SUPPORTING STATEMENT

Federal Direct Consolidation Loan Program Application Documents

OMB No. 1845-0053

A. Justification

1. Explain the circumstances that make the collection of information necessary. Identify any 

legal or administrative requirements that necessitate the collection. Attach a copy of the 

appropriate section of each statute and regulation mandating or authorizing the collection of 

information.

The Student Loan Reform Act of 1993, enacted on August 10, 1993, established the William D. 

Ford Federal Direct Loan (Direct Loan) Program under Title IV, Part D, of the Higher Education 

Act of 1965, as amended (the HEA). This legislation authorized the Federal Direct Consolidation 

Loan Program, which allows eligible borrowers to consolidate certain federal education loans 

into a Federal Direct Consolidation Loan (Direct Consolidation Loan). A Direct Consolidation Loan 

may allow a borrower to extend the period for repaying a loan, and in some cases may provide 

the borrower with a lower fixed interest rate. In addition, borrowers with loans made under the 

Federal Family Education Loan (FFEL) Program may consolidate their loans into a Direct 

Consolidation Loan to take advantage of the Public Service Loan Forgiveness Program that is 

available only in the Direct Loan Program. The regulations governing Direct Consolidation Loans 

are contained in 34 CFR 685.220.

34 CFR 685.220(e) requires a borrower who wishes to receive a Direct Consolidation Loan to 

submit a completed application to the Department of Education (ED). The processing of a 

borrower’s consolidation application involves the three forms that are described in Item 2 of 

this Supporting Statement.

ED is requesting a revision of the currently approved collection. The changes we are making 

include the following:

1. Addition of information related to the new Pay As You Earn repayment Plan that was 

established by final regulations published on November 1, 2012 (77 FR 66088).

2. Revision of information related to the Income-Based Repayment Plan (IBR Plan) to reflect 

statutory provisions in section 493C of the HEA that amend the terms and conditions of the 

IBR Plan for new borrowers on or after July 1, 2014.

3. Revising interest rate information to reflect a statutory change to the interest rate for Direct 

Consolidation Loans that was made by the Bipartisan Student Loan Certainty Act of 2013 

(Public Law 113-28).

4. Revision of the format and layout of the forms to make them easier to read.

5. Revision of text throughout the forms for greater clarity and, where applicable, for greater 

consistency with corresponding text in the Master Promissory Notes used for Direct 

Subsidized/Unsubsidized Loans (OMB No. 1845-0007) and Direct PLUS Loans (OMB No. 

1845-0068).
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OMB No. 1845-0053

2. Indicate how, by whom, and for what purpose the information is to be used. Except for a 

new collection, indicate the actual use the agency has made of the information received from 

the current collection.

ED has used the collection of information on the previously approved consolidation forms to 

make Direct Consolidation Loans to applicants. The collection of information on the revised 

forms included in this package continues to be necessary and will be used for the same purpose. 

There are three consolidation loan forms that are used as follows:

 Federal Direct Consolidation Loan Application and Promissory Note (Note), with 

Additional Loan Listing Sheet. The Note collects information about the loans that a 

borrower wants to consolidate and other information needed by ED to process a 

borrower’s application for a Direct Consolidation Loan. It also provides the borrower 

with information about the terms and conditions of a Direct Consolidation Loan, and 

serves as the borrower’s legally binding agreement to repay the loan. A borrower may 

obtain a Note from an ED website or by contacting one of ED’s federal loan servicers. A 

borrower may complete and return a paper copy of the Note by mail, or may complete 

and submit the Note electronically on our website. 

Instructions for completing the Note are provided in an accompanying document that is 

included with this submission. 

The Additional Loan Listing Sheet is simply an extension of the Note that may be used by 

an applicant if there is insufficient space on the Note to list all of the loans that the 

applicant does or does not want to consolidate. 

