[Federal Register Volume 85, Number 158 (Friday, August 14, 2020)]
[Rules and Regulations]
[Pages 49798-49828]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14589]
[[Page 49797]]
Vol. 85
Friday,
No. 158
August 14, 2020
Part IV
Department of Education
-----------------------------------------------------------------------
34 CFR Parts 600, 674 et al.
Federal Perkins Loan Program, Federal Work-Study Programs, Federal
Supplemental Educational Opportunity Grant Program, Federal Family
Education Loan Program, William D. Ford Federal Direct Loan Program,
National Direct Student Loan Program, Teacher Education Assistance for
College and Higher Education Grant Program, Federal Pell Grant Program,
Leveraging Educational Assistance Partnership Program, and Gaining
Early Awareness and Readiness for Undergraduate Programs; Final Rule
Federal Register / Vol. 85, No. 158 / Friday, August 14, 2020 / Rules
and Regulations
[[Page 49798]]
-----------------------------------------------------------------------
DEPARTMENT OF EDUCATION
34 CFR Parts 600, 674, 675, 676, 682, 685, 686, 690, 692, and 694
[Docket ID ED-2019-OPE-0081]
RIN 1840-AD40, 1840-AD44
Federal Perkins Loan Program, Federal Work-Study Programs,
Federal Supplemental Educational Opportunity Grant Program, Federal
Family Education Loan Program, William D. Ford Federal Direct Loan
Program, National Direct Student Loan Program, Teacher Education
Assistance for College and Higher Education Grant Program, Federal Pell
Grant Program, Leveraging Educational Assistance Partnership Program,
and Gaining Early Awareness and Readiness for Undergraduate Programs
AGENCY: Office of Postsecondary Education, Department of Education.
ACTION: Final regulations.
-----------------------------------------------------------------------
SUMMARY: In response to the United States Supreme Court decision in
Trinity Lutheran Church of Columbia, Inc. v. Comer (Trinity Lutheran),
and the United States Attorney General's October 7, 2017 Memorandum on
Federal Law Protections for Religious Liberty pursuant to Executive
Order No. 13798 (Attorney General's memorandum), the Department of
Education (Department or we) amends the current regulations regarding
the eligibility of faith-based entities to participate in the Federal
Student Aid programs authorized under title IV of the Higher Education
Act of 1965, as amended (HEA), and the eligibility of students to
obtain certain benefits under those programs. The Department also
amends the Teacher Education Assistance for College and Higher
Education (TEACH) Grant Program regulations to minimize the number of
TEACH Grants that are converted to Federal Direct Unsubsidized Loans,
and to update, strengthen, and clarify other areas of the TEACH Grant
Program regulations.
DATES:
Effective date: These regulations are effective July 1, 2021.
Implementation date: For the implementation dates of the included
regulatory provisions, see the Implementation Date of These Regulations
section of this document.
FOR FURTHER INFORMATION CONTACT: For information about the provisions
of this regulation, contact Sophia McArdle at (202) 453-6318 or by
email at [email protected].
If you use a telecommunications device for the deaf (TDD) or a text
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.
SUPPLEMENTARY INFORMATION:
Executive Summary
Purpose of This Regulatory Action: Through this regulatory action,
the Department responds to the United States Supreme Court decision in
Trinity Lutheran Church of Columbia, Inc. v. Comer (Trinity Lutheran),
137 S. Ct. 2012 (2017), and the United States Attorney General's
October 7, 2017 Memorandum on Federal Law Protections for Religious
Liberty pursuant to Executive Order No. 13798 (Attorney General's
memorandum) \1\ in order to ensure that members of religious orders are
not denied access to title IV funding or benefits under the title IV
programs. The Department also amends the Teacher Education Assistance
for College and Higher Education (TEACH) Grant Program regulations to
minimize the number of TEACH Grants that are converted to Federal
Direct Unsubsidized Loans, and to update, strengthen, and clarify other
areas of the TEACH Grant Program regulations. A more detailed summary
can be found in the Summary of the Major Provisions of This Regulatory
Action section.
---------------------------------------------------------------------------
\1\ U.S. Att'y Gen. Memorandum on Federal Law Protections for
Religious Liberty (Oct. 6, 2017) (hereinafter ``Mem.''), https://www.justice.gov/opa/press-release/file/1001891/download.
---------------------------------------------------------------------------
Summary of the Major Provisions of This Regulatory Action:
To restore religious liberty to faith-based institutions and
religious students, these regulations--
Restore the ability of members of religious orders, who
also are pursuing courses of study at institutions of higher education,
to participate in the title IV programs by eliminating regulatory
provisions that treat members of religious orders as having no
financial need in certain circumstances.
Allow certain borrowers, who serve as full-time volunteers
in tax-exempt organizations and give religious instruction, conduct
worship service, proselytize, or fundraise to support religious
activities as part of their official duties, to defer repayment of
Federal Perkins Loans, National Direct Student Loans (NDSLs), and
Federal Family Education Loan Program (FFEL) loans.
Provide an interpretation of the PSLF regulations that
permits borrowers who work for employers that engage in religious
instruction, worship services, or proselytizing to qualify for PSLF.
Clarify requirements for private secondary and
postsecondary faith-based institutions' participation in the GEAR UP
program.
Conform language in the Leveraging Educational Assistance
Partnership Program (LEAP) and Federal Work-Study Programs (FWSP)
regulations regarding allowable program activities to statutory
language.
For the TEACH Grant Program, the regulations--
Clarify that grant recipients may satisfy the TEACH Grant
service obligation by teaching for an educational service agency that
serves low-income students.
Clarify the beginning date of the eight-year period for
completing the TEACH Grant service obligation.
Revise the definition of ``highly qualified.''
Update and expand the conditions under which a TEACH Grant
recipient may satisfy the TEACH Grant service obligation by teaching in
a high-need field listed in the Department's annual Teacher Shortage
Area Nationwide Listing (Nationwide List) at https://tsa.ed.gov.
Clarify the service obligation requirements for TEACH
Grant recipients who withdraw from the institution where they received
a TEACH Grant before completing the program for which they received the
grant, then later re-enroll in the same program or in a different TEACH
Grant eligible program at the same academic level.
Provide that a TEACH Grant recipient may request reversal
of a voluntary grant-to-loan conversion so that the recipient can
complete the service obligation, as long as the service obligation is
completed within eight years from when the grant recipient ceased
enrollment at the institution where the recipient received the grant
or, in the case of a student who received a TEACH Grant at one
institution and subsequently transferred to another institution and
enrolled in another TEACH Grant-eligible program, within eight years of
ceasing enrollment at the other institution, excluding periods of
suspension, which the recipient could apply for retroactively.
Expand the information that is provided to TEACH Grant
recipients during initial, subsequent, and exit counseling, and add a
new conversion counseling requirement for grant recipients whose TEACH
Grants are converted to Direct Unsubsidized Loans.
Provide counseling requirements for TEACH Grant recipients
who receive
[[Page 49799]]
reversals of voluntary grant-to-loan conversions.
Add new conditions under which a TEACH Grant recipient may
receive a temporary suspension of the eight-year period for completing
the service obligation and for grant recipients whose grants were
converted to loans in error and who need additional time to complete
the teaching service obligation once the error is corrected.
Remove the current regulatory requirement for TEACH Grant
recipients to certify, within 120 days of completing the program for
which they received TEACH Grants, that they have begun qualifying
teaching service, or that they have not yet begun teaching, but they
intend to satisfy the service obligation.
Simplify the regulations specifying the conditions under
which TEACH Grants are converted to Direct Unsubsidized Loans so that
for all grant recipients, loan conversion will occur only if the
recipient asks the Secretary to convert his or her TEACH Grants to
loans, or if the recipient fails to begin or maintain qualifying
teaching service within a timeframe that would allow the recipient to
satisfy the service obligation within the eight-year service obligation
period.
Specify that the Secretary will send grant recipients, at
least annually, a notice containing detailed information about the
TEACH Grant service obligation requirements, a summary of the grant
recipient's progress toward satisfying the service obligation, and an
explanation of the process by which a grant recipient whose TEACH
Grants are converted to Direct Unsubsidized Loans may request
reconsideration of the conversion if he or she believes that the grants
were converted in error.
Provide that grant recipients will be automatically
provided with a ``statement of error'' when a grant that was
incorrectly converted to a loan is later reconverted to a TEACH Grant.
Describe the actions that the Secretary will take if a
grant recipient's request for reconsideration of the conversion of the
grant to a loan is approved or denied.
Specify that the Secretary will notify a grant recipient
in advance of the date by which he or she will be subject to loan
conversion for failure to begin or maintain qualifying teaching service
within a timeframe that would allow the recipient to complete the
service obligation within the eight-year service obligation period, and
inform the recipient of the final date by which he or she must provide
documentation of teaching service to avoid having his or her grants
converted to loans.
Incorporate statutory changes and update, simplify, and
clarify various areas of the TEACH Grant Program regulations.
Costs and Benefits
As discussed in the Regulatory Impact Analysis section of this
notice, the Department estimates that these final regulations would not
result in significant costs. Changes regarding faith-based institutions
and religious students have minimal impacts on financial aid costs to
the Federal government because these provisions affect relatively few
students and borrowers. Changes regarding the PSLF program to comply
with the Religious Freedom Restoration Act (RFRA) carry potential costs
related to a relatively small increase in the population of eligible
recipients. Changes regarding the GEAR UP program have no estimated
costs as participation in the Department's competitive grant programs
is voluntary, and the program currently serves a small number of
religiously affiliated schools. While changes to the TEACH Grant
Program improve the reporting and documentation process for recipients
and increase the number of teaching positions in which TEACH Grant
recipients could satisfy their service obligations, we do not believe
that the changes would result in a significant increase in the number
of grant recipients.
Implementation Date of These Regulations: Section 482(c) of the HEA
requires that we publish regulations affecting programs under title IV
of the HEA in final form by November 1, prior to the start of the award
year (July 1) to which they apply. However, that section also permits
the Secretary to designate any regulation as one that an entity subject
to the regulations may choose to implement earlier and the conditions
for early implementation.
The Secretary is exercising her authority under section 482(c) of
the HEA to designate the regulatory changes to regulations at title 34,
parts 600, 674, 675, 676, 682, 685, 686, 690, 692, and 694, of the Code
of Federal Regulations included in this document for early
implementation beginning on August 14, 2020, at the discretion of each
institution, or each agency, as appropriate. The Department will
implement the regulations as soon as possible after the implementation
date and will publish a separate notice announcing the timing of the
implementation. Otherwise, the final regulations included in this
document are effective July 1, 2021.
Public Comment: In response to our invitation in the notice of
proposed rulemaking (NPRM) published in the Federal Register on
December 11, 2019 (84 FR 67778), we received 46 comments on the
proposed regulations. We do not discuss comments or recommendations
that are beyond the scope of this regulatory action or that would
require statutory change. Generally, we do not address technical or
other minor changes.
Analysis of Comments and Changes
We developed these regulations through negotiated rulemaking.
Section 492 of the HEA requires that, before publishing any proposed
regulations to implement programs under title IV of the HEA, the
Secretary must obtain public involvement in the development of the
proposed regulations. After obtaining advice and recommendations, the
Secretary must conduct a negotiated rulemaking process to develop the
proposed regulations. The negotiated rulemaking committee reached
consensus on the proposed regulations that we published on December 11,
2019 (84 FR 6778). The Secretary requested comments on the proposed
regulations by January 10, 2020, and 46 parties submitted comments. An
analysis of the comments and of the changes in the regulations since
publication of the NPRM follows.
We group major issues according to subject, with appropriate
sections of the regulations referenced in parentheses. We discuss other
substantive issues under the sections of the regulations to which they
pertain. Generally, we do not address minor, non-substantive changes,
recommended changes that the law does not authorize the Secretary to
make, or comments pertaining to operational processes. We also do not
address comments pertaining to issues that were not within the scope of
the NPRM.
Faith-Based Entities
General Comments
Comments: Many commenters supported the proposed changes, because
the proposed revisions better reflect the demands of the Free Exercise
and Free Speech Clauses of the First Amendment to the United States
Constitution and the current understanding of the Establishment Clause
of the First Amendment. One commenter noted that even if Trinity
Lutheran had not been decided and the Attorney General's memorandum had
not been issued, the Department's proposed changes would be necessary
to bring the Department's regulations into
[[Page 49800]]
compliance with four decades of Supreme Court jurisprudence, including
Widmar v. Vincent,\2\ Rosenberger v. University of Virginia,\3\ and
Witters v. Washington Department of Services for the Blind.\4\ In
particular, the commenter noted that the Free Exercise Clause prohibits
the government from imposing ``special disabilities'' on individuals or
institutions based on their religious views or status. The commenter
also noted that RFRA prohibits the Federal government from
substantially burdening a person's religious exercise unless it can
demonstrate a compelling interest unachievable by less restrictive
means. Another commenter stated that the proposed regulations would
provide relief to qualified student borrowers while maintaining
critical safeguards to prevent Federal funds from being diverted to
religious purposes.
---------------------------------------------------------------------------
\2\ 454 U.S. 263 (1981)(holding unconstitutional a university's
exclusion of religious groups from the use of school facilities made
available to other student groups and holding that such use would
not have the ``primary effect'' of advancing religion in violation
of the Establishment Clause).
\3\ 515 U.S. 819 (1995) (finding that, to abide by the
Establishment Clause, it was not necessary for a university to deny
eligibility to a student publication seeking to print religious
viewpoints).
\4\ 474 U.S. 481 (1986) (holding that the Establishment Clause
permitted a State to extend assistance to a blind person who chose
to study at a religious college to become a pastor, missionary, or
youth director).
---------------------------------------------------------------------------
Discussion: We appreciate the commenters' support.
Changes: None.
Comments: Some commenters supported the faith-based provisions of
the proposed regulations and encouraged the Department to early
implement the new provisions.
Discussion: We agree that institutions should have the ability to
early implement the faith-based provisions of the final regulations
where possible, and that borrowers should similarly benefit from early
implementation by the Department of regulatory changes that affect
their ability to qualify for certain loan repayment benefits.
Instructions regarding early implementation are discussed in the
Implementation Date of These Regulations section of this preamble.
Changes: The Department provides instructions regarding early
implementation in the Implementation Date of These Regulations section
of this preamble.
Comments: Several commenters opposed the Department's faith-based
proposed regulations, arguing that the regulations misapply Supreme
Court precedent. These commenters expressed concerns that the
Department ignored relevant case law in the NPRM, including Mitchell v.
Helms \5\ and Locke v. Davey.\6\ Commenters also asserted that RFRA
does not apply to the Department's current regulations, since a
borrower who desires to perform non-qualifying work should not receive
public benefits.
---------------------------------------------------------------------------
\5\ These commenters cited Justice O'Connor's concurrence, in
which she disagreed with ``the plurality's conclusion that actual
diversion of government aid to religious indoctrination is
consistent with the Establishment Clause'' and explained ``that we
have long been concerned that secular government aid not be diverted
to the advancement of religion.'' 530 U.S. 793, 840 (2000)
(O'Connor, J., concurring in the judgment).
\6\ 540 U.S. 712, (2004) (finding that preventing the use of
public funds for devotional theology instruction does not violate
the Free Exercise Clause).
---------------------------------------------------------------------------
Commenters opined that the current regulations are sufficient to
protect citizens' religious freedoms, and that the proposed regulations
regarding title IV programs would subsidize religious activities. These
commenters expressed concern that the Department's proposed regulations
would favor religious institutions over their secular counterparts and
would therefore violate the Establishment Clause. Commenters pointed to
the facts in Locke v. Davey and argued that the State in that case
refused to extend government funding to Davey, not because of his
religious status, but because of how he proposed to use the funding--to
study theology. These commenters argued that, because the grantees and
recipients at issue in the Department's regulations are religious, they
will use grants or deferments in a manner similar to Davey and will
therefore violate the Establishment Clause. One commenter also pointed
out that the Establishment Clause still prohibits the government from
awarding funds for a religious purpose or with an effect of advancing
religion.
Other commenters stated that Trinity Lutheran has no precedential
value with respect to the Department's regulations. They claimed that
the Court in that decision limited its holding to discrimination based
on religious identity only with respect to playground resurfacing. One
commenter disapproved of the Department's reliance on Trinity Lutheran
to justify its changes but recognized that the Department's changes
would not require public funds to be used for religious purposes, and
therefore expressed support for the changes. But that commenter stated
that the Department did not need to cite Trinity Lutheran to support
its final regulations.
Discussion: The Department agrees with commenters that it must not
violate the Establishment Clause's prohibition on government
advancement of religion. The Department agrees that Congress may bar
the use of government funds for religious purposes consistent with the
Supreme Court's holding in Locke v. Davey if it wished to do so. We
also agree that the Department may provide direct aid to religious
institutions without having the effect of advancing religion as long as
there is no governmental indoctrination, religion is not used to define
recipients, and there is no excessive governmental entanglement with
religion, consistent with Mitchell v. Helms.\7\
---------------------------------------------------------------------------
\7\ 530 U.S. 793 at 808.
---------------------------------------------------------------------------
The Department does not agree, however, with those commenters who
argued that the Establishment Clause requires the Department's previous
prohibitions in order to bar the use of government funds to advance
religion or for religious purposes. Those commenters urged the
Department to go beyond the requirements of the Establishment Clause.
The Supreme Court has made it clear that a ``policy preference'' of
``achieving greater separation of church and State than is already
ensured under the Establishment Clause'' is insufficient to justify
excluding religious organizations from generally available benefits.
Trinity Lutheran, 137 S. Ct. at 2024 (quoting Widmar v. Vincent, 454
U.S. 263, 276 (1981)). Indeed, there is substantial Supreme Court
precedent supporting the proposition that the government must not
discriminate against individuals or entities on the basis of their
religious identity. See, e.g., Trinity Lutheran, 137 S. Ct. at 2019;
Church of the Lukumi Babalu Aye, Inc. v. Hialeah, 508 U.S. 520, 533,
542 (1993); McDaniel v. Paty, 435 U.S. 618, 626 (1978) (plurality
opinion); Everson v. Bd. of Educ. of Ewing, 330 U.S. 1, 16 (1947).
Some commenters also stated the Department's changes to eligibility
requirements for certain aid would have the effect of advancing
religion. The Department's aid will not advance religion, nor do the
Department's changes require aid to be used for religious purposes. In
the final regulations, the Department is correcting prior rules that
disfavored faith-based institutions and students--not, as some
commenters worried, to favor them over their secular counterparts. The
changes affecting faith-based institutions and individuals in the final
regulations fall into two broad categories: First, the eligibility of
faith-based entities to participate in Federal Student Aid programs
under title IV of the HEA; and second, the
[[Page 49801]]
eligibility of students to obtain benefits under those programs.
Accordingly, the final rules permit members of a religious order to
receive aid under title IV programs, including the Federal Pell Grant
Program, the Federal Perkins Loan Program, the FWSP, the Federal
Supplemental Educational Opportunity Grant Program (FSEOG) Program, the
FFEL Program, and the Direct Loan Program. Also, the rules allow
private secondary and postsecondary faith-based educational
institutions to participate in GEAR UP. The final regulations set
religious individuals and entities on equal footing with their secular
counterparts by allowing such individuals and entities to qualify for
the same aid already available to nonreligious individuals and
entities. Therefore, such treatment is correcting an inequality, not
creating one.
Because of such inequality, the Department does not agree with the
commenter who argued that RFRA is not implicated by the Department's
current rules excluding religious individuals and entities from the
ability to participate in generally available benefit programs.
Congress has tasked the Department with the duty to ensure that the
Department's actions, including its regulatory actions, do not
substantially burden a person's exercise of religion (absent a
compelling government interest and a showing that the burden is the
least restrictive means of furthering that interest). 42 U.S.C. 2000bb,
et seq. Because the current regulations discriminate against religious
groups and deny individuals the ability to participate in important
government programs on the basis of their religious status, the current
regulations likely amount to a substantial burden on those entities'
exercise of religion.
RFRA defines ``religious exercise'' as ``any exercise of religion,
whether or not compelled by, or central to, a system of religious
belief.'' 42 U.S.C. 2000bb-2(4) (citing 42 U.S.C. 2000cc-5). The
current rules impose a ``penalty'' on these individuals' free exercise
of religion, Trinity Lutheran, 137 S. Ct. at 2021--which they engage in
by becoming members of religious orders, attending religious
institutions, participating in or working at religious organizations,
among other ways--by requiring them to ``choose between their religious
beliefs and receiving a government benefit.'' Id. at 2023 (quoting
Locke, 540 U.S. at 720-21); see Sherbert v. Verner, 374 U.S. 398, 404
(1963) (finding a substantial burden where it was ``apparent that
appellant's declared ineligibility for benefits derives solely from the
practice of her religion,'' forcing her ``to choose between following
the precepts of her religion and forfeiting benefits, on the one hand,
and abandoning one of the precepts of her religion in order to accept
work, on the other hand''); see also 42 U.S.C. 2000bb(b)(1) (``The
purposes of this chapter are--(1) to restore the compelling interest
test as set forth in Sherbert v. Verner, 374 U.S. 398 (1963) and
Wisconsin v. Yoder, 406 U.S. 205 (1972) and to guarantee its
application in all cases where free exercise of religion is
substantially burdened . . .'').
And the Department's status-based restrictions are neither
necessary to further a compelling government interest, nor are they the
least restrictive means of furthering any such interest. Therefore,
RFRA would require the Department to alleviate the substantial burden
imposed by its regulations.
The Department also disagrees with one commenter's suggestion that
RFRA does not apply at all; the statute binds the ``Government'' which
includes the Department in its regulating capacity, 42 U.S.C. 2000bb-
1(a), and further ``applies to all Federal law, and the implementation
of that law, whether statutory or otherwise, and whether adopted before
or after November 16, 1993.'' 42 U.S.C. 2000bb-3(a).
