Student Assistance General Provisions

SUMMARY: The Secretary amends the Student Assistance General Provisions

regulations by adding a new Subpart J. These regulations govern the

approval and administration of tests that may be used to determine a

student's eligibility for assistance under the student financial

assistance programs authorized under Title IV of the Higher Education

Act of 1965, as amended (Title IV, HEA programs), if that student does

not have a high school diploma or its recognized equivalent. The

regulations also provide for a passing score for each approved test.

The regulations implement changes made to section 484(d) of the Higher

Education Act of 1965 (HEA), as amended by the Higher Education

Amendments of 1992, Public Law 102-325.

EFFECTIVE DATE: These regulations take effect on July 1, 1996 and apply

to the 1996-97 and subsequent award years. However, affected parties do

not have to comply with the information collection requirements in

Secs. 668.143, 668.144, 668.145, 668.146, 668.147, 668.148, 668.149,

668.150, 668.151, 668.152, 668.153, and 668.155 until the Department of

Education publishes in the Federal Register the control numbers

assigned by the Office of Management and Budget (OMB) to these

information collection requirements. Publication of the control numbers

notifies the public that OMB has approved these information collection

requirements under the Paperwork Reduction Act of 1995. The

incorporation by reference of the publication listed in the regulations

is approved by the Director of the Federal Register as of July 1, 1996.

FOR FURTHER INFORMATION CONTACT: Lorraine Kennedy, U.S. Department of

Education, 600 Independence Avenue, S.W., Regional Office Building 3,

Room 3045, Washington, DC 20202-5451. Telephone: (202) 708-7888.

Individuals that 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: These regulations implement section 484(d)

of the HEA which provides that a student who does not have a high

school diploma or its recognized equivalent is eligible to receive

Title IV, HEA program funds only if--

The student takes an independently administered

examination and achieves a score specified by the Secretary,

demonstrating that the student has the ability to benefit from the

education or training being offered; or

The student is determined to have the ability to benefit

from the education or training being offered in accordance with a

``process'' prescribed by the State in which the institution the

student is attending or plans on attending is located and that has been

approved by the Secretary.

The Secretary estimates that each year there are approximately

150,000 individuals without a high school diploma or its recognized

equivalent who take ability to benefit tests under section 484(d) of

the HEA in order to become eligible to receive Title IV, HEA Program

funds. There are also approximately another 150,000 individuals without

a high school diploma or its recognized equivalent who enroll in

postsecondary educational institutions who do not apply for Title IV,

HEA Program funds or who enroll in educational programs that do not

qualify as eligible programs under the Title IV, HEA programs. (In

addition, there are many other people who take basic skills tests for

reasons other than seeking Title IV, HEA program assistance.) However,

these regulations apply only to the first group.

The Secretary published a notice of proposed rulemaking in the

Federal Register on August 16, 1994, 52 FR 42134-42144. The NPRM

included a discussion of the major issues involving the proposed

regulations that will not be repeated here. The following list

summarizes those issues and identifies the pages in the preamble to the

NPRM on which a discussion of those issues can be found.

The Secretary proposed that students had to provide documentation

to institutions that they had high school diplomas or the recognized

equivalent (52 FR 42134-5);

The Secretary proposed that approved tests assess secondary school

level basic verbal and quantitative skills and general learned

abilities (52 FR 42136);

The Secretary proposed that students without a high school diploma

or a GED should be eligible for Title IV, HEA program funds because

they demonstrate on that test secondary school level basic verbal and

quantitative skills and general learned abilities comparable to the

range of scores of students who have a high school diploma or GED (52

FR 42136);

The Secretary proposed that the passing score on a test be one

standard deviation below the mean for students with high school

diplomas who have taken the test within three years before the date on

which the test was submitted for approval (52 FR 42136);

The Secretary proposed a scheme for test administration that

provided for tests being administered independent of the institutions

that use the test (52 FR 42136-42137); and

The Secretary proposed to approve a State ``process'' based upon

the ``success rate'' of students enrolled in that State process as

compared to the success rate of high school graduates. (page 42137).

Substantive Changes to the NPRM

The following discussion reflects substantive changes made to the

NPRM in the final regulations. The provisions are discussed in the

order in which they appeared in the proposed rule.

Section 668.7 Eligible Student

In response to public comments, the Secretary has withdrawn the

proposed requirement that institutions document that their students

have high school diplomas or GEDs. Moreover, the Secretary is

recodifying the provisions of Sec. 668.7 in Subpart C of part 668 in

another regulations package.

Section 668.143 Approval of State Tests or Assessments (No Comparable

Provision in NPRM)

In response to public comments and the Secretary's proposal in the

preamble, the Secretary has included an additional type of approved

tests. Those approved tests are tests that have been developed by

States to measure a student's skills and abilities for the purpose of

determining whether the student has the skills and abilities the State

expects of a high school graduate in that State. These tests will

supplement rather than substitute for the other type tests discussed in

this regulation.

Section 668.146 Criteria for Approving Tests (Section 668.145 in NPRM)

In response to public comment, the Secretary will approve tests

that consist of a series of subtests. If a test publisher does not

provide for a composite passing score for a series of basic verbal

tests and a composite passing score for a series of basic quantitative

tests, the test publisher must present evidence that allows the

Secretary to prescribe a cut score for each subtest. To pass that test,

a student must score at or above the cut score for each of the

subtests.

[[Page 61831]]

Agreement Between the Secretary and a Test Publisher, and Agreement

Between an Institution and a Certified Test Administrator (Sections

668.150 and 668.151 in NPRM)

In response to public comment, the Secretary eliminated the

requirements that a test publisher enter into an agreement with a

certified test administrator and that the certified test administrator

also enter into an agreement with an institution whose students are to

be tested. The sections that contained those requirements in the NPRM,

Secs. 668.150 and 668.151 were also eliminated.

The important aspects of those sections that related to the

integrity and independence of test administration were incorporated

into Sec. 668.151 Test administration.

Section 668.152 Administration of Tests by Assessment Centers (No

Comparable Provision in NPRM)

In response to public comment, a new section dealing with test

administration at assessment centers was added.

Section 668.155 Transitional Rule for the 1996-97 Award Year (No

Comparable Provision in NPRM)

The Secretary has added a rule to facilitate the transition from

the old to the new system.

These regulations go into effect on July 1, 1996 and govern the

determination of student eligibility for Title IV, HEA programs under

section 484(d) of the HEA starting with the 1996-97 award year. The

Secretary strongly encourages test publishers that wish to have their

tests approved for use in the 1996-97 award year to submit an

application that satisfies the requirements of this subpart as soon as

possible. Upon receipt of such an application, the Secretary will

evaluate it to determine if it meets the requirements of this subpart.

If the test meets the requirements of this subpart, the Secretary

will notify the test publisher. The Secretary will also publish in the

Federal Register the name of the test, the passing score for that test,

and the name of the test publisher.

To allow for a smooth transition from the current practice to the

new regulatory practice, the Secretary will permit institutions to

continue to use the current system for making an ability-to-benefit

determination for a student until 60 days after the Secretary publishes

in the Federal Register the first approved test and passing score that

is appropriate for that student. Therefore, an institution may continue

to use a test and test score that was an approved test and test score

as of June 30, 1996, the day before the new regulatory provisions go

into effect, until 60 days after the Secretary publishes in the Federal

Register the first test and passing score for each general category of

test approved under these regulations. For example, if the Secretary

approves a test in Spanish on August 1, 1996, an institution may

continue to use a test in Spanish that was approved as of June 30, 1996

until October 1, 1996.

If an institution properly based a student eligibility

determination under the current system, it does not have to redetermine

the student's eligibility under the new system.

Analysis of Comments and Changes

In response to the Secretary's invitation in the NPRM, 142 parties

submitted comments on the proposed regulations. An analysis of the

comments and any changes made in the regulations in response to those

comments follows.

Substantive issues are discussed under the regulations to which

they pertain. If comments apply to more than one regulatory provision,

they will be discussed under the first mentioned provision. Technical

and other minor changes--and suggested changes that the Secretary is

not legally authorized to make under the applicable statutory

authority--are not addressed.

General Comments

Comments: In the preamble to the NPRM, 59 FR 42134-42135, the

Secretary solicited comments with regard to an alternative method of

implementing section 484(d) of the HEA. This alternative method would

link the ability-to-benefit (ATB) testing system to State educational

practices under the Goals 2000: Educate America Act. The Secretary

invited public comment on these alternatives. Three comments were

received in support of this alternative approach.

Discussion: The Secretary agrees with these commenters that there

is merit to an approach that links an ability-to-benefit testing system

under section 484(d) of the HEA with State educational practices under

the Goals 2000: Educate America Act and other State education reform

initiatives. The Secretary believes, however, that such an approach

should supplement rather than replace the testing system described in

the NPRM.

Therefore, in developing the criteria for approved examinations and

the passing scores for those examinations, the Secretary took

cognizance of the focus and purpose of the Goals 2000: Educate America

Act in raising the educational standards of the country. Accordingly,

to the extent that States have developed educational standards that

reflect the skills and abilities expected of a high school graduate in

that State, and have developed tests or other assessments to measure

whether a student meets those standards, the Secretary will approve

those tests and assessments for purposes of the provisions of section

484(d) of the HEA as well as the passing scores on those tests and

assessments.

Because each State is responsible for determining the educational

standards that reflect the skills and abilities expected of a high

school graduate in that State, State standards may differ. Moreover,

States also may choose different tests or assessments to measure

whether students meet those standards, and may also differ on the

passing scores on those tests and assessments. Therefore, if the

Secretary approves a State's tests and assessments and passing scores,

that test or assessment, and the passing score on that test or

assessment, may be used for purposes of section 484(d) of the HEA only

for students who attend eligible institutions located in that State. In

this way, the Secretary will not impose one State's standards on

another State.