 Federal Direct Consolidation Loan Verification Certificate (LVC). The LVC is used to 

confirm that a borrower’s loans are eligible for consolidation, and to verify the current 

payoff amount of each loan. Once a borrower’s application and promissory note has 

been processed, ED sends an LVC to the loan holder or loan servicer of each loan that 

the borrower wants to consolidate. After completing the LVC, the loan holder/servicer 

returns the form to ED. Most loan holders/servicers provide the LVC information to ED 

electronically via our website or a batch process.

 Federal Direct Consolidation Loan Request to Add Loans (Request to Add Loans). The 

Request to Add Loans may be used by borrowers to add additional loans to a Direct 

Consolidation Loans after the application and promissory note has been submitted, or 

up to 180 days after a Direct Consolidation Loan has been made.

3. Describe whether, and to what extent, the collection of information involves the use of 

automated, electronic, mechanical, or other technological collection techniques or forms of 

information technology, e.g. permitting electronic submission of responses, and the basis for 

the decision of adopting this means of collection. Also describe any consideration given to 

using technology to reduce burden.

ED continues to maximize the use of available information technology in making Direct 

Consolidation Loans. The Note, LVC, and Request to Add Loans are all available on our website 

in PDF format for respondents to download, complete, and submit to us. In addition, 

respondents may complete the Note and the LVC electronically.

Application and Promissory Note
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OMB No. 1845-0053

Since July 2001, Direct Consolidation Loan applicants have had the option of completing the 

entire Note – including signing it – electronically on our website. Approximately 85% of Direct 

Consolidation Loan applicants complete and submit the Note electronically on our website. 

For borrowers who complete and submit the Note electronically on ED’s website, and in some 

cases for borrowers who download the Note in PDF format from our website, ED prepopulates 

the Borrower Information section, the Loans You Want to Consolidate section, and the Loans 

You Do Not Want to Consolidate section using existing information about the borrower and the 

borrower’s loans in our loan servicing systems and/or the National Student Loan Data System

(NSLDS). The instructions for completing the Note inform borrowers that some of the 

information in these sections may have been completed for them. Prepopulating portions of the 

Note significantly reduces burden on applicants, since they only have to review the preprinted 

information for completeness and accuracy and make any necessary changes (e.g., correcting 

information or indicating that they do not want to consolidate a loan listed in the Loans You 

Want to Consolidate section).

LVC

All loan holders/servicers have the option of completing the LVC electronically. They may do this 

(1) by completing and returning an LVC for each applicant via our website for loan 

holders/servicers or (2) by completing and returning LVCs for multiple applicants through a 

batch process. Both electronic processes reduce burden for loan holders/servicers by providing 

a more convenient, efficient and expedient way to complete and return the required LVCs. 

Approximately 80% of LVCs are completed electronically.

4. Describe efforts to identify duplication. Show specifically why any similar information 

already available cannot be used or modified for use for the purposes described in Item 2 

above.

A thorough review of procedures indicates that current requirements are minimal and avoid 

duplication. There is no similar information available that can be used or modified for these 

purposes at this time.

5. If the collection of information impacts small businesses or other small entities (Item 8b of 

IC Data Part 2), describe any methods used to minimize burden.

No small businesses are impacted by this collection.

6. Describe the consequences to Federal program or policy activities if the collection is not 

conducted or is conducted less frequently, as well as any technical or legal obstacles to 

reducing burden.

The Note and the LVC will be completed by an applicant or a loan holder/servicer one time for 

each Direct Consolidation Loan. 

The Request to Add Loans will be completed by a borrower only when the borrower wants to 

request that one or more loans not included on the original application and promissory note be 

added to the borrower’s Direct Consolidation Loan, either before the loan is made or within 180 

days of the date the loan is made. 

