plicant to work with other appropriate institutions and agencies.

(Implements Sec. 344(b), 20 U.S.C. 2534(b))

§ 191.46 Project duration.

Project awards pursuant to this subpart will be for a grant period of up to one year. If a grantee seeks to receive assistance under this part for an additional period beyond the grant period, a new application for a new grant award must be submitted.

(Implements Sec. 344(b), 20 U.S.C. 2534 (b))

§ 191.47 Project funding.

(a) While there is no formula for the distribution of funds under this subpart, the Commissioner intends to make a grant to all States that meet the requirements in § 191.44 and propose projects of sufficient quality under the criteria set forth in § 191.45.

(b) The size of an award will be affected by the Commissioner's intent to fund all the States in accordance with paragraph (a) of this section and by the scope and quality of the project as measured by criteria set forth in § 191.45.

(Implements Sec. 344(b), 20 U.S.C. 2534(b))

§ 191.48 Allowable costs.

Allowable costs pursuant to this subpart shall be determined in accordance with principles set forth in appendix B of Subchapter A of this chapter (Office of Education General Provisions Regulations).

(20 U.S.C. 1221c)

§ 191.49 Capacity to carry out the project. Notwithstanding the specific evaluation criteria in § 191.45, the Commissioner will not fund an application under this subpart unless the Commissioner is satisfied that the applicant has the capacity successfully to carry out the project.

(a) In making this judgment, the Commissioner will consider such factors as:

(1) Both the programmatic and financial management capacities of the applicant organization and its staff;

(2) Past performance by the applicant

(i) In carrying out any prior grant under this part; or

(ii) In carrying out similar projects— with respect to such matters as achievement of objectives, adherence to the project conditions, programmatic and financial management, and the governing board's assumption of responsibility;

(3) Adequacy of facilities and other resources, including consideration of any litigation or dispute which calls into question the continued availability of the facilities and resources to the applicant; and/or

(4) Consideration of local community factors which may prevent the successful operation of the grant.

192.7 State standards for determining substantial financial need.

192.8 Approval of State criteria for determining expected family contribution. 192.9 Maintenance of effort. 192.10 Use of funds.

192.11 Disapproval of State applications. 192.12 Audit-record retention.

AUTHORITY: Sections 415A-415E of Title IV of the Higher Education Act of 1965, as amended by section 123 of Pub. L. 94-482, 90 Stat. 2094, and by Pub. L. 95-40 (20 U.S.C. 1070c-1070c-4), unless otherwise noted.

SOURCE: 42 FR 46049, Sept. 14, 1977, unless otherwise noted.

EFFECTIVE DATE NOTE: Part 192 becomes effective November 30, 1977.

§ 192.1 Purpose.

The purpose of this program is to make incentive grants available to the

"Academic year" means a period of time, usually eight or nine months, during which a full-time student would normally be expected to complete the equivalent of two semesters, two trimesters, three quarters or 900 clock hours of instruction.

"Act" means Title IV, Part A, Subpart 3 of the Higher Education Act of 1965, as amended (20 U.S.C. 1070c1070c-4).

"Clock hour” means a period of time which is the equivalent of either: (1) a 50 to 60 minute class, lecture, or recitation, or (2) a 50 to 60 minute period of faculty-supervised laboratory, shop training, or internship.

an

"Continuation award" means award of funds to a student who previously received an award under this program.

"Cost of education" means the cost of education as defined by each State. "Dependent student" is a student who does not qualify as an independent or self-supporting student as defined in § 192.2.

"Expected family contribution of a dependent student" means the sum of the amounts which reasonably may be expected from the student and the student's spouse to meet the student's cost of education and the amount which reasonably may be expected to be made available to him by his parents for this purpose.

"Expected family contribution of an independent or self-supporting student" means the amount which reasonably may be expected from the student and the student's spouse to meet the student's cost of education.

"Full-time student" means a student who is carrying a full-time academic workload other than by correspondence measured in terms of: (1) course work or other required activities as de

termined by the institution in which the student is enrolled, or by the State whose agency is administering the program authorized by the Act, which amounts to the equivalent of a minimum of 12 semester hours or 12 quarter hours per academic term for institutions utilizing trimesters, semesters, or quarter hour systems, or which consists of a program requiring a minimum of 24 clock hours per week for those institutions that do not utilize such systems, and (2) the tuition and fees customarily charged for full-tirne study by the institution.

(20 U.S.C. 1088(c)(2).)

