[Federal Register: October 29, 2007 (Volume 72, Number 208)] [Rules and Regulations] [Page 61247-61267] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr29oc07-13] [[Page 61247]] ----------------------------------------------------------------------- Part III Department of Education ----------------------------------------------------------------------- 34 CFR Part 691 Academic Competitiveness Grant Program and National Science and Mathematics Access To Retain Talent Grant Program; Final Rule [[Page 61248]] ----------------------------------------------------------------------- DEPARTMENT OF EDUCATION 34 CFR Part 691 RIN 1840-AC92 [Docket ID ED-2007-OPE-0135] Academic Competitiveness Grant Program and National Science and Mathematics Access To Retain Talent Grant Program AGENCY: Office of Postsecondary Education, Department of Education. ACTION: Final regulations. ----------------------------------------------------------------------- SUMMARY: The Secretary amends the regulations for the Academic Competitiveness Grant (ACG) and National Science and Mathematics Access to Retain Talent Grant (National SMART Grant) programs. The Secretary is amending these regulations to reduce administrative burden for program participants and to clarify program requirements. DATES: Effective Date: These regulations are effective July 1, 2008. Implementation Date: The Secretary has determined, in accordance with section 482(c)(2)(A) of the Higher Education Act, of 1965, as amended (HEA) (20 U.S.C. 1089(c)(2)(A)), that institutions that administer the ACG and National SMART Grant Programs may, at their discretion, choose to implement these final regulations in their entirety, or by section, on or after November 1, 2007. For further information, see the section entitled ``IMPLEMENTATION DATE OF THESE REGULATIONS'' in the SUPPLEMENTARY INFORMATION section of this preamble. FOR FURTHER INFORMATION CONTACT: ------------------------------------------------------------------------ Topic Contact person and information ------------------------------------------------------------------------ General information and information Sophia McArdle. Telephone: related to recognition of rigorous (202) 219-7078 or via the secondary school programs and eligible Internet: majors. sophia.mcardle@ed.gov. Information related to successful Jacquelyn Butler. Telephone: completion of a rigorous secondary (202) 502-7890 or via the school program. Internet: jacquelyn.butler@ed.gov. Information related to grade point Carney McCullough. Telephone: average. (202) 502-7639 or via the Internet: carney.mccullough@ed.gov or Anthony Jones. Telephone: (202) 502-7652 or via the Internet: anthony.jones@ed.gov. Information related to academic year Fred Sellers. Telephone: (202) progression and prior enrollment. 502-7502 or via the Internet: fred.sellers@ed.gov. ------------------------------------------------------------------------ If you use a telecommunications device for the deaf (TDD), you may call the Federal Relay Service (FRS) at 1-800-877-8339. Individuals with disabilities may obtain this document in an alternative format (e.g., Braille, large print, audiotape, or computer diskette) on request to the first contact person listed under FOR FURTHER INFORMATION CONTACT. SUPPLEMENTARY INFORMATION: On August 7, 2007, the Secretary published a notice of proposed rulemaking (NPRM) for the ACG and National SMART Grant Programs in the Federal Register (72 FR 44050). In the preamble to the NPRM, the Secretary discussed on pages 44052 through 44058 the major changes proposed in that document to strengthen and improve the administration of the ACG and National SMART Grant Programs authorized under the HEA (as amended by the Higher Education Reconciliation Act of 2005 (Pub. L. 109-171), enacted on February 8, 2006, 20 U.S.C. 1070a-1 (HERA)). These include the following: Amending Sec. 691.2 to add a definition for the term Classification of Instructional Programs (CIP), as that term is used in connection with the National SMART Grant Program. Amending Sec. 691.6(a), (b), and (c) to require an institution in which a student is currently enrolled to determine the student's academic year progression based on the student's attendance in all ACG and National SMART Grant eligible programs only at that institution. Amending Sec. 691.6 by adding a new paragraph (d)(3) to provide that when determining the appropriate academic year for a transfer student, the institution to which the student transferred must count both (a) the number of credit or clock hours earned by the student at prior institutions that are accepted for the student, and (b) an estimated number of weeks of instructional time completed by the student. Amending Sec. 691.6 by adding paragraphs (e), (f), (g), and (h) to provide for three alternative methods to determine the weeks of instructional time for a student's academic year progression, and to provide that an institution choosing to use one of these alternative methods must do so for all students enrolled in the eligible program. Amending Sec. 691.6 by adding a new paragraph (d)(2) to clarify that when determining academic year progression for a student (a) an institution may not assign any weeks of instructional time to certain credit or clock hours accepted toward a student's eligible program if those credit or clock hours were earned from Advanced Placement (AP) programs, International Baccalaureate (IB) programs, testing out, life experience, other similarly earned credits or credits earned while not enrolled as a regular student in an ACG or National SMART Grant eligible program, or coursework that is not at the postsecondary level, such as remedial coursework; and (b) an institution must assign weeks of instructional time to determine National SMART Grant eligibility for periods in which a student was enrolled in an ACG-eligible program before declaring, or certifying his or her intent to declare, an eligible major. Amending Sec. 691.6 by adding paragraph (e) to provide that a student can request and receive an exact determination of his or her academic year standing and to provide that, if the institution performs an exact accounting, it may not employ any of the alternative methods for determining that student's academic year standing reflected in Sec. 691.6(f), (g), or (h). Amending Sec. 691.15 by adding paragraph (g) to clarify that, for purposes of eligibility for ACG and National SMART Grants, an institution that assesses grade point average (GPA) on a numeric scale other than a 4.0 scale must ensure that its minimum GPA requirement meets the same numeric standard as a cumulative GPA of 3.0 or higher on a 4.0 scale. Amending Sec. 691.15 by adding paragraph (f)(1) to clarify that institutions are required to calculate a student's GPA for determining second-year ACG eligibility as follows: [cir] For a student who transfers to an institution that accepts into the student's ACG eligible program at least the credit or clock hours for one academic year, but for less than two academic years, the institution must calculate the student's GPA using the [[Page 61249]] grades from all coursework accepted into the student's ACG eligible program. [cir] For a student who transfers to an institution that accepts less than the credit or clock hours for an academic year into the student's ACG eligible program, the institution must calculate the student's GPA by combining the grades from all coursework accepted into the student's ACG eligible program with the grades for coursework earned at the current institution through the payment period in which the student completes the credit or clock hours for his or her first academic year. Amending Sec. 691.15 by adding paragraph (f)(2) to require that, for a transfer student who transfers from one institution to another institution at which the student is eligible for a National SMART Grant, the subsequent institution determines that student's eligibility for the first payment period using one of two methods, depending on whether it incorporates the grades from the student's previous coursework that it accepts on transfer into the student's GPA at the subsequent