# Federal Perkins Loan Program, Federal Work-Study Programs, Federal Supplemental Educational Opportunity Grant Program, Federal Family Education Loan Program, William D. Ford Federal Direct Loan Program, Teacher Education Assistance for College and Higher Education Grant Program, Federal Pell Grant Program, Leveraging Educational Assistance Partnership Program, and Gaining Early Awareness and Readiness for Undergraduate Programs > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2019-25808 ## Record - **Collection:** Federal Register - **Document type:** Proposed Rule - **Published:** December 11, 2019 - **Citation:** 84 FR 67778 ## Text DEPARTMENT OF EDUCATION 34 CFR Parts 674, 675, 676, 682, 685, 686, 690, 692, and 694 [Docket ID ED-2019-OPE-0081] RIN 1840-AD40, 1840-AD44 Federal Perkins Loan Program, Federal Work-Study Programs, Federal Supplemental Educational Opportunity Grant Program, Federal Family Education Loan Program, William D. Ford Federal Direct Loan Program, Teacher Education Assistance for College and Higher Education Grant Program, Federal Pell Grant Program, Leveraging Educational Assistance Partnership Program, and Gaining Early Awareness and Readiness for Undergraduate Programs AGENCY: Office of Postsecondary Education, Department of Education. ACTION: Notice of proposed rulemaking. SUMMARY: In response to the United States Supreme Court decision in Trinity Lutheran Church of Columbia, Inc. v. Comer, and the United States Attorney General's October 7, 2017 Memorandum on Federal Law Protections for Religious Liberty pursuant to Executive Order No. 13798, the Department of Education (Department) proposes revising the current regulations regarding the eligibility of faith-based entities to participate in the Federal Student Aid programs authorized under title IV of the Higher Education Act of 1965, as amended (HEA), and the eligibility of students to obtain certain benefits under those programs. The Secretary is also proposing to simplify the Teacher Education Assistance for College and Higher Education (TEACH) Grant Program requirements to minimize the number of TEACH Grants that are converted to Federal Direct Unsubsidized Loans, and to update, strengthen, and clarify other areas of the TEACH Grant Program regulations. DATES: We must receive your comments on or before January 10, 2020. ADDRESSES: Submit your comments through the Federal eRulemaking Portal or via postal mail, commercial delivery, or hand delivery. We will not accept comments submitted by fax or by email or those submitted after the comment period. To ensure that we do not receive duplicate copies, please submit your comments only once. In addition, please include the Docket ID at the top of your comments. If you are submitting comments electronically, we strongly encourage you to submit any comments or attachments in Microsoft Word format. If you must submit a comment in Adobe Portable Document Format (PDF), we strongly encourage you to convert the PDF to print-to-PDF format or to use some other commonly used searchable text format. Please do not submit the PDF in a scanned format. Using a print-to-PDF format allows the Department to electronically search and copy certain portions of your submissions. • Federal eRulemaking Portal: Go to www.regulations.gov to submit your comments electronically. Information on using Regulations.gov , including instructions for accessing agency documents, submitting comments, and viewing the docket, is available on the site under “Help.” • Postal Mail, Commercial Delivery, or Hand Delivery: The Department strongly encourages commenters to submit their comments electronically. However, if you mail or deliver your comments about the proposed regulations, address them to Mr. Jean-Didier Gaina, U.S. Department of Education, 400 Maryland Ave. SW, Mail Stop 294-20, Washington, DC 20202. Privacy Note: The Department's policy is to make all comments received from members of the public available for public viewing in their entirety on the Federal eRulemaking Portal at www.regulations.gov. Therefore, commenters should be careful to include in their comments only information that they wish to make publicly available. FOR FURTHER INFORMATION CONTACT: For information related to faith-based issues, contact Lynn Mahaffie at (202) 453-7862 or by email at Lynn.Mahaffie@ed.gov. For information related to the TEACH Grant Program, contact Sophia McArdle at (202) 453-6318 or by email at Sophia.McArdle@ed.gov. If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339. SUPPLEMENTARY INFORMATION: Executive Summary Purpose of This Regulatory Action In response to the Supreme Court's decision in Trinity Lutheran Church of Columbia, Inc. v. Comer (137 S. Ct. 2012 (2017)), Executive Order Number 13798 (Exec. Order No. 13798 section 4, 82 FR 21675 (May 4, 2017)), and the Attorney General's October 6, 2017 Memorandum (U.S. Att'y Gen. Memorandum on Federal Law Protections for Religious Liberty (October 6, 2017, https://www.justice.gov/opa/pressrelease/file/1001891/download )), the Department engaged in a full review of its regulations related to title IV, HEA programs in order to identify provisions that may discriminate against otherwise eligible students and faith-based entities by disqualifying them from title IV, HEA programs due to their religious beliefs in violation of the Free Exercise Clause of the First Amendment to the United States Constitution. To ensure that students and faith-based entities are not discriminated against due to their religious beliefs, the Department proposes to: • Ensure that members of religious orders are not denied access to title IV funding or benefits under the title IV programs, including the Federal Pell Grant Program, the Federal Perkins Loan Program, the Federal Work-Study Program (FWSP), the Federal Supplemental Educational Opportunity Grant (FSEOG) Program, the Federal Family Education Loan (FFEL) Program, and the William D. Ford Federal Direct Loan (Direct Loan) Program. • Under certain circumstances, allow borrowers working as full-time volunteers to defer repayment of Federal Perkins Loans, National Defense Student Loans (NDSLs), and FFELs if those borrowers also engage in giving religious instruction, conducting worship services, engaging in religious proselytizing, or engaging in fundraising to support religious activities as part of their assigned volunteer duties. • Provide an interpretation of the Public Service Loan Forgiveness (PSLF) regulations that permit borrowers who work for employers that engage in religious instruction, worship services, or proselytizing to qualify for PSLF so long as they meet the applicable standard for full-time employment when those religious activities are excluded from their work hours. • Eliminate arbitrary limitations on the ability of private secondary and postsecondary faith-based educational institutions to participate in the Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP). In addition, during its review, the Department discovered language that is inconsistent with the statute in both the Leveraging Educational Assistance Partnership Program (LEAP) and FWSP regulations. The provisions in both programs relate to allowable employment-related activities for program participants. In these cases, the Department proposes to include the statutory language in the regulations. These proposed regulations would also make changes to the TEACH Grant Program requirements. In exchange for receiving a TEACH Grant, a grant recipient must agree to complete a teaching service obligation and must regularly provide documentation of his or her progress toward satisfying the service obligation. If a grant recipient fails to complete the service obligation or does not meet requirements for documenting the service obligation, the TEACH Grants that the individual received are converted to a Direct Unsubsidized Loan that must be repaid, with interest charged from the date of each TEACH Grant disbursement. The proposed regulations would simplify program requirements to make it easier for TEACH Grant recipients to document their progress toward satisfying the service obligation, thereby reducing the number of TEACH Grants that are converted to Direct Unsubsidized Loans. The proposed regulations would also establish a process for a TEACH Grant recipient to request reconsideration of the conversion of the grant to a loan if the recipient believes that his or her TEACH Grant was converted to a loan in error, expand and strengthen counseling requirements for TEACH Grant recipients, expand the conditions under which a TEACH Grant recipient may receive a temporary suspension of the period for completing the teaching service obligation, and strengthen, update, and clarify other areas of the TEACH Grant Program regulations. Summary of the Major Provisions of This Regulatory Action To restore religious liberty to faith-based institutions and religious students, we propose new regulations that would— • Restore the ability of members of religious orders, who also are pursuing courses of study at institutions of higher education, to participate in the title IV, HEA programs by eliminating regulatory provisions that treat members of religious orders as having no financial need in certain circumstances. • Allow certain borrowers, who serve as full-time volunteers in tax-exempt organizations and give religious instruction, conduct worship service, proselytize, or fundraise to support religious activities as part of their official duties, to defer repayment of Federal Perkins Loans, NDSLs, and FFELs. • Provide an interpretation of the PSLF regulations, which permit borrowers who work for employers that engage in religious instruction, worship services, or proselytizing to qualify for PSLF so long as they meet the applicable standard for full-time employment when those religious activities are excluded from their work hours. • Clarify requirements for private secondary and postsecondary faith-based institutions' participation in the GEAR UP program. • Conform language in the LEAP and FWSP regulations regarding allowable program activities to statutory language. For the TEACH Grant Program, we propose new regulations that would— • Clarify that grant recipients may satisfy the TEACH Grant service obligation by teaching for an educational service agency that serves low-income students. • Clarify the beginning date of the eight-year period for completing the TEACH Grant service obligation. • Revise the definition of “highly qualified.” • Update and expand the conditions under which a TEACH Grant recipient may satisfy the TEACH Grant service obligation by teaching in a high-need field listed in the Department's annual Teacher Shortage Area Nationwide Listing (Nationwide List). • Clarify the service obligation requirements for TEACH Grant recipients who withdraw from the institution where they received a TEACH Grant before completing the program for which they received the grant, then later re-enroll in the same program or in a different TEACH Grant eligible program at the same academic level. • Expand the information that is provided to TEACH Grant recipients during initial, subsequent, and exit counseling, and add a new conversion counseling requirement for grant recipients whose TEACH Grants are converted to Direct Unsubsidized Loans. • Add new conditions under which a TEACH Grant recipient may receive a temporary suspension of the eight-year period for completing the service obligation. • Remove the current regulatory requirement for TEACH Grant recipients to certify, within 120 days of completing the program for which they received TEACH Grants, that they have begun qualifying teaching service, or that they have not yet begun teaching, but they intend to satisfy the service obligation. • Simplify the regulations specifying the conditions under which TEACH Grants are converted to Direct Unsubsidized Loans so that for all grant recipients, loan conversion will occur only if the recipient asks the Secretary to convert his or her TEACH Grants to loans, or if the recipient fails to begin or maintain qualifying teaching service within a timeframe that would allow the recipient to satisfy the service obligation within the eight-year service obligation period. • Specify that the Secretary will send grant recipients, at least annually, a notice containing detailed information about the TEACH Grant service obligation requirements, a summary of the grant recipient's progress toward satisfying the service obligation, and an explanation of the process by which a grant recipient whose TEACH Grants are converted to Direct Unsubsidized Loans may request reconsideration of the conversion if he or she believes that the grants were converted in error. • Describe the actions that the Secretary will take if a grant recipient's request for reconsideration of the conversion of the grant to a loan is approved or denied. • Specify that the Secretary will notify a grant recipient in advance of the date by which he or she will be subject to loan conversion for failure to begin or maintain qualifying teaching service within a timeframe that would allow the recipient to complete the service obligation within the eight-year service obligation period, and inform the recipient of the final date by which he or she must provide documentation of teaching service to avoid having his or her grants converted to loans. • Incorporate statutory changes and update, simplify, and clarify various areas of the TEACH Grant Program regulations. Please refer to the Summary of Proposed Changes section of this notice of proposed rulemaking (NPRM) for more details on the major provisions contained in this NPRM. Costs and Benefits As discussed in the Regulatory Impact Analysis section of this document, the Department does not estimate that these proposed regulations would result in any significant costs. Changes regarding faith-based institutions and religious students would have minimal impacts on financial aid costs to the Federal government, because these provisions will affect few students and borrowers. Changes regarding the PSLF program would similarly have minimal impact, as the consensus language largely aligns with historical Department practice. Changes regarding the GEAR UP program would have no estimated costs as participation in the Department's competitive grant programs is voluntary and the program currently serves small numbers of religiously affiliated schools. While changes to the TEACH Grant Program would likely improve the reporting and documentation process for recipients and increase the number of teaching positions in which TEACH grant recipients could satisfy their service obligations, we do not estimate that the changes would result in a sizable increase in the number of grant recipients. 