49114 Federal Register / Vol. 82, No. 204 / Tuesday, October 24, 2017 / Rules and Regulations 

the potential impact of regulations on 

small entities during rulemaking. The 

term ‘‘small entities’’ comprises small 

businesses, not-for-profit organizations 

that are independently owned and 

operated and are not dominant in their 

fields, and governmental jurisdictions 

with populations of less than 50,000. 

The Corps certifies under 5 U.S.C. 

605(b) that this rule would not have a 

significant economic impact on a 

substantial number of small entities. 

While some owners or operators of 

vessels that intend to transit the danger 

zone may be small entities, for the 

reasons stated in paragraph (a) above 

this rule would not have a significant 

economic impact on any vessel owner 

or operator. In addition, the danger zone 

is necessary to protect public safety 

during training exercises. Small entities 

can utilize navigable waters outside of 

the danger zone when the danger zone 

is activated. Small entities may also 

transit the danger zone when it is 

activated, as long as they obtain 

permission from the Commanding 

Officer, Naval Construction Battalion 

Center, Gulfport or his/her designees. 

After considering the economic impacts 

of this danger zone regulation on small 

entities, I certify that this action will not 

have a significant impact on a 

substantial number of small entities. 

c. Review Under the National 

Environmental Policy Act 

An environmental assessment (EA) 

has been prepared. We have concluded 

that the establishment of the restricted 

area will not have a significant impact 

to the quality of the human environment 

and, therefore, preparation of an 

environmental impact statement is not 

required. The final EA and Finding of 

No Significant Impact may be reviewed 

at the District Office listed at the end of 

the FOR FURTHER INFORMATION CONTACT

section, above. 

d. Unfunded Mandates Reform Act 

This rule does not impose an 

enforceable duty among the private 

sector and, therefore, is not a Federal 

private sector mandate and is not 

subject to the requirements of Section 

202 or 205 of the Unfunded Mandates 

Reform Act (Public Laws 104–4, 109 

Stat. 48, 2 U.S.C. 1501 et seq.). We have 

also found, under Section 203 of the 

Act, that small governments will not be 

significantly or uniquely affected by this 

rule. 

List of Subjects in 33 CFR Part 334 

Danger zones, Marine safety, 

Navigation (water), Restricted areas, 

Waterways. 

For the reasons stated in the 

preamble, the Corps is amending 33 

CFR part 334 as follows: 

PART 334—DANGER ZONE AND 

RESTRICTED AREA REGULATIONS 

■ 1. The authority citation for 33 CFR 

part 334 continues to read as follows: 

Authority: 40 Stat. 266 (33 U.S.C. 1) and 

40 Stat. 892 (33 U.S.C. 3). 

■ 2. Add § 334.784 to read as follows: 

§ 334.784 East Pearl River, within the 

acoustic buffer area of the John C. Stennis 

Space Center, and adjacent to lands, in 

Hancock County, Mississippi; danger zone. 

(a) The area. A danger zone is 

established in and to the extent of 

waters of the United States, as defined 

in 33 CFR part 329, in the following 

reaches of the East Pearl River south of 

a point located at latitude 30.4030° N., 

longitude ¥89.6815° W., to a point 

below the confluence of Mikes River, 

located at latitude 30.3561° N., 

longitude ¥89.6514° W. The datum for 

these coordinates is NAD 1983. 

(b) The regulation. (1) No person, 

vessel, or other watercraft, other than a 

vessel owned and operated by the 

United States, shall enter or remain in 

the danger zone, or within a portion or 

portions thereof, when closed to public 

access, as provided in paragraph (b)(2) 

of this section, except by permission of 

the Commanding Officer, Naval 

Construction Battalion Center, Gulfport 

or such other person(s) as he or she may 

designate. 

(2) The danger zone, or a portion or 

portions thereof, will be closed, for 

riverine, weapons, or other dangerous 

naval training, by placement of 

Government picket boats at the northern 

and southern boundaries in the East 

Pearl River, or at such other location(s) 

within the danger zone as may be 

determined to be sufficient to protect 

the public. Prior to closure, picket boats 

will transit the area(s) to be closed, to 

ensure that no persons, vessels, or other 

watercraft are present. Once the danger 

zone, or location(s) within the danger 

zone, has been cleared, picket boats will 

remain in position, upstream and 

downstream, until it is safe to re-open 

the area(s) to public access. 

(3) Riverine, weapons, and other 

dangerous naval training may occur on 

any day of the week, typically, but not 

exclusively, in periods of two to eight 

hours, between 6 a.m. and 6 p.m. 

Training may occur at night, in 

darkness. 

(c) Enforcement. The restrictions on 

public access in this section shall be 

enforced by the Commanding Officer, 

Naval Construction Battalion Center, 

Gulfport or by such other person(s) as 

he or she may designate. 

Dated: October 18, 2017. 

Thomas P. Smith, 

Chief, Operations and Regulatory Division, 

Directorate of Civil Works. 

[FR Doc. 2017–23004 Filed 10–23–17; 8:45 am] 

BILLING CODE 3720–58–P 

DEPARTMENT OF EDUCATION 

34 CFR Parts 668, 674, 682, and 685 

[Docket ID ED–2017–OPE–0108] 

RIN 1840–AD25 

Student Assistance General 

Provisions, Federal Perkins Loan 

Program, Federal Family Education 

Loan Program, William D. Ford Federal 

Direct Loan Program, and Teacher 

Education Assistance for College and 

Higher Education Grant Program 

AGENCY: Office of Postsecondary 

Education, Department of Education. 

ACTION: Interim final rule; delay of 

effective date; request for comments. 

