[Federal Register Volume 61, Number 224 (Tuesday, November 19, 1996)]
[Rules and Regulations]
[Pages 58926-58930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-29489]



[[Page 58925]]

_______________________________________________________________________

Part II





Department of Education





_______________________________________________________________________



34 CFR Part 668, et al.



Student Assistance General Provisions, Federal Perkins Loan, Federal 
Work-Study, Federal Supplemental Educational Opportunity Grant, Federal 
Family Education Loan, William D. Ford Federal Direct Loan, and Federal 
Pell Grant Programs; Final Rule

  Federal Register / Vol. 61, No. 224 /  Tuesday, November 19, 1996 /  
Rules and Regulations  

[[Page 58926]]



DEPARTMENT OF EDUCATION

34 CFR Parts 668, 674, 675, 676, 682, 685, and 690


Student Assistance General Provisions, Federal Perkins Loan, 
Federal Work-Study, Federal Supplemental Educational Opportunity Grant, 
Federal Family Education Loan, William D. Ford Federal Direct Loan, and 
Federal Pell Grant Programs

AGENCY: Department of Education.

ACTION: Notice of relief from regulatory provisions.

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

SUMMARY: The Secretary announces regulatory relief from specific 
regulations governing the Federal Perkins Loan, Federal Work-Study 
(FWS), Federal Supplemental Educational Opportunity Grant (FSEOG), 
Federal Family Education Loan (FFEL), William D. Ford Federal Direct 
Loan (Direct Loan), and Federal Pell Grant programs, for the 1994-95, 
1995-96, 1996-97, and 1997-98 award years, to assist institutions and 
individuals who suffered financial harm from the following natural 
disasters: the Texas floods in October 1994; the California floods in 
January and March 1995; the Illinois, Louisiana, Mississippi, and 
Missouri floods in May 1995; the Hurricanes in the Commonwealth of 
Puerto Rico, the U.S. Virgin Islands, Florida, Alabama, Georgia, and 
North Carolina in September and October 1995; the Idaho, Maryland, New 
York, Ohio, Oregon, Pennsylvania, Virginia, Washington, and West 
Virginia floods in January and February 1996; and the Hurricanes in 
Maryland, North Carolina, Pennsylvania, Puerto Rico, Virginia, and West 
Virginia in September 1996.

EFFECTIVE DATE: This document takes effect December 19, 1996.

FOR FURTHER INFORMATION CONTACT: Kathy S. Gause, Senior Program 
Specialist, Grants Branch, Policy Development Division, Policy, 
Training, and Analysis Service, U.S. Department of Education, 600 
Independence Avenue, S.W., (Regional Office Building 3, Room 3045), 
Washington, D.C. 20202-5447. Telephone (202) 708-4690. 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: Many student financial aid applicants and 
recipients, institutions of higher education, lenders, and guaranty 
agencies have been adversely affected by the natural disasters that 
occurred in 1994, 1995, and 1996. The Secretary recognizes the severe 
impact the flooding and hurricanes have had on institutions and their 
students located in the designated natural disaster areas. Many title 
IV financial aid program participants adversely affected by the natural 
disasters faced and continue to face problems concerning the 
administration of the title IV programs. Also, many title IV loan 
recipients continue to have problems concerning the repayment of their 
loans.
    The title IV student financial aid programs affected by this notice 
are the FFEL Program which consists of the Federal Stafford Loan 
(Subsidized and Unsubsidized Loans) Program, the Federal Supplemental 
Loans for Students (SLS) Program (note: The SLS Program no longer 
exists, so no new loans are being made. However, this notice applies to 
the servicing of existing loans.), the Federal PLUS Program, and the 
Federal Consolidation Loan Program; the Direct Loan Program which 
consists of the Federal Direct Stafford/Ford Loan (Direct Subsidized 
Loan) Program, the Federal Direct Unsubsidized Stafford/Ford Loan 
(Direct Unsubsidized Loan) Program, the Federal Direct PLUS (Direct 
PLUS) Program, and the Federal Direct Consolidation Loan (Direct 
Consolidated Loan) Program; the Federal Pell Grant Program; and the 
Federal Perkins Loan, FWS, and FSEOG programs. To assist victims of the 
floods and hurricanes in their recovery, this notice provides relief to 
students, institutions, lenders, and guaranty agencies with respect to 
their obligation to comply with certain regulatory provisions under the 
student financial aid programs. Institutions were informed of this 
relief in Dear Colleague letters dated January 1995 (GEN-95-1), April 
1995 (GEN-95-20), July 1995 (GEN-95-36), November 1995 (GEN-95-49), 
March 1996 (GEN 96-10), and September 1996 (GEN 96-18).
    The Secretary has already provided certain regulatory relief to 
lenders and guaranty agencies in the FFEL Program under section 
432(a)(6) of the HEA and 34 CFR 682.406(b) and 682.413(f). The guaranty 
agency directors were informed of this relief in letters issued after 
each disaster covered by this notice.

