82_FR_45653 82 FR 45465 - Federal Student Aid Programs (Student Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education Loan Program, and the Federal Direct Loan Program)

82 FR 45465 - Federal Student Aid Programs (Student Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education Loan Program, and the Federal Direct Loan Program)

DEPARTMENT OF EDUCATION

Federal Register Volume 82, Issue 188 (September 29, 2017)

Page Range45465-45471
FR Document2017-20844

The Secretary is issuing updated waivers and modifications of statutory and regulatory requirements governing the Federal student financial aid programs under the authority of the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act). The HEROES Act requires the Secretary to publish a document in the Federal Register announcing the waivers or modifications of statutory or regulatory requirements applicable to the student financial assistance programs under title IV of the Higher Education Act of 1965, as amended (HEA), to assist individuals who are performing qualifying military service, and individuals who are affected by a disaster, war or other military operation, or national emergency, as described in the SUPPLEMENTARY INFORMATION section of this document.

Federal Register, Volume 82 Issue 188 (Friday, September 29, 2017)
[Federal Register Volume 82, Number 188 (Friday, September 29, 2017)]
[Rules and Regulations]
[Pages 45465-45471]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-20844]


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DEPARTMENT OF EDUCATION

34 CFR Parts 668, 674, 682, and 685


Federal Student Aid Programs (Student Assistance General 
Provisions, Federal Perkins Loan Program, Federal Family Education Loan 
Program, and the Federal Direct Loan Program)

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Updated waivers and modifications of statutory and regulatory 
requirements.

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SUMMARY: The Secretary is issuing updated waivers and modifications of 
statutory and regulatory requirements governing the Federal student 
financial aid programs under the authority of the Higher Education 
Relief Opportunities for Students Act of 2003 (HEROES Act). The HEROES 
Act requires the Secretary to publish a document in the Federal 
Register announcing the waivers or modifications of statutory or 
regulatory requirements applicable to the student financial assistance 
programs under title IV of the Higher Education Act of 1965, as amended 
(HEA), to assist individuals who are performing qualifying military 
service, and individuals who are affected by a disaster, war or other 
military operation, or national emergency, as described in the 
SUPPLEMENTARY INFORMATION section of this document.

DATES: The waivers and modifications begin on September 29, 2017. The 
waivers and modifications in this document expire on September 30, 
2022.

FOR FURTHER INFORMATION CONTACT: For provisions related to the title IV 
loan programs (Federal Perkins Loan Program, Federal Family Education 
Loan (FFEL) Program, and Federal Direct Loan (Direct Loan) Program): 
Barbara Hoblitzell, U.S. Department of Education, 400 Maryland Ave. 
SW., Room 6W253, Washington, DC 20202. Telephone: (202) 453-7583 or by 
email: [email protected] or Brian Smith, U.S. Department of 
Education, 400 Maryland Ave. SW., Room 7E222, Washington, DC 20202. 
Telephone: (202) 453-7440 or by email: [email protected]. For other 
provisions: Wendy Macias, U.S. Department of Education, 400 Maryland 
Ave. SW., Room 6C111, Washington, DC 20202. Telephone: (202) 203-9155 
or by email: [email protected].
    If you use a telecommunications device for the deaf (TDD) or text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.
    Individuals with disabilities can obtain this document in an 
accessible format (e.g., Braille, large print, audiotape, or compact 
disc) by contacting Wendy Macias, U.S. Department of Education, 400 
Maryland Ave. SW., Room 6C111, Washington, DC 20202. Telephone: (202) 
203-9155 or by email: [email protected].

SUPPLEMENTARY INFORMATION: In a document published in the Federal 
Register on December 12, 2003 (68 FR 69312), the Secretary exercised 
the authority under the HEROES Act (Pub. L. 108-76, 20 U.S.C. 
1098bb(b)) and announced waivers and modifications of statutory and 
regulatory provisions designed to assist ``affected individuals.'' 
Under 20 U.S.C. 1098ee(2), the term ``affected individual'' means an 
individual who:
     Is serving on active duty during a war or other military 
operation or national emergency;
     Is performing qualifying National Guard duty during a war 
or other military operation or national emergency;
     Resides or is employed in an area that is declared a 
disaster area by any Federal, State, or local official in connection 
with a national emergency; or
     Suffered direct economic hardship as a direct result of a 
war or other military operation or national emergency, as determined by 
the Secretary.
    Please note that these waivers and modifications do not apply to an 
individual who resides or is employed in an area declared a disaster 
area by any Federal, State, or local official unless that declaration 
has been made in connection with a national emergency.
    Under the HEROES Act, the Secretary's authority to provide the 
waivers and modifications would have expired on September 30, 2005. 
However, Public Law 109-78, enacted on September 30, 2005, extended the 
expiration date of the Secretary's authority to September 30, 2007. 
Accordingly, in a document in the Federal Register published on October 
20, 2005 (70 FR 61037), the Secretary extended the expiration of the 
waivers and modifications published on December 12, 2003, to September 
30, 2007.
    Public Law 110-93, enacted on September 30, 2007, eliminated the 
September 30, 2007, expiration date of the HEROES Act, thereby making 
permanent the Secretary's authority to issue waivers and modifications 
of statutory and regulatory provisions.
    On December 26, 2007, the Secretary published a document in the 
Federal Register (72 FR 72947) extending the waivers and modifications 
published on December 12, 2003, to September 30, 2012. In that 
document, the Secretary also indicated an intent to review the waivers 
and modifications published on December 12, 2003, in light of statutory 
and regulatory changes and to consider whether to change some or all of 
the published waivers and modifications.
    In a document in the Federal Register published on September 27, 
2012 (77 FR 59311), the Secretary published updated waivers and 
modifications to reflect the results of the review. Under that 
document, the updated waivers and modifications expire on September 30, 
2017.
    The Secretary is updating the waivers and modifications to reflect 
statutory and regulatory changes that have occurred since the September 
27, 2012, document was published. The waivers and modifications in this 
document will expire on September 30, 2022. With a few limited 
exceptions, the waivers and modifications in this document are the same 
waivers and modifications published in the September 27, 2012, Federal 
Register document. However,

[[Page 45466]]

the 2012 waivers and modifications have been updated in the following 
areas:
    (1) The Secretary updated the need analysis modification to reflect 
the change in which tax year's information is collected on the Free 
Application for Federal Student Aid (FAFSA) and used to calculate the 
applicant's expected family contribution (EFC). Previously when 
completing a FAFSA, a student provided income information from the most 
recently completed tax year prior to the beginning of the financial aid 
application cycle (e.g., 2015 income information for the 2016-2017 
FAFSA). Beginning with the 2017-2018 FAFSA, income information is 
collected from one tax year earlier--referred to as the ``prior-prior 
year.'' This change was made under the authority of section 
480(a)(1)(B) of the HEA. This modification was also updated to make it 
consistent with the modification to professional judgment included in 
this document, which provides three options that a financial aid 
administrator (FAA) may use to make adjustments to the values of the 
items used to calculate the EFC to reflect a student's special 
circumstances.
    (2) For the professional judgment modification, the Secretary 
clarified that in addition to using income information from the first 
or second calendar year of the award year, an institution may use 
another annual income that more accurately reflects the family's 
current financial circumstances.
    (3) The Secretary updated the modifications related to verification 
of adjusted gross income (AGI) and U.S. income tax paid so that 
affected individuals under this category are no longer required to 
provide a signature on the statement certifying that he or she has not 
filed an income tax return or a request for a filing extension because 
he or she was called up for active duty or for qualifying National 
Guard duty during a war or other military operation or national 
emergency; or certifying the amount of AGI and U.S. income tax paid for 
the specified year.
    (4) The Secretary extended the waiver assisting affected 
individuals with regard to the annual reevaluation requirements for 
FFEL and Direct Loan borrowers who are repaying loans under the Income-
Based Repayment (IBR) plan, and Direct Loan borrowers who are repaying 
loans under the Income-Contingent Repayment (ICR) plan to include 
borrowers who are repaying Direct Loans under the Pay As You Earn 
(PAYE) or Revised Pay As You Earn (REPAYE) repayment plans.
    (5) For the fourth category of affected individuals to which 
waivers and modifications apply, as described later in this document, 
the Secretary removed the reference to spouses of affected individuals 
who are serving on active duty or performing qualifying National Guard 
duty during a war or other military operation or national emergency, 
since the waivers under this category only pertain to the dependent 
student of such affected individuals.
    (6) The Secretary updated the waiver related to verification 
signature requirements to waive the requirement for a parental 
signature on any verification documentation required for title IV 
eligibility for a dependent student because of the parent's status as 
an affected individual.
    (7) The Secretary made a technical change to the waiver related to 
the section on required signatures on the FAFSA, the Student Aid Report 
(SAR), and the Institutional Student Information Record (ISIR), 
replacing the reference to ``ISIR'' with ``or submitting corrections 
electronically''. The Secretary also changed the reference to 
``responsible parent'' to ``relevant parent'' to mean the parent whose 
information is reported on the FAFSA.
    The Secretary is issuing these waivers and modifications under the 
authority of the HEROES Act, 20 U.S.C. 1098bb(a). In accordance with 
the HEROES Act, the Secretary is providing the waivers and 
modifications of statutory and regulatory requirements applicable to 
the student financial assistance programs under title IV of the HEA 
that the Secretary believes are appropriate to ensure that:
     Affected individuals who are recipients of student 
financial assistance under title IV are not placed in a worse position 
financially in relation to that financial assistance because they are 
affected individuals;
     Affected individuals who are recipients of student 
financial assistance are not unduly subject to administrative burden or 
inadvertent, technical violations or defaults;
     Affected individuals are not penalized when a 
determination of need for student financial assistance is calculated;
     Affected individuals are not required to return or repay 
an overpayment of grant funds based on the HEA's Return of Title IV 
Funds provision; and
     Entities that participate in the student financial 
assistance programs under title IV of the HEA and that are located in 
areas that are declared disaster areas by any Federal, State, or local 
official in connection with a national emergency, or whose operations 
are significantly affected by such a disaster, receive temporary relief 
from administrative requirements.
    In 20 U.S.C. 1098bb(b)(1), the HEROES Act further provides that 
section 437 of the General Education Provisions Act (20 U.S.C. 1232) 
and section 553 of the Administrative Procedure Act (5 U.S.C. 553) do 
not apply to the contents of this document.
    The following terms used in this document are defined in 20 U.S.C. 
1098ee: Active duty, military operation, national emergency, qualifying 
National Guard duty during a war or other military operation or 
national emergency, and serving on active duty during a war or other 
military operation or national emergency.
    The following waivers and modifications are grouped into four 
categories, according to the affected individuals to whom they apply.
    Category 1: The Secretary is waiving or modifying the following 
requirements of title IV of the HEA and the Department of Education's 
(Department's) regulations for ALL affected individuals.

Need Analysis

    Section 480 of the HEA provides that, in the calculation of an 
applicant's EFC, the term ``total income,'' which is used in the 
determination of ``annual adjusted family income'' and ``available 
income,'' is equal to the applicant's, the applicant's spouse's, or the 
applicant's parent's AGI plus untaxed income and benefits for the 
second preceding tax year minus excludable income. The HEROES Act 
allows an institution to substitute AGI plus untaxed income and 
benefits received in the first calendar year of the award year for 
which such determination is made for any affected individual, and for 
his or her spouse and dependents, if applicable, in order to reflect 
more accurately the financial condition of an affected individual and 
his or her family. The Secretary has determined that an institution has 
the option of using the applicant's original EFC (the EFC based on the 
income and tax information reported on the FAFSA), the EFC based on the 
data from the first calendar year of the award year, or the EFC based 
on another annual income that more accurately reflects the family's 
current financial circumstances.
    If an institution chooses to use anything other than the original 
EFC, it should use the administrative professional judgment options 
discussed in the following section.

