Administration of VA Educational Benefits-Centralized Certification, 9052-9059 [06-1652]

Agencies

• DEPARTMENT OF VETERANS AFFAIRS

[Federal Register Volume 71, Number 35 (Wednesday, February 22, 2006)]
[Proposed Rules]
[Pages 9052-9059]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-1652]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 21

RIN 2900-AL43


Administration of VA Educational Benefits--Centralized 
Certification

AGENCY: Department of Veterans Affairs.

ACTION: Withdrawal of proposed rule and promulgation of a new proposed 
rule.

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SUMMARY: This document withdraws the proposed rule, Administration of 
VA Educational Benefits--Centralized Certification, published in the 
Federal Register on June 30, 2003 and promulgates a new proposed rule 
on the same subject. The new proposed rule would amend Department of 
Veterans Affairs (VA) rules governing certification of enrollment in 
approved courses for the training of veterans and other eligible 
persons under education benefit programs VA administers. Under this new 
proposed rule, VA would permit educational institutions with multi-
state campuses to submit certifications to VA from a centralized 
location. VA considered comments received on the previous proposed rule 
when drafting this new proposed rule.

DATES: Comments on this proposed rule must be received on or before 
April 24, 2006.

ADDRESSES: Written comments may be submitted by: mail or hand-delivery 
to Director, Regulations Management (00REG1), Department of Veterans 
Affairs, 810 Vermont Ave., NW., Room 1068, Washington, DC 20420; fax to 
(202) 273-9026; or e-mail through https://www.Regulations.gov. Comments 
should indicate that they are submitted in response to ``RIN 2900-
AL43.'' All comments received will be available for public inspection 
in the Office of Regulation Policy and Management, Room 1063B, between 
the hours of 8 a.m. and 4:30 p.m., Monday through Friday (except 
holidays). Please call (202) 273-9515 for an appointment.

FOR FURTHER INFORMATION CONTACT: Lynn M. Nelson, Education Advisor, 
Veterans Benefits Administration, Department of Veterans Affairs 
(225C), 810 Vermont Avenue, NW., Washington, DC 20420, 202-273-7294.

SUPPLEMENTARY INFORMATION: On June 30, 2003, in 68 FR 38657, VA 
published a proposed rule that would have amended subpart D of 38 CFR 
part 21, regarding approval criteria for branches and extensions of 
educational institutions. Under the proposed rule, VA would have 
permitted educational institutions with multi-state campuses to submit 
required certifications from a centralized location. This document 
withdraws the proposed rule of June 30, 2003, 68 FR 38657. In its 
place, we are promulgating a new proposed rule concerning the same 
subject matter. Interested persons were given 60 days to submit 
comments on the initial proposed rule and VA considered those comments 
when drafting this new proposed rule. The differences between the now 
withdrawn proposed rule and the new proposed rule are explained below. 
In addition, this document addresses the public comments that VA

[[Page 9053]]

received in response to the withdrawn proposed rule.

I. Background

    Educational institutions are required, under sections 3675 and 
3676, title 38, United States Code (U.S.C.), to maintain certain 
records in order for their courses to be approved for the training of 
veterans and other eligible persons under the educational assistance 
programs VA administers. Generally, these records contain information 
about students' grades and progress, prior training, charges for 
tuition and fees, and other administrative and policy records that show 
the institution satisfactorily meets all the applicable approval 
criteria in 38 U.S.C. 3675 and 3676. In addition, under 38 U.S.C. 
3690(c) (38 U.S.C. 3034 and 10 U.S.C. 16136(b) provide the authority to 
apply Sec.  3690(c) to educational assistance provided under 38 U.S.C. 
chapter 30 and 10 U.S.C. chapter 1606), each institution must make its 
records and accounts pertaining to eligible veterans and eligible 
persons who receive educational assistance under chapters 30, 31, 32, 
35, and 36 of title 38, U.S.C. and chapter 1606 of title 10, U.S.C. 
available for examination by authorized representatives of the 
Government. Furthermore, by application of 38 U.S.C. 3684 each 
educational institution offering a course in which a veteran or 
eligible person is enrolled under chapter 30, 31, 32, 35, or 36 of 
title 38, U.S.C., or chapter 1606 of title 10, U.S.C., must report to 
VA the following information:
     The enrollment of each such veteran or eligible person; 
and
     The interruption or termination of the education of each 
such person. The school official that prepares and submits the above 
required certifications to VA is known as the ``Certifying Official.''
    Under VA's existing regulations, each educational institution (and 
generally each of its branches or extensions) must maintain its own 
administrative records for its students. In addition, a Certifying 
Official must be present at each location to prepare and submit the 
required certifications to VA. Over the years, we have referred to the 
branch's or extension's ability to maintain its own records and to 
submit its own certifications as the branch or extension having its own 
``administrative capability.'' There are limited exceptions to the rule 
that each campus or extension must have its own administrative 
capability. One exception is permitted when the parent facility is 
within the same State as the branch or extension and the parent 
facility maintains a centralized recordkeeping system, specifies the 
branch location when certifying enrollments to VA, and can identify the 
records of students at each location. Another exception allows the 
State approving agency to combine the approval of the courses offered 
at the branch or extension with the courses offered at the parent 
school if the branch or extension is located within the same State and:
     The course offering at the branch or extension consists of 
a small number of unit subjects that do not comprise a program of 
education or a set curriculum large enough to allow pursuit on a 
continuing basis;
     The course offering at the branch or extension is given on 
a temporary basis (no more than a few cycles of training); or
     The facilities at the branch or extension contain 
insufficient space for an administrative capability to be developed.
    When an educational institution's branches or extensions meet the 
requirements of the exceptions in the above paragraph, the Certifying 
Official is (or Certifying Officials are) located at the parent 
facility and there is no Certifying Official present at the branch or 
extension.

