Hispanic-Serving Institutions Work Study Program

SUMMARY: On October 2, 1996, HUD published for public comment a Notice

of Proposed Rulemaking (NPRM) for the Hispanic-serving Institutions

Work Study Program. A Notice of Funding Availability (NOFA) for Fiscal

Year (FY) 1996 for the program was separately published on that date.

The NPRM stated that the requirements contained in the NOFA would

provide the basis for a new regulatory provision governing HSI-WSP. The

NPRM also solicited comments on the FY 1996 NOFA which would be used in

preparing a final rule for the program. This final rule establishes the

regulatory provisions for the Hispanic-serving Institutions Work Study

Program (HSI-WSP). Under HSI-WSP, HUD awards grants to public and

private non-profit Hispanic-serving community colleges 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 Building Academic program.

EFFECTIVE DATE: May 9, 1997.

FOR FURTHER INFORMATION CONTACT: Jane Karadbil, Office of University

Partnerships, U.S. Department of Housing and Urban Development, Room

8110, 451 Seventh Street SW., Washington, D.C. 20410, telephone (202)

708-1537, extension 218. Hearing or speech-impaired individuals may

call HUD's TTY number (202) 708-1455, or 1-800-877-8399 (Federal

Information relay Service TTY). (Other than the ``800'' number, these

are not toll-free numbers. Ms. Karadbil can also be contacted via the

Internet at Jane__R.__K[email protected] .

SUPPLEMENTARY INFORMATION:

I. Paperwork Reduction Act Statement

The information collection requirements contained in this final

rule have been submitted to the Office of Management and Budget (OMB)

for review under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-

3520) and have been assigned OMB control number 2528-0182. 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. Background

A. Statutory Basis

The HSI-WSP is authorized by section 107(c) of the Housing and

Community Development Act of 1974, as amended. 42 U.S.C. Sec. 5307(c).

This section (which was added by section 501(b)(2) of the Housing and

Community Development Act of 1987) has served as authorization for the

Department's Community Development Work Study Program (CDWSP) since

that program's inception. It provides authority to, ``* * * make grants

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 community development work study programs and are

enrolled in full-time graduate or undergraduate programs in community

and economic development, community planning, or community

management.''

Since Fiscal Year 1996, legislative history accompanying the

Department's appropriations acts has earmarked a portion of the work

study funds for Hispanic-serving institutions. This final rule

establishes regulations governing the award of those funds under the

Hispanic-serving Institutions Work Study Program (HSI-WSP). While CDWSP

and HSI-WSP are subject to the same statutory requirements, they are

implemented by different regulatory provisions.

B. The October 2, 1996 NOFA and NPRM

The October 2, 1996 HSI-WSP NOFA (published at 61 FR 51566)

announced the requirements that would govern the use of funds earmarked

for HSI-WSP for fiscal year 1996. The NPRM (published on the same date

at 61 FR 51557) incorporated the NOFA by reference, stated HUD's

intention to use the requirements contained in the NOFA as the basis

for a final rule amending 24 CFR part 570, and invited public comment

on the announced requirements that were proposed to be used in

subsequent funding rounds.

The key requirements of the NOFA were:

--Eligibility was limited to two-year public or private non-profit

community colleges determined by the U.S. Department of Education to be

Hispanic-serving Institutions.

--Eligible degree programs were limited to those related to community

building. The term ``community building academic degree program'' was

defined to include not only community or economic development,

community planning, and community management, but also other academic

programs that promote community or social services.

--Work experiences were required to be in a complementary community

building job with a State or local government, areawide planning

organization, Indian tribe, or private nonprofit organization involved

in community building activities.

--All eligible students were required to be economically disadvantaged,

regardless of whether they were members of minority groups. Eligible

students were required to attend the institution full-time, be enrolled

in an eligible community building degree program, not have attained

more than half of the credits needed to graduate at the time they enter

the program, and agree to work at an appropriate placement site 12-20

hours a week during the academic year and 35-40 hours a week during the

summer.

