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PA Bulletin, Doc. No. 98-485

PROPOSED RULEMAKING

PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY

[22 PA. CODE CH. 121]

State Grant Program; Early Childhood Education Professional Loan Forgiveness Program

[28 Pa.B. 1535]

   The Pennsylvania Higher Education Assistance Agency (Agency), under authority contained in section 4 of the act of August 7, 1963 (P. L. 549, No. 290) (24 P. S. § 5104); section 1 of the act of January 25, 1966 (P. L. 1546 (1965), No. 541) (24 P. S. § 5151); The Institutional AssistanceGrants Act (24 P. S. §§ 5181--5189); and the Urban and Rural Teacher Loan Forgiveness Act (24 P. S. §§ 5191--5197); and the Agriculture Education Loan Forgiveness Act (24 P. S. §§ 5198--5198.7), proposes to amend §§ 121.1, 121.2, 121.7--121.9, 121.21, 121.32, 121.33, 121.42, 121.48 and 121.56 and add §§ 121.10 and 121.401--121.406.

   The changes proposed by the Agency affect the State Grant Program (24 P. S. § 5152.1); Loan Programs (24 P. S. §§ 5104--5112); and the Early Childhood Education Professional Loan Forgiveness Program (24 P. S. §§ 7101--7106).

State Grant Program

   Section 121.1.  Definitions--This section is proposed to be modified to reflect a recent clarification in the Federal definition of a ''veteran'' previously adopted by the Board. This is the same definition used in the Federal financial aid programs and the Agency's use of this definition helps to streamline the application process.

   Section 121.7.  Notice of denial and preliminary review procedures--This section is proposed to be modified to reflect a change of title from ''Executive Director'' to ''President and Chief Executive Officer'' as previously authorized by the Board.

   Section 121.8.  Applicant and recipient appeals and hearings--This section is proposed to be modified to reflect a change of title from ''Executive Director'' to ''President and Chief Executive Officer'' as previously authorized by the Board.

   Section 121.21.  Requirement for higher education grant applicants--This section is proposed to be changed to facilitate the classification of home schooled students as graduates of an approved high school. An applicant shall be a graduate of an approved high school or the recipient of a Commonwealth Secondary School Diploma to be considered for State Grant aid. The State Grant statute mandates that the Department of Education (DE) determine the equivalent of an approved high school for State Grant purposes. The DE has already approved three home school organizations (the Pennsylvania Homeschoolers Accreditation Agency, the Erie County Homeschoolers and the Buxmont Christian Education Institute) as such, and it is staff's understanding that the approval of additional similar organizations by the DE is under consideration. In addition, there is a statutory basis for providing an alternative procedure for students who do not receive their diplomas from an approved home school organization. This alternative procedure, as reflected in the proposed regulation change, is based on the compulsory attendance and home education program statutes, and will require verification by the school superintendent that the home schooled student has graduated from an approved high school.

   Section 121.32.  Approved institutions in higher education grant program--This section is proposed to be modified to incorporate a change in the name of an accrediting oversight organization. The Commission on Recognition of Postsecondary Accreditation (CORPA), was created as an interim oversight organization and has now disbanded and been replaced by the Council on Higher Education Accreditation (CHEA). The scope of oversight and membership field remain the same.

   Section 121.33.  Approved program of study in higher education grant program--This section is proposed to be changed to decrease the portion of an approved program that must be completed by means of classroom instruction. The 75% requirement was implemented in the mid-1970's to deal with ''universities without walls'' and other nontraditional programs. The current regulation serves to exclude most distance education programs of study activities, which involve the provision of educational services by means of telecommunications technologies, the use of which has grown tremendously within the past several years. The decrease in the percentage from 75 to 50% may be considered an interim step which recognizes this growth yet retains a measure of control over the extent of internships, on-the-job training, correspondence study and other forms of nonclassroom instruction until the educational community defines its position on this issue. It should be noted that the DE (which concurs with this proposed regulatory change) and the United States Department of Education require that at least 50% of an institution's programs be resident based to operate in this Commonwealth and participate in Federal aid programs respectively.

   Section 121.42.  Submission of applications--This section is proposed to be modified to reflect a change of title from ''Executive Director'' to ''President and Chief Executive Officer'' as previously authorized by the Board.

   Section 121.48.  Limitation on payment of grants--This section is proposed to be modified to reflect a change of title from ''Executive Director'' to ''President and Chief Executive Officer'' as previously authorized by the Board.