II. Comments

    VA received comments both in favor of and against the withdrawn 
proposed rule. Favorable comments were submitted by:
     Three representatives from private for-profit educational 
institutions that offer courses at multiple locations;
     The Legislative Director for the National Association of 
Veterans Program Administrators (NAVPA) on behalf of NAVPA (NAVPA is an 
organization for Certifying Officials); and
     A representative from a state educational institution.
    All five of the above individuals have experience with Certifying 
Official duties.
    VA received 24 letters against the proposed rule. One of the 24 
letters was from the President of the National Association of State 
Approving Agencies (NASAA) on behalf of the NASAA membership. Each 
state has a department or agency known as the State approving agency 
(SAA). Each SAA is responsible, under 38 U.S.C. 3671, for approving 
courses for veterans training offered in their state. In addition to 
the letter from the national association, 19 SAAs representing their 
individual states sent in letters similar to the letter from NASAA. The 
remaining four comments against the proposed rule were submitted by:
     A former college vice president;
     The President of the New Jersey Association of Veteran 
Program Administrators (NJAVPA) on behalf of NJAVPA (NJAVPA is an 
organization for Certifying Officials in New Jersey);
     A veteran who is a former Certifying Official commenting 
from a veteran's and a Certifying Official's perspective; and
     A Certifying Official from a community college that has 
five campuses.
    The comments in favor of the withdrawn proposed rule say that the 
change would improve service to veterans and other eligible 
individuals. In addition, the educational institution representatives 
in favor of the withdrawn proposed rule feel that centralizing their 
Certifying Officials would allow them to better manage their resources. 
The comments against the withdrawn proposed rule fell into these main 
categories:
     Decline in service to veterans and other eligible 
individuals;
     Adversely impacts state recordkeeping laws;
     State approving agencies (SAAs) may not be able to fulfill 
their contracted responsibilities; and
     Lessens the approval criteria for out-of-state 
institutions;
    We address the comments, both for and against, in the following 
paragraphs.
    A. Some providing comments perceived that the proposed change would 
adversely impact state recordkeeping laws; that State approving 
agencies might not be able to fulfill their contracted 
responsibilities; and that the proposed rule would lessen the approval 
criteria for out-of-state institutions. Based on comments from the SAAs 
and NASAA, it was apparent that VA needed to redefine the meaning of 
``administrative capability.'' Our proposed definition of 
``administrative capability'' in the withdrawn proposed rule was that 
``administrative capability'' meant the ability to:
     Maintain all records and accounts that 38 CFR 21.4209 
requires;
     Designate and have a certifying official on site; and
     Provide VA with the reports and certifications that 38 CFR 
21.4203, 21.4204, 21.7252, and 21.7652 require based on source data on 
site, without referral to another location of an educational 
institution for documentation.
    It now is apparent that including both the recordkeeping 
requirement and the VA certification element in the definition of 
``administrative capability,'' clouded our intent that

[[Page 9054]]

