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Department of Education Vol. 80 Friday, No. 210 October 30, 2015 Part VI Department of Education 34 CFR Parts 668, 682, and 685 Student Assistance General Provisions, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program; Final Rule VerDate Sep<11>2014 19:29 Oct 29, 2015 Jkt 238001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\30OCR4.SGM 30OCR4 tkelley on DSK3SPTVN1PROD with RULES4 67204 Federal Register / Vol. 80, No. 210 / Friday, October 30, 2015 / Rules and Regulations DEPARTMENT OF EDUCATION telephone (TTY), call the Federal Relay to 30 percent, and will not be placed on Service (FRS), toll free, at 1–800–877– provisional certification based on two 34 CFR Parts 668, 682, and 685 8339. such rates, if it brings a timely appeal [Docket ID ED–2014–OPE–0161] SUPPLEMENTARY INFORMATION: or challenge with respect to any of the relevant rates and demonstrates a PRI RIN 1840–AD18 Executive Summary less than or equal to 0.0625, provided that the institution has not brought a Student Assistance General Purpose of This Regulatory Action: PRI challenge or appeal with respect to Provisions, Federal Family Education These final regulations will amend the that rate before, and that the institution Loan Program, and William D. Ford Student Assistance General Provisions has not previously lost eligibility or Federal Direct Loan Program regulations governing Direct Loan cohort default rates (CDRs) to expand been placed on provisional certification AGENCY: Office of Postsecondary the circumstances under which an based on that rate. • Education, Department of Education. institution may challenge or appeal the Provide that a successful PRI ACTION: Final regulations. potential consequences of a draft or challenge with respect to a draft CDR is final CDR based on the institution’s PRI. effective not only in preventing SUMMARY: The Secretary amends the In addition, we are implementing imposition of sanctions upon issuance regulations governing the William D. changes to the FFEL Program of the official CDR for that year, but in Ford Federal Direct Loan (Direct Loan) regulations to streamline and enhance preventing the institution from being Program to create a new income- existing processes and provide support placed on provisional certification or contingent repayment plan in to borrowers by establishing new losing eligibility in subsequent years accordance with the President’s procedures for FFEL Program loan based on the official CDR for that year initiative to allow more Direct Loan holders to identify servicemembers who if the official rate is less than or equal borrowers to cap their loan payments at may be eligible for benefits under the to the draft rate. 10 percent of their monthly incomes. SCRA. The final regulations will also To reduce the burden on military The Secretary is also implementing require guaranty agencies to provide servicemembers who may be entitled to changes to the Federal Family FFEL Program borrowers who are in the an interest rate reduction under the Education Loan (FFEL) Program and process of rehabilitating a defaulted SCRA, the final regulations— Direct Loan Program regulations to loan with information on repayment • Require FFEL Program loan holders streamline and enhance existing plans available to them after the loan to proactively use the authoritative processes and provide additional has been rehabilitated, as well as database maintained by the DOD to support to struggling borrowers. These additional financial and economic begin, extend, or end, as applicable, the regulations will also amend the Student education materials. We have also made SCRA interest rate limit of six percent. Assistance General Provisions several technical changes to the loan • Permit a borrower to use a form regulations by expanding the rehabilitation provisions contained in developed by the Secretary to provide circumstances under which an § 682.405. In addition, the final the loan holder with alternative institution may challenge or appeal a regulations will add a new income- evidence of military service to draft or final cohort default rate based contingent repayment plan, called the demonstrate eligibility when the on the institution’s participation rate Revised Pay As You Earn repayment borrower believes that the information index. plan (REPAYE plan), to § 685.209. The contained in the DOD database may be DATES: The regulations are effective July REPAYE plan is modeled on the inaccurate or incomplete. 