Covered Individuals

    This notice is intended to assist institutions and individuals that 
were adversely affected by the following natural disasters:
    (1) The floods in Texas in October 1994--Relief applicable to the 
1994-95 award period (July 1, 1994 to June 30, 1995);
    (2) The floods in California in January and March 1995--Relief 
applicable to the 1994-95 award period (July 1, 1994 to June 30, 1995);
    (3) The floods in Illinois, Louisiana, Mississippi, and Missouri in 
May 1995--Relief applicable to the 1994-95 award year (July 1, 1994 to 
June 30, 1995). However, if specifically indicated, relief may be 
extended into the next award year (July 1, 1995 to June 30, 1996);
    (4) The hurricanes in the Commonwealth of Puerto Rico, the U.S. 
Virgin Islands, Florida, Alabama, Georgia, and North Carolina in 
September and October 1995--Relief applicable to the 1995-96 award year 
(July 1, 1995 to June 30, 1996). However, if specifically indicated 
relief may be extended into the next award year (July 1, 1996 to June 
30, 1997);
    (5) The floods in Idaho, Maryland, New York, Ohio, Oregon, 
Pennsylvania, Virginia, Washington, and West Virginia in January and 
February 1996--Relief applicable to the 1995-96 award year (July 1, 
1995 to June 30, 1996). However, if specifically indicated relief may 
be extended into the next award year (July 1, 1996 to June 30, 1997); 
and
    (6) The hurricanes in Maryland, North Carolina, Pennsylvania, 
Puerto Rico, Virginia, and West Virginia in September 1996--Relief 
applicable to the 1996-97 award year (July 1, 1996 to June 30, 1997). 
However, if specifically indicated relief may be extended into the next 
award year (July 1, 1997 to June 30, 1998).
    This notice applies to institutions, lenders, and guaranty agencies 
that were unable to maintain normal participation and interactions with 
title IV participants because they were located in specific counties in 
these states on the date on which the President declared the existence 
of a major disaster. This notice of relief also applies only to 
individuals who suffered financial harm from the disaster and, at the 
time the disaster occurred, were residing, attending an institution of 
higher education, or employed in the counties designated as disaster 
areas (or, in the case of an individual who is a dependent student, 
whose parent or stepparent suffered financial harm from such disaster 
and resided or was employed in such an area at that time). This notice 
of regulatory relief will be applicable for awards made and collection 
activities conducted under the title IV programs during the periods 
listed above.
    The following counties were designated as disaster areas:

[[Page 58927]]