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 provide relevant information and data whenever possible, even when there is no specific solicitation of data and other supporting materials in the request for comment. We also urge you to arrange your comments in the same order as the proposed regulations. Please do not submit comments that are outside the scope of the specific proposals in this NPRM, as we are not required to respond to such comments. We invite you to assist us in complying with the specific requirements of Executive Orders 12866 and 13563 and their overall requirement of reducing regulatory burden that might result from these proposed regulations. Please let us know of any further ways we could reduce potential costs or increase potential benefits while preserving the effective and efficient administration of the Department's programs and activities. During and after the comment period, you may inspect all public comments about the proposed regulations by accessing Regulations.gov . You may also inspect the comments in person at 400 Maryland Ave. SW, Washington, DC, between 8:30 a.m. and 4 p.m., Eastern Time, Monday through Friday of each week except Federal holidays. To schedule a time to inspect comments, please contact one of the persons listed under FOR FURTHER INFORMATION CONTACT . Assistance to Individuals with Disabilities in Reviewing the Rulemaking Record: On request, we will provide an appropriate accommodation or auxiliary aid to an individual with a disability who needs assistance to review the comments or other documents in the public rulemaking record for the proposed regulations. To schedule an appointment for this type of accommodation or auxiliary aid, please contact one of the persons listed under FOR FURTHER INFORMATION CONTACT . Background The Secretary proposes to amend parts 674, 675, 676, 682, 685, 686, 690, 692, and 694 of title 34 of the Code of Federal Regulations (CFR). The regulations in 34 CFR part 674 pertain to the Federal Perkins Loan Program. The regulations in 34 CFR part 675 pertain to FWSP. The regulations in 34 CFR part 676 pertain to the FSEOG. The regulations in 34 CFR part 682 pertain to FFEL. The regulations in 34 CFR part 685 pertain to Direct Loans. The regulations in 34 CFR part 686 pertain to the TEACH Grant Program. The regulations in 34 CFR part 690 pertain to the Federal Pell Grant Program. The regulations in 34 CFR part 692 pertain to LEAP. The regulations in 34 CFR part 694 pertain to GEAR UP. We are proposing these amendments to: (1) Ensure that students and faith-based organizations are not prevented from participating in title IV programs because of their religious views; (2) codify the statutory language about allowable forms of employment for both the FWSP and the LEAP program; (3) ensure that GEAR UP providers that serve students attending private schools are employed independently of the private school; (4) eliminate a redundant provision that prohibits the commingling of Federal and non-Federal funds used to provide services to GEAR UP students attending private institutions; and (5) eliminate the prohibition against pervasively sectarian institutions of higher education from serving as fiscal agents for GEAR UP grantees. Throughout this NPRM, when the Department refers to a “generally available benefit program,” the Department is referring to programs that meet the Supreme Court's characterization of “neutral and generally available benefit programs” in Trinity Lutheran. 1 1 137 S. Ct. 2012 (2017). In 2007, Congress established the TEACH Grant Program to help increase the number of teachers in high-need fields in low-income schools. The TEACH Grant Program provides up to $4,000 per year to undergraduate and graduate students enrolling in coursework to become a teacher. In exchange for receiving a TEACH Grant, a recipient must agree to teach in a high-need field such as reading, mathematics, or science, at a low-income school, for at least four years in an eight-year period and annually certify that he or she intends to meet this requirement. If a recipient does not meet the grant requirements or the annual certification requirements, the grant converts to a Federal Direct Unsubsidized Loan with interest charged from the date of each TEACH Grant disbursement. A 2015 Government Accountability Office (GAO) report found that around 36,000 out of more than 112,000 TEACH Grant recipients had not fulfilled TEACH Grant requirements and had their grants converted to loans (GAO, 2015). 2 GAO's analysis also found that 2,252 TEACH Grants were improperly converted to loans as of September 2014. GAO concluded that due to the number of incorrectly converted grants, the Department should better understand the reasons teachers do not meet program requirements, and program management should be improved, especially with respect to the grant-to-loan conversion dispute process. These proposed regulations help to address GAO's concerns. 2 Government Accountability Office. 2015. Higher Education: Better Management of Federal Grant and Loan Forgiveness Programs for Teachers Needed to Improve Participant Outcomes (GAO 15-314). Washington, DC: United States Government Accountability Office. A 2018 study conducted for the Department by the American Institutes for Research (U.S. Department of Education, 2018) 3 found that as of June 2016, 63 percent of TEACH Grant recipients who started their eight-year service obligation period before July 2014 had their grants converted to unsubsidized loans because they did not meet the service obligation requirements or the annual certification requirements. More specifically, this study found that the factors associated with recipients not meeting the grant requirements included those related to the recipient's employment (including teaching in a position that did not qualify for TEACH Grant service (39 percent) and not working as a certified teacher (33 percent)), the recipient not understanding the service obligation requirements, and factors related to the recipient providing the annual certification (not providing the certification because the recipient did not know about the annual certification process (19 percent) and not providing the certification because the recipient experienced challenges related to the certification process (13 percent)). 3 U.S. Department of Education. (2018). Study of the Teacher Education Assistance for College and Higher Education (TEACH) Program. To address the concerns raised by these studies, we are proposing amendments that we believe will reduce the number of TEACH Grants that are converted to Direct Unsubsidized Loans by simplifying the requirements for TEACH Grant recipients to show that they are meeting the service obligation requirements; ensure that TEACH Grant recipients are better informed of program requirements by expanding and strengthening counseling and notifications; make it easier for TEACH Grant recipients to satisfy the service obligation by establishing additional conditions under which the period for completing the required teaching service may be temporarily suspended, and by expanding the options for satisfying the service obligation by teaching in a high-need field listed in the Department's Nationwide List; provide a process for TEACH Grant recipients to request reconsideration of the conversion of their TEACH Grant to a loan if they believe that the grant was converted to a loan in error; and update, simplify, and clarify various areas of the TEACH Grant regulations. Public Participation On July 31, 2018, we published a notice in the Federal Register (83 FR 36814) announcing our intent to establish a negotiated rulemaking committee under section 492 of the HEA to develop proposed regulations related to a number of higher education practices and issues, including (1) accreditation; (2) distance learning and educational innovation; (3) TEACH Grants; and (4) participation by faith-based educational entities. We also announced three public hearings at which interested parties could comment on the topics suggested by the Department and suggest additional topics for consideration for action by the negotiated rulemaking committee. Those hearings took place on September 6, 2018, in Washington, DC, on September 11, 2018, in New Orleans, Louisiana, and on September 13, 2018, in Sturtevant, Wisconsin. We invited parties to comment and submit topics for consideration in writing as well. Transcripts from the public hearings are available at: www2.ed.gov/policy/highered/reg/hearulemaking/2018/index.html. Written comments submitted in response to the July 31, 2018 Federal Register notice may be viewed through the Federal eRulemaking Portal at www.regulations.gov, within docket ID ED-2018-OPE-0076. Instructions for finding comments are also available on the site under “How to Use Regulations.gov ” in the “Help” section. Negotiated Rulemaking Section 492 of the HEA, 20 U.S.C. 1098a, requires the Secretary to obtain public involvement in the development of proposed regulations affecting programs authorized by title IV of the HEA. After obtaining extensive input and recommendations from the public, including individuals and representatives of groups involved in the title IV, HEA programs, the Secretary in most cases must subject the proposed regulations to a negotiated rulemaking process. If negotiators reach consensus on the proposed regulations, the Department agrees to publish without alteration a defined group of regulations on which the negotiators reached consensus unless the Secretary reopens the process or provides a written explanation to the participants stating why the Secretary has decided to depart from the agreement reached during negotiations. Further information on the negotiated rulemaking process can be found at: www2.ed.gov/policy/highered/reg/hearulemaking/hea08/neg-reg-faq.html. On October 15, 2018, the Department published a notice in the Federal Register (83 FR 51906) announcing its intention to establish a negotiated rulemaking committee—the Accreditation and Innovation Committee—to prepare proposed regulations for the Federal Student Aid programs authorized under title IV of the HEA. The notice set forth a schedule for the committee meetings and requested nominations for individual negotiators to serve on the negotiating committee. We also announced the creation of three subcommittees—the Distance Learning and Educational Innovation Subcommittee, Faith-Based Entities Subcommittee, and the TEACH Grants Subcommittee—and requested nominations for individuals with pertinent expertise to participate on the subcommittees. The Department sought negotiators to represent the following groups for the Accreditation and Innovation Committee: Students; legal assistance organizations that represent students; financial aid administrators at postsecondary institutions; national accreditation agencies; regional accreditation agencies; programmatic accreditation agencies; institutions of higher education primarily offering distance education; institutions of higher education eligible to receive Federal assistance under title III, parts A, B and F, and title V of the HEA, which include Historically Black Colleges and Universities (HBCUs), Hispanic-Serving Institutions (HSIs), American Indian Tribally Controlled Colleges and Universities, Alaska Native and Native Hawaiian-Serving Institutions, and other institutions with a substantial enrollment of needy students as defined in title III of the HEA; two-year public institutions of higher education; four-year public institutions of higher education; faith-based institutions of higher education; private, nonprofit institutions of higher education; private, proprietary institutions of higher education; employers; and veterans. The Department sought individuals to represent the following groups for the Faith-Based Entities Subcommittee: Students; faith-based entities eligible for title IV, HEA programs; officers of institution-based GEAR UP grantees; institutions of higher education with knowledge of faith-based entities' participation in the title IV, HEA programs; institutions of higher education with knowledge of faith-based entities' participation in the title IV, HEA programs that also are eligible to receive Federal financial assistance under title III, parts A, B, and F, and title V of the HEA, which include HBCUs, HSIs, American Indian Tribally Controlled Colleges and Universities, Alaska Native and Native Hawaiian-Serving Institutions, Predominantly Black Institutions, and other institutions with a substantial enrollment of needy students as defined in title III of the HEA; accrediting agencies; associations or organizations that focus on issues related to faith-based entities or the participation of faith-based entities in Federal programs; and financial aid administrators at postsecondary institutions. The Department sought individuals with expertise in teacher education programs, student financial aid, and high-need teacher education programs to serve as members of the TEACH Grant Subcommittee: Students who are or have been TEACH Grant recipients; legal assistance organizations that represent students; financial aid administrators at postsecondary institutions; State primary and secondary education executive officers; institutions of higher education that award or have awarded TEACH grants and that are eligible to receive Federal assistance under title III, parts A, B, and F, and title V of the HEA, which include HBCUs, HSIs, American Indian Tribally Controlled Colleges and Universities, Alaska Native and Native Hawaiian-Serving Institutions, Predominantly Black Institutions, and other institutions with a substantial enrollment of needy students as defined in title III of the HEA; two-year institutions of higher education that award or have awarded TEACH grants; four-year institutions of higher education that award or have awarded TEACH grants; organizations or associations that represent the interests of students who participate in title IV programs; and organizations or associations that represent financial aid administrators. The Accreditation and Innovation negotiating committee included the following members: Susan Hurst, Ouachita Baptist University, and Karen McCarthy (alternate), National Association of Student Financial Aid Administrators, representing financial aid administrators at postsecondary institutions. Robyn Smith, Legal Aid Foundation of Los Angeles, and Lea Wroblewski (alternate), Legal Aid of Nebraska, representing legal assistance organizations that represent students. Ernest McNealey, Allen University, and Erin Hill Hart (alternate), North Carolina A & T State University, representing institutions of higher education that award or have awarded TEACH grants and that are eligible to receive Federal assistance under title III, parts A, B, and F, and title V of the HEA, which include HBCUs, HSIs, American Indian Tribally Controlled Colleges and Universities, Alaska Native and Native