3108 Federal Register / Vol. 79, No. 12 / Friday, January 17, 2014 / Rules and Regulations 

That Significantly Affect Energy Supply, 

Distribution, or Use. 

13. Technical Standards 

This rule does not use technical 

standards. Therefore, we did not 

consider the use of voluntary consensus 

standards. 

14. Environment 

We have analyzed this rule under 

Department of Homeland Security 

Management Directive 023–01 and 

Commandant Instruction M16475.lD, 

which guide the Coast Guard in 

complying with the National 

Environmental Policy Act of 1969 

(NEPA) (42 U.S.C. 4321–4370f), and 

have determined that this action is one 

of a category of actions that do not 

individually or cumulatively have a 

significant effect on the human 

environment. The safety zone provides 

safety for the public while the Highway 

661 Swing Bridge is being refurbished. 

This rule is categorically excluded from 

further review under paragraph (34)–(g.) 

of Figure 2–1 of the Commandant 

Instruction. An environmental analysis 

checklist supporting this determination 

and a Categorical Exclusion 

Determination will be made available as 

indicated under ADDRESSES. We seek 

any comments or information that may 

lead to the discovery of a significant 

environmental impact from this rule. 

List of Subjects in 33 CFR Part 165 

Harbors, Marine safety, Navigation 

(water), Reporting and recordkeeping 

requirements, Security measures, 

Waterways. 

For the reasons discussed in the 

preamble, the Coast Guard amends 33 

CFR part 165 as follows: 

PART 165—REGULATED NAVIGATION 

AREAS AND LIMITED ACCESS AREAS 

■ 1. The authority citation for part 165 

continues to read as follows: 

Authority: 33 U.S.C. 1231; 46 U.S.C. 

Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; 

33 CFR 1.05–1, 6.04–1, 6.04–6, and 160.5; 

Pub. L. 107–295, 116 Stat. 2064; Department 

of Homeland Security Delegation No. 0170.1. 

■ 2. A new temporary § 165.T08–0880 is 

added to read as follows: 

§ 165.T08–0880 Safety Zone; Houma 

Navigation Canal, from Mile Marker 35.5 to 

36.5, and Gulf Intracoastal Waterway, from 

Mile Marker 59.0 to 60.0, West of Harvey 

Locks, bank to bank; Houma, Terrebonne 

Parish, LA. 

(a) Location. The following area is a 

safety zone: All waters of the Houma 

Navigation Canal, from Mile Marker 

35.5 to 36.5, and in the Gulf Intracoastal 

Waterway, from Mile Marker 59.0 to 

60.0, West of Harvey Locks, bank to 

bank, Houma, Terrebonne Parish, LA. 

(b) Effective date. This rule is effective 

January 17, 2014 through July 1, 2014. 

For purposes of enforcement, actual 

notice has been used from December 13, 

2013. 

(c) Periods of enforcement. This rule 

will be enforced with actual notice 

beginning on December 13, 2013 

through July 1, 2014. The Captain of the 

Port (COTP) Morgan City or a 

designated representative will inform 

the public through Broadcast Notice to 

Mariners of the enforcement periods for 

the safety zone as well as any scheduled 

times for changes in the planned 

schedule. 

(d) Regulations. (1) In accordance 

with the general regulations in § 165.23 

of this part, entry into this zone is 

prohibited unless authorized by the 

COTP Morgan City or a designated 

representative. 

(2) Vessels requiring entry into or 

transit through the safety zone must 

request permission from the COTP 

Morgan City, or a designated 

representative. As a designated 

representative, the DOT 661 swing 

bridge operator may be contacted on 

VHF Channel 13 or 71. 

(3) Mariners should contact the DOT 

661 swing bridge operator prior to 

arrival at the safety zone for permission 

to enter or transit through the safety 

zone. 

(4) If permission is granted, all 

persons and vessels shall comply with 

the instructions of the COTP Morgan 

City or a designated representative and 

pass at slowest safe speed to minimize 

wake. 

(5) While the safety zone is in effect, 

there will be restricted clearance for 

marine traffic on the Houma Navigation 

Canal, from Mile Marker 35.5 to 36.5 

from 6:30 a.m. to 11:30 a.m. and 1:00 

p.m. to 6:00 p.m., seven days a week. To 

minimize waterway impact, this area 

will be open without restriction to 

marine traffic from 6:00 p.m. to 6:30 

a.m. and from 11:30 a.m. to 1:00 p.m. or 

until traffic clears, seven days a week. 

(6) All persons and vessels shall 

comply with the instructions of the 

COTP Morgan City and designated onscene patrol personnel. On-scene patrol 

personnel include commissioned, 

warrant, and petty officers of the U.S. 

Coast Guard. 

(e) Informational broadcasts. The 

COTP Morgan City or a designated 

representative will inform the public 

through Broadcast Notice to Mariners of 

the enforcement periods for the safety 

zone as well as any changes in the 

planned schedule. 

Dated: December 13, 2013. 

D.G. McClellan, 

Captain, U.S. Coast Guard, Captain of the 

Port Morgan City, Louisiana. 

[FR Doc. 2014–00902 Filed 1–16–14; 8:45 am] 

BILLING CODE 9110–04–P 

DEPARTMENT OF EDUCATION 

34 CFR Part 685 

RIN 1840–AD13 

[Docket ID ED–2013–OPE–0066] 

William D. Ford Federal Direct Loan 

Program 

AGENCY: Office of Postsecondary 

Education, Department of Education. 

ACTION: Final regulations. 

SUMMARY: The Secretary amends the 

William D. Ford Federal Direct Loan 

Program (Direct Loan Program) 

regulations to implement the changes to 

the Higher Education Act of 1965, as 

amended (HEA), resulting from the 

Moving Ahead for Progress in the 21st 

Century Act (MAP–21). These final 

regulations reflect the provisions of the 

HEA, as amended by MAP–21. 

DATES: Effective March 18, 2014. 

FOR FURTHER INFORMATION CONTACT: 

Nathan Arnold, U.S. Department of 

Education, Office of Postsecondary 

Education, 1990 K Street NW., Room 

8084, Washington, DC 20006–8542. 

Telephone: (202) 219–7134. 

If you use a telecommunications 

device for the deaf (TDD) or a text 

telephone (TTY), call the Federal Relay 

Service (FRS), toll free, at 1–800–877– 

8339. 

SUPPLEMENTARY INFORMATION: On May 

16, 2013, the Secretary published 

interim final regulations (IFR) in the 

Federal Register (78 FR 28954), 

implementing provisions of the HEA, as 

amended by MAP–21 (Pub. L. 112–141). 

In the IFR, the Secretary— 

• Provided that a Direct Subsidized 

Loan first disbursed on or after July 1, 

2012, and before July 1, 2013, has an 

interest rate of 3.4 percent. 

• Established new Direct Loan 

Program regulations that provide that a 

first-time borrower on or after July 1, 

2013, is no longer eligible to receive 

additional Direct Subsidized Loans if 

the period during which the borrower 

has received such loans meets or 

exceeds 150 percent of the published 

length of the program in which the 

borrower is currently enrolled. These 

borrowers may still receive Direct 

Unsubsidized Loans for which they are 

otherwise eligible. 


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• Established new Direct Loan 

Program regulations that provide that 

first-time borrowers who are ineligible 

for Direct Subsidized Loans as a result 

of these provisions and who enroll in a 

program for which the borrower would 

otherwise be eligible for a Direct 

Subsidized Loan become responsible for 

accruing interest on all previously 

received Direct Subsidized Loans during 

future periods, beginning on the date of 

the triggering enrollment, unless the 

student completes his or her prior 

program of study and has not lost 

eligibility for Direct Subsidized Loans as 

a result of these provisions. 

• Prorated periods of Direct 

Subsidized Loan receipt during parttime enrollment for purposes of the 150 

percent limit on Direct Subsidized Loan 

eligibility. 

• Established special rules for 

applying the 150 percent limit on Direct 

Subsidized Loan eligibility for 

borrowers enrolled in preparatory 

coursework required for enrollment in 

an undergraduate program, preparatory 

coursework required for enrollment in a 

graduate or professional program or 

teacher certification coursework 

necessary for a State teaching credential 

for which the institution awards no 

academic credential. These special rules 

limit the borrower’s responsibility for 

accruing interest in certain 

circumstances. 

• Modified existing entrance- and 

exit-counseling requirements to require 

institutions to provide borrowers with 

information regarding the 150 percent 

limit on Direct Subsidized Loans. 

The IFR was effective on the date of 

publication, May 16, 2013, and the 

Secretary requested public comment on 

those regulations. 

Summary of the Major Provisions of 

This Regulatory Action: The final 

regulations— 

• Modify the rule for rounding 

borrowers’ subsidized usage periods to 

ensure that similarly situated borrowers 

have similar subsidized usage periods; 

• Modify the calculation of the 

subsidized usage period for borrowers 

who are enrolled on a part-time basis for 

a period of less than a full academic 

year, but who receive a Direct 

Subsidized Loan in the amount of the 

full annual loan limit; 

• Modify the calculation of the 

maximum eligibility period for two-year 

baccalaureate degree programs that 

require an associate degree or at least 

two years of postsecondary coursework 

as a prerequisite for admission; and 

• Modify the calculation of the 

maximum eligibility period for certain 

associate degree programs that have 

special admissions requirements. 

Chart 1 summarizes the benefits, 

costs, and transfers stemming from the 

IFR and these final regulations, which 

are discussed in more detail in the 

Regulatory Impact Analysis section of 

this preamble. The Department 

estimates that approximately 62,000 

borrowers in the 2013 loan cohort will 

be affected by the IFR and final 

regulations, with the number of 

borrowers affected increasing in each 

subsequent year’s cohort to 

approximately 578,000 borrowers in the 

2023 loan cohort. The benefits of the 

IFR and final regulations include 

incentives for borrowers to complete 

programs more quickly (which could 

lead to reduced loan balances) and 

lower payments for borrowers receiving 

Direct Subsidized Loans between July 1, 

2012, and June 30, 2013. 

