[Federal Register Volume 86, Number 21 (Wednesday, February 3, 2021)]
[Rules and Regulations]
[Pages 7974-7977]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-02231]


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DEPARTMENT OF EDUCATION

34 CFR Parts 36 and 668

RIN 1801-AA21


Adjustment of Civil Monetary Penalties for Inflation

AGENCY: Department of Education.

ACTION: Final regulations.

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SUMMARY: The Department of Education (Department) issues these final 
regulations to adjust the Department's civil monetary penalties (CMPs) 
for inflation. This adjustment is required by the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Act), 
which amended the Federal Civil Penalties Inflation Adjustment Act of 
1990 (Inflation Adjustment Act). These final regulations provide the 
2021 annual inflation adjustments being made to the penalty amounts in 
the Department's final regulations published in the Federal Register on 
January 14, 2020 (2020 final rule).

DATES: These regulations are effective February 3, 2021. The adjusted 
CMPs established by these regulations are applicable only to civil 
penalties assessed after February 3, 2021 whose associated violations 
occurred after November 2, 2015.

FOR FURTHER INFORMATION CONTACT: Levon Schlichter, U.S. Department of 
Education, Office of the General Counsel, 400 Maryland Avenue SW, Room 
6E235, Washington, DC 20202-2241. Telephone: (202) 453-6387. Email: 
<a href="/cdn-cgi/l/email-protection#38545d4e5756164b5b5054515b504c5d4a785d5c165f574e"><span class="__cf_email__" data-cfemail="84e8e1f2ebeaaaf7e7ece8ede7ecf0e1f6c4e1e0aae3ebf2">[email protected]</span></a>.
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service, toll free, at 1-800-
877-8339.
    On request to the contact person listed in this section, 
individuals with disabilities can obtain this document in an accessible 
format. The Department will provide the requestor with an accessible 
format that may include Rich Text Format (RTF) or text format (txt), a 
thumb drive, an MP3 file, braille, large print, audiotape, or compact 
disc, or other accessible format.

SUPPLEMENTARY INFORMATION:

Background

    A CMP is defined in the Inflation Adjustment Act (28 U.S.C. 2461 
note) as any penalty, fine, or other sanction that is (1) for a 
specific monetary amount as provided by Federal law, or has a maximum 
amount provided for by Federal law; (2) assessed or enforced by an 
agency pursuant to Federal law; and (3) assessed or enforced pursuant 
to an

[[Page 7975]]

administrative proceeding or a civil action in the Federal courts.
    The Inflation Adjustment Act provides for the regular evaluation of 
CMPs to ensure that they continue to maintain their deterrent value. 
The Inflation Adjustment Act required that each agency issue 
regulations to adjust its CMPs beginning in 1996 and at least every 
four years thereafter. The Department published its most recent cost 
adjustment to its CMPs in the Federal Register on January 14, 2020 (85 
FR 2033), and those adjustments became effective on the date of 
publication.
    The 2015 Act (section 701 of Pub. L. 114-74) amended the Inflation 
Adjustment Act to improve the effectiveness of CMPs and to maintain 
their deterrent effect.
    The 2015 Act requires agencies to: (1) Adjust the level of CMPs 
with an initial ``catch-up'' adjustment through an interim final rule 
(IFR); and (2) make subsequent annual adjustments for inflation. Catch-
up adjustments are based on the percentage change between the Consumer 
Price Index for all Urban Consumers (CPI-U) for the month of October in 
the year the penalty was last adjusted by a statute other than the 
Inflation Adjustment Act, and the October 2015 CPI-U. Annual inflation 
adjustments are based on the percentage change between the October CPI-
U preceding the date of each statutory adjustment, and the prior year's 
October CPI-U.\1\ The Department published an IFR with the initial 
``catch-up'' penalty adjustment amounts on August 1, 2016 (81 FR 
50321).
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    \1\ If a statute that created a penalty is amended to change the 
penalty amount, the Department does not adjust the penalty in the 
year following the adjustment.
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    In these final regulations, based on the CPI-U for the month of 
October 2020, not seasonally adjusted, we are annually adjusting each 
CMP amount by a multiplier for 2021 of 1.01182, as directed by the 
Office of Management and Budget (OMB) Memorandum No. M-21-10 issued on 
December 23, 2020.