SUMMARY: Consistent with section 

553(b)(3)(B) and (d)(3) of the 

Administrative Procedure Act (APA), 

which allows Federal agencies to 

promulgate rules without advance 

notice and opportunity for comment for 

good cause, the Secretary issues this 

interim final rule with request for 

comment. This interim final rule delays 

until July 1, 2018, the effective date of 

selected provisions of the final 

regulations entitled Student Assistance 

General Provisions, Federal Perkins 

Loan Program, Federal Family 

Education Loan (FFEL) Program, 

William D. Ford Federal Direct Loan 

Program, and Teacher Education 

Assistance for College and Higher 

Education Grant Program (the final 

regulations), published in the Federal 

Register on November 1, 2016. The 

provisions this interim final rule delays 

are listed in the SUPPLEMENTARY

INFORMATION section of this document. 

The original effective date of the final 

regulations was July 1, 2017. 

DATES: Effective date: As of October 24, 

2017, the effective date for the 

amendments to or additions of: 

§§ 668.14(b)(30), (31), and (32); 

668.41(h) and (i); 668.71(c); 668.90(a)(3); 

668.93(h), (i), (j); 668.171; 668.175 (c) 

and (d) and (f) and (h); Appendix C to 

Subpart L of Part 668; 674.33(g)(3) and 

(g)(8); 682.202(b)(1); 682.211(i)(7); 

682.402(d)(3), (d)(6)(ii)(B)(1) and (2), 

(d)(6)(ii)(F) introductory text, 

(d)(6)(ii)(F)(5), (d)(6)(ii)(G), (d)(6)(ii)(H) 


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through (K), (d)(7)(ii) and (iii), (d)(8), 

and (e)(6)(iii); 682.405(b)(4); 

682.410(b)(4) and (b)(6)(viii); 

685.200(f)(3)(v) and (f)(4)(iii); 

685.205(b)(6); 685.206(c); 685.212(k); 

685.214(c)(2), (f)(4) through (7); 

685.215(a)(1), (c)(1) through (c)(8), and 

(d); 685.222; Appendix A to Subpart B 

of Part 685; and 685.308(a), published 

November 1, 2016, at 81 FR 75926, and 

delayed until further notice on June 16, 

2017, in 82 FR 27621, is further delayed 

until July 1, 2018. 

Comment date: We must receive your 

comments on or before November 24, 

2017. 

ADDRESSES: Submit your comments 

through the Federal eRulemaking Portal 

or via postal mail, commercial delivery, 

or hand delivery. We will not accept 

comments submitted by fax or by email 

or those submitted after the comment 

period. To ensure that we do not receive 

duplicate copies, please submit your 

comments only once. In addition, please 

include the Docket ID at the top of your 

comments. 

If you are submitting comments 

electronically, we strongly encourage 

you to submit any comments or 

attachments in Microsoft Word format. 

If you must submit a comment in 

Portable Document Format (PDF), we 

strongly encourage you to convert the 

PDF to print-to-PDF format or to use 

some other commonly used searchable 

text format. Please do not submit the 

PDF in a scanned format. Using a printto-PDF format allows the Department to 

electronically search and copy certain 

portions of your submissions. 

• Federal eRulemaking Portal: Go to 

www.regulations.gov to submit your 

comments electronically. Information 

on using Regulations.gov, including 

instructions for accessing agency 

documents, submitting comments, and 

viewing the docket, is available on the 

site under ‘‘Help.’’ 

• Postal Mail, Commercial Delivery, 

or Hand Delivery: The Department 

strongly encourages commenters to 

submit their comments electronically. 

However, if you mail or deliver your 

comments about the interim final rule, 

address them to Jean-Didier Gaina, U.S. 

Department of Education, 400 Maryland 

Ave. SW., Mail Stop 6W247, 

Washington, DC 20202. 

Privacy Note: The Department’s 

policy is to make all comments received 

from members of the public available for 

public viewing on the Federal 

eRulemaking Portal at 

www.regulations.gov. Therefore, 

commenters should be careful to 

include in their comments only 

information that they wish to make 

publicly available. 

FOR FURTHER INFORMATION CONTACT: 

Barbara Hoblitzell, U.S. Department of 

Education, 400 Maryland Ave. SW., 

Mail Stop 6W247, Washington, DC 

20202. Telephone: (202) 453–7583 or by 

email at: Barbara.Hoblitzell@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 1–800–877– 

8339. 

SUPPLEMENTARY INFORMATION: 

Invitation to Comment: We invite you 

to submit comments regarding this 

interim final rule. We will consider 

comments on the delayed effective date 

only and will not consider comments on 

the wording or substance of the final 

regulations. See ADDRESSES for 

instructions on how to submit 

comments. 

During and after the comment period, 

you may inspect all public comments 

about this interim final rule by 

accessing Regulations.gov. You may also 

inspect the comments in person in 

Room 6W245, 400 Maryland Avenue 

SW., Washington, DC, between 8:30 

a.m. and 4:00 p.m. Washington, DC 

time, Monday through Friday of each 

week, except Federal holidays. If you 

want to schedule time to inspect 

comments, please contact the person 

listed under FOR FURTHER INFORMATION

CONTACT. 

Assistance to Individuals With 

Disabilities in Reviewing the 

Rulemaking Record: On request, we will 

provide an appropriate accommodation 

or auxiliary aid to an individual with a 

disability who needs assistance to 

review the comments or other 

documents in the public rulemaking 

record for this interim final rule. If you 

want to schedule an appointment for 

this type of accommodation or auxiliary 

aid, please contact the person listed 

under FOR FURTHER INFORMATION

CONTACT. 

Delay of Effective Date 

On May 24, 2017, the California 

Association of Private Postsecondary 

Schools (CAPPS) filed a Complaint and 

Prayer for Declaratory and Injunctive 

Relief in the United States District Court 

for the District of Columbia (Court) 

challenging the final regulations in their 

entirety, and in particular those 

provisions of the regulations pertaining 

to the standard and process for the 

Department to adjudicate borrower 

defense claims, requirements pertaining 

to financial responsibility standards, 

provisions requiring proprietary 

institutions to provide warnings about 

their students’ loan repayment rates, 

and prohibitions against institutions 

including arbitration or class action 

waivers in their agreements with 

students. Complaint and Prayer for 

Declaratory and Injunctive Relief, 

California Association of Private 

Postsecondary Schools v. DeVos, No. 