CHART 1—SUMMARY OF THE IFR AND FINAL REGULATIONS

Issue and key features Benefits Cost/transfers 

Interest rate reduction, limitations on eligibility for Direct Subsidized 

Loans, and responsibility for accruing interest for first-time borrowers on or after July 1, 2013 (34 CFR part 685). 

Reduction of interest rate on Direct Subsidized Loans to 3.4 percent 

after July 1, 2011, and before July 1, 2013.

Reduced loan balance and lower 

payments for borrowers.

$5.6 billion for loans disbursed on 

or after July 1, 2012 and before 

July 1, 2013. 

Limitation on Direct Subsidized Loan eligibility for borrowers who receive such loans for a period that is equal to 150 percent of the 

published length of the educational program and borrower responsibility for accruing interest for enrollment after meeting or exceeding 

this limit.

Create incentives for students to 

complete academic programs in 

a timely manner and avoid incurring unnecessary loan debt.

Estimated net budget impact of 

¥$3.9 billion over the 2013– 

2023 loan cohorts. 

Prorating periods of Direct Subsidized Loan receipt during part-time 

enrollment.

Account for differing enrollment 

levels to provide similar treatment to similarly situated borrowers.

Specialized treatment for borrowers enrolled in preparatory 

coursework required for enrollment in an eligible program and 

teacher certification coursework necessary for a State teaching credential for which the institution awards no academic credential.

Limit borrower responsibility for 

accruing interest to encourage 

completion.

Special rule that specifies the calculation of the maximum eligibility period for certain two-year baccalaureate degree and selective admission associate degree programs.Provides for more accurate calculation of program length and 

borrower eligibility.

Modified entrance- and exit-counseling requirements to provide borrowers with information regarding the 150 percent limit on Direct 

Subsidized Loans.

Provide borrowers with information 

on eligibility limitations and potential responsibility for accruing 

interest.

Estimated cost of $5.21 million in 

increased burden to institutions 

and borrowers and other paperwork compliance costs. 

Analysis of Comments and Changes 

The changes to the IFR included in 

these final regulations were developed 

through the analysis of comments 

received on the IFR published on May 

16, 2013. In response to the Secretary’s 

invitation, 14 parties submitted 

comments on the IFR. 

An analysis of the comments 

submitted in response to the IFR and the 

changes we are making in these final 

regulations follows. We group major 

issues according to subject, with 

appropriate sections of the regulations 

referenced in parentheses. Generally, we 

do not address technical and other 

minor changes and suggested changes 

the law does not authorize the Secretary 

to make. We also do not respond to 


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3110 Federal Register / Vol. 79, No. 12 / Friday, January 17, 2014 / Rules and Regulations 

comments pertaining to issues that were 

not within the scope of the IFR. 

General Comments 

Comments: A commenter noted 

support for the Department’s efforts to 

encourage students to complete 

educational programs in a timely 

manner and to limit unnecessary 

borrowing. 

A commenter expressed appreciation 

for the Department seeking public 

comment on the IFR, even though 

Congress waived the negotiated 

rulemaking requirement. 

A commenter expressed appreciation 

for the Department’s efforts to assume 

responsibility for tracking and 

notification of eligibility determinations 

and loss of interest subsidy. 

Discussion: The Department thanks 

the commenters for their support. 

Changes: None. 

Comment: A commenter suggested 

that the interchangeable use of the terms 

‘‘enroll’’ and ‘‘attend’’ in the preamble 

and throughout the IFR is misleading. 

The commenter noted that ‘‘enrolled,’’ 

as defined in 34 CFR 668.2, means the 

status of a student who has completed 

registration requirements or, in the case 

of a student in a program offered 

predominantly by correspondence, has 

submitted one lesson. The commenter 

believed that the intent of the IFR was 

to apply the loss of interest subsidy 

based on actual attendance at an 

institution of higher education, not 

enrollment. The commenter 

recommended that we replace the term 

‘‘enrolled’’ with the term ‘‘attend’’ and 

its variations throughout § 685.200(f). 

Discussion: The commenter is correct 

that a borrower loses the interest 

subsidy when a borrower has reached 

the 150 percent limit and then ‘‘attends 

any undergraduate program or 

preparatory coursework on at least a 

half-time basis at an eligible institution 

that participates in the title IV, HEA 

programs,’’ as provided in 

§ 685.200(f)(3)(i)(B). The term ‘‘attend’’ 

or its variant (i.e. ‘‘attends’’) is used 

when necessary to specify that a 

borrower must actually attend the 

program rather than simply enroll (e.g., 

§ 685.200(f)(3)(iv) and § 685.200(f)(5)). 

We use the term ‘‘attend’’ when 

describing how borrowers may lose 

interest subsidy to specify that a 

borrower may only lose interest subsidy 

in certain circumstances after 

attendance, and that enrollment is not 

sufficient to cause the loss of interest 

subsidy. We therefore do not believe 

that use of the term ‘‘enroll’’ or its 

variant in § 685.200(f) is incorrect or 

will result in any confusion. 

Changes: None. 

First-Time Borrower (§ 685.200(f)(1)(i)) 

Comments: A commenter asked 

whether a borrower is considered a firsttime borrower under § 685.200(f)(1)(i) 

regardless of whether existing loans 

were repaid in full before or after July 

1, 2013, so long as the borrower does 

not receive the Direct Subsidized Loan 

until after the loans are repaid. 

The commenter also asked whether a 

borrower who owed a loan balance prior 

to July 1, 2013, who then borrows a new 

Direct Loan after July 1, 2013, and then 

pays off all loans in full is considered 

a first-time borrower. 

Discussion: Section 685.200(f)(1)(i) 

defines a first-time borrower for 

purposes of the 150 percent Direct 

Subsidized Loan limit as ‘‘an individual 

who has no outstanding balance of 

principal or interest on a Direct Loan 

Program or Federal Family Education 

Loan (FFEL) Program loan on July 1, 

2013 or on the date the borrower obtains 

a Direct Loan Program loan after July 1, 

2013.’’ If a borrower does not owe a 

balance on a Direct Loan or a FFEL 

Program loan at the time he or she 

receives a Direct Subsidized Loan on or 

after July 1, 2013, the borrower is 

considered a first-time borrower. 

In the first circumstance described by 

the commenter, it is of no practical 

consequence whether a borrower pays 

off the balance of his or her Direct 

Subsidized Loans before or after July 1, 

2013, before receiving a new Direct 

Subsidized Loan. In both cases, the 

borrower will not have a Direct Loan or 

FFEL program loan balance when the 

borrower receives his or her Direct 

Subsidized Loan on or after July 1, 2013. 

Therefore, in both cases, the borrower is 

a first-time borrower under the terms of 

§ 685.200(f)(1)(i). 

In the second circumstance described 

by the commenter, when the borrower 

receives his or her Direct Subsidized 

Loan after July 1, 2013, the borrower 

does owe a balance on a Direct Loan or 

a FFEL Program Loan. Therefore, at that 

point in time, the borrower would not 

be considered a first-time borrower. If 

the borrower subsequently pays off the 

balance of his or her loans and then 

borrows a new Direct Subsidized Loan, 

the borrower would then be considered 

a first-time borrower. 

Changes: None. 

Maximum Eligibility Period 

(§ 685.200(f)(1)(ii)) 

Comments: Two commenters stated 

that they believed that the definition of 

the term ‘‘maximum eligibility period’’ 

in § 685.200(f)(1)(ii) is inconsistent with 

the provisions of MAP–21. These 

commenters argued that under MAP–21, 

a transfer student’s aggregate period of 

enrollment should be calculated based 

on the ‘‘longest educational program in 

which the borrower’’ is or was enrolled. 

The commenters believed that 

calculating the maximum eligibility 

period based on the borrower’s current 

educational program disadvantages 

borrowers who transfer from a longer 

program to a shorter program (‘‘reverse 

transfer students’’). 

One commenter noted that the 

satisfactory academic progress 

regulations in 34 CFR 668.34 specify 

that the pace at which a student 

progresses through his or her 

educational program must ensure that 

the student completes the program 

within the maximum timeframe for that 

program. The definition of the term 

‘‘maximum timeframe’’ in 34 CFR 

668.34(b) specifies that, for 

undergraduate programs, the maximum 

timeframe is ‘‘no longer than 150 

percent of the published length of the 

educational program.’’ The commenter 

recommended that, to make it easier for 

financial aid administrators to 

understand § 685.200(f), the Department 

should use the maximum timeframe 

standard in 34 CFR 668.34(b) for 

purposes of determining the borrowers’ 

Direct Subsidized Loan eligibility, 

rather than using the maximum 

eligibility period in § 685.200(f)(1)(ii). 

Two commenters recommended that 

the definition of ‘‘maximum eligibility 

period’’ mirror the Pell Grant Lifetime 

Eligibility Used (LEU) limit, which 

limits a student’s receipt of Pell Grants 

to 12 semesters or an equivalent period. 

Discussion: In defining the term 

‘‘maximum eligibility period,’’ 

consistent with section 455(q)(1) of the 

HEA, as added by MAP–21, we sought 

to treat similarly situated borrowers in 

a similar manner. As we stated in the 

preamble to the IFR, ‘‘without 

recalculating a borrower’s maximum 

eligibility period when the borrower 

enrolls in a different program, 

otherwise-equivalent borrowers would 

have inconsistent and inequitable 

eligibility periods.’’ 78 FR at 28960. The 

suggestion to base Direct Subsidized 

Loan eligibility on the longest program 

in which the borrower had ever enrolled 

would result in maximum eligibility 

periods dependent in part on whether a 

particular borrower previously enrolled 

in a program of a longer or shorter 

duration for which he or she received 

Direct Subsidized Loans. The 

commenter’s approach would introduce 

a method of calculating remaining 

eligibility periods contrary to statutory 

intent because it would use a standard 

that is unrelated to a borrower’s timely 

completion of a program. It would also 


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introduce significant inconsistencies 

between borrowers with different 

postsecondary enrollment histories. 

