[Federal Register Volume 59, Number 81 (Thursday, April 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-9747]


[Federal Register: April 28, 1994]


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Part IV





Department of Education





_______________________________________________________________________



34 CFR Part 668



Student Assistance General Provisions; Final Rule
DEPARTMENT OF EDUCATION

34 CFR Part 668

RIN 1840-AC08


Student Assistance General Provisions

Agency: Department of Education.

Action: Final regulations.

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Summary: The Secretary amends subpart E of the Student Assistance 
General Provisions regulations, 34 CFR part 668, Verification of 
Student Aid Application Information, to implement technical revisions 
resulting from the Higher Education Amendments of 1992 (Pub. L. 102-
325) and the Higher Education Technical Amendments of 1993 (Pub. L. 
103-208) and to reduce the administrative burden associated with 
verification requirements on applicants and institutions. These 
regulations require institutions to have a system for verifying student 
aid application information reported by applicants for use in 
calculating expected family contributions (EFCs) for the Federal Pell 
Grant, campus-based (Federal Perkins Loan, Federal Work-Study (FWS), 
and Federal Supplemental Educational Opportunity Grant (FSEOG)), 
Federal Stafford Loan, Federal Direct Student Loan (FDSL), and 
Presidential Access Scholarship (PAS) programs.

Effective Date: These regulations take effect on July 1, 1994. When 
these regulations become effective, they will govern verification of 
student aid application information for any Title IV, Higher Education 
Amendments (HEA) program assistance that may be awarded to any student 
for award years beginning with 1994-95.

FOR FURTHER INFORMATION CONTACT: Lorraine Kennedy, U.S. Department of 
Education, 400 Maryland Avenue, SW., Regional Office Building 3, room 
4318, Washington, DC 20202-5451. Telephone (202) 708-4601. Individuals 
who use a telecommunications device for the deaf (TDD) may call the 
Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8 
a.m. and 8 p.m., Eastern time, Monday through Friday.

SUPPLEMENTARY INFORMATION: Subpart E of the Student Assistance General 
Provisions regulations (34 CFR part 668) governs the verification of 
the information that is used to calculate an applicant's expected 
family contribution (EFC) as part of the determination of an 
applicant's need for student financial assistance. Based on the need 
analysis formula established in statute, the EFC is the amount that an 
applicant and the applicant's family can reasonably be expected to 
contribute towards the applicant's cost of attendance at an institution 
of higher education.
    The changes in these regulations result from a review of current 
policies and procedures and from recently enacted legislation that 
renders certain provisions in the current regulations obsolete.

Summary of Changes

    Sections 668.51 through 668.61 are amended to delete all references 
to the Income Contingent Loan (ICL) Program and Quality Control Pilot 
Project. Program references throughout Subpart E have been changed to 
reflect the new names of the Title IV, HEA programs.
    Sections 668.52(b) and 668.54(a) are amended to delete the 
definition of Need Analysis Servicer, to delete references to the 
certification of need analysis servicers, and to delete references to 
the 30 percent verification limitation.
    Sections 668.54 through 668.56 are amended to include the use of an 
output document and institutional student information reports (ISIRs) 
in conjunction with the reference to the Student Aid Report (SAR). 
Output documents and ISIRs will also be used in conjunction with the 
reference to an SAR for applicants selected for verification under 
Sec. 668.54(a)(2).
    Sections 668.56(a)(5)(i) (A) and (B) and 668.57(d)(2)(i) are 
deleted since the Department no longer participates in a match with the 
Social Security Administration for these benefits.
    The Secretary also amends Sec. 668.57(a) (2) and (3) to remove the 
quotation marks before and after ``IRS Listing of Tax Account 
Information'' and to make the phrase lower case. This clarifies that 
the reference is to information that is being requested from IRS that 
would be used to verify specific data elements, not a specific IRS 
form. Also, this would accommodate new IRS forms that are continuously 
being developed through electronic technology to assist tax filers.
    Section 668.59 is amended to remove all references to the Pell 
Grant Index (PGI) and replace the reference with EFC, and to add the 
new terms output document or ISIRs as they apply. This section is also 
being amended to delete the Zero PGI Charts.
    The regulations also delete the use of the Zero PGI Charts as a 
tolerance option for applicants who have undergone verification. In the 
past, the charts have not been widely used and institutions can easily 
use another tolerance option such as the recalculation of an 
applicant's EFC. The Department of Education provides the Electronic 
Needs Analysis System (ENAS) to institutions at no cost. ENAS may be 
used for recalculating an applicant's EFC.

