[Federal Register Volume 70, Number 214 (Monday, November 7, 2005)]
[Rules and Regulations]
[Pages 67373-67374]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-22126]


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DEPARTMENT OF EDUCATION

34 CFR Parts 673, 674, 675, and 676


Federal Perkins Loan, Federal Work-Study, Federal Supplemental 
Educational Opportunity Grant Programs, and the General Provisions for 
These Programs

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Notice regarding reallocation of campus-based aid and waivers 
of statutory and regulatory provisions pursuant to the Natural Disaster 
Student Aid Fairness Act, Public Law 109-86.

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SUMMARY: The Natural Disaster Student Aid Fairness Act (Aid Fairness 
Act), Public Law 109-86, signed by the President on October 7, 2005, 
provides, in part, that the Secretary must reallocate unexpended 
Federal Perkins Loan (Perkins), Federal Work-Study (FWS), and Federal 
Supplemental Educational Opportunity Grant (FSEOG) program funds 
(campus-based funds) to institutions of higher education that are 
located in areas affected by Hurricane Katrina or Hurricane Rita or 
that have enrolled eligible students who were affected by Hurricane 
Katrina or Hurricane Rita. In this notice, we announce the reallocation 
process for institutions of higher education that have enrolled 
students affected by Hurricane Katrina or Hurricane Rita and waivers or 
modifications of relevant statutory and regulatory provisions. We will 
be addressing the reallocation of additional campus-based funds for 
institutions that are located in an area affected by a Gulf hurricane 
disaster through a separate process.

FOR FURTHER INFORMATION CONTACT: John Kolotos, U.S. Department of 
Education, 400 Maryland Avenue, SW., UCP, room 113F2, Washington, DC 
20202. Telephone: (202) 377-4027, FAX: (202) 275-4552, or by e-mail at 
[email protected].
    If you use a telecommunications device for the deaf (TDD), you may 
call the Federal Relay Service (FRS) at 1-800-877-8339.
    Individuals with disabilities may obtain this document in an 
alternate format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the program contact person listed in this 
section.

SUPPLEMENTARY INFORMATION:

Background

    Section 2(b) of the Aid Fairness Act requires the Secretary to 
reallocate to certain eligible institutions of higher education 
(institutions) any unexpended campus-based funds from the 2004-2005 
award year as supplemental allocations for the 2005-2006 award year. An 
institution is eligible to receive a reallocation if the institution 
participates in the program for which excess allocations are being 
reallocated and (1) is located in an area affected by a Gulf hurricane 
disaster or (2) has accepted for enrollment any affected students, as 
defined in the following paragraph, in academic year 2005-2006. The Aid 
Fairness Act further authorizes the Secretary to determine the manner 
in which excess allocations will be reallocated and authorizes the 
Secretary to waive or modify any statutory or regulatory provisions 
relating to reallocations.
    The Aid Fairness Act defines an affected student as an individual 
who has applied for, or received, student financial assistance under 
title IV of the Higher Education Act of 1965, as amended (HEA), and who 
(1) was enrolled or accepted for enrollment, as of August 29, 2005, at 
an institution in an area affected by a Gulf hurricane disaster; (2) 
was a dependent student enrolled or accepted for enrollment at an 
institution that is not in an area affected by a Gulf hurricane 
disaster, but whose parents resided or were employed, as of August 29, 
2005, in an area affected by a Gulf hurricane disaster; or (3) suffered 
direct economic hardship as a direct result of a Gulf hurricane 
disaster, as determined by the Secretary.
    An area affected by a Gulf hurricane disaster is any county or 
parish in Alabama, Louisiana, Mississippi, and Texas declared by FEMA 
as Major Disaster Areas designated for Individual Assistance. A listing 
of those counties and parishes is posted on the Department's 
``Information for Financial Aid Professionals'' (IFAP) Web site at 
http://www.ifap.ed.gov.

Reallocation for Institutions Enrolling Affected Students

    In this notice, we are addressing the reallocation of campus-based 
funds for only those institutions that participate in at least one of 
the campus-based programs and that accepted affected students for 
enrollment in academic year 2005-2006, including institutions located 
in an area affected by a Gulf hurricane disaster that enrolled affected 
students. We will be addressing the reallocation of additional campus-
based funds for institutions that participate in at least one of the 
campus-based programs and that are located in an area affected by a 
Gulf hurricane disaster through a separate process.

Criteria for Determining Economic Hardship

    As provided in the Aid Fairness Act in the definition of ``affected 
student,'' the Secretary has determined that a student has ``suffered 
direct economic hardship as a direct result of a Gulf hurricane 
disaster'' if the student (or if a dependent student, the student's 
parents) lost a domicile, income, or other means of support as a result 
of a Gulf hurricane disaster.

