[Federal Register: April 23, 2008 (Volume 73, Number 79)]
[Proposed Rules]               
[Page 22019-22044]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23ap08-36]                         


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Part II





Department of Education





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34 CFR Part 200



Title I--Improving the Academic Achievement of the Disadvantaged; 
Proposed Rule


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DEPARTMENT OF EDUCATION

34 CFR Part 200

RIN 1810-AB01
[Docket ID ED-2008-OESE-0003]

 
Title I--Improving the Academic Achievement of the Disadvantaged

AGENCY: Office of Elementary and Secondary Education, Department of 
Education.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Secretary proposes to amend the regulations governing 
programs administered under Part A of Title I of the Elementary and 
Secondary Education Act of 1965, as amended (ESEA), to clarify and 
strengthen current Title I regulations in the areas of assessment, 
accountability, public school choice, and supplemental educational 
services.

DATES: We must receive your comments on or before June 23, 2008.

ADDRESSES: Submit your comments through the Federal eRulemaking Portal 
or via postal mail, commercial delivery, or hand delivery. We will not 
accept comments by fax or by e-mail. Please submit your comments only 
one time, in order to ensure that we do not receive duplicate copies. 
In addition, please include the Docket ID at the top of your comments.
     Federal eRulemaking Portal: Go to http://
www.regulations.gov to submit your comments electronically. Information 
on using Regulations.gov, including instructions for accessing agency 
documents, submitting comments, and viewing the docket is available on 
the site under ``How To Use This Site.''
     Postal Mail, Commercial Delivery, or Hand Delivery. If you 
mail or deliver your comments about these proposed regulations, address 
them to Zollie Stevenson, Jr., U.S. Department of Education, 400 
Maryland Avenue, SW., room 3W230, Washington, DC 20202-6132.

    Privacy Note:
    The Department's policy for comments received from members of 
the public (including those comments submitted by mail, commercial 
delivery, or hand delivery) is to make these submissions available 
for public viewing in their entirety on the Federal eRulemaking 
Portal at http://www.regulations.gov. All submissions will be posted 
to the Federal eRulemaking Portal without change, including personal 
identifiers and contact information.


FOR FURTHER INFORMATION CONTACT: Zollie Stevenson, Jr. at 202-260-1824. 
If you use a telecommunications device for the deaf (TDD), you may call 
the Federal Relay Service (FRS) at 1-800-877-8339.
    Individuals with disabilities may obtain this document in an 
alternative format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed under FOR FURTHER 
INFORMATION CONTACT.

SUPPLEMENTARY INFORMATION: 

Invitation to Comment

    We invite you to submit comments regarding these proposed 
regulations. To ensure that your comments have maximum effect in 
developing the final regulations, we urge you to identify clearly the 
specific section or sections of the proposed regulations that each of 
your comments addresses and to arrange your comments in the same order 
as the proposed regulations.
    We invite you to assist us in complying with the specific 
requirements of Executive Order 12866 and its overall requirement of 
reducing regulatory burden that might result from these proposed 
regulations. Please let us know of any further opportunities we should 
take to reduce potential costs or increase potential benefits while 
preserving the effective and efficient administration of the program.
    During and after the comment period, you may inspect all public 
comments about these proposed regulations by accessing Regulations.gov. 
You may also inspect the comments, in person, in room 3W202, 400 
Maryland Avenue, SW., Washington, DC, between the hours of 8:30 a.m. 
and 4 p.m., Eastern time, Monday through Friday of each week except 
Federal holidays.

Assistance to Individuals With Disabilities in Reviewing the Rulemaking 
Record

    On request, we will supply an appropriate aid, such as a reader or 
print magnifier, to an individual with a disability who needs 
assistance to review the comments or other documents in the public 
rulemaking record for these proposed regulations. If you want to 
schedule an appointment for this type of aid, please contact the person 
listed under FOR FURTHER INFORMATION CONTACT.

Background

    The No Child Left Behind Act of 2001 (NCLB), which amended and 
reauthorized the ESEA, fundamentally changed the way States and local 
school districts help ensure that all students meet grade-level 
expectations or better. The law's core principles, particularly in 
Title I, guide the nation's conversation on education: annual 
assessments, publicly reported data, assistance for students and 
schools that fall behind, and accountability for results. NCLB's focus 
on accountability means that all States are now collecting better 
information to help schools, educators, policymakers, and parents make 
the best decisions for students. The Federal government has supported 
NCLB's implementation with significant resources: $165 billion in 
funding for NCLB from 2002 to 2008, including an increase of 40 percent 
in current dollars since 2001. This funding increase was accompanied by 
a philosophical change--that education is not just about how much we're 
spending, but about how well we're serving students.
    The 2007-2008 school year is the sixth full school year since the 
passage of NCLB. Throughout these six years, we carefully monitored the 
law's implementation. We gained valuable information from States, 
districts, and schools about how implementation of the law's 
requirements could be improved to ensure that all students reach 
proficiency in reading/language arts and mathematics by the 2013-2014 
school year. For example, in the first several years following the 
passage of NCLB, we received frequent requests from States to provide 
additional flexibility to measure the achievement of students with 
disabilities and students with limited English proficiency (LEP) for 
purposes of adequate yearly progress (AYP) determinations. In response 
to these requests, the Department promulgated regulations to permit 
States to include in their AYP determinations the proficient and 
advanced scores of students with disabilities assessed based on 
alternate and modified academic achievement standards, as well as 
regulations that provide flexibility in the assessment of, and 
accountability for, recently arrived and former LEP students.
    During this time, States developed more sophisticated State data 
systems that now permit more accurate calculations of high school 
graduation rates, as well as the measurement of individual student 
academic growth from one year to the next. Higher-quality State 
accountability and assessment systems are in place thanks to the 
rigorous standards established under NCLB, the assessment and 
accountability peer review process, and most importantly, the hard work 
of the States.
    With these advancements, we believe that it is time to further 
amend and update our regulations to address certain key areas. 
Accordingly, these proposed regulations build on the

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advancements of State accountability and assessment systems, while 
incorporating key feedback from the field into an even clearer vision 
of what it takes to educate each and every one of our Nation's 
schoolchildren.
    We want to ensure that these regulations are as effective as 
possible in advancing the key principles of NCLB and, therefore, want 
to provide the opportunity for as much public input on the proposed 
regulations as possible. The public will have 60 days to comment on 
these proposed regulations. We also will provide opportunities for 
public input during regional public meetings; the dates, times, and 
locations of these meetings will be announced in a separate notice in 
the Federal Register.
    These proposed regulations would clarify and strengthen current 
regulations in the areas of assessment, accountability, supplemental 
educational services (SES), and public school choice. Specifically, the 
proposed regulations address the following key areas:
     Assessing higher-order thinking skills through multiple 
measures.
     Increasing subgroup accountability.
     Ensuring that States and local educational agencies (LEAs) 
include State data from the National Assessment of Educational Progress 
(NAEP) on State and local report cards.
     Establishing a uniform and accurate method that States 
must use to calculate high school graduation rates and setting high 
school graduation rate goals for AYP purposes.
     Including disaggregated graduation rates in AYP 
calculations.
     Permitting the inclusion of measures of individual student 
academic growth in a State's definition of AYP.
     Creating a National Technical Advisory Council to advise 
the Secretary on complex issues related to State assessment and 
accountability systems.
     Identifying schools and LEAs for improvement.
     Ensuring that parents receive the information they need to 
exercise their public school choice and SES options.
     Providing information to the public about participation in 
SES and public school choice.
     Strengthening the requirements for schools in 
restructuring.
     Requiring States to be more transparent about how they 
monitor LEAs' implementation of SES and strengthening the evidence that 
States must consider when approving and monitoring SES providers.
     Using SES and school choice funds for parent outreach.
     Maximizing use of funds for public school choice-related 
transportation and SES.
    Issuing regulations that strengthen Title I implementation in these 
areas will help bring about higher-quality assessments and stronger 
accountability for results, as well as provide parents with the 
information they need to make informed decisions about public school 
choice and SES. We look forward to receiving your comments on these 
proposed regulations to ensure that they accomplish our intended 
objectives.

Significant Proposed Regulations

    We discuss substantive issues under the sections of the proposed 
regulations to which they pertain. Generally, we do not address 
proposed regulatory provisions that are technical or otherwise minor in 
effect.

Section 200.2--State Responsibilities for Assessment

    Statute: Section 1111(b)(3)(C)(vi) of the ESEA states that 
assessments must involve multiple up-to-date measures of student 
academic achievement, including measures that assess higher-order 
thinking skills and understanding.
    Current Regulations: Section 200.2(b)(7) of the Title I regulations 
essentially repeats the statutory language.
    Proposed Regulations: Proposed Sec.  200.2(b)(7)(i) and (ii) would 
clarify that measures of student academic achievement may include 
multiple types of questions that range in complexity and reflect the 
cognitive concepts and processes in the State content standards within 
a single assessment, as well as multiple assessments within a subject 
area.
    Reasons: There has been some misunderstanding among parents, 
teachers, and administrators that student achievement, for purposes of 
accountability determinations under Title I, must be based on a single 
assessment. This is not true; in fact, the law requires that a State's 
assessment include ``multiple measures.'' The proposed language would 
clarify what is meant by this concept, which is included in the law to 
ensure that a State's assessment system measure the full range of 
cognitive complexity in the State's academic content standards. 
Assessments, therefore, should include items that measure both higher 
order thinking skills (e.g., reasoning, synthesis, analysis) as well as 
knowledge and recall items to assess the depth and breadth of mastery 
of a particular content domain. In so doing, States may use a single 
test or several tests, or rely on one item format or several item 
formats (such as multiple choice or constructed response).
    Specifically, the proposed regulatory changes would clarify that, 
to meet the requirement to use multiple measures, a State may also 
choose to develop an assessment that relies on a combination of 
question formats, so long as the assessment reflects the degree of 
complexity of the cognitive concepts and processes in the State content 
standards. Multiple assessments to measure student achievement in a 
subject area may also be used in order to assess mastery of the breadth 
of a particular content domain. For example, some States use reading 
and writing assessments to calculate AYP in reading/language arts; 
other States use algebra and probability assessments to calculate AYP 
for mathematics.
    These clarifications are necessary to ensure that States clearly 
understand that their assessments may include single or multiple item 
formats, and that they may use multiple assessments to measure a 
specific content domain; they do not impose new requirements or require 
States to change their current assessment systems.

Section 200.7--Disaggregation of Data

    Statute: Section 1111(b)(2)(C)(v) of the ESEA requires a State to 
define AYP so that its annual measurable objectives apply to all 
students as well as to specific subgroups of students --that is, 
economically disadvantaged students; students from major racial and 
ethnic groups; students with disabilities; and LEP students. Section 
1111(b)(2)(I) of the ESEA makes clear that, for a school or LEA to make 
AYP, all students as well as each subgroup of students must meet or 
exceed the State's annual measurable objectives. Sections 1111(h)(1)(C) 
and 1111(h)(2) require that States and LEAs report on their report 
cards academic achievement data disaggregated by these same subgroups. 
Sections 1111(b)(2)(C) and 1111(h)(1)(C) of the ESEA, however, do not 
require a State to use such disaggregated data for determining AYP or 
reporting achievement data by subgroup if the number of students in a 
subgroup is insufficient to yield statistically reliable information or 
if the results would reveal personally identifiable information about 
an individual student.
    Current Regulations: Section 200.7(a) prohibits a State from using 
disaggregated data for one or more subgroups to report achievement 
results or to identify schools in need of improvement, corrective 
action, or