1:17–cv–00999 (D.D.C. May 24, 2017). 

As of the date of this interim final rule, 

the litigation is ongoing. 

In light of the pending litigation, on 

June 16, 2017, the Department 

published in the Federal Register a 

notification of the partial delay of 

effective dates under section 705 of the 

APA (5 U.S.C. 705) (82 FR 27621) (705 

Notice), to delay the effectiveness of 

certain provisions of the final 

regulations until the legal challenge is 

resolved. The 705 Notice postponed the 

effective date of the regulations to 

preserve the regulatory status quo while 

the litigation is pending and the Court 

makes a decision. As explained in the 

705 Notice, the plaintiff has raised 

serious questions concerning the 

validity of certain provisions of the final 

regulations and has identified 

substantial injuries that could result if 

they go into effect before those 

questions are resolved. Given the legal 

uncertainty, maintaining the status quo 

is critical. For instance, if the final 

regulations took effect, institutions 

participating in programs under title IV 

of the Higher Education Act of 1965, as 

amended (HEA), would have been 

required, as of July 1, 2017, to modify 

their contracts in accordance with the 

arbitration and class action waiver 

regulations. Postponing the final 

regulations avoids the cost that 

institutions would incur in making 

these changes while the final 

regulations are subject to judicial 

review. Meanwhile, the Department is 

continuing to process borrower defense 

claims under the existing regulations 

that will remain in effect during the 

postponement. 

Because the final regulations have 

been postponed beyond July 1, 2017, 

pursuant to the 705 Notice, the 

postponement of the final regulations 

must be for at least one year to comply 

with section 482 of the HEA (20 U.S.C. 

1089). That section imposes a 

requirement (the ‘‘master calendar 

requirement’’) on the Department for the 

effective date of regulations affecting 

programs under title IV of the HEA. 

Under the master calendar requirement, 

a regulatory change that has been 

published in final form on or before 

November 1 prior to the start of an 

award year—which begins on July 1 of 

any given year—may take effect only at 

the beginning of the next award year, or 


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1We note that in the limited circumstance where 

the Secretary designates a regulation for early 

implementation pursuant to 20 U.S.C. 1089(c)(2), 

regulated parties may choose to implement the 

regulation before the July 1 effective date. Early 

implementation, however, does not change the 

effective date of the regulation. 

in other words, on July 1 of the next 

year. Any regulatory change that has not 

been published in final form by 

November 1 prior to the start of an 

award year may not become effective 

until the beginning of the second award 

year after the November 1 date. 

The master calendar requirement 

provides that regulatory changes 

affecting the title IV programs must 

become effective at the beginning of an 

award year and does not authorize the 

Department to make a regulatory change 

affecting the title IV programs effective 

in the middle of an award year.1

Accordingly, regulations promulgated 

under title IV of the HEA have an 

effective date of July 1. Congress 

enacted the master calendar 

requirement to ensure that institutions 

have sufficient notice of the timing of 

any regulatory change in order to 

implement regulatory changes at the 

start of each award year. In this way, 

institutions avoid incurring the costs of 

compliance on a rolling basis 

throughout the year and avoid any 

disruption to the timely delivery of title 

IV funds. See S. Rep. No. 99–296, at 11 

(1986); see also Reauthorization of the 

Higher Education Act, 1985: Hearings 

Before the S. Subcomm. On Educ., Arts 

and Humanities, 99th Cong. 10 (1985) 

(statement of the Conference on Higher 

Education) (‘‘Although progress will 

always require updating, there is an 

equally important need for stability so 

that proper planning by all those 

involved—including families, aid 

administrators, and agency officials— 

can be achieved.’’). 

Congress has been clear that ‘‘the 

effective dates of all regulations on Title 

IV are driven by the Master Calendar 

requirements in Section 482,’’ H.R. Rep. 

No. 102–447, at 77 (1992), and it has 

reaffirmed the breadth of the master 

calendar requirement by providing 

express waivers of the requirement only 

in specific limited circumstances. See, 

e.g., Higher Education Opportunity Act, 

Public Law 110–315, sec. 402(b), 122 

Stat. 3078, 3191 (2008); Higher 

Education Act—Technical Corrections, 

Public Law 111–39, sec. 409, 123 Stat. 

1950, 1953 (2009). Accordingly, the 

Department has consistently interpreted 

and applied the master calendar 

requirement to provide that any 

regulatory change relating to student 

financial aid programs may take effect 

only at the beginning of an award year. 

With respect to the final regulations, 

implementing this substantial regulatory 

change in the middle of an award year 

would frustrate the notice objectives of 

the HEA and deny schools the assurance 

of the master calendar. For the July 1, 

2017, postponement to be consistent 

with the HEA, therefore, the effective 

date must be July 1, 2018 (or July 1 of 

a later year). Because the 705 Notice 

does not establish a specific effective 

date but is tied to the pending litigation, 

this interim final rule provides the 

public and regulated parties notice that 

even if the litigation concludes before 

July 1, 2018, the final regulations will 

not take effect until that date consistent 

with the master calendar requirement. 

Separately, we note that the delayed 

effective date is consistent with the 

Memorandum for the Heads of 

Executive Departments and Agencies 

entitled ‘‘Regulatory Freeze Pending 

Review,’’ published in the Federal 

Register on January 24, 2017 

(Memorandum), which was intended to 

ensure that the President’s appointees or 

designees have the opportunity to 

review any new or pending regulations 

and where appropriate to suggest 

changes. Among other things, the 

Memorandum directed the heads of 

executive departments and agencies to 

consider temporarily postponing the 

effective dates of all regulations that had 

been published in the Federal Register 

but had not yet taken effect. In addition, 

on February 24, 2017, the President 

issued Executive Order 13777, which 

requires each agency head to consider 

recommendations to repeal, replace, or 

modify existing regulations, consistent 

with applicable law. In accordance with 

these evaluative efforts, we announced 

on June 16, 2017, our intent to engage 

in negotiated and notice-and-comment 

rulemaking on the topics addressed by 

the final regulations on (82 FR 27640). 

