Maintained for Historical Purposes

This resource is being maintained for historical purposes only and is not currently applicable.

The Secretary announces regulatory relief from specific regulations governing the Federal Perkins Loan, Federal Work-Study (FWS), Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Family Education Loan (FFEL), William D. Ford Federal Di

FR part
II
Attachments:
PublicationDate: 11/19/96
FRPart: II
RegPartsAffected:
PageNumbers: 58925-58930
Summary: The Secretary announces regulatory relief from specific regulations governing the Federal Perkins Loan, Federal Work-Study (FWS), Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Family Education Loan (FFEL), William D. Ford Federal Direct Loan (Direct Loan), and Federal Pell Grant programs, for the 1994-95, 1995-96, 1996-97, and 1997-98 award years, to assist institutions and individuals who suffered financial harm from the following natural disasters: the Texas floods in October 1994; the California floods in January and March 1995; the Illinois, Louisiana, Mississippi, and Missouri floods in May 1995; the Hurricanes in the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Florida, Alabama, Georgia, and North Carolina in September and October 1995; the Idaho, Maryland, New York, Ohio, Oregon, Pennsylvania, Virginia, Washington, and West Virginia floods in January and February 1996; and the Hurricanes in Maryland, North Carolina, Pennsylvania, Puerto Rico, Virginia, and West Virginia in September 1996.
CommentDueDate:

  
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[


[Federal Register: November 19, 1996 (Volume 61, Number 224)]
[Rules and Regulations]
[Page 58925-58930]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19no96-9]


[[Page 58925]]

_______________________________________________________________________

Part II





Department of Education





_______________________________________________________________________



34 CFR Part 668, et al.



Student Assistance General Provisions, Federal Perkins Loan, Federal
Work-Study, Federal Supplemental Educational Opportunity Grant, Federal
Family Education Loan, William D. Ford Federal Direct Loan, and Federal
Pell Grant Programs; Final Rule


[[Page 58926]]



DEPARTMENT OF EDUCATION

34 CFR Parts 668, 674, 675, 676, 682, 685, and 690


Student Assistance General Provisions, Federal Perkins Loan,
Federal Work-Study, Federal Supplemental Educational Opportunity Grant,
Federal Family Education Loan, William D. Ford Federal Direct Loan, and
Federal Pell Grant Programs

AGENCY: Department of Education.

ACTION: Notice of relief from regulatory provisions.

-----------------------------------------------------------------------

SUMMARY: The Secretary announces regulatory relief from specific
regulations governing the Federal Perkins Loan, Federal Work-Study
(FWS), Federal Supplemental Educational Opportunity Grant (FSEOG),
Federal Family Education Loan (FFEL), William D. Ford Federal Direct
Loan (Direct Loan), and Federal Pell Grant programs, for the 1994-95,
1995-96, 1996-97, and 1997-98 award years, to assist institutions and
individuals who suffered financial harm from the following natural
disasters: the Texas floods in October 1994; the California floods in
January and March 1995; the Illinois, Louisiana, Mississippi, and
Missouri floods in May 1995; the Hurricanes in the Commonwealth of
Puerto Rico, the U.S. Virgin Islands, Florida, Alabama, Georgia, and
North Carolina in September and October 1995; the Idaho, Maryland, New
York, Ohio, Oregon, Pennsylvania, Virginia, Washington, and West
Virginia floods in January and February 1996; and the Hurricanes in
Maryland, North Carolina, Pennsylvania, Puerto Rico, Virginia, and West
Virginia in September 1996.

EFFECTIVE DATE: This document takes effect December 19, 1996.

FOR FURTHER INFORMATION CONTACT: Kathy S. Gause, Senior Program
Specialist, Grants Branch, Policy Development Division, Policy,
Training, and Analysis Service, U.S. Department of Education, 600
Independence Avenue, S.W., (Regional Office Building 3, Room 3045),
Washington, D.C. 20202-5447. Telephone (202) 708-4690. Individuals who
use a telecommunications device for the deaf (TDD) may call the Federal
Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. and 8
p.m., Eastern time, Monday through Friday.