[[Page 45467]]

Professional Judgment

    Section 479A of the HEA specifically gives the FAA at an 
institution the authority to use professional judgment to make, on a 
case-by-case basis, adjustments to the cost of attendance or to the 
values of the items used in calculating the EFC to reflect a student's 
special circumstances. The Secretary is modifying this provision by 
removing the requirement that adjustments be made on a case-by-case 
basis for affected individuals. The use of professional judgment in 
Federal need analysis is discussed in the Federal Student Aid Handbook 
available at www.ifap.ed.gov.
    The Secretary encourages FAAs to use professional judgment to 
reflect more accurately the financial need of affected individuals. To 
that end, the Secretary encourages institutions to determine an 
affected individual's need using one of the options listed below:
     Using the AGI plus untaxed income and benefits received in 
the first calendar year of the award year;
     Using another annual income that more accurately reflects 
the family's current financial circumstances; or
     Making no modifications.
    The FAA must clearly document the reasons for any adjustment and 
the facts supporting the decision. In almost all cases, the FAA should 
have documentation from a third party with knowledge of the student's 
special circumstances. As usual, any professional judgment decisions 
made by an FAA that affect a student's eligibility for a subsidized 
student financial assistance program must be reported to the Central 
Processing System.

Return of Title IV Funds--Grant Overpayments Owed by the Student

    Section 484B(b)(2) of the HEA and 34 CFR 668.22(h)(3)(ii) require a 
student to return or repay, as appropriate, unearned grant funds for 
which the student is responsible under the Return of Title IV Funds 
calculation. For a student who withdraws from an institution because of 
his or her status as an affected individual, the Secretary is waiving 
these statutory and regulatory requirements so that a student is not 
required to return or repay any overpayment of grant funds based on the 
Return of Title IV Funds provisions.
    For these students, the Secretary also waives 34 CFR 668.22(h)(4), 
which:
     Requires an institution to notify a student of a grant 
overpayment and the actions the student must take to resolve the 
overpayment;
     Denies eligibility to a student who owes a grant 
overpayment and does not take an action to resolve the overpayment; and
     Requires an institution to refer a grant overpayment to 
the Secretary under certain conditions.
    Therefore, an institution is not required to contact the student, 
notify the National Student Loan Data System, or refer the overpayment 
to the Secretary. However, the institution must document in the 
student's file the amount of any overpayment as part of the 
documentation of the application of this waiver.
    The student is not required to return or repay an overpayment of 
grant funds based on the Return of Title IV Funds provision. Therefore, 
an institution must not apply any title IV credit balance to the grant 
overpayment prior to: Using a credit balance to pay authorized charges; 
paying any amount of the title IV credit balance to the student or 
parent, in the case of a parent PLUS loan; or using the credit balance 
to reduce the student's title IV loan debt (with the student's 
authorization) as provided in Dear Colleague Letter GEN-04-03 (February 
2004; revised November 2004).

Verification of AGI and U.S. Income Tax Paid

    Pursuant to 34 CFR 668.57(a)(3)(ii), for an individual who is 
required to file a U.S. income tax return and has been granted a filing 
extension by the Internal Revenue Service (IRS), an institution must 
accept, in lieu of an income tax return for verification of AGI or U.S. 
income tax paid:
     A copy of IRS Form 4868, ``Application for Automatic 
Extension of Time to File U.S. Individual Income Tax Return,'' that the 
individual filed with the IRS for the specified year, or a copy of the 
IRS's approval of an extension beyond the automatic six-month extension 
if the individual requested an additional extension of the filing time; 
and
     A copy of each IRS Form W-2 that the individual received 
for the specified year or, for a self-employed individual, a statement 
signed by the individual certifying the amount of AGI and U.S. income 
tax paid for the specified year.
    The Secretary is modifying the requirement of this provision so 
that the submission of a copy of IRS Form 4868 or a copy of the IRS's 
approval of an extension beyond the six-month extension is not required 
if an affected individual has not filed an income tax return by the 
filing deadline.
    For these individuals, an institution must accept, in lieu of an 
income tax return for verification of AGI and U.S. income tax paid:
     A statement from the individual certifying that he or she 
has not filed an income tax return or a request for a filing extension 
because he or she was called up for active duty or for qualifying 
National Guard duty during a war or other military operation or 
national emergency; and
     A copy of each W-2 received for the specified year or, for 
a self-employed individual, a statement by the individual certifying 
the amount of AGI and U.S. income tax paid for the specified year.
    An institution may request that an individual granted a filing 
extension submit tax information using the IRS Data Retrieval Tool, or 
by obtaining a tax return transcript from the IRS that lists tax 
account information for the specified year after the income tax return 
is filed. If an institution receives the tax information, it must 
verify the income information of the tax filer(s).
    Category 2: The Secretary is waiving or modifying requirements in 
the following provisions of title IV of the HEA and the Department's 
regulations for affected individuals who are serving on active duty or 
performing qualifying National Guard duty during a war or other 
military operation or national emergency, or who reside or are employed 
in a disaster area.

Return of Title IV Funds--Post-Withdrawal Disbursements of Loan Funds

    Under 34 CFR 668.22(a)(6)(iii)(A)(5) and (D), a student (or parent 
for a parent PLUS loan) must be provided a post-withdrawal disbursement 
of a title IV loan if the student (or parent) responds to an 
institution's notification of the post-withdrawal disbursement within 
14 days of the date that the institution sent the notice, or a later 
deadline set by the institution. If a student or parent submits a late 
response, an institution may, but is not required to, make the post-
withdrawal disbursement.
    The Secretary is modifying this requirement so that, for a student 
who withdraws because of his or her status as an affected individual in 
this category and who is eligible for a post-withdrawal disbursement, 
the 14-day time period in which the student (or parent) must normally 
respond to the offer of the post-withdrawal disbursement is extended to 
45 days, or to a later deadline set by the institution. If the student 
or parent submits a response after the designated period, the 
institution may, but is not required to, make the post-withdrawal 
disbursement. As required under the current regulations, if the student 
or parent submits the timely response

[[Page 45468]]

instructing the institution to make all or a portion of the post-
withdrawal disbursement, or the institution chooses to make a post-
withdrawal disbursement based on receipt of a late response, the 
institution must disburse the funds within 180 days of the date of the 
institution's determination that the student withdrew.

Leaves of Absence

    Under 34 CFR 668.22(d)(3)(iii)(B), a student is required to provide 
a written, signed, and dated request, which includes the reason for 
that request, for an approved leave of absence prior to the leave of 
absence. However, if unforeseen circumstances prevent a student from 
providing a prior written request, the institution may grant the 
student's request for a leave of absence if the institution documents 
its decision and collects the written request at a later date. It may 
be appropriate in certain limited cases for an institution to provide 
an approved leave of absence to a student who must interrupt his or her 
enrollment because he or she is an affected individual in this 
category. Therefore, the Secretary is waiving the requirement that the 
student provide a written request for affected individuals who have 
difficulty providing a written request as a result of being an affected 
individual in this category. The institution's documentation of its 
decision to grant the leave of absence must include, in addition to the 
reason for the leave of absence, the reason for waiving the requirement 
that the leave of absence be requested in writing.

Treatment of Title IV Credit Balances When a Student Withdraws

    Under 34 CFR 668.164(h)(2), an institution must pay any title IV 
credit balance to the student, or parent in the case of a parent PLUS 
loan, as soon as possible, but no later than: 14 days after the balance 
occurred if the balance occurred after the first day of class of a 
payment period; or 14 days after the first day of class of a payment 
period if the balance occurred on or before the first day of class of 
that payment period. If the student (or parent) has provided 
authorization, an institution may use a title IV credit balance to 
reduce the borrower's total title IV loan debt, not just the title IV 
loan debt for the period for which the Return of Title IV Funds 
calculation is performed.
    For students who withdraw because they are affected individuals in 
this category, the Secretary finds that the institution has met the 14-
day requirement under 34 CFR 668.164(h)(2) if, within that timeframe, 
the institution attempts to contact the student (or parent) to suggest 
that the institution be authorized to return the credit balance to the 
loan program(s).
    Based upon the instructions of the student (or parent), the 
institution must promptly return the funds to the title IV loan 
programs or pay the credit balance to the student (or parent).
    In addition, if an institution chooses to attempt to contact the 
student (or parent) for authorization to apply the credit balance to 
reduce the student's title IV loan debt, it must allow the student (or 
parent) 45 days to respond. If there is no response within 45 days, the 
institution must promptly pay the credit balance to the student (or 
parent) or return the funds to the title IV programs if the student (or 
parent) cannot be located.
    Consistent with the guidance provided in Dear Colleague Letter GEN-
04-03 (February 2004; revised November 2004), the institution may also 
choose to pay the credit balance to the student (or parent) without 
first requesting permission to apply the credit balance to reduce the 
student's title IV loan debt.

Cash Management--Student or Parent Request for Loan or TEACH Grant 
Cancellation

    Under 34 CFR 668.165(a)(4)(ii), an institution must return loan or 
TEACH Grant proceeds, cancel the loan or TEACH Grant, or do both, if 
the institution receives a loan or TEACH Grant cancellation request 
from a student or parent:
     By the later of the first day of a payment period or 14 
days after the date the institution notifies the student or parent of 
his or her right to cancel all or a portion of a loan or TEACH Grant, 
if the institution obtains affirmative confirmation from the student 
under 34 CFR 668.165(a)(6)(i); or
     Within 30 days of the date the institution notifies the 
student or parent of his or her right to cancel all or a portion of a 
loan, if the institution does not obtain affirmative confirmation from 
the student under 34 CFR 668.165(a)(6)(i).
    Under 34 CFR 668.165(a)(4)(iii), if an institution receives a loan 
cancellation request from a borrower after the period specified in 34 
CFR 668.165(a)(4)(ii), the institution may, but is not required to, 
comply with the request. For a student or parent who is an affected 
individual in this category, the Secretary is modifying this 
requirement so that an institution must allow at least 60 days for the 
student or parent to request the cancellation of all or a portion of a 
loan or TEACH Grant for which proceeds have been credited to the 
account at the institution. If an institution receives a loan or TEACH 
Grant cancellation request after the 60-day period, the institution 
may, but is not required to, comply with the request.

Cash Management--Student and Parent Authorizations

    Under 34 CFR 668.165(b)(1), an institution must obtain a written 
authorization from a student or parent, as applicable, to:
     Use title IV funds to pay for educationally related 
charges incurred by the student at the institution other than charges 
for tuition and fees and, as applicable, room and board; and
     Hold on behalf of the student or parent any title IV funds 
that would otherwise be paid directly to the student or parent.
    The Secretary is modifying these requirements to permit an 
institution to accept an authorization provided by a student (or parent 
for a parent PLUS loan) orally, rather than in writing, if the student 
or parent is prevented from providing a written authorization because 
of his or her status as an affected individual in this category. The 
institution must document the oral consent or authorization.

Satisfactory Academic Progress

    Institutions may, in cases where a student failed to meet the 
institution's satisfactory academic progress standards as a direct 
result of being an affected individual in this category, apply the 
exception provision of ``other special circumstances'' contained in 34 
CFR 668.34(a)(9)(ii).