institution. Amending Sec. 691.15(b) to extend eligibility for a first-academic-year ACG to any student who enrolls as a regular student in an ACG eligible program while in high school provided that the student is beyond the age of compulsory school attendance. Amending Sec. 691.15 by adding paragraphs (d) and (e) to require an institution to document a student's eligible major and progress in the eligible program and major by maintaining documentation, such as the following: (a) Documentation of the declared major, including written declaration of intent to declare an eligible major provided by the student; and (b) written documentation showing that the student is progressing in coursework leading to a degree in the student's intended or declared eligible major; and (c) written documentation that the student is enrolling in the courses necessary to complete a degree in the intended or declared eligible major. Amending Sec. 691.17 to provide a process for institutions of higher education to request additional majors to be added to the list of eligible majors for National SMART Grants. Amending Sec. 691.15(b) to require that, in order to successfully complete a rigorous secondary school program of study, a student must obtain a high school diploma or, for a home-schooled student, receive a high school diploma or parental certification of completion of a secondary school education. Amending Sec. 691.16(b) to allow State educational agencies (SEAs) and local educational agencies (LEAs) to request recognition of rigorous secondary school programs of study for school years beyond the immediate next school year. Amending Sec. 691.16(d)(1) so that advanced or honors secondary school programs of study continue to be recognized as rigorous secondary school programs of study by the Secretary for school years subsequent to the 2005-2006 school year. There are no significant differences between the NPRM and these final regulations resulting from public comment or legislative action. Implementation Date of These Regulations Section 482(c) of the HEA requires that regulations affecting programs under Title IV of the HEA be published in final form by November 1 prior to the start of the award year (July 1) to which they apply. However, that section also permits the Secretary to designate any regulation as one that an entity subject to the regulation may choose to implement earlier and the conditions under which the entity may implement the provisions early. Consistent with the intent of this regulatory effort to reduce administrative burden for program participants and to clarify program requirements for the ACG and National SMART Grant Programs, the Secretary is using the authority granted her under section 482(c) to designate all regulations subject to that section included in this document for early implementation at the discretion of each institution. Therefore, the regulations in this document may be implemented early in their entirety, or by section (e.g., all of Sec. 691.6 or all of Sec. 691.15), but not by paragraph, because related provisions (provisions within a section, at the very least) should be implemented contemporaneously. Moreover, because these final regulations replace transitional guidance that had been provided to institutions, institutions must make sure that any early implementation of the final regulations is consistent with the discussion in this document, notwithstanding the information provided in the transitional guidance the Department issued regarding the implementation of academic year progression for the 2006-2007 and 2007-2008 award years. Institutions must maintain documentation of the early implementation and must continue with the early implementation once it has been initiated. Analysis of Comments and Changes In response to the Secretary's invitation in the NPRM published on August 7, 2007 (72 FR 44050), 52 parties submitted comments on the proposed regulations. 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 technical and other minor changes--and suggested changes the law does not authorize the Secretary to make. We also do not address comments pertaining to issues that were not within the scope of the NPRM. General Comments Several commenters stated that the ACG and National SMART Grant Programs are overly burdensome to implement. As noted in the Paperwork Reduction Act of 1995 section of this preamble, those comments relate to the basic structure of the program, as established in the HEA. While we cannot modify statutory program requirements through regulations, to the extent possible, we have tried to reduce the administrative burden associated with carrying out the statutory requirements governing the ACG and National SMART Grant Programs. We believe the final regulations are necessary to implement the statute. Two commenters expressed concern that the current definition of ``eligible program'' in Sec. 691.2(d) excludes certificate programs as eligible programs under the ACG and National SMART Grant Programs. We believe this definition is necessary to implement the programs in accordance with the plain language of the statute. Moreover, we believe that this definition encourages students to pursue associate or bachelor degrees. Regardless of whether an institution offers both degree and certificate programs, a student is only eligible for an ACG or National SMART Grant if the student is confirmed as enrolled full- time in the coursework of an ACG-eligible or National SMART Grant- eligible program, respectively. We encourage institutions to counsel each student about the eligibility requirements for the ACG and National SMART Grant Programs, including the need to enroll in an ``eligible program,'' as defined in Sec. 691.2(d), early on. This counseling may include explaining that if the student transfers from an ineligible program to an eligible [[Page 61250]] program, the student may receive an ACG or National SMART Grant as long as he or she meets all other eligibility requirements. Academic Year Progression (Sec. 691.6) General Comments: Several commenters objected to using the Title IV, HEA definition of academic year, as measured in a minimum number of weeks of instructional time and, for undergraduate programs, credit or clock hours, for determining a student's academic year progression. The commenters supported determining academic year progression based solely on a student's grade level or credits earned. These commenters believed that using the Title IV, HEA definition of academic year for the ACG and National SMART Grant Programs was confusing, cumbersome, and administratively burdensome, and could lead to unintended errors. Discussion: While we appreciate the commenters' concerns, under section 401A(c)(3) of the HEA, a student is eligible for an ACG in the student's ``first academic year of a program of undergraduate education'' and ``second academic year of a program of undergraduate education,'' and for a National SMART Grant, in the ``third or fourth academic year of a program of undergraduate education.'' The term academic year is defined in section 481(a)(2) of the HEA, which applies to all Title IV, HEA programs, including the ACG and National SMART Grant Programs. We cannot interpret the term ``academic year'' in any way that would be contrary to the statutory requirements in section 481(a)(2) of the HEA. Changes: None. Comments: Some commenters questioned the relationship between an exact accounting of weeks of instructional time for a student's academic year progression under the proposed regulations and the alternatives for determining the weeks of instructional time provided in proposed Sec. 691.6(e), (f), (g), and (h) for programs that calculate payments under Sec. 691.63(b) and (c) (e.g., nonterm programs). Another commenter supported the flexibility offered by proposed Sec. 691.6(e), (f), (g), and (h), but indicated that the commenter's institution expected to retain its current policy of using the exact accounting method because it agrees that an exact accounting is most beneficial for students. One commenter believed that programs that do not calculate payments under Sec. 691.63(b) and (c) also