The Secretary's Recognition of Accrediting Agencies

SUMMARY: The Secretary amends the regulations governing the Secretary's

recognition of accrediting agencies to implement provisions added to

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

Education Amendments of 1998. The Secretary recognizes accrediting

agencies to assure that those agencies are, for HEA and other Federal

purposes, reliable authorities regarding the quality of education or

training offered by the institutions or programs they accredit.

DATES: These regulations are effective July 1, 2000.

FOR FURTHER INFORMATION CONTACT: Karen W. Kershenstein, U.S. Department

of Education, 400 Maryland Avenue, SW., room 3012, ROB-3, Washington,

DC 20202-5244. If you use a telecommunications device for the deaf

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

800-877-8339.

Individuals with disabilities may obtain this document in an

alternate format (e.g., Braille, large print, audiotape, or computer

diskette) on request to the contact person listed in the preceding

paragraph.

SUPPLEMENTARY INFORMATION: The regulations in this document were

developed through the use of negotiated rulemaking. Section 492 of the

Higher Education Act requires that, before publishing any proposed

regulations to implement programs under Title IV of the Act, the

Secretary obtain public involvement in the development of the proposed

regulations. After obtaining advice and recommendations, the Secretary

must conduct a negotiated rulemaking process to develop the proposed

regulations. All proposed regulations must conform to agreements

resulting from the negotiated rulemaking process unless the Secretary

reopens that process or explains any departure from the agreements to

the negotiated rulemaking participants.

These regulations were published in proposed form in the Federal

Register on June 25, 1999 (64 FR 34466) in conformance with the

consensus of the negotiated rulemaking committee. Under the committee's

protocols, consensus meant that no member of the committee dissented

from the agreed-upon language. The Secretary invited comments on the

proposed regulations by August 24, 1999, and several comments were

received. An analysis of the comments and of the changes in the

proposed regulations follows.

In the preamble to the notice of proposed rulemaking (NPRM), we

discussed the changes we proposed to improve the accrediting agency

recognition process. The major changes included the following:

Revising and reordering the standards accrediting agencies

must have.

Providing a maximum timeframe for agencies to come into

compliance with the criteria for recognition (called the ``12-month

rule'').

Including distance education in the scope of an agency's

recognition.

Other proposed changes included in the NPRM were the result of

discussion and subsequent consensus among negotiators about how to

improve the current regulations by clarifying existing regulatory

language and eliminating redundancies.

These final regulations contain several changes resulting from the

26 public comments we received. Most of the changes are clarifications

of the regulatory language rather than substantive changes.

We discuss substantive changes under the sections of the

regulations to which they pertain. We discuss major issues according to

subject, with appropriate sections of the regulations referenced in

parentheses. Generally, we do not address technical and other minor

changes in the proposed regulations, and do not respond to comments

suggesting changes that the Secretary is not authorized by law to make,

e.g., requiring accrediting agencies to conduct unannounced

inspections. Finally, we do not address comments directed at our

processes, such as a comment that the regulations should be revised to

say that we will evaluate the consistency of an accrediting agency's

application of standards on the basis of ``actual fact.''

Analysis of Comments and Changes

Required Accreditation Standards (Sec. 602.16)

Comments: One commenter believed that the regulations needed to

include a definition of ``effectively,'' which appears in 602.16(a)(1).

This commenter suggested that the definition state that ``input demands

cannot override student learning.'' Another commenter asked what data,

factors, or other elements we will use to determine if an agency's

standards effectively address each area for which the agency is

required to have a standard.

Discussion: We disagree with the alternative language suggested by

the first commenter. ``Student learning'' is extremely important, but

it is difficult to assess comprehensively. Furthermore, success with

respect to student achievement is only one of the areas for which

Congress has mandated that agencies have standards.

While we appreciate the desire for some type of benchmark in the

regulations by which to measure the effectiveness of an agency's

standards, we believe the issue is quite complex, and any attempt to

define the issue thoroughly would be over-regulation at best. Aspects

of effectiveness are found in the agency's standards themselves, in the

agency's efforts to conduct a systematic program of review that

demonstrates that its standards are adequate to evaluate educational

quality and relevant to the education and training needs of students,

and in the agency's application of its standards, policies, and

procedures. As desirable as it might be to try to define

``effectiveness'' in a manner that encompasses and quantifies all of

these perspectives, we believe a more reasoned approach is one of

seeking patterns of evidence that, taken collectively, demonstrate

effectiveness.

Change: None.

Success With Respect to Student Achievement (Sec. 602.16(a)(1))

Comments: While several commenters expressed satisfaction with our

overall approach to the requirement that agencies have a standard that

assesses success with respect to student achievement, one commenter

expressed concern that the regulations failed to make student

achievement the ``touchstone'' of accreditation. To remedy this

situation, the commenter suggested that this section include a

statement that an accrediting agency will not be considered to be a

reliable authority regarding educational quality if it denies

accreditation to an institution because the institution does not adhere

to the agency's input standards even though the institution achieves

success with respect to student achievement in relation to its mission.

Another commenter felt the regulations needed to make it clear that

agencies are not required to measure success with respect to student

achievement using a particular assessment strategy.

Discussion: As we explained previously, we believe requiring

success with respect to student achievement to

[[Page 56613]]

override all other areas for which Congress requires agencies to have

standards would conflict with the intent of Congress. We agree that

agencies should be permitted flexibility in selecting strategies for

measuring success with respect to student achievement. We recognize

that assessing success with respect to student achievement is a

complex, multi-dimensional problem. For this reason, we discussed in

the preamble to the NPRM a number of measures that an agency could use,

or could require its institutions or programs to use, in the assessment

of student achievement. The key, we believe, is the measurement of

success with respect to student achievement in relation to

institutional mission. Different institutional missions may dictate

different measures, and agencies should be free to choose the measure

or measures they believe to be best suited to the types of institutions

or programs they accredit, provided they can demonstrate that those

measures are effective.

Change: None.

The ``12-Month'' Rule (Secs. 602.32 and 602.35)

Comments: We received numerous comments about these sections of the

regulations that deal with the provision in the 1998 Amendments to the

HEA requiring the Secretary to limit, suspend, or terminate the

recognition of an agency if the agency either does not meet the

criteria for recognition or is ineffective in its performance with

respect to the criteria. Alternatively, the statute permits the

Secretary to grant an agency a period of no more than 12 months during

which it must come into compliance or demonstrate effectiveness in its

performance. If it fails to do so within the specified timeframe, then

the statute requires the Secretary to limit, suspend, or terminate the

agency's recognition.

Many commenters felt the regulations needed to specify when the 12-

month period begins. They also felt that it should begin on the date of

the Secretary's decision.

One commenter felt that the regulations needed to define what

constitutes good cause. The commenter felt that the regulations should

make it clear that the Secretary is expected to grant extensions only

for demonstrable exigency and lack of fault and that extensions of the

timeframe should be rare and brief.

Many commenters raised questions about how we will review agencies

under this provision. In particular, they questioned how some of our

previous citations of agencies as being ``in need of strengthening''

compliance will be handled under the 12-month rule.

Finally, several commenters expressed the opinion that the

regulations should give the National Advisory Committee or the

Secretary some latitude in implementing the 12-month rule, either for

the benefit of agencies that are trying to improve their processes or

to allow agencies to continue to be recognized despite their

noncompliance with some of the criteria.

One commenter thought the regulations needed to make it clear that

recognized agencies maintain their status as recognized agencies even

if they are under a deferral or until a decision on their application

for continued recognition has been reached.

Discussion: We understand and appreciate the many concerns that

commenters, most of whom were affiliated with recognized accrediting

agencies, expressed about this new, statutorily mandated provision. We

note that some of the concerns are directed toward process, i.e., how

we will implement this provision, rather than toward the provision

itself, and we generally do not address process in the regulations.

With regard to the issue of when the 12-month period begins, we

note that some of the commenters appear to assume that the Secretary

must always give agencies 12 months to correct whatever problem caused

the Secretary to decide to defer a decision on the agency's application

for recognition. That is incorrect. Nevertheless, we believe it would

be useful for the regulations to establish clearly that whatever

deferral period the Secretary grants, that period begins on the date of

the Secretary's deferral decision.

On the issue of defining good cause in the regulations, we note

that negotiators carefully considered whether the regulations should

define ``good cause'' and in the end concluded that it was best not to

define this term. Instead, the burden rests with an agency that has

failed to meet the statutory deadline to demonstrate that good cause

exists for the Secretary to grant a request for an extension of time.

With regard to the call for greater flexibility to continue to

recognize agencies that are not in full compliance, no change can be

made because the statute does not allow for greater flexibility.

Finally, the proposed regulations were intended to convey that a

recognized agency maintains its status as a recognized agency even if

action on its continued recognition has been deferred or a decision on

recognition has not been reached. Deferral is not a final decision.

Changes: We have changed 602.35(b)(3)(iii) to state that the

deferral period begins on the date of the Secretary's decision. We have

also changed 602.35(d) to clarify that recognition of a recognized

agency continues until the Secretary reaches a final decision to

approve or deny recognition.

Distance Education and Scope of Recognition (Sec. 602.3)

Comments: Several commenters expressed concerns about the inclusion

of distance education in the scope of an agency's recognition. Most of

their comments focused on whether agencies would have to go through a

separate review process before distance education would be included in

their scope of recognition, although one commenter asked why distance

education, which the commenter described as ``just one particular type

of instructional methodology,'' should be included in an agency's scope

of recognition.

