Student Assistance General Provisions; Teacher Education Assistance for College and Higher Education (TEACH) Grant Program; Federal Pell Grant Program; Academic Competitiveness Grant Program and National Science and Mathematics Access To Retain Talent Grant Program, 20210-20225 [E9-10094]

Agencies

• DEPARTMENT OF EDUCATION

[Federal Register Volume 74, Number 83 (Friday, May 1, 2009)]
[Rules and Regulations]
[Pages 20210-20225]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-10094]


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DEPARTMENT OF EDUCATION

34 CFR Parts 668, 686, 690, and 691

RIN 1840-AC96
[Docket ID ED-2009-OPE-0001]


Student Assistance General Provisions; Teacher Education 
Assistance for College and Higher Education (TEACH) Grant Program; 
Federal Pell Grant Program; Academic Competitiveness Grant Program and 
National Science and Mathematics Access To Retain Talent Grant Program

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Interim final rule; request for comments.

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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. These interim 
final regulations are needed to implement provisions of the Higher 
Education Act of 1965 (HEA), as amended by the Ensuring Continued 
Access to Student Loans Act of 2008 (ECASLA) and the Higher Education 
Opportunity Act of 2008 (HEOA). The new statutory provisions are 
effective July 1, 2009. The Secretary also amends the regulations in 
the Student Assistance General Provisions, and the regulations for the 
Teacher Education Assistance for College and Higher Education (TEACH) 
Grant Program and the Federal Pell Grant Program to implement 
conforming changes based on the statutory amendments to the ACG and 
National SMART Grant programs.

DATES: These regulations are effective July 1, 2009. We must receive 
your comments on or before June 1, 2009.

ADDRESSES: Submit your comments through the Federal eRulemaking Portal 
or via postal mail, commercial delivery, or hand delivery. We will not 
accept comments by fax or by e-mail. Please submit your comments only 
one time, in order to ensure that we do not receive duplicate copies. 
In addition, please include the Docket ID at the top of your comments.
     Federal eRulemaking Portal: Go to https://www.regulations.gov to submit your comments electronically. Information 
on using Regulations.gov, including instructions for accessing agency 
documents, submitting comments, and viewing the docket is available on 
the site under ``How To Use This Site.''

[[Page 20211]]

     Postal Mail, Commercial Delivery, or Hand Delivery: If you 
mail or deliver your comments about these interim final regulations, 
address them to Sophia McArdle, U.S. Department of Education, 1990 K 
Street, NW., room 8019, Washington, DC 20006-8544.

    Privacy Note:  The Department's policy for comments received 
from members of the public (including those comments submitted by 
mail, commercial delivery, or hand delivery) is to make these 
submissions available for public viewing in their entirety on the 
Federal eRulemaking Portal at https://www.regulations.gov. Therefore, 
commenters should be careful to include in their comments only 
information that they wish to make publicly available on the 
Internet.


FOR FURTHER INFORMATION CONTACT: 

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                 Topic                    Contact person and information
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General information and information      Sophia McArdle. Telephone:
 related to rigorous secondary school     (202) 219-7078 or via the
 programs and eligible majors.            Internet:
                                         sophia.mcardle@ed.gov.
Information related to grade level       Fred Sellers. Telephone: (202)
 progression.                             502-7502 or via the Internet:
                                          fred.sellers@ed.gov.
Information related to payments for      Jacquelyn Butler. Telephone:
 part-time students.                      (202) 502-7890 or via the
                                          Internet:
                                         jacquelyn.butler@ed.gov.
Information related to prior enrollment  Carney McCullough. Telephone:
                                          (202) 502-7639 or via the
                                          Internet:
                                          carney.mccullough@ed.gov.
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    If you use a telecommunications device for the deaf (TDD), call the 
Federal Relay Service (FRS), toll free, at 1-800-877-8339.
    Individuals with disabilities may obtain this document in an 
accessible 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: 

Invitation To Comment

    We invite you to submit comments regarding these interim final 
regulations. To ensure that your comments have maximum effect in 
developing the final regulations, we urge you to identify clearly the 
specific section or sections of the interim final regulations that each 
of your comments addresses and to arrange your comments in the same 
order as the interim final regulations.
    We invite you to assist us in complying with the specific 
requirements of Executive Order 12866 and its overall requirement of 
reducing regulatory burden that might result from these interim final 
regulations. Please let us know of any further opportunities we should 
take to reduce potential costs or increase potential benefits while 
preserving the effective and efficient administration of the program.
    During and after the comment period, you may inspect all public 
comments about these interim final regulations by accessing 
Regulations.gov. You may also inspect the comments, in person, in room 
8019, 1990 K Street, NW., Washington, DC, between the hours of 8:30 
a.m. and 4 p.m., Eastern time, Monday through Friday of each week 
except Federal holidays.

Assistance to Individuals With Disabilities in Reviewing the Rulemaking 
Record

    On request, we will supply an appropriate aid, such as a reader or 
print magnifier, to an individual with a disability who needs 
assistance to review the comments or other documents in the public 
rulemaking record for these interim final regulations. If you want to 
schedule an appointment for this type of aid, please contact the first 
person listed under FOR FURTHER INFORMATION CONTACT.

Background

    These interim final regulations implement certain provisions of the 
HEA, as amended by the ECASLA (Pub. L. 110-227) and the HEOA (Pub. L. 
110-315), which become effective on July 1, 2009. The ECASLA makes ACGs 
and National SMART Grants available to eligible non-citizens and 
students enrolled at least half-time, provides that maximum ACG and 
National SMART Grant awards for part-time students be proportionally 
reduced consistent with the requirements in the Federal Pell Grant 
Program, and requires grant awards and payments to be determined on the 
same basis as in the Federal Pell Grant Program. Furthermore, the 
ECASLA provides that grant awards be based on a student's grade level, 
instead of academic year. Additionally, the ECASLA authorizes the award 
of ACGs for students enrolled in a one- or two-year certificate program 
at a degree-granting institution and allows students who were once 
enrolled in an undergraduate program as part of a secondary school 
program of study to receive a first-year ACG if the student is 
otherwise eligible. Finally, the ECASLA creates three additional 
program options by which students can qualify for a National SMART 
Grant. The HEOA amends the method by which secondary school programs of 
study are determined to be rigorous, while maintaining rigorous 
programs previously recognized by the Secretary in regulations.