The Department disagrees with commenters who claimed that the
Department's current rules are sufficiently protective of religious
freedom. The Supreme Court has upheld some religious-funding
restrictions,\8\ but those decisions are in considerable tension with
more recent Supreme Court cases that recognized that the First
Amendment permits--and in some situations, requires--the government to
provide religious organizations with access to government property
under neutral and generally applicable rules. Additionally, the Supreme
Court has repudiated the principle that the Establishment Clause bars
government aid from flowing from religiously neutral government
programs to religious institutions. See, e.g., Mitchell v. Helms, 530
U.S. at 835 (plurality opinion) (overruling Wolman v. Walter, 433 U.S.
229 (1977) and Meek v. Pittenger, 421 U.S. 349 (1975)); id. at 837
(O'Connor, J., concurring in the judgment) (same); Agostini v. Felton,
521 U.S. 203, 235 (overruling Aguilar v. Felton, 473 U.S. 402 (1985)
and School District of the City of Grand Rapids v. Ball, 473 U.S. 373
(1985)).
---------------------------------------------------------------------------
\8\ See Tilton v. Richardson, 403 U.S. 672, 683 (1971), and
Committee for Public Education & Religious Liberty v. Nyquist, 413
U.S. 756, 762 (1973).
---------------------------------------------------------------------------
The Supreme Court has made it clear that the government should be
``neutral in its relations with groups of religious believers and non-
believers; [the Establishment Clause] does not require the state to be
their adversary.'' Everson v. Board of Education, 330 U.S. 1, 18
(1947). And a law that burdens religious practice that is not neutral
and not generally applicable ``must undergo the most rigorous of
scrutiny'' under the Free Exercise Clause. Church of the Lukumi Babalu
Aye, Inc. v. City of Hialeah, 508 U.S. 520, 546 (1993).
In Trinity Lutheran, the Court reiterated that this
nondiscrimination principle of the Free Exercise Clause applies to
government benefits and funding. The Court in that case rejected the
State's interest in ``skating as far as possible from religious
establishment concerns'' as a basis for categorically excluding a
religious organization from a generally available funding program.
Trinity Lutheran, 137 S. Ct. at 2024. The Court applied ``the most
exacting scrutiny'' to the government program, finding that it
``expressly discriminate[d]'' against an entity that would be otherwise
eligible for the government grant but for that entity's religious
character. Id.
That same basic defect is present in the Department's current
regulations: But for the entities' and individuals' religious
character, they would have qualified for government aid under title IV.
For example, under current 34 CFR 674.9(c)(1), a student is prohibited
from receiving a Federal Perkins Loan if that student was a ``member of
a religious order'' that has as its primary objective ``the promotion
of ideals and beliefs regarding a Supreme Being'' and which required
its members to forego monetary support and receive subsistence support
from the order. Because the restriction only applies to individuals
based on an individual's members in a religious order, that restriction
is based on the individual's religious status. The Department believes
that otherwise-eligible students and institutions should not be denied
participation in title IV programs based solely on their religious
identities and, furthermore, that the Free Exercise Clause prohibits
such status-based religious discrimination.
The Department considered commenters' concerns that its changes
amount to government subsidies for religious activities. These
commenters included discussions of Locke v. Davey, which the Supreme
Court distinguished in Trinity Lutheran as a case in which the
recipient was denied a scholarship not because of who he was, but
because
[[Page 49802]]
of how he proposed to use the government funding--to prepare for
ministry. See Trinity Lutheran, 137 S. Ct. at 2023. Under this
analysis, the Court demonstrated that the constitutionality of an aid
restriction depends on whether the restriction is predicated on the
recipient's religious status (which is presumptively unconstitutional),
or whether it is based upon how the Federal aid will be used (which is
a permissible restriction under Locke but not required under the Free
Exercise Clause). Thus, a state could disallow or allow federal aid to
be used for religious instruction under Locke.
Some commenters argued that the current regulations fall within the
latter category--that allowing religious individuals and entities to
qualify for Federal aid would amount to promoting religion, because the
recipients would use their aid to practice their religion. But those
regulations deny eligibility based on a person's membership in a
religious order (see, e.g., 34 CFR 674.9), or because a person chose to
perform volunteer work for a religious organization providing services
to the community (see, e.g., 34 CFR 674.35(c)(5)(iv)). These
restrictions are on the basis of a person's or entity's religious
identity; they are not use-based restrictions. Additionally, Locke v.
Davey held that the government may refuse to use government funds for a
degree in devotional theology; that decision does not require the
government to refuse to do so. The Department's determination of how to
use any leeway allowed under Locke v. Davey must be guided by policy
and legal considerations, including the statutory mandate of RFRA.
The Supreme Court has long held that the government may furnish
``general . . . benefits to all its citizens without regard to their
religious belief.'' Everson, 330 U.S. at 16. In cases following
Everson, the Court consistently affirmed that an important factor in
upholding Government aid programs against an Establishment Clause
attack is those programs' ``neutrality towards religion.'' Good News
Club v. Milford Central School, 533 U.S. 98, 114 (2001) (quoting
Rosenburger, 515 U.S. at 839). The Constitution is ``respected, not
offended,'' when the Government employs neutral criteria and extends
benefits to ``recipients whose ideologies and viewpoints, including
religious ones, are broad and diverse.'' Rosenberger, 515 U.S. at 839
(emphasis added). In Mitchell, a plurality of justices endorsed the
bright-line rule that neutral, generally available Government aid does
not violate the Establishment Clause. See 530 U.S. at 809-14. Later, in
Zelman v. Simmons-Harris, the Supreme Court held that a school voucher
program did not need to exclude religious recipients to comply with the
Establishment Clause. See Zelman, 536 U.S. 639, 653-60 (2002). The U.S.
Department of Justice, Office of Legal Counsel has likewise held that,
in some circumstances, the Government may provide aid to sectarian or
religious entities.\9\ And finally, the Establishment Clause does not
prohibit religious organizations from receiving Government benefits
such as tax deductions and exemptions, which direct significant
economic benefits to both religious and secular organizations, on an
equal basis with secular organizations. See Walz, 397 U.S. at 674;
Zelman, 536 U.S. at 665-68 (O'Connor, J., concurring) (discussing tax
deductions and exemptions).
---------------------------------------------------------------------------
\9\ See Authority of the Department of the Interior to Provide
Historic Preservation Grants to Historic Religious Properties Such
as the Old North Church, 27 Op. O.L.C. 91, 114 (2003) (concluding
that the Department of the Interior could provide historic
preservation grants to renovate a still-active house of worship);
Authority of FEMA to Provide Disaster Assistance to Seattle Hebrew
Academy, 26 Op. O.L.C. 114, 129 (2002) (opining that FEMA could
provide disaster relief funds for reconstruction after an earthquake
to a Hebrew secondary school).
---------------------------------------------------------------------------
Commenters also argued that the Department errs in relying on
Trinity Lutheran. They argued that, according to footnote 3 in the
decision, Trinity Lutheran applies only to the narrow factual
circumstance of a church-run school seeking to compete for a playground
resurfacing grant.
But footnote 3 is not part of the majority opinion in Trinity
Lutheran, because two of the six Justices in the majority opinion
joined the opinion ``except as to footnote 3.'' Trinity Lutheran, 137
S. Ct. at 2016. In any event, footnote 3 does not limit the force of
the Court's reasoning.
The Court has long held that ``[w]hen an opinion issues for the
Court, it is not only the result but also those portions of the opinion
necessary to that result by which we are bound.'' Seminole Tribe of
Florida v. Florida, 517 U.S. 44, 67 (1996). And even broadly applicable
principles discussed by the Supreme Court often lead to the creation of
generally applicable legal rules. See Antonin Scalia, The Rule of Law
as a Law of Rules, 56 U. Chi. L. Review 1175, 1175-81 (1989). Indeed,
in explaining why he did not join footnote 3, Justice Gorsuch asserted
that the court's cases are governed by general principles, rather than
ad hoc improvisations.'' Trinity Lutheran, 137 S. Ct. at 2023 (quoting
Elk Grove Unified School Dist. v. Newdow, 542 U.S. 1,25 (2004)
(Gorsuch, J., concurring in part)). Here, the majority opinion in
Trinity Lutheran recognized that the Court had ``repeatedly confirmed
that denying a generally available benefit solely on account of
religious identity imposes a penalty on the free exercise of religion
that can be justified only by a state interest of the highest order.''
Id. at 2019 (majority op.). It confirmed that this principle applies to
``the refusal to allow [a Church plaintiff]--solely because it is a
church--to compete with secular organizations for a grant,'' id. at
2022, and it rejected the argument that a ``policy preference for
skating as far as possible from religious establishment concerns''
could justify such refusal, id. at 2024. This reasoning is persuasive
and applicable here.
Changes: None.
Comments: One commenter raised concerns that the Department
subjected constitutional principles to negotiated rulemaking
inappropriately and that there were few stakeholders with expertise in
church and State issues on the negotiated rulemaking committee.
Discussion: The HEA requires the Department to regulate all issues
relating to title IV of the HEA through a negotiated rulemaking
process. The Department followed the requirements of the HEA when
negotiating these issues. To ensure adequate expertise on church and
State issues, the Department created a subcommittee that met three
times for a total of six days to discuss thoroughly the issues relating
to church and State, including extensive discussion regarding the
constitutional issues implicated by the proposed regulations. The
subcommittee consisted of nine members, all of whom had extensive
knowledge and experience with respect to church and State issues.
Representatives of national organizations that have litigated both
sides of these issues in Federal courts served on the subcommittee.
Subcommittee representatives presented their proposals and analysis
to the full committee multiple times during the negotiated rulemaking.
Both sides of issues, those for and against the Department's proposed
amendments to the regulations, were presented to the full committee.
Additionally, multiple members of the full committee worked for faith-
based organizations or otherwise had experience working on church and
State issues.
The Department agrees with the commenters that the work of the
negotiated rulemaking committee cannot overrule the Constitutional
opinions of the U.S. Supreme Court, including cases like Trinity
Lutheran. As a result, the Department has tailored
[[Page 49803]]
the final rule to be consistent with those opinions, as further
described herein.
Changes: None.
Student Eligibility (Sec. 674.9); Student Eligibility (Sec. 675.9);
Student Eligibility (Sec. 676.9); Eligibility of Borrowers for
Interest Benefits on Stafford and Consolidation Loans (Sec. 682.301);
Borrower Eligibility (Sec. 685.200); Determination of Eligibility for
Payment (Sec. 690.75)
Comments: The Department received comments on its proposal to
remove provisions in Sec. Sec. 674.9, 675.9, 676.9, 682.301(a)(2),
685.200, and 690.75 that specify that a member of a religious order is
considered to have no financial need if the religious order has as its
primary objective the promotion of ideals and beliefs regarding a
supreme being, requires its members to forgo monetary or other support
substantially beyond the support its provides, and directs the member
to pursue the course of study or provides subsistence support to its
members.
Some commenters agreed with the proposed removal, indicating that
the current language violates the Free Exercise and the Free Speech
Clauses. Specifically, commenters noted that religious observance,
including vows of poverty and obedience, are protected by the First
Amendment of the United States Constitution and should not be cited as
a reason for exclusion from Federal student aid programs.
Other commenters opposed the proposed removal, because they believe
that without the current regulatory language, the Department would be
subsidizing inherently religious activities, such as religious
education and proselytizing, in violation of the Establishment Clause.
One commenter further indicated that the procedural history of the
regulations indicates that the rationale for the current regulations is
not based on belief but on real-world considerations of financial
status of individuals in religious orders who may receive financial
subsidies even if they do not have an income.
Discussion: The Department thanks commenters who supported the
proposed change. The Department disagrees that the proposed regulations
would cause the Department to subsidize inherently religious
activities. The Department would merely be providing financial aid for
otherwise eligible students to attend postsecondary education
regardless of their membership in a religious order and without
considering that order's primary objective. Financial aid funds would
go to individual students who have demonstrated financial need to
attend postsecondary education and would not fund religious activities.
An independent decision by a student aid recipient to participate in
inherently religious activities does not create a government subsidy of
those activities.
The formulas for determining financial need in U.S. Code Part F
consider subsidies received by students from any entity, including
religious and non-religious entities. The current regulatory language
that specifies that members of religious orders are presumed not to
have need singles out such members for differential treatment and is
likely not narrowly tailored to address a compelling interest. Such a
provision also unnecessary for determining financial need as the
formulas are themselves sufficient.
Changes: None.
Deferment of Repayment--Federal Perkins Loans Made Before July 1, 1993;
Deferment of Repayment--NDSLs Made on or After October 1, 1993
Comments: Many commenters supported proposed changes to Sec. Sec.
674.35 and 674.36 that would remove language that denies deferment of
repayment of certain Federal loans for borrowers working as volunteers
if their volunteer duties include giving religious instruction,
conducting worship services, proselytizing, or fundraising to support
religious activities. Many commenters agreed with the Department that
in some cases the provision of secular services is inextricably
intertwined with inherently religious activities and that deferment
provisions in the current regulations may violate the Free Exercise and
Free Speech Clauses and RFRA. These commenters noted that the Federal
government will not violate the Establishment Clause if it permits
volunteers engaged in religious activities to defer loan repayment
based on religiously neutral criteria. The commenters cited Zelman v.
Simmons-Harris, 536 U.S. 639 (2002), Mitchell v. Helms 530 U.S. 793
(2000), and other Supreme Court cases in support of their position.
Other commenters opposed the removal of these provisions,
indicating that allowing a borrower to be eligible for subsidies if the
borrower works on inherently religious activities would be directly
subsidizing individuals engaged in religious activities in violation of
the Establishment Clause.
Discussion: The Department thanks the commenters for their support.
The Department agrees with the commenters who argued that the
Establishment Clause would not be violated by the removal of these
provisions. The Department believes that removal of these provisions is
necessary to avoid violations of individuals' rights to freely exercise
their religions and their free speech rights. These provisions do not
violate the Establishment Clause because the Supreme Court has long
held that the government may furnish general benefits to all its
citizens without regard to their religious belief or their membership
in a particular religious organization or sect. See Everson, 330 U.S.
at 16 (holding that the State ``cannot exclude individual Catholics,
Lutherans, Mohammedans, Baptists, Jews, Methodists, Non-believers,
Presbyterians, or the members of any other faith, because of their
faith, or lack of it, from receiving the benefits of public welfare
legislation.''). In cases following Everson, the Court consistently
affirmed that an important factor in upholding Government aid programs
against an Establishment Clause attack is those programs' ``neutrality
towards religion.'' Good News Club v. Milford Central School, 533 U.S.
98, 114 (2001) (quoting Rosenburger, 515 U.S. at 839). The Constitution
is ``respected, not offended,'' when the Government employs neutral
criteria and extends benefits to ``recipients whose ideologies and
viewpoints, including religious ones, are broad and diverse.''
Rosenberger, 515 U.S. at 839 (emphasis added). In Mitchell, a plurality
of justices endorsed the bright-line rule that neutral, generally
available government aid does not violate the Establishment Clause. See
530 U.S. at 809-14.
Under the current regulations, a borrower may be eligible for
deferment if working as a full-time volunteer for a tax-exempt
organization providing services to low-income persons and their
communities to assist them in eliminating poverty and poverty-related
human, social, and environmental conditions for at least one year.
However, the regulation disqualifies that same borrower from deferment
if he or she, as part of his or her duties, gives religious
instruction, conducts worship services, engages in religious
proselytizing, or engages in fundraising to support religious
activities. The regulations thus disfavor borrowers participating in
otherwise-eligible public services merely because that public service
is performed from a religious perspective. For some borrowers, these
restrictions may also impose a substantial burden on their free
exercise of religion by forcing them to choose between such religious
exercise and eligibility for loan deferments. No compelling government
[[Page 49804]]
interest warrants the imposition of such burdens. Ultimately, the
eligibility requirements in these final regulations maintain the
government's stance of neutrality towards religion by not disfavoring a
particular type of public service.
The Supreme Court has noted the distinction, for Establishment
Clause purposes, between direct provision of government aid to a
religious programs and indirect government aid that flows to religious
programs based on private choice in its Establishment Clause cases. For
example, in Zelman v. Simmons-Harris, the Supreme Court held that a
school voucher program did not need to exclude religious recipients to
comply with the Establishment Clause where funding would only reach
such recipients following the private choice of the individual using
the voucher. See Zelman, 536 U.S. 639, 653-60 (2002). Likewise, in this
case, the borrower receiving the benefit of loan deferment under the
regulation makes a private choice between different volunteer options
in the community and therefore does not create an Establishment Clause
problem by choosing to volunteer with a religious entity performing
religious tasks. As a result of the intervening private choice of the
borrower, ``no imprimatur of state approval can be deemed to have been
conferred on any particular religion, or on religion generally'' by the
borrower's receipt of a deferment for volunteer work. See Zelman, 536
U.S. at 650 (internal citations, quotation marks omitted).\10\
---------------------------------------------------------------------------
\10\ See also Am. Jewish Congress v. Corp. for Nat'l & Cmty.
Serv., 399 F.3d 351 (D.C. Cir. 2005) (government agency placing
teachers in religious schools did not violate Establishment Clause
when some teachers chose to teach religion as well as secular
subjects).
---------------------------------------------------------------------------
Changes: None.
Eligible Employers and General Conditions and Limitation on Employment
(Sec. 675.20)
Comments: The Department received comments on proposed changes to
Sec. 675.20 that would replace language in the FWSP regulations with
language from Sec. 443(b)(1)(C) of the HEA to clarify that work
performed under the FWSP may ``not involve the construction, operation,
or maintenance of so much of any facility as is used or is to be used
for sectarian instruction or as a place for religious worship.''
Several commenters stated that the statutory language is problematic
but is clearer than the current regulatory language.
One commenter indicated that both the statute and the regulation
fail to define ``sectarian instruction.'' That commenter wondered
whether the term includes only inherently religious instruction or
whether it also includes efforts to integrate religious convictions
into other subjects.
Several commenters indicated that the statutory language includes
unjustified discrimination against religion, religious individuals, and
religious activities in violation of the Free Exercise and Free Speech
Clauses as well as RFRA. One commenter noted that the Department has
the authority and an independent duty to obey the Constitution and RFRA
regardless of the statutory language in the HEA.
One commenter contended that the changes would allow FWSP students
to serve in facilities dedicated solely to religious functions which
would violate the separation of church and State.
Discussion: The Department agrees with commenters that it has an
independent duty to obey the Constitution and RFRA. The Department does
not believe the statute is clearly unconstitutional under current
Supreme Court precedent. Even when the Government has established a
secular, neutral aid program, it may retain an interest in defining the
program to exclude certain religious uses. See Religious Restrictions
on Capital Financing for Historically Black Colleges and Universities,
2019 WL 4565486 O.L.C. at 19. Under Locke v. Davey, the government--in
this case, Congress--may lawfully decline to subsidize religious
activity. See Locke, 540 at 720-21. It therefore does not appear that
the FWSP restriction violates the Free Exercise Clause.
Nor does the Department believe that the restriction necessarily
runs counter to RFRA. It is true that RFRA applies retrospectively and
prospectively to ``all Federal law, and the implementation of that law,
whether statutory or otherwise, and whether adopted before or after''
its effective date, 42 U.S.C. 2000bb-3(a), including the FWSP
restriction here. On the one hand, because the restriction is religious
in nature, it is possible that the restriction could substantially
burden the exercise of religion by institutions of higher education
and/or individual student participants. The restriction appears to be
aimed at preventing the use of government funds to support religious
activities. However, the restriction is neither required by the
Establishment Clause in light of the need for intervening private
choice by an institution of higher education and an individual student
participant before program funds could be linked with religious
activity, see Zelman, 536 U.S. 639, 653-60 (2002), nor is it a
compelling government interest for purposes of RFRA, as any remaining
``policy preference for skating as far as possible from religious
establishment concerns'' cannot qualify as a compelling government
interest, see Trinity Lutheran, 137 S. Ct. at 2024. Thus, under RFRA
the Department cannot enforce the FWSP restriction against any person
whose exercise of religion is substantially burdened by such
application. As a result, the Department has added language to that
effect in the regulation to make clear how RFRA applies. Of course,
even in the absence of such additional clarifying language, the
Department interprets all of its statutes and regulations through the
lens of RFRA because none of its statutes contains an explicit
exemption from RFRA. 42 U.S.C. 2000bb-3(b).
To the extent that the FWSP restriction does not substantially
burden a person's exercise of religion, however, it does not appear to
violate the Constitution or RFRA.
In otherwise amending the regulation to conform to the statute, the
Department intends to provide as much clarity and flexibility as
possible within the confines of the HEA and to ensure adherence to the
statute. Chapels and other religious structures are often part of
larger multi-use facilities on college campuses. The Department wishes
to clarify that FWSP students may construct, operate, or maintain
portions of multiuse structures that are not dedicated solely to
religious purposes.
The Department disagrees with commenters who claimed that, under
the statutory language, FWSP students would be involved in the
construction, operation, or maintenance of facilities dedicated solely
to religious functions. The statutory language precludes such
opportunity by specifying that work performed under the FWSP may ``not
involve the construction, operation, or maintenance of so much of any
facility as is used or is to be used for sectarian instruction or as a
place for religious worship.'' Therefore, if a building is used solely
for sectarian instruction or as a place for religious worship, FWSP
employment may not include the construction, operation, or maintenance
of that building. For large, multi-use structures, however, FWSP
employment may include the construction, operation, or maintenance of
that building.
While neither the statute nor the current regulations define the
term ``sectarian instruction,'' the Department follows a similar
definition to that set forth in a published opinion by the Department
of Justice's Office of Legal Counsel. See Religious Restrictions on
Capital Financing for Historically Black Colleges and Universities,
2019 WL
[[Page 49805]]
4565486 O.L.C. at 18. In its opinion, the Office of Legal Counsel
defined the word ``sectarian'' in the phrase ``sectarian activities''
to mean ``devotional activities.'' Id. According to Black's Law
Dictionary, sectarian instruction would ordinarily be defined as
instruction that ``supports a particular religious group and its
beliefs,'' 1557 (10th ed. 2014), and Webster's Third would define it as
instruction that has ``the characteristics of one or more sects of a
religious character,'' Webster's Third New International Dictionary
2052 (2002). Thus, instruction that is predominately devotional and
religious is ``sectarian instruction.'' Sectarian instruction would
include instruction such as Christian or Jewish homilies or Islamic
khutbahs. Instruction related to the provision of generally secular
services does not constitute sectarian instruction, including various
types of counseling or educational instruction that may include some
sectarian or religious content but that is not predominately religious
or devotional in nature. Individuals or organizations may integrate
religious ideas or teachings into otherwise secular instruction without
engaging in sectarian instruction.
