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The Secretary amends the Student Assistance General Provisions regulations by adding a new Subpart J. These regulations govern the approval and administration of tests that may be used to determine a student's eligibility for assistance under the student

FR part
IX
Attachments:
PublicationDate: 12/1/95
FRPart: IX
RegPartsAffected:
PageNumbers: 61829-61844
Summary: The Secretary amends the Student Assistance General Provisions regulations by adding a new Subpart J. These regulations govern the approval and administration of tests that may be used to determine a student's eligibility for assistance under the student financial assistance programs authorized under Title IV of the Higher Education Act of 1965, as amended (Title IV, HEA programs), if that student does not have a high school diploma or its recognized equivalent. The regulations also provide for a passing score for each approved test. The regulations implement changes made to section 484(d) of the Higher Education Act of 1965 (HEA), as amended by the Higher Education Amendments of 1992, Public Law 102-325.
CommentDueDate:

  
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[


[Federal Register: December 1, 1995 (Volume 60, Number 231)]
[Rules and Regulations ]
[Page 61829-61844]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01de95-22]



[[Page 61829]]

_______________________________________________________________________

Part IX





Department of Education





_______________________________________________________________________



34 CFR Part 668



Student Assistance General Provisions; Final Rule


[[Page 61830]]


DEPARTMENT OF EDUCATION

34 CFR Part 668

RIN 1840-AB84


Student Assistance General Provisions

AGENCY: Department of Education.

ACTION: Final regulations.

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

SUMMARY: The Secretary amends the Student Assistance General Provisions
regulations by adding a new Subpart J. These regulations govern the
approval and administration of tests that may be used to determine a
student's eligibility for assistance under the student financial
assistance programs authorized under Title IV of the Higher Education
Act of 1965, as amended (Title IV, HEA programs), if that student does
not have a high school diploma or its recognized equivalent. The
regulations also provide for a passing score for each approved test.
The regulations implement changes made to section 484(d) of the Higher
Education Act of 1965 (HEA), as amended by the Higher Education
Amendments of 1992, Public Law 102-325.

EFFECTIVE DATE: These regulations take effect on July 1, 1996 and apply
to the 1996-97 and subsequent award years. However, affected parties do
not have to comply with the information collection requirements in
Secs. 668.143, 668.144, 668.145, 668.146, 668.147, 668.148, 668.149,
668.150, 668.151, 668.152, 668.153, and 668.155 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 collection
requirements under the Paperwork Reduction Act of 1995. The
incorporation by reference of the publication listed in the regulations
is approved by the Director of the Federal Register as of July 1, 1996.

FOR FURTHER INFORMATION CONTACT: Lorraine Kennedy, U.S. Department of
Education, 600 Independence Avenue, S.W., Regional Office Building 3,
Room 3045, Washington, DC 20202-5451. Telephone: (202) 708-7888.
Individuals that use a telecommunications device for the deaf (TDD) may
call the Federal Information Relay Service (FIRS) at 1-800-877-8339
between 8 a.m. and 8 p.m., Eastern time, Monday through Friday.

SUPPLEMENTARY INFORMATION: These regulations implement section 484(d)
of the HEA which provides that a student who does not have a high
school diploma or its recognized equivalent is eligible to receive
Title IV, HEA program funds only if--
- The student takes an independently administered
examination and achieves a score specified by the Secretary,
demonstrating that the student has the ability to benefit from the
education or training being offered; or
- The student is determined to have the ability to benefit
from the education or training being offered in accordance with a
``process'' prescribed by the State in which the institution the
student is attending or plans on attending is located and that has been
approved by the Secretary.
The Secretary estimates that each year there are approximately
150,000 individuals without a high school diploma or its recognized
equivalent who take ability to benefit tests under section 484(d) of
the HEA in order to become eligible to receive Title IV, HEA Program
funds. There are also approximately another 150,000 individuals without
a high school diploma or its recognized equivalent who enroll in
postsecondary educational institutions who do not apply for Title IV,
HEA Program funds or who enroll in educational programs that do not
qualify as eligible programs under the Title IV, HEA programs. (In
addition, there are many other people who take basic skills tests for
reasons other than seeking Title IV, HEA program assistance.) However,
these regulations apply only to the first group.
The Secretary published a notice of proposed rulemaking in the
Federal Register on August 16, 1994, 52 FR 42134-42144. The NPRM
included a discussion of the major issues involving the proposed
regulations that will not be repeated here. The following list
summarizes those issues and identifies the pages in the preamble to the
NPRM on which a discussion of those issues can be found.
The Secretary proposed that students had to provide documentation
to institutions that they had high school diplomas or the recognized
equivalent (52 FR 42134-5);
The Secretary proposed that approved tests assess secondary school
level basic verbal and quantitative skills and general learned
abilities (52 FR 42136);
The Secretary proposed that students without a high school diploma
or a GED should be eligible for Title IV, HEA program funds because
they demonstrate on that test secondary school level basic verbal and
quantitative skills and general learned abilities comparable to the
range of scores of students who have a high school diploma or GED (52
FR 42136);
The Secretary proposed that the passing score on a test be one
standard deviation below the mean for students with high school
diplomas who have taken the test within three years before the date on
which the test was submitted for approval (52 FR 42136);
The Secretary proposed a scheme for test administration that
provided for tests being administered independent of the institutions
that use the test (52 FR 42136-42137); and
The Secretary proposed to approve a State ``process'' based upon
the ``success rate'' of students enrolled in that State process as
compared to the success rate of high school graduates. (page 42137).

Substantive Changes to the NPRM

The following discussion reflects substantive changes made to the
NPRM in the final regulations. The provisions are discussed in the
order in which they appeared in the proposed rule.

Section 668.7 Eligible Student

In response to public comments, the Secretary has withdrawn the
proposed requirement that institutions document that their students
have high school diplomas or GEDs. Moreover, the Secretary is
recodifying the provisions of Sec. 668.7 in Subpart C of part 668 in
another regulations package.

Section 668.143 Approval of State Tests or Assessments (No Comparable
Provision in NPRM)

In response to public comments and the Secretary's proposal in the
preamble, the Secretary has included an additional type of approved
tests. Those approved tests are tests that have been developed by
States to measure a student's skills and abilities for the purpose of
determining whether the student has the skills and abilities the State
expects of a high school graduate in that State. These tests will
supplement rather than substitute for the other type tests discussed in
this regulation.

Section 668.146 Criteria for Approving Tests (Section 668.145 in NPRM)

In response to public comment, the Secretary will approve tests
that consist of a series of subtests. If a test publisher does not
provide for a composite passing score for a series of basic verbal
tests and a composite passing score for a series of basic quantitative
tests, the test publisher must present evidence that allows the
Secretary to prescribe a cut score for each subtest. To pass that test,
a student must score at or above the cut score for each of the
subtests.

[[Page 61831]]


Agreement Between the Secretary and a Test Publisher, and Agreement
Between an Institution and a Certified Test Administrator (Sections
668.150 and 668.151 in NPRM)

In response to public comment, the Secretary eliminated the
requirements that a test publisher enter into an agreement with a
certified test administrator and that the certified test administrator
also enter into an agreement with an institution whose students are to
be tested. The sections that contained those requirements in the NPRM,
Secs. 668.150 and 668.151 were also eliminated.
The important aspects of those sections that related to the
integrity and independence of test administration were incorporated
into Sec. 668.151 Test administration.

Section 668.152 Administration of Tests by Assessment Centers (No
Comparable Provision in NPRM)

In response to public comment, a new section dealing with test
administration at assessment centers was added.

Section 668.155 Transitional Rule for the 1996-97 Award Year (No
Comparable Provision in NPRM)

The Secretary has added a rule to facilitate the transition from
the old to the new system.
These regulations go into effect on July 1, 1996 and govern the
determination of student eligibility for Title IV, HEA programs under
section 484(d) of the HEA starting with the 1996-97 award year. The
Secretary strongly encourages test publishers that wish to have their
tests approved for use in the 1996-97 award year to submit an
application that satisfies the requirements of this subpart as soon as
possible. Upon receipt of such an application, the Secretary will
evaluate it to determine if it meets the requirements of this subpart.
If the test meets the requirements of this subpart, the Secretary
will notify the test publisher. The Secretary will also publish in the
Federal Register the name of the test, the passing score for that test,
and the name of the test publisher.
To allow for a smooth transition from the current practice to the
new regulatory practice, the Secretary will permit institutions to
continue to use the current system for making an ability-to-benefit
determination for a student until 60 days after the Secretary publishes
in the Federal Register the first approved test and passing score that
is appropriate for that student. Therefore, an institution may continue
to use a test and test score that was an approved test and test score
as of June 30, 1996, the day before the new regulatory provisions go
into effect, until 60 days after the Secretary publishes in the Federal
Register the first test and passing score for each general category of
test approved under these regulations. For example, if the Secretary
approves a test in Spanish on August 1, 1996, an institution may
continue to use a test in Spanish that was approved as of June 30, 1996
until October 1, 1996.
If an institution properly based a student eligibility
determination under the current system, it does not have to redetermine
the student's eligibility under the new system.

Analysis of Comments and Changes

In response to the Secretary's invitation in the NPRM, 142 parties
submitted comments on the proposed regulations. An analysis of the
comments and any changes made in the regulations in response to those
comments follows.
Substantive issues are discussed under the regulations to which
they pertain. If comments apply to more than one regulatory provision,
they will be discussed under the first mentioned provision. Technical
and other minor changes--and suggested changes that the Secretary is
not legally authorized to make under the applicable statutory
authority--are not addressed.