Discussion: The 1998 amendments to the Higher Education Act clearly

require us to evaluate distance education accrediting activities as

part of the recognition process and to include distance education as a

component in determining the scope of an agency's recognition. We do

not envision implementing this provision by requiring agencies to go

through a separate review process to have distance education included

in their scope. Rather, we will observe and evaluate, as part of our

regular review of an agency for initial or continued recognition, the

agency's compliance with the criteria for recognition, including the

agency's compliance in accrediting distance education programs and

institutions.

Change: None.

Section 602.3 Definitions

Adverse action

Comments: One commenter felt that show cause and probation should

be considered adverse actions to allow accrediting agencies to work

more effectively with institutions that need more time to improve. In

raising this issue, the commenter noted that students are the ones who

are hurt most if schools have to close if they lose their

accreditation. Another commenter, however, supported the change we

proposed that excludes show cause and probation from the term ``adverse

action.''

Discussion: We continue to believe that including interim actions

such as

[[Page 56614]]

probation and show cause as adverse actions would permit a noncompliant

institution or program to retain accreditation or preaccreditation well

beyond the maximum timeframes the regulations prescribe. It would also

put students at risk because the quality of education provided by the

institution or program might suffer as a result of the institution's or

program's noncompliance with the agency's standards. We believe that

the provision in 602.20(b), allowing an agency to extend the timeframe

for coming into compliance for good cause, gives the agency the

flexibility it needs on a case-by-case basis to deal with situations in

which the agency believes there is justification for giving the

institution or program more time.

Change: None.

Representative of the public

Comment: One commenter expressed concern that the proposed

definition does not state that a student may serve as a representative

of the public.

Discussion: We continue to believe, as we stated in the preamble to

the final regulations previously amending this part 602, published

April 29, 1994 (59 FR 22250) (the 1994 regulations), that it is useful

for agencies to include students and members of their families as

representatives of the public. The students are the consumers in this

context. However, the definition we proposed in the NPRM, which is the

same as the definition in the 1994 regulations, does not preclude

selection of students or their family members for this purpose.

Therefore, there is no need to change the definition.

Change: None.

Vocational Education

Comment: One commenter requested that we add a definition of

``vocational education'' to 602.3, noting that we mentioned the term in

the discussion of success with respect to student achievement in the

preamble to the NPRM.

Discussion: The term is not used in the regulations. Therefore,

there is no need to define it.

Change: None.

Section 602.14 Purpose and Organization

Comments: One commenter suggested that recognized agencies be

exempt from demonstrating compliance with this section when they apply

for continued recognition if they were found to be in compliance the

last time they were reviewed and their structure has not changed since

then. Another commenter believed that the provisions related to the

waiver of the ``separate and independent'' requirement nullify the

availability of the waiver and are not consistent with the statute.

Discussion: We believe the suggestion that recognized agencies not

be required to demonstrate compliance with 602.14 when they apply for

continued recognition has merit. However, we do not think a regulatory

change is needed to implement it. We expect to develop new guidelines

for agencies on how to submit petitions for recognition under these

regulations, and we will implement this suggestion in those materials.

With respect to the waiver of the ``separate and independent''

requirement, we disagree with the commenter's conclusion that the

regulations are inconsistent with the statute and nullify the

availability of the waiver. We note that the regulations on this point

remain unchanged from those issued in 1994.

Change: None.

Section 602.15 Administrative and Fiscal Responsibilities

Comment: One commenter suggested that the composition of on-site

evaluation teams should be reconsidered but offered no specific

suggestions for change.

Discussion: Even though the commenter provided no specific

suggestions, we reconsidered the proposed language in 602.15(a)(3) and

(4) governing the composition of an agency's evaluation, policy, and

decision-making bodies. We found that the language allowed an agency

that accredited a single-purpose institution, such as a freestanding

law school, to satisfy the regulations by simply having educators,

i.e., academic and administrative personnel, on these bodies and not

any practitioners. While we know that most agencies that accredit

single-purpose institutions include practitioners on their evaluation

teams, we felt it was important that the regulations require this

practice.

Change: We have modified 602.15(a)(4) to require an agency to have

educators and practitioners on its evaluation, policy, and decision-

making bodies if it accredits programs or single-purpose institutions

that prepare students for a specific profession.

Section 602.19 Monitoring and Reevaluation of Accredited Institutions

and Programs

Comment: Two commenters expressed concern about the discussion in

the preamble of the NPRM about agencies' responsibilities for

monitoring accredited institutions and programs throughout the

accreditation period. Specifically, they objected to the statement that

an agency's monitoring procedures must provide for prompt and

appropriate action by an agency whenever it receives substantial,

credible evidence from any reliable source, including the courts, that

indicates a systemic problem that calls into question the ability of an

institution or program to meet the agency's standards. They also

objected to the statement in the preamble that we find it unacceptable

for an agency to have as its policy that it will not look at, or take

appropriate action based upon, information that comes to its attention

through pending third-party litigation. The commenters felt that our

position would place the agency in the middle of the litigation.

Discussion: The comments are directed to preamble, rather than

regulatory, language, so there is no need to make any changes to the

regulations. Agencies, under the regulations, have a responsibility to

monitor institutions and programs throughout their accreditation period

to ensure that educational quality is maintained and to take

appropriate action whenever they receive substantial, credible evidence

from any reliable source that calls into question the quality of the

education or training provided by the institution or program. That

obligation applies with respect to information the agency obtains as a

result of litigation, just as it applies to information obtained from

other sources.

Change: None.

Section 602.21 Review of Standards

Comments: Most commenters liked the proposed regulations, which

require agencies to maintain a systematic program of review that

demonstrates their standards are adequate to evaluate the quality of

education or training provided by the institutions and programs they

accredit and relevant to the needs of students. Two commenters,

however, preferred the language in the 1994 regulations, which required

agencies to maintain a systematic program of review that demonstrated

their standards were valid and reliable indicators of educational

quality. One commenter thought the phrase ``relevant to the needs of

students'' in the proposed regulations should be replaced by the phrase

from the 1994 regulations, ``relevant to the education and training

needs of students,'' which the commenter believed was more appropriate.

Finally, one commenter stated that an agency's standards should not be

deemed adequate to evaluate the quality of education or relevant to the

[[Page 56615]]

needs of students if they resulted in the denial of accreditation to

schools that achieve student success in learning.

Discussion: The issue of the validation of standards through the

systematic review of an agency's standards was discussed at length

during negotiated rulemaking. The ultimate consensus that was reached

reflects negotiators' belief that the language in the proposed

regulations strikes a balance between overly prescriptive regulation of

agencies' standards and processes and a requirement that looks only at

an agency's review process and not at the substance of the standards.

It also avoids some of the problems encountered with the language in

the 1994 regulations that uses the terms ``validity'' and

``reliability,'' the interpretations of which, when applied in the

context of agencies' standards, were often misunderstood and misused.

We believe the comment about the need for agencies to demonstrate

that their standards are relevant to the education and training needs

of students, not simply the needs of students, has merit. However, we

disagree that an agency's standards should not be deemed adequate to

evaluate the quality of education or relevant to the needs of students

if its standards resulted in the denial of accreditation to schools

that achieve student success in learning. Demonstrating success with

respect to student achievement is certainly necessary to establishing

the adequacy of an agency's standards. By itself, however, such a

demonstration is by no means sufficient to ensure the adequacy of those

standards.

Change: We have changed 602.21(a) to require agencies to maintain a

systematic program of review that demonstrates their standards are

relevant to the education and training needs of students.

Section 602.21(c) Process for Changing Standards

Comment: Several commenters raised concerns that the proposed

regulations require an agency to provide notice about proposed changes

to standards only to its relevant constituencies but not to other

interested parties. One commenter felt regional accreditors should be

required to notify all institutions in their region, while specialized

accreditors should be required to provide notice to all institutions

that provide education in the field. Another commenter felt the

regulations should require agencies to give institutions opportunity

and adequate time to respond, with the knowledge that their comments

will be considered. Finally, one commenter felt the requirement for

agencies to complete an action to change a standard ``within a

reasonable period of time'' after a problem is found was too vague. The

commenter suggested as an alternative that agencies could demonstrate

that they have a formal process that allows changes to the standards to

occur in a systematic manner.

Discussion: During negotiated rulemaking, accreditors readily

acknowledged their responsibility to notify persons they knew to be

interested, but expressed concern about the burden and cost of

providing timely and effective notice to a large number of entities to

see if they might have an interest in commenting on proposed changes to

their standards. The language negotiators agreed upon was an attempt to

find a reasonable solution to the problem. Based on the comments we

received, we have reconsidered the matter. We believe the concept of

requiring a regional accreditor to notify all institutions in its

region of proposed changes to its standards has some merit, but that it

imposes a greater burden than necessary to address the concern. A more

reasonable approach, we believe, is to require an accrediting agency to

provide notice of proposed changes to its standards to all parties who

have made their interest known to the agency. This will ensure that all

who want notice will get it.

With regard to the comment that the regulations should require

agencies to give institutions opportunity and adequate time to respond,

we believe the regulations, by stating that agencies must give

``adequate opportunity to comment on the proposed changes,'' already do

this.

Finally, we do not believe the phrase ``within a reasonable period

of time'' is too vague. Rather, we believe it provides a degree of

flexibility to agencies in establishing schedules for meetings, within

a reasonable range.

Change: We have added the phrase ``and other parties who have made

their interest known to the agency'' to 602.21(c)(1).

Section 602.22(a)(vii) Substantive Change Procedures for Additional

Locations

Comments: Most commenters welcomed the changes to the requirement

for mandatory site visits to new sites within 6 months. One commenter,

however, wanted us to remove the requirement for a site visit to any

additional locations a school establishes.

