Key Policy Letters Signed by the Education Secretary or Deputy Secretary
May 2, 2006
Archived Information

May 2, 2006

Dear Colleague:

The purpose of this letter is to describe how the U.S. Department of Education intends to implement a new student grant program. Please note that action described in this letter may be required by June 1 for college students from your State to receive a new type of federal student financial aid.

A growing national consensus is emerging on the need for high school reform, and the need to refocus on math and science education. Leaders from the business, political, and educational communities are in agreement on the importance of improving our national performance. Recent studies and test scores support this view.

One common denominator has been the call for more academic rigor in the classroom—more demanding subjects, more years of study, and greater access to college preparatory courses. President George W. Bush has said that "... we need to encourage children to take more math and science, and to make sure those courses are rigorous enough to compete with other nations." At the 2005 National Education Summit on High Schools, the nation's governors agreed that "To ensure that all high school graduates are prepared for postsecondary education and work, governors and business and education leaders must develop a comprehensive plan for their states to ... [r]estore value to the high school diploma...." However, in a recent study, Achieve, Inc. reported that only eight States in the nation "have enacted college- and work-ready graduation requirements."

Recent statistics display how much room for improvement we have in this arena:

  • Eight developed nations have surpassed America's high school graduation rate among young adults;
  • Nearly a third of all students—and about half of African American and Hispanic students—do not graduate from high school on time;
  • Of the students who do graduate, less than half are ready for college-level math and science coursework;
  • Almost 30% of incoming college freshmen require remediation in reading, writing, or math; and
  • In 1970, the U.S. produced over 50% of the world's science and engineering doctorates; by 2010, our share is projected to be about 15%.

The solution to this situation demands systemic action on the part of educational leaders and citizens to improve our high schools, provide opportunities for students that will better prepare them for college, and place a greater emphasis on math and science education. Congress has responded to this need. On February 8, 2006, the President signed into law the Deficit Reduction Act of 2005 (Pub. L. 109-171). Included as a subtitle within the Act is the "Higher Education Reconciliation Act of 2005 (HERA)." HERA contains a new student grant program, the Academic Competitiveness Grant Program. The program includes two types of grants for certain Pell Grant-eligible college students: the Academic Competitiveness Grant (AC grant) and the National Science and Mathematics Access to Retain Talent Grant (SMART grant).

This grant program makes available $790 million in the 2006-07 academic year and $4.5 billion over five years to provide aid to low-income college students who meet general Pell Grant program guidelines, as well as additional specified criteria. AC Grants will be awarded to first- and second-year college students who have successfully completed a rigorous secondary school program, while SMART grants will be awarded to third- and fourth-year college students who major in mathematics, science, technology, engineering, or critical foreign languages. (See Attachment for additional program details.)

As these funds are available beginning in July for students enrolling in college for the 2006-07 academic year, it is important that quick action be taken to set up the means for distributing these funds. This letter aims to get the process moving on this grant program and to explain how the Department will deliver these critical funds to eligible students in the near term. I also outline the steps the Department envisions taking over the next several years to use these grants to encourage and support States as they make high school a more rigorous, challenging, and relevant experience for all students. As part of this process, and because there is a need to implement these programs in time to make awards at the beginning of the 2006-2007 academic year, we are preparing to publish final regulations, with a waiver of notice-and-comment rulemaking and negotiated rulemaking, that will specify how we will implement this program for at least the next two academic years. For the years thereafter, we intend to promulgate regulations to establish the details of the program's implementation. This rulemaking will be conducted in a manner consistent with the requirements of the Higher Education Act of 1965, as amended (HEA), and the Administrative Procedure Act (APA).

I recognize that implementing these new programs this year will place significant burdens on colleges and universities. I believe that financial aid officers and other campus officials will make every effort to implement these new programs in accordance with all of their unique requirements, but am sensitive to the fact that this may be difficult given the complexity of the programs and time constraints.

