Institutional Eligibility Under the Higher Education Act of 1965, As Amended; Eligibility of Foreign Medical Schools Under the Guaranteed Student Loan Program

SUMMARY: The Secretary proposes to amend the regulations for

Institutional Eligibility under the Higher Education Act of 1965, as

amended (HEA), and the regulations for Eligibility of Foreign Medical

Schools under the Guaranteed Student Loan Program (GSLP) to reflect

changes made to the HEA by the Higher Education Amendments of 1992. The

Secretary proposes to remove the latter regulations from title 34 of

the Code of Regulations, revise them, and add them to the former

regulations, as a new subpart E. The proposed regulations would revise

the procedures and criteria under which a foreign institution

establishes eligibility to apply to participate in the Federal Family

Education Loan (FFEL) programs if the institution is comparable to an

eligible institution of higher education located in the United States.

DATES: Comments must be received on or before March 4, 1994.

ADDRESSES: All comments concerning these proposed regulations should be

addressed to Ms. Joyce R. Coates, U.S. Department of Education, 400

Maryland Avenue, SW., room 4318, Regional Office Building 3,

Washington, DC 20202-5346.

FOR FURTHER INFORMATION CONTACT: Ms. Joyce R. Coates, Telephone: (202)

708-7888. Individuals who use a telecommunications device for the deaf

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

877-8339 between 8 a.m. and 8 p.m., Eastern time, Monday through

Friday.

SUPPLEMENTARY INFORMATION: The Institutional Eligibility regulations

contain requirements that apply to all postsecondary educational

institutions that seek initial or continued eligibility to apply to

participate in the programs authorized by the HEA.

Negotiated Rulemaking

Section 492 of the HEA contains procedural requirements that the

Secretary is to follow in developing proposed regulations required for

changes made by the Higher Education Amendments of 1992 (Pub. L. 102-

325) to parts B, G, and H of title IV of the HEA.

Section 492(a) required the Secretary to convene regional meetings

to gain public input on the content of proposed regulations.

Participants at those meetings were to include individuals and

representatives of the groups involved in the student financial

assistance programs authorized under title IV of the HEA, such as

students, legal assistance organizations that represent students,

institutions of higher education, guaranty agencies, lenders, secondary

markets, loan servicers, guaranty agency servicers, and collection

agencies. During the meetings, the Secretary was to provide for a

comprehensive discussion and exchange of information concerning the

implementation of the amendments made by Public Law 102-325 to parts B,

G, and H, and was to take information received at the meetings into

account in the development of proposed regulations.

Subsequent to the regional meetings, the Secretary was to draft and

submit regulations implementing the amendments made to parts B, G, and

H to a negotiated rulemaking process. Participants in the negotiations

process were to be chosen by the Secretary from individuals nominated

by groups participating in the regional meetings and were to reflect

the diversity and sizes of organizations providing financial aid

services to both local areas and national markets.

In accordance with these requirements, the Secretary convened four

regional meetings to discuss issues raised by the 1992 Amendments to

the Higher Education Act, including the eligibility of foreign

institutions to apply to participate in the FFEL programs. The primary

issues considered in those meetings were: the general criteria needed

for the Secretary to determine the eligibility of institutions outside

the United States, how the Secretary should determine whether a foreign

institution is comparable to an eligible institution of higher

education in the United States, and the appropriate method for

calculating examination ``pass rates'' of students or graduates of

foreign graduate medical schools. (These pass rates are among a number

of statutory requirements for determining the eligibility of foreign

graduate medical schools.)

Meetings were held in New York, New York; San Francisco,

California; Atlanta, Georgia; and Kansas City, Missouri, during the

month of September 1992. Participants in the meetings were invited to

nominate individuals to serve as negotiators in the negotiated

rulemaking sessions.

Taking into account views expressed at the regional meetings, the

Department prepared draft proposed regulations on the 1992 Amendments.

The draft regulations were negotiated during the negotiated rulemaking

sessions. The negotiators reached general agreement on the content of

the draft regulations relating to the eligibility of foreign

institutions to apply to participate in the FFEL programs.