could use the grade-level alternative under proposed Sec. 691.6(h) for determining students' weeks of instructional time. One commenter questioned whether transfer credits were subject to an exact accounting. Discussion: We consider an exact accounting of the credit or clock hours and weeks of instructional time to be the best method to determine any student's academic year progression because it is the most accurate. We further agree with the commenter who believed an exact accounting is more beneficial to students than estimating their academic year progression because it is the most accurate determination. We understand, however, that this better information places more administrative burden on an institution having to conduct an exact accounting for its students. The regulations, therefore, allow some flexibility for certain programs to use alternative methods to estimate a student's academic year progression. The alternative methods in Sec. 691.6(f), (g), and (h), which allow institutions to estimate the number of weeks of instructional time when determining academic year progression, may be used for certain eligible programs and must be used for transfer students. We are providing in Sec. 691.6(f), (g), and (h) alternative methods for determining weeks of instructional time for institutions calculating payments for programs under Sec. 691.63(b) and (c) because these institutions generally have not had to account precisely for the weeks of instructional time completed by individual students in order to be compliant with the Title IV, HEA academic year for Title IV purposes. The alternatives are based on specified criteria that will provide consistent measures for students enrolled in those programs while providing a less burdensome way for institutions to estimate academic year progression. In contrast, institutions that calculate payments for eligible programs under Sec. 691.63(d) and (e) must account for the actual number of weeks a student attends classes in their academic year progression calculations under Title IV, HEA. Using an exact accounting of credit or clock hours and weeks of instructional time to determine academic year progression (apart from determining weeks of instructional time for transfer credits) is, therefore, the only appropriate option for these institutions under the HEA. For this reason, we do not provide the alternatives under proposed Sec. 691.6(e), (f), (g), and (h) for determining weeks of instructional time for these eligible programs. For transfer students, because the proposed changes to Sec. 691.6(a), (b), and (c) require an institution to determine a student's academic year progression based on the student's attendance in all ACG and National SMART Grant eligible programs only at the institution in which the student is currently enrolled, an institution is no longer required to do an exact accounting of a student's academic year progression at all institutions. Therefore, when determining the appropriate academic year for a transfer student under Sec. 691.6(d)(3), the institution to which the student transferred must count the number of credit or clock hours earned by the student at prior institutions that are accepted toward the student's ACG-or National SMART Grant-eligible program, and estimate the number of weeks of instructional time completed by the student. Changes: None. Comments: Many commenters believed that the proposed regulations should be revised to incorporate, for the 2008-2009 and subsequent award years, the transitional guidance the Department issued regarding the implementation of academic year progression for the 2006-2007 and 2007-2008 award years, including the guidance we provided in Dear Colleague letter GEN-06-18. This transitional guidance permitted programs eligible to calculate payments under Sec. 691.63(b) and (c) to make certain assumptions when determining a student's academic year progression for ACG and National SMART Grant eligibility. The guidance also covered the treatment of transfer students, the extension of the fourth academic year for National SMART Grant eligibility, and the second academic year of associate degree programs for ACG eligibility. The common theme in the comments that mentioned the Department's transitional guidance was that the guidance provided institutions with more flexibilities in administering the ACG and National SMART Grant Programs than is available under the proposed regulations, and that these flexibilities provided significant burden relief and assisted them in addressing particular students' circumstances. Discussion: Following the creation of the ACG and National SMART Grant Programs and based on the need to implement the programs quickly, the Department determined that it was appropriate to provide transitional guidance to relieve administrative burden on institutions during the two initial award years of implementation of [[Page 61251]] the ACG and National SMART Grant Programs. The relief provided in the transitional guidance mostly related to the treatment of transfer students for these programs and to determining weeks of instructional time completed at traditional academic calendar institutions. The flexibilities provided in the transitional guidance were intended to ease the transition for institutions as they established procedures for these new programs. The negotiated rulemaking proceeding for these regulations gave the participants time to address these issues in more detail, and these regulations put in place modified requirements for institutions to use to administer the ACG and National SMART Grant programs on an ongoing basis. In addition, the extensions of fourth-academic-year National SMART Grant eligibility and second-academic-year of associate degree programs for ACG eligibility are no longer needed because all students now have an opportunity to qualify for awards during the appropriate academic year. Starting with the 2008-2009 award year, institutions will be required to comply fully with the HEA provisions for the ACG and National SMART Grant Program and these final regulations. Changes: None. Comments: Some commenters requested guidance on how to determine an individual student's academic year progression when the student's progression has been based on the Department's transitional guidance for the 2006-2007 and 2007-2008 award years and the student's academic year level is changed by the implementation of these final regulations in 2008-2009. One commenter suggested that, if we are unable to incorporate the transitional guidance into the final regulations, we should at least ``grandfather'' the transitional guidance for continuing students who may otherwise regress in applicable academic years. Discussion: For 2008-2009 and subsequent award years, an institution must determine a student's academic year progression in accordance with the HEA provisions for the ACG and National SMART Grant Programs and these final regulations. We believe that this new framework may delay awards for some students until they progress to the point they were previously deemed to have reached, but most of these students will still be eligible to receive the same amount of grant funds from that point forward. A student who received a third-academic- year National SMART Grant Scheduled Award in the 2007-2008 award year under the transitional guidance may, for example, now be considered to be in the second academic year in his or her National SMART Grant- eligible program in the 2008-2009 award year. That student would no longer be eligible for a National SMART Grant until the student enrolls in the fourth academic year of his or her National SMART Grant eligible program. In this example, the student has already received a third-year National SMART Grant award; thus the student may not be paid for any remaining eligibility for a second-year ACG award, even if otherwise eligible, because the student is presumed to have completed an ACG- eligible program through the second academic year at that same institution in order to qualify for the third-year award the student previously received. Because a student who has completed an ACG- eligible