34 C.F.R. § 600.40

Loss of eligibility

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(a)(1) Except as provided in paragraphs (a) (2) and (3) of this section, an institution, or a location or educational program of an institution, loses its eligibility on the date that—

(i) The institution, location, or educational program fails to meet any of the eligibility requirements of this part;

(ii) The institution or location permanently closes;

(iii) The institution or location ceases to provide educational programs for a reason other than a normal vacation period or a natural disaster that directly affects the institution, particular location, or the students of the institution or location; or

(iv) For purposes of the title IV, HEA programs—

(A) The institution's period of participation as specified under 34 CFR 668.13 expires; or

(B) The institution's provisional certification is revoked under 34 CFR 668.13.

(2) If an institution loses its eligibility because it violated the requirements of § 600.5(a)(8), as evidenced by the determination under provisions contained in § 600.5(d), it loses its eligibility on the last day of the fiscal year used in § 600.5(d), except that if an institution's latest fiscal year was described in § 600.7(h)(1), it loses its eligibility as of June 30, 1994.

(3) If an institution loses its eligibility under the provisions of § 600.7(a)(1), it loses its eligibility on the last day of the award year being evaluated under that provision.

(b) If the Secretary undertakes to terminate the eligibility of an institution because it violated the provisions of § 600.5(a)(8) or § 600.7(a), and the institution requests a hearing, the presiding official must terminate the institution's eligibility if it violated those provisions, notwithstanding its status at the time of the hearing.

(c)(1) If the Secretary designates an institution or any of its educational programs or locations as eligible on the basis of inaccurate information or documentation, the Secretary's designation is void from the date the Secretary made the designation, and the institution or program or location, as applicable, never qualified as eligible.

(2) If an institution closes its main campus or stops providing any educational programs on its main campus, it loses its eligibility as an institution, and that loss of eligibility includes all its locations and all its programs. Its loss of eligibility is effective on the date it closes that campus or stops providing any educational program at that campus.

(d) Except as otherwise provided in this part, if an institution ceases to satisfy any of the requirements for eligibility under this part—

(1) It must notify the Secretary within 30 days of the date that it ceases to satisfy that requirement; and

(2) It becomes ineligible to continue to participate in any HEA program as of the date it ceases to satisfy any of the requirements.

(Authority: 20 U.S.C. 1088, 1099a-3, and 1141) [59 FR 22336, Apr. 29, 1994, as amended at 63 FR 40622, July 29, 1998]

Notes of Decisions

Cited in 5 cases (1 in the last 5 years), 1993–2022 · leading case: Career Educ., Inc., D/B/A Atds-Texas v. Dep't of Educ., 6 F.3d 817 (D.C. Cir. 1993).

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Career Educ., Inc., D/B/A Atds-Texas v. Dep't of Educ., 6 F.3d 817 (D.C. Cir. 1993). · cites it 4× “See 34 C.F.R. § 600.40 (c)(2). When an eligible school changes ownership, the new owner may reestablish eligibility if the Department determines that the school is the “same institution” for purposes of the program.”

Armstrong v. Accrediting Council for Continuing Educ. & Training, Inc., 980 F. Supp. 53 (D.D.C. 1997). · cites it 3× “Plaintiff grounds her claim in the language of 34 C.F.R. § 600.40 (a)(l)(i), which states that an institution loses its eligibility on the date that it fails to meet any of the Department’s eligibility requirements.”

Int'l Junior Coll. of Bus. & Tech., Inc. v. Duncan, 802 F.3d 99 (1st Cir. 2015). “See 34 C.F.R. § 600.40 (a)(2)(1998). A noncomplying school also could not become eligible to participate in Title TV again until it “demonstrate[d] compliance with all eligibility requirements for at least the fiscal year following the [noncompliant] fiscal year.”

San Juan City Coll., Inc. v. United States, 74 Fed. Cl. 448 (Fed. Cl. 2006). · cites it 2× “” 34 C.F.R. § 600.40 , et seq. (1994). The regulations provide that an institution loses its eligibility to participate m Title IV funding programs on the date that “[t]he institution or location ceases to provide educational programs for a reason other than a normal vacation…”

Florida Coastal Sch. of Law v. Cardona (M.D. Fla. 2022). “At that same status conference, the Court ordered the Department not to take any adverse action against Florida Coastal School of Law pursuant to 34 C.F.R. § 600.40 (a)(1) or any other provision based on the cessation of classes between July 31, 2021, and the date that the Court…”

— 34 C.F.R. § 600.40(a) — 1 case

Armstrong v. Accrediting Council for Continuing Educ. & Training, Inc., 980 F. Supp. 53 (D.D.C. 1997). “Plaintiff grounds her claim in the language of 34 C.F.R. § 600.40 (a)(l)(i), which states that an institution loses its eligibility on the date that it fails to meet any of the Department’s eligibility requirements.”

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