Section 455(q)(1) of the HEA provides 

that the calculation of the 150 percent 

limit is based on the published length 

of the borrower’s educational program 

and the period of time for which the 

borrower received Direct Subsidized 

Loans. The statute does not mention 

satisfactory academic progress or related 

measurements or the Pell Grant LEU 

measurement. Those standards do not 

reflect section 455(q)(1) of the HEA. 

Therefore, the Secretary is not adopting 

those standards for purposes of 

calculating the 150 percent limit. 

Changes: None. 

Comments: Two commenters noted 

that an educational program’s published 

length is not always a direct reflection 

of the program’s degree level. Many 

institutions offer degree completion 

programs designed to allow students to 

matriculate into a bachelor’s degree 

program with transfer credits counting 

toward the bachelor’s degree. Since 

enrollment in these programs requires 

transfer credits, and the institution 

offers the program in such a way as to 

only offer ‘‘upper-division coursework,’’ 

a degree-completion program at the 

baccalaureate level is often two years in 

length with a maximum eligibility 

period of three years. One of the 

commenters recommended that instead, 

the maximum eligibility period should 

be calculated using a minimum program 

length based on credential level, rather 

than the published length of the 

program. 

A commenter also noted that there are 

certain associate degree programs that 

are similar to the baccalaureate degree 

programs addressed in the preceding 

paragraphs. These are programs, often at 

community colleges, that confer a twoyear associate degree in a specialized 

field, but which are offered at 

institutions that do not offer a four-year 

baccalaureate degree. As a prerequisite 

to admission into the associate degree 

program, students generally must 

complete at least two-years of general 

education coursework. Afterward, the 

two-year associate degree program 

provides the necessary ‘‘upper-division’’ 

or ‘‘specialized’’ coursework, which is 

often practical or clinical in nature. 

These programs generally lead to State 

licensure in occupations that are 

fundamentally similar to programs 

offering these specializations at the fouryear bachelor’s degree level. 

Discussion: We agree with the 

comments suggesting we revise 

§ 685.200(f) because, under the IFR, 

borrowers in baccalaureate degree 

completion programs would be treated 

differently than borrowers enrolled in 

full programs of equivalent degree 

levels. 

For example, imagine two borrowers, 

one enrolled in a program with a 

published length of four years and the 

other initially enrolled in a program 

with a published length of two years 

before going on to complete a two-year 

bachelor’s degree at another institution 

in a program that only offers the upperdivision coursework required to receive 

the bachelor’s degree. The first borrower 

would have a maximum eligibility 

period of six years to complete the 

bachelor’s degree program. The second 

borrower would have a maximum 

eligibility period of three years because 

each of the programs in which the 

borrower is enrolled has a published 

length of two years, and loans 

previously received will continue to 

count in the second program. The effect 

of this treatment is that, under the IFR, 

the second borrower has only three 

years of eligibility for Direct Subsidized 

Loans, while the first borrower has six 

years of eligibility despite being 

enrolled in a program with an 

equivalent degree and effectively 

equivalent program length. We believe 

this result is contrary to the intent of the 

statute. 

To ensure that borrowers’ maximum 

eligibility periods are calculated 

consistent with the statutory intent, we 

have revised § 685.200(f) to specify that 

certain two-year programs that meet 

specific criteria are, for purposes of 

determining a borrower’s maximum 

eligibility period, considered bachelor’s 

degree programs equivalent to those that 

are four years in duration. To be in this 

category, a two-year degree-completion 

program must be a bachelor’s degree 

program that requires an associate 

degree or the successful completion of 

at least two years of postsecondary 

coursework from an eligible program as 

a prerequisite for admission. The 

successful completion of coursework 

means receiving academic credit for 

coursework that is deemed sufficient to 

meet admissions requirements as 

determined by the accepting institution. 

Institutions which offer programs that 

meet the requirements of this provision 

would report a program length of four 

years for those programs to the 

Department for a maximum eligibility 

period of six years. 

We also agree with the commenter 

that there are certain associate degree 

programs that are similar to these 

bachelor’s degree programs. Under the 

IFR, borrowers attending these programs 

would have limited maximum eligibility 

periods for the same reasons as 

borrowers in bachelor’s degreecompletion programs; even completing 

the program on time could result in the 

borrower’s loss of eligibility for further 

Direct Subsidized Loans. We do not 

believe that these consequences for 

borrowers who complete these programs 

on time are consistent with the statutory 

intent of MAP–21. We have therefore 

revised § 685.200(f) to provide that these 

programs will be considered to have a 

program length of four years. 

Applying this provision broadly to 

attendance in any subsequent associate 

degree program or to multiple, unrelated 

associate degree programs would be 

contrary to the statutory intent of 

encouraging students to complete their 

programs in a timely manner. Selectiveadmissions associate degree programs, 

by contrast, only admit individuals who 

have completed prerequisite coursework 

and are analogous to longer 

baccalaureate degree programs. 

Therefore, we will apply this provision 

narrowly to associate degree programs 

that are designed specifically to confer 

a more specialized credential after 

completion of two years of 

postsecondary coursework and which 

are, for practical purposes, equivalent in 

length to a baccalaureate degree 

program. 

To ensure that these provisions are 

implemented in a manner consistent 

with the goals of the statute, the special 

treatment for selective-admissions 

associate degree programs applies only 

to programs that meet certain criteria. 

To be treated as a four-year program for 

purposes of the maximum eligibility 

period calculation, a two-year associate 

degree program must require, as a 

prerequisite to admission, that the 

student have successfully completed an 

associate degree or at least two years of 

postsecondary coursework in an eligible 

program. Furthermore, the program 

must be a selective admission program, 

which means that the program is not an 

‘‘open admission’’ program, and admits 

students based on competitive criteria. 

These criteria may include, but are not 

limited to, entrance exam scores, class 

rank, grade point average, written 

essays, or recommendation letters. 

Finally, these programs must provide 

the academic qualifications necessary 

for a profession that requires licensure 

or a certification by the State in which 

the program is offered. Typically, a 

baccalaureate degree is required in order 

to obtain the licensure or certification 

that the selective-admission associate 

degree program leads to, and this 

requirement would ensure that 

programs qualifying for this provision 

are comparable to four-year 

baccalaureate degree programs. 

Examples of programs that would likely 


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meet this criterion are registered nursing 

programs or physical therapy programs. 

Students in these selective-admission 

associate degree programs are eligible 

for Direct Subsidized Loans at the 

annual loan limit related to an associate 

degree program (i.e., loan limits that do 

not exceed the second-year level under 

34 CFR 685.203(a)(1)(i)–(a)(2)(i)). 

It should also be noted that 

§ 685.200(f)(8) does not confer title IV 

program eligibility on programs that are 

otherwise ineligible to participate in 

those programs. Programs seeking to 

qualify for the special rule provided 

under this regulation must meet and 

comply with all other statutory and 

regulatory requirements to award 

Federal student aid. 

To ensure compliance with the 

requirements of this regulation, during 

the Department’s program compliance 

reviews we will evaluate whether an 

institution with selective admission 

associate degree programs which have 

certified that they meet the 

requirements under this regulation do 

satisfy those requirements. If we 

determine that the institution did not 

qualify for the special rule provided in 

this regulation, the institution will not 

be permitted to report a program length 

of four years for that program and must 

instead report a program length of two 

years. However, students who were 

previously enrolled in such a program 

will not lose interest subsidy 

retroactively as a result of such a 

determination or required to return the 

loan proceeds under § 685.211(e). 

Changes: We have added a new 

§ 685.200(f)(8) to provide special 

treatment for certain baccalaureate 

degree-completion programs and 

selective-admission associate degree 

programs. The new provisions allow 

such programs to report a program 

length of four years consistent with the 

preceding discussion. 

Comments: A commenter asked how 

a combination bachelor’s and master’s 

degree (BA/MA) program or other dualdegree programs are treated for purposes 

of maximum eligibility period 

calculations. 

Discussion: Consistent with the 

Department’s longstanding guidance 

related to when students in combination 

BA/MA or other dual degree programs 

transition from undergraduate status to 

graduate/professional status (see, e.g., 

2012–2013 FSA Handbook, Volume 1, 

Page 67 and Volume 3, Page 96), an 

institution with a combination 

undergraduate/graduate or professional 

degree program must report program 

information, including credential level 

and program length, for the portion of 

the program during which the student is 

considered to be an undergraduate 

student and, therefore, eligible for a 

Direct Subsidized Loan. For example, if 

the institution offers a five-year BA/MA 

program, and the borrower is treated as 

an undergraduate student during the 

first four years of the program and 

receives Direct Subsidized Loans, the 

institution must report that the student 

is enrolled in a four-year baccalaureate 

degree program. 

For the duration of the student’s 

enrollment in the program as an 

undergraduate student, the institution 

must report the program’s credential 

level to the Common Origination and 

Disbursement (COD) System and the 

National Student Loan Data System 

(NSLDS) as a bachelor’s degree program. 

Upon the student’s receipt of a Direct 

Unsubsidized Loan for the master’s 

degree portion of the program, the 

institution must report the student’s 

enrollment as a graduate student to both 

NSLDS and the COD system. 

Changes: None. 

Subsidized Usage Period 

(§ 685.200(f)(1)(iii)) 

Comments: One commenter stated 

that the IFR is unclear as to the meaning 

of academic year. The commenter asked 

if the term ‘‘academic year’’ in 

§ 685.200(f)(1)(iii) means the period 

defined in 34 CFR 668.3, and suggested 

that the preamble to the IFR and 

subsequent guidance provided by the 

Department appears to use the term 

‘‘academic year’’ to refer to both the title 

IV academic year and to the academic 

year for annual loan limit purposes. The 

commenter stated that it is not clear 

what period of time the Department 

intends to use in the denominator when 

calculating the subsidized usage period, 

and recommended that the Department 

clarify the regulation. 

