Office of the Assistant Secretary for Policy Development and Research; Community Development Work Study Program; Amendments; Final Rule

SUMMARY: On November 6, 1995 (60 FR 56104), HUD published for public

comment a rule proposing to revise HUD's regulations governing the

Community Development Work Study Program (CDWSP). Under the CDWSP, HUD

awards grants to institutions of higher education, either directly or

through areawide planning organizations (APOS), or States, for the

purpose of providing assistance to economically disadvantaged and

minority full-time students who participate in a community development

work-study program. The November 6, 1995 rule proposed to make several

revisions to the CDWSP so that it would more effectively and

efficiently meet its program objectives. This rule finalizes the

policies and procedures of the November 6, 1995 proposed rule and

considers the public comments submitted on the proposed rule.

EFFECTIVE DATE: August 9, 1996.

FOR FURTHER INFORMATION CONTACT: John Hartung, Office of University

Partnerships, Department of Housing and Urban Development, Room 8130,

425 Seventh Street, SW., Washington, D.C. 20410, telephone (202) 708-

1537. (This telephone number is not toll-free.) Hearing- or speech-

impaired individuals may access this number via TTY by calling the

toll-free Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Paperwork Reduction Act Statement

The information collection requirements contained in this final

rule have been approved by the Office of Management and Budget (OMB) in

accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-

3520), and assigned OMB control number 2528-0175. An agency may not

conduct or sponsor, and a person is not required to respond to, a

collection of information unless the collection displays a valid

control number.

II. The November 6, 1995 Proposed Rule

On November 6, 1995 (60 FR 56104), HUD published for public comment

a rule proposing to revise its regulations at 24 CFR 570.415, which

govern the Community Development Work Study Program (CDWSP). Section

501(b)(2) of the Housing and Community Development Act of 1987 (Pub.L.

100-242, approved February 5, 1988), added a new section 107(c) to the

Housing and Community Development Act of 1974 (42 U.S.C. 5301 et seq.)

creating the CDWSP. Under the CDWSP, HUD is authorized to award grants

to institutions of higher education, either directly, or through

areawide planning organizations (APOs) or States, for the purpose of

providing assistance to economically disadvantaged and minority

students who participate in a community development work study program

while enrolled in a full-time community development academic program.

The November 6, 1995 rule proposed to make several revisions to

Sec. 570.415 so that it would more effectively and efficiently meet the

objectives of the CDWSP. HUD has determined that these changes are

necessary as a result of its experience in administering the CDWSP.

Among other revisions, the November 6, 1995 rule proposed to: (1) limit

the number of students assisted under the CDWSP to five students per

participating institution of higher education; (2) limit the CDWSP to

graduate level programs; and (3) permit institutions of higher learning

to apply individually or through APOs. The November 6, 1995 proposed

rule described in detail the amendments to 24 CFR 570.415.

III. Changes to the November 6, 1995 Proposed Rule

This rule clarifies the definition of ``areawide planning

organization (APO)'' set forth in the November 6, 1995 proposed rule.

Language in the current definition referencing the ``nonmetropolitan

area'' served by an APO is confusing since no specific

``nonmetropolitan'' areas are delineated for census purposes. The

November 6, 1995 rule proposed to establish a revised definition,

clarifying the relevant geographic area for purposes of an APO. Upon

further consideration, HUD has determined that this proposed definition

did not adequately address the ambiguity present in the current

definition. This final rule clarifies that in order for an organization

operating in a nonmetropolitan area to be considered an APO, its

jurisdiction must cover at least one county.

This final rule also makes one revision to the November 6, 1995

proposed rule as a result of public comment. Specifically, HUD has

decided to amend 24 CFR 570.415 by combining the per-student limit on

CDWSP tuition assistance with the per-student limit on ``additional

support.'' The public comment period on the November 6, 1995 proposed

rule expired on January 5, 1996. Ten public comments were received. The

following section of the preamble presents a summary of the significant

issues raised by the public commenters on the proposed rule, and HUD's

responses to these comments.

IV. Discussion of Public Comments on the November 6, 1996 Proposed

Rule

1. Support for the CDWSP and the Elimination of the Repayment

Requirements.

