Proposed Rulemaking Student Eligibility. Comments on this NPRM must be received no later than September 14, 1999.

[Federal Register: July 16, 1999 (Volume 64, Number 136)]

[Proposed Rules]               

[Page 38503-38508]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr16jy99-51]                         



[[Page 38503]]


_______________________________________________________________________


Part II


_______________________________________________________________________






Department of Education






_______________________________________________________________________




34 CFR Part 668




Student Assistance General Provisions; Proposed Rule



[[Page 38504]]




DEPARTMENT OF EDUCATION


34 CFR Part 668


RIN 1840-AC73



Student Assistance General Provisions


AGENCY: Department of Education.


ACTION: Notice of proposed rulemaking.


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


SUMMARY: The Secretary proposes to amend the regulations governing 

student eligibility for the student financial assistance programs 

authorized under Title IV of the Higher Education Act of 1965, as 

amended (Title IV, HEA programs). These programs include the Federal 

Pell Grant Program, the campus-based programs (Federal Perkins Loan, 

Federal Work-Study (FWS), and Federal Supplemental Educational 

Opportunity Grant (FSEOG) Programs), the William D. Ford Federal Direct 

Loan (Direct Loan) Program, the Federal Family Education Loan (FFEL) 

Program, and the Leveraging Educational Assistance Partnership (LEAP) 

Program (formerly called the State Student Incentive Grant (SSIG) 

Program). The proposed regulations implement changes made to the Higher 

Education Act of 1965, as amended (HEA), by the Higher Education 

Amendments of 1998 (1998 Amendments). Most of the proposed changes 

simply conform current regulatory provisions to the statutory changes.


DATES: We must receive your comments on or before September 14, 1999.


ADDRESSES: Address all comments about these proposed regulations to 

Lloyd Horwich, U.S. Department of Education, P.O. Box 23272, 

Washington, DC 20202-3272. If you prefer to send your comments through 

the Internet, use the following address: senprm@ed.gov.


FOR FURTHER INFORMATION CONTACT: Lloyd Horwich. Telephone (202) 708-

8242. If you use a telecommunications device for the deaf (TDD), you 

may call the Federal Information Relay Service (FIRS) at 1-800-877-

8339.

    Individuals with disabilities may obtain this document in an 

alternate format (e.g., Braille, large print, audiotape, or computer 

diskette) on request to the contact person listed in the preceding 

paragraph.


SUPPLEMENTARY INFORMATION:


Invitation to Comment


    We invite you to submit comments regarding these proposed 

regulations. To ensure that your comments have maximum effect in 

developing the final regulations, we urge you to identify clearly the 

specific section or sections of the proposed regulations that each of 

your comments addresses and to arrange your comments in the same order 

as the proposed regulations.

    We invite you to assist us in complying with the specific 

requirements of Executive Order 12866 and its overall requirement of 

reducing regulatory burden that might result from these proposed 

regulations. Please let us know of any further opportunities we should 

take to reduce potential costs or increase potential benefits while 

preserving the effective and efficient administration of the program.

    During and after the comment period, you may inspect all public 

comments about these proposed regulations at Regional Office Building 

3, 7th and D Streets, SW, Room 3045, Washington, DC, between 8:30 a.m. 

and 4:00 p.m., Eastern time, Monday through Friday (excluding Federal 

holidays).


Assistance to Individuals With Disabilities in Reviewing the Rulemaking 

Record


    On request, we will supply an appropriate aid, such as a reader or 

print magnifier, to an individual with a disability who needs 

assistance to review the comments or other documents in the public 

rulemaking record for these proposed regulations. If you want to 

schedule an appointment for this type of aid, you can call (202) 205-

8113 or (202) 260-9895. If you use a TDD, you may call the Federal 

Information Relay Service at 1-800-877-8339.


