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The Secretary amends the Student Assistance General Provisions. These amendments are necessary to implement the Student Right-to-Know Act, as amended by the Higher Education Amendments of 1991, and the Higher Education Technical Amendments of 1993. These

FR part
V
Attachments:
PublicationDate: 12/1/95
FRPart: V
RegPartsAffected: Citation : (R)668.41
Citation : (R)668.46
PageNumbers: 61775-61788
Summary: The Secretary amends the Student Assistance General Provisions. These amendments are necessary to implement the Student Right-to-Know Act, as amended by the Higher Education Amendments of 1991, and the Higher Education Technical Amendments of 1993. These final regulations require an institution that participates in any student financial assistance program under Title IV of the Higher Education Act of 1965, as amended (title IV, HEA program) to disclose information about graduation or completion rates to current and prospective students. The final regulations also require an institution that participates in any title IV, HEA program and awards athletically-related student aid to provide certain types of data regarding the institution's student population, and the graduation or completion rates of categories of student-athletes, to potential student-athletes, and to the athletes' parents, coaches, and high school counselors.
CommentDueDate:

  
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[


[Federal Register: December 1, 1995 (Volume 60, Number 231)]
[Rules and Regulations ]
[Page 61775-61788]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01de95-18]



[[Page 61775]]

_______________________________________________________________________

Part V





Department of Education





_______________________________________________________________________



34 CFR Part 668



Student Assistance General Provisions; Final Rule


[[Page 61776]]


DEPARTMENT OF EDUCATION

34 CFR Part 668

RIN 1840-AB44


Student Assistance General Provisions

Agency: Department of Education.

Action: Final rule.

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

SUMMARY: The Secretary amends the Student Assistance General
Provisions. These amendments are necessary to implement the Student
Right-to-Know Act, as amended by the Higher Education Amendments of
1991, and the Higher Education Technical Amendments of 1993. These
final regulations require an institution that participates in any
student financial assistance program under Title IV of the Higher
Education Act of 1965, as amended (title IV, HEA program) to disclose
information about graduation or completion rates to current and
prospective students. The final regulations also require an institution
that participates in any title IV, HEA program and awards athletically-
related student aid to provide certain types of data regarding the
institution's student population, and the graduation or completion
rates of categories of student-athletes, to potential student-athletes,
and to the athletes' parents, coaches, and high school counselors.

EFFECTIVE DATE: These regulations take effect on July 1, 1996, and
apply to the 1996-1997 and subsequent award years. However, affected
parties do not have to comply with the information requirements in
Sec. 668.41, Sec. 668.46, and Sec. 668.49 until the Department of
Education publishes in the Federal Register the control numbers
assigned by the Office of Management and Budget (OMB) to these
information collection requirements. Publication of the control numbers
notifies the public that OMB has approved these information
requirements under the Paperwork Reduction Act of 1995.

FOR FURTHER INFORMATION CONTACT: Ms. Paula Husselmann or Mr. David
Lorenzo, U.S. Department of Education, 600 Independence Avenue, S.W.,
Regional Office Building 3, Room 3053, Washington, D.C. 20202.
Telephone: (202) 708-7888. Individuals who use a telecommunications
device for the deaf (TDD) may call the Federal Information Relay
Service (FIRS) at 1-800-877-8339 between 8:00 a.m. and 8:00 p.m.,
Eastern time Monday through Friday.

SUPPLEMENTARY INFORMATION: The Student Assistance General Provisions
(34 CFR part 668) apply to all institutions that participate in the
student financial assistance programs authorized by Title IV of the
Higher Education Act of 1965 as amended (HEA). These final regulations
are necessary to implement changes to the HEA made by the Student
Right-to-Know Act, Pub. L. 101-542, as amended by the Higher Education
Technical Amendments of 1991, Pub. L. 102-26, and the Higher Education
Technical Amendments of 1993, Pub. L. 103-208. The Secretary published
a proposed rule on July 10, 1992 to implement the Student Right-to-Know
and Campus Security Act. Over three hundred commenters responded to
those proposed rules. Final regulations implementing the Campus
Security Act were published separately on April 29, 1994. A second
proposed rule addressing the Student Right-to-Know portion of Pub. L.
101-542 was published on September 21, 1995.

Background

The September 21, 1995 Notice of Proposed Rulemaking (NPRM)
contained regulations that would implement the Student Right-to-Know
portion of Pub. L. 101-542 for consumer information purposes only. In
that NPRM the Secretary emphasized that the proposed regulations were
meant to provide flexibility and create a minimum of burden to
institutions, while generating useful and comparable data for student
consumer information purposes. The Secretary's discussion and
solicitation of comments on these and related issues are contained in
60 FR 49156-49157.
The September 21, 1995 NPRM also included a discussion of major
issues regarding the proposed regulations that will not be repeated
here. The following list summarizes those issues and identifies the
pages of the preamble to the NPRM on which a discussion of those issues
can be found.
Disclosure of information on graduation or completion rates for the
general student population contained in Sec. 668.41(a) (page 49157).
Disclosure of information on the general student population, and on
the completion or graduation rates of various categories of student
athletes, and the report of that information to the Secretary,
contained in Sec. 668.41(b) (page 49157).
Issues concerning the definitions of ``full-time,'' ``normal
time,'' ``athletically-related student aid,'' and ``prospective
student,'' as contained in Sec. 668.41(a) (pages 49157-49158).
Issues concerning the composition of students who make up the
denominator of the institution's graduation or completion rate
fraction, as contained in 668.46(a) (page 49158).
Issues concerning the tracking of students, related to
Sec. 668.46(a) (page 49158).
Issues concerning the latest dates on which institutions must
disclose their completion or graduation rate information, contained in
Sec. 668.46(a)(2) (pages 49158-49159).
The students an institution may include in the numerator of its
completion or graduation rate fraction, and issues related to the
documentation of those students, as contained in Sec. 668.46(b) (pages
49159-49160).
The students who may be excluded from the institution's calculation
of a completion or graduation rate, as contained in Sec. 668.46(b)(2)
(page 49160).
The disclosure of the components of the numerator of the
institution's completion or graduation rate fraction, as contained in
Sec. 668.46(c) (page 49160).
The provisions for waivers for institutions that are members of
athletic conferences or associations that provide substantially
comparable data, as contained in Sec. 668.46(d) (page 49160).
The requirement that institutions that award athletically-related
student aid disclose data regarding the completion or graduation rates
of student athletes, and other general information, to a student
offered athletically-related student aid, and to his or her parents,
coaches, and high school counselors, and send a report of that data to
the Secretary, as contained in Sec. 668.49(a) (page 49160).
The requirement that such institutions report and disclose that
data by July 1 of every year, beginning July 1, 1997, as contained in
Sec. 668.49(a) (page 49160).
The kinds of general data to be reported and disclosed, and the
categories of students for whom completion or graduation rates are to
be calculated, reported, and disclosed, as contained in Sec. 668.41(a)
(pages 49160-49161).
The definition of ``sport'', as contained in Sec. 668.49(a)(2)
(page 49161).
The requirement that completion or graduation rates be calculated
in the same manner as specified in Sec. 668.46 (b) and (c), as
contained in Sec. 668.49(b).
The provision that an institution, if it wishes, may provide
information to potential student-athletes and the Secretary regarding
the completion or graduation rate of students who transfer into the
institution, and the number of students who transfer out of the
institution, as contained in Sec. 668.49(c) (page 49161).
The provision that allows institutions that are members of athletic
conferences

[[Page 61777]]
or associations to obtain waivers if the conference or association of
which it is a member provides substantially comparable information, as
contained in Sec. 668.49(d) (page 49161).

Summary of Changes From the Proposed Regulations

The Secretary has added definitions of ``first-time freshman
students,'' ``certificate- or degree-seeking students,'' and
``undergraduate students''. The Secretary has also changed the
definitions of ``full-time students'' and ``normal time''.
The Secretary requires institutions to disclose information on
completion or graduation rates and transfer-out rates for the general
student body by the January 1 immediately following the expiration of
150% of normal time for the group of students on which the institution
bases its completion or graduation rate calculation.
The Secretary requires an institution that offers a predominant
number of programs based on standard terms (semesters, trimesters, or
quarters) to establish a fall cohort, consisting of undergraduate
students who are enrolled as of October 15, or the end of the
institution's drop-add period, on which to calculate its completion or
graduation rate. The Secretary also requires such an institution to
count as an entering student an undergraduate student who is enrolled
at the institution as of October 15.
The Secretary requires an institution that does not offer a
predominant number of programs based on standard terms (semesters,
trimesters, or quarters) to count as entering students all full-time
undergraduate students who enter the institution between July 1 and
June 30 for purposes of calculating its completion or graduation rate.
Such an institution will consider a student to have entered for these
purposes if the student attends at least one day of class.
The Secretary requires an institution to count as an entering
student only first-time freshman students as defined in the
regulations. An institution may calculate a completion or graduation
rate or rates for students who transfer into the institution as
separate and supplemental rate or rates.
The Secretary requires institutions to publish two rates: one, the
rate at which students complete or graduate, and the other, the rate at
which students transfer out of the institution.
The Secretary allows institutions to count as completers those
students who complete a transfer preparatory program described in
Sec. 668.8(b)(1)(ii).
The Secretary is dropping the proposal that would have allowed
institutions to count as completers those students still enrolled in
good standing in programs longer than the program on which the
institution bases its disclosure date.
The Secretary will require documentation of a transfer in order for
an institution to count a student as a transfer-out, and will accept
such documentation as a certification letter, electronic certification,
confirmation of enrollment data from a legally-mandated tracking
system, or institutional data exchange information confirming that a
student has enrolled in another institution.
The Secretary is clarifying that an institution that is covered by
waivers for substantially comparable data gathered by an athletic
association or conference must still comply with the information
dissemination provisions of the statute and these regulations.
The Secretary is including a de minimus exception to the disclosure
requirements for the completion or graduation rates of student athletes
that allows institutions not to disclose those rates for categories
that include five or fewer students.

