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Professionals U.S. Department of Education

Citations: (R)667.5 AsOfDate: 12/31/95

From the Compilation of Regulations through 12/31/95. Sec. 667.5 Criteria the Secretary uses to refer institutions to a SPRE for review. (a)(1) The Secretary refers an institution that participates in a title IV, HEA program to a SPRE for review if the institution meets one or more of the criteria contained in paragraph (b) of this section. (2) In determining whether an institution meets one or more of the criteria contained in paragraph (b) of this section, the Secretary uses the most recently available data. (b) Except as provided in paragraph (c) of this section, the Secretary refers an institution to a SPRE if-(1) The institution has a cohort default rate (defined in 34 CFR 668.17) equal to or greater than 25 percent; (2)(i) The institution has a cohort default rate (defined in 34 CFR 668.17) equal to or greater than 20 percent; and (ii) During the latest completed award year for which data are available-(A) More than two-thirds of the institution's regular undergraduate students who were enrolled as at least half-time students received assistance under any title IV, HEA program, excluding assistance received from the SSIG, NEISP, and Federal PLUS programs; or (B) The amount that the institution's students received under the title IV, HEA programs, excluding funds from the SSIG, NEISP, and Federal PLUS programs, is equal to or greater than two-thirds of the institution's education and general expenditures; (3) The amount that the institution's students received under the Federal Pell Grant Program is equal to or greater than two-thirds of the institution's education and general expenditures; (4) The Secretary initiated a limitation, suspension, or termination action against the institution under 34 CFR part 668, subpart G, within the preceding 5 years; (5) An audit finding in the institution's 2 most recent audits under 34 CFR 668.23 resulted in a required repayment by the institution of an amount greater than 5 percent of the funds the institution received under the title IV, HEA programs for any 1 award year covered by those audits; (6) The Secretary cited the institution for its failure to submit an acceptable audit report by the deadlines established under 34 CFR 668.23; (7)(i) The amount that the institution's students received under the Federal Pell Grant Program during any award year differed by more than 25 percent from the amount that the institution's students received under that program in the preceding award year, unless the differences can be accounted for by changes in that program;

(ii) The amount that the institution's students received under the Federal Stafford Loan Program during any award year differs by more than 25 percent from the amount that the institution's students received under that program in the preceding award year, unless the differences can be accounted for by changes in that program; or (iii) The amount that the institution's students received under the Federal SLS Program during any award year differs by more than 25 percent from the amount that the institution's students received under that program in the preceding award year, unless the differences can be accounted for by changes in that program; (8) The institution failed to meet the factors of financial responsibility in 34 CFR part 668, subpart B; (9) The institution underwent a change in ownership that resulted in a change of control as defined in 34 CFR 600.31; (10) Except with regard to any public institution affiliated with a State system of higher education, the institution has participated for less than 5 years in-(i) The Federal Pell Grant Program; (ii) The FFEL Program; (iii) The FSEOG Program; (iv) The FWS Program; (v) The Federal Perkins Loan Program; or (11) The institution has been subject to a pattern of complaints from students related to its management or conduct of the title IV, HEA programs or to misleading or inappropriate advertising and promotion of the institution's educational programs that, in the Secretary's judgment, based on information available to the Secretary, including information provided to the Secretary by the SPRE, is sufficient to warrant review. (c)(1) Before the Secretary refers an institution to a SPRE for meeting one or more of the referral criteria contained in paragraph (b) of this section, the Secretary notifies the institution of that intended referral and the reasons for the referral. (2) The Secretary delays the referral if the Secretary receives from the institution a notice of its intent to challenge the accuracy of the information upon which the referral was based no later than seven days after the institution receives the notice from the Secretary. (3)(i) If an institution challenges the accuracy of the information on which its referral was based, the institution has the burden of proving that the information was inaccurate. (ii) For purposes of paragraph (c)(3)(i) of this section, the Secretary presumes that records maintained in the normal course of business by the U.S. Department of Education, a guaranty agency under the FFEL Program, a SPRE, a State licensing agency, or another State agency are accurate. (4)(i) If an institution challenges the accuracy of the information on which its referral was based, other than the accuracy of its cohort default rate for a particular year, the Secretary must receive the institution's submission, along with any supporting document or record, no later than 30 days after the institution receives the notice described in paragraph (c)(1) of this section. (ii) If an institution challenges the accuracy of its cohort default rate for a particular year under 34 CFR 668.17(d)(1)(i) (A) and (B), it must file a timely appeal of that rate under those

provisions. (d) If the institution timely challenges its referral under paragraph (c) of this section, the Secretary refers the institution to a SPRE for review unless the institution convinces the Secretary that its referral was based upon inaccurate information for all of the referral criteria. (e)(1) Documents referenced in this section may be hand-delivered or mailed. If documents are mailed, they must be mailed certified mail, return receipt requested, or by next-day mail service. (2) If documents are mailed, proof of receipt shall be evidenced by the delivery date indicated on the United States Postal Service return receipt card (green card), or the pickup date indicated on the next day mail service's bill. (3) For purposes of paragraph (e)(2) of this section, if any submission is sent by next-day mail service, the Secretary presumes that the document was delivered the day after the date on which it was picked up for delivery. (Authority: 20 U.S.C. 1099a-3)