Summary of Proposed Changes


    The Secretary proposes to revise the current Student Assistance 

General Provisions, 34 CFR part 668, concerning student eligibility for 

financial assistance programs authorized under Title IV, HEA. The 

revisions implement changes made by the 1998 Amendments (Public Law 

105-244, enacted October 7, 1998).


Negotiated Rulemaking Process


    Section 492 of the HEA requires that, before publishing any 

proposed regulations to implement programs under Title IV of the Act, 

the Secretary obtain public involvement in the development of the 

proposed regulations. After obtaining advice and recommendations, the 

Secretary must conduct a negotiated rulemaking process to develop the 

proposed regulations. All published proposed regulations must conform 

to agreements resulting from the negotiated rulemaking process unless 

the Secretary reopens the negotiated rulemaking process or provides a 

written explanation to the participants in that process why the 

Secretary has decided to depart from the agreements.

    To obtain public involvement in the development of the proposed 

regulations, we published a notice in the Federal Register (63 FR 

59922, November 6, 1998) requesting advice and recommendations from 

interested parties concerning what regulations were necessary to 

implement Title IV of the HEA. We also invited advice and 

recommendations concerning which regulated issues should be subjected 

to a negotiated rulemaking process. We further requested advice and 

recommendations concerning ways to prioritize the numerous issues in 

Title IV, in order to meet statutory deadlines. Additionally, we 

requested advice and recommendations concerning how to conduct the 

negotiated rulemaking process, given the time available and the number 

of regulations that needed to be developed.

    In addition to soliciting written comments, we held three public 

hearings and several informal meetings to give interested parties an 

opportunity to share advice and recommendations with the Department. 

The hearings were held in Washington, DC, Chicago, and Los Angeles, and 

we posted transcripts of those hearings to the Department's Information 

for Financial Aid Professionals website (http://ifap.ed.gov).

    We then published a second notice in the Federal Register (63 FR 

71206, December 23, 1998) to announce the Department's intention to 

establish four negotiated rulemaking committees to draft proposed 

regulations implementing Title IV of the HEA. The notice announced the 

organizations or groups believed to represent the interests that should 

participate in the negotiated rulemaking process and announced that the 

Department would select participants for the process from nominees of 

those organizations or groups. We requested nominations for additional 

participants from anyone who believed that the organizations or groups 

listed did not adequately represent the list of interests outlined in 

section 492 of the HEA. Once the four committees were established, they 

met to develop proposed regulations over the course of several months, 

beginning in January.

    The proposed regulations contained in this NPRM reflect the final 

consensus of Committee III, which was made up of the following members:


Accrediting Commission of Career Schools and Colleges of Technology

American Association of Collegiate Registrars and Admissions 

Officers


[[Page 38505]]


American Association of Community Colleges

American Association of Cosmetology Schools

American Association of State Colleges and Universities

American Council on Education

Association of American Universities

Career College Association

Coalition of Higher Education Assistance Organizations

Education Finance Council

Legal Services Counsel/Legal Aid (a coalition)

National Association of College and University Business Officers

National Association for Equal Opportunity in Higher Education

National Association of Graduate/Professional Students

National Association of Independent Colleges and Universities

National Association of State Student Grant and Aid Programs/

National Council of Higher Education Loan Programs (a coalition)

National Association of State Universities and Land-Grant Colleges

National Association of Student Financial Aid Administrators

National Direct Student Loan Coalition

The College Board

The College Fund/United Negro College Fund

United States Department of Education

United States Student Association

U.S. Public Interest Research Group

    As stated in the committee protocols, consensus means that there 

must be no dissent by any member in order for the committee to be 

considered to have reached agreement. Consensus was reached on all of 

the proposed regulations in this document.


Section 668.32 Student Eligibility--General


Home-Schooled Students


    Section 484(d) of the HEA, as amended by the 1998 Amendments, 

allows a student who completes a secondary school education in a home 

school that is treated as a home school or private school under State 

law to be eligible to receive Title IV, HEA program funds. The 

Secretary proposes to amend Sec. 668.32(e) to reflect that change.

