Federal Student Aid Programs (Student Assistance General Provisions, Federal Perkins Loan Program, William D. Ford Federal Direct Loan Program, and Federal-Work Study Programs)

Federal Register Extracts

Regulatory Documents

Agency: "Office of Postsecondary Education, Department of Education."

SUMMARY: The Secretary is issuing updated waivers and modifications of statutory and regulatory provisions governing the Federal student financial aid programs under the authority of the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act or Act). The HEROES Act requires the Secretary to publish, in a document in the Federal Register, the waivers or modifications of statutory or regulatory provisions 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. On March 13, 2020, President Trump declared a national emergency based on the COVID-19 outbreak. (Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak, available at https://www.whitehouse.gov/presidential-actions/proclamation-declaring-national-emergency-concerning-novel-coronavirus-disease-covid-19-outbreak/).

DATES:

Effective December 11, 2020. The waivers and modifications in this document expire as noted within each of the provisions below, unless extended by the Secretary in a document published in the Federal Register.

FOR FURTHER INFORMATION CONTACT: Barbara Hoblitzell, by telephone: [phone] or by email: [email protected], or Gregory Martin, by telephone: [phone] 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.

SUPPLEMENTARY INFORMATION:

The Secretary is issuing these waivers and modifications under the authority of the HEROES Act, as codified at 20 U.S.C. 1098bb(a)(2), which authorizes the Secretary to waive or modify any statutory or regulatory provision applicable to the Federal student financial assistance programs under title IV of the HEA, 20 U.S.C. 1070 et seq., as the Secretary deems necessary in connection with a war or other military operation or national emergency to affected individuals who are recipients of Federal student financial assistance under title IV of the HEA, institutions of higher education (IHEs), eligible lenders, guaranty agencies, and other entities participating in the Federal student assistance programs under title IV of the HEA 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. These entities may be granted temporary relief from requirements that are rendered infeasible or unreasonable by a national emergency, including due diligence requirements and reporting deadlines.

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 terms "institution of higher education" and "institution of higher education for purposes of title IV programs" (IHE) used in this document are defined in sections 101 and 102 of the HEA.

In 20 U.S.C. 1098ee, the HEROES Act provides definitions critical to determining whether a person is an "affected individual" under the Act and, if so, which waivers and modifications apply to the affected individual. However, because these definitions do not include the specific circumstances under which these waivers and modifications are provided under the HEROES Act, we provide these definitions below.

For purposes of this document, "affected individual" means a student enrolled in a postsecondary institution. An "affected borrower" is one whose Federal student loans provided under title IV are in repayment. These definitions are in keeping with 20 U.S.C. 1098bb(a)(2) that establishes that statutory and regulatory provisions can be waived or modified "as necessary to ensure that recipients of student financial assistance under title IV of the [HEA} who are affected individuals are not placed in a worse position financially in relation to that financial assistance because of their status as affected individuals". The statute also provides that administrative requirements placed on affected individuals who are recipients of student financial assistance are minimized, to the extent possible without impairing the integrity of the student financial assistance programs, to ease the burden on such students and avoid inadvertent, technical violations, or defaults.

In accordance with the HEROES Act, the Secretary is providing the following waivers and modifications of statutory and regulatory provisions applicable to the student assistance general provisions and student financial assistance programs under title IV of the HEA that the Secretary believes are necessary to ensure that, during and in response to the COVID-19 pandemic--

* Accrediting agencies and associations are permitted to conduct virtual site visits of institutions or programs currently under review, scheduled for initial or renewal of accreditation, or in a show-cause or probationary status;

* IHEs may ensure continuity of instruction and learning by employing distance education to protect the health of their students, faculty, and staff;

* IHEs that are undergoing a change of ownership are provided additional time to gather the records, data, financial information, and approvals necessary to support their change of ownership application, and their temporary program participation agreements are extended while the application is pending;

* Foreign graduate medical schools that participate in the Federal Direct Loan Program are not required to obtain and report test results from the Medical College Admission Test (MCAT) from applicants during admission years in which the COVID-19 national emergency is in effect;

* Entities not submitting single audits in accordance with the audit requirements of 2 CFR 200, subpart F, are provided an additional six months to submit their annual compliance and financial statement audits;

* IHEs that resume offering educational programs after temporarily closing or suspending their educational programs due to COVID-19 are not considered to have ended their participation in the title IV, HEA programs;

* IHEs that offer existing short-term programs that qualify for Federal Direct Loans, or began offering a short-term program prior to the COVID emergency, are given some flexibility for programs affected by COVID-19;

* IHEs are provided additional flexibility to approve leaves of absence for students whose coursework is suspended due to the COVID-19 pandemic;

* IHEs are provided additional time to comply with deadlines for campus security, fire safety, and equity in athletics disclosures;

* IHEs are permitted to waive the requirement for a parental signature in the event that it cannot be obtained, or accept a document signed and photographed and sent by email or text message attachment, on any verification documentation required to validate a student's title IV eligibility;

* IHEs that participate in the Federal student financial aid programs under the heightened cash monitoring one (HCM1) status are provided flexibility to pay student credit balances after drawing down title IV funds;

* IHEs are provided alternative methods for disbursing title IV, HEA credit balance funds to students;

* IHEs that were experiencing challenges accessing data and preparing their cohort default rate (CDR) appeals during the national emergency were permitted to submit appeals to the draft fiscal year (FY) 2017 CDRs on or before June 30, 2020;

* IHEs are provided additional time to complete and submit their Fiscal Operations Report and Application to Participate (FISAP);

* IHEs that participate in the Federal Work-Study (FWS) programs are not subject to the FWS community service requirements during the national emergency;

* Perkins Loan and HEAL borrowers whose loans are held by the Department of Education (Department) are afforded the same benefits extended to Direct Loan borrowers in the Coronavirus Aid, Relief, and Economic Security (CARES) Act; /1/

FOOTNOTE 1 https://www.congress.gov/bill/116th-congress/house-bill/748/text. END FOOTNOTE

* Borrowers with loans under the Federal Family Education Loan (FFEL), Federal Perkins Loan, HEAL, and Direct Loan programs that are held by the Department, did not accrue interest on those loans from March 13, 2020 to March 27, 2020. Borrowers were also permitted to suspend payment on their loans without any penalties during this period. The automatic suspension of payment and the application of a zero percent interest rate on loans held by the Department was extended to October 1, 2020, under the CARES Act. Those benefits were further extended through December 31, 2020, by the President through the Presidential Memorandum issued on August 8, 2020; /2/

FOOTNOTE 2 https://www.whitehouse.gov/presidential-actions/memorandum-continued-student-loan-payment-relief-covid-19-pandemic/. END FOOTNOTE

* Borrowers who, prior to July 1, 2020, submitted an application for borrower defense to repayment (BD) relief that included a FFEL or Perkins loan and who would need to consolidate those loans into a Direct Consolidation Loan (DCL) to receive BD relief will have their eligibility for relief be adjudicated under the standards for Direct Loans disbursed between July 1, 2017, and July 1, 2020.

* Borrowers participating in income-driven repayment plans are not required to recertify their income or family size until after the administrative forbearance period extended by the August 8, 2020, Presidential Memorandum expires, and will be notified of a new certification deadline thereafter;

--This is a summary of a Federal Register article originally published on the page number listed below--

Updated waivers and modifications of statutory and regulatory provisions.

CFR Part: "34 CFR parts 600, 602, 668, 673, 674, 682, and 685"

Citation: "85 FR 79856"

Federal Register Page Number: "79856"

"Rules and Regulations"