Waiver of Proposed Rulemaking

    In accordance with section 431(b)(2)(A) of the General Education 
Provisions Act (20 U.S.C. 1232(b)(2)(A)) and the Administrative 
Procedure Act (5 U.S.C. 553), it is the practice of the Secretary to 
offer interested parties the opportunity to comment on proposed 
regulations. However, the technical changes in these final regulations 
are a direct result of the Higher Education Amendments of 1992, are 
purely technical, and do not establish substantive policy. Therefore, 
the Secretary has determined under 5 U.S.C. 553(b)(B) that proposed 
rulemaking is unnecessary and contrary to the public interest.

Assessment of Educational Impact

    The Department has determined that the regulations in this document 
do not require transmission of information that is being gathered by or 
is available from any other agency or authority of the United States.

List of Subjects in 34 CFR Part 668

    Administrative practice and procedure, Colleges and universities, 
Consumer protection, Education, Grant programs--education, Loan 
programs--education, Reporting and recordkeeping requirements, Student 
aid.

    Dated: April 19, 1994.
Richard W. Riley,
Secretary of Education.
(Catalog of Federal Domestic Assistance Numbers: Federal 
Supplemental Educational Opportunity Grant Program, 84.007; Federal 
Stafford Loan Program, 84.032; Federal PLUS Loan Program, 84.032; 
Federal Work-Study Program, 84.033; Federal Perkins Loan Program, 
84.038; Federal Pell Grant Program, 84.063; Presidential Access 
Scholarship and Partnership Program, No number assigned; Federal 
Direct Student Loan Program, 84.268)

    The Secretary amends Part 668 of Title 34 of the Code of Federal 
Regulations as follows:

PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS

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

    Authority: 20 U.S.C. 1085, 1088, 1091, 1092, 1094, and 1141, 
unless otherwise noted.

    2. Section 668.51 is amended by removing paragraph (c), 
redesignating paragraph (d) as paragraph (c), and revising paragraph 
(a) and redesignated paragraph (c) to read as follows:


Sec. 668.51  General.

    (a) Scope and purpose. The regulations in this subpart govern the 
verification by institutions of information submitted by applicants for 
student financial assistance in connection with the calculation of 
their expected family contributions (EFC) for the Federal Pell Grant, 
campus-based, Federal Stafford Loan, Federal Direct Student Loan 
(FDSL), and Presidential Access Scholarship (PAS) programs.
* * * * *
    (c) Foreign schools. The Secretary exempts from the provisions of 
this subpart institutions participating in the Federal Stafford Loan 
Program that are not located in a State.

    3. Section 668.52 is amended by deleting the definition of ``Need 
analysis servicer,'' by adding, in alphabetical order, the definition 
of ``Institutional student information report,'' and by revising the 
definition of ``Student aid application'' to read as follows:


Sec. 668.52  Definitions.

* * * * *
    Institutional student information report as defined in 34 CFR 690.2 
for purposes of the Federal Pell Grant, campus-based, Federal Stafford 
Loan and PAS programs.
* * * * *
    Student aid application means an application approved by the 
Secretary and submitted by a person to have his or her EFC determined 
under the Federal Pell Grant, campus-based, Federal Stafford Loan, 
Federal Direct Loan or PAS programs.

    4. Section 668.54 is amended by revising paragraph (a)(2), removing 
paragraph (a)(3), by redesignating paragraphs (a)(4) through (a)(6) as 
paragraphs (a)(3) through (a)(5) respectively, and by revising 
paragraph (b)(2)(vii)(B) to read as follows:


Sec. 668.54  Selection of applications for verification.

    (a) * * *
    (2) An institution shall require each applicant whose application 
is selected for verification, on the basis of edits specified by the 
Secretary, to verify all of the applicable items specified in 
Sec. 668.56.
* * * * *
    (b) * * *
    (2) * * *
    (vii) * * *
    (B) A copy of the verified application and, if the applicant 
applied for a Federal Pell Grant, pages 1 and 3 of the applicant's SAR 
or a copy of the applicant's electronic SAR or ISIR.
* * * * *
    5. Section 668.55 is amended by revising paragraphs (b)(2) and (c) 
to read as follows:


Sec. 668.55  Updating Information.

