or demand for the payment of the overpayment, had been outstanding for the period required under 11 U.S.C. 523(a)(8)(A), exclusive of applicable suspensions of the repayment period for either debt of the kind defined in 34 CFR 682.402(m); and
(ii) The debt otherwise qualifies for discharge under applicable bankruptcy law; and
(i) In the case of a student who has been convicted of, or has pled nolo contendere or guilty to a crime involving fraud in obtaining title IV, HEA program assistance, has completed the repayment of such assistance to:
(2) The holder, in the case of a title IV, HEA program loan.
| Sec. 668.36 Social security number. |
(a)(1) Except for residents of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau, the Secretary attempts to confirm the social security number a student provides on the Free Application for Federal Student Aid (FAFSA) under a data match with the Social Security Administration. If the Social Security Administration confirms that number, the Secretary notifies the institution and the student of that confirmation.
(2) If the student's verified social security number is the same number as the one he or she provided on the FAFSA, and the institution has no reason to believe that the verified social security number is inaccurate, the institution may consider the number to be accurate.
(3) If the Social Security Administration does not verify the student's social security number on the FAFSA, or the institution has reason to believe that the verified social security number is inaccurate, the student can provide evidence to the institution, such as the student's social security card, indicating the accuracy of the student's social security number. An institution must give a student at least 30 days, or until the end of the award year, whichever is later, to produce that evidence.
(4) An institution may not deny, reduce, delay, or terminate a student's eligibility for assistance under the title IV, HEA programs because verification of that student's social security number is pending.
(b)(1) An institution may not disburse any title IV, HEA program funds to a student until the institution is satisfied that the student's reported social security number is accurate.
(2) The institution shall ensure that the Secretary is notified of the student's accurate social security number if the student demonstrates the accuracy of a social security number that is not the number the student included on the FAFSA.
(c) If the Secretary determines that the social security number provided to an institution by a student is incorrect, and that student has not provided evidence under paragraph (a)(3) of this section indicating the accuracy of the social security number, and a loan has been guaranteed for the student under the FFEL program, the institution shall notify and instruct the lender and guaranty agency making and guaranteeing the loan, respectively, to cease further disbursements of the loan, until the Secretary or the institution determines that the social security number provided by the student is correct, but the guaranty may not be voided or otherwise nullified before the date that the lender and the guaranty agency receive the notice.
(d) Nothing in this section permits the Secretary to take any compliance, disallowance, penalty or other regulatory action against—
(1) Any institution of higher education with respect to any error in a social security number, unless the error was the result of fraud on the part of the institution; or
(2) Any student with respect to any error in a social security number, unless the error was the result of fraud on the part of the student.
| Sec. 668.37 Selective Service registration. |
(a)(1) To be eligible to receive title IV, HEA program funds, a male student who is subject to registration with the Selective Service must register with the Selective Service.
(2) A male student does not have to register with the Selective Service if the student—
(i) Is below the age of 18, or was born before January 1, 1960;
(ii) Is enrolled in an officer procurement program the curriculum of which has been approved by the Secretary of Defense at the following institutions:
(A) The Citadel, Charleston, South Carolina;
(B) North Georgia College, Dahlonega, Georgia;
(C) Norwich University, Northfield, Vermont; or
(D) Virginia Military Institute, Lexington, Virginia; or
(iii) Is a commissioned officer of the Public Health Service or a member of the Reserve of the Public Health Service who is on active duty as provided in section 6(a)(2) of the Military Selective Service Act.
(b)(1) When the Secretary processes a male student's FAFSA, the Secretary determines whether the student is registered with the Selective Service under a data match with the Selective Service.
(2) Under the data match, Selective Service reports to the Secretary whether its records indicate that the student is registered, and the Secretary reports the results of the data match to the student and the institution the student is attending.
(c)(1) If the Selective Service does not confirm through the data match, that the student is registered, the student can establish that he—
(ii) Is not, or was not required to be, registered;
(iii) Has registered since the submission of the FAFSA; or
(iv) Meets the conditions of paragraph (d) of this section.
(2) An institution must give a student at least 30 days, or until the end of the award year, whichever is later, to provide evidence to establish the condition described in paragraph (c)(1) of this section.
(d) An institution may determine that a student, who was required to, but did not register with the Selective Service, is not ineligible to receive title IV, HEA assistance for that reason, if the student can demonstrate by submitting clear and unambiguous evidence to the institution that—
(1) He was unable to present himself for registration for reasons beyond his control such as hospitalization, incarceration, or institutionalization; or
(2) He is over 26 and when he was between 18 and 26 and required to register—
(i) He did not knowingly and willfully fail to register with the Selective Service; or
(ii) He served as a member of one of the U.S. Armed Forces on active duty and received a DD Form 214, "Certificate of Release or Discharge from Active Duty," showing military service with other than the reserve forces and National Guard.
(e) For purposes of paragraph (d)(2)(i) of this section, an institution may consider that a student did not knowingly and willfully fail to register with the Selective Service only if—
(1) The student submits to the institution an advisory opinion from the Selective Service System that does not dispute the student's claim that he did not knowingly and willfully fail to register; and
(2) The institution does not have uncontroverted evidence that the student knowingly and willfully failed to register.
(f)(1) A student who is required to register with the Selective Service and has been denied title IV, HEA program assistance because he has not proven to the institution that he has registered with Selective Service may seek a hearing from the Secretary by filing a request in writing with the Secretary. The student must submit with that request—
(i) A statement that he is in compliance with registration requirements;
(ii) A concise statement of the reasons why he has not been able to prove that he is in compliance with those requirements; and
(iii) Copies of all material that he has already supplied to the institution to verify his compliance.
(2) The Secretary provides an opportunity for a hearing to a student who—
(i) Asserts that he is in compliance with registration requirements; and
(ii) Files a written request for a hearing in accordance with paragraph (f)(1) of this section within the award year for which he was denied title IV, HEA program assistance or within 30 days following the end of the payment period, whichever is later.
(3) An official designated by the Secretary shall conduct any hearing held under paragraph (f)(2) of this section. The sole purpose of this hearing is the determination of compliance with registration requirements. At this hearing, the student retains the burden of proving compliance, by credible evidence, with the requirements of the Military Selective Service Act. The designated official shall not consider challenges based on constitutional or other grounds to the requirements that a student state and verify, if required, compliance with registration requirements, or to those registration requirements themselves.
(g) Any determination of compliance made under this section is final unless reopened by the Secretary and revised on the basis of additional evidence.
(h) Any determination of compliance made under this section is binding only for purposes of determining eligibility for title IV, HEA program assistance.
| Sec. 668.38 Enrollment in telecommunications and correspondence courses. |
(a) If a student is enrolled in correspondence courses, the student is eligible to receive title IV, HEA program assistance only if the correspondence courses are part of a program that leads to an associate, bachelor's, or graduate degree.