The Department's Civil Monetary Penalties

    The following analysis calculates new CMPs for penalty statutes in 
the order in which they appear in 34 CFR 36.2. The penalty amounts are 
being adjusted up based on the multiplier of 1.01182 provided in OMB 
Memorandum No. M-21-10.
    Statute: 20 U.S.C. 1015(c)(5).
    Current Regulations: The CMP for 20 U.S.C. 1015(c)(5) (Section 
131(c)(5) of the Higher Education Act of 1965, as amended (HEA)), as 
last set out in statute in 1998 (Pub. L. 105-244, title I, section 
101(a), October 7, 1998, 112 Stat. 1602), is a fine of up to $25,000 
for failure by an institution of higher education (IHE) to provide 
information on the cost of higher education to the Commissioner of 
Education Statistics. In the 2020 final rule, we increased this amount 
to $39,229.
    New Regulations: The new penalty for this section is $39,693.
    Reason: Using the multiplier of 1.01182 from OMB Memorandum No. M-
21-10, the new penalty is calculated as follows: $39,229 x 1.01182 = 
$39,692.69, which makes the adjusted penalty $39,693, when rounded to 
the nearest dollar.
    Statute: 20 U.S.C. 1022d(a)(3).
    Current Regulations: The CMP for 20 U.S.C. 1022d(a)(3) (Section 
205(a)(3) of the HEA), as last set out in statute in 2008 (Pub. L. 110-
315, title II, section 201(2), August 14, 2008, 122 Stat. 3147), is a 
fine of up to $27,500 for failure by an IHE to provide information to 
the State and the public regarding its teacher-preparation programs. In 
the 2020 final rule, we increased this amount to $32,676.
    New Regulations: The new penalty for this section is $33,062.
    Reason: Using the multiplier of 1.01182 from OMB Memorandum No. M-
21-10, the new penalty is calculated as follows: $$32,676 x 1.01182 = 
$33,062.23, which makes the adjusted penalty $33,062, when rounded to 
the nearest dollar.
    Statute: 20 U.S.C. 1082(g).
    Current Regulations: The CMP for 20 U.S.C. 1082(g) (Section 432(g) 
of the HEA), as last set out in statute in 1986 (Pub. L. 99-498, title 
IV, Sec.  402(a), October 17, 1986, 100 Stat. 1401), is a fine of up to 
$25,000 for violations by lenders and guaranty agencies of Title IV of 
the HEA, which authorizes the Federal Family Education Loan Program. In 
the 2020 final rule, we increased this amount to $58,328.
    New Regulations: The new penalty for this section is $59,017.
    Reason: Using the multiplier of 1.01182 from OMB Memorandum No. M-
21-10, the new penalty is calculated as follows: $58,328 x 1.01182 = 
$59,017.44, which makes the adjusted penalty $59,017, when rounded to 
the nearest dollar.
    Statute: 20 U.S.C. 1094(c)(3)(B).