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restructuring if the number of students in a subgroup is insufficient 
to yield statistically reliable information. Accordingly, Sec.  
200.7(a)(2) requires a State, using sound statistical methods, to 
determine and justify in its State Plan the minimum number of students 
sufficient to yield statistically reliable information for each purpose 
for which disaggregated data are used (e.g., for determining AYP and 
for reporting subgroup achievement on State and LEA report cards).
    Proposed Regulations: In determining a minimum subgroup size, a 
State must balance achieving statistical reliability with maximizing 
inclusion of subgroups for accountability purposes (consistent with the 
statutory requirements to hold schools and LEAs accountable for the 
achievement of specific subgroups). Thus, proposed Sec.  
200.7(a)(2)(i)(B) would require a State, as it considers statistical 
reliability in setting its minimum subgroup size, to ensure, to the 
maximum extent practicable, that all student subgroups are included, 
particularly at the school level, for purposes of making accountability 
decisions.
    Proposed Sec.  200.7(a)(2)(ii) would require each State to revise 
its Consolidated State Application Accountability Workbook (which is 
part of the State Plan and is hereafter referred to as the 
Accountability Workbook) to include (1) an explanation of how the 
State's minimum subgroup size meets proposed Sec.  200.7(a)(2)(i); (2) 
an explanation of how other components of the State's AYP definition, 
in addition to the State's minimum subgroup size, interact to affect 
the statistical reliability of the data and to ensure maximum inclusion 
of all students and student subgroups; and (3) information on the 
number and percentage of students and student subgroups excluded from 
school-level accountability determinations.
    Proposed Sec.  200.7(a)(2)(iii) would require each State to submit 
a revised Accountability Workbook that incorporates the information in 
proposed Sec.  200.7(a)(2)(ii) for technical assistance and peer review 
no later than six months after the effective date of the regulation.
    Reasons: One of the most significant aspects of NCLB is its focus 
on holding schools and LEAs accountable for the achievement of specific 
student subgroups. Prior to NCLB, the overall achievement of students 
in a school often masked the low achievement of certain subgroups of 
students. To ensure that schools and LEAs are held accountable for the 
achievement of all their students, NCLB specifically requires that 
specified student subgroups must meet a State's annual measurable 
objectives and other academic indicators in order for a school or LEA 
to make AYP. NCLB also requires that States and LEAs report to the 
public on the achievement of their student subgroups.
    These disaggregation requirements are tempered by the need to 
ensure statistical reliability and privacy. Thus, sections 
1111(b)(2)(C)(v) and 1111(h)(1)(C) of the ESEA and current Sec.  200.7 
do not require accountability determinations or reporting by student 
subgroup if the size of the subgroup is too small to yield 
statistically reliable results or would reveal personally identifiable 
information about individual students. Current Sec.  200.7(a)(1), 
therefore, requires a State to set a minimum subgroup size. A minimum 
subgroup size that is too small may yield unreliable data or reveal the 
identity of individual students. A minimum subgroup size, however, 
should be no larger than necessary to ensure the protection of privacy 
for individuals and to allow for statistically reliable results of the 
aggregate performance of the students who make up a subgroup. Moreover, 
the minimum subgroup size should be small enough to ensure the maximum 
inclusion of student subgroups in accountability decisions, consistent 
with the statutory requirements to disaggregate data.
    Some have argued that the heterogeneous nature of student 
populations requires a relatively large minimum subgroup size in order 
to reflect accurately the achievement of students in AYP 
determinations. We believe, however, that in many cases minimum 
subgroup sizes are larger than is necessary to ensure statistically 
reliable information; the result is that a large number of subgroups 
(e.g., low-income students, students in some racial or ethnic 
subgroups, LEP students, and students with disabilities) are excluded 
from school-level accountability determinations.
    Some estimates indicate that large minimum subgroup sizes result in 
nearly 2 million students (or about 1 in every 14 test scores) not 
being counted in NCLB subgroup accountability determinations at the 
school level and minority students are as much as seven times more 
likely than white students to have their scores excluded from school-
level AYP subgroup calculations.\1\ Under the current regulations and 
statute, in order for a school to be held accountable for a student 
subgroup, the number of students in that subgroup must exceed the 
State-established minimum subgroup size. Logically, the larger a 
State's minimum subgroup size, the less likely students will constitute 
an accountability subgroup at the school level and, thus, the school 
would not be held accountable for the performance of that subgroup.
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    \1\ Bass, F., Ziegler Dizon, N., & Feller, B. (2006, April 18). 
States Omit Minorities' School Scores. Associated Press.
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    Setting minimum subgroup sizes that are statistically reliable has 
been a challenge for States. This challenge may stem from the fact that 
the concept of ``statistical reliability'' normally refers to the 
adequacy of a sample size to produce results with enough precision to 
meet the purpose of a study or report. The larger the sample drawn, the 
smaller the sampling error, variability, and confidence intervals 
around the estimate, and the higher the resulting precision of the 
estimate. However, under NCLB, all students in the tested grades are 
required to be assessed. Therefore, in the NCLB context, statistical 
reliability is obtained through the requirement to test the population 
of students while addressing concerns about instability of scores in 
small subgroups by using a minimum subgroup size. The use of a minimum 
subgroup size is not as much a ``sampling'' issue, as it is a 
protection to minimize the instability of scores that may occur when 
there are a small number of scores in a population. A minimum subgroup 
size mitigates the instability of scores and reduces the likelihood 
that an extreme score (high or low) will positively or negatively 
affect the overall score for the subgroup.
    There have been a number of developments in State assessment and 
accountability systems since NCLB was enacted and Accountability 
Workbooks were first approved. These developments have provided States 
the opportunity to be more precise, consistent, and transparent in the 
application of statistical reliability concepts under NCLB. 
Specifically, when NCLB was enacted, most States did not yet assess all 
students in grades three through eight and once in the high school 
grade span as required under NCLB. Now, virtually all students in all 
required grades are assessed; therefore, test scores generally reflect 
actual proficiency levels of schools rather than estimates based on the 
scores of students in one grade. States also have more options to 
accurately assess student learning, particularly for students with 
disabilities and LEP students. In addition, States have made tremendous 
advances in their abilities to gather and analyze student

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achievement data. These advances help States strike a more optimal 
balance between reasonable subgroup accountability and inclusion of the 
maximum number of students in school-level AYP determinations.
    For these reasons, the proposed regulations would require a State 
to ensure that its minimum subgroup size is large enough to produce 
statistically reliable information for all purposes for which 
disaggregated data are used (e.g., the use of data for reporting and 
making accountability decisions) yet limited to the smallest number 
possible in order to maximize the inclusion of student subgroups in 
accountability decisions.
    Furthermore, while the proposed regulations would not require a 
specific minimum subgroup size, they would require each State to revise 
its Accountability Workbook to explain how the State's current or 
proposed minimum subgroup size meets Sec.  200.7(a)(2)(i). A State 
would also be required to explain how other elements of the State's AYP 
definition (such as the use of confidence intervals, performance 
indexes, and uniform averaging; the State's definition of full academic 
year), in concert with the State's minimum subgroup size, affect the 
statistical reliability of accountability determinations as well as 
impact the inclusion of all students and student subgroups in those 
determinations. States that propose large minimum subgroup sizes and 
include other components in their AYP definitions that result in the 
exclusion of large numbers of students or student subgroups would be 
subject to close scrutiny.
    The proposed regulations would also require each State to include 
in its Accountability Workbook data on the number and percentage of 
students and subgroups that are excluded from school-level 
accountability decisions as a result of the various components of the 
State's AYP definition. Making this information available through a 
State's Accountability Workbook should enable the public to gain a 
better understanding of how schools are being held accountable for the 
performance of their students and student subgroups.
    Finally, we are proposing that each State submit its Accountability 
Workbook, incorporating the information required by the proposed 
regulations, for technical assistance and peer review. We believe this 
would be an appropriate time to again have outside experts examine all 
the factors that bear on the statistical reliability of and inclusion 
of students in States' accountability systems. This will help the 
Department determine whether those systems are designed to produce 
reliable accountability determinations that maximize the inclusion of 
students and student subgroups, particularly in school-level 
accountability determinations. The Department will work with the 
National Technical Advisory Council that would be established under the 
proposed regulations to develop appropriate guidelines for the peer 
review.

Section 200.11--Participation in NAEP

    Statute: Section 1111(c)(2) of the ESEA requires States to 
participate in the National Assessment of Educational Progress (NAEP) 
in reading and mathematics for the fourth and eighth grades as a 
condition of receiving Title I funds, and section 1112(b)(1)(F) of the 
ESEA requires districts, if selected, to participate in the NAEP. The 
general authorization for the NAEP requirements is outlined in section 
411 of the National Education Statistics Act of 1994 (20 U.S.C. 9010).
    Current Regulations: Section 200.11 requires each State that 
receives funds under Title I, part A of the ESEA to participate in 
biennial State NAEP academic assessments of fourth and eighth grade 
reading and mathematics. It also requires an LEA that receives these 
funds to participate, if selected, in the State NAEP assessments.
    Proposed Regulations: Proposed Sec.  200.11(c) would require a 
State to report the most recent available academic achievement results 
from NAEP reading and mathematics assessments on the same public report 
card as it reports the results of its State assessments. It also would 
require an LEA to report the State NAEP assessment data on its report 
card.
    Reasons: The NAEP is the only nationally representative and 
continuing assessment of what America's students know and can do in 
various grades and subject areas and, therefore, is an important source 
of information about student achievement. We propose to require States 
and LEAs to include information on NAEP scores on the same report cards 
that provide data on the performance of students on State assessments 
to ensure that NAEP data are easily accessible and available to parents 
and the public and to provide them with a tool to compare how students 
in a State are performing on the NAEP with student performance on State 
assessments.
    The Department recognizes that simple comparisons of student 
performance on the NAEP and State assessments cannot be made without 
some understanding of the key differences between the two assessments. 
For example, the NAEP is not aligned with State academic content and 
achievement standards and, therefore, does not necessarily reflect the 
curriculum and instruction to which students are exposed in the 
classroom. Therefore, the Department encourages States to provide 
information to parents on how to interpret the NAEP and State data. 
When the NAEP assessment information is presented in the appropriate 
context, the Department believes information on how students in a State 
are performing on State assessments compared to their performance on 
the NAEP will provide for greater transparency and give parents another 
tool to assess the education system in their State.

Section 200.19--Other Academic Indicators

    Statute: Section 1111(b)(2)(C) of the ESEA outlines the specific 
components that must be included in a State's definition of AYP. 
Subparagraph (vi) of that section specifically provides that a State's 
definition of AYP must include, in accordance with section 
1111(b)(2)(D) of the ESEA, other academic indicators, and that the 
other academic indicator for high schools must be the graduation rate. 
(Graduation rate is generally defined in this section as the percentage 
of students who graduate from secondary school with a regular diploma 
in the standard number of years.) Section 1111(b)(2)(I)(i) of the ESEA 
further provides that, if any group of students identified in section 
1111(b)(2)(C)(v) \2\ does not meet the annual measurable objectives in 
any particular year, the school, under what is commonly known as the 
``safe harbor'' provision, is still considered to have made AYP for 
that year if the percentage of students in that group who did not meet 
or exceed the proficient level of academic achievement on the State 
assessment for that year decreased by 10 percent from the previous 
year, and that group made progress on one or more of the other academic 
indicators.
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    \2\ These groups are: (1) All public elementary and secondary 
school students, (2) economically disadvantaged students, (3) 
students from major racial and ethnic groups, (4) students with 
disabilities, and (5) students with limited English proficiency.
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    Current Regulations: Section 200.19(a)(1) of the regulations 
reflects the statutory requirements and requires States to use 
graduation rate as the other academic indicator for determining AYP for 
high schools. Under the current regulations, States have some 
flexibility in calculating graduation rates. States also have 
flexibility in setting