(b)(1) For purposes of this section, a student enrolled in a telecommunications course at an institution of higher education is not enrolled in a correspondence course.
(2) For purposes of paragraph (b)(1) of this section, an institution of higher education is one that is not an institute or school described in section 3(3)(C) of the Carl D. Perkins Vocational and Applied Technology Act of 1995.
| Sec. 668.39 Study abroad programs. |
A student enrolled in a program of study abroad is eligible to receive title IV, HEA program assistance if—
(a) The student remains enrolled as a regular student in an eligible program at an eligible institution during his or her program of study abroad; and
(b) The eligible institution approves the program of study abroad for academic credit. However, the study abroad program need not be required as part of the student's eligible degree program.
| Sec. 668.40 Conviction for possession or sale of illegal drugs. |
(a)(1) A student is ineligible to receive title IV, HEA program funds, for the period described in paragraph (b) of this section, if the student has been convicted of an offense under any Federal or State law involving the possession or sale of illegal drugs for conduct that occurred during a period of enrollment for which the student was receiving title IV, HEA program funds. However, the student may regain eligibility before that time period expires under the conditions described in paragraph (c) of this section.
(2) For purposes of this section, a conviction means only a conviction that is on a student's record. A conviction that was reversed, set aside, or removed from the student's record is not relevant for purposes of this section, nor is a determination or adjudication arising out of a juvenile proceeding.
(3) For purposes of this section, an illegal drug is a controlled substance as defined by section 102(6) of the Controlled Substances Act (21 U.S.C. 801(6)), and does not include alcohol or tobacco.
(b)(1) Possession. Except as provided in paragraph (c) of this section, if a student has been convicted—
(i) Only one time for possession of illegal drugs, the student is ineligible to receive title IV, HEA program funds for one year after the date of conviction;
(ii) Two times for possession of illegal drugs, the student is ineligible to receive title IV, HEA program funds for two years after the date of the second conviction; or
(iii) Three or more times for possession of illegal drugs, the student is ineligible to receive title IV, HEA program funds for an indefinite period after the date of the third conviction.
(2) Sale. Except as provided in paragraph (c) of this section, if a student has been convicted—
(i) Only one time for sale of illegal drugs, the student is ineligible to receive title IV, HEA program funds for two years after the date of conviction; or
(ii) Two or more times for sale of illegal drugs, the student is ineligible to receive Title IV, HEA program funds for an indefinite period after the date of the second conviction.
(c) If a student successfully completes a drug rehabilitation program described in paragraph (d) of this section after the student's most recent drug conviction, the student regains eligibility on the date the student successfully completes the program.
(d) A drug rehabilitation program referred to in paragraph (c) of this section is one which—
(1) Includes at least two unannounced drug tests; and
(2)(i) Has received or is qualified to receive funds directly or indirectly under a Federal, State, or local government program;
(ii) Is administered or recognized by a Federal, State, or local government agency or court;
(iii) Has received or is qualified to receive payment directly or indirectly from a Federally- or State-licensed insurance company; or
(iv) Is administered or recognized by a Federally- or State-licensed hospital, health clinic or medical doctor.
| Subpart D—Student Consumer Information Services |
Sec. 668.41 Reporting and disclosure of information.
(a) Definitions. The following definitions apply to this subpart:
Athletically related student aid means any scholarship, grant, or other form of financial assistance, offered by an institution, the terms of which require the recipient to participate in a program of intercollegiate athletics at the institution. Other student aid, of which a student-athlete simply happens to be the recipient, is not athletically related student aid.
Certificate or degree-seeking student means a student enrolled in a course of credit who is recognized by the institution as seeking a degree or certificate.
First-time undergraduate student means an entering undergraduate who has never attended any institution of higher education. It includes a student enrolled in the fall term who attended a postsecondary institution for the first time in the prior summer term, and a student who entered with advanced standing (college credit earned before graduation from high school).
Normal time is the amount of time necessary for a student to complete all requirements for a degree or certificate according to the institution's catalog. This is typically four years for a bachelor's degree in a standard term-based institution, two years for an associate degree in a standard term-based institution, and the various scheduled times for certificate programs.
Notice means a notification of the availability of information an institution is required by this subpart to disclose, provided to an individual on a one-to-one basis through an appropriate mailing or publication, including direct mailing through the U.S. Postal Service, campus mail, or electronic mail. Posting on an Internet website or an Intranet website does not constitute a notice.
Official fall reporting date means that date (in the fall) on which an institution must report fall enrollment data to either the State, its board of trustees or governing board, or some other external governing body.
On-campus student housing facility: A dormitory or other residential facility for students that is located on an institution's campus, as defined in Sec. 668.46(a).
Prospective employee means an individual who has contacted an eligible institution for the purpose of requesting information concerning employment with that institution.
Prospective student means an individual who has contacted an eligible institution requesting information concerning admission to that institution.
Undergraduate students, for purposes of Secs. 668.45 and 668.48 only, means students enrolled in a bachelor's degree program, an associate degree program, or a vocational or technical program at or below the baccalaureate level.
(b) Disclosure through Internet or Intranet websites. Subject to paragraphs (c)(2), (e)(2) through (4), or (g)(1)(ii) of this section, as appropriate, an institution may satisfy any requirement to disclose information under paragraph (d), (e), or (g) of this section for—
(1) Enrolled students or current employees by posting the information on an Internet website or an Intranet website that is reasonably accessible to the individuals to whom the information must be disclosed; and
(2) Prospective students or prospective employees by posting the information on an Internet website.
(c) Notice to enrolled students. (1) An institution annually must distribute to all enrolled students a notice of the availability of the information required to be disclosed pursuant to paragraphs (d), (e), and (g) of this section, and pursuant to 34 CFR 99.7 (Sec. 99.7 sets forth the notification requirements of the Family Educational Rights and Privacy Act of 1974). The notice must list and briefly describe the information and tell the student how to obtain the information.
(2) An institution that discloses information to enrolled students as required under paragraph (d), (e), or (g), or (h) of this section by posting the information on an Internet website or an Intranet website must include in the notice described in paragraph (c)(1) of this section—
(i) The exact electronic address at which the information is posted; and
(ii) A statement that the institution will provide a paper copy of the information on request.
(d) General disclosures for enrolled or prospective students. An institution must make available to any enrolled student or prospective student through appropriate publications, mailings or electronic media, information concerning—
(1) Financial assistance available to students enrolled in the institution (pursuant to Sec. 668.42).
(2) The institution (pursuant to Sec. 668.43).