program through the second academic year is not eligible for a second-year ACG award, the student in the example is not eligible for a second-year ACG award. Note, however, that the outcome of this example would be different if the student received the third-academic-year National SMART Grant award at another institution and then, upon transfer, was classified as being in his or her second academic year. If this transfer student were otherwise eligible, the student may receive any second-academic-year ACG Scheduled Award not already received at the prior institution because, under Sec. 691.6(a), (b), and (c), academic year progression only takes into account attendance at the transfer student's current institution. We do not believe it is necessary to ``grandfather'' the transitional guidance for continuing students because they generally will have the opportunity to progress to the academic year level they would otherwise be at under the transitional guidance. Changes: None. Comment: One commenter requested clarification of the relationship of academic year progression to the Scheduled Award. The commenter questioned whether an otherwise eligible student who receives a Scheduled Award within an award year and progresses to the next academic year within the same award year would be eligible to receive another ACG or National SMART Grant for the next academic year in that award year. Discussion: An ACG or National SMART Grant Scheduled Award is the amount a full-time student would be paid for a full academic year without respect to any award year. Unlike the Federal Pell Grant Program in which a student starts a new Scheduled Award with each new award year, a student receiving an ACG or National SMART Grant Scheduled Award starts a new Scheduled Award when the student starts a new academic year without reference to whether a new award year has commenced. For example, a program is offered in quarters with 10 weeks of instructional time and the academic year is defined as 36 credit hours and 30 weeks of instructional time. An eligible student in this program attends the quarters beginning in July, October, and January in the 2007-2008 award year and receives a first-academic-year ACG Scheduled Award over those three quarters. The student then continues into the quarter that begins in April and ends in June, which is prior to the next award year, and at the start of that quarter the student meets the eligibility requirements to receive a second-academic-year ACG Scheduled Award. In this example, the student would receive a payment from the second-year Scheduled Award for the quarter beginning in April. If the student continues to be eligible for a second- academic-year Scheduled Award in the quarters beginning in July and October of the 2008-2009 award year, the student would receive the second and third disbursements of the second-academic-year Scheduled Award during those quarters. Changes: None. Academic Year Progression (Sec. 691.6(a), (b), and (c)) Comments: Several commenters supported the changes reflected in proposed Sec. 691.6(a), (b), and (c), which require an institution to determine a student's academic year progression based on the student's attendance in all ACG and National SMART Grant eligible programs only at the institution in which the student is currently enrolled. The commenters believed that the proposed changes would reduce burden and provide some needed flexibilities. Discussion: We appreciate the commenters' support. Changes: None. Comment: Some commenters questioned the effect changing eligible programs would have on a student's academic year progression under the proposed regulations. One commenter believed that the proposed regulations would prohibit a student from being eligible for an award at an academic year level below the academic year level of any award the student had received at a prior institution. Another commenter believed that the regulations should provide that only credits that apply directly to a student's eligible [[Page 61252]] program should be considered in determining a student's academic year progression, without taking into account an institution's general academic policies regarding degree audits. Discussion: In general, under these regulations, an institution must follow a student's academic year progression in all ACG- and National SMART Grant-eligible programs attended by the student at that institution. The receipt of ACGs or National SMART Grants at other institutions would not affect the student's academic year progression at the current institution, as is discussed further in the next section, Transfer Students (Sec. 691.6(d)(3)). Under these regulations, a student's academic year progression must take into account (a) the credit or clock hours, including transferred hours, credited toward, for ACGs, ACG-eligible programs, and, for National SMART Grants, National SMART Grant-eligible programs at the student's current institution; and (b) the weeks of instructional time earned while enrolled in, for ACGs, ACG-eligible programs, and, for National SMART Grants, ACG- and National SMART Grant-eligible programs at the student's current institution, including any estimated weeks based on transferred hours. For example, a student completes his or her first academic year in weeks of instructional time and credit hours as a part-time student while enrolled in a Bachelor of Fine Arts degree program at an institution. At the end of the first academic year, the student transfers to the same institution's school of architecture to enroll full-time in the Bachelor of Architecture degree program. The student is still considered to have completed a first academic year at the institution for purposes of receiving an ACG. The student would be considered to be entering his or her second academic year in an ACG- eligible program at the institution by continuing in the Bachelor of Architecture without reference to the number of credits applicable to that degree from the Bachelor of Fine Arts degree program. A student moving between National SMART Grant-eligible programs would be treated similarly. The ACG and National SMART Grant Programs have different eligibility requirements because National SMART Grants are only available for qualified students who are progressing in a designated major in a National SMART Grant-eligible program. A student's attendance in ACG-eligible programs will only count for the credit-or clock-hour component of academic year progression for National SMART Grants if the credit or clock hours earned while in an ACG-eligible program are applicable to the National SMART Grant eligible program. For the weeks-of-instructional-time component, under Sec. 691.6(d)(2)(ii), a student is considered to have accrued weeks of instructional time in a National SMART Grant-eligible program while the student was enrolled in ACG-eligible programs. In determining a student's academic year progression, an institution must always take into consideration only those credit or clock hours applicable to the student's attendance in, for ACGs, ACG- eligible programs, and for National SMART Grants, National SMART Grant- eligible programs. In making these determinations, an institution may follow its general academic policies regarding degree audits. For example, an institution may consider all credits to be generally applicable to a student's bachelor's degree program under its academic policies until such time as it performs a degree audit or otherwise performs an exact accounting of a student's academic year progression. Changes: None. Comment: One commenter asked at what point in time would an institution determine whether a student is enrolled in a National SMART Grant-eligible program for the purpose of determining that student's academic year progression for a National SMART Grant. The commenter noted that, for National SMART Grant purposes, an eligible program is defined as one that leads to a bachelor's degree in a National SMART Grant-eligible major. The commenter questioned whether a student is considered to be enrolled in a National SMART Grant-eligible program (1) only if he or she has declared or intends to