40622 Federal Register / Vol. 63, No. 145 /Wednesday, July 29, 1998 /Rules and Regulations

DEPARTMENT OF EDUCATION

34 CFR Parts 600 and 668

RIN 1840–AC47

Institutional Eligibility; Student

Assistance General Provisions

AGENCY: Department of Education.

ACTION: Final Regulations.

SUMMARY: The Secretary amends the

Institutional Eligibility and Student

Assistance General Provisions

regulations. These technical

amendments are necessary to correct

cross-references, delete references to

programs that are no longer funded, and

make a number of nomenclature

changes that provide the correct names

of various Title IV, HEA programs.

EFFECTIVE DATE: These regulations take

effect July 29, 1998.

FOR FURTHER INFORMATION CONTACT:

Lorraine Kennedy, U.S. Department of

Education, 600 Independence Avenue,

SW, Regional Office Building 3, Room

3045, Washington, D.C. 20202–5451.

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 persons listed in

the preceding paragraph.

SUPPLEMENTARY INFORMATION: The

Institutional Eligibility regulations, 34

CFR part 600, and the Student

Assistance General Provisions

regulations, 34 CFR part 668 are

amended to clarify regulations, and to

correct errors and omissions.

All references to Income Contingent

Loan (ICL), State Postsecondary Review

Entity (SPRE), and Presidential Access

Scholarship (PAS) throughout 34 CFR

parts 600 and 668 have been removed

because the ICL program was eliminated

and the other two programs were not

funded.

References to the name of the Direct

Loan Program under 34 CFR parts 600

and 668 have been changed to conform

to the program names set fourth in the

William D. Ford Federal Direct Loan

(Direct Loan) Program regulations, 34

CFR part 685. As required, under 34

CFR part 685 and appropriate sections

throughout the regulations, other

conforming changes have been made to

incorporate the Direct Loan Program.

All references to § 668.7 have been

removed and replaced with references

to the correct sections in Subpart C of

the Student Assistance General

Provisions in accordance with the

regulations that were published in the

Federal Register on December 1, 1995.

These regulations change current

Student Right-to-Know (SRK)

regulations by incorporating some

technical corrections to the December 1,

1995 SRK regulations; these changes are

made to reflect statutory provisions

omitted in the December 1, 1995 SRK

regulations. Other changes being made

in these regulations reflect recent

statutory changes to the SRK provisions

of the Higher Education Act of 1965, as

amended (HEA); these recent statutory

changes were made to the HEA by

Pub.L. 105–18 entitled ‘‘1997

Emergency Supplemental

Appropriations Act for Recovery From

Natural Disasters, and for Overseas

Peacekeeping Efforts, Including Those

in Bosnia.’’

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 correct minor technical errors

and omissions in the Institutional

Eligibility regulations, 34 CFR part 600

and the Student Assistance General

Provisions regulations, 34 CFR part 668.

The changes in this document 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). For

the reasons stated, the Secretary also

waives the delayed effective date under

5 U.S.C. 553(d).

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 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.gov/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 Parts 600 and

668

Administrative practice and

procedure, Colleges and universities,

Consumer protection, Education, Grant

programs—education, Reporting and

recordkeeping requirements, Student

aid.

Dated: July 21, 1998.

David A. Longanecker,

Assistant Secretary for Postsecondary

Education.

The Secretary amends Parts 600 and

668 of Title 34 of the Code of Federal

Regulations as follows:

PART 600—INSTITUTIONAL

ELIGIBILITY UNDER THE HIGHER

EDUCATION ACT OF 1965, AS

AMENDED

1. The authority citation for part 600

continues to read as follows:

Authority: 20 U.S.C. 1088, 1091, 1094,

1099b. 1099c, and 1141, unless otherwise

noted.

§ 600.2 [Amended]

2. Section 600.2 is amended by

capitalizing the ‘‘P’’ in the definition of

‘‘Federal Family Education Loan (FFEL)

programs’’.

§ 600.9 [Amended]

3. Section 600.9(b)(2)(ii) is amended

by removing ‘‘or SPRE,’’.