If the Secretary approves a State's tests or assessments and the

passing scores for those tests or assessments, a student must obtain a

passing score on each required test or assessment in order to qualify

for Title IV, HEA program funds under section 484(d) of the HEA.

Moreover, the educational standards that a State develops, and the

tests or assessments that a State establishes to measure those

standards, apply to all students in the State. Therefore, the tests

that the Secretary approves to measure whether a student meets those

standards for Title IV, HEA programs purposes do not include tests that

are used solely for admission to a State public postsecondary

institution or for admission to an institution that is part of a State

system of public postsecondary institutions.

Changes: Sections 668.143 to 668.149 were redesignated as

Secs. 668.144 to 668.150, respectively, and a new section,

Sec. 668.143, was added. That new section provides for the approval of

State tests or other assessments submitted by a State that the State

uses to determine whether a student has the skills and abilities the

State expects of a high school graduate in that State. The new section

also provides for the approval of the State's passing scores on

[[Page 61832]]

the State tests, and further provides that an approved State test may

be used as an ability-to-benefit test for Title IV, HEA program

purposes only by institutions located in that State.

Comments: In their introduction to comments on specific sections of

the proposed rule, roughly one-third of the commenters stated that in

their opinion the statutory phrase ``benefit from the education or

training offered'' refers to specific educational or training programs

and the relative cognitive demands of those programs. The commenters

concluded that ability-to-benefit is dependent on existing cognitive

demands of occupations, and must be measured and judged individually

for each of the hundreds of occupation-specific training programs in

postsecondary education, even if the current cognitive demands of an

occupation are not ``postsecondary.''

Discussion: The Secretary disagrees with the commenters. The

Secretary believes that there is a basic minimum competency that a

student must achieve to benefit from any postsecondary education

program. That basic competency is appropriately measured in terms of

secondary school level basic skills and general learned abilities.

Therefore, the Secretary requires approved tests to measure those

skills and abilities. Further, as indicated in the preamble to the

NPRM, the Secretary believes that earning a high school diploma or GED

certificate should be the primary basis for qualifying to receive Title

IV, HEA program assistance. The Secretary believes that students who do

not have those credentials and qualify to receive such assistance by

taking a test should demonstrate through that test a level of verbal

and quantitative skills and general learned abilities at least

comparable to those other categories of students.

Moreover, the Secretary objects to the position expressed by the

commenters on the grounds that it is an approach that accustoms people

to the lowest level of functioning in an occupation. It excuses

institutions from critical aspects of instruction that will enable

individuals to advance in their jobs or to change careers, and it

falsely assumes that the nature of specific occupations will never

change. The approach thus does not advance the quality of the nation's

workforce. When the expenditure of Federal funds for education and

training is at issue, the Secretary wishes to encourage more than a

minimalist approach that only reinforces social and labor market

stratification. The Secretary has encouraged generic academic

competence in the School-to-Work transition programs, and is taking a

consistent position here.

Changes: None.

Comments: Nearly half the commenters contended that the receipt of

a high school diploma is no guarantee that a student possesses minimum

basic skills necessary to pursue postsecondary education, and that the

regulations make an assumption about achievement associated with a

secondary school credential that is unfounded.

Discussion: The Secretary agrees with the commenters that a high

school diploma may not necessarily indicate that the holder of that

diploma has sufficient skills to successfully pursue postsecondary

education. However, students with a high school diploma or its

recognized equivalent are statutorily eligible to receive Title IV, HEA

Program funds. The Secretary interprets section 484(d) of the HEA as

requiring students who do not have a high school diploma or its

equivalent to be comparable to those that do in order to be eligible to

receive Title IV, HEA program funds. Therefore, the Secretary

established the passing score on ATB tests to reflect the scores

received by high school graduates.

Changes: None.

Section 668.7 Eligible Student

Comments: Many commenters argued that the paperwork requirement to

document receipt of a high school diploma was onerous, particularly at

institutions to which students apply while they are still in high

school and at open door institutions that, under state law, are

required to admit anyone. Two other commenters pointed to the

difficulty older students sometimes have in obtaining copies of

records, and two commenters asked why students who had attended

secondary school in another country were required to provide affidavits

in both their native language and English. With few exceptions,

commenters questioned whether there was sufficient evidence that

students improperly claimed to have a high school diploma or its

equivalent to warrant a rule affecting all students in postsecondary

education.

One commenter asserted that the requirements weaken current federal

standards and advocated stricter provisions for documenting evidence of

receipt of a high school diploma or its equivalent. Another commenter,

indirectly concurring with this position, suggested that, if an

applicant for Title IV, HEA Program funds graduated from a secondary

school in the United States but was unable to secure a copy of his or

her diploma or transcript, a statement from the state or local

education agency confirming that the records were unavailable should be

required.

Discussion: The Secretary is persuaded by the commenters that the

added burden of documenting a student's declaration that he or she has

a high school diploma or its recognized equivalent outweighs the

benefit of requiring institutions to document that claim and has,

therefore, decided not to require documentation of a high school

diploma at this time. However, the Secretary will continue to

investigate any alleged abuses in this area and, after consulting with

the postsecondary education community and others, may pursue

alternative means of ensuring that this student eligibility requirement

is being enforced.

Changes: The Secretary has deleted the requirements relating to the

documentation of a student's claim that he or she has a high school

diploma. Moreover, the Secretary is recodifying the provisions of

Sec. 668.7 in Subpart C of part 668 in another regulations package.

Comments: Two commenters took opposite positions on the requirement

that a student could use a passing score on an approved ATB test for 12

months. One commenter recommended a shorter period on the grounds that

the most current score is the most valid measure. The other commenter

recommended that a passing score should be used indefinitely since a

test score on a valid ATB test reflects a permanent level of verbal and

quantitative skills. Another commenter asserted that the NPRM fails to

incorporate changes made to the definition of a ``recognized equivalent

of a high school diploma'' in Sec. 600.2 of the Institutional

Eligibility regulations, 34 CFR 600.2.

Discussion: The Secretary believes that a passing score should not

be used indefinitely because psychometric research demonstrates that

the ``current status'' of knowledge is a more reliable predictor of

imminent performance than previous status of such knowledge. However,

such research also indicates that a period shorter than a year does not

measurably increase the predictive power of a test.

The commenter is correct in the observation that proposed

Sec. 668.7 did not take into account the change in the definition of

``recognized equivalent of a high school diploma'' in Sec. 600.2 of the

Institutional Eligibility regulations, 34 CFR 600.2. However, since the

Secretary is deleting the requirements for documenting a student's

claim to have a high school diploma or its equivalent, the Secretary is

not amending Sec. 668.7 in this regulation package.

[[Page 61833]]

Changes: Changes to Sec. 668.7 have been deleted from these final

regulations.

Section 668.142 Special Definitions

Comments: One commenter suggested that the definition of the term

``assessment center'' be changed so that the location of an assessment

center be at a neutral site rather than at an educational site. Another

commenter suggested that ``assessment centers'' be located only at

public institutions because public governing authorities would serve as

an additional guarantee of integrity.

Discussion: The Secretary's definition of the term ``assessment

center'' describes an organizational unit at an eligible institution

that offers two-year or four-year degrees or qualifies as an eligible

public vocational institution, i.e. a postsecondary vocational

institution. The Secretary believes that the integrity of tests given

at assessment centers will not be compromised by the geographical

location of the center, or if they are given at private institutions

that offer a two year or four year degree, given the long-term nature

of those programs.

Changes: None.

Section 668.144 Application for Test Approval (Section 668.143 in

NPRM)

Comments: Some commenters requested the Secretary's approval of

placement examinations already used by their institutions. One

commenter requested that the requirements for the populations

participating in norming studies explicitly exclude students from

schools at which the test publisher has received notice that improper

test administrations have taken place.

Discussion: The Secretary will approve placement examinations used

by an institution if the institution using that test submits an

acceptable application and the examination satisfies all the regulatory

requirements for test approval. In such a case, the institution would

be considered the test publisher.

The Secretary believes that test publishers will be careful when

selecting a norming sample to avoid invalidating the results of that

sample. Therefore, the Secretary believes that the commenter's

suggestion is not needed to obtain valid norming studies.

Changes: None.

Comments: One commenter requested that the Secretary clarify the

requirement that an approved test be ``validated,'' and pointed out

that a test is validated with respect to a criterion, not a population.

Discussion: The Secretary acknowledges a confusion in the grouping

of requirements listed under the ``application for test approval,'' and

has changed the verb, ``validated'' to ``normed'' in describing the

contents of the technical manual in Sec. 668.144(c)(11)(iv). In a

narrow sense, validation is the process of determining the accuracy of

inferences made from a test score, e.g., if a student scores above a

given percentage, the more likely he or she is to complete a subsequent

course. In a broader sense, validation is the process of determining

the soundness of all interpretations made of the test. The Secretary

notes that there are many kinds of validity, and all of them are at

stake in the review of tests submitted under Sec. 668.144.

Changes: Section 668.144(c)(11)(iv) is amended to change

``validated'' to ``normed.''

Section 668.145 Test Approval Procedures (Section 668.144 in NPRM)

Comments: One commenter suggested that when the Secretary chooses

experts to evaluate tests, the Secretary only choose experts who have

substantial experience in psychometrics, familiarity with the Standards

for Educational and Psychological Testing (Standards) prepared by a

joint committee of the American Educational Research Association, the

American Psychological Association, and the National Council on

Measurement in Education, and membership in one of those three

organizations. This commenter also recommended that if a test did not

satisfy the criteria for test approval and the test publisher appealed

that decision, the test publisher would have to submit only those

sections of a test subject to question and that a different group of

experts be assembled to judge the appeal. The commenter further

suggested that any appeal by a test publisher of the disapproval of a

test be subject to the provisions of the Administrative Procedure Act.

