Federal-State Relationship Agreements, Federal Pell Grant Program, Academic Competitiveness Grant, and National Science and Mathematics Access To Retain Talent Grant

CourtEducation Department
Citation86 FR 59619
Record Number2021-23423
Published date28 October 2021
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Federal Register / Vol. 86, No. 206 / Thursday, October 28, 2021 / Rules and Regulations
Department of the Treasury, 1500
Pennsylvania Avenue NW, Freedman’s
Bank Building, Washington, DC 20220,
or via email to OFACReport@
treasury.gov.
(f) Effective January 16, 2019, General
License No. 16D, dated December 7,
2018, is replaced and superseded in its
entirety by this General License No.
16E.
Dated: January 16, 2019.
Andrea Gacki,
Director, Office of Foreign Assets Control.
Dated: October 25, 2021.
Bradley T. Smith,
Acting Director, Office of Foreign Assets
Control.
[FR Doc. 2021–23473 Filed 10–27–21; 8:45 am]
BILLING CODE 4810–AL–P
DEPARTMENT OF EDUCATION
34 CFR Parts 604, 690 and 691
RIN 1840—AD46
Federal-State Relationship
Agreements, Federal Pell Grant
Program, Academic Competitiveness
Grant, and National Science and
Mathematics Access To Retain Talent
Grant
AGENCY
: Office of Postsecondary
Education, Department of Education.
ACTION
: Final regulations.
SUMMARY
: The Secretary amends the
regulations implementing the Federal
Pell Grant Program to conform with
changes made by the Department of
Education Appropriations Act, 2012 and
the Department of Education
Appropriations Act, 2017. The Secretary
also removes obsolete regulations for
Federal-State Relationship Agreements
and the Academic Competitiveness
Grant (ACG) and National Science and
Mathematics Access to Retain Talent
Grant (National SMART Grant)
programs. These regulations also make
technical corrections and delete
references to programs that are no
longer authorized or funded.
DATES
: These final regulations are
effective October 28, 2021.
FOR FURTHER INFORMATION CONTACT
:
Aaron Washington, 400 Maryland
Avenue SW, Room 2C182, Washington,
DC 20202.
Telephone: (202) 453–7241.
Email: Aaron.Washington@ed.gov.
If you use a telecommunications
device for the deaf (TDD) or a text
telephone (TTY), call the Federal Relay
Service (FRS), toll free, at 1–800–877–
8339.
SUPPLEMENTARY INFORMATION
:
Executive Summary
Purpose of This Regulatory Action:
This regulatory action amends or
removes various Department regulations
to conform with statutory changes.
The Secretary removes and reserves
34 CFR part 604, Federal-State
Relationship Agreements, to reflect that
section 1203 of the Higher Education
Act of 1965, as amended (HEA), was
eliminated by the Higher Education
Amendments of 1998, Public Law 105–
244.
Section 401A(g) of the HEA
authorized the ACG and National
SMART Grant programs only through
the end of the 2010–2011 award year.
Therefore, the Secretary also removes
and reserves the implementing
regulations for those programs in 34
CFR part 691.
The Secretary also amends part 690 to
make conforming changes that are
consistent with the statutory provisions
referenced above and to make technical
revisions to delete references to the ACG
and National SMART Grant programs,
which are no longer authorized.
Summary of the Major Provisions of
this Regulatory Action: In the final
regulations we amend 34 CFR part 690
to reflect the following statutory
changes to the Pell Grant Program.
Duration of Student Eligibility (§ 690.6)
In December 2011, section 309 of the
Department of Education
Appropriations Act, 2012 (title III of
division F of the Consolidated
Appropriations Act, 2012, Pub. L. 112–
74) amended section 401(c)(5) of the
HEA to reduce the duration of a
student’s eligibility to receive a Federal
Pell Grant from 18 semesters (or its
equivalent) to 12 semesters (or its
equivalent).
Calculation of a Federal Pell Grant
(§ 690.62)
In December 2011, Public Law 112–74
amended section 401(b)(4) of the HEA to
change the minimum Federal Pell Grant
award calculation. The law set the
minimum Federal Pell Grant award for
a student at 10 percent of the maximum
award amount for the award year. In
addition, it eliminated the provision
that permitted a student who would be
eligible to receive a Federal Pell Grant
of between five and 10 percent of the
award year’s maximum award to receive
an award of 10 percent of the maximum
award.
One and One-Half Federal Pell Grants
in One Award Year (§§ 690.63(g),
690.64(b), 690.65(c), (d)(2), and (f), and
690.67)
In May 2017, section 310 of the
Department of Education
Appropriations Act, 2017 (title III of
division H of Pub. L. 115–31, the
Consolidated Appropriations Act, 2017),
added section 401(b)(8) to the HEA to
allow a student to receive Federal Pell
Grant funds for up to 150 percent of the
student’s Pell Grant Scheduled Award
for an award year, if the student is
enrolled at least half time in a
certificate, associate degree, or
baccalaureate degree program, effective
as of the 2017–2018 award year.
Prior to the publication of these final
regulations, we provided guidance in
Dear Colleague Letter GEN–17–06
(available at: https://ifap.ed.gov/
dpcletters/GEN1706.html) to
institutions on how to implement the
provisions of section 401(b)(8) to allow
certain students to receive one and one-
half Pell Grants in one award year
beginning with the 2017–2018 award
year.
Costs and Benefits: As further detailed
in the Regulatory Impact Analysis, the
statutory changes reflected in these
regulations provide a substantial net
benefit to students and result in
transfers between the Federal
Government and students.
Significant Regulations
We discuss substantive issues under
the sections of the regulations to which
they pertain. Generally, we do not
address regulatory provisions that are
technical or otherwise minor in effect.
Part 604—Federal-State Relationship
Agreements
Statute: Section 1203 of the HEA, as
amended by the Education
Amendments of 1980, established the
procedure for State participation in the
Continuing Education Outreach
Program, the State Student Incentive
Grant Program (currently the Leveraging
Educational Assistance Partnership
Program (LEAP) Program), and the
Undergraduate Academic Facilities
Program. States wishing to participate in
these programs were required to enter
into a Federal-State Relationship
Agreement with the Secretary. The
agreement had to contain assurances,
and the means by which they would be
met, relating to administration, financial
management, treatment of applicants,
supplement, not supplant requirements,
and planning. The provisions of the
agreement could not supersede any
reporting requirements established by
the applicable programs.
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Current Regulations: Current 34 CFR
part 604 provides that a State must enter
into an agreement with the Secretary if
it wishes to participate in the
Continuing Education Outreach
program, title I–B, with the exception of
sections 116 and 117 of the HEA; the
State Student Incentive Grant program
(currently the LEAP Program), subpart 3
of title IV–A of the HEA; and the
Undergraduate Academic Facilities
Grant program, title VII–A of the HEA.