Borrowers in a Grace Period

    Sections 428(b)(7)(D) and 464(c)(7) of the HEA and 34 CFR 
674.31(b)(2)(i)(C), 682.209(a)(5), and 685.207(b)(2)(ii) and (c)(2)(ii) 
exclude from a Federal Perkins Loan, FFEL, or Direct Loan borrower's 
(title IV borrower's) initial grace period any period during which a 
borrower who is a member of an Armed Forces reserve component is called 
or ordered to active duty for a period of more than 30 days. The 
statutory and regulatory provisions further require that any single 
excluded period may not exceed three years and must include the time 
necessary for the borrower to resume enrollment at the next available 
regular enrollment period. Lastly, any borrower who is in a grace 
period when called or ordered to active duty is entitled to another 
six- or nine-month grace period, as applicable, upon completion of the 
excluded period of service.
    The Secretary is modifying these statutory and regulatory 
requirements to exclude from a title IV borrower's initial

[[Page 45469]]

grace period, any period, not to exceed three years, during which a 
borrower is an affected individual in this category. Any excluded 
period must include the time necessary for an affected individual in 
this category to resume enrollment at the next available enrollment 
period.

Borrowers in an ``In-School'' Period

    A title IV borrower is considered to be in an ``in-school'' status 
and is not required to make payments on a title IV loan that has not 
entered repayment as long as the borrower is enrolled at an eligible 
institution on at least a half-time basis. Under sections 428(b)(7) and 
464(c)(1)(A) of the HEA and 34 CFR 674.31(b)(2), 682.209(a), and 
685.207(b), (c), and (e)(2) and (3), when a title IV borrower ceases to 
be enrolled at an eligible institution on at least a half-time basis, 
the borrower is obligated to begin repayment of the loan after a six- 
or nine-month grace period, depending on the title IV loan program and 
the terms of the borrower's promissory note. The Secretary is modifying 
the statutory and regulatory requirements that obligate an ``in-
school'' borrower who has dropped below half-time status to begin 
repayment if the borrower is an affected individual in this category, 
by requiring the holder of the loan to maintain the loan in an ``in-
school'' status for a period not to exceed three years, including the 
time necessary for the borrower to resume enrollment in the next 
regular enrollment period, if the borrower is planning to go back to 
school. The Secretary will pay interest that accrues on a subsidized 
Stafford Loan as a result of the extension of a borrower's in-school 
status under this modification.

Borrowers in an In-School, Graduate Fellowship, or Rehabilitation 
Training Program Deferment

    Under sections 427(a)(2)(C)(i), 428(b)(1)(M)(i), 428B(a)(2) and 
(d)(1), 428C(b)(4)(C), 455(f)(2)(A), and 464(c)(2)(A)(i) of the HEA and 
34 CFR 674.34(b)(1), 682.210(b)(1)(i), (ii), and (iii), 682.210(s)(2), 
(3), and (4), 685.204(b), 685.204(d), and 685.204(e), a title IV 
borrower is eligible for a deferment on the loan during periods after 
the commencement or resumption of the repayment period on the loan when 
the borrower is enrolled and in attendance as a regular student on at 
least a half-time basis (or full-time, if required by the terms of the 
borrower's promissory note) at an eligible institution; enrolled and in 
attendance as a regular student in a course of study that is part of a 
graduate fellowship program; engaged in an eligible rehabilitation 
training program; or, for Federal Perkins Loan borrowers, engaged in 
graduate or post-graduate fellowship-supported study outside the United 
States. The borrower's deferment period ends when the borrower no 
longer meets one of the above conditions.
    The Secretary is waiving the statutory and regulatory eligibility 
requirements for this deferment for title IV borrowers who were 
required to interrupt a graduate fellowship or rehabilitation training 
program deferment, or who were in an in-school deferment but who left 
school, because of their status as an affected individual in this 
category. The holder of the loan is required to maintain the loan in 
the graduate fellowship, rehabilitation training program, or in-school 
deferment status for a period not to exceed three years during which 
the borrower is an affected individual in this category. This period 
includes the time necessary for the borrower to resume his or her 
graduate fellowship program, resume a rehabilitation training program, 
or resume enrollment in the next regular enrollment period if the 
borrower returns to school. The Secretary will pay interest that 
accrues on a FFEL subsidized Stafford Loan or not charge interest on a 
Direct subsidized Stafford Loan as a result of extending a borrower's 
eligibility for deferment under this waiver.

Forbearance

    Under section 464(e) of the HEA and 34 CFR 674.33(d)(2), there is a 
three-year cumulative limit on the length of forbearances that a 
Federal Perkins Loan borrower can receive. To assist Federal Perkins 
Loan borrowers who are affected individuals in this category, the 
Secretary is waiving these statutory and regulatory requirements so 
that any forbearance based on a borrower's status as an affected 
individual in this category is excluded from the three-year cumulative 
limit.
    Under section 464(e) of the HEA and 34 CFR 674.33(d)(2) and (3), a 
school must receive a request and supporting documentation from a 
Federal Perkins Loan borrower before granting the borrower a 
forbearance, the terms of which must be in the form of a written 
agreement. The Secretary is waiving these statutory and regulatory 
requirements to require an institution to grant forbearance based on 
the borrower's status as an affected individual in this category for a 
one-year period, including a three-month ``transition period'' 
immediately following, without supporting documentation or a written 
agreement, based on the written or oral request of the borrower, a 
member of the borrower's family, or another reliable source. The 
purpose of the three-month transition period is to assist borrowers so 
that they will not be required to reenter repayment immediately after 
they are no longer affected individuals in this category. In order to 
grant the borrower forbearance beyond the initial twelve- to fifteen-
month period, supporting documentation from the borrower, a member of 
the borrower's family, or another reliable source is required.
    Under 34 CFR 682.211(i)(1), a FFEL borrower who requests 
forbearance because of a military mobilization must provide the loan 
holder with documentation showing that he or she is subject to a 
military mobilization. The Secretary is waiving this requirement to 
allow a borrower who is not otherwise eligible for the military service 
deferment under 34 CFR 682.210(t), 685.204(h), and 674.34(h) to receive 
forbearance at the request of the borrower, a member of the borrower's 
family, or another reliable source for a one-year period, including a 
three-month transition period that immediately follows, without 
providing the loan holder with documentation. To grant the borrower 
forbearance beyond this period, documentation supporting the borrower's 
military mobilization must be submitted to the loan holder.
    The Secretary will apply the forbearance waivers and modifications 
in this section to loans held by the Department.

Collection of Defaulted Loans

    In accordance with 34 CFR part 674, subpart C--Due Diligence, and 
682.410(b)(6), schools and guaranty agencies must attempt to recover 
amounts owed from defaulted Federal Perkins Loan and FFEL borrowers, 
respectively. The Secretary is waiving the regulatory provisions that 
require schools and guaranty agencies to attempt collection on 
defaulted loans for the time period during which the borrower is an 
affected individual in this category and for a three-month transition 
period. The school or guaranty agency may stop collection activities 
upon notification by the borrower, a member of the borrower's family, 
or another reliable source that the borrower is an affected individual 
in this category. Collection activities must resume after the borrower 
has notified the school or guaranty agency that he or she is no longer 
an affected individual and the three-month transition period has 
expired. The loan holder must document in the loan file why it has

[[Page 45470]]

suspended collection activities on the loan, and the loan holder is not 
required to obtain evidence of the borrower's status while collection 
activities have been suspended. The Secretary will apply the waivers 
described in this paragraph to loans held by the Department.

Loan Cancellation

    Depending on the loan program, borrowers may qualify for loan 
cancellation if they are employed fulltime in specified occupations, 
such as teaching or in law enforcement, pursuant to sections 428J, 
460(b)(1), and 465(a)(2)(A)-(M) and (3) of the HEA, and 34 CFR 674.53, 
674.55, 674.55(b), 674.56, 674.57, 674.58, 674.60, 682.216, and 
685.217. Generally, to qualify for loan cancellation, borrowers must 
perform uninterrupted, otherwise qualifying service for a specified 
length of time (for example, one year) or for consecutive periods of 
time, such as five consecutive years.
    For borrowers who are affected individuals in this category, the 
Secretary is waiving the requirements that apply to the various loan 
cancellations that such periods of service be uninterrupted or 
consecutive, if the reason for the interruption is related to the 
borrower's status as an affected individual in this category. 
Therefore, the service period required for the borrower to receive or 
retain a loan cancellation for which he or she is otherwise eligible 
will not be considered interrupted by any period during which the 
borrower is an affected individual in this category, including the 
three-month transition period. The Secretary will apply the waivers 
described in this paragraph to loans held by the Department.

Rehabilitation of Defaulted Loans

    A borrower of a Direct Loan or FFEL Loan must make nine voluntary 
on-time, monthly payments over ten consecutive months to rehabilitate a 
defaulted loan in accordance with section 428F(a) of the HEA and 34 CFR 
682.405 and 685.211(f). Federal Perkins Loan borrowers must make nine 
consecutive, on-time monthly payments to rehabilitate a defaulted 
Federal Perkins Loan in accordance with section 464(h)(1)(A) of the HEA 
and 34 CFR 674.39. To assist title IV borrowers who are affected 
individuals in this category, the Secretary is waiving the statutory 
and regulatory requirements that payments made to rehabilitate a loan 
must be consecutive or made over no more than ten consecutive months. 
Loan holders should not treat any payment missed during the time that a 
borrower is an affected individual in this category, or during the 
three-month transition period, as an interruption in the number of 
monthly, on-time payments required to be made consecutively, or the 
number of consecutive months in which payment is required to be made, 
for loan rehabilitation. If there is an arrangement or agreement in 
place between the borrower and loan holder and the borrower makes a 
payment during this period, the loan holder must treat the payment as 
an eligible payment in the required series of payments. When the 
borrower is no longer an affected individual in this category, and the 
three-month transition period has expired, the required sequence of 
qualifying payments may resume at the point they were discontinued as a 
result of the borrower's status. The Secretary will apply the waivers 
described in this paragraph to loans held by the Department.

Reinstatement of Title IV Eligibility

    Under sections 428F(b) and 464(h)(2) of the HEA and under the 
definition of ``satisfactory repayment arrangement'' in 34 CFR 
668.35(a)(2), 674.2(b), 682.200(b), and 685.102(b), a defaulted title 
IV borrower may make six consecutive, on-time, voluntary, full, monthly 
payments to reestablish eligibility for title IV student financial 
assistance. To assist title IV borrowers who are affected individuals 
in this category, the Secretary is waiving statutory and regulatory 
provisions that require the borrower to make consecutive payments to 
reestablish eligibility for title IV student financial assistance. Loan 
holders should not treat any payment missed during the time that a 
borrower is an affected individual in this category as an interruption 
in the six consecutive, on-time, voluntary, full, monthly payments 
required for reestablishing title IV eligibility. If there is an 
arrangement or agreement in place between the borrower and loan holder 
and the borrower makes a payment during this period, the loan holder 
must treat the payment as an eligible payment in the required series of 
payments. When the borrower is no longer an affected individual or in 
the three-month transition period for purposes of this document, the 
required sequence of qualifying payments may resume at the point they 
were discontinued as a result of the borrower's status. The Secretary 
will apply the waivers described in this paragraph to loans held by the 
Department.

Consolidation of Defaulted Loans

    Under the definition of ``satisfactory repayment arrangement'' in 
34 CFR 685.102(b), a defaulted FFEL or Direct Loan borrower may 
establish eligibility to consolidate a defaulted loan in the Direct 
Consolidation Loan Program by making three consecutive, voluntary, on-
time, monthly, full payments on the loan. The Secretary is waiving the 
regulatory requirement that such payments be consecutive. FFEL loan 
holders should not treat any payment missed during the time that a 
borrower is an affected individual in this category as an interruption 
in the three consecutive, voluntary, monthly, full, on-time payments 
required for establishing eligibility to consolidate a defaulted loan 
in the Direct Consolidation Loan Program. If there is an arrangement or 
agreement in place between the borrower and loan holder and the 
borrower makes a payment during this period, the loan holder must treat 
the payment as an eligible payment in the required series of payments. 
When the borrower is no longer an affected individual in this category 
or in the three-month transition period, the required sequence of 
qualifying payments may resume at the point they were discontinued as a 
result of the borrower's status as an affected individual. The 
Secretary will apply the waivers described in this paragraph to loans 
held by the Department.