§ 600.40 [Amended]

4. Section 600.40 is amended by

adding the word ‘‘or’’ at the end of

paragraph (a)(1)(iv)(A), removing ‘‘; or’’

at the end of paragraph (a)(1)(iv)(B) and

adding a period in its place, and

removing paragraph (a)(1)(iv)(C).
Federal Register / Vol. 63, No. 145 /Wednesday, July 29, 1998 /Rules and Regulations 40623

§ 600.41 [Amended]

5. Section 600.41 is amended by

adding the word ‘‘or’’ at the end of

paragraph (a)(1)(ii)(F), removing the

word ‘‘or’’ at the end of paragraph

(a)(1)(ii)(G), removing paragraph

(a)(1)(ii)(H), and removing paragraph

(e)(3).

§ 600.55 [Amended]

6. Section 600.55 is amended by

removing ‘‘668.7(a)(4)(i) through (iii)’’

from paragraph (a)(5)(i)(A) and adding,

in its place, ‘‘668.33’’.

PART 668—STUDENT ASSISTANCE

GENERAL PROVISIONS

7. 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.

8. Section 668.1 is amended by

removing paragraphs (c)(3), (c)(7), and

(c)(11); redesignating paragraphs (c)(4),

(5), (6), (8), (9), (10), and (12) as

paragraphs (c)(3), (4), (5), (6), (7), (8),

and (10), respectively; and adding a new

paragraph (c)(9) to read as follows:

§ 668.1 Scope.

* * * * *

(c) * * *

(9) The William D. Ford Federal

Direct Loan (Direct Loan) Program (20

U.S.C. 1087a et seq.; 34 CFR part 685);

and

* * * * *

9. Section 668.2(b) is amended by

removing the definitions of ‘‘Direct

loan,’’ ‘‘Federal Direct PLUS loan,’’

‘‘Federal Direct Stafford loan,’’ ‘‘Federal

Direct Student loan,’’ ‘‘Federal Direct

Student Loan (FDSL) Program,’’

‘‘Income Contingent Loan (ICL)

program,’’ ‘‘Payment period,’’ and

‘‘Presidential Access Scholarship (PAS)

program’’ and the authority citations

following the definitions; by removing

‘‘while they were students’’, and by

adding ‘‘Federal Consolidation Loan,’’

after ‘‘(as in effect before October 17,

1986),’’ the first time it appears in the

definition of ‘‘Federal Consolidation

Loan program’’; removing the word

‘‘natural’’ in the definition of ‘‘Parent’’

and adding, in its place, the word

‘‘biological’’; removing ‘‘and in 34 CFR

691.2 for purposes of the PAS Program’’

in the definitions of ‘‘Valid institutional

student information report (valid ISIR)’’

and ‘‘Valid student aid report (valid

SAR)’’; and adding new definitions for

‘‘Direct Loan Program loan,’’ ‘‘Direct

PLUS Loan,’’ ‘‘Direct Subsidized Loan,’’

‘‘Direct Unsubsidized Loan,’’ ‘‘Federal

Direct PLUS Program,’’ ‘‘Federal Direct

Stafford/Ford Loan Program,’’ ‘‘Federal

Direct Unsubsidized Stafford/Ford Loan

Program,’’ ‘‘William D. Ford Federal

Direct Loan (Direct Loan) Program’’ and

authority citations following the

definitions in alphabetical order to read

as follows:

§ 668.2 General definitions.

* * * * *

(b) * * *

Direct Loan Program loan: A loan

made under the William D. Ford Federal

Direct Loan Program.

(Authority: 20 U.S.C. 1087a et seq.)

Direct PLUS Loan: A loan made under

the Federal Direct PLUS Program.

(Authority: 20 U.S.C. 1078–2 and 1087a et

seq.)

Direct Subsidized Loan: A loan made

under the Federal Direct Stafford/Ford

Loan Program.

(Authority: 20 U.S.C. 1071 and 1087a et seq.)

Direct Unsubsidized Loan: A loan

made under the Federal Direct

Unsubsidized Stafford/Ford Loan

Program.

(Authority: 20 U.S.C. 1087a et seq.)

* * * * *

Federal Direct PLUS Program: A loan

program authorized by Title IV, Part D

of the HEA that is one of the

components of the Direct Loan Program.

The Federal Direct PLUS Program

provides loans to parents of dependent

students attending schools that

participate in the Direct Loan Program.