Comment. Several commenters expressed their strong support for the

CDWSP. These commenters believe the CDWSP is a valuable resource for

providing assistance to qualified minority and disadvantaged students

pursuing graduate level studies in the field of community planning.

Further, the majority of commenters applauded the proposed rule's

elimination of the repayment requirements currently found at 24 CFR

570.415(g)(3)(i) and (k)(3)(ii). As one of the commenters, a

university, wrote:

[W]e are delighted with the proposed amendments to 24 CFR

570.415(g) and 24 CFR 570.415(k), which eliminate the program's

repayment requirements. The university agrees that this requirement

is both unnecessary as an incentive to highly motivated students and

onerous to the recipient institution.

2. CDWSP Should Not be Limited to Graduate Programs

Comment. Four of the commenters opposed the proposed amendment to

paragraph (a) of Sec. 570.415, which would have limited the CDWSP to

graduate-level programs. These commenters believed the proposed

amendment would unfairly restrict CDWSP participation, and deny the

community the valuable contributions made by certain undergraduate

students. One commenter felt that this would especially be true for

``nontraditional'' undergraduate students, such as older, working, and

minority students. The commenter noted that these students often

possess valuable work and life experiences that they bring to their

work study assignments, greatly benefiting

[[Page 36457]]

the community organizations for whom they work.

HUD Response. HUD does not agree with these commenters. While HUD

appreciates the value of undergraduate participation in the CDWSP, the

program has long emphasized a curriculum that leads directly and

immediately to careers in community and economic development or a

related field. The masters degree has in recent years become the

accepted credential for professional positions in these fields.

Moreover, although CDWSP funding addresses a critical need for highly

qualified professionals, it is insufficient to fully meet that need in

an era when the community and economic development field is

increasingly complex. Accordingly, HUD finds it prudent to concentrate

the funding in graduate programs, where it can be of the greatest and

most immediate overall benefit to communities.

3. Five Student Limit Would Adversely Impact Minority Students

Four commenters were concerned about the potential negative impact

of proposed 24 CFR 570.415(c)(2), which would have limited CDWSP

assistance to five students per participating institution of higher

education. These commenters believed that the proposed amendment would

discourage the recruitment of minority students. The commenters wrote

that the proposed amendment would increase competition for the small

pool of minority students. This increased competition might lead many

colleges and universities to conclude that the available funding does

not warrant the extensive expenditures of time and resources

traditionally needed to identify and recruit qualified minority

students.

HUD Response. HUD disagrees. HUD's practice in recent years has

been to fund five or fewer students per college or university, despite

the authority to fund up to ten students per institution of higher

learning. Although the proposed amendment may reduce HUD's discretion,

it is not a divergence from existing practice. Moreover, HUD believes

the amendment will improve opportunities for qualifying minorities to

participate in the CDWSP. The amendment allows more institutions to

participate in the program and thus more interested students to apply.

4. Participation Through APOs Should be Encouraged

Proposed 24 CFR 570.415(d)(1)(iii) would have permitted

institutions of higher education to apply for participation in the

CDWSP independently of an APO. One commenter wrote that partnerships

between universities and APOs are essential to the success of the

CDWSP. This commenter noted that APOs have strong ties with many area

local governments and nonprofit organizations that serve as excellent

placement agencies. These strong relations enable APOs to provide a

variety of diverse internship opportunities.

The commenter also believed that it is more cost effective if APOs

administer CDWSP participation. The commenter noted that without APO

coordination, HUD staff must handle the administrative costs and

paperwork for each individual participating college or university. This

commenter believed that APO participation in the CDWSP dramatically

decreases the administrative burden for HUD staff and assists in

preserving limited Federal resources. The commenter suggested that HUD

revise the November 6, 1995 proposed rule to include language strongly

encouraging work partnerships between APOs and universities, especially

in metropolitan areas.

