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Institutional Eligibility Student Assistance General Provisions and Federal Pell Grant Program rule (2022)

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The Institutional Eligibility, Student Assistance General Provisions, and Federal Pell Grant Program rule is a significant rule issued by the Office of Postsecondary Education and the U.S. Department of Education on July 28, 2022, that proposes to amend regulations for the Federal Pell Grant program, institutional eligibility, and student assistance general provisions, pursuant to the American Rescue Plan Act of 2021 and the Higher Education Act of 1965.[1]

HIGHLIGHTS
  • Name: Institutional Eligibility, Student Assistance General Provisions, and Federal Pell Grant Program
  • Code of Federal Regulations: 34 CFR 600, 34 CFR 668, 34 CFR 690
  • Agency: Office of Postsecondary Education, U.S. Department of Education
  • Action: Proposed rule
  • Type of significant rule: Economically significant rule

    • Timeline

    The following timeline details key rulemaking activity:

    Background

    The Department of Education conducted two negotiated rulemaking committees from October 4, 2021, to March 18, 2022, resulting in consensus on Pell Grants for Prison Education Programs by the Affordability and Student Loans Committee and on the Title IV revenue and non-Federal education assistance funds by the Institutional and Programmatic Eligibility Committee. Subsequently, on July 13, 2022, the Department published a notice of proposed rulemaking (NPRM) addressing topics such as Interest Capitalization, Public Service Loan Forgiveness, and Borrower Defense to Repayment, with separate NPRMs planned for income-driven repayment regulations. The proposed regulations focus on extending Pell Grant eligibility to incarcerated individuals in qualifying programs, implementing changes to the 90/10 Rule for proprietary institutions, and refining regulations related to institutional changes in ownership.

    Summary of the rule

    The following is a summary of the rule from the rule's entry in the Federal Register:

    “ The Secretary proposes to amend regulations for the Federal Pell Grant program, institutional eligibility, and student assistance general provisions. First, the Secretary proposes to establish regulations for Federal Pell Grants (Pell Grants or Pell) for Prison Education Programs (PEPs), to implement new statutory requirements to establish Pell Grant eligibility for a confined or incarcerated individual enrolled in a PEP. Second, the Secretary proposes to revise the Title IV Revenue and Non-Federal Education Assistance Funds regulations (referred to as “90/10” or the “90/10 Rule”) to implement the statutory change in the American Rescue Plan Act of 2021 (ARP). The Secretary further proposes to amend which non-Federal funds can be counted when determining compliance with the 90/10 rule to align allowable non-Federal revenue more closely with statutory intent. Finally, the Secretary proposes regulations to clarify the process for consideration of changes in ownership and control, to promote compliance with the Higher Education Act of 1965, as amended (HEA), and related regulations and reduce risk for students and taxpayers, as well as institutions contemplating or undergoing such a change.[2] ”

    [1]

    Summary of provisions

    The following is a summary of the provisions from the rule's entry in the Federal Register:[1]