(3) The institution's retention rate as reported to the Integrated Postsecondary Education Data System (IPEDS). In the case of a request from a prospective student, the information must be made available prior to the student's enrolling or entering into any financial obligation with the institution.
(4) The institution's completion or graduation rate and, if applicable, its transfer-out rate (pursuant to Sec. 668.45). In the case of a request from a prospective student, the information must be made available prior to the student's enrolling or entering into any financial obligation with the institution.
(5) The placement of, and types of employment obtained by, graduates of the institution's degree or certificate programs.
(i) The information provided in compliance with this paragraph may be gathered from—
(A) The institution's placement rate for any program, if it publishes or uses in advertising such a rate;
(C) Alumni or student satisfaction surveys; or
(6) The types of graduate and professional education in which graduates of the institution's four-year degree programs enroll.
(i) The information provided in compliance with this paragraph may be gathered from—
(B) Alumni or student satisfaction surveys; or
(ii) The institution must identify the source of the information provided in compliance with this paragraph, as well as any time frames and methodology associated with it.
(e) Annual security report and annual fire safety report. (1) Enrolled students and current employees—annual security report and annual fire safety report. By October 1 of each year, an institution must distribute, to all enrolled students and current employees, its annual security report described in Sec. 668.46(b), and, if the institution maintains an on-campus student housing facility, its annual fire safety report described in Sec. 668.49(b), through appropriate publications and mailings, including—
(i) Direct mailing to each individual through the U.S. Postal Service, campus mail, or electronic mail;
(ii) A publication or publications provided directly to each individual; or
(iii) Posting on an Internet Web site or an Intranet Web site, subject to paragraph (e)(2) and (3) of this section.
(2) Enrolled students—annual security report and annual fire safety report. If an institution chooses to distribute either its annual security report or annual fire safety report to enrolled students by posting the disclosure or disclosures on an Internet Web site or an Intranet Web site, the institution must comply with the requirements of paragraph (c)(2) of this section.
(3) Current employees—annual security report and annual fire safety report. If an institution chooses to distribute either its annual security report or annual fire safety report to current employees by posting the disclosure or disclosures on an Internet Web site or an Intranet Web site, the institution must, by October 1 of each year, distribute to all current employees a notice that includes a statement of the report's availability, the exact electronic address at which the report is posted, a brief description of the report's contents, and a statement that the institution will provide a paper copy of the report upon request.
(4) Prospective students and prospective employees—annual security report and annual fire safety report. For each of the reports, the institution must provide a notice to prospective students and prospective employees that includes a statement of the report's availability, a description of its contents, and an opportunity to request a copy. An institution must provide its annual security report and annual fire safety report, upon request, to a prospective student or prospective employee. If the institution chooses to provide either its annual security report or annual fire safety report to prospective students and prospective employees by posting the disclosure on an Internet Web site, the notice described in this paragraph must include the exact electronic address at which the report is posted, a brief description of the report, and a statement that the institution will provide a paper copy of the report upon request.
(5) Submission to the Secretary—annual security report and annual fire safety report. Each year, by the date and in a form specified by the Secretary, an institution must submit the statistics required by Secs. 668.46(c) and 668.49(c) to the Secretary.
(6) Publication of the annual fire safety report. An institution may publish its annual fire safety report concurrently with its annual security report only if the title of the report clearly states that the report contains both the annual security report and the annual fire safety report. If an institution chooses to publish the annual fire safety report separately from the annual security report, it must include information in each of the two reports about how to directly access the other report.
(f) Prospective student-athletes and their parents, high school coach and guidance counselor—report on completion or graduation rates for student-athletes.
(1)(i) Except under the circumstances described in paragraph (f)(1)(ii) of this section, when an institution offers a prospective student-athlete athletically related student aid, it must provide to the prospective student-athlete, and his or her parents, high school coach, and guidance counselor, the report produced pursuant to Sec. 668.48(a).
(ii) An institution's responsibility under paragraph (f)(1)(i) of this section with reference to a prospective student athlete's high school coach and guidance counselor is satisfied if—
(A) The institution is a member of a national collegiate athletic association;
(B) The association compiles data on behalf of its member institutions, which data the Secretary determines are substantially comparable to those required by Sec. 668.48(a); and
(C) The association distributes the compilation to all secondary schools in the United States.
(2) By July 1 of each year, an institution must submit to the Secretary the report produced pursuant to Sec. 668.48.
(g) Enrolled students, prospective students, and the public—report on athletic program participation rates and financial support data.
(1)(i) An institution of higher education subject to Sec. 668.47 must, not later than October 15 of each year, make available to enrolled students, prospective students, and the public, the report produced pursuant to Sec. 668.47(c). The institution must make the report easily accessible to students, prospective students, and the public and must provide the report promptly to anyone who requests it.
(ii) The institution must provide notice to all enrolled students, pursuant to paragraph (c)(1) of this section, and prospective students of their right to request the report described in paragraph (g)(1) of this section. If the institution chooses to make the report available by posting the disclosure on an Internet website or an Intranet website, it must provide in the notice the exact electronic address at which the report is posted, a brief description of the report, and a statement that the institution will provide a paper copy of the report on request. For prospective students, the institution may not use an Intranet website for this purpose.
(2) An institution must submit the report described in paragraph (g)(1)(i) of this section to the Secretary within 15 days of making it available to students, prospective students, and the public.
(h) Enrolled students, prospective students, and the public—disclosure of an institution's use of pre-dispute arbitration agreements and/or class action waivers as a condition of enrollment for students receiving title IV Federal student aid. (1)(i) An institution of higher education that requires students receiving title IV Federal student aid to accept or agree to a pre-dispute arbitration agreement and/or a class action waiver as a condition of enrollment must make available to enrolled students, prospective students, and the public, a written (electronic) plain language disclosure of those conditions of enrollment. This plain language disclosure also must state that: The school cannot require the borrower to participate in arbitration or any internal dispute resolution process offered by the institution prior to filing a borrower defense to repayment application with the Department pursuant to Sec. 685.206(e); the school cannot, in any way, require students to limit, relinquish, or waive their ability to pursue filing a borrower defense claim, pursuant to Sec. 685.206(e) at any time; and any arbitration, required by a pre-dispute arbitration agreement, tolls the limitations period for filing a borrower defense to repayment application pursuant to Sec. 685.206(e)(6)(ii).
(ii) All statements in the plain language disclosure must be in 12-point font on the institution's admissions information web page and in the admissions section of the institution's catalogue. The institution may not rely solely on an intranet website for the purpose of providing this notice to prospective students or the public.
(2) For the purposes of this paragraph (h), the following definitions apply:
(i) Class action means a lawsuit or an arbitration proceeding in which one or more parties seeks class treatment pursuant to Federal Rule of Civil Procedure 23 or any State process analogous to Federal Rule of Civil Procedure 23.
