Teacher Quality Enhancement Grants Program

DEPARTMENT OF EDUCATION

34 CFR Part 611

RIN 1840-AC65

Teacher Quality Enhancement Grants Program

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Final regulations.

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SUMMARY: The Assistant Secretary for Postsecondary Education issues

regulations to implement a requirement of section 204(e) of the Higher

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

1998. Section 204(e) requires that students in teacher preparation

programs funded under the Teacher Recruitment Program must repay

scholarships provided with program funds if they do not teach in high-

need local educational agencies for the period of time for which they

receive scholarship assistance. These regulations also would apply to

any scholarships awarded to students in teacher preparation programs

funded under the State and Partnership Programs authorized in sections

202 and 203 of the HEA.

DATES: These regulations are effective January 12, 2000.

FOR FURTHER INFORMATION CONTACT: Dr. Louis Venuto, Higher Education

Programs, Office of Postsecondary Education, Office of Policy,

Planning, and Innovation, 1990 K Street, NW., Washington, DC 20006-

8525: Telephone: (202) 502-7763. Inquiries also may be sent by e-mail

to: Louis__V[email protected] or by FAX to: (202) 502-7699. 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:

Background

On October 8, 1998, the President signed into law the Higher

Education Amendments of 1998 (Pub. L. 105-244). Title II of this law

addresses the Nation's need to ensure that new teachers enter the

classroom prepared to teach all students to high standards by

authorizing, as Title II of the Higher Education Act (HEA), Teacher

Quality Enhancement Grants for States and Partnerships.

The new Teacher Quality Enhancement Grants Program consists of

three different competitive grant programs. Together, the State Grants

Program, the Partnership Grants for Improving Teacher Preparation

Program, and the Teacher Recruitment Program, these programs are

designed to increase student achievement by supporting comprehensive

approaches to improving teacher quality.

One key aspect of the Teacher Recruitment Grants Program is the

availability of scholarships to students who are enrolled in teacher

preparation programs at the grantee institutions of higher education

(IHEs) (or at IHEs working with State Teacher Recruitment Program

grantees), and who agree to teach in high-need school districts. As

provided in section 204(e) of the HEA, in exchange for scholarship

support recipients must agree to incur a contractual obligation, under

terms the Department establishes, to teach in high-need LEAs for a

period equivalent to the period for which they receive the scholarship.

On November 5, 1999, the Secretary published a notice of proposed

rulemaking (NPRM) for this part in the Federal Register (64 FR 60632).

In the preamble to the NPRM, the Secretary discussed on pages 60632

through 60638 the proposed terms and conditions of this contractual

agreement. The major issues addressed by the NPRM included--

Whether all with Teacher Recruitment Program scholarship

recipients should have to meet their service obligations by teaching in

high-need schools of high-need LEAs;

The definition of a ``high-need LEA'' and a ``high-need

school'' in which scholarship recipients would need to teach in order

to avoid responsibility for repaying their scholarships;

How, in order to retain the financial assistance as a

scholarship, the Department will calculate the period of time in which

the scholarship recipient must teach in a high-need school of a high-

need LEA;

Conditions under which the Department may defer a

scholarship recipient's service obligation;

The amount of the scholarship recipient's indebtedness to

the Federal government for failure to meet the service obligation,

terms of repayment, and any limited circumstances under which the

Department would discharge this indebtedness;

The content of the scholarship agreement that the

scholarship recipient would execute;

[[Page 1781]]

The respective responsibilities of the scholarship

recipient, teacher preparation program in which the recipient is

enrolled, and the LEA in which he or she is later employed, to provide

periodically to the Department basic employment and other information

on the recipient until the Department has determined that the recipient

has fulfilled the service obligation or has repaid the scholarship,

interest, and any costs of collection; and

Whether the rules governing the receipt of scholarships

provided under the Teacher Recruitment Program should also apply to the

receipt of scholarships that grantees provide under the State and

Partnership Programs.

In response to public comment received on the NPRM, these final

regulations have been renumbered to enhance clarity. They also contain

three changes to the proposed regulations announced in the NPRM. These

regulations now--

(1) Clarify that a middle or secondary school may be considered

``high need'' if it either has at least 50 percent of its enrolled

students eligible for free and reduced lunch subsidies, or is otherwise

eligible to operate as a schoolwide program under Title I of the

Elementary and Secondary Education Act (ESEA) (Sec. 611.1);

(2) Require program grantees offering teacher recruitment

scholarships, in collaboration with the high-need LEA(s) participating

in their projects, to ensure that scholarship recipients are placed, to

the extent possible, in the highest-need schools of those LEAs

(Sec. 611.52(c)); and

(3) Provide two ways in which a scholarship recipient may meet his

or her responsibility to ensure that the Department has timely

information confirming that the recipient is meeting the service

obligation. The first, as proposed in the NPRM, is by having the LEA in

which he or she teaches submit the needed employment information to the

Department in the time periods the regulation specifies. The second is

by submitting to the Department, within the required time periods, a

notarized statement that the recipient has asked the LEA to provide

this information to the Department along with a copy of the information

the LEA has been asked to provide. Where a scholarship recipient

chooses the second option, the Department's determination that he or

she is meeting the service obligation is only provisional; the

recipient maintains a responsibility to work to have the LEA submit the

needed information as soon as possible (Secs. 611.46(a) and 611.47(a)).

Corresponding changes also have been made to the proposed terms and

conditions of the scholarship agreement and LEA reporting form, which

were included in the November 5, 1999 notice as Appendices A and B to

the NPRM, respectively. In all other respects, these regulations are

the same as those published in the NPRM.