(subject to the existing exceptions in Sec.  21.4266(b) and (c)) only 
the certification duties could be centralized. To alleviate confusion, 
we are revising our previously proposed definition of ``administrative 
capability'' and also proposing a definition for the term ``Certifying 
Official.'' In this document we propose to define ``administrative 
capability'' to mean ``the ability to maintain all records and accounts 
that Sec.  21.4209 requires.'' We propose to define the term 
``Certifying Official'' to mean ``a representative of an educational 
institution designated to provide VA with the reports and 
certifications that Sec. Sec.  21.4203, 21.4204, 21.5810, 21.5812, 
21.7152, and 21.7652 require.''
    The revision of the withdrawn proposed rule makes it clear that VA 
is not proposing to change the existing rules for approval of branches 
and extensions, other than to permit an educational institution with 
multi-state campuses the option of centralizing its Certifying Official 
function. Under this proposed rule, each branch or extension still must 
maintain all records that 38 CFR 21.4209 requires, unless one of the 
exceptions in Sec.  21.4266(d) applies. Generally, these records 
contain information about students' grades and progress, prior 
training, charges for tuition and fees, and other administrative and 
policy records that show the institution satisfactorily meets all the 
applicable approval criteria in 38 U.S.C. 3675 and 3676.
    In this proposed rule, we clarify, in revised Sec.  21.4266(e), 
that the State approving agency may combine the approval of courses 
offered by an extension of an educational institution with the approval 
of courses offered at the main campus (or the branch campus it is 
dependent on) only if the extension and the campus it is dependent on 
are within the same State. (The proposed rule would not change 
jurisdiction for approval of courses by the State approving agencies 
(SAAs). For example, an educational institution in New York with a 
branch in California must have its courses offered in New York approved 
by the New York SAA and the courses offered at its California branch 
approved by the California SAA.) The language in the withdrawn proposed 
rule did not clearly express that combined approvals only apply to 
locations within the same State. In addition, we clarify in Sec.  
21.4266(e) that (in accordance with Sec.  21.4251) an extension of a 
proprietary educational institution that offers courses that do not 
lead to a standard college degree is still subject to the minimum 
period of operation requirements. The information was included because 
we recently learned that some individuals erroneously concluded the 
minimum period of operation rule did not apply when approvals were 
combined.
    In this document, we propose adding Sec.  21.4266(f) to clearly 
express the existing exceptions and the proposed additional exception 
to the requirement that each location where a course is offered must 
have a Certifying Official present. In proposed Sec.  21.4266(f)(1) and 
(f)(2), we show the two exceptions that are permitted under existing 
regulations. In proposed Sec.  21.4266(f)(3) we show the proposed 
additional exception that would apply to educational institutions with 
multi-state campuses who choose to centralize their Certifying Official 
functions. An educational institution with multi-state campuses may 
centralize Certifying Official functions if the institution:
     Submits all required reports and certifications via 
electronic submission through VA's internet-based education 
certification application;
     Shows the VA facility code for the location that has 
administrative capability for the location where the student is 
training when submitting required reports and certifications to VA;
     Provides the Certifying Official full access to the 
administrative records and accounts that Sec.  21.4209 requires for 
each student attending the location (or locations) for which the 
Certifying Official serves as the designated Certifying Official. The 
records may be originals, certified copies, or in an electronically 
formatted record keeping system; and
     Designates an employee, at each location of the 
educational institution that does not have a Certifying Official 
present, who will serve as a point of contact for the Certifying 
Official, veterans and other eligible persons, VA, and the SAA. This 
employee must have access (other than to transmit certifications) to 
VA's Internet-based education certification application to provide 
information to VA beneficiaries, the SAA and VA.
    Based on the comments we received, we are proposing rules that an 
educational institution with multi-state campuses must follow if it 
chooses to centralize its Certifying Official function. These proposed 
rules are based on concerns of the State approving agency 
representatives and to ensure program integrity. The new proposed rules 
the affected educational institutions must follow are explained in the 
following paragraphs.
    1. Submit all required reports and certifications via VA's 
Internet-based education certification application. The electronic 
certification application has safeguards to help prevent fraud that are 
not available in a paperless environment. In addition the application 
provides VA with a means to extract electronic reports showing all 
certifications for VA students submitted by an educational institution. 
VA can extract this information separately for each location. These 
reports will be helpful for compliance surveys performed by VA or the 
SAA.
    The SAAs expressed concern that their compliance review and 
supervisory visits would be hampered if the certification documents are 
maintained at a location outside of their individual states. This 
proposed rule requires that there must be an employee (at the location 
that does not have a Certifying Official present) designated to act as 
a point of contact for VA, the SAA, veterans, reservists, 
servicemembers and other eligible persons. The point of contact must 
have access (other than to transmit certifications) to VA's Internet-
based education certification application and must allow the SAA or VA 
representative conducting a site visit to view any VA enrollment 
certification data on any VA student attending that location. (The data 
displayed in VA's Internet-based education certification application is 
not a new collection of information under the Paperwork Reduction Act. 
The Office of Management and Budget (OMB) approved the collection of 
enrollment data on VA Form 22-1999 which includes collecting the 
information via the Internet-based application. The OMB approval number 
is 2900-0073 and is valid until October 31, 2006.)
    2. Show the VA facility code for the location that has 
administrative capability for the location where the student is 
training when submitting required reports and certifications to VA. 
This proposed rule is necessary so that VA can ensure that veterans and 
other eligible persons are certified properly. The facility code 
identifies the location that has administrative capability for the 
location where the student is enrolled. Administrative capability may 
be at the location the student is attending, or it may exist at another 
location of the educational institution within the same state. This 
code tells VA the location of the educational institution in the state 
where the student is enrolled, and which location of that institution 
has administrative capability. This will assist in extracting reports 
for compliance review and program integrity. In addition to program

