Committee III
Refunds, Program and Student Eligibility Issues

Second Meeting
February 24-25, 1999
Washington, DC

The second meeting of Committee III commenced as scheduled at approximately 9:00 a.m. on Wednesday, February 24, 1999 and adjourned on Thursday, February 25, 1999, at approximately 5:30 p.m. The meeting was held at the DoubleTree Hotel Park Terrace. The meeting was facilitated by and this report was written by Greg Bourne and Greg Sobel.

The meeting began with the facilitators and spokespersons introducing themselves. Next the facilitators provided an overview of activities since the last meeting and the proposed agenda for this meeting. The Draft Meeting #1 Summary was approved.

The primary focus of this meeting was to respond to draft negotiating text and related materials prepared by the Department and other Committee members since the last meeting. These documents were developed on an accelerated schedule from that initially envisioned. Some of the materials were in the form of questions about specific issues and provisions for which the Department desired more input before drafting text. In other instances, draft regulatory language was presented for discussion, refinement and, where possible, agreement.

The first topic of discussion addressed provisions related to the Pell Grant program, specifically "5th year teachers" and institutional ineligibility based on high default rates (HEA sections 401(c)(4) and 401(j), respectively). No negotiating text was provided but rather a series of questions designed to give the Department a more detailed understanding of various perspectives on specific issues.

After this discussion the Committee focused on provisions in sections 674, 675 and 676 of the regulations. Several agreements were reached based on the draft negotiating text provided by the Department where additions to existing regulations were highlighted in bold and deletions were noted by redlining. These agreements are summarized in Attachment A [below].

The remaining topics discussed related to eligibility for home schooled students (sec. 668.32), telecommunications and correspondence courses (sec. 668.38), definitions of eligible employment for the work-study program (sec. 675.2) and provisions affecting certain veterans' education and AmeriCorps benefits (sec. 673.5).

A Subcommittee formed at the first meeting presented draft language related to work study program definitions. A new Subcommittee was formed to assist with the provisions related to eligibility for home schooled students. The members of that Subcommittee are: Alisa Abadinsky, David Baime, Janie Barnett, Joan Berkes, Maureen Budetti, Ron Gambill and Becky Timmons. They plan to convene a teleconference on March 4 at 3:30 EST to discuss tasks and assignments leading to the development of recommendations, if possible, before the next Committee meeting. Several people also agreed to assist the Department with issues of veteran and AmeriCorps benefits: Joan Berkes, Maureen Budetti and Pat Hurley.

Another major issue of discussion was the publication in the Federal Register of proposed modifications to the Free Application for Federal Student Aid (FAFSA) form. Specific concerns related to the way potential drug offenses affecting receipt of aid is treated on the form. In addition, many Committee members were concerned with a possible "breach of protocols" because this issue is within the realm of issues being addressed by the regulatory negotiation.

Concerning the protocol issue, the Department agreed to submit drafts of any Dear Colleague letters, technical amendments or other similar public communications related to the regulatory negotiation to Committee members prior to public distribution. This includes putting draft documents on the listserve for review and comment prior to public distribution. If the listserve is not functioning for some Committee members, other forms of transmittal will be used such as FAX and overnight mail. Related specifically to the Federal Register release, it was acknowledged that organizations involved in the negotiations should pursue their normal avenues of comment on issues contained in Federal Register notices, in addition to discussions as part of the negotiations.

Regarding the substantive concerns, the Department outlined its approach for dealing with the transition period (i.e., before July 1, 2000) related to drug conviction reporting. Although additional work is needed on working out the specifics of this issue, the Department is proceeding along the following course. Self-certification will be the basis for identifying students with potential drug-conviction related problems. An alternative to using the FAFSA form would be to collect necessary information on the Student Aid Report (SAR) that each applicant receives from the Central Processor. Furthermore, a centralized approach was proposed that would increase the efficiency of this process and reduce the burden on institutions. These approaches will require additional consideration within the Department, particularly from computer system designers. The Department will report back to the Committee as soon as possible and discuss methods of communication with the public on this topic.

The next scheduled meeting of the Committee is April 6, 1999, beginning at 9:00 a.m. and adjourning on April 8 by 12:00 p.m. The meeting will be held at Department of Education offices in Federal Office Building 6 located at 400 Maryland Avenue, S.W. The specific meeting rooms will be announced in the near future. The agenda for the meeting is to continue discussions of the negotiating text prepared by the Department and other Committee members, and to explore any other issues for which more information is needed at this stage of the drafting process.

Preliminary agreements on Committee III negotiating text, listed by section of regulations, based on discussions held February 24-25, 1999.

Sec. 674.10 Selection of Students for Loans

The Committee agreed with the proposed deletion (redlined) under (b) "and if the total financial need...under this part."