SUPPLEMENTARY INFORMATION: Many student financial aid applicants and
recipients, institutions of higher education, lenders, and guaranty
agencies have been adversely affected by the natural disasters that
occurred in 1994, 1995, and 1996. The Secretary recognizes the severe
impact the flooding and hurricanes have had on institutions and their
students located in the designated natural disaster areas. Many title
IV financial aid program participants adversely affected by the natural
disasters faced and continue to face problems concerning the
administration of the title IV programs. Also, many title IV loan
recipients continue to have problems concerning the repayment of their
loans.
The title IV student financial aid programs affected by this notice
are the FFEL Program which consists of the Federal Stafford Loan
(Subsidized and Unsubsidized Loans) Program, the Federal Supplemental
Loans for Students (SLS) Program (note: The SLS Program no longer
exists, so no new loans are being made. However, this notice applies to
the servicing of existing loans.), the Federal PLUS Program, and the
Federal Consolidation Loan Program; the Direct Loan Program which
consists of the Federal Direct Stafford/Ford Loan (Direct Subsidized
Loan) Program, the Federal Direct Unsubsidized Stafford/Ford Loan
(Direct Unsubsidized Loan) Program, the Federal Direct PLUS (Direct
PLUS) Program, and the Federal Direct Consolidation Loan (Direct
Consolidated Loan) Program; the Federal Pell Grant Program; and the
Federal Perkins Loan, FWS, and FSEOG programs. To assist victims of the
floods and hurricanes in their recovery, this notice provides relief to
students, institutions, lenders, and guaranty agencies with respect to
their obligation to comply with certain regulatory provisions under the
student financial aid programs. Institutions were informed of this
relief in Dear Colleague letters dated January 1995 (GEN-95-1), April
1995 (GEN-95-20), July 1995 (GEN-95-36), November 1995 (GEN-95-49),
March 1996 (GEN 96-10), and September 1996 (GEN 96-18).
The Secretary has already provided certain regulatory relief to
lenders and guaranty agencies in the FFEL Program under section
432(a)(6) of the HEA and 34 CFR 682.406(b) and 682.413(f). The guaranty
agency directors were informed of this relief in letters issued after
each disaster covered by this notice.

Covered Individuals

This notice is intended to assist institutions and individuals that
were adversely affected by the following natural disasters:
(1) The floods in Texas in October 1994--Relief applicable to the
1994-95 award period (July 1, 1994 to June 30, 1995);
(2) The floods in California in January and March 1995--Relief
applicable to the 1994-95 award period (July 1, 1994 to June 30, 1995);
(3) The floods in Illinois, Louisiana, Mississippi, and Missouri in
May 1995--Relief applicable to the 1994-95 award year (July 1, 1994 to
June 30, 1995). However, if specifically indicated, relief may be
extended into the next award year (July 1, 1995 to June 30, 1996);
(4) The hurricanes in the Commonwealth of Puerto Rico, the U.S.
Virgin Islands, Florida, Alabama, Georgia, and North Carolina in
September and October 1995--Relief applicable to the 1995-96 award year
(July 1, 1995 to June 30, 1996). However, if specifically indicated
relief may be extended into the next award year (July 1, 1996 to June
30, 1997);
(5) The floods in Idaho, Maryland, New York, Ohio, Oregon,
Pennsylvania, Virginia, Washington, and West Virginia in January and
February 1996--Relief applicable to the 1995-96 award year (July 1,
1995 to June 30, 1996). However, if specifically indicated relief may
be extended into the next award year (July 1, 1996 to June 30, 1997);
and
(6) The hurricanes in Maryland, North Carolina, Pennsylvania,
Puerto Rico, Virginia, and West Virginia in September 1996--Relief
applicable to the 1996-97 award year (July 1, 1996 to June 30, 1997).
However, if specifically indicated relief may be extended into the next
award year (July 1, 1997 to June 30, 1998).
This notice applies to institutions, lenders, and guaranty agencies
that were unable to maintain normal participation and interactions with
title IV participants because they were located in specific counties in
these states on the date on which the President declared the existence
of a major disaster. This notice of relief also applies only to
individuals who suffered financial harm from the disaster and, at the
time the disaster occurred, were residing, attending an institution of
higher education, or employed in the counties designated as disaster
areas (or, in the case of an individual who is a dependent student,
whose parent or stepparent suffered financial harm from such disaster
and resided or was employed in such an area at that time). This notice
of regulatory relief will be applicable for awards made and collection
activities conducted under the title IV programs during the periods
listed above.
The following counties were designated as disaster areas:

[[Page 58927]]



----------------------------------------------------------------------------------------------------------------
State Counties
----------------------------------------------------------------------------------------------------------------
Flood Disaster in October 1994

----------------------------------------------------------------------------------------------------------------
Texas.................................. Angelina, Austin, Bastrop, Brazos, Brazoria, Burleson, Chambers,
Fayette, Fort Bend, Galveston, Grimes, Hardin, Harris, Houston,
Jackson, Jasper, Jefferson, Lee, Liberty, Madison, Matagorda,
Montgomery, Nacagdoches, Orange, Polk, San Augustine, San Jacinto,
Shelby, Trinity, Tyler, Victoria, Washington, Waller, Walker, Wharton.

----------------------------------------------------------------------------------------------------------------
Flood Disasters in January and March 1995

----------------------------------------------------------------------------------------------------------------
California............................. Alameda, Amador, Butte, Calaveras, Colusa, Contra Costa, Del Norte, El
Dorado, Fresno, Glenn, Humboldt, Imperial, Inyo, Kern, Kings, Lake,
Lassen, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced,
Modoc, Mono, Monterey, Napa, Nevada, Orange, Placer, Plumas,
Riverside, Sacramento, San Benito, San Bernadino, San Diego, San
Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara,
Santa Clara, Santa Cruz, Shasta, Sierra, Siskiyou, Solano, Sonoma,
Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolumne, Ventura, Yolo,
Yuba.

----------------------------------------------------------------------------------------------------------------
Flood Disasters in May 1995

----------------------------------------------------------------------------------------------------------------
Illinois............................... Madison, St. Claire Louisiana Ascension, Assumption, Jefferson,
LaFourche, Orleans (Ward 9), St. Bernard, St. Charles, St. James, St.
John the Baptist, St. Tammany, Tangipahoa, Terrebonne.
Mississippi............................ Hancock, Harrison, Jackson, Pearl River.
Missouri............................... Benton, Boone, Cole, Franklin, Gasconade, Jefferson, Johnson, Miller,
St. Charles, St. Claire, St. Genevieve, St. Louis.

----------------------------------------------------------------------------------------------------------------
Hurricane Disasters in September and October 1995

----------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico
U.S. Virgin Islands
Alabama................................ Autauga, Baldwin, Barbour, Bullock, Butler, Calhoun, Chambers,
Cherokee, Clarke, Clay, Cleburne, Coffee, Conecuh, Coosa, Covington,
Crenshaw, Dale, Elmore, Escambia, Etowah, Geneva, Henry, Houston,
Jefferson, Lee, Lowndes, Macon, Mobile, Montgomery, Pike, Randolph,
Russell, St. Clair, Talladega, Tallapoosa.
Florida................................ Bay, Collier, Calhoun, Escambia, Franklin, Gadsden, Gulf, Holmes,
Jackson, Lee, Liberty, Leon, Martin, Okaloosa, Palm Beach County,
Santa Rosa, Walton, Wakulla, Washington.
Georgia................................ Banks, Barrow, Bartow, Carroll, Catoosa, Chattooga, Cherokee, Clay,
Clayton, Cobb, Coweta, Dade, Dawson, De Kalb, Douglas, Fannin,
Fayette, Floyd, Forsyth, Fulton, Gilmer, Gordon, Gwinnett, Habersham,
Hall, Harris, Haralson, Heard, Lumpkin, Meriwether, Murray, Muscogee,
Paulding, Pickens, Pike, Polk, Quitman, Rabun, Randolph, Spalding,
Stewart, Talbot, Towns, Troup, Union, Upson, Walker, White, Whitfield.
North Carolina......................... Ashe, Avery, Cherokee, Clay, Graham, Haywood, Jackson, Macon, Madison,
Mitchell, Swain, Transylvania, Watauga, Wilkes, Yancey, Eastern Band
of the Cherokee Indian Reservation.

