# Secretary's Procedures and Criteria for Recognition of Accrediting Agencies; Proposed Rule DEPARTMENT OF EDUCATION

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URL: https://www.frixlaw.com/law-library/documents/fr%3A94-1459

## Record

- **Collection:** Federal Register
- **Document type:** Uncategorized Document
- **Published:** January 24, 1994

## Text

SUMMARY: The Secretary proposes to amend the regulations governing the
Secretary's recognition of accrediting agencies. The proposed
regulations are needed to implement provisions added to the Higher
Education Act of 1965 (HEA) by the Higher Education Amendments of 1992.
The purpose of the Secretary's recognition of accrediting agencies is
to assure that those agencies are, for HEA and other Federal purposes,
reliable authorities as to the quality of education or training offered
by the institutions of higher education or higher education programs
they accredit.

DATES: Comments must be received on or before March 21, 1994.

ADDRESSES: All comments concerning these proposed regulations should be
addressed to Karen W. Kershenstein, U.S. Department of Education, 400
Maryland Avenue, SW., room 3036, ROB-3, Washington, DC 20202-5244.
A copy of any comments that concern information collection
requirements should also be sent to the Office of Management and Budget
at the address listed in the Paperwork Reduction Act section of this
preamble.
FOR FURTHER INFORMATION CONTACT: Karen W. Kershenstein. Telephone:
(202) 708-7417. 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: In order to approve a postsecondary
education institution to participate in the student financial
assistance (SFA) programs authorized under Title IV of the HEA and many
other Federal programs, the Secretary must determine, in part, that the
institution satisfies the statutory definition of an ``institution of
higher education.'' Under the HEA and other Federal statutes, one
element of that definition requires an eligible institution of higher
education to be accredited or preaccredited by an accrediting agency
recognized by the Secretary as a reliable authority as to the quality
of the education or training provided by the institution. Another
element requires an eligible institution to be legally authorized to
provide an educational program beyond the secondary level in the State
in which it is located. Thus, the statutory definition of an
institution of higher education provides the framework for a shared
responsibility among accrediting agencies, States, and the Federal
government to ensure that the ``gate'' to SFA programs is opened to
only those institutions that provide students with quality education or
training worth the time, energy, and money they invest in it. The three
``gatekeepers'' sharing this responsibility have traditionally been
referred to as ``the triad.'' While the concept of a triad of entities
responsible for gatekeeping has had a long history, the triad has not
always worked as effectively as it should to ensure educational
quality, nor has it served as an effective deterrent to abuse by
institutions participating in SFA programs.
For several years, certain institutions participating in SFA
programs have failed to provide students with education or training of
an acceptable level of quality; they have also failed to treat students
fairly. In addition, they have failed to meet acceptable standards of
financial responsibility and administrative capability and to
adequately protect the SFA program funds entrusted to them. The
institutions that have engaged in these abusive practices are not
restricted to a particular sector of higher education. Rather, the
abuses have been found in all types of institutions participating in
SFA programs, including those in the private non-profit and public
sectors of higher education as well as those in the proprietary sector.
At the same time, gatekeeping functions have not been carried out
effectively. For example, some accrediting agencies have not taken
sufficient care to ensure the quality of the education or training
provided by the institutions or programs they accredit or to protect
student interests when they accredit particular institutions or
programs. Moreover, some States have also not taken sufficient care to
ensure the quality of the education or training provided by the
institutions they authorize or license to operate in the State or to
protect student interests. Finally, the Federal government's management
of its responsibilities to determine eligibility and to certify
institutions to participate in SFA programs has not always been
adequate to prevent abusive practices at institutions that participate
in SFA programs.
Consequently, in the Higher Education Amendments of 1992, Public
Law 102-325, Congress amended the HEA to provide for a new part H of
Title IV entitled ``Program Integrity Triad.'' Under that part, States
and accrediting agencies are required to assume major new oversight
responsibilities, and States, accrediting associations, and the
Secretary are linked to create a stronger and more coordinated
evaluation of institutions that participate or wish to participate in
the SFA programs. The Secretary believes that the most appropriate
approach to this coordinated evaluation of institutions by the three
components of the triad is a complementary one with each component
focusing its evaluation on its obligations within the context of the
HEA. Thus, the focus for accrediting agencies is the quality of
education or training provided by the institutions or programs they
accredit. For States, which already had responsibility for determining
that institutions have the legal authority to operate within the State,
the HEA added a new focus: reviewing institutions that meet certain
statutory review criteria. The focus of the Secretary's evaluation of
institutions is the administrative and financial capacity of those
institutions to participate in the SFA programs.
The statute allocates legal responsibility among the entities that
compose the program integrity triad. While specific statutory
responsibilities for the three triad entities may overlap, when viewed
as a whole the triad brings together in a coordinated fashion three
different but very important aspects of institutional review. Within
this statutory scheme, the Secretary has sought to assure that the
gatekeeping system operates as efficiently as possible, with maximum
integration among the three triad entities and without unnecessary
burden on postsecondary institutions. In order to assist the Secretary
in designing a final regulation that achieves these goals, the
Secretary specifically requests comment on the following questions:
(1) In several areas, the statute specifically requires each triad
entity to evaluate an institution under the same or similar standards.
For example, a SPRE and an accrediting agency may establish different
standards for evaluating the financial responsibility of an institution
or for evaluating the success of an institution's educational program.
Thus, a reviewed institution would need to satisfy the SPRE's and the
accrediting agency's standards even though those standards address the
same areas. How should final regulations be structured to both reduce
the burden on institutions and enable the triad entities to carry out
effectively their statutory functions?
(2) Should the final regulations be more explicit in identifying
levels, characteristics, or definitions for any of the assessment or
review criteria that a triad entity is expected to consider in its
evaluation of an institution?
Subpart 1 of part H establishes a State Postsecondary Review
Program under which each State designates a single State postsecondary
review entity that is responsible for reviewing institutions of higher
education that the Secretary identifies as meeting certain review
criteria and for determining whether those institutions should continue
to participate in the SFA programs. Subpart 3 specifies the procedures
the Secretary uses to determine whether an institution meets the
eligibility requirements and has the administrative capacity and
financial responsibility to administer the SFA programs.
In subpart 2 of part H, the Secretary is charged with making a
comprehensive and careful evaluation of an accrediting agency before
recognizing that agency as a reliable authority as to the quality of
the education or training offered by institutions or programs that the
agency accredits. Moreover, as part of this evaluation, the Secretary
is charged with establishing recognition standards that must include
``an appropriate measure or measures of student achievement.''
Accordingly, the standards that the Secretary proposes in this notice
of proposed rulemaking require an accrediting agency to make a detailed
and careful evaluation of the institutions or programs it accredits and
to include in that evaluation ``appropriate measure or measures of
student achievement.''
These proposed regulations were subject to the negotiated
rulemaking process set forth in section 492 of the HEA. Under that
process, the Secretary convened four regional meetings in September,
1992 to obtain public involvement in the development of these proposed
regulations. The meetings were held in San Francisco, Atlanta, New
York, and Kansas City. Before convening the meetings, the Secretary
held a meeting in Washington, DC in August 1992 to invite comments from
interested parties as to the key issues that should be addressed at the
regional meetings.
At the four regional meetings, the Secretary provided attendees
with a list of issues that needed to be addressed in these proposed
regulations. A summary of the responses of the attendees is contained
in Appendix A to these proposed regulations.
Individuals and groups who attended the regional meetings nominated
individuals to participate in the negotiated rulemaking process. The
Secretary selected negotiators from the list of nominees to reflect all
the groups that are involved in the SFA programs. With regard to these
proposed regulations, the Secretary chose negotiators who reflected the
diversity of the accrediting community as well as the interests of
States, higher education institutions, and students.
In accordance with section 492(b) of the HEA, the Secretary
prepared a draft proposed regulation and negotiated the provisions of
that draft with the negotiators. Two negotiating sessions were held:
one in January 1993 and one in February 1993. During those sessions,
consensus was reached on several of the provisions that are included in
this notice of proposed rulemaking. On the remaining provisions,
however, the negotiators agreed to disagree. Where agreement was not
reached on a particular provision, that fact is noted in the discussion
that follows.
On several issues that were negotiated, there was general
discussion on various approaches to take with regard to those issues.
The Secretary believes those issues are important enough to include in
this preamble possible alternative approaches in order to give the
public a fuller understanding of the issues and the available potential
solutions. Finally, on most issues where consensus was reached, the
negotiators also reached general agreement on the language of a
proposed regulatory provision. However, the Secretary wishes to
reiterate the remarks of the Federal negotiators that the agreed-to
language with regard to a specific provision would be subject to change
in the proposed regulations for technical reasons but the substance of
the provision would remain unchanged, wherever possible. Where a
substantive change was made in a particular provision, that fact is
noted in the discussion that follows, and an explanation of the reasons
for the change is provided.

Significant Changes Proposed by the Regulations

The following discussion reflects proposed significant changes to
the existing regulations governing the Secretary's Procedures and
Criteria for Recognition of Accrediting Agencies. The changes are
discussed in the order in which they appear in the proposed
regulations. If a provision applies to more than one section or is
included in more than one section, it is discussed the first time it
appears with an appropriate cross-reference to its other appearances.
The general format for the discussion of each section is to state the
appropriate statutory provision for that section and to explain any
provisions that interpret or clarify the statute that the Secretary
believes are necessary to implement the statutory provision through
regulation.
In developing these proposed regulations, the Secretary has
regulated as little as possible. He has regulated narrowly to the law,
except where the Secretary deems further interpretation is necessary.
In these cases, either the proposed regulations include the specific
language agreed to by negotiators during negotiated rulemaking, if an
agreement was reached, or the Secretary proposes language where
agreement was not reached. In both cases, the Secretary solicits
comments on the clarifications and interpretations included in the
proposed regulations.

