[Federal Register Volume 78, Number 152 (Wednesday, August 7, 2013)]
[Rules and Regulations]
[Pages 48048-48051]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-19071]


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DEPARTMENT OF EDUCATION

34 CFR Part 668

RIN 1880-AA87


Student Assistance General Provisions

AGENCY: Office of Hearings & Appeals, Office of Management, Department 
of Education.

ACTION: Final regulations.

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SUMMARY: The Secretary amends the Student Assistance General Provisions 
regulations governing participation in the student financial assistance 
programs authorized under Title IV of the Higher Education Act of 1965, 
as amended (Title IV, HEA programs). The amended regulations implement 
the Office of Hearings & Appeals (OHA) Electronic Filing System, which 
provides a Web-based interface for the submission of documents in 
administrative litigation involving enforcement and compliance with 
requirements of Title IV, HEA programs. The OHA Electronic Filing 
System (OES) permits documents to be submitted electronically in an 
Adobe Portable Document Format (PDF) directly to OHA through standard 
Web-based screens and prompts.

DATES: These regulations are effective August 7, 2013.

FOR FURTHER INFORMATION CONTACT: Frank Furey, Director, Office of 
Hearings & Appeals, U.S. Department of Education, 400 Maryland Avenue 
SW., Washington, DC 20202-4616. Telephone: (202) 619-9700.
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.

SUPPLEMENTARY INFORMATION: These regulations implement changes 
governing filing procedures in proceedings before the OHA. The changes 
allow parties participating in administrative adjudications involving 
Title IV, HEA programs to file documents electronically. The changes 
include removing the requirement that evidence must be filed at the 
time a postsecondary institution or third-party servicer files a 
request for review of a final audit determination or a final program 
review determination. The Secretary modified this requirement by 
holding that evidence filed after a request for review is filed may be 
considered by the hearing official, notwithstanding the rule codified 
by 34 CFR 668.116(e). See, In re Baytown Technical School, Inc., Docket 
No. 91-40-SP, U.S. Dep't of Educ. (April 12, 1994). For nearly two 
decades, the Department's hearings officials have followed the 
Secretary's decision. This revision brings the regulations into 
conformity with the Secretary's ruling.
    The amended regulations also remove a requirement imposed by 
existing regulations mandating that certain filings be submitted by 
hand delivery or certified mail. The new procedures offer litigants an 
alternative to using current paper-based procedures for the submission 
of documents. The amended regulations allow any filing to be submitted 
to OHA electronically by use of the OES, which is a Web-based

[[Page 48049]]

interface that is accessible 24 hours every day. The OES provides 
administrative litigants with an acknowledgement of receipt of filings 
and records at the time of submission. The OES generates email 
notifications when a document filed electronically has been received 
and has been accepted.
    To use the OES, a party must notify OHA and the opposing party of 
its intention to submit filings electronically through OES. Each party 
is free to elect to use the OES filing system, and may decline to do 
so. The regulations require each party to deliver a copy of any filing 
to the opposing party. If both parties have notified OHA and each other 
of their intent to use the OES, the parties may satisfy both their 
obligation to submit a filing to OHA as well as their obligation to 
deliver a copy of any filing to the opposing party simply by filing 
that document with OHA through the OES and obtaining confirmation of 
its acceptance. The OES generates notice to the opposing party that the 
document so filed has been accepted and is available on the OES. No 
further action is needed to serve a copy of that filing with the 
opposing party.
    If, however, a party who wishes to file through the OES has not 
received an affirmative agreement by the opposing party to use the OES, 
the party that files through the OES must, as under current 
regulations, deliver a copy of the filing to the opposing party by 
mail, by facsimile transmission, or by hand-delivery. In addition, the 
parties are free to agree to meet their respective obligations by any 
other means, including transmitting the filing directly by email or 
other electronic means. Unless a party affirmatively notifies the 
opposing party that it also chooses to use the OES, the party that 
elects to file by means of the OES must ensure that any filing it makes 
through the OES is delivered to the non-electing party by mail, by 
facsimile transmission, or by hand-delivery, as required under existing 
regulations.
    Furthermore, a party who chooses to file electronically through the 
OES may do so for some or all filings in the matter. For those filings 
not made through the OES, the party must meet all requirements in 
current regulations for filing with OHA and delivering copies to the 
opposing party.

