81 FR 54052 - Notice Inviting Postsecondary Educational Institutions To Participate in Experiments Under the Experimental Sites Initiative; Federal Student Financial Assistance Programs Under Title IV of the Higher Education Act of 1965, as Amended

DEPARTMENT OF EDUCATION

Federal Register Volume 81, Issue 157 (August 15, 2016)

Page Range		54052-54056
FR Document		2016-19297
The Secretary invites institutions of higher education (institutions) that participate in the Federal student financial assistance programs authorized under title IV of the Higher Education Act of 1965, as amended (HEA), to apply to participate in a new institutional experiment under the Experimental Sites Initiative (ESI). Under the ESI, the Secretary has authority to grant waivers of certain title IV, HEA statutory or regulatory requirements to allow a limited number of institutions to participate in experiments to test alternative methods of administering the title IV, HEA programs. The alternative methods of title IV, HEA administration that the Secretary is permitting under this ESI experiment are designed to facilitate efforts by institutions to evaluate certain innovative loan counseling practices that can prepare students to manage their college finances, inform them about their student loan repayment options, and ensure students are well-prepared to repay their loans on time. Under this experiment, participating institutions will have the flexibility to require additional loan counseling for student borrowers beyond the statutorily required one-time entrance and one-time exit counseling as a condition for the students to receive Direct Loan funds, and to customize counseling based on students' needs.
Federal Register, Volume 81 Issue 157 (Monday, August 15, 2016)
[Federal Register Volume 81, Number 157 (Monday, August 15, 2016)]
[Notices]
[Pages 54052-54056]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-19297]


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DEPARTMENT OF EDUCATION


Notice Inviting Postsecondary Educational Institutions To 
Participate in Experiments Under the Experimental Sites Initiative; 
Federal Student Financial Assistance Programs Under Title IV of the 
Higher Education Act of 1965, as Amended

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Notice.

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

SUMMARY:  The Secretary invites institutions of higher education 
(institutions) that participate in the Federal student financial 
assistance programs authorized under title IV of the Higher Education 
Act of 1965, as amended (HEA), to apply to participate in a new 
institutional experiment under the Experimental Sites Initiative (ESI).
    Under the ESI, the Secretary has authority to grant waivers of 
certain title IV, HEA statutory or regulatory requirements to allow a 
limited number of institutions to participate in experiments to test 
alternative methods of administering the title IV, HEA programs. The 
alternative methods of title IV, HEA administration that the Secretary 
is permitting under this ESI experiment are designed to facilitate 
efforts by institutions to evaluate certain innovative loan counseling 
practices that can prepare students to manage their college finances, 
inform them about their student loan repayment options, and ensure 
students are well-prepared to repay their loans on time.
    Under this experiment, participating institutions will have the 
flexibility to require additional loan counseling for student borrowers 
beyond the statutorily required one-time entrance and one-time exit 
counseling as a condition for the students to receive Direct Loan 
funds, and to customize counseling based on students' needs.

DATES: Letters of Interest to participate in the experiment described 
in this notice must be received by the Department no later than 
September 29, 2016 to ensure that the Department considers the 
institution for participation in the experiment. Letters received after 
September 29, 2016 may, at the discretion of the Secretary, be 
considered for participation.

ADDRESSES: Letters of Interest must be submitted by electronic mail to 
the following email address: experimentalsites@ed.gov. For format and 
other required information, see ``Instructions for Submitting Letters 
of Interest'' under SUPPLEMENTARY INFORMATION.

FOR FURTHER INFORMATION CONTACT: Warren Farr, U.S. Department of 
Education, Federal Student Aid, 830 First Street NE., Washington, DC 
20002. Telephone: (202) 377-4380 or by email at: Warren.Farr@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:  Instructions for Submitting Letters of 
Interest: Letters of Interest should be in an Adobe Portable Document 
Format (PDF) attachment to an email message sent to the email address 
provided in the ADDRESSES section of this notice. The subject line of 
the email should read ``ESI 2016--Additional Loan Counseling.'' The 
text of the email should include the name and address of the 
institution. The Letter of Interest should be on institutional 
letterhead and be signed by the institution's financial aid 
administrator. The Letter of Interest must include the institution's 
official name and its Office of Postsecondary Education Identification 
(OPEID) number, and the name of a contact person at the institution, 
along with a mailing address, email address, FAX number, and telephone 
number of a person at the institution. The letter should also include 
the information described in the ``Application and Selection'' section 
in this notice. Upon receipt of a Letter of Interest, the Department 
will notify the institution by email that its Letter of Interest was 
received. This notification should be kept in the institution's 
records.

Background

    Accurate and timely loan information is crucial for students to 
make informed decisions about borrowing and to understand their 
repayment obligations