Subpart A--General Provisions

Section 602.1 Purpose
Current regulations permit the Secretary to recognize any
accrediting agency the Secretary determines to be a reliable authority
as to the quality of postsecondary education or training provided by
the institutions or programs it accredits. However, section 496(m) of
the HEA now authorizes the Secretary to recognize only those agencies
that accredit institutions of higher education or higher education
programs for the purpose of enabling those institutions or programs to
establish eligibility to participate in programs administered either by
the Secretary or by other Federal agencies. In Sec. 602.1 of the
proposed regulations, the Secretary reiterates the statutory provision.
Section 602.2 Definitions
Most of the definitions included in the proposed regulations are
self-explanatory. Three, however, warrant additional comment based on
the discussions that took place during the negotiated rulemaking
sessions.
Institution of higher education. In the proposed regulations, the
Secretary defines an institution of higher education to be an
educational institution that qualifies or may qualify as an eligible
institution under 34 CFR part 600, Institutional Eligibility under the
Higher Education Act of 1965, as amended. Some of the non-Federal
negotiators, however, pointed out that it is not clear that this
definition includes certain types of hospitals and health care
facilities. For this reason, the Secretary wishes to make clear that a
hospital or health care facility may qualify as an eligible institution
of higher education if the hospital or facility satisfies any
definition of that term, i.e., a ``public or nonprofit private
institution of higher education,'' a ``proprietary institution of
higher education,'' or a ``postsecondary vocational institution.''
Prebaccalaureate vocational education programs and vocational
education programs.
In Sec. 602.2, the Secretary proposes to define the term
``vocational education program'' based upon the statutory provision
included in the definition of various types of eligible institutions of
higher education. Thus, the Secretary defines a vocational education
program as a program that ``prepares students for gainful employment in
a recognized occupation.'' (See, for example, section 481(b)(1) of the
HEA for a ``proprietary institution of higher education;'' section
481(c)(1) for a ``postsecondary vocational institution;'' and the
second sentence of section 1201(a) of the HEA for a ``public and
private nonprofit institution of higher education.'')
This definition, if read literally, could be viewed as including
all postsecondary programs. To avoid this overreaching conclusion, the
Secretary proposes that the vocational education programs that trigger
actions under these regulations are prebaccalaureate vocational
education programs. See, for example, Sec. 602.24(c). This latter term
is defined as a vocational education program that leads to a
certificate, degree, or other education credential that is less than a
bachelor's degree. The Secretary invites comment on these definitions,
as well as alternative definitions, in light of the fact that the non-
Federal negotiators could not agree among themselves as to the
acceptability of these definitions.
One alternative definition for prebaccalaureate vocational
education that the Secretary is considering is ``undergraduate
vocational education that leads to a certificate or other educational
credential but not to a degree.'' The Secretary is considering this
definition in order to ease the burden on institutions whose vocational
education programs leading to an associate degree would also trigger
special action under the proposed regulations.
If this alternative definition were to be adopted, however, the
Secretary is concerned that some institutions might try to stretch
their non-degree programs into associate-degree programs simply to
avoid the additional requirements that, as a result of these proposed
regulations, accrediting agencies will have to impose on institutions
that provide prebaccalaureate vocational education. The Secretary
invites comments on the alternative definition of prebaccalaureate
vocational education and suggestions for preventing unwarranted course
or program stretching, should the alternative definition be adopted.
The Secretary also wishes to know if commenters believe there are other
risks associated with adopting the alternative definition that might
outweigh any benefits derived by the degree-granting sector of the
higher education community through its adoption.
The Secretary acknowledges that the definition of ``vocational
education'' in these proposed regulations differs from the definition
of ``vocational program'' as that term is defined in the proposed
regulations for the State Postsecondary Review Program (``an
educational program below the baccalaureate degree level, that is not
classified as a professional program, that prepares students for
gainful employment in a recognized profession''). The Secretary
requests specific comment on whether the same definition should be used
in both regulations and, if so, what that definition should be.
Section 602.3 Organization and Membership
Section 496(a) of the HEA requires accrediting agencies whose
accreditation enables the institutions they accredit to participate in
programs authorized under the HEA to be administratively and
financially separate from and independent of any related, associated,
or affiliated trade association or membership organization. The term
``separate and independent'' is defined in section 496(b) of the HEA.
In Sec. 602.3 (a), (b), and (c) of the proposed regulations, the
Secretary reiterates the statutory requirement and definition.
During the negotiated rulemaking sessions, non-Federal negotiators
expressed concern that the ``separate and independent'' requirement
would prevent any joint use of personnel, services, equipment, or
facilities by an accrediting agency and a related, associated, or
affiliated trade association or membership organization, a practice
that is fairly common among accrediting agencies and helps reduce the
cost of accreditation. To address this concern, in Sec. 602.3(d) the
Secretary proposes conditions that accrediting agencies must meet
regarding the joint use of personnel, services, equipment, or
facilities if that use is not to be considered a violation of the
``separate and independent'' requirement. The Secretary believes this
approach respects the intent of Congress yet eases the financial burden
on agencies to implement the new requirement.
Section 496(a) of the HEA permits the Secretary to waive the
``separate and independent'' requirement if the agency is one that, for
purposes of determining eligibility for SFA programs, either conducts
accreditation through a voluntary membership organization of
individuals participating in a profession or has as its principal
purpose the accreditation of programs within institutions that are
accredited by another agency recognized by the Secretary. In
Sec. 602.3(e) of the proposed regulations, the Secretary proposes
conditions under which the Secretary may waive the ``separate and
independent'' requirement. Specifically, the Secretary proposes to
grant an agency's request for a waiver if the agency demonstrates to
the Secretary's satisfaction that the existing relationship between the
agency and the trade association or membership organization has not
compromised the independence of its accreditation process.
In providing comments with regard to this section, the Secretary
advises commenters that only the type of accrediting agency described
in Sec. 602.3(b)(4) may seek a waiver of the separate and independent
requirement under the law. Thus, the Secretary is precluded by statute
from waiving this requirement for any other type of accrediting agency.
Finally, the Secretary wishes to note that the language in
Sec. 602.3(c)(2) specifying that no less than one-seventh of an
agency's decision-making body must consist of representatives of the
public is derived from language in the Conference Report stating that
the House agrees to the requirement in the Senate bill that ``at least
one out of every seven members of an accreditation association's board
be members of the general public.''
Section 602.4 Submission of Information to the Secretary by Recognized
Accrediting Agencies
Section 496 does not specifically address the type of information
that a recognized accrediting agency must submit to the Secretary to
enable the Secretary to evaluate whether the agency continues to comply
with the requirements for recognition throughout its recognition
period. In Sec. 602.4 (a),(b), (c), (d), and (f) of the proposed
regulations, the Secretary proposes various types of information that
recognized agencies must routinely submit to the Secretary during their
recognition period. All of the items on the list were agreed to by the
negotiators, who did not perceive them to be particularly burdensome to
agencies to provide.
Of particular note is the requirement in Sec. 602.4(e) that
accrediting agencies must submit to the Secretary, upon request,
information to assist the Secretary in resolving problems with any
institution or program accredited by the agency, provided the
Secretary's request does not conflict with the agency's policies on
confidentiality with respect to its records on its institutions or
programs. This provision reflects the agreement of negotiators.
However, the Secretary has reconsidered the ``confidentiality'' aspect
of this provision because of a concern that certain information that
the Secretary may need to resolve a problem with a particular
institution or program may not be obtainable from an agency because of
its confidentiality policies. The Secretary believes this situation is
untenable because it allows agencies to withhold information that the
Secretary may need to carry out the Secretary's responsibilities under
the Act, such as determining whether an institution or program
accredited by the agency should remain eligible to participate in SFA
programs. The Secretary seeks suggestions for resolving this dilemma in
a manner that respects both the agency's need for confidentiality and
the Secretary's need for information.
The Secretary also is considering adding to this section a
requirement that an accrediting agency must refer to the Department's
Office of Inspector General any fraudulent activities it discovers on
the part of an institution or program that it accredits, if the
institution or program participates in Department programs. The
Secretary invites comments on this possible additional requirement and
alternative approaches to sharing information among members of the
triad concerning suspected fraudulent activity by an institution or
program.