[[Page 22024]]

graduation rate goals or determining the improvement in graduation 
rates needed for a school or district to make AYP. Graduation rate is 
defined in the regulations as: (1) the percentage of students, measured 
from the beginning of high school, who graduate from high school with a 
regular diploma (not including an alternative degree, such as a General 
Educational Development (GED) credential or another type of certificate 
that is not fully aligned with the State's academic standards) in the 
standard number of years; or (2) another definition, developed by the 
State and approved by the Secretary in the State Plan, that more 
accurately measures the rate of student graduation from high school 
with a regular diploma. In defining graduation rate, the State must 
avoid counting a dropout as a transfer.
    Section 200.19(d)(1) states that a State may, but is not required 
to, hold schools and LEAs accountable for achieving higher goals on its 
other academic indicators, including, with respect to high schools, the 
graduation rate, over the course of the timeline established by the 
State under Sec.  200.15. Further, Sec.  200.20 provides that, in order 
for a school or LEA to make AYP, each subgroup of students must meet or 
exceed the State's annual measurable objectives and the State's goals 
for the other academic indicator.
    Section 200.19(d)(2)(i) requires a State to disaggregate its other 
academic indicators by subgroup for purposes of reporting under section 
1111(h) of the ESEA and for using the ``safe harbor'' provision to 
determine AYP. Section 200.19(d)(2)(ii) states that a State need not 
disaggregate those indicators for determining AYP except as provided 
for in section 1111(b)(2)(C)(vii) (which permits States to establish 
any other academic indicators in addition to those required under 
section 1111(b)(2)(C)(vi)).
    Proposed Regulations: We propose several changes to the regulations 
regarding the use of high school graduation rate as the other academic 
indicator for determining AYP for high schools.
    Definition of graduation rate. Consistent with the definition 
adopted by the National Governors Association (NGA), and agreed to by 
all 50 governors in 2005, proposed Sec.  200.19(a)(1) would require 
States to use a uniform and accurate method of calculating graduation 
rates by defining graduation rate as the number of students who 
graduate in the standard number of years with a regular high school 
diploma divided by the number of students who form the ``adjusted 
cohort'' for that graduating class. The ``adjusted cohort'' is the 
group of students who entered the 9th grade four years earlier, and any 
students who transferred into or entered the cohort in grades 9 through 
12, minus any students removed from the cohort. To remove a student 
from the cohort, a school or LEA would need to confirm that the student 
either enrolled in another educational program that culminates in the 
award of a regular high school diploma or is deceased. A student who is 
retained in grade, enrolls in a GED program, or leaves school for any 
other reason would remain in the adjusted cohort for the purposes of 
calculating the graduation rate.
    Proposed Sec.  200.19(a)(1)(i)(C)(2) would permit a State to 
propose, for approval by the Secretary, an alternate definition of 
``standard number of years'' that would apply to limited categories of 
students who, under certain conditions, may take longer to graduate (as 
is the case, for example, for a small number of students with 
disabilities or students in ``early college high schools'' who earn an 
associate's degree along with a high school diploma).
    A State that does not have in effect a system to accurately track 
transfers for calculation of the graduation rate defined in proposed 
Sec.  200.19(a)(1)(i) would be required to use the averaged freshman 
graduation rate (AFGR) on a transitional basis. The AFGR would be 
defined as the number of high school students who graduate in the 
standard number of years with a regular high school diploma divided by 
the number of students in the incoming freshman class four years 
earlier, which is estimated by averaging the enrollment of that 
freshman class with the enrollment of that class in eighth grade the 
prior year and in tenth grade the subsequent year. For any school or 
district that does not have an eighth grade, the AFGR would be 
estimated by averaging the enrollment of the freshman class with the 
enrollment of the tenth grade class in the subsequent year. The 
proposed regulations would not permit States to use the AFGR to 
calculate graduation rates after 2011-2012; after 2011-2012, all States 
would have to calculate graduation rates under proposed Sec.  
200.19(a)(1).
    Graduation rate goals and continuous and substantial improvement 
measures. Proposed Sec.  200.19(d)(1) would provide two ways for States 
to determine whether their schools and LEAs meet the graduation rate 
component of AYP. Beginning in the 2008-2009 school year, in order for 
a high school or LEA to be considered to have met the other academic 
indicator for purposes of determining AYP, the school or LEA must 
either (1) meet a graduation rate goal, established by the State and 
approved by the Secretary that represents the rate the State expects 
all high schools to achieve; or (2) demonstrate continuous and 
substantial improvement from the prior year toward meeting or exceeding 
that goal, as defined by the State and approved by the Secretary.
    Disaggregation of graduation rates. Proposed Sec.  200.19(e)(1) 
would require each State, no later than the 2012-2013 school year, to 
calculate the graduation rate at the school, LEA, and State levels in 
the aggregate and disaggregated by the subgroups in Sec.  
200.13(b)(7)(ii) for reporting under section 1111(h) of the ESEA and 
for determining AYP. Proposed Sec.  200.19(e)(2)(i) and (ii) would 
require a State, prior to the 2012-2013 school year, to disaggregate 
the graduation rate data at the school, LEA, and State levels for 
reporting purposes and for determining ``safe harbor'' and at the LEA 
and State levels for determining AYP. Table 1 shows the proposed 
disaggregation requirements for determining AYP and for reporting AYP 
determinations.

                              Table 1.--Graduation Rate Disaggregation Requirements
----------------------------------------------------------------------------------------------------------------
                                   AFGR beginning school year 2008-2009     NGA no later than school year 2012-
                                 ----------------------------------------                  2013
                                                                         ---------------------------------------
                                    Determining AYP        Reporting        Determining AYP        Reporting
----------------------------------------------------------------------------------------------------------------
School..........................  No (except when     Yes...............  Yes...............  Yes.
                                   determining
                                   ``safe harbor'').
LEA.............................  Yes...............  Yes...............  Yes...............  Yes.
State...........................  Yes...............  Yes...............  Yes...............  Yes.
----------------------------------------------------------------------------------------------------------------


[[Page 22025]]

    Reasons: There is an urgent need to improve America's high schools 
and ensure that all students graduate from high school ready for 
postsecondary instruction or the workforce. A uniform and accurate 
method of calculating graduation rates is needed to raise expectations 
and to hold schools, districts, and States accountable for increasing 
the number of students who graduate on time with a regular high school 
diploma. In addition, a uniform and accurate method of calculating high 
school graduation rates will improve our understanding of the scope and 
characteristics of those students dropping out of school or taking 
longer to graduate.
    Numerous reports and statistics from the U.S. Department of Labor 
(DOL) indicate the growing importance of a high school diploma. In its 
publication, America's Dynamic Workforce, DOL reported that 90 percent 
of the fastest-growing jobs require some form of postsecondary 
education.\3\ There also are increasing gaps in the unemployment rate 
and earnings between college graduates and high school dropouts. In 
2006, the unemployment rate for high school dropouts age 25 and older 
was over three times the rate for college graduates (6.8 percent 
compared to 2.0 percent, respectively) and over 1.5 times the rate of 
individuals who had only a high school diploma (6.8 percent compared to 
4.3 percent, respectively). Moreover, what DOL refers to as the 
``education premium'' is increasing--in 2006, college graduates with a 
bachelor's or higher degree had median weekly earnings nearly 2.5 times 
greater than the typical high school dropout. Furthermore, college 
graduates have experienced growth in real median weekly earnings since 
1979, while high school dropouts have seen their real median weekly 
earnings decline by about 20 percent.\4\
---------------------------------------------------------------------------

    \3\ U.S. Department of Labor. (2007). America's Dynamic 
Workforce. Washington, DC: Author. Available at: http://www.dol.gov/
asp/media/reports/workforce2007/index.htm.
    \4\ Id.
---------------------------------------------------------------------------

    These statistics demonstrate the critical importance of having a 
high school diploma. Unfortunately, only about half of African American 
and Hispanic students graduate from high school on time with a regular 
high school diploma.\5\ Additionally, 15 percent of high schools in the 
country are producing over half of our dropouts--and yet nearly forty 
percent of these schools are making AYP because of inaccurate 
graduation rate calculations and a lack of accountability for all 
students.\6\
---------------------------------------------------------------------------

    \5\ Belfanz, R., Legters, N., T.C. & Weber, L.M. (2007). Are 
NCLB's Measures, Incentives, and Improvement Strategies the Right 
One's for the Nation's Low-Performing High Schools? American 
Educational Research Journal, 44(3), 559-593.
    \6\ Id.
---------------------------------------------------------------------------

    Because the current regulations allow States latitude in 
determining how graduation rates are measured, the accuracy of State-
calculated graduation rates varies considerably. Many States use some 
form of a ``completer rate'' (multiplication of dropout rates in each 
academic year) as their graduation rate. This rate has been shown to 
overestimate significantly high school graduation rates. The National 
Center for Education Statistics (NCES) calculated the AFGR for all 
States and compared the State-reported graduation rates to the AFGR. 
This analysis, published in the National Assessment of Title I Interim 
Report, shows that in some cases there is nearly a 30-point difference 
between a State's reported graduation rate and its AFGR.\7\
---------------------------------------------------------------------------

    \7\ Stullich, S., Eisner, E., McCrary, J., & Roney, C. (2006). 
National Assessment of Title I Interim Report to Congress: Volume I: 
Implementation of Title I. Washington, DC: U.S. Department of 
Education, Institute of Education Sciences. Available at: http://
www.ed.gov/rschstat/eval/disady/titlelinterimreport/voll.pdf.
---------------------------------------------------------------------------

    The requirements States have established for determining whether a 
high school makes AYP with respect to its graduation rate also vary. 
One State, for example, has set its goal at 50 percent; another has set 
its goal at 95 percent. In addition, more than one-half of States 
accept any improvement or some established minimal improvement (e.g., 
0.1 percent from the previous year) in their high school graduation 
rate to count as making AYP. In several States, a school can graduate 
less than half of its students, year after year, and still make AYP by 
graduating one more student with a regular high school diploma than it 
did in the previous year.
    The proposed regulations would revise current regulations to 
require the use of a uniform and accurate method of calculating high 
school graduation rates and would require schools and districts to 
either meet a State-established goal that has been approved by the 
Secretary or demonstrate continuous and substantial improvement from 
the prior year toward meeting or exceeding that goal. These changes are 
intended to increase the transparency and accuracy of graduation rates 
and strengthen accountability for the achievement of high school 
students. Following is the rationale for each of these changes.
    Definition of graduation rate. A uniform and accurate method of 
calculating high school graduation rates is necessary in order to 
provide parents and the public with important information about the 
success of a school, district, and State in graduating students in the 
standard number of years and to ensure that AYP determinations are 
based on valid graduation rate calculations.
    There is now a broad consensus about how to define the graduation 
rate. In August 2006, NCES released a report synthesizing the 
recommendations of a panel of experts on graduation rate 
calculations.\8\ The panel recommended that the standard graduation 
rate measure on-time completion of a regular diploma within four years 
and not include GED recipients or students without documentation of 
transferring to another educational program that terminates in the 
award of a regular high school diploma (e.g., documented through 
receipt of a transcript). Additionally, the NGA Task Force on High 
School Graduation Rate Data had as its lead recommendation that all 
States immediately adopt and begin taking steps to implement a standard 
four-year, adjusted cohort graduation rate, consistent with that 
proposed by the NCES panel (the ``NGA rate''), which 50 governors 
agreed to adopt in 2005.\9\ The proposed regulations offer a uniform 
and accurate method of calculating graduation rates that reflects this 
broad consensus in the field.
---------------------------------------------------------------------------

    \8\ Seastrom, M., Chapman, C., Stillwell, R., McGrath, D., 
Peltola, P., Dinkes, R., & Xu, Z. (2006). User's guide to Computing 
High School Graduation Rates. Washington, DC: U.S. Department of 
Education, National Center for Education Statistics.
    \9\ National Governors Association. (2006). Graduation Counts: A 
Report of the National Governors Association Task Force on High 
School Graduation Rate Data. Washington, DC: Author.
---------------------------------------------------------------------------

    To calculate the NGA rate, States need a system of documenting 
transfers as well as four years of data, or the equivalent of one full 
cohort. For States that do not yet have the ability to accurately track 
student transfers, NCES recommended using the AFGR as an interim 
measure. The AFGR estimates the effect of transfers into and out of a 
cohort of students and can be calculated with data currently available 
to States. It has been shown to be a reliable, accurate estimate of the 
high school graduation rate.
    The proposed regulations would provide time for States to 
transition to using the new definition of graduation rate. This 
transition period would allow all States sufficient time to develop a 
system for documenting transfers for one full cohort and subsequently 
to calculate the NGA rate. By 2012-2013, however, all States would be 
required to