[[Page 9055]]

integrity, the Internet-based application uses the facility code to 
automatically route the electronic certifications to the VA regional 
processing office (RPO) that has jurisdiction over the location where 
the student is training. VA also uses the facility code to extract 
statistical data for administrative purposes. (This is not a new 
collection of information. Certifying Officials show the VA facility 
code on all enrollment certifications and reports submitted to VA. We 
included this proposed rule for clarity so that educational 
institutions that centralize their Certifying Official functions 
understand they must continue to reflect the VA facility code for the 
location that has administrative capability for the location where the 
student is pursuing the course, rather than the facility code of the 
centralized location from where the certifications are prepared.)
    3. Provide the Certifying Official full access to administrative 
records and accounts that 38 CFR 21.4209 requires for each location the 
official serves as the designated Certifying Official. This proposed 
rule is necessary so that the Certifying Official has proper access to 
report enrollment information. We clarified this requirement in this 
proposed rule because many readers of the withdrawn proposed rule 
thought the withdrawn proposed rule would give educational institutions 
with multi-state campuses the authority to move all administrative 
records from branches and extensions to one central location. While the 
Certifying Officials must have access to the records, it was not our 
intent to say all administrative records would be maintained at the 
national level and that the administrative records would not be 
available at the state level. Many states require the branches to 
maintain administrative records and accounts locally for state 
licensure requirements. If an educational institution wants to submit 
VA certifications from a central location, the institution must ensure 
the individual submitting those certifications has access to all 
administrative records and accounts to properly certify enrollment 
information for veterans and other eligible persons.
    B. Service to veterans and other eligible individuals. Those 
commenting against centralizing the Certifying Official function 
strongly feel that service will decline because there will not be a 
designated person on campus to:
     Assist with the certification process;
     Provide guidance on VA benefits;
     Provide information on individual State veterans benefits; 
or
     Serve as a continuing advocate for veterans' education at 
the facility.
    They are also concerned that submitting certifications to VA from a 
centralized national location rather than directly from the campus 
where the student is attending will delay reporting and ultimately 
delay receipt of benefits. In addition, they feel that veterans might 
have to incur long distance phone charges and may have trouble 
accessing staff in the centralized office if the veteran resides in a 
different time zone than the centralized office. Several individuals 
expressed concerns that educational institutions may choose to 
centralize certification duties in an effort to reduce their 
administrative overhead costs and subsequently not properly staff the 
office at the central location.
    Those in favor of the option of centralizing the Certifying 
Official function feel service to veterans will improve. In several of 
the branches and extensions, a Certifying Official performs other 
duties and does not solely concentrate on veteran's certifications. It 
is an ancillary duty. Those educational institutions that prefer to 
centralize their certifying officials state that by allowing them this 
option they could dedicate staff members who specialize in VA 
certification. Thus, their quality of service would improve. By 
centralizing their Certifying Official functions, those institutions 
feel they could better train and manage their Certifying Officials.
    VA currently permits educational institutions offering distance 
learning courses to submit certifications from a central location for 
all students enrolled in their distance learning programs, regardless 
of where the student resides. VA has not experienced major problems 
with educational institutions that perform certifications for their 
campuses in their distance learning programs.
    Many Certifying Officials serve as knowledgeable source persons for 
VA education program information and assistance. Several individuals 
commenting strongly feel that these services will decline if 
educational institutions are permitted to centralize their Certifying 
Official functions. It is important to note that although many 
Certifying Officials serve as knowledgeable source persons and veterans 
advocates, providing a valuable service to veterans and VA, there is no 
statutory provision that requires them to do so. In addition, there is 
no evidence to support the allegation that an educational institution 
that chooses to centralize its Certifying Official function would stop 
providing quality service to its veteran customers. The majority of 
educational institutions that have multi-state campuses are not public 
institutions. The majority of veterans, servicemembers, reservists, and 
other eligible persons entitled to VA educational assistance attend 
public educational institutions. (For example, during fiscal year 2003, 
81% of individuals in receipt of Montgomery GI Bill educational 
assistance attended public educational institutions.) A private 
educational institution that is not concerned with assisting veterans 
and other eligible persons, and providing good customer service, risks 
losing those students as customers.
    Some providing comments perceive that only a local Certifying 
Official would have access to information about State benefits for 
veterans, servicemembers or other eligible individuals. While it may 
require some effort to obtain this information, a centralized office 
can obtain all the information about State benefits from the Internet. 
Most financial aid offices provide information about the types of 
funding available for those seeking financial aid. The educational 
institutions that have expressed an interest in centralizing their 
Certifying Official function already have a central financial aid 
office.
    Although several individuals commented that nothing replaces 
``face-to-face'' contact, and veterans will lose that benefit if a 
Certifying Official is not present on each campus, there are also 
individuals who prefer to conduct their business via email or telephone 
rather than in person. One SAA official commented that she has seen 
service decline within her State at some campuses when certification 
was centralized into one location. (Centralized certification within a 
State is permitted under existing regulations in certain instances.) 
She felt the decline was due to the physical separation and that the 
physical separation resulted in a disconnect between the veteran and 
the certification process. VA concedes that in some instances the 
service may decline, but it also may improve. Even under existing 
regulations, a veteran might receive better service from one campus 
Certifying Official than he/she would receive from the Certifying 
Official at another branch of the educational institution. However, VA 
cannot assume that all service would improve or all service would 
decline if centralized certification were permitted for educational 
institutions that have campuses in more than one state.
    The school representatives interested in centralizing their 
Certifying Official