The agreement must contain assurances
relating to administration, financial
management, treatment of applicants for
subgrants and contracts, supplement,
not supplant requirements, and
planning.
New Regulations: We are removing
and reserving 34 CFR part 604.
Reasons: Section 1203 of the HEA was
repealed on October 7, 2008, by the
Higher Education Amendments of 1998,
Public Law 105–244. Therefore, the
Secretary removes and reserves the
implementing regulations for the
Federal-State Relationship Agreements
in 34 CFR part 604.
Part 690—Federal Pell Grant Program
Duration of Student Eligibility (§ 690.6)
Statute: Section 401(c)(5) of the HEA
provides that the duration of a student’s
eligibility to receive a Federal Pell Grant
is 12 semesters (or its equivalent).
Current Regulations: Current
§ 690.6(e) provides that if a student
receives a Federal Pell Grant for the first
time on or after July 1, 2008, the student
may receive no more than nine
Scheduled Awards. A student may
receive a maximum of one Scheduled
Award per academic year.
New Regulations: Revised § 690.6(e)
provides that a student may receive no
more than six Scheduled Awards as
determined by the Secretary.
Reasons: These final regulations
amend § 690.6(e) to conform to
amended section 401(c)(5) of the HEA,
by reducing the number of Scheduled
Awards a student may receive to six (or
the equivalent of 12 semesters).
Institutional Participation (§ 690.7(a),
(d), and (e))
Statute: Section 401A(c)(1) of the
HEA provides that a student must be
eligible for a Federal Pell Grant to
qualify for an ACG or National SMART
Grant. Section 401(j) of the HEA
provides that no institution of higher
education is eligible to participate in the
Federal Pell Grant Program if that
institution is ineligible to participate in
the Federal Family Education Loan
(FFEL) or William D. Ford Federal
Direct Loan (Direct Loan) programs as a
result of a final default rate
determination made by the Secretary.
Current Regulations: Section 690.7(a)
provides that an institution may not
participate in the Federal Pell Grant
Program if it has at least one eligible
program under § 691.2(d) and does not
participate in the ACG or National
SMART Grant programs, as applicable.
Section 690.7(d) provides that if an
institution loses its eligibility to
participate in the FFEL or Direct Loan
program under the provisions of subpart
M of 34 CFR part 668, it also loses its
eligibility to participate in the Federal
Pell Grant Program for the same period
of time. Section 690.7(e) provides that
an institution must provide to the
Secretary, within 45 days after the
effective date of loss of eligibility,
student-level disbursement information
and an accounting of the Federal Pell
Grant expenditures for that award year
to the date of termination.
New Regulations: We are removing
paragraph (a) of § 690.7 and making
technical changes to the remaining
paragraphs.
Reasons: Section 401A(g) of the HEA
authorized the ACG and National
SMART Grant programs only through
the end of the 2010–2011 award year.
Therefore, we are removing § 690.7(a),
which references these two programs.
With the removal of paragraph (a),
current paragraphs (d) and (e) are
redesignated as paragraphs (c) and (d).
In redesignated paragraph (c)(1), we are
removing the reference to the FFEL
program and adding a reference to
subpart N, which includes regulations
for calculating the three-year cohort
default rate and parallels the provisions
in subpart M, part 668, which includes
regulations for calculating a two-year
cohort default rate. In redesignated
paragraph (c)(2), we are revising the
citations to include §§ 668.187(d) and
668.206(d) of subpart M and N, part 668,
respectively, to describe the
consequences of cohort default rates on
an institution’s ability to participate in
the Federal Pell Grant Program. In
redesignated paragraph (d), we are
adding ‘‘or for whom the institution
obtained a valid ISIR’’ to include the
electronic equivalent of the Student Aid
Report.
Calculation of a Federal Pell Grant
(§ 690.62(b))
Statute: Section 401(b)(4) of the HEA
provides that a Federal Pell Grant may
not be awarded to a student if the
amount of that grant for that student for
any academic year is less than 10
percent of the maximum amount of a
Federal Pell Grant award determined for
such academic year.
Current Regulations: Current
§ 690.62(b) states that no payment may
be made to a student if the student’s
annual award is less than $200.
However, a student who is eligible for
an annual award that is equal to or
greater than $200, but less than or equal
to $400, will be awarded a Federal Pell
Grant of $400.
New Regulations: We are removing
§ 690.62(b).
Reasons: We are removing § 690.62(b),
which has been superseded by section
401(b)(4) of the HEA. Since the 2012–
2013 award year, this change in the law
has been explained in the annual Dear
Colleague Letter that accompanies the
Pell Grant Payment and Disbursement
Schedules (available at: https://
ifap.ed.gov/dpcletters/P1201.html).
One and One-Half Federal Pell Grants in
an Award Year (§§ 690.63(g), 690.64(b),
690.65(c), (d)(2), and (f), and 690.67)
Statute: Section 401(b)(8) of the HEA
provides that a student may receive up
to one and one-half consecutive Federal
Pell Grant Scheduled Awards during a
single award year, if the student is
enrolled at least half-time in the
payment period(s) for which the student
receives additional Pell Grant funds in
excess of 100 percent of the student’s
Pell Grant Scheduled Award. The
student must also be enrolled in a
certificate, associate degree, or
baccalaureate degree program. Section
484(s)(3) of the HEA provides the
authority to waive this provision for
students with intellectual disabilities
who enroll in a comprehensive
transition and postsecondary program.
Calculation of a Federal Pell Grant for
a Payment Period (§ 690.63(g))
Current Regulations: Current
§ 690.63(g)(1) provides that the amount
of a student’s award for the award year
may not exceed his or her Scheduled
Federal Pell Grant award for the award
year.
New Regulations: We are revising
§ 690.63(g)(1) to provide that a student
is eligible to receive one and one-half of
the student’s Scheduled Federal Pell
Grant award in the same award year.
Under new § 690.63(g)(2), if a student
is eligible for the remaining portion of
a first Scheduled Award in an award
year and for a payment from the
additional one-half Scheduled Award,
the student’s payment is calculated
using the annual award for his or her
enrollment status for the payment
period. The student’s payment is the
remaining amount of the first Scheduled
Award being completed plus an amount
from the additional one-half Scheduled
Award in the award year up to the total
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amount of the payment for the payment
period.
Reasons: We are revising
§ 690.63(g)(1) to establish procedures for
awarding a student with one and one-
half of the student’s Scheduled Award
in an award year as required by section
401(b)(8) of the HEA.
The revisions to paragraph (g)(2)
allow for the calculation of a student’s
Federal Pell Grant payment when the
student is eligible to receive a payment
from his or her first Scheduled Award
and an additional one-half Scheduled
Award in a payment period. In addition,
we are making conforming changes to
§ 690.63(f).
Determining the Award Year for a
Federal Pell Grant Payment Period That
Occurs in Two Award Years
(§ 690.64(b))
Current Regulations: Current
§ 690.64(b) provides that an institution
may not make a payment that will result
in the student receiving more than his
or her Scheduled Federal Pell Grant for
an award year.
