credit hour program described in paragraphs (a) (1) through (3) of this definition; and

(2) The Secretary's ratification of that accrediting agency's determination.

State: A State of the Union, American Samoa, the Commonwealth of Puerto Rico, the District of Columbia, Guam, the Trust Territories of the Pacific Islands, the Virgin Islands, and the Commonwealth of the Northern Mariana Islands.

(Authority: 20 U.S.C. 1071 et seq.; 1078-2, 1085, 1088, and 1141 and 26 U.S.C. 501(c))

§ 600.3 Special conditions.

For the purpose of §§ 600.4, 600.5, 600.6, and 600.7:

(a) The Secretary considers an institution other than one offering only a program of correspondence to be "in a State" only if the institution's campus or place of instruction is physically located in that State.

(b) The Secretary considers an institution offering only a program of study by correspondence to be located only in the State in which its administrative office is located if the program does not include a period of residential training. If the program includes a period of residential training, the Secretary considers the institution to be located and the State in which its administrative office is located and the State in which its residential program is located.

(c)(1) If a State requires an institution to measure its educational programs in clock hours in order to be legally authorized in that State to provide a program of education beyond secondary education, the Secretary considers that institution is legally authorized in that State to provide a program of education beyond secondary education only if the institution measures its educational programs in clock hours.

(2) If a State requires a vocational school to measure its vocational or technical education programs in clock hours in order to be legally authorized in the State to provide a program of postsecondary vocational or technical education, the Secretary considers that vocational school to be legally authorized to provide a program postsec

ondary vocational or technical education in that State only if the vocational school measures its vocational or technical programs in clock hours.

(d)(1) If as part of the application process for receiving a license, charter, or other document that demonstrates it is legally authorized to provide a program of education beyond secondary education in a State, the State requires an institution to measure its educational programs in clock hours, the Secretary considers that institution to be legally authorized to provide a program of education beyond secondary education in that State only if the institution measures its educational programs in clock hours.

(2) If as part of the application process for receiving a license, charter, or other document that demonstrates it is legally authorized to provide a postsecondary vocational or technical education program in a State, the State requires a vocational school to measure its educational programs in clock hours, the Secretary considers that institution to be legally authorized to provide a program of education beyond secondary education in that State only if the institution measures its educational programs in clock hours.

(Authority: 20 U.S.C. 1085 (b) and (c), 1088 (b) and (c), and 1141(a))

EFFECTIVE DATE NOTE: At 53 FR 25489, July 7, 1988, the effective date of § 600.3(d) was suspended until July 1, 1989. This change takes effect 45 days after publication in the FEDERAL REGISTER or later if Congress takes certain adjournments. When effective, the change in the effective date is retroactive to July 1, 1988.

§ 600.4 Institution of higher education.

(a) An institution of higher education is a public or private non-profit educational institution which—

(1) Is in a State;

(2) Admits as regular students only persons who

(i) Have a high school diploma; (ii) Have the recognized equivalent of a high school diploma; or

(iii) Are beyond the age of compulsory school attendance in the State in which the institution is located, and, if the institution seeks to participate in a program other than a Part B loan pro

gram, have the ability to benefit, as determined by the institution in accordance with § 600.11, from the training offered;

(3) Is legally authorized to provide an educational program beyond secondary education in the State in which the institution is located;

(4) Provides an educational program

(i) For which it awards an associate, baccalaureate, graduate, or professional degree, or other recognized educational credential;

(ii) Which is at least a two-year program acceptable for full credit toward a baccalaureate degree; or

(iii) Which is at least a one-year training program that leads to a certificate, degree, or other recognized educational credential and prepares students for gainful employment in a recognized occupation; and

(5) Is—

(i) Accredited or preaccredited by a nationally recognized accrediting

agency or association;

(ii) An institution whose credits the Secretary determines, in accordance with the provisions contained in § 600.8, to be accepted on transfer by at least three accredited institutions for credit on the same basis as transfer credits from any accredited institution; or

(iii) Approved by a State agency that the Secretary recognizes, by listing in the FEDERAL REGISTER in accordance with 34 CFR Part 603, as a reliable authority on the quality of public postsecondary vocational education in its State, if the institution

(A) Is a public postsecondary vocational educational institution; and

(B) Seeks to participate only in Federal student assistance programs.

(b)(1) An institution, other than an institution that is eligible to participate only in a Part B loan program, that admits as regular students persons who do not have a high school diploma or its recognized equivalent and who are beyond the age of compulsory school attendance in the State in which the institution is located, shall consistently apply standards and procedures for determining, in accordance with § 600.11, whether these persons

have the ability to benefit from the education or training it offers.

(2) An institution must be able to demonstrate, upon request of the Secretary, that each regular student that it admitted who did not have a high school diploma or its recognized equivalent satisfied the institution's standards under paragraph (b)(1) of this section.