Waiver of Proposed Rulemaking, Negotiated Rulemaking, and Delayed 
Effective Date

    Under the Administrative Procedure Act (5 U.S.C. 553) (APA), the 
Department generally offers interested parties the opportunity to 
comment on proposed regulations. These regulations allow for electronic 
filing of documents in actions before the OHA, and they remove a 
deadline for filing evidence when a party requests review of a final 
audit determination or a final program review determination. As such, 
these regulations make procedural changes only and do not establish 
substantive policy. The revised regulations are therefore rules of 
agency practice and procedure, and the APA does not require notice and 
comment rulemaking here. See, Bachow Communications Inc. v. FCC, 237 
F.3d 683, 690 (D.C. Cir. 2001) (rules governing an application process 
are ``rules of agency organization, procedure, or practice'' and exempt 
from the APA's notice and comment requirement); see also, Merck & Co., 
Inc. v. Kessler, 80 F.3d 1543, 1549 (Fed. Cir. 1996) (holding that 
rules of practice are not substantive rules to which notice and comment 
would apply).
    In addition, the Secretary has decided to waive the 30-day delay in 
the effective date of these regulatory changes under 5 U.S.C. 
553(d)(3). It is unnecessary because here ``the administrative rule is 
a routine determination, insignificant in nature and impact, and 
inconsequential to the industry and to the public.'' Mack Trucks v. 
EPA, 682 F.3d 87, 94 (D.C. Cir. 2012). The 30-day delay is unnecessary 
because we have merely broadened the way the public may file papers, 
adding electronic filing to the other options that already existed. 
This is a ministerial change that requires no change in behavior by the 
public. For the same reasons, the Secretary has determined, under 
section 492(b)(2) of the HEA, 20 U.S.C. 1098a(b)(2), that these 
regulations should not be subject to negotiated rulemaking.

Executive Orders 12866 and 13563

Regulatory Impact Analysis

    Under Executive Order 12866, the Secretary must determine whether 
this regulatory action is ``significant'' and, therefore, subject to 
the requirements of the Executive order and subject to review by the 
Office of Management and Budget (OMB). Section 3(f) of Executive Order 
12866 defines a ``significant regulatory action'' as an action likely 
to result in a rule that may--
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely affect a sector of the economy, productivity, competition, 
jobs, the environment, public health or safety, or State, local, or 
tribal governments or communities in a material way (also referred to 
as an ``economically significant'' rule);
    (2) Create serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impacts of entitlement grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles stated in the 
Executive order.
    This final regulatory action is not a significant regulatory action 
subject to review by OMB under section 3(f) of Executive Order 12866.
    We have also reviewed these regulations under Executive Order 
13563, which supplements and explicitly reaffirms the principles, 
structures, and definitions governing regulatory review established in 
Executive Order 12866. To the extent permitted by law, Executive Order 
13563 requires that an agency--
    (1) Propose or adopt regulations only on a reasoned determination 
that their benefits justify their costs (recognizing that some benefits 
and costs are difficult to quantify);
    (2) Tailor its regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives and taking into 
account--among other things and to the extent practicable--the costs of 
cumulative regulations;
    (3) In choosing among alternative regulatory approaches, select 
those approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity);
    (4) To the extent feasible, specify performance objectives, rather 
than the behavior or manner of compliance a regulated entity must 
adopt; and
    (5) Identify and assess available alternatives to direct 
regulation, including economic incentives--such as user fees or 
marketable permits--to encourage the desired behavior, or provide 
information that enables the public to make choices.
    Executive Order 13563 also requires an agency ``to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible.'' The Office of 
Information and Regulatory Affairs of OMB has emphasized that these 
techniques may include ``identifying changing future compliance costs 
that might result from technological innovation or anticipated 
behavioral changes.''
    We are issuing these regulations only on a reasoned determination 
that their

[[Page 48050]]

benefits justify their costs. In choosing among alternative regulatory 
approaches, we selected those approaches that maximize net benefits. 
Based on the analysis that follows, the Department believes that these 
final regulations are consistent with the principles in Executive Order 
13563.
    We also have determined that this regulatory action would not 
unduly interfere with State, local, or tribal governments in the 
exercise of their governmental functions.
    In accordance with both Executive orders, the Department has 
assessed the potential costs and benefits, both quantitative and 
qualitative, of this regulatory action. The potential costs associated 
with this regulatory action are those resulting from statutory 
requirements and those we have determined as necessary for 
administering the Department's programs and activities. However, there 
are no identifiable or measurable costs expected. The benefit of these 
regulations is that parties will now have the option of filing 
documents electronically.

