### Issue 5

**Proposed Regulatory Language**

**Team II – School-based Loan Issues**

**Origin:**HEOAsection 488(a)

**Issue:**Information and Dissemination Activities

**Statutory cites:**HEA section 485(a)

**Regulatory cites:**§668.42

**DCL GEN-08-12 cite:**Page 95

**Summary of issue:**As part of the required information an institution must make available to prospective and enrolled students, the HEOA added a general requirement that the institution describe the terms and conditions of the loans students receive under the FFEL, Direct Loan and Perkins Loan programs.  The HEA and current regulations—in 34 CFR §668.42(a)(1)—require that an institution provide a description of all student financial assistance programs to prospective and enrolled students.  The new statutory provision expands the information that institutions must provide to include the terms and conditions of the loans.

For students receiving financial assistance, current regulations—-in 34 CFR §668.42(c)(4)—-require an institution to provide specific information about any loan received by the student as part of the aid package.

The HEOA also deleted the specific statutory requirement that institutions provide information about the terms and conditions under which FFEL and Perkins Loans could be deferred for service under the Peace Corps or Domestic Volunteer Service acts. 

##### 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.

(2) These programs include both need-based and non-need-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 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 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—

(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;

(6) The institution shall provide and collect exit counseling information 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 tax-exempt 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 2nd session

3/27/2009