Waiver of Rulemaking

    Under the Administrative Procedure Act (APA) (5 U.S.C. 553), the 
Department is generally required to publish a notice of proposed 
rulemaking and provide the public with an opportunity to comment on 
proposed regulations prior to establishing a final rule. In addition, 
all Department regulations for programs authorized by Title IV of the 
HEA (Title IV, HEA programs) are subject to the negotiated rulemaking 
requirements of section 492 of the HEA.\1\
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    \1\ Section 492 provides specifically that any regulations 
issued for the Title IV, HEA programs shall be subject to negotiated 
rulemaking to obtain the advice of and recommendations from 
individuals and groups involved in the student financial assistance 
programs.
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    Section 402(b) of the HEOA waives the negotiated rulemaking 
requirements in section 492 of the HEA (as well as the master calendar 
requirements in section 482 of the HEA) for changes made to the ACG and 
National SMART Grant Programs in both the ECASLA and in the HEOA. 
Consequently, the negotiated rulemaking requirements in section 492 of 
the HEA do not apply to the interim final regulations in this notice 
and we will not subject them to negotiated rulemaking.
    We are waiving the notice-and-comment rulemaking requirements under 
the APA. The APA provides that an agency is not required to conduct 
notice-and-comment rulemaking when the agency for good cause finds that 
notice and public procedure thereon are impracticable, unnecessary, or 
contrary to the public interest. Although these regulations are subject 
to the APA's notice-and-comment requirements, the

[[Page 20212]]

Secretary has determined that it would be impracticable to conduct 
notice-and-comment rulemaking in time to implement these changes for 
the 2009-2010 award year. Waiver of rulemaking under the 
impracticability exemption in the APA is warranted because it would not 
be possible for the Department to comply with the APA's rulemaking 
mandates and execute its statutory duties under the HEA, as amended by 
the ECASLA and the HEOA.\2\ The Department cannot both implement these 
changes to the ACG and National SMART Grant programs, including making 
awards to eligible students, by the beginning of the 2009-2010 award 
year, and conduct notice-and-comment rulemaking for the regulations for 
these programs.
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    \2\ See Riverbend Farms, Inc. v. Madigan, 958 F.2d 1479, 1484, 
n.2 (9th Cir. 1992). The term ``impracticable'' has also been 
described as meaning ``a situation in which the due and required 
execution of the agency functions would be unavoidably prevented by 
its undertaking rulemaking proceedings.'' Zhang v. Slattery, 55 F.3d 
732, 746 (2d Cir. 1995), citing National Nutritional Foods Ass'n v. 
Kennedy, 572 F.2d 377, 385 (2d Cir. 1978), citing S. Rep. No. 752, 
79th Cong., 1st Sess. (1945). See also New Jersey Dept of Envtl. 
Prot. v. U.S. EPA, 626 F.2d 1038, 1046 (D.C. Cir. 1980).
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    In the ECASLA, enacted on May 7, 2008, Congress made a number of 
changes to the ACG and National SMART Grant programs that were to be 
effective on January 1, 2009. On August 14, 2008, Congress enacted the 
HEOA, which amended some of the changes made in the ECASLA and made 
additional changes. The HEOA provides that amendments made by the 
ECASLA and HEOA are effective July 1, 2009. The Department therefore 
has a short window to plan the administration of the changes and make 
awards consistent with those changes for the 2009-2010 award year.
    Even on an extremely expedited timeline, the Department could not 
feasibly conduct notice-and-comment rulemaking and then promulgate 
final regulations in time to make awards for the 2009-2010 award year. 
Publishing a notice of proposed rulemaking, reviewing the public 
comments, and issuing final regulations normally takes at least six 
months, and this could not be accomplished prior to the statutory July 
1, 2009 effective date.
    In addition to developing and issuing these regulations, there are 
a number of other steps necessary for the Department to implement the 
changes to the ACG and National SMART Grant programs for the 2009-2010 
award year that make rulemaking impracticable. Implementation requires 
the Department to make a number of changes to the Department's 
financial aid systems so that students can apply for and receive ACGs 
and National SMART Grants for which they are eligible. The process of 
completing all of these steps and developing program regulations 
through notice-and-comment rulemaking requires far more time than that 
available to the Department in order to make awards to students for the 
upcoming 2009-2010 award year.
    Based upon this information, and in order to make timely grant 
awards for the 2009-2010 award year, the Secretary is issuing these 
interim final regulations without first publishing proposed regulations 
for public comment.
    Although the Department is adopting these regulations on an interim 
final basis, the Department requests public comment on these 
regulations. After consideration of public comments, the Secretary will 
publish final regulations.

Significant Regulations

    We discuss substantive issues under the sections of the interim 
final regulations to which they pertain. Generally, we do not address 
regulatory provisions that are technical or otherwise minor in effect.

Definitions (Sec.  691.2)

ACG and National SMART Grant Scheduled Award
    Statute: Section 10 of the ECASLA amends section 401A of the HEA by 
replacing the term ``academic year'' with the term ``year'' in those 
provisions related to determining a student's period of eligibility for 
an ACG or a National SMART Grant (e.g., section 401A(b), (c)(3), 
(d)(1)(A)(iii), and (d)(2) of the HEA). Section 10 of the ECASLA also 
amends section 401A of the HEA by adding a third year of eligibility 
for National SMART Grants for any otherwise eligible student enrolled 
in a program with at least five full years of coursework (see section 
401A(c)(3)(E)).
    Current Regulations: Current Sec.  691.2(d) defines an ACG or 
National SMART Grant Scheduled Award as the amount that would be paid 
to a full-time student for a full academic year.
    Regulations: We are amending the definitions in Sec.  691.2(d) to 
provide that an ACG Scheduled Award is the maximum amount of an ACG 
that would be paid to a full-time first-year student or a full-time 
second-year student for the applicable year. A National SMART Grant 
Scheduled Award is the maximum amount of a National SMART Grant that 
would be paid to a full-time third-year, fourth-year, or fifth-year 
student for the applicable year.
    Reason: We are amending these definitions to reflect the statutory 
change that a student's eligibility for a grant is based on his or her 
grade level as a first-, second-, third-, fourth-, or fifth-year 
student, rather than the student's academic year.
Annual Award
    Statute: Section 10(a)(3) of the ECASLA amends section 401A(c) of 
the HEA to provide that a student enrolled or accepted for enrollment 
in an institution of higher education on not less than a half-time 
basis may be an eligible student (see section 401A(c)(3) of the HEA). 
Prior to the ECASLA, only full-time students were eligible.
    Current Regulations: None.
    Regulations: We are amending Sec.  691.2(d) to define the term 
annual award as the maximum ACG or National SMART Grant amount a 
student would receive for enrolling as a full-time, three-quarter-time, 
or half-time student and remaining in that enrollment status for one 
year.
    Reason: We are adding this definition, in conjunction with other 
changes to Subpart F (Determination of Awards) of part 691, to ensure 
compliance with the statutory requirement that a student's payments be 
adjusted based on the student's enrollment status during a payment 
period.
Eligible Major
    Statute: Section 10(a)(3)(C)(v) of the ECASLA amends the HEA by 
adding a new section 401A(c)(3)(D), which extends eligibility for a 
National SMART Grant to a student enrolled in a qualifying liberal arts 
curriculum. Prior to this statutory change, an eligible major for a 
National SMART Grant was a major in the physical, life, or computer 
sciences, mathematics, technology, or engineering (as determined by the 
Secretary pursuant to regulations), or a foreign language that the 
Secretary, in consultation with the Director of National Intelligence, 
determines is critical to the national security of the United States.
    Current Regulations: Current Sec.  691.2(d) defines the term 
eligible major, for purposes of the National SMART Grant Program, as a 
major, as determined by the Secretary under Sec.  691.17, in one of the 
physical, life, or computer sciences, mathematics, technology, 
engineering, or a critical foreign language.
    Regulations: We are amending the definition of the term eligible 
major to include, in addition to majors in physical, life, or computer 
sciences, mathematics, technology, engineering or a critical foreign 
language, a qualifying