The Department is reevaluating its 

regulations in this area and the burdens 

on regulated parties may change. 

To provide adequate notice to these 

parties in accordance with the HEA’s 

master calendar requirement, the 

Department has determined that it is 

necessary to delay until July 1, 2018, the 

effective date of the revisions to or 

additions of the following provisions of 

the final regulations in title 34 of the 

Code of Federal Regulations (CFR): 

• § 668.14(b)(30), (31), and (32) 

Program participation agreement. 

• § 668.41(h) and (i) Reporting and 

disclosure of information. 

• § 668.71(c) Scope and special 

definitions. 

• § 668.90(a)(3) Initial and final 

decisions. 

• § 668.93(h), (i) and (j) Limitation. 

• § 668.171 General. 

• § 668.175(c), (d), (f), and (h) 

Alternative standards and requirements. 

• Part 668 subpart L, Appendix C. 

• § 674.33(g)(3) and (g)(8) Repayment. 

• § 682.202(b)(1) Permissible charges 

by lenders to borrowers. 

• § 682.211(i)(7) Forbearance. 

• § 682.402(d)(3), (d)(6)(ii)(B)(1) and 

(2), (d)(6)(ii)(F) introductory text, 

(d)(6)(ii)(F)(5), (d)(6)(ii)(G), (d)(6)(ii)(H) 

through (K), (d)(7)(ii) and (iii), (d)(8), 

and (e)(6)(iii) Death, disability, closed 

school, false certification, unpaid 

refunds, and bankruptcy payments. 

• § 682.405(b)(4)(ii) Loan 

rehabilitation agreement. 

• § 682.410(b)(4) and (b)(6)(viii) 

Fiscal, administrative, and enforcement 

requirements. 

• § 685.200(f)(3)(v) and (f)(4)(iii) 

Borrower eligibility. 

• § 685.205(b)(6) Forbearance. 

• § 685.206(c) Borrower 

responsibilities and defenses. 

• § 685.212(k) Discharge of a loan 

obligation. 

• § 685.214(c)(2), (f)(4) through (7) 

Closed school discharge. 

• § 685.215(a)(1), (c)(1) through (c)(8), 

and (d) Discharge for false certification 

of student eligibility or unauthorized 

payment. 

• § 685.222 Borrower defenses. 

• Part 685 subpart B, Appendix A 

Examples of borrower relief. 

• § 685.300(b)(11), (b)(12), and (d) 

through (i) Agreements between an 

eligible school and the Secretary for 

participation in the Direct Loan 

Program. 

• § 685.308(a) Remedial actions. 

In addition, in connection with this 

delay, the Department interprets all 

references to ‘‘July 1, 2017’’ in the text 

of the above-referenced regulations to 

mean the effective date of those 

regulations. The regulatory text 

included references to the specific July 

1, 2017, date in part to provide clarity 

to readers in the future as to when the 

regulations had taken effect. Because the 

regulations have not taken effect on July 

1, 2017, we will read those regulations 

as referring to the new effective date 

established by this delay, i.e., July 1, 

2018. 

We do not intend to delay the 

effective dates of the regulatory 

provisions published in 81 FR 75926 

which: (1) Expand the types of 

documentation that may be used for the 

granting of a discharge based on the 

death of the borrower; (2) amend the 

regulations governing the consolidation 

of Nursing Student Loans and Nurse 

Faculty Loans so that they align with 

the statutory requirements of section 

428C(a)(4)(E) of the HEA; (3) amend the 


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regulations governing Direct 

Consolidation Loans to allow a borrower 

to obtain a Direct Consolidation Loan 

regardless of whether the borrower is 

also seeking to consolidate a Direct 

Program or FFEL loan, if the borrower 

has a loan type identified in 34 CFR 

685.220(b); (4) address severability; and 

(5) make technical corrections. As 

established in 81 FR 75926, 34 CFR 

682.211(i)(7) and 682.410(b)(6)(viii) 

remain designated for early 

implementation, at the discretion of 

each lender or guaranty agency. 

Waiver of Notice-and-Comment 

Rulemaking, Negotiated Rulemaking, 

and Delayed Effective Date under the 

APA: Under the APA (5 U.S.C. 553), the 

Department generally offers interested 

parties the opportunity to comment on 

proposed regulations and publishes 

rules not less than 30 days before their 

effective dates. In addition, under 

section 492 of the HEA (20 U.S.C. 

1098a), all regulations proposed by the 

Department for programs authorized 

under title IV of the HEA are subject to 

negotiated rulemaking requirements. 

However, the APA provides that an 

agency is not required to conduct 

notice-and-comment rulemaking or 

delay effective dates when the agency, 

for good cause, finds that the 

requirement is impracticable, 

unnecessary, or contrary to the public 

interest (5 U.S.C. 553(b)(3)(B) and 

(d)(3)). In addition, section 492(b)(2) of 

the HEA provides that negotiated 

rulemaking may be waived for good 

cause when doing so would be 

‘‘impracticable, unnecessary, or contrary 

to the public interest.’’ Section 492(b)(2) 

of the HEA also requires the Secretary 

to publish the basis for waiving 

negotiations in the Federal Register at 

the same time as the proposed 

regulations in question are first 

published. 

The Department determined under 

the APA and the HEA that notice-andcomment and negotiated rulemaking are 

unnecessary and impracticable and 

therefore is waiving both requirements 

in this interim final rule. As noted 

previously, the 705 Notice delayed the 

effective date of the final regulations to 

maintain the status quo pending the 

outcome of the litigation, which could 

not be resolved before July 1, 2017. 

Given that delay, the next possible date 

for the regulations to become effective 

would be July 1, 2018, in accordance 

with the HEA’s master calendar 

requirement. Thus, even if the litigation 

were resolved before July 1, 2018, under 

the HEA, July 1, 2018, would be the 

earliest the regulations could take effect. 