Discussion: We continue to believe that there is need for an

accrediting agency to monitor an institution very closely as it begins

to operate more than just the main campus. While the need for that

close monitoring may diminish once the institution has gained

experience in establishing effective systems for the administration of

multiple sites, we do not believe that, in general, the addition of a

single additional site is sufficient for an institution to be able to

demonstrate that it has in place effective mechanisms to administer

multiple sites.

Change: None.

Section 602.24(b) Change in Ownership

Comment: One commenter stated that the proposed regulations did not

address a problem that existed with the 1994 regulations, namely that

an agency cannot conduct a site visit unless it is notified of the

change in ownership. The commenter suggested requiring agencies to

conduct the site visit within 6 months following the change, or

notification of the change, whichever comes later.

Discussion: The regulations require an agency's definition of

substantive change to include any change in the legal status, form of

control, or ownership of the institution. The agency's procedures for

handling substantive change must also require an institution to obtain

the agency's approval before the change is included in its scope of

accreditation of the institution. Thus, the situation the commenter

describes represents a failure by the school to follow the agency's

required procedures and should be dealt with by the agency. No

regulatory change is needed. Obviously, an agency can only conduct a

site visit if it knows about the change in ownership, and we would not

regard the agency as being in violation of the criteria for recognition

if it failed to conduct a visit within 6 months of the change solely

because it was not informed of the change at the time it occurred.

Change: None.

Section 602.24(c)(ii) Teach-outs

Comment: One commenter noted that the location of the closing

institution may not be very near other institutions that offer similar

programs and suggested that the regulations require the teach-out

institution to be as geographically proximate to the closing

institution as possible.

Discussion: We believe that this provision in the regulations must

balance the goal of achieving the most geographically proximate teach-

out with

[[Page 56616]]

the goal of ensuring, to the extent possible, that a teach-out is

offered. Sometimes there is no institution that is as close to the

closing institution as we might wish. In other instances, the most

geographically proximate institution does not want to provide the

teach-out, but another institution is willing to do so even if it is

not as close to the closing institution.

We believe the regulations contain the flexibility necessary to

best protect students. They address the proximity issue by requiring

the teach-out institution to demonstrate that it can provide students

access to the program without requiring them to move or travel

substantial distances.

Change: None.

Section 602.26 Notification of Accrediting Decisions

Comments: One commenter stated that the 24-hour rule for notifying

the public of final decisions to place an institution or program on

probation or an equivalent status or to deny, withdraw, suspend,

revoke, or terminate the accreditation or preaccreditation of an

institution or program was unclear. The commenter asked whether this

provision meant notifying the public in general, for example, by

posting the notice to the agency's web site, or whether it meant

telling anyone who happened to call the agency to inquire about the

institution or program.

Another commenter suggested that guaranty agencies be included in

the notification.

Discussion: With respect to the first commenter, we believe the

principal issue here is providing effective notice to the public. We

believe one way to do this is to post the information to the agency's

web site within 24 hours of notifying the institution or program, but

there may be other ways. The agency should have the flexibility to

decide the approach that suits it best. Certainly the agency should

give the information out to anyone who happens to call the agency

inquiring about the institution or program after the 24-hour timeframe.

We agree with the commenter who suggested that guaranty agencies

should receive notification about accrediting decisions. However, an

accrediting agency may not know which guaranty agencies service a

particular institution. Accordingly, the Department will establish a

process for forwarding this information, upon receipt, to guaranty

agencies.

Change: None.

Section 602.33 Appeal of an Advisory Committee Recommendation

Comments: One commenter thought that the 10-day timeframe for an

agency to file its intent to appeal an Advisory Committee

recommendation was too short. The commenter also questioned whether the

10-day timeframe meant 10 calendar days or 10 business days.

Discussion: We do not believe the 10-day timeframe to file an

intent to appeal an Advisory Committee recommendation is too short. An

agency knows the Advisory Committee's recommendation as soon as it is

made, and it need only submit a simple declaration of intent to appeal,

without any documentation, to meet the 10-day requirement. The

regulations permit the agency 30 days to submit the actual appeal,

along with any supporting documentation that agency may wish the

Secretary to consider.

On the issue of whether the timeframe refers to calendar or

business days, we note that all timeframes specified in these

regulations follow the same convention as in the previous regulations;

namely, they refer to calendar days, not business days.

Change: None.

Section 602.42 Appeal of the Subcommittee's Recommendation

Comments: One commenter thought that the selection of a

subcommittee of the Advisory Committee to conduct a hearing on whether

an agency's recognition should be limited, suspended, or terminated

should be done randomly.

Discussion: With regard to the composition of the subcommittee, the

principal issue is the availability of members to serve. The

subcommittee is only convened if Department staff has concluded that an

agency fails to comply with the criteria for recognition or is

ineffective with respect to those criteria, either of which is a very

serious situation and must be dealt with as quickly as possible.

Requiring that subcommittee members be selected on a completely random

basis, or even on a rotating basis, could jeopardize the Department's

ability to convene the subcommittee quickly.

Change: None.

Executive Order 12866

We have reviewed these final regulations in accordance with

Executive Order 12866. Under the terms of the order, we have assessed

the potential costs and benefits of this regulatory action.

The potential costs associated with these final regulations are

those resulting from statutory requirements and those we have

determined to be necessary for a determination that an accrediting

agency that seeks recognition is in fact a reliable authority regarding

the quality of education or training provided by the institutions or

programs it accredits.

In assessing the potential costs and benefits--both quantitative

and qualitative--of these final regulations, we have determined that

the benefits of the regulations justify the costs.

We have also determined that this regulatory action does not unduly

interfere with State, local, and tribal governments in the exercise of

their governmental functions.

We discussed the potential costs and benefits of these final

regulations in the preamble to the NPRM under the headings: Changes

From Existing Regulations (64 FR 34467-34473), Paperwork Reduction Act

of 1995 (64 FR 34474), and Regulatory Flexibility Act Certification (64

FR 34474).

Paperwork Reduction Act of 1995

The Paperwork Reduction Act of 1995 does not require accrediting

agencies to respond to a collection of information unless it displays a

valid Office of Management and Budget (OMB) control number. We display

the valid OMB control number assigned to the collection of information

in these final regulations at the end of the affected sections of the

regulations.

Assessment of Educational Impact

In the NPRM we requested comments on whether the proposed

regulations would require transmission of information that any other

agency or authority of the United States gathers or makes available.

Based on the response to the NPRM and on our review, we have

determined that these final regulations do not require transmission of

information that any other agency or authority of the United States

gathers or makes available.

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To use the PDF, you must have the Adobe Acrobat Reader Program with

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you have questions about using the PDF, call the

[[Page 56617]]

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Note: The official version of this document is the document

published in the Federal Register. Free Internet access to the

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

List of Subjects in 34 CFR Part 602

Colleges and universities, Education, Reporting and recordkeeping

requirements.

Dated: October 4, 1999.

Richard W. Riley,

Secretary of Education.

For the reasons discussed in the preamble, the Secretary amends

title 34 of the Code of Federal Regulations by revising part 602 to

read as follows:

PART 602--THE SECRETARY'S RECOGNITION OF ACCREDITING AGENCIES

Subpart A--General

Sec.

602.1 Why does the Secretary recognize accrediting agencies?

602.2 How do I know which agencies the Secretary recognizes?

602.3 What definitions apply to this part?

Subpart B--The Criteria for Recognition

Basic Eligibility Requirements

602.10 Link to Federal programs.

602.11 Geographic scope of accrediting activities.

602.12 Accrediting experience.

602.13 Acceptance of the agency by others.

Organizational and Administrative Requirements

602.14 Purpose and organization.

602.15 Administrative and fiscal responsibilities.

Required Standards and Their Application

602.16 Accreditation and preaccreditation standards.

602.17 Application of standards in reaching an accrediting

decision.

602.18 Ensuring consistency in decision-making.

602.19 Monitoring and reevaluation of accredited institutions and

programs.

602.20 Enforcement of standards.

602.21 Review of standards.

Required Operating Policies and Procedures

602.22 Substantive change.

602.23 Operating procedures all agencies must have.

602.24 Additional procedures certain institutional accreditors must

have.

602.25 Due process.

602.26 Notification of accrediting decisions.

602.27 Other information an agency must provide the Department.

602.28 Regard for decisions of States and other accrediting

agencies.

Subpart C--The Recognition Process

Application and Review by Department Staff

602.30 How does an agency apply for recognition?

602.31 How does Department staff review an agency's application?

Review by the National Advisory Committee on Institutional Quality and

Integrity

602.32 What is the role of the Advisory Committee and the senior

Department official in the review of an agency's application?

602.33 How may an agency appeal a recommendation of the Advisory

Committee?

Review and Decision by the Secretary

602.34 What does the Secretary consider when making a recognition

decision?

602.35 What information does the Secretary's recognition decision

include?

602.36 May an agency appeal the Secretary's final recognition

decision?

Subpart D--Limitation, Suspension, or Termination of Recognition

Limitation, Suspension, and Termination Procedures

602.40 How may the Secretary limit, suspend, or terminate an

agency's recognition?

602.41 What are the notice procedures?

602.42 What are the response and hearing procedures?

602.43 How is a decision on limitation, suspension, or termination

of recognition reached?

Appeal Rights and Procedures

602.44 How may an agency appeal the subcommittee's recommendation?

602.45 May an agency appeal the Secretary's final decision to

limit, suspend, or terminate its recognition?

Subpart E--Department Responsibilities

602.50 What information does the Department share with a recognized

agency about its accredited institutions and programs?

Authority: 20 U.S.C. 1099b, unless otherwise noted.

Subpart A--General

Sec. 602.1 Why does the Secretary recognize accrediting agencies?