--The amount of assistance to be provided per student was a maximum of

$13,200, which could include tuition and fees for up to two years, a

work stipend, books, and an allowance of $1,000 per student per year to

cover the cost of the institution's administration of the program.

--The minimum number of students that could be assisted was three per

participating institution of higher education and the maximum number

was ten.

All of these requirements have been retained in the final rule.

C. Discussion of Public Comments on the NOFA and Clarifying Changes

There were two public comments--one from the United Cerebral Palsy

Associations (UCPA) and one from Los Angeles Harbor College, one of the

institutions eligible for the program.

UCPA urged applicants to consider work site experiences with United

Cerebral Palsy affiliates. To the extent that the community building

academic field may relate to the kind of work UCP affiliates and

affiliates of other disability organizations are doing, HUD encourages

applicants to consider these organizations as appropriate placement

sites.

[[Page 17493]]

Los Angeles Harbor College recommended that the term ``Tuition and

Fees'' be expanded to cover the cost of tutoring in order to enable

students receiving assistance, especially those for whom English is a

second language, to maintain the required B average. The Department

agrees that such tutoring may be important for a student and, thus,

should be an eligible program cost. However, rather than include this

cost under ``Tuition and Fees,'' it will be included under ``Additional

Support.''

In the NPRM and the FY 1996 NOFA, the Department specifically

requested comments on the proposed rule's requirement that students

participating in HSI-WSP maintain a B average (as defined by the

institution), and its lack of a minimum graduation rate requirement. No

comments were received on these issues, and they remain unchanged in

the final rule.

While there were no public comments submitted on the eligibility of

transfer programs (i.e., those that lead to transfer to a four-year

institution of higher education for the student's junior year), as

opposed to those programs that provide terminal degrees (i.e.,

associate degrees), comments concerning this issue were raised in

several public meetings held on the program. The final rule has been

clarified to note that transfer programs in community building academic

disciplines are eligible only if the student is required to declare

his/her major in this discipline while at the community college. Thus,

general liberal arts associate degrees, without a major, would not be

considered eligible transfer programs.

In addition, the Department has received requests that the

definition of eligible institutions be amended to include Hispanic-

serving institutions that award BOTH two-year AND four-year degrees. As

indicated in the FY 1996 NOFA, the Department specifically decided to

limit eligibility under HSI-WSP to the 89 community colleges providing

only two-year degrees. Creating a program to serve both two-year and

four-year institutions would mean two sets of policies and requirements

because of the different natures of such institutions. In addition,

many four-year HSIs are universities that are eligible for the general

Community Development Work Study Program. Thus, the Department chose to

target community colleges providing only two-year degrees, in order to

encourage and assist the previously under-served economically

disadvantaged student population of community colleges to gain entry to

pre-professional community building career paths. In order to clarify

the Department's intention that institutions providing BOTH two-year

and four-year degrees are NOT eligible for HSI-WSP assistance, the

definition of eligible institution has been modified accordingly. This

modification is merely a clarification which effects no substantive

change to the class of institutions that were eligible for HSI-WSP

under the FY 1996 NOFA.

Finally, a number of other clarifications have been made which

result in no substantive change to the rule.

III. Other Matters

A. Environmental Impact

In accordance with 24 CFR 50.19(b)(9) of the HUD regulations, the

policies and procedures contained in this rule relate only to training

grants and technical assistance, and therefore, are categorically

excluded from the requirements of the National Environmental Policy

Act.

B. 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 it will not have a significant economic impact on

a substantial number of small entities. The rule only affects

applicants and participants in the Hispanic-serving Institutions

Community Work Study Program and will not have any meaningful economic

impact on any other entity.