Given the Department’s limited 

discretion to set an effective date under 

the master calendar requirement, the 

Department determined that both 

notice-and-comment and negotiated 

rulemaking are unnecessary. The 

Department also determined that it was 

impracticable to conduct notice-andcomment and negotiated rulemaking 

before the original July 1, 2017, effective 

date. The litigation was initiated on May 

24, 2017; the Department would not 

have been able to conduct negotiated 

rulemaking or notice-and-comment 

rulemaking to obtain comment on a 

possible new effective date in the short 

amount of time between May 24, and 

July 1, 2017. And, once the July 1, 2017, 

date passed, under the master calendar 

requirement, the Department did not 

have any discretion to set an effective 

date earlier than July 1, 2018. For the 

same reasons, we are also waiving the 

30-day delay of the effective date of this 

interim final rule under the APA. 

However, the Department is providing a 

30-day comment period and invites 

interested persons to comment on the 

delay of the effective date of the final 

regulations from July 1, 2017, to July 1, 

2018. In addition, the Department plans 

to issue a notice of proposed rulemaking 

to seek public comment on further 

delaying the effective date of the final 

regulations until July 1, 2019, to allow 

for completion of the negotiated 

rulemaking process before regulatory 

changes become effective in this area 

(see 82 FR 27640). The Department will 

seek public comments on whether such 

a further delay is desirable to avoid the 

costs to regulated parties of 

implementing regulations that may be 

subject to change in the near future. 

Executive Orders 12866, 13563 and 

13771 

Regulatory Impact Analysis 

Under Executive Order 12866, it must 

be determined whether this regulatory 

action is ‘‘significant’’ and, therefore, 

subject to the requirements of the 

Executive order and subject to review by 

the Office of Management and Budget 

(OMB). Section 3(f) of Executive Order 

12866 defines a ‘‘significant regulatory 

action’’ as an action likely to result in 

a rule that may— 

(1) Have an annual effect on the 

economy of $100 million or more, or 

adversely affect a sector of the economy, 

productivity, competition, jobs, the 

environment, public health or safety, or 

State, local, or Tribal governments or 

communities in a material way (also 

referred to as an ‘‘economically 

significant’’ rule); 

(2) Create serious inconsistency or 

otherwise interfere with an action taken 

or planned by another agency; 

(3) Materially alter the budgetary 

impacts of entitlement grants, user fees, 

or loan programs or the rights and 

obligations of recipients thereof; or 

(4) Raise novel legal or policy issues 

arising out of legal mandates, the 

President’s priorities, or the principles 

stated in the Executive order. 

The Department estimates the 

quantified annualized economic and net 

budget impacts of the delay of the 

effective date to be ¥$18.6 million in 

reduced costs to institutions and the 

Federal government. These reduced 

costs result from the delay of the 

borrower defense rules on the 2017 and 

2018 loan cohorts, as well as from the 

delayed paperwork burden on 

institutions, and the delayed execution 

of the closed school automatic 

discharge. This final regulatory action is 

not a significant regulatory action 

subject to review by OMB under section 

3(f) of Executive Order 12866. 

We have also reviewed these 

regulations 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 

on 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 

provide 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 


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49118 Federal Register / Vol. 82, No. 204 / Tuesday, October 24, 2017 / Rules and Regulations 

techniques may include ‘‘identifying 

changing future compliance costs that 

might result from technological 

innovation or anticipated behavioral 

changes.’’ 

We are issuing this interim final rule 

only on a reasoned determination that 

its benefits justify its costs. Based on the 

analysis that follows, the Department 

believes that this interim final rule is 

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. 

In accordance with both Executive 

Orders, the Department has assessed the 

potential costs and benefits, both 

quantitative and qualitative, of this 

regulatory action. 

The quantified economic effects and 

net budget impact associated with the 

delayed effective date are not expected 

to be economically significant. 

Effects of One-Year Delay 

As indicated in the Regulatory Impact 

Analysis (RIA) published with the final 

regulations on November 1, 2016, the 

final regulations were economically 

significant with a total estimated net 

budget impact of $16.6 billion over the 

2017–2026 loan cohorts in the primary 

estimate scenario, including a cost of 

$381 million for cohorts 2014–2016 

attributable to the provisions for a threeyear automatic closed school discharge. 

As the net budget impact is based on the 

net present value of the cash flows of 

the relevant cohorts over a forty-year 

timeframe, simply delaying the final 

regulations for a year will have a much 

more limited effect, as discussed below. 

This analysis is limited to the effect of 

delaying the effective date of the final 

regulations, and does not account for 

any potential future substantive changes 

in the final regulations. 

Even with the delayed effective date, 

borrowers will still be able to submit 

claims. The provisions of the final 

regulations pertaining to the process for 

review and determination of claims 

were not limited to specific cohorts 

designated by the effective date so the 

delay will not result in specific cohorts 

of borrowers being excluded from the 

process reflected in the final 

regulations, when implemented. Once 

in effect, the protection generated by the 

financial protection provisions will be 

available to be applied to claims from 

loans originated earlier, including the 

period from July 1, 2017 to June 30, 

2018. Loans made before July 1, 2017, 

were always subject to the State-based 

standard and their ability to bring 

claims under that standard is 

unchanged by the delay. For claims 

filed after the effective date of the 

regulations, the Federal standard 

established in the final regulations 

would apply. As discussed previously, 

the Department interprets all references 

to ‘‘July 1, 2017’’ in the text of the 

regulations to mean the effective date of 

the regulations. As a result, the delayed 

effective date means that loans made 

between July 1, 2017 and June 30, 2018, 

will be subject to the current State-based 

standard. As we noted in the final 

regulations, the Federal standard was 

designed to address much of the 

conduct already covered by the Statebased standard, so the vast majority of 

claims associated with loans made 

between July 1, 2017, and the delayed 

effective date could be made under the 

current, State law-based standard as 

well. 

In addition to borrowers, institutions 

are also affected by the delayed effective 

date. As indicated in the RIA for the 

final regulations, institutions bear the 

major costs of compliance, paperwork 

burden, and providing financial 

protection. The financial protection 

provisions of the final regulations 

depend on the effective date, so 

institutions will not incur these costs 

until the final regulations are in effect. 