[[Page 9056]]

functions stated, in their official comments on the withdrawn proposed 
rule, that they would still provide face-to-face representation at all 
their locations. It is only the individuals who certify and submit 
reports that they wish to centrally locate. One school representative 
stated it would be similar to the way they centrally administer Federal 
financial aid. The central location processes the paperwork and the 
local campus counsels the students and provides general information 
about aid that is available. In this proposed rule, we added a proposed 
requirement that there must be a designated point-of-contact at each 
location that does not have a Certifying Official present who will be 
available for VA, the Certifying Official, the SAA, and the student.
    C. Several SAAs and NASAA suggested having a requirement that each 
educational institution that centralizes its Certifying Official 
function, must:
     Have a knowledgeable point-of-contact for student, VA, and 
SAA contact purposes at each approved location without a Certifying 
Official present;
     Grant access to all student records, including VA 
certification documents, to the point-of-contact;
     Maintain a list of everyone who has applied for, received, 
or expresses a formal interest in using GI Bill benefits;
     Submit certifications to the VA Regional Processing Office 
that has jurisdiction of the State or territory in which the student is 
enrolled;
     Maintain adequate toll free numbers or lines for use by 
students with the capability to measure missed calls;
     Maintain adequate full-time campus personnel at the 
location the Certifying Official is present to ensure:
    [cir] That certifications and changes are timely submitted
    [cir] Student progress is monitored
    [cir] Course-to-program applicability is monitored; and
    [cir] Calls from veterans and SAAs are answered timely
    In addition, the SAA's suggested that VA:
     Permit centralized certification on a test basis;
     Establish a minimum ratio of veteran students to campus 
personnel;
     Establish a maximum timeframe to submit enrollment 
certifications (recommended a two-week timeframe); and
     Conduct an annual survey the first five years after the 
final rule permitting centralized certification to measure customer 
satisfaction with respect to centralized certification.
    Several of the suggestions would require VA to impose more rules on 
educational institutions that choose to centralize their Certifying 
Official functions than on those educational institutions that choose 
not to centralize. We do not believe, however, that it would be 
equitable for VA to require that only educational institutions that 
choose to centralize their Certifying Official functions would be 
subject to employee/veteran ratios, timeframe measurements, mandatory 
telephone line requirements; and maintenance of lists of persons 
interested in GI Bill benefits. VA does not see a need to regulate 
these matters. When problems arise with the certification process, VA's 
Education Liaison Representatives (ELR), the SAA official, the 
Certifying Official, and the educational institution work together to 
resolve the issues. In those instances where liaison assistance and/or 
training assistance do not resolve the issues, the approval is 
withdrawn.
    Educational institutions, whether opting to centralize their 
Certifying Official functions or not, will continue to submit 
enrollment information to the VA regional processing office (RPO) that 
has jurisdiction over the campus that has administrative capability for 
the location where the student is enrolled. This will be controlled 
automatically in VA's internet-based education certification 
application by routing certifications to the RPO by the VA facility 
code identifier.
    VA is exploring expanding our annual customer satisfaction survey 
of education assistance recipients to include questions that cover the 
certification process for new and continuing students.
    In this document we propose a rule, for those educational 
institutions opting to centralize their Certifying Official functions, 
that they must designate a point-of-contact at each branch or extension 
location that does not have a Certifying Official present. This was 
suggested by the SAAs. This will ensure veterans and other eligible 
persons know who will assist them as well as provide VA and the SAAs a 
point-of-contact for compliance reviews.
    VA also received a comment expressing concern that veterans would 
not be able to receive an advance payment if educational institutions 
centralize the Certifying Official function. We do not find that this 
would occur. An advance payment is a payment that equals the monthly 
amount of educational assistance due for the month in which the course 
begins and the following month. The check is made out to the student 
and is mailed to the school in advance of the start of the term. 
Students will still be able to receive an advance payment at the 
location that has administrative capability for the location where they 
are training. VA determines where to send the payment by using the VA 
facility code as an identifier. Less than 10% of students receive 
advance payments. Most students prefer VA to send payments 
electronically to their individual bank accounts.
    The SAAs expressed concerns that permitting educational 
institutions to centralize their Certifying Official functions may lead 
to incidents of fraud, waste, and abuse. VA carefully considered these 
concerns. By adding the proposed rule that those who centralize must 
use VA's Internet-based education certification application, VA can 
monitor certification submissions for each location by reports 
extracted from the application. VA can provide SAAs with listings of 
students enrolled and certified for the location that the SAA is 
visiting to assist in the review. In addition, the SAA may view 
individual enrollment records in VA's Internet-based education 
certification application during a supervisory visit at a location that 
does not have a Certifying Official present. The designated point of 
contact will have access to the Internet-based education certification 
application and allow the SAA to view enrollment data stored in the 
application. The ability to review the enrollments will also help VA 
employees who conduct compliance reviews to ensure veterans and other 
eligible persons are properly certified.
    In addition to the reports, the existing provisions in 38 CFR 
21.4210 permit VA to suspend or discontinue payments of educational 
assistance to all veterans, servicemembers, reservists, and other 
eligible persons and to disapprove further enrollments or reenrollments 
if evidence supports a substantial pattern of veterans, servicemembers, 
reservists, or other eligible persons who are receiving educational 
assistance to which they are not entitled because the educational 
institution offering the course has violated recordkeeping or reporting 
requirements. If VA obtained evidence of substantial violations of 
recordkeeping or reporting, VA could suspend and discontinue payments 
to students at all locations served by the centralized Certifying 
Official (or Officials). The rules in Sec.  21.4210 provide VA enough 
latitude, if there were substantial problems, that offering centralized 
certification on a test basis is not necessary.
    Some SAAs are concerned that, without a Certifying Official present 
at each location, reductions and terminations will not be reported 
timely