   Section 121.56.  Year Abroad Program--This section is proposed to be modified to reflect a change of title from ''Executive Director'' to ''President and Chief Executive Officer'' as previously authorized by the Board.

Loan Programs

   Section 121.2.  Citizenship--This section is proposed to be updated to reflect the citizenship eligibility requirements for Federal Family Education Loan Program (FFELP) loans that are contained in current Federal regulations. Generally, to be eligible for a loan, a borrower shall be a United States citizen, United States national or an eligible noncitizen as described in paragraph (2).

   Section 121.9.  Administrative loan collection review procedures--This section is proposed to be amended to make reference to Non-Title IV loan collection procedures only. Any references to Title IV collections will be addressed in § 121.10 (relating to administrative wage garnishment procedures for Federal loans). Section 121.10 is proposed to be added to comply with the Federal Administrative Wage Garnishment procedures established by the United States Department of Education. Section 121.10 will only be applicable to Title IV loan collections.

Early Childhood Education Professional
Loan Forgiveness Program

   The Early Childhood Education Professional Loan Forgiveness Program, enacted in 1993, is intended to help stabilize and improve child-care services in this Commonwealth by forgiving up to $2,500 annually (and up to a total of $10,000) in Agency-administered student loan programs for qualified child-care professionals earning less than $18,500 annually. While this program became effective in January, 1994, formal regulations have not previously been submitted to the Board due to the uncertainty of funding for this program. Although funding remains tenuous, proposed Subchapter N (relating to early childhood education professional loan forgiveness program) is being proposed for adoption since the enabling Legislation remains in force regardless of the year-to-year funding issue. The subchapter reflects the Board-approved policies under which the program has been administered since enacted into law.

Affected Parties

   The proposed amendments affect the applicants that apply for the benefits of these programs as well as other entities, such as schools, who participate in them.

Fiscal Impact

   The proposed amendments should have no significant fiscal impact on the Commonwealth, its political subdivisions or the general public.

Cost and Paperwork Estimates

   None of the proposed amendments affect costs or paperwork requirements already in place.

Effective Date

   These proposed amendments will become effective upon final publication in the Pennsylvania Bulletin.

Sunset Date

   The regulations as proposed will remain in effect indefinitely.

Regulatory Review

   Under section 5(a) of the Regulatory Review Act, on March 16, 1998, the Agency submitted a copy of the proposed amendments to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House and Senate Education Committees. In addition to submitting the proposed amendments, the Agency has provided IRRC and the Committees with a copy of a detailed Regulatory Analysis Form prepared by the Agency in compliance with Executive Order 1982-2, ''Improving Government Regulations.'' A copy of this material is available to the public upon request.

   Under section 5(g) of the Regulatory Review Act, if IRRC has objections to any portion of these proposed amendments, it will notify the Agency within 10 days of the close of the Committees' review period. The notification shall specify the regulatory review criteria which have not been met by that portion. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the proposed amendments, by the Agency, the General Assembly and the Governor of objections raised.

Public Comment/Contact Person

   Interested persons are invited to submit written comments, suggestions or objections regarding the proposed amendments to Sheila Dow Ford, PHEAA Chief Counsel, Pennsylvania Higher Education Assistance Agency, 1200 North Seventh Street, Harrisburg, PA 17102-1444 within 30 days after publication of this notice in the Pennsylvania Bulletin.

MICHAEL H. HERSHOCK,   
President and Chief Executive Officer

   Fiscal Note: 58-23. No fiscal impact; (8) recommends adoption.

Annex A

TITLE 22.  EDUCATION

PART VIII.  HIGHER EDUCATION ASSISTANCE AGENCY

CHAPTER 121.  STUDENT FINANCIAL AID

Subchapter A.  GENERAL PROVISIONS

§ 121.1.  Definitions.

   The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

*      *      *      *      *

   Veteran--A person who engaged in active service in the United States Army, Navy, Air Force, Marines or Coast Guard or was a cadet or midshipman at one of the service academies and was released under a condition other than dishonorable, or will be by June 30 of the academic year for which the application is made, or who was a National Guard or Reserve enlistee who [participated in Operation Desert Shield/Storm and was discharged from active] was activated for duty. ROTC students, cadets or midshipmen [at] currently attending the service academies, [National Guard or Reserve enlistees participating in Operation Desert Shield/Storm and not yet discharged from active duty,] National Guard or Reserve enlistees who were not activated for duty, or those currently serving in the United States Armed Forces and will continue to serve through June 30 of the academic year for which application is made are not considered veterans.