(ii) Class action waiver means any agreement or part of an agreement, regardless of its form or structure, between a school, or a party acting on behalf of a school, and a student that relates to the making of a Direct Loan or the provision of educational services for which the student received title IV funding and prevents an individual from filing or participating in a class action that pertains to those services.
(iii) Pre-dispute arbitration agreement means any agreement or part of an agreement, regardless of its form or structure, between a school, or a party acting on behalf of a school, and a student requiring arbitration of any future dispute between the parties relating to the making of a Direct Loan or provision of educational services for which the student received title IV funding.
| Sec. 668.42 Financial assistance information. |
(a)(1) Information on financial assistance that the institution must publish and make readily available to current and prospective students under this subpart includes, but is not limited to, a description of all the Federal, State, local, private and institutional student financial assistance programs available to students who enroll at that institution.
(2) These programs include both need-based and non-need-based programs.
(3) The institution may describe its own financial assistance programs by listing them in general categories.
(4) The institution must describe the terms and conditions of the loans students receive under the Federal Family Education Loan Program, the William D. Ford Federal Direct Student Loan Program, and the Federal Perkins Loan Program.
(b) For each program referred to in paragraph (a) of this section, the information provided by the institution must describe—
(1) The procedures and forms by which students apply for assistance;
(2) The student eligibility requirements;
(3) The criteria for selecting recipients from the group of eligible applicants; and
(4) The criteria for determining the amount of a student's award.
(c) The institution must describe the rights and responsibilities of students receiving financial assistance and, specifically, assistance under the title IV, HEA programs. This description must include specific information regarding—
(1) Criteria for continued student eligibility under each program;
(2)(i) Standards which the student must maintain in order to be considered to be making satisfactory progress in his or her course of study for the purpose of receiving financial assistance; and
(ii) Criteria by which the student who has failed to maintain satisfactory progress may re-establish his or her eligibility for financial assistance;
(3) The method by which financial assistance disbursements will be made to the students and the frequency of those disbursements;
(4) The terms of any loan received by a student as part of the student's financial assistance package, a sample loan repayment schedule for sample loans and the necessity for repaying loans;
(5) The general conditions and terms applicable to any employment provided to a student as part of the student's financial assistance package; and
(6) The exit counseling information the institution provides and collects as required by 34 CFR 674.42 for borrowers under the Federal Perkins Loan Program, by 34 CFR 685.304 for borrowers under the William D. Ford Federal Direct Loan Program, and by 34 CFR 682.604 for borrowers under the Federal Stafford Loan Program.
| Sec. 668.43 Institutional Information. |
(a) Institutional information that the institution must make readily available to enrolled and prospective students under this subpart includes, but is not limited to—
(1) The cost of attending the institution, including—
(i) Tuition and fees charged to full-time and part-time students;
(ii) Estimates of costs for necessary books and supplies;
(iii) Estimates of typical charges for room and board;
(iv) Estimates of transportation costs for students; and
(v) Any additional cost of a program in which the student is enrolled or expresses a specific interest;
(2) Any refund policy with which the institution is required to comply for the return of unearned tuition and fees or other refundable portions of costs paid to the institution;
(3) The requirements and procedures for officially withdrawing from the institution;
(4) A summary of the requirements under Sec. 668.22 for the return of title IV grant or loan assistance;
(5) The academic program of the institution, including—
(i) The current degree programs and other educational and training programs;
(ii) The instructional, laboratory, and other physical facilities which relate to the academic program;
(iii) The institution's faculty and other instructional personnel;
(iv) Any plans by the institution for improving the academic program of the institution, upon a determination by the institution that such a plan exists; and
(v) If an educational program is designed to meet educational requirements for a specific professional license or certification that is required for employment in an occupation, or is advertised as meeting such requirements, a list of all States where the institution has determined, including as part of the institution’s obligation under Sec. 668.14(b)(32), that the program does and does not meet such requirements; information regarding whether completion of that program would be sufficient to meet licensure requirements in a State for that occupation, including—
(A) A list of all States for which the institution has determined that its curriculum meets the State educational requirements for licensure or certification;
(B) A list of all States for which the institution has determined that its curriculum does not meet the State educational requirements for licensure or certification; and
(C) A list of all States for which the institution has not made a determination that its curriculum meets the State educational requirements for licensure or certification; and
(vi) If a prison education program, as defined in Sec. 668.236, is designed to meet educational requirements for a specific professional license or certification that is required for employment in an occupation (as described in Sec. 668.236(a)(7) and (8)), information regarding whether that occupation typically involves State or Federal prohibitions on the licensure or employment of formerly confined or incarcerated individuals in any other State for which the institution has made a determination about State prohibitions on the licensure or certification of formerly confined or incarcerated individuals;
(6) The names of associations, agencies or governmental bodies that accredit, approve or license the institution and its programs and the procedures by which documents describing that activity may be reviewed under paragraph (b) of this section;
(7) A description of the services and facilities available to students with disabilities, including students with intellectual disabilities as defined in subpart O of this part;
(8) The titles of persons designated under Sec. 668.44 and information regarding how and where those persons may be contacted;
(9) A statement that a student's enrollment in a program of study abroad approved for credit by the home institution may be considered enrollment at the home institution for the purpose of applying for assistance under the Title IV, HEA programs;
(10) Institutional policies and sanctions related to copyright infringement, including—
(i) A statement that explicitly informs its students that unauthorized distribution of copyrighted material, including unauthorized peer-to-peer file sharing, may subject the students to civil and criminal liabilities;
(ii) A summary of the penalties for violation of Federal copyright laws;
(iii) A description of the institution's policies with respect to unauthorized peer-to-peer file sharing, including disciplinary actions that are taken against students who engage in illegal downloading or unauthorized distribution of copyrighted materials using the institution's information technology system;
(11) A description of the transfer of credit policies established by the institution which must include a statement of the institution's current transfer of credit policies that includes, at a minimum—
(i) Any established criteria the institution uses regarding the transfer of credit earned at another institution; and any types of institutions or sources from which the institution will not accept credits;
(ii) A list of institutions with which the institution has established an articulation agreement; and
(iii) Written criteria used to evaluate and award credit for prior learning experience including, but not limited to, service in the armed forces, paid or unpaid employment, or other demonstrated competency or learning;
(12) A description in the program description of written arrangements the institution has entered into in accordance with Sec. 668.5, including, but not limited to, information on—
(i) The portion of the educational program that the institution that grants the degree or certificate is not providing;
(ii) The name and location of the other institutions or organizations that are providing the portion of the educational program that the institution that grants the degree or certificate is not providing;
(iii) The method of delivery of the portion of the educational program that the institution that grants the degree or certificate is not providing; and
(iv) Estimated additional costs students may incur as the result of enrolling in an educational program that is provided, in part, under the written arrangement.