[[Page 20213]]

liberal arts curriculum as determined by the Secretary under new Sec.  
691.17(b).
    Reason: The amendments to the definition of the term eligible major 
implement the new statutory provision that a student may be eligible 
for a National SMART Grant by enrolling in a qualifying liberal arts 
curriculum.
Eligible Program
    Statute: Section 10(a)(3)(C)(ii) of the ECASLA amends section 
401A(c)(3) of the HEA by providing that an eligible student enrolled in 
an institution of higher education in an undergraduate certificate 
program at least one year in length may be eligible for an ACG (see 
section 401A(c)(3)(A) of the HEA). Section 10(a)(3)(C)(v) of the ECASLA 
also amends section 401A(c)(3) of the HEA to provide that a student 
enrolled in a program at a degree-granting institution of higher 
education that requires at least five full years of coursework may be 
eligible for a National SMART Grant in his or her fifth--as well as 
third and fourth--year of enrollment (see section 401A(c)(3)(E) of the 
HEA).
    Current Regulations: Current Sec.  691.2(d) defines the term 
eligible program as an eligible program, as defined in 34 CFR 668.8, 
that (a) for the ACG Program, leads to an associate's or bachelor's 
degree, is a two-academic-year program acceptable for full credit 
toward a bachelor's degree, or is a graduate degree program that 
includes at least three academic years of undergraduate education or 
(b) for the National SMART Grant Program, leads to a bachelor's degree 
in an eligible major or is a graduate degree program in an eligible 
major that includes at least three academic years of undergraduate 
education.
    Regulations: We are amending the definition of an eligible program 
in Sec.  691.2 to include, for the ACG Program, an undergraduate 
certificate program of at least one academic year in length. We are 
also amending the definition of the term eligible program to include a 
degree program with at least five full undergraduate years of 
coursework at a degree-granting institution of higher education (a 
student in this type of program would be eligible for a National SMART 
Grant for the third, fourth, and fifth years of the program). In order 
to be consistent with the statutory changes regarding the inclusion of 
five-year programs under the National SMART Grant Program, we are 
amending the definition of eligible program to clarify that a five-year 
program is an eligible program if--(a) an appropriate official of an 
institution of higher education with authority to approve curricula 
certifies that the program requires at least five full undergraduate 
years of coursework to complete (as documented in the institution's 
records), and (b) each year of the program, including the fifth year, 
is not less than 24 semester hours, 36 quarter credits, or 900 clock 
hours. Paragraph (2)(ii)(C) of the definition clarifies that a program 
with a qualifying liberal arts curriculum identified as an eligible 
major under Sec.  691.17(b) is not eligible as a five-year program.
    Reason: We are amending the definition of the term eligible program 
to implement the statutory changes that a student may be eligible for 
an ACG if the student is enrolled in a certificate program at least one 
academic year in length and that a student may be eligible for a 
National SMART Grant for his or her fifth year in an eligible five-year 
program.
    We are amending the definition of the term eligible program, for 
purposes of the ACG Program, to include undergraduate programs of at 
least one academic year in length leading to a certificate. While the 
statutory language refers to ``a program of not less than one year for 
which the institution awards a certificate,'' we believe that the 
minimum length of the program should be tied to an ``academic year,'' 
and not a ``year.'' This is because to qualify as an institution of 
higher education under 34 CFR 600.4(a)(4)(iii) of the institutional 
eligibility regulations, an institution must offer a certificate 
program that is at least one academic year in length.
    With respect to the fifth-year National SMART Grant, the 
certification requirement reflected in new paragraph (2)(ii)(A) of the 
definition is required by section 401A(c)(3)(E) of the HEA. The 
requirement that the certification be documented in the institution's 
records is intended to avoid any additional reporting burden on 
institutions.
First-, Second-, Third-, Fourth-, and Fifth-Year
    Statute: Section 10 of the ECASLA amends section 401A of the HEA by 
replacing the term ``academic year'' with the term ``year'' in those 
provisions related to determining a student's period of eligibility for 
an ACG or a National SMART Grant (e.g., section 401A(b), (c)(3), 
(d)(1)(A)(iii) and (d)(2) of the HEA). Section 10 of the ECASLA also 
amends section 401A of the HEA by adding a third year of eligibility 
for National SMART Grants for any otherwise eligible student enrolled 
in a program with five full years of coursework (see section 
401A(c)(3)(E)).
    Current Regulations: None.
    Regulations: We are adding a new Sec.  691.2(e)(1) to define the 
terms ``first-year,'' ``second-year,'' ``third-year,'' ``fourth-year,'' 
and ``fifth-year'' as a student's grade level in the student's eligible 
program as determined by the institution for all students in the 
eligible program. We are also adding a new Sec.  691.2(e)(2) to provide 
that a student's grade level for purposes of the ACG and National SMART 
Grant programs must be the same grade level used for determining annual 
loan limits under the FFEL and Direct Loan programs (34 CFR parts 682 
and 685).
    Reason: New Sec.  691.2(e)(1) implements the statutory change from 
use of ``academic year'' to ``year.'' It is necessary for the 
Department to clarify that, in using the term ``year,'' we mean the 
student's grade level. New Sec.  691.2(e)(2) ensures the consistent 
treatment of students in all Title IV, HEA programs.

