50846 Federal Register / Vol. 62, No. 187 / Friday, September 26, 1997 / Rules and Regulations

DEPARTMENT OF EDUCATION

34 CFR Parts 674, 675, and 676

RIN 1840–AC40

Federal Perkins Loan Program, Federal

Work-Study Program, and Federal

Supplemental Educational Opportunity

Grant Program

AGENCY: Department of Education.

ACTION: Final regulations.

SUMMARY: This document contains

amendments to regulatory provisions

that provide consistency among

program regulations, correct minor

technical errors and omissions in the

existing regulations governing the

programs, and conform with selfimplementing provisions of the Higher

Education Act of 1965, as amended

(HEA). The student financial assistance

programs authorized by title IV of the

HEA, include the campus-based

programs (Federal Perkins Loan, Federal

Work-Study (FWS), and Federal

Supplemental Educational Opportunity

Grant (FSEOG) programs).

EFFECTIVE DATE: These regulations take

effect October 27, 1997.

FOR FURTHER INFORMATION CONTACT:

1. For the FWS and FSEOG programs:

Ms. Kathy Gause, Campus-Based Grants

Program Specialist, U.S. Department of

Education, 600 Independence Avenue,

SW, Regional Office Building 3, Room

3053, Washington, DC 20202–5447.

Telephone: (202) 708–8242.

2. For the Federal Perkins Loan

Program: Ms. Gail McLarnon, CampusBased Loan Program Specialist, U.S.

Department of Education, 600

Independence Avenue, SW, Regional

Office Building 3, Room 3053,

Washington, DC 20202–5447.

Telephone: (202) 708–8242.

Individuals with disabilities may

obtain this document in an alternate

format (e.g., Braille, large print,

audiotape, or computer diskette) by

contacting the person listed in the

preceding paragraph.

Individuals who use a

telecommunications device for the deaf

(TDD) may call the Federal Information

Relay Service (FIRS) at 1–800–877–8339

between 8 a.m. and 8 p.m., Eastern time,

Monday through Friday.

SUPPLEMENTARY INFORMATION: On March

4, 1995, the President directed every

Federal agency to review its rules and

procedures to reduce regulatory and

paperwork burden and directed Federal

agencies to eliminate or revise those

regulations that are outdated or

otherwise in need of reform.

As part of his response to the

President’s Regulatory Reinvention

Initiative, and to improve program

accountability to protect students and

the Federal fiscal interest, the Secretary

published amendments to the cash

management regulations contained in

part 668, subpart K, in the Federal

Register (61 FR 60578–60610) on

November 29, 1996 (effective date July

1, 1997). The campus-based programs

regulations are amended to conform

with the cash management regulations

published on November 29, 1996, and to

correct errors and omissions in the text

of the campus-based programs existing

regulations.

Although these regulations do not

establish any new policies, there are

issues surrounding the technical

changes to the regulations that govern

the Federal Perkins Loan Program that

need further explanation. Several

Federal Perkins Loan Program

regulatory provisions are amended to

conform with self-implementing

provisions of the HEA. The following

list summarizes those issues:

Federal Perkins Loan Program

Default Reduction Plan—Section 674.6

The Secretary amends § 674.6 to

eliminate the option allowing

institutions to submit a statement to the

Secretary indicating that they, in order

to satisfy the requirement to establish

and implement a default reduction plan

for their Federal Perkins Loan Program,

agree to apply to their Federal Perkins

Loan Program the default management

plan in place for their Federal Family

Education Loan (FFEL) Program. This

change is being made because as of July

1, 1996, institutions participating in the

FFEL Program are no longer required to

develop default management plans.

Student Eligibility—Section 674.9

An incorrect cross-reference has been

corrected in paragraph (a) by removing

‘‘34 CFR 668.7,’’ and adding, in its

place, ‘‘34 CFR 668.32.’’

Fiscal Procedures and Records—Section

674.19

An incorrect cross-reference has been

corrected in paragraph (b) by removing

‘‘§ 668.164,’’ and adding, in its place,

‘‘§ 668.163.’’

Promissory Note—Section 674.31 and

Repayment—Section 674.33

The Secretary amends §§ 674.31 and

674.33 to add language requiring

institutions to exclude periods of

forbearance in determining the 10-year

repayment period for a Federal Perkins

loan. This language, which reflects

section 464(c)(4) of the HEA, was

inadvertently omitted from the current

Federal Perkins Loan Program

regulations.