Analysis of Comments and Changes

In response to the Assistant Secretary's invitation in the NPRM, we

received eight comments. An analysis of these comments and of the

changes in the regulations since publication of the NPRM is published

in an appendix at the end of these final regulations. Generally, we do

not address technical and other minor changes--and suggested changes

the law does not authorize the Secretary to make.

Goals 2000: Educate America Act

The Goals 2000: Educate America Act (Goals 2000) focuses the

Nation's education reform efforts on the eight National Education Goals

and provides a framework for meeting them. Goals 2000 promotes new

partnerships to strengthen schools and expands the Department's

capacities for helping communities to exchange ideas and obtain

information needed to achieve the goals.

These proposed regulations would address the National Education

Goal that the Nation's teaching force will have the content knowledge

and teaching skills needed to instruct all American students for the

next century.

Paperwork Reduction Act of 1995

The Paperwork Reduction Act of 1995 does not require you to respond

to a collection of information unless it displays a valid OMB control

number. We display the valid OMB control numbers assigned to the

collections of information in these final regulations at the end of the

affected sections of the regulations.

Intergovernmental Review

This program is subject to the requirements of Executive Order

12372 and the regulations in 34 CFR Part 79. The objective of the

Executive order is to foster an intergovernmental partnership and a

strengthened federalism by relying on processes developed by State and

local governments for coordination and review of proposed Federal

financial assistance.

In accordance with the order, we intend this document to provide

early notification of specific plans and actions for this program.

Assessment of Educational Impact

In the NPRM we requested comments on whether the proposed

regulations would require transmission of information that any other

agency or authority of the United States gathers or makes available.

Based on the response to the NPRM and on our review, we have

determined that these final regulations do not require transmission of

information that any other agency or authority of the United States

gathers or makes available.

Waiver of Delayed Effective Date

5 U.S.C. 553(d) provides that the effective date of regulations

generally must be at least 30 days after their publication in the

Federal Register, but permits the Secretary to establish an earlier

effective date for good cause found and published with the regulations.

The Secretary makes thee regulations effective as of the date of

publication because program grantees need them immediately in order to

award scholarships with grant funds for the academic term beginning

January 2000.

Electronic Access to This Document

You may review this document, as well as all other Department of

Education documents published in the Federal Register, in text or

portable document format (PDF) on the World Wide Web at either of the

following sites: http://ocfo.ed.gov/fedreg.htm, http://www.ed.gov/

news.html. To use the PDF you must have the Adobe Acrobat Reader

Program with Search, which is available free at either of these sites.

If you have questions about using the PDF, call the U.S. Government

Printing Office at (202) 512-1530 or, toll free, at 1-888-293-6498.

Note: The official version of the 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

(Catalog of Federal Domestic Assistance Number 84.336: Teacher

Quality Enhancement Grants Program)

List of Subjects in 34 CFR part 611

Colleges and universities, Elementary and secondary education,

Grant programs--education.

[[Page 1782]]

Dated: January 6, 2000.

A. Lee Fritschler,

Assistant Secretary for Postsecondary Education.

For the reasons stated in the preamble, the Secretary amends

Chapter VI of title 34 of the Code of Federal Regulations by revising

part 611 to read as follows:

PART 611--TEACHER QUALITY ENHANCEMENT GRANTS PROGRAM

Subpart A--General Provisions

Sec.

611.1 What definitions apply to the Teacher Quality Enhancement

Grants Program?

Subpart B [Reserved]

Subpart C [Reserved]

Subpart D [Reserved]

Subpart E--Scholarships

611.41 Under what circumstances may an individual receive a

scholarship of program funds to attend a teacher training program?

611.42 How does the Secretary calculate the period of the

scholarship recipient's service obligation?

611.43 What are the consequences of a scholarship recipient's

failure to meet the service obligation?

611.44 Under what circumstances may the Secretary defer a

scholarship recipient's service obligation?

611.45 Under what circumstances does the Secretary discharge a

scholarship recipient's obligation to repay for failure to meet the

service obligation?

611.46 What are a scholarship recipient's reporting

responsibilities upon graduation from the teacher preparation

program?

611.47 What are a scholarship recipient's reporting

responsibilities upon the close of the LEA's academic year?

611.48 What are a scholarship recipient's reporting

responsibilities upon failure to graduate or withdrawal of

scholarship support?

611.49 What are a grantee's responsibilities for implementing the

scholarship requirements before awarding a scholarship?

611.50 What are a grantee's reporting responsibilities?

611.51 How does a grantee ensure that a scholarship recipient

understands the terms and conditions of the scholarship before the

recipient leaves the teacher preparation program?

611.52 What are a grantee's programmatic responsibilities for

ensuring that scholarship recipients become successful teachers in

high-need schools?

Subpart F--Other Grant Conditions

611.61 What is the maximum indirect cost rate for States and local

educational agencies?

Authority: 20 U.S.C. 1021 et seq. and 1024(e), unless otherwise

noted.

Subpart A--General Provisions

Sec. 611.1 What definitions apply to the Teacher Quality Enhancement

Grants Program?

The following definitions apply to this part:

High-need local educational agency (LEA) means an LEA that meets

one of the following definitions:

(1) An LEA with at least one school--

(i) In which 50 percent or more of the enrolled students are

eligible for free and reduced lunch subsidies; or

(ii) That otherwise is eligible, without receipt of a waiver, to

operate as a schoolwide program under Title I of the Elementary and

Secondary Education Act.