Preparation of Final Regulations

The Secretary has formulated these regulations in accordance with
Executive Order 12866, the Administration's initiative on regulatory
reinvention, and the Department's own Principles for Regulating.
The Secretary believes that the Student Right-to-Know Act
establishes important consumer information disclosure standards for
institutions. In promulgating these regulations, the Secretary's goal
is to ensure that institutions provide consistent and useful
information on completion and graduation rates. With this information
in hand, the Secretary believes that prospective students, and
prospective student athletes, will be better able to make informed
choices when they choose a postsecondary institution.
The Secretary believes that these final regulations strike an
appropriate balance between establishing a basic level of useful
consumer information for students, and keeping burden on institutions
to a minimum.

Analysis of Comments

In response to the Secretary's invitation in the September 21, 1995
NPRM, approximately 100 parties, including representatives of large and
small institutions, athletic associations, college and university
associations, associations of collegiate registrars and institutional
researchers, student advocacy groups, and student right-to-know
advocates, submitted comments on the proposed regulations. A summary of
those comments, and an analysis of changes in the regulations since the
publication of the NPRM, follows.
Substantive issues are discussed under the section of the
regulations to which they pertain. Technical and other minor changes--
and suggested changes the Secretary is not legally authorized to make
under the applicable statutory authority--are not addressed.

General

Comments: Some commenters agreed that the amount of flexibility
contained in the proposed rules was appropriate for the purpose of
providing consumer information. These commenters believed that the
added flexibility of these proposed rules reduced burden, reflected the
letter and spirit of the statute, or took into account changes in
technology. Some of these commenters maintained that nationwide
comparability of data should not be the most important factor in the
implementation of the statute, and expressed appreciation that these
proposed rules, unlike earlier proposals, recognized the diversity of
institutions of higher education. Other commenters agreed that the
level of flexibility was appropriate because the only relevant
comparisons to be made were within different sectors of the higher
education community, and that these proposed rules provided adequate
guidance to make such comparisons possible.
Some commenters believed that any degree of flexibility defeated
the purpose of the statute in providing meaningful and useful consumer
information, and asked the Department to establish and require the use
of a standard federal methodology and a set of standard federal
definitions.
A majority of commenters appreciated the Secretary's attempt to
provide flexibility, but believed the amount of flexibility contained
in the proposed rules did not serve well the consumer purpose of this
statute. These commenters maintained that the proposed rules would
result in the provision of inconsistent, incomparable data that would
be of little use to student consumers.
Of these commenters, many believed that for reasons of
comparability and burden reduction, the final rules should require all
institutions to report according to the definitions and methods
contained in the forthcoming National Center for Education Statistics
(NCES) Integrated Postsecondary Education Data System (IPEDS)
Graduation Rate Survey (GRS). These

[[Page 61778]]
commenters maintained that only a mandatory system would generate
meaningful, comparable, and useful consumer information, and that this
goal would be met with the least burden by requiring the use of the GRS
rather than the imposition of another, different methodology. These
commenters noted that all institutions would soon be required to report
to the NCES through the GRS.
Many others asked that the Secretary give serious consideration to
following the recommendations of the report on graduation rates and
other statistics the Joint Commission on Accountability Reporting
(JCAR) is now developing. These commenters argued that (1) graduation
rate statistics alone are not meaningful consumer information, and that
the JCAR survey will provide better information in the form of
statistics on graduation, completion, transfers, advancement, and
persistence, and (2) the JCAR statistics are fair, consistent among all
institutions, and easy to calculate.
A number of commenters asked that the GRS, the JCAR survey, or the
National Collegiate Athletic Association (NCAA) survey be approved as
ways of meeting the requirements of this statute. One commenter asked
that the IPEDS GRS be adopted as the model methodology. One commenter
asked that the Secretary implement final regulations that would provide
consistency among those reports and the report required by this
statute.
Several commenters maintained that the simple model the Secretary
put forth would lead to meaningless or dishonest reporting, in that it
attempts to condense necessary information into a single statistic. One
of these commenters argued that the type of information needed for
student consumers was more complex than that required by other types of
consumers, and that such information could only be gathered by closely
scrutinizing an institution's mission and programs in the context of
the student's own interests, abilities, and willingness to complete a
program.
Discussion: The Secretary continues to believe that the provision
of graduation rate data will provide meaningful information to student
consumers, and that a degree of flexibility is consonant with
generating useful consumer information. However, the Secretary has been
persuaded by the number and nature of comments that the degree of
flexibility contained in the proposed rules may present problems of
comparability.
Therefore, based on these comments, the Secretary is making changes
to the final regulations that address problems of comparability. The
Secretary requires institutions to use the definitions of
``certificate- or degree-seeking students,'' ``first time students,''
and ``undergraduate students'' that are based on those definitions as
they are published in the IPEDS GRS Glossary, NCES 95-822. These
definitions have been changed slightly from the IPEDS definition to
conform to the statute, but are the functional equivalent of the IPEDS
definitions. Because institutions will in the future be required to
report these data according to these definitions under IPEDS, the
Secretary believes that using definitions based on the IPEDS
definitions that are slightly changed to fit the requirements of the
statute, will increase comparability without increasing burden.
Also in the interests of comparability, the Secretary has removed
from the definitions the flexible definition of ``full-time students''
included in the proposed rules. Institutions must instead use the
definition of ``full-time student'' as defined in Sec. 668.2 of the
Student Assistance General Provisions regulations. This definition that
is functionally equivalent to the definition found in the IPEDS
Glossary.
In order to increase comparability and to decrease the possibility
that institutions will need to calculate duplicate graduation or
completion rates, the Department will work with organizations such as
the NCES, the JCAR, athletic conferences or associations, and state
agencies, or other organizations that are attempting to gather
completion or graduation rate data, to help those organizations develop
protocols that will generate data substantially comparable to the data
required by the statute and these regulations. If these organizations
do develop such protocols that meet the methodological and definitional
standards set by the statute and regulations, the Secretary will inform
institutions that the use of those protocols meet the requirements for
the compilation of these data under the statute and the regulations.
The Secretary, however, will not accept the protocols of these
organizations for these purposes, nor grant waivers to athletic
associations or conferences for their protocols, nor deem the protocols
of any organization or institution to be in compliance with the statute
and these regulations, if those protocols fail to incorporate the
provisions of the statute and regulations.
Changes: Section 668.41(c) has been changed to include definitions
of ``degree- or certificate-seeking student'' and ``first-time freshman
student'' that are based on the definitions published by IPEDS. ``Full-
time student'' is defined in accordance with the definition in
Sec. 668.2.
Comments: Many commenters expressed concern that these proposed
rules would create another set of reporting criteria that institutions
must meet, in addition to other reports on the same topic now required
of institutions by the NCES, the NCAA, JCAR, and accrediting agencies,
and that therefore these proposed rules were overly burdensome. Some of
these commenters maintained that smaller institutions, which employ
small staffs, would find it impossible to meet any new reporting
requirements in addition to those which they must already meet. Some
commenters reported that their institutions already were collecting
information based on the NCAA model (in which completion or graduation
rates are calculated for a cohort of first-time, full-time,
baccalaureate students who enter an institution during the
institution's fall term), the model set forth in the 1991 Dear
Colleague letter, or another system, and that to force them to change
systems to comply with new regulations would be prohibitively expensive
and extremely burdensome. One commenter asked that the final rules not
differ significantly from the guidance provided by Dear Colleague
Letter GEN-91-27. One commenter reported that the flexibility of the
rules allowing institutions to set their own definitions would prevent
coordinating bodies from collecting information from groups of
institutions.
One commenter believed that the provision of graduation rate
information as a regulatory issue was moot, given that several athletic
associations and news publications now provide statistics, and
expressed the belief that a regulatory system for providing this
information would only add to the current confusion.
Discussion: The Secretary recognizes that the calculation of these
rates in different ways as required by different organizations would
represent a burden on institutions. However, the Secretary is bound by
statute to require that these rates be calculated and published, and
that they be calculated according to statutory requirements. Insofar as
is possible within the terms of the statute, the Secretary is providing
flexibility for institutions to report according to protocols by which
institutions will be required to calculate completion or graduation
rates in the future, notwithstanding these regulations, e.g., the IPEDS
GRS and the JCAR survey, as well as surveys by state agencies and the
NCAA. However, if any particular

