Office of Postsecondary Education - U.S. Department of Education

Federal Register / Vol. 75, No. 209 / Friday, October 29, 2010 / Rules and Regulations66913WReier-Aviles on DSKGBLS3C1PROD with RULES2Because the applicant was employed,the applicant must be placed on theinstitution’s own payroll account andall required employer contributions forsocial security, workers’ compensation,or any other welfare or insuranceprogram, must still be paid by theinstitution because this applicant wasan employee.In addition, the institution is allowedunder § 668.58(a)(3) to employ a studentunder the FWS Program for the first 60consecutive days prior to receiving thecorrected valid SAR or valid ISIR if,after verification, it determines that anapplicant’s information will not changethe amount that the applicant wouldreceive under that program. In§ 668.61(c), we require that if an FWSoverpayment occurs because theinstitution does not receive the validSAR or valid ISIR reflecting correctionswithin the established deadline dates,the institution must reimburse the FWSProgram account by making restitutionfrom its own funds. In § 668.61(c), weclarify that the student must still bepaid for all work performed under theinstitution’s own payroll account andthe institution must still handle allemployer requirements.Changes: We have revised § 668.61,including the section heading, to clarifythat this section is about handlingoverpayments due to interimdisbursements made under § 668.58. Wehave also corrected the cross-referencesin this section. In addition, we haverevised § 668.61(b) to provide specificprocedures for recovering funds fromany FWS overpayment that results froman interim disbursement made beforeverification is completed. We haverevised § 668.61(c) that describes theprocedures for handling overpaymentsdue to an allowable interimdisbursement of subsidized studentfinancial assistance, including anydisbursement from FWS employment,before the institution receives the validSAR or valid ISIR reflecting thecorrections. Section 668.61(c) nowmakes it clear that the applicant muststill be paid for all work performedunder the institution’s own payrollaccount.Misrepresentation (Subpart F—§§ 668.71 Through 668.75)GeneralComment: A significant number ofcommenters generally or fundamentallysupported the proposed regulations insubpart F of part 668. Severalcommenters stated that the proposedregulations on misrepresentation reflectan excellent, much-neededimprovement over current regulatorylanguage and that they will significantlyenhance the Department’s ability toaddress deceptive practices thatcompromise the ability of students tomake informed choices aboutinstitutions and the expenditure of theirresources on higher education. Onecommenter agreed, in particular, withproposed §§ 668.72 and 668.73, whichensure that all students have access andtransparent information about theireducational program and its cost. Thiscommenter noted that accuratedisclosures are needed in order toprotect students, especially in light ofthe many documented instances inwhich students have had theirexpectations regarding postsecondaryeducation outcomes (e.g., completeddegrees, good jobs and high salaries) notmet with success but with failure andmountains of debt instead. Onecommenter stated that the proposedregulations on misrepresentationprovide additional protections againstmisleading and overly aggressiveadvertising and marketing tactics.Another commenter strongly supportedthe proposals and stated that integrity inhow institutions present themselves iskey to ensuring students are not victimsof false promises or misunderstandingwhen making a decision about highereducation. Finally, we received manycomments that supported theDepartment’s mission of helpingstudents make sound decisions andmaintaining the integrity of the title IV,HEA programs but expressed concernabout some of the specific language.Discussion: We appreciate thecommenters’ support. We address thecomments and concerns on specificlanguage in the relevant sections thatfollow.Changes: None.Comment: Many commentersstrenuously opposed the proposedrevisions to the misrepresentationregulations in subpart F of part 668.Some commenters argued that, becausemisrepresentation is an issue moreappropriately addressed by the FederalTrade Commission (FTC), theDepartment should have adopted inthese regulations the language from theFTC guidelines so that those guidelineswould be applicable to all institutionsparticipating in the title IV, HEAprograms. These commenters noted thatfor-profit institutions are already subjectto the FTC guidelines and that theresults of that guidance have servedtheir students well and that othersectors of higher education should besubject to the FTC guidelines as well.Several commenters stated thatstudents would be confused by theproposed regulations dealing withVerDate Mar2010 14:10 Oct 28, 2010 Jkt 223001 PO 00000 Frm 00083 Fmt 4701 Sfmt 4700 E:\FR\FM\29OCR2.SGM 29OCR2misrepresentation. Specifically, thecommenters expressed concern thatbecause institutions discloseinformation to many parties, includingaccrediting agencies, the Department,current and prospective students, andthe general public, information requiredto be disclosed under the title IV, HEAprogram regulations is complex and notalways easy to understand. Therefore,the commenters argued that studentswill not be able to make informeddecisions about which institution toattend because, under the title IV, HEAprogram regulations, they will beprovided different statistics and willhave difficulty understanding them.One commenter expressed concernthat while the education community isin need of clear guidance on ethicalpractices and the proposed regulationsare well-intended, they are too vagueand subjective. A few commenters urgedthe Department not to adopt theproposed regulations as final unlessthey are significantly clarified.Finally, one group of commentersstated that the proposed changes tosubpart F of part 668 are unfair to forprofitschools. Some commentersappeared to believe that the revisionsreflected in proposed subpart F of part668 would only apply to for-profitschools.Discussion: During the negotiationsthat were held during the months ofNovember 2009 through January 2010,we discussed whether to adopt the FTCguidelines in our misrepresentationregulations. Some non-Federalnegotiators strongly opposed adoptingthe FTC guidelines in the Department’sregulations because doing so, theyargued, would be duplicative andheavy-handed.The FTC only has jurisdiction overfor-profit entities, and those entities arealready subject to the FTC guidelines.The FTC guidelines do not apply todegree-granting institutions, and webelieve it would not be appropriate toadopt the FTC guidelines wholesale.Instead, we have reviewed theguidelines carefully and incorporatedonly those that we determined areappropriate for inclusion in ourregulations (i.e., those that we believeshould be applicable to all eligibleinstitutions participating in the title IV,HEA programs).With regard to the commenters whoexpressed concern for students beingconfused by these regulations, we notethat the proposed regulations apply toinstitutions participating in the title IV,HEA programs and not to students.Because students are not the intendedaudience for these regulations, we donot believe that students will be