Hawaiian-Serving Institutions, Predominantly Black Institutions, and other institutions with a substantial enrollment of needy students as defined in title III of the HEA. David Dannenberg, University of Alaska, Anchorage, and Tina Falkner (alternate), University of Minnesota, representing four-year public institutions of higher education. Terry Hartle, American Council on Education, and Ashley Ann Reich (alternate), Liberty University, representing private, nonprofit institutions of higher education. Jillian Klein, Strategic Education, Inc., and Fabian Fernandez (alternate), Schiller International University, representing private, proprietary institutions of higher education. William Pena, Southern New Hampshire University, and M. Kimberly Rupert (alternate), Spring Arbor University, representing institutions of higher education primarily offering distance education. Christina Amato, Sinclair College, and Daniel Phelan (alternate), Jackson College, representing two-year public institutions of higher education. Barbara Gellman-Danley, Higher Learning Commission, and Elizabeth Sibolski (alternate), Middle States Commission on Higher Education, representing regional accreditation agencies. Laura King, Council on Education for Public Health, and Janice Knebl (alternate), American Osteopathic Association Commission on Osteopathic College Accreditation, representing programmatic accreditation agencies. Michale S. McComis, Accrediting Commission of Career Schools and Colleges, and India Y. Tips (alternate), Accrediting Bureau of Health Education Schools, representing national accreditation agencies. Steven M. Sandberg, Brigham Young University, and David Altshuler (alternate), San Francisco Theological Seminary, representing faith-based institutions of higher education. Joseph Verardo, National Association of Graduate-Professional Students, and John Castellaw (alternate), University of Arizona, representing students. Edgar McCulloch, IBM Corporation, and Shaun T. Kelleher (alternate), BAM Technologies, representing employers. Daniel Elkins, Enlisted Association of the National Guard of the U.S., and Elizabeth Bejar (alternate), Florida International University, representing veterans. Annmarie Weisman, U.S. Department of Education, representing the Department. The Faith-Based Entities Subcommittee included the following members: Gregory Bruner, Olivet Nazarene University, representing financial aid administrators at postsecondary institutions. Andrew Bramson, College Crusade of Rhode Island, representing officers of institution-based GEAR UP grantees. Emmanual Guillory, United Negro College Fund, Inc., representing institutions of higher education eligible to receive Federal assistance under title III, parts A, B, F, and title V of the HEA, which include HBCUs, HSIs, American Indian Tribally Controlled Colleges and Universities, Alaska Native and Native Hawaiian-Serving Institutions, and other institutions with a substantial enrollment of needy students as defined in title III of the HEA. Stephen Eck, Oklahoma Christian University, representing faith-based entities eligible for title IV, HEA programs. Thomas Dunne, Fordham University, representing institutions of higher education with knowledge of faith-based entities' participation in the title IV, HEA programs. William Hathaway, Regent University, representing accrediting agencies. Richard Katskee, Americans United for Separation of Church and State, and Kimberlee Wood Colby, Center for Law and Religious Freedom, representing associations or organizations that focus on issues related to faith-based entities or the participation of faith-based entities in Federal programs. Haven Herrin, Soulforce, representing students. Lynn Mahaffie, U.S. Department of Education. The TEACH Grants Subcommittee included the following members: Debbi Braswell, Belhaven University, and Stephen Payne, National Association of Student Financial Aid Administrators, representing financial aid administrators at postsecondary institutions. Kyra Taylor, Legal Services Center at Harvard Law School, representing legal assistance organizations that represent students. Willis W. Walter, Virginia State University, representing institutions of higher education that award or have awarded TEACH Grants and that are eligible to receive Federal assistance under title III, parts A, B, and F, and title V of the HEA, which includes HBCUs, HSIs, American Indian Tribally Controlled Colleges and Universities, Alaska Native and Native Hawaiian-Serving Institutions, and other institutions with a substantial enrollment of needy students as defined in title III of the HEA. Alyssa Dobson, Slippery Rock University, and David T. Cantaffa, State University of New York, representing four-year institutions of higher education that award or have awarded TEACH Grants. Deborah Koolbeck, American Association of Colleges for Teacher Education, representing organizations or associations that represent the interests of students who participate in the title IV programs. Sophia McArdle, U.S. Department of Education. The negotiated rulemaking committee met to develop proposed regulations on January 14-16, 2019; February 19-22, 2019; March 25-28, 2019; and April 1-3, 2019. At the first meeting of the Committee, the Department received a petition for membership from David Tandberg, Vice President of Policy Research and Strategic Initiatives at the State Higher Education Executive Officers Association, to represent State higher education executive officers. The negotiated rulemaking committee voted to include Dr. Tandberg on the full committee. During its first meeting, the negotiating committee also reached agreement on its protocols and proposed agenda. The protocols provided, among other things, that the committee would operate by consensus. Consensus means that there must be no dissent by any member for the committee to have reached agreement. Under the protocols, the Department would use the consensus-based language in its proposed regulations for each bucket, as described in more detail below, on which final consensus was achieved. Furthermore, the Department would not substantively alter the consensus-based language of its proposed regulations unless the Department reopened the negotiated rulemaking process or provided a written explanation to the committee members regarding why it decided to depart from that language. During the first meeting, the negotiating committee agreed to negotiate an agenda of issues related to accreditation and student financial aid. Under the protocols, the issues were placed into three “buckets” upon which a final consensus would have to include consensus on all issues within that bucket. The first bucket included issues related to accreditation in 34 CFR parts 600, 602, 603, and 668, as well as the Robert C. Byrd Scholarship Program in 34 CFR part 654. The second bucket included issues related to the TEACH Grant Program in 34 CFR part 686 and the treatment of faith-based entities in student aid and grant programs in 34 CFR parts 674, 675, 676, 682, 685, 690, 692, and 694. The third bucket included issues related to distance learning and educational innovation in 34 CFR parts 600 and 668. The committee reached consensus on each of the three buckets. The Department plans to issue separate NPRMs and final regulations for each bucket of issues. This NPRM addresses issues related to the treatment of faith-based entities and TEACH Grants. During the committee meetings, the Department explained that it would consider early implementation of the provisions of the final TEACH grant regulations in order to reduce the number of conversions of grants to loans by simplifying program requirements. During committee meetings, the committee reviewed and discussed the Department's drafts of regulatory language and the committee members' alternative language and suggestions. At the final meeting on April 3, 2019, the committee reached consensus on regulatory language. For this reason, and according to the committee's protocols, committee members and the organizations that they represent have agreed to refrain from commenting negatively on the consensus-based regulatory language. For more information on the negotiated rulemaking sessions, please visit: https://www2.ed.gov/policy/highered/reg/hearulemaking/2018/index.html. Summary of Proposed Changes With respect to issues discussed by the Faith-Based Subcommittee, the proposed regulations would— • Amend §§ 674.9, 675.9, 676.9, 682.301, 685.200, and 690.75 by removing language that presumes that a member of a religious order has no financial need when determining eligibility for the Pell Grant Program, the Federal Perkins Loan Program, the FWSP, the FSEOG Program, the FFEL Program, and the Direct Loan Program, respectively. • Delete language in §§ 674.35, 674.36, and 682.210 that would prohibit borrowers with Federal Perkins Loans made before July 1, 1993, NDSLs made on or after October 1, 1980, but before July 1, 1993, or FFELs made before July 1, 1993, from obtaining deferment of their loans during periods of otherwise eligible full-time volunteer work that includes providing religious instruction, conducting religious services, proselytizing, or engaging in fundraising to support religious activities. • Amend §§ 675.20 and 692.30 to conform regulatory provisions in the FWSP and LEAP Program to statutory provisions that prohibit work study employment from involving the construction, operation, or maintenance of so much of any facility as is used or is to be used for sectarian instruction or as a place for religious worship. • Amend § 685.219 by deleting provisions that would exclude borrowers who are otherwise eligible for PSLF from receiving forgiveness, because they are working for organizations engaged in activities relating to religious instruction, worship services, or proselytizing. • Modify § 694.6(b) by replacing language related to the provision of GEAR UP services and providers at private religious schools with language requiring that providers of GEAR UP services be employed or contracted independently of a private school and its affiliated organizations. The Department proposes to delete the word “religious” before the word “organization” to clarify that employment must be independent of organizations affiliated with the school, regardless of whether those organizations are religious in nature. • Delete § 694.6(c), which prohibits the commingling of Federal and non-Federal funds used to provide GEAR UP services to students attending private schools. • Amend § 694.10 to delete language indicating that the fiscal agent of a GEAR UP grant may not be pervasively sectarian. For the TEACH Grant Program, the proposed regulations would— • Where needed throughout the regulations, add references to educational service agencies, replace “agreement to serve” with “agreement to serve or repay,” and revise the references to Direct Unsubsidized Loans for consistency with the terminology used in the Direct Loan Program regulations. • Amend § 686.1 by expanding the information included in the description of the scope and purpose of the TEACH Grant Program. • Revise § 686.2 by adding a cross-reference to the definition of “Free Application for Federal Student Aid (FAFSA)” in 34 CFR part 668, adding definitions of “educational service agency” and “Teacher Shortage Area Nationwide Listing (Nationwide List),” and revising the definitions of “Agreement to serve,” “highly qualified,” “school serving low-income students (low-income school),” and “TEACH Grant-eligible program.” • Modify §§ 686.10 and 686.11 by replacing references to submitting a TEACH Grant application with references to submitting the FAFSA and making additional conforming changes. • Amend § 686.12 by (1) changing “agreement to serve” to “agreement to serve or repay”; (2) expanding the description of the contents of the agreement to serve or repay; (3) clarifying the requirements for completion of more than one service obligation, and adding language to explain the service obligation requirements for grant recipients who withdraw from an institution prior to completing the program for which TEACH Grants were received and later re-enroll; and (4) updating the conditions under which a TEACH Grant recipient may satisfy the service obligation by teaching in a high-need field listed in the Department's Nationwide List. • Make minor changes to § 686.21 to be more consistent with the corresponding statutory language. • Amend § 686.32 by expanding and revising the information that TEACH Grant recipients receive during initial, subsequent, and exit counseling, and by adding a new conversion counseling requirement for grant recipients whose TEACH Grants are converted to Direct Unsubsidized Loans. • Modify § 686.40 by (1) removing the requirement for grant recipients to confirm their status within 120 days of ceasing enrollment in a program for which they received a TEACH Grant; (2) eliminating the current rule stating that a grant recipient may not satisfy the service obligation by teaching in a geographic region of a State or in a specific grade level not associated with a high-need field that has been designated as a teacher shortage area in the Department's Nationwide List; and (3) adding a new circumstance under which teaching for less than a complete academic year may be counted as a full year of qualifying teaching service. • Revise § 686.41 by adding new conditions under which a grant recipient may receive a temporary suspension of the period for completing the service obligation. • Amend § 686.42 by updating the requirements and procedures for receiving a discharge of the TEACH Grant service obligation based on a total and permanent disability (TPD). • Revise § 686.43 by (1) simplifying the rules for conversion of TEACH Grants to Direct Unsubsidized Loans to provide that for all grant recipients, conversion will occur only if the grant recipient requests conversion, or if the recipient fails to begin or maintain qualifying teaching service within a timeframe that would allow the recipient to complete the service obligation within the eight-year service obligation period; (2) adding language describing a notice that the Secretary will send to grant recipients at least annually to remind them of the service obligation requirements; (3) specifying that the Secretary will notify grant recipients in advance of the final date by which they must submit documentation of qualifying teaching service to avoid loan conversion; and (4) describing the information that the Secretary will provide to a grant recipient whose grants are converted to loans, including information about the process by which a grant recipient may request reconsideration of the conversion. Significant Proposed Regulations We discuss substantive issues under the sections of the proposed regulations to which they pertain. Generally, we do not address proposed regulatory provisions that are technical or otherwise minor in effect. Faith-Based Significant Proposed Regulations Student Eligibility (§ 674.9) Statute: Parts E (§ 461, et seq. ) and F (§ 471, et seq. ) of the HEA govern the Federal Perkins Loan Program and need analysis, respectively. Current Regulations: Section 674.9(c) provides that a member of a religious order pursuing a course of study in an institution of higher education has no financial need for purposes of the Federal Perkins Loan Program if the order has as its primary objective the promotion of ideals and beliefs regarding a Supreme Being; requires its members to forego monetary or other support substantially beyond the support it provides; and directs the member to pursue the course of study or provides subsistence support to its members. Proposed Regulations: We propose to revise § 674.9(c) to remove the language that provides that a member of a religious order is considered to have no financial need. Reasons: In Trinity Lutheran Church of Columbia, Inc. v. Comer, the Supreme Court held that laws and policies may provide benefits in a way that is neutral toward religion, but policies that single out the religious for disfavored treatment violate the Free Exercise Clause. 