The borrower is responsible for the

interest that accrues during any period.

(Authority: 20 U.S.C. 10782 and 1087a et

seq.)

Federal Direct Stafford/Ford Loan

Program: A loan program authorized by

Title IV, Part D of the HEA that is one

of the components of the Direct Loan

Program. The Federal Direct Stafford/

Ford Loan Program provides loans to

undergraduate, graduate, and

professional students attending schools

that participate in the Direct Loan

Program. The Secretary subsidizes the

interest while the borrower is in an inschool, grace, or deferment period.

(Authority: 20 U.S.C. 1071 and 1087a et seq.)

Federal Direct Unsubsidized Stafford/

Ford Loan Program: A loan program

authorized by Title IV, Part D of the

HEA that is one of the components of

the Direct Loan Program. The Federal

Direct Unsubsidized Stafford/Ford Loan

Program provides loans to

undergraduate, graduate, and

professional students attending schools

that participate in the Direct Loan

Program. The borrower is responsible

for the interest that accrues during any

period.

(Authority: 20 U.S.C. 1087a et seq.)

* * * * *

William D. Ford Federal Direct Loan

(Direct Loan) Program: The loan

program authorized by Title IV, Part D

of the HEA.

(Authority: 20 U.S.C. 1087a et seq.)

§ 668.8 [Amended]

10. Section 668.8(d)(3) is amended by

removing ‘‘Federal Stafford Loan,

Federal PLUS, and Federal SLS’’ and

adding, in its place, ‘‘FFEL and Direct

Loan’’.

§ 668.13 [Amended]

11. Section 668.13 is amended by

removing ‘‘the FDSL Program, or the

Federal Stafford Loan, Federal SLS, or

Federal PLUS Program’’ and adding, in

its place, ‘‘the Direct Loan Program, or

the FFEL Program,’’ in paragraph

(a)(4)(i) introductory text; and removing

‘‘(f)(1)’’ and adding, in its place, ‘‘(d)(1)’’

in paragraph (d)(2)(i).

12. Section 668.14 is amended by

removing paragraph (b)(4)(ii);

redesignating paragraphs (b)(4)(iii)

through (vi), as (b)(4)(ii) through (v),

respectively; removing ‘‘Federal Stafford

Loan, Federal PLUS, and Federal SLS’’

and adding, in its place, ‘‘Federal

Stafford Loan and Federal PLUS’’ in

redesignated paragraph (b)(4)(ii);

removing ‘‘Federal SLS,’’ in paragraph

(b)(7); removing ‘‘Federal Stafford Loan,

Federal PLUS, and Federal SLS’’ and

adding, in its place, ‘‘Federal Stafford

Loan and Federal PLUS’’ in paragraph

(b)(15); removing ‘‘State postsecondary

review entities designated under 34 CFR

part 667,’’ in paragraph (b)(17);

removing ‘‘, State postsecondary review

entities designated under 34 CFR part

667,’’ in paragraph (b)(23); and revising

paragraphs (b)(8), (11), and (16) to read

as follows:

§ 668.14 Program participation agreement.

* * * * *

(b) * * *

(8) It will not provide any statement

to any student or certification to any

lender in the case of an FFEL Program

loan, or origination record to the

Secretary in the case of a Direct Loan

Program loan that qualifies the student

or parent for a loan or loans in excess

of the amount that the student or parent

is eligible to borrow in accordance with

sections 425(a), 428(a)(2), 428(b)(1)(A)

and (B), 428B, 428H, and 455(a) of the

HEA;

* * * * *

(11) In the case of an institution

participating in the FFEL program, the
40624 Federal Register / Vol. 63, No. 145 /Wednesday, July 29, 1998 /Rules and Regulations

institution will inform all eligible

borrowers, as defined in 34 CFR part

682, enrolled in the institution about the

availability and eligibility of those

borrowers for State grant assistance from

the State in which the institution is

located, and will inform borrowers from

another State of the source of further

information concerning State grant

assistance from that State;

* * * * *

(16) In the case an institution that

changes ownership that results in a

change of control, or that changes its

status as a main campus, branch

campus, or an additional location, the

institution will, to participate in the

FFEL Program, develop a default

management plan for approval by the

Secretary and implement the plan for at

least two years after the change in

control or status;

* * * * *

13. In § 668.16, paragraph (e)(2)(i) is

amended by removing ‘‘668.7(c)’’ and

adding, in its place, ‘‘668.34’’; paragraph

(j)(1) is amended by removing ‘‘State

postsecondary review entities

designated under 34 CFR part 667,’’;

and paragraph (m)(1) introductory text

and (m)(1)(i) and the authority citation

are revised to read as follows:

§ 668.16 Standards of administrative

capability.