Another commenter stated that the 

combination of using calendar days in 

the calculation of the usage period and 

rounding down to the nearest quarter of 

a year could result in inequitable 

treatment of borrowers who are enrolled 

in similar programs that use slightly 

different academic calendars. While the 

commenter appreciated that rounding 

down preserves as much borrower 

eligibility as possible, the commenter 

also felt that rounding down would lead 

to inequitable results for similarly 

situated borrowers. 

Two commenters asked if it is 

possible that a subsidized usage period 

calculation could be rounded down to 

zero. 

Discussion: We agree with the 

commenter who emphasized the 

importance of drawing a clear 

distinction between the use of the term 

‘‘academic year’’ as defined in 34 CFR 

668.3 and the use of the same term for 

annual loan limit purposes. We have 

revised § 685.200(f)(1)(iii) to clarify that 

the calculation of a subsidized usage 

period is based on the length of the 

academic year for annual loan limit 

purposes (which includes, for example, 

breaks between terms). 

We agree with the commenters who 

identified an unintended consequence 

of the rounding rules in 

§ 685.200(f)(1)(iii). Because the 

calculation of a subsidized usage period 

includes all calendar days of the 

academic year for annual loan limit 

purposes (e.g., including breaks between 

terms), under the IFR it would have 

been possible for borrowers who 

received a loan for a single term of an 

academic year to have had a subsidized 

usage period that is less than the ratio 

of the number of terms in the academic 

year for which the borrower receives a 

Direct Subsidized Loan to the number of 

total terms in the academic year. 

In creating a rounding rule, we 

intended to make the subsidized usage 

period both easier to understand and a 

round number that would make it more 

likely that the borrower could utilize his 

or her remaining eligibility. We believe 

that these are still important 

considerations; however, we also 

believe it is important to ensure that 

borrowers who are in a similar situation 

are treated in a similar manner. 

Accordingly, we have revised the 

regulations to provide for rounding a 

borrower’s subsidized usage period 

either up or down (as appropriate) to the 

nearest tenth of a year, rather than down 

(and not up) to the nearest quarter of a 

year. 

This approach reduces the likelihood 

that similarly situated borrowers will 

have significantly divergent subsidized 

usage periods. We believe that 

continuing to round borrowers’ 

subsidized usage periods will make 

remaining eligibility periods easier to 

understand and will make it more likely 

that borrowers have a remaining 

eligibility period that can be used to 

borrow an additional Direct Subsidized 

Loan. 

The approach to rounding in the final 

regulations will eliminate the possibility 

that a borrower’s subsidized usage 

period could be rounded to zero. 

Section 685.301(a)(10) specifies that for 

standard term programs and certain 

nonstandard term programs, the 

minimum permissible length of a loan 

period is a term, or, for non-term and 

certain nonstandard term programs, the 

lesser of the length of a program or an 

academic year. It would not be possible 

for a term to have a sufficiently short 


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length to result in an unrounded 

subsidized usage period of 0.04 or less, 

and because 34 CFR 668.8 requires that 

the minimum length of a non-term or 

nonstandard term program is at least 10 

weeks, a subsidized usage period of 0.04 

or less is also impossible in that context. 

Therefore, under the final regulation, a 

borrower’s subsidized usage period will 

not be rounded down to zero. 

Changes: We have revised 

§ 685.200(f)(1)(iii) to specify that the 

term ‘‘academic year’’ as used to 

calculate a subsidized usage period is an 

academic year for annual loan limit 

purposes. 

We have also revised 

§ 685.200(f)(1)(iii) to specify that a 

subsidized usage period is rounded up 

or down to the nearest tenth of a year. 

Comments: A commenter asked how 

the Department will ensure the accurate 

calculation of subsidized usage periods 

during award year 2013–2014 if threequarter time enrollment status reporting 

is not required until award year 2014– 

2015. 

Discussion: Section 685.200(f)(4)(ii) 

provides that borrowers enrolled on a 

half-time and three-quarter-time basis 

will have their subsidized usage periods 

prorated by 0.5 and 0.75, respectively. 

As we make the operational changes 

necessary to implement the regulations, 

we will require reporting of threequarter-time enrollment for the 2014– 

2015 award year. Although the 

regulations are effective in award year 

2013–2014, due to rules governing 

minimum loan period length (discussed 

in detail in the preamble to the IFR), 

borrowers will not lose Direct 

Subsidized Loan eligibility or interest 

subsidy until award year 2014–2015. 

However, calculations involving parttime enrollment that occur prior to the 

2014–2015 award year could affect a 

borrower’s overall Direct Subsidized 

Loan eligibility. We will not require 

retrospective reporting of additional 

enrollment status indicators for the 

2013–2014 award year; instead, 

subsidized usage periods for 2013–2014 

Direct Subsidized Loans will be 

prorated on the basis of half-time 

enrollment if, for any portion of the 

loan’s loan period, the enrollment status 

reported to NSLDS is at least half-time, 

but less than full-time. For more 

information on this topic, please refer to 

‘‘150% Direct Subsidized Loan Limit 

Electronic Announcement #3’’, posted 

to the Information for Financial Aid 

Professionals (IFAP) Web site on August 

30, 2013, at http://ifap.ed.gov/

eannouncements/

083013150DSLLEA3.html. 

Changes: None. 

Comments: A commenter asked how 

situations in which a student is enrolled 

in a program for a very short period of 

time (i.e., two-week seminars or less) are 

treated for purposes of subsidized usage 

period calculations. The commenter 

also asked whether the answer is 

different if those enrollment periods are 

attached to the beginning or ending of 

a standard term. 

Discussion: Standalone periods of 

enrollment in very short programs have 

no effect on a borrower’s subsidized 

usage period because the minimum 

length of an eligible program (for Direct 

Loan purposes) is 10 weeks, under 34 

CFR 668.8(d)(3)(i). Therefore, 

institutions cannot originate a Direct 

Subsidized Loan to borrowers in such a 

program. In cases where a short period 

of enrollment in coursework is attached 

to the beginning or end of a term, that 

period would be reported as part of the 

loan period or academic year to COD, 

and would affect that borrower’s 

subsidized usage period according to 

the extent that the borrower’s loan 

period and academic year were 

lengthened as a result of those days of 

enrollment being included in the 

calculation of the subsidized usage 

period. 

Changes: None. 

Comments: A commenter noted that 

Dear Colleague Letter GEN 13–13 

(http://www.ifap.ed.gov/dpcletters/

GEN1313.html) states that if any portion 

of a Direct Subsidized Loan is retained 

by the institution after the Return to 

Title IV (R2T4) calculation, that loan 

period counts towards a borrower’s 

subsidized usage period. The 

commenter asked whether institutions 

or students are permitted to return that 

portion of the loan to avoid this 

consequence. 

Discussion: Under the HEA and the 

Department’s regulations, institutions 

may cancel all or a portion of a loan 

within 120 days of disbursement at the 

request of the borrower. Unless the 

student requests cancellation within 

that timeframe or the institution is 

otherwise legally obligated to cancel all 

or a portion of the loan, a institution 

may not return, nor may a borrower 

repay or cancel, loan funds for the 

purpose of reducing or eliminating a 

subsidized usage period. 

Changes: None. 

Comments: A commenter asked how 

subsidized usage periods are prorated 

for borrowers with more than one 

enrollment status during a loan period. 

Discussion: If a borrower has more 

than one enrollment status during a loan 

period, we will prorate the borrower’s 

subsidized usage period based on the 

enrollment status reported at the time of 

the loan disbursement for the relevant 

payment period. For example, if a 

borrower was enrolled half-time in the 

fall term and full-time in the spring 

term, we would apply a 0.5 proration to 

the payment period covering the fall 

term so that the subsidized usage period 

for that term would be 0.25. There 

would be no proration for the payment 

period covering the spring term. 

Therefore, the borrower’s subsidized 

usage period in this case would be 

calculated as 0.75 years and rounded to 

0.8 years. 

Changes: None. 

Borrower Responsibility for Accruing 

Interest (§ 685.200(f)(3)) 

Comments: One commenter 

recommended that the Department 

allow borrowers to regain the interest 

subsidy on their existing loans if they 

regain eligibility to receive additional 

Direct Subsidized Loans by transferring 

to a longer program. This commenter 

believed this would provide greater 

consistency among students with 

similar educational trajectories. 

Another commenter supported the 

inclusion of § 685.200(f)(3)(i)(B), which 

limits a borrower’s loss of the interest 

subsidy to attendance in those programs 

in which an otherwise-eligible borrower 

could receive a Direct Subsidized Loan. 

However, the commenter did not 

support the regulations which result in 

reverse transfer students losing the 

interest subsidy without receiving an 

additional Direct Subsidized Loan. As 

noted by the commenter, a borrower 

who transfers from a two-year program 

to a one-year certificate program will 

have a maximum eligibility period of 

1.5 years in the one-year program. If that 

student received two years of Direct 

Subsidized Loans while in the two-year 

program, the student would lose 

eligibility for Direct Subsidized Loans 

and would lose the interest subsidy on 

outstanding Direct Subsidized Loans 

upon enrollment in the one-year 

program. The lower maximum 

eligibility period for the one year 

program results in the borrower having 

no remaining eligibility period (causing 

the loss of eligibility). The fact that the 

borrower is enrolled in an 

undergraduate program while having no 

remaining eligibility period results in 

the loss of the interest subsidy. The 

commenter believed that this approach 

penalizes a student who has chosen to 

continue education in what may, for 

that student, be a more appropriate 

program. 

Discussion: The commenter’s 

suggestion that the regulations should 

allow borrowers to regain lost interest 

subsidy is not consistent with section 


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1The unrounded subsidized usage period for 

Borrower B is approximately 0.24, resulting in a 

rounded subsidized usage period of 0.2. 