4 The Department determined that the current regulations may violate the Free Exercise Clause by categorically denying individuals from participation in generally available benefit programs, based on a person's religious views. The Department believes that otherwise eligible students should not be denied participation in title IV programs based solely on their membership in a religious order or the particular attributes of that order. It is not necessary and is in violation of the Free Exercise Clause to single out and exclude from participation in title IV programs individuals who are members of religious orders. Accordingly, the Department proposes to delete this provision. 4 137 S. Ct. at 2021-25. Deferment of Repayment—Federal Perkins Loans Made Before July 1, 1993 (§ 674.35) Statute: Parts E (§ 461, et seq. ) and F (§ 471, et seq. ) of the HEA govern the Federal Perkins Loan Program and need analysis, respectively. Current Regulations: Section 674.35(c)(5)(iv) denies deferment of repayment for Federal Perkins loan borrowers working as volunteers if their volunteer duties include giving religious instruction, conducting worship services, proselytizing, or fundraising to support religious activities. Proposed Regulations: We propose to delete § 674.35(c)(5)(iv). Reasons: We believe that the current provision may violate the Free Exercise Clause of the First Amendment. Many religious organizations offer services such as providing food to impoverished people as part of their religious worship and outreach. Those organizations may not be able to separate the provision of secular and non-secular services, as they are intertwined in their faith and belief systems. Volunteers should be able to enjoy membership in a religious organization and obtain loan deferments (a generally available benefit). Accordingly, the Department proposes to delete this provision. Deferment of Repayment—NDSLs Made on or After October 1, 1980, but Before July 1, 1993 (§ 674.36) Statute: Section 464 of the HEA governs the terms of Perkins Loans. Current Regulations: Section 674.36(c)(4)(iv) denies deferment of repayment for NDSL borrowers working as volunteers if their duties include giving religious instruction, conducting worship service, proselytizing, or fundraising to support religious activities. Proposed Regulations: We propose to delete § 674.36(c)(4)(iv). Reasons: We believe that the current regulation may violate the Free Exercise Clause of the First Amendment. Many religious organizations offer services such as providing food to impoverished people as part of their religious worship and outreach. Those organizations may not be able to separate the provision of secular and non-secular services, as they are intertwined in their faith and belief systems. Volunteers should be able to enjoy membership in a religious organization and obtain loan deferments (a generally available benefit). Accordingly, the Department proposes to delete this provision. Student Eligibility (§ 675.9) Statute: HEA part C (§ 441, et seq. ) governs the FWSP and HEA part F (§ 471, et seq. ) governs need analysis. Current Regulations: Section 675.9(c) provides that a member of a religious order pursuing a course of study in an institution of higher education has no financial need for purposes of the FWSP if the order has as its primary objective the promotion of ideals and beliefs regarding a Supreme Being; requires its members to forego monetary or other support substantially beyond the support it provides; and directs the member to pursue the course of study or provides subsistence support to its members. Proposed Regulations: We propose to revise § 675.9(c) to remove the language that provides that a member of a religious order is considered to have no financial need. Reasons: In Trinity Lutheran Church of Columbia, Inc. v. Comer, the Supreme Court held that laws and policies may provide benefits in a way that is neutral and generally applicable without regard to religion, but policies that single out the religious for disfavored treatment violate the Free Exercise Clause. 5 The Department determined that the current regulations may violate the Free Exercise Clause by categorically denying individuals from participation in neutral and generally available benefit programs based on their membership in a religious order. Other non-discriminatory methods exist for determining a student's cost of attendance when a third party is providing housing, sustenance, or other support to the student. It is not necessary and is in violation of the Free Exercise Clause to single out and exclude from participation in title IV programs individuals who are members of religious orders. Accordingly, the Department proposes to delete this provision. 5 137 S. Ct. at 2021-25. Eligible Employers and General Conditions and Limitation on Employment (§ 675.20) Statute: Section 443(b)(1)(C) of the HEA states that work performed under the FWSP may “not involve the construction, operation, or maintenance of so much of any facility as is used or is to be used for sectarian instruction or as a place for religious worship.” Current Regulations: Section 675.20(c)(2)(iv) provides that FWSP employment may not “involve the construction, operation, or maintenance of any part of a facility used or to be used for religious worship or sectarian instruction.” Proposed Regulations: We propose to amend the regulation to be consistent with the statutory text. Reasons: On college campuses, chapels and other religious structures may be part of larger multi-use facilities. The current regulations are not clear as to when FWSP employment may include the construction, operation, or maintenance of a larger, multi-use facility that includes space that is used for religious worship or sectarian instruction. The current regulatory language also has departed from the statute in precluding certain employment activities from any part of a facility used or to be used for religious worship or sectarian instruction. To provide clarity and to ensure adherence to the statute, the Faith-Based Entities Subcommittee suggested that we conform the regulatory language to the statutory provision, and the committee reached consensus on amending the provision as proposed by the subcommittee. Student Eligibility (§ 676.9) Statute: Section 413C and Part F (§ 471, et seq. ) of the HEA govern the selection of recipients for the FSEOG Program and need analysis, respectively. Current Regulations: Section 676.9(c) states that a member of a religious order pursuing a course of study in an institution of higher education has no financial need for purposes of the FSEOG Program if the order has as its primary objective the promotion of ideals and beliefs regarding a Supreme Being; requires its members to forego monetary or other support substantially beyond the support it provides; and directs the member to pursue the course of study or provides subsistence support to its members. Proposed Regulations: We propose to revise § 676.9(c) to remove the language that provides that a member of a religious order is considered to have no financial need. Reasons: In Trinity Lutheran Church of Columbia, Inc. v. Comer, the Supreme Court held that laws and policies may provide benefits in a way that is neutral to religion, but policies that single out the religious for disfavored treatment violate the Free Exercise Clause. 6 The Department determined that the current regulations may violate the Free Exercise Clause by categorically denying individuals from participating in generally available benefit programs based on their membership in a religious order. The Department believes that otherwise eligible students who are members of religious orders should not be required to disavow their religious beliefs in order to participate in title IV programs. Other non-discriminatory methods exist for determining a student's cost of attendance when a third party is providing housing, sustenance, or other support to the student. It is not necessary and is in violation of the Free Exercise Clause to single out and exclude from participation in title IV programs individuals who are members of religious orders. Accordingly, the Department proposes to delete this provision. 6 137 S. Ct. at 2021-25. Deferment (§ 682.210) Statute: Section 427(a)(2)(c) of the HEA as it was in effect on July 2, 1992 governs deferments that were available to borrowers with loans issued before July 1, 1993. Current Regulations: Section 682.210(m)(1)(iv) denies deferment of repayment for FFEL borrowers working as volunteers if their duties include giving religious instruction, conducting worship service, proselytizing, or fundraising to support religious activities. Proposed Regulations: During negotiations, we developed proposed changes to § 682.210(m)(1)(iv) that would deny deferment of repayment for FFEL borrowers working as volunteers only for that portion of their duties spent participating in religious instruction, worship services, or any form of proselytizing. However, this proposed revision is inconsistent with the other provisions regarding deferment in which consensus was reached. Similar provisions in other regulations were simply deleted. Because this would be inconsistent with our other proposed regulatory changes, we seek comment from the public on whether we should instead remove § 682.210(m)(1)(iv). Reasons: We believe that the current regulatory provision may violate the Free Exercise Clause of the First Amendment. Many religious organizations offer services such as providing food to impoverished people as part of their religious worship and outreach. Those organizations may not be able to separate the provision of secular and non-secular services, as they are intertwined as part of their faith and belief system. Volunteers should be able to enjoy membership in a religious organization and obtain loan deferments (a generally available benefit). Accordingly, the Department proposes to revise this provision. Eligibility of Borrowers for Interest Benefits on Stafford and Consolidation Loans (§ 682.301) Statute: Section 428 of the HEA governs Federal payments to reduce student interest costs. Current Regulations: Section 682.301(a)(2) provides that a member of a religious order pursuing a course of study in an institution of higher education has no financial need for purposes of the FFEL Program if the order has as its primary objective the promotion of ideals and beliefs regarding a Supreme Being; requires its members to forego monetary or other support substantially beyond the support it provides; and directs the member to pursue the course of study or provides subsistence support to its members. Proposed Regulations: We propose to delete § 682.301(a)(2). Reasons: In Trinity Lutheran Church of Columbia, Inc. v. Comer, the Supreme Court held that laws and policies may provide benefits in a way that is neutral to religion, but policies that single out the religious for disfavored treatment violate the Free Exercise Clause. 7 The Department determined that the current regulations may violate the Free Exercise Clause by categorically denying individuals from participation in generally available benefit programs based on their membership in a religious order. The Department believes that otherwise eligible students who are members of religious orders should not be required to disavow their religious beliefs in order to participate in title IV programs. Other non-discriminatory methods exist for determining a student's cost of attendance when a third party is providing housing, sustenance, or other support to the student. It is not necessary to single out and exclude from participation in title IV programs individuals who are members of religious orders and singling out these individuals for exclusion may violate the Free Exercise Clause. Accordingly, the Department proposes to delete this provision. 7 137 S. Ct. at 2021-25. Borrower Eligibility (§ 685.200) Statute: Section 451, et seq. of the HEA governs the Direct Loan program. Current Regulations: Section 685.200(a)(2)(ii) provides that a member of a religious order, group, community, society, agency or other organization pursuing a course of study in an institution of higher education has no financial need for purposes of the Direct Loan Program if the order has as its primary objective the promotion of ideals and beliefs regarding a Supreme Being; requires its members to forego monetary or other support substantially beyond the support it provides; and directs the member to pursue the course of study or provides subsistence support to its members. Proposed Regulations: We propose to delete § 685.200(a)(2)(ii). Reasons: In Trinity Lutheran Church of Columbia, Inc. v. Comer, the Supreme Court held that laws and policies may provide benefits in a way that is neutral to religion, but policies that single out the religious for disfavored treatment violate the Free Exercise Clause. 8 The Department determined that the current regulations may violate the Free Exercise Clause by categorically denying individuals from participating in generally available benefit programs based on their membership in a religious order. The Department believes that otherwise eligible students who are members of religious orders should not be required to disavow their religious beliefs in order to participate in title IV programs. Other non-discriminatory methods exist for determining a student's cost of attendance when a third party is providing housing, sustenance, or other support to the student. It is not necessary to single out and exclude from participation in title IV programs individuals who are members of religious orders and singling out these individuals for exclusion may violate the Free Exercise Clause. Accordingly, the Department proposes to delete this provision. 