Annual Income Documentation Requirements for Direct Loan and FFEL 
Borrowers Under the IBR, PAYE, REPAYE, and ICR Plans

    Section 493C(c) of the HEA requires the Secretary to establish 
procedures for annually determining a borrower's eligibility for the 
IBR plan, including verification of a borrower's annual income and the 
annual amount due on the total amount of the borrower's loans. Section 
455(e)(1) of the HEA provides that the Secretary may obtain such 
information as is reasonably necessary regarding the income of a 
borrower for the purpose of determining the annual repayment obligation 
of the borrower under an income-contingent repayment plan. Under 34 CFR 
682.215(e), 685.209(a)(5), (b)(3), and (c)(4), and 685.221(e), 
borrowers repaying under the IBR, PAYE, REPAYE, or ICR plans must 
annually provide their loan holder with documentation of their income 
and family size so that the loan holder may, if necessary, adjust the 
borrower's monthly payment amount based on changes in the borrower's 
income or family size. Borrowers are required to provide information 
about their annual

[[Page 45471]]

income and family size to the loan holder each year by a deadline 
specified by the holder. If a borrower who is repaying his or her loans 
under the IBR, PAYE, or ICR plans fails to provide the required 
information by the specified deadline, the borrower's monthly payment 
amount is adjusted and is no longer based on the borrower's income. 
This adjusted monthly payment amount is generally higher than the 
payment amount that was based on the borrower's income.
    The Secretary is waiving these statutory and regulatory provisions 
to require loan holders to maintain an affected borrower's payment at 
the most recently calculated IBR, PAYE, REPAYE, or ICR monthly payment 
amount for up to a three-year period, including a three-month 
transition period immediately following the three-year period, if the 
borrower's status as an affected individual in this category has 
prevented the borrower from providing documentation of updated income 
and family size by the specified deadline.
    Category 3: The Secretary is waiving or modifying the following 
provisions of title IV of the HEA and the Department's regulations for 
affected individuals who are serving on active duty or performing 
qualifying National Guard duty during a war or other military operation 
or national emergency.

Institutional Charges and Refunds

    The HEROES Act encourages institutions to provide a full refund of 
tuition, fees, and other institutional charges for the portion of a 
period of instruction that a student was unable to complete, or for 
which the student did not receive academic credit, because he or she 
was called up for active duty or for qualifying National Guard duty 
during a war or other military operation or national emergency. 
Alternatively, the Secretary encourages institutions to provide a 
credit in a comparable amount against future charges.
    The HEROES Act also recommends that institutions consider providing 
easy and flexible reenrollment options to students who are affected 
individuals in this category. At a minimum, an institution must comply 
with the requirements of 34 CFR 668.18, which addresses the readmission 
requirements for service members serving for a period of more than 30 
consecutive days under certain conditions. Some institutions must also 
abide by the protections provided by the Principles of Excellence 
(Executive Order 13607, issued April 27, 2012) to service members who 
are absent for shorter periods of service. Institutions agree to comply 
with the Principles of Excellence through arrangements with the 
Department of Defense and the Department of Veterans Affairs. Executive 
Order 13607 is available at www.whitehouse.gov/the-press-office/2012/04/27/executive-order-establishing-principles-excellence-educational-instituti.
    Of course, an institution may provide such treatment to affected 
individuals other than those who are called up to active duty or for 
qualifying National Guard duty during a war or other military operation 
or national emergency.
    Before an institution makes a refund of institutional charges, it 
must perform the required Return of Title IV Funds calculations based 
upon the originally assessed institutional charges. After determining 
the amount that the institution must return to the title IV Federal 
student aid programs, any reduction of institutional charges may take 
into account the funds that the institution is required to return. In 
other words, we do not expect that an institution would both return 
funds to the Federal programs and also provide a refund of those same 
funds to the student.
    Category 4: The Secretary is waiving or modifying the following 
provisions of the HEA and the Department's regulations for dependents 
of affected individuals who are serving on active duty or performing 
qualifying National Guard duty during a war or other military operation 
or national emergency.

Verification Signature Requirements

    The Department's regulations in 34 CFR 668.57(b), (c), and (d) 
require signatures to verify the number of family members in the 
household, the number of family members enrolled in postsecondary 
institutions, or other information specified in the annual Federal 
Register document that announces the FAFSA information that an 
institution and an applicant may be required to verify, as well as the 
acceptable documentation for verifying that FAFSA information. The 
Secretary is waiving the requirement for a parent's signature on any 
verification documentation required for title IV eligibility for a 
dependent student when no relevant parent can provide the required 
signature because of the parent's status as an affected individual in 
this category.

Required Signatures on the FAFSA, SAR, or in Connection With Submitting 
Corrections Electronically

    Generally, when a dependent applicant for title IV aid submits the 
FAFSA or submits corrections to a previously submitted FAFSA, at least 
one parent's signature is required on the FAFSA, SAR, or in connection 
with submitting corrections electronically. The Secretary is waiving 
this requirement so that an applicant need not provide a parent's 
signature when there is no relevant parent who can provide the required 
signature because of the parent's status as an affected individual in 
this category. In these situations, a student's high school counselor 
or the FAA may sign on behalf of the parent as long as the applicant 
provides adequate documentation concerning the parent's inability to 
provide a signature due to the parent's status as an affected 
individual in this category.
    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 Portable Document Format (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.

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

    Program Authority:  20 U.S.C. 1071, 1082, 1087a, 1087aa, Part F-
1.

Kathleen A. Smith,
Acting Assistant Secretary for Postsecondary Education.
[FR Doc. 2017-20844 Filed 9-28-17; 8:45 am]
 BILLING CODE 4000-01-P



                                                                   Federal Register / Vol. 82, No. 188 / Friday, September 29, 2017 / Rules and Regulations                                     45465

                                                  the North Atlantic Ocean, Ocean City,                   affected by a disaster, war or other                  connection with a national emergency;
                                                  NJ, safety zone from 9:00 p.m. through                  military operation, or national                       or
                                                  11:59 p.m. on October 10, 2017. The                     emergency, as described in the                           • Suffered direct economic hardship
                                                  purpose of this document is to                          SUPPLEMENTARY INFORMATION section of                  as a direct result of a war or other
                                                  announce a change in the enforcement                    this document.                                        military operation or national
                                                  date. The zone will be enforced on                      DATES: The waivers and modifications                  emergency, as determined by the
                                                  October 7, 2017, instead of October 10,                 begin on September 29, 2017. The                      Secretary.
                                                  2017.                                                                                                            Please note that these waivers and
                                                                                                          waivers and modifications in this
                                                  DATES: The regulations in 33 CFR                                                                              modifications do not apply to an
                                                                                                          document expire on September 30,
                                                  165.506 will be enforced from 9 p.m. to                                                                       individual who resides or is employed
                                                                                                          2022.
                                                  11:59 p.m. on October 7, 2017, for the                                                                        in an area declared a disaster area by
                                                  safety zone listed as (a.)11 in the Table               FOR FURTHER INFORMATION CONTACT:      For             any Federal, State, or local official
                                                  to § 165.506.                                           provisions related to the title IV loan               unless that declaration has been made
                                                                                                          programs (Federal Perkins Loan                        in connection with a national
                                                  FOR FURTHER INFORMATION CONTACT: If
                                                                                                          Program, Federal Family Education                     emergency.
                                                  you have questions about this notice of                 Loan (FFEL) Program, and Federal                         Under the HEROES Act, the
                                                  enforcement, you may call or email                      Direct Loan (Direct Loan) Program):                   Secretary’s authority to provide the
                                                  MST2 Amanda Boone, Sector Delaware                      Barbara Hoblitzell, U.S. Department of                waivers and modifications would have
                                                  Bay Waterways Management Division,                      Education, 400 Maryland Ave. SW.,                     expired on September 30, 2005.
                                                  U.S. Coast Guard; telephone 215–271–                    Room 6W253, Washington, DC 20202.                     However, Public Law 109–78, enacted
                                                  4889, email Amanda.N.Boone@                             Telephone: (202) 453–7583 or by email:                on September 30, 2005, extended the
                                                  USCG.mil.                                               Barbara.Hoblitzell@ed.gov or Brian                    expiration date of the Secretary’s
                                                  SUPPLEMENTARY INFORMATION: Please                       Smith, U.S. Department of Education,                  authority to September 30, 2007.
                                                  refer to the notice of enforcement                      400 Maryland Ave. SW., Room 7E222,                    Accordingly, in a document in the
                                                  published in the Federal Register on                    Washington, DC 20202. Telephone:                      Federal Register published on October
                                                  August 7, 2017 (82 FR 36688), FR Doc.                   (202) 453–7440 or by email:                           20, 2005 (70 FR 61037), the Secretary
                                                  2017–16506.                                             Brian.Smith@ed.gov. For other                         extended the expiration of the waivers
                                                    Dated: September 22, 2017.                            provisions: Wendy Macias, U.S.                        and modifications published on
                                                                                                          Department of Education, 400 Maryland                 December 12, 2003, to September 30,
                                                  Scott E. Anderson,
                                                                                                          Ave. SW., Room 6C111, Washington, DC                  2007.
                                                  Captain, U.S. Coast Guard, Captain of the                                                                        Public Law 110–93, enacted on
                                                  Port Delaware Bay.                                      20202. Telephone: (202) 203–9155 or by
                                                                                                          email: Wendy.Macias@ed.gov.                           September 30, 2007, eliminated the
                                                  [FR Doc. 2017–20900 Filed 9–28–17; 8:45 am]                                                                   September 30, 2007, expiration date of
                                                  BILLING CODE 9110–04–P
                                                                                                             If you use a telecommunications
                                                                                                          device for the deaf (TDD) or text                     the HEROES Act, thereby making
                                                                                                          telephone (TTY), call the Federal Relay               permanent the Secretary’s authority to
                                                                                                          Service (FRS), toll free, at 1–800–877–               issue waivers and modifications of
                                                  DEPARTMENT OF EDUCATION                                                                                       statutory and regulatory provisions.
                                                                                                          8339.
                                                                                                             Individuals with disabilities can                     On December 26, 2007, the Secretary
                                                  34 CFR Parts 668, 674, 682, and 685                                                                           published a document in the Federal
                                                                                                          obtain this document in an accessible
                                                                                                          format (e.g., Braille, large print,                   Register (72 FR 72947) extending the
                                                  Federal Student Aid Programs
                                                                                                          audiotape, or compact disc) by                        waivers and modifications published on
                                                  (Student Assistance General
                                                                                                          contacting Wendy Macias, U.S.                         December 12, 2003, to September 30,
                                                  Provisions, Federal Perkins Loan
                                                                                                          Department of Education, 400 Maryland                 2012. In that document, the Secretary
                                                  Program, Federal Family Education
                                                                                                          Ave. SW., Room 6C111, Washington, DC                  also indicated an intent to review the
                                                  Loan Program, and the Federal Direct
                                                                                                          20202. Telephone: (202) 203–9155 or by                waivers and modifications published on
                                                  Loan Program)
                                                                                                          email: Wendy.Macias@ed.gov.                           December 12, 2003, in light of statutory
                                                  AGENCY:  Office of Postsecondary                                                                              and regulatory changes and to consider
                                                  Education, Department of Education.                     SUPPLEMENTARY INFORMATION: In a                       whether to change some or all of the
                                                                                                          document published in the Federal                     published waivers and modifications.
                                                  ACTION: Updated waivers and
                                                                                                          Register on December 12, 2003 (68 FR                     In a document in the Federal Register
                                                  modifications of statutory and
                                                                                                          69312), the Secretary exercised the                   published on September 27, 2012 (77 FR
                                                  regulatory requirements.
                                                                                                          authority under the HEROES Act                        59311), the Secretary published updated
                                                  SUMMARY:   The Secretary is issuing                     (Pub. L. 108–76, 20 U.S.C. 1098bb(b))                 waivers and modifications to reflect the
                                                  updated waivers and modifications of                    and announced waivers and                             results of the review. Under that
                                                  statutory and regulatory requirements                   modifications of statutory and                        document, the updated waivers and
                                                  governing the Federal student financial                 regulatory provisions designed to assist              modifications expire on September 30,
                                                  aid programs under the authority of the                 ‘‘affected individuals.’’ Under 20 U.S.C.             2017.
                                                  Higher Education Relief Opportunities                   1098ee(2), the term ‘‘affected                           The Secretary is updating the waivers
                                                  for Students Act of 2003 (HEROES Act).                  individual’’ means an individual who:                 and modifications to reflect statutory
                                                  The HEROES Act requires the Secretary                      • Is serving on active duty during a               and regulatory changes that have
                                                  to publish a document in the Federal                    war or other military operation or                    occurred since the September 27, 2012,
asabaliauskas on DSKBBXCHB2PROD with RULES