New Regulations: We are revising
current § 690.64(b) to provide that a
student is eligible to receive one and
one-half of the student’s Scheduled
Federal Pell Grant award in the same
award year.
Reasons: We are revising § 690.64(b)
to conform to section 401(b)(8) of the
HEA.
Transfer Student: Attendance at More
Than One Institution During an Award
Year (§ 690.65(c), (d)(2), and (f))
Current Regulations: Current
§ 690.65(c) provides that a student who
receives a Federal Pell Grant at one
institution and subsequently enrolls at a
second institution within the same
award year may only be paid at the
second institution for the period of time
the student is enrolled at that
institution. The institution must adjust
the student’s grant to ensure that funds
received by the student for the award
year do not exceed the student’s
Scheduled Federal Pell Grant for that
award year.
Current § 690.65(d)(2) provides that
the percentage of a student’s Scheduled
Federal Pell Grant used at the first
institution is subtracted from 100
percent to determine the percentage of
the Scheduled Federal Pell Grant the
student is eligible to receive at the
second institution.
Current § 690.65(f) provides that a
transfer student must repay any amount
received in an award year that exceeds
his or her first Scheduled Federal Pell
Grant.
New Regulations: To conform to
section 401(b)(8) of the HEA, we are
revising current § 690.65(c), (d)(2), and
(f) to establish procedures for awarding
a student an additional Pell Grant in an
amount up to one-half of his or her
Scheduled Award in an award year.
Reasons: Section 401(b)(8) provides
that an otherwise eligible student could
receive more than one Federal Pell
Grant in an award year. Therefore, we
are establishing procedures for awarding
a student an additional Pell Grant in an
amount up to one-half of his or her
Scheduled Award in an award year.
Eligibility To Receive Additional
Federal Pell Grant Funds in an Amount
Up to One-Half of a Scheduled Award
During a Single Award Year (§ 690.67)
Current Regulations: None.
New Regulations: New § 690.67
provides that an institution
participating in the Federal Pell Grant
Program must award an additional
Federal Pell Grant in an amount up to
one-half of a Scheduled Award to a
student in an award year if the student
is enrolled (1) in an eligible bachelor’s
or associate’s degree program, or
program leading to another recognized
educational credential, for one or more
additional payment periods during the
same award year that are not fully
covered by the student’s initial Federal
Pell Grant Scheduled Award; and (2) at
least as a half-time student in the
payment period(s) for which the student
receives any portion of the additional
Federal Pell Grant funds. This provision
does not apply to students with
intellectual disabilities, to the extent
provided in 34 CFR part 668, subpart O,
and section 484(s) of the HEA.
Reasons: These regulations establish
procedures for awarding a student an
additional Pell Grant in an amount up
to one-half of his or her Scheduled
Award in an award year, in accordance
with the statute.
Part 691—Academic Competitiveness
Grant (ACG) and National Science and
Mathematics Access To Retain Talent
Grant (National SMART Grant)
Programs
Statute: Section 401A of the HEA
established the ACG and National
SMART Grant programs to assist eligible
students in paying their college
education expenses.
Current Regulations: Current 34 CFR
part 691 provides guidance for the
administration of the ACG and National
SMART Grant programs. The ACG
Program awards grants to help eligible
financially needy first- and second-year
undergraduate students, who complete
rigorous secondary school programs of
study, meet the cost of their
postsecondary education.
The National SMART Grant Program
awards grants to help eligible
financially needy third-, fourth-, and, in
the case of a program with at least five
full years, fifth-year undergraduate
students who are pursuing eligible
majors in the physical, life, or computer
sciences, mathematics, technology, or
engineering or a critical foreign
language meet the cost of their
postsecondary education.
New Regulations: We are removing
and reserving 34 CFR part 691.
Reasons: Section 401A(g) of the HEA
authorized the ACG and National
SMART Grant programs only through
the end of the 2010–2011 award year.
Therefore, the Secretary removes and
reserves the implementing regulations
for the ACG and National SMART Grant
programs in 34 CFR part 691.
Waiver of Rulemaking and Delayed
Effective Date: Under the
Administrative Procedure Act (APA) (5
U.S.C. 553), the Department generally
offers interested parties the opportunity
to comment on proposed regulations.
However, the APA provides that an
agency is not required to conduct notice
and comment rulemaking when the
agency for good cause finds that notice
and public procedure thereon are
impracticable, unnecessary, or contrary
to the public interest. 5 U.S.C. 553(b)(B).
There is good cause here for waiving
rulemaking under the APA because this
regulatory action merely rescinds
regulations that have become obsolete
due to statutory changes and revises
others to conform to those changes. This
regulatory action does not establish or
affect substantive policy. Therefore,
under 5 U.S.C. 553(b)(B), the Secretary
has determined that obtaining public
comment on this regulatory action is
unnecessary.
Notice and comment is ‘‘unnecessary’’
when ‘‘the administrative rule is a
routine determination, insignificant in
nature and impact, and inconsequential
to the industry and to the public.’’ Mack
Trucks, Inc. v. EPA, 682 F.3d 87, 94
(D.C. Cir. 2012); Util. Solid Waste
Activities Grp. v. EPA, 236 F.3d 749,
755 (D.C. Cir. 2001). See also Riverbend
Farms, Inc. v. Madigan, 958 F.2d 1479,
1484 (9th Cir. 1992) (‘‘Notice and
comment is ‘unnecessary’ when ‘the
regulation is technical or minor.’ ’’)
(quoting Levesque v. Block, 723 F.2d
175, 184 (1st Cir. 1983)).
The APA generally requires that
regulations be published at least 30 days
before their effective date, unless the
agency has good cause to implement its
regulations sooner (5 U.S.C. 553(d)(3)).
In addition, this final rule has been
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determined to be a major rule for
purposes of the Congressional Review
Act (CRA) (5 U.S.C. 801, et seq.).
Generally, under the CRA, a major rule
takes effect 60 days after the date on
which the rule is published in the
Federal Register. Section 808(2) of the
CRA, however, provides that any rule
which an agency for good cause finds
(and incorporates the finding and a brief
statement of reasons therefore in the
rule issued) that notice and public
procedure thereon are impracticable,
unnecessary, or contrary to the public
interest, shall take effect at such time as
the Federal agency promulgating the
rule determines.
As previously stated, because the final
regulations merely reflect statutory
changes and remove and update
obsolete regulatory provisions, there is
good cause to waive the delayed
effective dates in the APA and the CRA
and make the final regulations effective
upon publication.