(3) An institution shall retain for at least five years documentation that demonstrates a student's ability to complete successfully the program in which the student was enrolled, if the student was admitted to the institution under the institution's ability-tobenefit standards.

(c) Notwithstanding the provisions in paragraph (a) of this section, the Secretary does not determine an institution to be eligible to apply to participate in the Part B loan programs if the institution uses or employs commissioned salespersons to promote the availability of Part B loan program loans at that institution.

(Authority: 20 U.S.C. 1085, 1094(c)(3), and 1141(a))

§ 600.5 Proprietary institution of higher

education.

(a) A proprietary institution of higher education is an educational institution which

(1) Is not a public or private nonprofit educational institution; (2) Is in a State;

(3) Admits as regular students only persons who

(i) Have a high school diploma; (ii) Have the recognized equivalent of a high school diploma; or

(iii) Are beyond the age of compulsory school attendance in the State in which the institution is located and have the ability to benefit, as determined by the institution in accordance with § 600.11, from the training offered;

(4) Is legally authorized to provide an educational program beyond secondary education in the State in which the institution is physically located;

(5) Provides at least a six-month training program to prepare students

for gainful employment in a recognized occupation;

(6) Is accredited by a nationally recognized accrediting agency or association; and

(7) Has been in existence for at least two years. The Secretary considers a proprietary institution to have been in existence for two years only if it has been legally authorized to provide, and has provided, a continuous training program to prepare students for gainful employment in a recognized occupation during the 24 months (except for normal vacation periods) preceding the date of application for eligibility.

(b)(1) A proprietary institution that admits as regular students persons who do not have a high school diploma or its recognized equivalent and who are beyond the age of compulsory school attendance in the State in which the institution is located, shall consistently apply standards and procedures for determining, in accordance with § 600.11, whether these students have the ability to benefit from the education or training it offers.

(2) An institution must be able to demonstrate, upon request of the Secretary, that each regular student that it admitted who did not have a high school diploma or its recognized equiv

alent satisfied the institution's standards under paragraph (b)(1) of this section.

(3) An institution must retain for at least five years documentation that demonstrates a student's ability to complete successfully the program in which the student was enrolled, if the student was admitted to the institution under the institution's ability-tobenefit standards.

(Authority: 20 U.S.C. 1068(b))

§ 600.6 Postsecondary vocational institution.

(a) A postsecondary vocational institution is a public or private nonprofit educational institution which—

(1) Is in a State;

which the institution is located and have the ability to benefit, as determined by the institution in accordance with § 600.11, from the training of fered;

(3) Is legally authorized to provide an educational program beyond secondary education in the State in which the institution is physically located.

(4) Provides at least a six-month training program to prepare students for gainful employment in a recognized occupation;

(5) Is

(i) Accredited or preaccredited by a nationally recognized accrediting agency or association;

(ii) An institution whose credits the Secretary determines, in accordance with the provisions contained in § 600.8, to be accepted on transfer by at least three accredited institutions for credit on the same basis as transfer credits from any accredited institution; or

(iii) Approved by a State agency that the Secretary recognizes, by listing in the FEDERAL REGISTER in accordance with 34 CFR Part 603, as a reliable authority on the quality of public postsecondary vocational education in the State, if the institution is a public postsecondary vocational educational institution.

(6) Has been in existence for at least two years. The Secretary considers an institution to have been in existence for two years only if it has been legally authorized to provide, and has provided, a continuous training program to prepare students for gainful employment in a recognized occupation during the 24 months (except for normal vacation periods) preceding the date of application for eligibility.

(b)(1) A postsecondary vocational institution that admits as regular students persons who do not have a high school diploma or its recognized equiv alent and who are beyond the age of compulsory school attendance in the

(i) Have a high school diploma; (ii) Have the recognized equivalent of a high school diploma; or

(iii) Are beyond the age of compulsory school attendance in the State in

ed, shall consistently apply standards and procedures for determining, in accordance with § 600.11, whether these students have the ability to benefit from the education or training it offers.

(2) An institution must be able to demonstrate, upon request of the Secretary, that each regular student that it admitted who did not have a high school diploma or its recognized equivalent satisfied the institution's standards under paragraph (b)(1) of this section

(3) An institution must retain for at least five years documentation that demonstrates a student's ability to complete successfully the program in which the student was enrolled, if the student was admitted to the institution under the institution's ability-tobenefit standards.

(Authority: 20 U.S.C. 1088 and 1094(c)(3))

§ 600.7 Vocational school.