Duration of Student Eligibility--Undergraduate Course of Study (Sec.  
691.6)

    Statute: Section 10 of the ECASLA amends section 401A of the HEA to 
provide that an eligible student may only receive one ACG for each of 
the first or second years of an undergraduate program and one National 
SMART Grant for each of the third, fourth, or fifth years of a 
bachelor's degree program, rather than the first, second, third, or 
fourth academic year of the program (see section 401A(c)(3) of the 
HEA). In addition, section 10 of the ECASLA amends section 401A of the 
HEA by adding a new paragraph (c)(3)(E) to provide that a student may 
be eligible for a third National SMART Grant for enrollment in the 
fifth year of an undergraduate baccalaureate program if that program 
requires at least five full years of coursework.
    Current Regulations: Current Sec.  691.6 bases the duration of 
student eligibility for the ACG and National SMART Grant programs on 
academic year and restricts a student to one grant for each of his or 
her first, second, third, or fourth academic years of enrollment in an 
eligible program.
    Regulations: We are amending Sec.  691.6 to provide that a student 
is eligible for one ACG Scheduled Award while enrolled as a first-year 
student, one ACG Scheduled Award while enrolled as a second-year 
student, one National SMART Grant Scheduled Award while enrolled as a 
third-year student, one National SMART Grant Scheduled Award while 
enrolled as a fourth-year student, and, in the case of a program with 
at least five full years of

[[Page 20214]]

coursework, one National SMART Grant Scheduled Award while enrolled as 
a fifth-year student. We are providing that a fourth-year student, 
enrolled in a National SMART Grant-eligible program with less than five 
full years of coursework, continues to be a fourth-year student until 
he or she completes his or her first undergraduate baccalaureate course 
of study. We are also providing that a fifth-year student, enrolled in 
a National SMART Grant-eligible program with at least five full years 
of coursework, continues to be a fifth-year student until he or she has 
completed his or her first undergraduate baccalaureate course of study.
    Reason: These interim final regulations implement the changes to 
the HEA by providing that the duration of a student's eligibility is 
based on the student's year in postsecondary education, consistent with 
the use of this term in the FFEL and Direct Loan programs, rather than 
the number of academic years the student has completed.
    Under the amendments to Sec.  691.6, a student's eligibility is 
based on the student's grade level rather than academic year. This 
change in implementation of the ACG and National SMART Grant programs 
will begin in the 2009-2010 award year. We believe that awards for some 
continuing students may be affected as they progress to the comparable 
point in grade level that they were previously deemed to have reached 
in an academic year. However, most of these students will still be 
eligible to receive the same amount of grant funds over their entire 
period of enrollment. A student who received a third-academic-year 
National SMART Grant Scheduled Award in the 2008-2009 award year, for 
example, may now be considered to be in the second-year grade level of 
his or her National SMART Grant-eligible program in the 2009-2010 award 
year. That student would no longer be eligible for a National SMART 
Grant until the student advances to the fourth year of his or her 
National SMART Grant-eligible program. However, in this example, 
although the student has already received a third-year National SMART 
Grant Scheduled Award, the student may be paid for any remaining 
eligibility for a second-year ACG Scheduled Award, if otherwise 
eligible, because only the student's grade level is the determining 
factor, without regard to any particular progression.
    Some of these students, however, will no longer be eligible to 
receive the same amount of grant funds over their entire period of 
enrollment. For example, a student who initially enrolled in the fall 
of 2008 with 30 semester hours based on Advanced Placement courses and 
received a first-academic-year ACG Scheduled Award in the 2008-2009 
award year while earning an additional 30 semester hours, may now be 
considered to be in the third-year grade level of his or her eligible 
program in the 2009-2010 award year and would not be eligible for a 
second-year ACG in 2009-2010. The student could receive a third-year 
National SMART Grant, if he or she met other eligibility criteria.
    The provision that a fourth-year student enrolled in a National 
SMART Grant-eligible program with less than five full years of 
coursework continues to be considered a fourth-year student until he or 
she completes his or her first undergraduate baccalaureate course of 
study, and that a fifth-year student in a five-year program continues 
to be a fifth-year student until he or she completes his or her 
undergraduate baccalaureate course of study is designed to provide 
students with the greatest amount of National SMART Grant funds 
possible, by allowing a student who was ineligible for some part of his 
or her fourth or fifth year to obtain a fourth- or fifth-year award.
    For example, a student is enrolled in a program that requires full-
time attendance for nine semesters, and a student normally completes a 
grade level by successfully completing two semesters of coursework. In 
the fall of 2008, the student begins her fourth year and completes the 
2008-2009 fall and spring terms which are the seventh and eighth 
semesters of the student's program. During the 2008-2009 award year, 
the student did not receive a Federal Pell Grant, and as a result none 
of the fourth-year National SMART Grant Scheduled Award was disbursed. 
In the fall term of 2009, the student enrolls for the final semester of 
her program and receives a Federal Pell Grant. For the fall term, as 
part of the extended fourth year, the student would also receive a 
National SMART Grant disbursement from the fourth-year National SMART 
Grant Scheduled Award, if otherwise eligible.

Enrollment Status for Students Taking Regular and Correspondence 
Courses (Sec.  691.8)

    Statute: The statute does not address how taking correspondence 
courses affects a student's enrollment status in an eligible program. 
Section 10(c)(2) of the ECASLA, however, amends section 401A(c)(2) of 
the HEA to provide that a student may be eligible for an ACG or a 
National SMART Grant if he or she is enrolled or accepted for 
enrollment in an institution of higher education on at least a half-
time basis. Before the ECASLA, only full-time students were eligible 
for grants under these programs.
    Current Regulations: Current Sec.  691.8 sets forth the 
circumstances under which correspondence courses may be applied toward 
a student's full-time enrollment status in an eligible program.
    Regulations: We are amending Sec.  691.8 to describe how 
correspondence courses may be applied toward a student's enrollment 
status (i.e., as a half-time, three-quarter-time, and full-time 
student) in an eligible program.
    Reason: Because the statute now allows students enrolled or 
accepted for enrollment in an institution of higher education on at 
least a half-time basis to be eligible for an ACG or a National SMART 
Grant, it is necessary to make changes to Sec.  691.8, regarding how 
correspondence courses may be applied to a student's less-than-full-
time enrollment in an eligible program.

Citizenship and Student Eligibility (Sec. Sec.  668.33 and 691.15)

    Statute: Section 10(a)(3) of the ECASLA amends section 401A(c) of 
the HEA by removing the requirement that a student be a U.S. citizen to 
be eligible for an ACG or a National SMART Grant.
    Current Regulations: Current Sec. Sec.  691.15(a)(1) and 668.33(c) 
provide that a student must be a U.S. citizen to be eligible to receive 
an ACG or a National SMART Grant.
    Regulations: We are removing the provisions in Sec. Sec.  
691.15(a)(1) and 668.33(c) that only U.S. citizens are eligible to 
receive ACGs or National SMART Grants.
    Reason: These amendments reflect the statutory change that 
eliminates the requirement that only students who are U.S. citizens may 
qualify for assistance under the ACG and National SMART Grant programs. 
Moreover, this change is consistent with section 484(a)(5) of the HEA, 
which provides that a student who is not a United States citizen or 
national but who can provide evidence that he or she is in the United 
States for other than a temporary purpose with the intention of 
becoming a citizen or permanent resident may qualify as an eligible 
student for the Title IV, HEA programs.

