[Federal Register: September 26, 1997 (Volume 62, Number 187)]
[Rules and Regulations]
[Page 50845-50848]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26se97-25]
[[Page 50845]]
_______________________________________________________________________
Part VIII
Department of Education
_______________________________________________________________________
34 CFR Parts 674, 675, and 676
Federal Perkins Loan Program, Federal Work Study Program, and Federal
Supplemental Educational Opportunity Grant Program; Final Rule
[[Page 50846]]
DEPARTMENT OF EDUCATION
34 CFR Parts 674, 675, and 676
RIN 1840-AC40
Federal Perkins Loan Program, Federal Work-Study Program, and
Federal Supplemental Educational Opportunity Grant Program
AGENCY: Department of Education.
ACTION: Final regulations.
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SUMMARY: This document contains amendments to regulatory provisions
that provide consistency among program regulations, correct minor
technical errors and omissions in the existing regulations governing
the programs, and conform with self-implementing provisions of the
Higher Education Act of 1965, as amended (HEA). The student financial
assistance programs authorized by title IV of the HEA, include the
campus-based programs (Federal Perkins Loan, Federal Work-Study (FWS),
and Federal Supplemental Educational Opportunity Grant (FSEOG)
programs).
EFFECTIVE DATE: These regulations take effect October 27, 1997.
FOR FURTHER INFORMATION CONTACT:
1. For the FWS and FSEOG programs: Ms. Kathy Gause, Campus-Based
Grants Program Specialist, U.S. Department of Education, 600
Independence Avenue, SW, Regional Office Building 3, Room 3053,
Washington, DC 20202-5447. Telephone: (202) 708-8242.
2. For the Federal Perkins Loan Program: Ms. Gail McLarnon, Campus-
Based Loan Program Specialist, U.S. Department of Education, 600
Independence Avenue, SW, Regional Office Building 3, Room 3053,
Washington, DC 20202-5447. Telephone: (202) 708-8242.
Individuals with disabilities may obtain this document in an
alternate format (e.g., Braille, large print, audiotape, or computer
diskette) by contacting the person listed in the preceding paragraph.
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 time, Monday through Friday.
SUPPLEMENTARY INFORMATION: On March 4, 1995, the President directed
every Federal agency to review its rules and procedures to reduce
regulatory and paperwork burden and directed Federal agencies to
eliminate or revise those regulations that are outdated or otherwise in
need of reform.
As part of his response to the President's Regulatory Reinvention
Initiative, and to improve program accountability to protect students
and the Federal fiscal interest, the Secretary published amendments to
the cash management regulations contained in part 668, subpart K, in
the Federal Register (61 FR 60578-60610) on November 29, 1996
(effective date July 1, 1997). The campus-based programs regulations
are amended to conform with the cash management regulations published
on November 29, 1996, and to correct errors and omissions in the text
of the campus-based programs existing regulations.
Although these regulations do not establish any new policies, there
are issues surrounding the technical changes to the regulations that
govern the Federal Perkins Loan Program that need further explanation.
Several Federal Perkins Loan Program regulatory provisions are amended
to conform with self-implementing provisions of the HEA. The following
list summarizes those issues:
Federal Perkins Loan Program
Default Reduction Plan--Section 674.6
The Secretary amends Sec. 674.6 to eliminate the option allowing
institutions to submit a statement to the Secretary indicating that
they, in order to satisfy the requirement to establish and implement a
default reduction plan for their Federal Perkins Loan Program, agree to
apply to their Federal Perkins Loan Program the default management plan
in place for their Federal Family Education Loan (FFEL) Program. This
change is being made because as of July 1, 1996, institutions
participating in the FFEL Program are no longer required to develop
default management plans.
Student Eligibility--Section 674.9
An incorrect cross-reference has been corrected in paragraph (a) by
removing ``34 CFR 668.7,'' and adding, in its place, ``34 CFR 668.32.''
Fiscal Procedures and Records--Section 674.19
An incorrect cross-reference has been corrected in paragraph (b) by
removing ``Sec. 668.164,'' and adding, in its place, ``Sec. 668.163.''