* * * * *
    (b) * * *
    (2) An applicant for a Federal Pell Grant who is not selected for 
verification shall update the information contained in his or her 
application regarding those factors and shall certify that the 
information is correct as of the day that the applicant submits his or 
her first SAR to the institution or signs his or her ISIR at the 
institution.
    (c) If an applicant has received Federal Pell Grant, campus-based, 
Federal Stafford Loan, FDSL, or PAS program assistance for an award 
year, and the applicant subsequently submits another application for 
assistance under any of those programs for that award year, and the 
applicant is required to update household size and number attending 
postsecondary educational institutions on the subsequent application, 
the institution--
    (1) Is required to take that newly updated information into account 
when awarding for that award year further Federal Pell Grant, campus-
based, FDSL or PAS program assistance or certifying a Federal Stafford 
Loan application; and
    (2) Is not required to adjust the Federal Pell Grant, campus-based, 
FDSL, or PAS program assistance previously awarded to the applicant for 
that award year, or any previously certified Federal Stafford Loan 
application for that award year, to reflect the newly updated 
information unless the applicant would otherwise receive an overaward.
* * * * *
    6. Section 668.56 is amended by revising paragraphs (a)(5)(i) and 
(b) introductory text to read as follows:


Sec. 668.56  Items to be verified.

    (a) * * *
    (5) * * *
    (i) Social security benefits if the institution has reason to 
believe that those benefits were received;
* * * * *
    (b) If an applicant selected for verification submits an SAR or 
output document to the institution or the institution receives the 
applicant's ISIR, within 90 days of the date the applicant signed his 
or her application, or if an applicant is selected for verification 
under Sec. 668.54(a)(2), the institution need not require the applicant 
to verify--
* * * * *
    7. Section 668.57 is amended by revising paragraphs (a)(2) and 
(d)(2) to read as follows:


Sec. 668.57  Acceptable documentation.

    (a) * * *
    (2) If an individual who filed a U.S. tax return and who is 
required by paragraph (a)(1) of this section to provide a copy of his 
or her tax return does not have a copy of that return, the institution 
may require that individual to submit, in lieu of a copy of the tax 
return, a copy of an IRS form which lists tax account information.
* * * * *
    (d) * * *
    (2) Social security benefits if the institution has reason to 
believe that the applicant has incorrectly reported Social Security 
benefits received by the applicant, applicant's parents, and any other 
children of the applicant's parents who are members of the applicant's 
household, in the case of a dependent student, or by the applicant, the 
applicant's spouse, and the applicant's children in the case of an 
independent student. The applicant shall verify Social Security 
benefits by submitting a document from the Social Security 
Administration showing the amount of benefits received in the 
appropriate calendar year for the appropriate individuals listed above 
or, at the institution's option, a statement signed by both the 
applicant and the applicant's parent, in the case of a dependent 
student, or by the applicant, in the case of an independent student, 
certifying that the amount listed on the applicant's aid application is 
correct; and
* * * * *


Sec. 668.58  [Amended]

    8. In 668.58, paragraphs (a)(1)(ii) and (a)(2)(ii)(B) are amended 
by removing the term ``CWS'' and adding in its place the words 
``Federal Work-Study.''
    9. Section 668.59 is amended by revising paragraphs (a) 
introductory text, (a)(1) introductory text, (a)(1)(i), (a)(2), 
(b)(2)(i) (B) and (C), (b)(2)(ii) (A) and (B) to read as follows:


Sec. 668.59  Consequences of a change in application information.