121.2. Citizenship.

   To be eligible for a Federal Family Education Loan, a student or parent borrower shall be, on or before the date of filing the loan guaranty application, one of the following:

*      *      *      *      *

   (2)  [In the United States for other than a temporary purpose and intending to become a permanent resident thereof; except that a student who is a permanent resident alien attending an educational institution outside the United States is not eligible to receive a Federal Stafford Loan or to have the parent of the student receive a Federal PLUS Loan on behalf of the student.] A permanent resident alien of the United States, a temporary resident who intends to become a United States citizen or resident, or a refugee in the United States for other than a temporary purpose. For the purposes of this paragraph, the United States includes the 50 states, the District of Columbia, Puerto Rico, Virgin Islands, Guam, American Samoa, the Trust [Territories] Territory of the Pacific Islands and the Northern Mariana Islands.

§ 121.7.  Notice of denial and preliminary review procedures.

*      *      *      *      *

   (b)  All appeals from [such] the decisions of the Agency staff will be reviewed initially by an Administrative Review Committee composed of staff personnel of the Agency designated by the [Executive Director] President and Chief Executive Officer. The Administrative Review Committee may grant eligibility in [such] cases [as] it deems proper. This subsection supersedes 1 Pa. Code § 35.20 (relating to appeals from actions of the staff).

*      *      *      *      *

§ 121.8.  Applicant and recipient appeals and hearings.

*      *      *      *      *

   (d)  The appeal may be heard by the Board of Directors or, at its direction, by a hearing examiner appointed by the [Chairman] Chairperson of the Board of Directors of the Agency or, in the event of the unavailability of the [Chairman] Chairperson, by the Vice [Chairman] Chairperson of the Board of Directors of the Agency from a list maintained by the [Executive Director] President and Chief Executive Officer. The hearing examiner or the Board of Directors will schedule the appeal promptly for hearing and give the applicant or recipient at least 7 days' notice of the hearing. The notice will specify the date, hour[,] and place of hearing.

*      *      *      *      *

§ 121.9.  Administrative loan collection review procedures.

*      *      *      *      *

   (b)  Administrative loan collection procedure for those loans which are held by the Agency and which are not reinsured by the United States Secretary of Education are as follows:

   [(b)]  (1)  ***

   [(1)]  (i)  ***

   [(2)] (ii)  ***

   [(c)] (2)  ***

   [(d)] (3)  All hearings will be conducted by a hearing examiner appointed by the [Chairman] Chairperson of the Board of Directors of the Agency or, in the event of the unavailability of the [Chairman] Chairperson, by the Vice [Chairman] Chairperson of the Board of Directors of the Agency from a list maintained by the [Executive Director] President and Chief Executive Officer and will be held at the offices of the Agency in Harrisburg, Pennsylvania. The time of the hearing will be fixed by the Agency within a reasonable time, as soon as convenient, after the receipt of the borrower's response, allowing at least 15 days' notice to be given to the borrower and the borrower's attorney, if an attorney has entered an appearance on behalf of the borrower. Notice of the hearing will be sent to the borrower by the hearing examiner, specifying the time and place for hearing. If a borrower wishes to request postponement of a hearing, the borrower shall contact the hearing examiner and provide the hearing examiner with valid reasons for the request. The hearing examiner may approve or disapprove the request in the examiner's discretion.

   [(e)] (4)  ***

   [(1)] (i)  ***

   [(2)] (ii)  ***

   [(3)] (iii)  ***

   [(4)] (iv)  ***

   [(5)] (v)  ***

   [(f)] (5)  ***

   [(g)] (6)  The hearing examiner will have the following powers and duties:

   [(1)] (i)  ***

   [(2)] (ii)  ***

   [(3)] (iii)  ***

   [(4)] (iv)  ***

   [(5)] (v)  To provide copies of the report to the [Executive Director] President and Chief Executive Officer of the Agency and to the borrower or the borrower's attorney of record within 60 days of the hearing.

