ICRAS 1404 1845-0023 v6 – Affected Public – For-Profit Institutions 2/7/2013

This request is for the extension of the Office of Management and Budget (OMB) approval of 

the reporting and recordkeeping requirement contained in 34 CFR sections 674.39, 674.41, 

674.42, 674.43, 674.45, 674.47, 674.48, and 674.49 under the control number 1845-0023. The 

information collections in these regulations are necessary to determine Federal Perkins Loan 

Program borrower eligibility to receive program benefits and to prevent fraud and abuse of 

program funds. 

Section 674.39 – Loan rehabilitation.

This section establishes that participating institutions are required to have a loan rehabilitation 

program for the purposes of rehabilitating defaulted loans and outlines the requirements of the 

rehabilitation program.

131 X .45 hours = 59 hours

Section 674.41 – Due diligence – general requirements.

This section establishes that institutions are required to inform the borrower on a timely basis 

and exercise due diligence in the collection of Perkins loans. Additionally, institutions are 

required to coordinate among the various campus administrative offices to share information as it 

relates to a borrower and the billing and collection process.

131 X 1.42 hours = 186 hours

Section 674.42 – Contact with the borrower.

This section establishes that institutions are required to provide borrowers with information 

about the repayment of the loan, a description of charges, an explanation of loan consolidation or 

other refinancing as well as other information about the amount of the repayment, the frequency, 

and to whom the payments must be made. Generally, this information is provided to the 

borrowers as a part of the required exit interview process. The institution is required to maintain 

information substantiating the institution’s compliance with these due diligence regulations.

131 X 1.42 hours = 186 hours

Section 674.43 – Billing procedures.

This section establishes that institutions are required to notify borrowers about the amount of 

repayment due, to remind borrowers when their payment is overdue, and to demand payment of 

overdue amounts.

131 X 1.42 hours = 186 hours

Section 674.45 – Collection procedures.

This section establishes that borrowers who do not respond satisfactorily to demand notices for 

repayment of defaulted loans must be referred for intensive collection efforts. Those efforts 
ICRAS 1404 1845-0023 v6 – Affected Public – For-Profit Institutions 2/7/2013

include reporting defaults to a national credit bureau, either the use of institutional resources to 

collect of the use of a collection agency, and ultimately, litigation to resolve the debt.

131 X .75 hours = 98 hours

Section 674.47 – Costs chargeable to the Fund.

This section establishes detail about the billing costs, late charge costs, other collections costs, as 

well as write-offs and waivers of collection costs and the limitations of those costs that can be 

charged to the Perkins fund.

131 X .83 hours = 109 hours

Section 674.48 – Use of contractors to perform billing and collection activities.

This section establishes that institutions that use contractors to perform billing and collection 

activities retain all responsibility to comply with the Title IV program requirements and must 

insure that the third-party provider meets all the compliance requirements.

131 X .92 hours = 121 hours

Section 674.49 – Bankruptcy of borrower.

This section establishes that institutions that receive notice that a borrower has filed a petition for 

relief in bankruptcy must follow the procedures in the regulations to avoid a discharge of the 

loan. The institution must assert any defense consistent with its status under applicable law to 

avoid discharge of the loan debt.

131 X .92 hours = 121 hours

TOTALS

Responses 1,048

Respondents 1,048

Burden Hours 1,066