effective date of the action is the date on which the notice is received by the institution.

(c) An emergency action shall not exceed 30 days unless a suspension, limitation, or termination proceeding is begun under this subpart before the expiration of that period. In such case, the period may be extended until the completion of that proceeding, including any appeal to the Commissioner.

(d) If a suspension, limitation, or termination proceeding is begun, the Commissioner will provide the institution, if it so requests an opportunity to show cause that the emergency action is unwarranted, pending the outcome of that proceeding.

(20 U.S.C. 1088f-1(a), 1232c(c), 1232d, section 113(b) of Pub. L. 94-482, 42 U.S.C. 2947(a)(3))

§ 168.75 Suspension proceeding.

(a) Scope and consequences. From its effective date, a suspension removes an institution's eligibility for the HEAL program or any or all title IV programs covered under this subpart for a period of time not exceeding 60 days unless

(1) The institution and the designated OE official agree to an extension where the institution has not requested a hearing, or

(2) The designated OE official begins a limitation or termination proceeding under § 168.76.

(b) Procedures. (1) The designated OE official begins a suspension proceeding by sending a notice to an institution by certified mail with return receipt requested. The notice must

(i) Inform the institution of the intent of the Commissioner to suspend the institution's eligibility, cite the consequences of that action, and identify the alleged violations which constitute the basis for the action;

(ii) Specify the proposed effective date of the suspension, which shall be at least 20 days after the date of mailing of the notice of intent;

(iii) Inform the institution that the suspension will not be effective on the date specified in the notice if the designated OE official receives, at least 5 days before that date, a request for a hearing or written material indicating

why the suspension should not take place; and

(iv) Invite voluntary efforts to correct the violation(s) which led to the commencement of the action.

(2) If the institution does not request a hearing, but submits written material, the designated OE official, after considering that material, notifies the institution that

(i) The proposed suspension is dismissed, or

(ii) The suspension is effective as of a specified date.

(3) If the institution on a timely basis requests a hearing, the designated OE official sets a date and place for it. The date will be at least 15 days after the designated OE official receives the request. No suspension takes place until a hearing is held.

(4) A presiding officer conducts a hearing on the record.

(5) At the hearing, the presiding officer shall consider any written material presented to him before the hearing or any material or other evidence presented to him during the course of the hearing.

(6) If, after considering the evidence, the presiding officer concludes that the suspension is warranted, the presiding officer will issue an initial decision that may suspend the eligibility of all or part of the institution.

(7) The Commissioner will review the initial decision of the presiding officer and will issue a final decision adopting the initial decision, unless the initial decision is clearly unsupported by the evidence.

(c) Notice of the suspension will be prompty mailed to the institution. The suspension takes effect either upon the date on which the notice is received by the institution or the original proposed effective date stated in the notice of intent, whichever is later.

(d) A suspension shall not exceed 60 days unless a limitation or termination proceeding is begun under this subpart before the expiration of that period. In such case, the period may be extended until the completion of that proceeding, including any appeal to the Commissioner.

U.S.C. 1088f-1(a)(4), 42 U.S.C.

(20 2947(a)(3))

§ 168.76 Limitation or termination proceeding, whether or not a suspension proceeding.

(a) Scope and consequences. From its effective date, a limitation or termination shall either

(1) Result in limitations on an institution's eligibility, or

(2) End the eligibility of an institution for the HEAL program or any or all title IV programs covered under this subpart.

(b) Procedures. The designated OE official begins a limitation or termination proceeding has begun under § 168.75, by sending an institution a notice, by certified mail with return receipt requested. This notice must

(i) Inform the institution of the intent of the Commissioner to limit or terminate the institution's eligibility, cite the consequences of that action, and identify the alleged violations which constitute the basis for the action, and in the case of a limitation proceeding, state the limits to be imposed;

(ii) Specify the proposed effective date of the limitation or termination, which shall be at least 20 days after the date of mailing of the notice of intent;

(iii) Inform the institution that the limitation or termination will not be effective on the date specified in the notice if the designated OE official receives, at least 5 days before that date, a request for a hearing or written material indicating why the limitation or termination should not take place;

(iv) Invite voluntary efforts to correct the violation(s) which led to the initiation of the action.

