Publication Date: April 14, 2011

Posted Date: April 14, 2011

Subject: Program Integrity Issues

FR Type: Final, Correction

Effective Date: July 1, 2011

[Federal Register: April 13, 2011 (Volume 76, Number 71)]
[Rules and Regulations]              
[Page 20534-20536]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13ap11-17]                        

===========================================
-----------------------------------------------------------------------

DEPARTMENT OF EDUCATION

34 CFR Parts 600, 602, 603, 668, 682, 685, 686, 690, and 691

[Docket ID ED-2010-OPE-0004]
RIN 1840-AD02

Program Integrity Issues

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Final regulations; correction.

-----------------------------------------------------------------------

SUMMARY: On October 29, 2010, the Department of Education published in
the Federal Register (75 FR 66832) final regulations for improving
integrity in the programs authorized under title IV of the Higher
Education Act of 1965, as amended (HEA), by amending the regulations
for Institutional Eligibility Under the HEA, the Secretary's
Recognition of Accrediting Agencies, the Secretary's Recognition
Procedures for State Agencies, the Student Assistance General
Provisions, the Federal Family Education Loan (FFEL) Program, the
William D. Ford Federal

[[Page 20535]]

Direct Loan Program, the Teacher Education Assistance for College and
Higher Education (TEACH) Grant Program, the Federal Pell Grant Program,
and the Academic Competitiveness Grant (AGC) and National Science and
Mathematics Access to Retain Talent Grant (National Smart Grant)
Programs. This document makes several corrections to the October 29
final regulations, including in the preamble discussion and the
regulatory text.

DATES: Effective July 1, 2011, except that the corrections to Sec. 
668.58 are effective July 1, 2012.

FOR FURTHER INFORMATION CONTACT: Marty Guthrie, U.S. Department of
Education, 1990 K Street, NW., room 8042, Washington, DC 20006-8014.
Telephone: (202) 219-7031 or via the Internet at:
 Marty.Guthrie@ed.gov.
    If you use a telecommunications device for the deaf (TDD), call the
Federal Relay Service (FRS), toll free, at 1-800-877-8339.
    Individuals with disabilities can obtain this document in an
accessible format (e.g., braille, large print, audiotape, or computer
diskette) on request to the contact listed in this section.

SUPPLEMENTARY INFORMATION:

Electronic Access to This Document

    You may view this document, as well as all other Department of
Education documents published in the Federal Register, in text or Adobe
Portable Document Format (PDF), on the Internet at the following site:
http://www.ed.gov/news/fedregister/index.html. To use PDF, you must
have Adobe Acrobat Reader, which is available free at this site.

    Note:  The official version of this document is the document
published in the Federal Register. Free Internet access to the
official edition of the Federal Register and the Code of Federal
Regulations is available via the Federal Digital System at:
 http://www.gpo.gov/fdsys.

Corrections to Preamble Discussion

    1. On page 66857, in the third column, in the fourth full paragraph
labeled as the Discussion section, the words ``enrolled in payment
periods or assigned to the 2011-12 and subsequent award years'' are
corrected to read ``enrolled in payment periods assigned to the 2011-12
and subsequent award years''.
    2. On page 66858, in the first column, in the second paragraph
labeled as Discussion, the last sentence of that paragraph is corrected
by adding the words ``do not'' between the words ``regulations'' and
``require'', so that the sentence reads: ``While these final
regulations do not require the creation of a State licensing agency, a
State may choose to rely on such an agency to legally authorize
institutions to offer postsecondary education in the State for purposes
of Federal program eligibility.''
    3. On page 66862, the chart and its notes are removed and the
following corrected chart and notes are added in their place to clarify
the items in the third column labeled ``Approval or licensure process''
that correspond to Business entities and Charitable organizations and
to correct the third bulleted note:

NOTE: CHART OMITTED -- SEE PDF FOR CHART

    4. On page 66862, in the first column, under the heading
Institutions considered legally authorized under amended Sec.  600.9,
the fourth bullet is corrected by adding the words ``by name'' prior to
the period of the first sentence so that it reads: ``A nonprofit
institution has a State charter as a postsecondary institution by
name.''
    5. On page 66865, in the second column, the words ``by name'' are
removed from the eighth line in the column so the affected sentence
reads: ``We have amended proposed Sec.  600.9 to provide that, if an
institution is an entity that is established by name as an educational
institution by the State and the State further requires compliance with
applicable State approval or licensure requirements for the institution
to qualify as legally authorized by the State for Federal program
purposes, the State may exempt the institution from the State approval
or licensure requirements based on the institution's accreditation by
one or more accrediting agencies