A summary of the significant changes made by these proposed

regulations to current regulations follows.

Summary of Proposed Changes

Proposed Sec. 600.51 (current Sec. 601.1) Purpose and scope. The

Secretary proposes to revise the purpose and scope of proposed subpart

E to remove the provisions that exempt from these regulations medical

schools in Canada or other foreign countries, if those schools are

accredited by a nationally recognized accrediting agency that accredits

medical schools in the United States. This change is necessary because

of the statutory change to section 481 of the HEA that requires every

foreign institution to be subject to all of the applicable criteria for

determining the eligibility of foreign institutions. Accreditation by a

nationally recognized accrediting agency is still among the criteria in

proposed Sec. 600.55(a)(4)(ii) for a public or private nonprofit

foreign medical school to be eligible to apply to participate in the

FFEL programs (see the discussion under that section).

Proposed Sec. 600.52 (current Sec. 601.2) Definitions. This section

would define a foreign institution as one that is not located in a

State, and would revise the definition of a foreign graduate medical

school to require medical schools in Canada to be subject to proposed

subpart E of 34 CFR part 600. These changes reflect statutory changes.

This section also would define a secondary school as one that

provides secondary education under the laws of the country in which the

school is located. This definition is needed for purposes of

establishing compliance with criteria in Sec. 600.54 governing a

foreign institution's admission policies and level of educational

program offered.

Proposed Sec. 600.53 (current Sec. 601.3) Requesting an eligibility

determination. The Secretary proposes to require a foreign institution

to provide, release, or authorize the release to the Secretary of the

information that would be required in this subpart. The failure to

provide that information would render the institution ineligible to

participate in the FFEL programs. These provisions restate the

statutory requirement in section 481(a)(2)(C) of the HEA. With regard

to the provision of performance data that would be required in

Sec. 600.55 on examinations administered by the Educational Commission

for Foreign Medical Graduates (ECFMG), the ECFMG initially informed the

Secretary that it would study the issue. Subsequently, the ECFMG

indicated that it is unwilling to furnish this data directly to the

Secretary. Consequently, the Secretary proposes to require applicant

institutions to furnish the data to enable the Secretary to comply with

the statutory mandate to consider the pass rates on those exams.

The Secretary also proposes to require a foreign institution

seeking initial or continued eligibility to apply for a determination

of that eligibility on a form prescribed by the Secretary, rather than

permitting a student to apply on behalf of the institution, as is

currently the case. This change is necessary because of the statutory

change requiring an institution to furnish applicable information.

However, a student would still be able to inform the Secretary of his

or her desire to seek an FFEL program loan for attendance at a foreign

institution. The Secretary would then contact the institution and

supply the institution with application forms.

Proposed Sec. 600.54 Criteria for determining whether a foreign

institution is eligible to apply to participate in the FFEL programs.

This section would contain the criteria that the Secretary would use to

determine whether a foreign institution is eligible to apply to

participate in the FFEL programs. To be eligible, a foreign institution

would have to admit as regular students only persons who have a

credential for completion of secondary school or the recognized

equivalent of that credential. The institution would have to be legally

authorized to provide a postsecondary educational program. The

institution would have to provide an eligible educational program that

leads to a legally authorized degree equivalent to an associate,

bachelor's, graduate, or professional degree awarded in the United

States, would have to be at least a two-academic-year program

acceptable for full credit toward the equivalent of a bachelor's degree

awarded in the United States, or would have to be equivalent to at

least a one-academic-year training program in the United States that

leads to a certificate, degree, or other recognized educational

credential and prepares students for gainful employment in a recognized

occupation.

Because the criteria of this section would be parallel to those

required of institutions of higher education, the Secretary proposes to

adopt the criteria for purposes of determining that a foreign

institution is comparable to an institution of higher education in the

United States.