    The negotiating committee discussed the language of the 1998 

Amendments, and how different States oversee home schools, and 

concluded that the statute would be implemented best by not adding any 

additional eligibility requirements for a home-schooled student beyond 

his or her State's home-school completion requirements.

    Under proposed Sec. 668.32(e)(4), to be eligible to receive Title 

IV, HEA program funds, a home-schooled student must satisfy the home-

school completion requirements of the State in which the student was 

home-schooled. Thus, if a State requires a home-schooled student to 

obtain a secondary school completion credential for home-school study 

that is more than an attestation that the student was exempt from the 

State's mandatory school attendance law, the student must obtain such a 

credential to be eligible for Title IV, HEA program funds. If the State 

does not require the student to obtain such a credential, the student 

will satisfy Sec. 668.32(e)(4) based on the exemption from the State's 

mandatory school attendance law.

    For purposes of Title IV, HEA program aid, the Secretary will allow 

a home-schooled student to self-certify his or her eligibility in the 

same way a high school graduate or GED recipient may.

Statement of Educational Purpose

    The proposed regulations amend Sec. 668.32(h), which governs a 

student's filing of his or her Statement of Educational Purpose, to 

comply with changes made to the HEA by the 1998 Amendments. Previously, 

a student who received a loan under the FFEL program had to file the 

Statement with the lender. Under proposed Sec. 668.32(h), a student 

simply would be required to file the Statement with the Secretary.

Technical Corrections and Cross-References

    The Secretary proposes to amend Sec. 668.32(k)(7) to reflect the 

name-change of the SSIG program to the LEAP program. The Secretary 

proposes to add as Sec. 668.32(l) a cross-reference that reflects the 

student eligibility criterion concerning drug convictions added by the 

1998 Amendments and implemented by the proposed addition of 

Sec. 668.40.


Section 668.38  Enrollment in Telecommunications and Correspondence 

Courses


    Prior to the 1998 Amendments, section 484(l) of the HEA provided 

that a student enrolled in a telecommunications course would not be 

considered to be enrolled in a correspondence course under certain 

circumstances, including that the student was enrolled in a program 

that led to an associate, bachelor, or graduate degree. The 1998 

Amendments amended section 484(l) by adding another category of 

students to be similarly treated: students who are enrolled in programs 

of one academic year or longer that lead to a certificate. The proposed 

regulations amend Sec. 668.38(b) to reflect that change.

    Thus, under proposed Sec. 668.38(b), the Secretary does not 

consider a student enrolled in a telecommunications course at an 

institution of higher education (as defined in Sec. 668.38(b)(2)) to be 

enrolled in a correspondence course, if the student is enrolled in a 

program described in the preceding paragraph, and the number of 

telecommunications and correspondence courses offered by the 

institution is less than half the total number of courses offered by 

the institution.

    The 1998 Amendments also restricted the type of institution at 

which telecommunications courses can be considered not to be 

correspondence courses. Proposed Sec. 668.38(b)(2) reflects that 

restriction. It defines an institution of higher education as one which 

is not described in section 521(4)(C) of the Carl D. Perkins Vocational 

and Applied Technology Education Act, and at which at least half of the 

programs of study lead to an associate, bachelor, or graduate degree. 

If the student is enrolled in telecommunications courses at an 

institution other than an institution of higher education as defined by 

proposed Sec. 668.38(b)(2), those courses are considered correspondence 

courses.


Section 668.40  Suspension of Eligibility for Drug-Related Offenses


    The 1998 Amendments added section 484(r) to the HEA. Under that 

subsection, a student who has been convicted under Federal or State law 

of possession or sale of a controlled substance, regardless of when the 

conviction occurred, is ineligible for Title IV, HEA program funds for 

the period specified in that subsection.

    The periods of ineligibility, which begin as of the date of the 

conviction, are as follows:

    If convicted of an offense involving the possession of a controlled 

substance, the ineligibility period is:


First offense............................  1 year.