(2) An LEA that has one school where--

(i) More than 34 percent of academic classroom teachers overall

(across all academic subjects) do not have a major, minor, or

significant course work in their main assignment field; or

(ii) More than 34 percent of the main assignment faculty in two of

the core-subject departments do not have a major, minor, or significant

work in their main assigned field.

(3) An LEA that serves a school whose attrition rate among

classroom teachers was 15 percent or more over the last three school

years.

High-need school means an elementary, middle, or secondary school

operated by a high-need LEA in which the school's students or teaching

staff meet the elements in paragraphs (1), (2), or (3) of the

definition of a high-need LEA.

Main assignment field means the academic field in which teachers

have the largest percentage of their classes.

Significant course work means four or more college-or graduate-

level courses in the content area.

(Authority: 20 U.S.C. 1024(e))

Subparts B-D [Reserved]

Subpart E--Scholarships

Sec. 611.41 Under what circumstances may an individual receive a

scholarship of program funds to attend a teacher training program?

(a) General: The service obligation. An individual, whom a grantee

finds eligible to receive a scholarship funded under this part to

attend a teacher preparation program, may receive the scholarship only

after executing a binding agreement with the institution of higher

education (IHE) offering the scholarship that, after completing the

program, the individual will either--

(1) Teach in a high-need school of a high-need LEA for a period of

time equivalent to the period for which the individual receives the

scholarship; or

(2) Repay, as set forth in Sec. 611.43, the Teacher Quality

Enhancement Grant Program funds provided as a scholarship.

(b) Content of the scholarship agreement. To implement the service-

obligation requirement, the scholarship agreement must include terms,

conditions, and other information consistent with Secs. 611.42-611.49

that the Secretary determines to be necessary.

(Approved by the Office of Management and Budget under control

number 1840-0753)

(Authority: 20 U.S.C. 1024(e))

Sec. 611.42 How does the Secretary calculate the period of the

scholarship recipient's service obligation?

(a) Calculation of period of scholarship assistance.

(1) The Secretary calculates the period of time for which a student

received scholarship assistance on the basis of information provided by

the grantee under Sec. 611.50.

(2) The period for which the recipient received scholarship

assistance is the period during which an individual enrolled in the

teacher preparation program on a full-time basis, excluding the summer

period, would have completed the same course of study.

(b) Calculation of period needed to teach to meet the service

obligation. (1) The period of the scholarship recipient's service

obligation is the period of the individual's receipt of scholarship

assistance as provided in paragraph (a) of this section.

(2) The Secretary calculates the period that a scholarship

recipient must teach in a high-need school of a high-need LEA in order

to fulfill his or her service obligation by--

(i) Comparing the period in which the recipient received a

scholarship as provided in paragraph (a) of this section with the

information provided by the high-need LEA under Secs. 611.46 and 611.47

on the period the recipient has taught in one of its high-need schools;

and

(ii) Adjusting the period in which the recipient has taught in a

high-need school to reflect the individual's employment, if any, as a

teacher on a part-time basis relative to classroom teachers the LEA

employs on a full-time basis under the LEA's standard yearly contract

(excluding any summer or intersession period).

(c) The Secretary adjusts the period of a scholarship recipient's

service obligation as provided in paragraph (b) of this section to

reflect information the

[[Page 1783]]

high-need LEA provides under Secs. 611.46 and 611.47 that the

scholarship recipient also has taught in a high-need school in a summer

or intersession period.

(Approved by the Office of Management and Budget under control

number 1840-0753)

(Authority: 20 U.S.C. 1024(e))

Sec. 611.43 What are the consequences of a scholarship recipient's

failure to meet the service obligation?

(a) Obligation to repay: General. (1) A scholarship recipient who

does not fulfill his or her service obligation must--

(i) Repay the Department the full amount of the scholarship,

including the principal balance, accrued interest, and any collection

costs charged under paragraphs (c) and (d) of this section; or

(ii) Be discharged of any repayment obligation as provided in

Sec. 611.45.

(2) Unless the service obligation is deferred as provided in

Sec. 611.44 or the repayment requirement is discharged, the obligation

to repay the amount provided in paragraph (a)(1) of this section begins

six months after the date the recipient--

(i) Completes the teacher training program without beginning to

teach in a high-need school of a high-need LEA; or

(ii) Is no longer enrolled in the teacher training program.

(3) The Secretary determines whether a scholarship recipient has

fulfilled the service obligation on the basis of information that the

Department receives as provided in Secs. 611.46 and 611.47.

(b) Obligation to Repay: Partial performance of the service

obligation. (1) A scholarship recipient who teaches in a high-need

school of a high-need school district for less than the period of his

or her service obligation must repay--

(i) The amount of the scholarship that is proportional to the unmet

portion of the service obligation;

(ii) Interest that accrues on this portion of the scholarship

beginning six months after the recipient's graduation from the teacher

preparation program; and

(iii) Costs of collection, if any.

(2) Unless the service obligation is deferred or the repayment

requirement is discharged, the obligation to repay the amount provided

in paragraph (b)(1) of this section begins six months after the date

the recipient is no longer employed as a teacher in a high-need school

of a high-need LEA.

(c) Availability of payment schedule. (1) Upon request to the

Secretary, the scholarship recipient may repay the scholarship and

accrued interest according to a payment schedule that the Secretary

establishes.

(2) A payment schedule must permit the full amount of the

scholarship and accrued interest to be repaid within ten years. The

minimum monthly payment is $50 unless a larger monthly payment is

needed to enable the full amount that is due to be paid within this

timeframe.