Proposed Sec. 600.55 (current Sec. 601.4) Additional criteria for

determining whether a foreign graduate medical school is eligible to

apply to participate in the FFEL programs. The Secretary proposes to

add to the criteria in current Sec. 601.4 a requirement for a foreign

graduate medical school to employ as faculty members only those with

academic credentials equivalent to credentials required of faculty

members teaching the same or similar courses in the United States. The

Secretary considers this requirement necessary for determining the

comparability of foreign graduate medical schools to medical schools in

the United States.

The Secretary proposes to replace the current requirement in

Sec. 601.4(e) concerning the pass rate of students and graduates of

foreign graduate medical schools on ECFMG examinations with new

requirements. The new requirements are mandated by the changes to

section 481(a)(2) of the HEA. Under those statutory changes, for the

year preceding the year in which any of a foreign graduate medical

school's students seeks a loan under the FFEL programs, generally at

least 60 percent of the school's enrolled students and 60 percent of

its graduates must have been neither citizens nor nationals of the

United States nor eligible noncitizens for purposes of the title IV,

HEA programs. Further, for the year preceding the year in which any of

the school's students seeks a loan under the FFEL programs, generally

at least 60 percent of the school's students or graduates taking ECFMG

examinations must have received a passing score on those examinations.

The Secretary, in implementing these requirements, proposes several

clarifications to ensure the statistical accuracy and uniformity of a

foreign graduate medical school's calculations. For purposes of the

calculation concerning the citizenship of the school's students and

graduates, the school would count only those enrolled students who are

full-time regular students. The Secretary believes that it is necessary

to restrict this calculation to full-time regular students to prevent

institutions from enrolling a significant number of part-time students

who are not seeking a degree or certificate in order to obtain the

required percentage. The school would count as graduates only those

from its most recent graduating class during the academic year

preceding the year for which the calculation is performed.

For purposes of the calculation concerning the pass rate of the

school's students and graduates, the school would count all enrolled

students, regardless of their enrollment status or their regular

student status. The Secretary believes that it is appropriate to count

all enrolled students or graduates in the pass rate calculations in

order to obtain a larger sample, thereby ensuring statistical accuracy

and validity. A second reason to include all enrolled students in the

pass rate calculation is that the statute requires the Secretary to

consider the pass rate on the examinations administered by the ECFMG as

a measure of comparability to medical schools located in the United

States. Performance on the examinations administered by the ECFMG

reflects both the quality of the education at the foreign medical

school and the knowledge of the individual student who takes the

examination. Thus, it is appropriate to include the scores of all

students in this calculation to fully reflect the comparability of the

institution and its students and graduates to medical schools located

in the United States. The Secretary also notes that the statute did not

expressly exclude any students from calculation of the pass rate. The

school would count as graduates those persons who graduated from the

school during the three years preceding the year for which the

calculation is performed.

The ECFMG examinations are administered separately in two steps:

Step 1 includes basic medical sciences and Step 2 includes the clinical

sciences. A person may take each step in different years. In addition,

the ECFMG administers an English test for purposes of satisfying the

requirement for demonstrating English language competency to obtain

ECFMG certification. Therefore, the Secretary would require the

school's calculation for any year to include any student or graduate

who took any step of the ECFMG examinations, including the English

test.

Section 481(a)(2) of the HEA exempts from both of the above

calculations a foreign graduate medical school whose clinical program

has been approved by a State as of January 1, 1992. The Secretary would

include this exemption, but would further require the school's clinical

program to maintain current State approval. The Secretary believes that

this additional requirement is necessary to establish that a school

that does not meet the applicable minimum percentages at least has a

clinical program comparable to one provided by an eligible institution

of higher education in the United States.

This section also would require a foreign graduate medical school

to be accredited by an accrediting body legally authorized to evaluate

the quality of graduate medical school educational programs and

facilities in the school's country. The accreditation standards used by

that accrediting body would have to be evaluated by an advisory panel

of medical experts appointed by the Secretary and that panel would have

to determine if those standards are comparable to those used for

accrediting medical schools in the United States. A public or nonprofit

school that is not accredited would have to be accredited by a

nationally recognized accrediting agency designated by the Secretary.

(Currently, the Secretary recognizes the Liaison Committee on Medical

Education for the accreditation of programs leading to the M.D.

degree.) These accreditation requirements are mandated by the changes

to section 481(a)(2) of the HEA.

