46972 Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations 

F. Environment 

We have analyzed this rule under 

Department of Homeland Security 

Directive 023–01, Rev. 1, associated 

implementing instructions, and 

Environmental Planning COMDTINST 

5090.1 (series), which guide the Coast 

Guard in complying with the National 

Environmental Policy Act of 1969(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. This rule involves a safety 

zone lasting 18 total days that will 

prohibit entry within a portion of the 

Potomac River. It is categorically 

excluded from further review under 

paragraph L60(a) of Appendix A, Table 

1 of DHS Instruction Manual 023–01– 

001–01, Rev. 1. A Record of 

Environmental Consideration 

supporting this determination is 

available in the docket. For instructions 

on locating the docket, see the 

ADDRESSES section of this preamble. 

G. Protest Activities 

The Coast Guard respects the First 

Amendment rights of protesters. 

Protesters are asked to call or email the 

person listed in the FOR FURTHER

INFORMATION CONTACT section to 

coordinate protest activities so that your 

message can be received without 

jeopardizing the safety or security of 

people, places or vessels. 

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: 46 U.S.C. 70034, 70051; 33 CFR 

1.05–1, 6.04–1, 6.04–6, and 160.5; 

Department of Homeland Security Delegation 

No. 0170.1. 

■ 2. Add § 165.T05–0650 to read as 

follows: 

§ 165.T05–0650 Safety Zone; Potomac 

River, Between Charles County, MD and 

King George County, VA. 

(a) Location. The following area is a 

safety zone: All navigable waters of the 

Potomac River, encompassed by a line 

connecting the following points 

beginning at 38°21′50.96′′ N, 

076°59′22.04′′ W, thence south to 

38°21′43.08′′ N, 076°59′20.55′′ W, thence 

west to 38°21′41.00′′ N, 076°59′34.90′′ 

W, thence north to 38°21′48.90′′ N, 

076°59′36.80′′ W, and east back to the 

beginning point, located between 

Charles County, MD and King George 

County, VA. These coordinates are 

based on datum NAD 83. 

(b) Definitions. As used in this 

section— 

Captain of the Port (COTP) means the 

Commander, U.S. Coast Guard Sector 

Maryland-National Capital Region. 

Designated representative means any 

Coast Guard commissioned, warrant, or 

petty officer, including a Coast Guard 

coxswain, petty officer, or other officer 

operating a Coast Guard vessel and a 

Federal, State, and local officer 

designated by or assisting the Captain of 

the Port Maryland-National Capital 

Region (COTP) in the enforcement of the 

safety zone. 

Marine equipment means any vessel, 

barge or other equipment operated by 

Skanska-Corman-McLean, Joint Venture, 

or its subcontractors. 

(c) Regulations. (1) Under the general 

safety zone regulations in subpart C of 

this part, you may not enter the safety 

zone described in paragraph (a) of this 

section unless authorized by the COTP 

or the COTP’s designated representative. 

(2) To seek permission to enter, 

contact the COTP or the COTP’s 

representative by telephone number 

410–576–2693 or on Marine Band Radio 

VHF–FM channel 16 (156.8 MHz). 

Those in the safety zone must comply 

with all lawful orders or directions 

given to them by the COTP or the 

COTP’s designated representative. 

(d) Enforcement officials. The U.S. 

Coast Guard may be assisted in the 

patrol and enforcement of the safety 

zone by Federal, State, and local 

agencies. 

(e) Enforcement. This safety zone will 

be enforced during the period described 

in paragraph (f) of this section. A 

‘‘BRIDGE WORK—DANGER—STAY 

AWAY’’ sign facing the northern and 

southern approaches of the navigation 

channel will be posted onthe sides of 

the marine equipment on-scene within 

the location described in paragraph (a) 

of this section. 

(f) Enforcement period. This section 

will be enforced from 7 a.m. on August 

23, 2021, through 8 p.m. on September 

11, 2021. 

Dated: August 17, 2021. 

David E. O’Connell, 

Commander, U.S. Coast Guard, Captain of 

the Port Sector Maryland-National Capital 

Region. 

[FR Doc. 2021–17978 Filed 8–20–21; 8:45 am] 

BILLING CODE 9110–04–P 

DEPARTMENT OF EDUCATION 

34 CFR Parts 674, 682 and 685 

[Docket ID ED–2019–FSA–0115] 

RIN 1840–AD48 

Total and Permanent Disability 

Discharge of Loans Under Title IV of 

the Higher Education Act 

AGENCY: Office of Postsecondary 

Education, Department of Education. 

ACTION: Final regulations. 

SUMMARY: The Department of Education 

(Department) adopts as final regulations, 

with changes, the interim final 

regulations for total and permanent 

disability (TPD) student loan discharge. 

DATES: 

Effective date: These regulations are 

effective July 1, 2022. 

Implementation date: For the 

implementation date of these regulatory 

changes, see the Implementation Date of 

These Regulations section of this 

document. 

FOR FURTHER INFORMATION CONTACT: 

Jennifer M. Hong, Director, Policy 

Coordination Group, U.S. Department of 

Education, Office of Postsecondary 

Education, 400 Maryland Avenue SW, 

Washington, DC 20202–2241. 

Telephone: (202)453–7805. Email: 

jennifer.hong@ed.gov. 

If you use a telecommunications 

device for the deaf (TDD) or a text 

telephone (TTY), call the Federal Relay 

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

8339. 

SUPPLEMENTARY INFORMATION: 

Executive Summary 

Purpose of This Regulatory Action: 

On November 26, 2019, the Department 

published in the Federal Register (84 

FR 65000) an interim final rule (IFR) to 

amend and update the regulations for 

TPD student loan discharge for veterans 

by removing administrative burdens 

that may have prevented at least 20,000 

totally and permanently disabled 

veterans from obtaining discharges for 

their student loans. These final 

regulations adopt and amend the 

regulations established in the IFR as 

further described below. These 

regulations do not address the process 

of obtaining a TPD student loan 

discharge through the physician’s 

certification process. 

Summary of Major Provisions of This 

Regulatory Action: 

These regulations— 

• Expand the automatic discharge 

process to borrowers who are eligible for 

TPD loan discharge through their SSA 


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data. Borrowers who qualify for TPD 

through Social Security Administration 

(SSA) data are those who are eligible for 

Social Security Disability Insurance 

(SSDI) and/or Supplemental Security 

Income (SSI) benefits and whose next 

scheduled disability review is no earlier 

than five nor later than seven years; 

• Clarify that borrowers determined 

to be eligible for a TPD discharge based 

on data that the Secretary obtains from 

the Department of Veterans Affairs (VA) 

or the SSA are not required to submit 

a TPD application to have their Federal 

student loans discharged; 

• Describe the process by which the 

Secretary will automatically discharge 

the Federal student loans of a borrower 

who is determined to be eligible for a 

TPD discharge based on data obtained 

from either VA or the SSA, unless the 

borrower notifies the Secretary by a 

specified date that the borrower does 

not wish to receive the discharge; 

• Specify the contents of the notice 

the Secretary sends to borrowers who 

are determined to be eligible for a TPD 

discharge based on data that the 

Secretary obtains from VA or from the 

SSA; and 

• Provide for the return of payments 

to the person who made payments on 

the loan on or after the effective date of 

the determination by VA or SSA for 

borrowers who receive the automatic 

TPD discharge. 

Authority for this Regulatory Action: 

Section 410 of the General Education 

Provisions Act provides the Secretary 

with authority to make, promulgate, 

issue, rescind, and amend rules and 

regulations governing the manner of 

operations of, and governing the 

applicable programs administered by, 

the Department. 20 U.S.C. 1221e–3. 

Furthermore, under section 414 of the 

Department of Education Organization 

Act, the Secretary is authorized to 

prescribe such rules and regulations as 

the Secretary determines necessary or 

appropriate to administer and manage 

the functions of the Secretary or the 

Department. 20 U.S.C. 3474. Under 20 

U.S.C. 1087(a)(1)(FFEL), 20 U.S.C. 

1087a(b)(2)(Direct Loans), and 20 U.S.C. 

1087dd(c)(1)(F)(ii)(Perkins), the 

Department has authority to cancel or 

discharge certain loans due to a total 

and permanent disability. 