Regulatory Flexibility Act

    The Secretary certifies that these regulations do not have a 
significant economic impact on a substantial number of small entities. 
The small entities that could be affected by these regulations are 
small postsecondary institutions. These regulations do not have a 
significant economic impact on these small entities because the 
regulations provide a voluntary, alternative means of filing documents 
in addition to the current methods, which remain available to all 
parties, including small postsecondary institutions. The amended 
regulations impose minimal requirements to ensure the proper 
expenditure of student financial assistance program funds.

Paperwork Reduction Act of 1995

    Sections 668.98, 668.113, and 668.124 contain information 
collection requirements that have already been approved by OMB. The 
changes in these final regulations do not alter those approved 
information collection requirements. Therefore, the Department will not 
need to submit a copy of those sections to OMB for its review (44 
U.S.C. 3504(h)).

Intergovernmental Review

    These programs are not subject to the requirements of Executive 
Order 12372 and the regulations in 34 CFR part 79.

Assessment of Educational Impact

    Based on our review, we have determined that these final 
regulations do not require transmission of information that any other 
agency or authority of the United States gathers or makes available.
    Accessible Format: Individuals with disabilities can obtain this 
document in an accessible format (e.g., braille, large print, 
audiotape, or compact disc) on request to the program contact person 
listed under FOR FURTHER INFORMATION CONTACT.
    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.gpo.gov/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 Adobe Portable Document Format (PDF). To use PDF 
you must have Adobe Acrobat Reader, which is available free at 
www.gpo.gov/fdsys.
    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 Number: 84.268, Federal 
Direct Student Loans)

List of Subjects in 34 CFR Part 668

    Administrative practice and procedure, Aliens, Colleges and 
universities, Consumer protection, Grant programs--education, Loan 
programs--education, Reporting and recordkeeping requirements, 
Selective Service System, Student aid, Vocational education.

    Dated: August 2, 2013.
Arne Duncan,
Secretary of Education.
    For the reasons discussed, the Secretary amends part 668 of title 
34 of the Code of Federal Regulations as follows:

PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS

0
1. The authority citation for part 668 is revised to read as follows:

    Authority:  20 U.S.C. 1001-1003, 1070g, 1085, 1088, 1091, 1092, 
1094, 1099c, and 1099c-1, unless otherwise noted.


0
2. Section 668.91 is amended by:
0
A. Revising paragraphs (a)(1) and (4).
0
B. Adding paragraphs (a)(5), (a)(6), and (b)(2)(v).
    The revisions and additions read as follows:


Sec.  668.91  Filing of requests for hearings and appeals; confirmation 
of mailing and receipt dates.

    (a) * * *
    (1)(i) A request by an institution or third-party servicer for a 
hearing or show-cause opportunity, or other material submitted by an 
institution or third-party servicer in response to a notice of proposed 
action under this subpart, must be filed with the designated department 
official by hand-delivery, mail, or facsimile transmission.
    (ii) An appeal to the Secretary by a party must be filed with the 
designated department official by hand-delivery, mail, facsimile 
transmission, or by use of the Office of Hearings and Appeals 
Electronic Filing System (OES).
* * * * *
    (4)(i) A party may file an appeal to the Secretary, and any other 
pleading or other document submitted in a proceeding under this 
subpart, by use of the Office of Hearings and Appeals Electronic Filing 
System (OES), by hand-delivery, by mail, or by facsimile transmission.
    (ii) A party must serve a copy on the other party of any pleading 
or other document it files, including an appeal to the Secretary, in a 
proceeding under this subpart. A party must do so by certified mail, 
return receipt requested; by hand-delivery; or, if agreed upon by the 
parties, service may also be made by use of the OES or any other means 
agreed to by the parties.
    (iii) A party who agrees to receive a document by any means other 
than service by certified mail, return receipt requested or hand-
delivery may limit that agreement to one or more particular documents.
    (iv) A party who agrees to service of a document through the OES 
thereby agrees that the notice of such filing provided to the party by 
the OES suffices to meet any obligation of the filing party under these 
regulations to provide a copy of that document.
    (5) Documents filed using the OES must be transmitted to the 
designated department official identified in instructions provided by 
the hearing official as the individual responsible to receive them. A 
party filing a document using the OES must ensure that the party has 
received an electronic confirmation that the document was accepted and 
approved for filing by the OES, and may be required by the

[[Page 48051]]

designated department official to provide a hard copy of the document.
    (6) Electronic documents must be formatted in Adobe Portable 
Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, 
which is available free at www.adobe.com.
    (b) * * *
    (2) * * *
    (v) The date a document sent electronically via the OES is recorded 
as received by the OES as indicated in the confirmation of receipt 
email for E-filing.
* * * * *

0
3. Section 668.98 is amended by revising paragraphs (c), (d), and (e) 
to read as follows:


Sec.  668.98  Interlocutory appeals to the Secretary from rulings of a 
hearing official.