----------------------------------------------------------------------------------------------------------------
Flood Disasters in January and February 1996

----------------------------------------------------------------------------------------------------------------
Idaho.................................. Benewah, Bonner, Boundary, Clearwater, Idaho, Kootenai, Latah, Lewis,
Nez Perce, Shoshone, Nez Perce Indian Reservation.
Maryland............................... Allegany, Carroll, Cecil, Frederick, Garrett, Washington.
New York............................... Albany, Allegany, Broome, Cattaraugus, Cayuga, Chemung, Chenango,
Clinton, Columbia, Cortland, Delaware, Dutchess, Essex, Greene,
Herkimer, Montgomery, Orange, Otsego, Rensselaer, Saratoga,
Schenectady, Schoharie, Steuben, Sullivan, Tioga, Tompkins, Ulster,
Warren.
Ohio................................... Adams, Belmont, Brown, Clermont, Columbiana, Hamilton, Jefferson,
Lawrence, Meigs, Monroe, Scioto, Washington.
Oregon................................. Benton, Clackamas, Clatsop, Columbia, Coos, Deschutes, Douglas,
Gilliam, Hood River, Jefferson, Josephine, Lane, Lincoln, Linn,
Marion, Morrow, Multnomah, Polk, Sherman, Tillamook, Umatilla, Union,
Wallowa, Wasco, Washington, Yamhill, Confederated Tribes of Umatilla
Indian Reservation, Warm Springs Indian Reservation.
Pennsylvania........................... All counties.
Virginia............................... Alleghany, Augusta, Bath, Bland, Botetourt, Clarke, Frederick, Giles,
Grayson, Highland, Loudoun, Page, Rappahanock, Rockbridge, Rockingham,
Shenandoah, Warren, Washington, Wythe, City of Buena Vista, City of
Covington, City of Harrisonburg, City of Waynesboro.
Washington............................. Adams, Asotin, Benton, Clark, Columbia, Cowlitz, Garfield, Grays
Harbor, King, Kitsap, Kittitas, Klickitat, Lewis, Lincoln, Pierce,
Skagit, Skamania, Snohomish, Thurston, Wahkiakum, Walla Walla,
Whitman, Yakima, Yakima Indian Reservation.
West Virginia.......................... Berkeley, Brooke, Grant, Greenbriar, Hampshire, Hancock, Hardy,
Jefferson, Marshall, Mason, Mercer, Mineral, Monroe, Morgan, Nicholas,
Ohio, Pendleton, Pleasants, Pocahontas, Preston, Raleigh, Randolph,
Summers, Tucker, Tyler, Webster, Wetzel, Wood.

----------------------------------------------------------------------------------------------------------------
Hurricane Disasters in September 1996

----------------------------------------------------------------------------------------------------------------
Maryland............................... Allegany, Frederick.

[[Page 58928]]


