The changes in these two sets of standards will permit specified packs of mixed colors of onions to be certified to a U.S. grade. The revisions apply to the U.S. standards for grades for two categories of onions: (1) Other Than BGG and Creole Type and (2) BGG Type. Also, these revisions affect the grade requirements under two marketing orders, 7 CFR parts 958 and 959, issued under the Agricultural Marketing Agreement Act of 1937 (7 U.S.C. 601-674) and applicable imports.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules and promoting flexibility. This rule has been determined not significant for purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

This action has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation would not have substantial and direct effects on Tribal governments and would not have significant Tribal implications.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. There are no administrative procedures which must be exhausted prior to any judicial challenge to the provisions of this rule.

Pursuant to the requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of these revisions on small entities. The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions so that small businesses will not be unduly or disproportionately burdened. Accordingly, AMS has prepared this final regulatory flexibility analysis.

Each of the standards, except the section in the Other Than BGG and Creole Type Standards that affects the U.S. No. 2 grade, currently states that one of the requirements to be certified in a grade is that the onion pack contains “similar varietal characteristics.” The wording will be changed to: “Similar varietal characteristics, except color when designated as a specialty or mixed pack.” In the U.S. No. 2 grade for the Other Than BGG and Creole Type Standards, the wording will be changed to “One type, except when designated as a specialty or mixed pack.” The additional wording will permit onions of different colors in the same pack as long as the pack is appropriately designated as a “specialty or mixed pack.” Allowing the commingling of mixed colors in an onion pack, when designated, will facilitate the marketing of onions by providing the industry with more flexibility that reflects current industry practices, thereby encouraging additional commerce.

A farm-level estimate of the size of the U.S. onion industry can be obtained from National Agricultural Statistics Service (NASS) data. Averaging NASS onion production for the most recent three years of data available (2010-2012) yields a U.S. production estimate of 73.3 million hundredweight (cwt), of which about 9.6 million cwt (13 percent) are onions for processing. Subtracting 9.6 million for processing from the total 73.3 million cwt yields an estimate of 63.7 million cwt sold for the fresh market. The total 3-year average onion crop value is $912 million, and the value of onions for processing is $81.5 million. The difference is a computed estimate of $830.5 million for the crop value sold into the fresh market. Average onion acreage for the period 2010-2012 is 143,383. Dividing total crop value by acreage yields a 3-year average grower revenue per acre estimate of about $5,800.

An estimate of the total number of onion farms from the 2007 Agricultural Census (the most recent data available on farm numbers) is 4,074. An onion farm is defined by the Census as a farm from which 50 percent or more of the value of agricultural sales are from onions. The Small Business Administration (SBA) threshold for a large business in farming is $750,000 in annual sales. With average revenue per acre of $5,800, 129 acres of onions would generate approximately $750,000 in crop value. Census data shows that 3,679 out of a total of 4,074 farms (90 percent) are less than 100 acres. Most onion farms would therefore be considered small businesses under the SBA definition, in terms of onion sales only (not including sales of other crops). There is no published data with which to make comparable estimates of the number of packers or shippers of onions. However, we estimate that at least some would be considered small entities under applicable SBA criteria.

With regard to the marketing orders, there are approximately 30 Idaho and Eastern Oregon onion handlers and approximately 30 South Texas onion handlers subject to regulation under marketing orders 958 and 959, respectively. Under both marketing orders, the majority of these handlers would be considered small businesses under the SBA criteria. In addition to these domestic handlers, in 2013, there were approximately 460 onion importers subject to import regulations.

About 80 percent of the value of production for U.S. onions comes from seven states. In declining order of magnitude, with three year average market shares ranging from 19 to 7 percent, those states are: California, Washington, Oregon, Georgia, Texas, Nevada, and New Mexico. The remaining five states for which NASS reports annual onion production are Idaho, New York, Colorado, Michigan, and Wisconsin, whose combined crop value is 20 percent of total U.S. onion crop value.

In considering alternatives to this rule, benefits of the changes substantially outweigh the costs. The only additional cost borne by packers/shippers, which is expected to be minimal, is when “specialty or mixed packs” are designated by means of labeling. There are no other additional costs to packers/shippers or growers from this change, and smaller entities would not bear a disproportionate cost. The change in the standards reflects a shift in onion packing/shipping practices that is already underway. The additional flexibility in the revised standards will facilitate additional onion sales, to the benefit of growers, packers, and consumers.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), this rule would not result in a change to the information collection and recordkeeping requirements previously approved and would impose no additional reporting and recordkeeping burden on domestic producers, first handlers, and importers of onions.

USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule. However, there are marketing programs that regulate the handling of onions under 7 CFR parts 958 and 959. Onions under a marketing order have to meet certain requirements set forth in the grade standards. In addition, onions are subject to section 8e import requirements under the Agricultural Marketing Act of 1937, as amended (7 U.S.C. 601-674) which requires imported onions to meet grade, size and quality under the applicable marketing order (7 CFR part 980).

The industry is packing mixed colors of onions, primarily in Idaho, Oregon, Washington, and Texas. In addition, marketing order 958 for Idaho and Oregon Onions, administered by the Idaho-Eastern Oregon Onion Committee, was amended November, 2011, to allow pearl onion packs and experimental shipments of mixed colors. Furthermore, in a May 2012 meeting with the USDA Marketing Order Administration Division, AMS was informed that Washington State, which is outside of marketing order 958, has packed mixed colors of larger Walla Walla type onions for Canada. However, the U.S. Onion Standards do not permit certifying a U.S. grade to mixed color packs.

To address this issue, a rule proposing revisions to U.S. Standards for Grades of Onions (Other Than BGG and Creole Type) and the U.S. Standards for Grades of BGG Type Onions was published in the Federal Register on August 22, 2013 (78 FR 52099). The public comment period closed on October 21, 2013. The one response, which came from a large industry trade association, showed full support for the revisions.

Based on the information gathered, the revisions will bring the U.S. Standards for Grades of Onions (Other Than BGG and Creole Type) and the U.S. Standards for Grades of BGG Type Onions in line with current marketing practices and provide shippers and packers with more flexibility. Therefore, AMS will amend the similar varietal characteristic and one type requirements for:

• Onions Other Than BGG and Creole Type in Sections 51.2830, 51.2831, and 51.2832, which affects the U.S. No. 1, U.S. Export No. 1, and U.S. Commercial grades, by adding “except color when designated as a specialty or mixed pack.” Likewise, AMS will amend the one type requirement in Section 51.2835, which affects the U.S. No. 2 grade, by adding “except when designated as a specialty or mixed pack.”

• BGG Type Onions in Sections 51.3195 and 51.3197, which affects the U.S. No. 1, U.S. Combination, and U.S. No. 2 grades, by adding “except color when designated as a specialty or mixed pack.”

In addition, AMS will correct an administrative error from the rule that inadvertently recorded “of” instead of “or” in Section 51.2831.

For reasons set forth in the preamble, 7 CFR part 51 is to be amended as follows:

The CFPB is issuing this compliance bulletin and policy guidance to residential mortgage servicers and subservicers (collectively, servicers), in light of potential risks to consumers that may arise in connection with transfers of residential mortgage servicing rights. The CFPB's concern in this area remains heightened due to the continuing high volume of servicing transfers.

Servicers engaged in significant servicing transfers should expect that the CFPB will, in appropriate cases, require them to prepare and submit informational plans describing how they will be managing the related risks to consumers.

The CFPB is continuing to monitor the mortgage servicing market and may engage in further rulemaking in this area.

This document replaces CFPB Bulletin 2013-01 (Mortgage Servicing Transfers), released in February 2013, which also addressed servicing transfers. This document advises mortgage servicers that the CFPB will be carefully reviewing servicers' compliance with Federal consumer financial laws applicable to servicing transfers. The revised Regulation X, implementing the Real Estate Settlement Procedures Act (RESPA) (new servicing rule), took effect on January 10, 2014. It requires servicers to, among other things, maintain policies and procedures that are reasonably designed to achieve the objectives of facilitating the transfer of information during mortgage servicing transfers and of properly evaluating loss mitigation applications. 1 Section A of this document, “General Transfer-Related Policies and Procedures”, provides examples of general transfer-related policies and procedures that CFPB examiners may consider in evaluating whether servicers have satisfied these requirements successfully. The examples listed in this section are not exhaustive and in future examinations CFPB examiners will consider a servicer's transfer-related policies and procedures as a whole in determining whether they are reasonably designed to achieve these objectives.