The Department concludes that this reading of the restriction is
independently justified in light of the canon of constitutional
avoidance. See, e.g., Clark v. Martinez, 543 U.S. 371, 381-82 (2005). A
broad reading of the restriction could potentially cover all buildings
where instruction takes place at a religious institution, potentially
converting the restriction from a use-based restriction into the kind
of status based restriction expressly prohibited in Trinity Lutheran,
137 S. Ct. at 2023. In order to avoid this potential Free Exercise
Clause problem, the Department construes the restriction narrowly to
only cover instruction that is predominately devotional and religious.
In addition, the Department's interpretation of ``sectarian
instruction'' is independently supported by RFRA. A broad reading of
the restriction could cover all buildings where instruction takes place
at a religious institution, potentially forcing the institution to
choose between participation in the FWSP and continuing in its
religious exercise. This would place a substantial burden on such
institutions' exercise of religion without advancing any compelling
government interest by the least restrictive means and would therefore
run counter to RFRA. See, e.g., Hobby Lobby Stores, Inc. v. Sebelius,
723 F.3d 1114, 1141 (10th Cir. 2013) (en banc), aff'd sub nom. Burwell
v. Hobby Lobby Stores, Inc., 573 U.S. 682 (2014). A denial of, or
condition on the receipt of, government benefits may substantially
burden the exercise of religion if such denial or condition exerts
significant pressure on an adherent to modify his or her religious
observance or practice. See U.S. Att'y Gen. Memorandum on Federal Law
Protections for Religious Liberty (Oct. 6, 2017); Sherbert v. Verner,
374 U.S. 398, 405-06 (1963); Hobbie v. Unemployment Appeals Comm'n of
Fla., 480 U.S. 136, 141 (1987); Thomas v. Review Board of Indiana
Employment Security Div., 450 U.S. 707, 717-18 (1981). And for the
reasons explained above, such a broad restriction would neither be
required by the Establishment Clause, nor justified by a compelling
governmental interest. A narrower reading of ``sectarian instruction''
avoids these problems and, thus, would appear to be more consistent
with congressional intent to impose this restriction without exempting
it from RFRA.
Changes: The Department amends the proposed regulation to specify
the narrow definition of sectarian instruction and to include the
exception for situations involving a substantial burden on a person's
exercise of religion under RFRA.
Deferment (Sec. 682.210)
Comments: In response to a directed question in the NPRM, the
Department received several comments stating that in order to provide
consistent treatment of deferments across loan programs, we should
remove Sec. 682.210(m)(1)(iv), which states that certain FFEL loans
cannot be deferred for volunteer work unless the borrower ``does not as
part of his or her duties give religious instruction, conduct worship
services, engage in religious proselytizing, or engage in fund-raising
to support religious activities.'' Commenters indicated that it would
be unfair and inconsistent to treat eligibility for loan deferment
under the FFEL program differently than under the Perkins and NDSL
programs.
Discussion: The Department agrees with commenters that there should
be consistent treatment of loan deferments across loan programs.
Changes: The Department has removed Sec. 682.210(m)(1)(iv).
Public Service Loan Forgiveness Program (Sec. 685.219)
Comments: The Department received many comments on the proposed
changes to Sec. 685.219 relating to the PSLF program. In particular,
commenters were concerned about proposed Sec. 685.219(c)(4), which
would provide that time spent participating in religious instruction,
worship services, or any form of proselytizing while employed by a non-
profit organization under section 501(c)(3) of the Internal Revenue
Code would not be included toward meeting the full-time requirement.
Many commenters asserted that both the original regulatory language
and the proposed change violate RFRA, because the regulations force
borrowers to choose between exercising their religion and obtaining a
meaningful government benefit. Also, commenters stated that the
proposed regulations would unlawfully continue to exclude those who are
participating in religious exercise and speech from qualifying for the
generally available benefit of loan forgiveness. Commenters believed
that, under the proposed rules, borrowers could be compelled to work
for secular organizations over religious organizations in order to
obtain loan forgiveness. From a practical perspective, commenters noted
that religious activities may be intertwined with secular work, making
it difficult to clearly separate out the hours and creating uncertainty
and confusion on the part of the applicants and employing
organizations. These commenters indicated that religious activities
should not be excluded in the calculation of work hours for PSLF.
Some commenters stated that the Establishment Clause does not
require borrowers eligible for loan forgiveness to exclude religious
activities from their full-time work hours. Commenters also contended
that the proposed provision would raise a significant threat of
entanglement under the Establishment Clause when the government tries
to evaluate whether a religious organization's employees are properly
defining work that touches on religious education or worship.
Further, commenters asserted that because the proposed language is
not the least restrictive means of advancing any government interest,
the language also violates RFRA.
One commenter also raised concerns that the terms ``religious
instruction,'' ``worship services,'' and ``proselytizing'' are not
defined and are not workable. For example, the commenter argued that
worship cannot be separated from the teaching of moral values, and that
it is not clear whether proselytizing includes secular viewpoints. The
commenter stated that use of these terms has the effect of excluding
people engaged in religious speech. The commenter argued
[[Page 49806]]
that it would be more appropriate to treat all applicants for PSLF
equally.
Other commenters expressed concern that it would violate the
Establishment Clause if borrowers received loan forgiveness to work on
inherently religious activities. One commenter argued that the
Department's justification for this proposal misinterprets the decision
in Trinity Lutheran and that RFRA does not apply to this situation in
which the Government is not preventing the borrower from performing the
desired religious activities and does not deny benefits to religious
persons engaging in qualified work. These commenters urged the
Department to maintain the proposed language as published in the NPRM.
Commenters stated that using RFRA to create a religious exemption
for PSLF work requirements is at odds with the tailored approach
required by RFRA, and that RFRA does not give the Department authority
to adjudicate claims it anticipates might happen and create blanket
exemptions. Instead, RFRA requires a ``careful, individualized, and
searching review.''
Many commenters encouraged the Department to adopt the proposed
language or to maintain the current regulatory language.
Discussion: The Department is persuaded that the proposed
regulations requiring borrowers to exclude work spent on religious
activities from full-time work is not required by the Establishment
Clause and may pose unnecessary burdens. The Establishment Clause does
not require that borrowers work solely for secular organizations to
obtain loan forgiveness.\11\
---------------------------------------------------------------------------
\11\ Zelman v. Simmons-Harris, 536 U.S. 639, 652 (2002);
Mitchell v. Helms, 530 U.S. 793, 829 (2000); Rosenberger v. Rector &
Visitors of Univ. of Virginia, 515 U.S. 819, 839 (1995); Everson v.
Bd. of Ed. of Ewing Twp., 330 U.S. 1, 17 (1947).
---------------------------------------------------------------------------
The Department also recognizes that there are practical
difficulties associated with separating religious work from public
service work, as the two may not always be cleanly divided. There would
be burdens on both the borrowers in attempting to record the different
time spent on religious activities and on the Department in overseeing
such a restriction. Moreover, concerns about potentially overbroad
interpretations of the religious activities that could not count toward
full-time work could dissuade borrowers from working for religious
organizations or pressure them to forgo the economic benefits that flow
from loan forgiveness. And to the extent that the proposed language was
interpreted broadly to disqualify from loan forgiveness individuals who
hold particular views about the religious nature of their public
service--for example, those who view their service as a form of
proselytization even if it contains no explicit call to conversion--
would raise Free Exercise or RFRA concerns. As a result, the Department
has not included proposed Sec. 685.219(c)(4) in the final regulations.
The final regulations will set religious individuals and entities on
equal footing with their secular counterparts by allowing such
individuals and entities to qualify for the same aid already available
to nonreligious individuals and entities.
The Department does not agree with commenters who argued that RFRA
is not implicated by the Department's current rules excluding religious
individuals and entities from participation in generally available
benefit programs. Nor does the Department agree with commenters who
argued that the Department is using RFRA to create overly broad,
blanket exceptions. The rule is designed to both correct existing RFRA
violations under the current regulations and to prevent future
violations. Congress has tasked the Department with the duty to ensure
that the Department's regulations do not substantially burden a
person's exercise of religion (absent a compelling government interest
and a showing that the burden is the least restrictive means of
furthering that interest). 42 U.S.C. 2000bb, et seq. This mandate, as
previously discussed, applies to ``all Federal law, and the
implementation of that law, whether statutory or otherwise.'' 42 U.S.C.
2000bb-3(a). Thus, the Department's establishment of this regulation
clearly falls under the mandate of RFRA.
Because the current regulations discriminate against religious
groups and deny individuals the ability to participate in important
government programs on the basis of their religious status, the current
regulations likely amount to a substantial burden on those entities'
exercise of religion.
RFRA defines ``religious exercise'' as ``any exercise of religion,
whether or not compelled by, or central to, a system of religious
belief.'' 42 U.S.C. 2000bb-2(4) (citing 42 U.S.C. 2000cc-5). The
current rules impose a ``penalty'' on these individuals' free exercise
of religion, Trinity Lutheran, 137 S. Ct. at 2021--which they engage in
by becoming members of religious orders, attending religious
institutions, participating in or working at religious organizations,
among other ways--by requiring them to ``choose between their religious
beliefs and receiving a government benefit.'' Id. at 2023 (quoting
Locke, 540 U.S. at 720-21); see Sherbert v. Verner, 374 U.S. 398, 404
(1963) (finding a substantial burden where it was ``apparent that
appellant's declared ineligibility for benefits derives solely from the
practice of her religion,'' forcing her ``to choose between following
the precepts of her religion and forfeiting benefits, on the one hand,
and abandoning one of the precepts of her religion in order to accept
work, on the other hand''); see also 42 U.S.C. 2000bb(b)(1) (``The
purposes of this chapter are--(1) to restore the compelling interest
test as set forth in Sherbert v. Verner, 374 U.S. 398 (1963) and
Wisconsin v. Yoder, 406 U.S. 205 (1972) and to guarantee its
application in all cases where free exercise of religion is
substantially burdened . . . .'').
And the Department's status-based restrictions are neither
necessary to further a compelling government interest, nor are they the
least restrictive means of furthering any such interest. Therefore,
RFRA would require the Department to alleviate any such substantial
burden.
Some commenters believe that the Department's changes to
eligibility requirements for certain aid would have the effect of
advancing religion. The Department's aid will not advance religion, nor
do the Department's changes require aid to be used for religious
purposes. Rather, the Department's aid will advance public service
generally, by eliminating a condition on eligibility for loan
forgiveness that might have deterred individuals from performing such
volunteer work, and it will accommodate the religious exercise of those
who seek to perform volunteer work for a religious organization.
Importantly, the Department's final regulations correct rules that
singled out individuals employed by organizations that are engaged in
religious activities for disfavored treatment.
Additionally, the Supreme Court has repudiated the suggestion,
advanced by some commenters, that the Establishment Clause bars
government aid from flowing from religiously neutral government
programs to religious institutions. See, e.g., Mitchell v. Helms, 530
U.S. 793, 835 (plurality opinion) (overruling Wolman v. Walter, 433
U.S. 229 (1977) and Meek v. Pittenger, 421 U.S. 349 (1975)); id. at 837
(O'Connor, J., concurring in the judgment) (same); Agostini v. Felton,
521 U.S. 203, 235 (overruling Aguilar v. Felton, 473 U.S. 402 (1985)
and School District of the City of Grand Rapids v. Ball, 473 U.S. 373
(1985)).
[[Page 49807]]
In addition, under the principle set forth in Zelman, a benefit
program like PSLF need not exclude religious recipients to comply with
the Establishment Clause where funding would only reach such recipients
following the private choice of the individual using the benefit. See
Zelman, 536 U.S. 639, 653-60 (2002). Likewise, in this case, the
borrower receiving the benefit of PSLF under the regulation makes a
private choice between different volunteer options in the community and
does not create an Establishment Clause problem by choosing to
volunteer with a religious entity that performs religious tasks. As a
result of the intervening private choice of the borrower, ``no
imprimatur of state approval can be deemed to have been conferred on
any particular religion, or on religion generally.'' Zelman, 536 U.S.
at 650 (internal citations, quotation marks omitted).
Although the current regulations do not raise an Establishment
Clause problem, they do raise a Free Exercise Clause concern. In
Trinity Lutheran, the Court reiterated that the Free Exercise Clause
applies to government benefits and funding. The Court in that case
rejected the State's interest in ``skating as far as possible from
religious establishment concerns'' as a basis for categorically
excluding a religious organization from a generally available funding
program. Id. at 2021. The Court applied ``the most exacting scrutiny''
to the government program, finding that it ``expressly
discriminate[d]'' against an entity that would be otherwise eligible
for the government grant but for that entity's religious character. Id.
A materially similar fact pattern exists in the current
regulations: But for the religious character of the public service
organization that a borrower works for and the types of religious
activities the organization performs, the borrower would have qualified
for loan forgiveness under title IV. The benefit available under Sec.
685.219 is generally available, except to borrowers who work for non-
profit organizations that are engaged in religious activities. Such an
exclusion is based on the religious status of an organization and,
therefore, is unconstitutional. Some commenters argue that the
Department errs in relying on Trinity Lutheran. They contend that,
according to footnote 3 in the decision, Trinity Lutheran applies only
to the narrow factual circumstance of a church-run school seeking to
compete for a playground resurfacing grant.
As discussed above in the Department's response to general comments
on Faith-Based Entities, footnote 3 does not undermine the force of the
reasoning in Trinity Lutheran and was only joined by four Justices.
Trinity Lutheran, 137 S. Ct. at 2016.
Changes: The Department has removed proposed Sec. 685.219(c)(4),
which would have prohibited PSLF applicants from counting hours spent
on religious instruction, worship, proselytizing, and fund raising
towards the full-time work requirement of the PSLF program.
How does a State administer its community service-learning job program?
(Sec. 692.30)
Comments: Several commenters indicated that they have the same
concerns about the proposed changes to Sec. 692.30 relating to the
LEAP program that they raised with respect to Sec. 675.20 relating to
the FWSP.
Discussion: See the discussion on Sec. 675.20 above.
Changes: None.
Who may provide GEAR UP services to students attending private schools?
(Sec. 694.6)
Comments: All commenters who opined on Sec. 694.6 supported the
Department's proposal with respect to the treatment of private schools
in the GEAR UP program. Commenters indicated that the proposal provides
additional clarification and retains important protections and
guidelines for serving GEAR UP students in private schools. Commenters
noted that the proposal retains the requirement that government funded
services be ``secular, neutral, and nonideological'' and thus maintains
boundaries required by the Establishment Clause.
Discussion: The Department thanks commenters for their support.
Changes: None.
What are the requirements that a Partnership must meet in designating a
fiscal agent for its project under this program? (Sec. 694.10)
Comments: Many commenters supported the proposed changes to Sec.
694.10 to remove language prohibiting pervasively sectarian
organizations from serving as fiscal agents in GEAR UP grants. Some
noted that it is inappropriate for the government to make
determinations as to whether an institution is pervasively sectarian.
Others noted that the term ``pervasively sectarian'' is outdated and
reflects an anti-religious bias. Commenters also noted that the
proposed regulations reflect current case law regarding the
Establishment Clause and the Free Exercise Clause. Others indicated
that they support the proposed change in combination with the retention
of the requirement that benefits provided to GEAR UP students must be
``secular, neutral, and nonideological.''
Discussion: The Department thanks commenters for their support.
Changes: None.
Teach Grant Program
General Comments
Comments: In general, commenters supported the proposed
regulations. Commenters believed that, by simplifying the requirements,
the proposed regulations would reduce the number of TEACH Grants
inadvertently converted to Direct Unsubsidized Loans. They also felt
that changes would be helpful for TEACH Grant recipients, including
expanding and strengthening counseling and notification provisions,
providing additional conditions under which the period for completing
the teaching service obligation may be temporarily suspended, providing
a reconsideration process for TEACH Grants inadvertently converted to
loans, and expanding options for satisfying the teaching service
obligation.
Discussion: We thank the commenters for their support.
Changes: None.
Comments: Some commenters expressed concerns about servicer and
institutional accountability regarding the administration of the TEACH
Grant program and recommended that the Department impose liabilities
and escalating consequences on servicers and institutions that fail to
properly carry out their responsibilities.
Discussion: We appreciate the commenters' concerns. However, these
concerns are outside the scope of this regulatory effort. The
Department holds servicers accountable through contractual agreements
and can impose escalating consequences and even terminate a contract of
a servicer that has failed to properly carry out its responsibilities.
Institutions can only disburse TEACH Grants if they maintain
institutional eligibility to disburse Federal student aid. One
requirement for institutional eligibility is that an institution must
satisfy standards of administrative capability. Failure to do so can
result in termination of the institution's eligibility. In addition, we
note that the Department's Federal Student Aid (FSA) office maintains a
Feedback System, which includes a formal process for borrowers to
report issues or file complaints about their loan experiences,
including problems with servicing. Borrowers may also elevate
complaints to the FSA Ombudsman Group--a neutral and confidential
resource available to
[[Page 49808]]
borrowers to resolve disputes related to their loans.
Changes: None.
Definitions (Sec. 686.2)
Highly Qualified
Comments: A couple of commenters expressed concern that a reference
to section 602(10) of the Individuals with Disabilities Education Act
(IDEA) was removed from the definition of ``highly qualified.'' The
commenters stated that this section should continue to be referenced in
the ``highly qualified'' definition.
Discussion: We agree with the commenters. The reference to section
602(10) of the IDEA was inadvertently removed.
Changes: We have restored the reference to section 602(10) of the
IDEA.
Comments: A couple of commenters stated their belief that it was
inappropriate for the TEACH Grant Program regulations to use language
from the teacher loan forgiveness provisions in sections 428J(g)(3) and
460(g)(3) of the HEA to describe how private school teachers who are
exempt from State certification requirements can meet the highly
qualified teacher standards. The commenters noted that the TEACH Grant
program is designed to incentivize highly qualified educators, who
receive hundreds of hours of professionally supervised pre-service
field experiences and undergo a comprehensive, standards-based
curriculum to teach in the most underserved schools in the most
undersupplied subject areas.
Discussion: We disagree with the commenters. As we explained in the
NPRM, teaching in an eligible non-profit private school can be
qualifying service for purposes of satisfying the TEACH Grant service
obligation, but the definition of ``highly qualified'' in the
Elementary and Secondary Education Act (ESEA) does not address private
school teachers. Therefore, we are expanding the definition of ``highly
qualified'' to include the language from sections 428J(g)(3) and
460(g)(3) of the HEA that describes how private school teachers who are
exempt from State certification requirements can meet the highly-
qualified teacher standards for teacher loan forgiveness purposes. We
believe it is appropriate to incorporate this language, since student
loan borrowers seeking teacher loan forgiveness must meet the same
highly qualified teacher standards that apply to TEACH Grant
recipients.
Changes: None.
Agreement To Serve or Repay (Sec. 686.12)
Comments: A couple of commenters expressed concern with Sec.
686.12 based on their belief that a TEACH Grant recipient who completes
a TEACH Grant-eligible educator preparation program in the middle of
the academic year will lose a full calendar year of the eight-year
period for satisfying the service obligation because of the requirement
that a teacher teach full-time for a full school year.
Discussion: Under these conditions, a grant recipient who starts
teaching mid-year would not lose a full calendar year of the eight-year
period for completing the service obligation. The HEA requires that a
grant recipient serve as a full-time teacher for a total of not less
than four academic years within eight years after completing the course
of study for which the TEACH grant was received. The current
regulations, in part, define ``academic year or its equivalent for
elementary and secondary schools (elementary or secondary academic
year)'' to be one complete school year, or two complete and consecutive
half-years from different school years, excluding summer sessions, that
generally fall within a 12-month period. To clarify this in the
regulations, in the NPRM we proposed to replace the reference to
``eight calendar years'' with ``eight years''.
Changes: None.
Comments: A couple of commenters felt that the grace period for
seeking qualifying employment should be extended to the earlier of--(1)
one year from the date a recipient is no longer enrolled in a
qualifying TEACH Grant program, or (2) the date the recipient begins
qualifying employment in a TEACH-eligible school and subject area.
Discussion: The regulations do not require a TEACH Grant recipient
to begin qualifying teaching service within a certain timeframe after
the recipient has ceased to be enrolled in the program of study for
which he or she received a TEACH Grant. Rather, a grant recipient must
begin and maintain qualifying teaching within a timeframe that will
allow the recipient to complete the four-year service obligation within
the eight-year service obligation period.
Changes: None.
Counseling Requirements (Sec. 686.32)
Comments: A couple of commenters disagreed with the policy
reflected in the proposed regulations that prohibited the reversal of
the conversion of a TEACH Grant to a loan if the grant recipient had
requested the conversion. The commenters believed that the
circumstances that led a grant recipient to request a conversion could
later change such that the grant recipient may now want to teach and
satisfy the service obligation. In such cases, the commenters felt that
the grant recipient should be able to have the conversion reversed so
that the recipient could teach and help address the nation's teacher
shortages.
Discussion: We agree that a grant recipient who previously
requested conversion should be able to have the conversion reversed, so
that the recipient could perform qualifying teaching to satisfy the
TEACH Grant service obligation. This cannot be an open-ended
opportunity, however. The grant recipient must still be able to fulfill
the service obligation within eight years from when the recipient
ceased enrollment at the institution where the recipient received the
TEACH grant or, in the case of a student who received a TEACH Grant at
one institution and subsequently transferred to another institution and
enrolled in another TEACH Grant-eligible program, within eight years of
ceasing enrollment at the other institution. The eight-year period for
completing the required four years of teaching does not include periods
of suspension, which the recipient could apply for retroactively, if
applicable. However, the eight-year period will include the period when
the grant was in loan status. If a grant recipient requests reversal of
a prior voluntary conversion at a point when the recipient would no
longer have enough time to complete the service obligation during the
eight-year period unless he or she qualifies for a retroactive
suspension, an application for suspension will need to be submitted and
approved prior to reconversion. This option should be explained to the
recipient during initial, subsequent, exit, and conversion counseling.