General Comments

Comments: In the preamble to the NPRM, 59 FR 42134-42135, the
Secretary solicited comments with regard to an alternative method of
implementing section 484(d) of the HEA. This alternative method would
link the ability-to-benefit (ATB) testing system to State educational
practices under the Goals 2000: Educate America Act. The Secretary
invited public comment on these alternatives. Three comments were
received in support of this alternative approach.
Discussion: The Secretary agrees with these commenters that there
is merit to an approach that links an ability-to-benefit testing system
under section 484(d) of the HEA with State educational practices under
the Goals 2000: Educate America Act and other State education reform
initiatives. The Secretary believes, however, that such an approach
should supplement rather than replace the testing system described in
the NPRM.
Therefore, in developing the criteria for approved examinations and
the passing scores for those examinations, the Secretary took
cognizance of the focus and purpose of the Goals 2000: Educate America
Act in raising the educational standards of the country. Accordingly,
to the extent that States have developed educational standards that
reflect the skills and abilities expected of a high school graduate in
that State, and have developed tests or other assessments to measure
whether a student meets those standards, the Secretary will approve
those tests and assessments for purposes of the provisions of section
484(d) of the HEA as well as the passing scores on those tests and
assessments.
Because each State is responsible for determining the educational
standards that reflect the skills and abilities expected of a high
school graduate in that State, State standards may differ. Moreover,
States also may choose different tests or assessments to measure
whether students meet those standards, and may also differ on the
passing scores on those tests and assessments. Therefore, if the
Secretary approves a State's tests and assessments and passing scores,
that test or assessment, and the passing score on that test or
assessment, may be used for purposes of section 484(d) of the HEA only
for students who attend eligible institutions located in that State. In
this way, the Secretary will not impose one State's standards on
another State.
If the Secretary approves a State's tests or assessments and the
passing scores for those tests or assessments, a student must obtain a
passing score on each required test or assessment in order to qualify
for Title IV, HEA program funds under section 484(d) of the HEA.
Moreover, the educational standards that a State develops, and the
tests or assessments that a State establishes to measure those
standards, apply to all students in the State. Therefore, the tests
that the Secretary approves to measure whether a student meets those
standards for Title IV, HEA programs purposes do not include tests that
are used solely for admission to a State public postsecondary
institution or for admission to an institution that is part of a State
system of public postsecondary institutions.
Changes: Sections 668.143 to 668.149 were redesignated as
Secs. 668.144 to 668.150, respectively, and a new section,
Sec. 668.143, was added. That new section provides for the approval of
State tests or other assessments submitted by a State that the State
uses to determine whether a student has the skills and abilities the
State expects of a high school graduate in that State. The new section
also provides for the approval of the State's passing scores on

[[Page 61832]]
the State tests, and further provides that an approved State test may
be used as an ability-to-benefit test for Title IV, HEA program
purposes only by institutions located in that State.
Comments: In their introduction to comments on specific sections of
the proposed rule, roughly one-third of the commenters stated that in
their opinion the statutory phrase ``benefit from the education or
training offered'' refers to specific educational or training programs
and the relative cognitive demands of those programs. The commenters
concluded that ability-to-benefit is dependent on existing cognitive
demands of occupations, and must be measured and judged individually
for each of the hundreds of occupation-specific training programs in
postsecondary education, even if the current cognitive demands of an
occupation are not ``postsecondary.''
Discussion: The Secretary disagrees with the commenters. The
Secretary believes that there is a basic minimum competency that a
student must achieve to benefit from any postsecondary education
program. That basic competency is appropriately measured in terms of
secondary school level basic skills and general learned abilities.
Therefore, the Secretary requires approved tests to measure those
skills and abilities. Further, as indicated in the preamble to the
NPRM, the Secretary believes that earning a high school diploma or GED
certificate should be the primary basis for qualifying to receive Title
IV, HEA program assistance. The Secretary believes that students who do
not have those credentials and qualify to receive such assistance by
taking a test should demonstrate through that test a level of verbal
and quantitative skills and general learned abilities at least
comparable to those other categories of students.
Moreover, the Secretary objects to the position expressed by the
commenters on the grounds that it is an approach that accustoms people
to the lowest level of functioning in an occupation. It excuses
institutions from critical aspects of instruction that will enable
individuals to advance in their jobs or to change careers, and it
falsely assumes that the nature of specific occupations will never
change. The approach thus does not advance the quality of the nation's
workforce. When the expenditure of Federal funds for education and
training is at issue, the Secretary wishes to encourage more than a
minimalist approach that only reinforces social and labor market
stratification. The Secretary has encouraged generic academic
competence in the School-to-Work transition programs, and is taking a
consistent position here.
Changes: None.
Comments: Nearly half the commenters contended that the receipt of
a high school diploma is no guarantee that a student possesses minimum
basic skills necessary to pursue postsecondary education, and that the
regulations make an assumption about achievement associated with a
secondary school credential that is unfounded.
Discussion: The Secretary agrees with the commenters that a high
school diploma may not necessarily indicate that the holder of that
diploma has sufficient skills to successfully pursue postsecondary
education. However, students with a high school diploma or its
recognized equivalent are statutorily eligible to receive Title IV, HEA
Program funds. The Secretary interprets section 484(d) of the HEA as
requiring students who do not have a high school diploma or its
equivalent to be comparable to those that do in order to be eligible to
receive Title IV, HEA program funds. Therefore, the Secretary
established the passing score on ATB tests to reflect the scores
received by high school graduates.
Changes: None.

Section 668.7 Eligible Student

Comments: Many commenters argued that the paperwork requirement to
document receipt of a high school diploma was onerous, particularly at
institutions to which students apply while they are still in high
school and at open door institutions that, under state law, are
required to admit anyone. Two other commenters pointed to the
difficulty older students sometimes have in obtaining copies of
records, and two commenters asked why students who had attended
secondary school in another country were required to provide affidavits
in both their native language and English. With few exceptions,
commenters questioned whether there was sufficient evidence that
students improperly claimed to have a high school diploma or its
equivalent to warrant a rule affecting all students in postsecondary
education.
One commenter asserted that the requirements weaken current federal
standards and advocated stricter provisions for documenting evidence of
receipt of a high school diploma or its equivalent. Another commenter,
indirectly concurring with this position, suggested that, if an
applicant for Title IV, HEA Program funds graduated from a secondary
school in the United States but was unable to secure a copy of his or
her diploma or transcript, a statement from the state or local
education agency confirming that the records were unavailable should be
required.
Discussion: The Secretary is persuaded by the commenters that the
added burden of documenting a student's declaration that he or she has
a high school diploma or its recognized equivalent outweighs the
benefit of requiring institutions to document that claim and has,
therefore, decided not to require documentation of a high school
diploma at this time. However, the Secretary will continue to
investigate any alleged abuses in this area and, after consulting with
the postsecondary education community and others, may pursue
alternative means of ensuring that this student eligibility requirement
is being enforced.
Changes: The Secretary has deleted the requirements relating to the
documentation of a student's claim that he or she has a high school
diploma. Moreover, the Secretary is recodifying the provisions of
Sec. 668.7 in Subpart C of part 668 in another regulations package.
Comments: Two commenters took opposite positions on the requirement
that a student could use a passing score on an approved ATB test for 12
months. One commenter recommended a shorter period on the grounds that
the most current score is the most valid measure. The other commenter
recommended that a passing score should be used indefinitely since a
test score on a valid ATB test reflects a permanent level of verbal and
quantitative skills. Another commenter asserted that the NPRM fails to
incorporate changes made to the definition of a ``recognized equivalent
of a high school diploma'' in Sec. 600.2 of the Institutional
Eligibility regulations, 34 CFR 600.2.
Discussion: The Secretary believes that a passing score should not
be used indefinitely because psychometric research demonstrates that
the ``current status'' of knowledge is a more reliable predictor of
imminent performance than previous status of such knowledge. However,
such research also indicates that a period shorter than a year does not
measurably increase the predictive power of a test.
The commenter is correct in the observation that proposed
Sec. 668.7 did not take into account the change in the definition of
``recognized equivalent of a high school diploma'' in Sec. 600.2 of the
Institutional Eligibility regulations, 34 CFR 600.2. However, since the
Secretary is deleting the requirements for documenting a student's
claim to have a high school diploma or its equivalent, the Secretary is
not amending Sec. 668.7 in this regulation package.

[[Page 61833]]

Changes: Changes to Sec. 668.7 have been deleted from these final
regulations.

Section 668.142 Special Definitions

Comments: One commenter suggested that the definition of the term
``assessment center'' be changed so that the location of an assessment
center be at a neutral site rather than at an educational site. Another
commenter suggested that ``assessment centers'' be located only at
public institutions because public governing authorities would serve as
an additional guarantee of integrity.
Discussion: The Secretary's definition of the term ``assessment
center'' describes an organizational unit at an eligible institution
that offers two-year or four-year degrees or qualifies as an eligible
public vocational institution, i.e. a postsecondary vocational
institution. The Secretary believes that the integrity of tests given
at assessment centers will not be compromised by the geographical
location of the center, or if they are given at private institutions
that offer a two year or four year degree, given the long-term nature
of those programs.
Changes: None.

Section 668.144 Application for Test Approval (Section 668.143 in
NPRM)

Comments: Some commenters requested the Secretary's approval of
placement examinations already used by their institutions. One
commenter requested that the requirements for the populations
participating in norming studies explicitly exclude students from
schools at which the test publisher has received notice that improper
test administrations have taken place.
Discussion: The Secretary will approve placement examinations used
by an institution if the institution using that test submits an
acceptable application and the examination satisfies all the regulatory
requirements for test approval. In such a case, the institution would
be considered the test publisher.
The Secretary believes that test publishers will be careful when
selecting a norming sample to avoid invalidating the results of that
sample. Therefore, the Secretary believes that the commenter's
suggestion is not needed to obtain valid norming studies.
Changes: None.
Comments: One commenter requested that the Secretary clarify the
requirement that an approved test be ``validated,'' and pointed out
that a test is validated with respect to a criterion, not a population.
Discussion: The Secretary acknowledges a confusion in the grouping
of requirements listed under the ``application for test approval,'' and
has changed the verb, ``validated'' to ``normed'' in describing the
contents of the technical manual in Sec. 668.144(c)(11)(iv). In a
narrow sense, validation is the process of determining the accuracy of
inferences made from a test score, e.g., if a student scores above a
given percentage, the more likely he or she is to complete a subsequent
course. In a broader sense, validation is the process of determining
the soundness of all interpretations made of the test. The Secretary
notes that there are many kinds of validity, and all of them are at
stake in the review of tests submitted under Sec. 668.144.
Changes: Section 668.144(c)(11)(iv) is amended to change
``validated'' to ``normed.''