Initial Eligibility

Not all college students receiving Pell Grants will be eligible for AC or SMART grants. Based on the additional statutory eligibility requirements, we estimate that less than forty percent of Pell Grant-eligible students will be eligible for an AC or SMART Grant.

Listed below are the general additional eligibility requirements for the AC and SMART grants, beyond the general Pell Grant requirements, that reduce the number of eligible students. These grants will be available to any Pell Grant-eligible student who:

  • Is a full-time student;
  • Is a citizen of the United States; and
  • Is enrolled in a two- or four-year degree-granting institution of higher education.

In addition, for AC Grants, a student must:

  • Have not been previously enrolled in a program of undergraduate education (if a first-year student);
  • Have completed high school after January 1, 2006, if a first-year student; and
  • Have completed high school after January 1, 2005, if a second-year student.

These criteria do not take into account the most obvious eligibility requirements for these grants—that is, taking a rigorous secondary school program of study for the AC Grants and majoring in math, science, or a critical foreign language for the SMART Grants. (See Attachment for full requirements.)

Academic Competitiveness Grants for 2006-07 and 2007-08

Under the AC Grant program, Congress has established that an individual student may receive up to $750 (for a first-year student) or $1,300 (for a second-year student) to pay for higher education, if the student has successfully completed "... a rigorous secondary school program of study...." Second-year recipients must also have attained at least a 3.0 GPA in their first year of undergraduate education. According to the statute, a rigorous secondary program of study is one that is "established by a State or local educational agency and recognized as such by the Secretary [of Education]...." The law also provides that "The Secretary shall recognize at least one rigorous secondary school program of study in each State...."

In recognizing these programs, I will respect the authority of each individual State to set graduation requirements, and I will follow the law's directive prohibiting the Department from mandating, directing or controlling State or local curricula, programs of instruction, academic achievement standards or assessments. I will conduct a thorough and transparent review and will be consulting with external stakeholders to aid me in this process.

Because the law requires the U.S. Department of Education to implement the AC Grant program for the 2006-07 academic year, time is of the essence to recognize rigorous secondary school programs of study. For the 2006-07 academic year, each State has the option of submitting a rigorous secondary school program of study to the Secretary for recognition. However, I am concerned about the timing of this process, because only about half of the States have created a statewide Honors or Advanced diploma program of study that they might consider rigorous, and other options are needed for private and home-schooled students. Students and institutions of higher education need to be able to understand, in the short term, who will be eligible for the aid offered by this program. Having this knowledge as early as possible is crucial to enabling students and financial aid officers to plan for the 2006-07 academic year.

As a first step toward recognition of rigorous secondary school programs of study, it is my intention to recognize all existing Advanced or Honors diploma programs as rigorous secondary school programs of study. A list of the Advanced or Honors programs that I will immediately recognize as rigorous appears in the Attachment. However, after examining the high school graduation requirements in all fifty States, it is clear that many States do not currently have an Advanced or Honors diploma pathway.

Options For Students

Advanced or Honors diploma programs are not available to all high school students and there will likely be States that do not opt to establish a new "rigorous program of study" by the June 1 deadline discussed below. To make it possible for all students to be eligible for these grants, we must create other options for private school students, home-schooled students, students enrolled in Department of Defense Overseas Schools, and students from States that have not designated an Advanced or Honors diploma. In order to cover all of these students, and enable them to understand quickly who is eligible for an AC Grant, I intend to recognize the additional following three options as evidence of rigor in a secondary school program of study. (These options are described in detail in the Attachment.)

  • The State Scholars Initiative requirements. A student may complete the courses required under the State Scholars Initiative. This program, supported by Congress, establishes a required set of courses that is patterned after the recommendations of the National Commission on Excellence in Education. Fourteen States currently participate in this program, which includes four years of English, three years of math, three years of lab science, three-and-one-half years of social studies, and two years of a language other than English. Eight additional States will begin participation in the State Scholars Initiative program this year.