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

Second offense...........................  2 years.

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

Third offense............................  Indefinite.

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


    If convicted of an offense involving the sale of a controlled 

substance, the ineligibility period is:


First offense............................  2 year.

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

Second offense...........................  Indefinite.

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


    The Secretary proposes to add Sec. 668.40(a) and (b) to implement 

those statutory provisions. Note that for purposes of determining a 

student's


[[Page 38506]]


eligibility for Title IV assistance, a conviction means a conviction 

that is on a student's record at the time the student's eligibility is 

being determined. Therefore, a conviction that was reversed, set aside, 

or removed from the student's record is not relevant.

    Because the statutory ineligibility periods begin on the date of 

conviction, if a student has been convicted of both possession and sale 

of a controlled substance and the two ineligibility periods overlap, 

the periods run concurrently for the time during which they overlap. 

The start of the ineligibility period for the later conviction is not 

postponed until the ineligibility period for the earlier conviction 

ends. For example, if a student is convicted on July 1, 2000 for the 

first time for possession of a controlled substance and convicted on 

January 1, 2001 for the first time for sale of a controlled substance, 

the student will regain eligibility on January 1, 2003.

    Section 484(r) of the HEA further provides that a student can 

regain eligibility, regardless of the number or type of convictions on 

the student's record, by successfully completing a drug rehabilitation 

program that complies with criteria established by the Secretary and 

that includes two unannounced drug tests. The proposed regulations 

establish criteria for an acceptable drug rehabilitation program in 

Sec. 668.40(d)(2). Under the proposed criteria, a drug rehabilitation 

program must (1) have received or be qualified to receive funds 

directly or indirectly under a Federal, State, or local government 

program, (2) be administered or recognized by a Federal, State, or 

local government agency or court, (3) have received or be qualified to 

receive payment directly or indirectly from a State-licensed insurance 

company, or (4) be administered or recognized by a State-licensed 

hospital, health clinic or medical doctor. The Secretary believes, and 

the rest of Committee III concurs, that these criteria would ensure the 

availability of a wide-range of opportunities for students to regain 

their eligibility, and that an acceptable drug rehabilitation program 

would have to be approved by an entity qualified to make such an 

assessment.

    Having reviewed the language of the new statutory provision and its 

legislative history, the Secretary believes, and the rest of Committee 

III concurs, that Congress intended the drug rehabilitation relief 

provision to be available at the same time students are subject to the 

loss of eligibility. Members of Congress specifically indicated in 

statements on the floor of Congress that students should be able to 

regain Title IV, HEA program eligibility if they complete a 

rehabilitation program. Since the HEA requires that acceptable 

rehabilitation programs comply with criteria prescribed by the 

Secretary in regulations and such regulations (as proposed in this 

NPRM) will not be effective until July 1, 2000, this new student 

eligibility provision will not be implemented until July 1, 2000. Until 

that time no student will be determined to be ineligible for Title IV 

assistance under the new provision.

    Nonetheless, a student's actions between now and the effective date 

of the regulations may affect eligibility. For example, a first 

conviction for possession of a controlled substance on February 1, 

2000, will make a student ineligible for Title IV assistance from July 

1, 2000--the effective date of the regulations--through January 31, 

2001--one year from the date of the conviction. If the conviction were 

the student's second, the student would not regain eligibility until 

February 1, 2002. Because of the serious consequences to some students 

of the new provision and because there are certain actions that they 

could take to mitigate those consequences, the Secretary strongly 

encourages, but is not requiring, institutions to inform their students 

of this provision and to help students understand how their actions 

might affect their future eligibility. For example, students whose 

Title IV assistance otherwise would be jeopardized under the new law 

can avoid a loss of eligibility by completing an acceptable drug 

rehabilitation program before July 1, 2000.