The Secretary also amends

§ 674.33(b)(6)(ii) by adding a reference

to a $30 minimum monthly payment

rate for Direct loans. This reference was

inadvertently omitted when the

Secretary published final regulations on

November 30, 1994, that revised the

minimum monthly payment rate

language in this section to reflect the

new $40 rate for Federal Perkins loans

in accordance with the HEA.

Deferment of Repayment—Section

674.34

The Secretary amends § 674.34(h) to

clarify that an institution may not

include the period of the post-deferment

grace period in determining the 10-year

repayment period for a Federal Perkins

loan in accordance with section

464(c)(2)(A)(iv) of the HEA.

Deferment of Repayment—Federal

Perkins Loans Made Before July 1,

1993—Section 674.35, Deferment of

Repayment—Direct Loans Made on or

After October 1, 1980, but Before July 1,

1993—Section 674.36, and Deferment of

Repayment—Direct Loans Made Before

October 1, 1980 and Defense Loans—

Section 674.37

The Secretary amends §§ 674.35,

674.36, and 674.37 to add the hardship

deferment to the list of the qualifying

deferment periods that are not to be

included in the 10-year repayment

period for a Federal Perkins loan. This

change reflects section 464(c)(4) of the

HEA and was inadvertently omitted

from the Federal Perkins Loan Program

regulations.

Collection Procedures—Section 674.45

The Secretary amends

§ 674.45(c)(1)(ii)(A) by eliminating the

phrase ‘‘unless specifically prohibited

by State law,’’ in order to make this

paragraph consistent with section 484A

of the HEA and § 674.45(g). Final

regulations published on November 30,

1994, in accordance with the HEA,

added § 674.45(g), the provisions of

which specifically preempt State

statutes, regulations, or rules that would

hinder satisfaction of requirements that

an institution must carry out in

collecting Federal Perkins loans.

Cancellation Procedures—Section

674.52

The Secretary amends § 674.52(d)(2)

by adding § 674.58 to the crossreferences. This cross-reference, which

reflects the changes made to section

464(c)(2)(A)(iv) of the HEA, was

inadvertently omitted from the Federal
Federal Register / Vol. 62, No. 187 / Friday, September 26, 1997 / Rules and Regulations 50847

Perkins Loan Program regulations. The

addition of a cross-reference to § 674.58

allows a borrower with a loan made on

or after July 1, 1993, to defer repayment

while doing service that qualifies for

cancellation in a Head Start program.

Federal Work-Study Program

There are no major changes to the

FWS Program. However, the Secretary

has made some minor technical changes

as described in the following

paragraphs.

Student Eligibility—Section 675.9

An incorrect cross-reference has been

corrected in paragraph (a) by removing

‘‘34 CFR 668.7,’’ and adding, in its

place, ‘‘34 CFR 668.32.’’

Fiscal Procedures and Records—Section

675.19

An incorrect cross-reference has been

corrected in paragraph (a)(3) by

removing ‘‘§ 668.164,’’ and adding, in its

place, ‘‘§ 668.163.’’

Eligible Employers and General

Conditions and Limitations on

Employment—Section 675.20

The Secretary amends § 675.20(b)(1)

to add the word ‘‘public’’ after the word

‘‘local,’’ and to delete the phrase ‘‘(see

appendix B for a sample agreement)’’ in

paragraph (b)(1). Appendix B was

previously removed from regulations

and is now included in the Federal

Student Financial Aid Handbook

Employment Provided by a Federal,

State, or Local Public Agency, or a

Private Nonprofit Organization—

Section 675.22

The Secretary amends § 675.22 to add

the word ‘‘public’’ after the word

‘‘local’’ in the section heading.

Nature and Source of Institutional

Share—Section 675.27

A typographical error has been

corrected in the authority citation

following the section.

Federal Supplemental Educational

Opportunity Grant Program

There are no major changes to the

FSEOG Program. However, the Secretary

has made some minor technical changes

as described in the following

paragraphs.

Student Eligibility—Section 676.9

An incorrect cross-reference has been

corrected in paragraph (a) by removing

‘‘34 CFR 668.7,’’ and adding, in its

place, ‘‘34 CFR 668.32.’’

Fiscal Procedures and Records—Section

676.19

An incorrect cross-reference has been

corrected in paragraph (a)(2) by

removing ‘‘§ 668.164,’’ and adding, in its

place, ‘‘§ 668.163.’’