North Carolina......................... Alamance, Beaufort, Bertie, Bladen, Brunswick, Carteret, Chatham,
Columbus, Craven, Cumberland, Duplin, Durham, Edgecombe, Franklin,
Granville, Greene, Guilford, Halifax, Harnett, Henderson, Hoke,
Johnston, Jones, Lee, Lenoir, Moore, Nash, New Hanover, Onslow,
Orange, Pamlico, Pender, Person, Polk, Richmond, Robeson, Rutherford,
Sampson, Vance, Wake, Warren, Wayne, Wilson.
Pennsylvania........................... Huntingdon, Juniata, Mifflin, Montgomery, Perry.
Commonwealth of Puerto Rico............ Arroyo, Bayamon, Canovanas, Carolina, Cayey, Ceiba, Guayama, Guaynabo,
Gurabo, Las Piedras, Loiza, Maunabo, Ponce, Rio Grande, Salinas, San
Juan, San Lorenzo, Santa Isabel, Toa Baja, Yabucoa.
Virginia............................... Augusta, Clarke, Danville (City), Halifax, Harrisonburg (City),
Madison, Martinsville (City), Mecklenburg, Nelson, Page, Pittsylvania,
Rappahannock, Rockbridge, Rockingham, Shenandoah, Staunton (City),
Warren, Waynesboro (City).
West Virginia.......................... Berkeley, Grant, Hampshire, Hardy, Jefferson, Mineral, Morgan,
Pendleton, Randolph, Tucker.
----------------------------------------------------------------------------------------------------------------

The Secretary provides the following enforcement relief from the
statutes and regulations governing the student financial aid programs
under title IV of the HEA:

I. 34 CFR Part 668--Student Assistance General Provisions

A. 34 CFR 668.19 Financial Aid Transcript

Under current regulations, before a student who previously attended
another eligible institution may receive any title IV, HEA program
funds, the institution to which the student is transferring must make
an effort to obtain the student's financial aid transcript. The
Secretary is waiving the requirement to obtain financial aid
transcripts before disbursing funds for individuals who attended
institutions covered by this notice for the 1994-95, 1995-96, 1996-97,
and 1997-98 award years. If the financial aid transcript is not
available as a result of damage caused by the disasters covered in this
notice, the institution may disburse title IV funds. Any institution
affected by this situation must document in the student's file that the
financial aid transcript is unavailable due to damage stemming from the
natural disaster. In addition, the student will still be expected to
provide statements concerning all prior financial aid received, and the
institution will be expected to retain this information in the
student's file.

B. 34 CFR 668.51-668.61 Subpart E--Selection of Applicants for
Verification

The Secretary is waiving verification requirements under 34 CFR
668.51-668.61 during the 1994-95, 1995-96, 1996-97, and 1997-98 award
years for those applicants who are selected for verification and whose
records were lost or destroyed because of the disasters covered by this
notice. The institution must document in the student's file that the
records are unavailable due to damage stemming from the natural
disaster. For these students, Verification Status Code ``S'' may be
used when reporting a Federal Pell Grant disbursement on the SAR.

II. 34 CFR Part 690--Federal Pell Grant Program

34 CFR 690.83 Submission of Reports

The Secretary modifies the deadline in 34 CFR 690.83(a)(1)(i) for
submitting SAR payment Vouchers (or SAR payment data for 1996-97) for
an award year. The Secretary will modify this reporting date, on a
``case-by-case'' basis, for institutions affected by the disasters
covered by this notice.

III. 34 CFR Part 674--Federal Perkins Loan Program

1. 34 CFR 674.31 Promissory Note

The terms of a student's promissory note require that repayment of
a loan must begin six (6) or nine (9) months after a borrower ceases to
be at least a half-time regular student and that the repayment period
normally ends 10 years later. The Secretary is modifying this provision
to provide that any borrower who was in an ``in-school'' status at the
time the natural disaster occurred and was unable to complete course
requirements or enroll in classes due to the disaster will continue to
be in an ``in-school'' status until such time as the borrower withdraws
or until the end of the award year in which the disaster occurred,
whichever is earlier. The institution must document this reason for
continued ``in-school'' status in the student's file.

2. 34 CFR 674.42 Contact With the Borrower

The Secretary will not require an institution to comply with the
provisions of Sec. 674.42(b). This section requires an institution to
make contact with the borrower during an initial or postdeferment grace
period if that grace period coincides with the disasters covered by
this notice. The Secretary suspends this requirement until the
institution is able to resume normal contact with the borrower. An
institution must document the reason for suspension of these activities
in the borrower's file.