Section 668.145 Test Approval Procedures (Section 668.144 in NPRM)

Comments: One commenter suggested that when the Secretary chooses
experts to evaluate tests, the Secretary only choose experts who have
substantial experience in psychometrics, familiarity with the Standards
for Educational and Psychological Testing (Standards) prepared by a
joint committee of the American Educational Research Association, the
American Psychological Association, and the National Council on
Measurement in Education, and membership in one of those three
organizations. This commenter also recommended that if a test did not
satisfy the criteria for test approval and the test publisher appealed
that decision, the test publisher would have to submit only those
sections of a test subject to question and that a different group of
experts be assembled to judge the appeal. The commenter further
suggested that any appeal by a test publisher of the disapproval of a
test be subject to the provisions of the Administrative Procedure Act.
Discussion: The Secretary agrees that professional credentials and
experience are important criteria in selecting reviewers of tests, and
will select experts who have substantial experience in psychometrics
and familiarity with the Standards. The Secretary assumes that anyone
who holds a graduate degree in psychometrics or evidences substantial
experience in test development is familiar with the Standards. The
Secretary believes that membership in a specific organization should
not be a prerequisite to being selected as a test evaluator.
If a test is disapproved for specific discrete reasons applicable
to a particular portion of a test and the test publisher appeals that
result, the appeal would be based on the portion of the test that
caused the disapproval. Therefore, the test publisher would presumably
limit its appeal to that portion of its test, and if the appeal was
successful the entire test would be approved without the need for
reapplication.
The Secretary believes that the review of a test and any appeal of
that review should not be conducted, and is not required to be
conducted, in an adversarial, formal, or legalistic setting. Therefore,
the Secretary will not subject those processes to the provisions of the
Administrative Procedure Act. Moreover, the Secretary believes it is
unnecessary to select another panel of experts to advise the Secretary
when a test publisher appeals an adverse decision regarding its test.
The Secretary makes a decision in response to an appeal, and wishes to
retain the discretion to seek the advice of experts the Secretary
considers appropriate to analyze the test publisher's arguments on
appeal.
In most instances, the Secretary will seek the advice of the
original panel of experts regarding those arguments. In reviewing over
100 tests since January 1991, the Secretary has found that when the
original panel of experts reviewed an appeal, they focused on only
those issues that were not satisfactorily addressed in the original
submission and provided fair and valuable advice with regard to those
issues.
Changes: None.

Section 668.146 Criteria for Approving Tests (Section 668.145 in NPRM)

Comments: Many commenters from community colleges objected that
approved tests must measure ``knowledge of high school curricula,''
claiming that this was inappropriate.
Discussion: The Secretary disagrees with the commenters'
interpretation of the questioned regulatory provision. The provision
does not state that approved tests are based on ``knowledge of high
school curricula.'' Rather, the provision states that the tests will
assess basic verbal and quantitative skills and general learned
abilities at the secondary school level. These skills and general
learned abilities can be acquired anywhere. The tests will not be
equivalent to final exams in specific high school subject areas, such
as Algebra 1, Chemistry, or Civics.
Changes: The term knowledge has been deleted as redundant.

[[Page 61834]]

Comments: Some test publishers asked whether a reading test would
suffice to cover the assessment of secondary school level verbal
skills, or whether tests of usage and, particularly, writing samples
must also be included. Some of the publishers of tests that provide
subtest scores, but not composite scores, objected to the use of a
single composite score for verbal skills and quantitative skills.
A few commenters addressed the point of reference of the passing
score, namely, the performance of high school graduates on a specific
test, and pointed out that the educational background of test-takers is
not always known, particularly in norming studies that may have been
conducted prior to changes in the law. One commenter expressed a
similar concern with respect to ESL test-takers since the normed
students must be ESL test-takers who have entered high school
equivalency programs. The commenter pointed out that this latter group
was very small, and the mean scores for them would not be very
reliable.
Discussion: Verbal skills, such as usage, mechanics, and
comprehension, must be assessed. If, however, a test measured only one
language skill, such as punctuation or word recognition, that test
would not be appropriate. A reading test is appropriate because it is
highly correlated with other verbal skills and is a fundamental
measurement of verbal ability. Writing is highly related to reading
comprehension and to other verbal skills, and would, therefore, be
redundant for this purpose. Therefore, an approved test does not have
to have a writing sample.
The Secretary will approve a test that consists of a series of
subtests. However, if the test publisher does not establish a composite
verbal score and a composite quantitative score, the test publisher
must present evidence that allows the Secretary to prescribe a cut
score for each subtest. To pass that test, a student must score at or
above the cut score for each of the subtests.
Based on existing evidence from a number of major testing programs,
the Secretary believes that all test publishers can gather information
on the educational background of test-takers in the ordinary course of
test administration, e.g., on the cover sheet of an examination. More
critically, for data necessary for setting a passing score, the
educational background of participants in a norming sample can easily
be ascertained, and in the case of tests requiring new norming studies,
there has been ample time since the law was passed to conduct such
studies.
The Secretary is persuaded by data on ESL test-takers to enlarge
the reference group beyond those who have entered high school
equivalency programs, but believes that entrance into some kind of
formal education or training program is an important criterion with
which to define this group for purposes of setting a passing score.
Changes: Section 668.146(c)(5) has been changed. The Secretary will
continue to approve a test that consists of a series of subtests.
However, if the test publisher does not establish a composite verbal
score and a composite quantitative score, the test publisher must
present evidence that allows the Secretary to prescribe a cut score for
each subtest.
The Secretary has also amended Sec. 668.148(b)(2) to enlarge the
reference population for setting the passing score on ESL tests by
including not only ESL test-takers who have entered high school
equivalency programs, but also ESL test-takers who have entered other
education or training programs, including bilingual vocational
programs.
The Secretary has also modified the wording of
Sec. 668.148(a)(2)(v)(A) so that, in cases where the test is in
Spanish, the test publisher provides tables of distributions of test
scores with a clear indication of the mean score and standard deviation
for Spanish-speaking students with high school diplomas so that the
Secretary will be able to indicate the passing score. The reference to
the most recent three-year period is changed to a five-year period to
allow a sample of sufficient size.
Comments: Several commenters expressed confusion with regard to the
establishment of a passing score in proposed Sec. 668.145(c)(3).
Discussion: The Secretary acknowledges a misprint, hence an
understandable confusion, in the proposed Sec. 668.145(c)(3). This
section should have read, and is corrected in Sec. 668.146(c)(3) of the
final regulation to read, as follows:

Except as indicated in Secs. 668.148 and 668.149, provide tables
of distributions of test scores that clearly indicate the mean score
and standard deviation for high school graduates who have taken the
test within three years before the date on which the test is
submitted to the Secretary for approval;

The misprint led to a more general confusion as to who has the
responsibility for designating the passing score on tests used for
ability-to-benefit determinations and communicating those scores to the
public. For the general population of test-takers for whom Sec. 668.147
is applicable, the Secretary determines the passing score for which the
publisher has provided the data. For special populations and special
types of administration such as those described in Secs. 668.148 and
668.149, the Secretary requests the publisher to ``recommend'' a
passing score based on the publisher's experience with the special
population and/or type of administration. The Secretary reviews the
recommendation, and either certifies it or, if necessary, requests
clarifications prior to certification. The Secretary recognizes that
this procedure needs to be modified in the case of tests given in
Spanish.
The Secretary will publish the approved passing scores in the
Federal Register.
Changes: Section 668.145(c)(1) has been amended to indicate that
the Secretary will publish in the Federal Register the names of
approved tests and the passing scores on those tests.

Section 668.147 Passing Score (Section 668.146 in NPRM)

Comments: The majority of comments received from commenters on the
passing score formula took five positions. The first position was that
the proposed score was too low and inconsistent with the standards
included in Title IV of the Goals 2000: Educate America Act and in the
School-to-Work Opportunities Act. The second position was that the
proposed score was too high. The third was that the proposed score was
right. The fourth position was that the proposed score should vary by
program of study. The fifth position was that the proposed score should
be determined by predictive validity studies using program completion
as a criterion.
Two commenters also advocated using the performance of students
with GEDs as the reference point for the passing score on the grounds
that these people have passed a de facto national high school
equivalency examination. Their performance is thus more public than
that of high school graduates, hence it offers a more reliable point of
comparison. And one commenter presented a plan for a ``documented
qualification process'' that would allow institutional variations on
passing scores.
Discussion: As noted earlier, the Secretary believes that there is
a basic minimum competency that a student must achieve to benefit from
any postsecondary education program. That basic competency is measured
in terms of secondary school level basic skills and general learned
abilities. Further, the Secretary believes that under section 484(d) of
the HEA, in order for a person without a high school diploma or its

[[Page 61835]]
recognized equivalent to receive Title IV, HEA Program funds, that
person should enter postsecondary education with roughly the same
comparable secondary school level basic skills and general learned
abilities as those of the typical range of high school graduates.
The Secretary established the passing score on approved tests as
the score that represents one standard deviation below the mean for
students with high school diplomas who took the test. The score means
theoretically that 84 percent of the high school graduates who took the
test passed the test. The Secretary established this score based upon a
recognition that the secondary school level basic skills and general
learned abilities of high school graduates in the United States vary
widely.
As noted earlier in the general comments, the Secretary disagrees
with the commenters who contended that passing scores should be
established on a program-by-program basis. The Secretary also disagrees
with those commenters who contended that the passing score was either
too high or too low, or was inconsistent with the Goals 2000: Educate
America Act and the School-to-Work Opportunity Act. The Secretary
believes it is difficult to make definitive judgments regarding whether
a passing score is too high or too low until tests are approved and
test-takers take the test. Moreover, until performance standards are
set for ``Certificate of Initial Mastery'' under school-to-work models,
it is premature to contend that the Secretary's passing score is
inconsistent with those standards. When that information is
forthcoming, the Secretary may revisit the question of the appropriate
passing score for these ATB tests.
The Secretary acknowledges the commenters' point that there is a
logic to using the performance of students with GEDs as the reference
point for the passing score. However, the Secretary chose not to use
that group as a reference because the GED population that subsequently
takes the types of examinations used for ability-to-benefit
determinations is small and not representative of the general
postsecondary school population in the United States. As for the
suggestion to adopt institutional variations on the passing score for
institutions that provide sufficient remediation and instructional
resources for ATB students, the Secretary suggests that this approach
is better suited for the ``state process'' as described in
Sec. 668.156.
Finally, the Secretary agrees that the fifth position, basing the
passing score on predictive validity studies using program completion
as the criterion, is theoretically the best approach to take in
establishing a passing score. However, the Secretary chose not to use
that approach because it was impossible to administer, given the small
size of the ATB population, the cost of predictive validity studies,
and the additional time that would be necessary to review and approve
that approach. Moreover, adopting that suggestion would further delay
the publication of these regulations implementing section 484(d) of the
HEA.
Changes: None.