----------------------------------------------------------------------------------------------------------------
                 State                                                   Counties                               
----------------------------------------------------------------------------------------------------------------
                                         Flood Disaster in October 1994                                         
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Texas..................................  Angelina, Austin, Bastrop, Brazos, Brazoria, Burleson, Chambers,       
                                          Fayette, Fort Bend, Galveston, Grimes, Hardin, Harris, Houston,       
                                          Jackson, Jasper, Jefferson, Lee, Liberty, Madison, Matagorda,         
                                          Montgomery, Nacagdoches, Orange, Polk, San Augustine, San Jacinto,    
                                          Shelby, Trinity, Tyler, Victoria, Washington, Waller, Walker, Wharton.
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                    Flood Disasters in January and March 1995                                   
                                                                                                                
----------------------------------------------------------------------------------------------------------------
California.............................  Alameda, Amador, Butte, Calaveras, Colusa, Contra Costa, Del Norte, El 
                                          Dorado, Fresno, Glenn, Humboldt, Imperial, Inyo, Kern, Kings, Lake,   
                                          Lassen, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced,      
                                          Modoc, Mono, Monterey, Napa, Nevada, Orange, Placer, Plumas,          
                                          Riverside, Sacramento, San Benito, San Bernadino, San Diego, San      
                                          Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara,    
                                          Santa Clara, Santa Cruz, Shasta, Sierra, Siskiyou, Solano, Sonoma,    
                                          Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolumne, Ventura, Yolo, 
                                          Yuba.                                                                 
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                           Flood Disasters in May 1995                                          
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Illinois...............................  Madison, St. Claire Louisiana Ascension, Assumption, Jefferson,        
                                          LaFourche, Orleans (Ward 9), St. Bernard, St. Charles, St. James, St. 
                                          John the Baptist, St. Tammany, Tangipahoa, Terrebonne.                
Mississippi............................  Hancock, Harrison, Jackson, Pearl River.                               
Missouri...............................  Benton, Boone, Cole, Franklin, Gasconade, Jefferson, Johnson, Miller,  
                                          St. Charles, St. Claire, St. Genevieve, St. Louis.                    
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                Hurricane Disasters in September and October 1995                               
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Commonwealth of Puerto Rico                                                                                     
U.S. Virgin Islands                                                                                             
Alabama................................  Autauga, Baldwin, Barbour, Bullock, Butler, Calhoun, Chambers,         
                                          Cherokee, Clarke, Clay, Cleburne, Coffee, Conecuh, Coosa, Covington,  
                                          Crenshaw, Dale, Elmore, Escambia, Etowah, Geneva, Henry, Houston,     
                                          Jefferson, Lee, Lowndes, Macon, Mobile, Montgomery, Pike, Randolph,   
                                          Russell, St. Clair, Talladega, Tallapoosa.                            
Florida................................  Bay, Collier, Calhoun, Escambia, Franklin, Gadsden, Gulf, Holmes,      
                                          Jackson, Lee, Liberty, Leon, Martin, Okaloosa, Palm Beach County,     
                                          Santa Rosa, Walton, Wakulla, Washington.                              
Georgia................................  Banks, Barrow, Bartow, Carroll, Catoosa, Chattooga, Cherokee, Clay,    
                                          Clayton, Cobb, Coweta, Dade, Dawson, De Kalb, Douglas, Fannin,        
                                          Fayette, Floyd, Forsyth, Fulton, Gilmer, Gordon, Gwinnett, Habersham, 
                                          Hall, Harris, Haralson, Heard, Lumpkin, Meriwether, Murray, Muscogee, 
                                          Paulding, Pickens, Pike, Polk, Quitman, Rabun, Randolph, Spalding,    
                                          Stewart, Talbot, Towns, Troup, Union, Upson, Walker, White, Whitfield.
North Carolina.........................  Ashe, Avery, Cherokee, Clay, Graham, Haywood, Jackson, Macon, Madison, 
                                          Mitchell, Swain, Transylvania, Watauga, Wilkes, Yancey, Eastern Band  
                                          of the Cherokee Indian Reservation.                                   
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                   Flood Disasters in January and February 1996                                 
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Idaho..................................  Benewah, Bonner, Boundary, Clearwater, Idaho, Kootenai, Latah, Lewis,  
                                          Nez Perce, Shoshone, Nez Perce Indian Reservation.                    
Maryland...............................  Allegany, Carroll, Cecil, Frederick, Garrett, Washington.              
New York...............................  Albany, Allegany, Broome, Cattaraugus, Cayuga, Chemung, Chenango,      
                                          Clinton, Columbia, Cortland, Delaware, Dutchess, Essex, Greene,       
                                          Herkimer, Montgomery, Orange, Otsego, Rensselaer, Saratoga,           
                                          Schenectady, Schoharie, Steuben, Sullivan, Tioga, Tompkins, Ulster,   
                                          Warren.                                                               
Ohio...................................  Adams, Belmont, Brown, Clermont, Columbiana, Hamilton, Jefferson,      
                                          Lawrence, Meigs, Monroe, Scioto, Washington.                          
Oregon.................................  Benton, Clackamas, Clatsop, Columbia, Coos, Deschutes, Douglas,        
                                          Gilliam, Hood River, Jefferson, Josephine, Lane, Lincoln, Linn,       
                                          Marion, Morrow, Multnomah, Polk, Sherman, Tillamook, Umatilla, Union, 
                                          Wallowa, Wasco, Washington, Yamhill, Confederated Tribes of Umatilla  
                                          Indian Reservation, Warm Springs Indian Reservation.                  
Pennsylvania...........................  All counties.                                                          
Virginia...............................  Alleghany, Augusta, Bath, Bland, Botetourt, Clarke, Frederick, Giles,  
                                          Grayson, Highland, Loudoun, Page, Rappahanock, Rockbridge, Rockingham,
                                          Shenandoah, Warren, Washington, Wythe, City of Buena Vista, City of   
                                          Covington, City of Harrisonburg, City of Waynesboro.                  
Washington.............................  Adams, Asotin, Benton, Clark, Columbia, Cowlitz, Garfield, Grays       
                                          Harbor, King, Kitsap, Kittitas, Klickitat, Lewis, Lincoln, Pierce,    
                                          Skagit, Skamania, Snohomish, Thurston, Wahkiakum, Walla Walla,        
                                          Whitman, Yakima, Yakima Indian Reservation.                           
West Virginia..........................  Berkeley, Brooke, Grant, Greenbriar, Hampshire, Hancock, Hardy,        
                                          Jefferson, Marshall, Mason, Mercer, Mineral, Monroe, Morgan, Nicholas,
                                          Ohio, Pendleton, Pleasants, Pocahontas, Preston, Raleigh, Randolph,   
                                          Summers, Tucker, Tyler, Webster, Wetzel, Wood.                        
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                      Hurricane Disasters in September 1996                                     
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Maryland...............................  Allegany, Frederick.                                                   