    The Secretary will not require institutions to question their 

Federal aid applicants about drug-related matters. The Secretary 

intends to use the 2000-2001 aid applicantion processes--Free 

Applications for Federal Student Aid (FAFSA) and Student Aid Report 

(SAR)--to collect needed informatiom from applicants and to report the 

results to schools on Institutional Student Information Records 

(ISIRs). The Secretary has been working with representatives from the 

higher education community in planning these new and sensitive 

processes, and will keep the community updated as these plans are 

developed.


Executive Order 12866


1. Potential Costs and Benefits


    Under Executive Order 12866, we have assessed the potential costs 

and benefits of this regulatory action.

    The potential costs associated with the proposed regulations are 

those resulting from statutory requirements and those we have 

determined as necessary for administering this program effectively and 

efficiently.

    In assessing the potential costs and benefits of this regulatory 

action--both quantitative and qualitative--we have determined that the 

benefits would justify the costs.

    We have also determined that this regulatory action would not 

unduly interfere with State, local, and tribal governments in the 

exercise of their governmental functions.

    We note that, as these proposed regulations were subject to 

negotiated rulemaking, the costs and benefits of the various 

requirements were discussed thoroughly by negotiators. The resultant 

consensus reached on a particular requirement generally reflected 

agreement on the best possible approach to that requirement in terms of 

cost and benefit.

    To assist the Department in complying with the specific 

requirements of Executive Order 12866, the Secretary invites comments 

on whether there may be further opportunities to reduce any potential 

costs or to increase any potential benefits resulting from these 

proposed regulations without impeding the effective and efficient 

administration of the Title IV, HEA programs.

    Elsewhere in this preamble, we discuss the potential costs and 

benefits of these proposed regulations under the heading Regulatory 

Flexibility Act Certification.


2. Clarity of the Regulations


    Executive Order 12866 and the President's Memorandum of June 1, 

1998 on ``Plain Language in Government Writing'' require each agency to 

write regulations that are easy to understand.

    The Secretary invites comments on how to make these proposed 

regulations easier to understand, including answers to questions such 

as the following:

    <bullet> Are the requirements in the proposed regulations clearly 

stated?

    <bullet> Do the proposed regulations contain technical terms or 

other wording that interferes with their clarity?

    <bullet> Does the format of the proposed regulations (grouping and 

order of sections, use of headings, paragraphing, etc.) aid or reduce 

their clarity?

    <bullet> Would the proposed regulations be easier to understand if 

we divided them into more (but shorter) sections? (A ``section'' is 

preceded by the symbol ``Sec. '' and a numbered heading; for example, 

Sec. 668.32, Student eligibility--general.)


[[Page 38507]]


    <bullet> Could the description of the proposed regulations in the 

SUPPLEMENTARY INFORMATION section of this preamble be more helpful in 

making the proposed regulations easier to understand? If so, how?

    <bullet> What else could we do to make the proposed regulations 

easier to understand?

    Send any comments that concern how the Department could make these 

proposed regulations easier to understand to the person listed in the 

ADDRESSES section of the preamble.


Regulatory Flexibility Act Certification


    The Secretary certifies that these proposed regulations would not 

have a significant economic impact on a substantial number of small 

entities.

    Entities affected by these regulations are institutions of higher 

education that participate in the Title IV, HEA programs. These 

institutions are defined as small entities, according to the U.S. Small 

Business Administration, if they are: for-profit or nonprofit entities 

with total revenue of $5,000,000 or less; or entities controlled by 

governmental entities with populations of 50,000 or less. These 

proposed regulations would not impose a significant economic impact on 

a substantial number of small entities. The regulations would benefit 

both small and large institutions, without requiring significant 

changes to current institutional system operations, through: the 

further simplification of the filing of a student's Statement of 

Educational Purpose; and the expansion of Title IV eligibility 

provisions regarding home-schooled students and students enrolled in 

telecommunications and correspondence courses. These proposed 

regulations also implement the new statutory criterion for Title IV 

eligibility concerning convictions for possession or sale of a 

controlled substance. This provision was discussed extensively as part 

of the negotiated rulemaking process, and the Secretary believes that 

the proposal to implement this change through the use of the student 

aid application processes is the best approach and would prevent 

unnecessary administrative burden on institutions.