[[Page 54053]]

and options. However, there is limited research on the effectiveness of 
loan counseling, including which types of content and modes of delivery 
of loan counseling are most effective in helping students to understand 
and manage their debt, as well as when and how often counseling should 
occur to be most effective.
    Since the start of his Administration, President Obama has outlined 
an ambitious agenda to make college more affordable for American 
families and promote student success. In his June 9, 2014, Presidential 
Memorandum for the Secretary of Treasury and the Secretary of 
Education, the President directed the agencies to focus their efforts 
on providing initiatives that help Federal student loan borrowers 
manage their debt.
    In support of the President's agenda, the Secretary, under the 
Experimental Sites authority in section 487A(b) of the HEA, is offering 
institutions the opportunity to participate in the experiment described 
in this notice. The experiment will provide institutions the 
flexibility to require, as a condition for a student to receive Direct 
Loan funds, loan counseling that is in addition to the entrance and 
exit counseling currently required under statute.
    Section 485(l)(1)(A) of the HEA requires that each institution 
ensure that first-time borrowers receive comprehensive information on 
the terms and conditions of the loan and of the responsibilities the 
borrower has with respect to the loan. This information must be 
provided in a simple and understandable format.
    The Department's regulations at 34 CFR 685.304(a) require 
institutions to ensure that entrance counseling is conducted with each 
Direct Subsidized Loan or Direct Unsubsidized Loan student borrower 
prior to making the first disbursement of the proceeds of a loan to the 
borrower, unless the borrower has previously completed entrance 
counseling at that institution or at another institution, regardless of 
when that counseling occurred. These regulations do not allow 
institutions to require counseling as a condition of disbursement 
beyond the required first-time entrance counseling and required exit 
counseling, though the institution may offer such counseling to 
students on a voluntary basis.
    The purpose of this experiment is to test the effectiveness of 
requiring additional loan counseling beyond the counseling that is 
statutorily required. The additional loan counseling is expected to 
help borrowers better understand their repayment options and 
obligations and make more informed decisions about their debt. The 
experiment may also identify the types of borrowers who have benefitted 
most from additional loan counseling. The Department hopes to learn if 
the additional loan counseling:
     Positively influences students' decision-making about 
borrowing;
     Promotes successful repayment of student loans, including 
reducing delinquencies and defaults; and
     Has an impact on students' academic performance (e.g., 
grades and time-to-completion).
    We also seek to learn whether different types of content and modes 
of delivery of loan counseling are more or less effective in promoting 
the above outcomes. This experiment can inform any future policy 
changes around loan counseling and efforts to inform borrowers about 
repayment plans and progress.
    Details of this experiment are provided in the section titled ``The 
Experiment'' below.

The Experiment

Description

    Under the experiment, an institution will require all of its 
eligible Direct Loan borrowers who have previously completed first-time 
entrance counseling to participate in the experiment (or for some large 
institutions, a subset of those borrowers), with approximately half of 
those borrowers randomly assigned by the Department to complete 
additional required counseling beyond the entrance counseling normally 
provided to first-time borrowers as a condition of receiving their 
Direct Loan funds.
    Institutions with particularly large numbers of borrowers who would 
be eligible for the experiment may request to include in the experiment 
a subset of those borrowers each year. The size of the subset will be 
determined by the Department in consultation with the institution and 
will take into consideration the overall number of students needed to 
estimate impacts for groups of institutions using similar counseling 
models. Once the size of the subset is determined, students will be 
randomly selected by the Department from the larger group of borrowers 
to be included in the subset and to participate in the experiment, 
either in the treatment group or in the control group.
    The Department will assign all borrowers who have been determined 
to be participants in the experiment to either the treatment group or 
to the control group. Borrowers assigned to the treatment group will be 
required to participate in additional loan counseling beyond the 
entrance counseling they completed as first-time borrowers, as a 
condition of receiving a Direct Loan. Borrowers assigned to the control 
group cannot be required to complete, but may do so voluntarily, any 
additional loan counseling beyond the already-completed entrance 
counseling and the statutorily required exit counseling.
    Under the experiment, institutions cannot require additional 
counseling more than once for each of the student's Direct Loan loan 
periods (generally once for each academic year). Therefore, students 
who are already required to participate in entrance counseling in any 
year (i.e., a first-time borrower at any institution) will not be 
included in the experiment for that year. Only students who completed 
their loan counseling during a prior year (whether for enrollment at 
the participating institution or at a different institution) will be 
included in the experiment for subsequent years.
    If an institution participating in the experiment currently offers 
voluntary additional loan counseling to students, it may continue to do 
so during its participation in the experiment. If an institution does 
not provide voluntary additional loan counseling, it may not begin to 
do so during its participation in the experiment. To the extent 
possible, the Department will require institutions to provide 
information regarding the students in the control group who utilize the 
institution's voluntary additional loan counseling.

Institutional Flexibilities

    An institution participating in the experiment will have 
flexibility in the content and modes of delivery of its additional loan 
counseling (e.g., online, individual in-person, group in-person, 
student-to-student). The institution will be allowed to choose the 
counseling approach it will use for the required additional counseling 
by choosing one of the following: The Department's Financial Awareness 
Counseling Tool (FACT); a third-party counseling product or third-party 
servicer; or institutionally developed alternative counseling.
    The additional required counseling provided to borrowers by 
participating institutions may vary based on the students' expected 
remaining time to complete their program. That counseling may also vary 
for different groups of students depending on their prior borrowing.
    The institution may include, as part of its additional counseling, 
a test or other evaluation to assess the student's knowledge of the 
information presented

[[Page 54054]]

as long as the test or evaluation is presented in a format accessible 
to students with disabilities, including students with visual or 
hearing impairments, and is in a language understandable by students 
with limited English proficiency. This may require the use of 
interpreters for oral or written communications with such students, as 
well as translations of written materials provided to such students. 
However, any such evaluation may not impede a student's ability to 
borrow, for example, by establishing a passing score for the test or 
evaluation before the student can receive Direct Loan funds.