In terms of cost savings for institutions, 

the estimated annual paperwork burden 

was approximately $9.4 million in the 

initial year of the final regulations. In 

the revised scenario developed to 

estimate the effect of the one-year delay 

in the effective date, transfers from 

institutions to students, via the Federal 

government, would be reduced by 

approximately $1.3 million for the 2017 

and 2018 loan cohorts. The costs of 

providing financial protection were not 

quantified in the final regulations, and 

the Department has no additional data 

to estimate costs institutions may avoid 

from the delayed effective date of the 

financial protection provisions. 

There is some uncertainty as to the 

regulatory baseline against which this 

interim final rule’s impacts should be 

assessed. As noted previously, the 705 

Notice delayed the effectiveness of 

certain provisions of the 2016 final 

regulations until a legal challenge is 

resolved. If the legal resolution were to 

be reached on or after July 1, 2018, then 

the 705 Notice would provide for the 

delay of effectiveness between now and 

then, and the interim final rule would 

not have any impact. By contrast, if the 

legal resolution were to be reached 

earlier, this interim final rule could 

have substantial impacts associated 

with the avoidance of confusion and 

legal ambiguity regarding the interaction 

among the 705 Notice, the master 

calendar, and the 2016 final regulations. 

Although an analysis of a simple oneyear delay does not exactly capture this 

collection of impacts (due to, among 

other reasons, the fact that July 1, 2018, 

is already less than a year away and 

thus this interim final rule cannot have 

a full year’s impact), it can provide a 

general sense of the magnitude of upper 

bound effects. 

Net Budget Impact 

In order to estimate the net budget 

impact of the one-year delay in the 

effective date, the Department 

developed a scenario that revised the 

primary estimate assumptions from the 

final regulations from the affected 2017 

and 2018 loan cohorts. The assumptions 

for the primary scenario from the 2016 

final regulation were the basis for the 

President’s Budget 2018 (PB2018) 

baseline that assumed the regulation 

would go into effect on July 1, 2017. The 

scenario developed for this interim final 

rule is designed to capture the 

incremental change from the PB2018 

baseline associated with the one-year 

delay in the effective date. Table 1 

presents assumptions for the primary 

estimate from the final regulations and 

the revised estimate for the one-year 

delay in the effective date. In this 

scenario, the conduct percent is 90 

percent of the primary scenario from the 

final regulation and the borrower 

percent is the same. The financial 

protection provided was always 

expected to increase over time so the 

delayed effective date in the near term 

is not expected to significantly affect the 

amount of recoveries over the life of any 

particular loan cohort, limiting any net 

budget impact from the delay. To 

estimate the potential reduction in 

recoveries related to the delayed 

effective date, we reduced recoveries for 

the affected portion of the 2017 and 

2018 cohorts by five percent for the 

private not-for-profit and proprietary 

sectors. As in the final regulations, 

recoveries from public institutions were 

held constant at 75 percent across 

scenarios. 


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Federal Register / Vol. 82, No. 204 / Tuesday, October 24, 2017 / Rules and Regulations 49119 

TABLE 1—REVISED ASSUMPTIONS FOR ONE-YEAR DELAY

Cohort 

2017 2018 

Public/private 

not for profit Proprietary Public/private not for profit Proprietary 

Conduct Percent: 

Final Primary ............................................................................................ 3.0 20 2.4 16 

Delay Revised .......................................................................................... 2.7 18 2.16 14.4 

Borrower Percent: 

Final Primary ............................................................................................ 35 45 36.8 47.3 

Delay Revised .......................................................................................... 35 45 36.8 47.3 

Public Priv/Prop Public Priv/Prop 

Recovery Percent: 

Final Primary ............................................................................................ 75 23.8 75 23.8 

Delay Revised .......................................................................................... 75 22.61 75 22.61 

The net budget impact associated 

with these effects of the one-year delay 

in the effective date on the borrower 

defense provisions only is 

approximately ¥$37.7 million from the 

2017 and 2018 loan cohorts. 

As the amount and composition of 

borrower defense claims and estimated 

recoveries over the lifetime of the 

relevant loan cohorts are not expected to 

change greatly due to the delayed 

effective date, the Department does not 

estimate an economically significant net 

budget impact from the delay itself, 

with a potential net budget impact 

related to borrower defense claims of 

¥$37.7 million in reduced costs. 

The closed school automatic 

discharge provisions were the other 

significant source of estimated net 

budget impact in the final regulations. 

Under credit reform scoring, the 

modification to older cohorts for the 

automatic discharge provision estimated 

to cost $364 million was expected to 

occur in FY 2017 in the President’s 

Budget for FY 2018 (PB2018). As a 

result of the delay in the effective date, 

the Department will not execute the 

modification in FY 2017. 

The Department does expect to incur 

the costs associated with the three-year 

automatic discharge after the delayed 

effective date, but moving the execution 

of the modification beyond FY 2017 will 

require a new cost analysis with 

economic assumptions from the fiscal 

year of the execution. This will result in 

a change of cost, but at this point it is 

not possible to know the discount rates 

in future fiscal years, so the cost of the 

modification will be determined in the 

year that it is executed. While the actual 

cost of the future modification cannot be 

determined at this time, the Department 

did approximate the effect of the delay 

by shifting the timing of the relevant 

discharges back by a year and 

recalculating a modification using the 

discount rates and economic 

assumptions used for the calculation of 

the PB2018 modification. When 

calculated in this manner, the delay in 

the modification is expected to result in 

estimated savings of less than $10 

million. 