Discussion: The Secretary agrees that professional credentials and

experience are important criteria in selecting reviewers of tests, and

will select experts who have substantial experience in psychometrics

and familiarity with the Standards. The Secretary assumes that anyone

who holds a graduate degree in psychometrics or evidences substantial

experience in test development is familiar with the Standards. The

Secretary believes that membership in a specific organization should

not be a prerequisite to being selected as a test evaluator.

If a test is disapproved for specific discrete reasons applicable

to a particular portion of a test and the test publisher appeals that

result, the appeal would be based on the portion of the test that

caused the disapproval. Therefore, the test publisher would presumably

limit its appeal to that portion of its test, and if the appeal was

successful the entire test would be approved without the need for

reapplication.

The Secretary believes that the review of a test and any appeal of

that review should not be conducted, and is not required to be

conducted, in an adversarial, formal, or legalistic setting. Therefore,

the Secretary will not subject those processes to the provisions of the

Administrative Procedure Act. Moreover, the Secretary believes it is

unnecessary to select another panel of experts to advise the Secretary

when a test publisher appeals an adverse decision regarding its test.

The Secretary makes a decision in response to an appeal, and wishes to

retain the discretion to seek the advice of experts the Secretary

considers appropriate to analyze the test publisher's arguments on

appeal.

In most instances, the Secretary will seek the advice of the

original panel of experts regarding those arguments. In reviewing over

100 tests since January 1991, the Secretary has found that when the

original panel of experts reviewed an appeal, they focused on only

those issues that were not satisfactorily addressed in the original

submission and provided fair and valuable advice with regard to those

issues.

Changes: None.

Section 668.146 Criteria for Approving Tests (Section 668.145 in NPRM)

Comments: Many commenters from community colleges objected that

approved tests must measure ``knowledge of high school curricula,''

claiming that this was inappropriate.

Discussion: The Secretary disagrees with the commenters'

interpretation of the questioned regulatory provision. The provision

does not state that approved tests are based on ``knowledge of high

school curricula.'' Rather, the provision states that the tests will

assess basic verbal and quantitative skills and general learned

abilities at the secondary school level. These skills and general

learned abilities can be acquired anywhere. The tests will not be

equivalent to final exams in specific high school subject areas, such

as Algebra 1, Chemistry, or Civics.

Changes: The term knowledge has been deleted as redundant.

[[Page 61834]]

Comments: Some test publishers asked whether a reading test would

suffice to cover the assessment of secondary school level verbal

skills, or whether tests of usage and, particularly, writing samples

must also be included. Some of the publishers of tests that provide

subtest scores, but not composite scores, objected to the use of a

single composite score for verbal skills and quantitative skills.

A few commenters addressed the point of reference of the passing

score, namely, the performance of high school graduates on a specific

test, and pointed out that the educational background of test-takers is

not always known, particularly in norming studies that may have been

conducted prior to changes in the law. One commenter expressed a

similar concern with respect to ESL test-takers since the normed

students must be ESL test-takers who have entered high school

equivalency programs. The commenter pointed out that this latter group

was very small, and the mean scores for them would not be very

reliable.

Discussion: Verbal skills, such as usage, mechanics, and

comprehension, must be assessed. If, however, a test measured only one

language skill, such as punctuation or word recognition, that test

would not be appropriate. A reading test is appropriate because it is

highly correlated with other verbal skills and is a fundamental

measurement of verbal ability. Writing is highly related to reading

comprehension and to other verbal skills, and would, therefore, be

redundant for this purpose. Therefore, an approved test does not have

to have a writing sample.

The Secretary will approve a test that consists of a series of

subtests. However, if the test publisher does not establish a composite

verbal score and a composite quantitative score, the test publisher

must present evidence that allows the Secretary to prescribe a cut

score for each subtest. To pass that test, a student must score at or

above the cut score for each of the subtests.

Based on existing evidence from a number of major testing programs,

the Secretary believes that all test publishers can gather information

on the educational background of test-takers in the ordinary course of

test administration, e.g., on the cover sheet of an examination. More

critically, for data necessary for setting a passing score, the

educational background of participants in a norming sample can easily

be ascertained, and in the case of tests requiring new norming studies,

there has been ample time since the law was passed to conduct such

studies.

The Secretary is persuaded by data on ESL test-takers to enlarge

the reference group beyond those who have entered high school

equivalency programs, but believes that entrance into some kind of

formal education or training program is an important criterion with

which to define this group for purposes of setting a passing score.

Changes: Section 668.146(c)(5) has been changed. The Secretary will

continue to approve a test that consists of a series of subtests.

However, if the test publisher does not establish a composite verbal

score and a composite quantitative score, the test publisher must

present evidence that allows the Secretary to prescribe a cut score for

each subtest.

The Secretary has also amended Sec. 668.148(b)(2) to enlarge the

reference population for setting the passing score on ESL tests by

including not only ESL test-takers who have entered high school

equivalency programs, but also ESL test-takers who have entered other

education or training programs, including bilingual vocational

programs.

The Secretary has also modified the wording of

Sec. 668.148(a)(2)(v)(A) so that, in cases where the test is in

Spanish, the test publisher provides tables of distributions of test

scores with a clear indication of the mean score and standard deviation

for Spanish-speaking students with high school diplomas so that the

Secretary will be able to indicate the passing score. The reference to

the most recent three-year period is changed to a five-year period to

allow a sample of sufficient size.

Comments: Several commenters expressed confusion with regard to the

establishment of a passing score in proposed Sec. 668.145(c)(3).

Discussion: The Secretary acknowledges a misprint, hence an

understandable confusion, in the proposed Sec. 668.145(c)(3). This

section should have read, and is corrected in Sec. 668.146(c)(3) of the

final regulation to read, as follows:

Except as indicated in Secs. 668.148 and 668.149, provide tables

of distributions of test scores that clearly indicate the mean score

and standard deviation for high school graduates who have taken the

test within three years before the date on which the test is

submitted to the Secretary for approval;

The misprint led to a more general confusion as to who has the

responsibility for designating the passing score on tests used for

ability-to-benefit determinations and communicating those scores to the

public. For the general population of test-takers for whom Sec. 668.147

is applicable, the Secretary determines the passing score for which the

publisher has provided the data. For special populations and special

types of administration such as those described in Secs. 668.148 and

668.149, the Secretary requests the publisher to ``recommend'' a

passing score based on the publisher's experience with the special

population and/or type of administration. The Secretary reviews the

recommendation, and either certifies it or, if necessary, requests

clarifications prior to certification. The Secretary recognizes that

this procedure needs to be modified in the case of tests given in

Spanish.

The Secretary will publish the approved passing scores in the

Federal Register.

Changes: Section 668.145(c)(1) has been amended to indicate that

the Secretary will publish in the Federal Register the names of

approved tests and the passing scores on those tests.

Section 668.147 Passing Score (Section 668.146 in NPRM)

Comments: The majority of comments received from commenters on the

passing score formula took five positions. The first position was that

the proposed score was too low and inconsistent with the standards

included in Title IV of the Goals 2000: Educate America Act and in the

School-to-Work Opportunities Act. The second position was that the

proposed score was too high. The third was that the proposed score was

right. The fourth position was that the proposed score should vary by

program of study. The fifth position was that the proposed score should

be determined by predictive validity studies using program completion

as a criterion.

Two commenters also advocated using the performance of students

with GEDs as the reference point for the passing score on the grounds

that these people have passed a de facto national high school

equivalency examination. Their performance is thus more public than

that of high school graduates, hence it offers a more reliable point of

comparison. And one commenter presented a plan for a ``documented

qualification process'' that would allow institutional variations on

passing scores.

Discussion: As noted earlier, the Secretary believes that there is

a basic minimum competency that a student must achieve to benefit from

any postsecondary education program. That basic competency is measured

in terms of secondary school level basic skills and general learned

abilities. Further, the Secretary believes that under section 484(d) of

the HEA, in order for a person without a high school diploma or its

[[Page 61835]]

recognized equivalent to receive Title IV, HEA Program funds, that

person should enter postsecondary education with roughly the same

comparable secondary school level basic skills and general learned

abilities as those of the typical range of high school graduates.

The Secretary established the passing score on approved tests as

the score that represents one standard deviation below the mean for

students with high school diplomas who took the test. The score means

theoretically that 84 percent of the high school graduates who took the

test passed the test. The Secretary established this score based upon a

recognition that the secondary school level basic skills and general

learned abilities of high school graduates in the United States vary

widely.

As noted earlier in the general comments, the Secretary disagrees

with the commenters who contended that passing scores should be

established on a program-by-program basis. The Secretary also disagrees

with those commenters who contended that the passing score was either

too high or too low, or was inconsistent with the Goals 2000: Educate

America Act and the School-to-Work Opportunity Act. The Secretary

believes it is difficult to make definitive judgments regarding whether

a passing score is too high or too low until tests are approved and

test-takers take the test. Moreover, until performance standards are

set for ``Certificate of Initial Mastery'' under school-to-work models,

it is premature to contend that the Secretary's passing score is

inconsistent with those standards. When that information is

forthcoming, the Secretary may revisit the question of the appropriate

passing score for these ATB tests.

The Secretary acknowledges the commenters' point that there is a

logic to using the performance of students with GEDs as the reference

point for the passing score. However, the Secretary chose not to use

that group as a reference because the GED population that subsequently

takes the types of examinations used for ability-to-benefit

determinations is small and not representative of the general

postsecondary school population in the United States. As for the

suggestion to adopt institutional variations on the passing score for

institutions that provide sufficient remediation and instructional

resources for ATB students, the Secretary suggests that this approach

is better suited for the ``state process'' as described in

Sec. 668.156.

Finally, the Secretary agrees that the fifth position, basing the

passing score on predictive validity studies using program completion

as the criterion, is theoretically the best approach to take in

establishing a passing score. However, the Secretary chose not to use

that approach because it was impossible to administer, given the small

size of the ATB population, the cost of predictive validity studies,

and the additional time that would be necessary to review and approve

that approach. Moreover, adopting that suggestion would further delay

the publication of these regulations implementing section 484(d) of the

HEA.