Subpart B--Recognition and Termination Procedures

Section 496(o) of the HEA requires the Secretary to provide, by
regulation, the procedures the Secretary uses for recognizing
accrediting agencies. In the proposed regulations, the Secretary
proposes to specify procedures for recognizing accrediting agencies in
far greater detail than in current or previous regulations. The
Secretary believes this greater detail is necessary to ensure that all
agencies applying for recognition, as well as other interested parties,
have a clear understanding of the entire process.
The Secretary acknowledges that the application for recognition
constitutes a significant burden on agencies seeking recognition by the
Secretary. For this reason, the Secretary is considering ways to
minimize the burden. One approach under consideration is to allow an
agency to provide a simple statement of assurance, along with
supporting documentation, that it meets certain requirements for
recognition. The Secretary estimates that at least two-thirds of the
requirements in the proposed regulations are amenable to this type of
approach, and the resultant savings in time, effort, and cost to
prepare an application for recognition would be significant. The
Secretary invites comments on this approach and alternative methods for
minimizing the burden on agencies of the application process without
adversely affecting the Secretary's ability to conduct a thorough
evaluation of the agency.
The recognition process, as described in subpart B of the proposed
regulations, consists of an application to the Secretary by the agency,
an analysis of the application by a designated Department official, an
opportunity for a written response to that analysis by the applicant
agency, a review of the agency's application by the National Advisory
Committee on Institutional Quality and Integrity (Advisory Committee),
a recommendation to the Secretary by the Advisory Committee with regard
to that application, an opportunity to contest the Advisory Committee's
recommendation by either the agency or the designated Department
official, and, finally, a decision on that application by the
Secretary. The analysis of an agency's application by the designated
Department official includes publication of a notice of the agency's
application in the Federal Register inviting comment on the agency's
compliance with the requirements for recognition and a review by the
designated Department official of any public comment received. The
Secretary believes the new procedures for recognition allow an agency a
full and fair review of its application.
Additional appeal procedures. The proposed regulations add two key
new steps to the recognition process. First, in Sec. 602.11(b) the
Secretary gives an accrediting agency seeking recognition by the
Secretary an opportunity to respond in writing to the designated
Department official's analysis of its application for recognition
before the application is reviewed by the Advisory Committee. Second,
in Sec. 602.13(b), after the Advisory Committee completes its review of
the agency's application and makes a recommendation to the Secretary on
the agency's application, the Secretary gives both the agency and the
designated Department official an opportunity to contest the Advisory
Committee's recommendation. The contesting party, however, may not
submit any evidence to the Secretary that it did not submit to the
Advisory Committee. This restriction is to ensure that the Advisory
Committee's authority is not circumvented. The Secretary believes that
in general the only reasonable grounds for contesting an Advisory
Committee recommendation would be if the contesting party could
demonstrate that the Advisory Committee either misunderstood or did not
take into proper account certain information presented by the
contesting party.
The negotiators reached consensus during the negotiated rulemaking
sessions on the first step. The Secretary added the second step after
the negotiated rulemaking sessions ended to address the non-Federal
negotiators' concerns about the lack of sufficient appeal mechanisms
for agencies prior to the Secretary's final decision. The Secretary
believes that these two new steps in the proposed recognition process
provide agencies with sufficient opportunity to present any concerns
they might have regarding the recommendation of either the designated
Department official or the Advisory Committee before the Secretary
reaches a decision on the agency's application.
Announced and unannounced site visits by the Secretary. Section
496(n) of the HEA requires the Secretary to conduct an independent
analysis of an agency's application for recognition, which must include
a site visit to the accrediting agency and may, at the Secretary's
discretion, include site visits to representative institutions or
programs accredited by the agency. Section 496(n) of the HEA also
provides that the site visits may be unannounced, as appropriate.
Accordingly, both Sec. 602.10(b) and Sec. 602.11(b) of the proposed
regulations provide for unannounced site visits. Specifically, the
Secretary proposes to conduct unannounced site visits only, where
necessary in the judgment of the Secretary, to obtain information to
verify the agency's compliance with the requirements for recognition
and the information would not be forthcoming in an announced site
visit. The Secretary wishes to make it clear that this Secretarial
judgment is not subject to challenge by an accrediting agency.
In Sec. 602.11(b), the Secretary also proposes that the Secretary's
evaluation of an agency may include a review of information directly
related to the institutions or programs accredited by the agency, as
this information relates to the institution's or program's compliance
with the agency's standards, the effectiveness of those standards, or
the agency's application of those standards. The Secretary believes
that the inclusion of this language in the proposed regulations, which
was agreed to by negotiators, provides the agency, the institutions and
programs it accredits, and the general public with a clear
understanding of the scope of the Secretary's evaluation of an agency.
In sum, to implement section 496(n) of the HEA, the proposed
regulations make it clear that in evaluating an agency's application
for recognition, the Secretary may not and does not depend solely on
written submissions from the accrediting agency or on announced visits
to the agency or its member institutions or programs. The Secretary
makes a more thorough and independent evaluation of an agency's
application for recognition, including, where appropriate, unannounced
visits to ensure that information available to the designated
Department official is comprehensive, accurate, and unbiased, and to
ensure that the agency is actually carrying out its stated policies and
procedures.
Scope of recognition requirements. Under Sec. 602.10(b) of the
current regulations, in order for an accrediting agency to be
recognized by the Secretary, the agency has to meet each recognition
criterion taken as a whole unless it can demonstrate to the Secretary's
satisfaction that one or more criteria should not be applied. In
Sec. 602.13(c) of the proposed regulations, the Secretary requires an
agency to meet each of the requirements contained in this part.
However, in Sec. 602.13(e) the Secretary proposes that the Secretary
may exercise discretion and grant recognition to an agency that does
not comply with each requirement if the Secretary determines that the
agency's effectiveness is not impaired by its noncompliance. Such
discretion might, for example, be exercised if an accrediting agency is
unable to conduct an unannounced site visit, as required by
Sec. 602.24, because the program being evaluated is offered on a
military installation that requires prior approval before any visitors
are permitted on the installation. The Secretary believes that
Secretarial discretion provides the desired flexibility that non-
Federal negotiators sought during the negotiated rulemaking sessions.
Consensus was reached by negotiators regarding the elements to be
included in the scope of recognition the Secretary grants to an agency,
i.e., geographic area, the degrees or certificates awarded, the types
of courses or programs offered, and the length of the recognition
period. In the proposed regulations, the Secretary has clarified that
an agency's scope of recognition does not automatically extend to any
preaccreditation status it offers. Rather, when an agency formally
applies for recognition, it must include the types of preaccreditation
status for which it seeks recognition, and the Secretary grants
recognition to an agency for each preaccreditation status if the agency
complies with all the requirements for recognition with regard to that
preaccreditation status.
Section 602.14 Limitation, Suspension, or Termination of Recognition.
Section 496(l) of the HEA permits the Secretary to limit, suspend,
or terminate the Secretary's recognition of an accrediting agency
before the completion of the agency's recognition period if the
Secretary determines that the agency has failed to meet any of the
requirements of part 602. In Sec. 602.14 of the proposed regulations,
the Secretary establishes the procedures to be followed before the
Secretary may limit, suspend, or terminate an agency's recognition. The
proposed procedures allow the agency to request a hearing to contest
that action.
The Secretary proposes that, if an agency requests a hearing, the
hearing will be conducted by the Advisory Committee. However, the
Secretary further proposes that the hearing may be conducted by a
subcommittee of the Advisory Committee, consisting of three members of
the Advisory Committee, if the schedule of the full Advisory Committee
would not permit a hearing to be held in a timely manner. After
evaluating the evidence presented before it, the Advisory Committee or
subcommittee makes a recommendation to the Secretary as to whether the
sanction proposed by the designated Department official, no sanction,
or another sanction is warranted. Any hearing held under this section
is open to the public.
After the negotiated rulemaking sessions, in response to non-
Federal negotiators' concerns about the lack of sufficient appeal
mechanisms, the Secretary added to this section a provision that either
party in a hearing may appeal the Advisory Committee's or
subcommittee's recommendation to the Secretary.
Section602.15 Requests for Reconsideration of the Secretary's Decision
Section 496(o) of the HEA requires the Secretary to provide in
regulation the procedures to be followed by an accrediting agency for
the appeal of the Secretary's decision regarding its application for
recognition. Accordingly, in Sec. 602.15 of the proposed regulations,
the Secretary permits an agency to request reconsideration of a final
decision of the Secretary regarding either the agency's application for
recognition or the limitation, suspension, or termination of the
agency's recognition. However, Sec. 602.15(a)(2) proposes that a
request for reconsideration may be made only under limited conditions.
Under these limited conditions, the agency may request reconsideration
only if it demonstrates that it has new information that could not have
been presented previously and that the information is likely to result
in reversal of the Secretary's decision.
While, as noted by the non-Federal negotiators at the negotiated
rulemaking sessions, the grounds for reconsideration are narrow, the
Secretary believes the narrow grounds are appropriate. Adverse
decisions regarding an agency's application for recognition are made by
the Advisory Committee and forwarded to the Secretary. Under
Sec. 602.13, the agency may appeal the Advisory Committee's
recommendation to the Secretary. Similarly, under Sec. 602.14, the
agency may appeal an adverse Advisory Committee or subcommittee
recommendation to the Secretary under a limitation, suspension or
termination proceeding. Therefore, the Secretary believes that
reconsideration requests should be narrowly circumscribed. The
Secretary notes that non-Federal negotiators requested opportunities
for agencies to request reconsideration in cases where the Secretary
had not established appeal procedures. Given the provisions for appeal
that are now in the proposed regulations, the Secretary requests public
comment on whether reconsideration procedures are necessary.
The Secretary wishes to make clear that any agency that fails to
notify the Secretary of its intent to file a written request for
reconsideration within the 10-day time frame specified in the
regulations forfeits its right to reconsideration. Additionally, the
Secretary wishes to reiterate that, in general, any failure to meet a
required deadline date in any appeal to the Secretary results in a
forfeiture of that appeal right.
While consensus was reached during the negotiated rulemaking
sessions that an agency should have 45 days to submit its written
request for reconsideration, the Secretary questions whether a shorter
period--30 days--is sufficient for the agency to prepare an adequate
request, given the fact that 30 days is the usual time frame specified
by the Department for other types of appeals to the Secretary. The
Secretary requests comments on the shorter period.
Because requests for reconsideration are restricted to instances
where the Secretary's decision involves denial, limitation, suspension,
or termination of an agency's recognition, it is anticipated that, due
to the extensive material that must be reviewed, the Secretary will
require more than 30 days to reach a final decision on an agency's
request for reconsideration. Non-Federal negotiators were concerned
that there be some time limit imposed to bring the issue to closure.
Accordingly, the Secretary is proposing a 60-day time frame for
reaching a final decision on an agency's request for reconsideration.
Section 602.16. Appeals Procedures.
As mentioned in Sec. 602.15, section 496(o) of the HEA requires the
Secretary to provide for the appeal of the Secretary's decision
regarding an accrediting agency's application for recognition. In
Sec. 602.16 of the proposed regulations, the Secretary provides for an
appeal to the Federal courts of all final decisions of the Secretary
regarding an agency's application for recognition. During the
negotiated rulemaking sessions, non-Federal negotiators urged an
appeals procedure other than through the courts, as, for example,
through an administrative law judge. However, the Secretary believes
that there can be no administrative appeal within the Department of a
Secretarial decision since the Secretary, as head of the Department of
Education, makes all final decisions on behalf of the Department. It
should be noted, however, that in response to the non-Federal
negotiators' concerns, the Secretary has modified the proposed
recognition procedures to include an opportunity for an agency to
appeal an Advisory Committee's recommendation to the Secretary before
the Secretary reaches a final decision on the agency's application. The
proposed limitation, suspension, and termination procedures also have
been modified to provide for an appeal to the Secretary of an Advisory
Committee or subcommittee recommendation.