Section 668.148 Additional Criteria for the Approval of Performance-
Based Tests, Tests for Non-Native Speakers of English, Modified Tests
for Persons With Disabilities, and Computer-Based Tests and Tests for
ESL Programs (Section 668.47 in NPRM)

Comments: One commenter suggested that performance assessments, as
described in proposed Sec. 668.147, not be included in the potential
pool of approved tests, because the commenter asserted that these tests
``are still in a developmental stage, with substantial false negative
and false positive reports.'' Another commenter recommended additional
security measures, including the requirement that a student show a
photo identification for computer-based tests.
Discussion: The validity and reliability of any assessment tests
will be based upon the evidence provided by the test publisher, and the
Secretary will not rule, a priori, that any category of tests is
inappropriate. The Secretary will rely on the security requirements of
test publishers with regard to the use of photo identification for
computer-based tests.
Changes: None.

Section 668.150 Agreement Between the Secretary and a Test Publisher
(Section 668.149 in NPRM)

Comments: Two commenters saw no necessity for this or any of the
agreements specified in proposed Secs. 668.149, 668.150, and 668.151 on
the grounds that the practices specified in these agreements and the
abuses they are designed to address are already accounted for in normal
industry practice.
Discussion: In the Secretary's opinion, test publishers are key to
the integrity of the ability-to-benefit testing process, and the
agreement between the Secretary and the test publisher is designed to
assure that the tests are being independently administered in a proper
and impartial manner. Past practice has indicated that integrity in the
administration of ability-to-benefit tests is not uniform throughout
the industry, and that this agreement is necessary to protect both
students and the public interest.
However, the Secretary agrees with the commenters that formal
agreements between a test publisher and a test administrator and
between a test administrator and an institution are not necessary to
the integrity of test administration. Therefore, the Secretary has
eliminated those two agreements although key provisions in those
agreements have been incorporated in the section dealing with test
administration, Sec. 668.151.
Changes: The Secretary has deleted the requirement that a test
publisher enter into an agreement with a test administrator and that
the test administrator also enter into an agreement with an
institution. In fact, the Secretary has deleted the proposed regulatory
sections in which those requirements were contained, proposed
Secs. 668.150 and 668.151.
Comments: One commenter asked that language be added to ensure that
test publishers exercise equal employment opportunity principles in
certifying test administrators. Another commenter suggested language be
inserted to require the publisher to decertify a test administrator if
he or she is found to have compromised the integrity of the testing
process. Another commenter asked whether decertified test
administrators could appeal and whether they could subsequently be
recertified.
Discussion: The Secretary believes that it would be inappropriate
to include a provision in the agreement regarding the test publisher's
employment practices because it is not within his legal jurisdiction to
do so.
The proposed rule included a provision for decertifying a test
administrator for violating the integrity of the test. The Secretary
has revised this provision to indicate that the decertification would
coincide with the period for which the test publisher's test was
approved. During this period, the test administrator could not be
recertified. No appeal is provided for a test publisher's decision to
decertify a test administrator.
Changes: Section 668.150(b)(3) is revised to provide that if a test
publisher decertifies a test administrator, the decertification
coincide with the period for which the test publisher's test was
approved.
Comments: Half the commenters suggested that institutions should be
allowed to score the ATB test at the educational location, rather than
send the test to the publisher for scoring.

[[Page 61836]]
These commenters cited the extra time and costs associated with test-
publisher scoring.
Discussion: The purpose of the regulatory scheme regarding test
administration is to remove institutions from giving or scoring tests.
In return, the Secretary will not hold institutions financially
responsible if they award Title IV, HEA Program funds to an ability-to-
benefit students who present evidence that they passed approved tests
as long as the institutions did not interfere with the independence of
the testing process and were not involved in the testing process.
Therefore, the Secretary strongly disagrees with the commenter's
suggestion that an institution should be able to score a test.
Moreover, the Secretary anticipates that there will be little delay
between the time a student takes a test and the time the institution
and the student receive the test results.
Changes: None.
Comments: Test publishers objected to the Secretary's requirement
that an analysis of scoring patterns be performed every two years to
determine irregularities. One commenter asked that the agreement
between the Secretary and a test publisher explicitly forbid the
publisher from requiring institutions to administer instruments in
addition to those required and approved by the Secretary.
Discussion: The Secretary believes that quality control is a
critical aspect of test administration, and an analysis of scoring
patterns of tests is useful tool for that purpose. However, to reduce
burden, the Secretary is requiring that an analysis of scoring patterns
of tests be performed every three years.
The Secretary is not including in the agreement between the
Secretary and a test publisher a provision that precludes the publisher
from requiring institutions to administer tests in addition to those
approved by the Secretary because he believes that such a provision is
beyond the scope of his authority. Moreover, the Secretary notes that
when faced with such a test publisher, an institution can simply choose
another test and another test publisher.
Changes: The Secretary is requiring that an analysis of scoring
patterns of tests be performed every three years.

Proposed Section 668.150 Agreement Between a Test Publisher and a Test
Administrator

Comments: One commenter recommended that test publishers, and not
educational institutions, retain the power to hire and dismiss on-site
test administrators. The commenter also suggested that test publishers
be responsible for training test administrators. Another commenter
suggested that the test publisher make an agreement with the
institution and independent test administrators under which the
institution would agree to respect the security and integrity of test
administration by selling the administrators an annual license. The
commenter believes that the purchase of a license will ensure proper
administration of the test.
Discussion: The Secretary believes that an institution should have
the option of selecting a test administrator that has been certified by
a test publisher to give its students an approved ATB test. Therefore,
the Secretary disagrees with the suggestion made by the first
commenter.
Since a test publisher certifies test administrators to give its
tests, a test publisher would presumably provide whatever training it
felt necessary to obtain a sufficient number of certified test
administrators for its test.
Finally, the Secretary does not see the need to have test
publishers sell licenses to test administrators.
Changes: The Secretary has deleted this section, but the provisions
discussed by the commenters have been incorporated into Sec. 668.151(a)
dealing with test administration.
Comments: Many commenters expressed confusion about the role of an
assessment center in the test administration process. Commenters
requested clarification regarding the rights and responsibilities of
assessment centers. At least one commenter representing a test
publisher requested the right to enter into agreements with an
assessment center as a condition for the assessment center to give its
test.
Discussion: The Secretary agrees with the commenters that the role
of an assessment center was not sharply defined in the proposed
regulations. The Secretary envisions that an assessment center may give
tests to ATB students without threatening the integrity and
independence of the test. An assessment center may give an approved
test to students without necessarily entering into an agreement with
the test publisher. However, the Secretary agrees with the suggestion
of the commenter that the test publisher should have the right to
control the use of its test by allowing an assessment center to give
its test only if the assessment center enters into an agreement with
the test publisher.
If a student takes a test at an assessment center, the test
administrator must be certified by the test publisher whose test is
being given. The test administrator must also give the test only in
accordance with the test publisher's instructions, must make the test
available only to a test taker during a regularly scheduled test, must
collect the test from the test taker after the test is given, and must
secure the test against disclosure or release.
An assessment center may, however, score the test and notify the
institution and the test taker of the test results instead of
forwarding the test to the publisher for scoring and notification. If
the assessment center scores tests, it must provide a copy of the test
takers' performances and test scores to the test publisher on at least
an annual basis.
Changes: A new section, Sec. 668.152, has been added to describe
the role and responsibilities of an assessment center.

Proposed Sec. 668.151 Agreement Between the Institution and a Certified
Test Administrator

Comments: One commenter recommended that, as part of this
agreement, the institution must keep complete records of all testing
activity conducted by a test administrator on its behalf, including
situations in which testing was not completed.
Discussion: The purpose of the regulatory scheme regarding test
administration is to remove institutions from giving or scoring tests.
Therefore, the Secretary disagrees with the commenter's recommendation.
Changes: The agreement between an institution and a test
administrator in Sec. 668.151 has been deleted, as has the section
dealing with this relationship. However, the important aspects of this
section relating to the integrity and independence of test
administration were incorporated into Sec. 668.151 Test administration.

Section 668.151 Administration of Tests (Section 668.152 in the NPRM)

Comments: A number of commenters objected to the proposed
procedures for scoring tests by the test publishers in those cases in
which ``assessment centers'' are not available. Those who objected
claimed that the process was inequitable and would result in
considerable delays in determining student eligibility. One commenter
objected to the policy that allows repeated taking of tests on the
grounds that repetition compromises the validity of the tests. Two
commenters requested clarification about the roles of assessment
centers with respect to recordkeeping, reporting of scores and
background information on test takers to test publishers, and whether
agreements between assessment centers and institutions that wish to use
their services are required.