Changes: None.

Section 668.148 Additional Criteria for the Approval of Performance-

Based Tests, Tests for Non-Native Speakers of English, Modified Tests

for Persons With Disabilities, and Computer-Based Tests and Tests for

ESL Programs (Section 668.47 in NPRM)

Comments: One commenter suggested that performance assessments, as

described in proposed Sec. 668.147, not be included in the potential

pool of approved tests, because the commenter asserted that these tests

``are still in a developmental stage, with substantial false negative

and false positive reports.'' Another commenter recommended additional

security measures, including the requirement that a student show a

photo identification for computer-based tests.

Discussion: The validity and reliability of any assessment tests

will be based upon the evidence provided by the test publisher, and the

Secretary will not rule, a priori, that any category of tests is

inappropriate. The Secretary will rely on the security requirements of

test publishers with regard to the use of photo identification for

computer-based tests.

Changes: None.

Section 668.150 Agreement Between the Secretary and a Test Publisher

(Section 668.149 in NPRM)

Comments: Two commenters saw no necessity for this or any of the

agreements specified in proposed Secs. 668.149, 668.150, and 668.151 on

the grounds that the practices specified in these agreements and the

abuses they are designed to address are already accounted for in normal

industry practice.

Discussion: In the Secretary's opinion, test publishers are key to

the integrity of the ability-to-benefit testing process, and the

agreement between the Secretary and the test publisher is designed to

assure that the tests are being independently administered in a proper

and impartial manner. Past practice has indicated that integrity in the

administration of ability-to-benefit tests is not uniform throughout

the industry, and that this agreement is necessary to protect both

students and the public interest.

However, the Secretary agrees with the commenters that formal

agreements between a test publisher and a test administrator and

between a test administrator and an institution are not necessary to

the integrity of test administration. Therefore, the Secretary has

eliminated those two agreements although key provisions in those

agreements have been incorporated in the section dealing with test

administration, Sec. 668.151.

Changes: The Secretary has deleted the requirement that a test

publisher enter into an agreement with a test administrator and that

the test administrator also enter into an agreement with an

institution. In fact, the Secretary has deleted the proposed regulatory

sections in which those requirements were contained, proposed

Secs. 668.150 and 668.151.

Comments: One commenter asked that language be added to ensure that

test publishers exercise equal employment opportunity principles in

certifying test administrators. Another commenter suggested language be

inserted to require the publisher to decertify a test administrator if

he or she is found to have compromised the integrity of the testing

process. Another commenter asked whether decertified test

administrators could appeal and whether they could subsequently be

recertified.

Discussion: The Secretary believes that it would be inappropriate

to include a provision in the agreement regarding the test publisher's

employment practices because it is not within his legal jurisdiction to

do so.

The proposed rule included a provision for decertifying a test

administrator for violating the integrity of the test. The Secretary

has revised this provision to indicate that the decertification would

coincide with the period for which the test publisher's test was

approved. During this period, the test administrator could not be

recertified. No appeal is provided for a test publisher's decision to

decertify a test administrator.

Changes: Section 668.150(b)(3) is revised to provide that if a test

publisher decertifies a test administrator, the decertification

coincide with the period for which the test publisher's test was

approved.

Comments: Half the commenters suggested that institutions should be

allowed to score the ATB test at the educational location, rather than

send the test to the publisher for scoring.

[[Page 61836]]

These commenters cited the extra time and costs associated with test-

publisher scoring.

Discussion: The purpose of the regulatory scheme regarding test

administration is to remove institutions from giving or scoring tests.

In return, the Secretary will not hold institutions financially

responsible if they award Title IV, HEA Program funds to an ability-to-

benefit students who present evidence that they passed approved tests

as long as the institutions did not interfere with the independence of

the testing process and were not involved in the testing process.

Therefore, the Secretary strongly disagrees with the commenter's

suggestion that an institution should be able to score a test.

Moreover, the Secretary anticipates that there will be little delay

between the time a student takes a test and the time the institution

and the student receive the test results.

Changes: None.

Comments: Test publishers objected to the Secretary's requirement

that an analysis of scoring patterns be performed every two years to

determine irregularities. One commenter asked that the agreement

between the Secretary and a test publisher explicitly forbid the

publisher from requiring institutions to administer instruments in

addition to those required and approved by the Secretary.

Discussion: The Secretary believes that quality control is a

critical aspect of test administration, and an analysis of scoring

patterns of tests is useful tool for that purpose. However, to reduce

burden, the Secretary is requiring that an analysis of scoring patterns

of tests be performed every three years.

The Secretary is not including in the agreement between the

Secretary and a test publisher a provision that precludes the publisher

from requiring institutions to administer tests in addition to those

approved by the Secretary because he believes that such a provision is

beyond the scope of his authority. Moreover, the Secretary notes that

when faced with such a test publisher, an institution can simply choose

another test and another test publisher.

Changes: The Secretary is requiring that an analysis of scoring

patterns of tests be performed every three years.

Proposed Section 668.150 Agreement Between a Test Publisher and a Test

Administrator

Comments: One commenter recommended that test publishers, and not

educational institutions, retain the power to hire and dismiss on-site

test administrators. The commenter also suggested that test publishers

be responsible for training test administrators. Another commenter

suggested that the test publisher make an agreement with the

institution and independent test administrators under which the

institution would agree to respect the security and integrity of test

administration by selling the administrators an annual license. The

commenter believes that the purchase of a license will ensure proper

administration of the test.

Discussion: The Secretary believes that an institution should have

the option of selecting a test administrator that has been certified by

a test publisher to give its students an approved ATB test. Therefore,

the Secretary disagrees with the suggestion made by the first

commenter.

Since a test publisher certifies test administrators to give its

tests, a test publisher would presumably provide whatever training it

felt necessary to obtain a sufficient number of certified test

administrators for its test.

Finally, the Secretary does not see the need to have test

publishers sell licenses to test administrators.

Changes: The Secretary has deleted this section, but the provisions

discussed by the commenters have been incorporated into Sec. 668.151(a)

dealing with test administration.

Comments: Many commenters expressed confusion about the role of an

assessment center in the test administration process. Commenters

requested clarification regarding the rights and responsibilities of

assessment centers. At least one commenter representing a test

publisher requested the right to enter into agreements with an

assessment center as a condition for the assessment center to give its

test.

Discussion: The Secretary agrees with the commenters that the role

of an assessment center was not sharply defined in the proposed

regulations. The Secretary envisions that an assessment center may give

tests to ATB students without threatening the integrity and

independence of the test. An assessment center may give an approved

test to students without necessarily entering into an agreement with

the test publisher. However, the Secretary agrees with the suggestion

of the commenter that the test publisher should have the right to

control the use of its test by allowing an assessment center to give

its test only if the assessment center enters into an agreement with

the test publisher.

If a student takes a test at an assessment center, the test

administrator must be certified by the test publisher whose test is

being given. The test administrator must also give the test only in

accordance with the test publisher's instructions, must make the test

available only to a test taker during a regularly scheduled test, must

collect the test from the test taker after the test is given, and must

secure the test against disclosure or release.

An assessment center may, however, score the test and notify the

institution and the test taker of the test results instead of

forwarding the test to the publisher for scoring and notification. If

the assessment center scores tests, it must provide a copy of the test

takers' performances and test scores to the test publisher on at least

an annual basis.

Changes: A new section, Sec. 668.152, has been added to describe

the role and responsibilities of an assessment center.

Proposed Sec. 668.151 Agreement Between the Institution and a Certified

Test Administrator

Comments: One commenter recommended that, as part of this

agreement, the institution must keep complete records of all testing

activity conducted by a test administrator on its behalf, including

situations in which testing was not completed.

Discussion: The purpose of the regulatory scheme regarding test

administration is to remove institutions from giving or scoring tests.

Therefore, the Secretary disagrees with the commenter's recommendation.

Changes: The agreement between an institution and a test

administrator in Sec. 668.151 has been deleted, as has the section

dealing with this relationship. However, the important aspects of this

section relating to the integrity and independence of test

administration were incorporated into Sec. 668.151 Test administration.

Section 668.151 Administration of Tests (Section 668.152 in the NPRM)

Comments: A number of commenters objected to the proposed

procedures for scoring tests by the test publishers in those cases in

which ``assessment centers'' are not available. Those who objected

claimed that the process was inequitable and would result in

considerable delays in determining student eligibility. One commenter

objected to the policy that allows repeated taking of tests on the

grounds that repetition compromises the validity of the tests. Two

commenters requested clarification about the roles of assessment

centers with respect to recordkeeping, reporting of scores and

background information on test takers to test publishers, and whether

agreements between assessment centers and institutions that wish to use

their services are required.

[[Page 61837]]

Discussion: The Secretary believes that it is not inequitable to

require test publishers to score tests and that considerable delays

will not be the result of such a requirement. A test administrator must

send the test publisher the test taker's examination within two days of

administration of the test, and the test publisher must ``immediately''

generate a test score and ``promptly'' notify the test taker and the

institution of the test results. If the test is a computer-based test,

the test taker and the institution will receive the test results even

more quickly. With regard to the retaking of tests, the Secretary

points out that many people retake major national examinations and

licensing examinations every year without compromising the validity of

those tests. However, the Secretary recognizes that the practice of

retesting can be abused, and that the criteria for test approval in

proposed Sec. 668.145 were not explicit in the matter of acceptable

retesting procedures.

Changes: The Secretary has modified Sec. 668.146(b) to add the

requirement that the publishers have guidelines for retesting,

including time between test-taking, and that such guidelines be based

on empirical analyses.

Section 668.154 Institutional Accountability

Comments: One commenter suggested that those professionals who

abuse the system be accountable for their actions, and institutions

without a history of abuse should be permitted to continue their

practices of local administration and scoring of ATB tests. Another

commenter felt that the institutional accountability section was too

lenient, and suggested strengthening the language so that students

would not be liable for repayment of fraudulently disbursed funds

unless the student knowingly caused the erroneous determination.