* * * * *

(m)(1) Has an FFEL Program cohort

default rate, a Direct Loan cohort rate,

or where applicable, a weighted average

cohort rate—

(i) As defined in § 668.17, that is less

than 25 percent for each of the three

most recent fiscal years for which the

Secretary has determined the

institution’s rate; and

* * * * *

(Authority: 20 U.S.C. 1082, 1985, 1094, and

1099c)

14. Section 668.19 is amended by

removing ‘‘Federal Direct Stafford

Loan’’ and adding, in its place, ‘‘Direct

Subsidized Loan or Direct Unsubsidized

Loan’’ and by removing ‘‘Federal Direct

PLUS’’ and adding, in its place, ‘‘Direct

PLUS Loan’’ in paragraph (a)(3)(iv);

removing ‘‘Federal Direct Stafford

Loan’’ and adding, in its place, ‘‘Direct

Subsidized or Direct Subsidized Loan’’

in paragraph (a)(3)(v); and by removing

‘‘Federal Direct PLUS’’ and adding, in

its place, ‘‘Direct PLUS Loan’’ in

paragraph (a)(3)(vi).

15. Section 668.20 is amended by

revising paragraph (c) introductory text

and paragraph (d)(2) to read as follows:

§ 668.20 Limitations on remedial

coursework that is eligible for Title IV, HEA

program assistance.

* * * * *

(c) In determining a student’s

enrollment status under the Title IV,

HEA programs or a student’s cost of

attendance under the campus-based,

FFEL, and Direct Loan programs, an

institution may not take into account

any noncredit or reduced credit

remedial course if—

* * * * *

(d) * * *

(2) A student’s cost of attendance

under the campus-based, FFEL, and

Direct Loan programs.

* * * * *

§ 668.21 [Amended]

16. Section 668.21 is amended by

removing ‘‘Pell Grant, SEOG, ICL, and’’

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

place, ‘‘Federal Pell Grant, FSEOG, and

Federal’’.

17. Section 668.22 is amended by

revising paragraph (c)(2)(ii); removing

‘‘Federal Stafford loan, Federal PLUS,

Federal SLS, Federal Direct Stafford, or

Federal Direct PLUS Program’’ in

paragraphs (f)(1)(ii), (g)(3)(ii) and (h)(1),

and adding, in its place, ‘‘FFEL, or

Direct Loan Program’; removing

‘‘unsubsidized Federal Direct Stafford

loans’’ in paragraph (h)(1)(iv), and

adding, in its place, ‘‘Direct

Unsubsidized Loans’’; removing

‘‘subsidized Federal Direct Stafford

loans’’ in paragraph (h)(1)(v), and

adding, in its place ‘‘Direct Subsidized

Loans’’; removing ‘‘Federal’’ and

capitalizing ‘‘L’’ in ‘‘loans’’ in paragraph

(h)(i)(vi); removing ‘‘Federal Stafford

Loan, Federal PLUS, Federal SLS,

Federal Direct Stafford Loan or Federal

Direct PLUS’’ in paragraph (h)(2)(ii),

and adding, in its place ‘‘FFEL or Direct

Loan’’; removing ‘‘Federal Stafford

Loan, Federal PLUS, Federal SLS

Program, Federal Direct Stafford, or

Federal Direct PLUS’’ in paragraph

(f)(2)(i), and adding, in its place ‘‘FFEL,

or Direct Loan Program’’; revising

paragraph (g)(2)(ii)(B); removing

‘‘Federal PLUS, Federal SLS’’ in

paragraph (h)(2)(iii), and adding, in its

place, ‘‘and Federal PLUS’’; and

removing ‘‘Federal Stafford Loan,

Federal PLUS, and Federal SLS’’ in

paragraph (h)(2)(iv), and adding, in its

place, ‘‘and FFEL’’; removing ‘‘Federal

Stafford Loan, Federal PLUS, Federal

SLS, Federal Direct Stafford, and

Federal Direct PLUS programs’’ in

paragraph (h)(2)(v), and adding, in its

place, ‘‘FFEL, and Direct Loan

Programs’’; removing ‘‘Federal Direct

PLUS loans’’ in paragraph (i), and

adding, in its place, ‘‘Direct PLUS

Loans’’ to read as follows:

§ 668.22 Institutional refunds and

repayments.