(2) If the institution does not request a hearing but submits written material, the designated OE official, after considering that material, notifies the institution that:

(i) The proposed action is dismissed, (ii) Limitations are effective as of a specified date, or

(iii) The termination is effective as of a specified date.

(3) If the institution on a timely basis requests a hearing, the designated OE official sets a date and a place for it. The date will be at least 15 days after the designated OE official re

ceives the request. No proposed limitation or termination takes place until after a hearing is held.

(4) A presiding officer conducts the hearing on the record.

(5) At the hearing the presiding officer shall consider any written material presented to him before the hearing, or any material or other evidence presented to him during the course of the hearing.

(6) If, after considering the evidence, the presiding officer concludes that limitation or termination is warranted, the presiding officer will issue an initial decision that may limit or terminate the institution's eligibility in whole or in part. If a termination action is brought against an institution, the presiding officer may issue a decision to impose one or more limitations on an institution rather than terminating its eligibility, if the presiding officer believes the limitation to be more appropriate.

(c) Expedited hearing. With the approval of the presiding officer and the mutual consent of the parties, any time schedule specified in this section may be shortened.

§ 168.77 Initial and final decisions.

(a) The presiding officer issues an initial decision in any suspension, limitation, or termination proceeding based on findings of fact and conclusions of law. Findings of fact shall be based only on evidence considered at the hearing and matters of which official notice has been taken. The initial decision of the presiding officer will be promptly mailed to the institution.

(b) In a suspension proceeding, the Commissioner will review the initial decision of the presiding officer and will issue a final decision adopting the initial decision, unless the initial decision is clearly unsupported by the evidence.

(c) (1) In a limitation or termination proceeding, the initial decision of the presiding officer becomes the Commissioner's final decision 20 days after being issued, unless within that 20-day period the institution or the designat

ed OE official appeals the decision to the Commissioner.

(2) Within a period of time specified by the Commissioner, the party that appeals to the Commissioner may submit any additional written material, including exceptions to the initial decision, proposed findings and conclusions, and supporting briefs and statements. The opposing party shall respond within such time as the Commissioner specifies. Parties making any submission to the Commissioner must provide a copy to each party that participated in the hearing.

(3) The initial decision of the presiding officer limiting or terminating the institution's eligibility does not take effect pending the appeal, unless the Commissioner determines that a stay would produce a serious and adverse effect upon the programs involved.

(4) In the case of an appeal, the Commissioner issues a final decision affirming, modifying, or reversing the initial decision, including a statement of reasons for the decision.

§ 168.80 Termination.

(a) Effect. Except as provided in paragraph (b) of this section, a termination-(1) Ends an institution's eligibility for the HEAL program or any or all title IV programs covered under this subpart;

(2) Prohibits an institution or the Commissioner from making or increasing financial aid awards;

(3) Prohibits an institution from making any other new obligations against title IV funds covered under this subpart; and

(4) Prohibits further commitments of Federal insurance by the Commissioner under the HEAL program or the guaranteed student loan program for loans to students to attend that institution, and prohibits further disbursements by an institution which is a lender under the HEAL program or the guaranteed student loan program (whether or not insurance commitments have been issued by the Coinmissioner or a guarantee agency for such disbursements).

(b) Payment period. (1) If an institution is terminated during a payment period, any student at that school who has received an award or to whom a commitment has been made before the effective date of the termination may receive payment for that payment period.

(2) For the purposes of this section, the payment period is a semester, trimester, or quarter for institutions using these academic periods. For all other institutions, the payment period is the period from the beginning to the midpoint of the academic year, or from the midpoint to the end of the academic year.