Changes: We have added new Sec. 686.43(a)(8) to provide that, in
the case of a grant recipient whose TEACH Grant was converted to a loan
in accordance with Sec. 686.43(a)(1)(i), the Secretary will reconvert
the loan to a TEACH Grant if requested by the grant recipient, and
restore the recipient's TEACH Grant service obligation, if there is
sufficient time remaining for the grant recipient to complete the
required four academic years of qualifying teaching service within
eight years from the date the grant recipient ceased enrollment at the
institution where the recipient received the grant or, in the case of a
student who received a TEACH Grant at one institution and subsequently
transferred to another institution and enrolled in another TEACH Grant-
eligible program, within eight years of ceasing enrollment
[[Page 49809]]
at the other institution. New Sec. 686.43(a)(8) further states that
the eight-year period for completing the required four years of
teaching does not include periods of suspension for which the recipient
qualifies under Sec. 686.41. It also provides that a period of
suspension for which the recipient applies and is determined to be
eligible may be applied retroactively. If the recipient would not have
sufficient time remaining to complete the service obligation within the
eight-year period the Secretary will not reconvert the recipient's loan
to a TEACH Grant unless the recipient first requests and is determined
to be eligible for a retroactive suspension.
We have removed the language in the proposed regulations addressing
the initial, subsequent, and exit counseling requirements which state
that the conversion of a TEACH Grant to a loan cannot be reversed if
the grant recipient requested the conversion, and have revised the
regulations governing the initial, subsequent, and exit counseling
requirements in Sec. 686.32(a), (b), and (c), respectively, and the
new conversion counseling requirements in Sec. 686.32(e) by adding for
each type of counseling a requirement that the counseling explain the
terms and conditions under which a grant recipient who voluntarily
requested conversion of a TEACH Grant to a loan under Sec.
686.43(a)(1)(i) may subsequently request and be approved for a reversal
of the conversion, as described above. We have also added new paragraph
Sec. 686.12(b)(7) to provide that the contents of the agreement to
serve or repay must include this same information.
We believe that the expanded counseling reflected in these
regulations will help reduce the number of grants that are converted to
loans. We note, however, that, consistent with the rules relating to
the Direct Loan Program, a recipient's failure to receive or read the
counseling materials is not a basis for reconverting the loan to a
grant.
The proposed regulations describing the initial, subsequent, exit,
and conversion counseling included language stating that the counseling
must explain that a TEACH Grant that has been converted to a Direct
Unsubsidized Loan may be reconverted to a grant if the Secretary
determines that the grant was converted to a loan in error. For
consistency with redesignated Sec. 686.43(a)(5), we have revised this
language to state that a grant that was converted to a loan may also be
reconverted to a grant based on documentation showing that the
recipient was satisfying the service obligation within the required
time frame.
We have deleted Sec. 686.43(d), which stated that a TEACH Grant
that is converted to a Federal Direct Unsubsidized Loan cannot be
reconverted to a grant, consistent with the other changes to this
section.
Comments: A couple of commenters recommended that all types of
TEACH Grant counseling should provide grant recipients with information
about the options of income-driven repayment plans and public service
loan forgiveness for those whose TEACH Grants are converted to loans.
Discussion: In the NPRM, we proposed to provide information about
income-driven repayment plans and public service loan forgiveness in
the new conversion counseling for recipients whose grants are converted
to loans. We do not believe it is necessary to include this information
in initial, subsequent, or exit counseling, since the information is
relevant only to recipients whose grants are being converted to loans.
Changes: None.
Documenting the Service Obligation (Sec. 686.40)
Comments: A couple of commenters expressed concern about removing
the requirement for grant recipients to confirm their status within 120
days of ceasing enrollment in a program for which they received a TEACH
Grant. The commenters felt that by removing the requirement for initial
certification, grant recipients would lose track of the requirement to
certify their progress toward satisfying the service obligation in
subsequent years, despite seeking to obtain, or even working, in
qualifying employment. Other commenters supported the proposed changes
that were intended to simplify the procedures for grant recipients to
certify that they are meeting the required service obligation, and the
provisions for the Secretary to provide periodic notifications to grant
recipients reminding them of their service obligation requirements.
Discussion: We continue to believe that the current 120-day
certification requirement should be removed because it adds unnecessary
complexity to the requirements for documenting the service obligation.
That complexity may, in some cases, have resulted in grant recipients
who were otherwise meeting the service obligation requirements having
their grants converted to loans. Under Sec. 686.42(a)(2), at least
annually during the service obligation period the Secretary will
provide the grant recipient with information that includes the number
of years of qualifying teaching that the recipient has completed and
the remaining timeframe within which the grant recipient must complete
the service obligation. We believe that these notifications will
provide the information the grant recipient needs to stay on track to
fulfill the service obligation.
Changes: None.
Periods of Suspension (Sec. 686.41)
Comments: A couple of commenters noted that there may be life
circumstances that reasonably prohibit grant recipients from securing
employment in eligible schools.
Discussion: While we appreciate the commenters' concern, it would
be difficult for the Department to determine all the life circumstances
that might reasonably prohibit grant recipients from securing
employment in eligible schools, and any such determination could be
considered arbitrary. We note that, under new Sec. 686.41(d), the
Secretary may provide temporary suspensions of the period for
completing the service obligation on a case-by-case basis if the
Secretary determines that a grant recipient was unable to complete a
full academic year of teaching or begin the next academic year of
teaching due to exceptional circumstances significantly affecting the
operation of the school or educational service agency where the grant
recipient was employed or the grant recipient's ability to teach.
Changes: None.
Obligation To Repay the Grant (Sec. 686.43)
Comments: None.
Discussion: After further review of the NPRM, the Department
recognizes that there was substantial overlap between proposed Sec.
686.43(a)(5) and Sec. 686.43(a)(6) and that the latter section was not
clear. Specifically, paragraph (a)(6) provided for reconversion of a
grant that had been ``involuntarily'' converted (that is, a grant that
had been converted for a reason other than a voluntary request for
conversion from the grant recipient, which would include the
circumstances described in paragraph (a)(5)), and it also provided for
reconversion of a grant that had been ``improperly'' converted to a
loan (that is, a grant that had been converted in error), based on
documentation provided by the recipient or in the Department's records
demonstrating that the recipient was satisfying the service obligation,
or that the grant had been converted to a loan in error. The
[[Page 49810]]
Department has revised these sections to clarify the requirements.
Changes: The Department has removed proposed Sec. 686.43(a)(5),
redesignated paragraph (a)(6) as (a)(5), revised redesignated paragraph
(a)(5) for greater clarity, and renumbered the remaining paragraphs in
Sec. 686.43(a).
Comments: Some commenters felt that, to strengthen the
effectiveness of provisions regarding incorrect grant-to-loan
conversions, the Department should automatically provide any recipient
with a written ``statement of error'' when a grant that was incorrectly
converted is reconverted to a TEACH Grant. Under the proposed
regulations, this statement of error would have been provided at the
recipient's request.
Discussion: We agree with the commenters. Automatically providing
the grant recipient with a written statement confirming that the TEACH
Grant had been converted to a loan in error when the loan is
reconverted to a TEACH grant would ensure that the grant recipient has
documentation that the Department determined that the conversion was
incorrect without further inconveniencing the affected individual.
Changes: Proposed Sec. 686.43(a)(7)(iv), which stated that a
statement of error would be provided to a grant recipient at the
recipient's request, has been redesignated as Sec. 686.43(a)(6)(vi)
and revised to provide that the Secretary will automatically send a
statement of error to the recipient when a TEACH Grant that was
converted to a loan in error is reconverted to a TEACH Grant.
Comments: Some commenters believed that there should be a
formalized process for a TEACH Grant recipient to request
reconsideration of other adverse actions that impact the recipient's
ability to complete the service obligation, stating that grant
recipients should have the opportunity to request reconsideration by
the Secretary of any adverse action taken against them by the Secretary
in connection with the servicing of their grant. Such adverse actions
would include, but would not be limited to, the rejection of a
certification of teaching service, a determination that the recipient's
employment does not meet the service obligation requirements, or a
denial of a request for suspension or discharge. The commenters
recommended that if the Secretary determines that the adverse action
was taken in error, the Secretary should reverse the adverse action and
take all other actions necessary to correct the adverse action. The
commenters believed that implementing this type of process would likely
result in fewer erroneous grant-to-loan conversions resulting from
wrongfully rejected certifications or other types of erroneous actions.
Discussion: We are not aware of widespread problems involving
``wrongful'' rejections of certifications or other erroneous actions
such as those cited by the commenters. The Department rejects a
certification form or a suspension/discharge request if information
needed to confirm the qualifying service or approve the suspension/
discharge is missing, or if the information provided on the
certification or the suspension/discharge request does not confirm
qualifying service or establish eligibility for the suspension/
discharge (e.g., if the dates of teaching are missing or incomplete, or
if the school listed on the certification form is not listed in the
Teacher Cancellation Low Income Directory). These situations are
generally resolved by the recipient providing the missing or additional
information. If information is missing, a letter is sent to the
recipient explaining what information the recipient needs to submit so
the certification or request can be processed. If the information
provided does not confirm that the individual has performed qualifying
service or does not support the recipient's eligibility for suspension/
discharge, the recipient receives a letter explaining the reason for
the rejection and has an opportunity to provide information documenting
the qualifying service or suspension/discharge eligibility. In
addition, if recipients continue to disagree with the decision, they
may contact the Department's Federal Student Aid Ombudsman's office to
try to resolve the issue. Thus, we do not believe it is necessary to
establish a formalized process for grant recipients to request
reconsideration of actions such as rejections of certification forms or
denials of suspension or discharge requests. Processes are already in
place for recipients to be notified of any problems with a
certification form or suspension/discharge request, and to provide an
opportunity for the recipient to submit corrected or missing
information. We further note that the simplified requirements for
documenting the service obligation in these final regulations should
significantly reduce the number of grant-to-loan conversions.
Changes: None.
Directed Questions
Comments: In response to the directed questions that were included
in the NPRM, a commenter supported the suggestion that a student's
service obligation period be extended by the number of years their
TEACH grants were incorrectly in loan status, regardless of whether the
student completed one or more years of qualifying service during the
period during which the grant was treated as a loan as described in the
first directed question, or did not complete any qualifying service
during the erroneous conversion period as described in the second
directed question. The commenter felt that, in either scenario, the
TEACH recipient may have left qualifying service at some point after
the grant-to-loan conversion. The commenter further stated that re-
entering qualifying service is not a simple undertaking, noting that
grant recipients may have relocated to an area without qualifying
service positions or made other life choices that would hinder their
ability to immediately re-enter a qualifying position. The commenter
felt that extending the timeframe for completing the service obligation
would give these individuals sufficient time to find qualifying
positions to establish their eligibility for TEACH grants with minimal
disruption to their lives and would mitigate the harm they have already
suffered from the erroneous grant-to-loan conversion.
Discussion: We agree with the commenter that the eight-year service
obligation period should not include the period of time that the TEACH
Grant was incorrectly in loan status, and that individuals whose grants
were converted to loans in error may have stopped teaching because they
believed that they would no longer receive credit for their service or
for other reasons, and that after the erroneous conversion has been
corrected it may take a significant period of time for these recipients
to find qualifying teaching positions. However, because it provides
more time for a recipient to find qualifying employment and to complete
the teaching service obligation, we believe it would be more
appropriate to adopt the alternative approach described in the directed
question scenarios. That is, after the correction of the erroneous
conversion we would provide the grant recipient with an additional
period of time, equal to eight years minus the number of full academic
years of qualifying teaching that the recipient had completed prior to
the reconversion of the recipient's loan to a TEACH Grant (including
any years of qualifying teaching that the recipient completed during
the period when the grant was incorrectly in loan status), to complete
the remaining portion of the service
[[Page 49811]]
obligation. This approach is illustrated by Example 1 below.
Example 1
A grant recipient completes the program for which he or
she received a TEACH Grant and enters the service obligation period.
The recipient receives no suspensions and does not begin
qualifying teaching until the start of the fifth year of the eight-year
service obligation period.
The recipient completes two academic years of qualifying
teaching during the fifth and sixth years of the eight-year service
obligation period. At the beginning of the seventh year of the service
obligation period, the recipient's TEACH Grant is converted to a loan
in error and remains incorrectly in loan status for three years.
During the period when the grant is incorrectly in loan
status, the recipient completes one additional academic year of
qualifying teaching service.
After the erroneous conversion is reversed and the
recipient's loan is reconverted to a TEACH Grant, the three years of
completed service (including the year of teaching completed while the
grant was incorrectly in loan status) is subtracted from eight years,
giving the recipient an additional five years following the correction
of the erroneous conversion to complete the remaining one year of
teaching required under the service obligation.
In contrast to the approach described in the directed question and
illustrated by the above example, under the proposed regulations the
grant recipient in Example 1 would have had only two years following
the correction of the erroneous conversion to complete the remaining
one year of the service obligation.
Changes: We have redesignated proposed Sec. 686.43(a)(7) as Sec.
686.43(a)(6), and now address this issue in Sec. 686.43(a)(6)(ii) and
(iii), which provide that after the Secretary reconverts an incorrectly
converted loan to a TEACH Grant, the Secretary (1) applies any full
academic years of qualifying teaching that the recipient completed
during the period when the grant was incorrectly in loan status toward
the grant recipient's four-year service obligation requirement, and (2)
provides the recipient with an additional period of time to complete
the remaining portion of the service obligation equal to eight years,
minus the number of full academic years of qualifying teaching that the
recipient completed prior to the correction of the erroneous
conversion.
Executive Orders 12866, 13563, and 13771
Regulatory Impact Analysis
Under Executive Order 12866, the Office of Management and Budget
(OMB) must determine whether this regulatory action is ``significant''
and, therefore, subject to the requirements of the Executive order and
subject to review by OMB. Section 3(f) of Executive Order 12866 defines
a ``significant regulatory action'' as an action likely to result in a
rule that may--
(1) Have an annual effect on the economy of $100 million or more,
or adversely affect a sector of the economy, productivity, competition,
jobs, the environment, public health or safety, or State, local, or
Tribal governments or communities in a material way (also referred to
as an ``economically significant'' rule);
(2) Create serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impacts of entitlement grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles stated in the
Executive order.
Under Executive Order 12866, section 3(f)(1), the changes proposed
in this regulatory action would materially alter the rights and
obligations of recipients of Federal financial assistance under title
IV of the HEA. Therefore, OMB has determined that this is a significant
regulatory action subject to review by OMB.
Under Executive Order 13771, for each new regulation that the
Department proposes for notice and comment or otherwise promulgates
that is a significant regulatory action under Executive Order 12866 and
that imposes total costs greater than zero, it must identify two
deregulatory actions. For FY 2020, any new incremental costs associated
with a new regulation must be fully offset by the elimination of
existing costs through deregulatory actions. The final regulations are
a significant regulatory action under Executive Order 12866. However,
Executive Order 13771 does not apply to ``transfer rules'' that cause
only income transfers between taxpayers and program beneficiaries.
Because the portion of the regulatory changes relating to the TEACH
Grant Program and PSLF are a transfer rule and the remaining proposed
regulatory changes impose minimal estimated costs of approximately
$1.27 million in annualized net PRA costs at a 7 percent discount rate,
discounted to a 2016 equivalent, over a perpetual time horizon, the
requirement to offset new regulations in Executive Order 13771 does not
apply to this final regulation. Accordingly, the Department is not
required to identify deregulatory actions under Executive Order 13771.
We have also reviewed these final regulations under Executive Order
13563, which supplements and explicitly reaffirms the principles,
structures, and definitions governing regulatory review established in
Executive Order 12866. To the extent permitted by law, Executive Order
13563 requires that an agency--
(1) Propose or adopt regulations only on a reasoned determination
that their benefits justify their costs (recognizing that some benefits
and costs are difficult to quantify);
(2) Tailor its regulations to impose the least burden on society,
consistent with obtaining regulatory objectives and taking into
account--among other things and to the extent practicable--the costs of
cumulative regulations;
(3) In choosing among alternative regulatory approaches, select
those approaches that maximize net benefits (including potential
economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity);
(4) To the extent feasible, specify performance objectives, rather
than the behavior or manner of compliance a regulated entity must
adopt; and
(5) Identify and assess available alternatives to direct
regulation, including economic incentives--such as user fees or
marketable permits--to encourage the desired behavior, or provide
information that enables the public to make choices.
Executive Order 13563 also requires an agency ``to use the best
available techniques to quantify anticipated present and future
benefits and costs as accurately as possible.'' The Office of
Information and Regulatory Affairs of OMB has emphasized that these
techniques may include ``identifying changing future compliance costs
that might result from technological innovation or anticipated
behavioral changes.''
We are issuing these final regulations only on a reasoned
determination that their benefits justify their costs. Based on the
analysis that follows, the Department believes that these regulations
are consistent with the principles in Executive Order 13563.
We also have determined that this regulatory action does not unduly
interfere with State, local, or Tribal
[[Page 49812]]
governments in the exercise of their governmental functions.
In this regulatory impact analysis, we discuss the need for
regulatory action, the potential costs and benefits, assumptions,
limitations, and data sources, as well as regulatory alternatives we
considered.
Need for Regulatory Action
In 2007, Congress established the Teacher Education Assistance for
College and Higher Education (TEACH) Grant Program to increase the
number of teachers in high-need fields in low-income schools. In
exchange for receiving a TEACH Grant, recipients agree to teach in a
high-need field \12\ such as reading, mathematics, or science, at a
low-income school for at least four years in an eight-year period and
annually certify that they intend to meet this requirement. If a
recipient does not meet the grant requirements or the annual
certification requirements, the grant converts to a Federal Direct
Unsubsidized Loan with interest charged from the date of each TEACH
Grant disbursement.
---------------------------------------------------------------------------
\12\ Section 420N(b)(1)(C) of the HEA describes high-need fields
as mathematics, science, foreign languages, bilingual education,
special education, reading specialist, or another field documented
as high-need by the Federal Government, State government, or LEA,
and approved by the Secretary.
---------------------------------------------------------------------------
A 2015 Government Accountability Office (GAO) report found that
around 36,000 out of more than 112,000 TEACH Grant recipients had not
fulfilled TEACH Grant requirements and had their grants converted to
loans (GAO, 2015).\13\ GAO concluded that the Department needs to
explore ways to increase awareness among students of how the TEACH
Grant program operates and improve program management, especially with
respect to the grant-to-loan conversion dispute process. GAO further
noted that the Department should take steps to understand why teachers
often do not meet the TEACH program requirements. GAO reiterated that
the goal of reducing grant-to-loan conversions and increasing program
completion should help drive the Department's efforts. GAO cited
inconsistent and confusing external guidance regarding grant to loan
conversions and the dispute process available to recipients as a
failure of ``Federal internal control standards that highlight
effective external communication.'' The revised regulations help to
address GAO's concerns by improving the administration of the program
and providing clearer information to recipients earlier in their
service to prevent future problems, and more thoroughly explaining the
dispute process if issues do arise.
---------------------------------------------------------------------------
\13\ Government Accountability Office. (2015). Higher Education:
Better Management of Federal Grant and Loan Forgiveness Programs for
Teachers Needed to Improve Participant Outcomes (GAO 15-314).
Washington, DC: United States Government Accountability Office.
---------------------------------------------------------------------------
A 2018 study conducted for the Department by the American
Institutes for Research (U.S. Department of Education, 2018) \14\ found
that as of June 2016, 63 percent of TEACH Grant recipients who started
their eight-year service obligation period before July 2014 had their
grants converted to Unsubsidized Loans because they did not meet the
service obligation requirements or the annual certification
requirements. For instance, the study reported that 39 percent of
recipients who were in loan status cited teaching in a position that
did not qualify for TEACH Grant service and 33 percent cited not
working as a certified teacher. Thirty-two percent said they did not
understand the service requirements. Other factors related to teachers
having grants converted to loans included not knowing about annual
certification (19 percent), challenges related to the certification
process (13 percent), forgetting about annual certification (9 percent)
and other factors made up 24 percent, such as recipients who were never
certain of their intention to teach or who changed their employment to
a nonteaching position prior to meeting their service obligation.
---------------------------------------------------------------------------
\14\ U.S. Department of Education. (2018). Study of the Teacher
Education Assistance for College and Higher Education (TEACH)
Program. Respondents could select more than one option.
---------------------------------------------------------------------------
To address the concerns raised by these studies, we are changing
the regulations to facilitate the process of documenting satisfaction
of the service obligation requirements and ensure that recipients who
fulfill their service obligation receive credit for it. Additionally,
these regulations create a process to remediate conversions caused by
life events (including on a case-by-case basis as determined by the
Secretary) or administrative error to facilitate the completion of
service obligation requirements for those who seek to do so. This will
help reduce the percentage of TEACH Grants that erroneously convert to
Direct Unsubsidized Loans and fulfill the TEACH Grant Program's
intended outcomes.
The regulations also ensure that faith-based entities, students who
are members of religious orders, and borrowers fulfilling service
obligations are not further burdened by their religious beliefs, and
instead have equal access to broadly available programs and government
funding. In response to the Supreme Court's decision in Trinity
Lutheran and Executive Order 13798 (U.S. Attorney General Memorandum on
Federal Law Protections for Religious Liberty (October 6, 2017)), the
Department engaged in a full review of its regulations related to title
IV, HEA programs in order to identify provisions that may discriminate
against otherwise eligible students and faith-based entities by
disqualifying them from title IV, HEA programs due to their religious
beliefs in violation of the Free Exercise Clause of the First Amendment
to the United States Constitution (Free Exercise Clause). The
Department proposes to make changes to regulatory provisions that may
discriminate against students or faith-based entities as a result of
their religious beliefs to ensure compliance with the Free Exercise
Clause.