Enrollment Status and Student Eligibility (Sec. Sec.  668.32, 691.2, 
691.15, 691.76, and 691.80)

    Statute: Section 10(a)(3) of the ECASLA amends section 401A(c) of 
the HEA to remove the requirement that a student be enrolled full-time 
to receive an ACG or a National SMART Grant. Instead, a student must be 
enrolled at

[[Page 20215]]

least half-time in order to receive an ACG or a National SMART Grant.
    Current Regulations: Current Sec.  691.15(a)(3) provides that a 
student must be enrolled full-time in order to be eligible to receive 
an ACG or a National SMART Grant.
    Regulations: We are removing from Sec.  691.15(a) the requirement 
that a student be enrolled full-time to be eligible to receive an ACG 
or a National SMART Grant. Also, we are amending the general student 
eligibility requirements for the Title IV, HEA programs in Sec.  
668.32(a)(2) by adding the ACG and National SMART Grant programs to the 
list of programs that require students to be enrolled at least half-
time.
    We are also amending the list of definitions used in the ACG and 
National SMART Grant regulations to refer to the existing definitions 
of the terms half-time student and three-quarter-time student contained 
in 34 CFR 668.2 of the Student Assistance General Provisions.
    Finally, we are amending Sec. Sec.  691.76 (Frequency of payment) 
and 691.80 (Redetermination of eligibility for a grant award) to 
address how (a) an institution determines a student's enrollment status 
for payment purposes for prior payment periods, and (b) changes in a 
student's enrollment status, which are now permitted under the statute, 
are handled for purposes of recalculation of award amounts.
    Reason: We are making the changes to Sec. Sec.  691.2 and 691.15 to 
implement the statutory change allowing students attending at least 
half-time to be eligible for an award under the ACG and National SMART 
Grant programs.
    We also believe that it is appropriate to amend the student 
eligibility provisions in 34 CFR part 668 (Student Assistance General 
Provisions) to include the ACG and National SMART Grant programs among 
the other Title IV, HEA programs that have the same enrollment status 
requirement.
    The amendments to Sec. Sec.  691.76 and 691.80 enable institutions 
to adjust ACG and National SMART Grant award payments based on a change 
in a student's enrollment status. These amendments are consistent with 
34 CFR 690.76 and 690.80 in the Federal Pell Grant Program regulations.

Prior Enrollment and Student Eligibility (Sec.  691.15)

    Statute: Section 10(a)(3)(C)(ii)(III) of the ECASLA amends section 
401A(c)(3)(A)(ii) of the HEA to clarify that students who were enrolled 
in a program of undergraduate education as part of a secondary school 
program of study are not subject to the prior enrollment restriction 
for first-year students.
    Current Regulations: Current Sec.  691.15(b)(1)(ii)(C) provides 
that a student is not eligible for a first-year ACG if the student was 
enrolled as a regular student in an ACG-eligible program while the 
student was at or below the age of compulsory attendance while he or 
she was in high school.
    Regulations: We are amending Sec.  691.15(b)(1)(ii)(C) to provide 
that the restriction on prior enrollment does not apply to students who 
were enrolled as regular students in an eligible program of 
undergraduate education that was also part of a secondary school 
program of study. We are also clarifying in new Sec.  
691.15(b)(1)(ii)(C) that transfer students who are first-year students 
are not considered to have been previously enrolled and, therefore, are 
not subject to the prior enrollment restriction.
    Reason: These interim final regulations implement the statutory 
clarification concerning prior enrollment and clarify that we do not 
consider transfer students to have been previously enrolled.

Rigorous Secondary School Program of Study (Sec.  691.16)

    Statute: Section 401A(f) of the HEA, as amended by section 10(a)(3) 
of the ECASLA and section 401(c)(3) of the HEOA, require the Secretary 
to recognize not less than one rigorous secondary school program of 
study in each State for the purpose of determining student eligibility 
for an ACG.
    Section 401A(c)(3)(A)(i)(I) of the HEA provides that a rigorous 
secondary school program of study established by a State educational 
agency (SEA) or local educational agency (LEA) after January 1, 2006, 
but before July 1, 2009, and recognized by the Secretary continues to 
be an eligible rigorous secondary school program of study for a first-
year ACG. Section 401A(c)(3)(B)(i)(I) of the HEA provides that a 
rigorous secondary school program of study established by an SEA or LEA 
after January 1, 2005, but before July 1, 2009, and recognized by the 
Secretary continues to be an eligible rigorous secondary school program 
of study for a second-year ACG. Section 401A(c)(3)(A)(i)(II)(aa) and 
401A(c)(3)(B)(i)(II)(aa) of the HEA provides that a rigorous secondary 
school program includes any secondary school program of study that, on 
or after July 1, 2009, a designated official recognizes--in a report to 
the Secretary--as a rigorous secondary school program of study that 
prepares students for college. Section 401A(c)(3)(A)(i)(II)(bb) and 
(c)(3)(B)(i)(II)(bb) of the HEA further provides that a rigorous 
secondary school program includes any secondary school program of study 
recognized as rigorous by the Secretary in regulations that were in 
effect on May 6, 2008.
    Current Regulations: Current Sec.  691.16(a) provides that, for an 
award year, the Secretary recognizes in each State at least one 
rigorous secondary school program of study established by an SEA or, if 
authorized by the State to establish a separate secondary school 
program of study, an LEA. Current Sec.  691.16(d) provides that, in 
addition to those programs established by States and LEAs and 
recognized by the Secretary under Sec.  691.16(b) and (c), the 
Secretary recognizes certain other secondary school programs of study 
as rigorous, including continued recognition of advanced or honors 
secondary school programs of study by the Secretary for school years 
subsequent to the 2005-2006 school year. Also under current Sec.  
691.16(d)(4) and (d)(5), successful completion of a secondary school 
program that includes at least two AP or IB courses and scoring a 3 or 
higher on the corresponding AP exams or a 4 or higher on the 
corresponding IB exams is considered by the Secretary to demonstrate 
that the student completed a rigorous secondary school program of 
study. Furthermore, under current Sec.  691.16(d)(2), the Secretary 
recognizes successful completion of the following coursework to fulfill 
the requirement that a student complete a rigorous secondary school 
program of study: four years of English; three years of mathematics, 
including Algebra I and a higher level class such as Geometry; three 
years of science, including one year each of at least two of the 
following courses: Biology, Chemistry, and Physics; three years of 
social studies; and one year of a language other than English.
    Current Sec.  691.16(b)(2) allows SEAs and LEAs to request 
recognition of rigorous secondary school programs of study for school 
years beyond the immediate next school year.
    Pursuant to current Sec.  691.16(e), the Secretary publishes a list 
of rigorous secondary school programs of study that the Secretary 
recognizes.
    Regulations: We are amending and reorganizing current Sec.  691.16 
by removing paragraphs (a) and (c) because these provisions apply to 
the Secretary's recognition of rigorous secondary school programs of 
study as established by an SEA or LEA. Effective July 1, 2009, the 
Secretary will no longer recognize new