Paperwork Reduction Act of 1995

These regulations have been

examined under the Paperwork

Reduction Act of 1995 and have been

found to contain no information

collection requirements.

Regulatory Flexibility Act Certification

The Secretary certifies that these

regulations would not have a significant

economic impact on a substantial

number of small entities. The small

entities affected by these regulations are

small institutions of higher education.

These regulations contain technical

amendments that correct current

regulations.

The changes will not have a

significant economic impact on the

institutions affected.

Waiver of Proposed Rulemaking

In accordance with the

Administrative Procedure Act, 5 U.S.C.

553, it is the practice of the Secretary to

offer interested parties the opportunity

to comment on proposed regulations.

However, the regulatory changes in this

document are necessary to correct minor

technical errors, to implement

mandatory statutory provisions, and to

correct omissions in the campus-based

programs existing regulations. The

changes in this document do not

establish any new policies. Therefore,

the Secretary has determined that

publication of a proposed rule is

unnecessary and contrary to the public

interest under 5 U.S.C. 553(b)(B).

Intergovernmental Review

The Federal Supplemental

Educational Opportunity Grant program

is subject to the requirements of

Executive Order 12372 and the

regulations in 34 CFR part 79. The

objective of the Executive order is to

foster an intergovernmental partnership

and a strengthened federalism by

relying on processes developed by State

and local governments for coordination

and review of proposed Federal

financial assistance.

In accordance with the order, this

document is intended to provide early

notification of the Department’s specific

plans and actions for this program.

The Federal Perkins Loan and Federal

Work-Study programs are not subject to

the requirements of Executive Order

12372 and the regulations in 34 CFR

part 79.

Assessment of Educational Impact

Based on its own review, the

Department has determined that the

regulations in this document would not

require transmission of information that

is being gathered by or is available from

any other agency or authority of the

United States.

List of Subjects

34 CFR Part 674

Loan programs—education, Student

aid, Reporting and recordkeeping

requirements.

34 CFR Part 675

Colleges and universities,

Employment, Grant programs—

education, Student aid, Reporting and

recordkeeping requirements.

34 CFR Part 676

Grant programs—education, Student

aid, Reporting and recordkeeping

requirements.

Dated: September 23, 1997.

Richard W. Riley,

Secretary of Education.

(Catalog of Federal Domestic Assistance

Numbers: 84.007 Federal Supplemental

Educational Opportunity Grant Program;

84.033 Federal Work-Study Program; and

84.038 Federal Perkins Loan Program)

The Secretary amends parts 674, 675,

and 676 of Title 34 of the Code of

Federal Regulations as follows:

PART 674—FEDERAL PERKINS LOAN

PROGRAM

1. The authority citation for part 674

continues to read as follows:

Authority: 20 U.S.C. 1087aa–1087hh and

20 U.S.C. 421–429, unless otherwise noted.

§ 674.6 [Amended]

2. Section 674.6 is amended by

removing the semicolon at the end of

paragraph (a)(1) and adding, in its place,

‘‘, or’’; by removing ‘‘; or’’ at the end of

paragraph (a)(2) and by adding, in its

place, a period; and by removing

paragraph (a)(3).

§ 674.9 [Amended]

3. Section 674.9(a) is amended by

removing ‘‘34 CFR 668.7’’ and by

adding, in its place, ‘‘34 CFR 668.32’’.

§ 674.19 [Amended]

4. Section 674.19(b) is amended by

removing ‘‘§ 668.164’’ and adding, in its

place, ‘‘§ 668.163’’.

5. Section 674.31(b)(2)(i)(D) is revised

to read as follows:

§ 674.31 Promissory note.

* * * * *
50848 Federal Register / Vol. 62, No. 187 / Friday, September 26, 1997 / Rules and Regulations

(b) * * *

(2) * * *

(i) * * *

(D) May vary because of minimum

monthly repayments (see § 674.33(b)),

extensions of repayment (see

§ 674.33(c)), forbearance (see

§ 674.33(d)), or deferments (see

§§ 674.34, 674.35, and 674.36);

* * * * *

6. Section 674.33 is amended by

adding ‘‘for a Direct Loan or’’ after

‘‘$30’’ in paragraph (b)(6)(ii), and by

adding a new paragraph (d)(8) to read as

follows:

§ 674.33 Repayment.

* * * * *

(d) * * *

(8) The institution may not include

the periods of forbearance described in

this paragraph in determining the 10-

year repayment period.