declare a National SMART Grant eligible major, or (2) as long as an eligible major is offered within that program. Discussion: A student's eligibility for a National SMART Grant is based upon his or her pursuit of an eligible major. A student demonstrates this pursuit by declaring an eligible major or demonstrating his or her intent to declare an eligible major. Accordingly, under Sec. 691.6(d)(2)(ii), a student may be considered to be enrolled in a National SMART Grant-eligible program only if the student has declared a National SMART Grant-eligible major, or demonstrated his or her intent to declare an eligible major, in accordance with Sec. 691.15(c)(2). Changes: None. Transfer Student (Sec. 691.6(d)(3)) Comments: Several commenters supported the requirement in proposed Sec. 691.6(d)(3) that, when determining the appropriate academic year for a transfer student, the institution to which the student transferred must count the number of credit or clock hours earned by the student at prior institutions that are accepted into the student's ACG-or National SMART Grant-eligible program, and estimate the number of weeks of instructional time completed by the student as determined by a formula provided in the proposed regulations. Discussion: We appreciate the commenters' support. Changes: None. Comments: Some commenters objected to excluding the types of credit or clock hours described in proposed Sec. 691.6(d)(2) when assigning weeks of instructional time for the purpose of calculating academic year progression. In particular, commenters believed it would be difficult for institutions to know whether the transferred credit or clock hours were earned in an ACG- or National SMART Grant-eligible program. One commenter was concerned that, in order to comply with the proposed regulations, an institution would need to collect documentation and perform evaluations beyond those normally required for transfer of credit or clock hours to determine whether the credit or clock hours would have associated estimated weeks of instructional time. Two commenters believed that, under the proposed regulations, an institution would be required to perform an exact accounting of weeks of instructional time for transfer credits and believed this requirement would be difficult to implement if the institution were using one of the alternative methods of determining weeks of instructional time under proposed Sec. 691.6(e), (f), (g), and (h). These commenters also questioned whether a student could request an exact accounting of weeks of instructional time for the transferred credit or clock hours, what the appropriate treatment would be for credit or clock hours earned in summer courses at other institutions without a written agreement between institutions, and what the appropriate treatment would be for the late receipt of credit or clock hours on transfer by an institution at a time subsequent to a student's initial enrollment at that institution. One commenter questioned whether the prior receipt of ACGs or National SMART Grants affected a student's academic year progression at a student's current institution. Discussion: We recognize the difficulty of determining whether credit or clock hours accepted on transfer should be excluded from an institution's [[Page 61253]] calculation of weeks of instructional time under Sec. 691.6(d)(2). Nonetheless, institutions must determine a student's eligibility for the ACG and National SMART Grant Programs and, for transfer students, an institution is responsible for determining the credit or clock hours accepted on transfer that apply to a student's ACG- or National SMART Grant-eligible program and estimating the number of weeks of instructional time associated with those hours. With respect to the exclusions identified in Sec. 691.6(d)(2) and the treatment of transfer students, an institution may rely on the documentation it normally collects from incoming transfer students to evaluate transfer credits. An institution is not required to collect additional documentation, and, unless the institution has information to the contrary, may consider all credit or clock hours accepted on transfer as having been earned while enrolled in an ACG- and National SMART Grant-eligible program. Correspondingly, if an institution has information indicating that the transferred credit or clock hours fall into one of the exclusions in Sec. 691.6(d)(2), it must exclude those from its calculation of weeks of instructional time for the transferred student. Under Sec. 691.6(d)(3), an institution would never perform an exact accounting of weeks of instructional time for transfer credits but would estimate the number of weeks of instructional time completed by a transfer student. Under the regulations, for transfer students, the estimated number of weeks of instructional time must correspond to the credit or clock hours accepted in the same ratio as the weeks of instructional time in the eligible program's academic year is to the credit or clock hours in the academic year of the student's ACG- or National SMART Grant-eligible program. For a student who transfers credit or clock hours into an ACG- or National SMART Grant-eligible program from attending a summer term at another institution or for whom the current institution receives credit or clock hours subsequent to the student's initial enrollment, the institution would estimate the number of weeks of instructional time completed by the student in the same manner as for all other transferred credit or clock hours. As previously addressed under Academic Year Progression (Sec. 691.6(a), (b), and (c)), a student's prior receipt of ACG or National SMART Grant awards at other institutions does not affect a student's academic year progression at his or her current institution, but the student cannot receive a duplicate award for the same academic year at the second institution. The current institution may only evaluate the credits accepted on transfer into the student's ACG- or National SMART Grant-eligible program in determining the student's academic year progression. While the receipt of ACGs and National SMART Grants at other institutions does not affect a student's academic year progression at his or her current institution, the current institution must always ensure that, in accordance with section 401A(d)(2)(B) of the HEA, an eligible student only receives one ACG for each of the first two academic years of an undergraduate program and one National SMART Grant for each of the third and fourth academic years of a bachelor's degree program. Changes: None. Comment: One commenter asked whether an institution that uses the grade-level alternative under Sec. 691.6(h) would be required to determine the academic years completed by a transfer student in accordance with proposed Sec. 691.6(d)(3) or whether the institution would do so by applying the credit hours the institution accepts on transfer toward the student's grade level in accordance with proposed Sec. 691.6(h). Discussion: We believe the commenter has identified a situation where it would be inappropriate to calculate a student's weeks of instructional time in accordance with proposed Sec. 691.6(d)(3). Because the grade-level alternative method to determining weeks of instructional time under proposed Sec. 691.6(h) is driven by the credit hours accrued by the student, including transfer credits, the requirements for determining academic year progression for transfer students in proposed Sec. 691.6(d)(3) would not apply when an institution uses the alternative method in proposed Sec. 691.6(h). Changes: We have revised proposed Sec. 691.6(d)(3) to provide that, for an eligible program for which an institution determines estimated weeks of instructional time based on grade level under Sec. 691.6(h), the institution must include the credit hours accepted on transfer into a student's eligible program when determining the student's grade level in accordance with Sec. 691.6(d)(2) and (h). Comment: One commenter asked whether proposed Sec. 691.6(d)(3) would apply only to eligible programs subject to a particular payment formula under Sec. 691.63 or to all eligible