(13) The percentage of those enrolled, full-time students at the institution who—
(iii) Receive a Federal Pell Grant; and
(iv) Are a self-identified member of a racial or ethnic group;
(14) If the institution's accrediting agency or State requires the institution to calculate and report a placement rate, the institution's placement in employment of, and types of employment obtained by, graduates of the institution's degree or certificate programs, gathered from such sources as alumni surveys, student satisfaction surveys, the National Survey of Student Engagement, the Community College Survey of Student Engagement, State data systems, or other relevant sources approved by the institution's accrediting agency as applicable;
(15) The types of graduate and professional education in which graduates of the institution's four-year degree programs enrolled, gathered from such sources as alumni surveys, student satisfaction surveys, the National Survey of Student Engagement, State data systems, or other relevant sources;
(16) The fire safety report prepared by the institution pursuant to Sec. 668.49;
(17) The retention rate of certificate or degree-seeking, first-time, full-time, undergraduate students entering the institution;
(18) Institutional policies regarding vaccinations;
(19) If the institution is required to maintain a teach-out plan by its accrediting agency, notice that the institution is required to maintain such teach-out plan and the reason that the accrediting agency required such plan under Sec. 602.24(c)(1); and
(20) If an enforcement action or prosecution is brought against the institution by a State or Federal law enforcement agency in any matter where a final judgment against the institution, if rendered, would result in an adverse action by an accrediting agency against the institution, revocation of State authorization, or limitation, suspension, or termination of eligibility under title IV, notice of that fact.
(b) The institution must make available for review to any enrolled or prospective student upon request, a copy of the documents describing the institution's accreditation and its State, Federal, or tribal approval or licensing. The institution must also provide its students or prospective students with contact information for filing complaints with its accreditor and with its State approval or licensing entity and any other relevant State official or agency that would appropriately handle a student's complaint.
(c)(1) If the institution has made a determination under paragraph (a)(5)(v) of this section that the program's curriculum does not meet the State educational requirements for licensure or certification in the State in which a prospective student is located, or if the institution has not made a determination regarding whether the program's curriculum meets the State educational requirements for licensure or certification, the institution must provide notice to that effect to the student prior to the student's enrollment in the institution in accordance with Sec. 668.14(b)(32). in the program.
(2) If the institution makes a determination under paragraph (a)(5)(v)(B) of this section that a program's curriculum does not meet the State educational requirements for licensure or certification in a State in which a student who is currently enrolled in such program is located, the institution must provide notice to that effect to the student within 14 calendar days of making such determination.
(3)(i) Disclosures under paragraphs (c)(1) and (2) of this section must be made directly to the student in writing, which may include through email or other electronic communication.
(ii)(A) For purposes of this paragraph (c), an institution must make a determination regarding the State in which a student is located in accordance with the institution's policies or procedures, which must be applied consistently to all students.
(B) The institution must, upon request, provide the Secretary with written documentation of its determination of a student's location under paragraph (c)(3)(ii)(A) of this section, including the basis for such determination.
(C) An institution must make a determination regarding the State in which a student is located at the time of the student's initial enrollment in an educational program and, if applicable, upon formal receipt of information from the student, in accordance with the institution's procedures under paragraph (c)(3)(ii)(A) of this section, that the student's location has changed to another State.
(d)(1) Program information website. Beginning on July 1, 2026, the Secretary will establish and maintain a website with information about institutions and their educational programs. For this purpose, an institution must provide to the Department such information about the institution and its programs as the Secretary prescribes through a notice published in the Federal Register. The Secretary may conduct consumer testing to inform the design of the website.
(i) The website must include, but is not limited to, the following items, to the extent reasonably available:
(A) The published length of the program in calendar time (i.e., weeks, months, years).
(B) The total number of individuals enrolled in the program during the most recently completed award year.
(C) The total cost of tuition and fees, and the total cost of books, supplies, and equipment, that a student would incur for completing the program within the published length of the program.
(D) Of the individuals enrolled in the program during the most recently completed award year, the percentage who received a Direct Loan Program loan, a private loan, or both for enrollment in the program.
(E) As calculated by the Secretary, the median loan debt of students who completed the program during the most recently completed award year or for all students who completed or withdrew from the program during that award year.
(F) As provided by the Secretary, the median earnings of students who completed the program or of all students who completed or withdrew from the program, during a period determined by the Secretary.
(G) Whether the program is programmatically accredited and the name of the accrediting agency, as reported to the Secretary.
(H) As calculated by the Secretary, the program’s debt-to-earnings rates.
(I) As calculated by the Secretary, the program’s earnings premium measure.
(ii) The website may also include other information deemed appropriate by the Secretary, such as the following items:
(A) The primary occupations (by name, SOC code, or both) that the program prepares students to enter, along with links to occupational profiles on O*NET (www.onetonline.org) or its successor site.
(B) As reported to or calculated by the Secretary, the program or institution’s completion rates and withdrawal rates for full-time and less-than-full-time students.
(C) As calculated by the Secretary, the medians of the total cost of tuition and fees, and the total cost of books, supplies, and equipment, and the total net cost of attendance paid by students completing the program.
(D) As calculated by the Secretary, the loan repayment rate for students or graduates who entered repayment on Direct Loan Program loans during a period determined by the Secretary.
(E) Whether students who graduate from a program are required to complete postgraduation training program to obtain licensure before eligible for independent practice.
(2) Program web pages. The institution must provide a prominent link to, and any other needed information to access, the website maintained by the Secretary on any web page containing academic, cost, financial aid, or admissions information about the program or institution. The Secretary may require the institution to modify a web page if the information is not sufficiently prominent, readily accessible, clear, conspicuous, or direct.
(3) Distribution to prospective students. The institution must provide the relevant information to access the website maintained by the Secretary to any prospective student, or a third party acting on behalf of the prospective student, before the prospective student signs an enrollment agreement, completes registration, or makes a financial commitment to the institution.
(4) Distribution to enrolled students. The institution must provide the relevant information to access the website maintained by the Secretary to any enrolled title IV, HEA recipient prior to the start date of the first payment period associated with each subsequent award year in which the student continues enrollment at the institution.
| Sec. 668.44 Availability of employees for information dissemination purposes. |
(a) Availability. (1) Except as provided in paragraph (b) of this section each institution shall designate an employee or group of employees who shall be available on a full-time basis to assist enrolled or prospective students in obtaining the information specified in Sec. 668.42, 668.43, 668.45, and 668.46.
(2) If the institution designates one person, that person shall be available, upon reasonable notice, to any enrolled or prospective student throughout the normal administrative working hours of that institution.