* * * * *

(c) * * *

(2) * * *

(ii) Late disbursements of loans made

under the FFEL and Direct Loan

Programs in accordance with 34 CFR

682.207(d) and 34 CFR 685.303(d),

respectively; and

* * * * *

(g) * * *

(2) * * *

(ii) * * *

(B) Late disbursements of loans made

under the FFEL and Direct Loan

programs in accordance with 34 CFR

682.207(d) and 34 CFR 685.303(d),

respectively; and

* * * * *

§ 668.25 [Amended]

18. Section 668.25 is amended by

removing ‘‘or Federal SLS’’ in paragraph

(c)(4); and removing ‘‘, Federal PLUS,

and Federal SLS’’ in paragraph (c)(4)(ii),

and adding, in its place, ‘‘and Federal

PLUS’’.

§ 668.26 [Amended]

19. Section 668.26 is amended by

removing ‘‘or FDSL’’ in paragraph (b)(4);

removing ‘‘and ICL’’ in paragraph (b)(6);

removing ‘‘and Federal SLS’’ in

paragraph (c)(2); removing ‘‘Federal

Stafford or Federal SLS’’ both times it

appears in paragraph (d)(2) introductory

text and adding, in its place, ‘‘Federal

Family Education Loan Programs’’;

removing ‘‘deliver’’ in paragraph (d)(3)

introductory text, and adding, in its

place, ‘‘disburse’’; removing

‘‘disbursement of a’’ in paragraph (d)(3);

removing ‘‘FDSL’’ in paragraphs (d)(3)

introductory text and (d)(3)(i), and

adding, in its place, ‘‘Direct Loan’’;

removing ‘‘Federal Direct Student’’ in

paragraph (d)(3) introductory text, and

adding, in its place, ‘‘Direct Loan

Program’’.

§ 668.32 [Amended]

20. Section 668.32 is amended by

removing ‘‘, FSEOG, and SSIG’’ and

adding, in its place ‘‘and FSEOG’’ in

paragraph (c)(1); and by removing

‘‘Student’’ and adding ‘‘William D.

Ford’’ before ‘‘Federal’’ in paragraph

(k)(5).

21. Section 668.42 is amended by

revising paragraph (b) introductory text

to read as follows:

§ 668.42 Preparation and dissemination of

materials.

* * * * *
Federal Register / Vol. 63, No. 145 /Wednesday, July 29, 1998 /Rules and Regulations 40625

(b) Make those materials available to

the student through appropriate

publications and mailings before the

student enters into a financial obligation

with the institution, to—

* * * * *

§ 668.43 [Amended]

22. Section 668.43(c)(6) is amended

by removing ‘‘34 CFR 685.303’’ and

adding, in its place, ‘‘34 CFR 685.304’’;

by removing ‘‘Student’’; by adding

‘‘William D. Ford’’ before ‘‘Federal

Direct’’; and by removing ‘‘and Federal

SLS programs’’ and adding, in its place,

‘‘Program’’.

§ 668.46 [Amended]

23. Section 668.46 is amended by

removing ‘‘July 1, 1996’’ in paragraph

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

‘‘September 1, 1996’’; removing ‘‘July

1st of one year and June 30th’’ in

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

place, ‘‘September 1 of one year and

August 31’’; removing ‘‘July 1, 1996 and

June 30, 1997’’ in paragraph (a)(5)(i),

and adding, in its place, ‘‘September 1,

1996 and August 31, 1997’’; and

removing ‘‘June 30’’ in paragraph

(a)(5)(ii), and adding, in its place,

‘‘August 31’’.

§ 668.46 [Amended]

24. The heading of the note following

§ 668.48 is corrected to read ‘‘Note to

paragraph (c)’’.