programs. Discussion: Proposed Sec. 691.6(d)(3) applies to all eligible programs. Changes: None. Comments: One commenter questioned whether the determination of the estimated weeks of instructional time for transferred credit or clock hours for a transfer student would apply only upon enrollment at the current institution and not for subsequent evaluations of a student's academic year progression. For example, the commenter questioned whether the transferred hours would be incorporated in determining the weeks of instructional time under the alternative methods provided in Sec. 691.6(g) and (h), based on credits and grade level, respectively. Discussion: The alternative methods of estimating weeks of instructional time provided in Sec. 691.6(f), (g), and (h), along with an exact accounting of weeks of instructional time, apply only to attendance at the current institution. A transfer student's estimated weeks of instructional time, as calculated in accordance with Sec. 691.6(d)(3), would be added to the weeks of instructional time the student accrues at the current institution, as determined based on an exact accounting or in accordance with Sec. 691.6(f) or (g). It is unnecessary to estimate the weeks of instructional time under Sec. 691.6(d)(3) when using the alternative method described in Sec. 691.6(h). The methodology for estimating weeks of instructional time under Sec. 691.6(g) is the same as that in Sec. 691.6(d)(3), so it may appear that proposed Sec. 691.6(g) applies to transfer credits. If the estimated weeks of instructional time for credit or clock hours accepted on transfer are applicable to a first or second academic year in an ACG-eligible program, institutions are reminded that, under Sec. 691.6(d)(2)(ii), those estimated weeks of instructional time would apply toward National SMART Grant academic year progression regardless of whether the credit or clock hours were earned while the student was enrolled in a National SMART Grant-eligible program. Changes: None. Comment: One commenter questioned whether the provisions of proposed Sec. 691.6(d)(3) would apply to a student attending more than one eligible institution under a written agreement, both during the period covered by the agreement and upon returning to the home institution. Discussion: To the extent the home institution is calculating the student's payments for payment periods under its academic calendar, including the credit or clock hours being earned at another eligible institution, the provisions of Sec. 691.6(d)(3) would not apply because the student would not be transferring these credits or clock hours. However, if the home institution does not calculate [[Page 61254]] the student's payment for a payment period, the credit or clock hours would be treated as transfer credit or clock hours and would be subject to the provisions of Sec. 691.6(d)(3). Changes: None. Alternative Methods for Determining Weeks of Instructional Time (Sec. 691.6(e), (f), (g), and (h)) Comments: Several commenters supported proposed Sec. 691.6(e), (f), (g), and (h), which would provide three alternative methods for determining the weeks of instructional time for a student's academic year progression in eligible programs for which payments are determined under Sec. 691.63(b) and (c). The alternative method in Sec. 691.6(f) counts weeks of instructional time based on the number of terms the student has attended (terms-attended alternative). The alternative method in Sec. 691.6(g) attributes weeks of instructional time to the credit hours earned by the student (credits-earned alternative). The alternative method in Sec. 691.6(g) uses student's grade level as a basis for determining weeks of instructional time completed (grade- level alternative). An extensive discussion of these alternatives is found in the preamble of the NPRM (see 72 FR 44053-44054). Several commenters objected to the applicability of proposed Sec. 691.6(d)(2), under the credits-earned and grade-level alternative methods reflected in proposed Sec. 691.6(g) and (h), respectively, because of the types of credits that are not counted under those methods. Proposed Sec. 691.6(d)(2) would not permit an institution to allocate weeks of instructional time to certain credits that were not earned at postsecondary institutions or as part of an ACG- or National SMART Grant-eligible program. Discussion: We appreciate the commenters' support and concerns. However, proposed Sec. 691.6(d)(2) is designed to work with the alternative methods in Sec. 691.6(f), (g), and (h), so that a student's academic year progression consistently excludes credits that do not have weeks of instructional time in an ACG- or National SMART Grant-eligible program associated with them. Changes: None. Comment: One commenter was concerned that proposed Sec. 691.6(e)(2)(i) allows only institutions that determine payments for the student's eligible program under Sec. 691.63(b) or (c) to use any of the three alternatives under proposed Sec. 691.6(f), (g), and (h). The commenter noted that a similar restriction is stated in proposed Sec. 691.6(f)(1) and (g)(1), but that these paragraphs use the language ``may determine payments'' under Sec. 691.63(b) or (c) rather than ``uses'' those payment formulas. In addition, the commenter notes that the restriction is not repeated in any form in proposed Sec. 691.6(h). Discussion: These alternative methods of estimating weeks of instructional time only apply to programs for which payments are calculated under Sec. 691.63(b) or (c) because institutions using these payment methods are not required to account directly for the weeks of instructional time when calculating payments for their programs. If a program were eligible for payment calculations under Sec. 691.63(b) or (c) but, in fact, calculated payments under Sec. 691.63(d), the institution would be required to accurately determine the weeks of instructional time attended by the student when making payment calculations, and it would be inappropriate to provide these three alternatives. Changes: We have revised proposed Sec. 691.6(f)(1) and (g)(1) by replacing the words ``may determine'' with the word ``determines'' in order to make these provisions consistent with proposed Sec. 691.6(e)(2)(i). We have also revised Sec. 691.6(h) to make it consistent with these other provisions. Comments: One commenter requested clarification on whether an institution must use only one alternative for all students in a program unless an exception is made to use an exact accounting for a given student. The commenter also questioned whether an institution is required to document the basis for its determination to use an alternative method or an exact accounting. Discussion: As provided under proposed Sec. 691.6(e)(2)(ii), an institution must use the same alternative method for all students in an eligible program unless the institution performs an exact accounting, either on its own initiative or upon a student's request. While an institution must document whether it has used an alternative method or exact accounting to determine a student's weeks of instructional time, it is not required to document the basis for its decision. Changes: None. Comment: One commenter questioned whether, in using an alternative method of determining weeks of instructional time, an institution might identify specific groups of students in the eligible program for whom it would always perform an exact accounting. For example, an institution might use the grade-level alternative but perform an exact accounting for all students with AP or IB credits. Discussion: We believe that an institution should use the same alternative for determining weeks of instructional time for students in a program except when the institution initiates or performs, pursuant to a student's request, an exact accounting of weeks of instructional time. Accordingly, we believe it would be appropriate for an institution to identify a group or groups of students in the eligible program for whom it would always perform an exact accounting and then to use the same alternative method for determining the weeks of instructional time for all other students in the