   [(h)] (7)  ***

   [(1)] (i)  ***

   [(2)] (ii)  ***

   [(3)] (iii)  ***

   [(4)] (iv)  ***

   [(5)] (v)  ***

   [(6)] (vi)  ***

   [(i)] (8) The borrower and the [Executive Director] President and Chief Executive Officer of the Agency shall each have the right to file exceptions to the hearing examiner's report within 15 days after the service of a copy of the report. Failure to file exceptions within the time allowed shall constitute a waiver of all objections to the report.

   [(j)] (9)  Upon consideration of the record, the hearing examiner's report, and any exceptions and briefs filed by the borrower and the [Executive Director] President and Chief Executive Officer of the Agency, the Board of Directors will enter a final order.

   [(k)] (10)  ***

   [(l)] (11)  ***

   [(m)] (12)  Notice of the entry of a final order by the Board of Directors will be mailed promptly to the borrower at the borrower's last known post office address. The [Executive Director] President and Chief Executive Officer may transfer the record and the order of default to the court of common pleas of the district in which the borrower resides or, when residence within this Commonwealth cannot be ascertained, to the Court of Common Pleas of Dauphin County, to be entered as a judgment.

   [(n)] (13)  ***

   [(o)] (14)  ***

   [(1)] (i)  ***

   [(2)] (ii)  ***

   [(3)] (iii)  ***

   [(4)] (iv)  ***

   [(p)] (15)  This section affects 1 Pa. Code Part II (relating to General Rules of Administrative Practice and Procedure) as follows:

   [(1)] (i)  Subsection (b)(1) supersedes 1 Pa. Code § 35.14 (relating to orders to show cause).

   [(2)] (ii)  Subsection [(d)] (b)(3) supersedes 1 Pa. Code §§ 35.105 and 35.185 (relating to notice of nonrulemaking proceedings; and designation of presiding officers). Subsection (d) supplements 1 Pa. Code § 31.26 (relating to service on attorneys).

   [(3)] (iii)  Subsection [(e)(1)--(3)] (b)(4)(i)--(iii) supplements 1 Pa. Code § 35.126 (relating to presentation by the parties); subsection [(e)(4)] (b)(4)(iv) supersedes 1 Pa. Code § 35.169 (relating to copies to parties and agency).

   [(4)] (iv)  Subsection [(g)(1)--(3)] (b)(6)(i)--(iii) supplements 1 Pa. Code § 35.187 (relating to authority delegated to presiding officers); subsection [(g)(4)] (b)(6)(iv) supersedes 1 Pa. Code § 35.205 (relating to contents of proposed reports); subsection [(g)(5)] (b)(6)(v) supersedes 1 Pa. Code § 35.207 (relating to service of proposed reports).

   [(5)] (v)  Subsection [(h)] (b)(7) supplements 1 Pa. Code § 35.125 (relating to order of procedure).

   [(6)] (vi)  Subsection [(i)] (b)(8) supersedes 1 Pa. Code § 35.211 (relating to procedure to except to proposed report).

   [(7)] (vii)  Subsection [(j)] (b)(9) supplements 1 Pa. Code § 35.226 (relating to final orders).

   [(8)] (viii)  Subsection [(l)] (b)(11) supersedes 1 Pa. Code § 35.214 (relating to oral argument on exceptions).

§ 121.10.  Administrative wage garnishment procedures for Federal loans.

   (a) This section implements the Federal administrative wage garnishment process authorized under section 488A of the Higher Education Act of 1965 (20 U.S.C.A. § 1095a).

   (b) Loan collection procedure for those loans which are held by the Agency and which qualify as loans under the Federal Family Education Loan Program (FFELP) are as follows:

   (1) If the Agency decides to garnish the disposable pay of a borrower who is not making payments on a loan held by the Agency, on which the United States Secretary of Education (Secretary) has paid a reinsurance claim, it will do so in accordance with the following procedures:

   (i)  The employer shall deduct and pay to the Agency from a borrower's wages an amount that does not exceed the lesser of 10% of the borrower's disposable pay for each pay period or the amount permitted by section 303 of the Consumer Credit Protection Act (15 U.S.C.A. § 1673) unless the borrower provides the Agency with written consent to deduct a greater amount. For purposes of subsection (b), the term ''disposable pay'' means that part of the borrower's compensation from an employer remaining after the deduction of any amounts required by law to be withheld.

   (ii)  At least 30 days before the initiation of garnishment proceedings, the Agency will mail to the borrower's last known address, a written notice of the nature and the amount of the debt, the intention of the Agency to initiate proceedings to collect the debt through deductions from pay and an explanation of the borrower's rights.