Procedures for Reallocation of Campus-Based Funds

    Institutions that participate in at least one of the campus-based 
programs and that have accepted for enrollment any affected students 
may submit a request to the Secretary for reallocation of excess 
campus-based funds, using the Reallocation Request Form described 
below. We will be sending to institutions that participate in one or 
more of the campus-based programs an e-mail message that will include, 
as an attachment, a Reallocation Request Form. Any of these 
institutions that have enrolled affected students and are requesting 
reallocation of funds must complete this form and submit it to the 
Department via FAX at the number that will be included in the e-mail 
message. The e-mail message also will specify the deadline date by 
which requests must

[[Page 67374]]

be received by the Department in order for an institution to be 
considered for reallocated funds.
    An institution's Reallocation Request Form must include the 
following information:
    (a) The number of students enrolled at the institution who were 
enrolled or accepted for enrollment for the 2005-2006 academic year at 
an institution located in an area affected by a Gulf hurricane 
disaster, whether or not those students have applied for or are 
recipients of Federal student aid.
    (b) The number of affected students enrolled at the institution who 
have applied for Federal student aid, as evidenced by a 2005-2006 
Student Aid Report (SAR) or Institutional Student Information Record 
(ISIR), received by the institution.
    (c) The total amount of campus-based reallocated funds the 
institution estimates it will be able to expend in the 2005-2006 award 
year.
    We advise institutions that, based on the amount of total funds 
available for reallocation, it is possible that the amount received by 
an institution that has enrolled fewer than 20 affected students would 
be minimal when compared to the time and effort institutions might need 
to prepare and submit a request.
    The Secretary also will be posting an announcement on the 
Department's IFAP Web site providing information on the process 
institutions will need to follow to submit their requests.

Use of Reallocated Campus-Based Funds

    An institution does not have to use the reallocated funds it 
receives directly for affected students, but it must use the funds to 
make campus-based awards to eligible students or for other statutorily 
allowed purposes. Any reallocated funds an institution receives must be 
included in the total program funds used for the purpose of calculating 
carry-forward amounts, carry-back amounts, Job Location and Development 
amounts, and campus-based administrative cost allowances.

Statutory and Regulatory Waivers

    As noted earlier in this notice, the Aid Fairness Act authorizes 
the Secretary to waive or modify certain statutory or regulatory 
requirements pertaining to the reallocated campus-based funds. Under 
that authority:
    (1) The Secretary will not require an institution to provide a non-
Federal share or capital contribution under 34 CFR 674.8, 675.26, and 
676.21 to match the reallocated campus-based funds.
    (2) In its notification to an institution of the amount of its 
reallocated funds, the Secretary will identify the dollar amount 
associated with each of the campus-based programs for which reallocated 
funds are being provided to the institution. However, the Secretary 
will waive the funds transfer limitations of 34 CFR 674.18, 675.18, and 
676.18, and allow the institution to transfer up to 100 percent of the 
reallocated funds it receives under any of the programs to either the 
FSEOG or FWS program, provided that the institution participates in the 
program(s) to which the funds are transferred. However, the institution 
cannot transfer any of the reallocated FSEOG or FWS funds to its 
Perkins Loan program.
    (3) Normally, under 34 CFR 673.4, an institution may use 
reallocated FWS funds only to pay students performing community service 
activities. However, an institution is not required to use any 
reallocated FWS funds it receives under this process for community 
service purposes. Nor is the institution required to use the amount of 
its FWS reallocation in calculating the seven percent community service 
requirement.

Documenting Requests for, and Use of, Reallocated Campus-Based Funds

    An institution that requests supplemental campus-based funds under 
this reallocation process must maintain documentation supporting its 
request, including a list of the names of the affected students 
included in the institution's request. In addition, the institution 
must maintain information that documents how each affected student 
qualifies under one of the three elements of the definition of 
``affected student'' described in this notice.
    The Secretary also reminds institutions that they are responsible 
for accounting properly for any funds received and expended under the 
Title IV, HEA programs, including any funds received as a result of 
hurricane related statutory, regulatory, or administrative provisions. 
Each institution that receives such funds is alerted that the Secretary 
may request a separate accounting or report of its use of those funds.

Electronic Access to This Document

    You may view this document, as well as all other documents of this 
Department published in the Federal Register, in text or Adobe Portable 
Document Format (PDF) on the Internet at the following site: http://www.ed.gov/news/fedregister.
    To use PDF you must have Adobe Acrobat Reader, which is available 
free at this site. If you have questions about using PDF, call the U.S. 
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in 
the Washington, DC area at (202) 512-1530.


    Note: 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 on GPO Access at: http://www.gpoaccess.gov/nara/index.html.

(Catalog of Federal Domestic Assistance numbers: 84.007 Federal 
Supplemental Educational Opportunity Grant Program; 84.033 Federal 
Work-Study Program; 84.038 Federal Perkins Loans)

    Program Authority: 20 U.S.C. 1070a, 1070b-1070b-4, 1070c-1070c-
4, 1071-1087-2, 1087a-1087j, 1087aa-1087ii, 1094, and 1099c; 42 
U.S.C. 2751-2756b; Pub. L. 109-86.

    Dated: November 2, 2005.
Sally L. Stroup,
Assistant Secretary for Postsecondary Education.
[FR Doc. 05-22126 Filed 11-4-05; 8:45 am]
BILLING CODE 4000-01-P