Costs and Benefits: Veterans and 

recipients of SSDI and/or SSI benefits 

who qualify for a TPD discharge will 

benefit from these final regulations. 

Qualifying veterans and recipients of 

SSDI and/or SSI benefits will be 

relieved of a financial burden related to 

Federal student loans, including the 

stress associated with repayment or 

potential defaults and collections. This 

final rule should result in a quicker, 

more efficient process and many more 

qualified borrowers receiving the 

discharge to which they are legally 

entitled. In addition, the paperwork 

burden will be reduced as no 

application will be needed for 

borrowers who qualify for an automatic 

TPD discharge. 

Implementation Date of These 

Regulations: Section 482(c) of the HEA 

requires that regulations affecting 

programs under title IV of the HEA be 

published in final form by November 1, 

prior to the start of the award year (July 

1) to which they apply. However, that 

section also permits the Secretary to 

designate any regulation as one that an 

entity subject to the regulations may 

choose to implement earlier, as well as 

the conditions of early implementation. 

The Secretary is exercising his 

authority under section 482(c) of the 

HEA to designate the regulatory changes 

to parts 674, 682, and 685 of the Code 

of Federal Regulations included in this 

document for early implementation 

effective September 30, 2021. The 

Secretary takes this action for the 

reasons set forth in the Summary, 

Background, and Need for Regulatory 

Actions sections included in this 

document. 

Public Comments: When the IFR was 

published in the Federal Register on 

November 26, 2019 (84 FR 65000), the 

Department requested public comment 

on whether we should make any 

changes to the interim final regulations. 

We received 18 comments. The final 

regulations include changes from the 

IFR. 

We group major issues according to 

subject, with appropriate sections of the 

regulations referenced in parentheses. 

We discuss other substantive issues 

under the sections of the regulations to 

which they pertain. Generally, we do 

not address minor, non-substantive 

changes, or recommended changes that 

the law does not authorize the Secretary 

to make. 

Analysis of Comments and Changes: 

An analysis of the comments and of the 

changes in the regulations since 

publication of the IFR follows. 

General Comments 

Comments: Commenters were 

generally supportive of the provision 

added by the IFR stating that veterans 

who are identified as eligible for TPD 

discharge based on data that the 

Secretary obtains from VA are not 

required to provide any additional 

documentation to have their loans 

automatically discharged, noting it 

reduces burden on disabled veterans. 

Several commenters explained that 

many disabled veterans lack a 

supportive caregiver who can assist 

them in the application process and 

ensure that they understand the 

implications of not having their Federal 

student loans discharged. The 

commenters further noted that many 

veterans who received letters notifying 

them that they were eligible for 

discharge, and that to receive the 

discharge they needed only to sign and 

submit a TPD discharge application, 

failed to subsequently submit an 

application. These commenters stated 

that these veterans are clearly eligible 

for the discharge, and they are pleased 

that the Department is making it easier 

for them to have their loans discharged. 

Discussion: We thank the commenters 

for their support. We note that the IFR, 

which provided that veterans identified 

as TPD based on data obtained from VA 

are not required to submit additional 

documentation to have their loans 

discharged, may not have made it 

sufficiently clear that ‘‘additional 

documentation’’ meant a TPD discharge 

application. Therefore, we are clarifying 

this point in the final regulations. 

Changes: In final §§ 674.61(d), 

682.402(c)(10), and 685.213(d), we have 

clarified that a borrower who qualifies 

for a TPD discharge based on data 

obtained from VA or from the SSA is 

not required to submit a TPD 

application, or any other documentation 

of eligibility for discharge. 

Comments: One commenter expressed 

concern that the automatic discharge 

process was paused because the 

regulations that were previously in 

effect required borrowers to submit a 

discharge application. Another 

commenter asked that the Department 

provide a copy of the Office of 

Management and Budget memo that 

determined rulemaking was required 

before the Department could discharge 

veterans’ loans without an application. 

Discussion: As we explained in the 

IFR, former Secretary Betsy DeVos 

exercised her authority under section 

482(c) of the Higher Education Act of 

1965, as amended (HEA), to designate 

the regulatory changes to parts 674, 682, 

and 685 of the Code of Federal 

Regulations, as reflected in the IFR, for 

early implementation effective 

immediately. Accordingly, the 

automatic TPD discharge process for 

veterans identified as eligible for 

discharge based on data obtained from 

VA was implemented immediately upon 

publication of the IFR. 

We have forwarded the request for the 

Office of Management and Budget 

memo to the Department’s Freedom of 

Information Act (FOIA) Service Center. 

All FOIA requests made to the 


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Department are handled by the 

Department’s FOIA Service Center. 

Changes: None. 

Comment: One commenter suggested 

that VA should be more involved in 

communicating to veterans regarding 

the discharge process. The commenter 

was concerned that some veterans might 

think the discharge letter was ‘‘too good 

to be true’’ since it was not something 

they had asked for. The commenter 

stated that if VA were more involved in 

the process, it might be able to confirm 

the validity of the letter and assist 

veterans in understanding the 

ramifications of allowing the discharge 

to go forward versus opting out of the 

discharge. 

Discussion: The Department plans to 

work closely with VA in implementing 

these regulations. However, we believe 

that the notification of eligibility for the 

TPD discharge should come from the 

Department, not VA. The notification 

relates to student loan programs 

administered by the Department, not to 

any VA benefit program. If a borrower 

has questions about the notification, the 

borrower should contact the 

Department, not VA. 

Changes: None. 

Opt-Out Provision (§§ 674.61(e)(1), 

682.402(c)(11)(i), 685.213(e)(1)) 

Comment: One commenter was 

concerned that the automatic discharge 

process could harm a veteran who is 

enrolled in school and obtaining loans 

and recommended that the Department 

include the opt-out provision discussed 

in the preamble to the IFR. 

Another commenter urged the 

Department to consider the moral 

hazard of lending to a borrower who has 

been deemed unable to work prior to or 

concurrent with enrollment. 

Discussion: As suggested by the first 

commenter, a veteran who is enrolled in 

school and receiving loans might wish 

to opt out of the automatic discharge so 

that the veteran could continue 

receiving loans without having to meet 

the additional eligibility requirements 

that apply to borrowers seeking new 

loans after having previously received a 

TPD discharge of earlier loans. We agree 

with the first commenter that we should 

include the opt-out provision in the 

regulatory language. 

We do not agree with the commenter 

who suggested that providing an opt-out 

provision creates a moral hazard that is 

sufficiently worrisome to outweigh the 

benefits of providing automatic 

discharges. As noted in the Regulatory 

Impact Analysis the opt out rate for 

borrowers identified through the VA 

process was just four percent through 

the two rounds of discharges processed 

since September 2019. This suggests the 

opt out is used in rare circumstances 

and is not a widespread practice that 

would indicate a significant moral 

hazard. Veterans who qualify for 

automatic TPD discharges, as well as 

recipients of SSDI and/or SSI benefits, 

should have the ability to decline the 

discharge without fear that declining the 

discharge will affect their ability to 

continue to obtain Federal student 

loans. 

Changes: In §§ 674.61(e)(1), 

682.402(c)(11)(i), and 685.213(e)(1), we 

have specified that the notification to a 

borrower of eligibility for an automatic 

TPD discharge informs the borrower 

that the borrower may opt out of the 

discharge. We have revised 

§§ 674.61(e)(5), 682.402(c)(11)(vii), and 

685.213(e)(3) to clarify that, if borrowers 

choose not to receive the automatic TPD 

discharge, they remain responsible for 

repaying the loan in accordance with 

the terms and conditions of the 

promissory note that the borrower 

signed. 

Post-Discharge Monitoring Period 

Comments: One commenter urged the 

Department to make it clear to 

borrowers that if they accept the TPD 

discharge, there will be a monitoring 

period that may prevent the borrower 

from receiving loans in the immediate 

future, and that these borrowers would 

need a physician’s certification if they 

are going to use loans to return to 

school. 