[[Page 61779]]
organization on this list fails to develop protocols that accord with
the statute and these regulations, the Secretary cannot simply waive
the requirements of this statute or change the specifics of the
statutory calculation to fit those circumstances. Institutions must
calculate and publish these rates, and do so in accordance with the
statute and regulations.
With regard to the particular case of the GRS survey to be
conducted by the NCES, the Secretary appreciates that while the
Statement of Educational Impact contained below is technically correct
in maintaining that no agency of the federal government is currently
gathering this information, commenters were concerned that the
forthcoming NCES GRS and these regulations may in the future require
institutions to submit the same types of information, compiled in
different ways, to the Federal Government. Because the NCES is a
federal entity, the Secretary will insure that the results of future
NCES GRS surveys will be acceptable for purposes of this statute and
these regulations.
The Secretary also notes that the definitions and suggested
protocols included in these final regulations substantially mirror the
provisions of Dear Colleague Letter GEN-91-27.
Changes: None.
Comments: Several commenters suggested that the Secretary encourage
institutions to supply additional information to place their graduation
rate reports in context, as a way of providing greater comparability
and usefulness without significantly increasing burden. One commenter
asked that all institutions be required to provide such contextual
information.
Discussion: The Secretary strongly encourages institutions to
provide contextual information. There is, however, no statutory
authority to require institutions to provide such information.
Changes: None.
Comments: Several commenters asked that the disclosure requirements
for short-term programs at proprietary schools regarding job placement,
licensure requirement, and licensure pass rate information that had
been previously included in the Student Assistance General Provisions
regulations be reinstated as part of these final regulations. One of
these commenters argued that the types of students who enter these
programs tended to be the consumers most in need of information and
protection. This commenter maintained that such provisions would embody
the spirit and intent of both the statute and other Congressional
commentary on consumer information issues regarding short-term
programs. This commenter also recommended that the information
generated by such requirements be reported to a government agency to be
compiled and published.
Discussion: Because these provisions are no longer included in the
statute, the Secretary will not include them in these regulations.
Changes: None.

Section 668.41 Information Disclosure

Comments: Several commenters proposed that the Department mandate
the Campus Security model for the placement of this information in
publications. These commenters maintained that this model was not
burdensome.
Several commenters opposed the Campus Security model. Several
commenters opposed any regulation of the placement of this information,
besides the general requirement that it be published in publications
that students and prospective students receive. These commenters
maintained that each individual institution was the best judge of where
such information be published. One commenter believed that no
regulation was necessary so long as institutions provided the
information before the student entered into any financial obligation.
One commenter asked that nonbinding guidance rather than regulations be
promulgated in this matter. One commenter objected to the Campus
Security model as now formulated in the regulations, in that it
requires the distribution of information.
One commenter asked that the Department mandate publication in the
institution's catalog or other similar publication that provides
meaningful context to this information. One commenter maintained that
trade schools be required to publish this information in their catalog.
One commenter asked that the Secretary clarify that publication in a
catalog or other such publication meets the requirements of the
statute.
One commenter maintained that the requirement to make this
information available through publications and mailing to prospective
students would be overly burdensome. This commenter argued that general
availability through literature racks and provision upon request should
be deemed as fulfilling the requirements of this statute.
Discussion: The Secretary agrees that the level of specificity
contained in the Campus Security model of disclosure need not apply to
these regulations. The Secretary believes that such publications as
catalogs, admission literature, or other similar types of publication
are appropriate places for this material. Because the statute requires
that this material be available in ``appropriate mailings,'' the
Secretary disagrees that the mere maintenance of this material in
literature racks would satisfy the requirements of the statute.
Changes: None.
Comments: One commenter maintained that the suggestion that
institutions also provide this information to secondary schools and
guidance counselors was too expensive and burdensome.
Discussion: The Secretary will not require institutions to provide
this information automatically to secondary schools and guidance
counselors, but strongly encourages institutions to provide this
information on request to parties such as guidance counselors.
Changes: None.
Comments: One commenter asked for a clarification of the standard
that students have this information before they enter into ``financial
obligation,'' and inquired whether payment of an application fee would
count as a financial obligation, as opposed, for example, to the
payment of tuition. This commenter argued that if the former were the
case, insurmountable problems would arise, since some students apply
for admission without first contacting the institution.
Discussion: The Secretary interprets ``financial obligation'' to
mean any agreement that obliges the student to pay significant sums of
money. This would include, for example, tuition or room and board
deposits, advance payments for tuition, room and board, and books and
supplies. The Secretary does not interpret the tacit agreement to pay
an application fee when submitting an application to fall within the
scope of ``financial obligation'' as that term is used in the statute.
Changes: None.

Section 668.41 Disclosures of Information on Student-Athletes

Comments: One commenter asked the Secretary to reformulate the
requirement that institutions provide the graduation rate data for
athletes to the student's parents, given that locating and providing
materials to both parents in cases of separation or divorce was very
burdensome. This commenter recommended that the relevant language be
changed to indicate that provision of these data to a single parent or
a guardian, when appropriate, would satisfy this requirement.
Several commenters asked that only general guidelines regarding the
medium in which the information is transmitted be promulgated, as

[[Page 61780]]
institutions are attempting to move away from paper formats to
electronic means of transmitting and disseminating information.
Discussion: The Secretary interprets this provision of the statute
to require the notification of the parent who acts as the student's
guardian.
The Secretary agrees that general guidelines will allow
institutions flexibility in adapting to technological changes, and
believes the regulatory text is consistent with that intent. However,
the Secretary also believes that institutions should have paper copies
available for parties who do not have electronic access.
Changes: None.

Definitions

Comments: Most commenters requested the Secretary to require the
use of standard definitions. Their reasoning was to ensure uniformity,
comparability among institutions, and ease of understanding for the
consumer of this information. The commenters stated that flexibility
with many of the definitions proposed in the NPRM is undesirable
because it will produce noncomparable data that would be confusing to
the consumer.
Most of the commenters recommended that the regulations require the
use of IPEDS definitions. The commenters explained that institutions
are already familiar with these definitions, that they are already
being used by the Secretary, and they would not require additional
classifications of students beyond those already used. As such, these
definitions would significantly reduce burden on institutions.
A much smaller number of commenters appreciated the flexibility
provided by the NPRM to use varying definitions so long as the
definitions were part of the information disclosed. A considerable
number of commenters recommended that the Secretary require the
definitions used by JCAR. JCAR also uses some of the IPEDS definitions.
In particular, most commenters recommended the IPEDS definitions for
the following terms: full-time, certificate or degree-seeking, first-
time freshman student, and undergraduate student.
Discussion: Upon reviewing the comments, the Secretary agrees that
statutory definitions of key terms will increase comparability and
benefit consumers. The Secretary also agrees that any definitions
promulgated in these regulations should be definitions with which
institutions are already familiar.
Changes: Particular changes to the ``definitions'' section of these
regulations are addressed below.
Comments: A majority of commenters argued that the amount of
flexibility in these proposed rules with regard to the definition of
``normal time'' would result in incomparable data. Many of these
commenters asked that the sector (less than two year, two year, and
four year) definitions promulgated by IPEDS be placed in the
regulations. Many others asked that the JCAR definitions of catalog
award-time, extended award-time, and eventual award-time be adopted as
mandatory definitions.
One commenter believed that defining ``normal time'' as ``minimal
time'' is inappropriate, given the number of students who enter
institutions with a large number of credits by means such as Advanced
Placement Tests and summer sessions, as well as the number of students
who take overloads and independent study courses. This commenter
believed that normal time instead be defined as ``designated completion
time.'' One commenter maintained that normal time should be the
advertised time to graduation or completion published in an
institution's advising worksheets, catalog, or similar publications,
and that if the institution does not publish such information, that
normal time for that institution be one year (twelve months) for a
certificate program, two years (twenty-four months) for an associate
degree, and four years (forty-eight months) for a bachelor's degree.
One commenter supported the use of normal time rather than average
time, because the latter would tend to change. One commenter supported
the definition of normal time as minimal time to complete or graduate
from a certificate or degree program, but asked that this be clarified
to exclude summer terms.
Several commenters supported the use of some type of ``average''
time rather than minimal time as the definition of normal time, given
that outside factors, such as family commitments, work time, and
availability of funds, affect the time students need to graduate or
complete. These commenters suggested that institutions be permitted to
determine ``normal time'' using other means, for example, measuring the
``normal time'' to completion experienced by the most recent cohort of
students, or using sampling techniques of student populations. One
commenter believed that the concept of normal time itself as used in
the statute and defined in these regulations was a misnomer, given that
students now routinely switch between full-time and part-time status,
and are affected by a whole range of non-academic factors.
Several commenters believed that the definition of normal time
should not include the term full-time, given that full-time represents
only a minimum number, not a particular number, and so two students who
take different full-time loads would have different normal times to
graduation or completion. One commenter believed that the definition of
normal time could contain the term full-time only if the latter term
was clarified to mean the greater of the institution's definition of
full-time, or the title IV, HEA definition of full-time.
Several commenters asked the Department to mandate that
institutions report their definition of normal time as part of their
graduation rate report.
Discussion: The Secretary agrees that the term ``normal time''
should not include the term ``full-time'' because the meaning of the
term ``full-time'' with regard to academic workloads may vary from
student to student.
The Secretary agrees with the commenters who concurred that
``normal time'' not be defined to mean ``average time.'' The Secretary
believes that Congress meant to address such issues as stop outs, work,
remediation, and other factors when it set the time for graduation or
completion at 150% of normal time. The Secretary also believes that
Congress meant ``normal time'' itself to be the standard, traditional
time to degree, e.g., four years for a bachelor's degree, two years for
an associate degree, and the scheduled time for clock hour programs.
The Secretary agrees that to make these points clear, the definition of
``normal time'' in the regulations should make reference to an
institution's catalog time. The Secretary also agrees to include the
specific time in standard terms (semesters, trimesters, or quarters,
not including summer terms) to completion that have been traditionally
associated with degrees. The Secretary acknowledges that measuring time
to completion in standard terms (semesters, trimesters, or quarters)
rather than months for degree programs is a change from earlier
guidance, but believes this change is necessary in order for this
information to be provided in a timely fashion. Time to completion
measured in months, for example, for a four year institution, would end
after the July 30 date for completors or graduates to count, and would
therefore delay disclosure for up to 15 months after the end of the
students' 150% of normal time, given the change to the January 1
disclosure date discussed below. Measured in standard terms, the data
will only be six