    “ The proposed regulations would make the following changes.
    • Make updates to appropriate cross-references. Prison Education Programs (PEP) (§§ 600.2, 600.7, 600.10, 600.21, 668.8, 668.32, 668.43, 668.234–242, 690.62)
    • Extend access to Pell Grants for confined or incarcerated individuals in qualifying postsecondary education programs by defining an eligible PEP based on the statutory requirements.
    • Clarify that only public or private nonprofit institutions as defined in § 600.4, or vocational institutions as defined in § 600.6, may offer eligible PEPs and require that those PEPs offered at a correctional institution be reported to the Department as an “additional location.”
    • Amend requirements for postsecondary institutions to obtain and maintain a waiver from the Secretary to allow students who are confined or incarcerated to exceed 25 percent of the institution's regular student enrollment.
    • For a PEP that is designed to meet educational requirements for a specific professional license or certification, require disclosures to students of typical State or Federal prohibitions on the licensure or employment of formerly incarcerated individuals.
    • Prohibit institutions from enrolling a confined or incarcerated individual in a PEP that is designed to lead to licensure or employment in a specific job or occupation where State or Federal law would prohibit that individual from licensure or employment based on the type of the criminal conviction for which the student has been confined or incarcerated.
    • Define the process and the factors that the oversight entity would use to determine if a PEP is operating in the best interest of the confined or incarcerated individuals over which they have supervision, including consulting with interested third parties and conducting periodic re-evaluations.
    • Define the requirements for approval from the Secretary and the IHE's accrediting agency for the first PEP at the institution's first two additional locations at prison facilities.
    • Require a postsecondary institution to obtain and report to the Department the release or transfer date of all confined or incarcerated individuals who participated in its PEP.
    • Outline the process for winding down eligible programs for confined or incarcerated individuals prior to July 1, 2023, that are not operating at a Federal or State correctional facility and are not approved as eligible prison education programs.
    • Outline the process a postsecondary institution must follow to reduce a Pell Grant award that exceeds the confined or incarcerated individual's cost of attendance. Title IV Revenue and Non-Federal Education Assistance Funds (90/10 Rule) (§ 668.28)
    • Revise the revenue calculation methodology in the 90/10 rule by changing references to “title IV revenue” to “Federal revenue” where appropriate to align with the statutory amendment that revises the 90/10 revenue requirement to include all Federal revenue.
    • Outline how the Department would publish, and update as necessary, which Federal funds it expects proprietary institutions to include in their 90/10 calculation.
    • Create a new requirement for when proprietary institutions must request and disburse title IV, HEA program funds to prevent proprietary institutions from delaying disbursements to reduce their Federal revenue percentage for a fiscal year in order to meet the 90/10 revenue requirement.
    • Clarify the allowable revenue generated from programs and activities that can be counted as non-Federal revenue for purposes of the 90/10 revenue requirement to provide additional consumer protection.
    • Revise how proprietary institutions apply funds to student accounts and determine the funds' inclusion in the 90/10 revenue requirement calculation to incorporate statutory changes, clarify how grants from non-Federal public agencies that include Federal funds must be treated, and add additional consumer protection measures.
    • Revise the provisions governing which revenue generated from institutional aid can be included in the 90/10 revenue requirement calculation to remove sections that are no longer applicable, codify existing practices in regulation, promote consumer protection measures, and close potential loopholes related to Income Share Agreements (ISAs) or other alternative financing agreements issued by the institution or a related party.
    • Revise the provisions governing which funds must be excluded from a proprietary institution's calculation of its revenue percentage to remove regulations that no longer apply and to limit certain types of revenues that proprietary institutions have employed to alter their revenue calculation.
    • Revise the steps that a proprietary institution must take to better protect students and taxpayers if it does not generate 10 percent or more of its revenue from allowable non-Federal sources in a fiscal year. The proposed regulations would also provide reporting procedures for proprietary institutions that learn, based on information received after the initial 45-day reporting period, that they failed the revenue requirement for the previous fiscal year.[2]
    		 ”

    Significant impact

    See also: Significant regulatory action

    Executive Order 12866, issued by President Bill Clinton (D) in 1993, directed the Office of Management and Budget (OMB) to determine which agency rules qualify as significant rules and thus are subject to OMB review.

    Significant rules have had or might have a large impact on the economy, environment, public health, or state or local governments. These actions may also conflict with other rules or presidential priorities. Executive Order 12866 further defined an economically significant rule as a significant rule with an associated economic impact of $100 million or more. Executive Order 14094, issued by President Joe Biden (D) on April 6, 2023, made changes to Executive Order 12866, including referring to economically significant rules as section 3(f)(1) significant rules and raising the monetary threshold for economic significance to $200 million or more.[1]


    The text of the Institutional Eligibility, Student Assistance General Provisions, and Federal Pell Grant Program rule states that OMB deemed this rule economically significant under E.O. 12866:

    “ [T]his proposed action is “economically significant” and subject to review by OMB under section 3(f) of Executive Order 12866.[2] ”

    Text of the rule

    The full text of the rule is available below:[1]

    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 Federal Register, "Institutional Eligibility, Student Assistance General Provisions, and Federal Pell Grant Program," July 28, 2022
    2. ↑ 2.0 2.1 2.2 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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