Discussion: For TPD discharges based 

on a disability determination from VA, 

there is no post-discharge monitoring 

period. 20 U.S.C. 1087(a)(2). However, 

under §§ 674.9(g)(1) and (2), 

682.201(a)(6)(i) and (ii), and 

685.200(a)(1)(iv)(A)(1) and (2), once 

borrowers’ loans have been discharged 

due to TPD, they cannot obtain 

additional Federal student loans unless 

the borrower (1) obtains a certification 

from a physician that the borrower is 

able to engage in substantial gainful 

activity; and (2) signs a statement 

acknowledging that any new loan the 

borrower receives cannot be discharged 

in the future on the basis of any 

impairment present when the new loan 

is made, unless that impairment 

substantially deteriorates. This 

information is included in the notice 

that is sent to veterans informing them 

that they qualify for a TPD discharge 

based on data obtained from VA. 

For borrowers who receive discharges 

based on SSA disability determinations, 

§§ 674.61(b)(3)(iv), 682.402(c)(3)(iv), 

and 685.213(b)(4)(iii) provide that the 

notification the borrower receives after 

the discharge has been granted explain 

the terms and conditions of the postdischarge monitoring period. The notice 

also includes the requirements for 

obtaining a new loan discussed above. 

Changes: None. 

Defaulted Borrowers 

Comments: Commenters noted that 

the loans of many veterans who qualify 

for a TPD discharge are in default. The 

commenters asserted that in some cases 

the loans were wrongly placed in 

default, because the borrower met the 

eligibility criteria for a TPD discharge at 

the time the loan was placed in default. 

Discussion: It is possible that some 

veterans who defaulted on their loans 

may have qualified for TPD discharge if 

they had submitted a discharge 

application. However, the Department 

would not have known at the time the 

loans defaulted that the veterans with 

loans described in this example were 

eligible for a TPD discharge. Prior to the 

implementation of the process that 

enables the Department to identify 

borrowers who are determined to be 

eligible for TPD discharge based on data 

obtained from VA, the Department and 

loan servicers had no means of knowing 

that a disabled veteran qualified for 

discharge unless the borrower submitted 

a TPD discharge application. If such a 

borrower became delinquent in making 

payments on a loan, and did not apply 

for forbearance, deferment, or discharge, 

or take other actions to resolve the 

delinquency, the loan would eventually 

be placed in default, in accordance with 

the terms and conditions of the 

promissory note that the borrower 

signed. Preventing this situation is a 

major reason the Department automated 

the process of discharges without the 

need for an application. The automated 

process will seek to avoid such an 

outcome for a borrower who is eligible 

for a TPD discharge. 

Changes: None. 

Return of Offset or Garnished Funds 

Comments: Commenters asked that 

any offsets from a defaulted borrower’s 

benefits that were taken to pay on their 

defaulted loans be returned to them, and 

their credit reports updated, if the 

borrower receives an automatic TPD 

discharge. 

Discussion: Any payments received 

on or after the effective date of VA’s 

disability determination or the date the 

Secretary received disability data from 

the SSA are returned to the person who 

made the payments. This includes any 

payments that were obtained through 

offsets. 

Section 674.61(c)(4)(ii) requires a 

school that holds a Perkins Loan to 

return the payments. Section 


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682.402(c)(10)(vii) requires a FFEL 

lender to return payments after the 

guaranty agency has paid a disability 

claim. Section 685.213(b)(4)(ii) and 

(c)(2)(i) provides for the return of 

payments for Direct Loans. 

The discharge of a loan is also 

reported to nationwide consumer 

reporting agencies. 

Changes: None. 

Tax Implications 

Comments: One commenter asked 

that the Department take additional 

action to ensure that veterans are 

counseled regarding which States treat 

loan amounts discharged due to TPD as 

taxable income. 

Discussion: The letter informing 

borrowers that they are eligible for 

discharge explains that, although loan 

amounts discharged due to TPD are no 

longer considered taxable income for 

Federal tax purposes, some States still 

consider discharged loan amounts as 

income. The letter recommends that 

borrowers scheduled to receive a TPD 

discharge contact their State revenue 

office or a tax professional before 

deciding to accept or opt out of the TPD 

discharge. 

Changes: None. 

Deregulatory Action 

Comment: One commenter asked why 

the IFR was not treated as a significant 

regulatory action under Executive Order 

(E.O.) 13771, which requires that for 

every significant regulatory action 

proposed by an agency for notice and 

comment or otherwise promulgated that 

imposes a cost greater than zero, the 

agency must repeal two regulatory 

actions. 

Discussion: On January 20, 2021, 

President Joseph Biden issued E.O. 

13992, which revoked E.O. 13771, so 

the terms of E.O. 13771 no longer apply. 

Regardless, the Department identified 

the IFR as a deregulatory action because 

it eliminates a regulatory requirement: 

In this case, the requirement that a 

disabled veteran submit an application 

for a TPD discharge. 

Changes: None. 

Automatic Discharges for Borrowers 

With SSA Disability Designations 

Comments: Several commenters 

supported the Department’s 

implementation of automatic TPD 

discharges for disabled veterans and 

asked that the Department also allow for 

automatic TPD discharges for borrowers 

who are identified as eligible for a TPD 

discharge through the existing data 

match with SSA. 

Discussion: We agree. Under 

§§ 674.61(b)(2)(iv), 682.402(c)(2)(iv), 

and 685.213(b)(1), these borrowers are 

eligible to receive a loan discharge but 

are currently required to submit an 

application before they may receive the 

discharge. Eliminating the application 

requirement for borrowers who are 

identified as eligible for a TPD discharge 

through the data match with SSA, so 

they can receive an automatic discharge, 

is a logical extension of the IFR. The 

rationale for providing borrowers with a 

TPD discharge based on a disability 

determination by VA obtained through 

a data match, thereby eliminating 

unnecessary documentation burdens on 

individuals determined by a 

government agency to qualify for a TPD 

discharge, applies equally to individuals 

who qualify for TPD discharge based on 

a disability determination by the SSA as 

obtained through a data match. 

The object of the logical outgrowth 

standard ‘‘is one of fair notice.’’ Long 

Island Care at Home, Ltd. v. Coke, 551 

U.S. 158, 174 (2007). The standard is 

well described in Mid Continent Nail 

Corp. v. United States, 846 F.3d 1364, 

1373–76 (Fed. Cir. 2017), which states 

that ‘‘a final rule is a logical outgrowth 

of a proposed rule only if interested 

parties should have anticipated that the 

change was possible, and thus 

reasonably should have filed their 

comments on the subject during the 

notice-and-comment period.’’ Id. at 

1373 (quoting Veteran’s Justice Grp., 

L.L.C. v. Sec’y of Veterans Affairs, 818 

F.3d 1336, 1344 (Fed. Cir. 2016)). The 

Federal Circuit indicated that the logical 

outgrowth standard is very broad, 

implying that it would even allow the 

removal of ‘‘critical elements’’ of rules 

so long as the NPRM contains ‘‘the 

merest hint’’ of the agency’s actions in 

the final rule. See id. at 1374, 1376. 

As supported by public comment on 

the IFR requesting this expansion of the 

automatic TPD discharge, the public 

could reasonably have anticipated that 

the final rule would apply to borrowers 

who are identified as eligible for a TPD 

discharge through the data match with 

SSA. The position taken in this final 

rule—expanding the automatic TPD 

discharge to apply to these borrowers— 

is consistent with and responsive to 

public comment, including comments 

from several U.S. Senators, a State 

Attorney General, legal aid societies, 

and other non-governmental 

organizations. The number of 

comments, the diversity of the 

commenters, and the universal support 

for this expansion all demonstrate that 

this rule is a logical outgrowth of the 

IFR. 

Changes: In §§ 674.61(d)(1)(ii), 

682.402(c)(10)(i)(B), and 

685.213(d)(1)(ii), we have provided that 

a borrower who is identified as eligible 

for TPD discharge through the data 

match with SSA does not need to 

submit a TPD application as a condition 

of receiving a loan discharge. 

Additional Proposals 

Comments: Some commenters 

suggested that all veterans with a 

service-related disability should have 

their loans discharged. One commenter 

recommended that student loans for all 

veterans be paid or forgiven, not just 

veterans who are totally and 

permanently disabled. Another 

commenter recommended that all 

veterans with a disability should qualify 

for a TPD discharge, regardless of 

whether their disability is serviceconnected. 

Two commenters stated that veterans 

who have never been deployed can 

receive a 100 percent disability rating 

from VA. These veterans would qualify 

for TPD, while veterans who were 

deployed, but who are less than 100 

percent disabled, would not qualify. 

This commenter believed that veterans 

who have not been deployed should not 

have priority over veterans who were 

deployed. 

