(a)

1. (1) A State that wishes the Secretary to consider its State process as an alternative to achieving a passing score on an approved, independently administered test for the purpose of determining a student's eligibility for title IV, HEA program funds must apply to the Secretary for approval of that process.
2. (2) To be an approved State process, the State process does not have to include all the institutions located in that State, but must indicate which institutions are included.

(b) The Secretary approves a State's process if—

1. (1) The State administering the process can demonstrate that the students it admits under that process without a high school diploma or its equivalent, who enroll in participating institutions have a success rate as determined under paragraph (h) of this section that is within 95 percent of the success rate of students with high school diplomas; and
2. (2) The State's process satisfies the requirements contained in paragraphs (c) and (d) of this section.

(c) A State process must require institutions participating in the process to provide each student they admit without a high school diploma or its recognized equivalent with the following services:

1. (1) Orientation regarding the institution's academic standards and requirements, and student rights.
2. (2) Assessment of each student's existing capabilities through means other than a single standardized test.
3. (3) Tutoring in basic verbal and quantitative skills, if appropriate.
4. (4) Assistance in developing educational goals.
5. (5) Counseling, including counseling regarding the appropriate class level for that student given the student's individual's capabilities.
6. (6) Follow-up by teachers and counselors regarding the student's classroom performance and satisfactory progress toward program completion.

(d) A State process must—

1. (1) Monitor on an annual basis each participating institution's compliance with the requirements and standards contained in the State's process;
2. (2) Require corrective action if an institution is found to be in noncompliance with the State process requirements; and
3. (3) Terminate an institution from the State process if the institution refuses or fails to comply with the State process requirements.

(e)

1. (1) The Secretary responds to a State's request for approval of its State's process within six months after the Secretary's receipt of that request. If the Secretary does not respond by the end of six months, the State's process is deemed to be approved.

2. (2) An approved State process becomes effective for purposes of determining student eligibility for title IV, HEA program funds under this subpart—

   1. (i) On the date the Secretary approves the process; or
   2. (ii) Six months after the date on which the State submits the process to the Secretary for approval, if the Secretary neither approves nor disapproves the process during that six month period.

(g)

1. (1) The Secretary withdraws approval of a State process if the Secretary determines that the State process violated any terms of this section or that the information that the State submitted as a basis for approval of the State process was inaccurate.
2. (2) The Secretary provides a State with the opportunity to contest a finding that the State process violated any terms of this section or that the information that the State submitted as a basis for approval of the State process was inaccurate.

(h) The State must calculate the success rates as referenced in paragraph (b) of this section by—

1. (1) Determining the number of students with high school diplomas who, during the applicable award year described in paragraph (i) of this section, enrolled in participating institutions and—

(5) Making the calculations described in paragraphs (h)(1) through (h)(4) of this section for students without a high school diploma or its recognized equivalent who enrolled in participating institutions.

1. (i) For purposes of paragraph (h) of this section, the applicable award year is the latest complete award year for which information is available that immediately precedes the date on which the State requests the Secretary to approve its State process, except that the award year selected must be one of the latest two completed award years preceding that application date.

   (Approved by the Office of Management and Budget under control number 1845-0049)

   (Authority: 20 U.S.C. 1091(d))