Discussion: As indicated earlier, the Secretary has developed a

regulatory scheme that eliminates institutions from test

administration. In return, the Secretary will not make institutions

financially responsible if an institution awards Title IV, HEA Program

funds to a student who presents evidence that he or she passed an

approved test, if the institution does not interfere with the

independence of the testing process. Therefore, the Secretary strongly

disagrees with the commenters' suggestion that an institution should be

able to administer and score a test.

Changes: None.

Section 668.156 Approved State Process (Section 668.155 in NPRM)

Comments: All commenters from community colleges and several other

commenters objected to the 95% ``success rate'' criterion as both

arbitrary and too high and suggested that the Secretary use an 85%

``success rate'' as an alternative. Some commenters added that this

requirement does not reflect the statutory mandate that the judgment of

success take into account the diversity of the populations served by

participating institutions. Nearly all commenters from community

colleges requested consistency of calculation of ``success rate'' with

that of the Student Right-to-Know Act. A few commenters also

interpreted the ``State process'' provisions as excluding students at

for-profit institutions. One commenter pointed out that the data

required for such a calculation were not immediately available, and

that State agencies submitting applications for approval of a ``State

process'' should be allowed three years to assemble the data necessary

to support their case.

Discussion: In the NPRM provisions governing the ``State process''

alternative to ATB testing, the Secretary proposed that the ``success

rate'' for students without a high school diploma or its equivalent

must, in effect, be equal to the success rate for students who possess

a high school diploma. ``Success'' was defined as the sum of program

completion and continued enrollment, although this definition was not

explicit in including successful transfers in the category of continued

enrollment. The 95% rate was chosen since it represents an equivalency

minus a theoretical standard error of measurement. The Secretary wishes

to make sure that institutions participating in a State process are

truly serious and not casual in their execution of responsibilities to

ATB students. If a special State process for students without high

school diplomas is truly effective, the success rate of the students it

services should at least equal the success rate of students with high

school diplomas who did not receive the special services under the

process. To account for variances in the measurement of this outcome,

the Secretary chose a standard rule of chance that 1 out of 20 results

might be attributable to faulty measurement. One out of 20 is 5%. An

equivalency minus 5% is 95%.

The commenters who objected to the 95 percent rate claimed that

such a rate was too high and arbitrary and suggested that the rate be

reduced to 85%. However, those commenters provided no justification for

that lower percentage.

The Secretary disagrees with the commenters who contended that the

regulation does not take into account the diversity of the population

served by institutions included in the State process. The regulations

give States maximum flexibility to design their processes under which

States are free to choose how to respond to the needs of the diverse

group of students served by the process. The Secretary measures whether

the process is successful in satisfying the needs of these students by

evaluating whether the success rate of these students, and all the

others in the State process, are equal to the success rate of high

school graduates.

As for the calculation of the ``success rate'' in terms similar to

those required under the Student Right-to-Know Act, the Secretary

proposed a simple ``success rate'' to avoid the complexities

necessitated by implementing that Act.

The Secretary is not requiring any condition or limitation with

regard to the type of institutions that may or must participate in a

State process. Therefore, the type of institutions that may or must

participate will be determined by the State.

Finally, the Secretary believes that a State does not need three

years to collect data to support the approval of its State process. The

Secretary believes that when this regulation goes into effect on July

1, 1996, the States will have had adequate lead-time to assemble data

to support the approval of their State processes. States may, of

course, wait a longer period of time before applying to the Secretary

for approval of their State process.

Changes: The Secretary amends Sec. 668.157(h)(1) to provide that

the transfer of a student who remains enrolled in another institution

at the end of that award year can be included in the ``success rate''

for the institution from which the student transferred.

Executive Order 12866

These regulations have been reviewed in accordance with Executive

Order 12866. Under the terms of the order the Secretary has assessed

the potential costs and benefits of this regulatory action.

The potential costs associated with the regulations are those

resulting from statutory requirements and those determined by the

Secretary to be necessary for administering this program effectively

and efficiently. Burdens specifically associated with information

collection requirements, if any, are identified and explained

[[Page 61838]]

elsewhere in this preamble under the heading

Paperwork Reduction Act of 1995

In assessing the potential costs and benefits--both quantitative

and qualitative--of these regulations, the Secretary has determined

that the benefits of the regulations justify the costs.

The Secretary has also determined that this regulatory action does

not unduly interfere with State, local, and tribal governments in the

exercise of their governmental functions.

Summary of Potential Costs and Benefits

The potential costs and benefits of these final regulations are

discussed elsewhere in this preamble under the following heading:

Analysis of Comments and Changes.

Paperwork Reduction Act of 1995

Sections 668.143, 668.144, 668.145, 668.146, 668.147, 668.148,

668.149, 668.150, 668.151, 668.152, 668.153, and 668,155 contain

information collection requirements.

Collection of information: Student Assistance General Provisions--

These regulations contain records that would affect test

publishers, postsecondary institutions, and students that do not have

high school diplomas or recognized equivalents and that wish to apply

for Title IV, HEA programs.

The collection activity associated with the State Process is

incorporated in various sections throughout these final regulations.

All other burden associated with the maintenance of records of the

student's ability-to-benefit is already cleared under the individual

programs of Federal financial assistance for which these students may

be applying.

Institutions are to collect this information annually. An estimate

of the total annual reporting and recordkeeping burden that will result

from the collection of the information is 0.5 hours per response for

158,180 respondents, including time for reviewing instructions,

searching existing data sources, gathering and maintaining the data

needed, and completing and reviewing the collection of information. The

total annual recordkeeping and reporting burden equals 79,090 hours.

The Department considers comments by the public on these proposed

collections of information in--

Evaluating whether the proposed collections of information

are necessary for the proper performance of the functions of the

Department, including whether the information will have a practical

use;

Evaluating the accuracy of the Department's estimate of

the burden of the proposed collections of information, including the

validity of the methodology and assumptions used;

Enhancing the quality, usefulness, and clarity of the

information to be collected; and

Minimizing the burden of collection of information on

those who are to respond, including through the use of appropriate

automated, electronic, mechanical, or other technological collection

techniques or other forms of information technology; e.g., permitting

electronic submission of responses.

The Department request comments concerning the collection of

information contained in these final regulations by January 30, 1996.

Organizations and individuals desiring to submit comments on the

information collection requirements should direct them to Patrick

Sherrill, U.S. Department of Education, 600 Independence Avenue, S.W.,

Room 5624, ROB-3, Washington, D.C. 20202.

Assessment of Educational Impact

In the notice of proposed rulemaking, the Secretary requested

comments on whether the proposed regulations would require transmission

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

agency or authority of the United States.

Based on the response to the proposed rules and on its own review,

the Department has determined that the regulations in this document do

not 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 668

Administrative practice and procedure, Colleges and universities,

Consumer protection, Education, Grant programs-education, Incorporation

by reference, Loan programs-education, Reporting and recordkeeping

requirements, Student aid.

(Catalog of Federal Domestic Assistance Number: 84.007 Federal

Supplemental Educational Opportunity Grant Program; 84.032 Federal

Family Educational Loan Program; 84.032 Federal PLUS Program; 84.032

Federal Supplemental Loans for Students Program; 84.033 Federal

Work-Study Program; 84.038 Federal Perkins Loan Program; 84.063

Federal Pell Grant Program; 84.069 Federal State Student Incentive

Grant Program.)

Dated: November 24, 1995.

Richard W. Riley,

Secretary of Education.

The Secretary amends Part 668 of Title 34 of the Code of Federal

Regulations as follows:

PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS

1. The authority citation for Part 668 continues to read as

follows:

Authority: 20 U.S.C. 1085, 1088, 1091, 1092, 1094, 1099c, and

1141, unless otherwise noted.

2. Part 668 is amended by adding a new Subpart J to read as

follows:

Subpart J--Approval of Independently Administered Tests; Specification

of Passing Score; Approval of State Process

Sec.

668.141 Scope.

668.142 Special definitions.

668.143 Approval of State tests or assessments.

668.144 Application for test approval.

668.145 Test approval procedures.

668.146 Criteria for approving tests.

668.147 Passing score.

668.148 Additional criteria for the approval of certain tests.

668.149 Special provisions for the approval of assessment

procedures for special populations for whom no tests are reasonably

available.

668.150 Agreement between the Secretary and a test publisher.

668.151 Administration of tests.

668.152 Administration of tests by assessment centers.

668.153 Administration of tests for students whose native language

is not English or for persons with disabilities.

668.154 Institutional accountability.

668.155 Transitional rule for the 1996-97 award year.

668.156 Approved State process.

Subpart J--Approval of Independently Administered Tests;

Specification of Passing Score; Approval of State Process

Sec. 668.141 Scope.

(a) This subpart sets forth the provisions under which a student

who has neither a high school diploma nor its recognized equivalent may

become eligible to receive Title IV, HEA program funds by--

(1) Achieving a passing score, specified by the Secretary, on an

independently administered test approved by the Secretary under this

subpart; or

(2) Being enrolled in an eligible institution that participates in

a State process approved by the Secretary under this subpart.

(b) Under this subpart, the Secretary sets forth--

[[Page 61839]]

(1) The procedures and criteria the Secretary uses to approve

tests;

(2) The basis on which the Secretary specifies a passing score on

each approved test;

(3) The procedures and conditions under which the Secretary

determines that an approved test is independently administered; and

(4) The procedures and conditions under which the Secretary

determines that a State process demonstrates that students in the

process have the ability to benefit from the education and training

being offered to them.

(Authority: 20 U.S.C. 1091(d))

Sec. 668.142 Special definitions.