   (iii)  The Agency will offer the borrower an opportunity to inspect and copy Agency records related to the debt.

   (iv)  The Agency will offer the borrower an opportunity to enter into a written repayment agreement with the Agency under terms agreeable to the Agency.

   (v)  The Agency will offer the borrower an opportunity for a hearing in accordance with subparagraph (x) concerning the existence or amount of the debt and, in the case of a borrower whose proposed repayment schedule under the Order of Withholding is established other than by a written agreement under subparagraph (iv), the terms of the repayment schedule.

   (vi)  The Agency will sue any employer for any amount that the employer, after receipt of the garnishment notice provided by the Agency under subparagraph (viii), fails to withhold from wages owed and payable to an employe under the employer's normal pay and disbursement cycle.

   (vii)  The Agency may not garnish the wages of a borrower whom it knows has been involuntarily separated from employment until the borrower has been reemployed continuously for at least 12 months.

   (viii)  Unless the Agency receives information that the Agency believes justifies a delay or cancellation of the Order of Withholding, it will send an Order of Withholding to the employer within 20 days after the borrower fails to make a timely request for a hearing, or if a timely request for a hearing is made by the borrower, within 20 days after a final decision is made by the Agency to proceed with garnishment.

   (ix)  The notice given to the employer under subparagraph (viii) will contain only the information necessary for the employer to comply with the Order of Withholding.

   (x)  The Agency will provide a hearing which, at the borrower's option, may be oral or written, if the borrower submits a written request for a hearing on the existence or amount of the debt or the terms of the repayment schedule. The time and location of the hearing will be established by the Agency. An oral hearing may, at the borrower's option, be conducted either in-person or by telephone conference. Telephonic charges are the responsibility of the Agency.

   (xi)  If the borrower's written request is received by the Agency on or before the 15th day following the borrower's receipt of the notice described in subparagraph (ii), the Agency may not issue an Order of Withholding until the borrower has been provided the requested hearing. For purposes of this subsection, in the absence of evidence to the contrary, a borrower will be considered to have received the notice described in subparagraph (ii) 5 days after it was mailed by the Agency. The Agency will provide a hearing to the borrower in sufficient time to permit a decision to be rendered within 60 days.

   (xii)  If the borrower's written request is received by the Agency after the 15th day following the borrower's receipt of the notice described in subparagraph (ii), the Agency will provide a hearing to the borrower in sufficient time that a decision may be rendered within 60 days, but may not delay issuance of an Order of Withholding unless the Agency determines that the delay in filing the request was caused by factors over which the borrower had no control, or the Agency receives information that the Agency believes justifies a delay or cancellation of the Order of Withholding. For purposes of this subparagraph, in the absence of evidence to the contrary, a borrower will be considered to have received the notice described in subparagraph (ii) 5 days after it was mailed by the Agency.

   (xiii)  The hearing examiner appointed by the Agency to conduct the hearing may be any qualified individual, including an administrative law judge, not under the supervision or control of the President and Chief Executive Officer of the Agency and have the following powers and duties:

   (A)  To administer oaths.

   (B)  To question witnesses presented by the Agency or by the borrower.

   (C)  To hear evidence submitted, review the documents presented, consider arguments and prepare a report.

   (D)  To recommend in the report a proposed adjudication and order, supported by findings of fact and conclusions of law.

   (E)  To provide copies of the report to the President and Chief Executive Officer of the Agency and to the borrower or the borrower's attorney of record at the earliest practicable date, but not later than 60 days after the Agency's receipt of the borrower's hearing request.

   (xiv)  The proceedings of a hearing will be conducted in the following order:

   (A)  The hearing examiner will state the purpose of the hearing, the procedure to be followed and the manner in which the report will be transmitted to the parties.

   (B)  The borrower or the borrower's attorney will present the borrower's case.

   (C)  The Agency may cross-examine each witness presented by the borrower.

   (D)  The Agency will present its case.

   (E)  The borrower or the borrower's attorney may cross-examine each witness presented by the Agency.

   (F)  The hearing examiner may question any witness at any time.

   (xv)  The borrower and the President and Chief Executive Officer of the Agency will each have the right to file exceptions to the hearing examiner's report within 15 days after the service of a copy of the report. Failure to file exceptions within the time allowed constitutes a waiver of all objections to the report.