Subpart C--Criteria for Secretarial Recognition

Section 602.22 Demonstration of Accreditation Experience
Section 496(a)(1) of the HEA requires accrediting agencies to
demonstrate experience in operating as an accrediting agency as a
condition for recognition. In Sec. 602.22 of the proposed regulations,
the Secretary defines what a demonstration of accrediting experience
must include, basically reiterating the requirements for experience set
forth in Sec. 602.14 of the current regulations. However, Sec. 602.22
does not contain the requirement set forth in Sec. 602.14(c) of the
current regulations that agencies must demonstrate that their policies,
evaluation methods, and decisions are accepted throughout the United
States by recognized accrediting agencies. The Secretary is aware, as
argued by the non-Federal negotiators, that this requirement is an
important indicator of an agency's acceptance. On the other hand, this
requirement has been subject to criticism by persons and institutions
interested in forming new accrediting agencies. These individuals and
agencies have often expressed concern to the Secretary that this
requirement imposes unfair hurdles for them and unduly stifles
competition among accrediting agencies. The Secretary proposes to
eliminate this requirement because the Secretary believes that it is
inappropriate to require acceptance by recognized agencies as a
condition for recognition even though evidence of acceptance by
recognized accrediting agencies provides some measure of an agency's
reliability.
Section 602.23 Application of Standards
Current regulations require accrediting agencies to maintain a
systematic program of review designed to assess the validity and
reliability of their criteria, procedures, and standards and their
relevance to the educational and training needs of affected students.
As this requirement is fundamental to sound accrediting practice, there
was consensus among negotiators that it should continue to be part of
any regulations governing the accrediting agency recognition process.
However, the language of the requirement has been changed in the
proposed regulations from the language of the current regulations in
response to the non-Federal negotiators' concerns about various
technical interpretations of the words ``validity and reliability.''
The substance of the requirement, as expressed in Sec. 602.23(b)(5), is
unchanged. The Secretary wishes to emphasize the importance of this
requirement, which is fundamental to the establishment of sound
standards for the accreditation process and the determination of
educational quality.
Section 602.24 Accreditation Processes
Section 496(c)(1) of the HEA requires that, in addition to the
announced on-site review that is part of the regular accreditation
process, an accrediting agency whose accreditation enables the
institutions it accredits to participate in programs authorized under
the HEA must conduct, some time during any accreditation or
preaccreditation period, at least one unannounced on-site review at
each institution that provides vocational education or training.
Accordingly, in Sec. 602.24(c) of the proposed regulations, the
Secretary requires unannounced site visits by these accrediting
agencies. However, as noted in the discussion of Sec. 602.2, if the
term ``vocational education'' is interpreted literally, it could be
viewed as including all postsecondary education, and, under this
interpretation, accrediting agencies would have to conduct unannounced
site visits to all institutions. To avoid this outcome, in
Sec. 602.24(c) of the proposed regulations, the Secretary limits the
type of vocational education programs that trigger unannounced visits
to the prebaccalaureate level. As non-Federal negotiators were divided
among themselves as to the definition of vocational education, they did
not reach consensus on this point.
As mentioned in the discussion under Sec. 602.2, the Secretary is
considering an alternative definition of prebaccalaureate vocational
education that would not require unannounced site visits to degree-
granting institutions whose prebaccalaureate vocational programs lead
to the associate degree. This would minimize the burden of the new
requirement for unannounced visits, hopefully without any adverse
consequences. The Secretary invites comments on this approach and
suggestions for alternative ways of reducing the burden without
eliminating from review those institutions offering vocational
education that have abused the Title IV program.
Section 602.25 Additions to or Substantive Changes in Educational
Programs
Section 496(a) of the HEA authorizes the Secretary to recognize
accrediting agencies that are reliable authorities as to the quality of
the education or training provided by the institutions or programs they
accredit. Section 496 does not specifically address the manner in which
accrediting agencies evaluate either new programs begun by institutions
after their last grant of accreditation or preaccreditation or programs
that are substantially changed after the institution is accredited or
preaccredited. However, the Secretary believes that an agency cannot be
a reliable authority as to the quality of education or training offered
by an institution if the agency does not assess those new or
substantively changed programs. Accordingly, in Sec. 602.25 of the
proposed regulations, the Secretary establishes the framework for a
policy that accrediting agencies must have to address additions to and
substantive changes in educational programs. Specifically, in
Sec. 602.25(a) the Secretary proposes that an accrediting agency may
include within its previous grant of accreditation or preaccreditation
an educational program that an institution initially offers or
substantively changes after that grant of accreditation or
preaccreditation only if the agency specifically evaluates and approves
the program. The Secretary proposes this requirement based upon the
past actions of some accrediting agencies.
Certain accrediting agencies that accredit institutions offering
specific prebaccalaureate vocational education programs have, on
occasion, extended their accreditation to additional programs that
these institutions offered after being accredited, without evaluating
the quality of those additional programs, even though the additional
programs were totally unrelated to the programs initially accredited.
For example, an accrediting agency that accredited an institution that
offered cosmetology courses extended its accreditation to additional
programs that the institution subsequently offered in jet airplane
mechanics and air conditioning and refrigeration without ever
evaluating the quality of those additional programs. The Secretary
believes that this practice violates the purpose of accreditation.
On the other hand, the Secretary believes that prior approval of
programs is not necessary in all circumstances, a belief shared by
negotiators, although no consensus was reached as to the circumstances.
In Sec. 602.25(b) the Secretary proposes an exception to this
requirement if the institution notifies the accrediting agency of the
new or substantially changed program before it is offered, and the new
or substantially changed program does not provide prebaccalaureate
vocational education. The Secretary proposes this exception because the
Secretary believes that new bachelor and higher degree programs are
thoroughly reviewed by a variety of entities before they may be
offered. Most institutional accrediting agencies, for example, require
institutions to have thorough internal reviews of all new degree
programs by curriculum committees, governing boards, and other
appropriate units within the institution and to obtain appropriate
state authorization for those new degree programs before they are
offered. However, even though an accrediting agency may not be required
by these proposed regulations to evaluate a new or substantially
changed program before it is offered under Sec. 602.25(b), accrediting
agencies are certainly free, and encouraged, to do so under their own
policies.
The Secretary acknowledges that the task of deciding which programs
should require preapproval by accrediting agencies is a difficult one
and seeks suggestions from commenters. For commenters who suggest that
preapproval be allowed for prebaccalaureate vocational education
programs that are ``related'' to a previously accredited program, the
Secretary requests specific suggestions on how to determine whether the
new or substantially changed program is ``related'' to the other
program.
The Secretary notes that most accrediting agencies already have a
definition of ``substantive change'' but observes that there is
considerable variation among agencies as to what this term means. Most
agencies' definitions generally include the following kinds of changes:
a substantial change in the length of a program, its content, or both,
as, for example, when a secretarial program increases from 1200 clock
hours to 1600 clock hours to provide a 400-hour component in office
automation; a change from a traditional 15-week semester format to an
alternate weekend format; and a change from a certificate program to an
associate degree program. The Secretary seeks to require preapproval
for these and similar types of changes and proposes that an agency's
definition of a substantive change in an educational program include,
at a minimum, a substantial change in the number of clock or credit
hours, the number of weeks, or the content of a program, a change in
the type of program offered, a change in the credential awarded for
completion of the program, and a change in the manner in which the
institution measures the educational quantity of the program from clock
hours to credit hours. The Secretary invites comments on this approach
as well as suggestions for alternative approaches to defining which
types of programs require preapproval.
Finally, the Secretary acknowledges that the proposed requirement
for a substantive change policy may result in increased costs to
agencies and, in turn, institutions. However, for the reasons noted
above, the Secretary believes the benefits far outweigh the costs. The
Secretary also wishes to note that there was general consensus among
non-Federal negotiators about the appropriateness of including a
substantive change requirement in the proposed regulations. However,
not all of the negotiators agreed that the approach proposed by the
Secretary was appropriate.
Section 602.26 Required Accreditation Standards
Section 496 of the HEA authorizes the Secretary to recognize
accrediting agencies that are reliable authorities as to the quality of
the education or training provided by the institutions or programs only
if the agencies satisfy standards established by the Secretary. Section
496(a) specifically requires the Secretary to establish standards and
requires the standards to include ``an appropriate measure or measures
of student achievement.''
Section 496(a)(5) of the HEA provides that the Secretary's
standards for recognition of accrediting agencies must require that an
accrediting agency establish accreditation standards that assess 12
areas pertaining to the institutions or programs it accredits. These
areas are: (1) Curricula; (2) faculty; (3) facilities, equipment and
supplies; (4) fiscal and administrative capacity as appropriate to the
specified scale of operation; (5) student support services; (6)
recruiting and admissions practices, academic calendars, catalogs,
publications, grading and advertising; (7) program length and tuition
and fees in relation to the subject matters taught and the objectives
of the degrees or credentials offered; (8) measures of program length
in clock hours or credit hours; (9) success with respect to student
achievement in relation to the institution's mission; (10) default
rates in student loan programs under Title IV of the HEA; (11) record
of student complaints received by, or available to, the accrediting
agency; and (12) the institution's compliance with its program
responsibilities under title IV of the HEA. However, under section
496(a)(5), accrediting agencies that have as their principal purpose
the accrediting of institutions of higher education or higher education
programs to enable them to participate in Federal programs not
authorized under the HEA are exempt from the requirement to have
standards for the areas listed in (7), (8), (9), (10), and (12).
The Secretary notes that most accrediting agencies already have
standards addressing many of these areas. However, to the extent that
an agency does not have standards for all of them, there is an
increased cost to that agency to develop and implement the new
standards. The Secretary believes that the proposed regulations
minimize the increased cost by allowing agencies maximum flexibility to
set their standards to best suit their needs and the needs of the
institutions or programs they accredit.
If the ultimate purpose of section 496 is to authorize the
Secretary to recognize accrediting agencies that are reliable
authorities as to the quality of the education or training provided by
the institutions or programs they accredit, so that recognized agencies
only accredit institutions or programs of demonstrated quality, then
the Secretary believes that each agency's standard for a particular
area listed in section 496(a)(5) must evaluate the quality of the
effort the institution or program is making in that area.
Accordingly, in Sec. 602.26 of the proposed regulations, the
Secretary requires accrediting agencies to have standards assessing the
12 areas cited in section 496(a)(5) of the HEA. In Sec. 602.26(a)(3),
the Secretary exempts accrediting agencies whose accreditation enables
their institutions or programs to participate only in Federal programs
not authorized under the HEA from having to establish standards for the
areas listed under (7), (8), (10), and (12). However, the Secretary
does not exempt these agencies from the requirement to establish
standards that assess success with respect to student achievement. The
Secretary believes that the standards specified in Sec. 602.26(b)(9)
fulfill the requirement in section 496(a) of the HEA that the Secretary
recognize accrediting agencies that meet the Secretary's standards,
which must include ``an appropriate measure or measures of student
achievement.'' Furthermore, the Secretary believes that any
determination by an accrediting agency that the program or institution
it accredits provides quality education or training must be based, in
part, on an assessment of the achievement of students enrolled in the
institution or program. The Secretary notes that the exemption provided
in section 496(a)(5) of the HEA for certain standards was not discussed
during negotiated rulemaking because it was added as a technical
legislative amendment after the negotiations took place.
Each of the 12 required standards is discussed below. The title for
each standard is based on the statutory language used in section
496(a)(5) for that standard. Unless otherwise noted, consensus was
reached among negotiators as to language for each of the standards.
The proposed regulatory language in Sec. 602.26(b) for standards
addressing areas (1), (2), (3), and (5) follows the recommendations of
negotiators and simply restates the law. These four provisions require
that, to be recognized by the Secretary, an accrediting agency must
adopt standards under which it evaluates the quality of an
institution's or program's curricula; faculty; facilities, equipment,
and supplies; and student support services. The Secretary has
reexamined the manner in which these four standards are described in
the proposed regulations and believes that it may be more useful to
provide guidance as to the manner in which quality may or should be
discussed under these standards than to simply restate the law. The
Secretary requests comment on this matter. To assist commenters in this
regard, for each of the four areas, the Secretary examined the
standards of several accrediting agencies to determine how these
agencies addressed quality standards for those areas and presents the
results of that examination under the appropriate topic. The Secretary
invites comments on those approaches and additional suggestions for
focusing on quality assessment.
Section 602.26(b)(1) Curricula. The Secretary found that the
standards most accrediting agencies have adopted to evaluate an
institution's or program's curricula relate to the overall quality of
the curricula, its appropriateness in light of an institution's or
program's educational objectives and the specific degrees or
certificates awarded, and the mechanisms the institution or program
uses to evaluate the curricula and make modifications. The Secretary
considers all of these to be elements of good practice in the
assessment of an institution's or program's curricula. Accordingly, the
Secretary requests specific comment as to whether the manner in which
these agencies handle standards for curricula would be a useful
addition to these regulations. The Secretary also invites additional
comments regarding other elements that the Secretary should include in
the evaluation of accrediting agencies for compliance with this