[[Page 58928]]

                                                                                                                
North Carolina.........................  Alamance, Beaufort, Bertie, Bladen, Brunswick, Carteret, Chatham,      
                                          Columbus, Craven, Cumberland, Duplin, Durham, Edgecombe, Franklin,    
                                          Granville, Greene, Guilford, Halifax, Harnett, Henderson, Hoke,       
                                          Johnston, Jones, Lee, Lenoir, Moore, Nash, New Hanover, Onslow,       
                                          Orange, Pamlico, Pender, Person, Polk, Richmond, Robeson, Rutherford, 
                                          Sampson, Vance, Wake, Warren, Wayne, Wilson.                          
Pennsylvania...........................  Huntingdon, Juniata, Mifflin, Montgomery, Perry.                       
Commonwealth of Puerto Rico............  Arroyo, Bayamon, Canovanas, Carolina, Cayey, Ceiba, Guayama, Guaynabo, 
                                          Gurabo, Las Piedras, Loiza, Maunabo, Ponce, Rio Grande, Salinas, San  
                                          Juan, San Lorenzo, Santa Isabel, Toa Baja, Yabucoa.                   
Virginia...............................  Augusta, Clarke, Danville (City), Halifax, Harrisonburg (City),        
                                          Madison, Martinsville (City), Mecklenburg, Nelson, Page, Pittsylvania,
                                          Rappahannock, Rockbridge, Rockingham, Shenandoah, Staunton (City),    
                                          Warren, Waynesboro (City).                                            
West Virginia..........................  Berkeley, Grant, Hampshire, Hardy, Jefferson, Mineral, Morgan,         
                                          Pendleton, Randolph, Tucker.                                          
----------------------------------------------------------------------------------------------------------------