    The Secretary invites comments from small institutions as to 

whether the proposed changes would have a significant economic impact 

on them.


Paperwork Reduction Act of 1995


    These proposed regulations do not contain any information 

collection requirements.


Intergovernmental Review


    This program is not subject to Executive Order 12372 and the 

regulations in 34 CFR Part 79.


Assessment of Educational Impact


    The Secretary particularly requests comments on whether these 

proposed regulations would require transmission of information that any 

other agency or authority of the United States gathers or makes 

available.


Electronic Access to This Document


    You may view this document as published in the Federal Register, in 

text or Adobe Portable Document Format (PDF), on the Internet at the 

following sites:


http://ocfo.ed.gov/fedreg.htm

http://ifap.ed.gov/csb__html/fedlreg.htm

http://www.ed.gov/legislation/HEA/rulemaking/


    To use the PDF you must have the Adobe Acrobat Reader Program with 

Search, which is available free at the previous sites. If you have 

questions about using the PDF, call the U.S. Government Printing Office 

(GPO), toll free, at 1-888-293-6498; or in the Washington, D.C., area 

at (202) 512-1530.


    Note: The official version of this document is the document 

published in the Federal Register. Free Internet access to the 

official edition of the Federal Register and the Code of Federal 

Regulations is available on GPO Access at: http://

www.access.gpo.gov/nara/index.html.


List of Subjects in 34 CFR Part 668


    Administrative practice and procedure, Colleges and universities, 

Student aid, Reporting and recordkeeping requirements.


    Dated: July 8, 1999.

Richard W. Riley,

Secretary of Education.


(Catalog of Federal Domestic Assistance numbers: 84.007 Federal 

Supplemental Educational Opportunity Grant Program; 84.032 

Consolidation Program; 84.032 Federal Stafford Loan Program; 84.032 

Federal PLUS Program; 84.032 Federal Supplemental Loans for Students 

Program; 84.033 Federal Work-Study Program; 84.038 Federal Perkins 

Loan Program; 84.063 Federal Pell Grant Program; 84.069 LEAP; and 

84.268 William D. Ford Federal Direct Loan Programs)


    The Secretary proposes to amend 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 is amended to read as 

follows:


    Authority: 20 U.S.C. 1001, 1002, 1003, 1085, 1088, 1091, 1092, 

1094, 1099c, and 1099c-1, unless otherwise noted.


    2. Section 668.32 is amended as follows:

    A. In paragraph (e)(2), by removing ``or'';

    B. In paragraph (e)(3), by removing the period at the end of the 

paragraph and adding in its place a semi-colon, and adding ``or'' after 

the semi-colon;

    C. By adding a new paragraph (e)(4) to read as follows;

    D. In paragraph (h), by removing ``or in the case of a loan made 

under the FFEL Program, with the lender'';

    E. In paragraph (j), by removing the ``and'' after the semi-colon;

    F. In paragraph (k)(7), by removing ``SSIG'' and adding in its 

place, ``LEAP,'' by removing the period at the end of the paragraph and 

adding in its place a semi-colon, and adding ``and'' after the semi-

colon; and

    G. By adding paragraph (l) to read as follows.



Sec. 668.32  Student eligibility--general.


* * * * *

    (e) * * *

    (4) Was home-schooled, and either--

    (i) Obtained a secondary school completion credential for home 

school (other than a high school diploma or its recognized equivalent) 

provided for under State law; or

    (ii) If State law does not require a home-schooled student to 

obtain the credential described in paragraph (e)(4)(i) of this section, 

has completed a secondary school education in a home school setting 

that qualifies as an exemption from compulsory attendance requirements 

under State law.