One commenter recommended 

eliminating the post-discharge 

monitoring period for all TPD discharge 

borrowers. 

Discussion: The statutory section 

authorizing a TPD discharge for veterans 

does not take a veteran’s deployment 

status into account and, therefore, 

deployment status has no bearing on 

whether a student loan is discharged. In 

addition, the Department does not have 

the statutory authority to grant a TPD 

discharge to a veteran who is not totally 

and permanently disabled. A veteran 

who is totally and permanently 

disabled, but whose disability is not 

service connected, may receive a TPD 

discharge under the other TPD 

discharge processes, which require 

either an SSA disability determination 

or a physician’s certification. 

There is no post-discharge monitoring 

period for borrowers who received TPD 

discharges based on VA disability 

determinations. Because the IFR only 

addressed automatic TPD discharges for 

veterans for whom there are no postdischarge monitoring periods, any 

changes to the post-discharge 

monitoring periods for other recipients 

of TPD discharges are outside the scope 

of this final rule. However, the 

Department has heard from the public 

on ways to improve the rules governing 

total and permanent disability discharge 

and may consider these policies through 

upcoming negotiated rulemaking. See 

86 FR 28299 (May 26, 2021). 


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Changes: None. 

Executive Orders 12866 and 13563 

Regulatory Impact Analysis 

Under Executive Order 12866, the 

Office of Management and Budget 

(OMB) must determine whether this 

regulatory action is ‘‘significant’’ and, 

therefore, subject to the requirements of 

the Executive order and subject to 

review by 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. 

These final regulations, taken together 

with the IFR, are an economically 

significant action and will have an 

annual effect on the economy of more 

than $100 million because the changes 

to an opt-out process for borrowers 

identified as TPD eligible through the 

data matches with VA and SSA are 

expected to increase transfers from the 

Federal Government as more loans are 

discharged by $1,685.8 million when 

annualized at a seven percent discount 

rate. Pursuant to the Congressional 

Review Act (5 U.S.C. 801 et seq.), the 

Office of Information and Regulatory 

Affairs designated this rule as a ‘‘major 

rule,’’ as defined by 5 U.S.C. 804(2). 

We have also reviewed these final 

regulations and the IFR under 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 and 

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 the 

behavior or manner of compliance a 

regulated entity must adopt; and 

(5) Identify and assess available 

alternatives to direct regulation, 

including economic incentives—such as 

user fees or marketable permits—to 

encourage the desired behavior, or 

providing information that enables the 

public to make choices. 

Executive Order 13563 also requires 

an agency ‘‘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 of 

OMB has emphasized that these 

techniques may include ‘‘identifying 

changing future compliance costs that 

might result from technological 

innovation or anticipated behavioral 

changes.’’ 

The Department has assessed the 

potential costs and benefits, both 

quantitative and qualitative, of this 

regulatory action, and we issued the 

IFR, and are issuing these final 

regulations, in response to the pressing 

need for, and manifest public interest 

in, deregulatory relief from bureaucratic 

burdens that have denied tens of 

thousands of veterans who are totally 

and permanently disabled, due to 

service-related injuries, student loan 

discharges for which they are eligible. 

Individuals who SSA has determined to 

be disabled have faced similar burdens 

and hurdles. The harm caused to our 

veterans, other disabled individuals, 

and to the public interest by the 

application process is significant and 

widely recognized. See Presidential 

Memorandum at 44677; S. Rep. No. 

115–150, at 182. Based on this analysis 

and the reasons stated in the preamble, 

the Department believes that these final 

regulations are consistent with the 

principles in Executive Order 13563. 

We also have determined that this 

regulatory action does not unduly 

interfere with State, local, or Tribal 

governments in the exercise of their 

governmental functions. 

Need for Regulatory Action 

The HEA provides that veterans who 

are totally and permanently disabled are 

eligible to have their Federal student 

loans discharged. Prior to the IFR, once 

determined by the Secretary of Veterans 

Affairs to be totally and permanently 

disabled due to a service-connected 

condition, the veteran was required to 

obtain documentation of that status 

from VA and provide it to the Secretary 

of Education, along with an application 

for total and permanent disability 

discharge, in order to receive the 

discharge of their student loans. 

Similarly, borrowers who are identified 

as eligible for a TPD discharge through 

the data match with SSA had to submit 

an application to the Department in 

order to receive the discharge. 

However, now that the Department 

has data sharing agreements with VA 

and SSA in place, the Department 

obtains all of the information it needs 

directly from those two agencies to 

discharge loans. This makes the 

submission of the TPD application to 

the Department an unnecessary and 

burdensome step for both groups of 

borrowers. Consequently, the President 

and Congress have asked the 

Department to ensure that individuals 

who have received a qualifying 

disability determination from SSA or 

VA receive all benefits the law allows 

with as little burden on the borrower as 

possible. Under the IFR and this final 

rule, individuals who have received a 

qualifying disability determination from 

SSA or VA only need to contact the 

Department if they choose to opt out of 

the TPD discharge, in which case they 

would be responsible for full payment 

on the loan. 

In terms of the potential impact on 

borrowers, the most significant change 

from the IFR is the extension of the 

automatic TPD discharge process to 

borrowers who are identified as eligible 

for a TPD discharge through the data 

match with SSA. Expanding TPD 

discharges without an application to 

individuals identified as TPD by SSA is 

a logical extension of the IFR. The 

rationale for providing an automatic 

discharge to veterans based on a 

disability determination by VA 

eliminating unnecessary documentation 

burdens on individuals determined by a 

government agency to have total and 

permanent disabilities that qualify them 

under statute to a discharge of their 

loans, particularly when those total and 

permanent disabilities may pose 

challenges to providing additional 

documentation—applies equally to 

individuals whose TPD has been 

identified by the SSA. 

The Department has been working 

with VA since 2018 to facilitate a more 

expedited TPD discharge process and 

about 22,000 veterans have received 


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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations 46977 

1Bureau of Labor Statistics, Economic News 

Release Table B–3. Average hourly and weekly 

earnings of all employees on private nonfarm 

payrolls by industry sector, seasonally adjusted. 

Applying average hourly wage rate for October 2019 

for total private industry. Available at www.bls.gov/ 

news.release/empsit.t19.htm. 

approximately $650 million in 

discharges under the opt-in process in 

effect prior to the IFR. However, 

thousands more have not applied for the 

discharge for which they were eligible. 

A similar match has been in place with 

the Social Security Administration since 

2016 and approximately 141,000 

borrowers have received $8.2 billion in 

discharges under the opt-in process for 

the period 2016–2021. While veterans 

do not have to complete a postdischarge monitoring period, other 

borrowers who receive a TPD discharge 

are subject to a three-year post-discharge 

monitoring period during which a loan 

discharge could be reversed, so the final 

number of discharges associated with 

SSA matches from 2016–2021 may shift 

somewhat. 

The amendments in the IFR and these 

final regulations provide a quicker, 

more efficient process and will likely 

result in many more qualified veterans 

and individuals SSA determined to 

have a qualifying disability status 

receiving the discharge for which they 

are eligible. 

In the past, loan discharge amounts 

were subject to Federal and, in some 

States, State tax, which may have 

dissuaded some veterans or other 

borrowers who could otherwise navigate 

the TPD application process from 

seeking a discharge. However, under the 

Tax Cuts and Jobs Act of 2017 (Pub. L. 

115–97), all Federal tax was eliminated 

on loan discharges of borrowers based 

on death or total and permanent 

disability through 2025. Some small 

percentage of these eligible veterans or 

other borrowers may opt out due to 

concerns over State tax treatment that 

was not affected by the 2017 Federal 

law. 

In addition, borrowers who are 

enrolled in a postsecondary institution 

at the time of the disability 

determination, or who plan to enroll in 

the future, may opt to forego loan 

forgiveness through TPD discharge so 

that they can continue to receive new 

Federal student loans for such 

enrollments. Although a borrower who 

accepts loan forgiveness through TPD 

discharge may still be able to borrow in 

the future, the Department requires such 

a borrower to obtain a certification from 

a physician that the borrower is able to 

engage in substantial gainful 

employment and to sign a statement 

acknowledging that the new Direct Loan 

the borrower receives cannot be 

discharged in the future on the basis of 

any impairment present when the new 

loan is made, unless that impairment 

substantially deteriorates. In addition, 

borrowers who want to receive new 

loans after receiving a TPD discharge 

based on SSA documentation (or based 

on a physician’s certification) are also 

required under §§ 674.61(b)(6), 

682.402(c)(4) and (5), and 685.213(b)(6) 

and (7) to resume payment on the 

discharged loans if they receive a new 

loan during the three-year postdischarge monitoring period. 