    The Secretary provides the following enforcement relief from the 
statutes and regulations governing the student financial aid programs 
under title IV of the HEA:

I. 34 CFR Part 668--Student Assistance General Provisions

A. 34 CFR 668.19  Financial Aid Transcript

    Under current regulations, before a student who previously attended 
another eligible institution may receive any title IV, HEA program 
funds, the institution to which the student is transferring must make 
an effort to obtain the student's financial aid transcript. The 
Secretary is waiving the requirement to obtain financial aid 
transcripts before disbursing funds for individuals who attended 
institutions covered by this notice for the 1994-95, 1995-96, 1996-97, 
and 1997-98 award years. If the financial aid transcript is not 
available as a result of damage caused by the disasters covered in this 
notice, the institution may disburse title IV funds. Any institution 
affected by this situation must document in the student's file that the 
financial aid transcript is unavailable due to damage stemming from the 
natural disaster. In addition, the student will still be expected to 
provide statements concerning all prior financial aid received, and the 
institution will be expected to retain this information in the 
student's file.

B. 34 CFR 668.51-668.61  Subpart E--Selection of Applicants for 
Verification

    The Secretary is waiving verification requirements under 34 CFR 
668.51-668.61 during the 1994-95, 1995-96, 1996-97, and 1997-98 award 
years for those applicants who are selected for verification and whose 
records were lost or destroyed because of the disasters covered by this 
notice. The institution must document in the student's file that the 
records are unavailable due to damage stemming from the natural 
disaster. For these students, Verification Status Code ``S'' may be 
used when reporting a Federal Pell Grant disbursement on the SAR.

II. 34 CFR Part 690--Federal Pell Grant Program

34 CFR 690.83  Submission of Reports

    The Secretary modifies the deadline in 34 CFR 690.83(a)(1)(i) for 
submitting SAR payment Vouchers (or SAR payment data for 1996-97) for 
an award year. The Secretary will modify this reporting date, on a 
``case-by-case'' basis, for institutions affected by the disasters 
covered by this notice.

III. 34 CFR Part 674--Federal Perkins Loan Program

1. 34 CFR 674.31  Promissory Note

    The terms of a student's promissory note require that repayment of 
a loan must begin six (6) or nine (9) months after a borrower ceases to 
be at least a half-time regular student and that the repayment period 
normally ends 10 years later. The Secretary is modifying this provision 
to provide that any borrower who was in an ``in-school'' status at the 
time the natural disaster occurred and was unable to complete course 
requirements or enroll in classes due to the disaster will continue to 
be in an ``in-school'' status until such time as the borrower withdraws 
or until the end of the award year in which the disaster occurred, 
whichever is earlier. The institution must document this reason for 
continued ``in-school'' status in the student's file.

2. 34 CFR 674.42  Contact With the Borrower

    The Secretary will not require an institution to comply with the 
provisions of Sec. 674.42(b). This section requires an institution to 
make contact with the borrower during an initial or postdeferment grace 
period if that grace period coincides with the disasters covered by 
this notice. The Secretary suspends this requirement until the 
institution is able to resume normal contact with the borrower. An 
institution must document the reason for suspension of these activities 
in the borrower's file.