Institutional Requirements

    Institutions participating in this experiment will be required to:
     Work with the Department to establish the number of its 
Direct Loan borrowers who will be included as participants in the 
experiment.
     Track and provide data to the Department for its borrowers 
who were assigned by the Department to the treatment group and its 
borrowers who were assigned to the control group.
     Ensure that the additional counseling required of the 
borrowers in the treatment group is reasonable as to time and effort, 
and is relevant to the student's borrowing decisions; and that the 
additional counseling is not biased or restricted based on students' 
religion, national origin, race, color, sex, socioeconomic status 
(including income), disability, place of residence, physical location 
where the student will be enrolled, or educational program.
     Ensure that the additional loan counseling does not 
discourage students from taking on debt needed to successfully complete 
their studies, while not over-borrowing taking into account anticipated 
earnings.
     Make loan counseling reasonable and not so burdensome that 
it becomes a barrier to receiving Direct Loan funds.
     Ensure that for each particular year, Direct Loan 
borrowers already required to receive loan entrance counseling at that 
institution (i.e., first-time borrowers) are not subject to required 
additional counseling for that year. These students would be eligible 
to participate in this experiment in subsequent years.
     Disclose to all borrowers included in the experiment (both 
those in the treatment group and those in the control group) that the 
institution is participating in an experiment related to loan 
counseling and that some of the students in the experiment may be 
required to participate in additional loan counseling as a condition of 
receiving Direct Loan funds.
     Inform students who have been selected to receive 
additional counseling that their Direct Loan disbursements are 
conditional upon completion of that counseling.
     Ensure that the institution's policy for providing 
counseling under the experiment remains consistent throughout the 
institution's participation in the experiment. A participating 
institution is also expected to ensure that its delivery of counseling 
does not change significantly during the institution's participation in 
the experiment.
    The Department will perform ongoing monitoring during the 
experiment to ensure that participating institutions meet these 
requirements throughout their participation in the experiment.
    All counseling provided to borrowers must deliver information that, 
at a minimum, includes the total amount of the borrowers' student loan 
indebtedness. The institution may customize the counseling based on the 
borrower's needs. However, the Department encourages participating 
institutions to include in its additional counseling the following 
information, where relevant, to assist students in making more informed 
borrowing decisions:
     Comprehensive information on the terms and conditions of 
Federal student loans, including information about annual and aggregate 
limits, interest rates, how interest accrues, loan fees for Federal 
student loans, and the responsibilities the borrower has with respect 
to such loans.
     A reminder that students will be required to repay their 
loans even if they do not complete the academic program.
     Information that indicates that completing an academic 
program will increase the students' ability to successfully repay their 
loans.
     Information about the requirement to complete additional 
counseling and to complete exit counseling upon leaving the 
institution.
     A statement that, when determining whether and how much to 
borrow, students should consider how much they can reasonably expect to 
earn after leaving their academic program of study. As part of this 
statement, the institution may provide other relevant information, such 
as earnings data, Gainful Employment disclosures required under 34 CFR 
668.412(a), and cohort default rate, if available and/or applicable.
     Comprehensive information about the different terms and 
features of Direct Loan repayment options and forgiveness benefits, 
including information about income-driven repayment plans, Public 
Service Loan Forgiveness, and Teacher Loan Forgiveness, and information 
about student loan deferments and forbearances.
     A reminder that information and assistance with Federal 
student loans, such as loan consolidation, rehabilitation, and 
participation in income-driven repayment plans, are provided by the 
Department at no charge and that the borrower does not need to pay 
someone for help.
     Information about establishing a relationship with a loan 
servicer, including, among other things, keeping address and contact 
information up-to-date and learning who to contact and how to ask 
questions.
     Information about the Department's Federal Student Aid 
Ombudsman Group, including a description of the services it provides 
and contact information.
     Information about the Department's Federal Student Aid 
Feedback System (see Electronic Announcement published July 1, 2016, 
``Federal Student Aid Launches Online Feedback System,'' located on the 
Information for Financial Aid Professionals (IFAP) Web site).

Waivers

    Institutions selected for this experiment will be granted 
flexibility in implementing their Direct Loan counseling program. 
Section 485(l)(1)(A) of the HEA and 34 CFR 685.304(a)(1) and (a)(2) 
provide that an institution must ensure that entrance counseling is 
conducted with each Direct Loan student borrower prior to making the 
first disbursement of the loan, unless the borrower has received a 
prior Direct Loan or a Federal Family Education Loan.
    However, institutions participating in this experiment will require 
additional counseling for their Direct Loan borrowers included in the 
treatment group. The additional counseling approaches to be used (i.e., 
the Department's FACT product; a third-party counseling product or 
third-party servicer; or institutionally developed alternative 
counseling) must be identified by the institution in its Letter of 
Interest. If the institution enters into an agreement with a third 
party to provide the additional counseling, that agreement is subject 
to the third-party servicer requirements of the regulations in 34 CFR 
668.25. As is required for all third-party servicers, such third 
parties must protect all student information they receive from the 
institution.

[[Page 54055]]

    All other provisions and regulations of the title IV, HEA student 
assistance programs will remain in effect.