Promissory Note--Section 674.31 and Repayment--Section 674.33
The Secretary amends Secs. 674.31 and 674.33 to add language
requiring institutions to exclude periods of forbearance in determining
the 10-year repayment period for a Federal Perkins loan. This language,
which reflects section 464(c)(4) of the HEA, was inadvertently omitted
from the current Federal Perkins Loan Program regulations.
The Secretary also amends Sec. 674.33(b)(6)(ii) by adding a
reference to a $30 minimum monthly payment rate for Direct loans. This
reference was inadvertently omitted when the Secretary published final
regulations on November 30, 1994, that revised the minimum monthly
payment rate language in this section to reflect the new $40 rate for
Federal Perkins loans in accordance with the HEA.
Deferment of Repayment--Section 674.34
The Secretary amends Sec. 674.34(h) to clarify that an institution
may not include the period of the post-deferment grace period in
determining the 10-year repayment period for a Federal Perkins loan in
accordance with section 464(c)(2)(A)(iv) of the HEA.
Deferment of Repayment--Federal Perkins Loans Made Before July 1,
1993--Section 674.35, Deferment of Repayment--Direct Loans Made on or
After October 1, 1980, but Before July 1, 1993--Section 674.36, and
Deferment of Repayment--Direct Loans Made Before October 1, 1980 and
Defense Loans--Section 674.37
The Secretary amends Secs. 674.35, 674.36, and 674.37 to add the
hardship deferment to the list of the qualifying deferment periods that
are not to be included in the 10-year repayment period for a Federal
Perkins loan. This change reflects section 464(c)(4) of the HEA and was
inadvertently omitted from the Federal Perkins Loan Program
regulations.
Collection Procedures--Section 674.45
The Secretary amends Sec. 674.45(c)(1)(ii)(A) by eliminating the
phrase ``unless specifically prohibited by State law,'' in order to
make this paragraph consistent with section 484A of the HEA and
Sec. 674.45(g). Final regulations published on November 30, 1994, in
accordance with the HEA, added Sec. 674.45(g), the provisions of which
specifically preempt State statutes, regulations, or rules that would
hinder satisfaction of requirements that an institution must carry out
in collecting Federal Perkins loans.
Cancellation Procedures--Section 674.52
The Secretary amends Sec. 674.52(d)(2) by adding Sec. 674.58 to the
cross-references. This cross-reference, which reflects the changes made
to section 464(c)(2)(A)(iv) of the HEA, was inadvertently omitted from
the Federal
[[Page 50847]]
Perkins Loan Program regulations. The addition of a cross-reference to
Sec. 674.58 allows a borrower with a loan made on or after July 1,
1993, to defer repayment while doing service that qualifies for
cancellation in a Head Start program.
Federal Work-Study Program
There are no major changes to the FWS Program. However, the
Secretary has made some minor technical changes as described in the
following paragraphs.
Student Eligibility--Section 675.9
An incorrect cross-reference has been corrected in paragraph (a) by
removing ``34 CFR 668.7,'' and adding, in its place, ``34 CFR 668.32.''
Fiscal Procedures and Records--Section 675.19
An incorrect cross-reference has been corrected in paragraph (a)(3)
by removing ``Sec. 668.164,'' and adding, in its place,
``Sec. 668.163.''
Eligible Employers and General Conditions and Limitations on
Employment--Section 675.20
The Secretary amends Sec. 675.20(b)(1) to add the word ``public''
after the word ``local,'' and to delete the phrase ``(see appendix B
for a sample agreement)'' in paragraph (b)(1). Appendix B was
previously removed from regulations and is now included in the Federal
Student Financial Aid Handbook
Employment Provided by a Federal, State, or Local Public Agency, or a
Private Nonprofit Organization--Section 675.22
The Secretary amends Sec. 675.22 to add the word ``public'' after
the word ``local'' in the section heading.
Nature and Source of Institutional Share--Section 675.27
A typographical error has been corrected in the authority citation
following the section.
Federal Supplemental Educational Opportunity Grant Program
There are no major changes to the FSEOG Program. However, the
Secretary has made some minor technical changes as described in the
following paragraphs.
Student Eligibility--Section 676.9
An incorrect cross-reference has been corrected in paragraph (a) by
removing ``34 CFR 668.7,'' and adding, in its place, ``34 CFR 668.32.''