The Committee agreed with the proposed language (bold type) under (b) "then a reasonable portion...to such students." While the agreement was based on using the statutory phrase "shall be made available," the Committee agreed that a discussion of the meaning of this phrase would be included in the preamble. This discussion would note that an "offer" of aid could be made without regard to a student's "acceptance."

Sec. 676.10 Selection of Students for FSEOG Awards

The Committee agreed with the proposed deletion under (b) "and if the total financial need...under this part."

The Committee agreed with the proposed language under (b) "then a reasonable portion...to such students." While the agreement was based on using the statutory phrase "shall be made available," the Committee agreed that a discussion of the meaning of this phrase would be included in the preamble. This discussion would note that an "offer" of aid could be made without regard to a student's "acceptance."

Sec 676.18 Use of Funds

The Committee agreed with proposed language under (c)(1), (c)(2), (d), (e) and (f) with one exception. Under (f), it was suggested that the Department change "May 15" to "May 1." The Department agreed to consider this proposal, but noted that this discussion was about determining when summer sessions began and not about redefining the "cross-over period."

Sec. 675.2 Definitions

Several Committee members advocated a broader definition of community under (1) that would allow the campus itself to be the community being served. The Department did not fully concur with this recommendation, however, based on its belief that Congress' intent is clear given the specific inclusion of services to enrolled students with disabilities as qualifying for community service in (3). This issue will require additional consideration.

The Committee agreed under (3) with both the proposed deletion and the proposed addition in bold ("including students with disabilities who are enrolled at the institution;").

Sec. 675.8 Program Participation Agreement

The Committee agreed to delete (d).

Sec. 675.10 Selection of Students for FWS Employment

The Committee agreed with the proposed deletion under (c) "and if the total financial need...under this part."

The Committee agreed with the proposed language under (c) "then a reasonable portion...to such students." While the agreement was based on using the statutory phrase "shall be made available," the Committee agreed that a discussion of the meaning of this phrase would be included in the preamble. This discussion would note that an "offer" of aid could be made without regard to a student's "acceptance."

Sec. 675.18 Use of Funds

The Committee agreed under (g)(1) to change "1994-95" to "2000-2001," and "at least 5 percent" to "at least 7 percent." Also under (g)(1), the Committee agreed with adding the sentence beginning, "In meeting this community service requirement,? or family literacy project is provided"

Under (g)(2), the Committee suggested making the two references to "requirement" plural, and the Department agreed to provide examples of a waiver for a hardship for students in the preamble.

The Committee agreed to proposed language under (3), (3)(i), (A), (B) and (B)(ii), and the Department agreed to provide examples of "reading reform projects" in the preamble.

Sec. 675.20 Eligible Employers and General Conditions and Limitation on Employment

The Committee agreed to proposed additions under (d) with several modifications:

Change the subsection heading from "Academic credit for work-study" to "Academic credit and work-study."

Under (1)(i) and (1)(ii), the Committee suggested substituting for "Completing" terms such as "Participating in" or "Enrolled in." The Department agreed to improve this language.

Under (1)(iii), the Committee agreed with the concept of "Employed in a research assistantship," but suggested the Department provide language clarifying that other assistantships, including teaching assistantships, are covered.

The Committee agreed to the ideas contained in the proposed language under (2), (2)(i), (2)(ii) and (2)(iii), but suggested the Department revise the language to improve the flow and make it easier to understand.

The Committee generally agreed with the proposed addition under (e), although clarity about dates should be addressed in the preamble because training, but not travel, expenses are permitted prior to the 1999-2000 award year.

Sec. 675.23 Employment Provided by a Private, For-Profit Organization

The Committee agreed to the proposed addition under (b)(1), "... to the maximum extent practicable;".

Sec 675.26 FWS Federal Share Limitations

The Committee suggested that (a)(2) and (a)(2)(i) be made consistent. Also the Department agreed to address issues raised about options for implementing this provision before 2000-2001.

The Committee agreed to the proposed additions under (a)(2)(i)(A), (B) and (C), with clarity on what is meant by "case-by-case" under (a)(2)(i)(B) and what constitutes the necessary documentation under (a)(2)(i)(C) to be included in the preamble.

The Committee agreed with the proposed addition (a)(2)(ii), with one clarification needed - whether the 10 percent is based on the number of students in the current or previous year.

The Committee asked the Department to research if the "Hispanic-Serving Institutions" Program should be recognized in (d)(2)(i)(A).

The Committee suggested that the Department consider combining (d)(2)(ii) and (d)(2)(iii), and broadening the permitted activity beyond reading tutoring in (d)(2)(ii).

The Committee agreed with deleting "as a tutor" under (d)(2)(iii).

Sec. 675.45 Allowable Costs, Federal Share and Institutional Share

The Committee agreed to the proposed language under (a)(5) and (a)(6) pending Bud Blakey's consultation with his organization members (Work-Colleges Program Institutions).
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