Reporting and Evaluation

    The Department is interested in assessing the impact of requiring 
additional loan counseling for students attending different types of 
institutions. The evaluation will allow the Department to examine the 
effectiveness of requiring additional counseling across all of the 
institutions and students participating in the experiment, as well as 
for groups of institutions using similar types of content and modes of 
delivery of loan counseling for groups of borrowers.
    To support an evaluation of the impact of a policy change similar 
to the one tested in this experiment, the design of the evaluation 
requires data from both a treatment group of students required to 
participate in additional loan counseling and a control group of 
students who received their student aid under existing rules.
    Participating institutions will, on a regular basis, provide to the 
Department a list containing identifying information for each of the 
institution's Direct Loan student borrowers who had previously received 
entrance counseling from the institution or from a different 
institution. Those borrowers will be considered for inclusion in the 
experiment for the subsequent year.
    The Department will assign each eligible borrower to either the 
treatment group, which will receive the additional loan counseling, or 
to the control group, for which the institution may not require any 
additional loan counseling.
    Once a borrower is placed into the treatment or control group, the 
borrower must remain in that group throughout the borrower's enrollment 
at the institution during the institution's participation in the 
experiment.
    To obtain some key outcome measures (e.g., receipt and amount of 
loan funds, academic progression, completion or withdrawal), the 
Department will draw on information contained in the Department's 
systems.
    In addition, each institution will be required to provide to the 
Department existing school records for all students participating in 
the experiment (whether assigned to the treatment or control group) for 
the purpose of assessing the impacts of the additional loan counseling 
intervention. The records will likely include the borrower's academic 
information (e.g., credits taken, credits earned, grade point average, 
completion information, and credentials earned) as well as financial 
information (e.g., cost of attendance, State and institutional aid 
received, non-Federal loans received, and other information relating to 
financial aid received by the borrower).
    Finally, on an annual basis, institutions participating in the 
experiment will be required to provide information about the method and 
content of the loan counseling and of their experiences with the 
experiment. The Department will collect from each participating 
institution the details and components of the additional counseling 
that the institution requires, including the content and method of 
delivery (e.g., individual in-person counseling, group counseling, Web-
based counseling) for each cohort of students. Institutions will 
receive more specific information about evaluation and reporting 
requirements prior to the start of the experiment.
    Institutions participating in this experiment will be required to 
submit a narrative description and self-assessment of their 
implementation of the experiment. At a minimum, the narrative should 
include any unforeseen challenges and unexpected benefits.

Application and Selection

    Institutions are invited to apply to participate in the experiment 
described in this notice. The Department is interested in information 
such as: (1) An estimate of the number of the institution's Direct Loan 
borrowers who, for an award year, have previously completed entrance 
counseling and, if the institution believes it does not have the 
capacity to include all of those borrowers in the experiment, an 
estimate of the number of borrowers it wishes to include in the 
experiment (both in the control and treatment groups) for each award 
year; (2) how the additional counseling will be provided, e.g., through 
the Department's FACT product, a third-party counseling product or a 
third-party servicer, or an institutionally developed alternative; (3) 
a brief description of the additional counseling that the institution 
proposes to use in the experiment, including its content and mode of 
delivery; and (4) how the institution's proposed approach to additional 
loan counseling is supported by relevant and available research or 
evidence (if applicable) and the source of such research or evidence.
    We understand that the actual number of students who will be 
included in the experiment may be different than the estimate provided 
in the Letter of Interest, as may the proposed counseling method.
    From the institutions that apply, the Secretary will select a 
limited number that represent a diverse cross-section of title IV 
participating institutions to participate in this experiment. In 
choosing participants, the Secretary will consider, among other 
institutional characteristics, the institution's history of compliance 
with the Department's regulatory and statutory requirements for 
participation in the title IV, HEA programs; the institution's 
administrative capability and financial responsibility; and whether the 
institution has adequately described in its Letter of Interest how it 
will comply with the requirements of the experiment outlined in this 
notice.
    In addition to the above items, when selecting institutions to 
participate in the experiment, the Secretary will consider all 
available information, including, but not limited to: Institutional 
type and control, the institution's geographic location, the 
institution's cohort default rate, the median amount of Direct Loan 
funds borrowed by the institution's students, student outcomes (e.g., 
retention and completion rates and loan repayment rates), and the type 
of counseling the institution intends to offer (i.e., FACT, third-party 
product or third-party servicer, or institutionally developed 
counseling).
    The Secretary's selection of institutions will be guided by the 
purpose of the experiment, which is to evaluate alternative delivery 
modes, content, and timing to current counseling requirements, and to 
inform policymakers about any recommended changes to those 
requirements. The ESI does not provide broad regulatory relief or 
general exceptions to the Department's statutory and regulatory 
requirements.
    If a selected institution consists of more than one location (e.g., 
campus), the Secretary may limit the experiment to a single location, 
unless the institution provides the Secretary with a rationale for 
expanding the experiment to one or more of the institution's other 
locations.
    The Secretary will consult with those institutions that have been 
invited to participate in the experiment on the final design of the 
experiment through Webinars or other outreach activities.
    Institutions selected for participation in an experiment will have 
their Program Participation Agreement (PPA) with the Secretary amended 
to reflect the specific statutory or regulatory provisions that the 
Secretary has waived for participants in the experiment at the 
institution. The institution must acknowledge its commitment to 
adequately establish the procedures necessary to successfully 
administer the experiment. The amended PPA will also

[[Page 54056]]

document the agreement between the Secretary and the institution about 
how the experiment will be conducted and will specify the evaluation 
and reporting requirements for the experiment.
    Accessible Format: Individuals with disabilities can 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.thefederalregister.org/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.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.

    Program Authority: 20 U.S.C. 1094a(b).