Some borrowers may elect to simply 

forego loan forgiveness to preserve 

future borrowing opportunities and 

avoid the need to obtain medical 

certification regarding their ability to 

engage in substantial gainful 

employment. Although borrowers could 

opt out of an automatic discharge before 

we issued the IFR, that option was not 

specified in the regulations. Currently, 

the opt-out rate for veterans is low, at 

four percent (approximately 2,100 

borrowers of nearly 48,000 opted out 

from the two rounds of discharges 

processed since September 2019). 

Accordingly, the Department expects a 

small percentage of borrowers who 

qualify for an automatic discharge based 

on SSA data to choose to opt out of the 

discharge. 

Nevertheless, this final rule removes 

barriers and allows many more qualified 

veterans and other borrowers to receive 

the TPD discharge to which they are 

entitled. 

Costs, Benefits, and Transfers 

The primary parties affected by the 

IFR and these final regulations will be 

the veterans and recipients of Social 

Security benefits who qualify for the 

discharge; and the taxpayers, through 

the transfers from the Federal 

government. Qualifying borrowers will 

be relieved of a financial burden related 

to Federal student loans, including the 

stress associated with repayment or 

potential defaults and collections. 

VA estimates that approximately 

150,000 veterans a year will reach a 

qualifying disability rating over the next 

10 years, of which approximately 18 

percent will be 50 years old or under 

and approximately 20 percent will have 

at least some postsecondary education 

at the time of their separation from the 

armed services. Many more will likely 

use education benefits and loans to 

pursue postsecondary credentials after 

separation. Therefore, we expect that 

thousands of current and future veterans 

will be affected by these final 

regulations. 

The match with the Social Security 

Administration is for individuals with 

Social Security Disability Insurance 

(SSDI) or Supplemental Security Income 

(SSI) benefits indicating that the 

borrower’s next scheduled disability 

review will occur in no less than five 

and no more than seven years. The 

number of borrowers eligible for a 

discharge depends on the age profile, 

student loan borrowing history, and 

repayment history of those with a 

qualifying disability status. The 

Department estimates that 

approximately 21,000 borrowers are 

newly identified through the SSA match 

on a quarterly basis, and the quarterly 

average of borrowers who apply for a 

discharge and successfully complete the 

monitoring period is just over 10,000. 

This is based on borrowers from existing 

loan cohorts who have already received 

a qualifying disability status. More 

borrowers from past loan cohorts could 

qualify for a disability status in future 

years, and future cohorts of borrowers 

will also be affected by these final 

regulations, so many thousands of 

borrowers from existing loan cohorts 

and those in the 10-year budget window 

will benefit from the opt-out process. 

As described in the Paperwork 

Reduction Act section of this preamble, 

the elimination of the application will 

reduce the burden on borrowers who 

qualify for the automatic TPD discharge. 

The elimination of the application is a 

reduction in burden of 5,000 hours and 

$140,900 for veterans and 11,586 hours 

and $326,493 for other borrowers, 

calculated at a wage rate of $28.18.1

The increase in transfers for 

discharges will affect taxpayers, through 

the Federal government, as more 

borrowers receive the loan discharge for 

which they qualify. This effect is 

described in the Net Budget Impacts 

section of this Regulatory Impact 

Analysis. Estimated annualized 

transfers are $1,685.8 million at a 7 

percent discount rate. The servicing 

contractor that processes disability 

discharges for the Department could see 

an increase in the number of discharges 

to process, which could require system 

upgrades or other resources. However, 

they have already adjusted to an opt-out 

process for veterans and manage the 

notifications for eligible borrowers 

identified through the match with the 

SSA, so we do not expect significant 

changes would be required. 

Additionally, the Department is 

required to pay the cost of SSA 

providing Medical Improvement Not 

Expected status as part of the match 

agreement. This is estimated to cost 

approximately $8,000 annually, but this 

cost would be incurred whether or not 

the results of the match were used for 


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46978 Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations 

the existing opt-in process or the opt-out 

process established by these final 

regulations. 

Net Budget Impacts 

We estimate that the IFR and these 

final regulations will have a net Federal 

budget impact over the 2022–2031 loan 

cohorts of $13.3 billion in outlays and 

a modification to past cohorts of $20.9 

billion, for a total net impact of $34.1 

billion. A cohort reflects all loans 

originated in a given fiscal year. 

Consistent with the requirements of the 

Credit Reform Act of 1990, budget cost 

estimates for the student loan programs 

reflect the estimated net present value of 

all future non-administrative Federal 

costs associated with a cohort of loans. 

The Net Budget Impact is compared to 

the 2022 President’s Budget baseline 

(PB2022) that includes the estimated 

effects of the student loan related 

provisions in the Coronavirus Aid, 

Relief, and Economic Security Act 

(CARES Act) and subsequent 

extensions. 

As discussed throughout this 

preamble, the IFR and these final 

regulations changed the discharge 

process of loans for veterans with a 

service-related disability to an opt-out 

process instead of the opt-in process 

associated with the match between the 

Department and VA prior to the IFR. 

While the match has been processed 

since 2018 and the Department has 

accepted VA determinations of 

disability status without additional 

medical information since 2013, a 

significant percentage of veterans who 

would qualify for the discharge did not 

submit applications. Of approximately 

58,000 qualifying veterans identified in 

the match process since 2018, only 

about 22,000 veterans have received 

discharges, totaling approximately $650 

million. According to Federal Student 

Aid, approximately 4,000 additional 

veterans are identified in each quarterly 

match. For the SSA match, 

approximately 21,000 additional 

borrowers are identified in each 

quarterly match. Since the start of the 

SSA match with the opt-in process in 

2016, approximately $8.2 billion in TPD 

discharges have been processed. 

To estimate the effect of the opt-out 

procedure, the Department adjusted the 

disability component of its Death, 

Disability, and Bankruptcy assumption 

(DDB), which also includes closed 

school and borrower defense discharges 

that have been the subject of recent 

regulations. To calculate the effect on 

past cohorts from borrowers currently 

eligible for the discharge, the 

Department summarized the balances, 

collections, and payments associated 

with veterans identified in the August 

2018 match who had not received a 

disability or death discharge by the end 

of FY 2019. These potential claims were 

grouped by population identification 

(non-consolidated, consolidated notfrom-default, and consolidated from 

default), and offset between the fiscal 

year of loan origination and fiscal year 

of disability. Baseline disability claims 

were also summarized by these factors 

and an adjustment factor for the 

increase represented by the potential 

claims was calculated. 

The change to the opt-out approach 

will increase the level of disability 

discharges going forward, but not to the 

same degree as the significant 

adjustment in FY2020 that captures the 

build-up of years from those who did 

not submit applications. To estimate the 

adjustment for future claims, the 

Department focused on those newly 

identified as disabled in 2018 and 

calculated an adjustment factor based 

on those who received a discharge 

versus those borrowers with potential 

discharges who were in the match but 

did not submit applications. This 

adjustment was applied to future 

cohorts and future disability 

determinations for borrowers in past 

cohorts. 

A separate adjustment was added to 

the disability rate to capture the effect 

of the SSA match switching to opt-out. 

A review of existing borrowers 

identified in the SSA match file prior to 

September 30, 2020, indicates that there 

are approximately $11.5 billion in 

outstanding balances of borrowers who 

would be eligible for a TPD discharge. 

This confirms that the potential increase 

in claims from existing and future 

cohorts is significant. The disability 

component of the DDB rate was almost 

doubled to estimate the effect of the 

SSA match opt-out process, resulting in 

the increase to $34.1 compared to the 

$1.96 billion estimated for only VA 

match in the IFR. 

A number of factors may affect the 

estimated cost of these final regulations. 

The estimate does not include any 

reduction in defaults associated with 

the borrowers’ loans, but borrowers’ 

repayment profile will affect the cost of 

this discharge. For borrowers in the SSA 

match prior to September 30, 2020, 

approximately 62 percent of loan 

disbursements across all loan cohorts 

have been in default at some point. 