HUD Response. HUD has not adopted the suggestion made by the

commenter. HUD agrees that in some circumstances the participation of

an APO may lead to a stronger application, but this is not necessarily

always the case. HUD believes the matter is best left to the discretion

of the institutions of higher education and the APOS. Further HUD

believes that institutions of higher education should not be penalized

for choosing to submit an individual application. While the

administrative burden for either HUD or the institutions of higher

education may be less when an APO is involved, this is not necessarily

always the case. The comparative advantage of an APO on these matters

depends on how effectively it communicates with HUD and monitors the

activities of the institutions of higher education involved.

5. HUD Should Consolidate Tuition and ``Additional Support'' Cost

Categories

Comment. One commenter suggested that HUD combine the per-student

limit on CDWSP tuition assistance with the per-student limit on

``additional support,'' a category that includes books and travel. The

commenter, director of the CDWSP at a private institution of higher

education, indicated that the institution would likely utilize this

greater flexibility to provide the entire combined amount to the

students as tuition assistance.

HUD Response. HUD agrees with the suggestion made by the commenter.

Tuition at private institutions now generally exceeds by far the

existing $3,500 annual per-student limit on CDWSP tuition assistance.

The additional flexibility would help economically disadvantaged and

minority students better afford to complete their degree. In

particular, students may find that they can minimize travel expense by

attending locally sponsored conferences, rather than travelling to

distant locations, and thus direct additional funds to meeting their

tuition obligations. Likewise, some students may be able to purchase

books at less than $500 per year, leaving more funds for meeting

tuition requirements.

Although this amendment was not part of the November 6, 1995

proposed rule, it falls squarely within the spirit of that rule. The

November 6, 1995 rule proposed an across-the-board streamlining of the

CDWSP in order to increase program efficiency, eliminate unnecessary

procedures, and clarify the existing regulations. The change suggested

by the commenter will increase the flexibility provided to CDWSP

participants, thus permitting the program to more effectively meet its

objective of assisting qualified minority and disadvantaged students.

Accordingly, this final rule adopts the commenter's recommendation and

amends 24 CFR 570.415 to consolidate the per-student limit on tuition

assistance with the per-student limit on additional support.

V. Other Matters

Environmental Impact. A Finding of No Significant Impact with

respect to the environment was made at the proposed rule stage in

accordance with HUD regulations at 24 CFR part 50, which implements

section 102(2)(C) of the National Environmental Policy Act of 1969

(NEPA). This Finding of No Significant Impact remains applicable to

this final rule and is available for public inspection between 7:30

a.m. and 5:30 p.m. weekdays in the Office of the Rules Docket Clerk,

Office of the General Counsel, Department of Housing and Urban

Development, Room 10276, 451 Seventh Street, SW., Washington, DC 20410-

0500.

Regulatory Flexibility. The Secretary, in accordance with the

Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed and approved

this final rule, and in so doing certifies that this final rule will

not have a significant economic impact on a substantial number of small

entities. This rule makes several streamlining changes to the CDWSP.

The amendments made by this rule are designed to clarify the existing

regulations, increase program

[[Page 36458]]

efficiency, and eliminate unnecessary procedures. This final rule only

affects applicants and participants in the CDWSP, and will not have any

meaningful economic impact on any entity.

Federalism Impact. The General Counsel, as the Designated Official

under section 6(a) of Executive Order 12612, Federalism, has determined

that the policies contained in this final rule will not have

substantial direct effects on States or their political subdivisions,

or the relationship between the Federal government and the States, or

on the distribution of power and responsibilities among the various

levels of government. Specifically, the requirements of this final rule

are directed toward applicants and participants in HUD's Community

Development Work Study Program (CDWSP). It effects no changes in the

current relationships between the Federal government, the States and

their political subdivisions in connection with CDWSP.

Family Impact. The General Counsel, as the Designated Official

under Executive Order 12606, The Family, has determined that this final

rule does not have the potential for significant impact on family

formation, maintenance and general well-being, and, thus, is not

subject to review under the Order. No significant changes in existing

HUD policies or programs will result from promulgation of this final

rule, as those policies and programs relate to family concerns.

List of Subjects in 24 CFR Part 570

Administrative practice and procedure, American Samoa, Community

development block grants, Grant programs--education, Grant programs--

housing and community development, Guam, Indians, Lead poisoning, Loan

programs--housing and community development, Low and moderate income

housing, New communities, Northern Mariana Islands, Pacific Islands

Trust Territory, Pockets of poverty, Puerto Rico, Reporting and

recordkeeping requirements, Small cities, Student aid, Virgin Islands.

