SUPPORTING STATEMENT

Information Collections Under the Final Regulations Governing the
Teacher Education Assistance for College and Higher Education Grants as
amending the Student Assistance General Provisions.

**A. Justification**

**1. Necessity of Information Collected**

The Teacher Education Assistance for College and Higher Education Grants
program (TEACH Grants) final regulations revises the current Student
Assistance General Provisions regulations in the area of program
administration. The Student Assistance General Provisions regulations in
the final TEACH Grant regulations assure the Secretary that the
integrity of the program is protected from fraud and other misuse of
program funds.

> These regulations are a result of regulatory review of the program
> regulations to reduce administrative burden for program participants,
> provide benefits to Title IV recipients, and protect the taxpayers\'
> interest. This request is for approval of reporting and recordkeeping
> requirements contained in the attached final regulations related to
> the administrative requirements of the Regulations Governing the
> Student Assistance General Provisions as revised by the TEACH Grant
> final regulations. The information collection requirements in these
> regulations are necessary to determine eligibility to receive program
> benefits and to prevent fraud and abuse of program funds.
>
> **Student Assistance General Provisions:** (OMB control number:
> 1845-0038)

We are making the following changes to this section:

**[General Provisions (OMB 1845-0038 -- Cash Management)]{.underline}**

> **Sections 668.165 --- Notices and authorizations.**

Section 668.165 contains information collection requirements under OMB
Control Number 1845-0038. In §668.165, we modified the current
notification and authorization requirements to include TEACH Grants in
the notification and authorization process. Before an institution
disburses title IV, HEA program funds for any award year, the
institution must notify a student of the amount of funds that the
student or his or her parent can expect to receive under each title IV,
HEA program, and how and when those funds will be disbursed.

Except in the case of a post-withdrawal disbursement made in accordance
with §668.22(a)(5), if an institution credits a student's account at the
institution with Direct Loan, FFEL, Federal Perkins Loan, or TEACH Grant
Program funds, the institution must notify the student or parent of\--

The anticipated date and amount of the disbursement;

> The student's right or parent's right to cancel all or a portion of
> that loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement
> and have the loan proceeds returned to the holder of that loan, or the
> TEACH Grant proceeds returned the Secretary. However, if the
> institution releases a check provided by a lender under the FFEL
> Program, the institution is not required to provide this information;
> and
>
> The procedures and time by which the student or parent must notify the
> institution that he or she wishes to cancel the loan, loan
> disbursement, TEACH Grant, or TEACH Grant disbursement.

The institution must provide the notice described in paragraph (a)(2) of
this section in writing\--

> No earlier than 30 days before, and no later than 30 days after,
> crediting the student's account at the institution, if the institution
> obtains affirmative confirmation from the student under paragraph
> (a)(6)(i) of this section; or
>
> No earlier than 30 days before, and no later than seven days after,
> crediting the student account at the institution, if the institution
> does not obtain affirmative confirmation from the student under
> paragraph (a)(6)(i) of this section.
>
> A student or parent must inform the institution if he or she wishes to
> cancel all or a portion of a loan, - loan disbursement, TEACH Grant,
> or TEACH Grant disbursement.
>
> The institution must return the loan or TEACH Grant proceeds, cancel
> the loan or TEACH Grant, or do both, in accordance with program
> regulations.
>
> If a student or parent requests a loan cancellation after the period
> set forth in paragraph (a)(4)(ii)(A) or (B) of this section, the
> institution may return the loan or TEACH GRANT proceeds, cancel the
> loan or the TEACH Grant, or do both, in accordance with program
> regulations.
>
> An institution must inform the student or parent in writing regarding
> the outcome of any cancellation request.
>
> For purposes of this section\--
>
> Affirmative confirmation is a process under which an institution
> obtains written confirmation of the types and amounts of title IV, HEA
> program loans that a student wants for an award year before the
> institution credits the student's account with those loan funds. The
> process under which the TEACH Grant Program is administered is
> considered to be an affirmative confirmation process; and
>
> An institution is not required to return any loan or TEACH Grant
> proceeds that it disbursed directly to a student or parent.

**2. Purpose and Use of Information Collected**

Student Assistance General Provisions:

> Subpart K - Cash Management of Part 668 of the Code of Federal
> Regulations (CFR) provide for the administration of Title IV, HEA
> program assistance funds. The information collected, recorded, and/or
> disclosed in §668.165 continues to be used as necessary for disbursing
> Title IV funds and in order to meet the requirements for notification
> and authorizations within the cash management regulations for
> effective Title IV program administration. The information collected,
> recorded, and/or disclosed in §668.165 will continue to be used as
> necessary. If we did not require the collection, recordation, and/or
> disclosure of information as specified in §668.165, we would not be
> able to ensure program compliance.

**3. Consideration of Improved Information Technology**

**General Provisions:**

> We have maximized the use of available technology to comply with the
> Cash Management requirements by permitting institutions greater
> flexibility to return Title IV credit balances through a variety of
> electronic processes.

**4. Efforts to Identify Duplication**

> A thorough review of procedures indicates that current requirements
> are minimal and avoid duplication. This review was done in conjunction
> with affected parties who have a vested interest in eliminating
> duplication.

**5. Burden Minimization as Applied to Small Business**

No small businesses are impacted by this collection.

**6. Consequences of Less Frequent Data Collection**

> Recordkeeping requirements are imposed to assure accountability of
> program participants for proper program administration and less
> frequent collection could impair accountability of program
> participants.