requirement.
Section 602.26(b)(2) Faculty. The Secretary found that the
standards most accrediting agencies have adopted to evaluate an
institution's or program's faculty relate to the overall quality of the
faculty, the extent to which the institution or program relies on part-
time faculty to teach students, and the effectiveness of the teaching
provided by all faculty. Some agencies also include in their standards
an assessment of the procedures an institution or program uses for the
hiring, promotion, evaluation, and professional development of faculty,
while other agencies merely examine these issues in light of whether
the institution's or program's policies provide for the fair and
equitable treatment of faculty. The Secretary considers all of these to
be elements of good practice in the assessment of an institution's or
program's faculty. Accordingly, the Secretary requests specific comment
as to whether the manner in which these agencies handle standards for
faculty would be a useful addition to these regulations. The Secretary
also invites additional comments regarding other elements that the
Secretary should include in the evaluation of accrediting agencies for
compliance with this requirement.
Section 602.26(b)(3) Facilities, equipment, and supplies. The
Secretary found that the standards most accrediting agencies have
adopted to evaluate an institution's or program's facilities,
equipment, and supplies relate to the overall quality of these support
areas. Specifically, the Secretary found that most accrediting agencies
assess, in light of an institution's or program's educational
objectives, the adequacy and appropriateness of: libraries, learning
resource centers, and other academic and instructional support
facilities; the equipment and supplies that support the instructional
program; and any other physical resources the institution or program
uses to achieve its educational objectives. The Secretary considers all
of these elements to be good practices for the assessment of
facilities, equipment, and supplies. Accordingly, the Secretary
requests specific comment as to whether the manner in which these
agencies handle standards for this area would be a useful addition to
these regulations. The Secretary also invites additional comments
regarding other elements that the Secretary should include in the
evaluation of accrediting agencies for compliance with this
requirement.
Section 602.26(b)(4) Fiscal and administrative capacity as
appropriate to the specified scale of operations. Section 496(a)(5)(D)
requires an accrediting agency to have standards that address the
fiscal and administrative capacity of an institution or program in
relation to its scale of operation. It is the Secretary's view that the
purpose of this requirement is to enable the agency to determine
whether the institution or program is fiscally and administratively
sound and will likely remain so for a future period. Because the
financial condition of an institution is subject to change, the
Secretary proposes that an agency must make this determination each
time it grants accreditation, preaccreditation, or reaccreditation. The
Secretary also proposes that an agency must examine each institution's
financial capacity in sufficient depth on an annual basis to determine
if the financial capacity of the institution threatens the ability of
the institution or program to continue to meet the agency's standards
and, if so, to take appropriate follow-up action. The Secretary invites
comments as to whether this follow-up action should include notifying
the Secretary of the institution's financial condition.
The Secretary believes that the enhanced financial monitoring by
accrediting agencies that is required by these proposed regulations
will provide increased protection to students with regard to problems
arising from an institution's financial instability.
Section 602.26(b)(5) Student support services. The Secretary found
that the standards most accrediting agencies have adopted to evaluate
an institution's or program's student support services relate to the
overall quality and extent of the services provided and their
appropriateness in light of the institution's or program's mission and
the types of students it admits. The Secretary considers all of these
elements to be good practices for the assessment of student support
services. Accordingly, the Secretary requests specific comment as to
whether the manner in which these agencies handle standards for this
area would be a useful addition to these regulations. The Secretary
also invites additional comments regarding other elements that the
Secretary should include in the evaluation of accrediting agencies for
compliance with this requirement.
Section 602.26(b)(6) Recruiting and admission practices; and
academic calendars, catalogs, publications, grading, and advertising.
Section 496(a)(5)(F) requires an accrediting agency to have standards
that address an institution's or program's recruiting and admissions
practices, as well as its academic calendars, catalogs, publications,
grading, and advertising. The Secretary believes this statutory
provision contains two different standards. One standard relates to the
appropriateness of the institution's or program's recruiting and
admission practices. Under this standard, the agency must determine
whether an institution's practices are reasonable in light of the
institution's or program's educational mission.
The other standard relates to the institution's academic calendars,
catalogs, publications, grading, and advertising. Under that standard,
which is in the nature of consumer protection, the agency must evaluate
whether those items are accurate, complete, and consistent with the
institution's actual practice.
Section 602.26(b)(7) Program length and tuition and fees in
relation to the subject matters taught and the objectives of the
degrees or credentials offered. Section 496(a)(5)(G) requires an
accrediting agency to have standards that address program length and
tuition and fees in relation to the subject matters taught and the
objectives of the degree or credential offered. It is the Secretary's
view that one of the purposes of this requirement is to eliminate
certain abuses that have been discovered at institutions participating
in Title IV, HEA programs.
These abusive practices fall into three main categories. One
category involves accredited institutions that offer prebaccalaureate
vocational programs and charge an excessive amount of tuition and fees
for programs that lead to dead end or very low-paying jobs. In some
cases, the tuition and fees for a short-term program to prepare
students for a particular job exceeded the annual income that a person
employed in that job could expect to earn.
Another category involves accredited institutions that offer
prebaccalaureate vocational education programs and inflate either the
clock or credit hours for the program or the length of the program
without educational justification, simply to increase the amount of SFA
funds these institutions may receive. The third category involves
accredited institutions that offer prebaccalaureate vocational
education that are simply too short to be able to provide training that
has any value in the workplace.
The Secretary proposes to address the statutory requirement for
standards related to program length and tuition and fees by requiring
an accrediting agency to establish minimum and maximum program lengths
for prebaccalaureate vocational programs. In this context, program
length means both the number of clock hours or credit hours in a
program and the number of weeks that a program is offered. The
Secretary invites specific comments with regard to this requirement.
The topic of standards for establishing minimum and maximum program
lengths was not discussed during the negotiated rulemaking sessions,
and the Secretary invites comments on this topic as well.
During the negotiated rulemaking sessions, consensus was reached on
various factors that should be considered when an agency establishes
its standard for program length in relation to tuition and fees. These
factors are listed under Sec. 602.26(b)(7) (i), (ii), (iii), and (iv).
The Secretary has reconsidered this matter and now proposes two
additional factors. The first concerns any applicable Federal statutes
and regulations. The Secretary does not believe the addition of a
requirement for agencies to take into account applicable statutes and
regulations when developing their standards goes beyond the intent of
the HEA because it does not require agencies to adopt the Federal
policies but simply to take them into account. The second factor
concerns the relationship between tuition and fees for a
prebaccalaureate vocational program and the remuneration that a
graduate of that program can reasonably be expected to receive. The
Secretary is concerned about this issue for this type of program
because the very purpose of a prebaccalaureate vocational program is to
prepare a student for gainful employment in a recognized occupation.
Moreover, the Secretary is concerned that tuition and fees being
charged for prebaccalaureate vocational programs may be excessive given
the type of job for which a graduate of the program qualifies.
Accordingly, the Secretary requests specific comment regarding
standards that address tuition and fee charges for a prebaccalaureate
vocational program vis-a-vis the remuneration that graduates of a
program may receive.
The Secretary requests comments on the various factors proposed for
standards that assess program length and tuition and fees. In calling
for comments with regard to this standard, the Secretary wishes to
remind commenters that a violation of a standard does not necessarily
preclude an agency from accrediting an institution or program. The
violation would, however, at least require the institution to justify
its tuition and fee charges to the agency.
The Secretary acknowledges that the development of standards for
this area involves very complex issues. For the purpose of stimulating
discussion in this area, the Secretary offers the following possible
approaches to the development of standards. Under one approach, the
standard might require that annualized tuition and fees for a program
not exceed a percentage of the annualized minimum wage. Under another
approach, the standard might require that annualized tuition and fees
for a program not exceed a percentage of the program's graduates'
average earnings for their first year of employment. Under still
another approach, annualized tuition and fees for a program could not
exceed a percentage of the average annualized wages, as reported by the
U.S. Bureau of Labor Statistics, in occupations for which the program
prepares students. In suggesting possible approaches to the
establishment of standards for this area, the Secretary reminds
commenters of the difficulty in obtaining employment information,
including salaries and wages, from graduates of an institution for
periods beyond the first year after graduation.
The Secretary is considering establishing in other regulations
requirements governing program length and tuition and fees for programs
that are eligible to participate in the SFA programs. Accordingly, if
those regulatory requirements are established, the Secretary would
consider requiring an accrediting agency to notify the Secretary if it
knows that an institution's program is too long or too short under that
requirement, or if it knows that an institution's tuition and fee
charges violate that other requirement. The Secretary invites comments
about the feasibility of adding this notification requirement or any
alternative method of obtaining this information.
Finally, the Secretary notes that the requirement to establish a
standard for program length and tuition and fees applies only to those
accrediting agencies whose accreditation enables the institutions they
accredit to participate in programs authorized under the HEA.
Section 602.26(b)(8) Measures of program length in clock hours or
credit hours. Section 496(a)(5)(H) requires an accrediting agency to
have standards that address measures of program length in clock or
credit hours. It is the Secretary's view that the purpose of this
requirement is to enable the agency to determine if an institution take
into proper account, as appropriate, factors such as program objectives
and content, the types and locations of instructional delivery, and the
knowledge and skills necessary for students to reach competence in the
field being taught when determining the length of its programs in clock
or credit hours. General agreement was reached by negotiators with
regard to the substance of this standard. However, the Secretary has
reconsidered this matter and now proposes an additional factor: any
applicable Federal statutes and regulations. The Secretary does not
believe the addition of a requirement for agencies to take into account
applicable statutes and regulations when developing their standards
goes beyond the HEA because it does not require agencies to adopt the
Federal policies but simply to take them into account. The Secretary
invites comments on this proposed addition.
To the extent that the Secretary regulates this area in other
regulations governing the SFA programs, these regulations may need to
be modified. Moreover, as indicated with regard to Sec. 602.26(b)(7),
if those other regulations are established, the Secretary may consider
requiring an accrediting agency to notify the Secretary if it knows
that an institution's measure of the number of credits hours in its
programs does not satisfy that other regulatory requirement. The
Secretary invites comments about the feasibility of adding this
notification requirement or on alternative methods of obtaining this
information.
The Secretary notes that the requirement to establish a standard
for measures of program length in clock or credit hours applies only to
those accrediting agencies whose accreditation enables the institutions
they accredit to participate in programs authorized under the HEA.
Section 602.26(b)(9) Success with respect to student achievement in
relation to mission. Section 496(a)(5)(I) of the HEA requires an
accrediting agency to have standards that address success with respect
to student achievement in relation to mission, including, as
appropriate, consideration of course completion rates, pass rates on
State licensing examinations, and job placement rates. It is the
Secretary's view that standards for student achievement are the most
important of all accreditation standards because the true success of an
institution or program is measured by the success of its students. For
institutions that offer prebaccalaureate vocational programs, the
Secretary proposes to require agencies to establish minimum
quantitative standards for completion rates, job placement rates, and
pass rates on State licensing examinations for those programs, since
gainful employment is the purpose of those programs. The Secretary
proposes this additional requirement for institutions offering
prebaccalaureate vocational education programs because, as noted in the
discussion under Sec. 602.26(b)(7), these institutions have often
engaged in abusive practices. The Secretary notes that the concept of
minimum quantitative standards, even when restricted to
prebaccalaureate vocational education, was not supported by non-Federal
negotiators.
The Secretary acknowledges that there are many possible approaches
to the establishment of the standards for measuring success in
prebaccalaureate vocational programs, both in terms of the information
collected and the minimum standard selected. For example, if an
institution's students are mainly first-time, full-time students in
short-term programs, agencies could use data collected by institutions
under the Student Right-to-Know and Campus Security Act of 1990 for
calculating completion rates. Minimum job placement rate standards
might be developed using three-year moving averages, adjusted for
regional unemployment rates as computed by the Bureau of Labor
Statistics of the U.S. Department of Labor. Further, a job placement
rate could be calculated only for those jobs in the areas for which
training was offered, all jobs obtained by graduates, or a combination
of the two.
The Secretary specifically invites suggestions for standards in
this area. Further, the Secretary understands that developing
appropriate standards in these areas is not easy and requests
suggestions with regard to specific rates for the standards in these
areas. The Secretary suggests as a reference point for completion and
placement rates the statutory requirement, contained in section
481(e)(2) of the HEA, that, to be an eligible short-term vocational
program under the SFA programs, a program must have a 70 percent
completion and a 70 percent placement rate.
Section 602.26(b)(10) Default rates in the student loan programs
established under Title IV of the HEA. Section 496(a)(5)(J) of the HEA
requires an accrediting agency to have standards that address an
institution's default rates in the student loan programs established
under Title IV of the HEA. It is the Secretary's view that the purpose