    Current Regulations: The CMP for 20 U.S.C. 1094(c)(3)(B) (Section 
487(c)(3)(B) of the HEA), as set out in statute in 1986 (Pub. L. 99-
498, title IV, Sec.  407(a), October 17, 1986, 100 Stat. 1488), is a 
fine of up to $25,000 for an IHE's violation of Title IV of the HEA or 
its implementing regulations. Title IV authorizes various programs of 
student financial assistance. In the 2020 final rule, we increased this 
amount to $58,328.
    New Regulations: The new penalty for this section is $59,017.
    Reason: Using the multiplier of 1.01182 from OMB Memorandum No. M-
21-10, the new penalty is calculated as follows: $58,328 x 1.01182 = 
$59,017.44, which makes the adjusted penalty $59,017, when rounded to 
the nearest dollar.
    Statute: 20 U.S.C. 1228c(c)(2)(E).
    Current Regulations: The CMP for 20 U.S.C. 1228c(c)(2)(E) (Section 
429 of the General Education Provisions Act), as set out in statute in 
1994 (Pub. L. 103-382, title II, Sec.  238, October 20, 1994, 108 Stat. 
3918), is a fine of up to $1,000 for an educational organization's 
failure to disclose certain information to minor students and their 
parents. In the 2020 final rule, we increased this amount to $1,722.
    New Regulations: The new penalty for this section is $1,742.
    Reason: Using the multiplier of 1.01182 from OMB Memorandum No. M-
21-10, the new penalty is calculated as follows: $1,722 x 1.01182 = 
$1,742.35, which makes the adjusted penalty $1,742, when rounded to the 
nearest dollar.
    Statute: 31 U.S.C. 1352(c)(1) and (c)(2)(A).
    Current Regulations: The CMPs for 31 U.S.C. 1352(c)(1) and 
(c)(2)(A), as set out in statute in 1989 (Pub. L. 101-121, title III, 
Sec.  319(a)(1), October 23, 1989, 103 Stat. 750), are a fine of 
$10,000 to $100,000 for recipients of Government grants, contracts, 
etc. that improperly lobby Congress or the Executive Branch with 
respect to the award of Government grants and contracts. In the 2020 
final rule, we increased these amounts to $20,489 to $204,892.
    New Regulations: The new penalties for these sections are $20,731 
to $207,314.
    Reason: Using the multiplier of 1.01182 from OMB Memorandum No. M-
21-10, the new minimum penalty is calculated as follows: $20,489 x 
1.01182 = $20,731.18, which makes the adjusted penalty $20,731, when 
rounded to the nearest dollar. The new maximum penalty is calculated as 
follows: $204,892 x 1.01182 = $207,313.82, which makes the adjusted 
penalty $207,314, when rounded to the nearest dollar.
    Statute: 31 U.S.C. 3802(a)(1) and (a)(2).
    Current Regulations: The CMPs for 31 U.S.C. 3802(a)(1) and (a)(2), 
as set out in statute in 1986 (Pub. L. 99-509, title VI,