                                                  Register announcing the waivers or                      national emergency;                                   document was published. The waivers
                                                  modifications of statutory or regulatory                   • Is performing qualifying National                and modifications in this document will
                                                  requirements applicable to the student                  Guard duty during a war or other                      expire on September 30, 2022. With a
                                                  financial assistance programs under title               military operation or national                        few limited exceptions, the waivers and
                                                  IV of the Higher Education Act of 1965,                 emergency;                                            modifications in this document are the
                                                  as amended (HEA), to assist individuals                    • Resides or is employed in an area                same waivers and modifications
                                                  who are performing qualifying military                  that is declared a disaster area by any               published in the September 27, 2012,
                                                  service, and individuals who are                        Federal, State, or local official in                  Federal Register document. However,


                                             VerDate Sep<11>2014   16:55 Sep 28, 2017   Jkt 241001   PO 00000   Frm 00045   Fmt 4700   Sfmt 4700   E:\FR\FM\29SER1.SGM   29SER1


                                                  45466            Federal Register / Vol. 82, No. 188 / Friday, September 29, 2017 / Rules and Regulations

                                                  the 2012 waivers and modifications                         (5) For the fourth category of affected            national emergency, or whose
                                                  have been updated in the following                      individuals to which waivers and                      operations are significantly affected by
                                                  areas:                                                  modifications apply, as described later               such a disaster, receive temporary relief
                                                     (1) The Secretary updated the need                   in this document, the Secretary removed               from administrative requirements.
                                                  analysis modification to reflect the                    the reference to spouses of affected                     In 20 U.S.C. 1098bb(b)(1), the
                                                  change in which tax year’s information                  individuals who are serving on active                 HEROES Act further provides that
                                                  is collected on the Free Application for                duty or performing qualifying National                section 437 of the General Education
                                                  Federal Student Aid (FAFSA) and used                    Guard duty during a war or other                      Provisions Act (20 U.S.C. 1232) and
                                                  to calculate the applicant’s expected                   military operation or national                        section 553 of the Administrative
                                                  family contribution (EFC). Previously                   emergency, since the waivers under this               Procedure Act (5 U.S.C. 553) do not
                                                  when completing a FAFSA, a student                      category only pertain to the dependent                apply to the contents of this document.
                                                  provided income information from the                    student of such affected individuals.
                                                                                                             (6) The Secretary updated the waiver                  The following terms used in this
                                                  most recently completed tax year prior                                                                        document are defined in 20 U.S.C.
                                                  to the beginning of the financial aid                   related to verification signature
                                                                                                          requirements to waive the requirement                 1098ee: Active duty, military operation,
                                                  application cycle (e.g., 2015 income                                                                          national emergency, qualifying National
                                                  information for the 2016–2017 FAFSA).                   for a parental signature on any
                                                                                                          verification documentation required for               Guard duty during a war or other
                                                  Beginning with the 2017–2018 FAFSA,                                                                           military operation or national
                                                  income information is collected from                    title IV eligibility for a dependent
                                                                                                          student because of the parent’s status as             emergency, and serving on active duty
                                                  one tax year earlier—referred to as the                                                                       during a war or other military operation
                                                  ‘‘prior-prior year.’’ This change was                   an affected individual.
                                                                                                             (7) The Secretary made a technical                 or national emergency.
                                                  made under the authority of section
                                                  480(a)(1)(B) of the HEA. This                           change to the waiver related to the                      The following waivers and
                                                  modification was also updated to make                   section on required signatures on the                 modifications are grouped into four
                                                  it consistent with the modification to                  FAFSA, the Student Aid Report (SAR),                  categories, according to the affected
                                                  professional judgment included in this                  and the Institutional Student                         individuals to whom they apply.
                                                  document, which provides three options                  Information Record (ISIR), replacing the                 Category 1: The Secretary is waiving
                                                  that a financial aid administrator (FAA)                reference to ‘‘ISIR’’ with ‘‘or submitting            or modifying the following requirements
                                                  may use to make adjustments to the                      corrections electronically’’. The                     of title IV of the HEA and the
                                                  values of the items used to calculate the               Secretary also changed the reference to               Department of Education’s
                                                  EFC to reflect a student’s special                      ‘‘responsible parent’’ to ‘‘relevant                  (Department’s) regulations for ALL
                                                  circumstances.                                          parent’’ to mean the parent whose                     affected individuals.
                                                     (2) For the professional judgment                    information is reported on the FAFSA.
                                                                                                             The Secretary is issuing these waivers             Need Analysis
                                                  modification, the Secretary clarified that
                                                                                                          and modifications under the authority                   Section 480 of the HEA provides that,
                                                  in addition to using income information
                                                                                                          of the HEROES Act, 20 U.S.C.                          in the calculation of an applicant’s EFC,
                                                  from the first or second calendar year of
                                                                                                          1098bb(a). In accordance with the                     the term ‘‘total income,’’ which is used
                                                  the award year, an institution may use
                                                                                                          HEROES Act, the Secretary is providing                in the determination of ‘‘annual
                                                  another annual income that more
                                                                                                          the waivers and modifications of                      adjusted family income’’ and ‘‘available
                                                  accurately reflects the family’s current
                                                                                                          statutory and regulatory requirements                 income,’’ is equal to the applicant’s, the
                                                  financial circumstances.
                                                                                                          applicable to the student financial                   applicant’s spouse’s, or the applicant’s
                                                     (3) The Secretary updated the                        assistance programs under title IV of the
                                                  modifications related to verification of                                                                      parent’s AGI plus untaxed income and
                                                                                                          HEA that the Secretary believes are                   benefits for the second preceding tax
                                                  adjusted gross income (AGI) and U.S.                    appropriate to ensure that:
                                                  income tax paid so that affected                                                                              year minus excludable income. The
                                                                                                             • Affected individuals who are
                                                  individuals under this category are no                                                                        HEROES Act allows an institution to
                                                                                                          recipients of student financial assistance
                                                  longer required to provide a signature                                                                        substitute AGI plus untaxed income and
                                                                                                          under title IV are not placed in a worse
                                                  on the statement certifying that he or                                                                        benefits received in the first calendar
                                                                                                          position financially in relation to that
                                                  she has not filed an income tax return                                                                        year of the award year for which such
                                                                                                          financial assistance because they are
                                                  or a request for a filing extension                                                                           determination is made for any affected
                                                                                                          affected individuals;
                                                  because he or she was called up for                                                                           individual, and for his or her spouse
                                                                                                             • Affected individuals who are
                                                  active duty or for qualifying National                                                                        and dependents, if applicable, in order
                                                                                                          recipients of student financial assistance
                                                  Guard duty during a war or other                                                                              to reflect more accurately the financial
                                                                                                          are not unduly subject to administrative
                                                  military operation or national                                                                                condition of an affected individual and
                                                                                                          burden or inadvertent, technical
                                                  emergency; or certifying the amount of                                                                        his or her family. The Secretary has
                                                                                                          violations or defaults;
                                                  AGI and U.S. income tax paid for the                       • Affected individuals are not                     determined that an institution has the
                                                  specified year.                                         penalized when a determination of need                option of using the applicant’s original
                                                     (4) The Secretary extended the waiver                for student financial assistance is                   EFC (the EFC based on the income and
                                                  assisting affected individuals with                     calculated;                                           tax information reported on the
                                                  regard to the annual reevaluation                          • Affected individuals are not                     FAFSA), the EFC based on the data from
                                                  requirements for FFEL and Direct Loan                   required to return or repay an                        the first calendar year of the award year,
                                                  borrowers who are repaying loans under                  overpayment of grant funds based on                   or the EFC based on another annual
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                                                  the Income-Based Repayment (IBR)                        the HEA’s Return of Title IV Funds                    income that more accurately reflects the
                                                  plan, and Direct Loan borrowers who                     provision; and                                        family’s current financial
                                                  are repaying loans under the Income-                       • Entities that participate in the                 circumstances.
                                                  Contingent Repayment (ICR) plan to                      student financial assistance programs                   If an institution chooses to use
                                                  include borrowers who are repaying                      under title IV of the HEA and that are                anything other than the original EFC, it
                                                  Direct Loans under the Pay As You Earn                  located in areas that are declared                    should use the administrative
                                                  (PAYE) or Revised Pay As You Earn                       disaster areas by any Federal, State, or              professional judgment options
                                                  (REPAYE) repayment plans.                               local official in connection with a                   discussed in the following section.


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                                                                   Federal Register / Vol. 82, No. 188 / Friday, September 29, 2017 / Rules and Regulations                                        45467