C. Federalism Impact

The General Counsel, as the Designated Official under section 6(a)

of Executive Order 12612, Federalism, has determined that the policies

and procedures contained in this notice 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. As a result, the notice is not subject to review under the

Order. Specifically, the notice solicits participation by institutions

of higher education in creating community development work study

programs for some of their economically disadvantaged and minority

students. The notice does not impinge upon the relationships between

the Federal government and State or local governments.

D. Impact on the Family

The General Counsel, as the Designated Official under Executive

Order 12606, The Family, has determined that this notice has the

potential for beneficial impact on family formation, maintenance, and

general well-being. The program will enable economically disadvantaged

and minority students to get a college education, helping them to

become self-sufficient. Accordingly, since the impact on the family is

beneficial, no further review is necessary.

E. Executive Order 12866

This final rule was reviewed by the Office of Management and Budget

under Executive Order 12866, Regulatory Planning and Review. Any

changes made to the final rule as a result of that review are clearly

identified in the docket file, which is available for public inspection

in the office of the Department's Rules Docket Clerk, Room 10276, 451

Seventh Street, SW., Washington, DC 20410-0500.

F. The Catalog of Federal Domestic Assistance Program

The Catalog of Federal Domestic Assistance program number is

14.513.

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.

Accordingly, 24 CFR part 570 is amended as follows:

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

follows:

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

2. Subpart E is amended to add a new Sec. 570.416 to read as

follows:

Sec. 570.416 Hispanic-serving institutions work study program.

(a) Applicability and objectives. HUD makes grants under the

Hispanic-serving Institutions Work Study Program (HSI-WSP) to public

and private non-profit Hispanic-serving Institutions (HSI's) of higher

education for the purpose of providing assistance to economically

disadvantaged and minority students who participate in a work study

program while enrolled in full-time community college programs in

community building, and to provide entry to pre-professional careers in

these fields.

[[Page 17494]]

(b) Definitions. The following definitions apply to HSI-WSP:

Applicant means a public or private non-profit Hispanic-serving

institution of higher education that offers only two-year degree

programs, including at least one community building academic degree

program, and that applies for funding under HSI-WSP.

Community building means community and economic development,

community planning, community management, public policy, urban

economics, urban management, urban planning, land use planning,

housing, and related fields. Related fields include, but are not

limited to, administration of justice, child development, and human

services.

Community building academic program or academic program means an

undergraduate associate degree program whose purpose and focus is to

educate students in community building. The terms ``community building

academic program'' or ``academic program'' refer to the types of

academic programs encompassed in the statutory phrase ``community or

economic development, community planning or community management.'' For

purposes of HSI-WSP, such programs include, but are not limited to,

associate degree programs in community and economic development,

community planning, community management, public administration, public

policy, urban economics, urban management, urban planning, land use

planning, housing, and related fields of study. Related fields of study

that promote community building, such as administration of justice,

child development, and human services are eligible, while fields such

as natural sciences, computer sciences, mathematics, accounting,

electronics, engineering, and the humanities (such as English or

history) would not be eligible. A transfer program (i.e., one that

leads to transfer to a four-year institution of higher education for

the student's junior year) in a community building academic discipline

is eligible only if the student is required to declare his/her major in

this discipline while at the community college.

Community building field means any of the fields of study eligible

under a community building academic program.

Economically disadvantaged and minority students means students who

satisfy all the 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

with disabilities and students who are Black, American Indian/Alaska

Native, Hispanic, Asian/Pacific Islanders, where such students satisfy

the financial needs guidelines defined above.

Hispanic-serving institution is an institution of higher education

that the U.S. Department of Education has determined meets the criteria

set out at 20 U.S.C. 1059c(b)(1), including the following: an

institution that has an enrollment of undergraduate full-time students

that is at least 25 percent Hispanic; in which not less than 50 percent

of the Hispanic students are low-income individuals (i.e., 150 percent

of the poverty level) who are first generation college students and

another 25 percent are either low-income individuals or first

generation college students. The U.S. Department of Education has

determined the eligibility of specific institutions as HSIs and has

issued a list of institutions meeting this definition. A list of HSI-

WSP-eligible community colleges that are included in the Department of

Education's list of HSIs will appear with each Notice of Funding

Availability (NOFA) for the program. Only institutions on this list, or

HSI-WSP-eligible institutions subsequently added to the U.S. Department

of Education's list prior to that NOFA's application deadline, are

eligible to apply for HSI-WSP funds.