(d) Interest. In accordance with 31 U.S.C. 3717 and 34 CFR part 30,

the Secretary charges interest on the unpaid balance that the

scholarship recipient owes. (The grantee offering the scholarship must

ensure that scholarship agreement the recipient executes includes the

current rate of interest, as provided by the Department.) However,

except as provided in Sec. 611.44(d), the Secretary does not charge

interest for the period of time that precedes the date on which the

scholarship recipient is required to begin repayment.

(e) Failure to meet requirements. A scholarship recipient's failure

to satisfy the requirements of Secs. 611.42-611.48 in a timely manner

results in the recipient being--

(1) In non-compliance with the terms of the scholarship;

(2) Liable for repayment of the scholarship and accrued interest;

and

(3) Subject to collection action.

(f) Action by reason of default. The Secretary may take any action

authorized by law to collect the amount of scholarship, accrued

interest and collection costs, if any, on which a scholarship recipient

obligated to repay under this section has defaulted. This action

includes, but is not limited to, filing a lawsuit against the

recipient, reporting the default to national credit bureaus, and

requesting the Internal Revenue Service to offset the recipient's

Federal income tax refund.

(Approved by the Office of Management and Budget under control

number 1840-0753)

(Authority: 20 U.S.C. 1024(e))

Sec. 611.44 Under what circumstances may the Secretary defer a

scholarship recipient's service obligation?

(a) Upon written request, the Secretary may defer a service

obligation for a scholarship recipient who--

(1) Has not begun teaching in a high-need school of a high-need LEA

as required by Sec. 611.41(a); or

(2) Has begun teaching in a high-need school of a high-need LEA,

and who requests the deferment within six months of the date he or she

no longer teaches in this school.

(b) To obtain a deferment of the service obligation, the recipient

must provide the Secretary satisfactory information of one or more of

the following circumstances:

(1) Serious physical or mental disability that prevents or

substantially impairs the scholarship recipient's employability as a

teacher.

(2) The scholarship recipient's inability, despite due diligence

(for reasons that may include the failure to pass a required teacher

certification or licensure examination), to secure employment as a

teacher in a high-need school of a high-need school LEA.

(3) Membership in the armed forces of the United States on active

duty for a period not to exceed three years.

(4) Other extraordinary circumstances that the Secretary accepts.

(c) Unless the Secretary determines otherwise--

(1) A scholarship recipient must apply to renew a deferment of the

service obligation on a yearly basis; and

(2) The recipient has 60 days from the end of the deferment period

to begin teaching in a high-need school of a high-need LEA or become

liable for repayment of the scholarship, any accrued interest, and any

costs of collection.

(d)(1) As provided in Sec. 611.43(a)(2), during periods for which

the Secretary defers a scholarship recipient's service obligation, the

scholarship recipient does not have an obligation to repay the

scholarship. However, interest continues to accrue on the amount of the

scholarship.

(2) If the scholarship recipient fulfills his or her service

obligation after the end of the deferment, the Secretary waives the

obligation to repay accrued interest.

(Approved by the Office of Management and Budget under control

number 1840-0753)

(Authority: 20 U.S.C. 1024(e))

Sec. 611.45 Under what circumstances does the Secretary discharge a

scholarship recipient's obligation to repay for failure to meet the

service obligation?

(a) The Secretary discharges the obligation of a scholarship

recipient to repay the scholarship, interest, and any costs for failure

to meet the service obligation based on information acceptable to the

Secretary of--

(1) The recipient's death; or

(2) The total and permanent physical or mental disability of the

recipient that prevents the individual from being employable as a

classroom teacher.

(b) Upon receipt of acceptable documentation and approval of the

discharge request, the Secretary returns

[[Page 1784]]

to the scholarship recipient, or for a discharge based on death to the

recipient's estate, those payments received after the date the

eligibility requirements for discharge were met. The Secretary returns

these payments whether they are received before or after the date the

discharge was approved.

(Approved by the Office of Management and Budget under control

number 1840-0753)

(Authority: 20 U.S.C. 1024(e))

Sec. 611.46 What are a scholarship recipient's reporting

responsibilities upon graduation from the teacher preparation program?

(a) Within six months of graduating from a teacher preparation

program, a scholarship recipient must either--

(1) Have the LEA in which the recipient is employed as a teacher

provide the Department information, which the Secretary may require, to

confirm--

(i) The home address, phone number, social security number, and

other identifying information about the recipient;

(ii) That he or she is teaching in a high-need school of a high-

need LEA; and

(iii) Whether the individual is teaching full- or part-time and, if

part-time, the full-time equivalency of this teaching compared to the

LEA's full-time teachers;

(2) Provide the Department--

(i) A notarized statement that the scholarship recipient has asked

the LEA to provide the Department the information identified in

paragraph (a)(1) of this section, including the name and telephone

number of the LEA official to whom the request was made; and

(ii) A copy of the information identified in paragraph (a)(1) of

this section that the recipient has asked the LEA to provide to the

Department; or

(3) Provide the Department a current home address and telephone

number, a work address and telephone number, the recipient's social

security number, and one of the following:

(i) The required repayment of the scholarship.

(ii) A request that the Secretary permit the recipient to repay the

scholarship and accrued interest in installments as permitted by

Sec. 611.43(c).

(iii) A request that the Secretary defer the service obligation as

permitted by Sec. 611.44.

(b) If the recipient provides the Department the information

identified in paragraph (a)(1) of this section, the Department accepts

the information provisionally, but the recipient retains responsibility

for working to have the LEA submit the information.

(Approved by the Office of Management and Budget under control

number 1840-0753)

(Authority: 20 U.S.C. 1024(e))

Sec. 611.47 What are a scholarship recipient's reporting

responsibilities upon the close of the LEA's academic year?