Proposed Sec. 600.56 (current Secs. 601.6 and 601.7) Duration of

eligibility determination. The Secretary proposes to provide for the

expiration of a foreign institution's eligibility after four years,

unless the Secretary specifies a shorter period of eligibility.

Currently, a foreign institution's eligibility generally expires after

two years. The Secretary proposes this change to allow for treatment of

foreign institutions consistent with that for institutions in the

United States.

The Secretary proposes to provide for the continued eligibility of

a foreign graduate medical school to be contingent upon the school's

annual submission of the information in Sec. 600.55 concerning the

school's enrollment and pass rate on ECFMG examinations. Currently, a

foreign graduate medical school's eligibility is not terminated solely

because of a failure to maintain the specified pass rate. The Secretary

proposes to make this change to conform to changes made by the Higher

Education Amendments of 1992.

The Secretary also proposes to provide for the continued

eligibility of an otherwise eligible student for loans under the FFEL

programs for up to an academic year after the academic year in which a

foreign institution loses eligibility, if the student received an FFEL

program loan for attendance at the institution while the institution

was eligible. This change would merely reflect statutory changes made

by the Higher Education Amendments of 1992.

Current Sec. 601.7 Exception for students who received a GSLP loan

to attend a foreign medical school prior to the publication date of

this subpart. The Secretary proposes to remove this section, which

governed the eligibility of certain students for loans under the FFEL

programs before the publication date of the current regulations

(February 25, 1983). This section is no longer needed.

Regulatory Flexibility Act Certification

The Secretary certifies that these proposed regulations would not

have a significant economic impact on a substantial number of small

entities.

The small entities affected by these regulations are small foreign

institutions. However, the regulations would not have a significant

economic impact on the small institutions affected because the

regulations would not impose excessive regulatory burdens or require

unnecessary Federal supervision. The regulations would impose minimal

burdens necessary to implement statutory requirements.

Paperwork Reduction Act of 1980

Section Sec. 600.53 contains information collection requirements.

As required by the Paperwork Reduction Act of 1980, the Department of

Education will submit a copy of this section to the Office of

Management and Budget (OMB) for its review. (44 U.S.C. 3504(h))

These regulations affect businesses or other for-profit entities

and nonprofit institutions that participate in the FFEL programs. The

Secretary needs to collect this information to enable the Secretary to

enforce the statutory provisions for determining the eligibility of

foreign institutions to apply to participate in the FFEL programs.

Annual public reporting burden for this collection of information

is estimated to average three hours per response for 1,100

institutions, including the time for reviewing instructions, searching

existing data sources, gathering and maintaining the data needed, and

completing and reviewing the collection of information.

Organizations and individuals desiring to submit comments on the

information collection requirements should direct them to the Office of

Information and Regulatory Affairs, OMB, room 3002, New Executive

Office Building, Washington, DC 20503; Attention: Daniel J. Chenok.

Invitation To Comment

Interested persons are invited to submit comments and

recommendations regarding these proposed regulations.

All comments submitted in response to these proposed regulations

will be available for public inspection, during and after the comment

period, in room 4318, Regional Office Building 3, 7th and D Streets,

SW., Washington, DC., between the hours of 8:30 a.m. and 4 p.m., Monday

through Friday of each week except Federal holidays.

Assessment of Educational Impact

The Secretary particularly requests comments on whether the

proposed regulations in this document would require transmission of

information that is being gathered by or is available from any other

agency or authority of the United States.

List of Subjects in 34 CFR Part 600

Administrative practice and procedure, Colleges and universities,

Consumer protection, Education, Grant programs--education, Loan

programs--education, Reporting and recordkeeping requirements, Student

aid.

(Catalog of Federal Domestic Assistance Number does not apply.)

Dated: January 5, 1994.

Richard W. Riley,

Secretary of Education.