3. 34 CFR 674.41-674.50 Subpart C--Due Diligence

The Secretary will not enforce 34 CFR 674 Subpart C--Due Diligence.
An institution may suspend the collection activities with regard to
borrowers residing in the designated disaster areas who were already in
default at the time of the natural disaster until the institution is
able to resume normal contact with the borrower. An institution must
document the reason for suspension of these activities in the
borrower's file.

4. 34 CFR 674.33 Repayment

The Secretary modifies the provisions for repayment in 34 CFR
674.33 and authorizes an institution to grant a forbearance to a
borrower who is in repayment at the time of the natural disaster but
who is unable to continue to repay the loan due to the disaster.
Interest will accrue during any period of forbearance. A borrower may
request this forbearance orally, or in writing, and is not required to
submit documentation to be considered eligible. The forbearance may be
granted in accordance with 34 CFR 674.33(d). This period of forbearance
is counted toward the 3-year maximum limit on the number of years of
forbearance that may be granted to a borrower. Documentation must be
maintained according to the governing regulations.

IV. 34 CFR Part 682--Federal Family Education Loan (FFEL) Program

A. 34 CFR 682.604 Processing the Borrower's Loan Proceeds and
Counseling Borrowers

To assist affected individuals, the Secretary will not enforce the
requirement in 34 CFR 682.604(c)(3) (i) and (ii) and 682.604(e)(3) that
loan proceeds be delivered to the borrower within 45 days of the
school's receipt of the check, but will instead permit the institution
to deliver loan proceeds to the borrower up to 120 days from the

[[Page 58929]]

institution's receipt of the check. The Department still expects
delivery of a borrower's loan proceeds as soon as possible.
Also, because some institutions may have to delay opening or have
ceased operation for an undetermined period of time, the Secretary
authorizes lenders not to disburse loan checks to institutions or to
parent PLUS borrowers in the affected areas until the lenders receive
revised disbursement schedules from the affected institutions. The
Secretary instructs guaranty agencies and lenders to revise information
on loan periods, graduation dates, and so forth, on the loan
applications related to these disbursements as the information becomes
available. This means that a borrower need not reapply for the loan.
This also will allow a student to receive his or her loan proceeds
according to a schedule that fits the institution's new academic
schedule.

B. 34 CFR 682.605 Determining the Date of a Student's Withdrawal

Section 682.605 requires an institution to follow the procedures in
34 CFR 668.22(j) for determining a student's date of withdrawal. The
Secretary modifies the provisions for determining withdrawal dates to
permit an institution affected by a disaster to take a longer period to
determine that a student has withdrawn from the institution. An
affected institution may make a determination of withdrawal within 60
days (instead of 30 days) after the expiration of the earlier of: (a)
the loan period; (b) the academic year in which the student withdrew;
or (c) the educational program from which the student withdrew.
In the case of a student who does not return for the next scheduled
term following a summer break, the school may make a determination of
withdrawal no later than 60 days (instead of 30 days) after the first
day of the next scheduled term.

C. 34 CFR 682.607 Payment of a Refund to a Lender

The Secretary will not enforce the deadlines by which an affected
institution shall pay a refund that is due to a lender, within 60 days
after the student's withdrawal as determined under 34 CFR 668.22(j)(3)
or within 30 days in the case of a student who does not return to the
institution at the expiration of an approved leave of absence. Instead,
the Secretary will require the institution to pay a refund to the
lender within 120 days (instead of 60) after the student's withdrawal
or within 60 days (instead of 30) after the last day of the leave of
absence.

D. 34 CFR 682.610 Administrative and Fiscal Requirements for
Participating Schools

The Secretary modifies the deadline in 34 CFR 682.610(c). That
section requires an institution to complete and submit required Student
Status Confirmation Reports (SSCRs) to the Secretary or guaranty agency
within 30 days of the institution's receipt of the report. Under the
modification, an institution must complete and submit these reports
within 90 days of the institution's receipt of the report.
Current regulations require that unless a school expects to submit
its next SSCR within the next 60 days, reports of changes of borrower
status must be submitted within 30 days of the discovery of the change.
This deadline is also modified to allow schools to report changes of
borrower status within 90 days (instead of 30 days).