    Dated: August 9, 2016.
Lynn Mahaffie,
Deputy Assistant Secretary for Policy, Planning and Innovation, 
Delegated the Duties of Assistant Secretary for Postsecondary 
Education.
[FR Doc. 2016-19297 Filed 8-12-16; 8:45 am]
 BILLING CODE 4000-01-P
54052 Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Notices

Reduction Act of 1995 (PRA) (44 U.S.C. Information is collected under the Direct Loan funds, and to customize
3506(c)(2)(A)), provides the general authority of Sections 14005 and 14006, counseling based on students’ needs.
public and Federal agencies with an Division A, of the American Recovery DATES: Letters of Interest to participate
opportunity to comment on proposed, and Reinvestment Act of 2009, as in the experiment described in this
revised, and continuing collections of amended by section 1832(b) of Division notice must be received by the
information. This helps the Department B of Public Law 112–10, the Department Department no later than September 29,
assess the impact of its information of Defense and Full-Year Continuing 2016 to ensure that the Department
collection requirements and minimize Appropriations Act, 2011, and the considers the institution for
the public’s reporting burden. It also Department of Education participation in the experiment. Letters
helps the public understand the Appropriations Act, 2012 (Title III of received after September 29, 2016 may,
Department’s information collection Division F of Public Law 112–74, the at the discretion of the Secretary, be
requirements and provide the requested Consolidated Appropriations Act, 2012). considered for participation.
data in the desired format. ED is Dated: August 9, 2016. ADDRESSES: Letters of Interest must be
soliciting comments on the proposed Tomakie Washington, submitted by electronic mail to the
information collection request (ICR) that following email address:
Acting Director, Information Collection
is described below. The Department of Clearance Division, Office of the Chief Privacy experimentalsites@ed.gov. For format
Education is especially interested in Officer, Office of Management. and other required information, see
public comment addressing the [FR Doc. 2016–19260 Filed 8–12–16; 8:45 am] ‘‘Instructions for Submitting Letters of
following issues: (1) Is this collection Interest’’ under SUPPLEMENTARY
BILLING CODE 4000–01–P
necessary to the proper functions of the INFORMATION.
Department; (2) will this information be FOR FURTHER INFORMATION CONTACT:
processed and used in a timely manner; DEPARTMENT OF EDUCATION Warren Farr, U.S. Department of
(3) is the estimate of burden accurate; Education, Federal Student Aid, 830
(4) how might the Department enhance Notice Inviting Postsecondary First Street NE., Washington, DC 20002.
the quality, utility, and clarity of the Educational Institutions To Participate Telephone: (202) 377–4380 or by email
information to be collected; and (5) how in Experiments Under the Experimental at: Warren.Farr@ed.gov.
might the Department minimize the Sites Initiative; Federal Student If you use a telecommunications
burden of this collection on the Financial Assistance Programs Under device for the deaf (TDD) or a text
respondents, including through the use Title IV of the Higher Education Act of telephone (TTY), call the Federal Relay
of information technology. Please note 1965, as Amended Service (FRS), toll free, at 1–800–877–
that written comments received in 8339.
response to this notice will be AGENCY: Office of Postsecondary
Education, Department of Education. SUPPLEMENTARY INFORMATION:
considered public records.
ACTION: Notice. Instructions for Submitting Letters of
Title of Collection: Race to the Top—
Interest: Letters of Interest should be in
Early Learning Challenge Annual SUMMARY: The Secretary invites an Adobe Portable Document Format
Performance Report. institutions of higher education (PDF) attachment to an email message
OMB Control Number: 1810–0713. (institutions) that participate in the sent to the email address provided in
Type of Review: An extension of an Federal student financial assistance the ADDRESSES section of this notice.
existing information collection. programs authorized under title IV of The subject line of the email should
Respondents/Affected Public: State, the Higher Education Act of 1965, as read ‘‘ESI 2016—Additional Loan
Local, and Tribal Governments. amended (HEA), to apply to participate Counseling.’’ The text of the email
Total Estimated Number of Annual in a new institutional experiment under should include the name and address of
Responses: 11. the Experimental Sites Initiative (ESI). the institution. The Letter of Interest
Total Estimated Number of Annual Under the ESI, the Secretary has should be on institutional letterhead
Burden Hours: 1,320. authority to grant waivers of certain title and be signed by the institution’s
Abstract: The Department of IV, HEA statutory or regulatory financial aid administrator. The Letter
Education and the Department of Health requirements to allow a limited number of Interest must include the institution’s
and Human Services (Departments) are of institutions to participate in official name and its Office of
requesting renewal of the currently experiments to test alternative methods Postsecondary Education Identification
approved Annual Performance Report of administering the title IV, HEA (OPEID) number, and the name of a
for RTT–ELC grantees, without making programs. The alternative methods of contact person at the institution, along
any material change to the collection title IV, HEA administration that the with a mailing address, email address,
instrument, instructions, frequency of Secretary is permitting under this ESI FAX number, and telephone number of
collection or use. The information experiment are designed to facilitate a person at the institution. The letter
submitted in the Annual Performance efforts by institutions to evaluate certain should also include the information
Report is used to verify that grantees are innovative loan counseling practices described in the ‘‘Application and
making substantial progress toward the that can prepare students to manage Selection’’ section in this notice. Upon
achievement of approved objectives. their college finances, inform them receipt of a Letter of Interest, the
This grant awarded all funds up front, about their student loan repayment Department will notify the institution
so the APR will not be used to options, and ensure students are well- by email that its Letter of Interest was
determine continuation awards, but will
sradovich on DSK3GMQ082PROD with NOTICES

prepared to repay their loans on time. received. This notification should be
be used to provide necessary Under this experiment, participating kept in the institution’s records.
performance information and data to institutions will have the flexibility to
program staff and to the public. Further, require additional loan counseling for Background
this APR form collects aggregate and student borrowers beyond the Accurate and timely loan information
quantifiable data needed to respond to statutorily required one-time entrance is crucial for students to make informed
the requirements of the Government and one-time exit counseling as a decisions about borrowing and to
Performance and Results Act (GPRA). condition for the students to receive understand their repayment obligations