3. 34 CFR 674.41-674.50  Subpart C--Due Diligence

    The Secretary will not enforce 34 CFR 674 Subpart C--Due Diligence. 
An institution may suspend the collection activities with regard to 
borrowers residing in the designated disaster areas who were already in 
default at the time of the natural disaster until the institution is 
able to resume normal contact with the borrower. An institution must 
document the reason for suspension of these activities in the 
borrower's file.

4. 34 CFR 674.33  Repayment

    The Secretary modifies the provisions for repayment in 34 CFR 
674.33 and authorizes an institution to grant a forbearance to a 
borrower who is in repayment at the time of the natural disaster but 
who is unable to continue to repay the loan due to the disaster. 
Interest will accrue during any period of forbearance. A borrower may 
request this forbearance orally, or in writing, and is not required to 
submit documentation to be considered eligible. The forbearance may be 
granted in accordance with 34 CFR 674.33(d). This period of forbearance 
is counted toward the 3-year maximum limit on the number of years of 
forbearance that may be granted to a borrower. Documentation must be 
maintained according to the governing regulations.

IV. 34 CFR Part 682--Federal Family Education Loan (FFEL) Program

A. 34 CFR 682.604  Processing the Borrower's Loan Proceeds and 
Counseling Borrowers

    To assist affected individuals, the Secretary will not enforce the 
requirement in 34 CFR 682.604(c)(3) (i) and (ii) and 682.604(e)(3) that 
loan proceeds be delivered to the borrower within 45 days of the 
school's receipt of the check, but will instead permit the institution 
to deliver loan proceeds to the borrower up to 120 days from the

[[Page 58929]]

institution's receipt of the check. The Department still expects 
delivery of a borrower's loan proceeds as soon as possible.
    Also, because some institutions may have to delay opening or have 
ceased operation for an undetermined period of time, the Secretary 
authorizes lenders not to disburse loan checks to institutions or to 
parent PLUS borrowers in the affected areas until the lenders receive 
revised disbursement schedules from the affected institutions. The 
Secretary instructs guaranty agencies and lenders to revise information 
on loan periods, graduation dates, and so forth, on the loan 
applications related to these disbursements as the information becomes 
available. This means that a borrower need not reapply for the loan. 
This also will allow a student to receive his or her loan proceeds 
according to a schedule that fits the institution's new academic 
schedule.

B. 34 CFR 682.605  Determining the Date of a Student's Withdrawal

    Section 682.605 requires an institution to follow the procedures in 
34 CFR 668.22(j) for determining a student's date of withdrawal. The 
Secretary modifies the provisions for determining withdrawal dates to 
permit an institution affected by a disaster to take a longer period to 
determine that a student has withdrawn from the institution. An 
affected institution may make a determination of withdrawal within 60 
days (instead of 30 days) after the expiration of the earlier of: (a) 
the loan period; (b) the academic year in which the student withdrew; 
or (c) the educational program from which the student withdrew.
    In the case of a student who does not return for the next scheduled 
term following a summer break, the school may make a determination of 
withdrawal no later than 60 days (instead of 30 days) after the first 
day of the next scheduled term.

C. 34 CFR 682.607  Payment of a Refund to a Lender

    The Secretary will not enforce the deadlines by which an affected 
institution shall pay a refund that is due to a lender, within 60 days 
after the student's withdrawal as determined under 34 CFR 668.22(j)(3) 
or within 30 days in the case of a student who does not return to the 
institution at the expiration of an approved leave of absence. Instead, 
the Secretary will require the institution to pay a refund to the 
lender within 120 days (instead of 60) after the student's withdrawal 
or within 60 days (instead of 30) after the last day of the leave of 
absence.