   (xvi)  The period of time may, for good cause, be extended upon motion made before the expiration of the 15-day time period and filed with the hearing examiner.

   (xvii)  The period of time may be extended upon motion made after the expiration of the 15-day time period if reasonable grounds are shown for failure to act. The motion shall be filed with the hearing examiner.

   (xviii)  Requests for the extension of time in which to file briefs shall be filed with the hearing examiner at least 5 days before the time fixed for filing such briefs.

   (xix)  Upon consideration of the record, the hearing examiner's report, and any exceptions and briefs filed by the borrower and the Executive Director of the Agency, the Board of Directors will enter a final order.

   (xx)  When the Board of Directors receives notice of an appeal, it will place the appeal on the meeting agenda of the Board when the Board has received a stenographic record of the hearing before the hearing examiner and has had the opportunity to review the record. The Board of Directors may delegate to the review committee, comprised of three or more Board members designated by the Chairperson of the Board, the responsibility to review the record and hearing examiner's report to the Board and to make a recommendation for action by the Board. The review committee will provide an opportunity for the borrower and the Agency to present oral argument, when requested by either party, before rendering a recommendation for action by the Board. Oral argument may be conducted either in-person or by telephone conference. Telephonic charges are the responsibility of the Agency. The Board of Directors will make a final order that is just and proper.

   (xxi)  Notice of the entry of a final order by the Board of Directors will be mailed promptly to the borrower at the borrower's last known post office address.

   (xxii)  As specified in section 488A(a)(8) of the Higher Education Act of 1965, the borrower may seek judicial relief, including punitive damages, if the employer discharges, refuses to employ or takes disciplinary action against the borrower due to the issuance of a Notice of Execution.

   (2)  References to ''the borrower'' in this section include all endorsers on a loan.

   (3)  This section affects 1 Pa. Code Part II (relating to General Rules of Administrative Practice and Procedure) as follows:

   (i)  Subsection (b)(1)(ii) supersedes 1 Pa. Code § 35.14 (relating to orders to show cause).

   (ii)  Subsection (b)(1)(iii) supersedes 1 Pa. Code § 35.169 (relating to copies to parties and agency).

   (iii)  Subsection (b)(1)(v) supersedes 1 Pa. Code § 35.105 (relating to notice of nonrulemaking proceedings).

   (iv)  Subsection (b)(1)(x) supersedes 1 Pa. Code § 35.105.

   (v)  Subsection (b)(1)(xiii)(A)--(C) supplements 1 Pa. Code § 35.187 (relating to authority delegated to presiding officers); subsection (b)(1)(xiii)(D) supersedes 1 Pa. Code § 35.205 (relating to contents of proposed reports); subsection (b)(1)(xiii)(E) super-sedes 1 Pa. Code § 35.207 (relating to service of proposed reports).

   (vi)  Subsection (b)(1)(xiv) supplements 1 Pa. Code § 35.125 (relating to order of procedure).

   (vii)  Subsection (b)(1)(xv) supersedes 1 Pa. Code § 35.211 (relating to procedure to except to proposed reports).

   (viii)  Subsection (b)(1)(xvi)--(xviii) supersedes 1 Pa. Code § 31.15(a) (relating to extensions of time) and supplements 1 Pa. Code, Subchapter D (relating to motions).

   (ix)  Subsection (b)(1)(xix) supplements 1 Pa. Code § 35.226 (relating to final orders).

   (x)  Subsection (b)(1)(xx) supersedes 1 Pa. Code § 35.214 (relating to oral argument on exceptions).

SECONDARY SCHOOL GRADUATION

§ 121.21.  Requirement for higher education grant applicants.

*      *      *      *      *

   (c)  For purposes of the State Higher Education Grant Program, an approved secondary school shall also include any home education program that is accredited by any home schooling accreditation agency approved by the Department of Education. If the home education program lacks the requisite accreditation, certification by the appropriate local school official attesting that the home education program is in compliance with section 1327.1 of the Public School Code of 1949 (24 P. S. § 13-1327.1) shall be submitted to the Agency by the appropriate local school official.

EDUCATIONAL INSTITUTIONS

§ 121.32.  Approved institutions in Higher Education Grant Program.