eligible program. Changes: We have clarified in Sec. 691.6(e)(2)(ii) that institutions must use the same alternative method for determining weeks of instructional time for all students enrolled in the eligible program for whom an exact accounting is not performed. Comments: One commenter questioned how the application of the alternative methods described in Sec. 691.6(f), (g), and (h) would be affected by a student attending some classes offered in an academic calendar outside the one offered by the student's eligible program or classes offered as part of intersessions between semesters that may be treated as part of a semester to qualify for payment calculations under Sec. 691.63(b) or (c). Discussion: We believe these situations would have little impact on how an institution would apply the alternative methods described in Sec. 691.6(f), (g), and (h). A student taking some courses outside the academic calendar of his or her eligible program would still have payments calculated based on the eligible program's calendar and the courses would be considered to fall within the eligible program's calendar. Intersessions treated as part of a semester would be similarly considered to fall within a semester in the eligible program's calendar for purposes of these alternative methods. Changes: None. Comments: One commenter asked for clarification regarding the impact of using the grade-level alternative under proposed Sec. 691.6(h) when an institution is required to remove from consideration credits that are not associated with weeks of instructional time under proposed Sec. 691.6(d)(2). The commenter questioned the relationship of credits with which no weeks of instructional time are associated (e.g., AP credits) to the formula in proposed Sec. 691.6(h)(3) for determining whether an institution may use the grade-level [[Page 61255]] alternative. The commenter further questioned whether an institution that qualifies to use the grade-level alternative based on an institution-wide analysis, rather than a program-level analysis under Sec. 691.6(h)(3), must use the grade-level alternative for all of its eligible programs. Discussion: Under proposed Sec. 691.6(d)(2), an institution must exclude credits without weeks of instructional time in determining a student's grade level for purposes of proposed Sec. 691.6(h)(2) when it determines the student's academic year progression. The formula in Sec. 691.6(h)(3) applies only to full-time, full-year students during periods of enrollment in ACG- and National SMART Grant-eligible programs at the institution. To take into consideration credits without weeks in applying the formula in Sec. 691.6(h)(3) would distort the academic year progression for those students. If an institution uses an institution-wide analysis under the grade-level alternative, it must use the grade-level alternative for all of its ACG- and National SMART Grant-eligible programs. We believe that Sec. 691.6(h)(3) should be changed to clarify this requirement. Changes: We have added paragraph (h)(2)(iii) to Sec. 691.6 to clarify that an institution that makes a determination under paragraph (h)(2)(i) of that section on an institutional basis must use the grade- level alternative method for all students at the institution for whom it does not perform an exact accounting of weeks of instructional time completed. We also have amended Sec. 691.6(e)(2) to reference this requirement. Comments: Several commenters supported continuing guidance similar to the transitional guidance for 2006-2007 and 2007-2008 that an institution may use one of the alternative methods or do an exact accounting to determine weeks of instructional time on a case-by-case basis without any restriction. Commenters also believed that the case- by-case determinations should include going from exact accounting back to using one of the alternative methods. The commenters believed that this type of flexibility would assist them in ensuring that students would more fully benefit under the ACG and National SMART Grant Programs. Discussion: The alternative methods of determining academic year progression are provided for programs for which institutions do not generally track the exact number of weeks of instructional time attended by students. We believe that the alternative methods would not ensure the accurate determination of a student's academic year progression if institutions were permitted to use the alternatives on a case-by-case basis as suggested by the commenters. We do not believe it is appropriate for a student's academic year progression to be determined under one of the alternative methods once an institution implements an exact accounting for that student. We consider an exact accounting of the weeks of instructional time completed by a student to always be the best evaluation of that student's academic year standing when determining the student's eligibility for an ACG or National SMART Grant. Changes: None. Limitations on Determining Weeks of Instructional Time (Sec. 691.6(d)(2)) Comments: Many commenters objected to the restrictions in proposed Sec. 691.6(d)(2) that an institution may not assign any weeks of instructional time to credit or clock hours accepted toward meeting a student's eligible program if the student earned (a) the credit or clock hours from Advanced Placement (AP) programs, International Baccalaureate (IB) programs, testing out, life experience, or other similar competency measures, (b) the credit or clock hours while not enrolled as a regular student in an ACG or National SMART Grant eligible program, or (c) the credit or clock hours for coursework that is not at the postsecondary level, such as remedial coursework. The commenters believed that these restrictions should be eliminated because they result in significant burden on institutions implementing these programs, require manual reviews of student records, reduce institutional flexibility, penalize students, and are inconsistent with the requirements of the other Title IV, HEA programs. The commenters generally believed that no credit or clock hours credited toward a student's eligible program should be excluded from estimating a student's academic progression in weeks of instructional time. Discussion: We appreciate the commenters' concerns and acknowledge the burden associated with calculating a student's weeks of instructional time under this framework. However, we believe it is important not to allocate weeks of instructional time to credits not earned at the postsecondary level in order to be consistent with the statute and to preserve maximum grant eligibility for these students. Students earn the credits described in Sec. 691.6(d)(2)(i)(A) through (C) while not enrolled in an ACG- or National SMART Grant-eligible program, and, therefore, we believe that it would not be appropriate for these credits to have weeks of instructional time in an ACG- or National SMART Grant-eligible program associated with them. Moreover, we believe that Sec. 691.6(d)(2)(i) is necessary to ensure that an institution accurately determines a student's academic year progression in his or her ACG or National SMART Grant eligible program. Changes: None. Exact Accounting; Student Request To Determine Academic Year Level (Sec. 691.6(e)) Comments: Several commenters believed that only an institution should initiate an exact accounting of a student's academic year progression. One commenter indicated that requiring institutions to perform an exact accounting upon a student request would be burdensome. Another did not believe students appreciated the distinctions in aid eligibility that may result from an exact accounting. Discussion: We continue to consider an exact calculation of the weeks of instructional time completed by a student to always be the best evaluation of that student's academic year standing when determining the student's eligibility for an ACG or National SMART Grant, and we believe a student should always have this option available. However, we believe that institutions may counsel a student on the implications of initiating an exact accounting so that the student will understand all available options and that, in