(a) The Secretary recognizes accrediting agencies to ensure that

these agencies are, for the purposes of the Higher Education Act of

1965, as amended (HEA), or for other Federal purposes, reliable

authorities regarding the quality of education or training offered by

the institutions or programs they accredit.

(b) The Secretary lists an agency as a nationally recognized

accrediting agency if the agency meets the criteria for recognition

listed in subpart B of this part.

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

Sec. 602.2 How do I know which agencies the Secretary recognizes?

(a) Periodically, the Secretary publishes a list of recognized

agencies in the Federal Register, together with each agency's scope of

recognition. You may obtain a copy of the list from the Department at

any time. The list is also available on the Department's web site.

(b) If the Secretary denies continued recognition to a previously

recognized agency, or if the Secretary limits, suspends, or terminates

the agency's recognition before the end of its recognition period, the

Secretary publishes a notice of that action in the Federal Register.

The Secretary also makes the reasons for the action available to the

public, on request.

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

Sec. 602.3 What definitions apply to this part?

The following definitions apply to this part:

Accreditation means the status of public recognition that an

accrediting agency grants to an educational institution or program that

meets the agency's standards and requirements.

Accrediting agency or agency means a legal entity, or that part of

a legal entity, that conducts accrediting activities through voluntary,

non-Federal peer review and makes decisions concerning the

accreditation or preaccreditation status of institutions, programs, or

both.

Act means the Higher Education Act of 1965, as amended.

Adverse accrediting action or adverse action means the denial,

withdrawal, suspension, revocation, or termination of accreditation or

preaccreditation, or any comparable accrediting action an agency may

take against an institution or program.

Advisory Committee means the National Advisory Committee on

Institutional Quality and Integrity.

Branch campus means a location of an institution that meets the

definition of branch campus in 34 CFR 600.2.

Distance education means an educational process that is

characterized by the separation, in time or place, between instructor

and student. The term includes courses offered principally through the

use of--

(1) Television, audio, or computer transmission, such as open

broadcast, closed circuit, cable, microwave, or satellite transmission;

(2) Audio or computer conferencing;

(3) Video cassettes or disks; or

(4) Correspondence.

Final accrediting action means a final determination by an

accrediting agency regarding the accreditation or

[[Page 56618]]

preaccreditation status of an institution or program. A final

accrediting action is not appealable within the agency.

Institution of higher education or institution means an educational

institution that qualifies, or may qualify, as an eligible institution

under 34 CFR part 600.

Institutional accrediting agency means an agency that accredits

institutions of higher education.

Nationally recognized accrediting agency, nationally recognized

agency, or recognized agency means an accrediting agency that the

Secretary recognizes under this part.

Preaccreditation means the status of public recognition that an

accrediting agency grants to an institution or program for a limited

period of time that signifies the agency has determined that the

institution or program is progressing towards accreditation and is

likely to attain accreditation before the expiration of that limited

period of time.

Program means a postsecondary educational program offered by an

institution of higher education that leads to an academic or

professional degree, certificate, or other recognized educational

credential.

Programmatic accrediting agency means an agency that accredits

specific educational programs that prepare students for entry into a

profession, occupation, or vocation.

Representative of the public means a person who is not--

(1) An employee, member of the governing board, owner, or

shareholder of, or consultant to, an institution or program that either

is accredited or preaccredited by the agency or has applied for

accreditation or preaccreditation;

(2) A member of any trade association or membership organization

related to, affiliated with, or associated with the agency; or

(3) A spouse, parent, child, or sibling of an individual identified

in paragraph (1) or (2) of this definition.

Scope of recognition or scope means the range of accrediting

activities for which the Secretary recognizes an agency. The Secretary

may place a limitation on the scope of an agency's recognition for

Title IV, HEA purposes. The Secretary's designation of scope defines

the recognition granted according to--

(1) Geographic area of accrediting activities;

(2) Types of degrees and certificates covered;

(3) Types of institutions and programs covered;

(4) Types of preaccreditation status covered, if any; and

(5) Coverage of accrediting activities related to distance

education, if any.

Secretary means the Secretary of the U.S. Department of Education

or any official or employee of the Department acting for the Secretary

under a delegation of authority.

Senior Department official means the senior official in the U.S.

Department of Education who reports directly to the Secretary regarding

accrediting agency recognition.

State means a State of the Union, American Samoa, the Commonwealth

of Puerto Rico, the District of Columbia, Guam, the United States

Virgin Islands, the Commonwealth of the Northern Mariana Islands, the

Republic of the Marshall Islands, the Federated States of Micronesia,

and the Republic of Palau. The latter three are also known as the

Freely Associated States.

Teach-out agreement means a written agreement between institutions

that provides for the equitable treatment of students if one of those

institutions stops offering an educational program before all students

enrolled in that program have completed the program.

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

Subpart B--The Criteria for Recognition

Basic Eligibility Requirements

Sec. 602.10 Link to Federal programs.

The agency must demonstrate that--

(a) If the agency accredits institutions of higher education, its

accreditation is a required element in enabling at least one of those

institutions to establish eligibility to participate in HEA programs;

or

(b) If the agency accredits institutions of higher education or

higher education programs, or both, its accreditation is a required

element in enabling at least one of those entities to establish

eligibility to participate in non-HEA Federal programs.

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

Sec. 602.11 Geographic scope of accrediting activities.

The agency must demonstrate that its accrediting activities cover--

(a) A State, if the agency is part of a State government;

(b) A region of the United States that includes at least three

States that are reasonably close to one another; or

(c) The United States.

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

Sec. 602.12 Accrediting experience.

(a) An agency seeking initial recognition must demonstrate that it

has--

(1) Granted accreditation or preaccreditation--

(i) To one or more institutions if it is requesting recognition as

an institutional accrediting agency and to one or more programs if it

is requesting recognition as a programmatic accrediting agency;

(ii) That covers the range of the specific degrees, certificates,

institutions, and programs for which it seeks recognition; and

(iii) In the geographic area for which it seeks recognition; and

(2) Conducted accrediting activities, including deciding whether to

grant or deny accreditation or preaccreditation, for at least two years

prior to seeking recognition.

(b) A recognized agency seeking an expansion of its scope of

recognition must demonstrate that it has granted accreditation or

preaccreditation covering the range of the specific degrees,

certificates, institutions, and programs for which it seeks the

expansion of scope.

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

Sec. 602.13 Acceptance of the agency by others.

The agency must demonstrate that its standards, policies,

procedures, and decisions to grant or deny accreditation are widely

accepted in the United States by--

(a) Educators and educational institutions; and

(b) Licensing bodies, practitioners, and employers in the

professional or vocational fields for which the educational

institutions or programs within the agency's jurisdiction prepare their

students.

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

Organizational and Administrative Requirements

Sec. 602.14 Purpose and organization.

(a) The Secretary recognizes only the following four categories of

agencies:

------------------------------------------------------------------------

The Secretary recognizes . . that . . .

--------------.---------------------------------------------------------

(1) An accrediting agency.... (i) Has a voluntary membership of

institutions of higher education;

[[Page 56619]]

(ii) Has as a principal purpose the

accrediting of institutions of higher

education and that accreditation is a

required element in enabling those

institutions to participate in HEA

programs; and

(iii) Satisfies the ``separate and

independent'' requirements in paragraph

(b) of this section.

(2) An accrediting agency.... (i) Has a voluntary membership; and

(ii) Has as its principal purpose the

accrediting of higher education

programs, or higher education programs

and institutions of higher education,

and that accreditation is a required

element in enabling those entities to

participate in non-HEA Federal programs.

(3) An accrediting agency.... for purposes of determining eligibility

for Title IV, HEA programs--

(i) Either has a voluntary membership of

individuals participating in a

profession or has as its principal

purpose the accrediting of programs

within institutions that are accredited

by a nationally recognized accrediting

agency; and

(ii) Either satisfies the ``separate and

independent'' requirements in paragraph

(b) of this section or obtains a waiver

of those requirements under paragraphs

(d) and (e) of this section.

(4) A State agency........... (i) Has as a principal purpose the

accrediting of institutions of higher

education, higher education programs, or

both; and

(ii) The Secretary listed as a nationally

recognized accrediting agency on or

before October 1, 1991 and has

recognized continuously since that date.

------------------------------------------------------------------------

(b) For purposes of this section, the term separate and independent

means that--

(1) The members of the agency's decision-making body--who decide

the accreditation or preaccreditation status of institutions or

programs, establish the agency's accreditation policies, or both--are

not elected or selected by the board or chief executive officer of any

related, associated, or affiliated trade association or membership

organization;

(2) At least one member of the agency's decision-making body is a

representative of the public, and at least one-seventh of that body

consists of representatives of the public;

(3) The agency has established and implemented guide lines for each

member of the decision-making body to avoid conflicts of interest in

making decisions;

(4) The agency's dues are paid separately from any dues paid to any

related, associated, or affiliated trade association or membership

organization; and

(5) The agency develops and determines its own budget, with no

review by or consultation with any other entity or organization.

(c) The Secretary considers that any joint use of personnel,

services, equipment, or facilities by an agency and a related,

associated, or affiliated trade association or membership organization

does not violate the ``separate and independent'' requirements in

paragraph (b) of this section if--

(1) The agency pays the fair market value for its proportionate

share of the joint use; and

(2) The joint use does not compromise the independence and

confidentiality of the accreditation process.

(d) For purposes of paragraph (a)(3) of this section, the Secretary

may waive the ``separate and independent'' requirements in paragraph

(b) of this section if the agency demonstrates that--

(1) The Secretary listed the agency as a nationally recognized

agency on or before October 1, 1991 and has recognized it continuously

since that date;

(2) The related, associated, or affiliated trade association or

membership organization plays no role in making or ratifying either the

accrediting or policy decisions of the agency;

(3) The agency has sufficient budgetary and administrative autonomy

to carry out its accrediting functions independently; and

(4) The agency provides to the related, associated, or affiliated

trade association or membership organization only information it makes

available to the public.