25. Section 668.49 is amended by

adding ‘‘, categorized by race and

gender’’ before the period at the end of

paragraph (a)(1)(iii); adding a new

paragraph (a)(1)(vi); removing ‘‘and (c)’’

in paragraph (b), and adding, in its

place, ‘‘, (c), and (d)’’; and revising

paragraph (d) to read as follows:

§ 668.49 Report on completion and

graduation rates for student-athletes.

(a) * * *

(1) * * *

(vi) The average completion or

graduation rate and transfer-out rate of

the four most recent classes of entering

students described in § 668.46 (a)(2), (3),

and (4) who received athletically-related

student aid, categorized by race and

gender within each sport. If an

institution has completion or graduation

rates and transfer-out rates for fewer

than four of those classes, it shall

disclose the average rate of those classes

for which it has rates.

* * * * *

(d) The provisions of § 668.46(e)

apply for purposes of this section.

§ 668.51 [Amended]

26. Section 668.51(a) is amended by

removing ‘‘Federal Direct Student Loan

(FDSL)’’ and adding, in its place,

‘‘Federal Direct Stafford/Ford Loan

programs’’.

§ 668.54 [Amended]

27. Section 668.54 is amended by

removing ‘‘Student’’ in paragraph

(a)(2)(i), and adding, in its place

‘‘Stafford/Ford’.

§ 668.55 [Amended]

28. Section 668.55 is amended by

removing ‘‘FDSL, or’’ in paragraph (c),

and adding, in its place ‘‘or Federal

Direct Stafford/Ford Loan’; removing

the comma after the word ‘‘Grant’’ and

adding, in its place ‘‘or’’ in paragraph

(c)(1); removing ‘‘FDSL or program’’ in

paragraph (c)(1); and adding ‘‘, or

originating a Direct Subsidized Loan’’

after the word ‘‘application’’ in

paragraph (c)(1); removing the comma

after the word ‘‘Grant’’ and adding, in

its place ‘‘or’’ in paragraph (c)(2);

removing ‘‘FDSL, or program’’ after the

word ‘‘campus-based’’ in paragraph

(c)(2); removing ‘‘or William D. Ford

Federal Direct Loan application’’ and

adding, in its place ‘‘application or

previously originated Direct Subsidized

Loan’’ in paragraph (c)(2); and adding

‘‘If the institution has previously

originated a Direct Subsidized Loan for

a borrower, the school shall not update

the borrower’s dependence status on the

loan origination record.’’ after the last

sentence in paragraph (d)(2).

29. Section 668.58 is amended by

removing the word ‘‘or’’ at the end of

paragraph (a)(1)(ii); removing the period

at the end of paragraph (a)(1)(iii) and

adding, in its place, ‘‘; or’’; removing

‘‘William D. Ford Federal’’ in

paragraphs (c), (d)(1), and (d)(2);

revising paragraphs (a)(1)(i), (a)(2)(ii)(A),

and (a)(2)(iii); and adding a new

paragraph (a)(1)(iv) to read as follows:

§ 668.58 Interim disbursements.

* * * * *

(a) * * *

(1) * * *

(i) Disburse any Federal Pell Grant or

campus-based program funds to the

applicant;

* * * * *

(iv) Originate or disburse a Direct

Subsidized Loan.

* * * * *

(2) * * *

(ii)(A) May make one disbursement of

any combination of Federal Pell Grant,

Federal Perkins Loan, or FSEOG funds

for the applicant’s first payment period;

and

* * * * *

(iii)(A) May withhold certification of

the applicant’s Federal Stafford Loan

application or origination of the

applicant’s Direct Subsidized Loan; or

(B) May certify the Federal Stafford

Loan application or originate the Direct

Subsidized Loan provided that the

institution does not deliver Federal

Stafford Loan proceeds or disburse

Direct Subsidized Loan proceeds.

* * * * *

30. Section 668.59 is amended by

adding ‘‘Federal’’ before ‘‘Pell’’ in

paragraph (b)(1); replacing ‘‘William D.

Ford Federal’’ with ‘‘Federal Direct

Stafford/Ford’’ in paragraphs (c)

introductory text and (c)(1)(ii); and

revising paragraph (d)(1) to read as

follows:

§ 668.59 Consequences of a change in

application information.