                                                  Professional Judgment                                   take an action to resolve the                            • A statement from the individual
                                                     Section 479A of the HEA specifically                 overpayment; and                                      certifying that he or she has not filed an
                                                                                                            • Requires an institution to refer a                income tax return or a request for a
                                                  gives the FAA at an institution the
                                                                                                          grant overpayment to the Secretary                    filing extension because he or she was
                                                  authority to use professional judgment
                                                                                                          under certain conditions.                             called up for active duty or for
                                                  to make, on a case-by-case basis,                         Therefore, an institution is not                    qualifying National Guard duty during a
                                                  adjustments to the cost of attendance or                required to contact the student, notify               war or other military operation or
                                                  to the values of the items used in                      the National Student Loan Data System,                national emergency; and
                                                  calculating the EFC to reflect a student’s              or refer the overpayment to the                          • A copy of each W–2 received for the
                                                  special circumstances. The Secretary is                 Secretary. However, the institution must              specified year or, for a self-employed
                                                  modifying this provision by removing                    document in the student’s file the                    individual, a statement by the
                                                  the requirement that adjustments be                     amount of any overpayment as part of                  individual certifying the amount of AGI
                                                  made on a case-by-case basis for affected               the documentation of the application of               and U.S. income tax paid for the
                                                  individuals. The use of professional                    this waiver.                                          specified year.
                                                  judgment in Federal need analysis is                      The student is not required to return                  An institution may request that an
                                                  discussed in the Federal Student Aid                    or repay an overpayment of grant funds                individual granted a filing extension
                                                  Handbook available at www.ifap.ed.gov.                  based on the Return of Title IV Funds                 submit tax information using the IRS
                                                     The Secretary encourages FAAs to use                 provision. Therefore, an institution                  Data Retrieval Tool, or by obtaining a
                                                  professional judgment to reflect more                   must not apply any title IV credit                    tax return transcript from the IRS that
                                                  accurately the financial need of affected               balance to the grant overpayment prior                lists tax account information for the
                                                  individuals. To that end, the Secretary                 to: Using a credit balance to pay                     specified year after the income tax
                                                  encourages institutions to determine an                 authorized charges; paying any amount                 return is filed. If an institution receives
                                                  affected individual’s need using one of                 of the title IV credit balance to the                 the tax information, it must verify the
                                                  the options listed below:                               student or parent, in the case of a parent            income information of the tax filer(s).
                                                     • Using the AGI plus untaxed income                  PLUS loan; or using the credit balance                   Category 2: The Secretary is waiving
                                                  and benefits received in the first                      to reduce the student’s title IV loan debt            or modifying requirements in the
                                                  calendar year of the award year;                        (with the student’s authorization) as                 following provisions of title IV of the
                                                     • Using another annual income that                   provided in Dear Colleague Letter GEN–                HEA and the Department’s regulations
                                                  more accurately reflects the family’s                   04–03 (February 2004; revised                         for affected individuals who are serving
                                                  current financial circumstances; or                     November 2004).                                       on active duty or performing qualifying
                                                     • Making no modifications.                                                                                 National Guard duty during a war or
                                                     The FAA must clearly document the                    Verification of AGI and U.S. Income                   other military operation or national
                                                  reasons for any adjustment and the facts                Tax Paid                                              emergency, or who reside or are
                                                  supporting the decision. In almost all                     Pursuant to 34 CFR 668.57(a)(3)(ii),               employed in a disaster area.
                                                  cases, the FAA should have                              for an individual who is required to file
                                                  documentation from a third party with                                                                         Return of Title IV Funds—Post-
                                                                                                          a U.S. income tax return and has been                 Withdrawal Disbursements of Loan
                                                  knowledge of the student’s special                      granted a filing extension by the Internal
                                                  circumstances. As usual, any                                                                                  Funds
                                                                                                          Revenue Service (IRS), an institution
                                                  professional judgment decisions made                    must accept, in lieu of an income tax                    Under 34 CFR 668.22(a)(6)(iii)(A)(5)
                                                  by an FAA that affect a student’s                       return for verification of AGI or U.S.                and (D), a student (or parent for a parent
                                                  eligibility for a subsidized student                    income tax paid:                                      PLUS loan) must be provided a post-
                                                  financial assistance program must be                       • A copy of IRS Form 4868,                         withdrawal disbursement of a title IV
                                                  reported to the Central Processing                      ‘‘Application for Automatic Extension                 loan if the student (or parent) responds
                                                  System.                                                 of Time to File U.S. Individual Income                to an institution’s notification of the
                                                                                                          Tax Return,’’ that the individual filed               post-withdrawal disbursement within
                                                  Return of Title IV Funds—Grant                                                                                14 days of the date that the institution
                                                  Overpayments Owed by the Student                        with the IRS for the specified year, or a
                                                                                                          copy of the IRS’s approval of an                      sent the notice, or a later deadline set by
                                                     Section 484B(b)(2) of the HEA and 34                 extension beyond the automatic six-                   the institution. If a student or parent
                                                  CFR 668.22(h)(3)(ii) require a student to               month extension if the individual                     submits a late response, an institution
                                                  return or repay, as appropriate,                        requested an additional extension of the              may, but is not required to, make the
                                                  unearned grant funds for which the                      filing time; and                                      post-withdrawal disbursement.
                                                  student is responsible under the Return                    • A copy of each IRS Form W–2 that                    The Secretary is modifying this
                                                  of Title IV Funds calculation. For a                    the individual received for the specified             requirement so that, for a student who
                                                  student who withdraws from an                           year or, for a self-employed individual,              withdraws because of his or her status
                                                  institution because of his or her status                a statement signed by the individual                  as an affected individual in this category
                                                  as an affected individual, the Secretary                certifying the amount of AGI and U.S.                 and who is eligible for a post-
                                                  is waiving these statutory and regulatory               income tax paid for the specified year.               withdrawal disbursement, the 14-day
                                                  requirements so that a student is not                      The Secretary is modifying the                     time period in which the student (or
                                                  required to return or repay any                         requirement of this provision so that the             parent) must normally respond to the
                                                  overpayment of grant funds based on                     submission of a copy of IRS Form 4868                 offer of the post-withdrawal
                                                  the Return of Title IV Funds provisions.                or a copy of the IRS’s approval of an                 disbursement is extended to 45 days, or
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                                                     For these students, the Secretary also               extension beyond the six-month                        to a later deadline set by the institution.
                                                  waives 34 CFR 668.22(h)(4), which:                      extension is not required if an affected              If the student or parent submits a
                                                     • Requires an institution to notify a                individual has not filed an income tax                response after the designated period, the
                                                  student of a grant overpayment and the                  return by the filing deadline.                        institution may, but is not required to,
                                                  actions the student must take to resolve                   For these individuals, an institution              make the post-withdrawal
                                                  the overpayment;                                        must accept, in lieu of an income tax                 disbursement. As required under the
                                                     • Denies eligibility to a student who                return for verification of AGI and U.S.               current regulations, if the student or
                                                  owes a grant overpayment and does not                   income tax paid:                                      parent submits the timely response


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                                                  45468            Federal Register / Vol. 82, No. 188 / Friday, September 29, 2017 / Rules and Regulations

                                                  instructing the institution to make all or              parent) to suggest that the institution be            institution. If an institution receives a
                                                  a portion of the post-withdrawal                        authorized to return the credit balance               loan or TEACH Grant cancellation
                                                  disbursement, or the institution chooses                to the loan program(s).                               request after the 60-day period, the
                                                  to make a post-withdrawal                                  Based upon the instructions of the                 institution may, but is not required to,
                                                  disbursement based on receipt of a late                 student (or parent), the institution must             comply with the request.
                                                  response, the institution must disburse                 promptly return the funds to the title IV
                                                                                                          loan programs or pay the credit balance               Cash Management—Student and Parent
                                                  the funds within 180 days of the date of
                                                  the institution’s determination that the                to the student (or parent).                           Authorizations
                                                  student withdrew.                                          In addition, if an institution chooses                Under 34 CFR 668.165(b)(1), an
                                                                                                          to attempt to contact the student (or                 institution must obtain a written
                                                  Leaves of Absence                                       parent) for authorization to apply the                authorization from a student or parent,
                                                     Under 34 CFR 668.22(d)(3)(iii)(B), a                 credit balance to reduce the student’s                as applicable, to:
                                                  student is required to provide a written,               title IV loan debt, it must allow the                    • Use title IV funds to pay for
                                                  signed, and dated request, which                        student (or parent) 45 days to respond.               educationally related charges incurred
                                                  includes the reason for that request, for               If there is no response within 45 days,               by the student at the institution other
                                                  an approved leave of absence prior to                   the institution must promptly pay the                 than charges for tuition and fees and, as
                                                  the leave of absence. However, if                       credit balance to the student (or parent)             applicable, room and board; and
                                                  unforeseen circumstances prevent a                      or return the funds to the title IV                      • Hold on behalf of the student or
                                                  student from providing a prior written                  programs if the student (or parent)                   parent any title IV funds that would
                                                  request, the institution may grant the                  cannot be located.                                    otherwise be paid directly to the student
                                                  student’s request for a leave of absence                   Consistent with the guidance                       or parent.
                                                  if the institution documents its decision               provided in Dear Colleague Letter GEN–                   The Secretary is modifying these
                                                  and collects the written request at a later             04–03 (February 2004; revised                         requirements to permit an institution to
                                                  date. It may be appropriate in certain                  November 2004), the institution may                   accept an authorization provided by a
                                                  limited cases for an institution to                     also choose to pay the credit balance to              student (or parent for a parent PLUS
                                                  provide an approved leave of absence to                 the student (or parent) without first                 loan) orally, rather than in writing, if the
                                                  a student who must interrupt his or her                 requesting permission to apply the                    student or parent is prevented from
                                                  enrollment because he or she is an                      credit balance to reduce the student’s                providing a written authorization
                                                  affected individual in this category.                   title IV loan debt.                                   because of his or her status as an
                                                  Therefore, the Secretary is waiving the                                                                       affected individual in this category. The
                                                  requirement that the student provide a                  Cash Management—Student or Parent
                                                                                                                                                                institution must document the oral
                                                  written request for affected individuals                Request for Loan or TEACH Grant
                                                                                                                                                                consent or authorization.
                                                  who have difficulty providing a written                 Cancellation
                                                  request as a result of being an affected                   Under 34 CFR 668.165(a)(4)(ii), an                 Satisfactory Academic Progress
                                                  individual in this category. The                        institution must return loan or TEACH                   Institutions may, in cases where a
                                                  institution’s documentation of its                      Grant proceeds, cancel the loan or                    student failed to meet the institution’s
                                                  decision to grant the leave of absence                  TEACH Grant, or do both, if the                       satisfactory academic progress standards
                                                  must include, in addition to the reason                 institution receives a loan or TEACH                  as a direct result of being an affected
                                                  for the leave of absence, the reason for                Grant cancellation request from a                     individual in this category, apply the
                                                  waiving the requirement that the leave                  student or parent:                                    exception provision of ‘‘other special
                                                  of absence be requested in writing.                        • By the later of the first day of a               circumstances’’ contained in 34 CFR
                                                                                                          payment period or 14 days after the date              668.34(a)(9)(ii).
                                                  Treatment of Title IV Credit Balances                   the institution notifies the student or
                                                  When a Student Withdraws                                parent of his or her right to cancel all              Borrowers in a Grace Period
                                                     Under 34 CFR 668.164(h)(2), an                       or a portion of a loan or TEACH Grant,                   Sections 428(b)(7)(D) and 464(c)(7) of
                                                  institution must pay any title IV credit                if the institution obtains affirmative                the HEA and 34 CFR 674.31(b)(2)(i)(C),
                                                  balance to the student, or parent in the                confirmation from the student under 34                682.209(a)(5), and 685.207(b)(2)(ii) and
                                                  case of a parent PLUS loan, as soon as                  CFR 668.165(a)(6)(i); or                              (c)(2)(ii) exclude from a Federal Perkins
                                                  possible, but no later than: 14 days after                 • Within 30 days of the date the                   Loan, FFEL, or Direct Loan borrower’s
                                                  the balance occurred if the balance                     institution notifies the student or parent            (title IV borrower’s) initial grace period
                                                  occurred after the first day of class of a              of his or her right to cancel all or a                any period during which a borrower
                                                  payment period; or 14 days after the                    portion of a loan, if the institution does            who is a member of an Armed Forces
                                                  first day of class of a payment period if               not obtain affirmative confirmation from              reserve component is called or ordered
                                                  the balance occurred on or before the                   the student under 34 CFR                              to active duty for a period of more than
                                                  first day of class of that payment period.              668.165(a)(6)(i).                                     30 days. The statutory and regulatory
                                                  If the student (or parent) has provided                    Under 34 CFR 668.165(a)(4)(iii), if an             provisions further require that any
                                                  authorization, an institution may use a                 institution receives a loan cancellation              single excluded period may not exceed
                                                  title IV credit balance to reduce the                   request from a borrower after the period              three years and must include the time
                                                  borrower’s total title IV loan debt, not                specified in 34 CFR 668.165(a)(4)(ii), the            necessary for the borrower to resume
                                                  just the title IV loan debt for the period              institution may, but is not required to,              enrollment at the next available regular
                                                  for which the Return of Title IV Funds                  comply with the request. For a student                enrollment period. Lastly, any borrower
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                                                  calculation is performed.                               or parent who is an affected individual               who is in a grace period when called or
                                                     For students who withdraw because                    in this category, the Secretary is                    ordered to active duty is entitled to
                                                  they are affected individuals in this                   modifying this requirement so that an                 another six- or nine-month grace period,
                                                  category, the Secretary finds that the                  institution must allow at least 60 days               as applicable, upon completion of the
                                                  institution has met the 14-day                          for the student or parent to request the              excluded period of service.
                                                  requirement under 34 CFR 668.164(h)(2)                  cancellation of all or a portion of a loan               The Secretary is modifying these
                                                  if, within that timeframe, the institution              or TEACH Grant for which proceeds                     statutory and regulatory requirements to
                                                  attempts to contact the student (or                     have been credited to the account at the              exclude from a title IV borrower’s initial