8 137 S. Ct. at 2021-25. PSLF Program (§ 685.219) Statute: HEA section 455 governs the PSLF Program. Current Regulations: The definition of “public service organization” in § 685.219(b) excludes a non-profit organization engaged in religious activities unless the qualifying activities are unrelated to religious instruction, worship services, or any form of proselytizing. The Department has not historically interpreted this regulation to categorically prohibit borrowers who work for employers that engage in religious instruction, worship services, or proselytizing from qualifying for the PSLF Program and proposes to revise this regulation. Proposed Regulations: The Department initially proposed to delete the provision in § 685.219(b) that defines a public service organization as a non-profit organization that is “not engaged in religious activities, unless the qualifying activities are unrelated to religious instruction, worship services, or any form of proselytizing.” The Department is concerned that denying certain borrowers the same generally available benefit as a result of the borrowers' choice to work for a non-profit engaged in religious activities may violate the Free Exercise Clause. 9 During negotiations, the Committee reached consensus to revise the definition of “public service organization” to provide that borrowers who work for employers that engage in religious instruction, worship services, or proselytizing qualify for the PSLF Program so long as they can meet the applicable standard for full-time employment when those religious activities are excluded from their work hours. 9 Trinity Lutheran, 137 S. Ct. at 2021-22. Reasons: Currently, borrowers or other members of the public who read the Department's regulations may not understand how they can qualify for the PSLF Program, if they are employed by an organization that engages in religious instruction, worship services, or any form of proselytizing. The proposed modification to the definition of “public service organization” constitutes a compromise that the Department reached with the Committee. This revision does not categorically deny borrowers the opportunity to qualify for the PSLF Program if they choose to work for a non-profit organization that is engaged in religious activities. The Department seeks comment on this revision, including whether and how borrowers may exclude religious activities from their work hours if their religious activities may be intertwined with their secular work. The Department also seeks comment on whether this revision may substantially burden a person's exercise of religion under the Religious Freedom Restoration Act, 42 U.S.C. 2000bb, et seq. Determination of Eligibility for Payment (§ 690.75) Statute: Section 401 of the HEA governs Pell Grants. Current Regulations: Section 690.75(d) states that a member of a religious order, community, society, agency, or organization who is pursuing a course of study in an institution of higher education is considered to have an expected family contribution amount at least equal to the maximum authorized award amount for the award year if that religious order has as a primary objective the promotion of ideals and beliefs regarding a Supreme Being and provides subsistence support to its members, or has directed the member to pursue the course of study. Proposed Regulations: We propose to delete § 690.75(d). Reasons: In Trinity Lutheran Church of Columbia, Inc. v. Comer, the Supreme Court held that laws and policies may provide benefits in a way that is neutral to religion, but policies that single out the religious for disfavored treatment violate the Free Exercise Clause. 10 The Department determined that the current regulations may violate the Free Exercise Clause by categorically denying individuals from participating in generally available benefit programs based on their membership in a religious order, community, society, agency, or organization. The Department believes that otherwise eligible students who are members of religious orders should not be required to disavow their religious beliefs in order to participate in title IV programs. Other non-discriminatory methods exist for determining a student's cost of attendance when a third party is providing housing, sustenance, or other support to the student. It is not necessary to single out and exclude from participation in title IV programs individuals who are members of religious orders and singling out such individuals for exclusion may violate the Free Exercise Clause. Accordingly, the Department proposes to delete this provision. 10 137 S. Ct. at 2021-25. How does a State administer its community service-learning job program? (§ 692.30) Statute: Section 415C of the HEA provides that grants for community service-learning jobs must be made in accordance with the requirements of the FWSP. Under those FWSP requirements in Section 443(b)(1)(C) of the HEA, work performed may “not involve the construction, operation, or maintenance of so much of any facility as is used or is to be used for sectarian instruction or as a place for religious worship.” Current Regulations: Section 692.30(c)(5) states that each community service-learning job must “not involve the construction, operation, or maintenance of any part of a facility used or to be used for religious worship or sectarian instruction.” Proposed Regulations: We propose replacing the regulatory text with the statutory text. Reasons: On college campuses, chapels and other religious structures may be part of larger multi-use facilities. The current regulations are not clear as to when a community service-learning job may include the construction, operation, or maintenance of a larger multi-use facility that includes space that is used for religious worship or sectarian instruction. The current regulatory language also departs from the statutory language. To provide clarity and to adhere to the statute, the Faith-Based Entities Subcommittee agreed to conform the regulatory language to the statutory provision. Who may provide GEAR UP services to students attending private schools? (§ 694.6) Statute: Section 404 et seq. of the HEA governs the GEAR UP program. Current Regulations: Section 694.6(b) states that, in providing GEAR UP services to students attending private schools, the employee, individual, association, agency, or organization must be independent of the private school that the students attend, and of any religious organization affiliated with the school, and that employment or contract must be under the control and supervision of the public agency. Proposed Regulations: We propose to change this provision to state that, when providing GEAR UP services to students attending private schools, the employee, individual, association, agency, or organization must be employed or contracted independently of the private school that the students attend, and of any other organization affiliated with the school, and that employment or contract must be under the control and supervision of the public agency. Reasons: In Trinity Lutheran Church of Columbia, Inc. v. Comer, the Supreme Court held that laws and policies may provide benefits in a way that is neutral to religion, but policies that single out the religious for disfavored treatment violate the Free Exercise Clause. 11 The current regulatory provision is written in a way that singles out and disfavors religious organizations and, thus, may violate the Free Exercise Clause. The Faith-Based Entities Subcommittee proposed, and the negotiating committee agreed to, language that provides needed safeguards without singling out religious organizations. 11 137 S. Ct. at 2021-25. Statute: Section 404, et seq. of the HEA governs the GEAR UP program. Current Regulations: Section 694.6(c) states that Federal funds used to provide GEAR UP services to students attending private schools may not be commingled with non-Federal funds. Proposed Regulations: We propose to delete this provision. Reasons: The current regulatory provision duplicates broader requirements in the Education Department General Administrative Regulations (EDGAR) and corresponding Office of Management and Budget Circulars that prohibit the comingling of any Federal and non-Federal funds, not just funds used to provide services to students attending private schools. Because the current regulatory provision duplicates other requirements, it is unnecessary. Furthermore, because the current provision is limited to funds used to serve students in private schools, it may mislead grantees to believe that Federal and non-Federal funds used for other purposes may be comingled. Grantees could also misinterpret the provision to believe that the requirements for the management of Federal and non-Federal funds is different for the GEAR UP program than for other discretionary grant programs administered by the Department. We believe that all regulatory provisions relating to the management of Federal and non-Federal funds should be in the EDGAR regulations that apply to all grant programs administered by the Department rather than including a narrow provision out of context in the GEAR UP program regulations. What are the requirements that a Partnership must meet in designating a fiscal agent for its project under this program? (§ 694.10) Statute: Section 404 et seq. of the HEA governs the GEAR UP program. Current Regulations: Section 694.10 states that a Partnership must designate a local educational agency (LEA) or an “institution of higher education that is not pervasively sectarian” to serve as its fiscal agent. Proposed Regulations: We propose to delete the phrase “that is not pervasively sectarian” so that any otherwise qualified institution of higher education can serve as the fiscal agent of a GEAR UP grant. Reasons: In Trinity Lutheran Church of Columbia, Inc. v. Comer, the Supreme Court held that laws and policies may provide benefits in a way that is neutral to religion, but policies that single out the religious for disfavored treatment violate the Free Exercise Clause. 12 The Department determined that the current regulations may categorically deny entities from participating in a generally available benefit program based on their religious status. It is not necessary to single out institutions that are pervasively sectarian from serving as fiscal agents for GEAR UP grants and singling out such institutions for exclusion may violate the Free Exercise Clause. Accordingly, the Department proposes to delete this provision. 12 137 S. Ct. at 2021-25. TEACH Grant Program Scope and Purpose (§ 686.1) Statute: HEA sections 420L through 420P establish the terms and conditions of the TEACH Grant Program. Current Regulations: Section 686.1 states that the TEACH Grant Program awards grants to students who intend to teach, to help meet the cost of their postsecondary education. In exchange for receiving a grant, a student must agree to serve as a full-time teacher in a high-need field in a low-income school for at least four academic years within eight years of completing the program of study for which the grant was received. The current regulations further provide that if the grant recipient does not satisfy the service obligation, the amounts of the TEACH Grants received are treated as a Direct Unsubsidized Loan that must be repaid with interest. Proposed Regulations: The Department proposes to revise and expand § 686.1 by— • Adding language stating that a student can receive a TEACH Grant by agreeing to serve as a full-time teacher in a high-need field for an educational service agency serving low-income students; • Replacing the current language stating that a student must agree to teach for at least four academic years within eight years of completing the program of study for which he or she received the grant with language stating that the student must agree to complete the required years of teaching within eight years of ceasing enrollment at the institution where the student received the TEACH grant or, in the case of a student who receives a TEACH Grant at one institution and subsequently transfers to another institution and enrolls in another TEACH Grant-eligible program, within eight years of ceasing enrollment at the other institution; • Adding language stating that the eight-year period for completing the required four years of teaching does not include periods of suspension in accordance with § 686.41; • Adding language to clarify that interest is charged from the date of each TEACH Grant disbursement if the TEACH Grant recipient does not satisfy the service obligation requirements and his or her TEACH Grants are converted into a Direct Unsubsidized Loan that must be repaid with interest; and • Adding language stating the conditions under which a TEACH Grant that has been converted to a Direct Unsubsidized Loan can be reconverted to a grant. Reasons: We are proposing to add a reference to educational service agencies in § 686.1 to reflect the change made by the Higher Education Opportunity Act of 2008 (Pub. L. 110-315) (HEOA) that amended section 465(a)(2)(A) of the HEA to include educational service agencies in the description of a low-income school for purposes of the title IV student financial assistance programs, including the TEACH Grant Program. For consistency with proposed changes discussed in more detail later in this preamble, we propose to amend § 686.1 to state that the eight-year period for completing the service obligation begins when a student ceases enrollment at the institution where he or she received a TEACH Grant, rather than when the student completes the program of study for which the student received the grant. Further, because the current TEACH Grant regulations do not address the starting date of the eight-year service obligation period for students who receive a TEACH Grant at one institution and later transfer to a different institution, we propose to clarify in § 686.1 that in such cases the eight-year period would begin when the student ceases enrollment at the transfer institution. This is consistent with other proposed changes, discussed later in this preamble, that provide that a grant recipient will have a single service obligation associated with all TEACH Grants received while the recipient is at the same academic level. The TEACH Grant subcommittee recommended that we expand § 686.1 to clarify that the eight-year period for completing the service obligation does not include periods of suspension granted under § 686.41, that interest is charged on a converted TEACH Grant from the date of each TEACH Grant disbursement, and that a TEACH Grant that has been converted to a Direct Unsubsidized Loan can be reconverted to a grant only if the