[[Page 9057]]

and thus more overpayments will occur. Whether the Certifying Officials 
are centralized or not, they each must follow the same reporting and 
certification regulations. VA will not lessen those requirements just 
because an educational institution decided to centralize. Again, VA can 
suspend or discontinue payment of educational assistance to all VA 
students enrolled at all locations for violations of reporting and 
certification regulations. Additionally, the student is still 
responsible to report his or her enrollment changes directly to VA. 
Students in receipt of benefits under the Montgomery GI Bill--Active 
Duty and the Montgomery GI Bill--Selected Reserve programs must verify 
their enrollment monthly. The student is required to report changes in 
enrollment as part of the verification. VA does not make payment under 
these two programs until the student's verification is received.
    It is important to note that the proposed rule only would permit, 
not require, educational institutions with multi-state campuses to 
centralize their Certifying Official functions. Under existing rules, 
educational institutions with campuses within the same State (and who 
have a centralized recordkeeping system) may centralize their 
Certifying Official functions. Many educational institutions will have 
no interest in changing the way they currently do business, especially 
those locations that have many veterans, servicemembers, or reservists 
enrolled. This proposed rule provides more flexibility to an 
educational institution that has many campuses, and that may not have 
significant veteran enrollment.

Paperwork Reduction Act

    This document contains a provision in proposed 38 CFR 
21.4266(f)(3)(i) that would require an educational institution to 
submit required certifications electronically using VA's Internet-based 
education certification application if the institution chooses to 
centralize its Certifying Official function. The proposed requirement 
is a collection of information under the Paperwork Reduction Act (44 
U.S.C. 3501-3521) that would need approval by the Office of Management 
and Budget (OMB). Accordingly, under section 3507(d) of the Act, VA has 
submitted a copy of this rulemaking action to OMB for review.
    OMB assigns a control number for each collection of information it 
approves. VA may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number.
    VA has approval to collect the information either by paper or 
electronically under OMB Control No. 2900-0073 (Enrollment 
Certification). Under the existing approval, educational institutions 
choose whether to submit their certifications by paper or 
electronically. The proposed requirement in 38 CFR 21.4266(f)(3) would 
require electronic submission by those educational institutions 
centralizing their Certifying Official functions and would require 
revision to the existing approval. The existing OMB approval expires 
October 31, 2006. In a separate document VA is requesting an extension 
of approval. That document will be published in the Federal Register in 
the near future and will provide the public an opportunity to comment 
on the collection.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in an expenditure by 
State, local, or tribal governments, in the aggregate or by the private 
sector, of $100 million or more (adjusted annually for inflation) in 
any given year. This proposed rule would have no such effect on State, 
local, or tribal governments, or the private sector.

Executive Order 12866

    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, when regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety, 
and other advantages; distributive impacts; and equity). The Order 
classifies a rule as a significant regulatory action requiring review 
by the Office of Management and Budget if it meets any one of a number 
of specified conditions, including: Having an annual effect on the 
economy of $100 million or more, creating a serious inconsistency or 
interfering with an action of another agency, materially altering the 
budgetary impact of entitlements or the rights of entitlement 
recipients, or raising novel legal or policy issues. VA has examined 
the economic, legal, and policy implications of this proposed rule and 
has concluded that it is a significant regulatory action because it 
raises novel policy issues.

