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Office of Special Education and Rehabilitative Services-Special Demonstration Programs-Model Demonstration Projects To Improve Outcomes for Individuals Receiving Social Security Disability Insurance (SSDI) Served by State Vocational Rehabilitation (VR) Agencies

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Office of Special Education and Rehabilitative Services, Department of Education.


Notice of proposed priority.

Catalog of Federal Domestic Assistance (CFDA) Number: 84.235L.


The Assistant Secretary for Special Education and Rehabilitative Services proposes a priority under the Special Demonstration Programs to fund a project to identify, develop, and implement model demonstration projects to improve outcomes for individuals receiving Social Security Disability Insurance (SSDI) served by State Vocational Rehabilitation (VR) agencies. The Assistant Secretary may use this priority for competitions in fiscal year (FY) 2010 and later years. We take this action to improve employment outcomes for SSDI beneficiaries receiving services from State VR agencies.


We must receive your comments on or before April 26, 2010.


Address all comments about this notice to Thomas Finch, U.S. Department of Education, 400 Maryland Avenue, SW., room 5147, Potomac Center Plaza (PCP), Washington, DC 20202-2800.

If you prefer to send your comments by e-mail, use the following address: You must include the term “SSDI Demonstration” in the subject line of your electronic message.

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Thomas Finch. Telephone: (202) 245-7343 or by e-mail:

If you use a telecommunications device for the deaf (TDD), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.

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Invitation To Comment: We invite you to submit comments regarding this notice.

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 this proposed priority. Please let us know of any further ways we could 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 this notice in room 5052, Potomac Center Plaza (PCP), 550 12th Street, SW., Washington DC, between the hours of 8:30 a.m. and 4:00 p.m., Washington, DC time, Monday through Friday of each week except Federal holidays.

Assistance to Individuals With Disabilities in Reviewing the Rulemaking Record: On request we will provide an appropriate accommodation or auxiliary aid to an individual with a disability who needs assistance to review the comments or other documents in the public rulemaking record for this notice. If you want to schedule an appointment for this type of accommodation or auxiliary aid, please contact the person listed under FOR FURTHER INFORMATION CONTACT.

Purpose of Program: The purpose of this program is to expand and improve the provision of rehabilitation and other services authorized under the Rehabilitation Act of 1973, as amended (the Rehabilitation Act), or to support activities that increase the provision, extent, availability, scope, and quality of rehabilitation services provided under the Rehabilitation Act.

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Program Authority: 29 U.S.C. 773(b).

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Applicable Program Regulations: 34 CFR part 373.

Proposed Priority

This notice contains one proposed priority.

Model Demonstration Projects To Improve Outcomes for Individuals Receiving Social Security Disability Insurance (SSDI) Served by State Vocational Rehabilitation (VR) Agencies


The Rehabilitation Act of 1973, as amended (the Rehabilitation Act), authorizes the establishment of VR agencies in each State to administer the State's Vocational Rehabilitation Services program. These State VR agencies provide VR services to eligible individuals with disabilities to assist them to prepare for, obtain, or retain employment, preferably competitive employment. Under the VR program, competitive employment means employment in the competitive labor market that is performed in an integrated setting and for which the individual is paid at or above the minimum wage but not less than the customary wage and level of benefits paid by the employer for the same work to individuals who are not disabled (see generally 34 CFR 361.5(b)(11)). In this context, an integrated setting means employment in jobs that are typically found in the community and in which individuals with disabilities have the same opportunity to interact with others in the course of their work that is available to any other person employed in a comparable position (see generally 34 CFR 361.5(b)(33)(ii)).

The Social Security Administration (SSA) provides income support to more than 10 million working age people with disabilities through its Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs. Under the SSDI program, SSA provides benefits to eligible individuals with a work history who have paid Social Security taxes on their earnings and who cannot work because they have a medical condition that is expected to last at least one year or result in death. The SSI program is an income supplement program that provides cash assistance for basic needs, such as food, clothing, and shelter, to individuals who are 65 years of age or older or who are disabled and who have little or no income. Individuals with disabilities may receive assistance under both the SSDI and SSI programs. The Federal government's cost of providing these benefits was almost $101 billion in 2005 and the number of beneficiaries and cost of these programs are expected to increase (GAO-07-332, March 30, 2007).