455(q) of the HEA. The statute specifies 

that when the interest subsidy is lost, 

interest shall accrue and be paid or 

capitalized in the same manner as on a 

Direct Unsubsidized Loan. It does not 

permit the borrower to regain the 

interest subsidy. 

With respect to the commenter’s 

request to limit the loss of the interest 

subsidy so that borrowers who transfer 

to programs of shorter duration do not 

lose the interest subsidy, doing so 

would be inconsistent with the statute. 

Section 455(q) of the HEA requires that 

a borrower who exceeds the 150 percent 

limitation loses the interest subsidy on 

existing Direct Subsidized Loans. 

However, a consequence related to the 

commenter’s concern is limited by 

§ 685.200(f)(3)(iv), which provides that 

if a borrower completes his or her prior 

educational program before losing the 

interest subsidy, enrolling in a shorter 

program would not cause the borrower 

to lose interest subsidy. 

Changes: None. 

Exceptions to the Calculation of 

Subsidized Usage Periods 

(§ 685.200(f)(4)) 

Comments: One commenter expressed 

concerns about how § 685.200(f)(4)(i) 

affects borrowers who are enrolled for 

different periods within an academic 

year or over multiple academic years. 

The commenter provided an example in 

which an institution has a one-year 

program comprised of four quarters and 

two entering cohorts: Cohort A and 

cohort B. Cohort A begins attendance in 

the program in the fourth quarter of year 

1. Because the costs of the program are 

sufficiently high, cohort A borrowers 

receive Direct Subsidized Loans in the 

amount of the annual loan limit for a 

single term, and have a subsidized usage 

period of one year under 

§ 685.200(f)(4)(i). Because the program 

has a maximum eligibility period of 1.5 

years, when cohort A continues 

enrollment in the remainder of the 

program in year 2, these borrowers 

would have a remaining eligibility 

period of 0.5 years and, after exhausting 

that remaining eligibility period, would 

lose the interest subsidy on all loans. 

Cohort B begins attendance in the 

program in the first quarter of year 2. 

The costs also support borrowers in 

cohort B receiving Direct Subsidized 

Loans in the amount of the annual loan 

limit, but for a period of the full 

academic year. Cohort B would 

therefore be able to start and finish the 

program in an academic year without 

losing eligibility for Direct Subsidized 

Loans or the interest subsidy on those 

loans. The commenter recommended 

revising § 685.200(f)(4)(i), or, as an 

alternative, allowing institutions to 

award less than the maximum eligible 

loan amount. 

Another commenter agreed in general 

with the proration approach for parttime enrollment included in the IFR. 

However, this commenter noted that 

this approach produces different results 

depending on a borrower’s enrollment 

patterns when the borrower receives a 

loan in the amount of the annual loan 

limit (see, e.g., examples 1 and 2 in the 

subsequent discussion section). The 

commenter believed that a borrower 

should not be disadvantaged because he 

or she demonstrated need for a loan in 

the amount of the full annual loan limit 

for less than a full year of attendance. 

The commenter believed that a borrower 

enrolled part-time should have a 

prorated subsidized usage period even if 

he or she received a Direct Subsidized 

Loan in the amount of the full annual 

loan limit for a period that is less than 

a full academic year. 

Discussion: Under section 428G of the 

HEA, a borrower can receive a Direct 

Subsidized Loan in an amount equal to 

the full annual loan limit for a period 

that is less than a full academic year 

(e.g., a semester). As we explained in 

the preamble to the IFR, ‘‘absent 

§ 685.200(f)(4)(i), a borrower would be 

able to partially circumvent the 

limitations on Direct Subsidized Loan 

eligibility enacted by MAP–21; an 

institution could double a borrower’s 

Direct Subsidized Loan eligibility by 

disbursing the full annual Direct 

Subsidized Loan limit for a single term 

of the academic year (e.g., one 

semester).’’ 78 FR at 28962. 

With respect to the commenter’s 

example illustrating concerns regarding 

the effect of this provision, if, due to 

program cost, a borrower receives in a 

single quarter a loan in the amount of 

the full annual loan limit for an entire 

academic year, then the borrower would 

have a subsidized usage period of one 

year. However, in the absence of 

§ 685.200(f)(4)(i), the borrower in the 

commenter’s example would be able to 

again receive the full annual loan limit 

at the beginning of the next academic 

year, and upon completion of the oneyear program, would have received 

twice the amount of the full annual loan 

limit of Direct Subsidized Loan funds 

for the same program. We believe this is 

directly contrary to statutory intent. We 

believe that § 685.200(f)(4)(i) will 

effectively mitigate this problem. We do 

note that institutions are permitted to 

counsel borrowers on the amount of 

loan funds that may be advisable to 

accept and may refuse to originate loans 

on a case-by-case basis. 

However, we agree with the other 

commenter’s concerns regarding the 

interaction of the annual loan limit 

exception and the proration of 

subsidized usage periods for part-time 

borrowers under § 685.200(f)(4)(ii). 

Under the IFR, a part-time student who 

receives a loan in the amount of the 

annual loan limit for a period less than 

an academic year has a subsidized usage 

period of one year, notwithstanding the 

part-time enrollment. This framework 

results in differences in borrowers’ 

subsidized usage periods that is 

disproportionate to their relative 

enrollment levels (see the discussion of 

examples 1 and 2 in the next 

paragraph). To mitigate this difference, 

the final regulations apply the annual 

loan limit provision of § 685.200(f)(4)(i), 

but also apply the proration of 

§ 685.200(f)(4)(ii) based on the 

borrower’s part-time enrollment status. 

The final regulations therefore minimize 

differing treatment of similarly situated 

borrowers while continuing to limit 

circumvention of the 150 percent 

limitation. 

The following two examples illustrate 

the operation of the final regulations. 

(Note: these examples incorporate the 

revised rounding rule discussed earlier 

in the preamble to the final regulations.) 

Example 1: Borrower A and Borrower B are 

both enrolled half-time and both enrolled in 

the fall term only. Borrower A receives a 

Direct Subsidized Loan in the amount of the 

annual loan limit and Borrower B receives a 

loan for less than the annual loan limit.1


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2Borrower D has a subsidized usage period of 0.5 

years under both the existing rule and the revised 

rule because § 685.200(f)(4)(i) applies to borrowers 

who receive the annual loan limit for a period of 

less than an academic year. Therefore, the 

proration rules for a part-time borrower apply under 

existing regulations for borrowers who receive the 

annual loan limit for the full academic year. 

SUBSIDIZED USAGE PERIOD

Borrowers Received 

annual loan limit? 

Enrollment 

status 

Enrollment 

period 

Existing rule 

(years) 

Revised rule 

(years) 

Borrower A ....................... Yes .................................. Half-time ......................... Fall term only .................. 1 0.5 

Borrower B ....................... No ................................... Half-time ......................... Fall term only .................. 0.2 0.2 

Under the IFR, when two half-time 

students are each receiving a Direct 

Subsidized Loan for a single term, the 

borrower who receives a loan in the 

amount of the annual loan limit has a 

subsidized usage period five times 

greater than the borrower who does not. 

The final regulations continue to 

apply the annual loan limit exception to 

part time borrowers—limiting the 

potential loophole by ensuring that such 

a borrower’s subsidized usage period 

reflects the amount of Direct Subsidized 

Loan funds that the borrower receives— 

but would also take into account the 

borrower’s less-than-full-time 

enrollment. As the example shows, the 

effect of this revised treatment is that 

Borrower A has a subsidized usage 

period of 0.5 years rather than one year 

for receiving the full annual loan limit 

for a single term when enrolled halftime. 

Example 2: Borrower C and Borrower D are 

both enrolled half-time and both receive a 

Direct Subsidized Loan in the amount of the 

annual loan limit. Borrower C receives a loan 

for the fall semester only and Borrower D 

receives a loan for both the fall and spring 

semesters (the full academic year). 

SUBSIDIZED USAGE PERIOD

Borrowers Received annual loan 

limit? Enrollment status Enrollment period Existing rule (years) 

Revised rule 

(years) 

Borrower C ....................... Yes .................................. Half-time ......................... Fall term only .................. 1 0.5 

Borrower D ....................... Yes .................................. Half-time ......................... Fall and spring terms ...... 0.5 0.5 

Both borrowers receive a loan in the 

amount of the full annual loan limit. 

Under the IFR, however, Borrower C 

receives a loan for a shorter period and 

has a subsidized usage period that is 

twice as large as Borrower D, who 

receives an equivalent loan amount for 

a longer period.2 The revision made in 

the final regulations results in both 

borrowers—who receive the same 

amount of money—receiving the same 

subsidized usage period. 

Changes: We have removed the 

reference to the annual loan limit 

exception in § 685.200(f)(4)(ii). 

Comments: A commenter expressed 

support for the part-time proration 

provisions in § 685.200(f)(4)(ii), but 

expressed concern about the subsidized 

usage period calculation in 

§ 685.200(f)(1)(iii). The commenter 

stated that, under this provision, 

otherwise equivalent borrowers with 

differing academic calendars could have 

different subsidized usage periods. The 

commenter illustrated this argument 

with an example: Suppose two 

borrowers—one in a semester-based 

program and the other in a quarterbased program—both attend for 15 

weeks of their program, and then both 

discontinue attendance after 15 weeks. 

The first borrower has a subsidized 

usage period corresponding to half the 

year for attendance in one semester. 

However, the second borrower would 

have a higher subsidized usage period 

because that borrower’s loan period 

would extend to the end of the second 

quarter of the academic year, and 

therefore comprise a higher proportion 

of the academic year than for the 

borrower enrolled in a semester-based 

program. The commenter suggested that 

the calculation of the borrowers’ 

subsidized usage periods should be 

based on the borrower’s actual dates of 

attendance, rather than on the loan 

period. 