Secretary determines that the grant was improperly converted to a loan. Subcommittee members believed that it was particularly important for TEACH Grant recipients to understand these specific provisions of the TEACH Grant Program and urged the Department to include them in § 686.1 for the benefit of grant recipients who may only read the “scope and purpose” section of the regulations. We agreed with the recommendations to expand the content of § 686.1, but instead of adding language stating that a TEACH Grant that has been converted to a loan can be reconverted to a grant only if the Secretary determines that the grant was improperly converted to a loan, we propose to say that a loan can be reconverted to a grant only in accordance with § 686.43. The reason for proposing this alternative language is that under certain circumstances as described in proposed § 686.43, a TEACH Grant that was converted to a loan can be reconverted to a grant even though the conversion to a loan was not improper. Definitions (§ 686.2) Free Application for Federal Student Aid (FAFSA) Statute: HEA section 420N(b) requires that teacher candidates must file an application to receive a TEACH Grant. Current Regulations: There is no current definition of a TEACH Grant application. Proposed regulations: In § 686.2(b), we propose to add a cross-reference to the term “Free application for Federal student aid (FAFSA)” in 34 CFR part 668. Reasons: This is a conforming change to reflect proposed changes in § 686.10 that replace references to an application for a TEACH Grant with references to the FAFSA. The FAFSA serves as the application for a TEACH Grant. Agreement To Serve or Repay Statute: Section 420N(b) of the HEA requires that an application for a TEACH Grant contain or be accompanied by an agreement to serve. Current Regulations: Section 686.2(d) defines “Agreement to serve (ATS)” as an agreement under which a TEACH Grant recipient commits to meet the service obligation described in § 686.12 and to comply with program requirements. Proposed Regulations: We propose to change the name of the agreement signed by a TEACH Grant recipient from “Agreement to serve (ATS)” to “Agreement to serve or repay” and to clarify that the agreement requires the TEACH Grant recipient to commit to meet the service obligation or repay the loan. Reasons: We are proposing the changes described above because the current term “Agreement to serve (ATS)” and the definition of that term do not clearly convey the consequences of failing to meet the service obligation requirements. This change would clarify that signing the agreement to serve or repay commits the TEACH Grant recipient to either meet the service obligation or repay the loan. Educational Service Agency Statute: The HEOA amended section 465(a)(2)(A) of the HEA to include educational service agencies in the description of a low-income school and added a new section 481(f) stating that “educational service agency” has the meaning given the term in section 9101 of the ESEA. Current Regulations: Current regulations do not define “educational service agency.” Proposed Regulations: We propose to add the term “educational service agency” in § 686.2(d) and to include in the regulations the definition of that term from section 9101 of the ESEA. An educational service agency is a regional public multiservice agency authorized by State statute to develop, manage, and provide services or programs to LEAs. Reasons: The Department proposes to add a definition of “educational service agency” to reflect the statutory change made by the HEOA to section 465(a)(2)(A) of the HEA to include educational service agencies in the description of a low-income school, and added a new section 481(f) that provides that “educational service agency” has the meaning given the term in section 9101 of the ESEA. High-Need Field Statute: Section 420N(b)(1)(C) of the HEA describes high-need fields as mathematics, science, foreign languages, bilingual education, special education, reading specialist, or another field documented as high-need by the Federal Government, State government, or LEA, and approved by the Secretary. Current Regulations: Section 686.2(d) defines “high-need field” as including the following— (1) Bilingual education and English language acquisition; (2) Foreign language; (3) Mathematics; (4) Reading specialist; (5) Science; (6) Special education; and (7) Another field documented as high-need by the Federal Government, a State government or an LEA, and approved by the Secretary and listed in the Department's annual Teacher Shortage Area Nationwide Listing (Nationwide List) in accordance with 34 CFR 682.210(q). Proposed Regulations: We propose to clarify that “science” includes computer science. In addition, we propose to remove the cross-reference to 34 CFR 682.210(q) from paragraph (7) of the current definition and incorporate this reference into the proposed definition of the term “Teacher Shortage Area Nationwide Listing (Nationwide List).” Reasons: While the Department has traditionally considered “science” to include “computer science,” non-Federal negotiators believed that institutions and students might not be aware of this, and therefore felt it was important to clarify this policy in the regulations. The Department agreed. The cross-reference to 34 CFR 682.210(q) in current paragraph (7) is no longer needed because it will be included in a proposed stand-alone definition of “Teacher Shortage Area Nationwide Listing (Nationwide List),” as discussed below. Highly Qualified Statute: Section 420N(b)(1)(E) of the HEA provides that, as a condition of receiving a TEACH Grant, an applicant must agree to comply with the requirements for being a highly qualified teacher as defined in section 9101 of the ESEA. Sections 428J(g)(3) and 460(g)(3) of the HEA describe how private school teachers who are exempt from State certification requirements may be considered highly qualified teachers for purposes of meeting the eligibility requirements for teacher loan forgiveness in the FFEL and Direct Loan programs. Current Regulations: Section 686.2(d) states that “highly-qualified” has the meaning set forth in section 9101(23) of the ESEA or in section 602(10) of the Individuals with Disabilities Education Act. Proposed Regulations: In § 686.2(d) we propose to replace the current definition of “highly-qualified” with the full text of the statutory definition of “highly qualified” from section 9101(23) of the ESEA. In addition, we propose to add to paragraph (4) of the definition provisions that describe how a public or other non-profit private, elementary or secondary school teacher who is exempt from State certification requirements can meet the “highly qualified” requirement. Reasons: The Every Student Succeeds Act (ESSA) removed the “highly qualified” definition from the law for ESEA purposes. However, section 9214(a) of the ESSA provides that, for purposes of the title IV, HEA Federal student aid programs, including the TEACH Grant Program, the term “highly qualified” as it was defined in the ESEA as of the day before the enactment of the ESEA continues to apply. Therefore, TEACH Grant recipients must still meet the highly qualified teacher standards to satisfy their service obligation. To clarify that the highly qualified teacher requirements continue to apply for purposes of the TEACH Grant Program and to ensure that grant recipients understand those requirements, we believe it is appropriate to add the definition of “highly qualified” in its entirety to the TEACH Grant regulations. The definition of “highly qualified” in the ESEA does not address private school teachers. However, teaching in qualified non-profit private schools can be qualifying service for a TEACH Grant recipient. To clarify the requirements for private school teachers and to be consistent with the requirements that apply to teachers seeking loan forgiveness in the Direct Loan and FFEL Programs, we propose to expand the definition of “highly qualified” to include the language from sections 428J(g)(3) and 460(g)(3) of the HEA that describes how private school teachers who are exempt from State certification requirements can meet the highly qualified teacher standards for teacher loan forgiveness purposes. School or Educational Service Agency Serving Low-Income Students (Low-Income School) Statute: Section 420N(b)(1)(B) of the HEA provides that an applicant for a TEACH Grant must agree to teach in a “low-income school” as described in section 465(a)(2)(A) of the HEA. Under that section such a school is— (1) A public or other nonprofit private elementary school or secondary school, which has been determined by the Secretary (pursuant to regulations of the Secretary and after consultation with the State educational agency of the State in which the school is located) to be a school in which the number of children meeting a measure of poverty under section 1113(a)(5) of the ESEA, exceeds 30 percent of the total number of children enrolled in such school, and is in the school district of an LEA which is eligible in such year for assistance pursuant to part A of title I of the ESEA; or (2) A public, or nonprofit private, elementary school or secondary school or location operated by an educational service agency that has been determined by the Secretary (pursuant to regulations of the Secretary and after consultation with the State educational agency of the State in which the educational service agency operates) to be a school or location at which the number of children taught who meet a measure of poverty under section 1113(a)(5) of the ESEA, exceeds 30 percent of the total number of children taught at such school or location. Current Regulations: Section 686.2(d) defines “school serving low-income students (low-income school)” as an elementary or secondary school that— (1) Is in the school district of an LEA that is eligible for assistance pursuant to title I of the ESEA; (2) Has been determined by the Secretary to be a school in which more than 30 percent of the school's total enrollment is made up of children who qualify for services provided under title I of the ESEA; and (3) Is listed in the Department's Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits. The current definition of “low-income school” further provides that the Secretary considers all elementary and secondary schools operated by the Bureau of Indian Education (BIE) in the Department of the Interior or operated on Indian reservations by Indian Tribal groups under contract or grant with the BIE to qualify as schools serving low-income students. Proposed Regulations: We propose to revise the current definition of “low-income school” to include educational service agencies in addition to elementary and secondary schools. We also propose to remove paragraphs (1) and (2) of the current definition and to replace “Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits” with “Teacher Cancellation Low-Income (TCLI) Directory.” The revised definition would state that a low-income school is an elementary school, secondary school, or educational service agency that is listed in the Department's TCLI Directory. We propose to retain the current language related to schools operated by the BIE, with the addition of a reference to educational service agencies. Reasons: We are proposing to add references to educational service agencies to the definition of “low-income school” to reflect the statutory change made by the HEOA to section 465(a)(2)(A) of the HEA that allows a TEACH Grant recipient to satisfy his or her service obligation by teaching in an educational service agency that serves low-income students. To simplify the definition of “low-income school,” we propose to delete current paragraphs (1) and (2), which explain the requirements that a school or educational service agency must meet to be included in the TCLI Directory. Since grant recipients must teach at a low-income school that is listed in the TCLI Directory, we believe it is sufficient to simply state that requirement, without including the TCLI eligibility criteria. Finally, we propose to replace “Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits” with “Teacher Cancellation Low-Income (TCLI) Directory” to reflect the current name of the Directory. TEACH Grant-Eligible Program Statute: The HEA does not define “TEACH Grant-eligible program.” Current Regulations: The current regulations define “TEACH Grant-eligible program” as an eligible program for Federal student financial aid purposes, as defined in 34 CFR 668.8, that is a program of study designed to prepare an individual to teach as a highly qualified teacher in a high-need field and which leads to a baccalaureate or master's degree, or is a post-baccalaureate program of study. A two-year program of study acceptable for full credit toward a baccalaureate degree is considered to be a program of study that leads to a baccalaureate degree. Proposed Regulations: We propose to add language to the current definition stating that a TEACH Grant-eligible program is a program of study “at a TEACH Grant-eligible institution.” Reasons: For greater clarity, the TEACH Grant subcommittee recommended that we specify in the definition that a program is TEACH Grant-eligible only if it is offered at an institution that participates in the TEACH Grant Program. This would make it clear that if an undergraduate TEACH Grant recipient transfers to a different institution prior to completing the program for which he or she received a TEACH Grant and enrolls in a baccalaureate program at the new institution that could qualify as TEACH Grant-eligible, the recipient would be eligible to have the starting date of the eight-year service obligation period adjusted, as discussed later in this preamble, only if the new institution participates in the TEACH Grant Program. Teacher Shortage Area Nationwide Listing (Nationwide List) Statute: The HEA does not define “Teacher Shortage Area Nationwide Listing (Nationwide List).” Current Regulations: Current regulations do not define “Teacher Shortage Area Nationwide Listing (Nationwide List).” Proposed Regulations: The Department proposes to add to § 686.2(d) the term “Teacher Shortage Area Nationwide Listing (Nationwide List),” which we would define as a list of teacher shortage areas in each State as defined under 34 CFR 682.210(q)(8)(vii). Reasons: The term “Teacher Shortage Area Nationwide Listing (Nationwide List)” is used in various sections of the proposed regulations, but we have not previously defined it. Therefore, we are proposing to add a definition for this term. Application (§ 686.10) Statute: Section 420N of the HEA provides that the Secretary must periodically set dates by which a teacher candidate who wishes to receive a TEACH Grant for any year must file an application that contains information showing that the candidate meets the eligibility