Fiscal Procedures and Records--Section 676.19
An incorrect cross-reference has been corrected in paragraph (a)(2)
by removing ``Sec. 668.164,'' and adding, in its place,
``Sec. 668.163.''
Paperwork Reduction Act of 1995
These regulations have been examined under the Paperwork Reduction
Act of 1995 and have been found to contain no information collection
requirements.
Regulatory Flexibility Act Certification
The Secretary certifies that these regulations would not have a
significant economic impact on a substantial number of small entities.
The small entities affected by these regulations are small institutions
of higher education. These regulations contain technical amendments
that correct current regulations.
The changes will not have a significant economic impact on the
institutions affected.
Waiver of Proposed Rulemaking
In accordance with the Administrative Procedure Act, 5 U.S.C. 553,
it is the practice of the Secretary to offer interested parties the
opportunity to comment on proposed regulations. However, the regulatory
changes in this document are necessary to correct minor technical
errors, to implement mandatory statutory provisions, and to correct
omissions in the campus-based programs existing regulations. The
changes in this document do not establish any new policies. Therefore,
the Secretary has determined that publication of a proposed rule is
unnecessary and contrary to the public interest under 5 U.S.C.
553(b)(B).
Intergovernmental Review
The Federal Supplemental Educational Opportunity Grant program is
subject to the requirements of Executive Order 12372 and the
regulations in 34 CFR part 79. The objective of the Executive order is
to foster an intergovernmental partnership and a strengthened
federalism by relying on processes developed by State and local
governments for coordination and review of proposed Federal financial
assistance.
In accordance with the order, this document is intended to provide
early notification of the Department's specific plans and actions for
this program.
The Federal Perkins Loan and Federal Work-Study programs are not
subject to the requirements of Executive Order 12372 and the
regulations in 34 CFR part 79.
Assessment of Educational Impact
Based on its own review, the Department has determined that the
regulations in this document would not require transmission of
information that is being gathered by or is available from any other
agency or authority of the United States.
List of Subjects
34 CFR Part 674
Loan programs--education, Student aid, Reporting and recordkeeping
requirements.
34 CFR Part 675
Colleges and universities, Employment, Grant programs--education,
Student aid, Reporting and recordkeeping requirements.
34 CFR Part 676
Grant programs--education, Student aid, Reporting and recordkeeping
requirements.
Dated: September 23, 1997.
Richard W. Riley,
Secretary of Education.
(Catalog of Federal Domestic Assistance Numbers: 84.007 Federal
Supplemental Educational Opportunity Grant Program; 84.033 Federal
Work-Study Program; and 84.038 Federal Perkins Loan Program)
The Secretary amends parts 674, 675, and 676 of Title 34 of the
Code of Federal Regulations as follows:
PART 674--FEDERAL PERKINS LOAN PROGRAM
1. The authority citation for part 674 continues to read as
follows:
Authority: 20 U.S.C. 1087aa-1087hh and 20 U.S.C. 421-429, unless
otherwise noted.
Sec. 674.6 [Amended]
2. Section 674.6 is amended by removing the semicolon at the end of
paragraph (a)(1) and adding, in its place, ``, or''; by removing ``;
or'' at the end of paragraph (a)(2) and by adding, in its place, a
period; and by removing paragraph (a)(3).
Sec. 674.9 [Amended]
3. Section 674.9(a) is amended by removing ``34 CFR 668.7'' and by
adding, in its place, ``34 CFR 668.32''.
Sec. 674.19 [Amended]
4. Section 674.19(b) is amended by removing ``Sec. 668.164'' and
adding, in its place, ``Sec. 668.163''.
5. Section 674.31(b)(2)(i)(D) is revised to read as follows:
Sec. 674.31 Promissory note.
* * * * *
[[Page 50848]]
(b) * * *
(2) * * *
(i) * * *
(D) May vary because of minimum monthly repayments (see
Sec. 674.33(b)), extensions of repayment (see Sec. 674.33(c)),
forbearance (see Sec. 674.33(d)), or deferments (see Secs. 674.34,
674.35, and 674.36);
* * * * *
6. Section 674.33 is amended by adding ``for a Direct Loan or''
after ``$30'' in paragraph (b)(6)(ii), and by adding a new paragraph
(d)(8) to read as follows:
Sec. 674.33 Repayment.