Executive Orders 12866 and 13563
Regulatory Impact Analysis
Under Executive Order 12866, the
Office of Management and Budget
(OMB) must determine whether this
regulatory action is ‘‘significant’’ and,
therefore, subject to the requirements of
the Executive order and subject to
review by OMB. Section 3(f) of
Executive Order 12866 defines a
‘‘significant regulatory action’’ as an
action likely to result in a rule that
may—
(1) Have an annual effect on the
economy of $100 million or more, or
adversely affect a sector of the economy,
productivity, competition, jobs, the
environment, public health or safety, or
State, local, or Tribal governments or
communities in a material way (also
referred to as an ‘‘economically
significant’’ rule);
(2) Create serious inconsistency or
otherwise interfere with an action taken
or planned by another agency;
(3) Materially alter the budgetary
impacts of entitlement grants, user fees,
or loan programs or the rights and
obligations of recipients thereof; or
(4) Raise novel legal or policy issues
arising out of legal mandates, the
President’s priorities, or the principles
stated in the Executive order.
The final regulations will result in
transfers between the Federal
Government and students of more than
$100 million. Therefore, this final action
is ‘‘economically significant’’ and
subject to review by OMB under section
3(f)(1) of Executive Order 12866.
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Office of
Information and Regulatory Affairs
designated this rule as a ‘‘major rule,’’
as defined by 5 U.S.C. 804(2).
We have also reviewed these
regulations under Executive Order
13563, which supplements and
explicitly reaffirms the principles,
structures, and definitions governing
regulatory review established in
Executive Order 12866. To the extent
permitted by law, Executive Order
13563 requires that an agency—
(1) Propose or adopt regulations only
on a reasoned determination that their
benefits justify their costs (recognizing
that some benefits and costs are difficult
to quantify);
(2) Tailor its regulations to impose the
least burden on society, consistent with
obtaining regulatory objectives and
taking into account—among other
things, and to the extent practicable—
the costs of cumulative regulations;
(3) In choosing among alternative
regulatory approaches, select those
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety,
and other advantages; distributive
impacts; and equity);
(4) To the extent feasible, specify
performance objectives, rather than the
behavior or manner of compliance a
regulated entity must adopt; and
(5) Identify and assess available
alternatives to direct regulation,
including economic incentives—such as
user fees or marketable permits—to
encourage the desired behavior, or
provide information that enables the
public to make choices.
Executive Order 13563 also requires
an agency ‘‘to use the best available
techniques to quantify anticipated
present and future benefits and costs as
accurately as possible.’’ The Office of
Information and Regulatory Affairs of
OMB has emphasized that these
techniques may include ‘‘identifying
changing future compliance costs that
might result from technological
innovation or anticipated behavioral
changes.’’
We are issuing these final regulations
only on a reasoned determination that
their benefits would justify their costs.
Based on the analysis that follows, the
Department believes that these
regulations are consistent with the
principles in Executive Order 13563.
We have also determined that this
regulatory action would not unduly
interfere with State, local, and Tribal
governments in the exercise of their
governmental functions.
In accordance with the Executive
orders, the Department has assessed the
potential costs and benefits, both
quantitative and qualitative, of this
regulatory action. The final regulations
are expected to have an economically
significant impact on the Federal
Government and students. As discussed
further in the costs, benefits, and
transfers section, there will be transfers
between the Federal Government and
students as a result of the statutory
changes, which are reflected in these
regulations. In this Regulatory Impact
Analysis, we discuss the need for
regulatory action; costs, benefits, and
transfers; net budget impacts; and
regulatory alternatives we considered.
Need for Regulatory Action
Over the past nine years, there have
been several self-implementing statutory
changes that have not been reflected in
the Federal Pell Grant Program
regulations. In December 2011, Public
Law 112–74 amended section 401(b)(4)
of the HEA to change the minimum
Federal Pell Grant award calculation.
The law established the minimum
Federal Pell Grant award for a student
at 10 percent of the maximum award
amount for the award year. In addition,
it eliminated the provision that
permitted a student who would be
eligible to receive a Federal Pell Grant
of between five and 10 percent of the
award year’s maximum award to receive
an award of 10 percent of the maximum
award. Therefore, beginning with the
2012–2013 award year, students could
not receive a Federal Pell Grant unless
they were eligible for at least 10 percent
of the maximum award for the academic
year. This change in the law has been
described in the annual Dear Colleague
Letter that accompanies the Pell Grant
Payment and Disbursement Schedules
since the 2012–2013 award year.
Section 309 of the Department of
Education Appropriations Act, 2012
(title III of division F of the
Consolidated Appropriations Act, 2012,
Pub, L. 112–74) amended section
401(c)(5) of the HEA to reduce the
duration of a student’s eligibility to
receive a Federal Pell Grant from 18
semesters (or its equivalent) to 12
semesters (or its equivalent), effective
beginning with the 2012–2013 award
year. The calculation of the duration of
a student’s eligibility includes all years
of the student’s receipt of Federal Pell
Grant funding. This change in the
duration of students’ Federal Pell Grant
eligibility is not limited to students who
received their first Federal Pell Grant on
or after the 2008–2009 award year, as
the HEA previously provided when the
duration of eligibility was 18 semesters.
Although the Department issued
guidance in Dear Colleague Letter GEN–
13–14, the Department needs to update
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Vivian Yuen Ting Liu, Is School Out for the
Summer? The Impact of Year-Round Pell Grants on
Academic and Employment Outcomes of
Community College Students, Education Finance
and Policy 2020 15:2, 241–269. Available at
www.mitpressjournals.org/doi/full/10.1162/edfp_a_
00277. ‘‘The study finds that for each $1,000 of
additional YRP grant funding, summer enrollment
increases by 28 percentage points, diploma
completion rates increase by 1.6 percentage points,
and third-year earnings from college entry increase
by $200. For YRP-eligible students who started in
a short-term program, the gains are a 2 percentage
point higher certificate attainment rate, 3.6
percentage point increase in associate degree
completion, and no effect on four-year transfer
rates.’’
its regulations to reflect this statutory
change.
In May 2017, section 310 of the
Department of Education
Appropriations Act, 2017 (title III of
division H of Pub. L. 115–31, the
Consolidated Appropriations Act, 2017),
added section 401(b)(8) to the HEA to
allow a student to receive Federal Pell
Grant funds for up to 150 percent of the
student’s Pell Grant Scheduled Award
for an award year, if the student is
enrolled at least half-time in a
certificate, associate degree, or
baccalaureate degree program, effective
as of the 2017–2018 award year. The
regulations preceding this statutory
change restricted students to the
maximum of one Pell award in an award
year. Although the Department issued
guidance via Dear Colleague Letter
GEN–17–06 for the 2017–2018 award
year, we need to revise our current
regulations to reflect these statutory
changes.
Furthermore, these regulatory changes
will impact institutions’ financial aid
operations and the Department must
revise current regulations to ensure that
institutions have the correct guidance to
properly disburse Pell awards.