(The catalog of Federal domestic assistance program number is

14.234)

Accordingly, 24 CFR part 570 is amended as follows:

PART 570--COMMUNITY DEVELOPMENT BLOCK GRANTS

1. The authority citation for 24 CFR part 570 continues to read as

follows:

Authority: 42 U.S.C. 3535(d) and 5300-5320.

Subpart E--Special Purpose Grants

2. Section 570.415 is amended by:

a. Revising paragraph (a);

b. Revising paragraph (b);

c. Revising paragraphs (c)(1)(i) (A) and (B),

d. Removing paragraph (c)(1)(i)(C);

e. Revising paragraph (c)(2);

f. Revising paragraphs (d)(1)(i) (A) and (B), (d)(1)(ii), and

(d)(1)(iii);

g. Revising paragraph (d)(2)(i)(A);

h. Removing paragraph (d)(2)(i)(D) and redesignating paragraphs

(d)(2)(i) (E) through (I) as paragraphs (d)(2)(i) (D) through (H),

respectively;

i. Revising newly designated (d)(2)(i)(E);

j. Revising paragraphs (f)(1) and (f)(2)(i);

k. Revising paragraphs (g)(1) (ii) and (iii), (g)(2)(ii), and

(g)(3) (i) and (ii);

l. Revising paragraphs (i)(1)(iii) and (i)(2);

m. Revising paragraph (k)(3)(ii); and

n. Removing paragraph (k)(3)(iii) and redesignating paragraph

(k)(3)(iv) as paragraph (k)(3)(iii), to read as follows:

Sec. 570.415 Community Development Work Study Program.

(a) Applicability and objectives. HUD makes grants under CDWSP to

institutions of higher education, either directly or through areawide

planning organizations or States, for the purpose of providing

assistance to economically disadvantaged and minority students who

participate in a work study program while enrolled in full-time

graduate programs in community and economic development, community

planning, and community management. The primary objectives of the

program are to attract economically disadvantaged and minority students

to careers in community and economic development, community planning,

and community management, and to provide a cadre of well-qualified

professionals to plan, implement and administer local community

development programs.

(b) Definitions. The following definitions apply to CDWSP:

Applicant means an institution of higher education, a State, or an

areawide planning organization that submits an application for

assistance under CDWSP.

Areawide planning organization (APO) means an organization

authorized by law or by interlocal agreement to undertake planning and

other activities for a metropolitan or nonmetropolitan area. For an

organization operating in a nonmetropolitan area to be considered an

APO, its jurisdiction must cover at least one county.

CDWSP means the Community Development Work Study Program.

Community building means community and economic development,

community planning, community management, land use and housing

activities.

Community building academic program or academic program means a

graduate degree program whose purpose and focus is to educate students

in community building. ``Community building academic program'' or

``academic program'' includes but is not limited to graduate degree

programs in community and economic development, community planning,

community management, public administration, public policy, urban

economics, urban management, and urban planning. ``Community building

academic program'' or ``academic program'' excludes social and

humanistic fields such as law, economics (except for urban economics),

education and history. ``Community building academic program'' or

``academic program'' excludes joint degree programs except where both

joint degree fields have the purpose and focus of educating students in

community building.

Economically disadvantaged and minority students means students who

satisfy all applicable guidelines established at the participating

institution of higher education to measure financial need for academic

scholarship or loan assistance, including, but not limited to, students

who are Black, American Indian/Alaskan Native, Hispanic, or Asian/

Pacific Island, and including students with disabilities.

Institution of higher education means a public or private

educational institution that offers a community building academic

program and that is accredited by an accrediting agency or association

recognized by the Secretary of Education under 34 CFR part 602.

Recipient means an approved applicant that executes a grant

agreement with HUD.

Student means a student enrolled in an eligible full-time academic

program. He/she must be a first-year student in a two-year graduate

program. Students enrolled in Ph.D. programs are ineligible.

Student with disabilities means a student who meets the definition

of ``person with disabilities'' in the Americans with Disabilities Act

of 1990.