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                                                                   Federal Register / Vol. 82, No. 188 / Friday, September 29, 2017 / Rules and Regulations                                       45469

                                                  grace period, any period, not to exceed                 rehabilitation training program; or, for              based on the written or oral request of
                                                  three years, during which a borrower is                 Federal Perkins Loan borrowers,                       the borrower, a member of the
                                                  an affected individual in this category.                engaged in graduate or post-graduate                  borrower’s family, or another reliable
                                                  Any excluded period must include the                    fellowship-supported study outside the                source. The purpose of the three-month
                                                  time necessary for an affected                          United States. The borrower’s deferment               transition period is to assist borrowers
                                                  individual in this category to resume                   period ends when the borrower no                      so that they will not be required to
                                                  enrollment at the next available                        longer meets one of the above                         reenter repayment immediately after
                                                  enrollment period.                                      conditions.                                           they are no longer affected individuals
                                                                                                             The Secretary is waiving the statutory             in this category. In order to grant the
                                                  Borrowers in an ‘‘In-School’’ Period                    and regulatory eligibility requirements               borrower forbearance beyond the initial
                                                     A title IV borrower is considered to be              for this deferment for title IV borrowers             twelve- to fifteen-month period,
                                                  in an ‘‘in-school’’ status and is not                   who were required to interrupt a                      supporting documentation from the
                                                  required to make payments on a title IV                 graduate fellowship or rehabilitation                 borrower, a member of the borrower’s
                                                  loan that has not entered repayment as                  training program deferment, or who                    family, or another reliable source is
                                                  long as the borrower is enrolled at an                  were in an in-school deferment but who                required.
                                                  eligible institution on at least a half-time            left school, because of their status as an               Under 34 CFR 682.211(i)(1), a FFEL
                                                  basis. Under sections 428(b)(7) and                     affected individual in this category. The             borrower who requests forbearance
                                                  464(c)(1)(A) of the HEA and 34 CFR                      holder of the loan is required to                     because of a military mobilization must
                                                  674.31(b)(2), 682.209(a), and 685.207(b),               maintain the loan in the graduate                     provide the loan holder with
                                                  (c), and (e)(2) and (3), when a title IV                fellowship, rehabilitation training                   documentation showing that he or she
                                                  borrower ceases to be enrolled at an                    program, or in-school deferment status                is subject to a military mobilization. The
                                                  eligible institution on at least a half-time            for a period not to exceed three years                Secretary is waiving this requirement to
                                                  basis, the borrower is obligated to begin               during which the borrower is an                       allow a borrower who is not otherwise
                                                  repayment of the loan after a six- or                   affected individual in this category. This            eligible for the military service
                                                  nine-month grace period, depending on                   period includes the time necessary for                deferment under 34 CFR 682.210(t),
                                                  the title IV loan program and the terms                 the borrower to resume his or her                     685.204(h), and 674.34(h) to receive
                                                  of the borrower’s promissory note. The                  graduate fellowship program, resume a                 forbearance at the request of the
                                                  Secretary is modifying the statutory and                rehabilitation training program, or                   borrower, a member of the borrower’s
                                                  regulatory requirements that obligate an                resume enrollment in the next regular                 family, or another reliable source for a
                                                  ‘‘in-school’’ borrower who has dropped                  enrollment period if the borrower                     one-year period, including a three-
                                                  below half-time status to begin                         returns to school. The Secretary will pay             month transition period that
                                                  repayment if the borrower is an affected                interest that accrues on a FFEL                       immediately follows, without providing
                                                  individual in this category, by requiring               subsidized Stafford Loan or not charge                the loan holder with documentation. To
                                                  the holder of the loan to maintain the                  interest on a Direct subsidized Stafford              grant the borrower forbearance beyond
                                                  loan in an ‘‘in-school’’ status for a                   Loan as a result of extending a                       this period, documentation supporting
                                                  period not to exceed three years,                       borrower’s eligibility for deferment                  the borrower’s military mobilization
                                                  including the time necessary for the                    under this waiver.                                    must be submitted to the loan holder.
                                                  borrower to resume enrollment in the                                                                             The Secretary will apply the
                                                  next regular enrollment period, if the                  Forbearance                                           forbearance waivers and modifications
                                                  borrower is planning to go back to                         Under section 464(e) of the HEA and                in this section to loans held by the
                                                  school. The Secretary will pay interest                 34 CFR 674.33(d)(2), there is a three-                Department.
                                                  that accrues on a subsidized Stafford                   year cumulative limit on the length of
                                                                                                          forbearances that a Federal Perkins Loan              Collection of Defaulted Loans
                                                  Loan as a result of the extension of a
                                                  borrower’s in-school status under this                  borrower can receive. To assist Federal                  In accordance with 34 CFR part 674,
                                                  modification.                                           Perkins Loan borrowers who are                        subpart C—Due Diligence, and
                                                                                                          affected individuals in this category, the            682.410(b)(6), schools and guaranty
                                                  Borrowers in an In-School, Graduate                     Secretary is waiving these statutory and              agencies must attempt to recover
                                                  Fellowship, or Rehabilitation Training                  regulatory requirements so that any                   amounts owed from defaulted Federal
                                                  Program Deferment                                       forbearance based on a borrower’s status              Perkins Loan and FFEL borrowers,
                                                     Under sections 427(a)(2)(C)(i),                      as an affected individual in this category            respectively. The Secretary is waiving
                                                  428(b)(1)(M)(i), 428B(a)(2) and (d)(1),                 is excluded from the three-year                       the regulatory provisions that require
                                                  428C(b)(4)(C), 455(f)(2)(A), and                        cumulative limit.                                     schools and guaranty agencies to
                                                  464(c)(2)(A)(i) of the HEA and 34 CFR                      Under section 464(e) of the HEA and                attempt collection on defaulted loans for
                                                  674.34(b)(1), 682.210(b)(1)(i), (ii), and               34 CFR 674.33(d)(2) and (3), a school                 the time period during which the
                                                  (iii), 682.210(s)(2), (3), and (4),                     must receive a request and supporting                 borrower is an affected individual in
                                                  685.204(b), 685.204(d), and 685.204(e), a               documentation from a Federal Perkins                  this category and for a three-month
                                                  title IV borrower is eligible for a                     Loan borrower before granting the                     transition period. The school or
                                                  deferment on the loan during periods                    borrower a forbearance, the terms of                  guaranty agency may stop collection
                                                  after the commencement or resumption                    which must be in the form of a written                activities upon notification by the
                                                  of the repayment period on the loan                     agreement. The Secretary is waiving                   borrower, a member of the borrower’s
                                                  when the borrower is enrolled and in                    these statutory and regulatory                        family, or another reliable source that
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                                                  attendance as a regular student on at                   requirements to require an institution to             the borrower is an affected individual in
                                                  least a half-time basis (or full-time, if               grant forbearance based on the                        this category. Collection activities must
                                                  required by the terms of the borrower’s                 borrower’s status as an affected                      resume after the borrower has notified
                                                  promissory note) at an eligible                         individual in this category for a one-                the school or guaranty agency that he or
                                                  institution; enrolled and in attendance                 year period, including a three-month                  she is no longer an affected individual
                                                  as a regular student in a course of study               ‘‘transition period’’ immediately                     and the three-month transition period
                                                  that is part of a graduate fellowship                   following, without supporting                         has expired. The loan holder must
                                                  program; engaged in an eligible                         documentation or a written agreement,                 document in the loan file why it has


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                                                  45470            Federal Register / Vol. 82, No. 188 / Friday, September 29, 2017 / Rules and Regulations