As the delay does not change the 

substance of the automatic discharge, 

we would expect the amount and 

composition of loans affected by the 

automatic discharge not to change 

significantly. The closed school threeyear automatic discharge provisions 

were applicable to loans made on or 

after November 1, 2013, and were not 

linked to the effective date of the final 

regulations. Therefore, delaying the 

effective date of those provisions will 

not change the set of loans eligible for 

this automatic discharge. Additionally, 

borrowers would have the ability to 

apply for a closed school discharge 

before July 1, 2018, if they did not want 

to wait for the automatic discharge to be 

implemented. For future cohorts, the 

delay is not significant as the three-year 

period will fall beyond the delayed 

effective date. Any significant change to 

the estimated net budget impact 

associated with the closed school 

automatic discharge depends on any 

substantive changes made to the 

provisions as a result of the upcoming 

rulemaking and changes to economic 

assumptions when the modification is 

executed. 

Consistent with Executive Order 

13771 (82 FR 9339, February 3, 2017), 

we have estimated that this interim final 

rule will result in cost savings. 

Therefore, this interim final rule is 

considered an Executive Order 13771 

deregulatory action. 

Accounting Statement 

In evaluating whether a regulation is 

economically significant, a key 

consideration is whether the annual 

effect in any given year is over $100 

million. To evaluate this, the 

Department looked at the difference in 

the undiscounted cashflows related to 

the death, disability, and bankruptcy 

(DDB) claims in which borrower defense 

claims are included for the PB2018 

baseline and the one-year delay scenario 

described in the Net Budget Impacts 

section of this interim final rule. The 

difference from subtracting the one-year 

delay scenario from the baseline for the 

2017 and 2018 cohorts for FY2017 to FY 

2026 is summarized in Table 2. 

TABLE 2—DIFFERENCE IN UNDISCOUNTED NET CASHFLOWS FOR THE 2017 AND 2018 LOAN COHORTS FROM ONE-YEAR

DELAY IN 2016 BORROWER DEFENSE RULE FOR FY2017 TO FY2026 

2017 2018 2019 2020 2021 

Change in DDB Cashflow .................................................... 406,737 846,076 514,402 4,457,479 11,564,985 

2022 2023 2024 2025 2026 

Change in DDB Cashflow .................................................... 9,114,464 635,180 (2,086,812) (981,585) 166,597 


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Table 3 shows the effects when those 

differences in the DDB cashflows are 

discounted at 7 and 3 percent and 

annualized. 

Category Benefits 

Institutions may not incur compliance costs or costs of obtaining financial protection until the rule is in effect ... Not Quantified 

Category Costs 

7% 3% 

Continued use of state law based standard ............................................................................................................ Not Quantified 

Delay in providing consumer information about institution’s performance and practices. 

Potential decreased awareness and usage of closed school and false certification discharges. 

Savings associated with delay in compliance with paperwork requirements ......................................................... ¥9.5 ¥9.51 

Category 

Transfers 

7% 3% 

Reduction in transfers from the Federal Government to affected borrowers in the 2017 and 2018 cohorts that 

would have been partially borne by affected institutions via reimbursements .................................................... ¥3.8 ¥3.8 

Reduced reimbursements from affected institutions to affected students, via the Federal government as loan 

cohorts 2017 and 2018 are subject to the existing borrower defense regulation ............................................... ¥1.3 ¥1.2 

Delay in closed school automatic discharge ........................................................................................................... ¥6.6 ¥6.6 

Paperwork Reduction Act of 1995 

As indicated in the Paperwork 

Reduction Act section published in the 

final regulations, the assessed estimated 

burden was 253,136 hours, affecting 

both institutions and individuals, with 

an estimated annual cost of $9,458,484. 

The table below identifies the regulatory 

sections, OMB Control Numbers, 

estimated burden hours, and estimated 

costs of the final regulations. 

Regulatory section OMB control No. Burden hours 

Estimated cost 

$36.55/hour 

institution 

$16.30/hour 

individual 

668.14 .............................................................................................................. 1845–0022 1,953 .............................. 71,382 

668.41 .............................................................................................................. 1845–0004 5,346 .............................. 195,396 

668.171 ............................................................................................................ 1845–0022 3,028 .............................. 110,673 

668.175 ............................................................................................................ 1845–0022 60,560 ............................ 2,213,468 

682.211 ............................................................................................................ 1845–0020 5,784 .............................. 211,405 

682.402 ............................................................................................................ 1845–0020 1,838 .............................. 67,179 

685.222 ............................................................................................................ 1845–0142 249 (Individuals) ............ 4,059 

685.222 ............................................................................................................ 1845–0142 800 (Institutions) ............ 29,240 

685.300 ............................................................................................................ 1845–0143 179,362 .......................... 6,555,681 

Total ......................................................................................................... .............................. 258,920 .......................... 9,458,484 

Cost savings due to delayed effective date excluding 682.211, for which 

early implementation is allowed.

.............................. 253,136 .......................... 9,247,079 

Burden remaining ............................................................................................ .............................. 5,784 .............................. 211,405 

This interim final rule delays the 

effective date of all of the cited 

regulations and would result in a cost 

savings of the total amount of 

$9,247,079. This cost savings equals the 

cost savings from delaying the effective 

date of all of the identified provisions of 

the final regulations other than 

§ 682.211(i)(7), regarding mandatory 

forbearance based on a borrower defense 

claim, with an estimated 5,784 hours 

and $211,405 cost, as such section has 

been designated for early 

implementation. Lenders may have 

elected to invoke early implementation, 

and, therefore, those specific costs and 

hours remain applicable and have been 

subtracted from the overall estimated 

cost savings. Based on the delayed 

effective date of July 1, 2018, the revised 

estimated annual cost savings to 

institutions and individuals is 

$9,247,079 ($9,458,484 ¥ $211,405) 

with an estimated burden hours savings 

of 253,136 (258,920 ¥ 5,784). 

Regulatory Flexibility Act 

The Secretary certifies that this 

interim final regulation will not have a 

significant economic impact on a 

substantial number of small entities. 

The small entities that are affected by 

these regulations are small 

postsecondary institutions. As stated 

above, this delayed effective date is not 

expected to have a significant economic 

impact generally. This same analysis 

applies with regard to affected small 

entities. 

Intergovernmental Review 

These programs are not subject to 

Executive Order 12372 and the 

regulations in 34 CFR part 79. 