[[Page 61781]]
months old by the December 1 disclosure date.
With regard to completion or graduation rate, or transfer-out rate
calculations based on ``extended catalog time'' (more than 150% of
normal time), the statute does not require that such rates be
calculated or disclosed. Institutions may always disclose such rates as
supplemental information.
Changes: A definition of ``normal time,'' based on the JCAR
definition of normal time, has been inserted in Sec. 668.41(c), which
defines normal time as the time necessary for a student to complete all
requirements for a degree or certificate according to an institution's
catalog. This is typically 4 years (8 semesters or trimesters, or 12
quarters, excluding summer terms) for a bachelor's degree, 2 years (4
semesters or trimesters, or 6 quarters, excluding summer terms) for an
associate's degree, and the scheduled times for certificate programs.
Comments: A majority of commenters believed that the degree of
flexibility permitted institutions to define full-time would lead to
non-comparable data. Most of these commenters supported the mandatory
use of the IPEDS definition of full-time.
Several commenters supported the proposed regulatory definition.
One commenter asked that an institution be required to disclose any
differences between its definition of full-time for academic purposes
and its definition of full-time for tuition purposes. Several
commenters asked that the Secretary require institutions to publish
their definitions with their graduation rate data.
Discussion: Upon further consideration, the Secretary agrees with
the commenters who asked that a definition of ``full-time'' be included
in the regulations. Because the definition of ``full-time'' in
Sec. 668.2 is familiar to all institutions, was the definition provided
in Dear Colleague Letter GEN-91-27, and is functionally the same as the
IPEDS definition of ``full-time,'' the Secretary applies that
definition to this section of the regulations. The Secretary believes
that for these reasons referring to this definition in the regulations
will increase comparability and decrease potential confusion.
Changes: The definition of ``full-time student'' has been removed
from Sec. 668.41(c). Institutions are required to use the definition of
``full-time student'' found in Sec. 668.2.
Comments: Most commenters recommended the use of the first-time
freshman student definition under IPEDS. This definition provides for a
student attending any institution for the first time at the
undergraduate level; this includes students enrolled in the fall term
who attended college for the first time in the prior summer term, and
also includes students who entered with advanced standing.
Discussion: The Secretary agrees with the commenters that for
reasons of comparability, consistency, and burden reduction, the
regulations should mandate the use of a particular definition of
``first-time freshman student,'' and that the definition should be the
IPEDS' definition or its functional equivalent. Promulgating such a
definition will ensure consistency of data among institutions, and is
less burdensome to institutions because institutions are already
familiar with the IPEDS definitions.
Changes: Section 668.41(c) has been changed to require institutions
to use a definition of ``first-time freshman student'' that is based on
the IPEDS definition found in the IPEDS Glossary, NCES 95-22.
Comments: Many commenters asked that the IPEDS definition of
``undergraduate student'' be included in the final regulations.
Discussion: For reasons of consistency and familiarity, the
Secretary agrees to include the IPEDS definition of ``undergraduate
student'' in the final regulations.
Changes: The definition of ``undergraduate student'' as found in
the IPEDS Glossary, NCES95-822, has been added to Sec. 668.41(c).

Section 668.46 Information on Completion or Graduation Rates and
Transfer-Out Rates

Comments: Many commenters objected to the October 1 disclosure date
for this information. In general these commenters maintained that the
amount of time between June 30 and October 1 was insufficient for
institutions to calculate these graduation rates. Several of these
commenters maintained that the statute provided institutions with one
year between the point in time when a group's 150% of normal time
elapsed and the required disclosure date. Several other commenters
suggested disclosure dates in the November or December immediately
following the elapse of 150% of normal time.
Discussion: The Secretary agrees to allow a disclosure date in the
next calendar year following the expiration of 150% of normal time.
However, in the interest of consumers, the Secretary believes that this
date should be the earliest possible. Therefore, the Secretary changes
the disclosure date to the first January 1 following the expiration of
150% of normal time for the entire group of students on which the
institution bases its completion or graduation rate calculation.
Changes: Section 668.46(a)(5) has been changed to require that an
institution, beginning with the group of students who enter the
institution on or after July 1, 1996, disclose this information no
later than the January 1 immediately following the point in time that
150% of normal time has elapsed for the entire group of students on
which the institution bases its completion or graduation rate, and
every January 1 thereafter.
Comments: Most commenters recommended that the Secretary require
the use of a snapshot approach for tracking students, that is, taking a
snapshot of a cohort that does not change for the entire length of the
analysis. Electronically, this methodology means comparing only two
files. For institutions that will make calculations from paper records,
the ``snapshot'' methodology requires looking at records from only two
academic years. The commenters explained that a snapshot methodology
will limit the requirement to comparison of a cohort's file for only
two years--at the time of entry and at the time of disclosure. The
commenters' concern is that continuous tracking would be an added and
unnecessary burden on institutions. The commenters also indicated that
the snapshot methodology is sufficient to produce the required
information under the statute. Very few commenters supported the
concept of tracking individual students.
Discussion: The Secretary agrees that a snapshot methodology is
appropriate for purposes of these regulations. To help institutions
implement this methodology, the Secretary is adjusting other elements
of the methodology, such as the characterization of an entering
student.
Changes: None.
Comments: The commenters almost unanimously recommended that the
Secretary require the use of a fall cohort to calculate an
institution's graduation rate. Most institutions' believe that students
entering in this term will be a representative sample of students
entering during the entire year. Institutions argue that using the same
methodology will produce more consistent and comparable data. The
commenters stated that using a full-year cohort would dramatically
increase data tracking and reporting burden on institutions. Moreover,
use of the fall cohort methodology is consistent with both the IPEDS
GRS under development and the JCAR methodology, and many