of this requirement is to enable the agency to determine if an
institution is out of compliance with its accrediting standards when
the institution's latest cohort default rate under the Federal Family
Education Loan (FFEL) programs exceeds a certain threshold or has
increased significantly over its previous rate. The Secretary proposes
to require an agency to conduct a review if an institution's latest
cohort default rate equals or exceeds 25 percent. The Secretary
establishes this rate as the trigger for review because that is the
rate, beginning in fiscal year 1994, i.e. October 1, 1993, at which an
institution will be disqualified from participating in the FFEL
programs. An accrediting agency is free, of course, to set its trigger
for review at a default rate below 25 percent.
The Secretary also is concerned that a significant change in an
institution's default rate could be an indication of other serious
problems that may affect the institution's compliance with an agency's
standards. For this reason, the Secretary proposes to require an agency
to conduct a review when the institution's latest cohort default rate
increases significantly over its rate the previous year. The Secretary
does not propose to define the term ``significant increase'' in the
proposed regulations but invites comments on an appropriate definition.
One possibility that the Secretary is considering is to require an
agency to conduct a review when the institution's default rate
increases by more than 50 percent from its previous rate, provided that
previous rate exceeds 10 percent. The Secretary believes that a cohort
default rate below 10 percent is not necessarily an indication that the
institution may be in violation of its accrediting agency's standards.
Therefore, this provision would apply only if the institution's latest
cohort default rate exceeds 15 percent and has increased by more than
50 percent from its previous rate. The Secretary invites comments on
this approach and other approaches that will provide guidance to
agencies on what constitutes a significant increase in default rate.
The Secretary notes that the requirement to establish a standard
for this area applies only to those accrediting agencies whose
accreditation permits the institutions they accredit to participate in
programs authorized under the HEA.
Section 602.26(b)(11) Record of student complaints received by, or
available to, an agency. Section 496(a)(5)(K) of the HEA requires an
accrediting agency to have standards that address the record of student
complaints received by, or available to, an agency concerning an
institution or program it accredits. It is the Secretary's view that
the purpose of this requirement is to enable an agency to focus its
evaluation of the institution or program on the matters that gave rise
to the student complaints when the agency undertakes its next
evaluation of the institution or program.
Section 602.26(b)(12) Compliance with an institution's program
responsibilities under Title IV of the Act. Section 496(a)(5)(L) of the
HEA requires an accrediting agency to have standards that address an
institution's compliance with its program responsibilities under Title
IV of the Act. It is the Secretary's view that an institution's failure
to comply with its Title IV responsibilities should be a factor in an
accrediting agency's determination as to whether that institution
should continue to be accredited by the agency. The Secretary
recognizes that accrediting agencies do not have the responsibility,
expertise, personnel, or time to evaluate, on a routine basis, whether
the institutions they accredit are in compliance with their Title IV
responsibilities. On the other hand, agencies may not ignore
information provided to them regarding the lack of compliance of those
institutions. Accordingly, the Secretary proposes that, in assessing an
institution's compliance under this standard, the agency relies on
documentation forwarded to it by the Secretary. The Secretary wishes to
make it clear that this section of the proposed regulations does not
require accrediting agencies to review an institution to determine
whether the institution is fulfilling its responsibilities under the
SFA programs, as, for example, by verifying that an institution is
calculating Pell distributions properly. Rather, the Secretary expects
agencies to use the information provided by the Secretary on the
institution to trigger a review of the institution for compliance with
agency standards if the documentation provided by the Secretary
indicates a problem that is related to one or more of the agency's
standards.
The Secretary notes that the requirement to establish standards for
this area applies only to those accrediting agencies whose
accreditation enables the institutions they accredit to participate in
programs authorized under the HEA.
Section 602.26(b)(13) The institution's practice of making refunds
to students. Under section 484B of the HEA, an institution
participating in the SFA programs must have a fair and equitable refund
policy. An institution's refund policy is judged to be fair and
equitable if it provides a refund in an amount of at least the largest
of the amounts provided under ``(1) the requirements of applicable
State law; (2) the specific refund requirements established by the
institution's nationally recognized accrediting agency and approved by
the Secretary; or (3) the pro rata refund calculation'' described
elsewhere in section 484B. To permit an institution to satisfy the fair
and equitable refund requirement using this criterion, the Secretary
proposes not to recognize an accrediting agency unless the agency has a
refund policy that provides for a fair and equitable refund to a
student of tuition, fees, and other institutional charges. Thus, the
Secretary's recognition of an agency means that the Secretary has
approved that agency's refund policy. Non-Federal negotiators objected
to the inclusion of this requirement in the proposed regulations on the
grounds that section 496(g) of the HEA explicitly states that the
Secretary may not establish standards for accrediting agencies that are
not required by section 496. The Secretary believes, however, that the
inclusion of a requirement for a standard addressing an institution's
refund policy in the proposed regulations is necessary to comply with
section 484B of the HEA.
Section 602.26(c) Time limit on correcting deficiencies. In
Sec. 602.26(c), the Secretary proposes that, when an institution or
program fails to meet an agency standard, the agency may permit the
institution or program a period, which may not exceed 18 months, during
which time it must take corrective action to bring itself back into
compliance with the standard. The agency is free to set the time frame
for coming into compliance at less than 18 months. If the institution
or program fails to bring itself into compliance during the specified
period, the agency must take adverse action, unless it finds that the
time frame for achieving compliance should be extended for cause. Of
course, the agency may take adverse action against an institution or
program, either immediately or in less than 18 months, without offering
the institution or program the opportunity to take corrective action if
the agency believes that the adverse action is necessary.
The Secretary believes that the 18-month time frame is necessary to
ensure that institutions and programs make serious efforts to improve
the quality of their offerings and to ensure that accrediting agencies
take adverse actions when institutions fail to make those efforts.
Accordingly, the Secretary anticipates that extensions beyond 18 months
for cause will not be routinely granted. Additionally, the Secretary
anticipates that for violations that are easily correctable, the
appropriate period will be significantly less than 18 months.
The Secretary is considering adding to this section a requirement
that an accrediting agency must take action not only if it determines
that an institution or program is not in compliance with a standard but
also if it determines that an institution or program may currently meet
the standard but is unlikely to be able to continue to meet the
standard. The Secretary invites comments on this possible addition to
the section.
Section 602.27 Required Operating Procedures
Section 496(c) of the HEA requires accrediting agencies whose
accreditation enables institutions to participate in Title IV, HEA
programs to take special action whenever institutions establish new
branch campuses or undergo changes in ownership that result in changes
in control. Accordingly, in Sec. 602.27 of the proposed regulations,
the Secretary reiterates the requirement for special action set forth
in that section. For purposes of this section, the Secretary notes that
the term ``branch campus'' includes any ``additional location,'' which
the Secretary defines to be a location that is geographically apart
from the main campus, that has its own separate administrative
structure, services, and facilities, and at which the institution plans
to offer a complete educational program. The Secretary believes the
inclusion of additional locations in this requirement is consistent
with the intent of Congress. The close scrutiny of branch campuses and
additional locations includes the requirement contained in sections
496(c)((2) and (3) to approve a business plan for a branch prior to its
opening; to extend accreditation to the branch only after determining
that it has sufficient educational, financial, operations, management,
and physical resources to provide education or training consistent with
the accreditation standards; and to conduct on-site reviews within six
months for all new branches and all institutions that change ownership
that results in a change in control.
Another requirement of section 496(c) of the HEA is that any
institution participating in Title IV, HEA programs that enters into a
teach-out agreement with another institution must agree to submit to
its accrediting agency for approval a teach-out agreement that is
consistent with applicable standards and regulations. In Sec. 602.27(b)
of the proposed regulations, the Secretary reiterates this requirement.
Section 602.28 Due Process for Institutions and Programs
Section 496(a)(6) of the HEA requires an accrediting agency seeking
recognition by the Secretary to use procedures throughout its
accreditation process that satisfy due process requirements.
Accordingly, in Sec. 602.28 of the proposed regulations, the Secretary
sets out this due process requirement. Specifically, in Sec. 602.28 the
Secretary requires an agency to set forth in writing all of its
procedures governing its accreditation and preaccreditation processes,
including its processes for the appeal of an adverse action it takes
against an institution or program, to notify an institution or program
in writing of any adverse action the agency takes against it, and to
afford the institution or program the opportunity to appeal the adverse
action. In accordance with section 496(a)(6)(D) of the HEA, in
Sec. 602.28(b)(5) the Secretary specifically requires that an agency
permit an institution or program the right to representation by counsel
during an appeal of an adverse action.
The Secretary acknowledges that the cost to an agency when an
institution or program appeals an adverse action can be substantial. To
minimize this cost, the Secretary has included in Sec. 602.28(b)(5) a
provision, suggested by non-Federal negotiators, that agencies be given
the discretion to determine when an appeal may be made only in writing.
Section 602.29 Notification of Accrediting Decisions
Section 496(a)(7) of the HEA requires accrediting agencies to
notify the Secretary, the appropriate State postsecondary review
entities, and the public of any final adverse accrediting action
regarding an institution or program. Accordingly, in Sec. 602.29(a) of
the proposed regulations, the Secretary establishes this notification
requirement. The Secretary proposes an additional requirement in
Sec. 602.29(a) that is not specified in the law: that accrediting
agencies notify other appropriate accrediting agencies of all final
adverse actions. The Secretary believes this additional notification
requirement, which was suggested after the negotiated rulemaking
sessions by one of the non-Federal negotiators, is necessary because of
the requirement, implied in section 496(l)(2) of the HEA, that an
accrediting agency must take into account the adverse accrediting
actions of other accrediting agencies in making its own accrediting
decisions.
Section 496(a)(8) of the HEA requires accrediting agencies to make
available to the Secretary, the appropriate State postsecondary review
entity and, upon request, the public a brief statement supporting any
decision to deny, withdraw, suspend, or terminate the accreditation or
preaccreditation of an institution or program, together with the
comments of the affected institution or program concerning that
decision. Accordingly, in Sec. 602.29 of the proposed regulations, the
Secretary establishes this requirement. To ensure that the statement is
made available in a timely fashion, the Secretary proposes to require
that the statement be made available within 60 days of an agency's
final decision.
The Secretary is considering adding to this section a requirement
that agencies notify the Secretary prior to taking final adverse action
against an institution when the information that caused the agency to
take the adverse action may relate to the institution's continued
participation in Title IV, HEA programs, as, for example, in the case
of fraud or gross mismanagement of Federal funds. The Secretary is
considering this additional notification requirement because of the
length of time it often takes agencies to reach a final adverse
decision, due to an institution's rights under due process, even when
circumstances indicate a gross violation of agency standards. The
Secretary invites comments on this additional requirement and
alternative approaches to notifying the Secretary when an agency has
such serious concerns about an institution that it initiates an adverse
action.
Finally, the Secretary is considering adding to this section a
requirement that an accrediting agency must notify the Secretary and
the appropriate State postsecondary review entity of any final adverse
accrediting action at the same time the agency notifies the institution
of this action. The Secretary believes this addition would prevent
excessive draw-down of SFA funds by an institution after it loses
accreditation. The Secretary notes that, while this topic was not
discussed during negotiated rulemaking, many negotiators have told
Department staff that this additional requirement would not present an
undue hardship to their agencies. The Secretary invites comments on
this proposed additional requirement and suggestions for alternative
approaches to prevent unwarranted expenditure of SFA funds by
institutions that have lost accreditation.
Section 602.30 Regard for Decisions of States and Other Accrediting
Agencies
Section 496(l)(2) of the HEA implies that accrediting agencies are
responsible for knowing what actions other recognized accrediting
agencies have taken against an institution. The Secretary addresses
this issue in Sec. 602.30 by proposing that all agencies, including
those that accredit only programs, take into account the decisions of
States and other accrediting agencies when making any accreditation or
preaccreditation decision involving an institution or program. The
Secretary believes the inclusion of programmatic accrediting agencies
in this requirement is essential to ensure that the problems that
caused a programmatic accrediting agency to take adverse action against
a program within an institution are promptly reviewed by the
institutional accrediting agency that accredits the institution to
determine if the institution is still in compliance with the latter
agency's standards.
In Sec. 602.30(a)(3) of the proposed regulations, the Secretary
requires that agencies routinely share with other appropriate
recognized accrediting agencies and State agencies information about
any actions they have taken regarding an institution's or programs's
accreditation or preaccreditation. The Secretary is considering adding
to this section a requirement that agencies share information about
actions they are taking or are about to take regarding an institution's
or program's accreditation or preaccreditation. The Secretary invites
comments on this additional requirement and alternative approaches to
sharing information with the other members of the triad regarding
actions either under way or planned by the agency with respect to an
institution or program.
Finally, in Sec. 602.30(b) the Secretary proposes that agencies are
subject to the requirements in Sec. 602.30(a) if they ``knew, or should
have known,'' of the actions being taken by another recognized
accrediting agency or State agency. The Secretary believes that it is
reasonable to expect an agency to have known of these actions if there
is evidence that the other agencies have sent information concerning
these actions to the agency.