HSI-WSP or HSI-WSP program means the Hispanic-serving Institutions

Work Study program.

Institution of higher education means a public or private

educational institution that offers two-year associate degrees in a

community building academic program and that is accredited by an

accrediting agency or association recognized by the Secretary of

Education. Institutions offering BOTH four-year and two-year degrees

are not eligible for HSI-WSP.

Recipient means an approved applicant that executes a grant

agreement with HUD.

Student means a person attending the institution of higher

education on a full-time basis, as defined by that institution and

pursuing an eligible community building degree. Students must have

attained no more than half of the credits required for their degree at

the time they first receive assistance under HSI-WSP.

Student with disabilities means a student who meets the definition

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

Act of 1990.

(c) Assistance provided--(1) Types of assistance available. HUD

provides funding in the form of grants to recipients who make

assistance available to eligible students. Grants are provided to cover

the costs of student assistance and for an administrative allowance.

(2) Maximum amount of assistance. The maximum amount that can be

provided to a student is $13,200 a year, including $1,000 for an

administrative allowance, subject to the 20% limitation described at

570.416(c)(4) below. HUD will not set maximums on how much should be

spent to each eligible expenditure, other than for administrative

costs. The institution must be able to document that the amounts paid

are customary for that institution and that it has actually paid that

amount to the students. If a student is receiving a Pell grant, he/she

may not receive funding for the same educational support through HSI-

WSP. However, HSI-WSP can substitute for all or part of the Pell grant.

(3) Student assistance. Grants are provided in the form of student

stipends, tuition support, and additional support.

(i) Student stipend. The amount of the student stipend should be

based on the hourly rate for initial entry positions in the community

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

work placement assignment. The stipend should be sufficiently high to

allow the student to earn the full stipend, as determined by the

recipient, without working over 20 hours per week during the school

year and 40 hours per week during the summer.

(ii) Tuition support. The amount of tuition support may not exceed

the tuition and required fees charged at the participating institution

of higher education.

(iii) Additional support. The recipient may provide additional

support for books, tutoring, and travel related to the academic program

or work placement assignment. Costs associated with reasonable

accommodations for students with disabilities including, but not

limited to, interpreters for the deaf/hard of hearing, special

equipment, and braille materials are eligible under this category.

(4) Administrative allowance. HUD provides an allowance to

recipients to cover the administrative costs of the program. The

administrative allowance is $1,000 per year for each student

participating in the program; however, no more than 20 percent of the

grant may be used for planning and program administrative costs.

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

that may be assisted is three students per participating institution of

higher education. The maximum number of students that may be assisted

is ten students per participating institution of

[[Page 17495]]

higher education; however, a lower maximum or higher minimum may be

established for a particular funding round by the NOFA announcing the

availability of the funds.

(d) Recipient eligibility and responsibilities--(1) Recipient

eligibility. Public or private Hispanic-serving institutions of higher

education offering only undergraduate two-year degrees, including

degrees in at least one community building academic program, are

eligible for assistance under HSI-WSP. HSIs that offer BOTH two-year

and four-year degrees are not eligible for HSI-WSP assistance.

(2) Recipient responsibilities. The recipient is responsible for

administering the program, for compliance with all program

requirements, and for coordination of program activities carried out by

the work placement agencies. The recipient must:

(i) Recruit students for participation in HSI-WSP. The recipient

shall establish recruitment procedures that identify eligible

economically disadvantaged and minority students pursuing careers in

community building, and make them aware of the availability of

assistance opportunities. While the program is restricted to HSIs, the

recipient may neither restrict the program to any particular minority

group or groups, nor provide any preferential treatment in the

selection process based on race or ethnicity. Only economically

disadvantaged students, as defined herein, may be assisted.