[[Page 22026]]

use the more rigorous definition of graduation rate in proposed Sec.  
200.19(a)(1).
    Graduation rate goals and continuous and substantial improvement 
measures. While some States only allow for schools to make AYP if a 
State-established goal is met, most States allow any improvement from 
the previous year or some established minimal improvement (ranging from 
0.1 percent to 2.0 percent) for a school to demonstrate it has met AYP; 
one State simply requires schools to maintain the prior year's rate. 
Furthermore, many States have established low graduation rate goals 
(e.g., 50 percent) that are considered the threshold for AYP 
determinations--a school or LEA must meet that threshold in order to be 
considered to have made AYP and no improvement above that threshold is 
required. These methods of determining whether a school or LEA meets 
the graduation rate component of AYP represent exceptionally low 
expectations and demonstrate the need for States to establish 
graduation rate goals that are more rigorous. Accordingly, Sec.  
200.19(d) would require a State to establish a graduation rate goal 
that it expects all high schools to eventually achieve and to establish 
requirements for demonstrating continuous and substantial improvement 
toward meeting or exceeding that goal, in order to make AYP. Given the 
ever-increasing importance of a high school diploma, allowing schools 
and LEAs with unacceptably low rates of graduation to make AYP by 
simply maintaining the same low rate or minimally increasing the number 
of graduates from the previous year does not provide for appropriate 
and meaningful accountability.
    Disaggregation of graduation rates. When the current regulations 
were written in 2002, the Department believed that permitting States to 
use aggregate graduation rate data for the purpose of determining AYP 
while requiring disaggregation for reporting would be sufficient to 
ensure school accountability for the achievement of all groups of 
students and would avoid overburdening State accountability systems. 
Six years later, we now know that simply reporting disaggregated 
graduation rate data is not sufficient to ensure that graduation rates 
improve for all students. As previously highlighted, too many schools 
are graduating too few students and not being held accountable for 
improving their performance in this important area. Moreover, it is 
evident that there are significant disparities in high school outcomes. 
For example, data provided by NCES show significant gaps in subgroup 
AFGR graduation rates. Data from the 2004-2005 school year show the 
average AFGR for white students is 80.4 percent, whereas the average 
AFGR for Hispanic, black, and Native American/Alaska Native students is 
64.2 percent, 60.3 percent, and 67.2 percent, respectively.\10\ With 
these figures, it is clear that disaggregated graduation rate data 
should be used for purposes of determining whether a high school or LEA 
makes AYP. Similar to the importance of disaggregating assessment 
results to ensure that high performance by a particular group of 
students does not mask low performance by another group of students, 
schools need to be held accountable for the differences in high school 
graduation rates among various groups of students.
---------------------------------------------------------------------------

    \10\ National Center for Education Statistics. (2008). Averaged 
Freshman Graduation Rates for Public School Students, 2004-05. 
Unpublished data.
---------------------------------------------------------------------------

    For these reasons, the proposed regulations would require, by the 
2012-2013 school year, all States to include disaggregated graduation 
rates in State-, district-, and school-level AYP decisions. The 
Department, however, recognizes that, while disaggregated AFGR results 
are valid at the State and district levels, there is less confidence in 
the validity of disaggregated AFGR results at the school level. 
Therefore, beginning with the effective date of this regulation, States 
would be required to use disaggregated results for reporting and 
determining AYP at the State and district levels, but would only be 
required to use school-level disaggregated results for reporting 
purposes and determining AYP under the ``safe harbor'' provision. 
Beginning in 2012-2013, when all States would have to use the NGA 
graduation rate, disaggregated results would also be required in 
school-level AYP determinations.

Section 200.20--Making Adequate Yearly Progress

    Statute: Section 1111(b)(2) of the ESEA sets out the requirements 
for calculating AYP, which is a measure of the percentage of students 
who are proficient in a school, LEA, and State. The AYP calculation 
method commonly referred to as a ``status model'' compares the 
achievement of one cohort of students against the test scores of the 
students in the previous year's class. Although Title I allows AYP to 
be determined using student progress with the ``safe harbor'' 
provision, the proficiency gains measured in that calculation do not 
look at individual student growth--it is still a cohort comparison. 
Currently, nine States are participating in a ``growth model'' pilot 
and are permitted to report their accountability results using measures 
of individual student growth that have been approved by the Department. 
North Carolina and Tennessee first used measures of individual student 
growth for the 2005-2006 school year; Alaska, Arizona, Arkansas, 
Delaware, Florida, and Iowa reported growth scores for the first time 
for the 2006-2007 school year.\11\
---------------------------------------------------------------------------

    \11\ Ohio has received conditional approval, but has not yet 
implemented its proposal due to delayed State legislative changes 
necessary for implementation.
---------------------------------------------------------------------------

    Current Regulations: Section 200.20 implements the statutory 
requirements for determining AYP.
    Proposed Regulations: Proposed Sec.  200.20(h) would establish the 
criteria that a State must meet in order for the Secretary to permit a 
State, under the waiver authority of section 9401 of the ESEA, to 
establish and implement policies for incorporating individual student 
academic progress into the State's definition of AYP. A State that 
desires to incorporate individual student academic growth into its 
definition of AYP would be required to--
    (a) Set annual growth targets that--
    (1) Lead to all students, by school year 2013-2014, meeting or 
exceeding the State's proficient level of academic achievement on the 
State assessments under Sec.  200.2;
    (2) Are based on meeting the State's proficient level of academic 
achievement on the State's assessments under Sec.  200.2 and are not 
based on individual student background characteristics; and
    (3) Measure student achievement separately in mathematics and 
reading/language arts;
    (b) Ensure that all students who are tested using the State's 
assessments under Sec.  200.2 are included in the State's assessment 
and accountability systems;
    (c) Hold all schools and LEAs accountable for the performance of 
all students and the student subgroups described in Sec.  
200.13(b)(7)(ii);
    (d) Be based on State assessments that--
    (1) Produce comparable results from grade to grade and from year to 
year in mathematics and reading/language arts;
    (2) Have been in use by the State for more than one year; and
    (3) Have received full approval from the Secretary before the State 
determines AYP based on student academic growth;

[[Page 22027]]

    (e) Track student progress through a State-developed data system;
    (f) Include, as separate factors in determining whether schools are 
making AYP for a particular year--
    (1) The rate of student participation in assessments; and
    (2) Other academic indicators as described in Sec.  200.19; and
    (g) Describe how the proposed annual growth targets fit into a 
State's accountability system in a manner that ensures that the system 
is coherent and that incorporating individual student academic growth 
into a State's definition of AYP does not dilute accountability.
    With the additions proposed in these regulations, a State could 
permit its LEAs and schools to make AYP by meeting (1) the State's 
proficiency targets, (2) growth targets, or (3) the ``safe harbor'' 
provision.
    A State's proposal to incorporate student academic growth in the 
State's definition of AYP will be peer reviewed under section 
1111(e)(2) of the ESEA.
    Reasons: There is general consensus among teachers, administrators, 
researchers, and advocates that States should be permitted to include 
measures of individual student academic progress (that is, to use what 
is often described as a ``growth model'') when determining whether a 
school or district is making AYP. When NCLB was signed into law in 
2002, few States had the data capacity to calculate individual student 
academic progress. With all States now testing annually in grades 3 
through 8 and once in high school coupled with improved data systems in 
many States, States have a greater capacity to measure individual 
student academic progress. The Department believes that allowing States 
to include accurate measures of individual student academic progress in 
AYP calculations will still hold schools accountable for the 
achievement of all students to State academic achievement standards, 
while providing schools and teachers with useful information on how 
their students are progressing towards grade-level proficiency, which 
can ultimately lead to better instruction. Under these proposed 
regulations and section 9401 of the ESEA, therefore, schools and LEAs 
in States that incorporate individual student academic growth into 
their definition of AYP would be held accountable for improving 
individual students' achievement from one school year to the next. We 
encourage States that decide to incorporate individual student growth 
into their accountability systems to include in their data systems a 
teacher identifier to help track student achievement and teacher 
performance by class assignment. While not a condition of incorporating 
individual student academic growth into a State's definition of AYP, 
inclusion of a teacher identifier will create a much richer set of data 
to guide school improvement efforts.

Section 200.22--National Technical Advisory Council

    Statute: Section 1111(e) of the ESEA requires the Secretary to 
establish a peer review process to assist in the review of State Plans.
    Current Regulations: There are no current regulations related to 
this statutory requirement.
    Proposed Regulations: The proposed regulations in Sec.  200.22 
would require the establishment of a National Technical Advisory 
Council (National TAC) to advise the Secretary on key technical issues 
related to State standards, assessments, and accountability systems 
that are part of State plans. The National TAC would not replace the 
peer review panels the Department uses to evaluate State standards, 
assessments, and accountability systems. Rather, the National TAC would 
consider complex issues that affect all States, as well as issues that 
would benefit from discussions with experts in the field. For example, 
the National TAC could help create guidelines for how States should 
determine an appropriate minimum subgroup size, taking into 
consideration other elements of States' AYP definitions, as we have 
proposed in Sec.  200.7.
    Under the proposed regulations, the Secretary would solicit 
nominations from the public for experts in the fields of assessment 
design and implementation, and the field of accountability to serve on 
the National TAC. The proposed regulations provide that, from these 
nominations, the Secretary would select 10 to 15 National TAC members. 
The National TAC could meet as a whole or in subcommittees.
    Reasons: The Department currently uses experts in the fields of 
assessment and accountability to review State standards, assessments, 
and accountability systems. During the course of reviewing State Plans, 
these experts, as well as States, have raised a number of complex 
issues (e.g., the appropriate use of confidence intervals and indexes, 
and the alignment of alternate assessments with alternate academic 
achievement standards). Advice from a National TAC consisting of 
experts with knowledge in the fields of educational standards, 
assessments, accountability systems, statistics, and psychometrics 
would help the Department address these complex and technical issues. 
Just as States have established State technical advisory committees to 
advise them on the development and implementation of their State 
standards, assessments, and accountability systems, the Department 
believes that regular access to a group of experts would benefit the 
Department, States, and, ultimately, students in ensuring that State 
standards and assessments are of the highest technical quality and that 
State accountability systems hold schools and districts accountable for 
the achievement of all students.

Sections 200.32 and 200.50(d)(1)--Identification of Schools and LEAs 
for Improvement

    Statute and Current Regulations: Section 1116(b)(1)(A) of the ESEA 
and Sec.  200.32(a)(1) require an LEA to identify a school for 
improvement if it does not make AYP, ``as defined * * * under section 
1111(b)(2),'' for two consecutive years. Section 1116(c)(3) of the ESEA 
and Sec.  200.50(d)(1) contain a similar requirement for identifying 
LEAs for improvement.
    Under section 1111(b)(2)(I) of the ESEA and Sec.  200.20, a school 
or LEA makes AYP if: (1) All students and each subgroup of students 
under Sec.  200.13(b)(7)(ii) meet or exceed the State's separate annual 
measurable objectives (AMOs) for reading/language arts and math, (2) 
the school or LEA meets or exceeds the State's other academic 
indicators, and (3) not less than 95 percent of all students and those 
in each subgroup identified in Sec.  200.13(b)(7)(ii) take the State's 
assessments. A school or LEA may also make AYP through the ``safe 
harbor'' provisions described previously in this notice.
    Under current policy, the Department permits the identification of 
schools and LEAs for improvement if the school or LEA did not make AYP 
because it did not meet the AMO in the same subject or academic 
indicator for two consecutive years. So, for example, if a school did 
not make AYP because it did not meet the AMO for math for two 
consecutive years, the school would be identified for improvement. On 
the other hand, if a school, in the first year, did not make AYP 
because it did not meet the AMO in math but met the AMO in reading/
language arts, and then, in the second year, did not make AYP because 
it did not meet the AMO in reading/language arts but met the AMO in 
math, that school would not be identified for improvement.