Discussion of Costs, Benefits, and
Transfers
The final regulations decrease the
maximum number of Federal Pell Grant
Scheduled Awards from nine to six and
increase the annual award value from
one Scheduled Award to one and one-
half of a Scheduled Award. In the
following sections, the Department
summarizes the effects these final
regulations are likely to have on
students, institutions of higher
education, and the Federal Government.
Students
The statutory changes reflected in
these regulations provide a substantial
net benefit to students and changes in
the transfers between the Federal
Government and Pell recipients. The
change to allow one and a half Pell
grants in an award year increases
transfers to students in any given award
year. Students who qualify for the
additional half Pell grant may be able to
reduce their borrowing needs and exit
college with less debt than they would
have under the previous statute and
rules. Students may also consider taking
additional classes during the summer
semester as a result of increased
funding, which could allow them to
graduate earlier and enter the job market
earlier. A recent study published in
Education Finance and Policy journal
found that $1,000 per student in
additional year-round Pell funding
increased summer enrollment,
completion rates, and post-college
earnings.
1
At the time of its enactment, the
Department estimated that this change
would benefit approximately 905,000
Pell recipients at a cost of $1.5 billion
for the 2018–19 award year. Over the
10-year budget window, it was expected
to benefit an average of 980,000 Pell
recipients annually with an average
additional award of approximately
$1,650.
The expiration of the Academic
Competitiveness Grants (ACG) and
National Science and Mathematics
Access to Retain Talent (SMART) grant
programs reduced transfers to students.
The programs awarded ACG grants to
first- and second-year undergraduates
who completed a rigorous high school
curriculum, and SMART Grants to
third- and fourth-year undergraduates
majoring in physical, life, or computer
sciences, mathematics, technology,
engineering, or a critical foreign
language.
Academic Competitiveness Grants
were awarded to students who were
eligible for a Federal Pell Grant. First-
year applicants, who may receive up to
$750, also must have been first-time
undergraduates who had completed a
rigorous secondary school program and
were enrolled or accepted for
enrollment in a 2- or 4-year degree-
granting institution. Second-year ACG
applicants qualified for an award of up
to $1,300 if they had completed a
rigorous program and maintained a
cumulative grade point average of at
least 3.0 during their first year as an
undergraduate.
SMART Grant applicants had to
maintain a cumulative GPA of at least
3.0 in the coursework required by their
major to qualify for up to $4,000 for
their third and fourth years of
undergraduate study. SMART Grants, in
combination with the Federal Pell Grant
and other student financial assistance,
were not allowed to exceed the
student’s cost of attendance.
In the 2010–11 award year, the final
year of these programs, the Department
estimated that there were 786,000
recipients of ACG grants with an
average grant of $697 and 150,000
SMART grant recipients with an average
grant of $2,560. With the sunset of the
program, future students who may have
qualified had to find other sources for
these funds, including programs that
would be affected by the higher unmet
need resulting from the elimination of
these grants.
Another policy that affected a
segment of Pell grant recipients was the
statutory change to set the minimum
Pell award to 10 percent of the
maximum award. This reduced the
maximum expected family contribution
(EFC) with which a student can be
eligible, decreasing the potential pool of
recipients. This change was expected to
affect those at the higher end of the
income range eligible for Pell Grants. As
described in the Net Budget Impacts, at
the time of its enactment, this was
estimated to reduce transfers to
recipients by $23 million in the 2012–
13 award year and $389 million in the
applicable 10-year budget window.
The statutory change to reduce a Pell
recipient’s lifetime limit to 12 semesters
was meant to emphasize timely
completion of programs. At the time of
its enactment, the Department estimated
that 66,000 recipients would be affected
in the 2012–13 award year and that total
savings over the 10-year budget window
would be approximately $2.9 billion.
For students, this policy may limit their
ability to transfer institutions, switch
educational programs, or restart their
undergraduate education and complete
a program. The Pell Grant duration for
a student is calculated by adding
together each of the annual percentages
of a student’s Scheduled Award that
was actually disbursed to the student.
For example, a student whose 2010–
2011 Federal Pell Grant Scheduled
Award was $5,550 (the maximum award
that year), but who received $2,775
because she was only enrolled for one
semester, will have used 50 percent of
that award year’s Scheduled Award.
Similarly, a student who was enrolled
three-quarter time for the 2011–2012
award year would have used 75 percent
of his Scheduled Award. If these
examples were for the same student and
she did not receive Pell Grant funds for
any other award year, her total Lifetime
Eligibility Used (LEU) would be 125
percent. The combination of policies—
the LEU and the possibility of receiving
up to 150 percent of an award in one
year—means students will have to track
their Pell usage carefully as they plan
their educational programs.
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2
Lucca, D., Nadauld, T. & Shen, K., July 2015,
Credit Supply and the Rise in College Tuition:
Evidence from the expansion in Federal Student
Aid Programs, Federal Reserve Bank of New York.
Institutions
The effect of the statutory change
reflected in these final regulations on
institutions will depend on the
percentage of recipients who receive
more than one Pell award in a given
award year. Institutions might benefit if
they choose to decrease the amount of
institutional aid they give to students
receiving both institutional grants and
also Pell Grants for an additional
semester, or reallocate that aid to other
students. Some institutions may decide
to increase tuition because of the
increased availability of Pell Grants.
Research from the Federal Reserve Bank
of New York found a correlation
between increased maximum Pell
awards and tuition and fees and a
reduction in institutional grants.
2
If an institution spends additional
revenue on academic or student support
services, that would benefit all students.
If the Pell Grants displace other non-
institutional sources used to pay tuition
(e.g., State aid or Federal loans), we
would expect little financial impact on
institutions.
We expect little impact on costs to
institutions from increases in
enrollment intensity by the marginal
student, as it would require very little
in additional resources. Full-time
students are typically more cost-
effective for institutions, given that they
pay more tuition but require or use the
same amount of many campus resources
as part-time students. Large-scale shifts
in student behavior, though, may
require increasing capacity like adding
sections of courses. This may be
particularly true for institutions that
have not historically had robust summer
terms, but see increased demand for
such courses due to the expanded
access to Pell grants.
The actual impact of this statutory
change on institutions will vary
according to student behavior and
institutional decision-making. In the
2018–19 award year, transfers to
recipients increased by approximately
$1.3 billion.
The elimination of ACG and SMART
grants eliminated these sources of
funding but also costs of administering
the programs for institutions. The
change in the lifetime limit also reduces
the maximum amount of Pell Grants an
institution may receive with respect to
individual recipients. If the reduced aid
prompted any students to leave school,
institutions would also lose out on the
net tuition revenue from those students.
The effect on costs is less clear.
Students may accelerate their
coursework and take more credits per
semester, potentially increasing the
expense associated with them in any
given semester. On the other hand,
students may focus on their program of
study sooner and take fewer classes
outside their major and reduce costs by
finishing faster.
Federal Government
The administrative changes associated
with the statutory and regulatory
changes described in this rule have
already been implemented and are not
expected to have significant costs. The
effects on the Pell Grant program are
described in the Net Budget Impacts
section of this document.