[[Page 61837]]

Discussion: The Secretary believes that it is not inequitable to
require test publishers to score tests and that considerable delays
will not be the result of such a requirement. A test administrator must
send the test publisher the test taker's examination within two days of
administration of the test, and the test publisher must ``immediately''
generate a test score and ``promptly'' notify the test taker and the
institution of the test results. If the test is a computer-based test,
the test taker and the institution will receive the test results even
more quickly. With regard to the retaking of tests, the Secretary
points out that many people retake major national examinations and
licensing examinations every year without compromising the validity of
those tests. However, the Secretary recognizes that the practice of
retesting can be abused, and that the criteria for test approval in
proposed Sec. 668.145 were not explicit in the matter of acceptable
retesting procedures.
Changes: The Secretary has modified Sec. 668.146(b) to add the
requirement that the publishers have guidelines for retesting,
including time between test-taking, and that such guidelines be based
on empirical analyses.

Section 668.154 Institutional Accountability

Comments: One commenter suggested that those professionals who
abuse the system be accountable for their actions, and institutions
without a history of abuse should be permitted to continue their
practices of local administration and scoring of ATB tests. Another
commenter felt that the institutional accountability section was too
lenient, and suggested strengthening the language so that students
would not be liable for repayment of fraudulently disbursed funds
unless the student knowingly caused the erroneous determination.
Discussion: As indicated earlier, the Secretary has developed a
regulatory scheme that eliminates institutions from test
administration. In return, the Secretary will not make institutions
financially responsible if an institution awards Title IV, HEA Program
funds to a student who presents evidence that he or she passed an
approved test, if the institution does not interfere with the
independence of the testing process. Therefore, the Secretary strongly
disagrees with the commenters' suggestion that an institution should be
able to administer and score a test.
Changes: None.

Section 668.156 Approved State Process (Section 668.155 in NPRM)

Comments: All commenters from community colleges and several other
commenters objected to the 95% ``success rate'' criterion as both
arbitrary and too high and suggested that the Secretary use an 85%
``success rate'' as an alternative. Some commenters added that this
requirement does not reflect the statutory mandate that the judgment of
success take into account the diversity of the populations served by
participating institutions. Nearly all commenters from community
colleges requested consistency of calculation of ``success rate'' with
that of the Student Right-to-Know Act. A few commenters also
interpreted the ``State process'' provisions as excluding students at
for-profit institutions. One commenter pointed out that the data
required for such a calculation were not immediately available, and
that State agencies submitting applications for approval of a ``State
process'' should be allowed three years to assemble the data necessary
to support their case.
Discussion: In the NPRM provisions governing the ``State process''
alternative to ATB testing, the Secretary proposed that the ``success
rate'' for students without a high school diploma or its equivalent
must, in effect, be equal to the success rate for students who possess
a high school diploma. ``Success'' was defined as the sum of program
completion and continued enrollment, although this definition was not
explicit in including successful transfers in the category of continued
enrollment. The 95% rate was chosen since it represents an equivalency
minus a theoretical standard error of measurement. The Secretary wishes
to make sure that institutions participating in a State process are
truly serious and not casual in their execution of responsibilities to
ATB students. If a special State process for students without high
school diplomas is truly effective, the success rate of the students it
services should at least equal the success rate of students with high
school diplomas who did not receive the special services under the
process. To account for variances in the measurement of this outcome,
the Secretary chose a standard rule of chance that 1 out of 20 results
might be attributable to faulty measurement. One out of 20 is 5%. An
equivalency minus 5% is 95%.
The commenters who objected to the 95 percent rate claimed that
such a rate was too high and arbitrary and suggested that the rate be
reduced to 85%. However, those commenters provided no justification for
that lower percentage.
The Secretary disagrees with the commenters who contended that the
regulation does not take into account the diversity of the population
served by institutions included in the State process. The regulations
give States maximum flexibility to design their processes under which
States are free to choose how to respond to the needs of the diverse
group of students served by the process. The Secretary measures whether
the process is successful in satisfying the needs of these students by
evaluating whether the success rate of these students, and all the
others in the State process, are equal to the success rate of high
school graduates.
As for the calculation of the ``success rate'' in terms similar to
those required under the Student Right-to-Know Act, the Secretary
proposed a simple ``success rate'' to avoid the complexities
necessitated by implementing that Act.
The Secretary is not requiring any condition or limitation with
regard to the type of institutions that may or must participate in a
State process. Therefore, the type of institutions that may or must
participate will be determined by the State.
Finally, the Secretary believes that a State does not need three
years to collect data to support the approval of its State process. The
Secretary believes that when this regulation goes into effect on July
1, 1996, the States will have had adequate lead-time to assemble data
to support the approval of their State processes. States may, of
course, wait a longer period of time before applying to the Secretary
for approval of their State process.
Changes: The Secretary amends Sec. 668.157(h)(1) to provide that
the transfer of a student who remains enrolled in another institution
at the end of that award year can be included in the ``success rate''
for the institution from which the student transferred.

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 this 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. Burdens specifically associated with information
collection requirements, if any, are identified and explained

[[Page 61838]]
elsewhere in this preamble under the heading

Paperwork Reduction Act of 1995

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 governments 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 Comments and Changes.

Paperwork Reduction Act of 1995

Sections 668.143, 668.144, 668.145, 668.146, 668.147, 668.148,
668.149, 668.150, 668.151, 668.152, 668.153, and 668,155 contain
information collection requirements.
Collection of information: Student Assistance General Provisions--
These regulations contain records that would affect test
publishers, postsecondary institutions, and students that do not have
high school diplomas or recognized equivalents and that wish to apply
for Title IV, HEA programs.
The collection activity associated with the State Process is
incorporated in various sections throughout these final regulations.
All other burden associated with the maintenance of records of the
student's ability-to-benefit is already cleared under the individual
programs of Federal financial assistance for which these students may
be applying.
Institutions are to collect this information annually. An estimate
of the total annual reporting and recordkeeping burden that will result
from the collection of the information is 0.5 hours per response for
158,180 respondents, including time for reviewing instructions,
searching existing data sources, gathering and maintaining the data
needed, and completing and reviewing the collection of information. The
total annual recordkeeping and reporting burden equals 79,090 hours.
The Department considers comments by the public on these proposed
collections of information in--
- Evaluating whether the proposed collections of information
are necessary for the proper performance of the functions of the
Department, including whether the information will have a practical
use;
- Evaluating the accuracy of the Department's estimate of
the burden of the proposed collections of information, including the
validity of the methodology and assumptions used;
- Enhancing the quality, usefulness, and clarity of the
information to be collected; and
- Minimizing the burden of collection of information on
those who are to respond, including through the use of appropriate
automated, electronic, mechanical, or other technological collection
techniques or other forms of information technology; e.g., permitting
electronic submission of responses.
The Department request comments concerning the collection of
information contained in these final regulations by January 30, 1996.
Organizations and individuals desiring to submit comments on the
information collection requirements should direct them to Patrick
Sherrill, U.S. Department of Education, 600 Independence Avenue, S.W.,
Room 5624, ROB-3, Washington, D.C. 20202.

Assessment of Educational Impact

In the notice of proposed rulemaking, the Secretary requested
comments on whether the proposed regulations would require transmission
of information that is being gathered by or is available from any other
agency or authority of the United States.
Based on the response to the proposed rules and on its own review,
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, Incorporation
by reference, Loan programs-education, Reporting and recordkeeping
requirements, Student aid.

(Catalog of Federal Domestic Assistance Number: 84.007 Federal
Supplemental Educational Opportunity Grant Program; 84.032 Federal
Family Educational Loan Program; 84.032 Federal PLUS Program; 84.032
Federal Supplemental Loans for Students Program; 84.033 Federal
Work-Study Program; 84.038 Federal Perkins Loan Program; 84.063
Federal Pell Grant Program; 84.069 Federal State Student Incentive
Grant Program.)

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

The Secretary amends Part 668 of Title 34 of the Code of Federal
Regulations as follows:

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. Part 668 is amended by adding a new Subpart J to read as
follows:
Subpart J--Approval of Independently Administered Tests; Specification
of Passing Score; Approval of State Process
Sec.
668.141 Scope.
668.142 Special definitions.
668.143 Approval of State tests or assessments.
668.144 Application for test approval.
668.145 Test approval procedures.
668.146 Criteria for approving tests.
668.147 Passing score.
668.148 Additional criteria for the approval of certain tests.
668.149 Special provisions for the approval of assessment
procedures for special populations for whom no tests are reasonably
available.
668.150 Agreement between the Secretary and a test publisher.
668.151 Administration of tests.
668.152 Administration of tests by assessment centers.
668.153 Administration of tests for students whose native language
is not English or for persons with disabilities.
668.154 Institutional accountability.
668.155 Transitional rule for the 1996-97 award year.
668.156 Approved State process.

Subpart J--Approval of Independently Administered Tests;
Specification of Passing Score; Approval of State Process


Sec. 668.141 Scope.

(a) This subpart sets forth the provisions under which a student
who has neither a high school diploma nor its recognized equivalent may
become eligible to receive Title IV, HEA program funds by--
(1) Achieving a passing score, specified by the Secretary, on an
independently administered test approved by the Secretary under this
subpart; or
(2) Being enrolled in an eligible institution that participates in
a State process approved by the Secretary under this subpart.
(b) Under this subpart, the Secretary sets forth--

[[Page 61839]]

(1) The procedures and criteria the Secretary uses to approve
tests;
(2) The basis on which the Secretary specifies a passing score on
each approved test;
(3) The procedures and conditions under which the Secretary
determines that an approved test is independently administered; and
(4) The procedures and conditions under which the Secretary
determines that a State process demonstrates that students in the
process have the ability to benefit from the education and training
being offered to them.

(Authority: 20 U.S.C. 1091(d))


Sec. 668.142 Special definitions.