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Federal Register / Vol. 82, No. 204 / Tuesday, October 24, 2017 / Rules and Regulations 49121 

Assessment of Educational Impact 

Based on 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. 

Accessible Format: Individuals with 

disabilities may obtain this document in 

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

print, audiotape, or compact disc) on 

request to the contact person listed 

under FOR FURTHER INFORMATION

CONTACT. 

Electronic Access to this Document: 

The official version of this document is 

the document published in the Federal 

Register. Free Internet access to the 

official edition of the Federal Register 

and the Code of Federal Regulations is 

available via the Federal Digital System 

at: www.gpo.gov/fdsys. At this site, you 

can view this document, as well as all 

other documents of this Department 

published in the Federal Register, in 

text or 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.Federal Register.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 668 

Administrative practice and 

procedure, Colleges and universities, 

Consumer protection, Grant programs— 

education, Loan programs—education, 

Reporting and recordkeeping 

requirements, Selective Service System, 

Student aid, Vocational education. 

34 CFR Part 674 

Loan programs—education, Reporting 

and recordkeeping requirements, 

Student aid. 

34 CFR Parts 682 and 685 

Administrative practice and 

procedure, Colleges and universities, 

Loan programs—education, Reporting 

and recordkeeping requirements, 

Student aid, Vocational education. 

Dated: October 16, 2017. 

Betsy DeVos, 

Secretary of Education. 

[FR Doc. 2017–22851 Filed 10–20–17; 4:15 pm] 

BILLING CODE 4000–01–P 

DEPARTMENT OF VETERANS 

AFFAIRS 

38 CFR Part 3 

RIN 2900–AP84 

Extension of the Presumptive Period 

for Compensation for Gulf War 

Veterans 

AGENCY: Department of Veterans Affairs. 

ACTION: Final rule. 

SUMMARY: The Department of Veterans 

Affairs (VA) is issuing this final rule to 

affirm its adjudication regulations 

regarding compensation for disabilities 

resulting from undiagnosed illnesses 

suffered by veterans who served in the 

Persian Gulf War. This amendment is 

necessary to extend the period during 

which disabilities associated with 

undiagnosed illnesses and medically 

unexplained chronic multi-symptom 

illnesses must become manifest in order 

for a Veteran to be eligible for 

compensation. The intended effect of 

this amendment is to provide 

consistency in VA adjudication policy, 

preserve certain rights afforded to 

Persian Gulf War (GW) veterans, and 

ensure fairness for current and future 

GW veterans. 

DATES: This final rule is effective 

October 24, 2017. 

FOR FURTHER INFORMATION CONTACT: 

Janel Keyes, Policy Analyst, Regulations 

Staff (211D), Compensation Service, 

Veterans Benefits Administration, 810 

Vermont Avenue NW., Washington, DC 

20420, Janel.Keyes@va.gov, (202) 461– 

9700. (This is not a toll-free telephone 

number.) 

SUPPLEMENTARY INFORMATION: On 

October 17, 2016, VA published in the 

Federal Register an interim final rule 

(81 FR 71382) amending its adjudication 

regulation regarding compensation for 

disabilities suffered by veterans who 

served in the Southwest Asia Theater of 

Operations during the GW. In order to 

ensure that benefits established by 

Congress are fairly administered, VA 

extended the evaluation period in 

which disabilities associated with 

undiagnosed illnesses and chronic 

multi-symptom illnesses must become 

manifest in order for a veteran to be 

eligible for compensation. Accordingly, 

VA removed the date, December 31, 

2016, from 38 CFR 3.317(a)(1)(i) and 

added, in its place, December 31, 2021. 

VA invited interested persons to 

submit written comments on or before 

December 16, 2016. VA received 22 

comments in response to the interim 

final rule. VA received comments from 

military service members, veterans, 

family members, and one veteran 

service organization, which was 

Veterans of Foreign Wars. Some 

comments addressed more than one 

issue. In those instances, VA reviewed 

and considered each issue 

independently. VA also grouped 

together by similar topic all of the issues 

raised by the commenters that 

concerned at least one portion of the 

rule. VA organized the responses to the 

comments by topic. VA responds to all 

commenters as follows. 

I. Supportive 

VA received five comments 

expressing support for the extension. 

One commenter provided personal 

testimony as a GW veteran that his 

symptoms had a delayed-onset; 

therefore, an extension was appropriate 

and justified. Another commenter 

provided personal testimony as a spouse 

of a GW veteran stating that her 

husband’s symptoms have ‘‘steadily 

gotten worse over the years’’. VA 

appreciates the feedback and support. 

VA makes no change based on these 

comments. 

II. Elimination of Expiration Date 

The majority of commenters, some of 

whom thanked VA for the extension, 

asserted that VA should eliminate the 

expiration date. One commenter stated, 

‘‘I think that the deadline for [GW] 

presumptive claims should be totally 

taken away since there is still not an 

official end to the [GW] and we do not 

know when there will be one.’’ Another 

stated, ‘‘It took about 5 years after 

getting out to see a pattern of illness and 

at a level to make me concerned. It took 

even longer to see and feel the full 

extent of my conditions.’’ Additionally, 

Veterans of Foreign Wars requested an 

open-ended presumptive period 

‘‘without an artificial time limit’’. 

VA makes no change based on these 

comments. Section 102(7) of the Persian 

Gulf War Veterans’ Benefits Act, Title I 

of the Veterans’ Benefits Improvement 

Act of 1994, Public Law 103–446, states 

Congress’ finding that further research 

must be undertaken to determine the 

causes of GW veterans’ illnesses and 

that 

pending the outcome of such research, 

veterans who are seriously ill as the result of 

such illnesses should be given the benefit of 

the doubt and be provided compensation to 

offset the impairment in earning capacities 

they may be experiencing. 

Hence, Congress contemplated an 

ongoing process for investigating the 

nature and causes of GW veterans’ 

illnesses that is reflected in the current 

statutory and regulatory scheme. See 38 

U.S.C. 1117 and 38 CFR 3.317. 


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