Discussion of Costs, Benefits and Transfers
The Department has analyzed the costs and benefits of complying
with these final regulations and our estimates are a function of the
uncertainty and limitations of relevant data. As discussed below, we
believe that these final regulations will result in modest transfers
from the Federal government and will benefit recipients of support
under the affected programs.
Benefits of the Final Regulations
With respect to the TEACH Grant Program, we anticipate that by
simplifying and clarifying certification procedures and providing
greater flexibility to recipients to meet their service obligation, the
final regulations will result in a decrease in the number of TEACH
Grant recipients that have their grants converted to loans. We further
anticipate that this outcome and the expansion of opportunities that
students can use to fulfill the service obligation will result in more
teachers teaching in high-need fields at low-income schools as well as
in authorized teacher shortage areas.
The final regulations related to other programs will also reduce
the potential for discrimination against students and faith-based
institutions due to their religious beliefs in violation of the Free
Exercise Clause.
Net Budget Impacts
Regarding changes to the TEACH Grant Program, the changes improve
the reporting and documentation process for grant recipients and could
lead to a reduction in the number of grant-to-loan conversions.
According to Department
[[Page 49813]]
data, the percentage of TEACH Grant recipients demonstrating effort to
fulfill their service requirement by performing one or more years of
qualified teaching service after six or more years following their last
TEACH award has been increasing steadily. The improvements to the
process for recipients to document their teaching service included in
these final regulations will help prevent or resolve unintended grant
to loan conversions.
For FY 2020, The Department estimates that approximately 32,000
recipients will receive $92 million in TEACH Grants with an average
award of slightly over $3,000. Over the past five years from fiscal
year 2014 through fiscal year 2019, the Department has provided a total
of $524.6 million in TEACH grant funding to 190,686 students. Based on
program data through FY 2019, the Department estimates that 64 percent
of students receiving TEACH Grants will fail to complete their required
service commitment and will have their grants converted to Direct
Unsubsidized Stafford Loans.
Using a sensitivity analysis of grant-to-loan conversions, we
estimate that for the 2020 cohort, a one percentage point reduction in
the grant-to-loan conversion would result in a transfer from the
Federal Government of $727,034, since each grant that is not converted
to a loan where the student is obligated to pay it back remains a
grant. The Department recognizes that the percentage change that the
final regulations would have on the percentage of conversions is
uncertain. The Department intends that these regulatory changes will
reduce the loan conversion rate. However, students fail to meet the
TEACH Grant service requirements for many reasons, including teaching
in positions that do not qualify or changing to non-teaching
employment. For instance, the PPSS/AIR study cited earlier reported
that approximately 39 percent of TEACH recipients whose grants had been
converted to loans reported teaching in a position that did not qualify
for the TEACH program, 33 percent reported not teaching or not
completing the teaching certificate program, 32 percent stated they did
not understand the service requirements, and about 44 percent of
respondents reported factors related to the annual certification
process as influencing them to not complete the program requirements.
Since respondents could select more than one response category, the
total percentage does not add to 100 percent. Of those that indicated
the annual certification process was a problem, the distribution
revealed that about 19 percent said they did not know about the annual
certification process; 13 percent reported not certifying because of
challenges to the certification process; 9 percent reported not
certifying because they forgot, and about 2 percent listed other
reasons.
While predicting how recipients might change their behavior due to
the final regulations is speculative, the PPSS/AIR responses give us
reason to assume that there will be improvement based on the recipients
who cited the certification process as a factor in their conversion.
Such improvement would logically lead to some reduction in the grant-
to-loan conversion rate.
Given an estimated grant-to-loan conversion rate, it is possible to
identify a series of transfers for a series of percentage reductions
that give context to the potential impact that the proposed regulations
would have.
Five Percentage Point Interval Grant-to-Loan Conversion Impacts
------------------------------------------------------------------------
Cost
Percentage point reduction (%) ($millions)
------------------------------------------------------------------------
5.......................................................... 3.6
10......................................................... 7.3
15......................................................... 10.9
20......................................................... 14.6
25......................................................... 18.2
------------------------------------------------------------------------
The above table suggests that if the grant-to-loan conversion rate
were reduced from the estimated 64 percent to 59 percent--a five
percentage point reduction--the Federal Government would incur
additional transfers of approximately $3.6 million based on the 2020
cohort. And, if the projected 64 percent rate were reduced by 10
percentage points to 54 percent for the same 2020 cohort, there would
be a cost of about $7.3 million. However, this transfer from the
Federal Government would also result in a benefit to student TEACH
Grant recipients who would not have to repay their TEACH Grants which
would not be converted to loans. Note that these are five percentage
percentage-point intervals, and not percentage decreases of the current
rate.
Currently, a TEACH Grant recipient may not satisfy the service
obligation by teaching in a geographic region of a State that has been
designated in the Nationwide List (at https://tsa.ed.gov) as having a
shortage of teachers, or by teaching at a particular grade level not
associated with a high-need field that has been designated in the
Nationwide List as having a shortage of teachers. Instead, the
recipient must teach in a high-need field listed in the Nationwide
List.
The final regulations remove this limitation. For example, under
the final regulations, a grant recipient could satisfy the service
obligation by serving as a full-time highly qualified general
elementary school or secondary school teacher at a low-income school in
a State that has reported a general shortage of elementary or secondary
teachers in the Nationwide List. This is not currently allowed.
Therefore, the final regulations allow grant recipients who are unable
to find qualifying teaching jobs in a high-need field to meet the
service obligation by teaching at a low-income school located in a
geographic teacher shortage area or at a grade level where there is a
shortage of teachers. This could facilitate increased opportunities for
TEACH recipients toward meeting the service obligation and perhaps
impact the conversion rate to loans. More importantly, it could serve
as an important incentive to attract highly qualified teachers to serve
in higher need areas and fields. It would be speculative to assume any
specific amount of change in the conversion rate attributable to
potential expanded teaching opportunities. Also, the proposed change
might result in some grant recipients simply transferring from one low-
income school to another low-income school to accept a teaching
position that might previously have not been eligible.
Based on available data from the Department's Teacher Shortage Area
listing,\15\ there are about 10 States, including California, Idaho,
Illinois, Maine, Michigan, North Dakota, South Dakota, Pennsylvania,
Virginia, West Virginia, and the District of Columbia, that appear to
have teacher shortages, particularly in the elementary education area,
that could potentially expand the eligible teaching opportunities for
TEACH Grant recipients. According to National Center for Education
Statistics data, these States represented approximately 27 percent of
teachers in public elementary and secondary schools in the 2011-12
Schools and Staffing Survey data, both for overall teachers and for
those in their first 10 years of teaching.\16\ As indicated in the
PPSS/AIR responses, approximately 15
[[Page 49814]]
percent of those respondents whose grants converted to loans said they
were unable to find a job in a high-need field and, adjusting for the
nationwide percentage of public schools with 30 percent or more of
students receiving a free and reduced lunch of approximately 70
percent,\17\ we estimate that the changes removing the high needs field
requirement in qualifying States will reduce the overall grant-to-loan
conversion rate by approximately 3 percent, so relieving that
requirement for those States would have some net budget impact.
Nevertheless, while the changes expand options for grant recipients to
meet the service obligation by allowing grant recipients who are not
teaching in a high-need subject area to qualify by teaching at a low-
income school in a geographic shortage area or in a grade-level
shortage area, we do not believe the final regulations would lead to a
significant increase in the actual number of TEACH grant recipients.
---------------------------------------------------------------------------
\15\ https://tsa.ed.gov/#/reports.
\16\ U.S. Department of Education, National Center for Education
Statistics, Digest of Education Statistics 2017, Table 209.30.
Highest degree earned, years of full-time teaching experience, and
average class size for teachers in public elementary and secondary
schools, by state: 2011-12. Data not reported for 5 states,
including the District of Columbia, so percentage is adjusted to be
total of those reporting.
\17\ United States Department of Education, National Center for
Education Statistics, Condition of Education--Characteristics of
Traditional Public Schools and Charter Schools, Figure 3. Percentage
of traditional public schools and public charter schools, by
percentage of students eligible for free or reduced-price lunch:
School year 2016-17. Available at https://nces.ed.gov/programs/coe/indicator_cla.asp.
---------------------------------------------------------------------------
Overall, the final regulations have the potential to improve some
aspects of the certification process and opportunities for recipients
to meet their service requirements, which would benefit recipients, in
keeping with the original goal of the program. As several provisions
are expected to decrease the grant-to-loan conversion rate and result
in additional cost to the Federal Government, we have estimated a net
budget impact of that change.
In addition to the 3 percent decrease attributed to the changes to
the high needs field requirements, we assume that the additional
changes to the TEACH Grant program described in this preamble will
decrease grant-to-loan conversions. We expect this effect will be lower
for existing cohorts as improved counseling is provided to future
participants and participants who took out TEACH Grants several years
ago may be established in jobs that may not qualify or may have moved
on from the profession, possibly limiting the ways those with older
TEACH grants may respond to the changes made by these regulations. As a
result, we applied the decreases shown in Table [2] to the grant-to-
loan conversion rate to the President's Budget 2021 baseline. For past
cohorts, the changes are applied only to future years of activity.
Table 2--Grant-to-Loan Conversion Rate Decrease Factor
------------------------------------------------------------------------
Decrease
Cohorts (%)
------------------------------------------------------------------------
2008-2012.................................................. 4
2013-2019.................................................. 9
2020-2029.................................................. 15
------------------------------------------------------------------------
The estimated net budget impact is a cost of $141.4 million,
including a modification to existing cohorts of $16.6 million and a
cost for cohorts 2020 to 2029 of $124.8 million.
A number of the changes to the regulations relate to the
eligibility of certain entities and recipients to participate in the
title IV programs. The final regulations remove language prohibiting
borrowers with Perkins loans made before July 1, 1993 and National
Defense Student Loans (NDSL) made between October 1, 1980 and July 1,
1993 from obtaining deferments during periods of otherwise eligible
full-time volunteer work that includes providing religious instruction,
conducting religious services, proselytizing, or engaging in
fundraising to support religious activities. Due to the small group of
borrowers expected to benefit from these changes and the heavy
discounting effect that would apply to any deferment costs on such old
loans, we do not estimate any budget impact from these changes.
The final regulations remove current provisions that state that a
member of a religious order pursuing a course of study in an
institution of higher education has no financial need for purposes of
the Pell Grant Program, Federal Perkins Loan Program, FWSP, FSEOG, FFEL
Program, or the Direct Loan Program.
Despite this change, the additional eligibility for student aid for
a very small group of participants in a given religious order would
not, in our estimation, result in any additional significant financial
aid costs to the government. We have little firm data on the number of
members in religious orders subject to these changes who would actually
choose to accept the financial aid for which they are eligible. For
instance, the Franciscans are perhaps the largest and most well-known
mendicant religious order, which means the priests take a vow of
poverty. According to a 2013 reference,\18\ there are around 14,000
first order Franciscan members, including 9,700 priests. Even
considering other orders within the Franciscans and additional smaller
monastic sects such as the Benedictines and Dominicans, the membership
estimates would not be large. Thus, the Department believes that the
pool of members potentially impacted by this regulatory change is
already small to begin with and the final regulations are not going to
induce changes in member practices and would not result in measurable
financial aid estimates. Note that there are already many postsecondary
institutions with a faith-based mission that are title IV eligible and
are not affected by these final regulations. Therefore, the changes
would allow our regulations to be consistent with the Supreme Court
decision in Trinity Lutheran without involving a significant economic
impact.
---------------------------------------------------------------------------
\18\ Annuario Pontificio 2013 (Libreria Editrice Vaticana 2013
ISBN 978-88-209-9070-1), p. 1422.
---------------------------------------------------------------------------
The regulatory changes would also affect PSLF. Under the final
regulations, certain institutions that are tax-exempt under section
501(c)(3) of the Internal Revenue Code that are religious organizations
would be considered public service eligible employers for purposes of
PSLF. The application form for PSLF (OMB No. 1845-0110) specifically
states that a qualifying employer includes a ``not-for-profit
organization that is tax-exempt under Section 501(c)(3) of the Internal
Revenue Code'' but makes no exclusion for religious purposes. The
current application makes it clear that, in performing job duties
toward the full-time requirement, a borrower's qualifying employment at
a 501(c)(3) organization or a not-for-profit organization does not
include time spent participating in religious instruction, worship
services, or any form of proselytizing. This provision is changed in
the final regulations in response to concerns that such provisions
would violate RFRA. There is little to no existing data within the
Department to isolate the potential population that may be newly
eligible after this changed rule. The Department's assumption under the
NPRM was that eligible 501(c)(3) employers and workers would cooperate
in the structure of their work responsibilities to allow all
potentially eligible workers not engaging in exclusively religious
activity to meet the existing qualification requirements. However,
there may have been previously ineligible workers, primarily clergy,
who will be eligible under the changed rule. While their employers may
have met the 501(c)(3) criteria, they were prohibited from receiving
forgiveness due to the ineligibility of their work activities under the
existing regulation. Based on an analysis of Bureau of Labor Statistics
(BLS) data,
[[Page 49815]]
the percentage of workers at non-profit religious organizations as a
proportion of the total population of workers potentially eligible for
Public Service Loan Forgiveness is very small, approximately 0.50% of
total workers. This high-level potential population is further reduced
by isolating the BLS occupation clergy, a proxy for our analysis
purposes of workers engaged in exclusively previously ineligible
activity at otherwise eligible 501(c)(3) employers. Further
characteristics that filter this population are the percentage who
borrow, percentage who work full-time, and finally, the percentage who
the Department estimates will successfully complete the requirements
for PSLF, that is 120 qualifying payments and 10 years of service.
These estimated adjustments to the currently eligible PSLF population
for this newly eligible potential population results in a 0.06%
increase in the population qualifying for PSLF from the current
baseline. Transfers in the Direct Loan Program for subsidy costs
related to this potential group of newly eligible potential population
may be as much as $213 million, $122 million for existing cohorts and
$91 million for future cohorts.
The changes to the GEAR UP program regulations would clarify that
providers of GEAR UP services to students enrolled in private schools
must be contracted independently of the private schools and would allow
pervasively sectarian institutions of higher education to serve as
fiscal agents for GEAR UP grants. In general, the Department does not
estimate costs associated with changes to regulations governing
competitive grant programs as participation in such programs is
voluntary and funding still must be limited to what is appropriated by
Congress. However, it is possible that certain changes in the
regulatory framework governing a competitive grant program could
produce transfers in program benefits among entities or recipients of
services.
Regarding the provision requiring providers of services to students
enrolled in private schools to be independent of the school, the
Department first assessed the extent to which GEAR UP services are
currently provided to students enrolled in such schools. During the
most recent reporting period, GEAR UP grantees reported serving
students in 4,033 schools. Of those schools, the Department was able to
identify only five private schools in which students received GEAR UP
services. In total, private schools represented only 0.1 percent of
schools served by the program and, even among the grantees serving such
schools, private schools represented 0.9 percent of the total schools
they served. As such, we do not believe that the requirement relating
to the employment relationship between individuals providing services
in such schools and the schools themselves is likely to have a large
impact on the administration of the program.
Regarding who may serve as a fiscal agent for a GEAR UP Grant, as
noted above, the final regulations would allow pervasively sectarian
institutions of higher education to serve in such a capacity. However,
nothing in the current GEAR UP regulations precludes a pervasively
sectarian institution of higher education from being a member of a GEAR
UP partnership. As such, pervasively sectarian institutions can
currently participate in and provide services under a GEAR UP grant.
The Department does not have readily available data to identify all
members of GEAR UP partnerships and whether they are pervasively
sectarian. With such information, the Department could more easily
quantify the potential number of partnerships affected by the change.
However, even without such information, given that pervasively
sectarian institutions are already eligible members of partnerships, we
do not believe the change to allow them to serve as fiscal agents would
dramatically change the makeup of the GEAR UP applicant pool. Any
pervasively sectarian institution that currently wishes to participate
in the GEAR UP program may do so and this change would only result in a
shift in who has primary fiscal liability for the grant.
Alternatives Considered
With respect to the TEACH Grant program, we considered maintaining
the current regulations as is, that is not including provisions related
to the current reconsideration process in the final regulations,
maintaining the current counseling requirements without adding a
separate conversion counseling requirement, maintaining, instead of
expanding, the current regulations related to qualifying teacher
shortage areas for fulfilling the service obligation, and not expanding
allowable suspensions beyond those that are currently available. As we
describe in previous sections, making these changes gives the
Department the opportunity to address GAO concerns specifically, and
generally provide from more information and clarity to recipients of
the TEACH Grant program.
For the faith-based provisions, we considered not making the
changes and leaving the current regulatory language in place as
written.
Regulatory Flexibility Act Certification
The Secretary certifies that the final regulations will not have a
significant economic impact on a substantial number of small entities.
In fact, the primary entities who are affected by the final regulations
are individual students, not organizations, businesses, or governmental
units. This holds true for the faith-based component of the final
regulations that address individuals participating in religious orders,
or student borrowers applying for PSLF. Similarly, the changes to the
TEACH Grant Program regulations primarily affect students who are
interested in teaching and apply for a TEACH grant.
Of the entities that would be affected by the final regulations,
many institutions, especially institutions with a faith-based mission,
would be considered small. The Department recently proposed a size
classification based on enrollment using IPEDS data that established
the percentage of institutions in various higher education sectors
considered to be small entities, as shown in Table [6].\19\ This size
classification was described in the NPRM published in the Federal
Register on July 31, 2018 for the proposed borrower defense rule (83 FR
37242, 37302). Under the Department's proposed size standards, ``small
entities'' have an enrollment of 1,000 students or less at 4-year
schools or 500 students or less at 2-years schools. The Department has
discussed the proposed standard with the Chief Counsel for Advocacy of
the Small Business Administration, and while no change has been
finalized, the Department continues to believe this approach better
reflects a common basis for determining size categories that is linked
to the provision of educational services.
---------------------------------------------------------------------------
\19\ U.S. Department of Education, National Center for Education
Statistics. Integrated Postsecondary Education Data System 2016
Institutional Characteristics: Directory Information survey file
downloaded March 3, 2018. Available at nces.ed.gov/ipeds/datacenter/DataFiles.aspx.
[[Page 49816]]
Table 6--Small Entities Under Enrollment Based Definition
----------------------------------------------------------------------------------------------------------------
Level Type Small Total Percent
----------------------------------------------------------------------------------------------------------------
2-year................................ Public.................. 342 1,240 28
2-year................................ Private................. 219 259 85
2-year................................ Proprietary............. 2,147 2,463 87
4-year................................ Public.................. 64 759 8
4-year................................ Private................. 799 1,672 48
4-year................................ Proprietary............. 425 558 76
-----------------------------------------------
Total............................. ........................ 3,996 6,951 57
----------------------------------------------------------------------------------------------------------------
The final regulations would affect students who belong to religious
orders and those students most likely attend institutions with a
religious mission. In general, we believe faith-based institutions are
more likely to be small institutions. However, the final regulations do
not affect the title IV eligibility of such institutions.
Accordingly, The Secretary certifies that the final regulations
will not have a significant economic impact on a substantial number of
small entities. Nothing in the final regulations would compel
institutions, small or not, to engage in substantive changes to their
programs. Therefore, there is no estimated associated institutional
burden.
Even if the affected institutions were considered small entities,
the final regulations are designed to permit them to participate in
title IV programs without jeopardizing their religious mission. Nothing
in the final regulations would require institutions to expand their
enrollment, take on additional students, or to participate in title IV
aid programs, but the final regulations would give them that
opportunity.
Paperwork Reduction Act of 1995
As part of its continuing effort to reduce paperwork and respondent
burden, the Department provides the general public and Federal agencies
with an opportunity to comment on proposed and continuing collections
of information in accordance with the Paperwork Reduction Act of 1995
(PRA) (44 U.S.C. 3506(c)(2)(A)). This helps ensure that: The public
understands the Department's collection instructions, respondents can
provide the requested data in the desired format, reporting burden
(time and financial resources) is minimized, collection instruments are
clearly understood, and the Department can properly assess the impact
of collection requirements on respondents.
Part 686 contains information collection requirements. Under the
PRA the Department has submitted a copy of these sections to OMB for
its review.
A Federal agency may not conduct or sponsor a collection of
information unless OMB approves the collection under the PRA and the
corresponding information collection instrument displays a currently
valid OMB control number.
Notwithstanding any other provision of law, no person is required
to comply with, or is subject to penalty for failure to comply with, a
collection of information if the collection instrument does not display
a currently valid OMB control number.
In the final regulations we will display the control numbers
assigned by OMB to any collection requirements adopted in the final
regulations.
Section 686.12--Agreement to serve or repay.
Requirements: Under final Sec. 686.12, the TEACH Grant agreement
to serve or repay will be expanded and updated with revised
definitions, requirements, and explanations of the program and
participant conditions, and options as discussed in the preamble.
Burden Calculation: These final regulations will require changes to
the TEACH Grant agreement to serve form currently approved under OMB
Control Number 1845-0083. We do not believe those changes will impact
the current burden associated with this form. We estimate that, on
average, it will take a grant recipient 30 minutes (.50 hours) to
review and complete the updated agreement, which is done
electronically. We continue to anticipate 50,793 TEACH applicants will
annually utilize the agreement accepting the program terms, including
the required teaching service, or the conversion of the grant to a
Direct Unsubsidized Loan if such service is not met or the applicant
does not otherwise comply with the terms of the agreement. Based on one
response per applicant, we continue to estimate an annual reporting
burden for individuals of 25,397 hours (50,793 x .50 hours).
Sec. 686.12--Agreement To Serve or Repay
[OMB control number 1845-0083]
----------------------------------------------------------------------------------------------------------------
Time to
Entity Respondent Responses respond Burden hours
(hours)
----------------------------------------------------------------------------------------------------------------
Individual...................................... 50,793 50,793 .50 25,397
---------------------------------------------------------------
Total....................................... 50,793 50,793 .............. 25,397
----------------------------------------------------------------------------------------------------------------
Section 686.32--Counseling requirements.