While the estimate for these final 

regulations is conservative and does not 

include any reduction in defaults, we 

know from prior analysis that a change 

such as this can have an impact on 

defaults going forward. As an example, 

a sensitivity analysis was done for the 

FY 2020 financial statements that 

showed that a 5 percent reduction in 

defaults for the last 5 originated cohorts 

saves $849 million. The Department 

will monitor the effect of these final 

regulations on defaults as the opt-out 

process is implemented and reflect it in 

future student loan program costs. Some 

borrowers may have lacked awareness 

of the potential discharge or found the 

application process difficult. To the 

extent borrowers previously chose to 

not apply for Federal tax reasons, the 

tax provision granting that relief is 

currently scheduled to expire on 

December 31, 2025. While that tax 

provision may be renewed, the opt-out 

rate for future discharges occurring in 

2026 and later could increase if it is not. 

In estimating the net budget impact of 

these final regulations, the Department 

reduced the adjustment factor for 2027 

and later by 15 percent to account for 

this. If that provision is extended, or if 

more of the unfiled applications were 

for process reasons and did not reflect 

deliberate tax planning, the opt-out rate 

may decrease and the costs could go up. 

We also assumed that the nonapplicants and future qualifying 

veterans and other borrowers will have 

a similar profile to applicants in terms 

of the amount of loans, repayment 

profiles, and the timing of their 

qualifying disability. It is possible that 

those who applied for a discharge as the 

result of the match had higher balances 

and thus more incentive to file, 

especially once the Federal tax 

consequences were removed. 

Applicants and non-applicants could 

vary by debt level, educational 

attainment, nature of their disability, 

availability of support, or other factors 

that could result in the discharges 

granted through the opt-out process 

having a different average amount or 

subsidy cost for the Department. 

Another challenge is predicting the 

effect on future loan cohorts. We assume 

the level and timing of service-related 

and other disabilities will remain 

similar to that for existing borrowers. 

Clearly, geopolitical and global health 

factors that the Department cannot 

predict could affect the number of 

veterans and other borrowers who 

qualify for the discharge. Additionally, 

student loan borrowing among those 

who may serve in the military and 

eventually qualify for a discharge could 

increase depending upon recruitment 

patterns and further education pursued 

by those serving in the military. 

However, it is possible that the 

relatively generous provisions of the 

Post 9/11 GI bill will reduce borrowing 

by more recent and future cohorts of 

veterans relative to past cohorts. An 


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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations 46979 

2Walter Ochinko and Kathy Payea, Veterans 

Education Success, Veteran Student Loan Debt: 

Data from NPSAS: 08,12,16, January 2019, Figure 

1, p.4. Available at https://vetsedsuccess.org/ 

veteran-student-loan-debt-7-years-afterimplementation-of-the-post-9-11-gi-bill/./ 

3 Id. 

4Social Security Administration, Office of 

Retirement and Disability Policy, Trends in Social 

Security Disability, August 2019. Available at 

https://www.ssa.gov/policy/docs/briefing-papers/ 

bp2019-01.html. 

analysis conducted by Veterans 

Education Success of National 

Postsecondary Student Aid Survey 

(NPSAS) data for the most recent three 

survey cycles (NPSAS:08, NPSAS:12 

and NPSAS:16) concluded that the 

percentage of veterans borrowing at 

proprietary schools decreased from 78 

percent in NPSAS:08, which surveyed 

students prior to passage of the Post-9/ 

11 GI Bill, to 42 percent in NPSAS:16, 

which surveyed students after, and the 

average annual amount borrowed 

decreased slightly from $8,680 to $8,630 

in 2015 dollars.2 The percent of veterans 

borrowing declined slightly in other 

sectors (38 percent to 32 percent for 

public 4-year institutions) and the 

average annual amounts borrowed also 

declined ($10,410 for 4-year private 

non-profit in NPSAS:08 to $8,980 in 

NPSAS:16).3

Medical or technical advances that 

affect the classification of disability 

could potentially be a factor reducing 

the estimated costs associated with 

future loan cohorts. In its report, Trends 

in Social Security Disability,4 published 

in August 2019, SSA indicated a decline 

in disability incidence since 2010 after 

an increase between 2007–2010. While 

SSA identifies economic conditions as a 

contributing factor to disability 

incidence, the report indicates that the 

decline is more significant than would 

be expected by economic conditions 

alone. Other factors identified that 

could affect disability rates in the future 

include availability of health insurance, 

a change in the mix of jobs to ones with 

less physically demanding labor, and 

policy and administrative procedural 

changes. For estimation purposes, we 

assume future cohorts will look like 

existing cohorts but acknowledge that a 

number of factors could shift the 

estimated costs in either direction. 

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 these final regulations. 

This table provides our best estimate of 

the changes in annual monetized 

transfers as a result of these final 

regulations. Expenditures are classified 

as transfers from the Federal 

government to veterans or borrowers 

eligible for SSDI and/or SSI benefits 

who qualify for a total and permanent 

disability discharge. 

TABLE 1—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURES

[In millions] 

Category Benefits 

Increased share of qualifying veterans or borrowers eligible for SSDI and/or SSI benefits who receive a total 

and permanent disability discharge ..................................................................................................................... Not Quantified 

Reduced paperwork burden on veterans or borrowers eligible for SSDI and/or SSI benefits whose next disability review is no earlier than five and no later than seven years who qualify for a TPD discharge ............... 7% 

$[.34] 

3% 

$[.35] 

Category Transfers 

Increased loan discharges for veterans or borrowers eligible for SSDI and/or SSI benefits with a qualifying 

total and permanent disability status ................................................................................................................... 7% 

$[1,685.8] 

3% 

$[1,138.6] 

Paperwork Reduction Act of 1995 

(PRA) 

As part of its continuing effort to 

reduce paperwork and respondent 

burden, the Department provides the 

general public and Federal agencies 

with an opportunity to comment on 

proposed and continuing collections of 

information in accordance with the PRA 

(44 U.S.C. 3506(c)(2)(A)). This helps 

ensure that: The public understands the 

Department’s collection instructions, 

respondents provide the requested data 

in the desired format, reporting burden 

(time and financial resources) is 

minimized, collection instruments are 

clearly understood, and the Department 

can properly assess the impact of 

collection requirements on respondents. 

Sections 674.61, 682.402, and 685.213 

of these final regulations contain 

information collection requirements. 

Under the PRA, the Department has 

submitted a copy of these sections and 

an Information Collections Request to 

OMB for its review. These final 

regulations do not impose any new 

information collection burden. OMB 

previously approved the information 

collection requirements under OMB 

control number 1845–0065. The forms 

that are part of this information 

collection do not change as a result of 

these final regulations. 

Sections 674.61(c), 682.402(c)(9), and 

685.213(c) 

Discussion: Prior to the IFR, a veteran 

was required to submit an application 

with documentation from VA to receive 

a TPD discharge of a loan under the 

Federal Perkins Loan Program, Federal 

Family Education Loan Program, or 

Federal Direct Loan Program. This 

information has been collected under 

OMB approved form control number 

1845–0065. The IFR and these final 

regulations eliminate the application 

requirement. 

Requirements: These changes allow 

the Secretary to offer a Federal student 

loan borrower who is identified through 

a data match with VA as being totally 

and permanently disabled a discharge of 

his or her loans without requiring the 

borrower to submit a separate TPD 

application. The veteran may elect to 

opt out of the TPD discharge and will 

continue to be responsible for repaying 

the loans. 

Burden Calculation: These changes 

eliminate burden on the veteran. The 

currently approved form, 1845–0065, 

estimates 30 minutes (.50 hours) to read, 

gather documentation, and complete the 

discharge application. We estimate that 


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46980 Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations 

annually approximately 10,000 veterans 

have submitted the application for 

discharge due to total permanent 

disability. This regulatory change 

reduces the burden assessed on the 

approved form by 5,000 hours (10,000 

applicants × .50 hours = 5,000 hours). 

This will be a one-time reduction in 

burden. We are not changing the TPD 

Discharge Application to remove the 

section applicable to a veteran’s request 

for such a discharge. 