    (a) For the Federal Pell Grant Program--
    (1) Except as provided in paragraphs (a) (2) and (3) of this 
section, if the information on an application changes as a result of 
the verification process, the institution shall require the applicant 
to resubmit his or her application information to the Secretary for 
corrections if--
    (i) The institution recalculates the applicant's EFC, determines 
that the applicant's EFC changes, and determines that the change in the 
EFC changes the applicant's Federal Pell Grant award; or
* * * * *
    (2) An institution need not require an applicant with a reported 
EFC of zero on his or her SAR or ISIR to resubmit that SAR to the 
Secretary or correct the ISIR at the institution, if the institution 
determines that the applicant's EFC remains at zero on the basis of the 
verified information.
* * * * *
    (b) * * *
    (2) * * *
    (i) * * *
    (B) Recalculate the applicant's Federal Pell Grant award on the 
basis of the EFC on the corrected SAR or ISIR; and
    (C) Disburse any additional funds under that award only if the 
applicant provides the institution with the corrected SAR or ISIR and 
only to the extent that additional funds are payable based on the 
recalculation.
    (ii) * * *
    (A) May disburse the applicant's Federal Pell Grant award on the 
basis of the original EFC without requiring the applicant to resubmit 
his or her application information to the Secretary; and
    (B) Except as provided in Sec. 668.60(b), shall disburse any 
additional funds under the increased award reflecting the new EFC if 
the institution receives the corrected SAR or ISIR.
* * * * *
    10. Section 668.60 is amended by revising paragraphs (b) 
introductory text, (b)(1)(i)(A), (b)(1)(iii), (c)(1) and (2) 
introductory text, and (d) to read as follows:


Sec. 668.60  Deadlines for submitting documentation and the 
consequences of failing to provide documentation.

* * * * *
    (b) For purposes of the campus-based, Federal Stafford Loan, FDSL 
and PAS programs--
    (1) * * *
    (i) * * *
    (A) Disburse any additional Federal Perkins Loan, FDSL, FSEOG or 
PAS funds to the applicant;
* * * * *
    (iii) The applicant shall repay to the institution any Federal 
Perkins Loan, FDSL, FSEOG, or PAS payments received for that award 
year;
* * * * *
    (c) * * *
    (1) An applicant may submit a verified SAR to the institution or 
the institution may receive a verified ISIR after the applicable 
deadline specified in 34 CFR 690.61 but within an established 
additional time period set by the Secretary through publication of a 
notice in the Federal Register. If the institution receives a verified 
SAR or ISIR during the established additional time period, and the EFC 
on the two SARs or ISIRs are different, payment must be based on the 
higher of the two EFCs.
    (2) If the applicant does not provide the requested documentation, 
and if necessary, a verified SAR or ISIR, within the additional time 
period referenced in paragraph (c)(1) of this section the applicant--
* * * * *
    (d) The Secretary may determine not to process any subsequent 
application for Federal Pell Grant, and an institution, if directed by 
the Secretary, may not process any subsequent application for campus-
based, PAS, FDSL, or Federal Stafford Loan program assistance of an 
applicant who has been requested to provide documentation until the 
applicant provides the documentation or the Secretary decides that 
there is no longer a need for the documentation.
* * * * *
    11. Section 668.61 is amended by revising paragraph (a)(2)(ii)(B) 
and adding an OMB control number to read as follows:


Sec. 668.61  Recovery of funds.

    (a) * * *
    (2) * * *
    (ii) * * *
    (B) The last day of the award year in which the institution 
disbursed Federal Pell Grant, Federal Perkins Loan, FDSL, FSEOG or PAS 
funds to the applicant.
* * * * *


Secs. 668.58, 668.59  [Amended]

    12. In 34 CFR part 668 remove the terms ``need-based Income 
Contingent Loan (ICL),'' ``and need-based ICL,'' and ``or need-based 
ICL'' in the following places:
    a. Section 668.58(a)(2)(i) and (a)(2)(ii); and
    b. Section 668.59(c) introductory text and (c)(1)(ii).


Secs. 668.55, 668.58, 668.59, 668.60, 668.61  [Amended]

    13. In 34 CFR Part 668 add the word ``Federal'' before the words 
``Pell Grant'', ``Stafford Loan'', ``Perkins Loan'', or ``Supplemental 
Educational Opportunity Grant'' in the following places each time they 
appear:
    a. Section 668.55(d)(2)(twice); and
    b. Section 668.58(a)(1)(i), (a)(1)(iii)(three times), (a)(2)(i), 
(a)(2)(iii)(A), (a)(2)(iii)(B)(twice), (c), (d)(1), and (d)(2); and
    c. Section 668.59(b) introductory text, (b)(1), (c) introductory 
text, (c)(1)(ii), and (d); and
    d. Section 668.60(b)(1)(i)(C), (b)(1)(i)(D), (b)(1)(ii), 
(b)(3)(twice), (c) introductory text, (c)(2)(i), (c)(2)(ii), and 
(e)(2)(twice); and
    e. Section 668.61(a)(2)(ii)(B).

[FR Doc. 94-9747 Filed 4-26-94; 8:45 am]
BILLING CODE 4000-01-U