(3) If more than one person is designated, their combined work schedules must be arranged so that at least one of them is available, upon reasonable notice, throughout the normal administrative working hours of that institution.
(b) Waiver. (1) The Secretary may waive the requirement that the employee or group of employees designated under paragraph (a) of this section be available on a full-time basis if the institution's total enrollment, or the portion of the enrollment participating in the Title IV, HEA programs, is too small to necessitate an employee or group of employees being available on a full-time basis.
(2) In determining whether an institution's total enrollment or the number of Title IV, HEA program recipients is too small, the Secretary considers whether there will be an insufficient demand for information dissemination services among its enrolled or prospective students to necessitate the full-time availability of an employee or group of employees.
(3) To receive a waiver, the institution shall apply to the Secretary at the time and in the manner prescribed by the Secretary.
(c) The granting of a waiver under paragraph (b) of this section does not exempt an institution from designating a specific employee or group of employees to carry out on a part-time basis the information dissemination requirements.
| Sec. 668.45 Information on completion or graduation rates. |
(a)(1) An institution annually must prepare the completion or graduation rate of its certificate- or degree-seeking, first-time, full-time undergraduate students, as provided in paragraph (b) of this section.
(2) An institution that determines that its mission includes providing substantial preparation for students to enroll in another eligible institution must prepare the transfer-out rate of its certificate- or degree-seeking, first-time, full-time undergraduate students, as provided in paragraph (c) of this section.
(3)(i) An institution that offers a predominant number of its programs based on semesters, trimesters, or quarters must base its completion or graduation rate, retention rate, and, if applicable, transfer-out rate calculations, on the cohort of certificate- or degree-seeking, first-time, full-time undergraduate students who enter the institution during the fall term of each year.
(ii) An institution not covered by the provisions of paragraph (a)(3)(i) of this section must base its completion or graduation rate, retention rate, and, if applicable, transfer-out rate calculations, on the cohort of certificate- or degree-seeking, first-time, full-time undergraduate students who enter the institution between September 1 of one year and August 31 of the following year.
(4)(i) An institution covered by the provisions of paragraph (a)(3)(i) of this section must count as an entering student a first-time undergraduate student who is enrolled as of October 15, the end of the institution's drop-add period, or another official reporting date as defined in Sec. 668.41(a).
(ii) An institution covered by paragraph (a)(3)(ii) of this section must count as an entering student a first-time undergraduate student who is enrolled for at least—
(A) 15 days, in a program of up to, and including, one year in length; or
(B) 30 days, in a program of greater than one year in length.
(5) An institution must make available its completion or graduation rate and, if applicable, transfer-out rate, no later than the July 1 immediately following the 12-month period ending August 31 during which 150 percent of the normal time for completion or graduation has elapsed for all of the students in the group on which the institution bases its completion or graduation rate and, if applicable, transfer-out rate calculations.
(6)(i) Completion or graduation rate information must be disaggregated by gender, by each major racial and ethnic subgroup (as defined in IPEDS), by recipients of a Federal Pell Grant, by recipients of a Federal Family Education Loan or a Federal Direct Loan (other than an Unsubsidized Stafford Loan made under the Federal Family Education Loan Program or a Federal Direct Unsubsidized Stafford Loan) who did not receive a Federal Pell Grant, and by recipients of neither a Federal Pell Grant nor a Federal Family Education Loan or a Federal Direct Loan (other than an Unsubsidized Stafford Loan made under the Federal Family Education Loan Program or a Federal Direct Unsubsidized Loan) if the number of students in such group or with such status is sufficient to yield statistically reliable information and reporting will not reveal personally identifiable information about an individual student. If such number is not sufficient for such purpose, i.e., is too small to be meaningful, then the institution shall note that the institution enrolled too few of such students to so disclose or report with confidence and confidentiality.
(ii) With respect to the requirement in paragraph (a)(6)(i) of this section to disaggregate the completion or graduation rate information by the receipt or nonreceipt of Federal student aid, students shall be considered to have received the aid in question only if they received such aid for the period specified in paragraph (a)(3) of this section.
(iii) The requirement in paragraph (a)(6)(i) of this section shall not apply to two-year, degree-granting institutions of higher education until academic year 2011–2012.
(b) In calculating the completion or graduation rate under paragraph (a)(1) of this section, an institution must count as completed or graduated—
(1) Students who have completed or graduated by the end of the 12-month period ending August 31 during which 150 percent of the normal time for completion or graduation from their program has lapsed; and
(2) Students who have completed a program described in Sec. 668.8(b)(1)(ii), or an equivalent program, by the end of the 12-month period ending August 31 during which 150 percent of normal time for completion from that program has lapsed.
(c) In calculating the transfer-out rate under paragraph (a)(2) of this section, an institution must count as transfers-out students who by the end of the 12-month period ending August 31 during which 150 percent of the normal time for completion or graduation from the program in which they were enrolled has lapsed, have not completed or graduated but have subsequently enrolled in any program of an eligible institution for which its program provided substantial preparation.
(d) For the purpose of calculating a completion or graduation rate and a transfer-out rate, an institution may—
(i) Have left school to serve in the Armed Forces;
(ii) Have left school to serve on official church missions;
(iii) Have left school to serve with a foreign aid service of the Federal Government, such as the Peace Corps;
(iv) Are totally and permanently disabled; or
(2) In cases where the students described in paragraphs (d)(1)(i) through (iii) of this section represent 20 percent or more of the certificate- or degree-seeking, full-time, undergraduate students at the institution, recalculate the completion or graduation rates of those students by adding to the 150 percent time-frame they normally have to complete or graduate, as described in paragraph (b) of this section, the time period the students were not enrolled due to their service in the Armed Forces, on official church missions, or with a recognized foreign aid service of the Federal Government.
(e)(1) The Secretary grants a waiver of the requirements of this section dealing with completion and graduation rate data to any institution that is a member of an athletic association or conference that has voluntarily published completion or graduation rate data, or has agreed to publish data, that the Secretary determines are substantially comparable to the data required by this section.
(2) An institution that receives a waiver of the requirements of this section must still comply with the requirements of Sec. 668.41(d)(3) and (f).
(3) An institution, or athletic association or conference applying on behalf of an institution, that seeks a waiver under paragraph (e)(1) of this section must submit a written application to the Secretary that explains why it believes the data the athletic association or conference publishes are accurate and substantially comparable to the information required by this section.