The Secretary proposes to amend title 34 of the Code of Federal

Regulations by amending part 600 and by removing part 601 as follows:

PART 600--INSTITUTIONAL ELIGIBILITY UNDER THE HIGHER EDUCATION ACT

OF 1965, AS AMENDED

1. The authority citation for part 600 continues to read as

follows:

Authority: 20 U.S.C. 1082, 1085, 1088, 1094, and 1141, unless

otherwise noted.

2. A new subpart E is added to part 600 to read as follows:

* * * * *

Subpart E--Eligibility of Foreign Institutions To Apply To

Participate in the Federal Family Education Loan (FFEL) Programs

Sec.

600.51 Purpose and scope.

600.52 Definitions.

600.53 Requesting an eligibility determination.

600.54 Criteria for determining whether a foreign institution is

eligible to apply to participate in the FFEL programs.

600.55 Additional criteria for determining whether a foreign

graduate medical school is eligible to apply to participate in the

FFEL programs.

600.56 Duration of eligibility determination.

* * * * *

Subpart E--Eligibility of Foreign Institutions To Apply To

Participate in the Federal Family Education Loan (FFEL) Programs

Sec. 600.51 Purpose and scope.

(a) A foreign institution is eligible to apply to participate in

the Federal Family Education Loan (FFEL) programs if it is comparable

to an eligible institution of higher education located in the United

States and has been approved by the Secretary in accordance with the

provisions of this subpart.

(b) This subpart E contains the procedures and criteria under which

a foreign institution may be deemed eligible to apply to participate in

the FFEL programs.

(c) This subpart E does not include the procedures and criteria by

which a foreign institution that is deemed eligible to apply to

participate in the FFEL programs actually applies for that

participation. Those procedures and criteria are contained in the FFEL

programs regulations, 34 CFR 682.600.

(Authority: 20 U.S.C. 1082, 1088)

Sec. 600.52 Definitions.

The following definitions apply to this subpart E:

Foreign graduate medical school: A foreign institution that

qualifies to be listed in, and is listed as a medical school in, the

most current edition of the World Directory of Medical Schools

published by the World Health Organization (WHO).

Foreign institution: An institution that is not located in a State.

Passing score: The minimum passing score as defined by the

Educational Commission for Foreign Medical Graduates (ECFMG).

Secondary school: A school that provides secondary education as

determined under the laws of the country in which the school is

located.

(Authority: 20 U.S.C. 1082, 1088)

Sec. 600.53 Requesting an eligibility determination.

(a) To be designated as eligible to apply to participate in the

FFEL Program or to continue to be eligible beyond the scheduled

expiration of the institution's current period of eligibility, a

foreign institution must--

(1) Apply on the form prescribed by the Secretary; and

(2) Provide all the information and documentation requested by the

Secretary to make a determination of that eligibility.

(b) The failure of a foreign institution to provide, release, or

authorize release to the Secretary of information that is required in

this subpart E shall render the institution ineligible to apply to

participate in the FFEL programs.

(Authority: 20 U.S.C. 1082, 1088)

Sec. 600.54 Criteria for determining whether a foreign institution is

eligible to apply to participate in the FFEL programs.

The Secretary considers a foreign institution to be comparable to

an eligible institution of higher education in the United States and

eligible to apply to participate in the FFEL programs if the foreign

institution--

(a) Admits as regular students only persons who--

(1) Have a secondary school completion credential; or

(2) Have the recognized equivalent of a secondary school completion

credential;

(b) Is legally authorized by an appropriate authority to provide an

eligible educational program beyond the secondary school level in the

country in which the institution is located; and

(c) Provides an eligible education program--

(1) For which the institution is legally authorized to award a

degree that is equivalent to an associate, baccalaureate, graduate, or

professional degree awarded in the United States;

(2) That is at least a two-academic-year program acceptable for

full credit toward the equivalent of a baccalaureate degree awarded in

the United States; or

(3) That is equivalent to at least a one-academic-year training

program in the United States that leads to a certificate, degree, or

other recognized educational credential and prepares students for

gainful employment in a recognized occupation.

(Authority: 20 U.S.C. 1082, 1088)

Sec. 600.55 Additional criteria for determining whether a foreign

graduate medical school is eligible to apply to participate in the FFEL

programs.