V. 34 CFR Part 685--William D. Ford Federal Direct Loan Program

A. 34 CFR 685.306 Payment of a Refund to the Secretary

The Secretary will not enforce the deadlines by which an affected
institution must pay a refund that is due to the Secretary after the
student's withdrawal as determined under 34 CFR 668.22(j)(3). Instead,
the Secretary will require the institution to pay a refund to the
Secretary within 120 days (instead of 60 days) after the student's
withdrawal.

B. 34 CFR 685.204 Deferment and 685.207 Obligation to Repay

The Secretary is modifying the provisions 34 CFR 685.204 and
685.207, to consider each Direct Subsidized and Direct Unsubsidized
loan that has not entered repayment on the date the borrower's
attendance at the school was interrupted due to the disaster to have
been in an ``in-school'' status and to continue in that status until
the school resumes normal operations. This period of disaster-related
nonattendance does not start a borrower's grace or repayment period.
Further, each Direct Subsidized and Direct Unsubsidized loan that
was in repayment status and not in a default status on the date the
borrower's attendance at the institution was interrupted due to
disaster, is to be considered in an in-school deferment status during
the period of disaster-related nonattendance provided the borrower
qualified for an in-school deferment when the borrower's attendance was
interrupted. This interim period of nonattendance should not force a
borrower back into repayment. The institution must document this reason
for continued ``in-school'' status in the student's file.

C. 34 CFR 685.309 Administrative and Fiscal Control and Fund
Accounting Requirements for Schools Participating in the Direct Loan
Program

The Secretary modifies the deadline in 34 CFR 685.309(b). That
section requires an institution to complete and submit required Student
Status Confirmation Reports (SSCRs) to the Secretary within 30 days of
the institution's receipt of the report. Under the modification, the
institution must complete and submit these reports within 90 days of
the institution's receipt of the report.
Current regulations require that unless a school expects to submit
its next SSCR within the next 60 days, reports of changes of borrower
status must be submitted within 30 days of the discovery of the change.
This deadline is also modified to allow schools to report changes of
borrower status within 90 days (instead of 30 days).

Waiver of Rulemaking

In accordance with the Administrative Procedure Act (5 U.S.C. 553),
it is the practice of the Secretary to offer interested parties the
opportunity to comment on proposed regulations. However, the severe
impact of the ongoing occurrences of disasters has caused national
emergencies which have been recognized by Congress. The Secretary,
recognizing the severe devastation of the hurricane and flood victims,
finds that soliciting further public comment with respect to these
regulations is unnecessary and would be contrary to the public interest
under 5 U.S.C. 553(b)(B).

Regulatory Flexibility Act Certification

The Secretary certifies that this notice will not have a
significant economic impact on a substantial number of small entities.
Small entities affected by this notice are small institutions of higher
education. This notice provides temporary regulatory relief and will
not increase institutions' workload, or costs associated with
administering the title IV, HEA programs. Therefore, it will not have a
serious economic impact on a substantial number of small entities.

Assessment of Educational Impact

The Secretary has determined that this notice does not require
transmission of information that is being gathered by or is available
from any other agency or authority of the United States.

(Legal Authority: 20 U.S.C. 1082, 34 CFR 682.406(b) and 682.413(f))


[[Page 58930]]


(Catalog of Federal Domestic Assistance Numbers: 84.268 William D.
Ford Federal Direct Loan Program; 84.032 Federal Family Education
Loan Program; 84.038 Federal Perkins Loan Program; 84.007 Federal
Supplemental Educational Opportunity Grant Program; 84.033 Federal
Work-Study Program; 84.063 Federal Pell Grant Program)

Dated: November 12, 1996.
Richard W. Riley,
Secretary of Education.
[FR Doc. 96-29489 Filed 11-18-96; 8:45 am]
BILLING CODE 4000-01-P




]

Last Modified: 06/23/1998