Section B, “Applicability of the New Servicing Rules to Transfers”, answers certain frequently asked questions about how the revised Regulation X applies in the area of servicing transfers. This section also describes certain focus areas for CFPB examiners and explains how entities can minimize compliance risk. Section C, “Protections under Federal Consumer Financial Law”, describes other Federal consumer financial laws applicable to servicing transfers and explains potential consequences if servicers are not fulfilling their obligations under the law. Section D, “Plans for Handling Servicing Transfers”, informs servicers engaged in significant servicing transfers that the CFPB will, in appropriate cases, require them to prepare and submit informational plans describing how they will be managing the related risks to consumers.

A mortgage servicer, among other things, collects and processes loan payments on behalf of the owner of the mortgage note. Servicing transfers are common and may occur in several ways. The mortgage owner may sell the rights to service the loan, called the Mortgage Servicing Rights (MSR), separately from the note ownership. The owner of the loan or MSR may, rather than servicing the loan itself, hire a vendor—typically called a subservicer—to take on the servicing duties. MSR owners frequently sell MSR outright as an asset. Servicing transfers may also occur through whole loan servicing transfers or whole loan portfolio transfers, rather than through sales of MSR. In this document, we are using the term “transfer” broadly to cover transfers of servicing rights as well as transfers of servicing responsibilities through subservicing or whole loan servicing arrangements.

The CFPB advises mortgage servicers that its examiners will be carefully reviewing servicers' compliance with Federal consumer financial laws applicable to servicing transfers. These may include, among others, the RESPA and its implementing regulation, Regulation X, the Truth in Lending Act (TILA) and its implementing regulation, Regulation Z, the Fair Credit Reporting Act (FCRA) and its implementing regulation, Regulation V, the Fair Debt Collection Practices Act (FDCPA), and the Dodd-Frank Wall Street Reform and Consumer Protection Act's prohibitions on unfair, deceptive, or abusive acts or practices (UDAAPs).

The provisions of the new servicing rule and related commentary that relate to transfers can be found at 12 CFR 1024.33, 12 CFR 1024.38, and 12 CFR 1024.41. 2

CFPB mortgage servicing examinations now include reviews for compliance with the new servicing rule. Among other things, the rule requires servicers to maintain policies and procedures that are reasonably designed to achieve the objective of facilitating the transfer of information during mortgage servicing transfers. 3 The following are examples of policies and procedures that CFPB examiners may consider in future examinations as contributing to meeting these requirements:  4

• Ensuring that contracts require the transferor to provide all necessary documents and information at loan boarding.

• Developing tailored transfer instructions for each deal and conducting meetings to discuss and clarify key issues with counterparties in a timely manner; for large transfers, this could be months in advance of the transfer. Key issues may include descriptions of proprietary modifications, detailed descriptions of data fields, known issues with document indexing, and specific regulatory or settlement requirements applicable to some or all of the transferred loans.

• Using specifically tailored testing protocols to evaluate the compatibility of the transferred data with the transferee servicer's systems and data mapping protocols.

• Engaging in quality control work after the transfer of preliminary data to validate that the data on the transferee's system matches the data submitted by the transferor.

• Recognizing when the transfer cannot be implemented successfully in a single batch and implementing alternative protocols, such as splitting the transfer into several smaller transactions, to ensure that the transferee can comply with its servicing obligations for every loan transferred.

• Implementing a post-transfer process for validating data to ensure it transferred correctly and is functional, as well as developing procedures for identifying and addressing data errors for inbound loans.

• Effectively organizing and labeling incoming information, as well as ensuring that the transferee servicer uses any transferred information before seeking information from borrowers.

• Conducting regularly scheduled calls with transferor servicers to identify any loan level issues and to research and resolve those issues within a few days of them being raised.

• As a transferor, specifically flagging all loans with pending loss mitigation applications (complete and incomplete), as well as approved loss mitigation plans (including trial modification plans) through a previously agreed upon means and assisting in ensuring that the transferee's systems can process the loss mitigation data upon transfer.

• As a transferee, requiring that the transferor servicer supply a detailed list of loans with pending loss mitigation applications, as well as approved loss mitigation plans.

• As a transferee, requiring that appropriate documentation for loans with pending loss mitigation applications, as well as approved loss mitigation plans, be transferred pre-boarding.