* * * * *

7. Section 674.34(h) is revised to read

as follows:

§ 674.34 Deferment of repayment—Federal

Perkins loans and Direct loans made on or

after July 1, 1993.

* * * * *

(h) The institution may not include

the deferment periods described in

paragraphs (b), (c), (d), (e), (f), and (g) of

this section and the period described in

paragraph (i) of this section in

determining the 10-year repayment

period.

* * * * *

8. Section 674.35 is amended by

removing ‘‘(see § 674.56)’’ in paragraph

(c)(1) and adding, in its place, ‘‘(see

§ 674.59)’’; by removing ‘‘(see § 674.57)’’

in paragraphs (c)(3) and (4) and adding,

in its place, ‘‘(see § 674.60)’’; by

removing paragraph (g); by

redesignating paragraph (i) as paragraph

(g); by redesignating paragraph (h) as

paragraph (i); and by adding a new

paragraph (h) to read as follows:

§ 674.35 Deferment of repayment—Federal

Perkins loans made before July 1, 1993.

* * * * *

(h) The institution may not include

the deferment periods described in

paragraphs (b), (c), (d), (e), (f), and (g) of

this section and the period described in

paragraph (i) of this section when

determining the 10-year repayment

period.

* * * * *

§ 674.36 [Amended]

9. Section 674.36 is amended by

removing ‘‘(see § 674.56)’’ in paragraph

(c)(1) and adding, in its place, ‘‘(see

§ 674.59)’’; by adding ‘‘(see § 674.60)’’

before the semicolon in paragraphs

(c)(2) and (c)(3); and by removing ‘‘and’’

after ‘‘(c),’’ and adding ‘‘, and (e)’’ after

‘‘(d)’’ in paragraph (f).

§ 674.37 [Amended]

10. Section 674.37 is amended by

removing ‘‘(see § 674.56)’’ in paragraph

(c)(1) and adding in its place ‘‘(see

§ 674.59)’’; by adding ‘‘(see § 674.60)’’

before the semicolon in paragraph (c)(2)

and before the period in paragraph

(c)(3); and by removing ‘‘and (c)’’ after

‘‘(b)’’ and adding, in its place, ‘‘, (c), and

(e)’’ in paragraph (d).

§ 674.45 [Amended]

11. Section 674.45(c)(1)(ii)(A) is

amended by removing ‘‘, unless

specifically prohibited by State law,’’

after ‘‘shall’’.

§ 674.52 [Amended]

12. Section 674.52(d)(2) is amended

by removing ‘‘or’’ before ‘‘674.57’’ and

by adding ‘‘, or 674.58’’ after ‘‘674.57’’.

PART 675—FEDERAL WORK-STUDY

PROGRAMS

13. The authority citation for part 675

continues to read as follows:

Authority: 42 U.S.C. 2751–2756b, unless

otherwise noted.

§ 675.9 [Amended]

14. Section 675.9(a) is amended by

removing ‘‘34 CFR 668.7’’ and adding,

in its place, ‘‘34 CFR 668.32’’.

§ 675.19 [Amended]

15. Section 675.19(a)(3) is amended

by removing ‘‘§ 668.164’’ and adding, in

its place, ‘‘§ 668.163’’.

§ 675.20 [Amended]

16. Section 675.20(b)(1) is amended

by adding ‘‘public’’ after ‘‘local’’ in the

first sentence and by removing in the

second sentence ‘‘(see Appendix B for a

sample agreement)’’.

§ 675.22 [Amended]

17. Section 675.22 is amended by

adding in the heading ‘‘public’’ after

‘‘local’’.

§ 675.27 [Amended]

18. Section 675.27 is amended by

revising the authority citation following

the section to read as follows:

(Authority: 42 U.S.C. 2754)

PART 676—FEDERAL

SUPPLEMENTAL EDUCATIONAL

OPPORTUNITY GRANT PROGRAM

19. The authority citation for part 676

continues to read as follows:

Authority: 20 U.S.C. 1070b–1070b–3,

unless otherwise noted.

§ 676.9 [Amended]

20. Section 676.9(a) is amended by

removing ‘‘34 CFR 668.7’’ and adding,

in its place, ‘‘34 CFR 668.32’’.

§ 676.19 [Amended]

21. Section 676.19(a)(2) is amended

by removing ‘‘§ 668.164’’ and adding, in

its place, ‘‘§ 668.163’’.

[FR Doc. 97–25658 Filed 9–25–97; 8:45 am]

BILLING CODE 4000–01–P