(a) The Secretary considers a foreign graduate medical school to be

eligible to apply to participate in the FFEL programs if, in addition

to satisfying the criteria in Sec. 600.54, the school satisfies all of

the following criteria:

(1) The school provides, and in the normal course requires its

students to complete, a program of clinical and classroom medical

instruction of not less that 32 months in length, that is supervised

closely by members of the school's faculty and that is provided

either--

(i) Outside the United States, in facilities adequately equipped

and staffed to afford students comprehensive clinical and classroom

medical instruction; or

(ii) In the United States, through a training program for foreign

medical students that has been approved by all medical licensing boards

and evaluating bodies whose views are considered relevant by the

Secretary.

(2) The school has graduated classes during each of the two twelve-

month periods immediately preceding the date the Secretary receives the

school's request for an eligibility determination.

(3) The school employs for the program described in paragraph

(a)(1) of this section only faculty members whose academic credentials

are the equivalent of credentials required of faculty members teaching

the same or similar courses at medical schools in the United States.

(4)(i) The school has been approved by an accrediting body--

(A) That is legally authorized to evaluate the quality of graduate

medical school educational programs and facilities in the country where

the school is located; and

(B) Whose standards of accreditation of graduate medical schools--

(1) Have been evaluated by the advisory panel of medical experts

established by the Secretary; and

(2) Have been determined to be comparable to standards of

accreditation applied to medical schools in the United States; or

(ii) The school is a public or private nonprofit educational

institution that satisfies the requirements in Sec. 600.4(a)(5)(i).

(5)(i)(A) During the academic year preceding the year for which any

of the school's students seeks an FFEL program loan, at least 60

percent of those enrolled as full-time regular students in the school

and at least 60 percent of the school's most recent graduating class

were persons who did not meet the citizenship and residency criteria

contained in 34 CFR 668.7(a)(4)(i) through (iii); and

(B) At least 60 percent of the school's students and graduates who

took any step of the examinations administered by the Educational

Commission for Foreign Medical Graduates (ECFMG) (including the ECFMG

English test) in the year preceding the year for which any of the

school's students seeks an FFEL program loan received passing scores on

the exams; or

(ii) The school's clinical training program was approved by a State

as of January 1, 1992, and is currently approved by that State.

(b) In performing the calculation required in paragraph

(a)(5)(i)(B) of this section, a foreign graduate medical school shall

count as a graduate each person who graduated from the school during

the three years preceding the year for which the calculation is

performed.

(Authority: 20 U.S.C. 1082, 1088)

Sec. 600.56 Duration of eligibility determination.

(a) The eligibility of a foreign institution under subpart E

expires four years after the date of the Secretary's determination that

the institution is eligible to apply for participation, except that the

Secretary may specify a shorter period of eligibility. In the case of a

foreign graduate medical school, continued eligibility is dependent

upon annual submission of the data and information required under

Sec. 600.55(a)(5)(i), subject to the terms described in Sec. 600.53(b).

(b) A foreign institution that has been determined eligible loses

its eligibility on the date that the institution no longer meets any

one of the criteria in this subpart E.

(c) Notwithstanding the provisions of 34 CFR 668.25(c)(2), if a

foreign institution loses its eligibility under subpart E of this part,

an otherwise eligible student, continuously enrolled at the institution

before the loss of eligibility, may receive an FFEL program loan for

attendance at that institution for the academic year succeeding the

academic year in which that institution lost its eligibility, if the

student actually received an FFEL program loan for attendance at the

institution for a period during which the institution was eligible

under this subpart E.

(Authority: 20 U.S.C. 1082, 1088, 1099c)

PART 601--ELIGIBILITY OF FOREIGN MEDICAL SCHOOLS UNDER THE

GUARANTEED STUDENT LOAN PROGRAM (GSLP) [REMOVED and RESERVED]

3. Part 601 of title 34 of the Code of Federal Regulations is

removed and reserved.

[FR Doc. 94-1119 Filed 1-14-94; 8:45 am]

BILLING CODE 4000-01-P