Requirements: The final regulations in Sec. 686.32 will expand the
information that is provided to TEACH Grant recipients during initial,
subsequent, and exit counseling. The final regulations will add a new
conversion counseling requirement for grant recipients whose TEACH
Grants are converted to Direct Unsubsidized Loans.
Burden Calculation: Currently there is burden of 24,459 hours
assessed to 37,749 respondents for the counseling requirements of Sec.
686.32 in the regulatory information collection 1845-0084 as filed in
January 2018. These figures do not include the new conversion
counseling that will be required under the final regulations. The
expansion and revision of the
[[Page 49817]]
required program counseling will require changes to the counseling
currently available. We anticipate that approximately 1,520 TEACH Grant
recipients will either voluntarily convert their grant to a loan or
will run out of time to complete the teaching obligation and have the
grant converted to a loan. This is based on the number of voluntary and
out of time conversions noted for 2019. We do not believe there will be
a significant increase or decrease in such activity.
We believe that it will take a TEACH Grant recipient the same
approximate 20 minutes (.33 hours) to review the new conversion
counseling materials as it takes them to review the other required
counseling materials. We estimate the total burden of 502 hours (1,520
x .33 hours) for recipients to review the conversion counseling
material.
The changes to the initial, subsequent, exit, and new conversion
counseling information collection will be completed and a full public
clearance filing will be made after publication of the final rule and
before being made available for use by the effective date of the
regulations.
Sec. 686.32--Counseling Requirements
[OMB control number 1845-0084 new conversion counseling figures only]
----------------------------------------------------------------------------------------------------------------
Time to
Entity Respondent Responses respond Burden hours
(hours)
----------------------------------------------------------------------------------------------------------------
Individual...................................... 1,520 1,520 .33 502
---------------------------------------------------------------
Total....................................... 1,520 1,520 .............. 502
----------------------------------------------------------------------------------------------------------------
Section 686.40--Documenting the service obligation.
Requirements: The final regulations clarify the requirements
regarding the documentation of completion of the teaching service
obligation in the TEACH Grant Program and how it is reported. To
support the requirement, we provided a draft ``TEACH Grant
Certification of Completed Teaching'' form with the Notice of Proposed
Rulemaking. While no public comments were received regarding the form,
we have determined that we need to add to the form. We are modifying
the ``TEACH Grant Certification of Completed Teaching'' form by adding
an option to allow TEACH Grant recipients to certify that they have
begun qualifying teaching service within a timeframe that will allow
them to complete the service obligation within the eight year service
obligation period, to avoid having their TEACH Grants converted to
loans in accordance with Section 686.43(a)(1)(ii). This form continues
to require both TEACH grant recipient and eligible school official
information.
Burden Calculation: The changes to the regulations relating to the
required service obligation will require a new certification form.
During the 2018 calendar year, Department records indicate we received
documentation for 52,989 grantees regarding yearly service obligation
completion. We estimate that to meet the requirements of Sec. 686.40
each respondent will need 20 minutes (.33 hours) to complete the
certification form. We estimate the total burden of 17,486 hours
(52,989 x .33 hours) for completion of this form.
We believe that the second certification option on the ``TEACH
Grant Certification of Completed Teaching'' form is needed to allow
TEACH Grant recipients who have not yet completed any qualifying
teaching, but who have sufficient time remaining in the eight-year
service obligation period to complete the required four-years of
teaching, to certify that they have begun qualifying teaching to avoid
conversion of the TEACH Grants to loans under Section 686.43(a)(1)(ii).
We estimate that to meet the certification requirements each respondent
will need 20 minutes (.33 hours) to complete the certification form. We
estimate that approximately 24 TEACH Grant recipients will submit the
certification form for this purpose. We estimate a total burden of 8
hours (24 x .33 hours = 8 hours) for completion of the form.
We estimate the total burden of 17,494 hours (53,013 x .33 hours)
under OMB Control Number 1845-0158.
Sec. 686.40--Documenting the Service Obligation
[OMB control number 1845-0158]
----------------------------------------------------------------------------------------------------------------
Time to
Entity Respondent Responses respond Burden hours
(hours)
----------------------------------------------------------------------------------------------------------------
Individual documenting service obligation....... 52,989 52,989 .33 17,486
Individual documenting beginning eligible 24 24 .33 8
teaching.......................................
---------------------------------------------------------------
Total....................................... 53,013 53,013 .............. 17,494
----------------------------------------------------------------------------------------------------------------
Section 686.41--Periods of suspension.
Requirements: The final regulations add new conditions under which
a TEACH Grant recipient may receive a temporary suspension of the
period for completing the service obligation.
Burden Calculation: The final regulations added new conditions that
will allow a TEACH Grant recipient to receive a temporary suspension of
the period for completing the service obligation. These new conditions,
including completion of licensure requirements, military orders for the
grantee's spouse, and residing or being employed in a federally
declared major disaster area require new temporary suspension forms.
The qualifying leave under the Family and Medical Leave Act of 1993,
and the call to military service are retained in the regulations.
Department records indicate that, during the 2018 calendar year, we
received documentation supporting suspension of 589 grantees for
enrollment to complete licensure
[[Page 49818]]
requirements. We estimate that to meet the requirements in final Sec.
686.41(a)(1)(ii), each respondent will need 20 minutes (.33 hours) to
complete the certification form. We estimate a total burden of 194
hours (589 x .33 hours).
Department records indicate that, during the 2018 calendar year, we
received documentation supporting suspension of 334 grantees for
qualifying leave under the Family and Medical Leave Act of 1993. We
estimate that to meet the requirements in final Sec.
686.41(a)(1)(iii), each respondent will need 20 minutes (.33 hours) to
complete the certification form. We estimate a total burden of 110
hours (334 x .33 hours).
Department records indicate that, during the 2018 calendar year, we
received documentation supporting suspension of 24 grantees for call to
military service. We estimate that to meet the requirements in final
Sec. 686.41(a)(1)(iv), each respondent will need 20 minutes (.33
hours) to complete the certification form. We estimate a total burden
of 8 hours (24 x .33 hours).
We anticipate that we will receive documentation supporting
suspension of 25 grantees based on military orders for the grantee's
spouse. We estimate that to meet the requirements in final Sec.
686.41(a)(1)(v), each respondent will need 20 minutes (.33 hours) to
complete the certification form. We estimate a total burden of 8 hours
(25 x .33 hours).
We anticipate that we will receive documentation supporting
suspension of 500 grantees based on residing or being employed in a
federally declared major disaster area. We estimate that to meet the
requirements in final Sec. 686.41(a)(1)(vi), each respondent will need
20 minutes (.33 hours) to complete the certification form. We estimate
a total burden of 165 hours (500 x .33 hours).
We estimate the total burden of 485 hours (1,472 x .33 hours) under
OMB Control Number 1845-0158.
Sec. 686.41--Periods of Suspension
[OMB control number 1845-0158]
----------------------------------------------------------------------------------------------------------------
Time to
Entity Respondent Responses respond Burden hours
(hours)
----------------------------------------------------------------------------------------------------------------
Individual (a)(1)(ii)........................... 589 589 .33 194
Individual (a)(1)(iii).......................... 334 334 .33 110
Individual (a)(1)(iv)........................... 24 24 .33 8
Individual (a)(1)(v)............................ 25 25 .33 8
Individual (a)(1)(vi)........................... 500 500 .33 165
---------------------------------------------------------------
Total....................................... 1,472 1,472 .............. 485
----------------------------------------------------------------------------------------------------------------
Section 686.42--Discharge of agreement to serve or repay.
Requirements: The final regulations revise the conditions under
which a TEACH Grant recipient may discharge an agreement to serve or
repay based on military service.
Burden Calculation: Department records indicate that, during the
2018 calendar year, we received documentation supporting suspension of
10 grantees for discharge due to an extended call to military service.
We estimate that to meet the requirements in final Sec. 686.42(c),
each respondent will need 20 minutes (.33 hours) to complete the new
certification form also used for military service suspension.
We estimate a total burden of 3 hours (10 x .33 hours) under OMB
Control Number 1845-0158.
Sec. 686.42--Discharge of Agreement to Serve or Repay
[OMB control number 1845-0158]
----------------------------------------------------------------------------------------------------------------
Time to
Entity Respondent Responses respond Burden hours
(hours)
----------------------------------------------------------------------------------------------------------------
Individual...................................... 10 10 .33 3
---------------------------------------------------------------
Total....................................... 10 10 .............. 3
----------------------------------------------------------------------------------------------------------------
Section 686.43--Obligation to repay the grant.
Requirements: The final regulations simplify the rules governing
when a TEACH Grant will be converted to a Direct Unsubsidized Loan and
provide for annual notifications from the Secretary to the recipient
regarding the status of a recipient's TEACH Grant service obligation.
Under the final regulations, a TEACH Grant recipient can request
conversion of the grant to a loan if the recipient decides not to
fulfill the TEACH Grant obligations for any reason or if the recipient
fails to begin or maintain qualifying teaching service within a
timeframe that would allow the recipient to complete the service
obligation in the requisite eight-year period. Additionally, the final
regulations describe the notifications the Secretary will annually send
to all TEACH Grant recipients regarding the service obligation
requirements.
Burden Calculation: We believe that the final regulations will
require action on the part of TEACH grant recipients. Based on
Department data, during the 2018 calendar year there were 52,989 TEACH
Grant recipients who submitted evidence of completed teaching service.
We estimate that an additional 25 percent of that figure or about
13,247 grant recipients will be working toward their teaching
obligation for a total of 66,236 grant recipients who will receive the
annual notice from the Secretary as required under final Sec.
686.43(a)(2). We estimate that grant recipients will require 10 minutes
(.17 hours) to review the information provided in each annual notice.
We estimate the total burden of 11,260 hours (66,236 x .17 hours).
There will be burden on those recipients who are notified that
their
[[Page 49819]]
TEACH Grant will be converted to a loan if the recipient does not
submit required documentation to show that they are satisfying the
service obligation. Based on the Department's data, during calendar
year 2018 there were a total of 10,591 TEACH Grant recipients whose
grants were converted to loans based on the recipients' voluntary
request, or because the recipient was out of time to perform the
service obligation or because the recipient did not provide evidence of
meeting the service obligation as required under Sec. 686.43(a)(4). We
estimate that grant recipients will require 10 minutes (.17 hours) to
review the information in the notice. We estimate a total burden of
1,800 burden hours (10,591 x .17 hours).
Additionally, there will be burden on any TEACH Grant recipient
whose grant was involuntarily converted to a Direct Unsubsidized Loan
to request reconsideration from the Secretary. Based on the
Department's data, during calendar year 2018 there were 282 correctable
conversions of TEACH Grants into loans. We estimate that a recipient
will require 15 minutes (.25 hours) to gather documentation to present
to the Secretary and make such a request as required under Sec.
686.43(a)(5). We estimate a total burden of 71 burden hours (282 x .25
hours).
We estimate a total burden of 13,131 burden hours under OMB Control
Number 1845-0157.
Sec. 686.43--Obligation To Repay the Grant
[OMB control number 1845-0157]
----------------------------------------------------------------------------------------------------------------
Time to
Entity Respondent Responses respond Burden hours
(hours)
----------------------------------------------------------------------------------------------------------------
Individual (a)(2)............................... 66,236 66,236 .17 11,260
Individual (a)(4)............................... * 10,591 .17 1,800
Individual (a)(5)............................... * 282 .25 71
---------------------------------------------------------------
Total....................................... 66,236 77,109 .............. 13,131
----------------------------------------------------------------------------------------------------------------
* These respondents will be part of the universe of respondents who receive the annual notifications and are not
summed to avoid duplication of respondents.
The estimated cost to the recipients is $1,680,714, based on the
$29.48 per hour averaged for 2018 elementary, middle school and high
school teacher salaries from the 2019 Bureau of Labor Statistics
Occupational Handbook.
----------------------------------------------------------------------------------------------------------------
OMB control No. and
Regulatory section Information collection estimated burden Estimated
(change in burden) costs
----------------------------------------------------------------------------------------------------------------
Sec. 686.12 Agreement to serve or Under final Sec. 686.12 the TEACH 1845-0083 +25,397 $748,704
repay. Grant agreement to serve or repay hours.
will need to be expanded and
updated with revised definitions,
requirements, and explanations of
the program and participant
conditions, and options as
discussed in the preamble.
Sec. 686.32 Counseling The final regulations in Sec. 1845-0084 +502 hours. 14,799
requirements. 686.32 will expand the information
that is provided to TEACH Grant
recipients during initial,
subsequent, and exit counseling.
The final regulations add a new
conversion counseling requirement
for grant recipients whose TEACH
Grants are converted to Direct
Unsubsidized Loans.
Sec. 686.40 Documenting the The final regulations will clarify 1845-0158 +17,494 515,723
service obligation. the requirements regarding the hours.
documentation of completion of the
teaching service obligation in the
TEACH Grant Program and how it is
reported.
Sec. 686.41 Periods of suspension The final regulations will add new 1845-0158 +485 hours. 14,298
conditions under which a TEACH
Grant recipient may receive a
temporary suspension of the period
for completing the service
obligation.
Sec. 686.42 Discharge of The final regulations will revise 1845-0158 +3 hours... 88
agreement to serve or repay. the language for conditions under
which a TEACH Grant recipient may
discharge an agreement to serve or
repay based on military service.
Sec. 686.43 Obligation to repay The final regulations will simplify 1845-0157 +13,131 387,102
the grant. the rules governing when a TEACH hours.
Grant will be converted to a Direct
Unsubsidized Loan, as well as
provide for annual notifications
from the Secretary to the recipient
regarding the status of a
recipient's TEACH Grant service
obligation. Under the final
regulations, TEACH Grant recipients
can request conversion if the
recipient decides not to fulfill
the TEACH Grant obligations for any
reason or if the recipient fails to
begin or maintain qualifying
teaching service within a timeframe
to complete the service obligation
in the requisite eight-year period.
Additionally, the final regulations
describe the notifications the
Secretary will annually send to all
TEACH Grant recipients regarding
the service obligation requirements.
----------------------------------------------------------------------------------------------------------------
Collections of Information
The total burden hours and change in burden hours associated with
each OMB control number affected by the final regulations follows:
[[Page 49820]]
------------------------------------------------------------------------
Total burden Change in burden
Control No. hours hours
------------------------------------------------------------------------
1845-0083........................ 25,397 No change.
1845-0084........................ 37,175 +502.
1845-0158........................ 17,982 +17,982.
1845-0157........................ 13,131 +13,131.
--------------------------------------
Total........................ 93,685 31,615.
------------------------------------------------------------------------
Intergovernmental Review
These programs are not subject to Executive Order 12372 and the
regulations in 34 CFR part 79.
Assessment of Educational Impact
In the NPRM we requested comments on whether the regulations would
require transmission of information that any other or authority of the
United States gathers or makes available.
Based on the response to the NPRM and on our review, we have
determined that these final regulations do not require transmission of
information that any other agency or authority of the United States
gathers or makes available.
Accessible Format: Individuals with disabilities can obtain this
document in an accessible format (e.g., braille, large print,
audiotape, or compact disc) on request to the program contact person
listed under FOR FURTHER INFORMATION CONTACT.
Electronic Access to This Document: The official version of this
document is the document published in the Federal Register. You may
access the official edition of the Federal Register and the Code of
Federal Regulations at www.govinfo.gov. At this site you can view this
document, as well as all other documents of this Department published
in the Federal Register, in text or Adobe Portable Document Format
(PDF). To use PDF, you must have Adobe Acrobat Reader, which is
available free at the site.
You may also access documents of the Department published in the
Federal Register by using the article search feature at:
www.federalregister.gov. Specifically, through the advanced search
feature at this site, you can limit your search to documents published
by the Department.
(Catalog of Federal Domestic Assistance Number does not apply.)
List of Subjects
34 CFR Part 674
Loan programs--education, Reporting and recordkeeping, Student aid.
34 CFR Part 675
Colleges and universities, Employment, Grant programs--education,
Reporting and recordkeeping requirements, Student aid.
34 CFR Part 676
Grant programs--education, Reporting and recordkeeping
requirements, Student aid.
34 CFR Part 682
Administrative practice and procedure, Colleges and universities,
Loan programs--education, Reporting and recordkeeping requirements,
Student aid, Vocational education.
34 CFR Part 685
Administrative practice and procedure, Colleges and universities,
Loan programs--education, Reporting and recordkeeping requirements,
Student aid, Vocational education.
34 CFR Part 686
Administrative practice and procedure, Colleges and universities,
Education, Elementary and secondary education, Grant programs--
education, Reporting and recordkeeping requirements, Student aid.
34 CFR Part 690
Colleges and universities, Education of disadvantaged, Grant
programs--education, Reporting and recordkeeping requirements, Student
aid.
34 CFR Part 692
Colleges and universities, Grant programs--education, Reporting and
recordkeeping requirements, Student aid.
34 CFR Part 694
Colleges and universities, Elementary and secondary education,
Grant programs--education, Reporting and recordkeeping requirements,
Student aid.
Betsy DeVos,
Secretary of Education.
For the reasons discussed in the preamble, the Secretary of
Education amends parts 674, 675, 676, 682, 685, 686, 690, 692, and 694
of title 34 of the Code of Federal Regulations as follows:
PART 674--FEDERAL PERKINS LOAN PROGRAM
0
1. The authority citation for part 674 continues to read as follows:
Authority: 20 U.S.C. 1070g, 1087aa-1087hh; Pub. L. 111-256, 124
Stat. 2643; unless otherwise noted.
0
2. Section 674.9 is amended by:
0
a. In the introductory text, adding the words ``Prior to October 1,
2017,'' at the beginning of the sentence, removing ``A'' and adding
``a'' in its place. , and removing the word ``is'' and adding in its
place the word ``was''; and
0
b. Revising paragraph (c).
The revision reads as follows:
Sec. 674.9 Student eligibility.
* * * * *
(c) Has financial need as determined in accordance with part F of
title IV of the HEA.
* * * * *
Sec. 674.35 [Amended]
0
3. Section 674.35 is amended by removing paragraph (c)(5)(iv) and
redesignating paragraph (c)(5)(v) as (c)(5)(iv).
0
4. Section 674.36 is amended by revising paragraph (c)(4) to read as
follows:
Sec. 674.36 Deferment of repayment--NDSLs made on or after October
1, 1980, but before July 1, 1993.
* * * * *
(c) * * *
(4) A full-time volunteer in service which the Secretary has
determined is comparable to service in the Peace Corps or under the
Domestic Volunteer Service Act of 1973 (ACTION programs). The Secretary
considers that a borrower is providing comparable service if he or she
satisfies the following four criteria:
(i) The borrower serves in an organization that is exempt from
taxation under the provisions of section 501(c)(3) of the Internal
Revenue Code of 1954.
(ii) The borrower provides service to low-income persons and their
communities to assist them in eliminating poverty and poverty-related
human, social, and environmental conditions.
(iii) The borrower does not receive compensation that exceeds the
rate prescribed under section 6 of the Fair Labor Standards Act of 1938
(the Federal minimum wage), except that the tax-exempt organization may
provide health, retirement, and other fringe benefits to the volunteer
that are substantially equivalent to the benefits offered to other
employees of the organization.
(iv) The borrower has agreed to serve on a full-time basis for a
term of at least one year.
* * * * *
PART 675--FEDERAL WORK-STUDY PROGRAMS
0
5. The authority citation for part 675 continues to read as follows:
Authority: 20 U.S.C. 1070g, 1087, 1094; 42 U.S.C. 2751-2756b;
unless otherwise noted.
[[Page 49821]]
0
6. Section 675.9 is amended by revising paragraph (c) to read as
follows:
Sec. 675.9 Student eligibility.
* * * * *
(c) Has financial need as determined in accordance with part F of
title IV of the HEA.
0
7. Section 675.20 is amended by revising paragraph (c)(2)(iv) to read
as follows:
Sec. 675.20 Eligible employers and general conditions and limitation
on employment.
* * * * *
(c) * * *
(2) * * *
(iv) Involve the construction, operation, or maintenance of so much
of any facility as is used or is to be used for instruction that is
predominantly devotional and religious or as a place for religious
worship, except to the extent that excluding such work would impose a
substantial burden on a person's exercise of religion.
* * * * *
PART 676--FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANT
PROGRAM
0
8. The authority citation for part 676 continues to read as follows:
Authority: 20 U.S.C. 1070b-1070b-3, unless otherwise noted.
0
9. Section 676.9 is amended by revising paragraph (c) to read as
follows:
Sec. 676.9 Student eligibility.
* * * * *
(c) Has financial need as determined in accordance with part F of
title IV of the HEA.
PART 682--FEDERAL FAMILY EDUCATION LOAN (FFEL) PROGRAM
0
10. The authority citation for part 682 continues to read as follows:
Authority: 20 U.S.C. 1071-1087-4, unless otherwise noted.
Sec. 682.210 [Amended]
0
11. Section 682.210 is amended by removing and reserving paragraph
(m)(1)(iv).
Sec. 682.301 [Amended]
0
12. Section 682.301 is amended by removing paragraph (a)(2) and
redesignating paragraph (a)(3) as paragraph (a)(2).
PART 685--WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM
0
13. The authority citation for part 685 continues to read as follows:
Authority: 20 U.S.C. 1070g, 1087a, et seq., unless otherwise
noted.
Sec. 685.200 [Amended]
0
14. Section 685.200 is amended by removing and reserving paragraph
(a)(2)(ii).
0
15. Section 685.219 is amended in paragraph (b) by revising the
definition of ``public service organization'' and by revising paragraph
(c)(1)(ii) to read as follows:
Sec. 685.219 Public Service Loan Forgiveness Program.
