The Secretary amends the Student Assistance General Provisions regulations. These technical amendments are necessary to clarify the regulations and to remove the procedural requirement that recipient institutions include in any request for funds the Cata

[Federal Register: September 17, 1996 (Volume 61, Number 181)]

[Rules and Regulations]               

[Page 49041-49043]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr17se96-24]



[[Page 49041]]



_______________________________________________________________________


Part VI






Department of






Education






_______________________________________________________________________




34 CFR Part 668




Student Assistance General Provisions;




Final Rule



[[Page 49042]]



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DEPARTMENT OF EDUCATION


34 CFR Part 668



Student Assistance General Provisions


AGENCY: Department of Education.


ACTION: Final regulations.


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SUMMARY: The Secretary amends the Student Assistance General Provisions 

regulations. These technical amendments are necessary to clarify the 

regulations and to remove the procedural requirement that recipient 

institutions include in any request for funds the Catalog of Federal 

Domestic Assistance (CFDA) number identifying the source of the funds 

and the amount of funds sought for each program included in the 

request. The Secretary takes action to defer this change in light of 

the information technology currently available to recipient 

institutions and the Department.


EFFECTIVE DATE: These regulations take effect on October 17, 1996.


FOR FURTHER INFORMATION CONTACT: Mr. John Kolotos, U.S. Department of 

Education, 600 Independence Avenue, SW., ROB-3, room 3045, Washington, 

DC 20202-5346. Telephone: (202) 708-7888. 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: Section 668.163 (Requesting funds) contains 

a requirement that each institution include in any request for cash the 

CFDA number identifying the source of the requested funds and the 

amount of funds for each program for which funds are sought in the 

request (61 FR 61796; December 1, 1995). The Secretary has continued to 

evaluate methods of requesting funds in light of refinements in 

information technology now available to recipient institutions and to 

the Department, and has decided to defer any change in this aspect of 

the procedure for requesting cash until future award years. At that 

time, the Secretary plans to make available to institutions a more 

precise yet easily used request method that will better identify the 

program authorization under which funds are requested. The procedural 

requirement for identification by CFDA number will therefore no longer 

be necessary.

    Changes to Sec. 668.163(a)(3) were previously made in regulations 

promulgated on June 30, 1995 (60 FR 34432) with the expressed intent of 

clarifying the procedures for payment under the reimbursement funding 

method. The language adopted there unfortunately suggested that the 

procedures had been changed rather than merely clarified. Under the 

reimbursement funding method, the Department reimburses an institution 

for the amounts the institution has expended by disbursing its own 

funds for the purpose of providing grant, loan, or work study 

assistance to its students under Title IV of the Higher Education Act 

of 1965, as amended (HEA). That disbursement may be made, as provided 

in program regulations, either by check or by credit to the student's 

account for tuition and other charges then owed, or, with the consent 

of the student, for later payment to the student. Until the 

disbursement has been made, however, the institution has no 

reimbursement claim against the Department. The revised language, which 

referred to the disbursements as those that the institution ``will'' 

make immediately after receiving payment from the Department was 

intended to reference situations where the institution had credited 

student accounts but not yet paid the student. This revised language 

did not accurately describe this procedure. The Secretary therefore 

corrects Sec. 668.163(a)(3) to restore a description of reimbursement 

requirements as they have been consistently understood and applied by 

the Department.

    Under those reimbursement procedures, the institution has been 

required to disburse fully any amounts for which it seeks 

reimbursement, including amounts paid to students directly or credited, 

by student consent, to their accounts for later payment. For 

reimbursement purposes, however, the Secretary now considers an 

institution to have made a disbursement for which a reimbursement claim 

is authorized when the institution has credited the student's account 

for later payment to the student. The Secretary recognizes the 

propriety of this claim because of the nature of the obligation the 

institution incurs by making that credit. By crediting the student's 

account, the institution incurs a legal obligation to pay the student 

the amount credited, to the extent that the student remains eligible. 

The institution remains legally obligated to make that payment even if, 

by the process of administrative offset, the Department applies funds 

otherwise payable to the institution for that approved reimbursement 

claim to satisfy a debt owed by the institution.