[[Page 7976]]

Sec.  6103(a), Oct. 21, 1986, 100 Stat. 1937), are a fine of up to 
$5,000 for false claims and statements made to the Government. In the 
2020 final rule, we increased this amount to $11,665.
    New Regulations: The new penalty for this section is $11,803.
    Reason: Using the multiplier of 1.01182 from OMB Memorandum No. M-
21-10, the new penalty is calculated as follows: $11,665 x 1.01182 = 
$11,802.88, which makes the adjusted penalty $11,803, when rounded to 
the nearest dollar.

Executive Orders 12866, 13563, and 13771

Regulatory Impact Analysis

    Under Executive Order 12866, the Office of Management and Budget 
(OMB) determines whether this regulatory action is ``significant'' and, 
therefore, subject to the requirements of the Executive order and 
subject to review by OMB. Section 3(f) of Executive Order 12866 defines 
a significant regulatory action as an action likely to result in a rule 
that may--
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely affect a sector of the economy; productivity; competition; 
jobs; the environment; public health or safety; or State, local, or 
Tribal governments or communities in a material way (also referred to 
as ``economically significant'' regulations);
    (2) Create serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impacts of entitlement grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles stated in the 
Executive order.
    We have determined that these final regulations: (1) Exclusively 
implement the annual adjustment; (2) are consistent with OMB Memorandum 
No. M-21-10; and (3) have an annual impact of less than $100 million. 
Therefore, based on OMB Memorandum No. M-21-10, this is not a 
significant regulatory action subject to review by OMB under section 
3(f) of Executive Order 12866.
    We have also reviewed these regulations under Executive Order 
13563, which supplements and explicitly reaffirms the principles, 
structures, and definitions governing regulatory review established in 
Executive Order 12866. To the extent permitted by law, Executive Order 
13563 requires that an agency--
    (1) Propose or adopt regulations only upon a reasoned determination 
that their benefits justify their costs (recognizing that some benefits 
and costs are difficult to quantify);
    (2) Tailor its regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives and taking into 
account, among other things, and to the extent practicable, the costs 
of cumulative regulations;
    (3) In choosing among alternative regulatory approaches, select 
those approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity);
    (4) To the extent feasible, specify performance objectives, rather 
than the behavior or manner of compliance a regulated entity must 
adopt; and
    (5) Identify and assess available alternatives to direct 
regulation, including economic incentives--such as user fees or 
marketable permits--to encourage the desired behavior, or providing 
information that enables the public to make choices.
    Executive Order 13563 also requires an agency ``to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible.'' The Office of 
Information and Regulatory Affairs of OMB has emphasized that these 
techniques may include ``identifying changing future compliance costs 
that might result from technological innovation or anticipated 
behavioral changes.''
    We are issuing these final regulations as required by statute and 
in accordance with OMB Memorandum No. M-21-10. The Secretary has no 
discretion to consider alternative approaches as delineated in the 
Executive order. Based on this analysis and the reasons stated in the 
preamble, the Department believes that these final regulations are 
consistent with the principles in Executive Order 13563.
    Under Executive Order 13771, for each new regulation that the 
Department proposes for notice and comment or otherwise promulgates 
that is a significant regulatory action under Executive Order 12866 and 
that imposes total costs greater than zero, it must identify two 
deregulatory actions. For fiscal year 2021, any new incremental costs 
associated with a new regulation must be fully offset by the 
elimination of existing costs through deregulatory actions. These final 
regulations are not a significant regulatory action. Therefore, the 
requirements of Executive Order 13771 do not apply.

Waiver of Rulemaking and Delayed Effective Date

    Under the Administrative Procedure Act (APA) (5 U.S.C. 553), the 
Department generally offers interested parties the opportunity to 
comment on proposed regulations. However, section 4(b)(2) of the 2015 
Act (28 U.S.C. 2461 note) provides that the Secretary can adjust these 
2021 penalty amounts notwithstanding the requirements of 5 U.S.C. 553. 
Therefore, the requirements of 5 U.S.C. 553 for notice and comment and 
delaying the effective date of a final rule do not apply here.

Regulatory Flexibility Act Certification

    Pursuant to 5 U.S.C. 601(2), the Regulatory Flexibility Act applies 
only to rules for which an agency publishes a general notice of 
proposed rulemaking. The Regulatory Flexibility Act does not apply to 
this rulemaking because section 4(b)(2) of the 2015 Act (28 U.S.C. 2461 
note) provides that the Secretary can adjust these 2021 penalty amounts 
without publishing a general notice of proposed rulemaking.

Paperwork Reduction Act of 1995

    These regulations do not contain any information collection 
requirements.

Intergovernmental Review

    This program is not subject to Executive Order 12372 and the 
regulations in 34 CFR part 79.

Assessment of Educational Impact

    Based on our own review, we have determined that these regulations 
do not require transmission of information that any other agency or 
authority of the United States gathers or makes available.
    Electronic Access to This Document: The official version of this 
document is the document published in the Federal Register. You may 
access the official edition of the Federal Register and the Code of 
Federal Regulations at www.govinfo.gov. At this site you can view this 
document, as well as all other documents of this Department published 
in the Federal Register, in text or Portable Document Format (PDF). To 
use PDF you must have Adobe Acrobat Reader, which is available free at 
the site.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at: 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.

[[Page 7977]]

List of Subjects

34 CFR Part 36

    Claims, Fraud, Penalties.

34 CFR Part 668

    Administrative practice and procedure, Colleges and universities, 
Consumer protection, Grant programs-education, Loan programs-education, 
Reporting and recordkeeping requirements, Selective Service System, 
Student aid, Vocational education.