* * * * *
(b) * * *
Public service organization means:
(i) A Federal, State, local, or Tribal government organization,
agency, or entity;
(ii) A public child or family service agency;
(iii) A non-profit organization under section 501(c)(3) of the
Internal Revenue Code that is exempt from taxation under section 501(a)
of the Internal Revenue Code;
(iv) A Tribal college or university; or
(v)(A) A private organization that provides the following public
services: Emergency management, military service, public safety, law
enforcement, public interest law services, early childhood education
(including licensed or regulated child care, Head Start, and State
funded pre-kindergarten), public service for individuals with
disabilities and the elderly, public health (including nurses, nurse
practitioners, nurses in a clinical setting, and full-time
professionals engaged in health care practitioner occupations and
health care support occupations, as such terms are defined by the
Bureau of Labor Statistics), public education, public library services,
school library or other school-based services; and
(B) Is not a business organized for profit, a labor union, or a
partisan political organization.
* * * * *
(c) * * *
(1) * * *
(ii) Is employed full-time by a public service organization or
serving in a full-time AmeriCorps or Peace Corps position--
(A) When the borrower makes the 120 monthly payments described
under paragraph (c)(1)(iii) of this section;
(B) At the time of application for loan forgiveness; and
(C) At the time the remaining principal and accrued interest are
forgiven.
* * * * *
PART 686--TEACHER EDUCATION ASSISTANCE FOR COLLEGE AND HIGHER
EDUCATION (TEACH) GRANT PROGRAM
0
16. The authority citation for part 686 continues to read as follows:
Authority: 20 U.S.C. 1070g, et seq., unless otherwise noted.
0
17. Section 686.1 is revised to read as follows:
Sec. 686.1 Scope and purpose.
The TEACH Grant program awards grants to students who intend to
teach, to help meet the cost of their postsecondary education. In
exchange for the grant, the student must agree to serve as a full-time
teacher in a high-need field in a school serving low-income students,
or as a full-time teacher in a high-need field for an educational
service agency serving low-income students, for at least four academic
years within eight years of ceasing enrollment at the institution where
the student received the grant or, in the case of a student who
receives a TEACH Grant at one institution and subsequently transfers to
another institution and enrolls in another TEACH Grant-eligible
program, within eight years of ceasing enrollment at the other
institution. The eight-year period for completing the required four
years of teaching does not include periods of suspension in accordance
with Sec. 686.41. If the student does not satisfy the service
obligation, the amounts of the TEACH Grants received are treated as a
Direct Unsubsidized Loan and must be repaid with interest charged from
the date of each TEACH Grant disbursement. A TEACH Grant that has been
converted to a Direct Unsubsidized Loan can be reconverted to a grant
only in accordance with Sec. 686.43.
0
18. Section 686.2 is amended:
0
a. In paragraph (b), by adding in alphabetical order and entry for
``Free application for Federal student aid (FAFSA)''; and
0
b. In paragraph (d) by:
0
i. Removing the definition of ``Agreement to serve (ATS)'' and adding
in alphabetical order a definition for ``Agreement to serve or repay'';
0
ii. Adding in alphabetical order a definition for ``Educational service
agency'';
0
iii. In paragraph (5) of the definition of ``High-need field'', adding
``, including, but not limited to, computer science'' after the word
``Science'';
0
iv. In paragraph (7) of the definition of ``High-need field'', removing
the words ``in accordance with 34 CFR 682.210(q)'';
[[Page 49822]]
0
v. Revising the definition of ``Highly qualified'';
0
vi. Removing the definition of ``School serving low-income students
(low-income school)'' and adding in alphabetical order a definition for
``School or educational service agency serving low-income students
(low-income school)'';
0
vii. Revising the definition of ``TEACH Grant-eligible program''; and
0
viii. Adding in alphabetical order a definition for ``Teacher Shortage
Area Nationwide Listing (Nationwide List)''.
The additions and revisions read as follows:
Sec. 686.2 Definitions.
* * * * *
(b) * * *
Free application for Federal student aid (FAFSA).
* * * * *
(d) * * *
Agreement to serve or repay: An agreement under which the
individual receiving a TEACH Grant commits to meet the service
obligation or repay the loan as described in Sec. 686.12 and to comply
with notification and other provisions of the agreement.
* * * * *
Educational service agency: A regional public multiservice agency
authorized by State statute to develop, manage, and provide services or
programs to local educational agencies (LEAs).
* * * * *
Highly qualified: Has the meaning set forth in paragraphs (i)
through (iv) of this definition, or the meaning set forth in section
602(10) of the Individuals With Disabilities Education Act.
(i) When used with respect to any public elementary school or
secondary school teacher in a State, means that--
(A) The teacher has obtained full State certification as a teacher
(including certification obtained through alternative routes to
certification) or passed the State teacher licensing examination, and
holds a license to teach in such State, except that when used with
respect to any teacher teaching in a public charter school, the term
means that the teacher meets the requirements set forth in the State's
public charter school law; and
(B) The teacher has not had certification or licensure requirements
waived on an emergency, temporary, or provisional basis.
(ii) When used with respect to--
(A) An elementary school teacher who is new to the profession,
means that the teacher--
(1) Holds at least a bachelor's degree; and
(2) Has demonstrated, by passing a rigorous State test, subject
knowledge and teaching skills in reading, writing, mathematics, and
other areas of the basic elementary school curriculum (which may
consist of passing a State-required certification or licensing test or
tests in reading, writing, mathematics, and other areas of the basic
elementary school curriculum); or
(B) A middle or secondary school teacher who is new to the
profession, means that the teacher holds at least a bachelor's degree
and has demonstrated a high level of competency in each of the academic
subjects in which the teacher teaches by--
(1) Passing a rigorous State academic subject test in each of the
academic subjects in which the teacher teaches (which may consist of a
passing level of performance on a State-required certification or
licensing test or tests in each of the academic subjects in which the
teacher teaches); or
(2) Successful completion, in each of the academic subjects in
which the teacher teaches, of an academic major, a graduate degree,
coursework equivalent to an undergraduate academic major, or advanced
certification or credentialing.
(iii) When used with respect to an elementary, middle, or secondary
school teacher who is not new to the profession, means that the teacher
holds at least a bachelor's degree and--
(A) Has met the applicable standard in paragraph (ii) of this
definition, which includes an option for a test; or
(B) Demonstrates competence in all the academic subjects in which
the teacher teaches based on a highly objective uniform State standard
of evaluation that--
(1) Is set by the State for both grade-appropriate academic subject
matter knowledge and teaching skills;
(2) Is aligned with challenging State academic content and student
academic achievement standards and developed in consultation with core
content specialists, teachers, principals, and school administrators;
(3) Provides objective, coherent information about the teacher's
attainment of core content knowledge in the academic subjects in which
a teacher teaches;
(4) Is applied uniformly to all teachers in the same academic
subject and the same grade level throughout the State;
(5) Takes into consideration, but is not based primarily on, the
time the teacher has been teaching in the academic subject;
(6) Is made available to the public upon request; and
(7) May involve multiple, objective measures of teacher competency.
(iv)(A) When used with respect to any public, or other non-profit
private, elementary or secondary school teacher who is exempt from
State certification requirements means that the teacher is permitted to
and does satisfy rigorous subject knowledge and skills tests by taking
competency tests in the applicable grade levels and subject areas.
(B) For purposes of paragraph (iv)(A) of this definition, the
competency tests taken by a private school teacher must be recognized
by five or more States for the purpose of fulfilling the highly
qualified teacher requirements as described in paragraphs (i) through
(iii) of this definition, and the score achieved by the teacher on each
test must equal or exceed the average passing score of those five
States.
* * * * *
School or educational service agency serving low-income students
(low-income school): An elementary school, secondary school, or
educational service agency that is listed in the Department's Teacher
Cancellation Low-Income (TCLI) Directory. The Secretary considers all
elementary and secondary schools and educational service agencies
operated by the Bureau of Indian Education (BIE) in the Department of
the Interior or operated on Indian reservations by Indian Tribal groups
under contract or grant with the BIE to qualify as schools or
educational service agencies serving low-income students.
* * * * *
TEACH Grant-eligible program: An eligible program, as defined in 34
CFR 668.8, is a program of study at a TEACH Grant-eligible institution
that is designed to prepare an individual to teach as a highly
qualified teacher in a high-need field and leads to a baccalaureate or
master's degree, or is a post-baccalaureate program of study. A two-
year program of study that is acceptable for full credit toward a
baccalaureate degree is considered to be a program of study that leads
to a baccalaureate degree.
* * * * *
Teacher Shortage Area Nationwide Listing (Nationwide List): A list
of teacher shortage areas, as defined in 34 CFR 682.210(q)(8)(vii), in
each State.
* * * * *
0
19. Section 686.10 is revised to read as follows:
Sec. 686.10 Application.
To receive a grant under this part, a student must--
[[Page 49823]]
(a) Complete and submit the Free application for Federal student
aid (FAFSA) in accordance with the instructions in the FAFSA;
(b) Complete and sign an agreement to serve or repay in accordance
with Sec. 686.12; and
(c) Provide any additional information requested by the Secretary
and the institution.
Sec. 686.11 [Amended]
0
20. Section 686.11 is amended:
0
a. In paragraph (a)(1)(i), by removing the words ``submitted a
completed application'' and adding in their place the words ``met the
application requirements in Sec. 686.10'';
0
b. By removing paragraph (a)(1)(ii);
0
c. By redesignating paragraphs (a)(1)(iii), (iv), and (v) as paragraphs
(a)(1)(ii), (iii), and (iv), respectively;
0
d. In paragraph (b) introductory text, by removing the words
``submitted a completed application'' and adding in their place the
words ``met the application requirements in Sec. 686.10'';
0
e. By removing paragraph (b)(1); and
0
f. By redesignating paragraphs (b)(2) and (3) as paragraphs (b)(1) and
(2), respectively.
0
21. Section 686.12 is revised to read as follows:
Sec. 686.12 Agreement to serve or repay.
(a) General. A student who meets the eligibility requirements in
Sec. 686.11 may receive a TEACH Grant only after he or she signs an
agreement to serve or repay provided by the Secretary and receives
counseling in accordance with Sec. 686.32.
(b) Contents of the agreement to serve or repay. The agreement to
serve or repay--
(1) Provides that, for each TEACH Grant-eligible program for which
the student received TEACH Grant funds, the grant recipient must
fulfill a service obligation by performing creditable teaching service
by serving--
(i) As a full-time teacher for a total of not less than four
elementary or secondary academic years within eight years after the
date the recipient ceased to be enrolled at the institution where the
recipient received the TEACH Grant, or in the case of a student who
receives a TEACH Grant at one institution and subsequently transfers to
another institution and enrolls in another TEACH Grant-eligible
program, within eight years of ceasing enrollment at the other
institution;
(ii) In a low-income school as defined in Sec. 686.2(d) and
subject to the requirements under Sec. 686.40(a)(3);
(iii) As a highly qualified teacher as defined in Sec. 686.2(d);
and
(iv) In a high-need field in the majority of classes taught during
each elementary and secondary academic year;
(2) Requires the grant recipient to submit, upon completion of each
year of service, documentation of the service in the form of a
certification by a chief administrative officer of the school;
(3) Explains that the eight-year period for completing the service
obligation does not include periods of suspension in accordance with
Sec. 686.41;
(4) Explains the conditions under which a TEACH Grant may be
converted to a Direct Unsubsidized Loan, as described in Sec. 686.43;
(5) Explains that, if a TEACH Grant is converted to a Direct
Unsubsidized Loan, the grant recipient must repay the loan in full,
with interest charged from the date of each TEACH Grant disbursement;
and
(6) Explains that to avoid further accrual of interest as described
in paragraph (b)(5) of this section, a grant recipient who decides not
to teach in a qualified school or field, or who for any other reason no
longer intends to satisfy the service obligation, may request that the
Secretary convert his or her TEACH Grant to a Direct Unsubsidized Loan
so that the grant recipient may begin repaying immediately, instead of
waiting for the TEACH Grant to be converted to a loan under the
condition described in Sec. 686.43(a)(1)(ii); and
(7) Explains that a grant recipient whose TEACH Grant was converted
to a Direct Unsubsidized Loan based on a request from the recipient in
accordance with Sec. 686.43(a)(1)(i) may request that the Secretary
reconvert the recipient's loan to a TEACH Grant as provided in Sec.
686.43(a)(8); and
(8) Requires the grant recipient to comply with the terms,
conditions, and other requirements consistent with Sec. Sec. 686.40
through 686.43 that the Secretary determines to be necessary.
(c) Completion of the service obligation. (1) A grant recipient
must complete one service obligation for all TEACH Grants received for
undergraduate study, and one service obligation for all TEACH Grants
received for graduate study. Each service obligation begins when the
grant recipient ceases enrollment at the institution where the TEACH
Grants were received, or, in the case of a grant recipient who receives
a TEACH Grant at one institution and subsequently transfers to another
institution, within eight years from the date the grant recipient
ceases enrollment at the other institution. However, creditable
teaching service, a suspension approved under Sec. 686.41(a)(2), or a
military discharge granted under Sec. 686.42(c)(2) may apply to more
than one service obligation.
(2) Unless paragraph (c)(3) of this section applies--
(i) In the case of a TEACH Grant recipient who withdraws from an
institution before completing a baccalaureate or post-baccalaureate
program of study for which he or she received TEACH Grants, but later
re-enrolls at the same institution or at a different institution in
either the same baccalaureate or post-baccalaureate program or in a
different TEACH Grant-eligible baccalaureate or post-baccalaureate
program prior to the date that his or her TEACH Grants are converted to
Direct Unsubsidized Loans under Sec. 686.43(a)(1)(ii) and receives
additional TEACH Grants or the Secretary otherwise confirms that the
grant recipient has re-enrolled in a TEACH Grant-eligible program, the
Secretary adjusts the starting date of the period for completing the
service obligation to begin when the grant recipient ceases to be
enrolled at the institution where he or she has re-enrolled; and
(ii) In the case of a TEACH Grant recipient who withdraws from an
institution before completing a master's degree program of study for
which he or she received TEACH Grants, but later re-enrolls at the same
institution or at a different institution in either the same master's
degree program or in a different TEACH Grant eligible master's degree
program prior to the date that his or her TEACH Grants are converted to
Direct Unsubsidized Loans under Sec. 686.43(a)(1)(ii) and receives
additional TEACH Grants or the Secretary otherwise confirms that the
grant recipient has re-enrolled in a TEACH Grant-eligible program, the
Secretary adjusts the starting date of the period for completing the
service obligation to begin when the grant recipient ceases to be
enrolled at the institution where he or she has re-enrolled.
(3) In the case of a TEACH Grant recipient covered under paragraph
(c)(2)(i) or (ii) of this section who completed one or more complete
academic years of creditable teaching service as described in Sec.
686.12(b) during the period between the grant recipient's withdrawal
and re-enrollment--
(i) The Secretary does not adjust the starting date of the period
for completing the service obligation unless requested by the
recipient;
(ii) The completed teaching service counts toward satisfaction of
the grant recipient's service obligation under paragraph (c)(2)(i) of
this section; and
[[Page 49824]]
(iii) If the grant recipient continues to perform creditable
teaching service after re-enrolling in a TEACH Grant-eligible program,
the grant recipient may receive credit toward satisfaction of the
service obligation for any complete academic years of creditable
teaching performed while the recipient is concurrently enrolled in the
TEACH Grant-eligible program only if the recipient does not request and
receive a temporary suspension of the period for completing the service
obligation under Sec. 686.41(a)(1)(i).
(d) Teaching in a high-need field listed in the Nationwide List.
For a grant recipient's teaching service in a high-need field listed in
the Nationwide List to count toward satisfying the recipient's service
obligation, the high-need field in which he or she prepared to teach
must be listed in the Nationwide List for the State in which the grant
recipient teaches--
(1) For teaching service performed before July 1, 2010, at the time
the grant recipient begins teaching in that field, even if that field
subsequently loses its high-need designation for that State; or
(2) For teaching service performed on or after July 1, 2010--
(i) At the time the grant recipient begins teaching in that field,
even if that field subsequently loses its high-need designation for
that State; or
(ii) At the time the grant recipient signed the agreement to serve
or repay or received the TEACH Grant, even if that field subsequently
loses its high-need designation for that State before the grant
recipient begins teaching in that field.
Sec. 686.21 [Amended]
0
22. Section 686.21 is amended:
0
a. In paragraphs (a)(2)(i) and (ii), by removing the word ``aggregate''
and adding in its place the word ``total''; and
0
b. In paragraph(a)(2)(ii), by removing the words ``a master's degree''
and adding in their place the words ``graduate study''.
Sec. 686.31 [Amended]
0
23. Section 686.31 is amended:
0
a. In paragraph (a)(3), by adding the words ``or repay'' after the word
``serve'' and
0
b. In paragraph (e)(2)(ii), by removing the word ``Federal'' before the
words ``Direct Unsubsidized Loan''.
0
24. Section 686.32 is amended by revising paragraphs (a)(3), (b)(3),
(c)(4), and (d) and adding paragraph (e) to read as follows:
Sec. 686.32 Counseling Requirements.
(a) * * *
(3) The initial counseling must--
(i) Explain the terms and conditions of the TEACH Grant agreement
to serve or repay as described in Sec. 686.12;
(ii) Provide the grant recipient with information about how to
identify low-income schools and documented high-need fields;
(iii) Inform the grant recipient that, for the teaching to count
towards the recipient's service obligation, the high-need field in
which he or she has prepared to teach must be--
(A) One of the six high-need fields listed in Sec. 686.2; or
(B) A high-need field that is listed in the Nationwide List for the
State in which the grant recipient teaches--
(1) At the time the grant recipient begins teaching in that field,
even if that field subsequently loses its high-need designation for
that State; or
(2) For teaching service performed on or after July 1, 2010, at the
time the grant recipient signed the agreement to serve or repay or
received the TEACH Grant, even if that field subsequently loses its
high-need designation for that State before the grant recipient begins
teaching in that field;
(iv) Inform the grant recipient of the opportunity to request a
suspension of the eight-year period for completion of the agreement to
serve or repay and the conditions under which a suspension may be
granted in accordance with Sec. 686.41;
(v) Explain to the grant recipient that conditions, such as
conviction of a felony, could preclude the grant recipient from
completing the service obligation;
(vi) Emphasize to the grant recipient that if the grant recipient
fails or refuses to complete the service obligation contained in the
agreement to serve or repay or any other condition of the agreement to
serve or repay--
(A) The TEACH Grant must be repaid as a Direct Unsubsidized Loan;
and
(B) The grant recipient will be obligated to repay the full amount
of each grant and the accrued interest from each disbursement date;
(vii) Explain the circumstances, as described in Sec. 686.43,
under which a TEACH Grant will be converted to a Direct Unsubsidized
Loan;
(viii) Explain that to avoid further accrual of interest as
described in Sec. 686.12(b)(4)(ii), a grant recipient who decides not
to teach in a qualified school or field, or who for any other reason no
longer intends to satisfy the service obligation, may request that the
Secretary convert his or her TEACH Grant to a Direct Unsubsidized Loan
that the grant recipient may begin repaying immediately, instead of
waiting for the TEACH Grant to be converted to a loan under the
condition described in Sec. 686.43(a)(1)(ii);
(ix) Emphasize that, once a TEACH Grant is converted to a Direct
Unsubsidized Loan, it may be reconverted to a grant only if--
(A) The Secretary determines, based on documentation provided by
the recipient or in the Secretary's records, that the grant recipient
was satisfying the service obligation as described in Sec. 686.12 or
that the grant was converted to a loan in error; or
(B) In the case of a grant recipient whose TEACH Grant was
converted to a Direct Unsubsidized Loan in accordance with Sec.
686.43(a)(1)(i), the grant recipient requests that the Secretary
reconvert the loan to a grant and is determined to be eligible for
reconversion in accordance with Sec. 686.43(a)(8);
(x) Review for the grant recipient information on the availability
of the Department's Federal Student Aid Ombudsman's office;
(xi) Describe the likely consequences of loan default, including
adverse credit reports, garnishment of wages, Federal offset, and
litigation; and
(xii) Inform the grant recipient of sample monthly repayment
amounts based on a range of student loan indebtedness.
(b) * * *
(3) Subsequent counseling must--
(i) Review the terms and conditions of the TEACH Grant agreement to
serve or repay as described in Sec. 686.12;
(ii) Emphasize to the grant recipient that if the grant recipient
fails or refuses to complete the service obligation contained in the
agreement to serve or repay or any other condition of the agreement to
serve or repay--
(A) The TEACH Grant must be repaid as a Direct Unsubsidized Loan;
and
(B) The grant recipient will be obligated to repay the full amount
of the grant and the accrued interest from the disbursement date;
(iii) Explain the circumstances, as described in Sec. 686.43,
under which a TEACH Grant will be converted to a Direct Unsubsidized
Loan;
(iv) Explain that to avoid further accrual of interest as described
in Sec. 686.12(b)(4)(ii), a grant recipient who decides not to teach
in a qualified school or field, or who for any other reason no longer
intends to satisfy the service obligation, may request that the
Secretary convert his or her TEACH Grant to a Direct Unsubsidized Loan
that the grant recipient may begin repaying immediately, instead of
waiting for the TEACH Grant to be converted to a loan under the
condition described in Sec. 686.43(a)(1)(ii);
[[Page 49825]]
(v) Emphasize that, once a TEACH Grant is converted to a Direct
Unsubsidized Loan, it may be reconverted to a grant only if--
(A) The Secretary determines, based on documentation provided by
the recipient or in the Secretary's records, that the grant recipient
was satisfying the service obligation as described in Sec. 686.12 or
that the grant was converted to a loan in error; or
(B) In the case of a grant recipient whose TEACH Grant was
converted to a Direct Unsubsidized Loan in accordance with Sec.
686.43(a)(1)(i), the grant recipient requests that the Secretary
reconvert the loan to a grant and is determined to be eligible for
reconversion in accordance with Sec. 686.43(a)(8); and
(vi) Review for the grant recipient information on the availability
of the Department's Federal Student Aid Ombudsman's office.