Waiver of Proposed Rulemaking


    In accordance with the Administrative Procedure Act, 5 U.S.C. 553, 

it is the practice of the Secretary to offer interested parties the 

opportunity to comment on proposed regulations. However, the Secretary 

has determined that these amendments to Sec. 668.163(a) to revise and 

clarify the procedure for presenting cash requests to the Department 

are procedural rules under the exemption from rulemaking requirements 

in 5 U.S.C. 553(b)(A) and do not require publication for public 

comment.


Executive Order 12866


    These regulations have been reviewed in accordance with Executive 

Order 12866. Under the terms of the order the Secretary has assessed 

the potential costs and benefits of this regulatory action.

    The potential costs associated with the proposed regulations are 

those determined by the Secretary to be necessary for administering 

this program effectively and efficiently.

    In assessing the potential costs and benefits--both quantitative 

and qualitative--of these regulations, the Secretary has determined 

that the benefits of the regulations justify the costs.

    The Secretary has also determined that this regulatory action does 

not unduly interfere with State, local, and tribal governments in the 

exercise of their governmental functions.


Regulatory Flexibility Act Certification


    The Secretary certifies that these proposed regulations would not 

have a significant economic impact on a substantial number of small 

entities. Entities affected by these regulations are institutions of 

higher education that participate in the Title IV programs under the 

HEA. These regulations, however, would not have a significant impact on 

any entities affected. They do not impose excessive regulatory burdens 

or require unnecessary Federal supervision. The regulations clarify 

existing requirements and relieve unnecessary regulatory burden.


Paperwork Reduction Act of 1995


    These proposed regulations have been examined under the Paperwork 

Reduction Act of 1995 and have been found to contain no information 

collection requirements.


Assessment of Educational Impact


    Based on its own review, the Department has determined that the 

regulations in this document do not require transmission of information 

that is being gathered by or is available from any other agency or 

authority of the United States.


[[Page 49043]]


List of Subjects in 34 CFR Part 668


    Administrative practice and procedure, Colleges and universities, 

Consumer protection, Education, Grant programs--education, Loan 

programs--education, Reporting and recordkeeping requirements, Student 

aid.


    Dated: September 12, 1996.

Richard W. Riley,

Secretary of Education.

(Catalog of Federal Domestic Assistance Number not applicable.)


    The Secretary amends Part 668 of Title 34 of the Code of Federal 

Regulations as follows:


PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS


    1. The authority citation for part 668 continues to read as 

follows:


    Authority: 20 U.S.C. 1085, 1088, 1091, 1092, 1094, 1099c, and 

1141, unless otherwise noted.


    2. Section 668.163 is amended by removing paragraph (a)(2)(iii) and 

revising paragraph (a)(3) to read as follows:



Sec. 668.163  Requesting funds.


    (a) * * *

    (3) Reimbursement payment method. Under the reimbursement payment 

method--

    (i) An institution must first make disbursements to students and 

parents for the amount of funds those students and parents are eligible 

to receive under the Federal Pell Grant, Direct Loan, and campus-based 

programs before the institution may seek reimbursement from the 

Secretary for those disbursements. The Secretary considers an 

institution to have made a disbursement if the institution has either 

credited a student's account or paid a student or parent directly with 

its own funds;

    (ii) An institution seeks reimbursement by submitting to the 

Secretary a request for funds that does not exceed the amount of the 

actual disbursements the institution has made to students and parents 

included in that request;

    (iii) As part of the institution's reimbursement request, the 

Secretary requires the institution to--

    (A) Identify the students for whom reimbursement is sought; and

    (B) Submit to the Secretary or entity approved by the Secretary 

documentation that shows that each student and parent included in the 

request was eligible to receive and has received the title IV, HEA 

program funds for which reimbursement is sought; and

    (iv) The Secretary approves the amount of the institution's 

reimbursement request for a student or parent and pays the institution 

that amount, if the Secretary determines with regard to that student or 

parent that the institution--

    (A) Accurately determined the student's eligibility for title IV, 

HEA program funds;

    (B) Accurately determined the amount of title IV, HEA program funds 

paid to the student or parent; and

    (C) Submitted the documentation required under paragraph 

(a)(3)(iii) of this section.

* * * * *

[FR Doc. 96-23853 Filed 9-16-96; 8:45 am]

BILLING CODE 4000-01-P