State VR agencies serve a significant number of SSA beneficiaries. In FY 2008, approximately 28 percent of all individuals whose service records were closed were SSA beneficiaries at the time that they applied for VR services, over half of whom were SSDI beneficiaries. Similarly, SSA beneficiaries represented nearly a quarter of those individuals exiting the State VR program with an employment outcome in FY 2008, over half of whom were SSDI beneficiaries (RSA-911 data). Accordingly, SSA has a significant and ongoing interest in State VR agencies' success in helping individuals with disabilities secure employment.

The Rehabilitation Act Amendments of 1992 increased the role of VR agencies in assisting SSA beneficiaries by requiring that individuals with disabilities who receive SSDI or SSI benefits be considered individuals with significant disabilities and be presumed to be eligible for VR services under the State VR Services program (see section 102(a)(3) of the Rehabilitation Act). State VR agencies' role has increased even more since the passage of the Ticket to Work and Work Incentives Improvement Act of 1998 (42 U.S.C. 1320b-19). Under the Ticket to Work program, most SSDI beneficiaries and SSI recipients between the ages of 18 and 64 are offered a “ticket” which they may use to obtain VR services, employment services, and other support services from an SSA employment network services provider. State VR agencies can participate in the Ticket to Work program as an employment network services provider or through a cost reimbursement program. As of March 1, 2010, about 229,224 ticket-holders are working with a State VR agency under the traditional cost reimbursement arrangement. In addition, about 34 percent of the 40,328 tickets that have been assigned have been assigned to State VR agencies as an employment network and about 66 percent have been assigned to other employment networks. The Web site​work/​tickettracker.html provides more details on the coordination effort between State VR agencies and the Ticket to Work program. There are also new opportunities for State VR agencies to partner with other VR providers under options that became available under the new Ticket to Work regulations that became effective July 21, 2008 (20 CFR part 411).

Notwithstanding collaboration between SSA and the VR program, recent studies have criticized the return to work efforts for SSA beneficiaries. A GAO study found that while individuals increased their earnings after receiving VR services, only a small proportion of that group of individuals earned a sufficient amount that would enable them to leave the SSA beneficiary rolls (Vocational Rehabilitation: Earnings Increased for Many SSA Beneficiaries after Completing VR Services, but Few Earned Enough to Leave SSA's Disability Rolls, GAO-07-332 March 30, 2007). The most recent GAO study (Vocational Rehabilitation: Improved Information and Practices May Enhance State Agency Earnings Outcomes for SSA Beneficiaries, GAO-07-521, May 23, 2007) reported that State agency outcomes for SSA beneficiaries completing VR programs varied widely Start Printed Page 14584across different outcome measures. For example, according to SSA earning records, there is wide variation among State VR agencies in the amount of money that individuals with disabilities who achieved employment outcomes earned during the first year after closure of the VR service record.

This most recent study also found that some of the variance in outcomes could be explained by factors such as State economic conditions and the characteristics of the individuals receiving agency services. However, GAO did find that a few State VR agency practices appeared to yield positive earnings results and made the following recommendation:

To improve the effectiveness of Education's program evaluation efforts and ultimately the management of vocational rehabilitation programs, the Secretary of Education should further promote agency practices that show promise for helping more SSA disability beneficiaries participate in the work force. Such a model should seek to increase: (1) The percentage of VR staff who meet State standards and certifications established under the Comprehensive System of Personnel Development (CSPD), (2) partnership or involvement with area business communities, and (3) collaboration with other agencies that provide complementary services (Vocational Rehabilitation: Improved Information and Practices May Enhance State Agency Earnings Outcomes for SSA Beneficiaries, GAO-07-521, May 23, 2007).

We propose to address GAO's recommendation that the Department promote promising practices by examining practices in State VR agencies and other factors affecting the employment outcomes of SSDI beneficiaries. The focus of this proposed priority is limited to individuals with disabilities receiving SSDI benefits at the time of application to the VR program, including those individuals receiving both SSDI and SSI, because differences in program eligibility and other characteristics of the SSDI and SSI programs and their recipients (work history, amount of disability payment, work-related incentives/disincentives), would make it difficult to analyze, interpret, and generalize the results.