Discussion: We believe that the 

changes to the rounding rules described 

in the ‘‘subsidized usage period’’ 

discussion in this preamble will 

minimize the differences in subsidized 

usage period calculations for generally 

comparable borrowers. However, a 

borrower who discontinues enrollment 

in the middle of a term or payment 

period received the benefit of the loan 

and, therefore, has a higher subsidized 

usage period, commensurate with that 

increased benefit. Under these 

regulations, borrowers accrue 

subsidized usage periods for terms or 

payment periods in which they receive 

and retain loan proceeds. 

Changes: None. 

Comments: A commenter asked how 

the annual loan limit provision in 

§ 685.200(f)(4)(i) applies to a student’s 

final period of enrollment, where a 

student may receive the annual loan 

limit in a prorated amount. 

Discussion: Section 685.200(f)(4)(i) 

applies only in the case where a 

borrower receives a loan in the amount 

of the full annual loan limit for a period 

of enrollment of less than an academic 

year. In the circumstance described by 

the commenter, where the borrower 

receives a prorated amount of the 

annual loan limit for enrollment in the 

final term of an academic program, the 

borrower has not received the full 

annual loan limit. Therefore, 

§ 685.200(f)(4)(i) does not apply and the 

borrower’s subsidized usage period is 

calculated as described in 

§ 685.200(f)(1)(iii). 

Changes: To minimize confusion, we 

have revised § 685.200(f)(4)(i) to provide 

that only a Direct Subsidized Loan 

received in the amount of the ‘‘full’’ 

annual loan limit (as described in 

§§ 685.203(a)(1)(i), (a)(2)(i), (a)(3)(i), 

(a)(4), (a)(6)(i), and (a)(7)) causes a 

borrower to have a subsidized usage 

period of one year for a period of 

enrollment less than an academic year. 

Treatment of Preparatory Coursework 

(§ 685.200(f)(6)) 

Comments: One commenter expressed 

support for the treatment of preparatory 

coursework in the IFR, but requested 

clarification that the regulation only 

limits loan receipt to twelve months, 

rather than prohibiting students from 

enrolling in preparatory coursework for 

a period greater than 12 months. 

Discussion: The commenter is correct. 

The IFR did not create a limitation on 

the length of a student’s enrollment. The 


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Department’s regulations do not prevent 

students from enrolling in academic 

programs—the Department’s regulations 

address the requirements related to the 

administration of the programs 

authorized under the HEA. A borrower 

may enroll in preparatory coursework 

for a period greater than 12 months to 

the extent permitted by the institution, 

but may not receive title IV aid for any 

period beyond 12 months. 

Changes: None. 

Treatment of Teacher Certification 

Programs for Which an Institution Does 

Not Award an Academic Credential 

(§ 685.200(f)(7)) 

Comments: One commenter expressed 

support for the treatment of noncredential teacher certification programs 

in the IFR. 

Discussion: The Department 

appreciates the commenter’s support. 

Changes: None. 

Additional Reporting Requirements 

and Modifications to Departmental 

Systems 

Comments: As discussed in the 

preamble to the IFR, institutions must 

report to the Department the 

Classification of Instructional Programs 

(CIP) Codes for their title IV eligible 

programs. Two commenters noted that 

the existing definition of the term 

‘‘educational program’’ in 34 CFR 600.2 

makes no reference to the subject matter 

covered by the educational program. 

These commenters believe that 

submission of CIP Codes is not needed 

for the implementation of the 150 

percent requirements, and should not be 

required. 

One commenter objected to the 

requirement that institutions report the 

CIP Code, credential level, and length of 

program to both NSLDS and the COD 

System. The commenter believed that 

requiring this information to be reported 

to both systems was unnecessary, 

because the Department could distribute 

the data internally, as needed. 

Another commenter asserted that 

these regulations require reporting that 

is impractical for institutions with large 

enrollments. The commenter also stated 

that updating loan periods or academic 

year dates so frequently is not feasible 

without extraordinary manual 

intervention. 

Discussion: In response to the 

comment about the CIP Codes, we note 

that this information is necessary to 

properly determine the program in 

which the borrower is enrolled. A CIP 

Code is a six-digit identifier that 

designates the subject matter of the 

program and therefore distinguishes 

between separate programs of study. As 

we stated in the preamble of the IFR, it 

is necessary for the Department to 

collect this information because 

‘‘section 455(q) of the HEA and the 

implementing regulations require that 

the borrower’s maximum eligibility 

period be determined program by 

program.’’ 78 FR at 28971. By 

identifying the program of study, CIP 

Code reporting will allow the 

Department to verify the proper 

reporting of loan receipt and changes in 

program enrollment to determine 

whether the borrower should lose the 

interest subsidy. This information, 

including CIP Codes, is necessary to 

ensure that other information reported 

by institutions is accurate and that 

borrowers’ maximum eligibility periods 

and remaining eligibility periods are 

correctly calculated. While the 

commenter is correct that the definition 

of ‘‘educational program’’ in 34 CFR 

600.2 does not specifically refer to a CIP 

Code, this definition does not preclude 

the Secretary from requiring institutions 

to report CIP Codes as part of the normal 

course of reporting Direct Loan 

origination and disbursement 

information to the COD System or 

enrollment information to NSLDS. 

One goal of MAP–21 and the IFR and 

final regulations is to encourage 

students to complete their programs of 

study in a timely fashion by limiting 

Direct Subsidized Loan receipt and the 

interest subsidy. Without the collection 

of CIP Codes, we would not have 

sufficient information to perform 

meaningful analysis of this policy. The 

collection of the CIP Code is therefore 

necessary for the Department to 

implement the requirements of section 

455(q) of the HEA. 

With respect to the commenter’s 

suggestion that the Department transfer 

data internally, we note that the two 

systems will be collecting the data at 

different times and for different 

purposes. For example, the data in the 

COD System will be used to determine 

a borrower’s eligibility for a Direct 

Subsidized Loan under the 150 percent 

limit. Institutions report information to 

the COD system when originating or 

disbursing a Direct Loan (or reporting a 

change to a previously submitted 

origination or disbursement record). 

Because the COD System and NSLDS 

need the information about a borrower’s 

program of study as of different times, 

institutions must report the same types 

of information to both systems. 

Although the information reported 

through the two systems is similar, the 

specific information being reported will 

sometimes differ due to the passage of 

time. Thus, the internal transfer of data 

is not a viable approach. 

Finally, with respect to the 

commenter with concerns regarding the 

burden on institutions associated with 

adjusting borrowers’ records in COD 

and NSLDS: While we understand that 

the patterns described by the 

commenter do occur, we believe they 

are rare, and that for most borrowers, 

reporting enrollment and loan data will 

be straightforward. Nevertheless, we 

appreciate that for some borrowers, 

adjusting loan records requires 

additional work, and we appreciate that 

this task is one of many required of title 

IV aid administrators to help ensure the 

appropriate administration and 

awarding of title IV aid. 

We also note, however, that the 

requirement that institutions update 

information is not new—institutions 

should have always been updating loan 

period and academic year dates, as 

necessary, in the COD system. This is 

especially the case for borrowers who 

withdraw and commence attendance at 

another institution, which must rely on 

the original institution’s reporting of 

loan period and academic year 

information in tracking the borrower’s 

progress toward the annual loan limit. If 

this information is not updated, it is 

possible that an institution will allow a 

borrower to receive Direct Loan funds in 

excess of the annual loan limit. To 

participate in the title IV programs, an 

institution is required to maintain 

proper records and meet numerous 

reporting requirements. Compliance 

with these requirements is necessary not 

only for the integrity of the taxpayer 

funds used to finance the title IV 

programs, but to ensure that only 

eligible students are receiving aid. 

Congress required that a borrower’s 

receipt of Direct Subsidized Loans be 

limited to a period of 150 percent of the 

borrower’s program length. To attempt 

to ease the burden on institutions, the 

Department undertook the obligation of 

determining the borrowers’ eligibility 

and possible loss of the interest subsidy. 

We believe that the alternative— 

requiring institutions to track borrower 

histories and make eligibility 

determinations with negative 

institutional consequences when funds 

were improperly disbursed—would be 

even more burdensome than properly 

reporting loan period dates, academic 

year dates, and additional information 

pertaining to a borrower’s program of 

study. 

Changes: None. 

Executive Orders 12866 and 13563 

Regulatory Impact Analysis 

Under Executive Order 12866, the 

Secretary must determine whether this 


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regulatory action is ‘‘significant’’ and, 

therefore, subject to the requirements of 

the Executive order and subject to 

review by the Office of Management and 

Budget (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 an ‘‘economically 

significant’’ rule); 

(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. 

The regulatory changes made by the 

IFR were estimated to have an annual 

effect on the economy of more than 

$100 million because the transfers 

between borrowers who exceed the 150 

percent limit and the government total 

approximately $3.9 billion over loan 

cohorts 2013 to 2023 and the extension 

of the 3.4 percent interest rate for 

subsidized loans made between July 1, 

2012 and June 30, 2013 represented a 

transfer from the Federal government to 

Direct Subsidized Loan borrowers of 

$5.7 billion over loan cohorts 2012 to 

2022. 

For purposes of this analysis, we 

deem the rulemaking to consist of the 

IFR as modified by these final 

regulations. Therefore, this final 

regulatory action is ‘‘economically 

significant’’ and subject to review by 

OMB under section 3(f)(1) of Executive 

Order 12866. Notwithstanding this 

determination, we have assessed the 

potential costs and benefits, both 

quantitative and qualitative, of this 

regulatory action and have determined 

that the benefits justify the costs. 

We have also reviewed these 

regulations pursuant to 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, 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 

specifying the behavior or manner of 

compliance that regulated entities must 

adopt; and 

(5) Identify and assess available 

alternatives to direct regulation, 

including providing economic 

incentives to encourage the desired 

behavior, such as user fees or 

marketable permits, or providing 

information upon which choices can be 

made by the public. 

Executive Order 13563 requires 

agencies ‘‘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 

within OMB 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 

only upon a reasoned determination 

that their benefits justify their costs. In 

choosing among alternative regulatory 

approaches, we selected those 

approaches that maximize net benefits. 