○ For example, one transferor servicer that has engaged in large volumes of transfers has provided advance access to a web portal containing loan documentation for such loans 45-60 days before transfer.

• As a transferee, ensuring receipt of information regarding any loss mitigation discussions with borrowers, including any copies of loss mitigation documents. 6

○ The transferee servicer's policies and procedures must address obtaining any such missing information or documents from a transferor servicer before attempting to obtain such information from borrowers. 7

○ The CFPB expects transferee servicers to ensure that they review transferred documents to determine if the documents may be used in loss mitigation efforts. A transferee that, following a transfer, requires borrowers to resubmit loss mitigation application materials is unlikely to have policies and procedures that comply with 12 CFR 1024.38(b)(4).

○ A transferee that, following a transfer, fails to identify documents and information that borrowers are required to submit to complete loss mitigation applications is unlikely to have policies and procedures that comply with 12 CFR 1024.38(b)(2)(iv).

○ A transferee that, following a transfer, fails to properly evaluate borrowers who submit loss mitigation applications is unlikely to have policies and procedures that comply with 12 CFR 1024.38(b)(2)(v).

• As a transferee, monitoring newly transferred loans and determining if partial payments received are actually payments pursuant to trial or permanent modification agreements.

Finally, CFPB has received questions regarding a policy of transferring relevant data or documents to a transferee during the days following loan boarding, even though the transferor had the information in its possession prior to boarding. Such a transfer practice may prevent the transferor servicer from complying with its obligation to have policies and procedures reasonably designed to timely transfer all information and documents. It also may prevent the transferee servicer from complying with its obligation to have policies and procedures reasonably designed to achieve the objective of properly evaluating loss mitigation applications. CFPB examiners will carefully scrutinize the policies and procedures of any institution that regularly waits until after loan boarding to transfer information that it had in its possession prior to boarding. The CFPB recognizes that servicers may not legally be able to provide certain information prior to the sale date; in that event, the CFPB will expect that servicers will still make every effort to transfer information prior to loan boarding, subject to those limitations. 9

In addition to the transfer-related policies and procedures requirements described above, transfers may implicate other requirements under the new servicing rule:

Servicers are required to meet certain procedural requirements for responding to notices of error and written information requests.

• If the transferee servicer receives a notice of error or information request from the borrower or the borrower's agent, the transferee servicer must comply with all applicable requirements under 12 CFR 1024.35 and .36 within the regulatory timeframes, even if the transferor was servicing the loan at the time of the alleged error or the event about which information is requested.

• A transfer does not relieve transferor servicers from their obligations under 12 CFR 1024.35 and .36. Transferor servicers are obligated to respond to notices of error and information requests received from the borrower or borrower's agent up to one year after the loan was transferred or discharged. 10

• Servicers that transfer a mortgage loan shortly after receiving a notice of error or information request from the borrower or borrower's agent are still obligated to respond within the applicable timeframes, notwithstanding the servicing transfer.

Before a servicer assesses any premium charge or fee related to force-placed insurance on a borrower, the servicer must comply with certain requirements, including sending notices to the borrower.

• If the transferee servicer replaces the existing force-placed insurance policy with a new force-placed insurance policy, 11 the transferee servicer must comply with Regulation X's requirements, including having a reasonable basis to conclude the borrower has failed to comply with the mortgage loan contract's requirement to maintain hazard insurance. The transferee servicer must also send the notice required by 12 CFR 1024.37(e) prior to assessing a premium charge or fee on the borrower.

• If a servicer transfers a mortgage loan after mailing or delivering to the borrower one or both of the notices required by 12 CFR 1024.37(c) and (d), the transferee servicer does not need to resend the notice(s) that the transferor already sent. However, the transferee servicer must ensure that the borrower has been sent all required notices within the applicable timeframes before it may assess any premium charge or fee related to force-placed insurance.

A servicer must establish or make good faith efforts to establish live contact with a delinquent borrower not later than the 36th day of the borrower's delinquency. 12 As clarified in CFPB Bulletin 2013-12, 13 servicers are required to make good faith efforts to establish live contact for each billing cycle for which a borrower has been delinquent for at least 36 days.

• A transferee servicer must begin or continue the good faith efforts regardless of whether the delinquency began while the loan was being serviced by the transferor servicer.

A servicer must provide to a delinquent borrower a written notice containing certain information not later than the 45th day of the borrower's delinquency. 14

• A transferee servicer must comply with the written notice requirement regardless of whether the delinquency began while the loan was being serviced by the transferor servicer.