                                                  suspended collection activities on the                  is an affected individual in this                     Consolidation of Defaulted Loans
                                                  loan, and the loan holder is not required               category, or during the three-month                      Under the definition of ‘‘satisfactory
                                                  to obtain evidence of the borrower’s                    transition period, as an interruption in              repayment arrangement’’ in 34 CFR
                                                  status while collection activities have                 the number of monthly, on-time                        685.102(b), a defaulted FFEL or Direct
                                                  been suspended. The Secretary will                      payments required to be made                          Loan borrower may establish eligibility
                                                  apply the waivers described in this                     consecutively, or the number of                       to consolidate a defaulted loan in the
                                                  paragraph to loans held by the                          consecutive months in which payment                   Direct Consolidation Loan Program by
                                                  Department.                                             is required to be made, for loan                      making three consecutive, voluntary,
                                                  Loan Cancellation                                       rehabilitation. If there is an arrangement            on-time, monthly, full payments on the
                                                                                                          or agreement in place between the                     loan. The Secretary is waiving the
                                                     Depending on the loan program,
                                                                                                          borrower and loan holder and the                      regulatory requirement that such
                                                  borrowers may qualify for loan
                                                                                                          borrower makes a payment during this                  payments be consecutive. FFEL loan
                                                  cancellation if they are employed
                                                                                                          period, the loan holder must treat the                holders should not treat any payment
                                                  fulltime in specified occupations, such
                                                  as teaching or in law enforcement,                      payment as an eligible payment in the                 missed during the time that a borrower
                                                  pursuant to sections 428J, 460(b)(1), and               required series of payments. When the                 is an affected individual in this category
                                                  465(a)(2)(A)–(M) and (3) of the HEA,                    borrower is no longer an affected                     as an interruption in the three
                                                  and 34 CFR 674.53, 674.55, 674.55(b),                   individual in this category, and the                  consecutive, voluntary, monthly, full,
                                                  674.56, 674.57, 674.58, 674.60, 682.216,                three-month transition period has                     on-time payments required for
                                                  and 685.217. Generally, to qualify for                  expired, the required sequence of                     establishing eligibility to consolidate a
                                                  loan cancellation, borrowers must                       qualifying payments may resume at the                 defaulted loan in the Direct
                                                  perform uninterrupted, otherwise                        point they were discontinued as a result              Consolidation Loan Program. If there is
                                                  qualifying service for a specified length               of the borrower’s status. The Secretary               an arrangement or agreement in place
                                                  of time (for example, one year) or for                  will apply the waivers described in this              between the borrower and loan holder
                                                  consecutive periods of time, such as five               paragraph to loans held by the                        and the borrower makes a payment
                                                  consecutive years.                                      Department.                                           during this period, the loan holder must
                                                     For borrowers who are affected                                                                             treat the payment as an eligible payment
                                                  individuals in this category, the                       Reinstatement of Title IV Eligibility                 in the required series of payments.
                                                  Secretary is waiving the requirements                      Under sections 428F(b) and 464(h)(2)               When the borrower is no longer an
                                                  that apply to the various loan                                                                                affected individual in this category or in
                                                                                                          of the HEA and under the definition of
                                                  cancellations that such periods of                                                                            the three-month transition period, the
                                                                                                          ‘‘satisfactory repayment arrangement’’
                                                  service be uninterrupted or consecutive,                                                                      required sequence of qualifying
                                                                                                          in 34 CFR 668.35(a)(2), 674.2(b),
                                                  if the reason for the interruption is                                                                         payments may resume at the point they
                                                                                                          682.200(b), and 685.102(b), a defaulted
                                                  related to the borrower’s status as an                                                                        were discontinued as a result of the
                                                                                                          title IV borrower may make six
                                                  affected individual in this category.                                                                         borrower’s status as an affected
                                                                                                          consecutive, on-time, voluntary, full,
                                                  Therefore, the service period required                                                                        individual. The Secretary will apply the
                                                                                                          monthly payments to reestablish
                                                  for the borrower to receive or retain a                                                                       waivers described in this paragraph to
                                                                                                          eligibility for title IV student financial            loans held by the Department.
                                                  loan cancellation for which he or she is
                                                                                                          assistance. To assist title IV borrowers
                                                  otherwise eligible will not be                                                                                Annual Income Documentation
                                                                                                          who are affected individuals in this
                                                  considered interrupted by any period                                                                          Requirements for Direct Loan and FFEL
                                                                                                          category, the Secretary is waiving
                                                  during which the borrower is an                                                                               Borrowers Under the IBR, PAYE,
                                                                                                          statutory and regulatory provisions that
                                                  affected individual in this category,                                                                         REPAYE, and ICR Plans
                                                                                                          require the borrower to make
                                                  including the three-month transition
                                                                                                          consecutive payments to reestablish                      Section 493C(c) of the HEA requires
                                                  period. The Secretary will apply the
                                                                                                          eligibility for title IV student financial            the Secretary to establish procedures for
                                                  waivers described in this paragraph to
                                                  loans held by the Department.                           assistance. Loan holders should not                   annually determining a borrower’s
                                                                                                          treat any payment missed during the                   eligibility for the IBR plan, including
                                                  Rehabilitation of Defaulted Loans                       time that a borrower is an affected                   verification of a borrower’s annual
                                                    A borrower of a Direct Loan or FFEL                   individual in this category as an                     income and the annual amount due on
                                                  Loan must make nine voluntary on-                       interruption in the six consecutive, on-              the total amount of the borrower’s loans.
                                                  time, monthly payments over ten                         time, voluntary, full, monthly payments               Section 455(e)(1) of the HEA provides
                                                  consecutive months to rehabilitate a                    required for reestablishing title IV                  that the Secretary may obtain such
                                                  defaulted loan in accordance with                       eligibility. If there is an arrangement or            information as is reasonably necessary
                                                  section 428F(a) of the HEA and 34 CFR                   agreement in place between the                        regarding the income of a borrower for
                                                  682.405 and 685.211(f). Federal Perkins                 borrower and loan holder and the                      the purpose of determining the annual
                                                  Loan borrowers must make nine                           borrower makes a payment during this                  repayment obligation of the borrower
                                                  consecutive, on-time monthly payments                   period, the loan holder must treat the                under an income-contingent repayment
                                                  to rehabilitate a defaulted Federal                     payment as an eligible payment in the                 plan. Under 34 CFR 682.215(e),
                                                  Perkins Loan in accordance with section                 required series of payments. When the                 685.209(a)(5), (b)(3), and (c)(4), and
                                                  464(h)(1)(A) of the HEA and 34 CFR                      borrower is no longer an affected                     685.221(e), borrowers repaying under
                                                  674.39. To assist title IV borrowers who                individual or in the three-month                      the IBR, PAYE, REPAYE, or ICR plans
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                                                  are affected individuals in this category,              transition period for purposes of this                must annually provide their loan holder
                                                  the Secretary is waiving the statutory                  document, the required sequence of                    with documentation of their income and
                                                  and regulatory requirements that                        qualifying payments may resume at the                 family size so that the loan holder may,
                                                  payments made to rehabilitate a loan                    point they were discontinued as a result              if necessary, adjust the borrower’s
                                                  must be consecutive or made over no                     of the borrower’s status. The Secretary               monthly payment amount based on
                                                  more than ten consecutive months. Loan                  will apply the waivers described in this              changes in the borrower’s income or
                                                  holders should not treat any payment                    paragraph to loans held by the                        family size. Borrowers are required to
                                                  missed during the time that a borrower                  Department.                                           provide information about their annual


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                                                                   Federal Register / Vol. 82, No. 188 / Friday, September 29, 2017 / Rules and Regulations                                             45471

                                                  income and family size to the loan                      Principles of Excellence through                      FAFSA or submits corrections to a
                                                  holder each year by a deadline specified                arrangements with the Department of                   previously submitted FAFSA, at least
                                                  by the holder. If a borrower who is                     Defense and the Department of Veterans                one parent’s signature is required on the
                                                  repaying his or her loans under the IBR,                Affairs. Executive Order 13607 is                     FAFSA, SAR, or in connection with
                                                  PAYE, or ICR plans fails to provide the                 available at www.whitehouse.gov/the-                  submitting corrections electronically.
                                                  required information by the specified                   press-office/2012/04/27/executive-                    The Secretary is waiving this
                                                  deadline, the borrower’s monthly                        order-establishing-principles-                        requirement so that an applicant need
                                                  payment amount is adjusted and is no                    excellence-educational-instituti.                     not provide a parent’s signature when
                                                  longer based on the borrower’s income.                     Of course, an institution may provide
                                                                                                                                                                there is no relevant parent who can
                                                  This adjusted monthly payment amount                    such treatment to affected individuals
                                                                                                                                                                provide the required signature because
                                                  is generally higher than the payment                    other than those who are called up to
                                                                                                          active duty or for qualifying National                of the parent’s status as an affected
                                                  amount that was based on the
                                                  borrower’s income.                                      Guard duty during a war or other                      individual in this category. In these
                                                     The Secretary is waiving these                       military operation or national                        situations, a student’s high school
                                                  statutory and regulatory provisions to                  emergency.                                            counselor or the FAA may sign on
                                                  require loan holders to maintain an                        Before an institution makes a refund               behalf of the parent as long as the
                                                  affected borrower’s payment at the most                 of institutional charges, it must perform             applicant provides adequate
                                                  recently calculated IBR, PAYE,                          the required Return of Title IV Funds                 documentation concerning the parent’s
                                                  REPAYE, or ICR monthly payment                          calculations based upon the originally                inability to provide a signature due to
                                                  amount for up to a three-year period,                   assessed institutional charges. After                 the parent’s status as an affected
                                                  including a three-month transition                      determining the amount that the                       individual in this category.
                                                  period immediately following the three-                 institution must return to the title IV                  Electronic Access to This Document:
                                                  year period, if the borrower’s status as                Federal student aid programs, any                     The official version of this document is
                                                  an affected individual in this category                 reduction of institutional charges may
                                                                                                                                                                the document published in the Federal
                                                  has prevented the borrower from                         take into account the funds that the
                                                                                                                                                                Register. Free internet access to the
                                                  providing documentation of updated                      institution is required to return. In other
                                                  income and family size by the specified                 words, we do not expect that an                       official edition of the Federal Register
                                                  deadline.                                               institution would both return funds to                and the Code of Federal Regulations is
                                                     Category 3: The Secretary is waiving                 the Federal programs and also provide                 available via the Federal Digital System
                                                  or modifying the following provisions of                a refund of those same funds to the                   at: www.gpo.gov/fdsys. At this site you
                                                  title IV of the HEA and the Department’s                student.                                              can view this document, as well as all
                                                  regulations for affected individuals who                   Category 4: The Secretary is waiving               other documents of this Department
                                                  are serving on active duty or performing                or modifying the following provisions of              published in the Federal Register, in
                                                  qualifying National Guard duty during a                 the HEA and the Department’s                          text or Portable Document Format
                                                  war or other military operation or                      regulations for dependents of affected                (PDF). To use PDF you must have
                                                  national emergency.                                     individuals who are serving on active                 Adobe Acrobat Reader, which is
                                                  Institutional Charges and Refunds                       duty or performing qualifying National                available free at the site. You may also
                                                                                                          Guard duty during a war or other                      access documents of the Department
                                                    The HEROES Act encourages                             military operation or national                        published in the Federal Register by
                                                  institutions to provide a full refund of                emergency.                                            using the article search feature at:
                                                  tuition, fees, and other institutional
                                                                                                          Verification Signature Requirements                   www.federalregister.gov. Specifically,
                                                  charges for the portion of a period of
                                                  instruction that a student was unable to                                                                      through the advanced search feature at
                                                                                                             The Department’s regulations in 34
                                                  complete, or for which the student did                                                                        this site, you can limit your search to
                                                                                                          CFR 668.57(b), (c), and (d) require
                                                  not receive academic credit, because he                                                                       documents published by the
                                                                                                          signatures to verify the number of
                                                  or she was called up for active duty or                 family members in the household, the                  Department.
                                                  for qualifying National Guard duty                      number of family members enrolled in                  (Catalog of Federal Domestic Assistance
                                                  during a war or other military operation                postsecondary institutions, or other                  Numbers: 84.007 Federal Supplemental
                                                  or national emergency. Alternatively,                   information specified in the annual                   Educational Opportunity Grant Program;
                                                  the Secretary encourages institutions to                Federal Register document that                        84.032 Federal Family Education Loan
                                                  provide a credit in a comparable amount                 announces the FAFSA information that                  Program; 84.032 Federal PLUS Program;
                                                  against future charges.                                 an institution and an applicant may be                84.033 Federal Work Study Program; 84.038
                                                    The HEROES Act also recommends                        required to verify, as well as the                    Federal Perkins Loan Program; 84.063
                                                  that institutions consider providing easy               acceptable documentation for verifying                Federal Pell Grant Program; and 84.268
                                                  and flexible reenrollment options to                    that FAFSA information. The Secretary                 William D. Ford Federal Direct Loan
                                                  students who are affected individuals in                is waiving the requirement for a parent’s             Program.)
                                                  this category. At a minimum, an                         signature on any verification                           Program Authority: 20 U.S.C. 1071, 1082,
                                                  institution must comply with the                        documentation required for title IV                   1087a, 1087aa, Part F–1.
                                                  requirements of 34 CFR 668.18, which                    eligibility for a dependent student when
                                                  addresses the readmission requirements                  no relevant parent can provide the                    Kathleen A. Smith,
                                                  for service members serving for a period                required signature because of the                     Acting Assistant Secretary for Postsecondary
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                                                  of more than 30 consecutive days under                  parent’s status as an affected individual             Education.
                                                  certain conditions. Some institutions                   in this category.                                     [FR Doc. 2017–20844 Filed 9–28–17; 8:45 am]
                                                  must also abide by the protections                                                                            BILLING CODE 4000–01–P
                                                  provided by the Principles of Excellence                Required Signatures on the FAFSA,
                                                  (Executive Order 13607, issued April                    SAR, or in Connection With Submitting
                                                  27, 2012) to service members who are                    Corrections Electronically
                                                  absent for shorter periods of service.                    Generally, when a dependent
                                                  Institutions agree to comply with the                   applicant for title IV aid submits the


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Document Created: 2017-09-29 03:27:19
Document Modified: 2017-09-29 03:27:19
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionUpdated waivers and modifications of statutory and regulatory requirements.
DatesThe waivers and modifications begin on September 29, 2017. The waivers and modifications in this document expire on September 30, 2022.
ContactFor provisions related to the title IV loan programs (Federal Perkins Loan Program, Federal Family Education Loan (FFEL) Program, and Federal Direct Loan (Direct Loan) Program): Barbara Hoblitzell, U.S. Department of Education, 400 Maryland Ave. SW., Room 6W253, Washington, DC 20202. Telephone: (202) 453-7583 or by email: [email protected] or Brian Smith, U.S. Department of Education, 400 Maryland Ave. SW., Room 7E222, Washington, DC 20202. Telephone: (202) 453-7440 or by email: [email protected] For other provisions: Wendy Macias, U.S. Department of Education, 400 Maryland Ave. SW., Room 6C111, Washington, DC 20202. Telephone: (202) 203-9155 or by email: [email protected]
FR Citation82 FR 45465 
CFR Citation34 CFR 668
34 CFR 674
34 CFR 682
34 CFR 685

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