Regulatory Flexibility Act

    The Secretary of Veterans Affairs (VA) hereby certifies that this 
proposed rule will not have a significant economic impact on a 
substantial number of small entities as they are defined in the 
Regulatory Flexibility Act, 5 U.S.C. 601-612. The proposed rule will 
affect only those educational institutions that choose to centralize 
their Certifying Official functions. Centralizing certifying functions 
would be at the option of the educational institution should they 
desire to consolidate their certifying functions. Some educational 
institutions with multi-state campuses requested VA expand current 
regulations to permit them to centralize their Certifying Official 
functions. Those education institutions believe centralizing their 
functions will allow them to better manage and allocate their 
resources. Existing VA regulations do not permit educational 
institutions with multi-state campuses to centralize their Certifying 
Official functions. The economic effect on small entitles would 
essentially entail a cost savings associated with the consolidation of 
certifying functions. By centralizing the functions, the institutions 
desiring this option say they could dedicate less full-time employees 
to the centralizing duties and at the same time have those employees 
specialize. According to the staff members of educational institutions 
interested in centralizing, their training costs would be reduced by 
having a centralized staff dedicated to VA certification and serving 
veterans. The option in this proposed rule that would liberalize 
current regulations to permit centralizing the certification functions 
would not impact a substantial number of small entities. Of the 6,900 
post secondary educational institutions approved by Department of 
Education for Title IV funds, only 3 of those institutions commented on 
the previous proposed rule that would have permitted centralized 
certification. Less than 10 educational institutions have expressed 
interest in centralized certification, but those that have are very 
interested in the proposed change that would allow them the option. 
Pursuant to 5 U.S.C. 605(b), this proposed rule, therefore, is exempt 
from the initial and final regulatory flexibility analyses requirements 
of sections 603 and 604.

Catalog of Federal Domestic Assistance Program Numbers

    The Catalog of Federal Domestic Assistance numbers and titles for 
the programs affected by this proposed rule are 64.117, Survivors and 
Dependents Educational Assistance; 64.120, Post-Vietnam Era Veterans' 
Educational Assistance; and 64.124, All-Volunteer Force Educational 
Assistance. This proposed rule also affects the Montgomery GI Bill 
Selected Reserve

[[Page 9058]]

program. There is no Catalog of Federal Domestic Assistance number for 
the Montgomery GI Bill Selected Reserve program.

List of Subjects in 38 CFR Part 21

    Administrative practice and procedure, Armed forces, Civil rights, 
Claims, Colleges and universities, Conflicts of interests, Defense 
Department, Education, Employment, Grant programs-education, Grant 
programs-veterans, Health care, Loan programs-education, Loan programs-
veterans, Manpower training programs, Reporting and recordkeeping 
requirements, Schools, Travel and transportation expenses, Veterans, 
Vocational education, Vocational rehabilitation.

    Approved: September 30, 2005.
Gordon H. Mansfield,
Deputy Secretary of Veterans Affairs.
    For the reasons set out above, 38 CFR part 21 (subpart D) is 
proposed to be amended as follows.

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

Subpart D--Administration of Educational Assistance Programs

    1. The authority citation for part 21, subpart D, continues to read 
as follows:

    Authority: 10 U.S.C. 2141 note, ch. 1606; 38 U.S.C. 501(a), chs. 
30, 32, 34, 35, 36, unless otherwise noted.

    2. Section 21.4266 is revised to read as follows:


Sec.  21.4266  Approval of courses at a branch campus or extension.

    (a) Definitions. The following definitions apply to the terms used 
in this section.
    (1) Administrative capability. The term administrative capability 
means the ability to maintain all records and accounts that Sec.  
21.4209 requires.
    (2) Certifying Official. Certifying Official means a representative 
of an educational institution designated to provide VA with the reports 
and certifications that Sec. Sec.  21.4203, 21.4204, 21.5810, 21.5812, 
21.7152, and 21.7652 require.
    (3) Main campus. The term main campus means the location where the 
primary teaching facilities of an educational institution are located. 
If an educational institution has only one teaching location, that 
location is its main campus. If it is unclear which of the educational 
institution's teaching facilities is primary, the main campus is the 
location of the primary office of its Chief Executive Officer.
    (4) Branch campus. The term branch campus means a location of an 
educational institution that:
    (i) Is geographically apart from and operationally independent of 
the main campus of the educational institution;
    (ii) Has its own faculty, administration and supervisory 
organization; and
    (iii) Offers courses in education programs leading to a degree, 
certificate, or other recognized education credential.
    (5) Extension. The term extension means a location of an 
educational institution that is geographically apart from and is 
operationally dependent on the main campus or a branch campus of the 
educational institution.