* * * * *

    (l) Is not ineligible under 34 CFR 668.40.

    3. Section 668.38 is amended by revising paragraph (b) to read as 

follows:



Sec. 668.38  Enrollment in telecommunications and correspondence 

courses.


* * * * *

    (b) (1) For purposes of this section, a student enrolled in a 

telecommunications course at an institution of higher education is not 

enrolled in a correspondence course, if--

    (i) The student is enrolled in a program that leads to a 

certificate for a program of study of 1 year or longer, or an 

associate, bachelor, or graduate degree; and

    (ii) The number of telecommunications and correspondence courses 

the institution offered during its latest completed


[[Page 38508]]


award year was fewer than 50 percent of all the courses the institution 

offered during that same year.

    (2) For purposes of paragraph (b)(1) of this section, an 

institution of higher education is one--

    (i) That is not an institute or school described in section 

521(4)(C) of the Carl D. Perkins Vocational and Applied Technology Act; 

and

    (ii) At which at least 50 percent of the programs of study offered 

by the institution during its latest completed award year led to an 

associate, bachelor, or graduate degree.

    (3) For purposes of paragraph (b)(1)(ii) of this section, the 

institution must calculate the number of courses using the provisions 

contained in 34 CFR 600.7(b)(2).

    4. Section 668.40 is added to read as follows:



668.40  Conviction for possession or sale of illegal drugs.


    (a)(1) A student is ineligible to receive Title IV, HEA program 

funds if the student has been convicted of an offense involving the 

possession or sale of illegal drugs for the period described in 

paragraph (b) of this section. However, the student may regain 

eligibility before that period expires under the conditions described 

in paragraph (c) of this section.

    (2) For purposes of this section, a conviction means only a 

conviction that is on a student's record at the time the student's 

eligibility is being determined. A conviction that was reversed, set 

aside, or removed from the student's record is not relevant for 

purposes of this section.

    (3) For purposes of this section, an illegal drug is a controlled 

substance as defined by section 102(6) of the Controlled Substances Act 

(21 U.S.C. 801(6)), and does not include alcohol or tobacco.

    (b)(1) Possession. Except as provided in paragraph (c) of this 

section, if a student has been convicted--

    (i) Only one time for possession of illegal drugs, the student is 

ineligible to receive Title IV, HEA program funds for one year after 

the date of conviction;

    (ii) Two times for possession of illegal drugs, the student is 

ineligible to receive Title IV, HEA program funds for two years after 

the date of the second conviction; or

    (iii) Three or more times for possession of illegal drugs, the 

student is ineligible to receive Title IV, HEA program funds for an 

indefinite period after the date of the third conviction.

    (2) Sale. Except as provided in paragraph (c) of this section, if a 

student has been convicted--

    (i) Only one time for sale of illegal drugs, the student is 

ineligible to receive Title IV, HEA program funds for two years after 

the date of conviction; or

    (ii) Two or more times for sale of illegal drugs, the student is 

ineligible to receive Title IV, HEA program funds for an indefinite 

period after the date of the second conviction.

    (c) If a student successfully completes a drug rehabilitation 

program described in paragraph (d) of this section after the student's 

most recent drug conviction, the student regains eligibility on the 

date the student successfully completes the program.

    (d) A drug rehabilitation program referred to in paragraph (c) of 

this section is one which--

    (1) Includes at least two unannounced drug tests; and

    (2)(i) Has received or is qualified to receive funds directly or 

indirectly under a Federal, State, or local government program;

    (ii) Is administered or recognized by a Federal, State, or local 

government agency or court;

    (iii) Has received or is qualified to receive payment directly or 

indirectly from a State-licensed insurance company; or

    (iv) Is administered or recognized by a State-licensed hospital, 

health clinic or medical doctor.


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


[FR Doc. 99-18175 Filed 7-15-99; 8:45 am]

BILLING CODE 4000-01-P