(f) In addition to calculating the completion or graduation rate required by paragraph (a)(1) of this section, an institution may, but is not required to—
(1) Calculate a completion or graduation rate for students who transfer into the institution;
(2) Calculate a completion or graduation rate for students described in paragraphs (d)(1)(i) through (iv) of this section; and
(3) Calculate a transfer-out rate as specified in paragraph (c) of this section, if the institution determines that its mission does not include providing substantial preparation for its students to enroll in another eligible institution.
| Sec. 668.46 Institutional security policies and crime statistics. |
(a) Definitions. Additional definitions that apply to this section:
Business day: Monday through Friday, excluding any day when the institution is closed.
Campus: (i) Any building or property owned or controlled by an institution within the same reasonably contiguous geographic area and used by the institution in direct support of, or in a manner related to, the institution's educational purposes, including residence halls; and
(ii) Any building or property that is within or reasonably contiguous to the area identified in paragraph (i) of this definition, that is owned by the institution but controlled by another person, is frequently used by students, and supports institutional purposes (such as a food or other retail vendor).
Campus security authority: (i) A campus police department or a campus security department of an institution.
(ii) Any individual or individuals who have responsibility for campus security but who do not constitute a campus police department or a campus security department under paragraph (i) of this definition, such as an individual who is responsible for monitoring entrance into institutional property.
(iii) Any individual or organization specified in an institution's statement of campus security policy as an individual or organization to which students and employees should report criminal offenses.
(iv) An official of an institution who has significant responsibility for student and campus activities, including, but not limited to, student housing, student discipline, and campus judicial proceedings. If such an official is a pastoral or professional counselor as defined below, the official is not considered a campus security authority when acting as a pastoral or professional counselor.
Clery geography. (i)For the purposes of collecting statistics on the crimes listed in paragraph (c) of this section for submission to the Department and inclusion in an institution's annual security report, Clery geography includes—
(A) Buildings and property that are part of the institution's campus;
(B) The institution's noncampus buildings and property; and
(C) Public property within or immediately adjacent to and accessible from the campus.
(ii) For the purposes of maintaining the crime log required in paragraph (f) of this section, Clery geography includes, in addition to the locations in paragraph (i) of this definition, areas within the patrol jurisdiction of the campus police or the campus security department.
Dating violence. Violence committed by a person who is or has been in a social relationship of a romantic or intimate nature with the victim.
(i) The existence of such a relationship shall be determined based on the reporting party's statement and with consideration of the length of the relationship, the type of relationship, and the frequency of interaction between the persons involved in the relationship.
(ii) For the purposes of this definition—
(A) Dating violence includes, but is not limited to, sexual or physical abuse or the threat of such abuse.
(B) Dating violence does not include acts covered under the definition of domestic violence.
(iii) For the purposes of complying with the requirements of this section and Sec. 668.41, any incident meeting this definition is considered a crime for the purposes of Clery Act reporting.
Domestic violence. (i) A felony or misdemeanor crime of violence committed—
(A) By a current or former spouse or intimate partner of the victim;
(B) By a person with whom the victim shares a child in common;
(C) By a person who is cohabitating with, or has cohabitated with, the victim as a spouse or intimate partner;
(D) By a person similarly situated to a spouse of the victim under the domestic or family violence laws of the jurisdiction in which the crime of violence occurred, or
(E) By any other person against an adult or youth victim who is protected from that person's acts under the domestic or family violence laws of the jurisdiction in which the crime of violence occurred.
(ii) For the purposes of complying with the requirements of this section and Sec. 668.41, any incident meeting this definition is considered a crime for the purposes of Clery Act reporting.
Federal Bureau of Investigation's (FBI) Uniform Crime Reporting (UCR) program. A nationwide, cooperative statistical effort in which city, university and college, county, State, Tribal, and federal law enforcement agencies voluntarily report data on crimes brought to their attention. The UCR program also serves as the basis for the definitions of crimes in Appendix A to this subpart and the requirements for classifying crimes in this subpart.
Hate crime. A crime reported to local police agencies or to a campus security authority that manifests evidence that the victim was intentionally selected because of the perpetrator's bias against the victim. For the purposes of this section, the categories of bias include the victim's actual or perceived race, religion, gender, gender identity, sexual orientation, ethnicity, national origin, and disability.
Hierarchy Rule. A requirement in the FBI's UCR program that, for purposes of reporting crimes in that system, when more than one criminal offense was committed during a single incident, only the most serious offense be counted.
Noncampus building or property: (i) Any building or property owned or controlled by a student organization that is officially recognized by the institution; or
(ii) Any building or property owned or controlled by an institution that is used in direct support of, or in relation to, the institution's educational purposes, is frequently used by students, and is not within the same reasonably contiguous geographic area of the institution.
Pastoral counselor: A person who is associated with a religious order or denomination, is recognized by that religious order or denomination as someone who provides confidential counseling, and is functioning within the scope of that recognition as a pastoral counselor.
Professional counselor: A person whose official responsibilities include providing mental health counseling to members of the institution's community and who is functioning within the scope of the counselor's license or certification.
Programs to prevent dating violence, domestic violence, sexual assault, and stalking. (i)">Comprehensive, intentional, and integrated programming, initiatives, strategies, and campaigns intended to end dating violence, domestic violence, sexual assault, and stalking that—
(A) Are culturally relevant, inclusive of diverse communities and identities, sustainable, responsive to community needs, and informed by research or assessed for value, effectiveness, or outcome; and
(B) Consider environmental risk and protective factors as they occur on the individual, relationship, institutional, community, and societal levels.
(ii) Programs to prevent dating violence, domestic violence, sexual assault, and stalking include both primary prevention and awareness programs directed at incoming students and new employees and ongoing prevention and awareness campaigns directed at students and employees, as defined in paragraph (j)(2) of this section.
Public property: All public property, including thoroughfares, streets, sidewalks, and parking facilities, that is within the campus, or immediately adjacent to and accessible from the campus.
Referred for campus disciplinary action: The referral of any person to any campus official who initiates a disciplinary action of which a record is kept and which may result in the imposition of a sanction.
Sexual assault. An offense that meets the definition of rape, fondling, incest, or statutory rape as used in the FBI's UCR program and included in Appendix A of this subpart.
Stalking. (i) Engaging in a course of conduct directed at a specific person that would cause a reasonable person to—
(A) Fear for the person's safety or the safety of others; or
(B) Suffer substantial emotional distress.
(ii) For the purposes of this definition—
(A) Course of conduct means two or more acts, including, but not limited to, acts in which the stalker directly, indirectly, or through third parties, by any action, method, device, or means, follows, monitors, observes, surveils, threatens, or communicates to or about a person, or interferes with a person's property.
(B) Reasonable person means a reasonable person under similar circumstances and with similar identities to the victim.
(C) Substantial emotional distress means significant mental suffering or anguish that may, but does not necessarily, require medical or other professional treatment or counseling.
(iii) For the purposes of complying with the requirements of this section and section 668.41, any incident meeting this definition is considered a crime for the purposes of Clery Act reporting.