(c) * * *

(1) * * *

(i) * * *

(A) Student stipend. The amount of the student stipend is based

upon the prevailing hourly rate for initial entry positions in

community building and the number of hours worked by the student at the

work placement assignment, except that the hourly rate used should be

sufficiently high to allow a student to earn the full stipend without

working over 20 hours per week

[[Page 36459]]

during the school year and 40 hours per week during the summer. The

amount of the stipend the student receives may not exceed the actual

amount earned, up to $9,000 per year.

(B) Tuition support and additional support. The amount of support

for tuition, fees, books, and travel related to the academic program,

workplace assignment or conferences may not exceed actual costs

incurred or $5,000 per year, whichever is higher. The conferences are

limited to those dealing with community building, sponsored by

professional organizations.

* * * * *

(2) Number of students assisted. The minimum number of students

that may be assisted is three students per participating institution of

higher education. If an APO or State receives assistance for a program

that is conducted by two or more institutions of higher education, each

participating institution must have a minimum of three students in the

program. The maximum number of students that may be assisted under

CDWSP is five students per participating institution of higher

education.

(d) * * *

(1) * * *

(i) * * *

(A) Institutions of higher education. Institutions of higher

education offering a community building academic program are eligible

for assistance under CDWSP.

(B) Areawide planning organizations and States. An APO or a State

may apply for assistance for a program to be conducted by two or more

institutions of higher education. Institutions participating in an APO

program must be located within the particular area that is served by

the APO and is identified by the State law or interlocal agreement

creating the APO. Institutions of higher education participating in a

State program must be located within the State.

(ii) To be eligible in future funding competitions for CDWSP,

recipients are required to maintain a 50-percent rate of graduation

from a CDWSP-funded academic program.

(iii) If an institution of higher education that submits an

individual application is also included in the application of an APO or

State, then the separate individual application of the institution of

higher education will be disregarded. Additionally, if an institution

of higher education is included in the application of both an APO and a

State, then the references to the institution in the application of the

State will be stricken. The State's application will then be ineligible

if fewer than two institutions of higher education remain as

participants in the State's application.

(2) * * *

(i) * * *

(A) Recruit and select students for participation in CDWSP. The

recipient shall establish recruitment procedures that identify

economically disadvantaged and minority students pursuing careers in

community building, and make such students aware of the availability of

assistance opportunities. Students must be selected before the

beginning of the semester for which funding has been provided.

* * * * *

(E) Encourage participating students to obtain employment for a

minimum of two years after graduation with a unit of State or local

government, Indian tribe or nonprofit organization engaged in community

building.

* * * * *

(f) Work placement agencies eligibility and responsibilities. (1)

Eligibility. To be eligible to participate in the CDWSP, the work

placement agencies must be involved in community building and must be

an agency of a State or unit of local government, an APO, an Indian

tribe, or a nonprofit organization.

(2) * * *

(i) Provide practical experience and training in community

building.

* * * * *

(g) * * *

(1) * * *

(ii) Must be a full-time student enrolled in the first year of

graduate study in a community building academic program at the

participating institution of higher education. Individuals enrolled in

doctoral programs are ineligible.

(iii) Must demonstrate an ability to maintain a satisfactory level

of performance in the community building academic program and in work

placement assignments, and to comply with the professional standards

set by the recipient and the work placement agencies.

* * * * *

(2) * * *

(ii) An interest in, and commitment to, a professional career in

community building.

* * * * *

(3) * * *

(i) Enroll in a two-year program. A student's academic and work

placement responsibilities include: Full-time enrollment in an approved

academic program; maintenance of a satisfactory level of performance in

the community building academic program and in work placement

assignments; and compliance with the professional conduct standards set

by the recipient and the work placement agency. A satisfactory level of

academic performance consists of maintaining a B average. A student's

participation in CDWSP shall be terminated for failure to meet these

responsibilities and standards. If a student's participation is

terminated, the student is ineligible for further CDWSP assistance.

(ii) Agree to make a good-faith effort to obtain employment in

community building with a unit of State or local government, an Indian

tribe, or a nonprofit organization. The term of employment should be

for at least two consecutive years following graduation from the

academic program. If the student does not obtain such employment, the

student is not required to repay the assistance received.

