[Federal Register: December 18, 1996 (Volume 61, Number 244)]
[Proposed Rules]
[Page 66853-66854]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[[Page 66853]]
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Part IV
Department of Education
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34 CFR Part 668
Student Assistance General Provisions; Reopening of Comment Period;
Proposed Rule
[[Page 66854]]
DEPARTMENT OF EDUCATION
34 CFR Part 668
Student Assistance General Provisions
AGENCY: Department of Education.
ACTION: Reopening of comment period.
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SUMMARY: On September 20, 1996, the Department of Education published
in the Federal Register a notice of proposed rulemaking (NPRM) for the
Student Assistance General Provisions (34 CFR Part 668) regarding
standards of financial responsibility (60 FR 49552-49574). The proposed
standards would apply to all institutions that participate in a program
authorized by title IV of the Higher Education Act of 1965, as amended
(title IV, HEA programs), and to third-party servicers that enter into
a contract with a lender or guarantee agency to administer any aspect
of that lender's or agency's Federal Family Education Loan (FFEL)
programs.
Many commenters responding to the NPRM requested that the Secretary
extend the comment period to give institutions, higher education
associations, and other interested parties more time to evaluate
further the proposed ratio methodology and standards, and to prepare
substantive comments and recommendations based on that additional
analysis. The Secretary agrees that more time is needed to evaluate the
proposed ratio methodology and standards, as well as the proposed rules
regarding changes of ownership, and that additional public comment
would improve the quality of information available for rulemaking.
Therefore, the Secretary is reopening for 60 days the comment period
for the following parts of the September 20, 1996 NPRM:
* The proposed Subpart L.
* The proposed Appendix F.
* Paragraphs (e)-(h) of the proposed Sec. 668.23 (the
repayment standards formerly contained in Sec. 668.24).
DATES: Comments must be received on or before February 18, 1997.
ADDRESSES: All comments concerning this notice or the notice of
proposed rulemaking should be addressed to Mr. David Lorenzo, U.S.
Department of Education, P.O. Box 23272, Washington, D.C. 20026, or to
the following internet address: fin__resp@ed.gov
FOR FURTHER INFORMATION CONTACT: Mr. David Lorenzo or Mr. John Kolotos,
U.S. Department of Education, 600 Independence Avenue, S.W., Room 3045
ROB-3, Washington, D.C. 20202, telephone (202) 708-7888. Individuals
who use a telecommunications device for the deaf (TDD) may call the
Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8
a.m. and 8 p.m., Eastern standard time, Monday through Friday.
Background
On November 29, 1996, the Secretary published final regulations
amending Secs. 668.15 and 668.23 of the Student Assistance General
Provisions. In that document, the Secretary indicated that the
Department would reopen the comment period for several parts of the
September 20, 1996 NPRM. The parts for which the comment period is
reopened are indicated above. The Secretary is not reopening the
comment period for those parts of the September 20, 1996 NPRM on which
final regulations were published on November 29 and which are not
listed above.
The Secretary is particularly interested in receiving comments on
the following topics. These topics were originally raised in the NPRM
and noted by commenters as areas of special concern. The Secretary is
seeking additional comment and recommendations on these issues that
more fully reflect the commenters' positions:
* The utility and appropriateness of the proposed ratio
methodology for evaluating the financial condition of participating
institutions. The Secretary is interested in specific comments on how
the various ratios may be improved, as well as comments on the
weighting mechanism, strength factors, and composite score standard.
The Secretary is particularly interested in suggestions that would
improve the way the proposed ratio methodology may be used to judge the
financial health of an institution that has not incurred debt, given
the fact that an institution may have no debt either because it has
avoided debt as a management strategy, or because it is in such poor
financial condition that it cannot secure credit.
* Ways in which a public institution may demonstrate that it
is backed by the full faith and credit of a state or equivalent
governmental entity, as an alternative means under which a public
institution may satisfy the statutory requirement that it is
financially responsible.
* Ways to streamline the process by which the Secretary
determines that an institution may retain or resume participation in
title IV, HEA programs during or after a change of ownership. The
Secretary is looking for suggestions outlining steps the Department may
take to shorten or eliminate funding interruptions to students while
protecting title IV, HEA program funds.
* The impact on financial statements of the new accounting
standards contained in the Financial Accounting Standards Board's
Statements of Financial Accounting Standards 116 and 117. The Secretary
particularly requests comments from institutions that have already
adopted those new accounting standards.
* Whether the proposed ratio methodology is appropriate for
evaluating the financial responsibility of third-party servicers that
enter into a contract with a lender or guarantee agency to administer
any aspect of that lender's or agency's FFEL programs. Commenters are
encouraged to submit concrete suggestions for possible revisions to the
proposed ratio methodology and standards, or for an alternative
methodology or standards, if the commenters do not agree that the
proposed ratio methodology and standards are appropriate for these
servicers.
* At present, the Secretary does not have a data base of
third-party servicer financial statements to use while evaluating
comments on the proposed ratio methodology and standards as they apply
to third-party servicers. In order to help the Secretary evaluate
comments on the proposed ratio methodology and standards as they apply
to third-party servicers, and any suggested revisions or alternatives
to the proposed ratio methodology and standards, the Secretary
encourages third-party servicers to submit their latest audited
financial statement along with their comments.
Dated: December 12, 1996.
David A. Longanecker,
Assistant Secretary for Postsecondary Education.
[FR Doc. 96-32047 Filed 12-17-96; 8:45 am]
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