requirements in section 420N(a)(2). Current regulations: Section 686.10(a)(1) provides that to receive a TEACH Grant, a student must complete and submit an application designated by the Secretary. Section 686.10(a)(2) states that a TEACH Grant applicant must complete and sign an agreement to serve and promise to repay, and § 686.10(a)(3) requires a TEACH Grant applicant to provide any additional information and assurances requested by the Secretary. Section 686.10(b) requires the student to submit the application by sending the completed application to the Secretary, or by providing the application, signed by all appropriate family members, to the institution that the student attends or plans to attend, so that the institution can transmit the application information to the Secretary electronically. Section 686.10(c) requires the student to provide the address of his or her residence. Finally, § 686.10(d) provides that for each award year, the Secretary, through publication in the Federal Register , establishes deadline dates for submitting the application and additional information, and for making corrections to the information provided. Proposed Regulations: We propose to redesignate § 686.10(a)(1) as § 686.10(a) and revise the redesignated paragraph to state that to receive a TEACH Grant, a student must complete and submit the FAFSA in accordance with the instructions in the FAFSA. We further propose to redesignate § 686.10(a)(2) and (3) as § 686.10(b) and (c), respectively, amend the redesignated paragraphs, and remove § 686.10(b), (c), and (d). In redesignated § 686.10(b), we propose to replace “agreement to serve and promise to pay” with “agreement to serve or repay,” and to specify that the TEACH Grant applicant must complete and sign the agreement to serve or repay in accordance with § 686.12. In redesignated § 686.10(c), we propose to remove the requirement for the applicant to provide any assurances requested by the Secretary, and to specify that in addition to being required to provide any additional information requested by the Secretary, the applicant must also provide any additional information requested by the institution. Reasons: We are proposing to replace references to submitting an application as designated by the Secretary with a reference to submitting the FAFSA, and to remove other current provisions related to submitting the application, because the FAFSA is the application for the TEACH Grant Program. There is no separate application for the TEACH Grant Program. We also propose to remove the requirement for the TEACH Grant applicant to provide assurances because any required assurances are included in the agreement to serve or repay. We further propose to add a provision stating that a TEACH Grant applicant must provide any additional information requested by the institution. TEACH Grant subcommittee members recommended adding this provision because there are institutions that require potential TEACH Grant recipients to submit information showing that they meet the program eligibility requirements of the TEACH Grant-eligible program that are specific to that institution. Eligibility To Receive a Grant (§ 686.11) Statute: Section 420N(a) of the HEA provides student eligibility requirements for the TEACH Grant Program. Current Regulations: Section 686.11(a) sets forth the TEACH Grant student eligibility requirements common to all students who are enrolled in undergraduate, post-baccalaureate, and graduate programs. All students must meet the student eligibility requirements for Federal student financial aid in 34 CFR part 668, subpart C; have submitted a completed application along with a signed service agreement; and be enrolled in a TEACH Grant-eligible institution in a TEACH Grant-eligible program. All students must also complete coursework and other requirements necessary to begin a career in teaching or plan to do so before graduating and meet specific academic requirements. Section 686.11(b) sets forth the TEACH Grant student eligibility requirements for current or former teachers and retirees. A current or former teacher or retiree must meet the student eligibility requirements for Federal student financial aid in 34 CFR part 668, subpart C, have submitted a completed application along with a signed service agreement, and have applied for a TEACH Grant to obtain a master's degree. The applicant must be a teacher or retiree or be a current or former teacher pursuing certification through a high-quality alternative certification route. Applicants must be enrolled in a TEACH Grant eligible-program at a TEACH Grant-eligible institution during the time period required for completion of a master's degree. Section 686.11(c) provides the eligibility requirements to receive a grant for transfer students. Proposed Regulations: We are proposing to revise § 686.11(a)(1)(i) to specify that, instead of submitting a completed application, a student must meet the application requirements in proposed § 686.10, and to delete § 686.11(a)(1)(ii). We would also redesignate § 686.11(a)(1)(iii) through (v) as § 686.11(a)(1)(ii) through (iv), respectively. We propose to revise the introductory text in § 686.11(b) to refer to the application requirements in proposed § 686.10, consistent with the proposed change to § 686.11(a)(1)(i). We also propose to remove § 686.11(b)(1) and redesignate § 686.11(b)(2) and (3) as § 686.11(b)(1) and (2), respectively. Reasons: We are proposing these changes to be consistent with the proposed cross-reference to § 686.10, which specifies that a student must complete the FAFSA, sign an agreement to serve or repay, and provide any additional information requested by the Secretary. Because the requirements under proposed § 686.10 incorporate the agreement to serve or repay, there is no need to repeat this language in proposed § 686.11 (a) or (b). The consensus language contained an edit to § 686.11(b)(1) that would change the term “agreement to serve” to “agreement to serve or repay.” We have determined that § 686.11(b)(1) should instead be removed because, like § 686.11(a)(1)(ii), it is redundant as a result of the proposed change to refer to the application requirements in § 686.10 in the introductory text of § 686.11(b). Agreement To Serve (§ 686.12) Statute: Section 420N(b)(1) of the HEA provides that each TEACH Grant application must contain or be accompanied by an agreement by the applicant that he or she will— (1) Serve as a full-time teacher for a total of not less than four academic years within eight years after completing the course of study for which the applicant received a TEACH Grant; (2) Teach in a school described in section 465(a)(2)(A) of the HEA; (3) Teach in any of the fields of mathematics, science, foreign language, bilingual education, special education, reading specialist, or another field documented as high-need by the Federal Government, State government, or LEA, and approved by the Secretary; (4) Submit evidence of qualifying employment in the form of a certification by the chief administrative officer of the school upon completion of each year of service; and (5) Comply with the requirements for being a highly qualified teacher as defined in section 9101 of the ESEA. Section 420N(b)(2) of the HEA provides that if the applicant is determined to have failed or refused to carry out the service obligation, the sum of the amounts of any TEACH Grants received by the applicant will be treated as a loan and collected from the applicant in accordance with section 420N(c) of the HEA. Section 420N(b)(3) of the HEA states that the agreement to serve must contain or be accompanied by a plain-language disclosure form developed by the Secretary that clearly describes the nature of the TEACH Grant award, the service obligation, and the loan repayment requirements that are the consequences of failure to complete the service obligation. Section 420N(d)(1) of the HEA provides that if a recipient of an initial TEACH Grant has acquired an academic degree or expertise in a field that was, at the time of the recipient's application for that grant, designated as high-need by the Federal Government, State government, or LEA, and approved by the Secretary, but it is no longer designated as high-need, the grant recipient may fulfill the TEACH Grant service obligation by teaching in that field. Current Regulations: Section 686.12(a) provides that a student who meets the eligibility requirements in § 686.11 may receive a TEACH Grant only after he or she signs an agreement to serve and receives counseling in accordance with § 686.32. Section 686.12(b) describes the contents of the agreement to serve. Section 686.12(b) introductory text provides that for each TEACH Grant-eligible program for which a student received TEACH Grant funds, the grant recipient must fulfill a service obligation by performing creditable teaching service. Section 686.12(b)(1) states that a grant recipient must perform the creditable teaching service by serving as a full-time teacher for a total of not less than four elementary or secondary academic years within eight calendar years after completing the program or otherwise ceasing enrollment in the program for which the recipient received the TEACH Grant— (1) In a low-income school; (2) As a highly qualified teacher; and (3) In a high-need field in the majority of classes taught during each elementary and secondary year. Under § 686.12(b)(2), the agreement to serve requires the grant recipient to submit, upon completion of each year of service, documentation of the service in the form of a certification by a chief administrative officer of the school. Under § 686.12(b)(3), the agreement to serve requires the grant recipient to comply with the terms, conditions, and other requirements consistent with §§ 686.40—686.43 that the Secretary determines to be necessary. Section 686.12(c) addresses the completion of more than one service obligation. Section 686.12(c)(1) states that a grant recipient must complete a service obligation for each program of study for which he or she received TEACH Grants; specifies that each service obligation begins following the completion or other cessation of enrollment by the student in the TEACH Grant-eligible program for which the student received TEACH Grant funds; and clarifies that creditable teaching service, a suspension approved under § 686.41(a)(2), or a military discharge granted under § 686.42(c)(2) may apply to more than one service obligation. Section 686.12(c)(2) provides that a grant recipient may request a suspension, in accordance with § 686.41, of the eight-year time period described in § 686.12(b)(1). Section 686.12(d) describes the requirements for majoring and serving in a high-need field. The current regulations state that a grant recipient who completes a TEACH Grant-eligible program in a field that is listed in the Nationwide List cannot satisfy his or her service obligation to teach in that high-need field unless the high-need field in which he or she has prepared to teach is listed in the Nationwide List for the State in which the grant recipient begins teaching at the time the recipient begins teaching in that field. Section 686.12(e) describes the requirement that the recipient repay the amount of TEACH Grants received plus interest if the recipient fails to complete the service obligation. Under § 686.12(e), if a grant recipient fails or refuses to carry out the required service obligation described in § 686.12(b), the TEACH Grants received by the recipient must be repaid and will be treated as a Federal Direct Unsubsidized Loan, with interest accruing from the date of each TEACH Grant disbursement, in accordance with applicable sections of 34 CFR part 685, subpart B. Proposed Regulations: The proposed regulations would change the title of § 686.12 to “Agreement to serve or repay,” and would make conforming changes where needed throughout the section. The proposed regulations would redesignate the introductory text of § 686.12(b) as § 686.12(b)(1), redesignate § 686.12(b)(1) as (b)(1)(i), and redesignate § 686.12(b)(1)(i), (ii), and (iii) as § 686.12(b)(1)(ii), (iii), and (iv), respectively. We propose to amend redesignated § 686.12(b)(1)(i) by changing “eight calendar years” to “eight years,” and by further revising the current language to provide that a grant recipient must complete the four-year service obligation within eight years after the date the recipient ceased to be enrolled at the institution where he or she received a TEACH Grant or, in the case of a student who receives a TEACH Grant at one institution and later transfers to another institution and enrolls in another TEACH Grant-eligible program, within eight years of ceasing enrollment at the other institution. In redesignated §§ 686.32(b)(1)(ii) and (iii), we propose to add cross-references to the definitions of “low-income school” and “highly qualified” teacher in § 686.2(d). We propose to add new paragraphs § 686.12(b)(3) and (4), and redesignate current paragraph § 686.12(b)(3) as paragraph § 686.12(b)(5). Under proposed new § 686.12(b)(3), the agreement to serve or repay would explain that the eight-year period for completing the service obligation does not include periods of suspension in accordance with § 686.41. Under proposed new §§ 686.12(b)(4)(i) through (iii), the agreement to serve or repay would: (1) Explain the conditions under which a TEACH Grant may be converted to a Direct Unsubsidized Loan, as described in § 686.43; (2) explain that if a TEACH Grant is converted to a loan, the grant recipient must repay the loan in full, with interest charged from the date of each TEACH Grant disbursement; and (3) explain that to avoid further accrual of interest, a grant recipient who for any reason no longer intends to satisfy the service obligation may request that the Secretary convert his or her TEACH Grant to a loan that the grant recipient can begin repaying immediately. We propose to change the heading for § 686.12(c) from “Completion of more than one service obligation” to “Completion of the service obligation.” In addition, we propose to revise paragraph (c)(1) and add new paragraphs (c)(2) and (3). Current paragraph (c)(2) would be redesignated as paragraph (c)(4). Proposed revised § 686.12(c)(1) would provide that a TEACH Grant recipient must complete one service obligation for all TEACH Grants received for undergraduate study, and one service obligation for all TEACH Grants received for graduate study, and would further specify that the eight-year period for completing the service obligation begins when the grant recipient ceases to be enrolled at the institution where he or she received a TEACH Grant or, in the case of a student who receives a TEACH Grant at one institution and later transfers to another institution and enrolls in another TEACH Grant-eligible program, when the recipient ceases enrollment at