Other Issues

The following discussion addresses other issues either discussed by
negotiators or raised by the Secretary after the negotiations. None of
the issues, however, involves a significant change from the current
policies and procedures governing the accrediting agency recognition
process, and thus none warrants inclusion in the previous section.
Section 602.2 Definitions
Accrediting agency. While the definition in the proposed
regulations eliminates the language in the current regulations
describing the type of entity that may comprise an agency, the
Secretary wishes to make clear that the legal entity that is an
accrediting agency may be an association, council, commission, or
corporation.
Designated Department official. While this term is not used in the
current regulations, the Secretary proposes to use it in subpart B on
recognition and termination procedures to describe much of what has, in
fact, been the Department's practice with respect to the accrediting
agency recognition process. For example, the Assistant Secretary for
Postsecondary Education has, on occasion, presented the summary of the
preliminary analysis of an accrediting agency to the Advisory
Committee; on other occasions, the Assistant Secretary has delegated
that responsibility to a member of the Assistant Secretary's staff.
After the Advisory Committee meeting, the Assistant Secretary has
routinely forwarded to the Secretary the Advisory Committee's
recommendation on an agency's application for recognition, along with
the Assistant Secretary's recommendation. Finally, the Assistant
Secretary has routinely advised the Secretary on issues related to the
recognition of agencies. The Secretary believes that the inclusion of
the term ``designated Department official'' and its use throughout
subpart B clarifies the longstanding involvement of individuals other
than the Secretary in the accrediting agency recognition process.
Representative of the public. The Secretary wishes to make clear
that under an agency's policy on conflicts of interest, a
representative of the public may not participate in any accrediting
decisions pertaining to an institution or program with which he or she
may have any direct or indirect affiliation.
Section 602.21 Administrative and Fiscal Responsibility
Consensus was reached by negotiators regarding the provisions
specified in this section for demonstrating that an accrediting agency
has the necessary administrative and fiscal resources to carry out its
accrediting responsibilities. However, the Secretary is concerned that
the provisions contained in this section do not adequately address
whether an agency's personnel and fiscal resources will continue to be
adequate during any recognition period granted. The Secretary invites
suggestions on how to address this concern.

Executive Order 12866

These proposed regulations have been reviewed in accordance with
Executive Order 12866. An assessment of the potential costs and
benefits of the various requirements contained in the proposed
regulations has been incorporated into the relevant sections of this
preamble. The Secretary notes that, as these proposed regulations were
subject to negotiated rulemaking, the costs and benefits of the various
requirements were discussed thoroughly by negotiators. The resultant
consensus reached on a particular requirement reflected agreement on
the best possible approach to that requirement in terms of cost and
benefit.

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 number of entities that would be affected by these
proposed regulations are accrediting agencies that apply for
recognition by the Secretary. The regulations would not have a
significant economic impact on the institutions affected because the
regulations would not impose excessive regulatory burdens or require
unnecessary Federal supervision. The regulations would impose the
minimum requirements needed to ensure the proper implementation of the
Secretary's statutory mandate to recognize accrediting agencies.

Paperwork Reduction Act of 1980

Sections 602.4, 602.10, 602.26, and 602.27 contain information
collection requirements. In addition, section 602.21(b)(7) contains
specific record retention requirements. As required by the Paperwork
Reduction Act of 1980, the Department of Education will submit a copy
of these sections to the Office of Management and Budget for its
review. (44 U.S.C. 3504(h))
These proposed regulations contain substantial information
collection requirements for accrediting agencies applying for
recognition by the Secretary, as well as additional requirements for
recognized agencies during their recognition period. The Department
needs and uses the information collected to determine whether an agency
seeking recognition by the Secretary meets the requirements for
recognition and whether, if the agency is recognized, it continues to
operate in compliance with the requirements for recognition throughout
its recognition period.
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 3069, ROB-3, 7th & 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.
To assist the Department in complying with the specific
requirements of Executive Order 12866, the Secretary invites comments
on whether there may be further opportunities to reduce any potential
costs or increase potential benefits resulting from these proposed
regulations without impeding the effective and efficient administration
of the accrediting agency recognition process.

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 602

Colleges and universities, Education, Reporting and recordkeeping
requirements.

[Catalog of Federal Domestic Assistance Number does not apply.]

Dated: January 14, 1994.
Richard W. Riley,
Secretary of Education.

The Secretary proposes to amend title 34 of the Code of Federal
Regulations by revising part 602 to read as follows:

PART 602--SECRETARY'S PROCEDURES AND CRITERIA FOR THE RECOGNITION
OF ACCREDITING AGENCIES

Subpart A--General Provisions

Sec.
602.1 Purpose.
602.2 Definitions.
602.3 Organization and membership.
602.4 Submission of information to the Secretary by recognized
accrediting agencies.

Subpart B--Recognition and Termination Procedures

602.10 Application for recognition.
602.11 Preliminary review by the Secretary.
602.12 Review by the National Advisory Committee on Institutional
Quality and Integrity.
602.13 Review and decision by the Secretary.
602.14 Limitation, suspension, or termination of recognition.
602.15 Requests for reconsideration of the Secretary's decisions.
602.16 Appeals procedures.
602.17 Publication of list of recognized agencies.

Subpart C--Criteria for Secretarial Recognition

602.20 Geographic scope of accrediting activities.
602.21 Administrative and fiscal responsibility.
602.22 Accreditation experience.
602.23 Application of standards.
602.24 Accreditation processes.
602.25 Additions to or substantive changes in educational programs.
602.26 Required accreditation standards.
602.27 Additional required operating procedures.
602.28 Due process for institutions and programs.
602.29 Notification of accrediting agency decisions.
602.30 Regard for decisions of States and other accrediting
agencies.

Authority: 20 U.S.C. 1058, 1061, 1085, 1088, 1099b, 1141, 1401,
2471, and 3381, unless otherwise noted.

Subpart A--General Provisions

Sec. 602.1 Purpose.

(a)(1) This part establishes procedures and criteria for the
Secretary's recognition of accrediting agencies. The purpose of the
Secretary's recognition of agencies is to assure that these agencies
are, for the purposes of the Higher Education Act of 1965, as amended
(HEA), or for other Federal purposes, reliable authorities as to the
quality of education or training offered by the institutions of higher
education or the higher education programs they accredit.
(2) The Secretary's recognition of an accrediting agency is based
on the Secretary's determination that the agency satisfies the
requirements of this part.
(b) The Secretary grants recognition only to those agencies that--
(1) Accredit institutions of higher education for the purpose of
enabling them to establish eligibility to participate in HEA programs;
or
(2) Accredit institutions of higher education or higher education
programs for the purpose of enabling them to establish eligibility to
participate in other programs administered by the Department or by
other Federal agencies.

(Authority: 20 U.S.C. 1099b)

Sec. 602.2 Definitions.

The following definitions apply to terms used in this part:
Accreditation means the status of public recognition that an
accrediting agency grants to an educational institution or program that
meets the agency's established qualifications and standards.
Accrediting agency or agency means a legal entity, or that part of
a legal entity, that conducts accrediting activities through voluntary,
non-Federal peer evaluations and makes decisions concerning the
accreditation or preaccreditation status of institutions, programs, or
both.
Act means the Higher Education Act of 1965, as amended.
Adverse accrediting action means the denial, withdrawal,
suspension, or termination of accreditation or preaccreditation, or any
comparable accrediting action an agency may take against an institution
or program, except that placing an institution or program on probation
or issuing a show cause order against an institution or program is not
an adverse accrediting action unless it is so defined by the
accrediting agency.
Advisory Committee means the National Advisory Committee on
Institutional Quality and Integrity.
Branch campus means a location of an institution of higher
education that is geographically apart from and independent of the main
campus of the institution. The Secretary considers a location of an
institution to be independent of the main campus if the location (1) is
permanent in nature; (2) offers courses in educational programs leading
to a degree, certificate, or other recognized educational credential;
(3) has its own faculty and administrative or supervisory organization;
and (4) has its own budgetary and hiring authority.
Designated Department official means the official in the Department
of Education to whom the Secretary has delegated the responsibilities
indicated in this part.
Institution of higher education or institution means an educational
institution that qualifies or may qualify as an eligible institution
under 34 CFR part 600.
Institutional accrediting agency means an agency that accredits
institutions of higher education.
Nationally recognized accrediting agency, nationally recognized
agency, or recognized agency means an accrediting agency that is
recognized by the Secretary under this part.
Part means part 602 of title 34 of the Code of Federal Regulations
governing the Secretary's procedures and criteria for the recognition
of accrediting agencies.
Preaccreditation means the status of public recognition that an
accrediting agency grants to an institution or program for a limited
period of time that signifies that the agency has determined that the
institution or program is progressing towards accreditation and is
likely to attain accreditation within a reasonable period of time.
Prebaccalaureate vocational education means vocational education
that leads to a certificate, degree, or other credential that is less
than a bachelor's degree.
Program means a postsecondary educational program offered by an
institution that leads to an academic or professional degree,
vocational certificate, or other recognized educational credential.
Programmatic accrediting agency means an agency that accredits
specific educational programs that prepare students for entry into a
profession, occupation, or vocation.
Representative of the public means a person who is not (1) an
employee, member of the governing board, owner, or shareholder of, or
consultant to, an institution or program that either is accredited by
the agency or has applied for accreditation; or (2) a member of any
trade association or membership organization related to, affiliated
with, or associated with the accrediting agency.
Secretary means the Secretary of the U.S. Department of Education
or any official or employee of the Department acting for the Secretary
under a delegation of authority.
State means a State of the Union, American Samoa, the Commonwealth
of Puerto Rico, the District of Columbia, Guam, the Trust Territory of
the Pacific Islands, the Virgin Islands, and the Commonwealth of the
Northern Mariana Islands.
Teach-out agreement means a written agreement between accredited
institutions that provides for the equitable treatment of students if
one of those institutions stops offering an educational program before
all students enrolled in that program complete the program.
Title IV, HEA program means any of the programs set forth in 34 CFR
668.1(c).
Vocational education means education or training that prepares
students for gainful employment in a recognized occupation.

(Authority: 20 U.S.C. 1099b)

Sec. 602.3 Organization and membership.

