67048
Federal Register
/Vol. 67, No. 212/Friday, November 1, 2002/Rules and Regulations
DEPARTMENT OF EDUCATION34 CFR Parts 600, 668, 673, 674, 675,682, 685, 690, and 694
RIN 1845–AA23
Federal Student Aid Programs
AGENCY
:
Office of PostsecondaryEducation, Department of Education.
ACTION
:
Final regulations.
SUMMARY
:
The Secretary amends theInstitutional Eligibility Under theHigher Education Act of 1965, asAmended; Student Assistance GeneralProvisions; General Provisions for theFederal Perkins Loan Program, FederalWork-Study Program, and FederalSupplemental Educational OpportunityGrant Program; Federal Perkins Loan(Perkins Loan) Program; Federal Work-Study (FWS) Programs; Federal FamilyEducation Loan (FFEL) Program;William D. Ford Federal Direct Loan(Direct Loan) Program; Federal PellGrant Program; and Gaining EarlyAwareness and Readiness forUndergraduate Programs (GEAR UP)regulations. The Secretary is amendingthese regulations to reduceadministrative burden for programparticipants, and to provide them withgreater flexibility to serve students and borrowers.
DATES
:
Effective Date:
Except for theamendment to section 694.10, theseregulations are effective July 1, 2003.The amendment to section 694.10 becomes effective December 2, 2002.
Implementation Date:
The Secretaryhas determined, in accordance withsection 482(c)(2)(A) of the HigherEducation Act of 1965, as amended(HEA) (20 U.S.C. 1089(c)(2)(A)), thatinstitutions, lenders, guaranty agencies,and state grant agencies that administerTitle IV, HEA programs may, at theirdiscretion, choose to implement all of the provisions of these final rules on orafter November 1, 2002. For furtherinformation, see ‘‘Implementation Dateof These Regulations’’ under the
SUPPLEMENTARY INFORMATION
section of this preamble.
FOR FURTHER INFORMATION CONTACT
:
Forprovisions related to the Title IV loanprograms (Perkins Loan Program, FFELProgram, and Direct Loan Program): Ms.Gail McLarnon, U.S. Department of Education, 1990 K Street, NW, (8thFloor) Washington, DC 20006,Telephone: (202) 219–7048 or via theInternet:
Gail.McLarnon@ed.gov.
For other provisions: Ms. WendyMacias, U.S. Department of Education,1990 K Street, NW, (8th Floor),Washington, DC, 20006, Telephone:(202) 502–7526 or via the Internet:
Wendy.Macias@ed.gov.
If you use a telecommunicationsdevice for the deaf (TDD), you may callthe Federal Information Relay Service(FIRS) at 1–800–877–8339.Individuals with disabilities mayobtain this document in an alternativeformat (
e.g.
, Braille, large print,audiotape, or computer diskette) onrequest to the contact person listedunder
FOR FURTHER INFORMATION
CONTACT
.
SUPPLEMENTARY INFORMATION
:
On August6, 2002, and August 8, 2002, theSecretary published in the
FederalRegister
two separate notices of proposed rulemaking (NPRMs) (67 FR51036 and 67 FR 51718, respectively)for the Federal student assistanceprograms authorized by Title IV of theHEA. This document contains the finalregulations for the rules that wereproposed in both of these NPRMs.The August 6, 2002 NPRM includedproposed rules for the StudentAssistance General Provisions, PerkinsLoan Program, FFEL Program, andDirect Loan Program regulations.In the preamble to the August 6, 2002NPRM, the Secretary discussed on pages51037 through 51046 the major changesproposed to improve the Federalstudent assistance programs. Theseincluded the following:
•
Amending §668.35 to state theconditions under which a borrower whois subject to a judgment obtained on aTitle IV loan may regain eligibility foradditional Title IV student financialassistance. [page 51037]
•
Amending §§674.39, 682.405, and685.211 to exclude from rehabilitationdefaulted Perkins Loan, FFEL, andDirect Loan program loans on which ajudgment has been obtained. [page51037]
•
Amending §§674.19, 682.402, and682.414 to clarify the record retentionrequirements for promissory notesunder the Perkins Loan and FFELprograms. [page 51038]
•
Amending §§674.34, 682.210, and, by reference, 685.204, to modify the wayloan holders in the Perkins Loan, FFEL,and Direct Loan programs calculateFederal postsecondary educational loandebt for purposes of determining a borrower’s eligibility for an economichardship deferment. [page 51039]
•
Amending §§674.42, 682.604, and685.304 to clarify that entities otherthan the institution may provide initialand exit loan counseling on theinstitution’s behalf and to provideconsistency in the information that must be disclosed to borrowers. [page 51039]
•
Amending §§682.204 and 685.203to clarify loan limits for separate stand-alone programs in the FFEL and DirectLoan programs. [page 51039]
•
Amending §682.210 and, byreference, §685.204 to make it easier for borrowers in the FFEL and Direct Loanprograms to certify eligibility for anunemployment deferment. [page 51040]
•
Amending §§682.402, 685.212, and685.220 to expand the instances whereFFEL and Direct Loan program borrowers can have a portion of aconsolidation loan discharged. [page51040]
•
Amending §§674.2 and 674.16 toprovide for the use of a MasterPromissory Note (MPN) in the PerkinsLoan Program. [page 51041]
•
Amending §§674.9 and 674.47 tomodify the low-balance write-off options for institutions that participatein the Perkins Loan Program. [page51042]
•
Amending §674.17 to clarify thatwhen an institution participating in thePerkins Loan Program closes, orotherwise leaves the program, thatinstitution must assign its outstandingloans to the Secretary and liquidate itsPerkins Loan fund according to theSecretary’s instructions. [page 51042]
•
Amending §§674.33 and 674.42 toclarify the conditions under which aninstitution must coordinate minimumrepayment options when a Perkins Loan borrower has received loans from morethan one institution. [page 51042]
•
Amending §674.42 to provideflexibility to institutions that participatein the Perkins Loan Program inproviding copies of promissory notes to borrowers. [page 51042]
•
Amending §674.43 to provideinstitutions increased flexibility inassessing late fees in the Perkins LoanProgram. [page 51043]
•
Amending §674.45 to clarify whenan institution that participates in thePerkins Loan Program must report adefaulted account to a national credit bureau. [page 51043]
•
Amending §674.46 to simplify therequirements for an institution thatparticipates in the Perkins LoanProgram to determine if it shouldinitiate litigation against a defaulted borrower. [page 51043]
•
Amending §674.50 to provideconsistency within the regulations forthe assignment to the Secretary of Perkins loans. [page 51043]
•
Amending §682.200 to revise thedefinition of lender to clarify thetreatment of loans held by trusteelenders. [page 51044]
•
Amending §682.209 to allow anFFEL lender to establish a borrower’sfirst payment due date up to 60 daysafter the borrower enters repayment, toprovide increased flexibility to FFEL
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