34 C.F.R. § 668.81

Scope and special definitions

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(a) This subpart establishes regulations for the following actions with respect to a participating institution or third-party servicer:

(1) An emergency action.

(2) The imposition of a fine.

(3) The limitation, suspension, or termination of the participation of the institution in a title IV, HEA program.

(4) The limitation, suspension, or termination of the eligibility of the servicer to contract with any institution to administer any aspect of the institution's participation in a Title IV, HEA program.

(5) The determination of—

(i) Borrower defense to repayment claims that are brought by the Department against an institution under § 685.206, § 685.222 or part 685, subpart D, of this chapter; and

(ii) Liability of an institution to the Secretary for losses to the Secretary arising from these claims.

(b) This subpart applies to an institution or a third-party servicer that violates any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, or any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA.

(1) An institution or any of its locations or educational programs fails to qualify for initial designation as an eligible institution, location, or educational program because the institution, location, or educational program fails to satisfy the statutory and regulatory provisions that define an eligible institution or educational program with respect to the Title IV, HEA program for which a designation of eligibility is sought;

(2) An institution fails to qualify for initial certification or provisional certification to participate in any Title IV, HEA program because the institution does not meet the factors of financial responsibility and standards of administrative capability contained in subpart B of this part;

(3) A participating institution's or a provisionally certified participating institution's period of participation, as specified under § 668.13, has expired; or

(4) A participating institution's provisional certification is revoked under the procedures in § 668.13.

(d) This subpart does not apply to a determination by the Secretary of the system to be used to disburse Title IV, HEA program funds to a participating institution (i.e., advance payments and payments by way of reimbursements).

(e) The proceedings described in this subpart provide the institution's sole opportunity for a hearing on the existence and amount of the debt that is required by applicable law prior to the Department collecting the debt from any available funds, including but not limited to offsetting the debt or any liability against funds to be provided to an institution pursuant to any Title IV, HEA program in which that institution participates.

(f) Nothing contained in this subpart limits the right of the Department to gather information, including by subpoena, or conduct any examination, audit, program review, investigation, or other review authorized by other applicable law.

(g) Unless directed by a court of competent jurisdiction, the hearing official, or the Secretary for good cause, if a collateral attack is brought in any court concerning all or any part of any proceeding under this subpart, the challenged proceeding shall continue without regard to the pendency of that court proceeding. No default or other failure to timely act as directed in a proceeding authorized by this subpart shall be excused based on the pendency of such court proceeding.

(Authority: 20 U.S.C. 1094) [51 FR 43325, Dec. 1, 1986, as amended at 55 FR 32183, Aug. 7, 1990; 58 FR 13344, Mar. 10, 1993; 59 FR 22443, Apr. 29, 1994; 59 FR 61186, Nov. 29, 1994; 63 FR 40626, July 29, 1998; 82 FR 6256, Jan. 19, 2017; 87 FR 66041, Nov. 1, 2022]

Notes of Decisions

Cited in 6 cases (3 in the last 5 years), 1990–2024 · leading case: Continental Training Services, Inc. D/B/A Superior Training Services v. Lauro Cavazos, Secretary of Education

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Continental Training Services, Inc. D/B/A Superior Training Services v. Lauro Cavazos, Secretary of Education (1990) ca7 · cites it 4× “34 C.F.R. § 668.81 (1988); see also 34 C.”

San Juan City College, Inc. v. United States (2006) uscfc “These regulations further state that if the Department of Education believes an institution is no longer eligible for Title IV participation, the Secretary may: (1) Terminate the institution’s eligibility designation in whole or as to a particular location— (i) Under the…”

United States v. Iwanski (2011) flsd “§§ 1082 (g), (h); 34 C.F.R. §§ 668.81 -.97, 682.413(c)). Defendant’s defense is based on the premise that these enforcement mechanisms are applicable to the United States, and that Plaintiffs violations of certain provisions of the HEA prevent it from collecting the debt owed by…”

Britt v. IEC Corporation (2021) flsd “§ 1094 (c)(1)(F) (2016); see also 34 C.F.R. 668.81 (2018) (establishing regulations for fines and the limitation, suspension, or termination of an institution in a Title IV program).”

Eastern Gateway Community College v. Cardona (2022) ohsd “34 CFR § 668.81 (authority to take enforcement actions is limited).”

360 Degree Education, LLC v. U.S. Department of Education (2024) txnd “The HEA provides the Department with two pathways to end an institution’s or a program’s participation in the Title IV program: (1) Program Reviews; and (2) an action under Subpart G of Part 668 to Title 34 of the Code of Federal Regulations, 34 C.F.R. §§ 668.81 through 668.100.…”

— 34 C.F.R. § 668.81(c) — 1 case

Continental Training Services, Inc. D/B/A Superior Training Services v. Lauro Cavazos, Secretary of Education (1990) ca7 “34 C.F.R. § 668.81 (1988); see also 34 C.”

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