* * * * *

(d)(1) If the institution selects an

applicant for verification for an award

year who previously received a Direct

Subsidized Loan for that award year,

and as a result of verification the loan

amount is reduced, the institution shall

comply with the procedures specified in

§ 668.61(b)(2).

* * * * *

31. Section 668.60 is amended by

removing ‘‘FDSL’’ in paragraphs

(b)(1)(i)(A) and (b)(1)(iii); removing

‘‘FDSL’’ and adding, in its place,

‘‘Federal Direct Stafford/Ford Loan’’ in

paragraph (d); removing ‘‘FDSL and

PAS’’ and adding, in its place, ‘‘and

Federal Direct Stafford/Ford Loan’’ in

paragraph (b) introductory text;

removing ‘‘CWS’’ and adding, in its

place, ‘‘FWS’’ in paragraph (b)(1)(i)(B);

removing ‘‘William D. Ford Federal

Direct Loan’’ in paragraph (b)(1)(i)(D)

and adding, in its place, ‘‘Direct

Subsidized Loan’’; and revising

paragraphs (b)(1)(i)(C), (b)(1)(ii), and

(e)(2) to read as follows:

§ 668.60 Deadlines for submitting

documentation and the consequences of

failing to provide documentation.

* * * * *

(b) * * *

(1) * * *

(i) * * *

(C) Certify the applicant’s Federal

Stafford Loan application or originate

the applicant’s Direct Subsidized Loan;

or

* * * * *

(ii) The institution shall return to the

lender, or to the Secretary, in the case

of a Direct Subsidized Loan, any Federal

Stafford Loan or Direct Subsidized Loan

proceeds that otherwise would be

payable to the applicant; and

* * * * *

(e) * * *
40626 Federal Register / Vol. 63, No. 145 /Wednesday, July 29, 1998 /Rules and Regulations

(2) Certify that applicant’s Federal

Stafford Loan application, originate that

applicant’s Direct Subsidized Loan, or

process that applicant’s Federal Stafford

Loan or Direct Subsidized Loan

proceeds; or

* * * * *

32. Section 668.61 is amended by

removing ‘‘FDSL, FSEOG or’’ and

adding, in its place, ‘‘or FSEOG’’ in

paragraph (a)(2)(ii)(B); removing ‘‘or

William D. Ford Federal Direct Loan’’ in

paragraph (b); redesignating paragraph

(b) as (b)(1); and adding a new

paragraph (b)(2) to read as follows:

§ 668.61 Recovery of funds.

* * * * *

(b) * * *

(2) If the institution determines as a

result of the verification process that a

student received Direct Subsidized Loan

proceeds for an award year in excess of

the student’s need for the loan, the

institution shall reduce or cancel one or

more subsequent disbursements to

eliminate the amount in excess of the

student’s need.

§ 668.81 [Amended]

33. Section 668.81 is amended by

removing paragraph (e).

§ 668.83 [Amended]

34. Section 668.83 is amended by

removing ‘‘, Federal PLUS, or Federal

SLS’’ and adding, in its place, ‘‘or

Federal PLUS’’ in paragraph (c)(2)(i)(B);

removing ‘‘, Federal PLUS, and Federal

SLS’’ and adding, in its place ‘‘or

Federal PLUS’’ in paragraph

(c)(2)(iii)(D); and removing ‘‘, Federal

PLUS, or Federal SLS Program’’ and

adding, in its place, ‘‘or Federal PLUS

programs’’ in paragraph (d)(1)(iii).

§ 668.94 [Amended]

35. Section 668.94 is amended by

removing the period after ‘‘termination’’

and adding, in its place, ‘‘—’’ in

paragraph (a); and removing ‘‘, Federal

PLUS, or Federal SLS Program’’ and

adding, in its place, ‘‘Program or Federal

PLUS programs’’ in paragraph (a)(5).

§ 668.130 [Amended]

36. Section 668.130 is amended by

removing ‘‘§ 668.7(a)(4)(ii)’’ and adding,

in its place, ‘‘§ 668.33(a)(2)’’ in

paragraphs (a) and (b).

§ 668.131 [Amended]

37. Section 668.131 is amended by

removing ‘‘§ 668.7(a)(4)(ii)’’ and adding,

in its place, ‘‘§ 668.33(a)(2)’’ in the

definitions of ‘‘Eligible noncitizen’’ and

‘‘Primary confirmation.’’