(c) Commitment. For the purposes of this section (1) a commitment under the basic educational opportunity grant program occurs after a student is enrolled and attending the institution and has submitted a valid student eligibility report to the institution, or to the Commissioner if the student is attending an institution which is under the alternate disbursement system, (2) a commitment under the supplemental educational opportunity grant, college work-study, or national direct student loan program occurs when the student is enrolled and attending the institution and has received an award letter from the institution, and (3) a commitment under the HEAL program or the guaranteed student loan program occurs when the Commissioner or a guarantee agency advises the lender that the loan will be insured.

or

(b) The corrective action may include payment of any funds, to the Commissioner or to designated recipients, which the institution improperly received, withheld, disbursed, caused to be disbursed. Corrective action may, for example, relate to (1) with respect to the guaranteed student loan program-(i) ineligible interest benefits, special allowances or other claims paid by the Commissioner, and (ii) discounts, premiums, or excess interest paid in violation of part 177 of title 45 of the Code of Federal Regulations; (2) with respect to the HEAL program, ineligible claims paid by the Commissioner; and (3) with respect to the HEAL program or all title IV programs covered under this subpart-(i) refunds due to students under the regulations, and (ii) any grants, workstudy assistance, or loans made in violation of program regulations.

§ 168.82 Reinstatement after termination.

(a) An institution whose eligibility for the HEAL program or any or all title IV programs covered under this subpart has been terminated may not file a request for reinstatement of its eligibility before the expiration of 18 months from the effective date of its termination.

(b) After the minimum termination period, the institution may request reinstatement of its eligibility. The request must be in writing and must show that the institution has corrected the violations on which the termination was based and that it meets all qualifications for eligibility.

(c) Not later than 60 days after receipt of the request for reinstatement, the Commissioner shall respond to the

institution

(i) Granting its request;
(ii) Denying its request; or

(iii) Granting the request subject to limitations.

(d)(1) If the Commissioner denies the institution's request, or allows reinstatement subject to limitation(s), the institution, upon request, will be granted an opportunity to show cause why it should be fully reinstated.

(2) In the event the Commissioner's response allows reinstatement subject to limitation, the institution, by requesting a show cause meeting, shall not be deemed to waive its rights to participate in the HEAL program or any or all title IV programs covered under this subpart if it complies with the reinstatement limitations pending the outcome of the meeting.

(20 U.S.C. 1088f-1(a)(4), 2941(a)(3))

§ 168.83 Removal of limitation.

42 U.S.C.

(a) An institution whose eligibility for the HEAL program or any or all title IV programs covered under this subpart has been limited may not

apply for removal of the limitation of its eligibility before the expiration of 12 months from the effective date of the limitation.

(b) After the minimum limitation period, the institution may request removal of the limitation. The request must be in writing and show that the institution has corrected the violations on which the limitation was based.

(c) No later than 60 days after the receipt of the request, the Commissioner shall respond to the institution

(i) Granting its request;

(ii) Denying its request; or

(iii) Granting the request subject to other limitations.

(d) If the Commissioner denies the request, or establishes other limitations, the institution upon request will be granted an opportunity to show cause why its eligibility should be fully reinstated.

(e) The institution's request for a show cause meeting shall not be deemed to waive its right to participate in the HEAL program or any or all title IV programs covered under this subpart if it complies with such continuing limitations pending the outcome of the meeting.

Subpart A-General Provisions

§ 169.1 Statement of purpose.

The purpose of this part is to assist developing institutions of higher education which demonstrate a desire and potential to make a substantial contribution to the higher education resources of the nation but which for financial and other reasons are struggling for survival and are isolated from the main currents of academic life. The Commissioner will support the establishment of cooperative arrangements under which these developing institutions may draw on the talent and experience of the stronger colleges and universities, on the educational resources of business and industry, and on the strengths of other developing institutions in an effort to improve their academic programs, administrative and management resources and their student services. The Commissioner will also support National Teaching Fellows and Professors Emeritus under this part.

(20 U.S.C. 1051-1054, 1056)