1845–0065 DISCHARGE APPLICATION—TOTAL AND PERMANENT DISABILITY

Affected entity Number of 

respondents 

Number of 

responses 

Hours per 

response 

Total 

burden 

Estimate 

costs 

individual 

$28.18 

Individual Veteran ................................................................ ¥10,000 ¥10,000 .50 ¥5,000 ¥$140,000 

Total .............................................................................. ¥10,000 ¥10,000 ........................ ¥5,000 ¥140,000 

Discussion: The TPD discharge 

regulations currently require a borrower 

who qualifies for discharge of a Federal 

Perkins Loan Program, Federal Family 

Education Loan Program, or Federal 

Direct Loan Program loan based on total 

and permanent disability certified by 

the SSA to submit an application in 

order to receive a TPD discharge. This 

information was collected under OMB 

control number 1845–0065. Under these 

final regulations, a borrower who 

qualifies for a TPD discharge based on 

total and permanent disability as 

identified by the SSA will no longer be 

required to submit a TPD application in 

order to receive a TPD discharge. 

Requirements: These changes allow 

the Secretary to offer a Federal student 

loan borrower who is identified through 

SSA data as being totally and 

permanently disabled a discharge of his 

or her loans without requiring the 

borrower to submit a separate TPD 

application. The borrower may elect to 

opt out of the TPD discharge and will 

continue to be responsible for repaying 

the loans. 

Burden Calculation: These changes 

eliminate burden on the borrower. The 

currently approved form, 1845–0065, 

estimates 30 minutes (.50 hours) to read, 

gather documentation, and complete the 

discharge application. In 2020 the 

Department received 23,171 

applications from borrowers who were 

required to submit the application for 

discharge based on a total permanent 

disability determination from SSA. This 

regulatory change reduces the burden 

assessed on the approved form by 

11,586 hours (23,171 applicants × .50 

hours = 11,586 hours). This will be a 

one-time reduction in burden. We are 

not changing the TPD Discharge 

Application to remove the section 

applicable to a borrower’s request for a 

discharge based on SSA documentation. 

1845–0065 DISCHARGE APPLICATION—TOTAL AND PERMANENT DISABILITY

Affected entity Number of 

respondents 

Number of 

responses 

Hours per 

response 

Total 

burden 

Estimated 

costs 

individual 

$28.18 

Individual SSA Disability ...................................................... ¥23,171 ¥23,171 .50 ¥11,586 ¥$326,493 

Total .............................................................................. ¥23,171 ¥23,171 ........................ ¥11,586 ¥326,493 

In total, we are revising the total 

burden assessment for the Information 

Collection 1845–0065 to be 221,629 

respondents, 221,629 responses, and 

110,814 hours. There are no changes to 

any of the forms in this collection. 

A Federal agency may not conduct or 

sponsor a collection of information 

unless OMB approves the collection 

under the PRA and the corresponding 

information collection instrument 

displays a currently valid OMB control 

number. Notwithstanding any other 

provision of the law, no person is 

required to comply with, or is subject to 

penalty for failure to comply with, a 

collection of information if the 

collection instrument does not display a 

currently valid OMB control number. 

Regulatory Flexibility Act Certification 

The Secretary certifies that these 

regulations will not have a significant 

economic impact on a substantial 

number of small entities. The U.S. Small 

Business Administration Size Standards 

define for-profit institutions as small 

businesses if they are independently 

owned and operated, are not dominant 

in their field of operation, and have total 

annual revenue below $7,000,000. Nonprofit institutions are defined as small 

entities if they are independently owned 

and operated and not dominant in their 

field of operation. Public institutions are 

defined as small organizations if they 

are operated by a government 

overseeing a population below 50,000. 

This regulation would not affect any 

small entities. Small entities do not 

qualify as borrowers under these 

Federal loan programs, nor do small 

entities provide or fund Federal loans or 

their discharge. 

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 the IFR and our own 

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. 

Electronic Access to This Document: 

The official version of this document is 

the document published in the Federal 

Register. You may access the official 

edition of the Federal Register and the 

Code of Federal Regulations at 


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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations 46981 

www.govinfo.gov. 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 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. 

List of Subjects 

34 CFR Part 674 

Loan programs—education, Reporting 

and recordkeeping, Student aid. 

34 CFR Part 682 

Administrative practice and 

procedure, Colleges and Universities, 

Loan programs—education, Reporting 

and recordkeeping requirements, 

Student aid, Vocational education. 

34 CFR Part 685 

Administrative practice and 

procedure, Colleges and Universities, 

Loan programs—education, Reporting 

and recordkeeping requirements, 

Student aid, Vocational education. 

Annmarie Weisman, 

Deputy Assistant Secretary for Policy, 

Planning, and Innovation, Office of 

Postsecondary Education. 

Accordingly, the interim rule 

amending 34 CFR parts 674, 682, and 

685, which published on November 26, 

2019 (84 FR 65000), is adopted as final 

with the following changes: 

PART 674—FEDERAL PERKINS LOAN 

PROGRAM 

■ 1. The authority citation for part 674 

continues to read as follows: 

Authority: 20 U.S.C. 1070g, 1087aa– 

1087hh; Public Law 111–256, 124 Stat. 2643; 

unless otherwise noted. 

■ 2. Section 674.61 is amended by: 

■ a. In paragraph (c)(2)(iv), removing 

‘‘The veteran’’ and adding in its place 

‘‘Except as provided in paragraph (d) of 

this section, the veteran’’. 

■ b. Removing paragraph (c)(2)(x). 

■ c. Redesignating paragraphs (d) and 

(e) as paragraphs (f) and (g), 

respectively. 

■ d. Adding new paragraphs (d) and (e). 

■ e. Removing the parenthetical 

authority citation at the end of the 

section. 

The additions read as follows: 

§ 674.61 Discharge for death or disability. 

* * * * * 

(d) Discharge without an application. 

(1) The Secretary may discharge a loan 

under this section without an 

application or any additional 

documentation from the borrower if the 

Secretary— 

(i) Obtains data from the Department 

of Veterans Affairs (VA) showing that 

the borrower is unemployable due to a 

service-connected disability; or 

(ii) Obtains data from the Social 

Security Administration (SSA) showing 

that the borrower qualifies for SSDI or 

SSI benefits and that the borrower’s next 

scheduled disability review will be no 

earlier than five nor later than seven 

years. 

(2) [Reserved] 

(e) Notifications and return of 

payments. (1) After determining that a 

borrower qualifies for a total and 

permanent disability discharge under 

paragraph (d) of this section, the 

Secretary sends a notification to the 

borrower informing the borrower that 

the Secretary will discharge the 

borrower’s title IV loans unless the 

borrower notifies the Secretary, by a 

date specified in the Secretary’s 

notification, that the borrower does not 

wish to receive the loan discharge. 

(2) Unless the borrower notifies the 

Secretary that the borrower does not 

wish to receive the discharge, the 

Secretary notifies the borrower’s lenders 

that the borrower has been approved for 

a disability discharge. 

(3) In the case of a discharge based on 

a disability determination by VA— 

(i) The notification— 

(A) Provides the effective date of the 

disability determination by VA; and 

(B) Directs each institution holding a 

Defense, NDSL, or Perkins Loan made to 

the borrower to discharge the loan; and 

(ii) The institution returns to the 

person who made the payments any 

payments received on or after the 

effective date of the determination by 

VA that the borrower is unemployable 

due to a service-connected disability. 

(4) In the case of a discharge based on 

a disability determination by the SSA— 

(i) The notification— 

(A) Provides the date the Secretary 

received the SSA notice of award for 

SSDI or SSI benefits; and 

(B) Directs each institution holding a 

Defense, NDSL, or Perkins Loan made to 

the borrower to assign the loan to the 

Secretary within 45 days of the notice 

described in paragraph (e)(2) of this 

section; and 

(ii) After the loan is assigned, the 

Secretary discharges the loan in 

accordance with paragraph (b)(3)(v) of 

this section. 

(5) If the borrower notifies the 

Secretary that they do not wish to 

receive the discharge, the borrower will 

remain responsible for repayment of the 

borrower’s loans in accordance with the 

terms and conditions of the promissory 

notes that the borrower signed. 

* * * * * 

PART 682—FEDERAL FAMILY 

EDUCATION LOAN (FFEL) PROGRAM 

■ 3. The authority citation for part 682 

continues to read as follows: 

Authority: 20 U.S.C. 1071–1087–4, unless 

otherwise noted. 