(c) * * *
(4) The exit counseling must--
(i) Review the terms and conditions of the TEACH Grant agreement to
serve or repay as described in Sec. 686.12 and emphasize to the grant
recipient that the four-year service obligation must be completed
within the eight-year period described in Sec. 686.12;
(ii) Explain the treatment of a grant recipient who withdraws from
and then reenrolls in a TEACH Grant-eligible program at a TEACH Grant
eligible institution as described in Sec. 686.12(c);
(iii) Inform the grant recipient of the opportunity to request a
suspension of the eight-year period for completion of the service
obligation and the conditions under which a suspension may be granted
in accordance with Sec. 686.41;
(iv) Provide the grant recipient with information about how to
identify low-income schools and documented high-need fields;
(v) Inform the grant recipient that, for the teaching to count
towards the recipient's service obligation, the high-need field in
which he or she has prepared to teach must be--
(A) One of the six high-need fields listed in Sec. 686.2; or
(B) A high-need field that is listed in the Nationwide List for the
State in which the grant recipient teaches--
(1) At the time the grant recipient begins teaching in that field,
even if that field subsequently loses its high-need designation for
that State; or
(2) For teaching service performed on or after July 1, 2010, at the
time the grant recipient signed the agreement to serve or repay or
received the TEACH Grant, even if that field subsequently loses its
high-need designation for that State before the grant recipient begins
teaching in that field;
(vi) Emphasize to the grant recipient that if the grant recipient
fails or refuses to complete the service obligation contained in the
agreement to serve or repay or fails to meet any other condition of the
agreement to serve or repay--
(A) The TEACH Grant must be repaid as a Direct Unsubsidized Loan;
and
(B) The grant recipient will be obligated to repay the full amount
of each grant and the accrued interest from each disbursement date;
(vii) Explain to the grant recipient that the Secretary will, at
least annually during the service obligation period, send the recipient
the notice described in Sec. 686.43(a)(2);
(viii) Explain the circumstances, as described in Sec. 686.43,
under which a TEACH Grant will be converted to a Direct Unsubsidized
Loan;
(ix) Explain that to avoid further accrual of interest as described
in Sec. 686.12(b)(4)(ii), a grant recipient who decides not to teach
in a qualified school or field, or who for any other reason no longer
intends to satisfy the service obligation, may request that the
Secretary convert his or her TEACH Grant to a Direct Unsubsidized Loan
that the grant recipient may begin repaying immediately, instead of
waiting for the TEACH Grant to be converted to a loan under the
condition described in Sec. 686.43(a)(1)(ii);
(x) Emphasize that once a TEACH Grant is converted to a Direct
Unsubsidized Loan it may be reconverted to a grant only if--
(A) The Secretary determines, based on documentation provided by
the recipient or in the Secretary's records, that the grant recipient
was satisfying the service obligation as described in Sec. 686.12 or
that the grant was converted to a loan in error; or
(B) In the case of a grant recipient whose TEACH Grant was
converted to a Direct Unsubsidized Loan in accordance with Sec.
686.43(a)(1)(i), the grant recipient requests that the Secretary
reconvert the loan to a grant and is determined to be eligible for
reconversion in accordance with Sec. 686.43(a)(8); and
(xi) Explain to the grant recipient how to contact the Secretary.
(5) If exit counseling is conducted through interactive electronic
means, an institution must take reasonable steps to ensure that each
grant recipient receives the counseling materials and participates in
and completes the exit counseling.
* * * * *
(d) Compliance. The institution must maintain documentation
substantiating the institution's compliance with paragraphs (a) through
(c) of this section for each TEACH Grant recipient.
(e) Conversion counseling. (1) At the time a TEACH Grant
recipient's TEACH Grant is converted to a Direct Unsubsidized Loan, the
Secretary conducts conversion counseling with the recipient by
interactive electronic means and by mailing written counseling
materials to the most recent address provided by the recipient.
(2) The conversion counseling--
(i) Informs the borrower of the average anticipated monthly
repayment amount based on the borrower's indebtedness;
(ii) Reviews for the borrower available repayment plan options,
including standard, graduated, extended, income-contingent, and income-
based repayment plans, including a description of the different
features of each plan and the difference in interest paid and total
payments under each plan;
(iii) Explains to the borrower the options to prepay each loan, to
pay each loan on a shorter schedule, and to change repayment plans;
(iv) Provides information on the effects of loan consolidation
including, at a minimum--
(A) The effects of consolidation on total interest to be paid, and
length of repayment;
(B) The effects of consolidation on a borrower's underlying loan
benefits, including grace periods, loan forgiveness, cancellation, and
deferment opportunities; and
(C) The options of the borrower to prepay the loan and to change
repayment plans;
(v) Includes debt-management strategies that are designed to
facilitate repayment;
(vi) Explains to the borrower the availability of Public Service
Loan Forgiveness and teacher loan forgiveness;
(vii) Explains how the borrower may request reconsideration of the
conversion of the TEACH Grant to a Direct Unsubsidized Loan if the
borrower believes that the grant was converted to a loan in error, or
if the borrower can provide documentation showing that he or she was
satisfying the service obligation as described in Sec. 686.12;
(viii) Describes the likely consequences of default, including
adverse credit reports, delinquent debt collection procedures under
Federal law, and litigation;
(ix) Informs the borrower of the grace period as described in Sec.
686.43(c);
[[Page 49826]]
(x) Provides--
(A) A general description of the terms and conditions under which a
borrower may obtain full or partial forgiveness or discharge of the
loan (including under the Public Service Loan Forgiveness Program),
defer repayment of the loan, or be granted a forbearance on repayment
of the loan; and
(B) A copy, either in print or by electronic means, of the
information the Secretary makes available pursuant to section 485(d) of
the HEA;
(xi) Requires the borrower to provide current information
concerning name, address, Social Security number, and driver's license
number and State of issuance, as well as the borrower's permanent
address;
(xii) Reviews for the borrower information on the availability of
the Federal Student Aid Ombudsman's office;
(xiii) Informs the borrower of the availability of title IV loan
information in the National Student Loan Data System (NSLDS) and how
NSLDS can be used to obtain title IV loan status information;
(xiv) Provides a general description of the types of tax benefits
that may be available to borrowers;
(xv) Informs the borrower of the amount of interest that has
accrued on the converted TEACH Grants and explains that any unpaid
interest will be capitalized at the end of the grace period; and
(xvi) In the case of a borrower whose TEACH Grant was converted to
a Direct Unsubsidized Loan in accordance with Sec. 686.43(a)(1)(i),
explains that the borrower may request that the Secretary reconvert the
loan to a grant as provided in Sec. 686.43(a)(8).
0
25. Section 686.40 is revised to read as follows:
Sec. 686.40 Documenting the service obligation.
(a) If a grant recipient is performing full-time teaching service
in accordance with the agreement to serve or repay, or agreements to
serve or repay if more than one agreement exists, the grant recipient
must, upon completion of each of the four required elementary or
secondary academic years of teaching service, provide to the Secretary
documentation of that teaching service on a form approved by the
Secretary and certified by the chief administrative officer of the
school or educational service agency in which the grant recipient is
teaching. The documentation must show that the grant recipient--
(1) Taught full-time in a low-income school as a highly qualified
teacher as defined in Sec. 686.2(d); and
(2)(i) Taught a majority of classes during the period being
certified in any of the high-need fields of mathematics, science, a
foreign language, bilingual education, English language acquisition,
special education, or as a reading specialist; or
(ii) Taught a majority of classes during the period being certified
in another high-need field designated by that State and listed in the
Nationwide List, in accordance with Sec. 686.12(d).
(b) For purposes of completing the service obligation, the
elementary or secondary academic year may be counted as one of the
grant recipient's four complete elementary or secondary academic years
if the grant recipient completes at least one-half of the elementary or
secondary academic year and the grant recipient's school employer
considers the grant recipient to have fulfilled his or her contract
requirements for the elementary or secondary academic year for the
purposes of salary increases, tenure, and retirement if the grant
recipient is unable to complete an elementary or secondary academic
year due to--
(1) A condition that is a qualifying reason for leave under the
Family and Medical Leave Act of 1993 (FMLA) (29 U.S.C. 2612(a)(1) and
(3));
(2) A call or order to Federal or State active duty, or Active
Service as a member of a Reserve Component of the Armed Forces named in
10 U.S.C. 10101, or service as a member of the National Guard on full-
time National Guard duty, as defined in 10 U.S.C. 101(d)(5); or
(3) Residing in or being employed in a federally declared major
disaster area as defined in the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5122(2)).
(c)(1) A grant recipient who taught in more than one qualifying
school or qualifying educational service agency during an elementary or
secondary academic year and demonstrates that the combined teaching
service was the equivalent of full-time, as supported by the
certification of one or more of the chief administrative officers of
the schools or educational service agencies involved, is considered to
have completed one elementary or secondary academic year of qualifying
teaching.
(2) If the school or educational service agency at which the grant
recipient is employed meets the requirements of a low-income school in
the first year of the grant recipient's four elementary or secondary
academic years of teaching and the school or educational service agency
fails to meet those requirements in subsequent years, those subsequent
years of teaching qualify for purposes of satisfying the service
obligation described in Sec. 686.12(b).
0
26. Section 686.41 is revised to read as follows:
Sec. 686.41 Periods of suspension.
(a)(1) A grant recipient who has completed or who has otherwise
ceased enrollment in a TEACH Grant-eligible program for which he or she
received TEACH Grant funds may request a suspension from the Secretary
of the eight-year period for completion of the service obligation based
on--
(i) Enrollment in a program of study for which the recipient would
be eligible for a TEACH Grant or in a program of study that has been
determined by a State to satisfy the requirements for certification or
licensure to teach in the State's elementary or secondary schools;
(ii) Receiving State-required instruction or otherwise fulfilling
requirements for licensure to teach in a State's elementary or
secondary schools;
(iii) A condition that is a qualifying reason for leave under the
FMLA;
(iv) A call to order to Federal or State active duty or Active
Service as a member of a Reserve Component of the Armed Forces named in
10 U.S.C. 10101, or service as a member of the National Guard on full-
time National Guard duty, as defined in 10 U.S.C. 101(d)(5);
(v) Military orders for the recipient's spouse for--
(A) Deployment with a military unit or as an individual in support
of a call to Federal or State Active Duty, or Active Service; or
(B) A change of permanent duty station from a location in the
continental United States to a location outside of the continental
United States or from a location in a State to any location outside of
that State; or
(vi) Residing in or being employed in a federally declared major
disaster area as defined in the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5122(2)).
(2) A grant recipient may receive a suspension described in
paragraphs (a)(1)(i) through (vi) of this section in one-year
increments that--
(i) Does not exceed a combined total of three years under
paragraphs (a)(1)(i) through (iii) of this section;
(ii) Does not exceed a total of three years under paragraph
(a)(1)(iv) of this section;
(iii) Does not exceed a total of three years under paragraph
(a)(1)(v) of this section; or
[[Page 49827]]
(iv) Does not exceed a total of three years under paragraph
(a)(1)(vi) of this section.
(b) A grant recipient, or his or her representative in the case of
a grant recipient who qualifies under paragraph (a)(1)(iv) or (vi) of
this section, must apply for a suspension on a form approved by the
Secretary, prior to being subject to any of the conditions under Sec.
686.43(a)(1) through (5) that would cause the TEACH Grant to convert to
a Direct Unsubsidized Loan.
(c) A grant recipient, or his or her representative in the case of
a grant recipient who qualifies under paragraph (a)(1)(iv) or (vi) of
this section, must provide the Secretary with documentation supporting
the suspension request as well as current contact information including
home address and telephone number.
(d) On a case-by-case basis, the Secretary may grant a temporary
suspension of the period for completing the service obligation if the
Secretary determines that a grant recipient was unable to complete a
full academic year of teaching or begin the next academic year of
teaching due to exceptional circumstances significantly affecting the
operation of the school or educational service agency where the grant
recipient was employed or the grant recipient's ability to teach.
(e) The Secretary notifies the grant recipient regarding the
outcome of the application for suspension.
0
27. Section 686.42 is amended:
0
a. In the section heading by adding the words ``or repay'' after the
word ``serve'';
0
b. In paragraphs (a)(1) introductory text and (a)(2), by adding the
words ``or repay'' after the word ``serve'';
0
c. By revising paragraph (b); and
0
d. In paragraph (c)(4), by removing the words ``and the Coast Guard''
and adding in their place the words ``the Coast Guard, a reserve
component of the Armed Forces named in 10 U.S.C. 10101, or the National
Guard''.
The revision reads as follows:
Sec. 686.42 Discharge of agreement to serve or repay.
* * * * *
(b) Total and permanent disability. (1) A grant recipient's
agreement to serve or repay is discharged if the recipient becomes
totally and permanently disabled, as defined in 34 CFR 685.102(b), and
the grant recipient applies for and satisfies the eligibility
requirements for a total and permanent disability discharge in
accordance with 34 CFR 685.213.
(2) If at any time the Secretary determines that the grant
recipient does not meet the requirements of the three-year period
following the discharge as described in 34 CFR 685.213(b)(7), the
Secretary will notify the grant recipient that the grant recipient's
obligation to satisfy the terms of the agreement to serve or repay is
reinstated.
(3) The Secretary's notification under paragraph (b)(2) of this
section will--
(i) Include the reason or reasons for reinstatement;
(ii) Provide information on how the grant recipient may contact the
Secretary if the grant recipient has questions about the reinstatement
or believes that the agreement to serve or repay was reinstated based
on incorrect information; and
(iii) Inform the TEACH Grant recipient that he or she must satisfy
the service obligation within the portion of the eight-year period that
remained after the date of the discharge.
(4) If the TEACH Grant made to a recipient whose TEACH Grant
agreement to serve or repay is reinstated is later converted to a
Direct Unsubsidized Loan, the recipient will not be required to pay
interest that accrued on the TEACH Grant disbursements from the date
the agreement to serve or repay was discharged until the date the
agreement to serve or repay was reinstated.
* * * * *
0
28. Section 686.43 is revised to read as follows:
Sec. 686.43 Obligation to repay the grant.
(a)(1) The TEACH Grant amounts disbursed to the recipient will be
converted into a Direct Unsubsidized Loan, with interest accruing from
the date that each grant disbursement was made and be collected by the
Secretary in accordance with the relevant provisions of subpart A of 34
CFR part 685 if--
(i) The grant recipient, regardless of enrollment status, requests
that the TEACH Grant be converted into a Direct Unsubsidized Loan
because he or she has decided not to teach in a qualified school or
educational service agency, or not to teach in a high-need field, or
for any other reason; or
(ii) The grant recipient does not begin or maintain qualified
employment within the timeframe that would allow that individual to
complete the service obligation within the number of years required
under Sec. 686.12.
(2) At least annually during the service obligation period under
Sec. 686.12, the Secretary notifies the grant recipient of--
(i) The terms and conditions that the grant recipient must meet to
satisfy the service obligation;
(ii) The requirement for the grant recipient to provide to the
Secretary, upon completion of each of the four required elementary or
secondary academic years of teaching service, documentation of that
teaching service on a form approved by the Secretary and certified by
the chief administrative officer of the school or educational service
agency in which the grant recipient taught and emphasizes the necessity
to keep copies of this information and copies of the recipient's own
employment documentation;
(iii) The service years completed and the remaining timeframe
within which the grant recipient must complete the service obligation;
(iv) The conditions under which the grant recipient may request a
temporary suspension of the period for completing the service
obligation;
(v) The conditions as described under paragraph (a)(1) of this
section under which the TEACH Grant amounts disbursed to the recipient
will be converted into a Direct Unsubsidized Loan;
(vi) The potential total interest accrued;
(vii) The process by which the recipient may contact the Secretary
to request reconsideration of the conversion, the deadline by which the
grant recipient must submit the request for reconsideration, and a list
of the specific documentation required by the Secretary to reconsider
the conversion; and
(viii) An explanation that to avoid further accrual of interest as
described in Sec. 686.12(b)(4)(ii), a grant recipient who decides not
to teach in a qualified school or field, or who for any other reason no
longer intends to satisfy the service obligation, may request that the
Secretary convert his or her TEACH Grant to a Direct Unsubsidized Loan
that the grant recipient may begin repaying immediately, instead of
waiting for the TEACH Grant to be converted to a loan under the
condition described in paragraph (a)(1)(ii) of this section.
(3) On or about 90 days before the date that a grant recipient's
TEACH Grants would be converted to Direct Unsubsidized Loans in
accordance with paragraph (a)(1)(ii) of this section, the Secretary
notifies the grant recipient of the date by which the recipient must
submit documentation showing that the recipient is satisfying the
obligation.
(4) If the TEACH Grant amounts disbursed to a recipient are
converted to a Direct Unsubsidized Loan, the Secretary notifies the
recipient of the conversion and offers conversion counseling as
described in Sec. 686.32(e).
[[Page 49828]]
(5) Except as provided in paragraph (a)(8) of this section, if a
grant recipient's TEACH Grant was converted to a Direct Unsubsidized
Loan, the Secretary will reconvert the loan to a TEACH Grant based on
documentation provided by the recipient or in the Secretary's records
demonstrating that the recipient was satisfying the service obligation
as described in Sec. 686.12 or that the grant was converted to a loan
in error.
(6) If a grant recipient who requests reconsideration demonstrates
to the satisfaction of the Secretary that a TEACH Grant was converted
to a loan in error, the Secretary--
(i) Reconverts the loan to a TEACH Grant;
(ii) Applies any academic years of qualifying teaching service that
the grant recipient completed before or during the period when the
grant was incorrectly in loan status toward the grant recipient's four-
year service obligation requirement;
(iii) Upon reconversion of the loan to a TEACH Grant, provides the
grant recipient with an additional period of time, equal to eight years
minus the number of full academic years of teaching that the recipient
completed prior to the reconversion of the loan to a TEACH Grant,
including any years of qualifying teaching completed during the period
when the TEACH Grant was incorrectly in loan status, to complete the
remaining portion of the service obligation.
(iv) Ensures that the grant recipient receives credit for any
payments that were made on the Direct Unsubsidized Loan that was
reconverted to a TEACH Grant;
(v) Notifies the recipient of the reconversion to a grant and
explains that the recipient is once again responsible for meeting all
requirements of the service obligation under Sec. 686.12; and
(vi) Requests deletion of any derogatory information reported to
the consumer reporting agencies related to the grant while it was in
loan status and furnishes a statement confirming that the grant was
converted to a loan in error that the recipient may provide to
creditors until the recipient's credit history has been corrected.
(7) If a grant recipient who requests reconsideration does not
demonstrate to the satisfaction of the Secretary that a TEACH Grant was
converted to a loan in error, the Secretary--
(i) Notifies the recipient that the loan cannot be converted to a
TEACH Grant;
(ii) Explains the reason or reasons why the loan cannot be
converted to a TEACH Grant; and
(iii) Explains how the recipient may contact the Federal Student
Aid Ombudsman if he or she continues to believe that the TEACH Grant
was converted to a loan in error.
(8) In the case of a grant recipient whose TEACH Grant was
converted to a Direct Unsubsidized Loan in accordance with paragraph
(a)(1)(i) of this section, the Secretary will reconvert the loan to a
grant and restore the recipient's service obligation if--
(i) The grant recipient submits a request to the Secretary to
reconvert the loan to a TEACH Grant;
(ii) Excluding any periods of suspension granted under Sec.
686.41, there is sufficient time remaining for the grant recipient to
complete the required four academic years of qualifying teaching
service within eight years from the date the grant recipient ceased
enrollment at the institution where the recipient received the grant
or, in the case of a student who received a TEACH Grant at one
institution and subsequently transferred to another institution and
enrolled in another TEACH Grant-eligible program, within eight years
from the date the recipient ceased enrollment at the other institution;
and
(iii) In the case of a recipient who would not have sufficient time
remaining to complete the service obligation within the eight-year
period as described in paragraph (a)(8)(ii) of this section unless the
recipient qualifies for a suspension under Sec. 686.40, which may be
granted retroactively, the recipient requests and is determined to be
eligible for the suspension.
(9) A TEACH Grant recipient remains obligated to meet all
requirements of the service obligation under Sec. 686.12, even if the
recipient does not receive the notices from the Secretary as described
in paragraph (a)(2) of this section.
(b) A TEACH Grant that is converted to a loan, and is treated as a
Direct Unsubsidized Loan, is not counted against the grant recipient's
annual or aggregate loan limits under 34 CFR 685.203.
(c) A grant recipient whose TEACH Grant has been converted to a
Direct Unsubsidized Loan--
(1) Enters a six-month grace period prior to entering repayment,
and
(2) Is eligible for all of the benefits of the Direct Loan Program.
PART 690--FEDERAL PELL GRANT PROGRAM
0
29. The authority citation for part 690 continues to read as follows:
Authority: 20 U.S.C. 1070a, 1070g, unless otherwise noted.
Sec. 690.75 [Amended]
0
30. Section 690.75 is amended by removing paragraph (d).
PART 692--LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP PROGRAM
0
31. The authority citation for part 692 continues to read as follows:
Authority: 20 U.S.C. 1070c-1070c-4, unless otherwise noted.
0
32. Section 692.30 is amended by revising paragraph (c)(5) to read as
follows:
Sec. 692.30 How does a State administer its community service-
learning job program?
* * * * *
(c) * * *
(5) Not involve the construction, operation, or maintenance of so
much of any facility as is used or is to be used for sectarian
instruction or as a place for religious worship; and
* * * * *
PART 694--GAINING EARLY AWARENESS AND READINESS FOR UNDERGRADUATE
PROGRAMS (GEAR UP)
0
33. The authority citation for part 694 continues to read as follows:
Authority: 20 U.S.C. 1070a-21 to 1070a-28.
0
34. Section 694.6 is amended by:
0
a. Revising paragraph (b); and
0
b. Removing paragraph (c).
The revision reads as follows:
Sec. 694.6 Who may provide GEAR UP services to students attending
private schools?
* * * * *
(b) When providing GEAR UP services to students attending private
schools, the employee, individual, association, agency, or organization
must be employed or contracted independently of the private school that
the students attend, and of any other organization affiliated with the
school, and that employment or contract must be under the control and
supervision of the public agency.
Sec. 694.10 [Amended]
0
35. Section 694.10 is amended in paragraph (b) by removing the words
``that is not pervasively sectarian''.
[FR Doc. 2020-14589 Filed 8-7-20; 4:15 pm]
BILLING CODE 4000-01-P