D. 34 CFR 682.610  Administrative and Fiscal Requirements for 
Participating Schools

    The Secretary modifies the deadline in 34 CFR 682.610(c). That 
section requires an institution to complete and submit required Student 
Status Confirmation Reports (SSCRs) to the Secretary or guaranty agency 
within 30 days of the institution's receipt of the report. Under the 
modification, an institution must complete and submit these reports 
within 90 days of the institution's receipt of the report.
    Current regulations require that unless a school expects to submit 
its next SSCR within the next 60 days, reports of changes of borrower 
status must be submitted within 30 days of the discovery of the change. 
This deadline is also modified to allow schools to report changes of 
borrower status within 90 days (instead of 30 days).

V. 34 CFR Part 685--William D. Ford Federal Direct Loan Program

A. 34 CFR 685.306  Payment of a Refund to the Secretary

    The Secretary will not enforce the deadlines by which an affected 
institution must pay a refund that is due to the Secretary after the 
student's withdrawal as determined under 34 CFR 668.22(j)(3). Instead, 
the Secretary will require the institution to pay a refund to the 
Secretary within 120 days (instead of 60 days) after the student's 
withdrawal.

B. 34 CFR 685.204  Deferment and 685.207 Obligation to Repay

    The Secretary is modifying the provisions 34 CFR 685.204 and 
685.207, to consider each Direct Subsidized and Direct Unsubsidized 
loan that has not entered repayment on the date the borrower's 
attendance at the school was interrupted due to the disaster to have 
been in an ``in-school'' status and to continue in that status until 
the school resumes normal operations. This period of disaster-related 
nonattendance does not start a borrower's grace or repayment period.
    Further, each Direct Subsidized and Direct Unsubsidized loan that 
was in repayment status and not in a default status on the date the 
borrower's attendance at the institution was interrupted due to 
disaster, is to be considered in an in-school deferment status during 
the period of disaster-related nonattendance provided the borrower 
qualified for an in-school deferment when the borrower's attendance was 
interrupted. This interim period of nonattendance should not force a 
borrower back into repayment. The institution must document this reason 
for continued ``in-school'' status in the student's file.

C. 34 CFR 685.309  Administrative and Fiscal Control and Fund 
Accounting Requirements for Schools Participating in the Direct Loan 
Program

    The Secretary modifies the deadline in 34 CFR 685.309(b). That 
section requires an institution to complete and submit required Student 
Status Confirmation Reports (SSCRs) to the Secretary within 30 days of 
the institution's receipt of the report. Under the modification, the 
institution must complete and submit these reports within 90 days of 
the institution's receipt of the report.
    Current regulations require that unless a school expects to submit 
its next SSCR within the next 60 days, reports of changes of borrower 
status must be submitted within 30 days of the discovery of the change. 
This deadline is also modified to allow schools to report changes of 
borrower status within 90 days (instead of 30 days).

Waiver of Rulemaking

    In accordance with 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 severe 
impact of the ongoing occurrences of disasters has caused national 
emergencies which have been recognized by Congress. The Secretary, 
recognizing the severe devastation of the hurricane and flood victims, 
finds that soliciting further public comment with respect to these 
regulations is unnecessary and would be contrary to the public interest 
under 5 U.S.C. 553(b)(B).

Regulatory Flexibility Act Certification

    The Secretary certifies that this notice will not have a 
significant economic impact on a substantial number of small entities. 
Small entities affected by this notice are small institutions of higher 
education. This notice provides temporary regulatory relief and will 
not increase institutions' workload, or costs associated with 
administering the title IV, HEA programs. Therefore, it will not have a 
serious economic impact on a substantial number of small entities.

Assessment of Educational Impact

    The Secretary has determined that this notice does not require 
transmission of information that is being gathered by or is available 
from any other agency or authority of the United States.

(Legal Authority: 20 U.S.C. 1082, 34 CFR 682.406(b) and 682.413(f))


[[Page 58930]]


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

    Dated: November 12, 1996.
Richard W. Riley,
Secretary of Education.
[FR Doc. 96-29489 Filed 11-18-96; 8:45 am]
BILLING CODE 4000-01-P