some circumstances, an exact calculation could reduce or delay the aid a student might receive under the estimate otherwise used by the institution. Changes: None. Comment: One commenter questioned the meaning of the phrase ``including an accounting pursuant to paragraph (e)(2)(ii) of this section'' in proposed Sec. 691.6(e)(3). Discussion: The reference to paragraph (e)(2)(ii) was an error; the proper reference is to paragraph (e)(2)(iii). Changes: We have revised Sec. 691.6(e)(3) to reference paragraph (e)(2)(iii). Comments: Several commenters believed that proposed Sec. 691.6(e)(2)(iii) provided that only a student could initiate an exact accounting of academic year progression and questioned whether an institution may initiate an exact accounting. One commenter asked what we meant, in proposed Sec. 691.6(e)(3), when we used the word ``initiates.'' [[Page 61256]] Discussion: While a student has a right to request that an institution perform an exact accounting of his or her weeks of instructional time, an institution can always choose to perform an exact accounting of a student's weeks of instructional time pursuant to Sec. 691.6(e)(3). An institution is considered to have ``initiated'' an exact accounting under proposed Sec. 691.6(e)(3) when the institution performs an exact accounting. Changes: None. Comment: One commenter questioned whether using an exact accounting for a student would apply to the student even after transfer to another institution. Discussion: The requirement that a student is always subject to an exact accounting once one has been performed applies only to the student's current institution. If the student transfers to another institution, the new institution could, after accepting the prior courses under the transfer procedures, determine the student's academic year progression for courses taken at the new institution based on an exact accounting or any of the alternative methods for determining weeks of instructional time for the student in Sec. 691.6, provided that the institution otherwise meets the requirements to use the alternative method selected. Changes: None. Comment: One commenter was concerned that neither an institution nor a student would have the benefit of understanding the implications of choosing an exact accounting over an alternative method (or vice versa) before committing to an exact accounting. Discussion: The institution may counsel the student on whether to ask for the exact accounting, but must use that information if the calculation is made. An exact accounting provides the most accurate determination of a student's eligibility. The alternative methods have been adopted to ease the administrative burdens on institutions, rather than to provide students with the opportunity to receive grants they would not be entitled to under an exact accounting. Changes: None. Comments: One commenter had several questions relating to whether an exact accounting of a student's academic year progression would always preempt the use of the alternative methods for calculating weeks of instructional time under proposed Sec. 691.6(f), (g), and (h). First, the commenter questioned whether the decision to conduct an exact accounting would apply only to the payment period in which the exact accounting was conducted or to all subsequent payment periods, as well. The commenter also questioned whether it mattered for future determinations that an exact accounting was initiated by the institution or at the request of the student. Finally, the commenter questioned whether a student would be able to rescind his or her request. Discussion: An exact accounting is the best measure of a student's academic year progression, and an institution must continue to use that information in all subsequent payment periods during the student's enrollment at that institution. No distinction exists for calculations requested by a student or initiated by the institution, and a student may not rescind his or her request for an exact accounting once it is made. Changes: None. Comment: One commenter indicated that, because the commenter's institution was unable to automate an exact accounting of a student's academic year progression, the institution would be unable to perform an exact accounting. Discussion: When requested by a student, an institution is responsible for performing exact accountings of academic year progression regardless of whether its information systems would allow the process to be automated. Institutions are expected to perform these calculations manually in these circumstances. Changes: None. Academic Year Progression and Grade Point Average (GPA) Comments: Several commenters questioned the effect changes in determinations of student's academic year progression would have on the student's relevant GPA. Two commenters noted that, with the termination of the transitional guidance for the 2006-2007 and 2008-2009 award years, institutions would no longer count weeks of instructional time for some students and this would result in continuing students regressing in academic year progression and would affect the students' relevant GPA. One of the commenters suggested ``grandfathering'' the GPA for these continuing students. Discussion: The transitional guidance on academic year progression for the 2006-2007 and 2007-2008 award years generally dealt with estimating the weeks of instructional time in a student's academic year progression. It did not affect the number of credit or clock hours credited towards a student's ACG-or National SMART Grant-eligible program. As previously noted, the end of the transitional guidance may result in a student regressing in academic year progression due to a reduced estimated number of weeks of instructional time calculated for that student going forward. The GPA would be calculated appropriate to a student's revised academic year standing. If a student were now considered a first-year student, there would be no GPA requirement for determining eligibility for a first-year ACG. If a student were now considered a second-year student, the GPA for the first academic year would be used to determine the student's eligibility for a second-year ACG. For a National SMART Grant, the cumulative GPA would be unchanged because there would be no change in the credit or clock hours credited toward a student's eligible program. We do not believe there is any need to ``grandfather'' the GPAs of continuing students. Changes: None. Grade Point Average (GPA) (Sec. 691.15) General Comment: One commenter expressed disappointment with our failure to change the frequency with which institutions must calculate a National SMART Grant student's GPA. The commenter would prefer that the GPA be calculated annually rather than for each payment period. Another commenter believed that an annual calculation would significantly ease the institution's administrative burden without a loss of integrity to the program. Discussion: Section 401A(c)(3)(B)(ii) of the HEA provides that, in order to receive a second-year ACG, a student must have obtained a cumulative GPA of at least 3.0 at the end of the student's first academic year of study. In contrast, for eligibility for a National SMART Grant, section 401A(c)(3)(C)(ii) requires a student to obtain a cumulative GPA of at least 3.0, but does not limit that measurement to a specific time. Because eligibility for a National SMART Grant must be determined each payment period and payments for the National SMART Grant Program are calculated for a payment period, we believe that it is most appropriate to review the student's GPA for the National SMART Grant Program each payment period. Changes: None. Numeric Equivalent (Sec. 691.15(b)(1)(iii)(D), 691.15(c)(3), and 691.15(g)) Comment: One commenter sought clarification on whether an institution must calculate a numeric equivalent [[Page 61257]] GPA when a student completes certain courses that are not measured by a standard numeric grading procedure in a program that otherwise assesses grades on a standard 4.0 numeric scale. Specifically, the commenter requested guidance on situations in which a student in such a program completes some or all cou