* * * * *

(i) * * *

(1) * * *

(iii) The applicant must demonstrate that each institution of

higher education participating in the program as a recipient has the

required academic programs and faculty to carry out its activities

under CDWSP. Each work placement agency must have the required staff

and community building work study program to carry out its activities

under CDWSP.

(2) Rating. All applications that meet the threshold requirements

for applicant eligibility will be rated based on the following

selection criteria:

(i) Quality of academic program. The quality of the academic

program offered by the institution of higher education, including

without limitation the:

(A) Quality of course offerings;

(B) Appropriateness of course offerings for preparing students for

careers in community building; and

(C) Qualifications of faculty and percentage of their time devoted

to teaching and research in community building.

(ii) Rates of graduation. The rates of graduation of students

previously enrolled in a community building academic program at the

institution of higher education, specifically including (where

applicable) graduation rates from any previously funded CDWSP academic

programs or similar programs.

(iii) Extent of financial commitment. The commitment and ability of

the institution of higher education to assure that CDWSP students will

receive sufficient financial assistance (including loans, where

necessary) above and beyond the CDWSP funding to complete

[[Page 36460]]

their academic program in a timely manner and without working in excess

of 20 hours per week during the school year.

(iv) Quality of work placement assignments. The extent to which the

participating students will receive a sufficient number and variety of

work placement assignments, the assignments will provide practical and

useful experience to students participating in the program, and the

assignments will further the participating students' preparation for

professional careers in community building.

(v) Likelihood of fostering students' permanent employment in

community building. The extent to which the proposed program will lead

participating students directly and immediately to permanent employment

in community building, as indicated by, without limitation:

(A) The past success of the institution of higher education in

placing its graduates (particularly CDWSP-funded and similar program

graduates where applicable) in permanent employment in community

building; and

(B) The amount of faculty and staff time and institutional

resources devoted to assisting students (particularly students in

CDWSP-funded and similar programs where applicable) in finding

permanent employment in community building.

(vi) Effectiveness of program administration. The degree to which

an applicant will be able effectively to coordinate and administer the

program. HUD will allocate the maximum points available under this

criterion equally among the following considerations set forth in

paragraphs (i)(2)(vi) (A), (B), and (C) of this section, except that

the maximum points available under this criterion will be allocated

equally between the considerations set forth in paragraphs (i)(2)(vi)

(A) and (B) of this section only where the applicant has not previously

administered a CDWSP-funded program.

(A) The strength and clarity of the applicant's plan for placing

CDWSP students on rotating work placement assignments and monitoring

CDWSP students' progress both academically and in their work placement

assignments;

(B) The degree to which the individual who will coordinate and

administer the program has clear responsibility, ample available time,

and sufficient authority to do so; and

(C) The effectiveness of the applicant's prior coordination and

administration of a CDWSP-funded program, where applicable (including

the timeliness and completeness of the applicant's compliance with

CDWSP reporting requirements).

(vii) Commitment to meeting economically disadvantaged and minority

students' needs. The applicant's commitment to meeting the needs of

economically disadvantaged and minority students as demonstrated by

policies and plans regarding, and past effort and success in,

recruiting, enrolling and financially assisting economically

disadvantaged and minority students. If the applicant is an APO or

State, then HUD will consider the demonstrated commitment of each

institution of higher education on whose behalf the APO or State is

applying; HUD will then also consider the demonstrated commitment of

the APO or State to recruit and hire economically disadvantaged and

minority students.

* * * * *

(k) * * *

(3) * * *

(ii) If a student's participation in CDWSP is terminated before the

completion of the two-year term of the student's program, the recipient

may substitute another student to complete the two-year term of a

student whose participation has terminated. The substituted student

must have a sufficient number of academic credits to complete the

degree program within the remaining portion of the terminated student's

two-year term.

* * * * *

Dated: June 28, 1996.

Michael A. Stegman,

Assistant Secretary for Policy Development and Research.

[FR Doc. 96-17558 Filed 7-9-96; 8:45 am]

BILLING CODE 4210-62-P