■ 4. Section 682.402 is amended by: 

■ a. In paragraph (c)(9)(iv), removing 

‘‘The veteran’’ and adding in its place 

‘‘Except as provided in paragraph (c)(10) 

of this section, the veteran’’. 

■ b. Removing paragraph (c)(9)(xiii). 

■ c. Adding paragraphs (c)(10) and (11). 

■ d. Removing the parenthetical 

authority citation at the end of the 

section. 

The additions read as follows: 

§ 682.402 Death, disability, closed school, 

false certification, unpaid refunds, and 

bankruptcy payments. 

* * * * * 

(c) * * * 

(10) Discharge without an application. 

(i) The Secretary may discharge a loan 

under this section without an 

application or any additional 

documentation from the borrower if the 

Secretary— 

(A) Obtains data from the Department 

of Veterans Affairs (VA) showing that 

the borrower is unemployable due to a 

service-connected disability; or 

(B) Obtains data from the Social 

Security Administration (SSA) showing 

that the borrower qualifies for SSDI or 

SSI benefits and that the borrower’s next 

scheduled disability review will be no 

earlier than five nor later than seven 

years. 

(ii) [Reserved] 

(11) Notifications and return of 

payments. (i) After determining that a 

borrower qualifies for a total and 

permanent disability discharge under 

paragraph (c)(10) of this section, the 

Secretary sends a notification to the 

borrower informing the borrower that 

the Secretary will discharge the 

borrower’s title IV loans unless the 

borrower notifies the Secretary, by a 

date specified in the Secretary’s 

notification, that the borrower does not 

wish to receive the loan discharge. 

(ii) Unless the borrower notifies the 

Secretary that the borrower does not 

wish to receive the discharge, the 

Secretary notifies the borrower’s loan 

holders that the borrower has been 

approved for a disability discharge. 

With this notification the Secretary 


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46982 Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations 

provides the effective date of the 

determination by VA or the date the 

Secretary received the SSA notice of 

award for SSDI or SSI benefits, and 

directs the holder of each FFELP loan 

made to the borrower to submit a 

disability claim to the guaranty agency 

in accordance with paragraph (g)(1) of 

this section. 

(iii) If the claim meets the 

requirements of paragraph (g)(1) of this 

section and § 682.406, the guaranty 

agency pays the claim and must— 

(A) Discharge the loan, in the case of 

a discharge based on data from VA; or 

(B) Assign the loan to the Secretary, 

in the case of a discharge based on data 

from the SSA. 

(iv) The Secretary reimburses the 

guaranty agency for a disability claim 

after the agency pays the claim to the 

lender. 

(v) Upon receipt of the claim payment 

from the guaranty agency, the loan 

holder returns to the person who made 

the payments any payments received on 

or after— 

(A) The effective date of the 

determination by VA that the borrower 

is unemployable due to a serviceconnected disability; or 

(B) The date the Secretary received 

the SSA notice of award for SSDI or SSI 

benefits. 

(vi) For a loan that is assigned to the 

Secretary for discharge based on data 

from the SSA, the Secretary discharges 

the loan in accordance with paragraph 

(c)(3)(iv) of this section. 

(vii) If the borrower notifies the 

Secretary that they do not wish to 

receive the discharge, the borrower will 

remain responsible for repayment of the 

borrower’s loans in accordance with the 

terms and conditions of the promissory 

notes that the borrower signed. 

* * * * * 

PART 685—WILLIAM D. FORD 

FEDERAL DIRECT LOAN PROGRAM 

■ 5. The authority citation for part 685 

continues to read in part as follows: 

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

unless otherwise noted. 

* * * * * 

■ 6. Section 685.213 is amended by: 

■ a. In paragraph (b)(1) introductory 

text, removing the words ‘‘To qualify’’ 

and adding, in their place, ‘‘Except as 

provided in paragraph (d)(2) of this 

section, to qualify’’. 

■ b. In paragraph (c)(1) introductory 

text, removing ‘‘To qualify’’ and adding 

in their place ‘‘Except as provided in 

paragraph (d)(1) of this section, to 

qualify’’. 

■ c. Removing paragraph (c)(1)(v). 

■ d. Adding paragraphs (d) and (e). 

■ e. Removing the parenthetical 

authority citation at the end of the 

section. 

The additions read as follows: 

§ 685.213 Total and permanent disability 

discharge. 

* * * * * 

(d) Discharge without an application. 

(1) The Secretary may discharge a loan 

under this section without an 

application or any additional 

documentation from the borrower if the 

Secretary— 

(i) Obtains data from the Department 

of Veterans Affairs showing that the 

borrower is unemployable due to a 

service-connected disability; or 

(ii) Obtains data from the Social 

Security Administration (SSA) showing 

that the borrower qualifies for SSDI or 

SSI benefits and that the borrower’s next 

scheduled disability review will be no 

earlier than five nor later than seven 

years. 

(2) [Reserved] 

(e) Notification to the borrower. (1) 

After determining that a borrower 

qualifies for a total and permanent 

disability discharge under paragraph (d) 

of this section, the Secretary sends a 

notification to the borrower informing 

the borrower that the Secretary will 

discharge the borrower’s title IV loans 

unless the borrower notifies the 

Secretary, by a date specified in the 

Secretary’s notification, that the 

borrower does not wish to receive the 

loan discharge. 

(2) Unless the borrower notifies the 

Secretary that the borrower does not 

wish to receive the discharge the 

Secretary discharges the loan— 

(i) In accordance with paragraph 

(b)(4)(iii) of this section for a discharge 

based on data from the SSA; or 

(ii) In accordance with paragraph 

(c)(2)(i) of this section for a discharge 

based on data from VA. 

(3) If the borrower notifies the 

Secretary that they do not wish to 

receive the discharge, the borrower will 

remain responsible for repayment of the 

borrower’s loans in accordance with the 

terms and conditions of the promissory 

notes that the borrower signed. 

* * * * * 

[FR Doc. 2021–18081 Filed 8–20–21; 8:45 am] 

BILLING CODE 4000–01–P 

DEPARTMENT OF VETERANS 

AFFAIRS 

38 CFR Part 9 

RIN 2900–AR24 

Extension of Veterans’ Group Life 

Insurance (VGLI) Application Periods 

in Response to the COVID–19 Public 

Health Emergency 

AGENCY: Department of Veterans Affairs. 

ACTION: Final rule. 

SUMMARY: This document adopts as a 

final rule, without change, an interim 

final rule amending the Department of 

Veterans Affairs (VA) regulation 

regarding Veterans’ Group Life 

Insurance (VGLI). The amendment was 

necessary in order to extend the 

deadline for former members to apply 

for VGLI coverage following separation 

from service to address the inability of 

former members directly or indirectly 

affected by the 2019 Novel Coronavirus 

(COVID–19) public health emergency to 

purchase VGLI. 

DATES: Effective September 22, 2021. 

FOR FURTHER INFORMATION CONTACT: Paul 

Weaver, Department of Veterans Affairs 

Insurance Service (310/290B), 5000 

Wissahickon Avenue, Philadelphia, PA 

19144, (215) 842–2000, ext. 4263. (This 

is not a toll-free number.) 

SUPPLEMENTARY INFORMATION: An 

interim final rule amending VA’s 

regulation regarding the deadline for 

former members to apply for VGLI 

coverage following separation from 

service was published in the Federal 

Register on June 9, 2021 (86 FR 30541). 

VA provided a 30-day comment 

period that ended on July 9, 2021. No 

comments were received. Based on the 

rationale set forth in the interim final 

rule, we now adopt the interim final 

rule as a final rule without change. 

Administrative Procedure Act 

In the June 9, 2021, Federal Register 

notice, VA determined that there was a 

basis under the Administrative 

Procedure Act for issuing the interim 

final rule with immediate effect. We 

invited and did not receive public 

comment on the interim final rule. This 

document adopts the interim final rule 

as a final rule without change. 

Paperwork Reduction Act 

This final rule contains no provisions 

constituting a collection of information 

under the Paperwork Reduction Act (44 

U.S.C. 3501–3521). 

Executive Orders 12866 and 13563 

Executive Orders 12866 and 13563 

direct agencies to assess the costs and 


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