The following definitions apply to this subpart:
Assessment center: A center that--
(1) Is located at an eligible institution that provides two-year or
four-year degrees, or qualifies as an eligible public vocational
institution, i.e. a ``postsecondary vocational institution;''
(2) Is responsible for gathering and evaluating information about
individual students for multiple purposes, including appropriate course
placement;
(3) Is independent of the admissions and financial aid processes at
the institution at which it is located;
(4) Is staffed by professionally trained personnel; and
(5) Does not have as its primary purpose the administration of
ability-to-benefit tests.
Computer-based test: A test taken by a student on a computer and
scored by a computer.
Disabled student: A student who has a physical or mental impairment
that substantially limits one or more major life activities, has a
record of such an impairment, or is regarded as having such an
impairment.
General learned abilities: Cognitive operations, such as deductive
reasoning, reading comprehension, or translation from graphic to
numerical representation, that may be learned in both school and non-
school environments.
Non-native speaker of English: A person whose first language is not
English and who is not fluent in English.
Secondary school level: As applied to ``content,'' ``curricula,''
or ``basic verbal and quantitative skills,'' refers to basic knowledge
or skills generally learned in the 9th through 12th grades in United
States secondary schools.
Test administrator: An individual who may give tests under this
subpart.
Test item: A question on a test.
Test publisher: An individual, organization, or agency that owns a
registered copyright of a test, or is licensed by the copyright holder
to sell or distribute a test.

(Authority: 20 U.S.C. 1091(d))


Sec. 668.143. Approval of State tests or assessments.

(a) The Secretary approves tests or other assessments submitted by
a State that the State uses to measure a student's skills and abilities
for the purpose of determining whether the student has the skills and
abilities the State expects of a high school graduate in that State.
(b) The Secretary approves passing scores or other methods of
evaluation established by the State for each test or assessment
described in paragraph (a) of this section.
(c) If the Secretary approves a State's tests and assessments and
the passing scores on those tests and assessments under paragraphs (a)
and (b) of this section, that test or assessment may be used, for
purposes of section 484(d) of the HEA, only for students who attend
eligible institutions located in that State.
(d) If a State wishes to have the Secretary approve its tests or
assessments under this section, the State shall--
(1) Submit to the Secretary those tests and assessments, its
passing scores on those tests and assessments, and the educational
standards those tests and assessments measure at such time and in such
manner as the Secretary may prescribe;
(2) Provide the Secretary with an explanation of how the tests,
assessments, and passing scores are appropriate in light of the State's
educational standards; and
(3) Provide the Secretary with an assurance that the tests and
assessments will be administered in an independent, fair, and secure
manner.

(Authority: 20 U.S.C. 1091(d))


Sec. 668.144 Application for test approval.

Except as provided in Sec. 668.143--
(a) The Secretary only reviews tests under this subpart that are
submitted by the publisher of that test;
(b) A test publisher that wishes to have its test approved by the
Secretary under this subpart must submit an application to the
Secretary at such time and in such manner as the Secretary may
prescribe. The application shall contain all the information necessary
for the Secretary to approve the test under this subpart, including but
not limited to, the information contained in this section; and
(c) A test publisher shall include with its application--
(1) A summary of the precise editions, forms, levels, and (if
applicable) sub-tests and abbreviated tests for which approval is being
sought;
(2) The name, address, and telephone number of a contact person to
whom the Secretary may address inquiries;
(3) Each edition and form of the test for which the publisher
requests approval;
(4) The distribution of test scores for each edition, form, level,
sub-test, or partial battery, for which approval is sought, that allows
the Secretary to prescribe the passing score for each test in
accordance with Sec. 668.147;
(5) Documentation of test development, including a history of the
test's use;
(6) Norming data and other evidence used in determining the
distribution of test scores;
(7) Material that defines the content domains addressed by the
test;
(8) For tests first published five years or more before the date
submitted to the Secretary for review and approval, documentation of
periodic reviews of the content and specifications of the test to
ensure that the test continues to reflect secondary school level verbal
and quantitative skills;
(9) If a test has been revised from the most recent edition
approved by the Secretary, an analysis of the revisions, including the
reasons for the revisions, the implications of the revisions for the
comparability of scores on the current test to scores on the previous
test, and data from validity studies of the test undertaken subsequent
to the revisions;
(10) A description of the manner in which test-taking time was
determined in relation to the content representativeness requirements
in Sec. 668.146(b)(2), and an analysis of the effects of time on
performance;
(11) A technical manual that includes--
(i) An explanation of the methodology and procedures for measuring
the reliability of the test;
(ii) Evidence that different forms of the test, including, if
applicable, short forms, are comparable in reliability;
(iii) Other evidence demonstrating that the test permits consistent
assessment of individual skill and ability;
(iv) Evidence that the test was normed using--
(A) Groups that were of sufficient size to produce defensible
standard errors of the mean and were not disproportionately composed of
any race or gender; and
(B) A contemporary population representative of persons who are
beyond the usual age of compulsory school attendance in the United
States;

[[Page 61840]]

(v) Documentation of the level of difficulty of the test;
(vi) Unambiguous scales and scale values so that standard errors of
measurement can be used to determine statistically significant
differences in performance; and
(vii) Additional guidance on the interpretation of scores resulting
from any modifications of the tests for persons with documented
disabilities.
(12) The manual provided to test administrators containing
procedures and instructions for test security and administration, and
the forwarding of tests to the test publisher;
(13) An analysis of the item-content of each edition, form, level,
and (if applicable) sub-test to demonstrate compliance with the
required secondary school level criterion specified in Sec. 668.146(b);
(14) For performance-based tests or tests containing performance-
based sections, a description of the training or certification required
of test administrators and scorers by the test publisher;
(15) A description of retesting procedures and the analysis upon
which the criteria for retesting are based; and
(16) Other evidence establishing the test's compliance with the
criteria for approval of tests as provided in Sec. 668.146.

(Authority: 20 U.S.C. 1091(d))


Sec. 668.145 Test approval procedures.

Except as provided in Sec. 668.143--
(a)(1) When the Secretary receives a complete application from a
test publisher, the Secretary selects experts in the field of
educational testing and assessment, who possess appropriate advanced
degrees and experience in test development or psychometric research, to
determine whether the test meets the requirements for test approval
contained in Secs. 668.146, 668.147, 668.148, or 668.149, as
appropriate, and to advise the Secretary of their determinations;
(2) If the test involves a language other than English, the
Secretary selects at least one individual described in paragraph (a)(1)
of this section who is fluent in the language in which the test is
written to advise the Secretary on whether the test meets the
additional criteria, provisions, and conditions for test approval
contained in Secs. 668.148 and 668.149;
(b) The Secretary determines whether the test publisher's test
meets the criteria and requirements for approval after taking the
advice of the experts into account;
(c)(1) If the Secretary determines that a test satisfies the
criteria and requirements for test approval, the Secretary notifies the
test publisher of the Secretary's decision, and publishes the name of
the test and the passing scores in the Federal Register.
(2) If the Secretary determines that a test does not satisfy the
criteria and requirements for test approval, the Secretary notifies the
test publisher of the Secretary's decision, and the reasons why the
test did not meet those criteria and requirements.
(3) The test publisher may request that the Secretary reevaluate
the Secretary's decision. Such a request must be accompanied by--
(i) Documentation and information that address the reasons for the
non-approval of the test; and
(ii) An analysis of why the information and documentation submitted
meet the criteria and requirements for test approval notwithstanding
the Secretary's earlier decision to the contrary.
(d)(1) The Secretary approves a test for a period not to exceed
five years from the date of the Secretary's written notice to the test
publisher.
(2) The Secretary extends the approval period of a test to include
the period of review if the test publisher re-submits the test for
review and approval under Sec. 668.144 at least six months before the
date on which the test approval is scheduled to expire;
(e) The approval of a test may be withdrawn if the Secretary
determines that the publisher violated any terms of the agreement
described in Sec. 668.150, or that the information the publisher
submitted as a basis for approval of the test was inaccurate;
(f) If the Secretary revokes approval of a previously approved
test, the Secretary publishes a notice of that revocation in the
Federal Register. The revocation becomes effective 120 days from the
date the notice of revocation is published in the Federal Register; and
(g) For test batteries that contain multiple sub-tests measuring
content domains other than verbal and quantitative domains, the
Secretary reviews only those subtests covering verbal and quantitative
domains.

(Authority: 20 U.S.C. 1091(d))


Sec. 668.146 Criteria for approving tests.

Except as provided in Sec. 668.143--
(a) Except as provided in Sec. 668.148, the Secretary approves a
test under this subpart if the test meets the criteria set forth in
paragraph (b) of this section and the test publisher satisfies the
requirements set forth in paragraph (c) of this section;
(b) To be approved under this subpart, a test shall--
(1) Assess secondary school level basic verbal and quantitative
skills and general learned abilities;
(2) Sample the major content domains of secondary school level
verbal and quantitative skills with sufficient numbers of questions
to--
(i) Adequately represent each domain; and
(ii) Permit meaningful analyses of item-level performance by
students who are representative of the contemporary population beyond
the age of compulsory school attendance and have earned a high school
diploma;
(3) Require appropriate test-taking time to permit adequate
sampling of the major content domains described in paragraph (a)(2) of
this section;
(4) Have all forms (including short forms) comparable in
reliability;
(5) If the test is revised, have new scales, scale values, and
scores that are demonstrably comparable to the old scales, scale
values, and scores; and
(6) Meet all primary and applicable conditional and secondary
standards for test construction provided in the 1985 edition of the
Standards for Educational and Psychological Testing, with amendments
dated June 2, 1989, prepared by a joint committee of the American
Educational Research Association, the American Psychological
Association, and the National Council on Measurement in Education
incorporated by reference in this section. Incorporation by reference
of this document has been approved by the Director of the Office of the
Federal Register pursuant to the Director's authority under 5 U.S.C.
552(a) and 1 CFR part 51. The incorporated document is on file at the
Department of Education, Office of Postsecondary Education, Room 4318,
ROB-3, 600 Independence Avenue, S.W., Washington, D.C. 20202 and at the
Office of the Federal Register, 800 North Capitol Street, N.W., Suite
700, Washington, DC. The standards may be obtained from the American
Psychological Association, Inc., 750 First Street, N.W., Washington, DC
20026.
(7) Have publisher's guidelines for retesting, including time
between test-taking, be based on empirical analyses that are part of
the studies of test reliability; and
(c) In order for a test to be approved under this subpart, a test
publisher shall--
(1) Include in the test booklet or package--
(i) Clear, specific, and complete instructions for test
administration, including information for test takers on