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Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Notices 54053

and options. However, there is limited decisions about their debt. The counseling beyond the entrance
research on the effectiveness of loan experiment may also identify the types counseling they completed as first-time
counseling, including which types of of borrowers who have benefitted most borrowers, as a condition of receiving a
content and modes of delivery of loan from additional loan counseling. The Direct Loan. Borrowers assigned to the
counseling are most effective in helping Department hopes to learn if the control group cannot be required to
students to understand and manage additional loan counseling: complete, but may do so voluntarily,
their debt, as well as when and how • Positively influences students’ any additional loan counseling beyond
often counseling should occur to be decision-making about borrowing; the already-completed entrance
most effective. • Promotes successful repayment of counseling and the statutorily required
Since the start of his Administration, student loans, including reducing exit counseling.
President Obama has outlined an delinquencies and defaults; and Under the experiment, institutions
ambitious agenda to make college more • Has an impact on students’ cannot require additional counseling
affordable for American families and academic performance (e.g., grades and more than once for each of the student’s
promote student success. In his June 9, time-to-completion). Direct Loan loan periods (generally once
2014, Presidential Memorandum for the We also seek to learn whether for each academic year). Therefore,
Secretary of Treasury and the Secretary different types of content and modes of students who are already required to
of Education, the President directed the delivery of loan counseling are more or participate in entrance counseling in
agencies to focus their efforts on less effective in promoting the above any year (i.e., a first-time borrower at
providing initiatives that help Federal outcomes. This experiment can inform any institution) will not be included in
student loan borrowers manage their any future policy changes around loan the experiment for that year. Only
debt. counseling and efforts to inform students who completed their loan
In support of the President’s agenda, borrowers about repayment plans and counseling during a prior year (whether
the Secretary, under the Experimental progress. for enrollment at the participating
Sites authority in section 487A(b) of the Details of this experiment are institution or at a different institution)
HEA, is offering institutions the provided in the section titled ‘‘The will be included in the experiment for
opportunity to participate in the Experiment’’ below. subsequent years.
experiment described in this notice. The If an institution participating in the
experiment will provide institutions the The Experiment experiment currently offers voluntary
flexibility to require, as a condition for Description additional loan counseling to students,
a student to receive Direct Loan funds, it may continue to do so during its
loan counseling that is in addition to the Under the experiment, an institution participation in the experiment. If an
entrance and exit counseling currently will require all of its eligible Direct Loan institution does not provide voluntary
required under statute. borrowers who have previously additional loan counseling, it may not
Section 485(l)(1)(A) of the HEA completed first-time entrance begin to do so during its participation in
requires that each institution ensure that counseling to participate in the the experiment. To the extent possible,
first-time borrowers receive experiment (or for some large the Department will require institutions
comprehensive information on the institutions, a subset of those to provide information regarding the
terms and conditions of the loan and of borrowers), with approximately half of students in the control group who
the responsibilities the borrower has those borrowers randomly assigned by utilize the institution’s voluntary
with respect to the loan. This the Department to complete additional additional loan counseling.
information must be provided in a required counseling beyond the
simple and understandable format. entrance counseling normally provided Institutional Flexibilities
The Department’s regulations at 34 to first-time borrowers as a condition of An institution participating in the
CFR 685.304(a) require institutions to receiving their Direct Loan funds. experiment will have flexibility in the
ensure that entrance counseling is Institutions with particularly large content and modes of delivery of its
conducted with each Direct Subsidized numbers of borrowers who would be additional loan counseling (e.g., online,
Loan or Direct Unsubsidized Loan eligible for the experiment may request individual in-person, group in-person,
student borrower prior to making the to include in the experiment a subset of student-to-student). The institution will
first disbursement of the proceeds of a those borrowers each year. The size of be allowed to choose the counseling
loan to the borrower, unless the the subset will be determined by the approach it will use for the required
borrower has previously completed Department in consultation with the additional counseling by choosing one
entrance counseling at that institution institution and will take into of the following: The Department’s
or at another institution, regardless of consideration the overall number of Financial Awareness Counseling Tool
when that counseling occurred. These students needed to estimate impacts for (FACT); a third-party counseling
regulations do not allow institutions to groups of institutions using similar product or third-party servicer; or
require counseling as a condition of counseling models. Once the size of the institutionally developed alternative
disbursement beyond the required first- subset is determined, students will be counseling.
time entrance counseling and required randomly selected by the Department The additional required counseling
exit counseling, though the institution from the larger group of borrowers to be provided to borrowers by participating
may offer such counseling to students included in the subset and to participate institutions may vary based on the
on a voluntary basis. in the experiment, either in the students’ expected remaining time to
The purpose of this experiment is to treatment group or in the control group.
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complete their program. That
test the effectiveness of requiring The Department will assign all counseling may also vary for different
additional loan counseling beyond the borrowers who have been determined to groups of students depending on their
counseling that is statutorily required. be participants in the experiment to prior borrowing.
The additional loan counseling is either the treatment group or to the The institution may include, as part of
expected to help borrowers better control group. Borrowers assigned to the its additional counseling, a test or other
understand their repayment options and treatment group will be required to evaluation to assess the student’s
obligations and make more informed participate in additional loan knowledge of the information presented