If the information requested on these forms were not collected, borrowers would not be able to 

take advantage of the benefits offered by Direct Consolidation Loans, as described in Item 1 of 

this supporting statement. 
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OMB No. 1845-0053

7. Explain any special circumstances that would cause an information collection to be 

conducted in a manner:

 requiring respondents to report information to the agency more often than quarterly;

 requiring respondents to prepare a written response to a collection of information in 

fewer than 30 days after receipt of it;

 requiring respondents to submit more than an original and two copies of any 

document;

 requiring respondents to retain records, other than health, medical, government 

contract, grant-in-aid, or tax records for more than three years;

 in connection with a statistical survey, that is not designed to produce valid and 

reliable results than can be generalized to the universe of study;

 requiring the use of a statistical data classification that has not been reviewed and 

approved by OMB;

 that includes a pledge of confidentiality that is not supported by authority established 

in statute or regulation, that is not supported by disclosure and data security policies 

that are consistent with the pledge, or that unnecessarily impedes sharing of data 

with other agencies for compatible confidential use; or

 requiring respondents to submit proprietary trade secrets, or other confidential 

information unless the agency can demonstrate that it has instituted procedures to 

protect the information’s confidentiality to the extent permitted by law.

The collection of this information will be conducted in a manner that is consistent with the 

guidelines in 5 CFR 1320.5(d)(2), with one exception. The verification certificate must be 

completed and returned by the loan holder/servicer within 10 business days of the date 

received. This deadline is established in 34 CFR 685.220(f)(1)(i).

8. If applicable, provide a copy and identify the date and page number of publication in the 

Federal Register of the agency’s notice, required by 5 CFR 1320.8(d), soliciting comments on 

the information collection prior to submission to OMB. Summarize public comments received 

in response to that notice and describe actions taken by the agency in response to these 

comments. Specifically address comments received on cost and hour burden.

Describe efforts to consult with persons outside the agency to obtain their views on the 

availability of data, frequency of collection, the clarity of instruction and record keeping, 

disclosure, or reporting format (if any), and on the data elements to be recorded, disclosed, or 

reported.

Consultation with representatives of those from whom information is to be obtained or those 

who must compile records should occur at least once every 3 years – even if the collection of 

information activity is the same as in prior periods. There may be circumstances that may 

preclude consultation in a specific situation. These circumstances should be explained.

ED solicited recommendations from ED’s federal loan servicers and ED staff involved in 

processing Direct Consolidation Loan applications for ways to make the currently approved 

forms easier to use. The revised forms included in this clearance package reflect some of the 

suggestions received from those sources. 

The clearance process provides the public with two opportunities to provide comments on the 

revised forms. A notice inviting comments during the first of the two public comment periods 
Page 5 – Supporting Statement for Federal Direct Consolidation Loan Application Documents, 

OMB No. 1845-0053

was published in the Federal Register on December 24, 2013 (78 FR 77665). No comments were 

received during the initial 60-day public comment period. Although we received no public 

comments, based on further internal review we have made two minor changes to the draft 

forms that were posted for comment during the 60-day period. These changes are as follows:

1. In the chart titled “Loan Types and Their Codes” that appears in the Instructions, the 

Request to Add Loans, and the LVC, we have added two new loan types: Direct 

Subsidized Loans (Subsidy Loss Eligible) and Direct Subsidized Consolidation Loans 

(Subsidized Loss Eligible), designated by codes 0 and 9, respectively. These new loan 

types are subsidized Direct Loans made to first-time borrowers on or after July 1, 2013 

that are potentially subject to loss of the federal interest subsidy in accordance with 

final regulations published on January 17, 2014 (79 FR 3108). It is necessary to add 

these loan types to ensure that ED can properly track loans that are potentially subject 

to loss of the interest subsidy if they are consolidated into a Direct Consolidation Loan.

2. In the “Borrower Understandings, Certifications, and Authorizations” section of the 

Note, we have removed borrower understanding 24.F., which authorized ED to verify 

the borrower’s Social Security Number with the Social Security Administration. This 

authorization is not included on any of the other Direct Loan Program promissory notes 

and is unnecessary, as there is a separate borrower understanding (item 22.M.) 

indicating that ED has the authority to verify information reported on the Note with 

other federal agencies.