[[Page 20536]]

recognized by the Secretary or based upon the institution being in
operation for at least 20 years.''
    6. On page 66873, in the first column, under the paragraph labeled
as (2), the sentence is corrected by adding the words ``or entity''
between the words ``person'' and ``based'', so that the sentence reads:
``Whether the commission, bonus, or other incentive payment is provided
to any person or entity based in any part, directly or indirectly, upon
success in securing enrollments or the award of financial aid, which
are defined as activities engaged in for the purpose of the admission
or matriculation of students for any period of time or the award of
financial aid.''
    7. On page 66876, in the third column, under the paragraph labeled
as (2), the sentence is corrected by adding the words ``or entity''
between the words ``person'' and ``based'', so that the sentence reads:
``Whether the commission, bonus, or other incentive payment is provided
to any person or entity based in any part, directly or indirectly, upon
success in securing enrollments or the award of financial aid, which
are defined as activities engaged in for the purpose of the admission
or matriculation of students for any period of time or the award of
financial aid.''
    8. On page 66878, in the first column, in the paragraphs labeled as
the Discussion section, in the third paragraph, the sentence is
corrected by adding the words ``or entity'' after the word ``person''
and deleting the words ``who is'', so that the sentence reads: ``For
this reason, we are making a change to Sec.  668.14(b)(22)(ii) to
provide that institutions may make payments, including profit-sharing
payments, so long as they 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.''
    9. On page 66878, in the paragraph labeled Changes that begins at
the bottom of the first column, the sentence is corrected by adding the
words ``or entity'' after the word ``person'' and deleting the words
``who is'', so that the sentence reads: ``We have revised Sec. 
668.14(b)(22)(ii) to clarify that, notwithstanding the ban in Sec. 
668.14(b)(22)(i), eligible institutions, organizations that are
contractors to eligible institutions, and other entities may make
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.''
    10. On page 66895, in the third column, in the first paragraph, the
words ``or a second disbursement of Pell Grant funds,'' are removed so
that the sentence reads: ``If the student has not begun attendance in
enough courses to establish a half-time enrollment status, the
institution may not make a first disbursement of a Direct Loan to the
student (34 CFR 685.303(b)(2)(i)), although the funds are included as
aid that could have been disbursed in the Return of Title IV Funds
calculation.''
    11. On page 66916, the paragraph labeled Discussion that begins at
the bottom of the second column and ends in the third column is removed
and the following corrected Discussion is added in its place to read as
follows:
    ``Discussion: As noted elsewhere in this preamble, the Department
enforces its regulations, including those in subpart F of part 668
within a rule of reasonableness. We strongly believe that the concerns
voiced by many commenters have ignored this fact. For this reason, we
agree to limit the reach of the ban on making substantial
misrepresentations to statements made by any ineligible institution,
organization, or person with whom the eligible institution has an
agreement to provide educational programs or those that provide
marketing, advertising, recruiting, or admissions services. We have
done this by narrowing the language in Sec.  668.71(b) and the
definition of the term misrepresentation. As a result, statements made
by students through social media outlets will generally not be covered
by these misrepresentation regulations. Also, statements made by
entities that have agreements with the institution to provide services,
such as food service, other than educational programs, marketing,
advertising, recruiting, or admissions services will generally not be
covered by these misrepresentation regulations.''
    12. On page 66917, in the third column, the third paragraph is
corrected to read as follows:
    ``With regard to the commenters who stated that the `capacity,
likelihood, or tendency to deceive or confuse' language will be
confusing, in general, we have no reason to believe that this language
will have any such effect. However, we recognize that the word
`capacity' is subject to a broad range of interpretations, so we have
revised the regulations to state that a misleading statement is one
that has the tendency or likelihood to deceive or confuse.''
    13. On page 66918, in the first column, the Changes paragraph
incorrectly indicated that no changes were made to Sec.  668.71(c).
That paragraph is corrected to read as follows:
    ``Changes: We have revised Sec.  668.71(c) to state that a
misleading statement is one that has the tendency or likelihood to
deceive or confuse.''

Corrections to Regulatory Text


Sec.  668.8  [Corrected]

0
14. On page 66950, in the second column, the introductory text of Sec. 
668.8(l)(2) is corrected by adding the word ``not'' between the words
``has'' and ``identified''.


Sec.  668.14  [Corrected]

0
15. On page 66950, in the third column, Sec.  668.14(b)(22)(ii)(B) is
corrected by:
0
(A) Adding the words ``or entity'' after the word ``person''.
0
(B) Removing the words ``who is''.


Sec.  668.58  [Corrected]

0
16. On page 66957, in the first column, Sec.  668.58(a)(1)(iii) is
corrected by removing the word ``certified''.

0
17. On page 66957, in the second column, Sec.  668.58(a)(2)(iii)(B) is
corrected by removing the words ``Subsidized Stafford Loan or''.

0
18. On page 66957, in the second column, Sec.  668.58(a)(3)(ii)(C) is
corrected by removing the words ``Subsidized Stafford Loan or''.

    Dated: April 7, 2011.
Eduardo M. Ochoa,
Assistant Secretary for Postsecondary Education.
[FR Doc. 2011-8747 Filed 4-12-11; 8:45 am]
BILLING CODE 4000-01-P

Attachments/Enclosures:

This Federal Register is in PDF Format

   

End of Page