Net Budget Impacts
Because Pell Grants are an entitlement
to eligible recipients, changes to
eligibility or award value change costs
of the Pell Grant Program. These
regulations increase the maximum
annual award from one Scheduled
Award to one and one-half of a
Scheduled Award. With this change,
more money may be awarded per award
year over fewer award years. The
Department will see increased costs in
the form of Pell awards as a result of the
statutory change reflected in the year-
round Pell regulations. At the time of
enactment the Department estimated
that year-round Pell would benefit
approximately 905,000 Pell recipients at
a cost of $1,502,000,000 in the 2018–19
award year and would have an
estimated cost of $16.3 billion over the
10-year budget window. This estimate
was derived using the take-up rate and
other student data from the 2010–11
award year when year-round Pell grants
were previously available. In the 2010–
11 award year students were able to
receive two full Scheduled Awards
rather than the current one and a half.
This change was controlled for in
applying the 2010–11 data to the current
award year conditions. The newest
iteration of year-round Pell grants has
now been in place for three full award
years. Most recently, in the 2019–20
award year approximately 823,000
recipients benefitted at a cost of about
$1,300,000,000. In future estimates the
Department will take into account these
additional data points.
While the change to year-round Pell
increased transfers to recipients, the
implementation of the 10 percent
minimum award and 12 semester
lifetime Pell eligibility limit reflected in
these regulations reduced the cost of the
Pell Grant program. The statutory
change to set the minimum Pell award
to 10 percent of the maximum award
reduces the maximum EFC with which
a student can be eligible, thus reducing
the potential pool of recipients. At the
time of enactment this change was
estimated to save $23 million in the
2012–13 award year and $389 million
over the 10-year budget window.
Limiting Pell recipients’ lifetime limit to
12 semesters was estimated to save $247
million in the 2012–13 award year and
$2,862 million over the 10-year budget
window.
The elimination of the ACG and
SMART grant programs were not
expected to have a significant budget
impact because they were expected to
sunset in 2010–11 and that was
reflected in the Department’s budget
baselines at the time.
Alternatives Considered
No alternatives were considered for
the revisions to the regulations included
in this document because these changes
implement changes to the HEA enacted
by Congress, and the Department did
not exercise discretion in developing
these amendments.
Accounting Statement
As required by OMB Circular A–4
(available at www.whitehouse.gov/sites/
default/files/omb/assets/omb/circulars/
a004/a-4.pdf), in the following table we
have prepared an accounting statement
showing the classification of the
expenditures associated with the
provisions of these final regulations.
This table provides our best estimate of
the changes in annual monetized
transfers in constant 2017 dollars as a
result of these final regulations.
Expenditures are classified as transfers
from the Federal Government to
financial aid recipients.
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A
CCOUNTING
S
TATEMENT
C
LASSIFICATION OF
E
STIMATED
E
XPENDITURES
[In millions]
Category Transfers
7% 3%
Annualized Monetized Transfers related to year-round Pell ................................................................................... $1,407.5 $1,436.4
Annualized Monetized Transfers related to minimum Pell award ........................................................................... ¥28.4 ¥30.1
Annualized Monetized Transfers related to 12 semester lifetime limit ................................................................... ¥248.0 ¥254.6
From Whom to Whom? ........................................................................................................................................... From the Federal Government
to financial aid recipients
Regulatory Flexibility Act Certification
The Regulatory Flexibility Act does
not apply to this rulemaking because
there is good cause to waive notice and
comment under 5 U.S.C. 553.
Paperwork Reduction Act of 1995
The final regulations do not create
any new information collection
requirements.
We are removing OMB control
numbers from certain regulations
because they either are no longer
necessary, or the applicable burden is
now captured under a separate control
number. OMB Control Number 1840–
0536, ‘‘Pell Grant Program
(Recordkeeping Requirements),’’ which
we are removing from § 690.81 ‘‘Fiscal
control and fund accounting
procedures,’’ was disapproved on
November 16, 1990. Section 690.81
cross references requirements for
maintaining general fiscal records and
general funds received in accordance
with other sections of the Department’s
regulations. Any burden associated with
those requirements is accounted for
under OMB control numbers associated
with those other regulations.
OMB Control Number 1840–0681,
‘‘Federal Pell Grant Program,
Information Collection Presidential
Access Scholarship Program,
Information Collection,’’ expired on
December 31, 1997. It was associated
with §§ 690.12, 690.13, and 690.82. The
Presidential Access Scholarship
Program is no longer active. Any burden
associated with §§ 690.12 and 690.13 is
captured under OMB Control Number
1845–0001, ‘‘Free Application for
Federal Student Aid (FAFSA).’’ Section
690.82 cross-references record retention
and examination provisions in § 668.24.
Any burden associated with § 668.24 is
accounted for under OMB Control
Number 1845–0038.
OMB Control Number 1845–NEW5
was associated with an information
collection in § 690.63(h), which was
removed through a prior interim final
rule (77 FR 25893, May 2, 2012) due to
statutory changes. Therefore, we are
deleting the OMB control number from
§ 690.63, as the information collection
request has been discontinued and is no
longer applicable to that section.
Intergovernmental Review
The Federal Pell Grant, ACG, and
National SMART Grant programs are
not subject to Executive Order 12372
and the regulations in 34 CFR part 79.
Assessment of Educational Impact
Based on our own review, we have
determined that the final regulations do
not require transmission of information
that any other agency or authority of the
United States gathers or makes
available.
Accessible Format: On request to the
program contact person listed under
FOR
FURTHER INFORMATION CONTACT
,
individuals with disabilities can obtain
this document in an accessible format.
The Department will provide the
requestor with an accessible format that
may include Rich Text Format (RTF) or
text format (txt), a thumb drive, an MP3
file, Braille, large print, audiotape, or
compact disc, or other accessible format.
Electronic Access to This Document:
The official version of this document is
the document published in the Federal
Register. You may access the official
edition of the Federal Register and the
Code of Federal Regulations at
www.govinfo.gov. At this site you can
view this document, as well as all other
documents of this Department
published in the Federal Register, in
text or Portable Document Format
(PDF). To use PDF, you must have
Adobe Acrobat Reader, which is
available free at the site.
You may also access documents of the
Department published in the Federal
Register by using the article search
feature at: www.federalregister.gov.
Specifically, through the advanced
search feature at this site, you can limit
your search to documents published by
the Department.
You may also view this document in
text or PDF at the following site:
www.ifap.ed.gov/.
(Catalog of Federal Domestic Assistance
Numbers: 84.063 Federal Pell Grants; 84.375
Academic Competitiveness Grants; and
84.376 National Science and Mathematics
Access to Retain Talent Grants.)
List of Subjects
34 CFR Part 604
Colleges and universities, Grant
programs—education,
Intergovernmental relations.