The following definitions apply to this subpart:

Assessment center: A center that--

(1) Is located at an eligible institution that provides two-year or

four-year degrees, or qualifies as an eligible public vocational

institution, i.e. a ``postsecondary vocational institution;''

(2) Is responsible for gathering and evaluating information about

individual students for multiple purposes, including appropriate course

placement;

(3) Is independent of the admissions and financial aid processes at

the institution at which it is located;

(4) Is staffed by professionally trained personnel; and

(5) Does not have as its primary purpose the administration of

ability-to-benefit tests.

Computer-based test: A test taken by a student on a computer and

scored by a computer.

Disabled student: A student who has a physical or mental impairment

that substantially limits one or more major life activities, has a

record of such an impairment, or is regarded as having such an

impairment.

General learned abilities: Cognitive operations, such as deductive

reasoning, reading comprehension, or translation from graphic to

numerical representation, that may be learned in both school and non-

school environments.

Non-native speaker of English: A person whose first language is not

English and who is not fluent in English.

Secondary school level: As applied to ``content,'' ``curricula,''

or ``basic verbal and quantitative skills,'' refers to basic knowledge

or skills generally learned in the 9th through 12th grades in United

States secondary schools.

Test administrator: An individual who may give tests under this

subpart.

Test item: A question on a test.

Test publisher: An individual, organization, or agency that owns a

registered copyright of a test, or is licensed by the copyright holder

to sell or distribute a test.

(Authority: 20 U.S.C. 1091(d))

Sec. 668.143. Approval of State tests or assessments.

(a) The Secretary approves tests or other assessments submitted by

a State that the State uses to measure a student's skills and abilities

for the purpose of determining whether the student has the skills and

abilities the State expects of a high school graduate in that State.

(b) The Secretary approves passing scores or other methods of

evaluation established by the State for each test or assessment

described in paragraph (a) of this section.

(c) If the Secretary approves a State's tests and assessments and

the passing scores on those tests and assessments under paragraphs (a)

and (b) of this section, that test or assessment may be used, for

purposes of section 484(d) of the HEA, only for students who attend

eligible institutions located in that State.

(d) If a State wishes to have the Secretary approve its tests or

assessments under this section, the State shall--

(1) Submit to the Secretary those tests and assessments, its

passing scores on those tests and assessments, and the educational

standards those tests and assessments measure at such time and in such

manner as the Secretary may prescribe;

(2) Provide the Secretary with an explanation of how the tests,

assessments, and passing scores are appropriate in light of the State's

educational standards; and

(3) Provide the Secretary with an assurance that the tests and

assessments will be administered in an independent, fair, and secure

manner.

(Authority: 20 U.S.C. 1091(d))

Sec. 668.144 Application for test approval.

Except as provided in Sec. 668.143--

(a) The Secretary only reviews tests under this subpart that are

submitted by the publisher of that test;

(b) A test publisher that wishes to have its test approved by the

Secretary under this subpart must submit an application to the

Secretary at such time and in such manner as the Secretary may

prescribe. The application shall contain all the information necessary

for the Secretary to approve the test under this subpart, including but

not limited to, the information contained in this section; and

(c) A test publisher shall include with its application--

(1) A summary of the precise editions, forms, levels, and (if

applicable) sub-tests and abbreviated tests for which approval is being

sought;

(2) The name, address, and telephone number of a contact person to

whom the Secretary may address inquiries;

(3) Each edition and form of the test for which the publisher

requests approval;

(4) The distribution of test scores for each edition, form, level,

sub-test, or partial battery, for which approval is sought, that allows

the Secretary to prescribe the passing score for each test in

accordance with Sec. 668.147;

(5) Documentation of test development, including a history of the

test's use;

(6) Norming data and other evidence used in determining the

distribution of test scores;

(7) Material that defines the content domains addressed by the

test;

(8) For tests first published five years or more before the date

submitted to the Secretary for review and approval, documentation of

periodic reviews of the content and specifications of the test to

ensure that the test continues to reflect secondary school level verbal

and quantitative skills;

(9) If a test has been revised from the most recent edition

approved by the Secretary, an analysis of the revisions, including the

reasons for the revisions, the implications of the revisions for the

comparability of scores on the current test to scores on the previous

test, and data from validity studies of the test undertaken subsequent

to the revisions;

(10) A description of the manner in which test-taking time was

determined in relation to the content representativeness requirements

in Sec. 668.146(b)(2), and an analysis of the effects of time on

performance;

(11) A technical manual that includes--

(i) An explanation of the methodology and procedures for measuring

the reliability of the test;

(ii) Evidence that different forms of the test, including, if

applicable, short forms, are comparable in reliability;

(iii) Other evidence demonstrating that the test permits consistent

assessment of individual skill and ability;

(iv) Evidence that the test was normed using--

(A) Groups that were of sufficient size to produce defensible

standard errors of the mean and were not disproportionately composed of

any race or gender; and

(B) A contemporary population representative of persons who are

beyond the usual age of compulsory school attendance in the United

States;

[[Page 61840]]

(v) Documentation of the level of difficulty of the test;

(vi) Unambiguous scales and scale values so that standard errors of

measurement can be used to determine statistically significant

differences in performance; and

(vii) Additional guidance on the interpretation of scores resulting

from any modifications of the tests for persons with documented

disabilities.

(12) The manual provided to test administrators containing

procedures and instructions for test security and administration, and

the forwarding of tests to the test publisher;

(13) An analysis of the item-content of each edition, form, level,

and (if applicable) sub-test to demonstrate compliance with the

required secondary school level criterion specified in Sec. 668.146(b);

(14) For performance-based tests or tests containing performance-

based sections, a description of the training or certification required

of test administrators and scorers by the test publisher;

(15) A description of retesting procedures and the analysis upon

which the criteria for retesting are based; and

(16) Other evidence establishing the test's compliance with the

criteria for approval of tests as provided in Sec. 668.146.

(Authority: 20 U.S.C. 1091(d))

Sec. 668.145 Test approval procedures.

Except as provided in Sec. 668.143--

(a)(1) When the Secretary receives a complete application from a

test publisher, the Secretary selects experts in the field of

educational testing and assessment, who possess appropriate advanced

degrees and experience in test development or psychometric research, to

determine whether the test meets the requirements for test approval

contained in Secs. 668.146, 668.147, 668.148, or 668.149, as

appropriate, and to advise the Secretary of their determinations;

(2) If the test involves a language other than English, the

Secretary selects at least one individual described in paragraph (a)(1)

of this section who is fluent in the language in which the test is

written to advise the Secretary on whether the test meets the

additional criteria, provisions, and conditions for test approval

contained in Secs. 668.148 and 668.149;

(b) The Secretary determines whether the test publisher's test

meets the criteria and requirements for approval after taking the

advice of the experts into account;

(c)(1) If the Secretary determines that a test satisfies the

criteria and requirements for test approval, the Secretary notifies the

test publisher of the Secretary's decision, and publishes the name of

the test and the passing scores in the Federal Register.

(2) If the Secretary determines that a test does not satisfy the

criteria and requirements for test approval, the Secretary notifies the

test publisher of the Secretary's decision, and the reasons why the

test did not meet those criteria and requirements.

(3) The test publisher may request that the Secretary reevaluate

the Secretary's decision. Such a request must be accompanied by--

(i) Documentation and information that address the reasons for the

non-approval of the test; and

(ii) An analysis of why the information and documentation submitted

meet the criteria and requirements for test approval notwithstanding

the Secretary's earlier decision to the contrary.

(d)(1) The Secretary approves a test for a period not to exceed

five years from the date of the Secretary's written notice to the test

publisher.

(2) The Secretary extends the approval period of a test to include

the period of review if the test publisher re-submits the test for

review and approval under Sec. 668.144 at least six months before the

date on which the test approval is scheduled to expire;

(e) The approval of a test may be withdrawn if the Secretary

determines that the publisher violated any terms of the agreement

described in Sec. 668.150, or that the information the publisher

submitted as a basis for approval of the test was inaccurate;

(f) If the Secretary revokes approval of a previously approved

test, the Secretary publishes a notice of that revocation in the

Federal Register. The revocation becomes effective 120 days from the

date the notice of revocation is published in the Federal Register; and

(g) For test batteries that contain multiple sub-tests measuring

content domains other than verbal and quantitative domains, the

Secretary reviews only those subtests covering verbal and quantitative

domains.

(Authority: 20 U.S.C. 1091(d))

Sec. 668.146 Criteria for approving tests.

Except as provided in Sec. 668.143--

(a) Except as provided in Sec. 668.148, the Secretary approves a

test under this subpart if the test meets the criteria set forth in

paragraph (b) of this section and the test publisher satisfies the

requirements set forth in paragraph (c) of this section;

(b) To be approved under this subpart, a test shall--

(1) Assess secondary school level basic verbal and quantitative

skills and general learned abilities;

(2) Sample the major content domains of secondary school level

verbal and quantitative skills with sufficient numbers of questions

to--

(i) Adequately represent each domain; and

(ii) Permit meaningful analyses of item-level performance by

students who are representative of the contemporary population beyond

the age of compulsory school attendance and have earned a high school

diploma;

(3) Require appropriate test-taking time to permit adequate

sampling of the major content domains described in paragraph (a)(2) of

this section;

(4) Have all forms (including short forms) comparable in

reliability;

(5) If the test is revised, have new scales, scale values, and

scores that are demonstrably comparable to the old scales, scale

values, and scores; and

(6) Meet all primary and applicable conditional and secondary

standards for test construction provided in the 1985 edition of the

Standards for Educational and Psychological Testing, with amendments

dated June 2, 1989, prepared by a joint committee of the American

Educational Research Association, the American Psychological

Association, and the National Council on Measurement in Education

incorporated by reference in this section. Incorporation by reference

of this document has been approved by the Director of the Office of the

Federal Register pursuant to the Director's authority under 5 U.S.C.

552(a) and 1 CFR part 51. The incorporated document is on file at the

Department of Education, Office of Postsecondary Education, Room 4318,

ROB-3, 600 Independence Avenue, S.W., Washington, D.C. 20202 and at the

Office of the Federal Register, 800 North Capitol Street, N.W., Suite

700, Washington, DC. The standards may be obtained from the American

Psychological Association, Inc., 750 First Street, N.W., Washington, DC

20026.