(a) At the close of the LEA's academic year, a scholarship

recipient whose LEA reports under Sec. 611.46(a) that he or she is

teaching in a high-need school of a high-need LEA must--

(1) Have the LEA provide information to the Department, as the

Secretary may require, that confirms the recipient's actual employment

status for the preceding period; or

(2) Provide the Department--

(i) A notarized statement that the scholarship recipient has asked

the LEA to provide the Department the information identified in

paragraph (a)(1) of this section, including the name and telephone

number of the LEA official to whom the request was made; and

(ii) A copy of the information identified in paragraph (a)(1) of

this section that the recipient has asked the LEA to provide to the

Department.

(b) If the recipient provides the Department the notarized

statement and accompanying information identified in paragraph (a)(2)

of this section, the Department accepts the information provisionally,

but the recipient retains an ongoing responsibility for working to have

the LEA submit the information directly to the Department.

(c) In subsequent school years, the recipient must have the LEA

continue to provide information to the Department on the recipient's

employment as the Secretary may require, until the Department notifies

the recipient that the service obligation has been fulfilled. The

alternative procedures in paragraph (a)(2) of this section also apply

in subsequent years.

(d)(1) The Secretary provides a scholarship recipient with credit

toward the service obligation for teaching in a high-need school of a

high-need LEA during a summer or intersession period (for LEAs that

operate year-round programs).

(2) To receive this credit, the recipient must have the LEA at the

end of the summer or intersession period provide information to the

Department, as the Secretary may require, that confirms that the

recipient has taught during this period in a high-need school.

(Approved by the Office of Management and Budget under control

number 1840-0753)

(Authority: 20 U.S.C. 1024(e))

Sec. 611.48 What are a scholarship recipient's reporting

responsibilities upon failure to graduate or withdrawal of scholarship

support?

(a)(1) Within six months of the date the scholarship recipient is

no longer enrolled in the teacher training program, or within six

months of the IHE's withdrawal of scholarship support for failure to

maintain good academic standing, the recipient must submit to the

Department--

(i) The required repayment of the scholarship;

(ii) A request that the Secretary establish a binding schedule

under which the recipient is obligated to repay the scholarship,

accrued interest, and any costs of collection; or

(iii) A request that the Secretary defer the service obligation as

permitted by Sec. 611.44.

(2) Upon review of the repayment or information provided under

paragraph (a)(1) of this section, the Department notifies the recipient

of the status of the recipient's obligations and of any schedule under

which the recipient must repay the scholarship.

(b) Until the Secretary determines that the individual either has

satisfied his or her service obligation or has repaid the full amount

of the scholarship, accrued interest, and any costs, the recipient also

remains responsible for providing the Department--

(1) The information identified in this part; and

(2) A current home address and telephone number, and a current work

address and work telephone number.

(Approved by the Office of Management and Budget under control

number 1840-0753)

(Authority: 20 U.S.C. 1024(e))

Sec. 611.49 What are a grantee's responsibilities for implementing the

scholarship requirements before awarding a scholarship?

Before awarding scholarship assistance with funds provided under

this part to any student attending a teacher preparation program, a

grantee must--

(a) Ensure that the student understands the terms and conditions

that the Secretary has determined must be included in the scholarship

agreement;

(b) Have the student and the institution awarding the scholarship

execute a scholarship agreement that contains these terms and

conditions; and

(c) Establish policies for--

(1) The withdrawal of scholarship support for any student who does

not remain in good academic standing; and

[[Page 1785]]

(2) Determining when and if re-negotiation of a student's

scholarship package over an extended period of time is appropriate.

(Approved by the Office of Management and Budget under control

number 1840-0753)

(Authority: 20 U.S.C. 1024(e))

Sec. 611.50 What are a grantee's reporting responsibilities?

(a) Within 30 days of the beginning of the teacher preparation

program's academic term or within 30 days of the execution of any

scholarship agreement, whichever is later, the grantee must provide to

the Department the following information:

(1) The identity of each scholarship recipient.

(2) The amount of the scholarship provided with program funds to

each recipient.

(3) The full-time equivalency, over each academic year, of each

recipient's enrollment in the teacher training program for which he or

she receives scholarship assistance.

(4) Other information as the Secretary may require.

(b) Within 30 days of a scholarship recipient's graduation or

withdrawal from the teacher preparation program, the grantee must

provide to the Department the following information:

(1) The date of the recipient's graduation or withdrawal.

(2) The total amount of program funds the grantee awarded as a

scholarship to the recipient.

(3) The original of any scholarship agreement executed by the

scholarship recipient and the grantee (or its partnering IHE if the

grantee is not an IHE) before the recipient was awarded a scholarship

with program funds.

(4) A statement of whether the institution has withdrawn

scholarship support because of the recipient's failure to maintain good

academic standing.

(5) Other information as the Secretary may require.

(Approved by the Office of Management and Budget under control

number 1840-0753)

(Authority: 20 U.S.C. 1024(e))

Sec. 611.51 How does a grantee ensure that a scholarship recipient

understands the terms and conditions of the scholarship before the

recipient leaves the teacher preparation program?

(a) An institution that provides a scholarship with funds provided

under this part must conduct an exit conference with each scholarship

recipient before that individual leaves the institution. During the

exit conference the institution must give the recipient a copy of any

scholarship agreement the recipient has executed.