There are a number of practices and other factors that may affect the outcomes of SSDI beneficiaries that need to be examined at the State or local level, for example, looking at the effect of partnering with business or collaborating with other agencies that provide complementary services, as suggested by GAO. Likewise, State VR agencies commit varying levels of resources towards rehabilitation of SSA beneficiaries, and these individual State decisions could also explain differences in State VR agency performance. Finally, the existence within States of different levels of extended services and supports available from other agencies to assist individuals with disabilities to maintain employment following the completion of the VR program and case closure may also have a direct impact on job retention and earnings levels.

One way to study these individual State differences is to identify State VR agencies that are particularly successful in achieving employment outcomes for SSDI beneficiaries at comparatively higher wages and hours worked and to conduct in-depth case studies of those agencies to identify practices that are associated with more and better employment outcomes and can be replicated by other State VR agencies.

One source of data that may be used for this analysis is the RSA-911. The RSA-911 is the primary individual service record level database on which State VR agencies report information about individual characteristics of, services provided to, and the employment outcomes obtained by individuals served by the VR program. Examination of RSA-911 information for FY 2008 shows that, as GAO reported, State VR agencies differ considerably in both the number of SSDI beneficiaries served and in the number and quality of the employment outcomes obtained by SSDI beneficiaries. There are differences in relative success rates (called employment outcome rates or rehabilitation rates in VR nomenclature) and relative differences in emphasis on full- or part-time work (as indicated by average hours worked per week). There are also differences in gross weekly wages and in the percentage of individuals who earn more than the substantial gainful activity (SGA) level at closure (RSA analysis of RSA-911 data, FY 2008).

A preliminary review of four performance measures (employment outcome rate, wages at case closure, hours worked, and percentage of individuals earning an amount greater than SGA at closure) in the RSA-911 data indicates that there are 10 State VR agencies that score in the top 20 percent of all State VR agencies for at least three out of the four performance measures. Although a more in-depth analysis of recent RSA-911 data and other information may provide somewhat different results, RSA has concluded from this preliminary review that there is a pool of State VR agencies that are able to achieve more employment outcomes involving full-time work and higher wages for SSDI beneficiaries from which selections for a case study review could be made.

This proposed priority is envisioned as a cooperative agreement with significant interaction and collaboration between RSA and the grantee. There are several distinct activities involved in this research activity. These include: further analysis of existing RSA data and other relevant data to identify high-performing State VR agencies; investigation of practices within these agencies using rigorous case study methodology; analysis of the case study findings; and design, implementation, and evaluation of a demonstration project based on the findings from the case studies.

Some of the preliminary work for this data analysis has been completed, as discussed previously in this notice. Before a grant is made under this priority, RSA staff will conduct a more thorough analysis of State VR agency performance related to serving SSDI beneficiaries to determine whether there are State VR agencies that consistently appear to perform better than others across multiple measures. In conducting this analysis, RSA will likely use other databases in conjunction with the RSA-911. The analysis will refine the criteria for measuring high performance and will be the basis for identifying States that meet the identified criteria. RSA will share the results of this analysis with the grantee during the discussion of the selection of the high-performing State VR agencies to be examined further through the case studies.[1] It is recommended that applicants assume that there will be three case studies on the premise that further analysis will reduce the pool of State VR agencies that show consistent positive outcomes for SSDI beneficiaries and that only some of those State VR agencies will agree to participate in the study.

The purpose of the case studies of State VR agencies that demonstrate sustained success with SSDI beneficiaries is to determine possible factors contributing to that success. High-performing agencies will be asked Start Printed Page 14585by RSA to participate in these in-depth case studies to determine factors or variables that are related to high performance as defined for this project. The factors or variables may be decisions or activities that are under the control of the State VR agency, or they may be characteristics of the external State environment. Information from the case study analysis will be used in the design of an intervention model by the successful grantee that will serve as the basis for the demonstration projects to be carried out and evaluated by the grantee under this priority.

Proposed Priority

The Assistant Secretary for Special Education and Rehabilitative Services proposes a priority under the Special Demonstration Programs to fund a project to identify, develop, and implement model demonstration projects to improve outcomes for individuals receiving Social Security Disability Insurance (SSDI) who are served by State vocational rehabilitation (VR) agencies. Under this priority, the project must be designed to contribute to the following outcomes:

  • Identify through in-depth case study of selected State VR agencies factors that account for the relatively better qualitative and quantitative results of these agencies in achieving employment outcomes at or above substantial gainful activity (SGA) for SSDI beneficiaries.
  • Determine whether there are a sufficient number of factors related to the better employment outcome results that are within the control of the State VR agency, and if so, develop an intervention model incorporating those factors that can be replicated in other State VR agencies and that can be evaluated in terms of the model's impact after implementation.
  • Implement and evaluate the intervention model in at least three State VR agencies, selected by the Rehabilitation Services Administration (RSA) based on information provided by the grantee, that are willing to implement the model. One criterion for selecting these State VR agencies is that SSDI beneficiaries whom they serve have an employment outcome rate at or below the rate for other State VR agencies.
  • If the model demonstration projects show an improved employment rate for SSDI beneficiaries, complete the development of the intervention model incorporating information acquired through the model demonstration projects, recommend any strategies needed for implementation of the model by other State VR agencies, and disseminate the findings of this demonstration project to State VR agencies.

Types of Priorities

When inviting applications for a competition using one or more priorities, we designate the type of each priority as absolute, competitive preference, or invitational through a notice in the Federal Register. The effect of each type of priority follows:

Absolute priority: Under an absolute priority, we consider only applications that meet the priority (34 CFR 75.105(c)(3)).

Competitive preference priority: Under a competitive preference priority, we give competitive preference to an application by (1) awarding additional points, depending on the extent to which the application meets the priority (34 CFR 75.105(c)(2)(i)); or (2) selecting an application that meets the priority over an application of comparable merit that does not meet the priority (34 CFR 75.105(c)(2)(ii)).

Invitational priority: Under an invitational priority, we are particularly interested in applications that meet the priority. However, we do not give an application that meets the priority a preference over other applications (34 CFR 75.105(c)(1)).

Final Priority

We will announce the final priority in a notice in the Federal Register. We will determine the final priority after considering responses to this notice and other information available to the Department. This notice does not preclude us from proposing additional priorities, requirements, definitions, or selection criteria, subject to meeting applicable rulemaking requirements.


This notice does not solicit applications. In any year in which we choose to use this priority, we invite applications through a notice in the Federal Register.

Executive Order 12866: This notice has been reviewed in accordance with Executive Order 12866. Under the terms of the order, we have assessed the potential costs and benefits of this proposed regulatory action.

The potential costs associated with this proposed regulatory action are those resulting from statutory requirements and those we have determined as necessary for administering this program effectively and efficiently.

In assessing the potential costs and benefits—both quantitative and qualitative—of this proposed regulatory action, we have determined that the benefits of the proposed priority justify the costs.

Intergovernmental Review: This program is subject to Executive Order 12372 and the regulations in 34 CFR part 79. One of the objectives of the Executive order is to foster an intergovernmental partnership and a strengthened federalism. The Executive order relies on processes developed by State and local governments for coordination and review of proposed Federal financial assistance.

This document provides early notification of our specific plans and actions for this program.

Accessible Format: Individuals with disabilities can obtain this document in an accessible format (e.g., braille, large print, audiotape, or computer diskette) by contacting the Grants and Contracts Services Team, U.S. Department of Education, 400 Maryland Avenue, SW., room 5075, PCP, Washington, DC 20202-2550. Telephone: (202) 245-7363. If you use a TDD, call the FRS, toll free, at 1-800-877-8339.

Electronic Access to This Document: You can view this document, as well as all other documents of this Department published in the Federal Register, in the text or Adobe Portable Document Format (PDF) on the Internet at the following site:​news/​fedregister. To use PDF you must have the Adobe Acrobat Reader, which is available free at this site.


The official version of this document is the document published in the Federal Register. Free Internet access to the official edition of the Federal Register and the Code of Federal Regulations is available on GPO Access at:​nara/​index.html.

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Dated: March 23, 2010.

Alexa Posny,

Assistant Secretary for Special Education and Rehabilitative Services.

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1.  State VR agencies that serve individuals who are blind or visually impaired will be excluded from this study for two reasons: individuals who are blind or visually impaired have significantly different benefits under the SSDI program, the most important of which is the allowance of a higher level of earnings before meeting the SGA requirement; and most of these agencies serve relatively few individuals, making analysis more difficult. Likewise, VR programs in the Commonwealths of Puerto Rico and the Northern Marianas and the territories of Guam, American Samoa, and the Virgin Islands are excluded from this study for reasons of small numbers served, cost considerations, and significant differences in availability and organization of other resources for individuals with disabilities.

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[FR Doc. 2010-6787 Filed 3-25-10; 8:45 am]