[[Page 22028]]

    The Department, however, does not permit an LEA or a State to limit 
the identification of schools and LEAs for improvement to only those 
schools and LEAs that did not make AYP because the same subgroup did 
not meet the AMO in the same subject or meet the same other academic 
indicator for two consecutive years. So, for example, if a school, in 
the first year, did not make AYP because the students with disabilities 
subgroup did not meet the AMO in math, and then, in the second year, 
the school did not make AYP because the LEP students subgroup did not 
meet the AMO in math, the LEA must identify that school for 
improvement. In this example, identification for improvement is based 
on not meeting the AMO in the same subject, math, not on whether the 
same subgroup did not meet the AMO.
    Proposed Regulations: We are proposing to codify the Department's 
current policy in Sec. Sec.  200.32 and 200.50(d). Proposed Sec.  
200.32 would provide that, in identifying a school for improvement, an 
LEA may base identification on whether the school did not make AYP 
because it did not meet the AMO in the same subject or meet the same 
other academic indicator for two consecutive years. The LEA may not, 
however, limit such identification to those schools that did not make 
AYP only because they did not meet the AMO in the same subject or meet 
the same other academic indicator for the same subgroup under Sec.  
200.13(b)(7)(ii) for two consecutive years. Comparable changes with 
respect to the identification of LEAs for improvement would be made in 
proposed Sec.  200.50(d)(1).
    Reasons: We are proposing to codify our current policy in order to 
establish clear parameters for LEAs and States to use when identifying 
schools and LEAs for improvement. We believe the current policy and 
proposed regulatory changes are consistent with section 1111(b)(2)'s 
emphasis on proficiency in separate subjects and requiring separate 
participation rates for math and reading/language arts assessments for 
purposes of determining AYP, as well as the absence of any similar 
authority for emphasizing subgroups.
    Section 1111(b)(2)(E) of the ESEA clearly acknowledges that student 
achievement in reading and math in a State may start at very different 
points and, when they do, different trajectories need to be established 
for each subject toward the goal of 100 percent proficiency by 2013-
2014. Similarly, section 1111(b)(2)(G) of the ESEA requires a State to 
set different AMOs in math and reading. Participation rates, likewise, 
must be calculated separately because a student could participate in 
one, both, or neither of the State's mathematics and reading/language 
arts assessments. Accordingly, it follows that a State may take into 
consideration in identifying a school or LEA for improvement the fact 
that the school or LEA did not meet its AMO in the same subject 
(including the participation rate for that subject) or meet the same 
other academic indicator for two consecutive years.
    There is no similar basis for identifying for improvement a school 
or LEA only when the same subgroup did not meet the AMO in the same 
subject or the same other academic indicator for two consecutive years. 
Although section 1111(b)(2) of the ESEA requires a State to establish 
separate AMOs for each subject, it requires a State to apply those AMOs 
to each subgroup in determining whether a school or LEA makes AYP. In 
addition, section 1111(b)(2)(I)(i) of the ESEA provides that, for a 
school or LEA to make AYP, ``all students'' and each subgroup must meet 
or exceed the AMOs. Based on these provisions, the ESEA does not 
authorize limiting the identification of a school or LEA for 
improvement to instances when the school or LEA did not make AYP for 
two consecutive years only because the same subgroup did not meet the 
AMO for the same subject or the same other academic indicator. 
Identifying a school or LEA in this manner would be inconsistent with 
the ESEA's accountability provisions, which require that each subgroup 
meet the State's AMOs in each subject each year.

Section 200.37--Notice of Identification for Improvement, Corrective 
Action, or Restructuring

    Statute: Section 1116(b)(1)(A) of the ESEA requires LEAs to 
identify for improvement any Title I school that fails to make AYP for 
two consecutive years. The identification must occur before the 
beginning of the school year following the school's failure to make AYP 
(section 1116(b)(1)(B)). Section 1116(b)(6) of the ESEA requires an LEA 
to promptly notify parents of students enrolled in a school identified 
for improvement, corrective action, or restructuring and to provide 
them with information regarding what it means to be identified for 
improvement, corrective action, or restructuring, including an 
explanation of the parents' option to transfer their child to another 
public school or the option to obtain SES for the student. Section 
1116(b)(1)(E) requires LEAs to provide students enrolled in a school 
identified for improvement, corrective action, or restructuring with 
the option to transfer to another school not later than the first day 
of the school year following such identification. Section 1116(e)(2)(A) 
requires LEAs with schools in the second year of improvement, in 
corrective action, or in restructuring to provide, at a minimum, annual 
notice to parents of the availability of SES, the identity of approved 
SES providers of those services that are within the LEA or whose 
services are reasonably available in neighboring LEAs, and a brief 
description of the services, qualifications, and demonstrated 
effectiveness of each of those providers.
    Current Regulations: Section 200.37(b)(4) and (b)(5) implement the 
statutory requirements for LEAs to provide notice to parents of public 
school choice and SES options, respectively.
    Proposed Regulations: Proposed Sec.  200.37(b)(4)(iv) would require 
that LEAs provide to parents an explanation of the available school 
choices sufficiently in advance of, but no later than 14 calendar days 
before, the start of the school year, so that parents have adequate 
time to exercise their choice option before the school year begins.
    Proposed Sec.  200.37(b)(5)(ii)(C) would require that the annual 
notice of the availability of SES explain the benefits of receiving 
SES, in addition to the identity of approved providers of those 
services available within the LEA and a brief description of the 
services, qualifications and demonstrated effectiveness of the 
providers, as provided in current regulations. Proposed Sec.  
200.37(b)(5)(iii) would require this notice to be clear and concise and 
clearly distinguishable from the other information sent to parents 
under Sec.  200.37.
    Reasons: The importance of notifying parents of their public school 
choice options in advance of the start of the school year is documented 
by findings from the National Assessment of Title I (NATI) report 
(2007). In a survey of LEAs described in this report, those that 
notified parents about their public school choice options before the 
first day of school had higher participation rates in public school 
choice than LEAs that notified parents on or after the first day of 
school. Yet, only 29 percent of the LEAs that were required to offer 
public school choice notified parents before the beginning of the 
school year. Twenty-one percent notified parents at the start of the 
school year, and 49 percent notified parents after the start of the 
school year.\12\
---------------------------------------------------------------------------

    \12\ Stullich, S., Eisner, E., & McCrary, J. (2007). National 
Assessment of Title I: Final Report, Volume I: Implementation. 
Washington, DC: National Center for Education Evaluation and 
Regional Assistance, Institute of Education Sciences, U.S. 
Department of Education.

---------------------------------------------------------------------------

[[Page 22029]]

    We know that transferring one's child to another school is an 
important decision for a parent to make and therefore, it is critical 
that LEAs provide parents as much advance notice as possible so that 
they have time to make informed decisions. We also know from the NATI 
report that parents are more likely to take advantage of their choice 
options if they are notified in advance of the school year. However, 
early parent notification may be constrained by several factors, 
including the time it takes for States to receive students' scores on 
the State's annual assessment and the time needed to determine whether 
a school has made AYP based on the students' test scores and the other 
components of the State's AYP definition (e.g., definition of full 
academic year, indexes, ``safe harbor''). Further, the Department 
understands that it is in the best interest of students to have as much 
time in the school year as possible to learn the content before taking 
the State's annual assessment.
    The Department recognizes that the importance of giving parents the 
time they need to make decisions regarding their choice option must be 
balanced by these practical realities of making AYP determinations. 
Notifying parents as far in advance as possible, but no later than 14 
days before the start of the school year, strikes a reasonable balance 
among these various timing and practical considerations. We also 
believe that by allowing more time for parents to consider their choice 
options, there will be greater interest and participation in public 
school choice.
    The NATI report also found that, in 2004-2005, 94 percent of LEAs 
reported sending parents written notification materials regarding SES 
options; however in a survey of eligible parents in eight urban school 
districts, only 53 percent of parents with a child eligible for SES 
said they had been notified.\13\ Additionally, the NATI report found 
that the quality of LEAs' parent notification letters varied 
considerably. Specifically, the NATI report looked at 20 parent letters 
about SES and found that some were easy to read and described SES 
options in a positive manner, while others were confusing and 
incomplete, and discouraged the use of SES.\14\ The proposed 
regulations regarding the SES notice would help ensure that LEAs 
promptly communicate to parents information on SES, and that parents 
are aware of their SES options and the benefits of those services.
---------------------------------------------------------------------------

    \13\ Id.
    \14\ Id.
---------------------------------------------------------------------------

Section 200.39--Responsibilities Resulting From Identification for 
School Improvement

    Statute: Section 1116(b) of the ESEA states that an LEA must 
identify for school improvement any elementary or secondary school that 
fails, for two consecutive years, to make AYP. Specifically, LEAs with 
Title I schools identified for improvement are responsible for 
providing public school choice to eligible students (section 
1116(b)(1)(E)), consulting with identified schools as they develop a 
school improvement plan (section 1116(b)(3)), and ensuring the 
provision of technical assistance as the school develops and implements 
the school improvement plan (section 1116(b)(4)). For Title I schools 
in their second year of improvement, the LEA must continue with these 
actions and, in addition, make SES available to eligible students.
    Current Regulations: Section 200.39 implements the statutory 
requirements regarding LEAs' responsibilities for Title I schools 
identified for improvement.
    Proposed Regulations: Proposed Sec.  200.39(c) would require LEAs 
to provide the public with information regarding the LEA's 
implementation of the public school choice and SES requirements, as 
soon as this information becomes available. LEAs would be required to 
prominently display the following information on the LEA's Web site:
     Beginning with data from the 2007-2008 school year and for 
each subsequent school year, the number of students who were eligible 
for and the number of students who participated in public school 
choice.
     Beginning with data from the 2007-2008 school year and for 
each subsequent school year, the number of students who were eligible 
for and the number of students who participated in SES.
     For the current school year, a list of SES providers 
approved by the State to serve the LEA and the locations where services 
are provided.
     For the current school year, a list of available schools 
that are offered to students eligible to participate in public school 
choice.
    Reasons: We believe that making information regarding an LEA's 
implementation of the public school choice and SES requirements 
available and transparent to the public would hold LEAs accountable for 
implementing these requirements and lead to greater student 
participation. In addition, information on the SES providers approved 
to serve students in the LEA and the available schools that are offered 
to students eligible to participate in public school choice would help 
parents make informed choices for their children. An LEA's Web site is 
one way for LEAs to make information on public school choice and SES 
widely available because these sites can be easily updated with the 
latest information and are a medium that can be accessed anytime and 
anywhere by individuals and entities. For parents without access to the 
Internet, LEAs and community organizations would be encouraged to make 
this information available to parents through other avenues.

Section 200.43--Restructuring

    Statute: Under section 1116(a)(7) of the ESEA, if any school served 
by an LEA does not make AYP by the end of the second full school year 
after having been identified for improvement, the LEA must identify the 
school for corrective action and take one of several specific 
corrective actions. These may include replacing school staff and 
instituting a new curriculum. If, after one full school year of 
corrective action, a school continues not to make AYP, the LEA must 
identify the school for restructuring and implement a restructuring 
plan under section 1116(b)(8)(A) of the ESEA. In addition to 
implementing a restructuring plan, the LEA must continue to provide SES 
and public school choice to eligible students.
    Section 1116(b)(8)(B) of the ESEA sets forth the requirements for 
implementing restructuring plans and requires that, not later than the 
beginning of the school year following the year in which an LEA 
implements restructuring, the LEA must implement one of the following 
alternative governance arrangements for the school consistent with 
State law:
    (i) Reopen the school as a public charter school;
    (ii) Replace all or most of the school staff (which may include the 
principal) who are relevant to the failure to make AYP;
    (iii) Enter into a contract with an entity, such as a private 
management company with a demonstrated record of effectiveness, to 
operate the public school;
    (iv) Turn the operation of the school over to the SEA, if permitted 
under State law and agreed to by the State; or
    (v) Any other major restructuring of the school's governance 
arrangement that makes fundamental reforms, such as significant changes 
in the school's staffing and governance, to improve

[[Page 22030]]

student academic achievement in the school, and that has substantial 
promise of enabling the school to make AYP.
    Current Regulations: Section 200.43 of the current regulations, for 
the most part, restates the statutory language. The regulations also 
clarify that a school must continue to implement its restructuring plan 
until it has made AYP for two consecutive years.
    Proposed Regulations: The proposed regulations would make several 
clarifying changes. First, we propose to move the parenthetical in 
current Sec.  200.43(a)(1) that provides examples of fundamental 
reforms to proposed Sec.  200.43(b)(3)(v) to better track the statutory 
language in section 1116(b)(8)(B)(v) of the ESEA. Second, proposed 
Sec.  200.43(a)(4) would clarify that interventions implemented as part 
of a school's restructuring plan must be significantly more rigorous 
and comprehensive than those interventions implemented under the 
school's corrective action plan as required under Sec.  200.42. Third, 
proposed Sec.  200.43(a)(5) would require that an LEA implement 
interventions that address the reasons for the school's being in 
restructuring in order to enable the school to exit restructuring as 
soon as possible. Fourth, the proposed regulations would revise Sec.  
200.43(b)(3)(ii) to clarify that, in replacing all or most of the 
school staff, an LEA may also replace the principal; however, replacing 
the principal alone would not be sufficient to constitute 
restructuring. Finally, in addition to the proposed change to track 
more closely the language in section 1116(b)(8)(B)(v) of the ESEA, 
proposed Sec.  200.45(b)(3)(v) would clarify again that, in making 
significant changes in the school's staff, an LEA may not replace only 
the principal.
    Reasons: Based on available data, the Department is concerned that 
the restructuring requirements in Sec.  200.43 are not being 
implemented effectively, and in some cases not at all. Preliminary 
analyses of Department data from 36 States indicate that only 
approximately 18 percent of schools that were identified for 
restructuring in either the 2004-2005 or 2005-2006 school year have 
exited restructuring status.\15\ In addition, a recent study from the 
Government Accountability Office (GAO) found that 40 percent of schools 
in restructuring did not implement any of the five restructuring 
options.\16\
---------------------------------------------------------------------------