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54054 Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Notices

as long as the test or evaluation is • Inform students who have been income-driven repayment plans, Public
presented in a format accessible to selected to receive additional Service Loan Forgiveness, and Teacher
students with disabilities, including counseling that their Direct Loan Loan Forgiveness, and information
students with visual or hearing disbursements are conditional upon about student loan deferments and
impairments, and is in a language completion of that counseling. forbearances.
understandable by students with limited • Ensure that the institution’s policy • A reminder that information and
English proficiency. This may require for providing counseling under the assistance with Federal student loans,
the use of interpreters for oral or written experiment remains consistent such as loan consolidation,
communications with such students, as throughout the institution’s rehabilitation, and participation in
well as translations of written materials participation in the experiment. A income-driven repayment plans, are
provided to such students. However, participating institution is also expected provided by the Department at no
any such evaluation may not impede a to ensure that its delivery of counseling charge and that the borrower does not
student’s ability to borrow, for example, does not change significantly during the need to pay someone for help.
by establishing a passing score for the institution’s participation in the
experiment. • Information about establishing a
test or evaluation before the student can
The Department will perform ongoing relationship with a loan servicer,
receive Direct Loan funds.
monitoring during the experiment to including, among other things, keeping
Institutional Requirements ensure that participating institutions address and contact information up-to-
Institutions participating in this meet these requirements throughout date and learning who to contact and
experiment will be required to: their participation in the experiment. how to ask questions.
• Work with the Department to All counseling provided to borrowers • Information about the Department’s
establish the number of its Direct Loan must deliver information that, at a Federal Student Aid Ombudsman
borrowers who will be included as minimum, includes the total amount of Group, including a description of the
participants in the experiment. the borrowers’ student loan services it provides and contact
• Track and provide data to the indebtedness. The institution may information.
Department for its borrowers who were customize the counseling based on the • Information about the Department’s
assigned by the Department to the borrower’s needs. However, the Federal Student Aid Feedback System
treatment group and its borrowers who Department encourages participating (see Electronic Announcement
were assigned to the control group. institutions to include in its additional published July 1, 2016, ‘‘Federal
• Ensure that the additional counseling the following information, Student Aid Launches Online Feedback
counseling required of the borrowers in where relevant, to assist students in System,’’ located on the Information for
the treatment group is reasonable as to making more informed borrowing Financial Aid Professionals (IFAP) Web
time and effort, and is relevant to the decisions: site).
student’s borrowing decisions; and that • Comprehensive information on the
the additional counseling is not biased terms and conditions of Federal student Waivers
or restricted based on students’ religion, loans, including information about Institutions selected for this
national origin, race, color, sex, annual and aggregate limits, interest experiment will be granted flexibility in
socioeconomic status (including rates, how interest accrues, loan fees for implementing their Direct Loan
income), disability, place of residence, Federal student loans, and the counseling program. Section
physical location where the student will responsibilities the borrower has with 485(l)(1)(A) of the HEA and 34 CFR
be enrolled, or educational program. respect to such loans. 685.304(a)(1) and (a)(2) provide that an
• Ensure that the additional loan • A reminder that students will be
institution must ensure that entrance
counseling does not discourage students required to repay their loans even if
counseling is conducted with each
from taking on debt needed to they do not complete the academic
Direct Loan student borrower prior to
successfully complete their studies, program.
making the first disbursement of the
while not over-borrowing taking into • Information that indicates that
loan, unless the borrower has received
account anticipated earnings. completing an academic program will
• Make loan counseling reasonable a prior Direct Loan or a Federal Family
increase the students’ ability to
and not so burdensome that it becomes Education Loan.
successfully repay their loans.
a barrier to receiving Direct Loan funds. • Information about the requirement However, institutions participating in
• Ensure that for each particular year, to complete additional counseling and this experiment will require additional
Direct Loan borrowers already required to complete exit counseling upon counseling for their Direct Loan
to receive loan entrance counseling at leaving the institution. borrowers included in the treatment
that institution (i.e., first-time • A statement that, when determining group. The additional counseling
borrowers) are not subject to required whether and how much to borrow, approaches to be used (i.e., the
additional counseling for that year. students should consider how much Department’s FACT product; a third-
These students would be eligible to they can reasonably expect to earn after party counseling product or third-party
participate in this experiment in leaving their academic program of servicer; or institutionally developed
subsequent years. study. As part of this statement, the alternative counseling) must be
• Disclose to all borrowers included institution may provide other relevant identified by the institution in its Letter
in the experiment (both those in the information, such as earnings data, of Interest. If the institution enters into
treatment group and those in the control an agreement with a third party to
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Gainful Employment disclosures
group) that the institution is required under 34 CFR 668.412(a), and provide the additional counseling, that
participating in an experiment related to cohort default rate, if available and/or agreement is subject to the third-party
loan counseling and that some of the applicable. servicer requirements of the regulations
students in the experiment may be • Comprehensive information about in 34 CFR 668.25. As is required for all
required to participate in additional the different terms and features of Direct third-party servicers, such third parties
loan counseling as a condition of Loan repayment options and forgiveness must protect all student information
receiving Direct Loan funds. benefits, including information about they receive from the institution.