* * * * *
(d) * * *
(8) The institution may not include the periods of forbearance
described in this paragraph in determining the 10-year repayment
period.
* * * * *
7. Section 674.34(h) is revised to read as follows:
Sec. 674.34 Deferment of repayment--Federal Perkins loans and Direct
loans made on or after July 1, 1993.
* * * * *
(h) The institution may not include the deferment periods described
in paragraphs (b), (c), (d), (e), (f), and (g) of this section and the
period described in paragraph (i) of this section in determining the
10-year repayment period.
* * * * *
8. Section 674.35 is amended by removing ``(see Sec. 674.56)'' in
paragraph (c)(1) and adding, in its place, ``(see Sec. 674.59)''; by
removing ``(see Sec. 674.57)'' in paragraphs (c)(3) and (4) and adding,
in its place, ``(see Sec. 674.60)''; by removing paragraph (g); by
redesignating paragraph (i) as paragraph (g); by redesignating
paragraph (h) as paragraph (i); and by adding a new paragraph (h) to
read as follows:
Sec. 674.35 Deferment of repayment--Federal Perkins loans made before
July 1, 1993.
* * * * *
(h) The institution may not include the deferment periods described
in paragraphs (b), (c), (d), (e), (f), and (g) of this section and the
period described in paragraph (i) of this section when determining the
10-year repayment period.
* * * * *
Sec. 674.36 [Amended]
9. Section 674.36 is amended by removing ``(see Sec. 674.56)'' in
paragraph (c)(1) and adding, in its place, ``(see Sec. 674.59)''; by
adding ``(see Sec. 674.60)'' before the semicolon in paragraphs (c)(2)
and (c)(3); and by removing ``and'' after ``(c),'' and adding ``, and
(e)'' after ``(d)'' in paragraph (f).
Sec. 674.37 [Amended]
10. Section 674.37 is amended by removing ``(see Sec. 674.56)'' in
paragraph (c)(1) and adding in its place ``(see Sec. 674.59)''; by
adding ``(see Sec. 674.60)'' before the semicolon in paragraph (c)(2)
and before the period in paragraph (c)(3); and by removing ``and (c)''
after ``(b)'' and adding, in its place, ``, (c), and (e)'' in paragraph
(d).
Sec. 674.45 [Amended]
11. Section 674.45(c)(1)(ii)(A) is amended by removing ``, unless
specifically prohibited by State law,'' after ``shall''.
Sec. 674.52 [Amended]
12. Section 674.52(d)(2) is amended by removing ``or'' before
``674.57'' and by adding ``, or 674.58'' after ``674.57''.
PART 675--FEDERAL WORK-STUDY PROGRAMS
13. The authority citation for part 675 continues to read as
follows:
Authority: 42 U.S.C. 2751-2756b, unless otherwise noted.
Sec. 675.9 [Amended]
14. Section 675.9(a) is amended by removing ``34 CFR 668.7'' and
adding, in its place, ``34 CFR 668.32''.
Sec. 675.19 [Amended]
15. Section 675.19(a)(3) is amended by removing ``Sec. 668.164''
and adding, in its place, ``Sec. 668.163''.
Sec. 675.20 [Amended]
16. Section 675.20(b)(1) is amended by adding ``public'' after
``local'' in the first sentence and by removing in the second sentence
``(see Appendix B for a sample agreement)''.
Sec. 675.22 [Amended]
17. Section 675.22 is amended by adding in the heading ``public''
after ``local''.
Sec. 675.27 [Amended]
18. Section 675.27 is amended by revising the authority citation
following the section to read as follows:
(Authority: 42 U.S.C. 2754)
PART 676--FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANT
PROGRAM
19. The authority citation for part 676 continues to read as
follows:
Authority: 20 U.S.C. 1070b-1070b-3, unless otherwise noted.
Sec. 676.9 [Amended]
20. Section 676.9(a) is amended by removing ``34 CFR 668.7'' and
adding, in its place, ``34 CFR 668.32''.
Sec. 676.19 [Amended]
21. Section 676.19(a)(2) is amended by removing ``Sec. 668.164''
and adding, in its place, ``Sec. 668.163''.
[FR Doc. 97-25658 Filed 9-25-97; 8:45 am]
BILLING CODE 4000-01-P