  • A set of courses similar to those required under the State Scholars Initiative. A student may demonstrate that he or she has completed a set of courses that are similar to the courses required under the State Scholars program.

  • Advanced Placement (AP) or International Baccalaureate (IB) courses and test scores. A student may demonstrate that he or she has taken two AP or IB courses and received passing scores on the AP or IB tests. This recognition is consistent with the Administration's belief that AP and IB courses demand content mastery from a student, and the Administration's proposal to expand the AP/IB Incentive Program.

This set of options will open up many opportunities for individual students to receive AC Grants. In addition, a State can establish, or request recognition of, a new or different rigorous secondary school program of study and submit information on that program to the Department for recognition for this academic year. If a State wishes to establish an alternative rigorous secondary school program of study to meet the requirements of this new law, the State Educational Agency must submit its proposal to the Department by June 1, 2006, in order to ensure that we move forward quickly enough for grants to be disbursed in a timely fashion. If a State does not submit a proposal by this date, it will signify its affirmation of the four options for rigor listed above. Additional details about how to submit this information are in the Attachment.

I am recognizing the set of options identified above as rigorous secondary school programs of study for at least the next two academic years (2006-07 and 2007-08), as we work to implement this grant program quickly and smoothly. If a State seeks recognition of a newly established or different secondary school program of study for the 2007-08 academic year, it should submit information on that program to the Department by November 1, 2006.

Academic Competitiveness Grants in 2008-09 and Beyond

After this initial two-academic-year time frame, I would like to recognize a set of requirements for academic rigor that even more accurately reflects what is required for success in college. Over time, we will recommend a more demanding set of requirements for what is recognized as a rigorous secondary school program of study. This action—which would begin in the 2008-09 academic year—will enable States, schools, families, and students to ready themselves to achieve this higher goal.

In future rulemaking, the Department envisions establishing criteria that it will consider when recognizing additional rigorous secondary school programs of study, as well as other program provisions. The guidelines I set forth below are my suggestions, based on the latest research available to the Department, for working toward a more accurate reflection of the preparation students need in order to succeed in college. Additional information about these recommendations appears in the Attachment.

First, for the 2008-09 academic year I plan to recommend that the State-defined Advanced or Honors diplomas, State Scholars Initiative requirements, and Advanced Placement or International Baccalaureate courses and test scores would remain as eligibility options.

Second, I plan to recommend raising the standard by which the required set of courses option is recognized for the 2008-09 academic year. At that time, I would recognize a required set of courses as specified for the State Scholars Initiative, with several slight revisions. These revisions would increase the flexibility students would have in their course taking.

SMART Grants: 2006-07 and 2007-08

Under the SMART Grant program, Congress established that qualifying third- or fourth-year students may receive up to $4,000 per year to pay for higher education, if the student majors in mathematics, science, or a critical foreign language.

The implementation of the SMART Grant program does not present as many implementation obstacles as the AC Grant program does, because institutions of higher education already have most of the information that is required to determine a student's eligibility. The only additional information required is a list of the eligible majors in math, science, technology, engineering, and critical foreign languages. The Department will publish a list of these majors on its Web site.


To improve our nation's economic competitiveness, we must first improve our students' academic performance. The data clearly point to a solution: higher expectations, more rigorous coursework, and a renewed focus on math and science. With AC Grants and SMART Grants, we have two new tools to encourage students to take—and schools to offer—the right courses to prepare students to enter and thrive in college.

In recognizing the rigorous secondary school programs of study described in this letter, I believe we will allow deserving students to participate in this program, and that we will encourage students to prepare themselves academically for success in higher education and the highly competitive workforce. States will also maintain the flexibility to submit a proposal for what they recognize as rigorous.

In addition to helping us administer the AC and SMART Grant programs, we trust that States will communicate about this program to their residents, particularly the educators and parents upon whom students' academic success ultimately depends. We look forward to working with you in the effective and expedient implementation of these grants. Please feel free to contact us if you have any questions.

  Margaret Spellings

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Last Modified: 05/02/2006