(Authority: 38 U.S.C. 3675, 3676, 3684)


    (b) State approving agency jurisdiction. (1) The State approving 
agency for the State where a residence course is being taught has 
jurisdiction over approval of that course for VA education benefit 
purposes.
    (2) The fact that the location where the educational institution is 
offering the course may be temporary will not serve to change 
jurisdictional authority.
    (3) The fact that the main campus of the educational institution 
may be located in another State from that in which the course is being 
taught will not serve to change jurisdictional authority.

(Authority: 38 U.S.C. 3672)


    (c) Approving a course offered by a branch campus or an extension 
of an educational institution. Before approving a course or a program 
of education offered at a branch campus or an extension of an 
educational institution, the State approving agency must ensure that:
    (1) Except as provided in paragraph (d) of this section, each 
location where the course or program is offered has administrative 
capability; and
    (2) Except as provided in paragraph (f) of this section, each 
location where the course or program is offered has a Certifying 
Official on site.

(Authority: 38 U.S.C. 3672)


    (d) Exceptions to the requirement that administrative capability 
exist at each location. (1) A State approving agency may approve a 
course or program offered by a branch campus that does not have its own 
administrative capability if:
    (i) The main campus of the educational institution within the same 
State maintains a centralized recordkeeping system that includes all 
records and accounts that Sec.  21.4209 requires for each student 
attending the branch campus without administrative capability. These 
records may be originals, certified copies, or in an electronically 
formatted recordkeeping system; and
    (ii) The main campus can identify the records of students at the 
branch campus for which it maintains centralized records.
    (2) The State approving agency may approve a course or program 
offered by an extension that does not have its own administrative 
capability if:
    (i) The extension and the main campus or branch campus it is 
dependent on are located within the same State;
    (ii) The main campus or branch campus the extension is dependent on 
has administrative capability for the extension; and
    (iii) The State approving agency combines the approval of the 
course(s) offered by the extension with the approval of the courses 
offered by the main campus or branch campus the extension is dependent 
on.
    (e) Combined approval. The State approving agency may combine the 
approval of courses offered by an extension of an educational 
institution with the approval of the main campus or the branch campus 
that the extension is dependent on, if the extension is within the same 
State as the campus it is dependent on. Combining the approval of 
courses offered by an extension, with the approval of courses offered 
by the main campus or branch campus the extension is dependent on, does 
not negate the minimum period of operation requirements in Sec.  
21.4251 for courses that do not lead to a standard college degree 
offered by an extension of a proprietary educational institution. The 
State approving agency will list the extension and courses approved on 
the notice of approval sent to the educational institution pursuant to 
Sec.  21.4258 of this part.
    (f) Exceptions to the requirement that each location where the 
course or program is offered must have a Certifying Official on site. 
Exceptions to the requirement in paragraph (c) of this section, that 
each location with an approved course or program of education must have 
a Certifying Official on site, will be permitted for:
    (1) Extensions of an educational institution when the State 
approving agency combines the approval of the courses offered by the 
extension with a branch campus or main campus. (See paragraph (e) of 
this section.)
    (2) Educational institutions with more than one campus within the 
same State if the main campus:

[[Page 9059]]

    (i) Maintains a centralized recordkeeping system. (See paragraph 
(d)(1) of this section.);
    (ii) Has administrative capability for the branch campus (or branch 
campuses) within the same State; and
    (iii) Centralizes its Certifying Official function at the main 
campus.
    (3) Educational institutions with multi-state campuses when an 
educational institution wants to centralize its Certifying Official 
function into one or more locations if:
    (i) The educational institution submits all required reports and 
certifications that Sec. Sec.  21.4203, 21.4204, 21.5810, 21.5812, 
21.7152, and 21.7652 require via electronic submission through VA's 
internet-based education certification application;
    (ii) The educational institution designates an employee, at each 
teaching location of the educational institution that does not have a 
Certifying Official present, to serve as a point-of-contact for 
veterans, servicemembers, reservists, or other eligible persons; the 
Certifying Official(s); the State approving agency of jurisdiction; and 
VA. The designated employee must have access (other than to transmit 
certifications) to VA's internet-based education certification 
application to provide certification information to veterans, 
servicemembers, reservists, or other eligible persons, State approving 
agency representatives, and VA representatives;
    (iii) Each Certifying Official uses the VA facility code for the 
location that has administrative capability for the teaching location 
where the student is training when submitting required reports and 
certifications to VA; and
    (iv) Each Certifying Official has full access to the administrative 
records and accounts that Sec.  21.4209 requires for each student 
attending the teaching location(s) for which the Certifying Official 
has been designated responsibility. These records may be originals, 
certified copies, or in an electronically formatted recordkeeping 
system.

(Authority: 38 U.S.C. 3672)


[FR Doc. 06-1652 Filed 2-21-06; 8:45 am]
BILLING CODE 8320-01-P