Test: Regularly scheduled drills, exercises, and appropriate follow-through activities, designed for assessment and evaluation of emergency plans and capabilities.
(b) Annual security report. An institution must prepare an annual security report that contains, at a minimum, the following information:
(1) The crime statistics described in paragraph (c) of this section.
(2) A statement of policies regarding procedures for students and others to report criminal actions or other emergencies occurring on campus. This statement must include the institution's policies concerning its response to these reports, including—
(i) Policies for making timely warning reports to members of the campus community, as required by paragraph (e) of this section, regarding the occurrence of crimes described in paragraph (c)(1) of this section;
(ii) Policies for preparing the annual disclosure of crime statistics;
(iii) A list of the titles of each person or organization to whom students and employees should report the criminal offenses described in paragraph (c)(1) of this section for the purpose of making timely warning reports and the annual statistical disclosure; and
(iv) Policies or procedures for victims or witnesses to report crimes on a voluntary, confidential basis for inclusion in the annual disclosure of crime statistics.
(3) A statement of policies concerning security of and access to campus facilities, including campus residences, and security considerations used in the maintenance of campus facilities.
(4) A statement of policies concerning campus law enforcement that—
(i) Addresses the enforcement authority and jurisdiction of security personnel;
(A) and Whether those security personnel have the authority to make arrests; and
(B) Any agreements, such as written memoranda of understanding between the institution and such agencies, for the investigation of alleged criminal offenses.
(ii) Addresses the working relationship of campus security with State and local police agencies, including—
(iii) Encourages accurate and prompt reporting of all crimes to the campus police and the appropriate police agencies, when the victim of a crime elects to, or is unable to, make such a report; and
(iv) Describes procedures, if any, that encourage pastoral counselors and professional counselors, if and when they deem it appropriate, to inform the persons they are counseling of any procedures to report crimes on a voluntary, confidential basis for inclusion in the annual disclosure of crime statistics.
(5) A description of the type and frequency of programs designed to inform students and employees about campus security procedures and practices and to encourage students and employees to be responsible for their own security and the security of others.
(6) A description of programs designed to inform students and employees about the prevention of crimes.
(7) A statement of policy concerning the monitoring and recording through local police agencies of criminal activity by students at noncampus locations of student organizations officially recognized by the institution, including student organizations with noncampus housing facilities.
(8) A statement of policy regarding the possession, use, and sale of alcoholic beverages and enforcement of State underage drinking laws.
(9) A statement of policy regarding the possession, use, and sale of illegal drugs and enforcement of Federal and State drug laws.
(10) A description of any drug or alcohol-abuse education programs, as required under section 120(a) through (d) of the HEA, otherwise known as the Drug-Free Schools and Communities Act of 1989. For the purpose of meeting this requirement, an institution may cross-reference the materials the institution uses to comply with section 120(a) through (d) of the HEA.
(11) A statement of policy regarding the institution's programs to prevent dating violence, domestic violence, sexual assault, and stalking, as defined in paragraph (a) of this section, and of procedures that the institution will follow when one of these crimes is reported. The statement must include—
(i) A description of the institution's educational programs and campaigns to promote the awareness of dating violence, domestic violence, sexual assault, and stalking, as required by paragraph (j) of this section;
(ii) Procedures should follow if a crime of dating violence, domestic violence, sexual assault, or stalking has occurred, including written information about—
(A) The importance of preserving evidence that may assist in proving that the alleged criminal offense> occurred or may be helpful in obtaining a protection order;
(B) How and to whom the alleged offense should be reported;
(C) Options about the involvement of law enforcement and campus authorities, including notification of the victim's option to—
(1) Notify proper law enforcement authorities, including on-campus and local police;
(2) Be assist by campus authorities in notifying law enforcement authoritiesif the victim so chooses; and
(3) Decline to notify such authorities; and
(D) Where applicable, the rights of victims and the institution's responsibilities for orders of protection, "no-contact" orders, restraining orders, or similar lawful orders issued by a criminal, civil, or tribal court or by the institution;
(iii) Information about how the institution will protect the confidentiality of victims and other necessary parties, including how the institution will—
(A) Complete publicly available recordkeeping, including Clery Act reporting and disclosures, without the inclusion of personally identifying information about the victim, as defined in section 40002(a)(20) of the Violence Against Women Act of 1994 (42 U.S.C. 13925(a)(20)); and
(B) Maintain as confidential any accommodations or protective measures provided to the victim, to the extent that maintaining such confidentiality would not impair the ability of the institution to provide the accommodations or protective measures;
(iv) A statement that the institution will provide written notification to students and employees about existing counseling, health, mental health, victim advocacy, legal assistance, visa and immigration assistance, student financial aid, or other services for victims, both within the institution and in the community;
(v) A statement that the institution will provide written notification to victims about options for, available assistance in, and how to request changes to academic, living, transportation, and working situations or protective measures. The institution must make such accommodations or provide such protective measures if the victim requests them and if they are reasonably available, regardless of whether the victim chooses to report the crime to campus police or local law enforcement;
(vi) An explanation of the procedures for institutional disciplinary action in cases of alleged dating violence, domestic violence, sexual assault, or stalking, as required by paragraph (k) of this section; and
(vii) A statement that, when a student or employee reports to the institution that the student or employee has been a victim of dating violence, domestic violence, sexual assault, or stalking, whether the offense occurred on or off campus, the institution will provide the student or employee a written explanation of the student's or employee's rights and options, as described in paragraphs (b)(11)(ii) through (vi) of this section.
(12) A statement advising the campus community where law enforcement agency information provided by a State under section 121 of the Adam Walsh Child Protection and Safety Act of 2006 (42 U.S.C. 16921), concerning registered sex offenders may be obtained, such as the law enforcement office of the institution, a local law enforcement agency with jurisdiction for the campus, or a computer network address.
(13) A statement of policy regarding emergency response and evacuation procedures, as required by paragraph (g) of this section.
(14) A statement of policy regarding missing student notification procedures, as required by paragraph (h) of this section.
(c) Crime statistics—(1) Crimes that must be reported and disclosed. An institution must report to the Department and disclose in its annual security report statistics for the three most recent calendar years concerning the number of each of the following crimes that occurred on or within its Clery geography and that are reported to local police agencies or to a campus security authority:
(i) Primary crimes, including—
(1) Murder and nonnegligent manslaughter; and
(ii) Arrests and referrals for disciplinary actions, including—
(A) Arrests for liquor law violations, drug law violations, and illegal weapons possession.
(B) Persons not included in paragraph (c)(1)(ii)(A) of this section who were referred for campus disciplinary action for liquor law violations, drug law violations, and illegal weapons possession.