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DRAFT for discussion at 3rd meeting

4/24/2009

Issue 5

Proposed Regulatory Language

Team II – School-based Loan Issues

Origin: HEOA section 488(a)

Issue: Information and Dissemination 

Activities

Statutory cites: HEA section 485(a)

Regulatory cites: §668.42

DCL GEN-08-12 cite: Page 95

Status: Tentative agreement reached

Regulatory language: 

§ 668.42 Financial assistance information.

(a)(1) Information on financial assistance that the 

institution must publish and make readily available to 

current and prospective student's under this subpart 

includes, but is not limited to, a description of all the 

Federal, State, local, private and institutional student 

financial assistance programs available to students who 

enroll at that institution.
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DRAFT for discussion at 3rd meeting

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(2) These programs include both need-based and nonneed-based programs.

(3) The institution may describe its own financial 

assistance programs by listing them in general categories.

(4) The institution must describe the terms and 

conditions of the loans students receive under the Federal 

Stafford Loan Family Education Loan Program, the William D. 

Ford Federal Direct Student Loan Program, and the Federal 

Perkins Loan Program.

(b) For each program referred to in paragraph (a) of 

this section, the information provided by the institution 

must describe—-

(1) The procedures and forms by which students apply 

for assistance;

(2) The student eligibility requirements;

(3) The criteria for selecting recipients from the 

group of eligible applicants; and

(4) The criteria for determining the amount of a 

student's award.

(c) The institution shall must describe the rights and 

responsibilities of students receiving financial assistance 

and, specifically, assistance under the title IV, HEA 
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DRAFT for discussion at 3rd meeting

4/24/2009

programs. This description must include specific 

information regarding—

(1) Criteria for continued student eligibility under 

each program;

(2)(i) Standards which the student must maintain in 

order to be considered to be making satisfactory progress 

in his or her course of study for the purpose of receiving 

financial assistance; and

(ii) Criteria by which the student who has failed to 

maintain satisfactory progress may re-establish his or her 

eligibility for financial assistance;

(3) The method by which financial assistance 

disbursements will be made to the students and the 

frequency of those disbursements;

(4) The terms of any loan received by a student as 

part of the student's financial assistance package, a 

sample loan repayment schedule for sample loans and the 

necessity for repaying loans;

(5) The general conditions and terms applicable to any 

employment provided to a student as part of the student's 

financial assistance package; and

(6) The institution shall provide and collect exit

Exit counseling information the institution provides and 
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DRAFT for discussion at 3rd meeting

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collects as required by 34 CFR 674.42 for borrowers under 

the Federal Perkins Loan Program, by 34 CFR 685.304 for 

borrowers under the William D. Ford Federal Direct Student 

Loan Program, and by 34 CFR 682.604 for borrowers under the 

Federal Stafford Loan Program; and.

(7) The terms and conditions under which students 

receiving Federal Family Education Loan or William D. Ford 

Federal Direct Loan assistance may obtain deferral of the 

repayment of the principal and interest of the loan for—

(i) Service under the Peace Corps Act (22 U.S.C. 

2501);

(ii) Service under the Domestic Volunteer Service Act 

of 1973 (42 U.S.C. 4951); or

(iii) Comparable service as a volunteer for a taxexempt organization of demonstrated effectiveness in the 

field of community service.

(Approved by the Office of Management and Budget under control number 1845–

0022) 

(Authority: 20 U.S.C. 1092)

[51 FR 43323, Dec. 1, 1986. Redesignated and amended at 64 

FR 59067, Nov. 1, 1999]
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DRAFT for discussion at 3rd meeting

4/24/2009

Issue 5

Amendatory Language

Team II – School-based Loan Issues

§668.42 [Amended]

x. Section 668.42 is amended by:

A. In paragraph (a)(1), removing the word ―student’s‖ 

and adding, in its place, the word ―students‖.

B. In paragraph (a), adding a new paragraph (4). 

C. In paragraph (c) introductory text, removing the 

word ―shall‖ and adding, in its place, the word ―must‖.

D. In paragraph (c)(5), adding the word ―and‖ after 

the punctuation ―;‖.

E. In paragraph (c)(6), removing the words ―The 

institution shall provide and collect exit counseling 

information‖ and adding, in their place, the words ―The 

exit counseling the institution provides and collects‖.

F. In paragraph (c)(6), removing the punctuation and 

word ―; and‖ and adding, in their place, the punctuation 

―.‖.

G. In paragraph (c), removing paragraph (7).

The additions and revisions read as follows:
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DRAFT for discussion at 3rd meeting

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(a)(1) Information on financial assistance that the 

institution must publish and make readily available to 

current and prospective students under this subpart 

includes, but is not limited to, a description of all the 

Federal, State, local, private and institutional student 

financial assistance programs available to students who 

enroll at that institution.

* * * * *

(4) The institution must describe the terms and 

conditions of the loans students receive under the Federal 

Family Education Loan Program, the William D. Ford Federal 

Direct Student Loan Program, and the Federal Perkins Loan 

Program.

* * * * *

(c) The institution must describe the rights and 

responsibilities of students receiving financial assistance 

and, specifically, assistance under the title IV, HEA 

programs. This description must include specific 

information regarding--

* * * * *
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(5) The general conditions and terms applicable to 

any employment provided to a student as part of the 

student's financial assistance package; and

(6) The exit counseling information the institution 

provides and collects as required by 34 CFR 674.42 for 

borrowers under the Federal Perkins Loan Program, by 34 CFR 

685.304 for borrowers under the William D. Ford Federal 

Direct Student Loan Program, and by 34 CFR 682.604 for 

borrowers under the Federal Stafford Loan Program.