(a) A vocational school is a business or trade school, technical institution, or other technical or vocational school which

(1) Is in a State;

(2) Admits as regular students only persons who

(i) Have completed or left elementary or secondary school; and

(ii) Have the ability to benefit, as determined by the institution in accordance with § 600.11, from the training offered;

(3) Is legally authorized in the State in which the school is physically located to provide, and provides within that State a program of postsecondary vocational or technical education that

(i) Is designed to provide occupational skills to fit individuals for useful employment in recognized tions;

(ii) Is not less than

occupa

(A) Eight semester or trimester hours or units, or 12 quarter hours or units, at a school using credit hours or units to measure the academic progress; or

(B) Three hundred clock hours of supervised training at a school using clock hours to measure progress;

(iii) In the case of a program of study by correspondence, requires not less than an average of 12 hours of preparation per week over each 12week period and completion of a minimum of 300 clock hours in not less than six months; and

(iv) In the case of a flight school program, maintains current valid certi

fication by the Federal Aviation Administration:

(4) Is

(i) Accredited by a nationally recognized accrediting agency or association; or

(ii) In the case of a public vocational school, approved by a State agency that the Secretary recognizes, by listing in the FEDERAL REGISTER, in accordance with 34 CFR Part 603, as a reliable authority on the quality of public postsecondary vocational education in the State;

(5) Has been

(i) In existence for two years; or

(ii) Has been specifically determined by the Secretary to be an eligible location of a vocational school despite not having been in existence for two years; and

(6) Does not use or employ commissioned sales persons to promote the availability of Part B loan program loans at that school.

(b) For purposes of this section, the Secretary considers a school to have been in existence for two years only if it has been legally authorized to provide and has provided, a continuous training program to fit individuals for useful employment in recognized occupations during the 24 months (except for normal vacation periods) preceding the date of application for eligibility.

(c)(1) A school that admits as regular students persons who do not have a high school diploma or its recognized equivalent shall consistently apply standards and procedures for determining, in accordance with § 600.11, whether these persons have the ability to benefit from the training it offers.

(2) A school must be able to demonstrate, upon request of the Secretary, that each regular student that it admitted who did not complete, or who left, elementary or secondary school satisfied the school's standards under paragraph (c)(1) of this section.

(3) A school must retain for at least five years documentation that demonstrates a student's ability to complete successfully the program in which the student was enrolled, if the student was admitted to the institution under the institution's ability-to-benefit standards.

(Authority: 20 U.S.C. 1085 and 1094(c)(3))

§ 600.8 Transfer-of-credit alternative to

accreditation.

(a) For an unaccredited public or private nonprofit institution to satisfy the requirements of § 600.4(a)(5)(ii) or § 600.6(a)(5)(ii), the Secretary must determine that

(1) At least three accredited institutions, which satisfy the conditions in paragraph (c) of this section, have a policy of accepting on transfer the credits of a student who transfers from the unaccredited institution on the same basis as they accept on transfer the credits of a student who transfers from any accredited institution;

(2) Within the three years preceding the date the unaccredited institution applies for a determination that it satisfies the requirements

§ 600.4(a)(5)(ii) or § 600.6(a)(5)(ii)—

of

(i) At least twelve of the unaccredited institution's regular students or former regular students transferred to at least three of the accredited institutions identified under paragraph (a)(1) of this section, with a minimum of four transfer students to each accredited institution; and

(ii) Each of at least three of the accredited institutions to which the twelve students transferred accepted the credits of the students who transferred for credit on the same basis as it accepted the credits of students who transferred from any accredited institution.

(b) For the purposes of paragraph (a)(2) of this section, the Secretary considers that a student has transferred to an accredited institution if—

(1) The student has enrolled as a regular student in an accredited educational program in the accredited institution;

(2) The student no longer remains enrolled as a regular student at the unaccredited institution;

(3) The student has attended classes at the accredited institution for a period of time that exceeds the date beyond which the student would, upon withdrawal, qualify for the maximum refund of tuition and fees available to a student who attends at least one day of class; and

(4) The accredited institution has officially applied the credits earned by the student at the unaccredited institution toward a degree or certificate that it offers.

(c) To qualify under paragraph (a) of this section, an accredited institution must

(1) Offer an educational program that is at least as long, in terms of academic years, academic terms, or clock hours, as the longest educational program offered at the unaccredited institution;

(2) Offer a degree or certificate at least as advanced as the highest degree or certificate offered at the unaccredited institution; and

(3) Apply the transfer credits toward an accredited degree or certificate program in which the transfer students will not constitute a majority of the students enrolled.

(d) If an unaccredited institution that was previously accredited or preaccredited has lost that status and applies for a determination that it satisfies the requirements of this section

(1) The students described in paragraph (a)(2) of this section must have earned the transferred credits from the unaccredited institution after the institution lost its accreditation or preaccreditation; and

(2) Each accredited institution described in paragraph (a) of this section must know, when it accepts the credits of the transfer students, that the applicant institution lost its accreditation or preaccreditation before the credits to be transferred were earned.

(e)(1) The applicant unaccredited institution shall provide sufficient information and documentation to enable the Secretary to determine whether the unaccredited institution satisfies the requirements of this section. The information and documentation must include, but is not limited to

(i) Information as to the length of the educational programs offered by the applicant unaccredited institution and the highest degree or certificate it offers;

(ii) The names and addresses of the institutions described in paragraph (a) of this section, and for each institution, the length of its educational pro