[[Page 61782]]
institutions and state-level agencies have already developed data
systems using the fall cohort methodology recommended by Dear Colleague
Letter GEN-91-27. A number of institutions opposed extrapolation to a
full-year rate; a small number supported such extrapolation. Some
institutions believe flexibility should be given to institutions for
whom a fall cohort is not representative.
Discussion: The Secretary accepts the commenters' assertion that
the use of a fall cohort is the best approach for some institutions,
namely standard term-based (semester, trimester, quarter) institutions,
which primarily commented on this issue. To be a standard term-based
institution for these purposes, the institution must offer
predominantly standard term-based programs, that is, greater than 50%
of its programs must be term-based. In order to accommodate
institutions for whom a fall cohort may not suffice, the regulations
require the use of a year-long cohort (July 1-June 30) for institutions
that do not operate on a standard term basis.
Changes: Section 668.46(a)(2) has been added to require
institutions that offer a predominant number of semester, trimester, or
quarter based programs to use a fall cohort of students entering
between every July 1 and October 15. An institution using a snapshot
methodology may use a census date of October 15 or another appropriate
date to identify that cohort. Institutions that do not have a
predominant number of programs based on standard semesters, trimesters,
and quarters must use a year-long cohort of students who enter between
every July 1 and June 30. The Secretary believes this is a reasonable
differentiation because most non-term based institutions are
proprietary schools, and the Secretary understands that these
institutions are now required by their accrediting agencies to track
all their students.
Comments: All commenters who addressed the concept of an entering
student's attendance for at least one day of class opposed the
proposal. The commenters explained that many students register, add and
drop courses, and withdraw after the first day of class. Moreover,
institutions generally use an enrollment date or census date to record
a snapshot of their enrollment. Typically this date is at least ten
days to thirty-five days after the beginning of a term; some states
mandate the actual census date. The commenters indicated that,
realistically, institutions simply do not have mechanisms to know if a
student attends only one day of class. Therefore, the commenters feel
the Secretary should refer institutions to the definition of entering
(or first-time) student under the IPEDS Fall Enrollment Survey (the
count of students by the NCES that counts the number of students
enrolled as of October 15 for the purpose of providing annual
projections of college enrollment for the NCES publications Condition
of Education and The Digest of Education). As previously indicated,
institutions are generally familiar with these definitions.
Discussion: The Secretary is concerned by the issues raised by the
commenters, in part because it is important for other parts of the
regulations governing the title IV, HEA programs (e.g., refunds) that
institutions know when students withdraw or drop out of an institution.
However, given the number and nature of the comments received on this
issue, the Secretary agrees that it will reduce burden and increase
comparability to require institutions to use the enrollment date
(October 15) set by the IPEDS Fall Enrollment Survey, or the end of the
institution's drop-add period, for purposes of identifying an entering
student for institutions that are required by these regulations to use
a fall cohort.
For institutions that use a year-long cohort, an entering student
is a student who attends at least one day of class. The Secretary
believes that this differentiation among schools on this issue is
logical since non-term based schools are better able to track their
students from the first day because such institutions do not have drop-
add periods.
Changes: A change has been made in Sec. 668.46(a) that mandates
institutions that offer a predominant number of programs based on
semesters, trimesters, or quarters to base their calculations on the
students who enter during the institution's fall term, beginning July
1, 1996. An entering student shall be considered to have entered for
these purposes if that entering student is enrolled as of October 15 or
the end of the institution's drop-add period. All other institutions
must count all students who enter between every July 1 and June 30, and
attend at least one day of class, beginning July 1, 1996.
Comments: The primary concern raised by the commenters concerning
the definition of entering students was the treatment of students
transferring into an institution. Almost unanimously the commenters
favored a separate cohort and graduation rate for these students. The
commenters believed that including students who transfer into colleges
and universities in the same cohort with first-time freshman students
will lead to inconsistent and noncomparable data among institutions,
because institutions evaluate transfer students differently and at
different times, and different levels of credit may be awarded for
different curriculum choices. Some commenters recommended that the
progress of transfers-in should be accounted for by using a snapshot
methodology at 150% of the normal time to complete from their time of
entrance into the new institution. That is, their status should be
measured at the time of entry and at the time of disclosure and be
reported separately. Other commenters noted that the inclusion of
transfers-in with first-time freshman students requires a continuing
adjustment to the entering cohort. This approach would violate the
snapshot methodology recommended by so many commenters. Moreover, some
commenters believe that such a methodology complicates the
calculations, creates a burden on the institutions, and ultimately
confuses the consumer. Other commenters note that separate reporting
for first-time freshman students and transfers-in is consistent with
established tracking methodologies in the states, which for the most
part concentrate on tracking first-time freshmen.
Discussion: In response to the commenters' concerns, the Secretary
has reconsidered the position taken in the NPRM and excludes from the
definition of ``entering'' students those students who transfer into an
institution. The Secretary will now consider reporting on students who
transfer into an institution to be an optional disclosure for Student
Right-to-Know purposes. If an institution does choose to establish a
cohort of transfers-in, the calculation of the completion or graduation
rate of these students must be separate from the calculation of the
completion or graduation rate of the first-time cohort, and the two
rates must be published and labeled as two separate rates.
Changes: Section 668.46(a) is revised to make optional and separate
the reporting on students transferring into an institution.
Comments: Many commenters urged the Secretary to consider adopting
the JCAR methodology, which includes the disclosure of completion or
graduation rates, and other information, on part-time as well as full-
time undergraduate students. These commenters maintained that
information on part-time students was necessary to meet the needs of a
large number of student consumers who do not fit into the traditional
category of full-time students.

[[Page 61783]]

Discussion: The statute only requires that institutions compile and
disclose information on full-time, certificate- or degree-seeking
undergraduate students. Institutions may always disclose completion or
graduation rates and other information on part-time students or other
types of students as supplemental information.
Changes: None.
Comments: Many commenters recommended that the Secretary not
consider students who transfer to a new institution to be completers.
These commenters believed that considering transfers-out to be
completers is inaccurate because an individual could be counted as a
completer by two separate institutions. These commenters also asserted
that students who transfer out of an institution are not equivalent to
completers, since their final outcome is unknown.
Many other commenters recommended that the Secretary should
regulate what types of documentation the Secretary will accept to
define ``substantial preparation.'' Moreover, these commenters
recommended that the Secretary not define substantial preparation
because these definitions would place a burden on institutions, since
they would require evaluation of transfer credits at entry, an uncommon
practice in higher education. The absence of a standard practice for
evaluating transfer credits and the varying definitions of academic
standing minimizes the comparability of data from one institution to
another and introduces the possibility of data manipulation. Both
produce poor consumer information in the eyes of these commenters.
Some commenters appreciated the flexibility to allow transfers-out
in good standing to be completers and request that the institutions be
allowed to define good standing.
A number of commenters consider a request for a transcript an
insufficient indicator of students' transfer behavior; transcript
requests do not provide the necessary certification, as they are
generated for many reasons unrelated to a student's intent to transfer.
Some commenters indicate that surveys are also insufficient. Such
estimates introduce considerable uncertainty and variation in the data.
Other commenters support the idea of surveys as a viable means of
dealing with this statutory requirement.
Many commenters recommended that the regulations allow one of four
types of documentation that a student has transferred to another
institution. First, a certification letter or document from the
registrar of the receiving institution that a student is enrolled is
evidence of transfer. Second, an electronic certification, such as a
SPEEDE/ExPRESS or a secure e-mail message, from the registrar of the
receiving institution is evidence of transfer. Third, the confirmation
of enrollment data from a legally-mandated, statewide or regional
tracking system (or shared information from such systems) is evidence
of transfer. Fourth, other documentation of enrollment at the receiving
institution, such as institutional data exchanges of students enrolled
as of the official enrollment date, is evidence of transfer. Some
commenters requested that the Secretary specify these means of evidence
in the regulations. A number of commenters believed that enrollment at
a new institution alone is evidence of substantial preparation.
Further, institutions should be permitted to use a variety of sources
for this rate, without being required to have documented proof of
transfer on a student-by-student basis. It must be emphasized that an
approximate rate is more useful to the student than a rate which is
clearly underrepresented because of difficulties in student-by-student
data collection and documentation.
Most commenters urged the Secretary to adopt separate reporting of
completion and transfer-out rates if it is legally necessary to address
transfers-out. The resulting statistics represent distinct pieces of
consumer information depending upon an entering student's own
objective. The commenters indicate that combining these rates into a
single statistic will not help students make the choices that actually
face them.
Many of the commenters petitioned the Secretary to work with the
academic community to devise procedures which would facilitate the
transfer of data among institutions which chose to participate in such
data transfer mechanisms. A significant number of commenters
recommended that the Secretary consider the method employed by the GRS
because of its flexibility in reporting students who transfer out of an
institution. Some commenters recommended that transfers-out be
considered completers if they are ``transfer-ready.'' In other words,
if the student enrolled in a transfer preparation program had achieved
a certain grade point average and completed a certain number of
credits, the student could be considered to have received ``substantial
preparation'' and therefore, be ``transfer-ready.'' This student, the
commenters maintained, is a completer.
Discussion: The Secretary agrees that combining graduates with
transfers-out in a single rate will lead to confusing and sometimes
misleading information. Therefore, the Secretary requires that
institutions publish separately its transfer-out rate.
The Secretary recognizes the variety of serious problems associated
with the statutory provision that transfers-out be reported. Because
the provision is mandated by law, institutions may not ignore it.
However, the Secretary wishes to provide institutions with flexibility
to address transfers-out. Therefore, consistent with the treatment of
transfers-out in the GRS, an institution is only required to report on
those students the institution knows have transferred to another
institution.
For the reasons cited by the commenters, the Secretary agrees that
merely requesting a transcript is insufficient evidence of transfer.
There must be reasonable evidence of a transfer in order for an
institution to consider a student a transfer-out. The four examples of
valid documentation suggested by many of the commenters have been
incorporated into the regulations per their request.
Moreover, in order to resolve the conflict between the transfer-out
provision and the particular mission of community colleges in preparing
students for transfer to other institutions, these regulations provide
that institutions that offer transfer preparatory programs as described
in Sec. 668.8(b)(1)(ii) may consider a student who is ``transfer-
ready'' to be a completer. A transfer-ready student is a student who
has successfully completed his or her transfer program.
With respect to the Student Right-to-Know Act disclosures, in
response to the commenters' concerns, an institution must disclose the
transfer-out rate separately from its graduation rate, but may provide
additional information that combines the completion or graduation rate
with its transfer-out rate.
Changes: A change has been made in Sec. 668.46(c) that mandates
that institutions report their transfer-out rate separately. Section
668.46(c) has also been changed to require an institution to document
that a student has transferred to another institution, and provides
examples of the types of documentation necessary to document a
transfer-out.
A change has been made to Sec. 668.46(b) which allows an
institution to count in its completion or graduation rate a student who
has successfully completed a transfer-preparatory program as described
in Sec. 668.8(b)(1)(ii).
Comments: Some commenters believe the use of a persistence rate for
programs longer than the predominant