*      *      *      *      *

   (b)  To be approved, an institution shall be other than a school of theology or a theological seminary as determined by the Agency, shall be located in the United States, the Canal Zone, Puerto Rico, the Virgin Islands, American Samoa or Guam and shall comply with the following:

   (1)  If the institution is a college or university located within this Commonwealth, the institution shall be approved by the Department of Education and shall be accredited or a recognized candidate for accreditation with an accrediting body recognized by the [Commission on Recognition of Postsecondary] Council for Higher Education Accreditation; if the college or university is located outside this Commonwealth, the institution shall be degree-granting, shall be operated not-for-profit and shall be fully accredited by the regional institutional accrediting body recognized by the [Commission on Recognition of Postsecondary] Council for Higher Education Accreditation responsible for accreditation in the state where the college or university is conducting its educational program.

*      *      *      *      *

   (3)  If the institution is a trade, technical or business school located within this Commonwealth, the institution shall be approved by the Department of Education or shall currently be, and shall have been throughout the preceding 24 months, licensed by the State Board of Private Licensed Schools and shall be accredited by an accrediting body recognized by the [Commission on Recognition of Postsecondary] Council for Higher Education Accreditation, except that this requirement for licensure and accreditation may be waived by the President and Chief Executive Officer for branch campuses of an institution that has been operating satisfactorily in this Commonwealth for 2 years or more; if the institution is located outside this Commonwealth, it shall be degree-granting, shall be operated not-for-profit and shall be fully accredited by the regional institutional accrediting body recognized by the [Commission on Recognition of Postsecondary] Council for Higher Education Accreditation responsible for accreditation in the state where the institution is conducting its educational program.

*      *      *      *      *

§ 121.33.  Approved program of study in Higher Education Grant Program.

   To be eligible for a State higher education grant, an applicant shall enroll in a program of study approved by the Agency and offered by an institution approved by the Agency under § 121.32 (relating to approved institutions in Higher Education Grant Program) for participation in the State Higher Education Grant Program. An approved program of study shall comply with the following:

   (1)  An approved program of study shall be a program of instruction of at least 2 academic years which shall be the equivalent of at least 60 semester credit hours or at least 1,800 clock hours of instruction (1,500 clock hours in the case of programs leading to the associate degree in specialized technology or the associate degree in specialized business offered by institutions of higher education located within this Commonwealth) except that, other than for those community college programs which are measured in credit hours, programs not leading to a degree shall be measured in clock hours, with at least [45] 30 semester credit hours or [1,350] 900 clock hours earned through instruction within the classroom, and shall be presented over a calendar of at least 15 months.

   (2)  An approved program of study shall require that at least [75] 50% of the credits needed for completion of the program at the approved institution be earned through instruction within the classroom.

   [(3) An approved program of study shall be offered on a full-time basis and in such a way that a recipient completes the program in the period of time normally required for the completion of the program at other approved institutions.]

   [(4)] (3)  ***

   [(5)] (4)  An approved program of study shall be on the approved list as of August 1 for the ensuing academic year. Approval after August 1 will become effective the following August 1 with two exceptions:

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   (ii)  In the light of the particular circumstances related to the approval of the program of study and the funding and application processing conditions of the Agency, the [Executive Director] President and Chief Executive Officer may make the approval effective on a date prior to August 1.

Subchapter B. HIGHER EDUCATION GRANT PROGRAM

§ 121.42.  Submission of applications.

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   (d)  The [Executive Director] President and Chief Executive Officer may authorize the setting aside of deadlines for other categories of applicants when in the judgment of the [Executive Director] President and Chief Executive Officer the setting aside of the deadline will facilitate administration of the State Higher Education Grant Program in accordance with the policies established by the Board of Directors of the Agency and will promote equitable program results. Any determination made by the [Executive Director] President and Chief Executive Officer under this subsection will be reduced to writing, which writing will delimit the category and give an estimate of the number of applicants for the particular processing year which is expected to fall within the category. A copy of the writing will be furnished to each member of the Board of Directors of the Agency.

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§ 121.48.  Limitation on payment of grants.

   The Agency will not make payment of, or further payment on, an existing State higher education grant on the basis of an inquiry or request received after August 1 of the calendar year next commencing following the academic year for which the payment is sought unless the [Executive Director] President and Chief Executive Officer specifically directs that payment be made in order to prevent grave hardship.

§ 121.56.  Year Abroad Program.