(b) The institution also must review with the recipient the terms

and conditions of the scholarship, including--

(1) The recipient's service obligation;

(2) How the recipient can confirm whether a school and LEA in which

he or she would teach will satisfy the service obligation;

(3) Information that the recipient will need to have the LEA

provide to the Department to enable the Secretary to confirm that the

recipient is meeting the service obligation;

(4) How the recipient may request a deferment of the service

obligation, and information that the recipient should provide the

Department in any deferment request;

(5) The consequences of failing to meet the service obligation

including, at a minimum, the amount of the recipient's potential

indebtedness; the possible referral of the indebtedness to a collection

firm, reporting it to a credit bureau, and litigation; and the

availability of a monthly payment schedule;

(6) The amount of scholarship assistance and interest charges that

the recipient must repay for failing to meet the service obligation;

and

(7) The recipient's responsibility to ensure that the Department

has a home address and telephone number, and a work address and

telephone number until the Secretary has determined that the recipient

has fulfilled the service obligation or the recipient's debt has been

paid or discharged; and

(8) The follow-up services that the institution will provide the

student during his or her first three years of teaching in a high-need

school of a high-need LEA.

(Authority: 20 U.S.C. 1024(e))

Sec. 611.52 What are a grantee's programmatic responsibilities for

ensuring that scholarship recipients become successful teachers in

high-need schools?

In implementing its approved project, the grantee must--

(a) Provide scholarship recipients both before and after graduation

with appropriate support services, including academic assistance, job

counseling, placement assistance, and teaching support that will help

to ensure that--

(1) Upon graduation, scholarship recipients are able to secure

teaching positions in high-need schools of high-need LEAs; and

(2) After beginning to teach in a high-need school of a high-need

LEA, former scholarship recipients have appropriate follow-up services

and assistance during their first three years of teaching;

(b) Provide LEAs with which the grantees collaborate in teacher

recruitment activities with information and other assistance they need

to recruit highly-qualified teachers effectively; and

(c) Work with the high-need LEAs participating in its project to

ensure that scholarship recipients are placed, to the extent possible,

in highest-need schools of those LEAs.

(Authority: 20 U.S.C. 1024(e))

Subpart F--Other Grant Conditions

Sec. 611.61 What is the maximum indirect cost rate for States and

local educational agencies?

Notwithstanding 34 CFR 75.560-75.562 and 34 CFR 80.22, the maximum

indirect cost rate that a State or local educational agency receiving

funding under the Teacher Quality Enhancement Grants Program may use to

charge indirect costs to these funds is the lesser of--

(a) The rate established by the negotiated indirect cost agreement;

or

(b) Eight percent.

(Authority: 20 U.S.C. 1021 et seq.)

Note: The following appendix will not appear in the Code of

Federal Regulations.

Appendix--Analysis of Comments and Changes

Comment: Proposed Sec. 611.1 defines a high-need school and a

high-need local educational agency (LEA). These definitions are

important because after graduating from their teacher preparation

programs, scholarship recipients must teach in these schools and

LEAs in order to meet their service obligations.

Consistent with section 201(b)(2) of the Higher Education Act

(HEA), the definition would offer three alternative criteria by

which a school (of a high-need LEA) can be considered high-need. Two

commenters urged us to expand these proposed criteria so that more

schools could qualify as ones in which scholarship recipients can

teach and meet their service obligations. Under one of these

proposed criteria, a school would qualify as high-need if at least

50 percent of its enrolled students are eligible to receive free and

reduced lunch subsidies, i.e., if the school is eligible to operate

a schoolwide program under Title I of the Elementary and Secondary

Education Act (ESEA). One commenter supported this proposal, but

noted that many secondary schools do not have reliable data on

student eligibility for free-and reduced-lunch subsidies. The

commenter proposed, therefore, that a secondary school qualify as

one in which scholarship recipients can meet their service

obligations through alternative factors. These factors would include

having (a) multiple elementary and middle schools in its feeder

system that meet this 50-percent test; (b) a

[[Page 1786]]

drop-out rate that exceeds a specified amount; (c) more than 15

percent of teachers teaching out of files; and (d) a teacher

turnover rate exceeding ten percent.

Another commenter urged that the criterion related to the

percentage of the school's teachers teaching out-of-field be

expanded. In this regard, section 201(b)(2) of the HEA provides that

a school can be considered high-need if there is a high percentage

of secondary school teachers who are not teaching in the content

area in which the teachers were trained to teach. As proposed,

Sec. 611.1 would define this element to mean that more than 34

percent of either academic classroom teacher overall, or main

assignment faculty in two core subject departments, do not have a

major, minor, or significant course work in their main assignment

field. The proposed regulation goes on to define ``significant

coursework'' to mean ``four or more college or graduate-level

courses in the content area.''

The commenter notes that his State now requires teaching

candidates to have taken more than four courses to earn a teaching

certificate in a particular content area. The commenter, therefore,

recommends that the definition also permit a school to qualify as a

high-need school if more than 34 percent of academic classroom

teachers do not have certification to teach in their main assignment

field.

Discussion: We agree that clarification is needed on how a

secondary school may qualify, on the basis of the percent of poverty

in the area it serves, as one in which a scholarship recipient may

meet his or her service obligation. As the first commenter notes, we

know from experience that high school and middle school students are

less likely to participate in free- and reduced-price lunch programs

than are elementary school students. Hence, those schools often may

not be identified as eligible for Title I services, or not qualify

to operate Title I, ESEA, schoolwide programs, despite the actual

poverty rates in the area they serve.