[[Page 61784]]
program is necessary because it shows recognition that not all programs
are defined in the same way among all institutions. Other commenters
believe that persistence rates should not be allowed to substitute for
graduation rates in any cases because an institution cannot determine
whether a persister will graduate. These commenters believe that
counting persisters as completers distorts the graduation rate. These
commenters therefore believe that students who are enrolled in a
program that is longer than the program on which the institution bases
its disclosure, should not be counted as completers. These commenters
recommended use of the GRS.
Other commenters recommended that institutions be given an option
of calculating a persistence rate until they are able to calculate a
graduation rate.
Discussion: While the Secretary is concerned that graduation rates
be disclosed as early as is legally possible so that students may
receive current information, the Secretary has been persuaded by the
commenters that any type of equation of persisters with graduates is
misleading. Therefore, the Secretary has eliminated the proposal that
an institution consider students in good standing who are enrolled in
programs longer than the predominant programs' length as completers for
the purpose of disclosing its graduation or completion rate.
As for the disclosure of a persistence rate in general, either
before a disclosure date, or at the disclosure date, an institution may
disclose such a rate as supplemental information, but must clearly mark
the rate as a persistence rate.
Changes: A change has been made to Sec. 668.46(b) that eliminates
the inclusion of students persisting in programs longer than the
program on which the disclosure date is based as completers.
Comments: Most commenters support the cohort's exclusion of
students who die or become permanently and totally disabled. A number
of commenters pointed out the small number of these students would have
little effect on graduation rates.
Some commenters expressed serious concern that the graduation rates
at institutions with a significant number of legal exclusions may
appear artificially low. For example, an institution with a large
percentage of its students who serve on church missions will report a
low graduation rate if those students do not complete within the
statutory time frame. Many commenters objected to the statutory
exclusions and believe that any post-hoc adjustment of the cohort based
on subsequent student behavior will affect comparability of data. These
commenters recommend use of the GRS to allow reporting these students
as not enrolled if the time of reporting coincides with the time of the
special circumstance, and separate statistics for students who have
left the institution for various reasons, e.g., performing church
missions, joining the Armed Forces, etc. One commenter argued that in
order to be excluded, the student must leave school for the express
purpose of joining the Armed Forces, going on a church mission, etc.,
and not just subsequently join such an endeavor after leaving school
for another reason.
Discussion: In response to the commenters' support, the regulations
retain the exclusions for students who die or become totally and
permanently disabled.
The Secretary appreciates the concerns raised regarding the other
statutory exclusions, such as church missionary activity. However, the
Secretary is unable to extend the time frame within which graduation or
completion may take place for the student to be counted as a completor
or graduate in the institution's completion or graduation rate, because
this time frame (150% of normal time) is a statutory provision. An
institution, however, may choose to deal with the difficulties of this
situation in several ways. It could explain the reasons why only a few
students are in its cohort, if it excludes these students through the
statutory provisions. Or it could include these students in its cohort,
and supplement the required calculation with additional information on
the graduation rate of those students when an extended time frame is
applied. The Secretary encourages institutions to provide supplementary
information and data concerning these and other limitations of its
graduation rate disclosure.
The Secretary also agrees that a student must leave the institution
due to one of the circumstances described in Sec. 668.46(d) in order to
be excluded from the denominator of the completion or graduation rate
fraction.
Changes: None.
Comments: Most commenters recommended that institutions not report
a single graduation rate number based on a ratio of completers,
transfers and persisters. Institutions strongly recommend the reporting
of separate rates for graduates, students still enrolled, transfers-
out, transfers-in and students not enrolled or graduated. The
commenters believe that combining these rates will lead to a
meaningless statistic.
Discussion: As noted above, the Secretary has dropped the proposal
that institutions be allowed to count students persisting in programs
longer than the program on which the institution bases its disclosure
date as completers. The Secretary also mandates a separate completion
or graduation rate, and a separate transfer-out rate. Therefore, the
provisions in the proposed Sec. 668.46(c) that required the break out
of the different factors of the institution's graduation or completion
rate have been eliminated.
As noted above, an institution may also supply supplemental
information describing the transfer rate of the students who transfer
into the institution. It may also publish supplemental information
describing the rate of those who complete or graduate when combined
with the rate of those students who transferred-out.
Changes: Section 668.46(c) is revised as described above.
Comments: Several commenters supported the provisions that allow
the Secretary to waive the requirements of Secs. 668.46 and 668.49 if
an athletic association or conference of which it is a member satisfies
the Secretary that it compiles and publishes substantially comparable
data. Some of these commenters asked that the standard process for
obtaining a waiver be published with the final regulations. One of
these commenters also expressed the belief that the granting of the
waiver should be pro forma. One of these commenters asked that an
institution that is a member of such an athletic association or
conference be allowed to maintain, publish, and distribute its own set
of data as well. One commenter asked that an athletic conference or
association be allowed to apply on behalf of all its members at once,
rather than for each institution individually.
One commenter asked that state higher education agencies be given
the opportunity to request similar waivers for their member
institutions. This commenter argued that such additional waivers would
not result in any more incomparability than would already be generated
under the flexible rules the Secretary is proposing.
Several commenters argued that the Secretary should not give
institutions the opportunity to obtain a waiver. These commenters
maintained that in the interests of accurate and comparable consumer
information, the Department recognize only the GRS as an acceptable
method for gathering this information, and that athletic associations
or conferences not be allowed to determine the methodology by which any
of these data is gathered.

[[Page 61785]]

Several commenters asked that waivers granted to institutions for
substantially comparable data supplied to athletic conferences or
associations not exempt those institutions from the requirement to
supply information to students, prospective students, the public, or
high school counselors and coaches, as stipulated in Secs. 668.41(a)(3)
and 668.41(b).
One commenter asked that small institutions be allowed to request
waivers exempting them entirely from these regulations. This commenter
argued that small denominators in graduation rate fractions would lead
to huge variances in rates from year to year. If waivers could not be
granted, this commenter asked that such institutions be permitted to
report data for several years together in order to cure this problem.
Discussion: The statute provides institutions the opportunity to
ask for waivers through their athletic conferences or associations. The
Secretary does not have the authority to remove this opportunity, or to
withhold waivers to associations or conferences that submit
applications that meet reasonable criteria. The Secretary will not
approve waivers if the application does not specify that the
methodology by which the conference or association is to gather these
data meets the criteria set forth by the statute and these regulations.
The Secretary believes that these approval criteria will provide
comparable data between those institutions that report according to
athletic association or conference protocols, and those that do not.
As noted above, the Secretary will also consider the protocols of
state higher education agencies or other associations as acceptable
methodologies if those protocols meet the requirements set by the
statute and these regulations.
The statute is clear in requiring that all institutions that
participate in any title IV, HEA program must comply with the
requirements for supplying completion or graduation rate information
and transfer-out rate information for their undergraduate populations,
and that all institutions that participate in any title IV, HEA program
and award athletically-related student aid must comply with the
requirements to supply information on their general student population
and the completion or graduation rate and transfer-out rate of their
student-athletes. The statute only allows waivers for substantially
comparable data submitted to an athletic conference or association. It
does not empower the Secretary either to exempt an institution from
these requirements, or to allow institutions to make these disclosures
and reports on any but an annual basis.
In response to the concerns of small schools, institutions are
always able to provide additional information, such as prior years'
data, and explanations of factors affecting their completion or
graduation rates.
The Secretary does not construe the statute to prohibit
institutions from compiling and publishing these data even if its
athletic conference or association has successfully requested waivers
on its behalf, so long as the institution generates the information in
compliance with the requirements of the statute, these regulations, and
other Departmental guidance regarding acceptable protocols.
The Secretary agrees with the commenter that the successful
application for waivers of data collection requirements on behalf of an
institution by an athletic association or conference does not also
exempt that institution from supplying this information to the parties
identified in the statute. Institutions that obtain such waivers must
still comply with the information dissemination requirements set by
Sec. 668.41.
The Secretary will publish at a later date the procedures by which
an athletic association or conference may request waivers for its
member institutions.
Changes: A change has been made to Sec. 668.46(e) that clarifies
that an institution that obtains waivers through its athletic
association or conference for the generation of this data must still
comply with the provisions of Sec. 668.41.