(ii) Select students for participation in HSI-WSP. In selecting

among the eligible students, the recipient must consider the extent to

which each student has demonstrated financial need under the applicable

guidelines established at the institution of higher education; an

interest in, and commitment to, a career in community building; and the

ability to satisfactorily complete the academic and work placement

responsibilities under HSI-WSP. Students must be selected before the

beginning of the semester for which funding is being provided. If a

student's participation terminates, the student may not be replaced;

the grant will be reduced by the amount of unused funds allotted for

that student.

(iii) Provide the educational component for participating students.

(iv) Recruit and select work placement agencies, and negotiate and

execute an agreement covering each work placement assignment.

(v) Refer participating students to work placement agencies and

assist students in the selection of work placement assignments.

(vi) Assign sufficient staff to administer and supervise the

program on a day-to-day basis.

(vii) Encourage participating students to either: obtain post-

graduation employment with a unit of State or local government, an

areawide planning organization (APO), Indian tribe or nonprofit

organization engaged in community building; or transfer to a four-year

institution of higher education to obtain a bachelor's degree in a

community building academic discipline.

(viii) Maintain records by racial and ethnic categories for each

economically disadvantaged and minority student participating in HSI-

WSP.

(ix) Keep records and make such reports as HUD may require.

(x) Comply with all other applicable Federal requirements.

(e) Work placement agencies eligibility and responsibilities--(1)

Eligibility. To be eligible to participate in HSI-WSP, the work

placement agency must be an agency of a State or local government, an

APO, an Indian tribe, or a private nonprofit organization involved in

community building activities. A work placement site that is part of

the institution of higher education (e.g., a child care center) can

only be an eligible site if the services provided by that site are

offered to people in the broader community outside the institution.

(2) Responsibilities. Work placement agencies must:

(i) Provide practical experience and training in the community

building field to participating students through work placement

assignments.

(ii) Consult with the institution of higher education to ensure

that the student's work placement assignment provides the requisite

experience and training to meet the required number of work hours

specified in the student work placement agreement.

(iii) Provide a sufficient number and variety of work assignments

to provide participating students with a wide choice of work

experience.

(iv) Require each student to devote 12-20 hours per week during the

regular school year, and 35-40 hours a week during the summer, to the

work placement assignment. Work placement agencies may provide

flexibility in the work period, if such a schedule is consistent with

the requirements of the student's academic program. However, a

participating student may receive a stipend payment only during the

period when the student is placed with the work placement agency.

(v) Comply with all other applicable Federal requirements.

(vi) Maintain such records as HUD may require.

(f) Student eligibility and responsibilities. Students apply

directly to recipients receiving grants under HSI-WSP.

(1) Eligibility. To be eligible for HSI-WSP, the student:

(i) Must satisfy all applicable guidelines established at the

participating institution of higher education to measure financial need

for academic scholarship or loan assistance.

(ii) Must be a full-time student enrolled in a community building

associate degree program at the participating institution of higher

education. The student must have attained no more than 50 percent of

the credits required for his/her degree at the time the student first

receives assistance under this program.

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

of performance in community building academic program (i.e., maintain a

B average, as defined by the institution) and in work placement

assignments, and comply with the professional standards set by the

recipient and the work placement agencies.

(iv) May not have previously participated in HSI-WSP.

(2) Student responsibilities. Participating students must:

(i) Enroll or be enrolled in a two-year community building

associate degree 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 by the work placement agency. A satisfactory level of

academic performance consists of maintaining a B average, as defined by

the institution. A student's participation in HSI-WSP shall be

terminated for failure to meet these responsibilities and standards. If

the student's participation is terminated, the student is ineligible

for further HSI-WSP assistance.