The changes described above do not have any impact on the burden associated with this 

collection. We have made no other changes to the draft forms that were posted for the initial 

60-day comment period. 

9. Explain any decision to provide any payment or gift to respondents, other than 

remuneration of contractors or grantees.

No payments or gifts will be provided to respondents.

10. Describe any assurance of confidentiality provided to respondents and the basis for the 

assurance in statute, regulation, or agency policy.

The Note and Request to Add Loans include a Privacy Act Notice that (1) informs the respondent 

of the statutory authority for the information collection; (2) explains that disclosure of the 

requested information is voluntary, but is required in order for ED to process the request for a 

Direct Consolidation Loan; and (3) identifies the third parties to whom the information may be 

disclosed, and explains the circumstances under which such disclosures may occur.

11. Provide additional justification for any questions of a sensitive nature, such as sexual 

behavior and attitudes, religious beliefs, and other matters that are commonly considered 

private. The justification should include the reasons why the agency considers the questions 

necessary, the specific uses to be made of the information, the explanation to be given to 

persons from whom the information is requested, and any steps to be taken to obtain their 

consent.

The Direct Consolidation Loan forms do not request any sensitive information.

12. Provide estimates of the hour burden of the collection of information. The statement 

should :
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OMB No. 1845-0053

 Indicate the number of respondents, frequency of response, annual hour burden, 

and an explanation of how the burden was estimated. Unless directed to do so, 

agencies should not conduct special surveys to obtain information on which to 

base hour burden estimates. Consultation with a sample (fewer than 10) of 

potential respondents is desirable. If the hour burden on respondents is expected 

to vary widely because of differences in activity, size, or complexity, show the 

range of estimated hour burden, and explain the reasons for the variance. 

Generally, estimates should not include burden hours for customary and usual 

business practices.

 If this request for approval covers more than one form, provide separate hour 

burden estimates for each form and aggregate the hour burdens in item 16 of IC 

Data Part 1.

 Provide estimates of annualized cost to respondents of the hour burdens for 

collections of information, identifying and using appropriate wage rate categories. 

The cost of contracting out or paying outside parties for information collection 

activities should not be included here. Instead, this cost should be included in 

Item 14.

The total estimated annual reporting hour burden for this collection is approximately 575,100

hours. This represents the total of the burden estimates for the hour burden for the Note, the 

LVC, and the Request to Add Loans. We calculated the burden estimate for each form as 

follows:

Note (includes Additional Loan Listing Sheet)

Respondents 600,000

Responses x 1

Hours per response x 0.5 (30 minutes)

Annual reporting burden 300,000 hours

LVC

Respondents 2,000

Responses x 900

(average # of 

responses – see 

below)

Hours per response x 0.15 (9 minutes)

Annual reporting burden 270,000 hours

NOTE: Each Direct Consolidation Loan application averages three different loan 

holders/servicers. This means that an average of three LVCs will be generated for each 

Direct Consolidation Loan, for a total of 1,800,000 responses (3 x 600,000 = 1,800,000). 
Page 7 – Supporting Statement for Federal Direct Consolidation Loan Application Documents, 

OMB No. 1845-0053

There are approximately 2,000 loan holders/servicers. The average number of responses 

was obtained by dividing the total number of responses by the number of respondents:

1,800,000  2,000 = 900

Request to Add Loans

Respondents 30,000

(5% of the # of 

respondents for the 

Note)

Responses x 1

Hours per response x 0.17 (10 minutes)

Annual reporting burden 5,100 hours

13. Provide an estimate of the total annual cost burden to respondents or record keepers 

resulting from the collection of information. (Do not include the cost of any hour burden 

shown in Items 12 and 14.)