§ 668.132 [Amended]

38. Section 668.132 is amended by

removing ‘‘§ 668.7(a)(4)(ii)’’ and adding,

in its place, ‘‘§ 668.33(a)(2)’’ in

paragraphs (a)(2) and (b).

§ 668.133 [Amended]

39. Section 668.133 is amended by

removing ‘‘§ 668.7(a)(4)(ii)’’ and adding,

in its place, ‘‘§ 668.33(a)(2)’’ in

paragraphs (a) introductory text (twice),

and (a)(1)(i).

§ 668.134 [Amended]

40. Section 668.134 is amended by

removing ‘‘§ 668.7(a)(4)(ii)’’ and adding,

in its place, ‘‘§ 668.33(a)(2)’’ in

paragraphs (a) introductory text, (a)(1),

(a)(3), (b)(1), and (b)(2).

§ 668.136 [Amended]

41. Section 668.136 is amended by

removing ‘‘§ 668.7(a)(4)(ii)’’ and adding,

in its place, ‘‘§ 668.33(a)(2)’’ in

paragraphs (a) and (b) introductory text.

§ 668.137 [Amended]

42. Section 668.137 is amended by

removing ‘‘§ 668.7(a)(4)(ii)’’ and adding,

in its place, ‘‘§ 668.33(a)(2)’’ in

paragraph (a); and removing ‘‘or certify

a Federal Stafford, Federal PLUS, or

Federal SLS loan’’ and adding, in its

place, ‘‘certify a Federal Stafford or

Federal PLUS loan application, or

originate a Direct Loan Program loan’’ in

paragraph (b).

43. Section 668.138 is amended by

revising paragraphs (a) and (b) to read

as follows:

§ 668.138 Liability.

(a) A student is liable for any SSIG,

FSEOG, or Federal Pell Grant payment

and for any Federal Stafford, Direct

Subsidized, Direct Unsubsidized or

Federal Perkins loan made to him or her

if the student was ineligible for the Title

IV, HEA assistance.

(b) A Federal PLUS or Direct PLUS

Loan borrower is liable for any Federal

PLUS or Direct PLUS Loan made to him

or her on behalf of an ineligible student.

* * * * *

44. Section 668.139 is amended by

revising paragraphs (b) and (d) to read

as follows:

§ 668.139 Recovery of payments and loan

disbursements to ineligible students.

* * * * *

(b) If an institution causes a Federal

Stafford, Federal PLUS, Direct

Subsidized, Direct Unsubsidized, or

Direct PLUS Loan to be disbursed to or

on behalf of an ineligible student for

which it is not liable in accordance with

§ 668.138, it shall assist the Secretary in

recovering the funds by notifying the

lender in the case of an FFEL Program

loan or the Secretary in the case of a

Direct Loan Program loan that the

student has failed to establish eligibility

under the requirements of §§ 668.201 or

685.200, as appropriate.

* * * * *

(d) If an institution is liable for a

Federal Stafford, Federal PLUS, Direct

Subsidized, Direct Unsubsidized, or

Direct PLUS Loan disbursement to an

ineligible student, the institution shall

repay an amount equal to the

disbursement to the lender in the case

of an FFEL Program loan or the

Secretary in the case of a Direct Loan

Program loan, and provide written

notice to the borrower.

§ 668.166 [Amended]

45. Section 668.166(a)(1) is amended

by adding ‘‘other than Federal Perkins

Loan Program funds,’’ after ‘‘title IV,

HEA program funds,’.

46. Section 668.167 is amended by

revising paragraph (a)(3) to read as

follows:

§ 668.167 FFEL Program funds.

(a) * * *

(3)(i) An institution may not request

a lender to provide it with loan funds

by EFT or master check for any Federal

PLUS Program loan earlier than 13 days

before the first day of classes for any

payment period.

(ii) An institution may not request a

lender to provide with loan funds by

check requiring the endorsement of the

borrower for any Federal PLUS Program

loan earlier than 30 days before the first

day of classes for any payment period.

* * * * *

[FR Doc. 98–20171 Filed 7–28–98; 8:45 am]

BILLING CODE 4000–01–P