Section 668.49 Graduation or Completion Rate and Transfer-out Rates of
Student-athletes

Comments: Several commenters expressed concern over the July 1,
1997 reporting date for the data on graduation and completion rates of
student athletes. These commenters contended that requiring
institutions to meet this date would entail gathering information on
students who had entered as far back as 1993, and because institutions
who were not members of the NCAA are not tracking those students, the
result would be inaccurate and flawed data, as well as a heavy burden
on those institutions. These commenters believed that the tracking of
these students should begin with the students entering after July 30,
1996, and that the Department not require the first report to be
compiled and issued until after the 150% of the time for graduation or
completion for that group of students has elapsed.
Discussion: The Secretary appreciates the concerns of these
commenters with regard to the issue of disclosing completion or
graduation rates for students entering before July 1, 1996.
With regard to the students on which institutions must compile
completion or graduation rate information, the Secretary will not
require institutions to provide this information for students who enter
before July 1, 1996, subject to the regulatory provisions regarding the
provision of average rates for previous years. However, the Secretary
is aware that a large number of schools will have in hand data on
students entering prior to that date as a result of complying with the
requirements of organizations such as the NCAA. The Secretary strongly
encourages those institutions to report those data.
All institutions must disclose the information other than the
completion or graduation rate data required by this section beginning
July 1, 1997. Institutions affected by these regulations must disclose
the information on completion or graduation rates for student-athletes
beginning on the July 1 immediately following the expiration of 150% of
normal time for the group of students entering on or after July 1, 1996
on which the institution bases its completion or graduation rate, in
accordance with Sec. 668.46(a)(2).
The Secretary also wishes to clarify that the disclosure and
reporting date for this information is the July 1 of the calendar year
following the expiration of the 150% of normal time for the students
whose graduation or completion rate performance is measured.
Institutions thus will not be required to disclose this information for
approximately one year after the expiration of the 150% period. The
Secretary encourages institutions to disclose earlier, for example,
along with the January 1 disclosures for non-student athletes.
Changes: None.
Comments: Several comments expressed concern that the level of
detail the statute requires regarding the gender and race of athletes
within particular sports will result in the possibility that particular
students will be identifiable from the data an institution reports.
These commenters contended that such a situation would violate the
privacy provisions of the Buckley Amendment (Family Educational Rights
and Privacy Act), and therefore asked that the Department allow
institutions to leave blank those categories in their reports in which
the status of a very few students (less than five) would be reported.

[[Page 61786]]

Discussion: The Secretary agrees with the commenters, and will not
require institutions to report this information if five or fewer
students are involved. The institution must supply a note stating that
the disclosure was not made due to privacy concerns.
Changes: A change has been made in Sec. 668.49 to add a provision
that an institution need not disclose a completion or graduation rate
or a transfer-out rate for categories that include five or fewer
students.
Comments: Several commenters supported the provision that the same
cohort of students be the subject of the reports in both Secs. 668.46
and 668.49.
Discussion: The Secretary appreciates these commenters' support.
Changes: None.
Comments: Several commenters noted the absence of a definition of
the term ``athlete'' in the proposed rules, and maintained that such a
definition should be supplied in the final rules in order for the
regulations to generate comparable data among institutions. One of
these commenters inquired whether the term referred only to athletes
who receive athletically-related student aid, whether it would include
only participants in intercollegiate athletic sports, and how long
participants need participate before being deemed ``athletes.''
Discussion: The Secretary does not agree that it is necessary to
define the term ``athlete.'' The Secretary notes that the statutory
term ``athletically-related student aid'' governs the selection of
students upon whose performance completion or graduation rates are
reported, and to whom information on performance is provided. The
Secretary believes that for the purposes of the information required by
Sec. 668.49(a)(1)(ii), students who receive athletically-related
student aid are all students who receive that aid at any time during
the previous reporting year. For purposes of Sec. 668.49(a)(1)(iv),
entering students who receive athletically-related student aid are
those students who receive athletically-related student aid for any
period of time between July 1 and June 30 of their entering year. The
Secretary notes that this is a methodology similar to that now employed
for these purposes by the NCAA.
Changes: None.

Executive Order 12866

These regulations have been reviewed in accordance with Executive
Order 12866. Under the terms of the order the Secretary has assessed
the potential costs and benefits of the regulatory action.
The potential costs associated with the regulations are those
resulting from statutory requirements and those determined by the
Secretary to be necessary for administering this program effectively
and efficiently.
In assessing the potential costs and benefits--both quantitative
and qualitative--of these regulations, the Secretary has determined
that the benefits of the regulations justify the costs.
The Secretary has also determined that this regulatory action does
not unduly interfere with State, local, and tribal government in the
exercise of their governmental functions.

Summary of Potential Costs and Benefits

The potential costs and benefits of these final regulations are
discussed elsewhere in this preamble under the following heading:
Analysis of Comment and Changes.

Paperwork Reduction Act of 1995

Sections 668.41, 668.46 and 668.49 all contain information
collection requirements. As required by the Paperwork Reduction Act of
1995, the Department of Education has submitted a copy of these
sections to the Office of Management and Budget (OMB) for review.

Collection of Information: Student Right-to-Know

These regulations affect the following types of entities eligible
to participate in the Title IV, HEA programs: Educational institutions
that are public or nonprofit institutions, and businesses and other
for-profit institutions.
Institutions of higher education that participate in title IV, HEA
programs will need and use the information required by these
regulations to meet the eligibility requirements for participation in
those programs that were added by the Student Right-to-Know Act.
Section 668.41--Institutions must make available to students and
potential students information on the completion or graduation rates
and transfer out rates of the general full-time undergraduate
population.
Institutions that award athletically-related student aid must
provide the potential student athlete, and his or her parents, coaches,
and high school counselor information on the completion or graduation
rates and transfer-out rates of student-athletes. Institutions must
also provide a copy of this information to the Secretary. The Secretary
needs and uses this report to fulfill statutory requirements under the
Student Right-to-Know Act to publish that information broken down by
institution and athletic conference.
Section 668.46--The information to be collected includes the
completion or graduation rate, and the transfer-out rate of full-time,
certificate- or degree-seeking undergraduate students entering the
institution.
Section 668.49--The information to be collected includes the number
of students attending the institution who received athletically related
student aid, broken down by race and gender; the completion or
graduation rate and transfer-out rate of full-time, certificate-or
degree-seeking undergraduate students broken down by race and gender;
the completion or graduation rate and transfer-out rate of full-time,
certificate- or degree-seeking undergraduate students who received
athletically related student aid, broken down by race and gender with
each sport; and the average graduation or completion rate and transfer-
out rate of full-time, certificate- or degree-seeking undergraduate
students for the four most recent graduating or completing classes,
broken down by race and gender.
Information is to be collected and disclosed once each year for
institutions covered by Secs. 668.41(a) and 668.46, and collected,
disclosed, and reported to the Secretary once each year for
institutions covered by Secs. 668.41(b) and 668.49. Annual public
reporting and recordkeeping burden is estimated to average 24.5 hours
for each response for 8,000 respondents for Sec. 668.46 and 24.5 hours
for each response for 1,800 respondents for Sec. 668.49. Thus the total
annual reporting and recordkeeping burden for this collection is
estimated to be 240,100 hours. These hours include the time needed for
searching existing data sources and gathering, maintaining, and
disclosing the data.
OMB is required to make a decision concerning the collections of
information contained in these final regulation between 30 and 60 days
after publication of this document in the Federal Register. Therefore,
a comment is best assured of having its full effect if OMB receives it
within 30 days of publication.
Organizations and individuals desiring to submit comments on the
information collection requirements should direct them to the Office of
Information and Regulatory Affairs, OMB, Room 10235, New Executive
Office Building, Washington, DC 20503; Attention: Desk Officer for U.S.
Department of Education.

[[Page 61787]]


Regulatory Flexibility Certification

The Secretary certifies that these regulations will not have a
significant economic impact on a substantial number of small entities.
Small entities affected by these regulations are small institutions of
higher education.

Assessment of Educational Impact

In the Notice of Proposed Rulemaking, the Secretary solicited
comments on whether the proposed regulations would require transmission
of information that is being gathered by or is available from any other
agency of the United States.
Based on the response to the proposed rule, the Department has
determined that the regulations in this document do not require
transmission of information that is being gathered by or is available
from any other agency or authority of the United States.

List of Subjects in 34 CFR Part 668

Administrative practice and procedure, Colleges and universities,
Consumer protection, Education, Grant programs-- education, Loan
programs-- education, Reporting and recordkeeping requirements, Student
aid.

(Catalog of Federal Domestic Assistance Numbers: 84.007 Federal
Supplemental Educational Opportunity Grant Program: 84.032 Federal
Stafford Loan Program; 84.032 Federal PLUS Program; 84.032 Federal
Supplemental Loans for Students Program; 84.033 Federal Work-Study
Program; 84.038 Perkins Loan Program; 84.063 Federal Pell Grant
Program; 84.069 Federal State Student Incentive Grant Program;
84.268 Federal Direct Student Loan Program; and 84.272 National
Early Intervention Scholarship and Partnership Program.)

Dated: November 24, 1995.
Richard W. Riley,
Secretary of Education.

PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS

1. The authority citation for part 668 continues to read as
follows:

Authority: 20 U.S.C. 1085, 1088, 1091, 1092, 1094, 1099c and
1141, unless otherwise noted.

2. Section 668.41 is amended by adding a new paragraph (a)(3);
redesignating paragraph (b) as paragraph (c) and revising the
redesignated paragraph (c); and by adding new paragraph (b) to read as
follows:


Sec. 668.41 Scope and special definitions.

(a) * * *
(3) The institution's completion or graduation rate and its
transfer-out rate, produced in accordance with Sec. 668.46.
(b)(1) Each institution participating in any title IV, HEA program,
when it offers a potential student-athlete athletically-related student
aid, shall provide to the potential student-athlete, and his or her
parents, high school coach, and guidance counselor, the information on
completion and graduation rates, transfer-out rates, and other data
produced in accordance with Sec. 668.49.
(2) The institution shall also submit to the Secretary the report
produced in accordance with Sec. 668.49 by July 1, 1997 and by every
July 1 every year thereafter.
(c) The following definitions apply to this subpart:
Athletically-related student aid means any scholarship, grant, or
other form of financial assistance, offered by an institution, the
terms of which require the recipient to participate in a program of
intercollegiate athletics at the institution.
Certificate or degree-seeking student means a student enrolled in a
course of credit who is recognized by the institution as seeking a
degree or certificate.
First-time freshman student means an entering freshman who has
never attended any institution of higher education. Includes a student
enrolled in the fall term who attended a postsecondary institution for
the first time in the prior summer term, and a student who entered with
advanced standing (college credit earned before graduation from high
school).
Normal time is the amount of time necessary for a student to
complete all requirements for a degree or certificate according to the
institution's catalog. This is typically four years (8 semesters or
trimesters, or 12 quarters, excluding summer terms) for a bachelor's
degree in a standard term-based institution, two years (4 semesters or
trimesters, or 6 quarters, excluding summer terms) for an associate
degree in a standard term-based institution, and the various scheduled
times for certificate programs.
Prospective students means individuals who have contacted an
eligible institution requesting information concerning admission to
that institution.
Undergraduate students, for purposes of this section only, means
students enrolled in a 4- or 5-year bachelor's degree program, an
associate's degree program, or a vocational or technical program below
the baccalaureate.

(Authority: 20 U.S.C. 1092)

3. Section 668.46 is added to subpart D, to read as follows:


Sec. 668.46 Information on completion or graduation rates.

(a)(1) An institution shall prepare annually information regarding
the completion or graduation rate and the transfer-out rate of the
certificate- or degree-seeking, full-time undergraduate students
entering that institution on or after July 1, 1996.
(2)(i) An institution that offers a predominant number of programs
based on semesters, trimesters, or quarters shall base its completion
or graduation rate and transfer-out rate calculations on the group of
certificate- or degree-seeking, full-time undergraduate students who
enter the institution during the fall term.
(ii) An institution not covered by the provisions of paragraph
(a)(2)(i) of this section shall base its completion or graduation rate
and transfer-out rate calculations on the group of certificate- or
degree-seeking, full-time undergraduate students who enter the
institution between every July 1st of one year and June 30th of the
following year.
(3)(i) For purposes of the completion or graduation rate and
transfer-out rate calculations required in paragraph (a)(1) of this
section, an institution shall count as entering students only first-
time freshman students, as defined in Sec. 668.41(c).
(ii) An institution may also calculate the completion or graduation
rate of students who transfer into the institution as a separate,
supplemental rate.
(4)(i) An institution covered by the provisions of paragraph
(a)(2)(i) of this section shall count as an entering student a first-
time freshman student who is enrolled as of October 15, or the end of
the institution's drop-add period.
(ii) An institution covered by the provisions of paragraph
(a)(2)(ii) of this section shall count as an entering student a first-
time freshman student who has attended at least one day of class.
(5)(i) Beginning with the group of students who enter the
institution between July 1, 1996 and June 30, 1997, an institution
shall disclose its completion or graduation rate and transfer-out rate
information no later than the January 1 immediately following the point
in time that 150% of the normal time for completion or graduation has
elapsed for all of the students in the group on which the institution
bases its completion or graduation rate and transfer-out rate
calculations.
(ii) An institution shall disclose no later than January 1 each
year thereafter its completion or graduation rate information for each
succeeding group

[[Page 61788]]
of students who completed or graduated within 150% of the normal time
for completion or graduation from their programs as of June 30 of the
preceding year.
(b) In calculating the completion or graduation rate under
paragraph (a) of this section, an institution shall count as completed
or graduated--
(1) Students who have completed or graduated within 150% of the
normal time for completion or graduation from their program;
(2) Students who have completed a transfer program as described in
Sec. 668.8(b)(1)(ii) within 150% of normal time for completion from
that program may be counted as completers.
(c)(1) In calculating the transfer-out rate under section paragraph
(a) of this section, an institution shall count as students who have
transferred out those students who, within 150% of the normal time for
completion or graduation from the program in which the student was
enrolled, subsequently enroll in any program of an eligible institution
for which the prior program provides substantial preparation;
(2) An institution shall document that its program provided
substantial preparation to a student by obtaining a copy of any of the
following:
(i) Certification letter from the receiving institution stating
that a student is enrolled in that institution;
(ii) Electronic certification from the receiving institution
stating that a student is enrolled in that institution;
(iii) Confirmation of enrollment data from a legally-authorized
statewide or regional tracking system (or shared information from those
systems) confirming that a student has enrolled in another institution;
(iv) Institutional data exchange information confirming that a
student as enrolled in another institution; or
(v) An equivalent level of documentation.
(d) For the purpose of calculating a completion or graduation rate
and a transfer-out rate, an institution may exclude from the
calculation of its completion or graduation rate and its transfer-out
rate students who--
(1) Have left school to serve in the Armed Forces;
(2) Have left school to serve on official church missions;
(3) Have left school to serve with a foreign aid service of the
Federal Government, such as the Peace Corps; or
(4) Are deceased, or totally and permanently disabled.
(e)(1) The Secretary grants a waiver of the requirements of this
section to any institution that is a member of an athletic association
or conference that has voluntarily published completion or graduation
rate data, or has agreed to publish data, that the Secretary determines
are substantially comparable to the data required by this section.
(2) An institution that receives a waiver of the requirements of
this section must still comply with the requirements of
Secs. 668.41(a)(3) and 668.41(b) of this subpart.
(3) An institution, or athletic association or conference applying
on behalf of an institution that seeks a waiver under paragraph (e)(1)
of this section shall submit a written application to the Secretary
that explains why it believes the data the athletic association or
conference publishes are accurate and substantially comparable to the
information required by this section.

(Authority: 20 U.S.C. 1092)

4. Section 668.49 is added to subpart D, to read as follows:


Sec. 668.49 Report on completion or graduation rates for student-
athletes.

(a)(1) By July 1, 1997, and by every July 1 every year thereafter,
each institution that is attended by students receiving athletically-
related student aid shall produce an annual report containing the
following information:
(i) The number of students, categorized by race and gender, who
attended that institution during the year prior to the submission of
the report.
(ii) The number of students described in paragraph (a)(1)(i) of
this section who received athletically-related student aid, categorized
by race and gender within each sport.
(iii) The completion or graduation rate and transfer-out rate of
all the entering, certificate- or degree-seeking, full-time,
undergraduate students described in Sec. 668.46(a) (1), (2), (3) and
(4).
(iv) The completion or graduation rate and transfer-out rate of the
entering students described in Sec. 668.46(a) (1), (2), (3)and (4) who
received athletically-related student aid, categorized by race and
gender within each sport.
(v) The average completion or graduation rate and transfer-out rate
for the four most recent completing or graduating classes of entering
students described in Sec. 668.46(a) (2), (3), and (4) categorized by
race and gender. If an institution has completion or graduation rates
and transfer-out rates for fewer than four of those classes, it shall
disclose the average rate of those classes for which it has rates.
(2) For purposes of this section, sport means--
(i) Basketball;
(ii) Football;
(iii) Baseball;
(iv) Cross-country and track combined; and
(v) All other sports combined.
(3) If a category of students identified in paragraph (a)(1)(iv)
above contains five or fewer students, the institution need not
disclose information on that category of students.
(b) The provisions of Sec. 668.46 (a), (b) and (c) apply for
purposes of calculating the completion or graduation rates and
transfer-out rates required under paragraphs (a)(1)(iii), (a)(1)(iv),
and (a)(1)(v) of this section.
(c) Each institution of higher education described in paragraph (a)
of this section may also provide to students and the Secretary
supplemental information containing--
(1) The graduation or completion rate of the students who
transferred into the institution; and
(2) The number of students who transferred out of the institution.
(d) Section 668.46(d) applies for purposes of this section.

(Authority: 20 U.S.C. 1092)

[FR Doc. 95-29181 Filed 11-30-95; 8:45 am]
BILLING CODE 4000-01-P



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Last Modified: 06/28/1998