[Code of Federal Regulations]
[Title 34, Volume 1]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 34CFR85.201]

[Page 247-248]
 
                           TITLE 34--EDUCATION
 
PART 85--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT) AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)--Table of Contents
 
                       Subpart B--Effect of Action
 
Sec.  85.201  Treatment of title IV, HEA participation.

    (a)(1) The debarment of an educational institution, lender, or third 
party servicer under E.O. 12549 by an agency other than the Department 
pursuant to procedures described in paragraph (c) of this section 
terminates the eligibility of the entity to enter into transactions 
under any student financial assistance program authorized by title IV of 
the Higher Education Act of 1965, as amended, for the duration of the 
debarment.
    (2)(i) The suspension of an educational institution, lender, or 
servicer under E.O. 12549 or pursuant to a proposed debarment under the 
Federal Acquisition Regulation (FAR), 48 CFR part 9, subpart 9.4, by an 
agency other than the Department under procedures described in paragraph 
(c) of this section suspends the eligibility of the entity to enter into 
transactions under any student financial assistance program authorized 
by title IV of the Higher Education Act of 1965, as amended.
    (ii) The suspension of title IV eligibility as a result of a 
suspension described in paragraph (a)(2) of this section lasts for a 
period of 60 days, beginning on the later of the date of the decision of 
the suspending official of the other agency in response to an objection 
to the suspension or, if no objection to that suspension was raised, on 
the 35th day after the notice of suspension was issued by that agency. 
The suspension described here does not expire on the 60th day if the 
suspended entity and the Secretary agree to an extension or if the 
Secretary initiates a limitation or termination proceeding against the 
entity under 34 CFR part 668, subpart G, or part 682, subpart G, as 
applicable, prior to the 60th day.
    (3) A transaction under a title IV, HEA program includes--
    (i) The disbursement or delivery of funds provided under a title IV, 
HEA program to a student or borrower;
    (ii) The certification by an educational institution of eligibility 
for a loan under at title IV, HEA program;
    (iii) The acquisition of a loan made under a title IV, HEA program; 
and
    (iv) The acquisition of any servicing responsibility for a grant, 
loan, or work study assistance under a title IV, HEA program.
    (b)(1) The Secretary notifies the institution, lender, or servicer 
that has been debarred or suspended by another Federal agency whether 
the debarment or suspension takes effect in accordance with paragraph 
(a) of this section and states the effective date and duration of that 
action.
    (2)(i) If the Secretary proposes to give effect to a suspension or 
debarment against an educational institution, lender, or third-party 
servicer that does not meet the standards in paragraph (c) of this 
section, the Secretary initiates a debarment or suspension proceeding 
under Sec.  85.316 or Sec.  85.414, respectively, against that entity.
    (ii) The effective date of a debarment or suspension that takes 
effect under paragraph (a) of this section shall be 20 days after the 
date the notice is mailed. The Secretary gives effect to a suspension 
described in paragraph (a)(2) of this section only after the suspending 
official of the other agency has issued a decision in response to an 
objection to the suspension or, if no objection to that suspension was 
raised,

[[Page 248]]

on the 35th day after the notice of suspension was issued by that 
agency. The suspension lasts for a period of 60 days, beginning on the 
effective date specified in the notice, unless the suspended entity and 
the Secretary agree to an extension or the Secretary initiates a 
limitation or termination proceeding against the entity under 34 CFR 
part 668, subpart G, or part 682, subpart G, as applicable, prior to the 
60th day.
    (3) If an institution, lender, or a third party servicer is 
suspended by ED or another Federal agency, the Secretary determines 
whether grounds exist for the initiation of an emergency action against 
the entity under 34 CFR part 668, subpart G, or part 682, subpart G, as 
applicable.
    (c) An institution, lender, or third-party servicer that is debarred 
or suspended by another agency, or proposed for debarment under 48 CFR 
part 9, subpart 9.4 by another Federal agency, is debarred, terminated 
or suspended, as provided under this part, 34 CFR part 668, and 34 CFR 
part 682, as applicable, if that agency took this action under 
procedures that afforded the excluded party the following:
    (1) Notice of the proposed action;
    (2) An opportunity to submit and have considered evidence and 
argument in opposition to the proposed action;
    (3) An opportunity to obtain a hearing on its objection--
    (i) At which the agency bears the burden of persuasion, by a 
preponderance of the evidence;
    (ii) Conducted by an impartial person who does not also exercise 
prosecutorial or investigative responsibilities with respect to that 
action;
    (iii) At which the entity may, unless the hearing official 
determines that no genuine dispute of material fact exists, present 
testimony and secure the attendance of those agency witnesses with 
personal knowledge of material facts whose testimony the hearing 
official determines to be needed, in light of other available evidence 
and witnesses; and
    (iv) Of which a transcribed record is available upon request; and
    (4) A written decision stating findings of fact and conclusions of 
law on which the decision is rendered.
    (d) The title IV, HEA programs are those programs listed in 34 CFR 
668.1(c).

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and 
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)

[60 FR 33056, June 26, 1995]