 The cost estimate should be split into two components: (a) a total capital and start-up 

cost component (annualized over its expected useful life); and (b) a total operation 

and maintenance and purchase of services component. The estimates should take 

into account costs associated with generating, maintaining, and disclosing or providing 

the information. Include descriptions of methods used to estimate major cost factors 

including system and technology acquisition, expected useful life of capital equipment, 

the discount rate(s), and the time period over which costs will be incurred. Capital 

and start-up costs include, among other items, preparations for collecting information 

such as purchasing computers and software; monitoring, sampling, drilling and testing 

equipment; and acquiring and maintaining record storage facilities.

 If cost estimates are expected to vary widely, agencies should present ranges of cost 

burdens and explain the reasons for the variance. The cost of contracting out 

information collection services should be a part of this cost burden estimate. In 

developing cost burden estimates, agencies may consult with a sample of respondents 

(fewer than 10), utilize the 60-day pre-OMB submission public comment process and 

use existing economic or regulatory impact analysis associated with the rulemaking 

containing the information collection, as appropriate.

 Generally, estimates should not include purchases of equipment or services, or 

portions thereof, made: (1) prior to October 1, 1995, (2) to achieve regulatory 

compliance with requirements not associated with the information collection, (3) for 

reasons other than to provide information or keep records for the government, or (4) 

as part of customary and usual business or private practices.

Total Annualized Capital/Startup Cost:

Total Annual Costs (O&M):

______

Total Annualized Costs Requested:
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OMB No. 1845-0053

There are no capital/startup costs to respondents, nor are there any annual costs to 

respondents associated with operating or maintaining systems or purchasing services. 

14. Provide estimates of annualized cost to the Federal government. Also, provide a 

description of the method used to estimate cost, which should include quantification of hours, 

operational expenses (such as equipment, overhead, printing, and support staff), and any 

other expense that would not have been incurred without this collection of information. 

Agencies also may aggregate cost estimates from Items 12, 13, and 14 in a single table.

The total estimated annual cost to the federal government for this collection is $41,440,853.00. 

This estimate includes the following:

Printing forms $12,453.00

Processing $41,428,400.00

Total $41,440,853.00

15. Explain the reasons for any program changes or adjustments to #16f of the IC Data Part 1 

Form.

ED is reporting a decrease of 142,482 hours as a program change. Although the estimated 

number of respondents for the Direct Consolidation Application and Promissory Note has 

increased from 492,000 to 600,000 (see below), we have reduced the estimated time required 

to complete the Note to 30 minutes. The time estimate for the currently approved Note is one 

hour. Since the last submission, ED has begun prepopulating the Note with loan information for 

most applicants, as explained in Item 3 of this Supporting Statement. This significantly reduces 

the time required to complete the form, since gathering the required information about loans to 

be consolidated (or not to be consolidated) is the most time-consuming aspect of completing 

the Note. The reduction in the time required to complete the Note results in a reduction in 

overall burden hours, even though the number of respondents has increased. 

The increase in the number of respondents for the Note is attributable largely to the Public 

Service Loan Forgiveness Program, which was added to the HEA by the College Cost Reduction 

Act of 2007 (CCRAA; Public Law 110-84) and is available only to Direct Loan Program borrowers. 

As a result, there has been an increase in the number of FFEL Program borrowers who wish to 

take advantage of this program by consolidating their loans into Direct Consolidation Loans. 

16. For collections of information whose results will be published, outline plans for tabulation 

and publication. Address any complex analytical techniques that will be used. Provide the 

time schedule for the entire project, including beginning and ending dates of the collection of 

information, completion of report, publication dates, and other actions.

The results of this information collection will not be published.

17. If seeking approval to not display the expiration date for OMB approval of the information 

collection, explain the reasons that display would be inappropriate.

ED is not seeking this approval.

18. Explain each exception to the certification statement identified in the Certification of 

Paperwork Reduction Act.
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OMB No. 1845-0053

ED is not requesting any exceptions to the “Certification for Paperwork Reduction Act 

Submissions” of OMB Form 83-I.

B. Collection of Information Employing Statistical Methods

This collection of information does not employ any statistical methods.