the other institution. Proposed revised § 686.12(c)(1) would continue to specify that creditable teaching service, an approved suspension, or a military discharge may apply to more than one service obligation. Proposed new § 686.12(c)(2) would address the service obligation requirements for TEACH Grant recipients who withdraw from an institution before completing the program of study for which they received TEACH Grants, but later re-enroll at the same institution or at a different institution in the same or a different TEACH Grant-eligible program at the same academic level. Specifically, proposed new § 686.12(c)(2)(i) would provide that if a grant recipient withdraws from an institution before completing a baccalaureate or post-baccalaureate program, but later re-enrolls at the same or a different institution in either the same program or in a different baccalaureate or post-baccalaureate program and receives additional TEACH Grants, or the Secretary otherwise confirms that the recipient has re-enrolled in a TEACH Grant-eligible program, the Secretary would adjust the starting date of the eight-year service obligation period to begin when the recipient ceases enrollment at the institution where he or she has re-enrolled, except as provided in proposed new § 686.12(c)(3). Proposed new § 686.12(c)(2)(ii) would provide for the same treatment of a grant recipient who withdraws from and later re-enrolls in a TEACH Grant-eligible master's degree program. Proposed § 686.12(c)(2)(i) and (ii) would apply only if the grant recipient re-enrolls before we convert the recipient's TEACH Grants to Direct Unsubsidized Loans in accordance with proposed § 686.43(a)(1)(ii). Proposed new § 686.12(c)(3) would address the treatment of grant recipients covered under proposed § 686.12(c)(2)(i) or (ii) who complete one or more years of creditable teaching service during the period between their withdrawal and subsequent re-enrollment. Specifically, the proposed regulations would provide that if a grant recipient completed one or more complete academic years of creditable teaching service during the period between withdrawal and re-enrollment, those years of teaching would count toward satisfaction of the grant recipient's service obligation, and the Secretary would not adjust the starting date of the eight-year period for completing the service obligation, unless the recipient requests an adjustment. Proposed new § 686.12(c)(3) would further provide that if a grant recipient continues to perform creditable teaching service after re-enrolling in a TEACH Grant-eligible program, qualifying teaching service performed while the recipient is concurrently enrolled in the TEACH Grant-eligible program may be applied toward satisfaction of the grant recipient's service obligation only if the grant recipient does not request and receive a temporary suspension of the service obligation period under § 686.41(a)(1)(i). We propose to change the heading of § 686.12(d) from “Majoring and serving in a high-need field” to “Teaching in a high-need field listed in the Nationwide List”. We propose to revise retitled § 686.12(d) to provide that for teaching service prior to July 1, 2010, teaching in a high-need field listed in the Nationwide List counts toward satisfaction of the service obligation as long as the high-need field in which the recipient prepared to teach is listed in the Nationwide List for the State in which the recipient teaches at the time the recipient begins teaching in that field, even if that field subsequently loses its high-need designation. For teaching service performed on or after July 1, 2010, the field must be listed in the Nationwide List at the time the grant recipient begins teaching in that field, even if the field later loses its high-need designation, or must have been listed at the time the grant recipient signed the agreement to serve or repay or received the TEACH Grant, even if that field is no longer designated as high-need when the recipient begins teaching in that field. Reasons: We propose to change the title of § 686.12 from “agreement to serve” to “agreement to serve or repay” to better emphasize that, as a condition for receiving a TEACH Grant, a student must agree to either complete the service obligation or repay the grant as a loan. For greater clarity, we also propose to restructure current § 686.12(b)(1) and add cross references to definitions in § 686.2(d). To reflect our current practice, we propose to specify in § 686.12(b)(1)(i) that the eight-year period for completing the service obligation begins on the date the grant recipient ceases enrollment at the institution or at the transfer institution where he or she received a TEACH Grant, rather than on the date the recipient completes or otherwise ceases to be enrolled in the program of study for which the recipient received a TEACH Grant. Existing practice is to start the eight-year service obligation on the date we receive enrollment information indicating that a grant recipient has ceased enrollment at the institution, because we generally do not collect the dates on which students cease enrollment in specific educational programs. Proposed revised § 686.12(b)(1)(i) would also specify that the grant recipient must complete the service obligation within “eight years” rather than within “eight calendar years” as in current § 686.12(b)(1). During the TEACH Grant subcommittee meetings, a subcommittee member asked the Department if a grant recipient would be considered to have completed the service obligation within the eight-year service obligation period if the recipient's fourth academic year of qualifying teaching began less than eight calendar years from the starting date of the eight-year period, but did not end until more than eight calendar years had elapsed. The Department confirmed that, in this situation, the recipient would be considered to have satisfied the service obligation within the eight-year period. To make this clear in the regulations, the subcommittee member recommended that the Department replace “eight calendar years” with “eight years.” We agreed to propose this change. We are proposing to add new paragraphs § 686.12(b)(3) and (4) to specify that the agreement to serve or repay will include certain information, as described earlier under “Proposed Regulations,” that subcommittee members believed was particularly important to ensure that students are better informed of the terms and conditions of the service obligation before they submit the agreement. We propose to revise § 686.12(c) to cover certain circumstances that the current regulations do not address. Current § 686.12(c)(1) states that a grant recipient must complete a service obligation for each program of study for which he or she received TEACH Grants, but it does not address the service obligation requirements for grant recipients who start out in one TEACH Grant-eligible program, but then change to a different TEACH Grant-eligible program at the same academic level and at the same institution, or for grant recipients who receive a TEACH Grant at one institution and later transfer to another institution. We believe that the simplest approach, and the approach that is most beneficial to grant recipients, is to require a grant recipient to complete one service obligation for all TEACH Grants received for undergraduate study at the same institution or at more than one institution, and to complete one service obligation for all TEACH Grants received for graduate study at the same institution or at more than one institution. This means, for example, that a grant recipient who receives TEACH Grants for undergraduate TEACH Grant-eligible Program A, but before completing that program changes to undergraduate TEACH Grant-eligible Program B at either the same institution or at a different institution, would have just one four-year service obligation associated with all TEACH Grants received for undergraduate study. This approach is consistent with section 420N(b)(1)(A) of the HEA, which requires a TEACH Grant recipient to complete a four-year service obligation after completing the course of study for which the individual received TEACH Grants. Because current § 686.12(c)(1) also does not address the service obligation requirements for grant recipients who withdraw from an institution before completing the program for which they received TEACH Grants, but later re-enroll in the same or a different TEACH Grant-eligible program, we are proposing to add new paragraphs (c)(2) and (3) to describe the requirements that would apply in this circumstance. The regulations in proposed new (c)(2) and (3) are consistent with the concept of having one service obligation for all TEACH Grants received for undergraduate study, and one service obligation for all TEACH Grants received for graduate study, as described in proposed § 686.12(c)(1). The following example illustrates how proposed § 686.12(c)(2)(i) would apply: A TEACH Grant recipient withdraws from an institution in December 2019 before completing TEACH Grant-eligible baccalaureate Program A. The eight-year period for completing the TEACH Grant service obligation begins on the student's withdrawal date. In September 2020, the grant recipient re-enrolls in Program A and receives another TEACH Grant. The grant recipient completes Program A and graduates in June 2021. We adjust the starting date of the eight-year period for completing the service obligation to begin in June 2021. Proposed § 686.12(c)(2)(ii) would provide for the same treatment as described in the above example in the case of a grant recipient who withdraws prior to completing a TEACH Grant-eligible master's degree program and later re-enrolls in the same program or in a different TEACH Grant-eligible master's degree program. Proposed § 686.12(c)(3)(i) and (ii) would specify that if a grant recipient completes one or more academic years of qualifying teaching service during the period between withdrawal and re-enrollment, the completed teaching counts toward satisfaction of the recipient's service obligation and the starting date of the period for completing the service obligation is not adjusted, unless the recipient requests an adjustment. The reason for not adjusting the service obligation period starting date in this circumstance is that if the starting date were adjusted to begin when the recipient ceases enrollment at the institution where he or she has re-enrolled, the period of completed teaching service for which the grant recipient is receiving credit would have been performed prior to the start of the service obligation period. Therefore, in this situation the starting date of the service obligation period will be the date the recipient withdrew prior to completing the program for which he or she received TEACH Grants. However, upon re-enrollment the grant recipient could request a temporary suspension of the period for completing the service obligation in accordance with proposed § 686.41(a)(1)(i). The non-Federal negotiators supported the provisions described in proposed new § 686.12(c)(2) and (3), but felt that a grant recipient who completed one or more years of qualifying teaching service during the period between withdrawal and re-enrollment should have the option of forfeiting credit for the completed teaching and instead have the starting date of the period for completing the service obligation adjusted to begin when the recipient ceases enrollment at the institution where he or she re-enrolled. This would provide the recipient with eight years to complete another four years of teaching. Some subcommittee members believed that for certain grant recipients it might be more beneficial to have a full eight years to complete four years of teaching than to receive credit for the teaching that was completed during the period between withdrawal and re-enrollment and then have fewer than eight years to complete the remaining portion of the service obligation. The Department agreed to include this option in the proposed regulations. Under proposed § 686.12(c)(3)(iii), if a grant recipient continues to perform qualifying teaching service after re-enrolling in a TEACH Grant-eligible program, the recipient may receive credit for that teaching service toward satisfaction of the service obligation only if the recipient does not request and receive a temporary suspension of the period for completing the service obligation under proposed § 686.41(a)(1)(i) based on re-enrollment in a TEACH Grant-eligible program. The reason for this limitation is that teaching service may be applied toward satisfaction of a grant recipient's service obligation only if the teaching is performed during the service obligation period. Since we exclude periods of suspension from the service obligation period, any teaching performed during a period when we suspend the service obligation period cannot be counted toward satisfaction of the service obligation. The following example illustrates how proposed § 686.12(c)(3) would apply: A TEACH Grant recipient withdraws from an institution before completing TEACH Grant-eligible master's degree Program A in June 2020. The recipient's eight-year period for completing the service obligation begins in June 2020. In September 2020, the recipient begins teaching in a high-need field in a low-income school and completes a full year of qualifying teaching during the 2020-2021 school year. In September 2021, the grant recipient stops teaching, re-enrolls in Program A, and completes the program, graduating in June 2022. The recipient requests and receives a temporary suspension of the eight-year service obligation period while completing Program A. Unless the recipient requests otherwise, the starting date of the eight-year period for completing the service obligation continues to be June 2020. The recipient would receive credit for the one year of teaching completed during the 2020-2021 school year, and now has seven years left to complete the remaining three years of the four-year service obligation. However, the recipient would have the option of asking the Secretary to adjust the starting date of the eight-year service obligation period to begin in June 2022, when the recipient graduates after completing Program A. In that case, the recipient would receive no credit for the year of teaching completed during the 2020-2021 school year and would have eight years to complete four years of teaching, starting in June 2022. Under proposed § 686.12(c)(3)(iii), if the grant recipient in the above example continued to perform qualifying teaching service after re-enrolling in Program A in September 2021 and completed an additional year of teaching during the 2021-2022 school year, the recipient could receive credit for the second year of teaching only if he o [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2019-25808. Public record. Not legal advice.