   A recipient shall be eligible to receive an award for a Year Abroad Program which shall provide the recipient with equivalent credit for the academic [term or] terms involved in the program as the recipient would earn at the approved institution of higher learning and which requires the recipient to pay the educational costs to [such] the institution. Exceptions to the requirement that educational costs [must] be paid to the approved institution may be made by the [Executive Director] President and Chief Executive Officer.

   (Editor's Note: The following subchapter is new. It has been printed in regular type to enhance readability.)

Subchapter N.  EARLY CHILDHOOD EDUCATION PROFESSIONAL LOAN FORGIVENESS PROGRAM

Sec.

121.401.Application of existing agency regulations.
121.402.Qualified applicant.
121.403.Loan forgiveness.
121.404.Employment.
121.405.Approved child-care facility.
121.406.Lottery.

§ 121.401.  Application of existing agency regulations.

   The following higher education grant regulations contained in Subchapters A and B (relating to general provisions and the State Higher Education Grant Program) apply to applicants in the Early Childhood Education Professional Loan Forgiveness Program except those provisions which are inconsistent with this subchapter:

   (1) Section 121.1 (relating to definitions).

   (2) Section 121.3 (relating to discrimination prohibited).

   (3) Section 121.4(a) (relating to denial of eligibility to loan defaulters).

   (4) Section 121.6 (relating to denial of eligibility for financial assistance).

   (5) Section 121.7 (relating to notice of denial and preliminary review procedures).

   (6) Section 121.8 (relating to applicant and recipient appeals and hearings).

§ 121.402.  Qualified applicant.

   A qualified applicant in the Early Childhood Education Loan Forgiveness Program is a person who meets the following requirements:

   (1)  Has successfully completed an undergraduate program at an accredited college or university.

   (2)  Has a bachelor's degree and has obtained Pennsylvania State Early Childhood Education Certification (nursery through third grade), or an associate's degree in Early Childhood or Child Development.

   (3)  Has borrowed through the Agency-administered Guaranteed Student Loan Programs.

   (4)  Is a resident of this Commonwealth.

   (5)  Executes a sworn affidavit, under penalty of perjury, that he does not have a delinquent payment owing to any Commonwealth agency.

   (6)  Receives an annual salary of less than $18,500 for the employment period for which loan forgiveness is requested.

   (7)  Has submitted a completed application by the filing deadline designated by the Agency.

§ 121.403.  Loan forgiveness.

   Qualified applicants who are selected for the program in accordance with the Early Childhood Loan Forgiveness Act (24 P. S. §§ 7101--7106) are eligible for payment by the Agency of a portion of the debt incurred by the applicant through the Agency-administered Guaranteed Student Loan Programs for the education necessary to successfully complete the specified bachelor's degree or associate's degree programs. For each 12-month employment period designated by the Agency that the applicant is a full-time professional in an approved Commonwealth child-care facility, the Agency may forgive a proportional part of the applicant's loan so that the loan may be entirely forgiven over 4 years of full-time employment in an approved child-care facility. For a graduate with a bachelor's or associate's degree in the specified areas, no more than $2,500 may be forgiven in any year, and no more than $10,000 may be forgiven for any applicant. Payments shall be made in accordance with the procedures established by the Agency. A loan forgiveness award may not be made for a loan that is in default at the time of the application.

§ 121.404.  Employment.

   An applicant selected for the Early Childhood Education Professional Loan Forgiveness Program is required to submit documentation the Agency may require as proof that those child-care professionals are working as full-time professionals in approved child-care facilities in this Commonwealth for the 12-month employment period designated by the Agency for loan forgiveness. Each child-care professional is required to submit documentation of eligibility as the Agency may require.

§ 121.405.  Approved child-care facility.

   An ''approved child-care facility'' is defined as a child day-care center or group day-care home located in this Commonwealth which is subject to and in compliance with 55 Pa. Code (relating to public welfare).

§ 121.406.  Lottery.

   (a)  Loan forgiveness awards shall be made to the extent that funds are appropriated by the General Assembly and are sufficient to cover administration of the program. If funding is insufficient to fully fund administration and eligible applicants, the Agency shall utilize a random lottery system for determining which applicants receive loan forgiveness awards.

   (b)  When a random lottery is required, the lottery shall include only those records that are complete and eligible in accordance with Agency requirements at the time the lottery is conducted.

[Pa.B. Doc. No. 98-485. Filed for public inspection March 27, 1998, 9:00 a.m.]



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