1, 2016. existing Pay As You Earn repayment In regard to loan rehabilitation, the Implementation date: For the plan, and will be available to all Direct final regulations— implementation dates of the included Loan student borrowers regardless of • Assist with the transition to loan regulatory provisions, see the when the borrower took out the loans. repayment for a borrower who Implementation Date of These Finally, the regulations will allow lump rehabilitates a defaulted loan, by Regulations section of this document. sum payments made through student requiring a guaranty agency to: Provide FOR FURTHER INFORMATION CONTACT: For loan repayment programs administered each borrower with whom it has entered further information related to the by the DOD to count as qualifying into a loan rehabilitation agreement Servicemembers Civil Relief Act payments for purposes of the Public with information on repayment plans (SCRA), the treatment of lump sum Service Loan Forgiveness Program. available to the borrower after payments made under Department of Summary of the Major Provisions of rehabilitating the defaulted loan; Defense (DOD) student loan repayment This Regulatory Action: explain to the borrower how to select a programs for the purposes of public To expand the circumstances under repayment plan; and provide financial service loan forgiveness, and expanding which an institution may challenge or and economic education materials to the use of the participation rate index appeal the potential consequences of a borrowers who successfully complete (PRI) challenge and appeal, Barbara draft or official CDR based on the loan rehabilitation. Hoblitzell at (202) 502–7649 or by email institution’s PRI, the final regulations-– • Amend § 682.405 with respect to at: [email protected]. For • Permit an institution to bring a the cap on collection costs that may be information related to loan timely PRI challenge or appeal in any added to a rehabilitated loan when it is rehabilitation, Ian Foss at (202) 377– year in which the institution’s CDR is sold to a new holder and the treatment 3681 or by email at: [email protected]. less than or equal to 40 percent, but of rehabilitated loans for which the For information related to the Revised greater than or equal to 30 percent, for guaranty agency cannot secure a buyer, Pay As You Earn repayment plan, Brian any of the three most recently calculated to conform with the Higher Education Smith or Jon Utz at (202) 502–7551 or fiscal years. Act of 1965, as amended (HEA). (202) 377–4040 or by email at: • Provide that an institution will not To establish a new, widely available [email protected] or [email protected]. lose eligibility based on three years of income-contingent repayment plan If you use a telecommunications official CDRs that are less than or equal targeted to the neediest borrowers, the device for the deaf (TDD) or a text to 40 percent, but greater than or equal REPAYE regulations— VerDate Sep<11>2014 19:29 Oct 29, 2015 Jkt 238001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\30OCR4.SGM 30OCR4 tkelley on DSK3SPTVN1PROD with RULES4 Federal Register / Vol. 80, No. 210 / Friday, October 30, 2015 / Rules and Regulations 67205 • Provide that, for each year a borrower begins repayment under the available to borrowers during the borrower is in the REPAYE plan, the alternative repayment plan, or by the rehabilitation process. borrower’s monthly payment amount is end date of the 20- or 25-year REPAYE On July 9, 2015, the Secretary recalculated based on income and plan repayment period, whichever is published a notice of proposed family size information provided by the earlier. rulemaking (NPRM) for these parts in borrower. If a process becomes available • Allow the borrower to return to the the Federal Register (80 FR 39607).1 in the future that allows borrowers to REPAYE plan if the borrower provides The final regulations contain changes give consent for the Department of the Secretary with the income from the proposed regulations, which Education (the Department) to access information for the period of time that are fully explained in the Analysis of their income and family size the borrower was on the alternative Comments and Changes section of this information from the Internal Revenue repayment plan or another repayment final rule. Service (IRS) or another Federal source, plan. If the payments the borrower was Implementation Date of These the regulations will allow use of such a required to make under the alternative Regulations: Section 482(c) of the HEA process for recalculating a borrower’s repayment plan or the other repayment requires that regulations affecting monthly payment amount. plan are less than the payments the programs under title IV of the HEA be • In the case of a married borrower borrower would have been required to published in final form by November 1, filing a separate Federal income tax make under the REPAYE plan, the prior to the start of the award year (July return, use the adjusted gross income borrower’s monthly REPAYE payment 1) to which they apply. However, that (AGI) of both the borrower and the amount will be adjusted to ensure that section also permits the Secretary to borrower’s spouse to calculate the the excess amount owed by the designate any regulation as one that an monthly payment amount. A married borrower is paid in full by the end of the entity subject to the regulations may borrower filing separately who is REPAYE plan repayment period.
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