Servicers must maintain policies and procedures that are reasonably designed to achieve certain objectives related to personnel assigned to assist delinquent borrowers.

• A transferee servicer's policies and procedures must be reasonably designed to achieve these objectives when delinquent loans are transferred. In future examinations, CFPB examiners may consider the following policies and procedures, among others, as contributing to meeting this requirement:

○ Identifying which borrowers are 45 days or more delinquent at transfer and ensuring that personnel are available to assist such borrowers starting at loan boarding. 15

○ Ensuring that these servicer personnel can provide the borrower with accurate information as required by 12 CFR 1024.40(b)(1), including information relating to loss mitigation applications started at the transferor servicer.

○ Ensuring, pursuant to 12 CFR 1024.40(b)(2), that servicer personnel can retrieve, in a timely manner:

A complete record of the borrower's payment history, including with the transferor servicer and all prior servicers, and

All written information the borrower has provided to the transferor servicer and all prior servicers in connection with a loss mitigation application.

• Servicers also should consider how to inform delinquent borrowers of the availability of servicer personnel. For example, the customer service telephone number could be included in the Welcome Letter or early intervention communications required by Regulation X or other communications following the transfer.

As stated above, CFPB examiners will pay particular attention to servicers' handling of loss mitigation in the context of transfers. A transferee that obtains the servicing of a mortgage loan for which an evaluation of a complete loss mitigation option is in process should continue the evaluation of the complete loss mitigation application to the extent practicable. 16

• CFPB examiners will carefully scrutinize any evaluations that take longer than 30 days from the date the transferor received the borrower's complete application, especially where the borrower suffered negative consequences attributable to the delay.

As discussed above, in cases where servicers choose to engage in transfers of loans with pending loss mitigation applications or approved trial modification plans, among the policies and procedures that CFPB examiners may consider as contributing to meeting the requirements under 12 CFR 1024.38(b)(4), are whether the transferee servicer obtained information regarding loss mitigation discussions from the transferor before attempting to obtain such information from a borrower. If a loan is transferred with a loss mitigation application pending or when a borrower is in a loss mitigation program, the transferor and transferee should manage their risk of non-compliance with 12 CFR 1024.41. One way to help manage this risk is by ensuring that all applicable loss mitigation information was sent to the transferee by the date of transfer, including, for example:

• All applicable loss mitigation notices and when they were sent, including:

○ Acknowledgment notices required by 12 CFR 1024.41(b)(2)(i)(B);

○ Notices stating the servicer's determination of which loss mitigation options, if any, it will offer to the borrower on behalf of the owner or assignee of the mortgage loan, as required by 12 CFR 1024.41(c)(1)(ii);

○ Denial notices as required by 12 CFR 1024.41(d), and 12 CFR 1024(h)(4);

• All documents and information submitted by a borrower to be evaluated for loss mitigation options; and

• Documents and information sufficient to show, as applicable:

○ If a borrower submitted an application and when that application was received by the transferor servicer;

○ Whether documentation and information submitted by a borrower in response to the notice required by 12 CFR 1024.41(b)(2)(i)(B) constituted a complete application or not;

○ The date the transferor servicer received a complete application;

If, and when, the servicer requested additional documents or information, and if, and when, the borrower provided them;

○ Whether an evaluation had been completed and if a loss mitigation offer was made to a borrower;

○ If the borrower was denied for a loan modification option, whether the borrower appealed and, if so, the status of the appeal; and

○ If a foreclosure sale is pending:

The current date of the foreclosure sale;

Whether a borrower submitted a complete application more than 37 days before the foreclosure sale; and

Instructions to and from foreclosure counsel to ensure compliance with 12 CFR 1024.41(g), including instructions and status of all necessary stays, continuances and/or dismissals.

• All loss mitigation agreements, including trial and permanent loan modification agreements, forbearance agreements, short sale agreements, deed-in-lieu of foreclosure agreements, or other applicable agreements;

• Documents and information sufficient to show, as applicable, whether the borrower accepted an offer; and whether the borrower was performing in accordance with the terms of the offer.