"Half-time student" means a student who is carrying a half-time academic workload measured in terms of: (1) Course work or other required activities as determined by the institution in which the student is enrolled, or by the State whose agency is administering the program authorized by the Act, which amounts to a minimum of 6 semester hours or 6 quarter hours for institutions utilizing trimesters, semesters or quarters, or which consists of a program requiring a minimum of 12 clock hours per week for those institutions which do not utilize these systems and (2) the tuition and fees customarily charged for half-time study by the institution.

(20 U.S.C. 1088(c)(2).)

"Independent or self-supporting student" means an independent or selfsupporting student as defined by each State.

"Initial award" means the student's first award made under this prograrn.

"Institution of higher education" means an educational institution in any State which: (1) admits as regular students only: (i) persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate, or (ii) persons who are beyond the age of compulsory school attendance in the State in which the institution is located and who have the ability to benefit from the training offered by the institution, (2) is legally authorized within the State to provide a program of education beyond secondary education, (3) provides an edu

cational program for which it awards a bachelor's degree or provides not less than a two-year program which is acceptable for full credit toward the degree, (4) is a public or other nonprofit institution, and (5) is accredited by a nationally recognized accrediting agency or association or, if not so accredited, (i) is an institution with respect to which the Commissioner has determined that there is satisfactory assurance, considering the resources available to the institution, the period of time, if any, during which it has operated, the effort it is making to meet accreditation standards, and the purpose for which this determination is being made, that the institution will meet the accreditation standards of the agency or association within a reasonable time, or (ii) is an institution whose credits are accepted, on transfer, by not less than three institutions which are so accredited, for credit on the same basis as if transferred from an institution so accredited. The term also includes any school which provides not less than a oneyear program of training to prepare students for gainful employment in a recognized occupation and which meets the provision of paragraphs (1), (2), (4), and (5) of this section unless the school is a public institution in which case it may also be accredited by the State agency in that State which has been listed by the Commissioner as a reliable authority as to the quality of public postsecondary vocational education in that State. For purposes of this part, a one-year program of training for institutions using a semester, trimester or quarter system means a program of at least 24 semester or trimester hours or 36 quarter hours. For institutions not using those academic terms, a one year program of training means a program of study in which a student will receive supervised training totalling at least 900 clock hours of instruction. The term also includes any proprietary institution of higher education, as defined in § 192.2, which has an agreement with the Commissioner containing the terms and conditions which the Commissioner determines to be necessary to insure that the availability of assistance to students at

the school under this program has not resulted, and will not result, in an increase in the tuition, fees, or other charges to students.

(20 U.S.C. 1087-1(b), 1141(a).)

"National of the United States" means (1) a citizen of the United States, or (2) a person who though not a citizen of the United States owes permanent allegiance to the United States.

(8 U.S.C. 1101(a)(22).)

"Nonprofit" as applied to a school, agency, organization, or institution means a school, agency, organization, or institution owned and operated by one or more nonprofit corporations or associations no part of the net earnings of which may lawfully inure to the benefit of any private shareholder or individual.

(20 U.S.C. 1141.)

"Parent" means the mother or father of the student, unless any other person, except the student's spouse, provides more than one-half of the student's support and claims or is eligible to claim the student as an exemption for Federal income tax purposes, in which case that person will be considered the parent.

"Proprietary institution of higher education" means a school (1) which provides not less than a six-month program of training to prepare students for gainful employment in a recognized occupation, (2) which admits as regular students only persons having a certificate of graduation from a school providing secondary education or the recognized equivalent of the certificate, (3) which is legally authorized by the State in which it is located to provide a program of education beyond secondary education, (4) which is accredited by a nationally recognized accrediting agency or association approved by the Commissioner for this purpose, (5) which is not a public or other nonprofit institution, and (6) which has been in existence for at least two years. For purposes of this part, a six-month program of training means for institutions using a semester, trimester or quarter system, a program of study of at least 16 se

mester or trimester hours, or 24 quarter hours. For institutions not using those systems a program of training means a program of study in which a student will receive supervised training totalling at least 600 clock hours of instruction.

(20 U.S.C. 1088(b)(3).)

"State" means, in addition to the several States of the Union, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, and the Virgin Islands. (20 U.S.C. 1141(b); 20 U.S.C. 1088(a).)

"Undergraduate student" means a student who (1) is in attendance at an institution of higher education and (2) has not earned a first baccalaureate or professional degree. A student who has not earned a first baccalaureate or professional degree and who is enrolled in a program of study at the postsecondary level which is designed to extend for more than four academic years will not be considered an undergraduate student beyond the fourth academic year unless that program leads to a first degree and is designed to extend for a period of five academic years.

(20 U.S.C. 1070c-1070c-4, unless otherwise noted.)

§ 192.3 Allotment and reallotment.