Based on the analysis that follows, the 

Department believes that these final 

regulations are consistent with the 

principles in Executive Order 13563. 

We also have determined that these 

final regulations will not unduly 

interfere with State, local, and tribal 

governments in the exercise of their 

governmental functions. 

In this regulatory impact analysis 

(RIA) we discuss the potential costs and 

benefits of the IFR as revised by the 

final regulations. To provide context for 

the changes made in response to 

comments received about the IFR, we 

have included a brief summary of the 

statutory and regulatory requirements 

relating to the 150 percent limitation. A 

full description and analysis of the 150 

percent statutory and regulatory 

requirements and the regulatory impact 

of the IFR is available in the IFR 

published in the Federal Register on 

May 16, 2013 (78 FR 28954). 

1. Summary of the IFR 

The IFR implemented the statutory 

requirements in MAP–21 that limit the 

availability of Direct Subsidized Loans 

to 150 percent of the program length 

and that cause borrowers to become 

responsible for accruing interest if they 

are no longer eligible for Direct 

Subsidized Loans as a result and then 

enroll in a program of study. The IFR 

included regulations: (i) Implementing 

the 3.4 percent interest rate for Direct 

Subsidized loans first disbursed on or 

after July 1, 2012, and before July 1, 

2013; (ii) establishing the rules 

implementing the 150 percent policy 

including how the relevant periods 

would be measured, and under what 

circumstances students would become 

responsible for accruing interest on 

existing loans and be ineligible for 

further subsidized loans; (iii) 

determining the treatment of part-time 

enrollment, teacher preparation 

programs, and preparatory coursework; 

and (iv) modifying exit and entrance 

counseling requirements for providing 

borrowers information regarding the 150 

percent limit on Direct Subsidized 

loans. The estimated $3.957 billion in 

net budget savings that will be 

generated by the IFR will contribute to 

paying for the extension of the 3.4 

percent interest rate on Direct 

Subsidized Loans made between July 1, 

2012, and June 30, 2013, which was 

estimated to cost $5.6 billion in outlays 

over the 2012 to 2022 loan cohorts. 

The Federal government and student 

borrowers are most directly affected by 

the statutory changes implemented in 

the IFR. As discussed in the IFR, firsttime borrowers as of July 1, 2013, who 

are otherwise eligible for Direct 

Subsidized Loans will not be eligible for 

additional Direct Subsidized Loans after 

taking out Direct Subsidized Loans for 

a period that equals or exceeds 150 

percent of the published length of their 

program. The limitation has two parts: 

(1) The determination that a borrower 

has received Direct Subsidized Loans 

for a period equal to or greater than 150 

percent of the length of the borrower’s 

program, and (2) once that limit has 

been reached or exceeded, the 

borrower’s responsibility for accruing 

interest on prior undergraduate loans is 

triggered by the borrower’s further 

enrollment in an undergraduate 

program of equal or shorter duration, 

except for borrowers who complete their 

programs before becoming responsible 

for accruing interest. The borrower is 

responsible for interest that accrues 

from the date that he or she becomes 


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responsible for accruing interest, not 

from the original disbursement date of 

the loan. 

As detailed in the IFR, the 

Department used a simulated pool of 

borrowers, borrowing patterns in 

existing NSLDS cohorts, and the 

Department’s student loan model to 

estimate which borrowers will become 

ineligible for further Direct Subsidized 

loans, which borrowers would become 

responsible for accruing interest, and 

the net budget impact of a shift in 

volume from subsidized to 

unsubsidized loans. The IFR also 

described the treatment of teacher 

preparation programs and preparatory 

coursework for undergraduate and 

graduate programs. As discussed, the 

estimated net budget impact of the 150 

percent regulations in the IFR was a 

savings of $3.957 billion. The process 

also allowed the Department to quantify 

the effect of the IFR on student 

borrowers. The percentage of borrowers 

estimated to exceed the 150 percent 

limit increases in later cohorts as the 

percentage of the cohort representing 

first-time borrowers after July 2013 

increases. The percentage of borrowers 

affected reaches approximately 6.54 

percent by the 2023 cohort; by that date, 

almost all borrowers should be first-time 

borrowers who are subject to the final 

regulations. The affected borrowers, 

approximately 578,000 by the 2023 

cohort, would lose eligibility for future 

Direct Subsidized Loans and become 

responsible for accruing interest. 

While the 150 percent limitation 

implemented in the IFR most directly 

affects the Federal government and 

students, institutions of higher 

education (IHEs) will face additional 

reporting and financial aid counseling 

requirements. The Department 

estimated that this reporting and 

financial aid counseling activity will 

cost IHEs approximately $1.6 million, as 

detailed in the Paperwork Reduction 

Act section of the IFR. In the IFR, the 

Department welcomed comments about 

the estimates of the costs and benefits. 

No comments about the analysis were 

received. 

2. Regulatory Alternatives Considered 

and Analysis of Significant Comments 

In this portion of the RIA we describe 

the regulatory alternatives that the 

Department considered for the interim 

final regulations and significant changes 

made in these final regulations as 

compared to the alternative of retaining 

the treatment of the issue from the IFR. 

As described in the Analysis of 

Comments and Changes, comments 

were received from fourteen parties in 

response to the IFR, and the following 

changes were made in response to those 

comments. 

Subsidized Usage Period for 

Rounding Methodology: In response to 

comments about the calculation of the 

subsidized usage period and whether a 

subsidized usage period of 0.24 or less 

should be rounded down to zero, the 

Department revised the rounding 

methodology used to calculate a 

borrower’s subsidized usage period. The 

rounding rule is meant to be easy to 

understand, to leave borrowers with a 

remaining subsidized usage period that 

they can use, and to provide similar 

treatment for similarly situated 

borrowers. The Secretary changed the 

rounding methodology from rounding 

down to the nearest quarter in the IFR 

to rounding up or down to the nearest 

tenth in these final regulations. This 

will lead a borrower who enrolls in the 

Fall semester and not the Spring 

semester and who has an unrounded 

subsidized usage period of 0.46 to have 

a rounded subsidized usage period of .5 

instead of .25. 

Proration of Subsidized Usage Period 

and the Annual Loan Limit Exception: 

In response to comments about the 

interaction of the annual loan limit 

exception and the proration of 

subsidized usage periods for part-time 

borrowers, the Department decided to 

retain the annual loan limit provision of 

the IFR and then apply proration for 

part-time enrollment for a period of less 

than a full academic year. Under the 

IFR, a borrower who receives the full 

annual loan limit for a period of less 

than an academic year would have a 

subsidized usage period of one year, 

even if the student was enrolled parttime. Examples discussed in the 

Analysis of Comments and Changes 

section of this preamble demonstrate 

how this rule could interact with the 

proration for part-time borrowing to 

create different results for similarly 

situated borrowers. The revised rules for 

the proration of usage periods for parttime borrowers who receive the full 

annual loan limit for enrollment that is 

less than a full academic year may result 

in some students having longer 

subsidized usage periods compared to 

the result under the IFR. 

Treatment of Baccalaureate Degree 

Completion Programs and Selective 

Admission Associate Degree Programs: 

Commenters noted that several 

institutions offer baccalaureate degree 

completion programs that are two years 

in length because credit is given for a 

student’s prior work or credits. To 

minimize the differences in treatment of 

a student who completes two years of 

coursework and then transfers to one of 

these degree completion programs and a 

borrower who transfers to a four-year 

program, the Department has decided 

that, for purposes of the 150% 

limitation, two-year programs that meet 

certain criteria will be considered 

baccalaureate degree programs 

equivalent to those that are four years in 

duration. These institutions are 

permitted to report a four-year program 

length for these programs to the 

Department, for a maximum usage 

period of six years. To qualify for this 

treatment, an institution that offers 

these two year programs must require, 

as a prerequisite for admission into the 

program, completion of an associate 

degree or the successful completion of 

at least two years of postsecondary 

coursework in an eligible program. 

Several commenters also pointed out 

that some associate degree programs are 

similar to the baccalaureate degree 

completion programs previously 

described in that they require the 

completion of a separate associate 

degree or two years of coursework prior 

to admission. If these programs are 

treated as two year programs for 

purposes of the 150 percent limitation, 

students in these programs would not 

have a sufficient remaining subsidized 

usage period to complete the program if 

they received Direct Subsidized Loans 

to complete the prerequisite degree or 

coursework. The Department decided to 

create a narrowly tailored special rule to 

address the concern for these 

specialized programs. Under these final 

regulations, associate degree programs 

that are designed specifically to confer 

a more specialized credential after 

completion of postsecondary 

coursework and that are equivalent in 

length to a baccalaureate degree 

program are allowed to report a program 

length of four years. Qualifying 

programs must be selective admission 

programs that admit students based on 

competitive criteria such as grade point 

average, entrance exam scores, written 

essays, recommendation letters and 

class rank, or other factors and be in a 

profession that requires licensure or 

certification by the State. 

Taken together, the Department 

estimates that the changes in these final 

regulations will not have a significant 

net budget impact. Rounding up or 

down to the nearest tenth instead of 

down to the nearest quarter may result 

in some students losing Direct 

Subsidized Loan eligibility or interest 

subsidy absent the revised calculations. 

However, the other changes in these 

final regulations (the proration for parttime, part-year borrowers who receive 

the full annual loan limit or the special 

rule for selective admission or 

bachelor’s degree completion programs) 


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3Paul Attewell et al., ‘‘New Evidence on College 

Remediation,’’ Journal of Higher Education 77, no. 

5 (October 2006): 886–924. 

will result in the retention of loan 

eligibility or interest subsidy for some 

borrowers who might have otherwise 

lost such eligibility. We expect the 

number of students affected by these 

changes to be insubstantial. For 

example, the Department estimates that 

less than two percent of part-time, partyear borrowers receive the full annual 

loan limit. In total, these changes are 

offsetting and do not have a significant 

effect on the net budget impact detailed 

in the interim final regulations. 