(a) The Secretary recognizes only the accrediting agencies
described in paragraph (b) of this section that--
(1) Accredit institutions of higher education or higher education
programs for the purpose described in Sec. 601.1(b); and
(2) Satisfy the criteria for Secretarial recognition contained in
subpart C of this part.
(b) The accrediting agencies referred to in paragraph (a) of this
section are--
(1) A State agency that--
(i) Has as a principal purpose the accrediting of institutions of
higher education, higher education programs, or both; and
(ii) Has been listed by the Secretary as a nationally recognized
accrediting agency on or before October 1, 1991;
(2) An accrediting agency that--
(i) Has a voluntary membership of institutions of higher education;
(ii) Has as a principal purpose the accrediting of institutions of
higher education to enable them to participate in programs authorized
under this Act; and
(iii) Satisfies the ``separate and independent'' requirements
contained in paragraph (c) of this section;
(3) An accrediting agency that--
(i) Has a voluntary membership; and
(ii) Has as its principal purpose the accrediting of higher
education programs, or higher education programs and institutions of
higher education to enable them to participate in Federal programs not
authorized under this Act; and
(4) An accrediting agency that, for purposes of determining
eligibility for Title IV, HEA programs--
(i)(A) Has a voluntary membership of individuals participating in a
profession; or
(B) Has as its principal purpose the accrediting of programs within
institutions that are accredited by another nationally recognized
accrediting agency; and
(ii)(A) Satisfies the ``separate and independent'' requirements
contained in paragraph (c) of this section; or
(B) Obtains a waiver from the Secretary under paragraph (e) of this
section of the ``separate and independent'' requirements contained in
paragraph (c) of this section.
(c) For purposes of this section, ``separate and independent''
means that--
(1) The members of the agency's decision-making body--who make its
accrediting decisions, establish its accreditation policies, or both--
are not elected or selected by the board or chief executive officer of
any related, associated, or affiliated trade association or membership
organization;
(2) At least one member of the agency's decision-making body is a
representative of the public, with no less than one-seventh of the body
consisting of representatives of the public;
(3) The agency has established and implemented guidelines for each
member of the decision-making body to avoid conflicts of interest in
making decisions;
(4) The agency's dues are paid separately from any dues paid to any
related, associated, or affiliated trade association or membership
organization; and
(5) The agency's budget is developed and determined by the agency
without review by or consultation with any other entity or
organization.
(d) The Secretary considers that any joint use of personnel,
services, equipment, or facilities by an accrediting agency and a
related, associated, or affiliated trade association or membership
organization does not violate the provisions of paragraph (c) of this
section if--
(1) The agency pays the fair market value for its proportionate
share of the joint use; and
(2) The joint use does not compromise the independence and
confidentiality of the accreditation process.
(e)(1) Upon request of an accrediting agency described in paragraph
(b)(4) of this section, the Secretary waives the ``separate and
independent'' requirements of this section if the agency demonstrates
that--
(i) The agency has been listed by the Secretary as a nationally
recognized agency on or before October 1, 1991; and
(ii) The existing relationship between the agency and the related,
associated, or affiliated trade association or membership organization
does not compromise the independence of the accreditation process.
(2) To demonstrate that the existing relationship between the
agency and the related, associated, or affiliated trade association or
membership organization does not compromise the independence of the
accreditation process, the agency must show that--
(i) The related, associated, or affiliated trade association or
membership organization plays no role in making or ratifying the
accreditation decisions of the agency;
(ii) The agency has sufficient budget and administrative autonomy
to carry out its accrediting functions; and
(iii) The agency provides to the related, associated, or affiliated
trade association or membership organization only information it makes
available to the public.

(Authority: 20 U.S.C. 1099b)

Sec. 602.4 Submission of information to the Secretary by recognized
accrediting agencies.

Each accrediting agency recognized by the Secretary shall submit to
the Secretary--
(a) Reports of final accrediting actions taken by the agency with
respect to the institutions and programs it accredits;
(b) A copy of any annual report prepared by the agency;
(c) A copy, updated annually, of the agency's directory of
accredited institutions and programs;
(d) A summary of the agency's major accrediting activities during
the previous year (an annual data summary), if so requested by the
Secretary to carry out the Secretary's responsibilities related to this
part;
(e) Upon request, information to assist the Secretary in resolving
problems with any institution or program accredited by the agency,
provided that the request does not conflict with the agency's policies
on confidentiality with respect to its records on those institutions or
programs; and
(f) Any proposed change that might alter the agency's--
(1) Scope of recognition; or
(2) Compliance with the requirements of this part.

(Authority: 20 U.S.C. 1099b)

Subpart B--Recognition and Termination Procedures

Sec. 602.10 Application for recognition.

(a) An accrediting agency seeking initial or renewed recognition by
the Secretary as a nationally recognized accrediting agency submits a
written application to the Secretary. The application for recognition
consists of--
(1) A statement of the agency's requested scope of recognition;
(2) An analysis of the agency's compliance with the criteria for
recognition set forth in this part; and
(3) Supporting documentation.
(b)(1) An accrediting agency's application for recognition
constitutes a grant of authority to the Secretary to conduct site
visits and to gain access to agency records, personnel, and facilities
on an announced or unannounced basis.
(2) The Secretary conducts an unannounced site visit only, where
necessary in the judgment of the Secretary, to obtain information to
verify that the agency is in compliance with the requirements of this
part and the information cannot be obtained or substantiated in an
announced site visit.
(c) The Secretary does not make available to the public any
confidential agency materials examined by Department personnel or the
Secretary as part of the evaluation of an accrediting agency's
application for recognition.

(Authority: 20 U.S.C. 1099b)

Sec. 602.11 Preliminary review by the Secretary.

(a) Upon receipt of an accrediting agency's application for
recognition, the Secretary--
(1) Establishes a schedule for the review of the agency by the
designated Department official, the National Advisory Committee on
Institutional Quality and Integrity, and the Secretary; and
(2) Publishes a notice of the agency's application in the Federal
Register inviting public comment on the agency's compliance with the
requirements for recognition.
(b)(1) The designated Department official analyzes the accrediting
agency's application to determine whether the agency satisfies the
requirements of this part, taking into account all available relevant
information concerning the compliance of the agency with the
requirements for recognition. The analysis includes--
(i) Site visits, on an announced or unannounced basis, to the
agency and, at the Secretary's discretion, representative institutions
or programs it accredits;
(ii) Review of public comment and other third-party information
solicited by the Secretary, as well as any other information provided
to the Secretary, concerning the performance of the agency in relation
to the requirements of this part; and
(iii) Review of complaints or legal actions involving the agency.
(2) The designated Department official's evaluation may also
include a review of information directly related to institutions or
programs accredited or preaccredited by the agency, relative to their
compliance with the accrediting agency's standards, the effectiveness
of the agency's standards, or the agency's application of those
standards.
(c) The designated Department official--
(1) Prepares a written analysis of the accrediting agency;
(2) Sends the analysis and all supporting documentation, including
all third-party comments received by the Secretary, to the agency in
advance of the Advisory Committee meeting; and
(3) Specifies a time period before the Advisory Committee meeting
during which the agency may provide the designated Department official
with any written comments on the analysis.
(d) The accrediting agency provides any written comments it chooses
to make to the designated Department official before the expiration of
the time period specified in paragraph (c)(3) of this section.
(e) The designated Department official provides the Advisory
Committee with the accrediting agency's application and supporting
documentation, the designated Department official's analysis of the
application, all information relied upon in developing the analysis,
any response by the agency to the analysis, any Department rebuttal to
the agency's response, and any third-party information the Secretary
receives regarding the agency.
(f) The designated Department official provides the agency with a
copy of any Department rebuttal provided to the Advisory Committee
under paragraph (e) of this section.

(Authority: 20 U.S.C. 1099b)

Sec. 602.12 Review by the National Advisory Committee on Institutional
Quality and Integrity.

(a)(1) The Advisory Committee considers an accrediting agency's
application at a public meeting and invites the designated Department
official, the agency, and other interested parties to make oral
presentations at the meeting.
(2) The designated Department official arranges for a transcript to
be made of the Advisory Committee meeting.
(b) At the conclusion of the meeting, the Advisory Committee
recommends that the Secretary approve or deny recognition of the
accrediting agency or defer a decision on the agency's application.
(c)(1) If the Advisory Committee recommends recognition, the
Advisory Committee also recommends the scope of recognition for the
agency and a recognition period.
(2) If the Advisory Committee recommends recognition despite
finding that the agency failed to comply with each of the requirements
of this part, the Advisory Committee provides the Secretary with a
detailed explanation as to why it believes the agency's failure to
comply with the particular requirement(s) does not require denial or
deferral.
(3) If the Advisory Committee recommends denial of recognition, the
Advisory Committee specifies the reasons for the recommendation and the
requirements of this part that the agency failed to meet.
(4) If the Advisory Committee recommends deferral of a decision on
the agency's application, the Advisory Committee specifies the reasons
for the recommendation, the requirements of this part that it believes
the agency has not met, and a recommended deferral period.
(d) After the meeting, the Advisory Committee forwards its written
recommendations concerning recognition to the Secretary.

(Authority: 20 U.S.C. 1099b, 1145)

Sec. 602.13 Review and decision by the Secretary.

(a) The Secretary determines whether to grant national recognition
to an applicant accrediting agency based on the Advisory Committee's
recommendation and the full record of the agency's application,
including all oral and written presentations to the Advisory Committee
by the agency, the designated Department official, and interested third
parties.
(b)(1) Before making a final decision, the Secretary affords both
the designated Department official and the accrediting agency an
opportunity to contest, in writing, the Advisory Committee's
recommendation. If either the agency or the designated Department
official wishes to contest the recommendation, that party shall notify
the Secretary and the other party no later than 10 days after the
Advisory Committee meeting.
(2) If the party contesting the Advisory Committee's recommendation
wishes to make a written submission to the Secretary, the Secretary
must receive that submission no later than 30 days after the Advisory
Committee meeting. However, the contesting party may not submit any
evidence to the Secretary that it did not submit to the Advisory
Committee. The contesting party shall simultaneously provide a copy of
its submission to the other party.
(3) If the noncontesting party wishes to respond in writing to the
Secretary, the Secretary must receive that submission no later than 30
days after the noncontesting party receives the contesting party's
submission. However, the noncontesting party may not submit any
evidence to the Secretary that it did not submit to the Advisory
Committee. The noncontesting party shall simultaneously provide a copy
of its response to the contesting party.
(4) If the Advisory Committee's recommendation is contested, the
Secretary renders a final decision after taking into account the two
parties' written submissions, if any.
(c) The Secretary approves the accrediting agency for national
recognition if the Secretary determines that the agency satisfies each
of the requirements contained in this part.
(d) The Secretary approves the accrediting agency for national
recognition even if the agency does not satisfy each of the
requirements contained in this part if the Secretary determines that
the agency's effectiveness is not impaired by the noncompliance.
(e) If the Secretary approves the accrediting agency for national
recognition, the Secretary defines-
(1) The scope of recognition, which may include the--
(i) Geographic area;
(ii) Degrees and certificates awarded;
(iii) Types of institutions the agency may accredit;
(iv) Types of programs the agency may accredit; and
(v) Preaccreditation status(es), if any, that the Secretary
approves for recognition; and
(2) The recognition period, which does not exceed five years.
(f)(1) If the Secretary denies recognition to the accrediting
agency or grants recogni

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A94-1459. Public record. Not legal advice.