[[Page 20216]]

rigorous secondary school programs of study submitted by an SEA or LEA; 
thus paragraphs (a) and (c) are no longer needed. As a result of 
removing paragraphs (a) and (c) of this section, we are redesignating 
paragraphs (b) and (d) as paragraphs (a) and (b), respectively.
    We are amending current Sec.  691.16(b) (new Sec.  691.16(a)) to 
provide that, starting with the 2009-2010 award year, a designated 
official, consistent with State law, may recognize and report to the 
Secretary any secondary school programs of study that prepare students 
for college and that the designated official deems rigorous. Programs 
reported to the Secretary by designated officials under new Sec.  
691.16(a) supplement the secondary school programs recognized by the 
Secretary as rigorous under the current regulations.
    We are amending current Sec.  691.16(b)(1) and (2) (new Sec.  
691.16(a)(2)(i) and (ii)) such that a designated official may report to 
the Secretary rigorous programs for students graduating during the 
current award year and for students graduating during award years 
subsequent to the current award year.
    We are amending current Sec.  691.16(d) (new Sec.  691.16(b)) by 
adding paragraph (b)(6) to include--in the list of preapproved rigorous 
secondary school programs of study--any rigorous programs submitted by 
States and recognized by the Secretary as rigorous after January 1, 
2005, but before July 1, 2009.
    Reason: The amendments to Sec.  691.16 implement the statutory 
change that, instead of submitting secondary school programs of study 
for the Secretary's recognition as rigorous, starting with the 2009-
2010 award year, designated officials report to the Secretary rigorous 
secondary school programs of study, including such programs of study in 
home schools and private schools, that prepare students for college. As 
indicated in the Paperwork Reduction Act of 1995 section of this 
notice, we are specifically requesting comments on the most effective 
methods by which designated officials would report information about 
rigorous secondary school programs of study in private schools and home 
schools to the Secretary and how that information would most 
effectively be transmitted to institutions to allow them to determine a 
student's eligibility for an ACG.
    These interim final regulations, consistent with changes made to 
the HEA by the HEOA, also retain as rigorous those secondary school 
programs of study submitted by States after January 1, 2005 but before 
July 1, 2009 and recognized as rigorous by the Secretary. Finally, the 
interim final regulations allow designated officials to report their 
rigorous programs to the Secretary for both the current and future 
award years.

Eligible Majors (Sec. Sec.  691.2(b), 691.15, and 691.17)

Declaring and Documenting a Major (Sec.  691.15)

    Statute: Section 401A(c)(3)(C) and (c)(3)(D) of the HEA, as amended 
by section 10(a)(3) of the ECASLA, identify the majors that are 
eligible for a National SMART Grant for a student in his or her third 
or fourth year of undergraduate education at an institution of higher 
education. Section 401A(c)(3)(C)(i) of the HEA provides that a student 
pursuing a major in the physical, life, or computer sciences, 
mathematics, technology, engineering, or a critical foreign language 
(which is defined in section 103(3) of the HEA) may be eligible for a 
National SMART Grant. Section 401A(c)(3)(D)(i)(I) of the HEA provides 
that a student at an institution of higher education that offers a 
single liberal arts curriculum that was offered prior to February 8, 
2006, under which a student is not permitted to declare a major in a 
particular subject area, may receive a National SMART Grant if the 
student studies a subject that has requirements that are at least equal 
to the requirements for an academic major in the physical, life, or 
computer sciences, mathematics, technology, engineering, or a critical 
foreign language at another institution of higher education that offers 
a baccalaureate degree in that subject. Alternatively, under section 
401A(c)(3)(D)(i)(II) of the HEA, a student at such institution may 
undertake a rigorous course of study in mathematics, biology, 
chemistry, and physics that consists of at least four years of study in 
mathematics and three years of study in the sciences, with a laboratory 
component in each of those years.
    Under section 401A(c)(3)(E) of the HEA, as amended by the ECASLA, a 
student may be eligible for a National SMART Grant in his or her fifth 
year of undergraduate education if the student pursues a major in the 
physical, life, or computer sciences, mathematics, technology, 
engineering, or a critical foreign language if an appropriate 
institutional official certifies that the program requires five full 
years of coursework.
    Current Regulations: Current Sec.  691.15(c)(2) requires that, to 
be eligible for a National SMART Grant, a student must formally declare 
his or her eligible major in accordance with the institution's academic 
requirements. However, if under an institution's procedures, a student 
would not be able to formally declare a major in time to qualify for a 
National SMART Grant, the student must demonstrate his or her intent to 
declare an eligible major as documented by the institution. Under 
current Sec.  691.15(c)(2), as soon as the student is able to formally 
declare a major, the student must do so in order to remain eligible for 
a National SMART Grant. In the case of a student who has declared or 
intends to declare an eligible major, the student must enroll in the 
courses necessary to complete the degree program and to fulfill the 
eligible major requirements.
    Current Sec. Sec.  691.15(d)(1) and 691.15(e) specify how an 
institution must document a student's declaration of an eligible major, 
and progress in the eligible program and major, by requiring the 
institution to maintain the following documentation: (a) Documentation 
of the declared major or, in the case of a student's intent to declare 
a major, a written declaration of intent provided by the student that 
has been received recently enough for the institution to determine that 
it still correctly reflects the student's stated intent; and (b) 
written documentation showing that the student is completing coursework 
at an appropriate pace in the student's declared or intended eligible 
program and eligible major.
    Regulations: Section 691.15(d)(3) exempts a student enrolled in a 
qualifying liberal arts curriculum from the requirement that the 
student must declare an eligible major to receive a National SMART 
Grant.
    We also are amending Sec.  691.15(c)(2)(ii) and Sec.  691.15(e) to 
provide that an institution need only document a student's progress in 
completing the program in the intended or declared National SMART 
Grant-eligible program.
    Reason: Under the new statutory provision reflected in section 
401A(c)(3)(D) of the HEA, a student enrolled in a qualifying liberal 
arts curriculum as a major is necessarily enrolled in a National SMART 
Grant-eligible major. Because students in a qualifying liberal arts 
curriculum do not declare majors, it is not possible for the 
institution to document the student's declaration of a major as 
required under the current regulations. We are, therefore, removing the 
documentation requirement for students in qualifying liberal arts 
curricula.
    In addition, a major change to the National SMART Grant Program is 
the extension of eligibility to otherwise eligible students who are 
enrolled less

[[Page 20217]]

than full-time but at least half-time. A student who is enrolled on a 
less-than-full-time basis would have difficulty enrolling in a course 
in the eligible major each payment period as currently required because 
a part-time student will typically only enroll in two or three courses 
in a payment period. Thus, even though the part-time student could be 
progressing in a satisfactory manner in his or her program, the student 
would be ineligible for a National SMART Grant under the current 
requirements. Sections 691.15(c)(2) and (e), therefore, amend the 
current regulations to require an institution to document a student's 
progress in completing the program in the intended or declared National 
SMART Grant-eligible program rather than coursework strictly specific 
to the academic major's requirements each payment period.