(7) Have publisher's guidelines for retesting, including time

between test-taking, be based on empirical analyses that are part of

the studies of test reliability; and

(c) In order for a test to be approved under this subpart, a test

publisher shall--

(1) Include in the test booklet or package--

(i) Clear, specific, and complete instructions for test

administration, including information for test takers on

[[Page 61841]]

the purpose, timing, and scoring of the test; and

(ii) Sample questions representative of the content and average

difficulty of the test;

(2) Have two or more secure, equated, alternate forms of the test;

(3) Except as provided in Secs. 668.148 and 668.149, provide tables

of distributions of test scores which clearly indicate the mean score

and standard deviation for high school graduates who have taken the

test within three years prior to the date on that the test is submitted

to the Secretary for approval under Sec. 668.144;

(4) Norm the test with--

(i) Groups that were of sufficient size to produce defensible

standard errors of the mean and were not disproportionately composed of

any race or gender; and

(ii) A contemporary population representative of persons who are

beyond the usual age of compulsory school attendance in the United

States; and

(5) If test batteries include sub-tests assessing different verbal

and/or quantitative skills, a distribution of test scores as described

in paragraph (c)(3) of this section that allows the Secretary to

prescribe either--

(i) A passing score for each sub-test; or

(ii) One composite passing score for verbal skills and one

composite passing score for quantitative skills.

(Authority: 20 U.S.C. 1091(d))

Sec. 668.147 Passing scores.

Except as provided in Secs. 668.143, 668.148 and 668.149, to

demonstrate that a test taker has the ability to benefit from the

education and training offered, the Secretary specifies that the

passing score on each approved test is one standard deviation below the

mean for students with high school diplomas who have taken the test

within three years before the date on which the test is submitted to

the Secretary for approval.

(Authority; 20 U.S.C. 1091(d))

Sec. 668.148 Additional criteria for the approval of certain tests.

Except as provided in Sec. 668.143--

(a) In addition to satisfying the criteria in Sec. 668.146, to be

approved by the Secretary, a test or a test publisher must meet the

following criteria, if applicable:

(1) In the case of a test that is performance-based, or includes

performance-based sections, for measuring writing, speaking, listening,

or quantitative problem-solving skills, the test publisher must

provide--

(i) A minimum of four parallel forms of the test; and

(ii) A description of the training provided to test administrators,

and the criteria under which trained individuals are certified to

administer and score the test.

(2) In the case of a test developed for a non-native speaker of

English who is enrolled in a program that is taught in his or her

native language, the test must be--

(i) Linguistically accurate and culturally sensitive to the

population for which the test is designed, regardless of the language

in which the test is written;

(ii) Supported by documentation detailing the development of

normative data;

(iii) If translated from an English version, supported by

documentation of procedures to determine its reliability and validity

with reference to the population for which the translated test was

designed;

(iv) Developed in accordance with guidelines provided in the 1985

edition of the ``Testing Linguistic Minorities'' section of the

Standards for Educational and Psychological Testing, with amendments

dated June 2, 1989, prepared by a joint committee of the American

Educational Research Association, the American Psychological

Association, and the National Council on Measurement in Education

incorporated by reference in this section. Incorporation by reference

of this document has been approved by the Director of the Office of the

Federal Register pursuant to the Director's authority under 5 U.S.C.

552(a) and 1 CFR part 51. The incorporated document is on file at the

Department of Education, Office of Postsecondary Education, Room 4318,

ROB-3, 600 Independence Avenue, S.W., Washington, D.C. 20202 and at the

Office of the Federal Register, 800 North Capitol Street, N.W., Suite

700, Washington, DC. The standards may be obtained from the American

Psychological Association, Inc., 750 First Street, N.W., Washington, DC

20026; and

(v)(A) If the test is in Spanish, accompanied by a distribution of

test scores that clearly indicates the mean score and standard

deviation for Spanish-speaking students with high school diplomas who

have taken the test within 5 years before the date on which the test is

submitted to the Secretary for approval; and

(B) If the test is in a language other than Spanish, accompanied by

a recommendation for a provisional passing score based upon performance

of a sample of test takers representative of the intended population

and large enough to produce stable norms.

(3) In the case of a test that is modified for use for persons with

disabilities, the test publisher must--

(i) Follow guidelines provided in the ``Testing People Who Have

Handicapping Conditions'' section of the Standards for Educational and

Psychological Testing;

(ii) Provide documentation of the appropriateness and feasibility

of the modifications relevant to test performance; and

(iii) Recommend passing score(s) based on the previous performance

of test-takers.

(4) In the case of a computer-based test, the test publisher must--

(i) Provide documentation to the Secretary that the test complies

with the basic principles of test construction and standards of

reliability and validity as promulgated in the Standards for

Educational and Psychological Testing, as well as specific guidelines

set forth in the American Psychological Association's Guidelines for

Computer-based Tests and Interpretations (1986);

(ii) Provide test administrators with instructions for

familiarizing test takers with computer hardware prior to test-taking;

and

(iii) Provide two or more parallel, equated forms of the test, or,

if parallel forms are generated from an item pool, provide

documentation of the methods of item selection for alternate forms; and

(b) If a test is designed solely to measure the English language

competence of non-native speakers of English--

(1) The test must meet the criteria set forth in

Sec. 668.146(b)(6), and Sec. 668.146 (c)(1), (c)(2), and (c)(4); and

(2) The test publisher must recommend a passing score based on the

mean score of test takers beyond the age of compulsory school

attendance who entered U.S. high school equivalency programs, formal

training programs, or bilingual vocational programs.

(Authority: 20 U.S.C. 1091(d))

Sec. 668.149 Special provisions for the approval of assessment

procedures for special populations for whom no tests are reasonably

available.

If no test is reasonably available for persons with disabilities or

students whose native language is not English and who are not fluent in

English, so that no test can be approved under Secs. 668.146 or 668.148

for these students, the following procedures apply:

(a) Persons with disabilities. (1) The Secretary considers a

modified test or testing procedure, or instrument that

[[Page 61842]]

has been scientifically developed specifically for the purpose of

evaluating the ability to benefit from postsecondary training or

education of disabled students to be an approved test for purposes of

this subpart provided that the testing procedure or instrument measures

both basic verbal and quantitative skills at the secondary school

level.

(2) The Secretary considers the passing scores for these testing

procedures or instruments to be those recommended by the test

developer, provided that the test administrator--

(i) Uses those procedures or instruments;

(ii) Maintains appropriate documentation, including a description

of the procedures or instruments, their content domains, technical

properties, and scoring procedures; and

(iii) Observes recommended passing scores.

(b) Students whose native language is not English. The Secretary

considers a test in a student's native language for a student whose

native language is not English to be an approved test under this

subpart if--

(1) The Secretary has not approved any test in that native

language;

(2) The test was not previously rejected for approval by the

Secretary;

(3) The test measures both basic verbal and quantitative skills at

the secondary school level; and

(4) The passing scores and the methods for determining the passing

scores are fully documented.

(Authority: 20 U.S.C. 1091(d))

Sec. 668.150 Agreement between the Secretary and a test publisher.

(a) If the Secretary approves a test under this subpart, the test

publisher must enter into an agreement with the Secretary that contains

the provisions set forth in paragraph (b) of this section before an

institution may use the test to determine a student's eligibility for

Title IV, HEA program funds.

(b) The agreement between a test publisher and the Secretary

provides that the test publisher shall--

(1) Allow only test administrators that it certifies to give its

test;

(2) Certify test administrators who have--

(i) The necessary training, knowledge, and skill to test students

in accordance with the test publisher's testing requirements; and

(ii) The ability and facilities to keep its test secure against

disclosure or release;

(3) Decertify a test administrator for a period that coincides with

the period for which the publisher's test is approved if the test

publisher finds that the test administrator--

(i) Has repeatedly failed to give its test in accordance with the

publisher's instructions;

(ii) Has not kept the test secure;

(iii) Has compromised the integrity of the testing process; or

(iv) Has given the test in violation of the provisions contained in

Sec. 668.151;

(4) Score a test answer sheet that it receives from a test

administrator;

(5) If a computer-based test, provide the test administrator with

software that will:

(i) Immediately generate a score report for each test taker;

(ii) Allow the test administrator to send to the test publisher a

secure write-protected diskette copy of the test taker's performance on

each test item and the test taker's test scores; and

(iii) Prohibit any changes in test taker responses or test scores.

(6) Promptly send to the student and the institution the student

indicated he or she is attending or scheduled to attend a notice

stating the student's score for the test and whether or not the student

passed the test;

(7) Keep for a period of three years each test answer sheet or

electronic record forwarded for scoring and all other documents

forwarded by the test administrator with regard to the test;

(8) Three years after the date the Secretary approves the test and

for each subsequent three-year period, analyze the test scores of

students to determine whether the test scores produce any irregular

pattern that raises an inference that the tests were not being properly

administered, and provide the Secretary with a copy of this analysis;

and

(9) Upon request, give the Secretary, a guaranty agency, or an

accrediting agency access to test records or other documents related to

an audit, investigation, or program review of the institution, test

publisher, or test administrator.

(c)(1) The Secretary may terminate an agreement with a test

publisher if the test publisher fails to carry out the terms of the

agreement described in paragraph (b) of this section.

(2) Before terminating the agreement, the Secretary gives the test

publisher the opportunity to show that it has not failed to carry out

the terms of its agreement.

(3) If the Secretary terminates an agreement with a test publisher

under this section, the Secretary notifies institutions through

publication in the Federal Register when they may no longer use the

publisher's test(s) for purposes of determining a student's eligibility

for Title IV, HEA program funds.

(Authority: 20 U.S.C. 1091(d))

Sec. 668.151 Administration of tests.