    \15\ U.S. Department of Education. (2008). EDFacts. Unpublished 
raw data.
    \16\ U.S. Government Accountability Office. (2007). No Child 
Left Behind Act: Education Should Clarify Guidance and Address 
Potential Compliance Issues for Schools in Corrective Action and 
Restructuring Status (GAO-07-1035). Washington, DC: Author.
---------------------------------------------------------------------------

    The Department needs to address these issues because a large number 
of schools could potentially enter restructuring in the next few years. 
For the 2006-2007 school year, 2,330 schools were identified for 
corrective action, 937 schools were identified for restructuring after 
not meeting AYP for five years, and 1,242 schools began implementing 
their restructuring plans after not meeting AYP for six years. It is 
important to make these proposed regulatory changes at this time in 
order to strengthen the restructuring requirements and thereby help 
schools to exit restructuring as soon as possible.
    Although rigorous research is limited on what restructuring 
interventions are most effective and under what conditions, 
correlational and descriptive studies indicate that more than one 
reform should be implemented in a school, rather than relying on one 
``silver bullet'' to address the significant academic needs of a school 
that has not made AYP for six or more years. For example, a study of 
restructuring in Michigan conducted by the Center on Education Policy 
(CEP) found, in general, that multiple reform efforts tailored to the 
needs of the schools were more likely to result in the schools' making 
AYP and exiting restructuring.\17\
---------------------------------------------------------------------------

    \17\ Scott, C. (2007). What Now? Lessons from Michigan About 
Restructuring Schools and Next Steps Under NCLB. Washington, DC: 
Center for Education Policy.
---------------------------------------------------------------------------

    To strengthen the requirements for schools in restructuring, we are 
proposing to clarify, consistent with the statute, that the actions 
taken by a school identified for restructuring must (1) be 
significantly more rigorous and comprehensive than those the school 
implemented as corrective actions and (2) address the reasons for the 
school's being identified for restructuring. Schools that have been 
identified for restructuring are in that status because they have 
continually not made AYP, notwithstanding the reforms undertaken when 
the school was in improvement or corrective action. Simply continuing 
the same actions that were unsuccessful in moving the school out of 
improvement or corrective action is unlikely to be sufficient to move 
the school out of restructuring. Restructuring requires actions that 
are more comprehensive and rigorous than those the school took when the 
school was in improvement or corrective action status.
    Consistent with the need for more comprehensive and rigorous 
actions when a school is in restructuring, we also are proposing to 
clarify that, when a State, as part of its restructuring plan, chooses 
to make significant changes in the school's staff, these changes may 
include, but may not be limited to, replacing the principal. While we 
believe that it is important to place the right leader in a chronically 
under-performing school, as permitted in current Sec.  200.43, simply 
replacing the principal without any other changes is inconsistent with 
the statute and likely insufficient to move a school out of 
restructuring.
    Just as we would not expect that continuing the same actions that 
were instituted when a school was in improvement or corrective action 
would move the school out of restructuring, we also would not expect a 
school to be able to make sufficient gains to exit restructuring if the 
interventions do not address the specific reasons that the school 
continues not to make AYP. For example, if a school is in restructuring 
because either the ``all students'' group or subgroups that comprise a 
large percentage of its students have not made AYP for six years, a 
restructuring plan that addresses only a subset of the students would 
not be likely to move a school out of restructuring; rather, the 
restructuring plan would need to be broader in scope and address the 
needs of the majority of students.

Section 200.44--Public School Choice

    Statute: Section 1116(b)(1)(E) requires LEAs to provide students 
enrolled in a school identified for improvement, corrective action, or 
restructuring with the option to transfer to another school not later 
than the first day of the school year following such identification.
    Current Regulations: Section 200.44 provides that if an LEA 
identifies a school for improvement, corrective action, or 
restructuring, the LEA must provide all students attending the school 
with the option to transfer to another public school served by the LEA. 
An LEA must offer this option to parents not later than the first day 
of the school year following the year in which the LEA administered the 
assessment that resulted in its identification of the school for 
improvement, corrective action, or restructuring.
    Proposed Regulations: Proposed Sec.  200.44(a)(2)(ii) would 
reference proposed Sec.  200.37(b)(4) to make clear that an LEA must 
notify parents about the option to transfer their child to another 
school and the available public school choices sufficiently in advance 
of, but no later than 14 calendar days before, the start of the school 
year so that parents have adequate time to exercise their choice option 
before the school year begins.
    Reasons: Reiterating in the public school choice section of the 
regulations

[[Page 22031]]

that notice to parents of the availability of public school choice must 
occur in a timely manner, consistent with proposed Sec.  
200.37(b)(4)(iv), would help ensure that LEAs understand that they must 
notify parents about their public school choice options sufficiently in 
advance of the start of the school year so that parents have sufficient 
time to consider their options and make an informed decision.

Section 200.47--SEA Responsibilities for Supplemental Educational 
Services

    Statute: Section 1116(e)(1) of the ESEA requires LEAs to arrange 
for the provision of SES to eligible students from a provider with a 
demonstrated record of effectiveness. A provider is defined in section 
1116(e)(12)(B) as a non-profit entity, for-profit entity, or LEA that 
(1) has a demonstrated record of effectiveness in increasing student 
academic achievement; (2) is capable of providing SES that are 
consistent with the instructional program of the LEA and the academic 
standards described in section 1111 of the ESEA; and (3) is financially 
sound. Section 1116(e)(3)(A) of the ESEA requires an LEA to develop, 
with the parents of a child participating in SES and the provider, an 
agreement that includes a statement of specific achievement goals for 
the student, a description of how the student's progress will be 
measured, and a timetable for improving achievement. Section 
1116(e)(3)(C) also requires that this agreement be terminated if the 
provider is unable to meet the goals and timetables specified in the 
agreement.
    Section 1116(e)(4)(B) of the ESEA requires States to develop and 
apply, in the selection of providers, objective criteria that are based 
on a demonstrated record of effectiveness in increasing the academic 
proficiency of students in subjects relevant to meeting the State's 
academic content and student achievement standards. Section 
1116(e)(4)(D) requires States to develop, implement, and publicly 
report on standards and techniques for monitoring the quality and 
effectiveness of the services offered by approved providers and for 
withdrawing approval from providers that fail, for two consecutive 
years, to contribute to increasing the academic proficiency of students 
served. Section 1116(e)(5)(B) requires providers to ensure that their 
instructional program is consistent with the instruction provided and 
content used by the LEA and State, and that it is aligned with State 
student academic achievement standards.
    Current Regulations: Section 200.47 repeats the statutory 
requirements regarding the State's responsibility to approve SES 
providers with a demonstrated record of effectiveness, and to develop 
and apply objective criteria to monitor and withdraw approval of 
providers. Section 200.47 also requires that, to be approved by an SEA, 
the provider must agree to ensure that the instruction the provider 
gives and the content the provider uses are consistent with the 
instruction provided and the content used by the LEA and the SEA, and 
are aligned with State student academic achievement standards.
    Proposed Regulations: We propose several changes to the regulations 
regarding SEA responsibilities for SES.
    Monitoring LEA implementation. Proposed Sec.  200.47(a)(4)(iii) 
would require a State to develop, implement, and publicly report on 
standards and techniques for monitoring LEAs' implementation of the SES 
requirements in the ESEA.
    Approving SES providers. Proposed Sec.  200.47(b)(2)(ii) would 
clarify that, to be approved as an SES provider, an entity must provide 
the State with evidence that the instruction it would provide and the 
content it would use are aligned with the State's academic content and 
student academic achievement standards and are research-based. Proposed 
Sec.  200.47(b)(3) would require that, as a condition of approval, a 
State must consider, at a minimum, (1) information from the provider on 
whether the provider has been removed from any State's approved 
provider list; (2) parent recommendations or results from parent 
surveys, if any, regarding the success of the provider's instructional 
program in increasing student achievement; and (3) evaluation results, 
if any, demonstrating that the instructional program has improved 
student achievement.
    Monitoring approved providers. Proposed Sec.  200.47(c) would 
specify the evidence that a State must consider when monitoring the 
quality and effectiveness of the services offered by an approved 
provider in order to inform the renewal or withdrawal of approval of a 
provider. Specifically, Sec.  200.47(c) would require a State to 
examine, at a minimum, evidence that the provider's instructional 
program (1) is consistent with the instruction provided and the content 
used by the LEA and SEA; (2) addresses students' individual needs as 
described in students' SES plans; (3) has contributed to increasing 
students' academic proficiency (as required by section 1116(e)(4)(D)); 
and (4) is aligned with State academic content and student academic 
achievement standards. In addition, States would also be required to 
consider, if any, parent recommendations, results from parent surveys, 
or results from other evaluations demonstrating the success of the 
provider's instructional program in improving student achievement.
    Reasons: We believe that providing information to the public about 
how SEAs monitor the implementation of SES requirements by their LEAs, 
and enhancing the criteria that SEAs must use to approve and monitor 
SES providers, would strengthen the implementation of SES by SEAs and 
LEAs and ultimately contribute to increased student achievement. 
Following is the rationale for each of these changes.
    Monitoring LEA implementation. While SEAs are required under the 
current regulations to monitor LEAs and their implementation of the SES 
requirements, the proposed regulations would require SEAs to publicly 
report on the standards and techniques for how they monitor their LEAs' 
implementation of the SES requirements. We believe that requiring 
States to develop, implement, and publicly report on the criteria they 
use to monitor LEAs' implementation of SES will help ensure that SEAs 
set rigorous and clear expectations for their LEAs.
    Approving SES providers. We have learned in discussions with States 
that there is uncertainty regarding the evidence that States may 
require providers to submit as part of their application to be an 
approved SES provider. We believe that specifying the minimum evidence 
that SEAs must consider in approving providers will help ensure that 
students receive high quality SES services and reinforce with States 
that they have the authority and the responsibility to approve only 
entities that will contribute to increased student academic 
achievement.
    Monitoring approved providers. To ensure that State-approved 
providers deliver high quality SES services, it is important that 
States monitor the provision of SES. We believe that the monitoring 
criteria in proposed Sec.  200.47(c)(1) would reinforce with States 
that they have the authority and the responsibility to monitor 
providers in order to make informed decisions about whether SES 
providers should remain on a State's approved provider list. We believe 
that specifying the minimum evidence that SEAs must consider in 
approving providers will help ensure that students receive high quality 
SES services and reinforce with States that they have the authority and 
the responsibility to approve only entities that will contribute to 
increased student academic achievement.