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Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Notices 54055

All other provisions and regulations attendance, State and institutional aid title IV participating institutions to
of the title IV, HEA student assistance received, non-Federal loans received, participate in this experiment. In
programs will remain in effect. and other information relating to choosing participants, the Secretary will
financial aid received by the borrower). consider, among other institutional
Reporting and Evaluation Finally, on an annual basis, characteristics, the institution’s history
The Department is interested in institutions participating in the of compliance with the Department’s
assessing the impact of requiring experiment will be required to provide regulatory and statutory requirements
additional loan counseling for students information about the method and for participation in the title IV, HEA
attending different types of institutions. content of the loan counseling and of programs; the institution’s
The evaluation will allow the their experiences with the experiment. administrative capability and financial
Department to examine the effectiveness The Department will collect from each responsibility; and whether the
of requiring additional counseling participating institution the details and institution has adequately described in
across all of the institutions and components of the additional its Letter of Interest how it will comply
students participating in the counseling that the institution requires, with the requirements of the experiment
experiment, as well as for groups of including the content and method of outlined in this notice.
institutions using similar types of delivery (e.g., individual in-person In addition to the above items, when
content and modes of delivery of loan counseling, group counseling, Web- selecting institutions to participate in
counseling for groups of borrowers. based counseling) for each cohort of the experiment, the Secretary will
To support an evaluation of the students. Institutions will receive more consider all available information,
impact of a policy change similar to the specific information about evaluation including, but not limited to:
one tested in this experiment, the design and reporting requirements prior to the Institutional type and control, the
of the evaluation requires data from start of the experiment. institution’s geographic location, the
both a treatment group of students Institutions participating in this institution’s cohort default rate, the
required to participate in additional experiment will be required to submit a median amount of Direct Loan funds
loan counseling and a control group of narrative description and self- borrowed by the institution’s students,
students who received their student aid assessment of their implementation of student outcomes (e.g., retention and
under existing rules. the experiment. At a minimum, the completion rates and loan repayment
Participating institutions will, on a narrative should include any unforeseen rates), and the type of counseling the
regular basis, provide to the Department challenges and unexpected benefits. institution intends to offer (i.e., FACT,
a list containing identifying information third-party product or third-party
Application and Selection
for each of the institution’s Direct Loan servicer, or institutionally developed
student borrowers who had previously Institutions are invited to apply to counseling).
received entrance counseling from the participate in the experiment described The Secretary’s selection of
institution or from a different in this notice. The Department is institutions will be guided by the
institution. Those borrowers will be interested in information such as: (1) An purpose of the experiment, which is to
considered for inclusion in the estimate of the number of the evaluate alternative delivery modes,
experiment for the subsequent year. institution’s Direct Loan borrowers who, content, and timing to current
The Department will assign each for an award year, have previously counseling requirements, and to inform
eligible borrower to either the treatment completed entrance counseling and, if policymakers about any recommended
group, which will receive the additional the institution believes it does not have changes to those requirements. The ESI
loan counseling, or to the control group, the capacity to include all of those does not provide broad regulatory relief
for which the institution may not borrowers in the experiment, an or general exceptions to the
require any additional loan counseling. estimate of the number of borrowers it Department’s statutory and regulatory
Once a borrower is placed into the wishes to include in the experiment requirements.
treatment or control group, the borrower (both in the control and treatment If a selected institution consists of
must remain in that group throughout groups) for each award year; (2) how the more than one location (e.g., campus),
the borrower’s enrollment at the additional counseling will be provided, the Secretary may limit the experiment
institution during the institution’s e.g., through the Department’s FACT to a single location, unless the
participation in the experiment. product, a third-party counseling institution provides the Secretary with a
To obtain some key outcome product or a third-party servicer, or an rationale for expanding the experiment
measures (e.g., receipt and amount of institutionally developed alternative; (3) to one or more of the institution’s other
loan funds, academic progression, a brief description of the additional locations.
completion or withdrawal), the counseling that the institution proposes The Secretary will consult with those
Department will draw on information to use in the experiment, including its institutions that have been invited to
contained in the Department’s systems. content and mode of delivery; and (4) participate in the experiment on the
In addition, each institution will be how the institution’s proposed approach final design of the experiment through
required to provide to the Department to additional loan counseling is Webinars or other outreach activities.
existing school records for all students supported by relevant and available Institutions selected for participation
participating in the experiment research or evidence (if applicable) and in an experiment will have their
(whether assigned to the treatment or the source of such research or evidence. Program Participation Agreement (PPA)
control group) for the purpose of We understand that the actual number with the Secretary amended to reflect
assessing the impacts of the additional the specific statutory or regulatory
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of students who will be included in the
loan counseling intervention. The experiment may be different than the provisions that the Secretary has waived
records will likely include the estimate provided in the Letter of for participants in the experiment at the
borrower’s academic information (e.g., Interest, as may the proposed institution. The institution must
credits taken, credits earned, grade counseling method. acknowledge its commitment to
point average, completion information, From the institutions that apply, the adequately establish the procedures
and credentials earned) as well as Secretary will select a limited number necessary to successfully administer the
financial information (e.g., cost of that represent a diverse cross-section of experiment. The amended PPA will also

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Document Created: 2016-08-13 02:22:44
Document Modified: 2016-08-13 02:22:44
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Notice.
Dates		Letters of Interest to participate in the experiment described in this notice must be received by the Department no later than September 29, 2016 to ensure that the Department considers the institution for participation in the experiment. Letters received after September 29, 2016 may, at the discretion of the Secretary, be considered for participation.
Contact		Warren Farr, U.S. Department of Education, Federal Student Aid, 830 First Street NE., Washington, DC 20002. Telephone: (202) 377-4380 or by email at: [email protected]
FR Citation		81 FR 54052