(e) An agency seeking a waiver of the ``separate and independent''

requirements under paragraph (d) of this section must apply for the

waiver each time the agency seeks recognition or continued recognition.

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

Sec. 602.15 Administrative and fiscal responsibilities.

The agency must have the administrative and fiscal capability to

carry out its accreditation activities in light of its requested scope

of recognition. The agency meets this requirement if the agency

demonstrates that--

(a) The agency has--

(1) Adequate administrative staff and financial resources to carry

out its accrediting responsibilities;

(2) Competent and knowledgeable individuals, qualified by education

and experience in their own right and trained by the agency on its

standards, policies, and procedures, to conduct its on-site

evaluations, establish its policies, and make its accrediting and

preaccrediting decisions;

(3) Academic and administrative personnel on its evaluation,

policy, and decision-making bodies, if the agency accredits

institutions;

(4) Educators and practitioners on its evaluation, policy, and

decision-making bodies, if the agency accredits programs or single-

purpose institutions that prepare students for a specific profession;

(5) Representatives of the public on all decision-making bodies;

and

(6) Clear and effective controls against conflicts of interest, or

the appearance of conflicts of interest, by the agency's--

(i) Board members;

(ii) Commissioners;

(iii) Evaluation team members;

(iv) Consultants;

(v) Administrative staff; and

(vi) Other agency representatives; and

(b) The agency maintains complete and accurate records of--

(1) Its last two full accreditation or preaccreditation reviews of

each institution or program, including on-site evaluation team reports,

the institution's or program's responses to on-site reports, periodic

review reports, any reports of special reviews conducted by the agency

between regular reviews, and a copy of the institution's or program's

most recent self-study; and

(2) All decisions regarding the accreditation and preaccreditation

of any institution or program, including all correspondence that is

significantly related to those decisions.

(Approved by the Office of Management and Budget under control

number 1845-0003)

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

[[Page 56620]]

Required Standards and Their Application

Sec. 602.16 Accreditation and preaccreditation standards.

(a) The agency must demonstrate that it has standards for

accreditation, and preaccreditation, if offered, that are sufficiently

rigorous to ensure that the agency is a reliable authority regarding

the quality of the education or training provided by the institutions

or programs it accredits. The agency meets this requirement if--

(1) The agency's accreditation standards effectively address the

quality of the institution or program in the following areas:

(i) Success with respect to student achievement in relation to the

institution's mission, including, as appropriate, consideration of

course completion, State licensing examination, and job placement

rates.

(ii) Curricula.

(iii) Faculty.

(iv) Facilities, equipment, and supplies.

(v) Fiscal and administrative capacity as appropriate to the

specified scale of operations.

(vi) Student support services.

(vii) Recruiting and admissions practices, academic calendars,

catalogs, publications, grading, and advertising.

(viii) Measures of program length and the objectives of the degrees

or credentials offered.

(ix) Record of student complaints received by, or available to, the

agency.

(x) Record of compliance with the institution's program

responsibilities under Title IV of the Act, based on the most recent

student loan default rate data provided by the Secretary, the results

of financial or compliance audits, program reviews, and any other

information that the Secretary may provide to the agency; and

(2) The agency's preaccreditation standards, if offered, are

appropriately related to the agency's accreditation standards and do

not permit the institution or program to hold preaccreditation status

for more than five years.

(b) If the agency only accredits programs and does not serve as an

institutional accrediting agency for any of those programs, its

accreditation standards must address the areas in paragraph (a)(1) of

this section in terms of the type and level of the program rather than

in terms of the institution.

(c) If none of the institutions an agency accredits participates in

any Title IV, HEA program, or if the agency only accredits programs

within institutions that are accredited by a nationally recognized

institutional accrediting agency, the agency is not required to have

the accreditation standards described in paragraphs (a)(1)(viii) and

(a)(1)(x) of this section.

(d) An agency that has established and applies the standards in

paragraph (a) of this section may establish any additional

accreditation standards it deems appropriate.

(Approved by the Office of Management and Budget under control

number 1845-0003)

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

Sec. 602.17 Application of standards in reaching an accrediting

decision.

The agency must have effective mechanisms for evaluating an

institution's or program's compliance with the agency's standards

before reaching a decision to accredit or preaccredit the institution

or program. The agency meets this requirement if the agency

demonstrates that it--

(a) Evaluates whether an institution or program--

(1) Maintains clearly specified educational objectives that are

consistent with its mission and appropriate in light of the degrees or

certificates awarded;

(2) Is successful in achieving its stated objectives; and

(3) Maintains degree and certificate requirements that at least

conform to commonly accepted standards;

(b) Requires the institution or program to prepare, following

guidance provided by the agency, an in-depth self-study that includes

the assessment of educational quality and the institution's or

program's continuing efforts to improve educational quality;

(c) Conducts at least one on-site review of the institution or

program during which it obtains sufficient information to determine if

the institution or program complies with the agency's standards;

(d) Allows the institution or program the opportunity to respond in

writing to the report of the on-site review;

(e) Conducts its own analysis of the self-study and supporting

documentation furnished by the institution or program, the report of

the on-site review, the institution's or program's response to the

report, and any other appropriate information from other sources to

determine whether the institution or program complies with the agency's

standards; and

(f) Provides the institution or program with a detailed written

report that assesses--

(1) The institution's or program's compliance with the agency's

standards, including areas needing improvement; and

(2) The institution's or program's performance with respect to

student achievement.

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

Sec. 602.18 Ensuring consistency in decision-making.

The agency must consistently apply and enforce its standards to

ensure that the education or training offered by an institution or

program, including any offered through distance education, is of

sufficient quality to achieve its stated objective for the duration of

any accreditation or preaccreditation period granted by the agency. The

agency meets this requirement if the agency--

(a) Has effective controls against the inconsistent application of

the agency's standards;

(b) Bases decisions regarding accreditation and preaccreditation on

the agency's published standards; and

(c) Has a reasonable basis for determining that the information the

agency relies on for making accrediting decisions is accurate.

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

Sec. 602.19 Monitoring and reevaluation of accredited institutions and

programs.

(a) The agency must reevaluate, at regularly established intervals,

the institutions or programs it has accredited or preaccredited.

(b) The agency must monitor institutions or programs throughout

their accreditation or preaccreditation period to ensure that they

remain in compliance with the agency's standards. This includes

conducting special evaluations or site visits, as necessary.

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

Sec. 602.20 Enforcement of standards.

(a) If the agency's review of an institution or program under any

standard indicates that the institution or program is not in compliance

with that standard, the agency must--

(1) Immediately initiate adverse action against the institution or

program; or

(2) Require the institution or program to take appropriate action

to bring itself into compliance with the agency's standards within a

time period that must not exceed--

(i) Twelve months, if the program, or the longest program offered

by the institution, is less than one year in length;

(ii) Eighteen months, if the program, or the longest program

offered by the institution, is at least one year, but less than two

years, in length; or

(iii) Two years, if the program, or the longest program offered by

the

[[Page 56621]]

institution, is at least two years in length.

(b) If the institution or program does not bring itself into

compliance within the specified period, the agency must take immediate

adverse action unless the agency, for good cause, extends the period

for achieving compliance.

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

Sec. 602.21 Review of standards.

(a) The agency must maintain a systematic program of review that

demonstrates that its standards are adequate to evaluate the quality of

the education or training provided by the institutions and programs it

accredits and relevant to the educational or training needs of

students.

(b) The agency determines the specific procedures it follows in

evaluating its standards, but the agency must ensure that its program

of review--

(1) Is comprehensive;

(2) Occurs at regular, yet reasonable, intervals or on an ongoing

basis;

(3) Examines each of the agency's standards and the standards as a

whole; and

(4) Involves all of the agency's relevant constituencies in the

review and affords them a meaningful opportunity to provide input into

the review.

(c) If the agency determines, at any point during its systematic

program of review, that it needs to make changes to its standards, the

agency must initiate action within 12 months to make the changes and

must complete that action within a reasonable period of time. Before

finalizing any changes to its standards, the agency must--

(1) Provide notice to all of the agency's relevant constituencies,

and other parties who have made their interest known to the agency, of

the changes the agency proposes to make;

(2) Give the constituencies and other interested parties adequate

opportunity to comment on the proposed changes; and

(3) Take into account any comments on the proposed changes

submitted timely by the relevant constituencies and by other interested

parties.

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

Required Operating Policies and Procedures

Sec. 602.22 Substantive change.

(a) If the agency accredits institutions, it must maintain adequate

substantive change policies that ensure that any substantive change to

the educational mission, program, or programs of an institution after

the agency has accredited or preaccredited the institution does not

adversely affect the capacity of the institution to continue to meet

the agency's standards. The agency meets this requirement if--

(1) The agency requires the institution to obtain the agency's

approval of the substantive change before the agency includes the

change in the scope of accreditation or preaccreditation it previously

granted to the institution; and

(2) The agency's definition of substantive change includes at least

the following types of change:

(i) Any change in the established mission or objectives of the

institution.

(ii) Any change in the legal status, form of control, or ownership

of the institution.

(iii) The addition of courses or programs that represent a

significant departure, in either content or method of delivery, from

those that were offered when the agency last evaluated the institution.

(iv) The addition of courses or programs at a degree or credential

level above that which is included in the institution's current

accreditation or preaccreditation.

(v) A change from clock hours to credit hours.

(vi) A substantial increase in the number of clock or credit hours

awarded for successful completion of a program.