However, if a school--elementary, middle, or secondary--is to

meet the statutory criterion of high need because it serves an area

with a high percentage of individuals from families with incomes

below the poverty line, we continue to believe that the school still

must be eligible under Title I requirements to operate a Title I

schoolwide program. In this regard, the Department has issued

guidance for the Title I program that addresses alternative measures

for determining a secondary school's eligibility to participate in

Title I. This guidance clarifies that a school district may use

comparable data to data for free- and reduced-lunch eligibility (or

other measures permitted under Title I) that are collected through

alternative means such as a survey. Also, an LEA may use the feeder

pattern concept. This concept would allow the LEA to project the

number of low-income children in a middle school or high school

based on the average poverty rate of the elementary school

attendance areas that feed into that school. More specific

information on these alternative measures for secondary and middle

school eligibility under Title I may be found in part two of the

April 1996 Title I, Part A, Policy Guidance: Improving Basic

Programs Operated by Local Educational Agencies. This guidance is

available on the Internet at http://www.ed.gov/legislation/ESEA/

Title I/. Further information also is available from those in the

State educational agency who administer the Title I program. (The

ESEA authorizes waivers of most Title I program requirements,

including the requirement that schools that wish to be schoolwide

programs serve an area with a specified level of poverty. The HEA

contains no comparable waiver authority. Therefore, a middle or high

school that lacks data to confirm its eligibility to operate as a

Title I schoolwide program cannot become eligible to be a high-need

school through a waiver of the Title I schoolwide program

requirements.)

Beyond this clarification, we are unable to accept the

commenter's recommendations for alternative factors that the

regulations would identify as making a secondary school one in which

a scholarship recipient may meet the service obligation. Simply

having some feeder schools meet the 50 percent threshold for free-

and reduced-lunch subsidies may not adequately address the level of

poverty in the entire area the high school serves. The school's

drop-out rate is not sufficiently related to the permissible

criteria in section 201(b)(2) of the statute.

Finally, we believe that the standards of (1) 15 percent of

teachers teaching out-of-field, and (2) a teacher turnover rate

exceeding ten percent, which the commenter proposes, would permit

too many schools to be considered high need. Aside from the poverty

criterion, the law permits high need to be based on a ``high''

percentage of secondary school teachers teaching out-of-field, or a

``high'' teacher turnover rate. In the application package available

in February 1999 for the initial Teacher Quality Enhancement Grant

Program competitions, we explained that 34 percent (incorrectly

printed as ``35 percent'') teaching out-of-field and a 15 percent

attrition rate reflect the best available national data on what

these statutory terms mean. More specifically, 34 percent teaching

out-of-field reflects an average of the percentage of public school

teachers without a major or minor in their main assignment field and

the percentage of teachers in high-poverty schools teaching out-of-

field. A 15 percent teacher attrition rate reflects nationwide data

on the percentage of teachers in all schools, including in high-

poverty schools, who do not return to the same school the following

year.

Action: The definition of ``high-need LEA'' in Sec. 611.1 has

been modified. It now clarifies that the term includes an LEA with

at least one school (1) in which at least 50 percent of enrolled

students are eligible for free- and reduced lunch subsidies, or (2)

that otherwise is eligible, without a waiver, to operate as a

schoolwide program under Title I of the ESEA.

Comment: One commenter stated that it is not practical for an

IHE to provide follow-up services to former scholarship recipients

for three years after the individual becomes a teacher. The

commenter, from a grantee awarded a Partnership Program grant under

section 203 of the HEA, asserts that there are many contractual and

budgetary issues affecting the LEA that are beyond the IHE's

control. The commenter recommends that the regulations instead

require the IHE to provide induction services during the teacher's

first year, and otherwise make services available to the teacher,

upon request, for up to three years after graduation.

Discussion: Section 204(d)(1)(C) of the HEA requires that

Teacher Recruitment Program grantees provide follow-up services to

former scholarship recipients during their first three years of

teaching. For the other two Teacher Quality Enhancement Grant

Programs, the State Grant Program and the Partnership Grants for

Improving Teacher Education Program, the law authorizes grantees to

use program funds for ``[a]ctivities described in section 204(d).''

See sections 202(d)(7) and 203(d)(7) of the HEA, respectively. As

section 204(d)(1)(C) authorizes scholarship assistance to

individuals attending teacher preparation programs, State and

Partnership Program grantees may use grant funds to award these

scholarships.

However, by authorizing State and Partnership Program grantees

to use program funds for activities described in section 207(d), we

believe Congress intended that those who receive scholarship

assistance under these two programs would benefit before and after

graduation from the same range of IHE services that recipients of

scholarships funded under the Teacher Recruitment Program must

receive. Hence, we also believe that it is appropriate to require,

through these regulations, State and Partnership grantees to provide

former scholarship recipients with the same level of follow-up

services after graduation as is required under the Teacher

Recruitment Program. These services would include, as required by

section 204(d)(1)(c), follow-up activities during these new

teachers' first three years of teaching.

We do note that the law does not specify the degree of these

services. Consistent with a grantee's approved applications, we

believe that the form, content, and extent of these follow-up

services will be determined through collaboration among the LEA,

scholarship recipient(s), and the program grantee.

Action: None.

Comment: One commenter stated that all States and partnerships

using program funds to award teacher recruitment scholarships should

prioritize placements in ways that assure that schools in the States

with greatest need have the best opportunities to hire well-trained

teachers. Therefore, the commenter recommended that all States and

partnerships, in collaboration with high-need LEAs, be required to

give priority in placing scholarship recipients in LEAs and schools

that demonstrate the greatest need according to one of the three

criteria with which 611.1 defines ``high need.''

Discussion: We agree with the thrust of the comment. The purpose

of the Teacher Recruitment Program is to address chronic shortages

of qualified teachers in high-need schools and school districts.