(ii) Devote 12-20 hours per week during the regular school year,

and 35-40 hours a week during the summer, to the work placement

assignment. Work placement agencies may provide flexibility in the work

period, if such a schedule is consistent with the requirements of the

student's academic program. However, a participating student may

receive a stipend payment only during the period when the student is

placed with the work placement agency.

[[Page 17496]]

(iii) Agree to make a good-faith effort to either: obtain

employment in community building with a unit of State or local

government, an APO, an Indian tribe, or a non-profit organization; or

to transfer to a four-year institution of higher education to obtain a

bachelor's degree in a community building academic discipline. However,

if the student does not obtain such employment or transfer to a four-

year institution, the student is not required to repay the assistance

received.

(g) Notice of funding availability. HUD will solicit grant

applications from eligible institutions of higher education by

publishing a notice of funding availability in the Federal Register.

The notice will:

(1) Explain how application kits providing specific application

requirements and guidance may be obtained;

(2) Specify the place for filing completed applications, and the

date by which applications must be physically received at that

location;

(3) State the amount of funding available under the notice, which

may include funds recaptured from previously awarded grants;

(4) Provide other appropriate program information and guidance.

(h) Agreements.--(1) Grant agreement. The responsibilities of the

recipient under HSI-WSP will be incorporated in a grant agreement

executed by HUD and the recipient.

(2) Student agreement. The recipient and each participating student

must execute a written agreement incorporating their mutual

responsibilities under HSI-WSP. The agreement must be executed before

the student can be enrolled in the program. The Recipient shall

terminate a student's participation in HSI-WSP for failure to meet the

responsibilities and standards in the agreement.

(3) Work placement assignment agreement. The recipient, the

student, and the work placement agency must execute a written agreement

covering each work placement assignment. The agreement must address the

responsibilities of each of the parties, the educational objectives,

the nature of the supervision, the standards of evaluation, and the

student's time commitments under the work placement assignment.

(i) Grant administration.--(1) Initial obligation of funds. When

HUD selects an application for funding, HUD will obligate funds to

cover the amount of the approved grant. The term of the award will be

for two calendar years, unless subsequently altered by HUD at its

discretion for good cause.

(2) Disbursement. Recipients will receive grant payments by direct

deposit on a reimbursement basis. If that is not possible, grant

payments will be made by U.S. Treasury checks.

(3) Deobligation. HUD may deobligate amounts for grants if proposed

activities are not begun or completed within a reasonable period of

time after selection.

(j) Other Federal requirements.--(1) Applicability of part 570.

HSI-WSP shall be subject to the policies and procedures set forth in

subparts A, K, and O of 24 CFR part 570, as applicable, except as

modified or limited under the provisions of this Notice. The provisions

of subparts C and J of part 570 shall not apply to HSI-WSP.

(2) Uniform Administrative requirements. Recipients under HSI-WSP

shall comply with the requirements and standards of OMB Circular No. A-

22, ``Cost Principles for Educational Institutions.'' Recipients that

are private institutions of higher education shall comply with OMB

Circular A-133, ``Non-Federal Audit Requirements for Institutions of

Higher Education and Other Nonprofit Institutions,'' which is

implemented at 24 CFR part 45. Recipients that are public institutions

of higher education shall comply with OMB Circular A-128, ``Non-Federal

Audit Requirements for State and Local Governments,'' which is

implemented at 24 CFR part 44. Audits shall be conducted annually. In

addition, all recipients under HSI-WSP shall comply with the provisions

of OMB Circular A-110, ``Uniform Administrative Requirements for Grants

and Agreements With Institutions of Higher Education, Hospitals and

Other Non-Profit Organizations,'' which is implemented at 24 CFR part

84. OMB Circular A-110 shall apply to recipients in its entirety.

Dated: April 2, 1997.

Michael A. Stegman,

Assistant Secretary for Policy, Development and Research

[FR Doc. 97-9035 Filed 4-8-97; 8:45 am]

BILLING CODE 4210-62-P