34 CFR Part 690
Colleges and universities, Education
of disadvantaged, Grant programs—
education, Reporting and recordkeeping
requirements, Student aid.
34 CFR Part 691
Colleges and universities, Elementary
and secondary education, Grant
programs—education, Student aid.
Miguel A. Cardona,
Secretary of Education.
For the reasons discussed in the
preamble, the Secretary amends parts
604, 690, and 691 of title 34 of the Code
of Federal Regulations as follows:
PART 604 [Removed and Reserved]
1. Under the authority of 20 U.S.C.
1221e–3, part 604 is removed and
reserved.
PART 690—FEDERAL PELL GRANT
PROGRAM
2. The authority citation for part 690
continues to read as follows:
Authority: 20 U.S.C. 1070a, 1070g, unless
otherwise noted.
§ 690.2 [Amended]
3. Section 690.2 is amended by:
a. In paragraph (b), removing the
terms ‘‘Academic Competitiveness
Grant (ACG) Program’’, ‘‘Federal Family
Education Loan (FFEL) Program’’,
‘‘Federal Perkins Loan Program’’, and
‘‘National Science and Mathematics
Access to Retain Talent Grant (National
SMART Grant) Program’’.
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b. Removing the parenthetical
authority citation at the end of the
section.
4. Section 690.6 is amended by:
a. Revising paragraph (e).
b. Removing the parenthetical
authority citation at the end of the
section.
The revision reads as follows:
§ 690.6 Duration of student eligibility.
* * * * *
(e) A student may receive no more
than six Scheduled Awards, as
determined by the Secretary.
* * * * *
§ 690.7 [Amended]
5. Section § 690.7 is amended by:
a. Removing paragraph (a).
b. Redesignating paragraphs (b)
through (e) as paragraphs (a) through
(d), respectively.
c. In newly redesignated paragraph
(c)(1), removing the words ‘‘FFEL or’’
and adding the words ‘‘or N’’ after the
words ‘‘subpart M’’.
d. In newly redesignated paragraph
(c)(2), removing the citation ‘‘668.187’’
and adding in its place the citations
‘‘668.187(d) or 668.206(d)’’.
e. In newly redesignated paragraph
(d)(1), adding the words ‘‘or for whom
the institution obtained a valid ISIR’’
after the word ‘‘institution’’.
f. Removing the parenthetical
authority citation at the end of the
section.
§ 690.10 [Amended]
6. Section § 690.10 is amended by:
a. In paragraph (b), removing the
words and punctuation ‘‘Federal
Perkins Loan,’’.
b. Removing the parenthetical
authority citation at the end of the
section.
§ 690.12 [Amended]
7. Section § 690.12 is amended by
removing the parenthetical OMB control
number and authority citation at the end
of the section.
§ 690.13 [Amended]
8. Section § 690.13 is amended by
removing the parenthetical OMB control
number and authority citation at the end
of the section.
§ 690.14 [Amended]
9. Section § 690.14 is amended by:
a. In paragraph (c)(2), removing the
citation ‘‘34 CFR 668.57’’ and adding in
its place the citation ‘‘subpart E of part
668 of this chapter’’.
b. Removing the parenthetical
authority citation at the end of the
section.
10. Section 690.62 is revised to read
as follows:
§ 690.62 Calculation of a Federal Pell
Grant.
The amount of a student’s Pell Grant
for an academic year is based upon the
payment and disbursement schedules
published by the Secretary for each
award year.
11. Section 690.63 is amended by:
a. Revising paragraphs (f) and (g).
b. Removing the parenthetical OMB
control number and authority citation at
the end of the section.
The revisions read as follows:
§ 690.63 Calculation of a Federal Pell
Grant for a payment period.
* * * * *
(f) Calculating payments that exceed
50 percent of a student’s annual award.
A single disbursement may not exceed
50 percent of any award determined
under paragraphs (d) and (g)(2) of this
section. If a payment for a payment
period calculated under paragraphs (d)
and (g)(2) of this section would require
the disbursement of more than 50
percent of a student’s annual award in
that payment period, the institution
must make at least two disbursements to
the student in that payment period. The
institution may not disburse an amount
that exceeds 50 percent of the student’s
annual award until the student has
completed the period of time in the
payment period that equals, in terms of
weeks of instructional time, 50 percent
of the weeks of instructional time in the
program’s academic year.
(g) Additional Federal Pell Grant
funds and defining an academic year.
(1) Notwithstanding paragraphs (b), (c),
(d), and (e) of this section and § 690.66,
the amount of a student’s award for an
award year may not exceed one and
one-half of his or her Scheduled Federal
Pell Grant award for that award year.
(2) A student’s payment for the
payment period may include the
remaining amount of the student’s
Scheduled Award plus an amount from
the additional Federal Pell Grant funds
not to exceed one-half of a student’s
Scheduled Award.
(3) For purposes of this section and
§ 690.66, an institution must define an
academic year for each of its eligible
programs in terms of the number of
credit or clock hours and weeks of
instructional time in accordance with
the requirements of 34 CFR 668.3.
* * * * *
§ 690.64 [Amended]
12. Section 690.64 is amended by:
a. In paragraph (b), adding the words
‘‘one and one-half of’’ after the words
‘‘more than’’.
b. Removing the parenthetical
authority citation at the end of the
section.
§ 690.65 [Amended]
13. Section 690.65 is amended by:
a. In paragraph (c), adding the words
‘‘one and one-half of’’ after the words
‘‘not exceed’’.
b. In paragraph (d)(2), adding the
words ‘‘or 150 percent, if the student is
eligible to receive additional Federal
Pell Grant funds in an amount up to
one-half of a Scheduled Award during
a single award year’’ after the words
‘‘100 percent’’.
c. In paragraph (f), adding the
punctuation and words ‘‘, or one and
one-half of his or her Scheduled Federal
Pell Grant, whichever is applicable’’
after the word ‘‘Grant’’.
d. Removing the parenthetical
authority citation at the end of the
section.
14. Section 690.67 is added to read as
follows:
§ 690.67 Eligibility to receive additional
Federal Pell Grant funds in an amount up
to one-half of a Scheduled Award during a
single award year.
An institution awards additional
Federal Pell Grant funds up to one-half
of a Scheduled Award to a student in an
award year if the student is enrolled—
(a) In an eligible program leading to
a bachelor’s or associate’s degree or
other recognized educational credential,
except as provided in 34 CFR part 668,
subpart O, for students with intellectual
disabilities, for one or more additional
payment periods during the same award
year that are not fully covered by the
student’s initial Federal Pell Grant
Scheduled Award; and
(b) At least as a half-time student in
the payment period(s) for which the
student receives any portion of the
additional Federal Pell Grant funds.
§ 690.81 [Amended]
15. Section 690.81 is amended by
removing the parenthetical OMB control
number and authority citation at the end
of the section.