* * * * *
    (c) A copy of the petition must be provided to the hearing official 
at the time of filing with the Secretary, and a copy of a petition or 
any certification must be served upon the parties as provided in Sec.  
668.91(a)(4). The petition or certification must reflect this service.
    (d) If a party files a petition under this section, the hearing 
official may state to the Secretary a view as to whether review is 
appropriate or inappropriate by submitting a brief statement addressing 
the party's petition within 10 days of the receipt of that petition by 
the hearing official. A copy of the statement must be served on all 
parties in the manner provided in Sec.  668.91(a)(4)(ii).
    (e) A party's response to a petition or certification for 
interlocutory review must be filed within 7 days after service of the 
petition or statement, as applicable, and may not exceed 10 pages, 
double-spaced, in length. The response must be filed, and a copy served 
on the other party, as provided in Sec.  668.91(a)(4).
* * * * *

0
4. Section 668.113 is amended by revising paragraph (b) to read as 
follows:


Sec.  668.113  Request for review.

* * * * *
    (b) The institution or servicer must file its request for review no 
later than 45 days from the date that the institution or servicer 
receives the final audit determination or final program review 
determination.
* * * * *

0
5. Section 668.116 is amended by revising paragraphs (e)(1)(ii), (iii), 
(v), and (vi) to read as follows:


Sec.  668.116  Hearing.

* * * * *
    (e)(1) * * *
    (ii) In the case of an institution, institutional audit work 
papers, records, and other materials.
    (iii) In the case of a third-party servicer, the servicer's audit 
work papers and the records and other materials of the servicer or any 
institution that contracts with the servicer.
* * * * *
    (v) Institutional or servicer records and other materials 
(including records and other materials of any institution that 
contracts with the servicer) provided to the Department of Education in 
response to a program review.
    (vi) Other Department of Education records and materials.
* * * * *

0
6. Section 668.122 is amended by revising paragraphs (a) and (c) to 
read as follows:


Sec.  668.122  Determination of filing, receipt, and submission dates.

    (a)(1) Appeals and written submissions to a hearing official 
referred to in this subpart may be hand-delivered, mailed, or filed 
electronically by use of the Office of Hearings and Appeals Electronic 
Filing System (OES).
    (2)(i) Service on the other party of a document required to be 
served on another party may be made by mail or by hand delivery, or, if 
agreed upon by the parties, by use of the OES or by any other means 
agreed to by the parties. A party who agrees to receive a document 
filed by another party by any means other than service by mail or hand-
delivery may limit that agreement to one or more particular documents.
    (ii) A party who agrees to service of a document through the OES 
thereby agrees that the notice of such filing provided to the party by 
the OES suffices to meet any obligation of the filing party under these 
regulations to provide a copy of that document.
* * * * *
    (c) Determination of filing, receipt, or submission dates is based 
on the date of hand-delivery, the date of receipt recorded by the U.S. 
Postal Service, the date a document sent electronically by using the 
OES is recorded as received as indicated in the confirmation of receipt 
email for E-filing, or for other means, the date on which the delivery 
is recorded in the medium used for delivery.
* * * * *

0
7. Section 668.124 is amended by revising paragraphs (c), (d), and (e) 
to read as follows:


Sec.  668.124  Interlocutory appeals to the Secretary from rulings of a 
hearing official.

* * * * *
    (c) A copy of the petition must be provided to the hearing official 
at the time of filing with the Secretary, and a copy of a petition or 
any certification must be served upon the parties as provided in Sec.  
668.122(a)(2). The petition or certification must reflect this service.
    (d) If a party files a petition under this section, the hearing 
official may state to the Secretary a view as to whether review is 
appropriate or inappropriate by submitting a brief statement addressing 
the party's petition within 10 days of the receipt of that petition by 
the hearing official. A copy of the statement must be served on all 
parties in the manner provided in Sec.  668.122(a)(2).
    (e) A party's response to a petition or certification for 
interlocutory review must be filed within 7 days after service of the 
petition or statement, as applicable, and may not exceed 10 pages, 
double-spaced, in length. A copy of the response must be served on the 
parties and the hearing official as provided in Sec.  668.122(a)(2).
* * * * *
[FR Doc. 2013-19071 Filed 8-6-13; 8:45 am]
BILLING CODE 4000-01-P