[Federal Register Volume 63, Number 144 (Tuesday, July 28, 1998)]
[Rules and Regulations]
[Pages 40348-40349]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20124]



[[Page 40347]]

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Part IV





Department of Education





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34 CFR Part 668



Student Assistance General Provisions; Final Rule

Federal Register / Vol. 63, No. 144 / Tuesday, July 28, 1998 / Rules 
and Regulations

[[Page 40348]]



DEPARTMENT OF EDUCATION

34 CFR Part 668


Student Assistance General Provisions

AGENCY: Department of Education.

ACTION: Final regulations.

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SUMMARY: The Secretary amends the Student Assistance General Provisions 
regulations. These technical amendments are necessary to correct 
citations and typographical errors, to clarify regulatory language, and 
to add Office of Management and Budget control numbers.

EFFECTIVE DATE: These regulations take effect July 1, 1998.

FOR FURTHER INFORMATION CONTACT: John Kolotos or Lloyd Horwich, U.S. 
Department of Education, 7th and D Streets, SW, Regional Office 
Building 3, Room 3045, Washington, DC 20202-5345. Telephone: (202) 708-
8242. 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.
    Individuals with disabilities may obtain this document in an 
alternate format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed in the preceding 
paragraph.

SUPPLEMENTARY INFORMATION: The following regulations are amended to 
correct citations and typographical errors and to clarify regulatory 
language in the text of the Student Assistance General Provisions 
regulations, 34 CFR Part 668.
    Sections 668.172 and 668.173 are amended to clarify regulatory 
language explaining the general standards of financial responsibility. 
Sections 668.174 and 668.175 are amended to correct certain citations 
to other sections.
    Section 668.174 also is amended to correct typographical errors 
concerning the percentage of ownership necessary for a person or entity 
to be considered to exercise substantial control over an institution 
that receives funds under title IV of the Higher Education Act of 1965, 
as amended, or over a third-party servicer to such an institution.
    Final regulations for Secs. 668.171, 668.172, 668.174, and 668.175 
were published on November 25, 1997 (62 FR 62830). Compliance with 
information collection requirements in these sections was subject to 
Office of Management and Budget (OMB) approval and assignment of an OMB 
control number. OMB assigned a control number on January 20, 1998. 
Publication of the control number in these final regulations notifies 
the public that OMB has approved these information collection 
requirements under the Paperwork Reduction Act of 1995.
    Appendix G to Part 668 is amended to clarify the definition of an 
accounting term used in calculating an institution's Primary Reserve 
Ratio.

Waiver of Proposed Rulemaking

    In accordance with the Administrative Procedure Act, 5 U.S.C. 553, 
it is the Secretary's practice to offer interested parties the 
opportunity to comment on proposed regulations. However, the regulatory 
changes in this document are necessary to add OMB control numbers and 
correct minor technical errors and omissions in the Student Assistance 
General Provisions regulations, 34 CFR 668. They do not establish any 
new substantive rules. 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).

Regulatory Flexibility Act Certification

    The Secretary certifies that these final regulations will not have 
significant economic impact on a substantial number of small entities. 
Small entities affected by these regulations are small institutions of 
higher education. These regulations contain technical amendments 
designed to clarify and correct current regulations. The changes will 
not have a significant economic impact on any of the institutions 
affected.

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.

Assessment of Educational Impact

    Based on its own review, the Department has determined that the 
regulations in this document do not require transmission of information 
that is being gathered by or is available from any other agency or 
authority of the United States.

Electronic Access to This Document

    Anyone may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or 
portable document format (pdf) on the World Wide Web at either of the 
following sites:

http://ocfo.ed.gov/fedreg.htm
http://www.ed.gpv/news.html

To use the pdf you must have the Adobe Acrobat Reader Program with 
Search, which is available free at either of the previous sites. If you 
have questions about using the pdf, call the U.S. Government Printing 
Office toll free at 1-888-293-6498.

List of Subjects in 34 CFR Part 668

    Administrative practice and procedure, Colleges and universities, 
Student aid, Reporting and recordkeeping requirements.

    Dated: July 20, 1998.
David A. Longanecker,
Assistant Secretary for Postsecondary Education.

    The Secretary amends Part 668 of Title 34 of the Code of Federal 
Regulations as follows:

PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS

    1. The authority citation for Part 668 continues to read as 
follows:

    Authority: 20 U.S.C. 1085, 1088, 1091, 1092, 1094, 1099c, and 
1141, unless otherwise noted.


Secs. 668.171, 668.172, 668.174, 668.175  [Amended]

    2. Sections 668.171, 668.172, 668.174, and 668.175 are amended by 
adding the OMB control number following the sections to read as 
follows: ``(Approved by Office of Management and Budget under control 
number 1840-0537)''.


Sec. 668.172  [Amended]

    3. Section 668.172 is amended by removing ``Primary Reserve ratio'' 
and adding in its place ``ratio calculations'' in paragraph (c)(5)(ii).
    4. Section 668.173 is amended by revising paragraph (b) to read as 
follows:


Sec. 668.173  Refund reserve standards.

* * * * *
    (b) Timely refunds. An institution demonstrates that it makes 
required refunds within the time permitted under Sec. 668.22(j)(4) if 
the auditor(s) who conducted the institution's compliance audits for 
the institution's two most recently completed fiscal years, or the 
Secretary or a State or guaranty agency that conducted a review of the 
institution covering those fiscal years--
    (1) Finds in the sample of student records audited or reviewed for 
each of those fiscal years that--
    (i) Less than five percent of the refunds that the institution made 
within that sample were late (for purposes of determining the 
percentage of late refunds under this paragraph, the auditor or 
reviewer must include in the

[[Page 40349]]

sample only those title IV, HEA program recipients who received or 
should have received a refund under Sec. 668.22); or
    (ii) The institution made only one late refund within that sample 
(regardless of the percentage of the refunds within that sample 
represented by the one late refund); and
    (2) Did not note for either of those fiscal years a material 
weakness or a reportable condition in the institution's report on 
internal controls that is related to refunds.
* * * * *


Sec. 668.174  [Amended]

    5. Section 668.174 is amended by removing ``20 percent ownership'' 
and adding in its place ``25 percent ownership'' in paragraphs 
(c)(3)(i), (ii), (iii) and (iv)(B).
    6. Section 668.174 is amended by adding ``a general partner'' after 
``board of directors'' in paragraph (c)(3)(iv) introductory text.


Sec. 668.175  [Amended]

    7. Section 668.175 is amended by removing ``668.174(d)'' and adding 
in its place ``668.174(b)(1) and (c)'' in paragraphs (f)(3)(i) and 
(ii).
    8. Section 668.175 is amended by removing the semicolon and 
inserting ``, except that this requirement does not apply to a public 
institution;'' at the end of paragraph (f)(2)(i).
    9. Section 668.175 is amended by removing ``668.174(d)'' and adding 
in place ``668.174(b)(1) and (c)'' and by removing 
``668.174(c)(2)(ii)'' and adding in its place ``668.174(b)(2)(ii)'' in 
paragraph (g)(1)(i)(A).
    10. Section 668.175 is amended by removing ``668.171(b) and (d)'' 
and adding in its place ``668.171(b) and (d)(1)'' in paragraph 
(g)(1)(ii).

Appendix G--[Amended]

    11. Appendix G, Section 1, to Part 668 is amended by inserting
    ``--(unsecured related-party receiv- ables)'' at the end of the 
definition of Expendable Net Assets.

[FR Doc. 98-20124 Filed 7-27-98; 8:45 am]
BILLING CODE 4000-01-P