7.  **Special Circumstances Governing Data Collection**

> The collection of this information will be conducted in a manner that
> is consistent with the guidelines in 5 CFR 1320.5(d)(2).

**8. Consultation Outside the Agency**

> Under the Administrative Procedure Act (APA) (5 U.S.C.553), the
> Department is generally required to publish a noticed of proposed
> rulemaking and provide the public with an opportunity to comment on
> proposed regulations prior to establishing a final rule. In addition,
> all Department regulations for programs authorized under the title IV,
> HEA programs are subject to the negotiated rulemaking requirements of
> section 492 of the HEA.

**9.** **Payments or Gifts to Respondents**

No payments or gifts will be provided to the respondents.

**10. Assurance of Confidentiality**

> A Privacy Act Notice is included on the Free Application for Federal
> Student Aid (FAFSA) application form and the TEACH Grant service
> agreement. In this notice, the grant applicant (and his parents, for
> dependent students) is informed of the statutory authority for
> collecting the information requested. Although disclosure of the
> information is voluntary, the grant recipient is informed that in
> order to be considered for TEACH Grant funds, the information must be
> provided. The information provided is used to verify the grant
> recipient's identity, to determine the grant recipient\'s eligibility
> to receive TEACH Grant benefits, and if those cases where a TEACH
> Grant is converted into a Direct Unsubsidized Loan, to permit the
> servicing of the borrower\'s loan(s), and to locate the borrower and
> collect on the loan(s) if the loan(s) become delinquent or default. A
> listing of the persons and entities to which the information may be
> disclosed and for what purposes the information may be disclosed is
> also included.

**11. Questions of Sensitive Nature**

The Department is not requesting any sensitive data.

**12. Annual Hour Burden for Respondents/Recordkeepers.**

> **Sections 668.165 --- Notices and authorizations.**
>
> The final regulations modify current notification and authorization
> requirements to include the TEACH Grant program in the institution's
> required notification to the TEACH Grant recipient of the recipient's
> right to reduce or cancel their TEACH Grant prior to the institution
> disbursing the TEACH Grant, Title IV program assistance funds. These
> regulations also require an institution to inform the recipient in
> writing regarding the outcome of any cancellation request.
>
> It is estimated that the changes will increase the burden for
> institutions as they provide the recipient with information about the
> institution's procedures and time by which the TEACH Grant funds will
> be disbursed. Included in the institution's notification will be the
> anticipated date and amount of the disbursement, the student's right
> to cancel or reduce the amount of the disbursement.
>
> The changes will decrease the burden for institution, which will be
> reflected in OMB 1845-0038.

Total Projected \# of Eligible Institutions: 5,665

Projected % of Institutions participating in

the TEACH Grant program [X.15]{.underline}

Projected \# Participating Institutions 850

Amount of time to provide notification

To a TEACH Grant recipient .25 hours

Estimate of burden hour increase:

estimated \# of Title IV recipients affected by the change 55,800

X average amount of burden increase [X.25]{.underline} hours

Total burden hour reduction: 13,950 hours

estimated \# of TEACH Grant recipients affected by the change 55,800

X Projected percentage of TEACH Grant recipients

that reduce or cancel their TEACH Grant [X.01 %]{.underline}

Total burden hour increase for schools: 558 Recipients

X average amount of burden to contact school X .25 hours

Total burden hour increase for students: 140 hours

Affected Entities:

INSTITUTIONS:

For-profit 30 X 1,970 recipients X .25 hours = 492 hours

Not-for-profit 410 X 26,915 recipients X .25 hours = 6,729 hours

Public 410 X 26,915 recipients X .25 hours = 6,729 hours

Total 850 55,800 13,950

INDIVIDUALS:

> 558 recipients X .25 hours = 140 hours

Respondents, Responses and Burden Hours:

\# of Respondents \# of Responses #Hrs/Response #Hrs

Burden

1,408 56,358 .25 14,090

13. **Annual Cost Burden to Respondents**

Student Assistance General Provisions:

> No changes to the current inventory.

**14**. **Estimated Annual Cost to the Federal Government**

Student Assistance General Provisions:

> There are no additional costs to the federal government as a result of
> these regulations.

15. **Reasons for Changes to Burden Hour Estimated**

[Current Burden Inventory:]{.underline}

  ---- ------------- ---------------- ----------------- ------------------
       OMB 1845-0038                                    
       Version 6.0                                      

                                                        

  \#   Reg Section   \# of            Hrs/response      Burden hours
                     respondents                        

  1    668.165       56,358           .25               14,090
  ---- ------------- ---------------- ----------------- ------------------

> **[Summary Current Burden Inventory:]{.underline}**
>
> [Respondents, Responses and Burden Hours:]{.underline}
>
> \# of Respondents \# of Responses #Hrs
>
> Burden

21,410 1,024,476 964,243

> **[New Burden Associated with the regulatory changes:]{.underline}**
>
> [Respondents, Responses and Burden Hours:]{.underline}
>
> \# of Respondents \# of Responses \# Hrs/Response #Hrs
>
> Burden
>
> Sections 668.165 -- Notices and authorizations

1,408 56,358 .25 14,090

> **[Revised Burden Inventory:]{.underline}**

\# of Respondents \# of Responses #Hrs

> Burden

22,818 1,080,834 978,333

**16. Collection of Information with Published Results**

The results of the collection of information will not be published.

**17. Approval to Not Display Expiration Date**

ED is not seeking this approval.

**18. Exception to the Certification Statement**

> ED is not requesting any exceptions to the \"Certification for
> Paperwork Reduction Act Submissions\".