[[Page 61841]]
the purpose, timing, and scoring of the test; and
(ii) Sample questions representative of the content and average
difficulty of the test;
(2) Have two or more secure, equated, alternate forms of the test;
(3) Except as provided in Secs. 668.148 and 668.149, provide tables
of distributions of test scores which clearly indicate the mean score
and standard deviation for high school graduates who have taken the
test within three years prior to the date on that the test is submitted
to the Secretary for approval under Sec. 668.144;
(4) Norm the test with--
(i) Groups that were of sufficient size to produce defensible
standard errors of the mean and were not disproportionately composed of
any race or gender; and
(ii) A contemporary population representative of persons who are
beyond the usual age of compulsory school attendance in the United
States; and
(5) If test batteries include sub-tests assessing different verbal
and/or quantitative skills, a distribution of test scores as described
in paragraph (c)(3) of this section that allows the Secretary to
prescribe either--
(i) A passing score for each sub-test; or
(ii) One composite passing score for verbal skills and one
composite passing score for quantitative skills.

(Authority: 20 U.S.C. 1091(d))


Sec. 668.147 Passing scores.

Except as provided in Secs. 668.143, 668.148 and 668.149, to
demonstrate that a test taker has the ability to benefit from the
education and training offered, the Secretary specifies that the
passing score on each approved test is one standard deviation below the
mean for students with high school diplomas who have taken the test
within three years before the date on which the test is submitted to
the Secretary for approval.

(Authority; 20 U.S.C. 1091(d))


Sec. 668.148 Additional criteria for the approval of certain tests.

Except as provided in Sec. 668.143--
(a) In addition to satisfying the criteria in Sec. 668.146, to be
approved by the Secretary, a test or a test publisher must meet the
following criteria, if applicable:
(1) In the case of a test that is performance-based, or includes
performance-based sections, for measuring writing, speaking, listening,
or quantitative problem-solving skills, the test publisher must
provide--
(i) A minimum of four parallel forms of the test; and
(ii) A description of the training provided to test administrators,
and the criteria under which trained individuals are certified to
administer and score the test.
(2) In the case of a test developed for a non-native speaker of
English who is enrolled in a program that is taught in his or her
native language, the test must be--
(i) Linguistically accurate and culturally sensitive to the
population for which the test is designed, regardless of the language
in which the test is written;
(ii) Supported by documentation detailing the development of
normative data;
(iii) If translated from an English version, supported by
documentation of procedures to determine its reliability and validity
with reference to the population for which the translated test was
designed;
(iv) Developed in accordance with guidelines provided in the 1985
edition of the ``Testing Linguistic Minorities'' section of the
Standards for Educational and Psychological Testing, with amendments
dated June 2, 1989, prepared by a joint committee of the American
Educational Research Association, the American Psychological
Association, and the National Council on Measurement in Education
incorporated by reference in this section. Incorporation by reference
of this document has been approved by the Director of the Office of the
Federal Register pursuant to the Director's authority under 5 U.S.C.
552(a) and 1 CFR part 51. The incorporated document is on file at the
Department of Education, Office of Postsecondary Education, Room 4318,
ROB-3, 600 Independence Avenue, S.W., Washington, D.C. 20202 and at the
Office of the Federal Register, 800 North Capitol Street, N.W., Suite
700, Washington, DC. The standards may be obtained from the American
Psychological Association, Inc., 750 First Street, N.W., Washington, DC
20026; and
(v)(A) If the test is in Spanish, accompanied by a distribution of
test scores that clearly indicates the mean score and standard
deviation for Spanish-speaking students with high school diplomas who
have taken the test within 5 years before the date on which the test is
submitted to the Secretary for approval; and
(B) If the test is in a language other than Spanish, accompanied by
a recommendation for a provisional passing score based upon performance
of a sample of test takers representative of the intended population
and large enough to produce stable norms.
(3) In the case of a test that is modified for use for persons with
disabilities, the test publisher must--
(i) Follow guidelines provided in the ``Testing People Who Have
Handicapping Conditions'' section of the Standards for Educational and
Psychological Testing;
(ii) Provide documentation of the appropriateness and feasibility
of the modifications relevant to test performance; and
(iii) Recommend passing score(s) based on the previous performance
of test-takers.
(4) In the case of a computer-based test, the test publisher must--
(i) Provide documentation to the Secretary that the test complies
with the basic principles of test construction and standards of
reliability and validity as promulgated in the Standards for
Educational and Psychological Testing, as well as specific guidelines
set forth in the American Psychological Association's Guidelines for
Computer-based Tests and Interpretations (1986);
(ii) Provide test administrators with instructions for
familiarizing test takers with computer hardware prior to test-taking;
and
(iii) Provide two or more parallel, equated forms of the test, or,
if parallel forms are generated from an item pool, provide
documentation of the methods of item selection for alternate forms; and
(b) If a test is designed solely to measure the English language
competence of non-native speakers of English--
(1) The test must meet the criteria set forth in
Sec. 668.146(b)(6), and Sec. 668.146 (c)(1), (c)(2), and (c)(4); and
(2) The test publisher must recommend a passing score based on the
mean score of test takers beyond the age of compulsory school
attendance who entered U.S. high school equivalency programs, formal
training programs, or bilingual vocational programs.

(Authority: 20 U.S.C. 1091(d))


Sec. 668.149 Special provisions for the approval of assessment
procedures for special populations for whom no tests are reasonably
available.

If no test is reasonably available for persons with disabilities or
students whose native language is not English and who are not fluent in
English, so that no test can be approved under Secs. 668.146 or 668.148
for these students, the following procedures apply:
(a) Persons with disabilities. (1) The Secretary considers a
modified test or testing procedure, or instrument that

[[Page 61842]]
has been scientifically developed specifically for the purpose of
evaluating the ability to benefit from postsecondary training or
education of disabled students to be an approved test for purposes of
this subpart provided that the testing procedure or instrument measures
both basic verbal and quantitative skills at the secondary school
level.
(2) The Secretary considers the passing scores for these testing
procedures or instruments to be those recommended by the test
developer, provided that the test administrator--
(i) Uses those procedures or instruments;
(ii) Maintains appropriate documentation, including a description
of the procedures or instruments, their content domains, technical
properties, and scoring procedures; and
(iii) Observes recommended passing scores.
(b) Students whose native language is not English. The Secretary
considers a test in a student's native language for a student whose
native language is not English to be an approved test under this
subpart if--
(1) The Secretary has not approved any test in that native
language;
(2) The test was not previously rejected for approval by the
Secretary;
(3) The test measures both basic verbal and quantitative skills at
the secondary school level; and
(4) The passing scores and the methods for determining the passing
scores are fully documented.

(Authority: 20 U.S.C. 1091(d))


Sec. 668.150 Agreement between the Secretary and a test publisher.

(a) If the Secretary approves a test under this subpart, the test
publisher must enter into an agreement with the Secretary that contains
the provisions set forth in paragraph (b) of this section before an
institution may use the test to determine a student's eligibility for
Title IV, HEA program funds.
(b) The agreement between a test publisher and the Secretary
provides that the test publisher shall--
(1) Allow only test administrators that it certifies to give its
test;
(2) Certify test administrators who have--
(i) The necessary training, knowledge, and skill to test students
in accordance with the test publisher's testing requirements; and
(ii) The ability and facilities to keep its test secure against
disclosure or release;
(3) Decertify a test administrator for a period that coincides with
the period for which the publisher's test is approved if the test
publisher finds that the test administrator--
(i) Has repeatedly failed to give its test in accordance with the
publisher's instructions;
(ii) Has not kept the test secure;
(iii) Has compromised the integrity of the testing process; or
(iv) Has given the test in violation of the provisions contained in
Sec. 668.151;
(4) Score a test answer sheet that it receives from a test
administrator;
(5) If a computer-based test, provide the test administrator with
software that will:
(i) Immediately generate a score report for each test taker;
(ii) Allow the test administrator to send to the test publisher a
secure write-protected diskette copy of the test taker's performance on
each test item and the test taker's test scores; and
(iii) Prohibit any changes in test taker responses or test scores.
(6) Promptly send to the student and the institution the student
indicated he or she is attending or scheduled to attend a notice
stating the student's score for the test and whether or not the student
passed the test;
(7) Keep for a period of three years each test answer sheet or
electronic record forwarded for scoring and all other documents
forwarded by the test administrator with regard to the test;
(8) Three years after the date the Secretary approves the test and
for each subsequent three-year period, analyze the test scores of
students to determine whether the test scores produce any irregular
pattern that raises an inference that the tests were not being properly
administered, and provide the Secretary with a copy of this analysis;
and
(9) Upon request, give the Secretary, a guaranty agency, or an
accrediting agency access to test records or other documents related to
an audit, investigation, or program review of the institution, test
publisher, or test administrator.
(c)(1) The Secretary may terminate an agreement with a test
publisher if the test publisher fails to carry out the terms of the
agreement described in paragraph (b) of this section.
(2) Before terminating the agreement, the Secretary gives the test
publisher the opportunity to show that it has not failed to carry out
the terms of its agreement.
(3) If the Secretary terminates an agreement with a test publisher
under this section, the Secretary notifies institutions through
publication in the Federal Register when they may no longer use the
publisher's test(s) for purposes of determining a student's eligibility
for Title IV, HEA program funds.

(Authority: 20 U.S.C. 1091(d))


Sec. 668.151 Administration of tests.