(vii) The establishment of an additional location geographically

apart from the main campus at which the institution offers at least 50

percent of an educational program.

(b) The agency may determine the procedures it uses to grant prior

approval of the substantive change. Except as provided in paragraph (c)

of this section, these may, but need not, require a visit by the

agency.

(c) If the agency's accreditation of an institution enables the

institution to seek eligibility to participate in Title IV, HEA

programs, the agency's procedures for the approval of an additional

location described in paragraph (a)(2)(vii) of this section must

determine if the institution has the fiscal and administrative capacity

to operate the additional location. In addition, the agency's

procedures must include--

(1) A visit, within six months, to each additional location the

institution establishes, if the institution--

(i) Has a total of three or fewer additional locations;

(ii) Has not demonstrated, to the agency's satisfaction, that it

has a proven record of effective educational oversight of additional

locations; or

(iii) Has been placed on warning, probation, or show cause by the

agency or is subject to some limitation by the agency on its

accreditation or preaccreditation status;

(2) An effective mechanism for conducting, at reasonable intervals,

visits to additional locations of institutions that operate more than

three additional locations; and

(3) An effective mechanism, which may, at the agency's discretion,

include visits to additional locations, for ensuring that accredited

and preaccredited institutions that experience rapid growth in the

number of additional locations maintain educational quality.

(d) The purpose of the visits described in paragraph (c) of this

section is to verify that the additional location has the personnel,

facilities, and resources it claimed to have in its application to the

agency for approval of the additional location.

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

Sec. 602.23 Operating procedures all agencies must have.

(a) The agency must maintain and make available to the public, upon

request, written materials describing--

(1) Each type of accreditation and preaccreditation it grants;

(2) The procedures that institutions or programs must follow in

applying for accreditation or preaccreditation;

(3) The standards and procedures it uses to determine whether to

grant, reaffirm, reinstate, restrict, deny, revoke, terminate, or take

any other action related to each type of accreditation and

preaccreditation that the agency grants;

(4) The institutions and programs that the agency currently

accredits or preaccredits and, for each institution and program, the

year the agency will next review or reconsider it for accreditation or

preaccreditation; and

(5) The names, academic and professional qualifications, and

relevant employment and organizational affiliations of--

(i) The members of the agency's policy and decision-making bodies;

and

(ii) The agency's principal administrative staff.

(b) In providing public notice that an institution or program

subject to its jurisdiction is being considered for accreditation or

preaccreditation, the agency must provide an opportunity for third-

party comment concerning the institution's or program's qualifications

for accreditation or preaccreditation. At the agency's discretion,

third-party comment may be received either in writing or at a public

hearing, or both.

(c) The accrediting agency must--

(1) Review in a timely, fair, and equitable manner any complaint it

[[Page 56622]]

receives against an accredited institution or program that is related

to the agency's standards or procedures;

(2) Take follow-up action, as necessary, including enforcement

action, if necessary, based on the results of its review; and

(3) Review in a timely, fair, and equitable manner, and apply

unbiased judgment to, any complaints against itself and take follow-up

action, as appropriate, based on the results of its review.

(d) If an institution or program elects to make a public disclosure

of its accreditation or preaccreditation status, the agency must ensure

that the institution or program discloses that status accurately,

including the specific academic or instructional programs covered by

that status and the name, address, and telephone number of the agency.

(e) The accrediting agency must provide for the public correction

of incorrect or misleading information an accredited or preaccredited

institution or program releases about--

(1) The accreditation or preaccreditation status of the institution

or program;

(2) The contents of reports of on-site reviews; and

(3) The agency's accrediting or preaccrediting actions with respect

to the institution or program.

(f) The agency may establish any additional operating procedures it

deems appropriate. At the agency's discretion, these may include

unannounced inspections.

(Approved by the Office of Management and Budget under control

number 1845-0003)

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

Sec. 602.24 Additional procedures certain institutional accreditors

must have.

If the agency is an institutional accrediting agency and its

accreditation or preaccreditation enables those institutions to obtain

eligibility to participate in Title IV, HEA programs, the agency must

demonstrate that it has established and uses all of the following

procedures:

(a) Branch campus. (1) The agency must require the institution to

notify the agency if it plans to establish a branch campus and to

submit a business plan for the branch campus that describes--

(i) The educational program to be offered at the branch campus;

(ii) The projected revenues and expenditures and cash flow at the

branch campus; and

(iii) The operation, management, and physical resources at the

branch campus.

(2) The agency may extend accreditation to the branch campus only

after it evaluates the business plan and takes whatever other actions

it deems necessary to determine that the branch campus has sufficient

educational, financial, operational, management, and physical resources

to meet the agency's standards.

(3) The agency must undertake a site visit to the branch campus as

soon as practicable, but no later than six months after the

establishment of that campus.

(b) Change in ownership. The agency must undertake a site visit to

an institution that has undergone a change of ownership that resulted

in a change of control as soon as practicable, but no later than six

months after the change of ownership.

(c) Teach-out agreements. (1) The agency must require an

institution it accredits or preaccredits that enters into a teach-out

agreement with another institution to submit that teach-out agreement

to the agency for approval.

(2) The agency may approve the teach-out agreement only if the

agreement is between institutions that are accredited or preaccredited

by a nationally recognized accrediting agency, is consistent with

applicable standards and regulations, and provides for the equitable

treatment of students by ensuring that--

(i) The teach-out institution has the necessary experience,

resources, and support services to provide an educational program that

is of acceptable quality and reasonably similar in content, structure,

and scheduling to that provided by the closed institution; and

(ii) The teach-out institution demonstrates that it can provide

students access to the program and services without requiring them to

move or travel substantial distances.

(3) If an institution the agency accredits or preaccredits closes,

the agency must work with the Department and the appropriate State

agency, to the extent feasible, to ensure that students are given

reasonable opportunities to complete their education without additional

charge.

(Approved by the Office of Management and Budget under control

number 1845-0003)

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

Sec. 602.25 Due process.

The agency must demonstrate that the procedures it uses throughout

the accrediting process satisfy due process. The agency meets this

requirement if the agency does the following:

(a) The agency uses procedures that afford an institution or

program a reasonable period of time to comply with the agency's

requests for information and documents.

(b) The agency notifies the institution or program in writing of

any adverse accrediting action or an action to place the institution or

program on probation or show cause. The notice describes the basis for

the action.

(c) The agency permits the institution or program the opportunity

to appeal an adverse action and the right to be represented by counsel

during that appeal. If the agency allows institutions or programs the

right to appeal other types of actions, the agency has the discretion

to limit the appeal to a written appeal.

(d) The agency notifies the institution or program in writing of

the result of its appeal and the basis for that result.

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

Sec. 602.26 Notification of accrediting decisions.

The agency must demonstrate that it has established and follows

written procedures requiring it to provide written notice of its

accrediting decisions to the Secretary, the appropriate State licensing

or authorizing agency, the appropriate accrediting agencies, and the

public. The agency meets this requirement if the agency, following its

written procedures--

(a) Provides written notice of the following types of decisions to

the Secretary, the appropriate State licensing or authorizing agency,

the appropriate accrediting agencies, and the public no later than 30

days after it makes the decision:

(1) A decision to award initial accreditation or preaccreditation

to an institution or program.

(2) A decision to renew an institution's or program's accreditation

or preaccreditation;

(b) Provides written notice of the following types of decisions to

the Secretary, the appropriate State licensing or authorizing agency,

and the appropriate accrediting agencies at the same time it notifies

the institution or program of the decision, but no later than 30 days

after it reaches the decision:

(1) A final decision to place an institution or program on

probation or an equivalent status.

(2) A final decision to deny, withdraw, suspend, revoke, or

terminate the accreditation or preaccreditation of an institution or

program;

(c) Provides written notice to the public of the decisions listed

in paragraphs (b)(1) and (b)(2) of this section within 24 hours of its

notice to the institution or program;

[[Page 56623]]

(d) For any decision listed in paragraph (b)(2) of this section,

makes available to the Secretary, the appropriate State licensing or

authorizing agency, and the public upon request, no later than 60 days

after the decision, a brief statement summarizing the reasons for the

agency's decision and the comments, if any, that the affected

institution or program may wish to make with regard to that decision;

and

(e) Notifies the Secretary, the appropriate State licensing or

authorizing agency, the appropriate accrediting agencies, and, upon

request, the public if an accredited or preaccredited institution or

program--

(1) Decides to withdraw voluntarily from accreditation or

preaccreditation, within 30 days of receiving notification from the

institution or program that it is withdrawing voluntarily from

accreditation or preaccreditation; or

(2) Lets its accreditation or preaccreditation lapse, within 30

days of the date on which accreditation or preaccreditation lapses.

(Approved by the Office of Management and Budget under control

number 1845-0003)

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

Sec. 602.27 Other information an agency must provide the Department.

The agency must submit to the Department--

(a) A copy of any annual report it prepares;

(b) A copy, updated annually, of its directory of accredited and

preaccredited institutions and programs;

(c) A summary of the agency's major accrediting activities during

the previous year (an annual data summary), if requested by the

Secretary to carry out the Secretary's responsibilities related to this

part;

(d) Any proposed change in the agency's policies, procedures, or

accreditation or preaccreditation standards that might alter its--

(1) Scope of recognition; or

(2) Compliance with the criteria for recognition;

(e) The name of any institution or program it accredits that the

agency has reason to believe is failing to meet its Title IV, HEA

program responsibilities or is engaged in fraud or abuse, along with

the agency's reasons for concern about the institution or program; and

(f) If the Secretary requests, information that may bear upon an

accredited or preaccredited institution's compliance with its Title IV,

HEA program responsibilities, including the eligibility of the

institution or program to participate in Title IV, HEA programs. The

Secretary may ask for this information to assist the Department in

resolving problems with the institution's participation in the Title

IV, HEA programs.