Phil Rosenfelt,
Acting Secretary of Education.

    For the reasons discussed in the preamble, the Secretary amends 
parts 36 and 668 of title 34 of the Code of Federal Regulations as 
follows:

PART 36--ADJUSTMENT OF CIVIL MONETARY PENALTIES FOR INFLATION

0
1. The authority citation for part 36 continues to read as follows:

    Authority: 20 U.S.C. 1221e-3 and 3474; 28 U.S.C. 2461 note, as 
amended by section 701 of Pub. Law 114-74, unless otherwise noted.


0
2. Section 36.2 is amended by revising Table 1 to read as follows:


Sec.  36.236  Penalty adjustment.

* * * * *

                      Table 1 to Sec.   36.2--Civil Monetary Penalty Inflation Adjustments
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                                                                                                         New
                                                                                                       maximum
                                                                                                         (and
                                                                                                     minimum, if
                  Statute                                          Description
                                                                                                     applicable)
                                                                                                       penalty
                                                                                                        amount
----------------------------------------------------------------------------------------------------------------
20 U.S.C. 1015(c)(5) (Section 131(c)(5) of   Provides for a fine, as set by Congress in 1998, of up      $39,693
 the Higher Education Act of 1965 (HEA)).     to $25,000 for failure by an institution of higher
                                              education (IHE) to provide information on the cost of
                                              higher education to the Commissioner of Education
                                              Statistics.
20 U.S.C. 1022d(a)(3) (Section 205(a)(3) of  Provides for a fine, as set by Congress in 2008, of up       33,062
 the HEA).                                    to $27,500 for failure by an IHE to provide
                                              information to the State and the public regarding its
                                              teacher-preparation programs.
20 U.S.C. 1082(g) (Section 432(g) of the     Provides for a civil penalty, as set by Congress in          59,017
 HEA).                                        1986, of up to $25,000 for violations by lenders and
                                              guaranty agencies of Title IV of the HEA, which
                                              authorizes the Federal Family Education Loan Program.
20 U.S.C. 1094(c)(3)(B) (Section             Provides for a civil penalty, as set by Congress in          59,017
 487(c)(3)(B) of the HEA).                    1986, of up to $25,000 for an IHE's violation of
                                              Title IV of the HEA, which authorizes various
                                              programs of student financial assistance.
20 U.S.C. 1228c(c)(2)(E) (Section 429 of     Provides for a civil penalty, as set by Congress in           1,742
 the General Education Provisions Act).       1994, of up to $1,000 for an educational
                                              organization's failure to disclose certain
                                              information to minor students and their parents.
31 U.S.C. 1352(c)(1) and (c)(2)(A).........  Provides for a civil penalty, as set by Congress in       20,731 to
                                              1989, of $10,000 to $100,000 for recipients of             207,314
                                              Government grants, contracts, etc. that improperly
                                              lobby Congress or the Executive Branch with respect
                                              to the award of Government grants and contracts.
31 U.S.C. 3802(a)(1) and (a)(2)............  Provides for a civil penalty, as set by Congress in          11,803
                                              1986, of up to $5,000 for false claims and statements
                                              made to the Government.
----------------------------------------------------------------------------------------------------------------

* * * * *

PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS

0
3. The authority citation for part 668 continues to read in part as 
follows:

    Authority: 20 U.S.C. 1001-1003, 1070a, 1070g, 1085, 1087b, 
1087d, 1087e, 1088, 1091, 1092, 1094, 1099c, 1099c-1, 1221e-3, and 
3474; Pub. L. 111-256, 124 Stat. 2643; unless otherwise noted.
* * * * *


Sec.  668.84   Amended]

0
4. In Sec.  668.84 amend paragraph (a)(1) introductory text by removing 
the number ``$58,328'' and adding, in its place, the number 
``$59,017''.

[FR Doc. 2021-02231 Filed 2-2-21; 8:45 am]
BILLING CODE 4000-01-P


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