(a)(1) To establish a student's eligibility for Title IV, HEA
program funds under this subpart, if a student has not passed an
approved state test, under Sec. 668.143, an institution must select a
certified test administrator to give an approved test.
(2) An institution may use the results of an approved test to
determine a student's eligibility to receive Title IV, HEA programs
funds if the test was independently administered and properly
administered.
(b) The Secretary considers that a test is independently
administered if the test is--
(1) Given at an assessment center by a test administrator who is an
employee of the center; or
(2) Given by a test administrator who--
(i) Has no current or prior financial or ownership interest in the
institution, its affiliates, or its parent corporation, other than the
interest obtained through its agreement to administer the test, and has
no controlling interest in any other educational institution;
(ii) Is not a current or former employee of or consultant to the
institution, its affiliates, or its parent corporation, a person in
control of another institution, or a member of the family of any of
these individuals;
(iii) Is not a current or former member of the board of directors,
a current or former employee of or a consultant to a member of the
board of directors, chief executive officer, chief financial officer of
the institution or its parent corporation or at any other institution,
or a member of the family of any of the above individuals; and
(iv) Is not a current or former student of the institution.
(c) The Secretary considers that a test is not independently
administered if an institution--
(1) Compromises test security or testing procedures;
(2) Pays a test administrator a bonus, commission, or any other
incentive based upon the test scores or pass rates of its students who
take the test;
(3) Otherwise interferes with the test administrator's independence
or test administration.
(d) The Secretary considers that a test is properly administered if
the test administrator--
(1) Is certified by the test publisher to give the publisher's
test;
(2) Administers the test in accordance with instructions provided
by the test publisher, and in a manner that ensures the integrity and
security of the test;

[[Page 61843]]

(3) Makes the test available only to a test-taker, and then only
during a regularly scheduled test;
(4) Secures the test against disclosure or release;
(5) Submits the completed test to the test publisher within two
business days after test administration in accordance with the test
publisher's instructions; and
(6) Upon request, gives the Secretary, guaranty agency, licensing
agency, accrediting agency, and law enforcement agencies access to test
records or other documents related to an audit, investigation, or
program review of the institution, or test publisher.
(e) Except as provided in Sec. 668.152, a certified test
administrator may not score a test.
(f) A student who fails to pass a test approved under this subpart
may not retake the same form of the test for the period prescribed by
the test's publisher.
(g) An institution shall maintain a record for each student who
took a test under this subpart of--
(1) The test taken by the student;
(2) The date of the test; and
(3) The student's scores as reported by the test publisher,
assessment center, or State.

(Authority: U.S.C. 1091(d))


Sec. 668.152 Administration of tests by assessment centers.

(a)(1) If a test is given by an assessment center, the assessment
center shall properly administer the test as described in
Sec. 668.151(d).
(b)(1) Unless an agreement between a test publisher and an
assessment center indicates otherwise, an assessment center scores the
tests it gives and promptly notifies the institution and the student of
the student's score on the test and whether the student passed the
test.
(2) If the assessment center scores the test, it must provide
annually to the test publisher--
(i) All copies of completed tests; or
(ii) A report listing all test-takers' scores and institutions to
which the scores were sent.

(Authority: U.S.C. 1091(d))


Sec. 668.153 Administration of tests for students whose native
language is not English or for persons with disabilities.

Except as provided in Sec. 668.143--
(a) Students whose native language is not English. For a student
whose native language is not English and who is not fluent in English,
the institution shall use the following tests, as applicable:
(1) If the student is enrolled in a program conducted entirely in
his or her native language, the student must take a test approved under
Secs. 668.146 and 668.148(a)(2), or 668.149(b).
(2) If the student is enrolled in a program that is taught in
English with an ESL component, and the student is enrolled in that
program and the ESL component, the student must take either an ESL test
approved under Sec. 668.148(b), or a test in the student's native
language approved under Secs. 668.146, 668.148 or 668.149.
(3) If the student is enrolled in a program that is taught in
English without an ESL component, or the student does not enroll in the
ESL component if the institution offers such a component, the student
must take a test in English approved under Sec. 668.146.
(4) If the student enrolls in an ESL program, the student must take
an ESL test approved under Sec. 668.148(b); and
(b) Persons with disabilities. (1) An institution shall use a test
described in Sec. 668.148(a)(3) or 668.149(a) for a student with a
documented impairment who has neither a high school diploma nor its
equivalent and who is applying for Title IV, HEA program funds.
(2) The test must reflect the student's skills and general learned
abilities rather than reflect the student's impairment.
(3) The institution shall document that a student is disabled and
unable to be evaluated by the use of a conventional test from the list
of tests approved by the Secretary.
(4) Documentation of a student's impairment may be satisfied by--
(i) A written determination, including a diagnosis and recommended
testing accommodations, by a licensed psychologist or medical
physician; or
(ii) A record of such a determination by an elementary or secondary
school or a vocational rehabilitation agency, including a diagnosis and
recommended testing accommodations.

(Authority: U.S.C. 1091(d))


Sec. 668.154 Institutional accountability.

An institution shall be liable for the Title IV, HEA program funds
disbursed to a student whose eligibility is determined under this
subpart only if the institution--
(a) Used a test administrator who was not independent of the
institution at the time the test was given;
(b) Compromises the testing process in any way; or
(c) Is unable to document that the student received a passing score
on an approved test.

(Authority: U.S.C. 1091(d))


Sec. 668.155 Transitional rule for the 1996-97 award year.

(a) Notwithstanding any other provision of this part, an
institution may continue to base an eligibility determination under
section 484(d) of the HEA for a student on a test that was an approved
test as of June 30, 1996, and the passing score on that test, until 60
days after the Secretary publishes in the Federal Register the name of
an approved test and the passing score on that test that is appropriate
for that student.
(b) If an institution properly based a student's eligibility
determination for purposes of section 484(d) of the HEA on a test and
passing score that was in effect on June 30, 1996, the institution does
not have to redetermine the student's eligibility based upon a test and
passing score that was approved under Secs. 668.143 through 668.149.

(Authority: U.S.C. 1091(d))


Sec. 668.156 Approved State process.

(a)(1) A State that wishes the Secretary to consider its State
process as an alternative to achieving a passing score on an approved,
independently administered test for the purpose of determining a
student's eligibility for Title IV, HEA program funds must apply to the
Secretary for approval of that process.
(2) To be an approved State process, the State process does not
have to include all the institutions located in that State, but must
indicate which institutions are included.
(b) The Secretary approves a State's process if--
(1) The State administering the process can demonstrate that the
students it admits under that process without a high school diploma or
its equivalent, who enroll in participating institutions have a success
rate as determined under paragraph (h) of this section that is within
95 percent of the success rate of students with high school diplomas;
and
(2) The State's process satisfies the requirements contained in
paragraphs (c) and (d) of this section.
(c) A State process must require institutions participating in the
process to provide each student they admit without a high school
diploma or its recognized equivalent with the following services--
(1) Orientation regarding the institution's academic standards and
requirements, and student rights;
(2) Assessment of each student's existing capabilities through
means other than a single standardized test;
(3) Tutoring in basic verbal and quantitative skills, if
appropriate;

[[Page 61844]]

(4) Assistance in developing educational goals;
(5) Counseling, including counseling regarding the appropriate
class level for that student given the student's individual's
capabilities; and
(6) Follow-up by teachers and counselors regarding the student's
classroom performance and satisfactory progress toward program
completion.
(d) A State process must--
(1) Monitor on an annual basis each participating institution's
compliance with the requirements and standards contained in the State's
process;
(2) Require corrective action if an institution is found to be in
noncompliance with the State process requirements; and
(3) Terminate an institution from the State process if the
institution refuses or fails to comply with the State process
requirements.
(e)(1) The Secretary responds to a State's request for approval of
its State's process within six months after the Secretary's receipt of
that request. If the Secretary does not respond by the end of six
months, the State's process becomes effective.
(2) An approved State process becomes effective for purposes of
determining student eligibility for Title IV, HEA program funds under
this subpart six months after the date on which the State submits the
process to the Secretary for approval, if the Secretary approves, or
does not disapprove, the process during that six month period.
(f) The Secretary approves a State process for a period not to
exceed five years.
(g)(1) The Secretary withdraws approval of a State process if the
Secretary determines that the State process violated any terms of this
section or that the information that the State submitted as a basis for
approval of the State process was inaccurate.
(2) The Secretary provides a State with the opportunity to contest
a finding that the State process violated any terms of this section or
that the information that the State submitted as a basis for approval
of the State process was inaccurate.
(h) The State shall calculate the success rates as referenced in
paragraph (b) of this section by--
(1) Determining the number of students with high school diplomas
who, during the applicable award year described in paragraph (i) of
this section, enrolled in participating institutions and--
(i) Successfully completed education or training programs;
(ii) Remained enrolled in education or training programs at the end
of that award year; or
(iii) Successfully transferred to and remained enrolled in another
institution at the end of that award year;
(2) Determining the number of students with high school diplomas
who enrolled in education or training programs in participating
institutions during that award year;
(3) Determining the number of students calculated in paragraph
(h)(2) of this section who remained enrolled after subtracting the
number of students who subsequently withdrew or were expelled from
participating institutions and received a 100 percent refund of their
tuition under the institutions' refund policies;
(4) Dividing the number of students determined in paragraph (h)(1)
of this section by the number of students determined in paragraph
(h)(3) of this section;
(5) Making the calculations described in paragraphs (h)(1) through
(h)(4) of this section for students without a high school diploma or
its recognized equivalent who enrolled in participating institutions.
(i) For purposes of paragraph (h) of this section, the applicable
award year is the latest complete award year for which information is
available that immediately precedes the date on which the State
requests the Secretary to approve its State process, except that the
award year selected must be one of the latest two completed award years
preceding that application date.

(Authority: 20 U.S.C. 1091(d))

[FR Doc. 95-29125 Filed 11-30-95; 8:45 am]
BILLING CODE 4000-01-P



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Last Modified: 08/18/1998