IHEs and LEAs should work together to encourage teaching

[[Page 1787]]

candidates who receive scholarship assistance with Teacher Quality

Enhancement Program funds to fulfill their service obligations by

becoming teachers in the highest need schools and school districts.

However, we are concerned that the commenter's recommendations

would (1) burden IHEs unduly with the responsibility for securing

data on literally scores of schools and then somehow ranking those

schools by relative need, and (2) involve the IHE too intimately in

hiring decisions that are better left to the scholarship recipients

and LEA and school officials. For this reason, we believe that the

better approach is to require the IHE, in collaboration with the

high-need LEA(s) with which it partners, to ensure that scholarship

recipients are placed, to the extent possible, in the highest-need

schools of those LEAs.

Action: Section 611.52(c) (proposed 611.40(d)(3)) has been

modified accordingly.

Comment: As proposed, Sec. 611.39(a) would require former

scholarship recipients who are fulfilling their service obligations

to have high-need LEAs in which they teach submit employment

information periodically to the Department confirming that they are,

in fact, meeting their service obligation. One commenter expressed

concern that if, through no fault of the teacher, the LEA does not

forward the information to the Department, the former scholarship

recipient could be wrongly held responsible for repaying the

scholarship assistance he or she had received. The commenter

recommended that we accept, on an interim basis if necessary,

evidence such as a notarized statement that the scholarship

recipient had requested the LEA to submit the information verifying

employment.

Discussion: We agree with the commenter's concern and

recommendation, except that we believe the recommendation does not

sufficiently encourage recipients to have LEAs provide us with

timely information that verifies the scholarship recipient's

employment as a teacher in a high-need school of a high-need LEA.

After considering the matter, we are satisfied that the scholarship

recipient should be permitted to meet this responsibility to verify

that he or she is meeting the service obligation in either of two

ways. Specifically, in lieu of having the LEA provide the needed

information to us in a timely manner, the recipient may attach to

the notarized statement a copy of the information that he or she has

asked the LEA to provide to the Department.

We will consider the timely receipt of this notarized statement

and attachment as satisfactory provisional evidence that the

individual is meeting the service obligation, and so should not be

responsible for its repayment. However, the Department will be

unable to determine finally that this is so without the signed

statement from the LEA. Therefore, the scholarship recipient will

have a continuing responsibility to work to get the LEA to submit

this information.

Action: Sections 611.46 and 611.47 (proposed Sec. 611.39(a) and

(b)) have been modified accordingly.

Comment: One commenter stated that the proposed reasons for

which the Department would defer a scholarship recipient's service

obligation are too limited. The commenter recommends that deferments

also be available for students who currently are attending two-year

institutions and cannot be admitted to the continuing, and

certifying, higher education program due to changes in admission

standards that were implemented after the student had received a

Title II scholarship.

Discussion: A scholarship recipient's responsibility for

repaying the scholarship, accrued interest, and costs of collection,

if any, only arises if the scholarship recipient (1) graduates from

a teacher preparation program and fails to confirm to the Department

that he or she has fulfilled the service obligation, (2) withdraws

from the teacher preparation program, or (3) is found to be no

longer in good standing. We see no reason to expand the proposed

areas in which deferment of the service obligation, or

responsibility to repay the indebtedness, is available. One of the

conditions of the scholarship is that the recipient will repay the

scholarship amount plus accrued interest if he or she does not

remain in good academic standing. Assuming that the recipient

remains in good academic standing, we believe that the appropriate

response to the situation the commenter posed is for the grantee to

continue working with the scholarship recipient to permit him or her

to meet any new admission requirements that the continuing

institution may adopt.

We add only that we believe the situations the commenter

describes should be quite rare. First, the kinds of changes in

admission standards that the commenter describes are likely to be

very infrequent. Beyond this, with regard to scholarship recipients,

we presume that program grantees are in a position to influence the

admission standards and decisions of the teacher preparation

programs they are implementing or with which they are partnering.

Action: None.

Comment: One commenter asserted that the proposed regulations

would inappropriately penalize scholarship recipients who, upon

graduation, fail immediately to find employment as teachers in high-

need schools and school districts. The commenter also criticized the

service obligation as a disincentive to minority recruitment since

students have other scholarship opportunities that do not attach

these conditions.

Discussion: The law requires those who receive scholarships with

Teacher Quality Enhancement Grant Program funds to meet the service

obligation. Moreover, as proposed, Sec. 611.37(b)(2) would enable a

scholarship recipient to have the service obligation deferred where,

despite due diligence, the recipient is unable to secure employment

as a teacher in a high-need school of a high-need LEA.

Action: None.

Comment: One commenter stated that while most of the regulations

were clearly stated, the regulations would be easier to read if they

were divided into more, but shorter, sections.

Discussion: Some of the regulations do not seem appropriate for

dividing into parts. However, we agree with the commenter that both

proposed Sec. 611.39 (``What are a scholarship recipient's reporting

responsibilities?'') and proposed Sec. 611.40 (``What are a

grantee's responsibilities for helping to implement the scholarship

requirements?'') would be clearer if broken into a series of shorter

regulations.

Action: The final regulations have been revised accordingly.

We also have made these regulations applicable to all three of

the Teacher Quality Enhancement Grant Programs by (1) renumbering

them, (2) moving them to a new and generally applicable subpart E,

``Scholarships,'' and (3) thereby eliminating, as no longer

necessary, proposed Sec. 611.42 (``What rules govern scholarships

funded by the State or Partnership Programs for individuals

attending teacher preparation programs?'')

[FR Doc. 00-646 Filed 1-11-00; 8:45 am]

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