[[Page 22032]]

Section 200.48--Funding for Choice-Related Transportation and 
Supplemental Educational Services (SES)

    Statute and Current Regulations: Section 1116(b)(10) of the ESEA 
and Sec.  200.48(a)(2) require LEAs to spend an amount equal to 20 
percent of their Title I, Part A allocations, unless a lesser amount is 
needed, to comply with all requests for SES and to provide 
transportation, or pay for the transportation costs, for students 
exercising the public school choice option under the ESEA. An LEA may 
use Title I funds to pay for the costs to implement SES and public 
school choice, including outreach to parents; however, under Sec.  
200.48(a)(2)(iii)(B), the LEA may not count these costs toward meeting 
its 20 percent obligation.
    Proposed Regulations: Proposed Sec.  200.48(a)(2)(iii)(C) would 
allow an LEA to count costs for providing outreach and assistance to 
parents regarding public school choice and SES toward meeting its 20 
percent obligation. The amount that could be counted toward these costs 
would be capped at an amount equal to 0.2 percent of the LEA's Title I, 
Part A, subpart 2 allocation. An LEA would still be able to spend more 
than that amount on parental outreach activities; the proposed 
regulations would only cap what could be counted toward meeting the 20 
percent obligation.
    Proposed Sec.  200.48(d) would require an LEA, before reallocating 
unused funds from choice-related transportation and SES to other 
purposes, to demonstrate to the SEA that it had met specific criteria 
established in proposed Sec.  200.48(d)(1). Specifically, the LEA would 
have to demonstrate success in the following:
    (a) Partnering with community-based organizations or other groups 
to reach out to eligible students and their families about SES and 
public school choice opportunities.
    (b) Ensuring that eligible students and their parents have had a 
genuine opportunity to sign up to transfer to another public school or 
receive SES, including by:
     Providing timely, accurate notice as required in 
Sec. Sec.  200.36 and 200.37 of the availability of public school 
choice and SES.
     Ensuring that sign-up forms for SES are distributed 
directly to all eligible students and their parents and are made widely 
available and accessible through broad means of dissemination, such as 
the Internet, other media, and communications through public agencies 
serving eligible students and their families.
     Allowing eligible students to sign up for SES throughout 
the school year.
    (c) Ensuring that eligible SES providers are given access to school 
facilities, using a fair, open, and objective process, on the same 
basis and terms as are available to other groups that seek access to 
school facilities.
    If an LEA does not meet these criteria, the proposed regulations 
would require the LEA to spend the amount remaining from its 20 percent 
obligation in the following school year for choice-related 
transportation, SES, or parent outreach (subject to the 0.2 percent cap 
in Sec.  200.48(a)(2)(iii)(C)). The requirement to spend these unused 
funds would be in addition to the requirement to spend an amount equal 
to 20 percent of its Title I, Part A allocation in the following school 
year.
    Reasons: There is evidence indicating that SES participation 
improves student achievement. A recent study by the RAND Corporation, 
supported by the Department, found that, in five out of the seven large 
urban districts in which there were sufficient numbers of students to 
analyze the effects, students participating in SES showed statistically 
significant positive effects in both reading and mathematics 
achievement.\18\ However, currently, only 14.5 percent of eligible 
students take advantage of SES nationwide.\19\
---------------------------------------------------------------------------

    \18\ U.S. Department of Education. (2007). State and Local 
Implementation of the No Child Left Behind Act, Volume I--Title I 
School Choice, Supplemental Educational Services, and Student 
Achievement, Washington, DC: Author.
    \19\ U.S. Department of Education. Consolidated State 
Performance Report, 2006-2007. Unpublished raw data.
---------------------------------------------------------------------------

    In order to increase participation in SES and public school choice, 
the Department believes that LEAs need to devote sufficient time and 
resources to effectively notify parents of available public school 
choice and SES options. Currently, LEAs are not permitted to count 
costs for these activities toward meeting their 20 percent obligation 
for choice-related transportation and SES. The proposed regulations 
would permit LEAs to count a limited amount of funds for parent 
outreach and assistance in order to help ensure that LEAs provide 
parents with the information they need to make the best, most informed 
decisions for their children.
    The proposed regulations also would require LEAs, before 
reallocating funds for other purposes, to demonstrate to the SEA 
success in meeting several requirements. Our rationale for each of 
these requirements follows.
    Partnering with community-based organizations. In a survey of LEAs' 
strategies for communicating with parents about their SES options, only 
16 percent of LEAs reported that they worked with a local community 
partner to reach parents regarding their SES options, and only 10 
percent did so to communicate with parents about public school choice 
options.\20\ We learned during visits to LEAs across the country as 
part of a 2007 outreach tour on SES and public school choice that 
information from a variety of sources is needed to reach parents and 
make them fully aware of their SES and public school choice options. 
LEAs that we met with reported that partnering with community 
organizations was an effective way of making parents aware of SES and 
public school choice options for their children.\21\
---------------------------------------------------------------------------

    \20\ Stullich, S., Eisner, E., & McCrary, J. (2007). National 
Assessment of Title I: Final Report, Volume I: Implementation. 
Washington, DC: National Center for Education Evaluation and 
Regional Assistance, Institute of Education Sciences, U.S. 
Department of Education.
    \21\ U.S. Department of Education, Office of Innovation and 
Improvement, Giving Parents Options: Strategies for Informing 
Parents and Implementing Public School Choice and Supplemental 
Educational Services Under No Child Left Behind, Washington, DC, 
2007.
---------------------------------------------------------------------------

    Providing timely, accurate notice. As noted in our discussion of 
the proposed changes to Sec.  200.37, the NATI report provides evidence 
that notifying parents of their public school choice options in a 
timely manner helps to increase study participation in public school 
choice. The NATI report also found that in 2004-2005 the quality and 
clarity of LEAs' parent notification letters regarding SES and public 
school choice varied considerably with many omitting key information. 
For example, fewer than half of the 20 public school choice letters 
that were sampled identified the schools that parents could choose for 
their children, and fewer than half of the 21 SES letters sampled 
identified the eligible SES providers.\22\ We believe that requiring 
LEAs to provide parents with timely and accurate notice of their SES 
and public school choice options is essential to ensuring that parents 
have the information they need to make informed decisions about their 
child's education.
---------------------------------------------------------------------------

    \22\ Stullich, S., Eisner, E., & McCrary, J. (2007). National 
Assessment of Title I: Final Report, Volume I: Implementation. 
Washington, DC: National Center for Education Evaluation and 
Regional Assistance, Institute of Education Sciences, U.S. 
Department of Education.
---------------------------------------------------------------------------

    Sign-up forms and signing up throughout the school year. The 
Department believes that parents of students eligible to receive SES 
should have opportunities to request SES for

[[Page 22033]]

their children throughout the school year. A short sign-up period at 
the beginning of the school year may exclude many students from 
participation, including, for example, children whose parents learn 
later in the school year that their child is struggling and needs 
additional support. Moreover, it is important that parents can easily 
access the forms to sign-up for services. We know from our discussions 
with States and SES providers that participation in SES is lower when 
access to sign-up forms is limited, for example, by requiring parents 
to attend a meeting or to travel to a district or school office to 
obtain the form. We believe that distributing sign-up forms directly to 
eligible students and their parents and allowing eligible students to 
sign up to receive SES services throughout the school year will make it 
easier for students and parents to take advantage of SES services.
    Access to school facilities. The statute does not require LEAs to 
pay or provide transportation for students to and from SES programs; 
therefore, if SES providers cannot operate on school grounds, families 
may have to arrange transportation for their children to the site where 
SES services are provided. Although the Department has promoted a 
policy of access to school facilities through non-regulatory guidance 
and technical assistance for several years, many LEAs around the 
country continue to deny providers access to their buildings. Giving 
providers access to school facilities is an important way of ensuring 
that families can participate in, and students can attend, SES 
programs.
    We believe that these proposed changes will encourage LEAs to 
improve opportunities for parents to take advantage of their options 
and result in more students participating in public school choice and 
SES, ultimately leading to increased student achievement.

Section 200.56--Definition of ``highly qualified teacher''

    Statutes and regulations: Under section 9101(23) of the ESEA and 
Sec.  200.56, a highly qualified teacher in any public elementary or 
secondary school must hold at least a bachelor's degree and either have 
(1) obtained full State teacher certification or (2) passed the State 
teacher licensing examination and hold a license to teach in that 
State. The ESEA also includes additional requirements for a highly 
qualified teacher depending on which grade level the teacher teaches 
and whether the teacher is new to the profession. Under section 
1119(a)(1) of the ESEA, beginning with the first day of the 2002-2003 
school year, each LEA receiving assistance under Title I, Part A is 
responsible for applying these requirements to any public school 
teacher teaching in a core academic subject supported by Part A funds 
who is hired after that date. The LEA also must have a plan to ensure 
that all public school teachers teaching in core academic subjects in 
the LEA meet these requirements by the end of the 2005-2006 school 
year.
    Under section 602(10)(A) of the IDEA and 34 CFR 300.18, a highly 
qualified special education teacher must obtain full State 
certification as a special education teacher or pass the State special 
education teacher licensing exam and hold a license to teach in the 
State as a special education teacher. The IDEA also includes 
requirements for special education teachers who teach core academic 
subjects exclusively to children who are assessed against alternate 
academic achievement standards. Section 602(10)(C) of the IDEA and 34 
CFR 300.18(c) require special education teachers teaching core academic 
subjects exclusively to alternate achievement standards to meet the 
NCLB requirements for elementary school teachers and have subject 
matter knowledge appropriate to the level of instruction being provided 
and needed to teach to those standards effectively. Special education 
teachers teaching multiple subjects and who are new to the profession 
have additional flexibility. Section 602(10)(D)(iii) of the IDEA and 34 
CFR 300.18(d) permit a new special education teacher who teaches 
multiple subjects and who is highly qualified in mathematics, language 
arts, or science, to have two years to demonstrate competence on the 
other core area subjects the teacher teaches, which may include a 
single high objective uniform State standard of evaluation (HOUSSE).
    Proposed Regulations: Proposed Sec.  200.56(d) would add a cross-
reference to the definition of highly qualified special education 
teachers in 34 CFR 300.18 of the IDEA regulations.
    Reasons: Special education teachers provide individualized and 
specialized instruction to improve the academic achievement of students 
with disabilities. The current Title I regulations do not define the 
requirements for highly qualified special education teachers who do not 
teach core academic subjects. The cross-reference aligns the Title I 
regulations with the IDEA regulations; the current requirements for 
highly qualified general or special education teachers would not 
change.

Executive Order 12866

    Under Executive Order 12866, the Secretary must determine whether 
this regulatory action is ``significant'' and therefore subject to the 
requirements of the Executive Order and subject to review by OMB. 
Section 3(f) of Executive Order 12866 defines a ``significant 
regulatory action'' as an action likely to result in a rule that may 
(1) have an annual effect on the economy of $100 million or more, or 
adversely affect a sector of the economy, productivity, competition, 
jobs, the environment, public health or safety, or State, local or 
tribal governments, or communities in a material way (also referred to 
as an ``economically significant'' rule); (2) create serious 
inconsistency or otherwise interfere with an action taken or planned by 
another agency; (3) materially alter the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raise novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive order. The Secretary has 
determined that this regulatory action is significant under section 
3(f)(4) of the Executive order.
1. Potential Costs and Benefits
    The proposed costs have been reviewed in accordance with Executive 
Order 12866. Under the terms of the order, the Department has assessed 
the costs and benefits of this regulatory action.
    In assessing the potential costs and benefits--both quantitative 
and qualitative--of these proposed regulations, the Department has 
determined that the benefits of the proposed regulations exceed the 
costs. The Department also has determined that this regulatory action 
does not unduly interfere with State, local, and tribal governments in 
the exercise of their governmental functions.
    To assist the Department in complying with the requirements of 
Executive Order 12866, the Secretary invites comments on whether there 
may be further opportunities to reduce any potential costs or increase 
potential benefits resulting from these proposed regulations without 
impeding the effective and efficient administration of the programs.

Summary of Costs and Benefits

    The Department believes that the majority of the proposed 
regulatory changes will not impose significant costs on States, LEAs, 
or other entities that participate in programs funded

