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[Federal Register: October 8, 1996 (Volume 61, Number 196)]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DEPARTMENT OF EDUCATION
William D. Ford Federal Direct Loan Program
AGENCY: Department of Education.
ACTION: Notice of processing deadlines to submit loan records and
SUMMARY: This notice establishes processing deadlines for the
submission of William D. Ford Federal Direct Loan (Direct Loan) Program
promissory notes and electronic records to the Secretary for the 1994-
1995 academic year (Year 1) and the 1995-1996 academic year (Year 2).
Any electronic records and promissory notes for loans made during Year
1 and Year 2 are subject to the deadlines contained in this notice.
EFFECTIVE DATE: The deadline for processing any electronic records and
promissory notes for loans made during Year 1 is November 22, 1996. The
deadline for processing any electronic records and promissory notes for
loans made during Year 2 is July 31, 1997.
FOR FURTHER INFORMATION CONTACT: Douglas Laine, Program Specialist,
Direct Loan Policy Group, U.S. Department of Education, 600
Independence Avenue, S.W., Room 3045, ROB-3, Washington, D.C. 20202.
Telephone (202) 708-9406. 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: The Secretary is establishing processing
deadlines by which institutions that participated in Year 1 or Year 2
of the Direct Loan Program must submit electronic records and
promissory notes for Direct Loans made during those years. Under an
institution's participation agreement with the Secretary to participate
in the Direct Loan Program, an institution must comply with all of the
requirements established by the Secretary relating to student loan
information with respect to loans made under the Direct Loan Program.
See 34 CFR 685.300(b)(6). This provision includes the submission of
records relating to Direct Loans. The Secretary is exercising his
authority under this provision to establish a processing deadline by
which all applicable electronic records and promissory notes for a
particular academic year must be final, complete, accurate, and
submitted to the Secretary.
The Secretary believes that establishing annual processing
deadlines for the submission of all electronic records (including
initial and adjusted or revised records) and promissory notes is
necessary to improve the integrity and accountability of the Direct
Loan Program and to improve services to students and schools. Schools
are required under 34 CFR 685.309(a) to establish and maintain proper
administrative and fiscal procedures to protect the rights of student
and parent borrowers as well as to protect the United States from
unreasonable risk of loss. Establishing the processing deadlines
contained in this notice will help achieve these goals. Further,
establishing an annual processing deadline will enable the Secretary to
finalize cash records under the Direct Loan Program for an academic
year within a reasonable period of time following the end of that
academic year. The Secretary also will be better able to ensure that
Direct Loan monies were disbursed appropriately to student borrowers
attending a school, or to parent borrowers borrowing on behalf of
dependent students at the school. The processing deadlines also will
enable the Department to conduct a program review of a Direct Loan
school more efficiently, as all Direct Loan records
submitted to the Secretary by that date will be deemed final.
It is important that schools understand the difference between the
annual processing deadline and the 30-day requirement for the regular
submission of Direct Loan records. The Secretary believes that
institutions have been adequately notified that Direct Loan records
must be submitted to the Secretary in a timely manner. The Department
has published numerous documents emphasizing that schools should submit
all loan origination records, promissory notes, and disbursement
records to the Secretary on a monthly basis. The Department
specifically provided this guidance in the April 26, 1994, Announcement
of Criteria for Loan Origination--1995-1996 Academic Year (59 FR 21804)
and in ``Direct Loan Program Bulletin'' DLB-15. Further, the Department
has published regulations in the Federal Register on December 1, 1995,
requiring schools that originate Direct Loans to submit loan
origination records, promissory notes, and disbursement records, for
the first disbursements of loans to the Secretary no later than 30 days
following the date the disbursements are made. In addition, these
regulations require that schools submit disbursement records for each
subsequent disbursement to the Secretary no later than 30 days
following the date the subsequent disbursements are made. Schools that
participate under standard origination must submit an initial and
subsequent disbursement record to the Secretary no later than 30 days
following the date of each disbursement. See 34 CFR 685.301(d).
These regulations, which were effective beginning on July 1, 1996,
apply to all Direct Loan disbursements, both those made prior to July 1
and those made on or after July 1. Thus, for any disbursement of a loan
made prior to July 1, 1996, the institution was required to submit all
electronic records and promissory notes associated with that
disbursement no later than 30 days after the effective date of these
regulations--July 31, 1996. Any institution that is not in compliance
with the 30-day time period for reporting may be subject to fines,
penalties, or other sanctions, as determined by the Secretary.
The Secretary realizes that in some cases institutions will need
to edit or adjust the electronic records after the initial records are
submitted to the Secretary. Therefore, the Secretary is publishing this
notice establishing annual processing deadlines and to notify
institutions that any electronic record or promissory note submitted to
the Secretary for Year 1 or Year 2 after the applicable deadline will
be rejected. Borrower loan files that remain incomplete or inaccurate
by the deadline date may result in institutional, rather than federal,
responsibility for the loan or portion of the loan.
Deadlines for Submission of Records
An institution that participated in Year 1 (academic year 1994-
1995) of the Direct Loan Program must submit all electronic loan
records and promissory notes associated with Direct Loans made during
Year 1 to the Secretary no later than (45 days after publication in the
Institutions that participated in Year 2 (academic year 1995-1996)
of the Direct Loan Program must submit all electronic loan records and
promissory notes associated with Direct Loans made during Year 2 to the
Secretary no later than July 31, 1997.
(Catalog of Federal Domestic Assistance Number 84.268, William D.
Ford Federal Direct Loan Program)
Dated: September 30, 1996.
David A. Longanecker,
Assistant Secretary for Postsecondary Education.
[FR Doc. 96-25709 Filed 10-7-96; 8:45 am]
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