(Approved by the Office of Management and Budget under control

number 1845-0003)

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

Sec. 602.28 Regard for decisions of States and other accrediting

agencies.

(a) If the agency is an institutional accrediting agency, it may

not accredit or preaccredit institutions that lack legal authorization

under applicable State law to provide a program of education beyond the

secondary level.

(b) Except as provided in paragraph (c) of this section, the agency

may not grant initial or renewed accreditation or preaccreditation to

an institution, or a program offered by an institution, if the agency

knows, or has reasonable cause to know, that the institution is the

subject of--

(1) A pending or final action brought by a State agency to suspend,

revoke, withdraw, or terminate the institution's legal authority to

provide postsecondary education in the State;

(2) A decision by a recognized agency to deny accreditation or

preaccreditation;

(3) A pending or final action brought by a recognized accrediting

agency to suspend, revoke, withdraw, or terminate the institution's

accreditation or preaccreditation; or

(4) Probation or an equivalent status imposed by a recognized

agency.

(c) The agency may grant accreditation or preaccreditation to an

institution or program described in paragraph (b) of this section only

if it provides to the Secretary, within 30 days of its action, a

thorough and reasonable explanation, consistent with its standards, why

the action of the other body does not preclude the agency's grant of

accreditation or preaccreditation.

(d) If the agency learns that an institution it accredits or

preaccredits, or an institution that offers a program it accredits or

preaccredits, is the subject of an adverse action by another recognized

accrediting agency or has been placed on probation or an equivalent

status by another recognized agency, the agency must promptly review

its accreditation or preaccreditation of the institution or program to

determine if it should also take adverse action or place the

institution or program on probation or show cause.

(e) The agency must, upon request, share with other appropriate

recognized accrediting agencies and recognized State approval agencies

information about the accreditation or preaccreditation status of an

institution or program and any adverse actions it has taken against an

accredited or preaccredited institution or program.

(Approved by the Office of Management and Budget under control

number 1845-0003)

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

Subpart C--The Recognition Process

Application and Review by Department Staff

Sec. 602.30 How does an agency apply for recognition?

(a) An accrediting agency seeking initial or continued recognition

must submit a written application to the Secretary. The application

must consist of--

(1) A statement of the agency's requested scope of recognition;

(2) Evidence that the agency complies with the criteria for

recognition listed in subpart B of this part; and

(3) Supporting documentation.

(b) By submitting an application for recognition, the agency

authorizes Department staff to observe its site visits and decision

meetings and to gain access to agency records, personnel, and

facilities on an announced or unannounced basis.

(c) The Secretary does not make available to the public any

confidential agency materials a Department employee reviews during the

evaluation of either the agency's application for recognition or the

agency's compliance with the criteria for recognition.

(Approved by the Office of Management and Budget under control

number 1845-0003)

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

Sec. 602.31 How does Department staff review an agency's application?

(a) Upon receipt of an agency's application for either initial or

continued recognition, Department staff--

(1) Establishes a schedule for the review of the agency by

Department staff, the National Advisory Committee on Institutional

Quality and Integrity, and the Secretary;

(2) Publishes a notice of the agency's application in the Federal

Register, inviting the public to comment on the agency's compliance

with the criteria for recognition and establishing a deadline for

receipt of public comment; and

(3) Provides State licensing or authorizing agencies, all currently

recognized accrediting agencies, and other appropriate organizations

with copies of the Federal Register notice.

(b) Department staff analyzes the agency's application to determine

[[Page 56624]]

whether the agency satisfies the criteria for recognition, taking into

account all available relevant information concerning the compliance of

the agency with those criteria and any deficiencies in the agency's

performance with respect to the criteria. The analysis includes--

(1) Site visits, on an announced or unannounced basis, to the

agency and, at the Secretary's discretion, to some of the institutions

or programs it accredits or preaccredits;

(2) Review of the public comments and other third-party information

the Department staff receives by the established deadline, as well as

any other information Department staff assembles for purposes of

evaluating the agency under this part; and

(3) Review of complaints or legal actions involving the agency.

(c) Department staff's evaluation may also include a review of

information directly related to institutions or programs accredited or

preaccredited by the agency relative to their compliance with the

agency's standards, the effectiveness of the standards, and the

agency's application of those standards.

(d) If, at any point in its evaluation of an agency seeking initial

recognition, Department staff determines that the agency fails to

demonstrate substantial compliance with the basic eligibility

requirements in Secs. 602.10 through 602.13, the staff--

(1) Returns the agency's application and provides the agency with

an explanation of the deficiencies that caused staff to take that

action; and

(2) Recommends that the agency withdraw its application and reapply

when the agency can demonstrate compliance.

(e) Except with respect to an application that is withdrawn under

paragraph (d) of this section, when Department staff completes its

evaluation of the agency, the staff--

(1) Prepares a written analysis of the agency, which includes a

recognition recommendation;

(2) Sends the analysis and all supporting documentation, including

all third-party comments the Department received by the established

deadline, to the agency no later than 45 days before the Advisory

Committee meeting; and

(3) Invites the agency to provide a written response to the staff

analysis and third-party comments, specifying a deadline for the

response that is at least two weeks before the Advisory Committee

meeting.

(f) If Department staff fails to provide the agency with the

materials described in paragraph (e)(2) of this section at least 45

days before the Advisory Committee meeting, the agency may request that

the Advisory Committee defer acting on the application at that meeting.

If Department staff's failure to send the materials at least 45 days

before the Advisory Committee meeting is due to the failure of the

agency to submit reports or other information the Secretary requested

by the deadline the Secretary established, the agency forfeits its

right to request a deferral.

(g) Department staff reviews any response to the staff analysis

that the agency submits. If necessary, Department staff prepares an

addendum to the staff analysis and provides the agency with a copy.

(h) Before the Advisory Committee meeting, Department staff

provides the Advisory Committee with the following information:

(1) The agency's application for recognition and supporting

documentation.

(2) The Department staff analysis of the agency.

(3) Any written third-party comments the Department received about

the agency on or before the established deadline.

(4) Any agency response to either the Department staff analysis or

third-party comments.

(5) Any addendum to the Department staff analysis.

(6) Any other information Department staff relied on in developing

its analysis.

(i) At least 30 days before the Advisory Committee meeting, the

Department publishes a notice of the meeting in the Federal Register

inviting interested parties, including those who submitted third-party

comments concerning the agency's compliance with the criteria for

recognition, to make oral presentations before the Advisory Committee.

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

Review by the National Advisory Committee on Institutional Quality and

Integrity

Sec. 602.32 What is the role of the Advisory Committee and the senior

Department official in the review of an agency's application?

(a) The Advisory Committee considers an agency's application for

recognition at a public meeting and invites Department staff, the

agency, and other interested parties to make oral presentations at the

meeting. A transcript is made of each Advisory Committee meeting.

(b) When it concludes its review, the Advisory Committee recommends

that the Secretary either approve or deny recognition or that the

Secretary defer a decision on the agency's application for recognition.

(1)(i) The Advisory Committee recommends approval of recognition if

the agency complies with the criteria for recognition listed in subpart

B of this part and if the agency is effective in its performance with

respect to those criteria.

(ii) If the Advisory Committee recommends approval, the Advisory

Committee also recommends a recognition period and a scope of

recognition.

(iii) If the recommended scope or period of recognition is less

than that requested by the agency, the Advisory Committee explains its

reasons for recommending the lesser scope or recognition period.

(2)(i) If the agency fails to comply with the criteria for

recognition in subpart B of this part, or if the agency is not

effective in its performance with respect to those criteria, the

Advisory Committee recommends denial of recognition, unless the

Advisory Committee concludes that a deferral under paragraph (b)(3) of

this section is warranted.

(ii) If the Advisory Committee recommends denial, the Advisory

Committee specifies the reasons for its recommendation, including all

criteria the agency fails to meet and all areas in which the agency

fails to perform effectively.

(3)(i) The Advisory Committee may recommend deferral of a decision

on recognition if it concludes that the agency's deficiencies do not

warrant immediate loss of recognition and if it concludes that the

agency will demonstrate or achieve compliance with the criteria for

recognition and effective performance with respect to those criteria

before the expiration of the deferral period.

(ii) In its deferral recommendation, the Advisory Committee states

the bases for its conclusions, specifies any criteria for recognition

the agency fails to meet, and identifies any areas in which the agency

fails to perform effectively with respect to the criteria.

(iii) The Advisory Committee also recommends a deferral period,

which may not exceed 12 months, either as a single deferral period or

in combination with any expiring deferral period in which similar

deficiencies in compliance or performance were cited by the Secretary.

(c) At the conclusion of its meeting, the Advisory Committee

forwards its recommendations to the Secretary through the senior

Department official.

(d) For any Advisory Committee recommendation not appealed under

[[Page 56625]]

Sec. 602.33, the senior Department official includes with the Advisory

Committee materials forwarded to the Secretary a memorandum containing

the senior Department official's recommendations regarding the actions

proposed by the Advisory Committee.

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

Sec. 602.33 How may an agency appeal a recommendation of the Advisory

Committee?

(a) Either the agency or the senior Department official may appeal

the Advisory Committee's recommendation. If a party wishes to appeal,

that party must--

(1) Notify the Secretary and the other party in writing of its

intent to appeal the recommendation no later than 10 days after the

Advisory Committee meeting;

(2) Submit its appeal in writing to the Secretary no later than 30

days after the Advisory Committee meeting; and

(3) Provide the other party with a copy of the appeal at the same

time it submits the appeal to the Secretary.

