SUPPORTING STATEMENT

Lender's Application for Payment of Insurance Claims

ED Form 1207

1.  The Department of Education (ED) is submitting for continual
    approval.

> The legal authority for this information is contained in the Higher
> Education Act of 1965, as amended and CFR Part 682 Federal Family
> Education Loan (FFEL) Program Subpart E Federal Guaranteed Student
> Loan Programs.

2\. The collection of this information is necessary so that ED can
determine how much is to be paid to a lender for a claim which falls
under one of the following categories: default, bankruptcy, death,
permanent or total disability, false certification, or closed schools.
The document provides ED with specific types of information that is
required for claim payment validation. The ED Form 1207 is used by
lenders to request payment of a claim for the Federal Insured Student
Loan Program (FISL) or for the Federal Stafford, Federal Plus, Federal
SLS, Federal Consolidation, or Federal Unsubsidized Programs when a
guaranty agency no longer exists and ED becomes the guarantor.

ED uses the information on the ED Form 1207 to match disbursement data
already on file for claim payment validation. This data is used to
calculate the claim payment amount, and forms the basis to be used in
the collection of defaulted loans by ED. If the information were not
collected payments to lenders for FFEL and FISL claims would be delayed.

3.  Information on the form is the minimum required by ED to properly
    process and pay a FFEL or FISL claim. The FISL program is being
    phased out (no loans have been made since 1984). In addition,
    guaranty agency functions have been transferred to ED.

ED has considered use of electronic submission of the ED Form1207 which
will reduce the burden to the community, but determined that while an
electronic format could be developed, the necessary supporting loan
documentation that accompanies the form is unavailable electronically.

4\. The information collected on the ED Form 1207 is ED's first
notification of the reason for the claim and is unavailable elsewhere in
the format needed to pay a FFEL or FISL claim.

5\. Collection of this information does not involve small businesses.

6\. Lenders submit the ED Form 1207 only when necessary. There are time
limitations for the lender to submit the claim. If the information were
collected less frequently, it would impact on ED's collection activities
on defaulted loans by extending the time between default and assumption
efforts by ED.

7\. The collection of this information will be conducted in accordance
with the guidelines in 5CFR 1320.6.

8\. The collection of this information will be conducted in accordance
with the guidelines in 5CFR 1320.8.

9\. There are no plans to provide any payment or gift to respondents.

10\. No assurance of confidentiality has been provided to respondents.
The information collected here is available to the public as provided
under the Privacy Act and the Freedom of Information Act.

11\. There is no question of a sensitive or private nature in this
information collection activity.

12\. The estimated cost to respondents of the hour burden associated
with the collection of information will be \$206.55. This was determined
by multiplying the number of respondents (51) times the amount of time
it takes to collect, complete, review, submit, and maintain the forms
(.27 hrs), times an average hourly wage of \$15.00 per hour.

51 annual responses = 51

[x .27]{.underline} hrs.

13.77 [x 15]{.underline} per hour

\$206.55

The total annual burden has been determined to be approximately 13.77
hours. This was determined as follows:

Total Annual Responses 51

Hours per Responses [x .15]{.underline}

Total Burden Hours 7.65

Record keepers 51

Hours per Record keeper [x .12]{.underline}

Total Hours 6.12

Total Annual Burden Hours 13.77

13\. There is no annual cost burden to respondents or record keepers
resulting from the collection of information.

14\. A ED contractor will process this form. It is estimated that the
annual cost to the Federal Government of operating the computer system
will be \$25,000.00.

15\. The total annual burden has decreased by 844.23 hours due to the
decrease in number of respondents due to decreased volume of
rehabilitated loan claim requests.

16\. ED does not plan to publish for statistical use the results of the
information to be collected. Management reports, however, will be
prepared.

17\. The expiration date for OMB approval of the information collection
will be displayed.

18. The collection of information complies with the Paperwork Reduction
    Act.

```{=html}
<!-- -->
```
B.  This collection of information does not employing statistical
    methods.