Determination of Eligible Majors (Sec. Sec.  691.2(b) and 691.17)

    Statute: Section 401A(c)(3)(C) and (D) of the HEA, as amended by 
section 10(a)(3) of the ECASLA, identifies the majors that a student 
must pursue to be eligible for a National SMART Grant in his or her 
third or fourth year of undergraduate education at an institution of 
higher education.
    Specifically, section 401A(c)(3)(C)(i) of the HEA provides that a 
student pursuing a major in the physical, life, or computer sciences, 
mathematics, technology, engineering, or a critical foreign language is 
eligible for a National SMART Grant, provided the student meets other 
eligibility criteria.
    Section 401A(c)(3)(D) of the HEA extends eligibility for a National 
SMART Grant to a student enrolled in a program at an institution of 
higher education that offers a single liberal arts curriculum leading 
to a baccalaureate degree that was offered prior to February 8, 2006, 
and under which the student is not permitted to declare a major in a 
particular subject area. A student in this type of program may receive 
a National SMART Grant if (a) the student studies a subject that has 
requirements that are at least equal to the requirements for an 
academic major in the physical, life, or computer sciences, 
mathematics, technology, engineering, or a critical foreign language at 
another institution of higher education that offers a baccalaureate 
degree in that subject and the student has obtained a cumulative grade 
point average of at least 3.0 in the relevant coursework (see section 
401A(c)(3)(D)(i)(I) of the HEA); or (b) the student undertakes a 
rigorous course of study in mathematics, biology, chemistry, and 
physics that consists of at least four years of study in mathematics 
and three years of study in the sciences, with a laboratory component 
in each of those years (see section 401A(c)(3)(D)(i)(II) of the HEA).
    Section 401A(c)(3)(E) of the HEA, as amended by the ECASLA, 
identifies the majors a student must pursue to be eligible for a 
National SMART Grant in his or her fifth year of undergraduate 
education. These majors are the same as those identified for 
eligibility for third- and fourth-year National SMART Grants except 
that the major may not be a liberal arts curriculum.
    Current Regulations: Current Sec.  691.17(a) provides that, for 
each award year, the Secretary identifies eligible majors in the 
physical, life, or computer sciences, mathematics, technology, 
engineering, and, after consulting with the Director of National 
Intelligence, critical foreign languages.
    Regulations: Section 691.17(a) amends the current regulations to 
incorporate the new definition of a ``critical foreign language'' found 
in section 103(3) of the HEA. Current Sec.  691.17(b) is removed and 
replaced with a new Sec.  691.17(b) to include a qualifying liberal 
arts curriculum as an eligible major. Section 691.17(d) amends the 
current regulations for designating an additional eligible major by 
adding a requirement that an institution requesting designation of a 
liberal arts curriculum as an eligible major submit, in addition to the 
information requested in Sec.  691.17(d)(1), information demonstrating 
that the liberal arts curriculum complies with the requirements in new 
Sec.  691.17(b).
    Reason: The interim final regulations are necessary to implement 
the statutory provisions that expand the list of majors eligible for a 
National SMART Grant and to provide a mechanism for an institution to 
request designation of a qualifying liberal arts curriculum as a 
National SMART Grant-eligible major.

Calculation of a Grant (Sec.  691.62)

    Statute: Section 10(a)(3) of the ECASLA amends section 401A(c) of 
the HEA to provide that a student enrolled or accepted for enrollment 
in an institution of higher education on not less than a half-time 
basis may be an eligible student. Section 10(a)(4) of the ECASLA amends 
section 401A(d)(1)(B) of the HEA to clarify that, in any case in which 
a student attends on a less than full-time basis, the student's grant 
amount shall be reduced in the same manner as a Federal Pell Grant is 
reduced under section 401(b)(2)(B) of the HEA.
    Current Regulations: Current Sec.  691.62(b) describes the maximum 
ACG and National SMART Grant Scheduled Award amounts for an eligible 
full-time student, but does not provide annual award amounts for three-
quarter-time and half-time students.
    Regulations: We are amending Sec.  691.62 by adding paragraphs (c) 
and (d) to describe the ACG and National SMART Grant annual award 
amounts for full-time, three-quarter-time, and half-time students.
    Reason: We are adding Sec.  691.62(c) and (d) in conjunction with 
other changes to Subpart F, to ensure compliance with the statutory 
requirement that a student's payments be adjusted based on the 
student's enrollment status during a payment period consistent with the 
calculation of a payment for a payment period under the Federal Pell 
Grant Program.

Calculation of a Grant for a Payment Period (Sec. Sec.  691.63 and 
691.66)

General
    Statute: Section 10(a)(3) of the ECASLA amends section 401A(c) of 
the HEA to provide that a student enrolled or accepted for enrollment 
in an institution of higher education on not less than a half-time 
basis may be an eligible student. Section 10(a)(4) of the ECASLA also 
amends section 401A(d)(1)(B)(i) of the HEA to provide that, in any case 
in which a student attends on a less than full-time basis, the 
student's grant amount shall be reduced in the same manner as a Federal 
Pell Grant is reduced under section 401(b)(2)(B) of the HEA.
    Current Regulations: Current Sec.  691.63 provides that an ACG or a 
National SMART Grant payment for a payment period is calculated only on 
the basis of the ACG or National SMART Grant Scheduled Award. This 
section does not address how an ACG Grant or a National SMART Grant 
payment for a payment period is calculated for less-than-full-time 
students.
    Regulations: We are amending Sec.  691.63(h) to describe how ACG 
and National SMART Grant payments for a payment period are calculated 
for full-time, three-quarter-time, and half-time students. In addition, 
throughout Sec.  691.63, except as provided in Sec.  691.63(e), we 
change references from ``Scheduled Award'' to ``annual award under 
Sec.  691.62'' to account for a student's enrollment status as a full-
time, three-quarter-time, or half-time student in calculating the 
student's payment for a payment period.
    Finally, we are adding a new Sec.  691.66 to address how 
institutions of higher education calculate an ACG and a National SMART 
Grant payment for a

[[Page 20218]]

payment period in a program of study offered by correspondence. 
Conforming changes are also made to Sec.  686.25 and Sec.  690.66.
    Reason: We are amending Sec.  691.63 and adding Sec.  691.66, in 
conjunction with other changes to Subpart F, to ensure compliance with 
the statutory requirement that a student's payments be adjusted based 
on the student's enrollment status during a payment period and that a 
student enrolled at least half-time in a program of study offered by 
correspondence would be eligible for an ACG or a National SMART Grant.
Payment Period and Grade Level Progression
    Statute: As discussed elsewhere in this notice, section 10 of the 
ECASLA amends the provisions of section 401A of the HEA by replacing 
the term ``academic year'' with the term ``year'' in those instances 
related to determining a student's period of eligibility for an ACG or 
a National SMART Grant (e.g., section 401A(b), (c)(3), (d)(1)(A)(iii) 
and (d)(2) of the HEA).
    Current Regulations: Current Sec.  691.63(h) provides that a 
student may not progress to the next academic year during a payment 
period.
    Regulations: We are amending Sec.  691.63(h) to provide that a 
student may not progress to the next year in a grade level (rather than 
next academic year) during a payment period.
    Reason: We are making this change because eligibility for the ACG 
and National SMART Grant programs is no longer based on the student's 
academic year standing. Eligibility is based on ``year,'' which refers 
to a student's grade level consistent with the FFEL and Direct Loan 
programs.