(a)(1) To establish a student's eligibility for Title IV, HEA

program funds under this subpart, if a student has not passed an

approved state test, under Sec. 668.143, an institution must select a

certified test administrator to give an approved test.

(2) An institution may use the results of an approved test to

determine a student's eligibility to receive Title IV, HEA programs

funds if the test was independently administered and properly

administered.

(b) The Secretary considers that a test is independently

administered if the test is--

(1) Given at an assessment center by a test administrator who is an

employee of the center; or

(2) Given by a test administrator who--

(i) Has no current or prior financial or ownership interest in the

institution, its affiliates, or its parent corporation, other than the

interest obtained through its agreement to administer the test, and has

no controlling interest in any other educational institution;

(ii) Is not a current or former employee of or consultant to the

institution, its affiliates, or its parent corporation, a person in

control of another institution, or a member of the family of any of

these individuals;

(iii) Is not a current or former member of the board of directors,

a current or former employee of or a consultant to a member of the

board of directors, chief executive officer, chief financial officer of

the institution or its parent corporation or at any other institution,

or a member of the family of any of the above individuals; and

(iv) Is not a current or former student of the institution.

(c) The Secretary considers that a test is not independently

administered if an institution--

(1) Compromises test security or testing procedures;

(2) Pays a test administrator a bonus, commission, or any other

incentive based upon the test scores or pass rates of its students who

take the test;

(3) Otherwise interferes with the test administrator's independence

or test administration.

(d) The Secretary considers that a test is properly administered if

the test administrator--

(1) Is certified by the test publisher to give the publisher's

test;

(2) Administers the test in accordance with instructions provided

by the test publisher, and in a manner that ensures the integrity and

security of the test;

[[Page 61843]]

(3) Makes the test available only to a test-taker, and then only

during a regularly scheduled test;

(4) Secures the test against disclosure or release;

(5) Submits the completed test to the test publisher within two

business days after test administration in accordance with the test

publisher's instructions; and

(6) Upon request, gives the Secretary, guaranty agency, licensing

agency, accrediting agency, and law enforcement agencies access to test

records or other documents related to an audit, investigation, or

program review of the institution, or test publisher.

(e) Except as provided in Sec. 668.152, a certified test

administrator may not score a test.

(f) A student who fails to pass a test approved under this subpart

may not retake the same form of the test for the period prescribed by

the test's publisher.

(g) An institution shall maintain a record for each student who

took a test under this subpart of--

(1) The test taken by the student;

(2) The date of the test; and

(3) The student's scores as reported by the test publisher,

assessment center, or State.

(Authority: U.S.C. 1091(d))

Sec. 668.152 Administration of tests by assessment centers.

(a)(1) If a test is given by an assessment center, the assessment

center shall properly administer the test as described in

Sec. 668.151(d).

(b)(1) Unless an agreement between a test publisher and an

assessment center indicates otherwise, an assessment center scores the

tests it gives and promptly notifies the institution and the student of

the student's score on the test and whether the student passed the

test.

(2) If the assessment center scores the test, it must provide

annually to the test publisher--

(i) All copies of completed tests; or

(ii) A report listing all test-takers' scores and institutions to

which the scores were sent.

(Authority: U.S.C. 1091(d))

Sec. 668.153 Administration of tests for students whose native

language is not English or for persons with disabilities.

Except as provided in Sec. 668.143--

(a) Students whose native language is not English. For a student

whose native language is not English and who is not fluent in English,

the institution shall use the following tests, as applicable:

(1) If the student is enrolled in a program conducted entirely in

his or her native language, the student must take a test approved under

Secs. 668.146 and 668.148(a)(2), or 668.149(b).

(2) If the student is enrolled in a program that is taught in

English with an ESL component, and the student is enrolled in that

program and the ESL component, the student must take either an ESL test

approved under Sec. 668.148(b), or a test in the student's native

language approved under Secs. 668.146, 668.148 or 668.149.

(3) If the student is enrolled in a program that is taught in

English without an ESL component, or the student does not enroll in the

ESL component if the institution offers such a component, the student

must take a test in English approved under Sec. 668.146.

(4) If the student enrolls in an ESL program, the student must take

an ESL test approved under Sec. 668.148(b); and

(b) Persons with disabilities. (1) An institution shall use a test

described in Sec. 668.148(a)(3) or 668.149(a) for a student with a

documented impairment who has neither a high school diploma nor its

equivalent and who is applying for Title IV, HEA program funds.

(2) The test must reflect the student's skills and general learned

abilities rather than reflect the student's impairment.

(3) The institution shall document that a student is disabled and

unable to be evaluated by the use of a conventional test from the list

of tests approved by the Secretary.

(4) Documentation of a student's impairment may be satisfied by--

(i) A written determination, including a diagnosis and recommended

testing accommodations, by a licensed psychologist or medical

physician; or

(ii) A record of such a determination by an elementary or secondary

school or a vocational rehabilitation agency, including a diagnosis and

recommended testing accommodations.

(Authority: U.S.C. 1091(d))

Sec. 668.154 Institutional accountability.

An institution shall be liable for the Title IV, HEA program funds

disbursed to a student whose eligibility is determined under this

subpart only if the institution--

(a) Used a test administrator who was not independent of the

institution at the time the test was given;

(b) Compromises the testing process in any way; or

(c) Is unable to document that the student received a passing score

on an approved test.

(Authority: U.S.C. 1091(d))

Sec. 668.155 Transitional rule for the 1996-97 award year.

(a) Notwithstanding any other provision of this part, an

institution may continue to base an eligibility determination under

section 484(d) of the HEA for a student on a test that was an approved

test as of June 30, 1996, and the passing score on that test, until 60

days after the Secretary publishes in the Federal Register the name of

an approved test and the passing score on that test that is appropriate

for that student.

(b) If an institution properly based a student's eligibility

determination for purposes of section 484(d) of the HEA on a test and

passing score that was in effect on June 30, 1996, the institution does

not have to redetermine the student's eligibility based upon a test and

passing score that was approved under Secs. 668.143 through 668.149.

(Authority: U.S.C. 1091(d))

Sec. 668.156 Approved State process.

(a)(1) A State that wishes the Secretary to consider its State

process as an alternative to achieving a passing score on an approved,

independently administered test for the purpose of determining a

student's eligibility for Title IV, HEA program funds must apply to the

Secretary for approval of that process.

(2) To be an approved State process, the State process does not

have to include all the institutions located in that State, but must

indicate which institutions are included.

(b) The Secretary approves a State's process if--

(1) The State administering the process can demonstrate that the

students it admits under that process without a high school diploma or

its equivalent, who enroll in participating institutions have a success

rate as determined under paragraph (h) of this section that is within

95 percent of the success rate of students with high school diplomas;

and

(2) The State's process satisfies the requirements contained in

paragraphs (c) and (d) of this section.

(c) A State process must require institutions participating in the

process to provide each student they admit without a high school

diploma or its recognized equivalent with the following services--

(1) Orientation regarding the institution's academic standards and

requirements, and student rights;

(2) Assessment of each student's existing capabilities through

means other than a single standardized test;

(3) Tutoring in basic verbal and quantitative skills, if

appropriate;

[[Page 61844]]

(4) Assistance in developing educational goals;

(5) Counseling, including counseling regarding the appropriate

class level for that student given the student's individual's

capabilities; and

(6) Follow-up by teachers and counselors regarding the student's

classroom performance and satisfactory progress toward program

completion.

(d) A State process must--

(1) Monitor on an annual basis each participating institution's

compliance with the requirements and standards contained in the State's

process;

(2) Require corrective action if an institution is found to be in

noncompliance with the State process requirements; and

(3) Terminate an institution from the State process if the

institution refuses or fails to comply with the State process

requirements.

(e)(1) The Secretary responds to a State's request for approval of

its State's process within six months after the Secretary's receipt of

that request. If the Secretary does not respond by the end of six

months, the State's process becomes effective.

(2) An approved State process becomes effective for purposes of

determining student eligibility for Title IV, HEA program funds under

this subpart six months after the date on which the State submits the

process to the Secretary for approval, if the Secretary approves, or

does not disapprove, the process during that six month period.

(f) The Secretary approves a State process for a period not to

exceed five years.

(g)(1) The Secretary withdraws approval of a State process if the

Secretary determines that the State process violated any terms of this

section or that the information that the State submitted as a basis for

approval of the State process was inaccurate.

(2) The Secretary provides a State with the opportunity to contest

a finding that the State process violated any terms of this section or

that the information that the State submitted as a basis for approval

of the State process was inaccurate.

(h) The State shall calculate the success rates as referenced in

paragraph (b) of this section by--

(1) Determining the number of students with high school diplomas

who, during the applicable award year described in paragraph (i) of

this section, enrolled in participating institutions and--

(i) Successfully completed education or training programs;

(ii) Remained enrolled in education or training programs at the end

of that award year; or

(iii) Successfully transferred to and remained enrolled in another

institution at the end of that award year;

(2) Determining the number of students with high school diplomas

who enrolled in education or training programs in participating

institutions during that award year;

(3) Determining the number of students calculated in paragraph

(h)(2) of this section who remained enrolled after subtracting the

number of students who subsequently withdrew or were expelled from

participating institutions and received a 100 percent refund of their

tuition under the institutions' refund policies;

(4) Dividing the number of students determined in paragraph (h)(1)

of this section by the number of students determined in paragraph

(h)(3) of this section;

(5) Making the calculations described in paragraphs (h)(1) through

(h)(4) of this section for students without a high school diploma or

its recognized equivalent who enrolled in participating institutions.

(i) For purposes of paragraph (h) of this section, the applicable

award year is the latest complete award year for which information is

available that immediately precedes the date on which the State

requests the Secretary to approve its State process, except that the

award year selected must be one of the latest two completed award years

preceding that application date.

(Authority: 20 U.S.C. 1091(d))

[FR Doc. 95-29125 Filed 11-30-95; 8:45 am]

BILLING CODE 4000-01-P