(b) The non-appealing party may file a written response to the

appeal. If that party wishes to do so, it must--

(1) Submit its response to the Secretary no later than 30 days

after receiving its copy of the appeal; and

(2) Provide the appealing party with a copy of its response at the

same time it submits its response to the Secretary.

(c) Neither the agency nor the senior Department official may

include any new evidence in its submission; i.e., evidence it did not

previously submit to the Advisory Committee.

(Authority: 20 U.S.C. 1099b and 1145) Review and Decision by the

Secretary

Sec. 602.34 What does the Secretary consider when making a recognition

decision?

The Secretary makes the decision regarding recognition of an agency

based on the entire record of the agency's application, including the

following:

(a) The Advisory Committee's recommendation.

(b) The senior Department official's recommendation, if any.

(c) The agency's application and supporting documentation.

(d) The Department staff analysis of the agency.

(e) All written third-party comments forwarded by Department staff

to the Advisory Committee for consideration at the meeting.

(f) Any agency response to the Department staff analysis and third-

party comments.

(g) Any addendum to the Department staff analysis.

(h) All oral presentations at the Advisory Committee meeting.

(i) Any materials submitted by the parties, within the established

timeframes, in an appeal taken in accordance with Sec. 602.33.

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

Sec. 602.35 What information does the Secretary's recognition decision

include?

(a) The Secretary notifies the agency in writing of the Secretary's

decision regarding the agency's application for recognition.

(b) The Secretary either approves or denies recognition or defers a

decision on the agency's application for recognition.

(1)(i) The Secretary approves recognition if the agency complies

with the criteria for recognition listed in subpart B of this part and

if the agency is effective in its performance with respect to those

criteria.

(ii) If the Secretary approves recognition, the Secretary's

recognition decision defines the scope of recognition and the

recognition period.

(iii) If the scope or period of recognition is less than that

requested by the agency, the Secretary explains the reasons for

approving a lesser scope or recognition period.

(2)(i) If the agency fails to comply with the criteria for

recognition in subpart B of this part, or if the agency is not

effective in its performance with respect to those criteria, the

Secretary denies recognition, unless the Secretary concludes that a

deferral under paragraph (b)(3) of this section is warranted.

(ii) If the Secretary denies recognition, the Secretary specifies

the reasons for this decision, including all criteria the agency fails

to meet and all areas in which the agency fails to perform effectively.

(3)(i) The Secretary may defer a decision on recognition if the

Secretary concludes that the agency's deficiencies do not warrant

immediate loss of recognition and if the Secretary concludes that the

agency will demonstrate or achieve compliance with the criteria for

recognition and effective performance with respect to those criteria

before the expiration of the deferral period.

(ii) In the deferral decision, the Secretary states the bases for

the Secretary's conclusions, specifies any criteria for recognition the

agency fails to meet, and identifies any areas in which the agency

fails to perform effectively with respect to the criteria.

(iii) The Secretary also establishes a deferral period, which

begins on the date of the Secretary's decision.

(iv) The deferral period may not exceed 12 months, either as a

single deferral period or in combination with any expiring deferral

period in which similar deficiencies in compliance or performance were

cited by the Secretary, except that the Secretary may grant an

extension of an expiring deferral period at the request of the agency

for good cause shown.

(c) The recognition period may not exceed five years.

(d) If the Secretary does not reach a final decision to approve or

deny an agency's application for continued recognition before the

expiration of its recognition period, the Secretary automatically

extends the recognition period until the final decision is reached.

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

Sec. 602.36 May an agency appeal the Secretary's final recognition

decision?

An agency may appeal the Secretary's decision under this part in

the Federal courts as a final decision in accordance with applicable

Federal law.

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

Subpart D--Limitation, Suspension, or Termination of Recognition

Limitation, Suspension, and Termination Procedures

Sec. 602.40 How may the Secretary limit, suspend, or terminate an

agency's recognition?

(a) If the Secretary determines, after notice and an opportunity

for a hearing, that a recognized agency does not comply with the

criteria for recognition in subpart B of this part or that the agency

is not effective in its performance with respect to those criteria, the

Secretary--

(1) Limits, suspends, or terminates the agency's recognition; or

(2) Requires the agency to take appropriate action to bring itself

into compliance with the criteria and achieve effectiveness within a

timeframe that may not exceed 12 months.

(b) If, at the conclusion of the timeframe specified in paragraph

(a)(2) of this section, the Secretary determines, after notice and an

opportunity for a hearing, that the agency has failed to bring itself

into compliance or has failed to achieve effectiveness, the Secretary

limits, suspends, or terminates recognition, unless the Secretary

extends the timeframe, on request by the agency for good cause shown.

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

[[Page 56626]]

Sec. 602.41 What are the notice procedures?

(a) Department staff initiates an action to limit, suspend, or

terminate an agency's recognition by notifying the agency in writing of

the Secretary's intent to limit, suspend, or terminate recognition. The

notice--

(1) Describes the specific action the Secretary seeks to take

against the agency and the reasons for that action, including the

criteria with which the agency has failed to comply;

(2) Specifies the effective date of the action; and

(3) Informs the agency of its right to respond to the notice and

request a hearing.

(b) Department staff may send the notice described in paragraph (a)

of this section at any time the staff concludes that the agency fails

to comply with the criteria for recognition in subpart B of this part

or is not effective in its performance with respect to those criteria.

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

Sec. 602.42 What are the response and hearing procedures?

(a) If the agency wishes either to respond to the notice or request

a hearing, or both, it must do so in writing no later than 30 days

after it receives the notice of the Secretary's intent to limit,

suspend, or terminate recognition.

(1) The agency's submission must identify the issues and facts in

dispute and the agency's position on them.

(2) If neither a response nor a request for a hearing is filed by

the deadline, the notice of intent becomes a final decision by the

Secretary.

(b)(1) After receiving the agency's response and hearing request,

if any, the Secretary chooses a subcommittee composed of five members

of the Advisory Committee to adjudicate the matter and notifies the

agency of the subcommittee's membership.

(2) The agency may challenge membership of the subcommittee on

grounds of conflict of interest on the part of one or more members and,

if the agency's challenge is successful, the Secretary will replace the

member or members challenged.

(c) After the subcommittee has been selected, Department staff

sends the members of the subcommittee copies of the notice to limit,

suspend, or terminate recognition, along with the agency's response, if

any.

(d)(1) If a hearing is requested, it is held in Washington, DC, at

a date and time set by Department staff.

(2) A transcript is made of the hearing.

(3) Except as provided in paragraph (e) of this section, the

subcommittee allows Department staff, the agency, and any interested

party to make an oral or written presentation, which may include the

introduction of written and oral evidence.

(e) On agreement by Department staff and the agency, the

subcommittee review may be based solely on the written materials

submitted.

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

Sec. 602.43 How is a decision on limitation, suspension, or

termination of recognition reached?

(a) After consideration of the notice of intent to limit, suspend,

or terminate recognition, the agency's response, if any, and all

submissions and presentations made at the hearing, if any, the

subcommittee issues a written opinion and sends it to the Secretary,

with copies to the agency and the senior Department official. The

opinion includes--

(1) Findings of fact, based on consideration of all the evidence,

presentations, and submissions before the subcommittee;

(2) A recommendation as to whether a limitation, suspension, or

termination of the agency's recognition is warranted; and

(3) The reasons supporting the subcommittee's recommendation.

(b) Unless the subcommittee's recommendation is appealed under

Sec. 602.44, the Secretary issues a final decision on whether to limit,

suspend, or terminate the agency's recognition. The Secretary bases the

decision on consideration of the full record before the subcommittee

and the subcommittee's opinion.

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

Appeal Rights and Procedures

Sec. 602.44 How may an agency appeal the subcommittee's

recommendation?

(a) Either the agency or the senior Department official may appeal

the subcommittee's recommendation. If a party wishes to appeal, that

party must--

(1) Notify the Secretary and the other party in writing of its

intent to appeal the recommendation no later than 10 days after receipt

of the recommendation;

(2) Submit its appeal to the Secretary in writing no later than 30

days after receipt of the recommendation; and

(3) Provide the other party with a copy of the appeal at the same

time it submits the appeal to the Secretary.

(b) The non-appealing party may file a written response to the

appeal. If that party wishes to do so, it must--

(1) Submit its response to the Secretary no later than 30 days

after receiving its copy of the appeal; and

(2) Provide the appealing party with a copy of its response at the

same time it submits its response to the Secretary.

(c) Neither the agency nor the senior Department official may

include any new evidence in its submission, i.e., evidence it did not

previously submit to the subcommittee.

(d) If the subcommittee's recommendation is appealed, the Secretary

renders a final decision after taking into account that recommendation

and the parties' written submissions on appeal, as well as the entire

record before the subcommittee and the subcommittee's opinion.

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

Sec. 602.45 May an agency appeal the Secretary's final decision to

limit, suspend, or terminate its recognition?

An agency may appeal the Secretary's final decision limiting,

suspending, or terminating its recognition to the Federal courts as a

final decision in accordance with applicable Federal law.

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

Subpart E--Department Responsibilities

Sec. 602.50 What information does the Department share with a

recognized agency about its accredited institutions and programs?

(a) If the Department takes an action against an institution or

program accredited by the agency, it notifies the agency no later than

10 days after taking that action.

(b) If another Federal agency or a State agency notifies the

Department that it has taken an action against an institution or

program accredited by the agency, the Department notifies the agency as

soon as possible but no later than 10 days after receiving the written

notice from the other Government agency.

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

[FR Doc. 99-27313 Filed 10-19-99; 8:45 am]

BILLING CODE 4000-01-P