Executive Order 12866

1. Regulatory Impact Analysis

    Under Executive Order 12866, the Secretary must determine whether 
the regulatory action is ``significant'' and therefore subject to the 
requirements of the Executive order and subject to review by the Office 
of Management and Budget (OMB). Section 3(f) of Executive Order 12866 
defines a ``significant regulatory action'' as an action likely to 
result in a rule that may (1) have an annual effect on the economy of 
$100 million or more, or adversely affect a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local or tribal governments or communities in a 
material way (also referred to as an ``economically significant'' 
rule); (2) create serious inconsistency or otherwise interfere with an 
action taken or planned by another agency; (3) materially alter the 
budgetary impacts of entitlement grants, user fees, or loan programs or 
the rights and obligations of recipients thereof; or (4) raise novel 
legal or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in the Executive order.
    Pursuant to the terms of the Executive order, it has been 
determined that this interim final regulatory action will have an 
annual effect on the economy of more than $100 million. Therefore, this 
action is ``economically significant'' and subject to OMB review under 
section 3(f)(1) of Executive Order 12866.
Need for Federal Regulatory Action
    These interim final regulations address a range of issues affecting 
students and institutions of higher education participating in the ACG 
and National SMART Grant programs. They are needed to implement 
statutory changes enacted through the ECASLA and the HEOA.
Regulatory Alternatives Considered
    The Department cannot modify statutory program requirements through 
regulations. Because the interim final regulations merely implement 
specific statutory provisions, the Department had extremely limited 
discretion to consider alternative approaches. In general, as discussed 
in detail under the Reason sections that accompany the discussion of 
each interim final regulatory provision, the Department used this 
limited discretion to minimize burden and complexity and, to the extent 
possible, mirror comparable regulations for other student aid programs. 
In assessing the budgetary impact of these alternatives, the Department 
considered the effect of possible changes on student eligibility for 
ACG and National SMART Grant awards and on the size or timing of 
student awards. In all cases, the alternatives considered did not have 
a measurable effect on Federal costs.
Transfers
    These interim final regulations broaden access to the ACG and 
National SMART Grant programs by implementing statutory changes that 
extend eligibility to part-time students who are enrolled at their 
institution on at least a half-time basis, eligible non-citizens, and 
students enrolled in certain certificate programs. The interim final 
regulations also allow eligible degree programs with at least five full 
undergraduate years to award National SMART Grant awards in the third, 
fourth, and fifth years of the program. Mandatory funding for the ACG 
and National SMART Grant programs is provided through fiscal year 2010, 
after which the program would sunset. Funds for fiscal year 2010 would 
be used to support the 2010-2011 award year. The Department estimates 
that changes implemented through these interim final regulations, which 
become effective July 1, 2009, will result in 538,000 additional awards 
totaling $448 million over award years 2009-2010 and 2010-2011. More 
specifically, under current estimates, expanding eligibility to less-
than-full-time students, eligible non-citizens, and students at 
certificate programs will increase ACG awards by 209,000 in 2009-2010 
and 241,000 in 2010-2011 and increase National SMART Grant awards by 
43,000 in 2009-2010 and 45,000 in 2010-2011.
    Other changes in these interim final regulations implement 
statutory changes replacing the term ``academic year'' with the term 
``year'' for the purposes of determining a student's period of 
eligibility for an ACG or a National SMART Grant. These changes are 
expected to significantly simplify the process of determining 
eligibility for participating institutions of higher education and 
students.
    As noted, statutory changes in program eligibility criteria 
implemented by these interim final regulations will increase the dollar 
amount of grant awards under the ACG and National SMART Grant programs 
by $448 million over award years 2009-2010 and 2010-2011. This will 
increase Federal costs by the same amount.
    Because institutions of higher education affected by these interim 
final regulations already participate in the ACG and National SMART 
Grant programs, these schools must have already established systems and 
procedures to meet program eligibility requirements. The interim final 
regulations reflect discrete changes in specific parameters associated 
with the Department's existing regulations for these programs, rather 
than entirely new requirements. Accordingly, entities wishing to 
continue to participate in the programs have already absorbed most of 
the administrative costs related to implementing these interim final 
regulations. Marginal costs over this baseline are primarily related to 
one-time changes that, while possibly significant in some cases, are an 
unavoidable cost of continued program participation.
    Elsewhere in this SUPPLEMENTARY INFORMATION section, we identify 
and

[[Page 20219]]

explain burdens specifically associated with information collection 
requirements. See the heading Paperwork Reduction Act of 1995.
Accounting Statement
    As required by OMB Circular A-4 (available at https://www.Whitehouse.gov/omb/Circulars/a004/a-4.pdf), in Table 1, we have 
prepared an accounting statement showing the classification of the 
expenditures associated with the provisions of these interim final 
regulations. As shown in the table, the Department estimates that these 
interim final regulations will increase Federal grant payments to 
students by $448 million.

   Table 1--Accounting Statement: Classification of Estimated Savings
                              [In millions]
------------------------------------------------------------------------
                          Category                             Transfer
------------------------------------------------------------------------
Annualized monetized transfers..............................        $448
------------------------------------------------------------------------

2. Clarity of the Regulations

    Executive Order 12866 and the Presidential memorandum on ``Plain 
Language in Government Writing'' require each agency to write 
regulations that are easy to understand.
    The Secretary invites comments on how to make these interim final 
regulations easier to understand, including answers to questions such 
as the following:
     Are the requirements in the interim final regulations 
clearly stated?
     Do the interim final regulations contain technical terms 
or other wording that interferes with their clarity?
     Does the format of the interim final regulations (grouping 
and order of sections, use of headings, paragraphing, etc.) aid or 
reduce their clarity?
     Would the interim final regulations be easier to 
understand if we divided them into more (but shorter) sections? (A 
``section'' is preceded by the symbol ``Sec. '' and a numbered heading; 
for example, Sec.  691.16 Rigorous Secondary School Program of Study.)
     Could the description of the interim final regulations in 
the SUPPLEMENTARY INFORMATION section of this preamble be more helpful 
in making the interim final r