[[Page 22034]]

under Part A of Title I. For example, the entire cost of the National 
TAC would be borne by the Department and would be financed through 
funds appropriated by the Congress for the Department's operations. As 
additional examples, the proposed regulations on multiple measures of 
student achievement, identification of schools and LEAs for 
improvement, and restructuring should provide useful clarification to 
the States without imposing any new costs on them. Similarly, the 
proposed regulations would require LEAs to notify parents of eligible 
students of the option to transfer their child to another school, 
sufficiently in advance of, but no later than 14 calendar days before, 
the start of the school year to give those parents adequate time to 
exercise their public school choice option; this regulation would not 
increase LEA costs because it would affect merely the timing of the 
parental notification.
    As another example, States and LEAs should be able to implement at 
minimal cost the requirement to include NAEP data on State and LEA 
report cards. The State NAEP results are available on the NCES Web site 
and through other sources, and obtaining those data should not pose a 
significant burden. Neither should including the data on the report 
cards, as the NAEP results would be a minor addition to the data 
already so included.
    The regulations would clarify that State definitions of AYP must 
include a minimum subgroup size that is based on sound statistical 
methodology, that yields statistically reliable information for each 
purpose for which disaggregated data are used, and that ensures that, 
to the maximum extent practicable, all student subgroups are included, 
particularly at the school level, in accountability determinations. All 
States would be required to revise their Accountability Workbooks and 
explain how their minimum subgroup sizes meet these criteria and to 
provide certain other information on their minimum subgroup sizes and 
AYP definitions. Within six months of the effective date of the final 
regulation, States would be required to submit to the Department, for 
technical assistance and peer review, a revised Accountability Workbook 
that reflects these new requirements.
    The Department has previously reviewed each State's minimum 
subgroup size and believes that some already meet the proposed 
criteria. Some States, however, may need to revise their minimum 
subgroup sizes and other components of the State's AYP definition based 
on the new requirements and on feedback from the new peer review.
    The costs to States of submitting a revised Accountability Workbook 
for technical assistance and peer review should be fairly low, as these 
Accountability Workbooks would, in large part, incorporate policies and 
amendments that the States have already included in their Workbooks in 
past years. The Department estimates that each State would, on average, 
require 112 hours of staff time to complete this effort, including 80 
hours for development and analysis of a proposed minimum subgroup size 
policy (within an overall definition of AYP) and an additional 32 hours 
for actual preparation of the Workbook. We further estimate that SEAs' 
cost for that activity will be $30 an hour. For the 50 States, the 
District of Columbia, and Puerto Rico, the estimated cost of revising 
and submitting their Workbooks would thus be $174,720. The Department 
further estimates that 25 States may need to do additional work on 
their Accountability Workbooks as a result of feedback from the peer 
review. The Department estimates that this work will require an 
additional 40 hours of staff time per State, adding an additional 
$30,000, for a total estimated cost of $204,720 to implement these 
proposed requirements.
    The Department believes that the costs of implementing this new 
policy should be minimal. The Department further believes that the 
benefits of this change, in terms of greater accountability that would 
result from the use of minimum subgroup sizes that meet the proposed 
criteria, would greatly outweigh the minimal costs of compliance.
    The proposed regulation to allow States to use measures of 
individual student academic growth in school and LEA AYP determinations 
would provide States with greater flexibility without burdening them 
with significant additional costs. Although, in order to receive 
permission to incorporate individual student academic growth into its 
AYP definition, a State would have had to have implemented a 
longitudinal data system that tracks student progress from grade to 
grade, it is highly unlikely that any State would develop and implement 
such a data system only (or even primarily) in order to use measures of 
individual student growth for calculating AYP; this is the case because 
the benefits of having a longitudinal student data system in place are 
much greater than just having the ability to support the use of 
individual student academic growth in calculating AYP. States have 
found such systems to be valuable in numerous ways, including in 
tracking the educational progress of students as they progress through 
grades and across schools and school systems; more accurately 
determining whether students graduate from high school; calculating 
accurate student dropout rates; holding schools and LEAs accountable 
for results; targeting assistance to those schools and LEAs most in 
need; determining whether the content their secondary schools offer is 
well aligned with college-preparedness requirements; identifying 
strengths and weaknesses in teacher preparedness; and measuring the 
educational performance of the State as a whole. For these reasons, 
many States had developed longitudinal student data systems, or were in 
the planning stages of such development, even before the Department 
announced the Growth Model Pilot in 2005. Therefore, the Department 
believes it would be inappropriate to assign the costs States incur in 
designing and implementing longitudinal data systems as a cost of this 
change in the regulations.
    The proposed regulations would require States to adopt a uniform 
cohort definition of graduation rate no later than school year 2012-
2013. States that do not currently have the capacity to track student 
transfers would be required to use an interim rate, the Averaged 
Freshman Graduation Rate (AFGR). The regulations also would require the 
use of disaggregated graduation rate data for AYP purposes beginning in 
the 2008-2009 school year for States and LEAs and in the 2012-2013 
school year for school-level accountability determinations. In 
addition, the proposed regulations would require a State to include in 
its AYP definition (a) a graduation rate goal that the State expects 
all high schools to meet (e.g., 90 percent), and (b) how LEAs 
demonstrate continuous and substantial improvement from the prior year 
toward meeting or exceeding the goal. To make AYP, the school or LEA 
must meet or exceed the graduation rate goal or demonstrate continuous 
and substantial improvement.
    As discussed earlier (in the explanation of the proposed changes to 
Sec.  200.19), the Department, based on work completed by NCES and the 
NGA, believes that States can incorporate the AFGR into their AYP 
definitions using currently available data. The Department, thus, 
believes these adjustments can be completed at minimal cost. In order 
to meet the proposed 2012-2013 deadline for implementation of a uniform 
cohort

[[Page 22035]]

graduation rate, States will need to have in place a data system that 
can track cohorts over four years, including the ability to track (and 
include in graduation rate calculations) students who drop out of 
school or leave in order to transfer to another school. States also 
will need to collect four years of student data through those systems 
in order to implement the new rate by the proposed deadline. However, 
it is important to note that, while a data system that tracks 
individual student data could be used to collect data for this rate, 
such a system would not be required in order to implement the proposed 
graduation rate requirements. In addition, the data needed to calculate 
the AFGR are already available to all schools, LEAs, and States, as 
reported in the Common Core of Data produced by NCES.
    The proposed regulations would not impose new costs on a State 
unless it does not yet have the data system capability to start 
collecting the four years of data needed to implement the uniform 
cohort graduation rate. We believe that the proposed regulations would 
not impose significant costs on States that they were not likely to 
assume in the absence of the regulations. In 2005, all 50 States agreed 
to the National Governors Association's Graduation Counts: A Compact on 
State High School Graduation Data, which calls for each State to 
develop a longitudinal graduation rate. In addition, data reported by 
the States to the Data Quality Campaign indicate that all States except 
for two will have in place a data system that can track individual 
students by the end of the 2007-2008 school year.\23\ Moreover, one of 
the two States that does not yet have such a system already uses an 
alternative method to calculate a cohort graduation rate that would 
meet the proposed regulatory requirements, and both States report that 
they will have such a data system by 2009-2010. These States should be 
able to collect the four years of required data by 2012-2013. Again, 
all of this reflects activities that the States initiated in the 
absence of the proposed regulation.
---------------------------------------------------------------------------

    \23\ Data Quality Campaign, 2007 State Data Collection Survey 
Results: State Specific Responses to Element 1. (2007). Austin, TX: 
Author. Available at: http://www.dataqualitycampaign.org/files/
element1_survey_responses.pdf.
---------------------------------------------------------------------------

    Therefore, as with the regulation on including individual student 
academic growth in AYP definitions, it would not be appropriate to 
assume that the cost of developing these data systems would be 
attributable, in whole or even in large part, to the need to comply 
with the proposed regulation on the graduation rate. Moreover, the 
Federal government supports States' development of longitudinal student 
data systems through the Department's Statewide Longitudinal Data 
Systems program. For the fiscal years 2005 (when the program began) 
through 2008, the Congress has appropriated more than $122 million for 
this program and, through fiscal year 2007, 27 States have received 
these grants.
    We believe the benefits of the proposed changes regarding 
graduation rate clearly outweigh the fairly minimal net costs 
previously discussed. A uniform and accurate method of calculating 
graduation rates is needed to raise expectations and to hold schools, 
districts, and States accountable for increasing the number of students 
who graduate on time with a regular high school diploma, as well as to 
provide parents and the public with more accurate information. By 
requiring all States to use a more rigorous and accurate graduation 
rate calculation, the Department can ensure greater accountability and 
transparency on this important indicator. In addition, we need to have 
a uniform and accurate method of calculating high school graduation 
rates to improve our understanding of the scope and characteristics of 
those students dropping out of school or taking longer to graduate.
    The final set of proposed regulations in this package relates to 
the implementation of public school choice and SES. The proposed 
language in Sec.  200.37(b)(5)(ii)(C), (b)(5)(iii)(A), and 
(b)(5)(iii)(B) would require that the notice to parents of students 
eligible for SES: (a) Explain the benefits of SES, (b) be clear and 
concise, and (c) be clearly distinguishable from the other information 
sent to parents under Sec.  200.37. Following, we estimate the costs of 
meeting this requirement. We note here that LEAs could assign costs 
related to meeting this requirement to the amount equal to 0.2 percent 
of their Title I, Part A allocations that the proposed regulations 
would permit LEAs to use for outreach and assistance to parents on 
public school choice and SES.
    Data from the ESEA Consolidated State Performance Report indicate 
that approximately 2,000 LEAs nationally have at least one school in 
year two of school improvement (or in a later stage of the Title I 
accountability timeline). These are the schools with students eligible 
for SES that would technically be covered by this new requirement. 
However, some of these LEAs are not able to offer SES and thus are not 
affected by the proposed notice requirement. For example, rural and 
other small or isolated districts often do not have any approved SES 
providers serving their area. For this reason, our analysis assumes 
that 80 percent of the estimated 2,000 LEAs with at least one school in 
year two of improvement or later, or 1,600 districts, will be subject 
to the notice requirement annually. We estimate that these 1,600 LEAs 
will each require an average of 12 hours of staff time to prepare the 
notice to parents so that it is clearly distinguishable from the other 
information sent to parents and that the cost for this time will 
average $25 per hour. Under this assumption, the cost for the 
preparation of this notice will be $480,000.
    Further, in the 2006-2007 school year, in the States for which the 
Department has data, approximately 3.6 million students were eligible 
for SES.\24\ Assuming that approximately 3.6 million students continue 
to be eligible each year, we project that the parents of one half of 
these students would receive the SES information by mail, in a separate 
mailing, and one-half through notices that students bring home from 
school, in a mailing that includes other information already required 
to be provided to parents (in Sec.  200.37), or by other means that 
impose very small costs on LEAs. For the one-half who would receive the 
notices by mail, the cost (assuming continuation of current postage 
rates) would be $738,000, bringing the total cost for the 
implementation of the proposed SES notice requirement to $1,218,000.
---------------------------------------------------------------------------

    \24\ U.S. Department of Education. (2007). Consolidated State 
Performance Report, 2006-07. Unpublished raw data.
---------------------------------------------------------------------------

    The proposed regulations in Sec.  200.39 would require LEAs to post 
on their Web sites information on their implementation of the public 
school choice and SES requirements, including information on the number 
of students who were eligible for and who participated in the public 
school choice and SES options, information on approved SES providers 
operating in the district, and a list of schools available to students 
who wish to take advantage of the public school choice option. Based on 
data from the ESEA Consolidated State Performance Report, approximately 
3,000 LEAs have a school in year one of improvement or later and thus 
are technically required to offer either public school choice, or both 
public school choice and SES, to their eligible students. However, as 
with the SES notice requirement, some of those LEAs would not be 
affected because they are unable to offer public school choice and SES 
due to a lack of choice options (for instance, rural and other

[[Page 22036]]

small districts frequently have only one school at a particular grade 
span) or the absence of an approved SES provider serving their area. We 
estimate that 80 percent of the 3,000 LEAs with a school in year one of 
improvement or later, or 2,400 districts, would need to post the new 
information on their Web site. We further estimate that these districts 
would require an average of 25 hours of staff time to prepare the data 
for the Web, at a cost of $25 per hour, for an estimated national cost 
of $1,500,000 to meet the new requirement to post public school choice 
and SES information on LEA web sites. Therefore, the total estimated 
cost for implementation of the new SES and Web site notice requirements 
is $2,718,000.
    The benefits would be that parents and others would have more and 
better information on the public school choices and SES programs 
available to eligible children and, thus, parents might be more likely 
to take advantage of those options (with attendant benefits for those 
children) and that LEA implementation of the choice and SES 
requirements would be more transparent. We also note that LEAs could 
assign costs related to meeting this requirement to the amount equal to 
0.2 percent of their Title I, Part A allocations under proposed Sec.  
200.48(a)(2)(iii)(C).
    The proposed regulations in Sec.  200.47 would clarify the SEA's 
responsibilities for SES, by stating that those responsibilities 
include developing, implementing, and publicly reporting on the SEA's 
standards and techniques for monitoring LEAs' implementation of SES. 
The Department believes that States already have such standards and 
techniques in place and that the burden of publicly reporting on them, 
such as by posting information about them on the SEA's Web site, would 
be very minimal. The benefit of the proposed regulations would be 
greater transparency of how SEAs monitor LEAs implementation of SES.
    The proposed regulations in Sec.  200.47 would also clarify that, 
in order to be approved as an SES provider, an entity must provide the 
State with evidence that the instruction it would provide and the 
content it would use are aligned with the State's academic content and 
student academic achievement standards and are research based. In 
addition, a State would also be required to consider, at a minimum, (1) 
whether the entity has been removed from any State's approved provider 
list; (2) parent recommendations or results from parent surveys, if 
any, regarding the success of the entity's instructional program in 
increasing student achievement; and (3) evaluation results, if any, 
demonstrating that the instructional program has improved student 
achievement. The Department believes that these requirements will 
result in improvements in States' SES provider approval procedures 
resu