§ 690.82 [Amended]
16. Section 690.82 is amended by
removing the parenthetical OMB control
number and authority citation at the end
of the section.
§ 690.83 [Amended]
17. Section 690.83 is amended by:
a. In paragraph (d)(2), removing the
citation ‘‘34 CFR 668.23(c)’’ and adding
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1
Staff of H. Comm. on the Judiciary, 105th Cong.,
Section-by-Section Analysis of H.R. 2281 as Passed
by the United States House of Representatives on
August 4, 1998, at 6 (Comm. Print 1998).
2
17 U.S.C. 1201(a)(3)(A).
3
17 U.S.C. 1201(a)(3)(B).
4
See H.R. Rep. No. 105–551, pt. 2, at 36 (1998).
5
See 17 U.S.C. 1201(a)(1).
6
17 U.S.C. 1201(a)(1)(C).
7
Id.
8
17 U.S.C. 1201(a)(2).
9
17 U.S.C. 1201(b).
10
See 17 U.S.C. 1201(a)(1)(E) (‘‘Neither the
exception under subparagraph (B) from the
applicability of the prohibition contained in
subparagraph (A), nor any determination made in
a rulemaking conducted under subparagraph (C),
may be used as a defense in any action to enforce
any provision of this title other than this
paragraph.’’).
in its place the citation ‘‘34 CFR
668.23(b)’’.
b. In the parenthetical OMB control
number at the end of the section,
removing the words ‘‘control number
1840–0688’’ and adding in their place
the words ‘‘control number 1845–0039’’.
c. Removing the parenthetical
authority citation at the end of the
section
PART 691 [Removed and Reserved]
18. Under the authority of 20 U.S.C.
1221e–3, part 691 is removed and
reserved.
[FR Doc. 2021–23423 Filed 10–27–21; 8:45 am]
BILLING CODE 4000–01–P
LIBRARY OF CONGRESS
Copyright Office
37 CFR Part 201
[Docket No. 2020–11]
Exemption to Prohibition on
Circumvention of Copyright Protection
Systems for Access Control
Technologies
AGENCY
: U.S. Copyright Office, Library
of Congress.
ACTION
: Final rule.
SUMMARY
: In this final rule, the Librarian
of Congress adopts exemptions to the
provision of the Digital Millennium
Copyright Act (‘‘DMCA’’) that prohibits
circumvention of technological
measures that control access to
copyrighted works. As required under
the statute, the Register of Copyrights,
following a public proceeding,
submitted a recommendation
concerning proposed exemptions to the
Librarian of Congress (‘‘Register’s
Recommendation’’). After careful
consideration, the Librarian adopts final
regulations based upon the Register’s
Recommendation.
DATES
: Effective October 28, 2021.
FOR FURTHER INFORMATION CONTACT
:
Kevin R. Amer, Acting General Counsel
and Associate Register of Copyrights, by
email at kamer@copyright.gov, or Mark
Gray, Attorney-Advisor, by email at
mgray@copyright.gov. Each can be
contacted by telephone by calling (202)
707–8350.
SUPPLEMENTARY INFORMATION
: The
Librarian of Congress, pursuant to
section 1201(a)(1) of title 17, United
States Code, has determined in this
eighth triennial rulemaking proceeding
that the prohibition against
circumvention of technological
measures that effectively control access
to copyrighted works shall not apply for
the next three years to persons who
engage in certain noninfringing uses of
certain classes of such works. This
determination is based upon the
Register’s Recommendation.
The below discussion summarizes the
rulemaking proceeding and the
Register’s recommendations, announces
the Librarian’s determination, and
publishes the regulatory text specifying
the exempted classes of works. A more
complete discussion of the rulemaking
process, the evidentiary record, and the
Register’s analysis with respect to each
proposed exemption can be found in the
Register’s Recommendation, which is
posted at www.copyright.gov/1201/
2021/.
I. Background
A. Statutory Requirements
Congress enacted the DMCA in 1998
to implement certain provisions of the
WIPO Copyright and WIPO
Performances and Phonograms Treaties.
Among other things, title I of the DMCA,
which added a new chapter 12 to title
17 of the U.S. Code, prohibits
circumvention of technological
measures employed by or on behalf of
copyright owners to protect access to
their works. In enacting this aspect of
the law, Congress observed that
technological protection measures
(‘‘TPMs’’) can ‘‘support new ways of
disseminating copyrighted materials to
users, and . . . safeguard the
availability of legitimate uses of those
materials by individuals.’’
1
Section 1201(a)(1) provides in
pertinent part that ‘‘[n]o person shall
circumvent a technological measure that
effectively controls access to a work
protected under [title 17].’’ Under the
statute, to ‘‘circumvent a technological
measure’’ means ‘‘to descramble a
scrambled work, to decrypt an
encrypted work, or otherwise to avoid,
bypass, remove, deactivate, or impair a
technological measure, without the
authority of the copyright owner.’’
2
A
technological measure that ‘‘effectively
controls access to a work’’ is one that
‘‘in the ordinary course of its operation,
requires the application of information,
or a process or a treatment, with the
authority of the copyright owner, to gain
access to the work.’’
3
Section 1201(a)(1) also includes what
Congress characterized as a ‘‘fail-safe’’
mechanism,
4
which requires the
Librarian of Congress, following a
rulemaking proceeding, to exempt any
class from the prohibition for a three-
year period if she has determined that
noninfringing uses by persons who are
users of copyrighted works in that class
are, or are likely to be, adversely
affected by the prohibition against
circumvention during that period.
5
The
Librarian’s determination to grant an
exemption is based upon the
recommendation of the Register of
Copyrights, who conducts the
rulemaking proceeding.
6
The Register
consults with the Assistant Secretary for
Communications and Information of the
Department of Commerce, who oversees
the National Telecommunications and
Information Administration (‘‘NTIA’’),
in the course of formulating her
recommendations.
7
Exemptions adopted by rule under
section 1201(a)(1) apply only to the
conduct of circumventing a
technological measure that controls
access to a copyrighted work. Other
parts of section 1201 address the
manufacture and provision of—or
‘‘trafficking’’ in—products and services
designed for purposes of circumvention.
Section 1201(a)(2) bars trafficking in
products and services that are used to
circumvent technological measures that
control access to copyrighted works (for
example, a password needed to open a
media file),
8
while section 1201(b) bars
trafficking in products and services used
to circumvent technological measures
that protect the exclusive rights of the
copyright owner (for example,
technology that prevents the work from
being reproduced).
9
The Librarian has
no authority to adopt exemptions for the
anti-trafficking prohibitions contained
in section 1201(a)(2) or (b).
10
The statute contains certain
permanent exemptions to permit
specified uses. These include section
1201(d), which exempts certain
activities of nonprofit libraries, archives,
and educational institutions; section
1201(e), which exempts ‘‘lawfully
authorized investigative, protective,
information security, or intelligence
activity’’ of a state or the federal
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