(a) Allotment of funds for initial awards. From the sums appropriated under section 415A(b)(1) of the Act for any fiscal year, the Commissioner will allot to each State an amount which bears the same ratio to these sums as the number of students in attendance as at least half-time students at institutions of higher education in the State bears to the total number of students in attendance in all the States.

(b) Reallotment of funds for initial awards. The amount of any State's allotment for any fiscal year under paragraph (a) of this section which the Commissioner determines will not be required for that State's grant program for that fiscal year will be available for reallotment from time to time, on dates during the year which the Commissioner may fix, to other States in proportion to the original allot

ments to those States under paragraph (a) of this section. The proportionate amount for any of these States shall be reduced to the extent it exceeds the sum the Commissioner estimates the State needs and will be able to use for the year for carrying out the State plan. The total of the reductions will be similarly reallotted among the States whose proportionate amounts were not reduced.

(c) Any amount reallotted to a State under paragraph (b) of this section during a year will be considered part of its allotment under paragraph (a) of this section for that year.

(d) For the purposes of this section, the number of students in attendance as at least half-time students at institutions of higher education in a State and in all the States will be determined by the Commissioner for the most recent year for which satisfactory data are available.

(e) Allotment of funds for continuation awards. The Commissioner will allot the sums appropriated for each fiscal year for continuation grants pursuant to § 415A(b)(2) of the Act among the States so that each State will receive the same percentage of its request for continuation grant funds for that fiscal year submitted in accordance with § 192.5(b).

(f) Notwithstanding paragraph (e) of this section, in any year when the Congress appropriates a single lump sum for both initial and continuation awards, funds will be allotted to the States on the basis of the formula used for initial awards set forth in paragraph (a) of this section and States will divide their allotments among initial and continuation awards according to their individual requirements, assuring that the needs of continuation students have priority.

(g) Each State receiving an allotment of funds under this program in a fiscal year will submit a report before September 1 of that year projecting any portion of the allotment that will not be needed to make awards. These unused funds may be redistributed among the other States in proportion to the original allotments to those States, but no State may receive more than its requests.

(h) Whenever the sum appropriated for this program for any fiscal year exceeds $75,000,000, the Commissioner will allot one-third of the amount above $75,000,000 to those States currently operating State Student Loan Insurance programs under Section 428(b) of the higher Education Act of 1965, either through an agency of the State or through a nonprofit private institution or organization designated by the State. The one-third bonus will be apportioned among qualified States so that the amount which each State receives bears the same ratio to onethird of the excess funds over $75,000,000 as the number of students in attendance on at least a half-time basis in institutions of higher education in that State bears to the total number of students in attendance on at least a half-time basis in institutions of higher education in all of the States qualifying for the bonus.

(i) Sums appropriated for incentive grants to States for any fiscal year will remain available for payments to States for the award of student grants under this program until the end of the fiscal year succeeding that fiscal year.

(20 U.S.C. 1070c-1.)

§ 192.4 State program requirements.

(a) A State may receive funds allotted to it under § 192.3 for any fiscal year only if funds will be expended under a State program which:

(a) Is administered by a single State agency;

(b) Awards grants only to students who meet the eligibility requirements of § 192.6;

(c) Provides for the selection of recipients of the grants on the basis of substantial financial need determined annually on the basis of criteria established by the State and approved by the Commissioner;

under the Basic Educational Opportunity Grant, Supplemental Educational Opportunity Grant, or State Student Incentive Grant programs, or (3) is not in default on a loan made, insured, or guaranteed under the National Direct Student Loan or Guaranteed Student Loan programs for attendance at the institution at which the student is enrolled;

(e) Provides that grants will be in amounts not in excess of $1,500 per academic year for attendance on a full-time basis at an institution of higher education;

(f) Provides that all nonprofit institutions of higher education in the State are eligible to participate in the State program, effective with respect to any academic year beginning on or after October 1, 1978;

(g) Provides for the payment of the non-Federal share of grants awarded under this program from funds supplied by the State;

(h) Meets the maintenance of effort requirement of § 192.9;

(i) Provides for fiscal control and fund accounting procedures necessary to assure proper disbursement of and accounting for Federal funds paid to the State under this program; and

(j) Provides for the reporting which is reasonably necessary to enable the Commissioner to perform his functions under this program.

(20 U.S.C. 1070c-2.)

§ 192.5 State applications.

(a) Any State wishing to obtain a payment under this program which has not previously received funds under the Act must file with the Commissioner, through the State agency administering its program of student grants, in a form specified by the Commissioner, an application containing the following information:

(1) A description of the applicable State grant program, including:

(i) The name of the State agency administering the program,

(ii) A certification by an appropriate State official that this State agency is the single State agency responsible for the administration of this grant program,

(iii) The maximum grant permitted under the program,