The IFR described the Department’s 

consideration of multiple approaches to 

the treatment of preparatory coursework 

and teacher certification coursework. In 

the case of preparatory coursework, the 

Department wanted to ensure that the 

regulations did not have a significant 

negative impact on borrowers who need 

this coursework to prepare for 

undergraduate studies. Research shows 

that preparatory coursework only has a 

modest effect on the length of time that 

students take to graduate.3 For this 

reason, we declined to treat these 

courses as stand-alone programs for the 

purposes of subsidized loan eligibility. 

In this preamble, the Department 

clarified that the 12-month limitation 

related to preparatory coursework is on 

Direct Subsidized Loan receipt and not 

enrollment. With respect to teacher 

certification coursework, because many 

States require teachers to obtain such 

certificates as a prerequisite for teaching 

or as a requirement to continue 

teaching, the Department concluded 

that these programs should be treated as 

stand-alone programs for purposes of 

the 150 percent limit and that the 

borrower’s eligibility for subsidized 

loans will not be affected by periods in 

which the borrower received Direct 

Subsidized Loans for earlier 

undergraduate programs. However, to be 

consistent with the overall intent of the 

150 percent limitation, we provided in 

the IFR that teacher certification 

coursework is a continuation of any 

previous teacher certification 

coursework for the purpose of 

subsidized loan eligibility. No changes 

were made to this policy in response to 

comments. 

Accounting Statement 

As required by OMB Circular A–4 

(available at www.whitehouse.gov/sites/ 

default/files/omb/assets/omb/circulars/

a004/a-4.pdf), in the following table we 

have prepared an accounting statement 

showing the classification of the 

expenditures associated with the 

provisions of the IFR and these final 

regulations. This table provides our best 

estimate of the changes in annual 

monetized transfers as a result of the 

IFR and final regulations. Expenditures 

are classified as transfers between 

affected student loan borrowers and the 

Federal government and the IHEs’ cost 

of compliance with the paperwork 

requirements. 

ACCOUNTING STATEMENT CLASSIFICATION OF ESTIMATED EXPENDITURES

[in millions] 

Category Amount or description 

Annual Benefits ........................................................................................ Not quantified. The 150% limit may encourage borrowers’ on-time completion of programs. 

Annual Costs ............................................................................................ $5.21 (7%). 

$5.31 (3%). 

Cost of Paperwork Compliance. 

Annualized Monetized Transfers associated with 150 percent limit as 

defined in the IFR as compared to a pre-statutory baseline.

$212.8 (7%). 

$237.6 (3%). 

From Whom To Whom? ........................................................................... From affected student loan borrowers to the Federal government. 

Annualized Monetized Transfers associated with the extension of the 

3.4% interest rate to Direct Subsidized loans first disbursed on or 

after July 1, 2012 and before July 1, 2013. The baseline is the IFR.

$690.8 (7%). 

$619.9 (3%). * 

From Whom To Whom? ........................................................................... From the Federal government to affected student loan borrowers. 

* These figures reflect the annual monetized transfers associated with the estimated $3.957 billion in net budget savings that will be generated 

by the amendments in the IFR and these final regulations and will contribute to paying for the extension of the 3.4 percent interest rate on Direct 

Subsidized Loans made between July 1, 2012, and June 30, 2013, which is estimated to cost $5.6 billion in outlays over the 2012 to 2022 loan 

cohorts. 

Regulatory Flexibility Act Certification 

In the IFR, published May 16, 2013, 

the Department analyzed the effect of 

the regulations on small entities and 

asked for comments about the analysis. 

The estimated burden on small entities 

from the requirements in the IFR is 

summarized in Table 1. 

TABLE 1—ESTIMATED PAPERWORK BURDEN ON SMALL ENTITIES

Reg section OMB control No. Cost Cost per 

institution 

COD reporting of enrollment status, program length, teacher 

preparation programs, preparatory coursework, and CIP 

code.

685.301(e) OMB 1845–NEW1 ................. $852,234 $195 

NSLDS reporting ..................................................................... 685.309(b) OMB 1845–NEW1 ................. 65,953 15 

Additional entrance and exit counseling requirements ........... 685.304 OMB 1845–NEW1 ................. 268,566 62 

We did not receive any comments on 

our regulatory flexibility analysis in the 

IFR, and did not make any changes in 

the final regulations that affected this 

analysis. Therefore, the estimated 


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burden analyzed in the IFR remains the 

same. 

Paperwork Reduction Act of 1995 

We received no comments on the 

Paperwork Reduction Act portion of the 

IFR and none of the changes to the 

regulation increase or decrease the 

burden associated with the regulation. 

OMB initially approved the collection of 

information necessary to implement the 

150 percent limit under OMB control 

number 1845–0116 on an emergency 

basis, which limited the collection’s 

authority to six months (the emergency 

approval of the collection expires on 

December 31, 2013). The collection is 

currently undergoing full Paperwork 

Reduction Act review, with the 

attendant 60- and 30-day comment 

periods. 

Intergovernmental Review 

This program is not subject to 

Executive Order 12372 and the 

regulations in 34 CFR part 79. 

Assessment of Educational Impact 

In the IFR we requested comments on 

whether the regulations would require 

transmission of information that any 

other agency or authority of the United 

States gathers or makes available. 

Based on the response to this request 

and our review, we have determined 

that these final regulations do not 

require transmission of information that 

any other agency or authority of the 

United States gathers or makes 

available. 

Accessible Format: Individuals with 

disabilities can obtain this document in 

an accessible format (e.g., braille, large 

print, audiotape, or compact disc) on 

request to the program contact person 

listed under FOR FURTHER INFORMATION

CONTACT. 

Electronic Access to This Document: 

The official version of this document is 

the document published in the Federal 

Register. Free Internet access to the 

official edition of the Federal Register 

and the Code of Federal Regulations is 

available via the Federal Digital System 

at: www.gpo.gov/fdsys. 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 Adobe 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. 

You may also view this document in 

text or PDF at the following site: 

www.ifap.ed.gov. 

(Catalog of Federal Domestic Assistance 

Number: 84.268 William D. Ford Direct loan 

Program) 

List of Subjects in 34 CFR Part 685 

Colleges and universities, Education 

loan programs—education, Student aid. 

Dated: January 14, 2014. 

Arne Duncan, 

Secretary of Education. 

For the reasons discussed in the 

preamble, the Secretary amends part 

685 of title 34 of the Code of Federal 

Regulations as follows: 

PART 685—WILLIAM D. FORD 

FEDERAL DIRECT LOAN PROGRAM 

■ 1. The authority citation for part 685 

continues to read as follows: 

Authority: 20 U.S.C. 1070g, 1087a, et seq., 

unless otherwise noted. 

■ 2. Section 685.200 is amended by: 

■ A. In paragraph (f)(1)(iii), removing 

the words ‘‘down to the nearest quarter’’ 

and adding, in their place, the words ‘‘to 

the nearest tenth’’. 

■ B. In the formula for calculating a 

subsidized usage period in paragraph 

(f)(1)(iii), adding the words ‘‘for annual 

loan limit purposes’’ after the words 

‘‘days in the academic year’’. 

■ C. In paragraph (f)(4)(i), adding the 

word ‘‘full’’ before the words ‘‘annual 

loan limit’’. 

■ D. In paragraph (f)(4)(ii), removing the 

words and punctuation ‘‘Except as 

provided in paragraph (f)(4)(i) of this 

section, for’’ and adding ‘‘For’’ in their 

place. 

■ E. Adding paragraph (f)(8). 

The addition reads as follows: 

§ 685.200 Borrower eligibility. 

* * * * * 

(f) * * * 

(8) Special admission degree 

programs. (i) For purposes of calculating 

the maximum eligibility period, a 

bachelor’s degree program that requires 

an associate degree or the successful 

completion of at least two years of 

postsecondary coursework as a 

prerequisite for admission has a 

program length of four years. 

(ii) For purposes of calculating the 

maximum eligibility period, a selective 

admission associate degree program that 

requires an associate degree or the 

successful completion of at least two 

years of postsecondary coursework as a 

prerequisite for admission has a 

program length of four years. For 

purposes of this paragraph (f)(8)(ii), a 

selective admission associate degree 

program— 

(A) Admits only a selected number of 

applicants based on additional 

competitive criteria which may include 

entrance exam scores, class rank, grade 

point average, written essays, or 

recommendation letters; and 

(B) Provides the academic 

qualifications necessary for a profession 

that requires licensure or a certification 

by the State. 

* * * * * 

[FR Doc. 2014–00928 Filed 1–16–14; 8:45 am] 

BILLING CODE 4000–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R05–OAR–2012–0650; FRL–9905–54- 

Region 5] 

Approval and Promulgation of Air 

Quality Implementation Plans; Indiana; 

Consent Decree Requirements 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Final rule. 

SUMMARY: The Environmental Protection 

Agency (EPA) is approving a portion of 

Indiana’s construction permit rule for 

sources subject to the state operating 

permit program regulations. These 

provisions authorize the state to 

incorporate terms from Federal consent 

decrees and Federal district court orders 

into these construction permits. EPA is 

also approving public notice 

requirements for these permit actions. 

These rules will help streamline the 

process for making Federal consent 

decree and Federal district court order 

requirements permanent and Federally 

enforceable. 

DATES: This final rule is effective on 

February 18, 2014. 

ADDRESSES: EPA has established a 

docket for this action under Docket ID 

No. EPA–R05–OAR–2012–0650. All 

documents in the docket are listed on 

the www.regulations.gov Web site. 

Although listed in the index, some 

information is not publicly available, 

i.e., Confidential Business Information 

(CBI) or other information whose 

disclosure is restricted by statute. 

Certain other material, such as 

copyrighted material, is not placed on 

the Internet and will be publicly 

available only in hard copy form. 

Publicly available docket materials are 

available either electronically through 

www.regulations.gov or in hard copy at 


pmangrum on DSK3VPTVN1PROD with RULES