Other federal consumer financial laws may also apply in the transfer context. The FCRA provides protection for consumers by generally prohibiting the furnishing of information to a consumer reporting agency that the furnisher knows or has reasonable cause to believe is inaccurate. 17 A servicer that furnishes information to consumer reporting agencies must establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the information furnished; in doing so, the servicer must consider applicable federal guidelines and must periodically review the policies and procedures and update them as necessary to ensure their continued effectiveness. 18 The FCRA also gives consumers the ability to dispute credit reporting information with consumer reporting agencies and directly with their furnishers. 19 Servicers, like other furnishers, must appropriately investigate such disputes and report their existence along with any other information reported to consumer reporting agencies. 20

The FDCPA imposes obligations on servicers to the extent they act as debt collectors within the meaning of the FDCPA. 21 Among other obligations, the FDCPA requires that within five days after the initial communication with a borrower in connection with the collection of any debt, a debt collector must send the borrower a notice including the amount of the debt, the creditor's name, the borrower's right to request verification of the debt, and other required information. 22 CFPB examiners have identified a number of entities that failed to send the notices within five days of initial contact and some entities that failed to send them at all. The FDCPA also prohibits deceptive representations, the use of unfair or unconscionable means, and harassing or abusive conduct in debt collection. 23

In addition to the notice requirements and other consumer protections described above, servicers must avoid engaging in UDAAPs. The CFPB emphasizes that conduct that does not violate one of the specific prohibitions in the laws discussed above may nonetheless constitute a UDAAP. 24

CFPB expects all servicers under its jurisdiction, including those with significant transfer volume, to maintain a robust Compliance Management System (CMS). A robust CMS must, among other things, both ensure that violations of Federal consumer financial law do not occur during a transfer and must contain mechanisms for promptly identifying and remediating any violations of Federal consumer financial law that do occur. Entities with a robust CMS have strong policies and procedures, effective board oversight, regular and properly directed training, internal monitoring, external audits and complaint review.

CFPB expects servicers that identify any potential violations during a transfer to undertake all necessary corrective measures. Such corrective measures should include both steps to prevent the violation from occurring for subsequently transferred loans and to remediate any actual harm the violation may have caused the consumer whose loan was transferred. If the CFPB determines that a servicer has engaged in any acts or practices that violate the new servicing rule, that are unfair, deceptive, or abusive, or that otherwise violate Federal consumer financial law, it will take appropriate supervisory and enforcement actions to address violations and seek all appropriate corrective measures, including remediation of any harm to consumers. In determining the appropriate action, the CFPB will consider a variety of factors, including the timeliness of identification and the timeliness and scope of remediation of the violation by the servicer.

As part of its efforts to focus supervisory attention on the topics described above, the CFPB will, in appropriate cases, require servicers engaged in significant servicing transfers to prepare and submit written plans to the CFPB detailing how they will manage the associated consumer risks. The CFPB will use these plans to assess consumer risk and inform further examination planning. Servicers do not need approval from the CFPB before moving forward with servicing transfers unless specifically required to do so (e.g., by a consent order).

The information included in a plan would depend on the circumstances of the particular transfer. In general, however, the CFPB will request information regarding:

1. The number of loans involved in the transfer;

2. The total servicing volume being transferred (measured by unpaid principal balance);

3. The name(s) of the servicing platform(s) on which the transferor stored all relevant account-level information for transferred loans prior to transfer and information about compatibility with the transferee's systems;

4. A detailed description of how the servicer will ensure that it is complying with the applicable new servicing rule provisions on transfers;

5. A detailed description of the transaction and system testing to be conducted to ensure accurate transfer of electronic information and a description of the summary report resulting from the transferee or transferor's testing;

6. A description of how the transferee will identify and correct errors identified in connection with the transfer, including a specified time period for reviewing files and resolving errors;

7. A description of the training plan and actual training materials for staff involved in reviewing, assessing, utilizing, or communicating information regarding the transferred loans; and

8. A customer-service plan, specific to the transferred loans, that provides for responding to loss mitigation requests or inquiries and for identifying whether a loan is subject to a pending loss mitigation resolution or application.

This Compliance Bulletin and Policy Guidance is a non-binding compliance bulletin and policy guidance articulating considerations relevant to the CFPB's exercise of its supervisory authority under Regulation X and RESPA and reciting certain requirements of Regulation X and other Federal consumer financial laws applicable to servicing transfers. It is therefore exempt from the notice and comment rulemaking requirements under the Administrative Procedure Act pursuant to 5 U.S.C. 553(b).

Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis. 5 U.S.C. 603(a), 604(a).

The CFPB has determined that this Compliance Bulletin and Policy Guidance does not impose any new or revise any existing recordkeeping, reporting, or disclosure requirements on covered entities or members of the public that would be collections of information requiring OMB approval under the Paperwork Reduction Act, 44 U.S.C. 3501, et seq.

On September 12, 2014, the Federal Register published document designated as “Docket No. FAA-2014-0698, Notice No. 25-567-SC,” (79 FR 54574). The document issued special conditions pertaining to network security in the digital systems architecture, access from external sources, on the BD-500-1A10 and BD-500-1A11 series airplanes.

As published, the document contained two errors:

1. In the header of the document, “Notice No.” should have been “Special Conditions No.”

2. In one instance, one of the airplane model numbers was published as “BD-500-1A1” instead of “BD-500-1A11.”

In Final special conditions document (FR Doc. 2014-21789) published on September 12, 2014 (79 FR 54574), make the following corrections:

1. On page 54574, second column in the header information, correct “Notice No.” to read “Special Conditions No.”

2. On page 54575, third column, last line in the introductory text in the section titled, “The Special Conditions,” correct “BD-500-1A1” to read “BD-500-1A11.”

On September 12, 2014, the Federal Register published document designated as “Docket No. FAA-2014-0666, Notice No. 25-566-SC,” (79 FR 54572). The document issued special conditions pertaining to network security in the digital systems architecture, access from internal sources, on the BD-500-1A10 and BD-500-1A11 series airplanes.

As published, the document contained two errors:

1. In the header of the document, “Notice No.” should have been “Special Conditions No.”

2. In one instance, the airplane model number was published as “BD-500-1A1” instead of “BD-500-1A11.”

In Final special conditions document (FR Doc. 2014-21788), published on September 12, 2014 (79 FR 54572), make the following corrections:

1. On page 54572, third column in the header information, correct “Notice No.” to read “Special Conditions No.”

2. On page 54574, first column, last line in the introductory text of the section titled, “The Special Conditions,” correct “BD-500-1A1” to read “BD-500-1A11.”

Background

On December 10, 2009, Bombardier Aerospace applied for a type certificate for their new Models BD-500-1A10 and BD-500-1A11 series airplanes (hereafter collectively referred to as “CSeries”). The CSeries airplanes are swept-wing monoplanes with an aluminum alloy fuselage sized for 5-abreast seating. Passenger capacity is designated as 110 for the Model BD-500-1A10 and 125 for the Model BD-500-1A11. Maximum takeoff weight is 131,000 pounds for the Model BD-500-1A10 and 144,000 pounds for the Model BD-500-1A11.

Conventional airplanes with aluminum skin and structure provide a well-understood level of safety during post-crash fire scenarios with respect to fuel tanks. This is based on service history and extensive full-scale fire testing. The CSeries airplanes will not be fabricated primarily with aluminum for the fuel tank structure. Instead, they will be fabricated using predominantly composite structure and skin for the wings and fuel tanks. Composites may or may not have the equivalent capability of aluminum, and current regulations do not provide objective performance requirements for wing and fuel tank structure with respect to post-crash fire safety. Because the use of composite structure is novel and unusual with respect to the designs envisioned when the applicable regulations were promulgated, additional tests and analyses substantiation will be required to show that the CSeries airplanes will provide an acceptable level of safety with respect to the performance of the wings and fuel tanks during an external fuel-fed fire.

Under the provisions of Title 14, Code of Federal Regulations (14 CFR) 21.17, Bombardier Aerospace must show that the CSeries airplanes meet the applicable provisions of 14 CFR part 25 as amended by Amendments 25-1 through 25-129.

If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 25) do not contain adequate or appropriate safety standards for the CSeries airplanes because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same or similar novel or unusual design feature, the special conditions would also apply to the other model under § 21.101.

In addition to the applicable airworthiness regulations and special conditions, the CSeries airplanes must comply with the fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of 14 CFR part 36, and the FAA must issue a finding of regulatory adequacy under § 611 of Public Law 92-574, the “Noise Control Act of 1972.”

The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type-certification basis under § 21.17(a)(2).

The CSeries airplanes will incorporate the following novel or unusual design features: The structural elements and skin of the wings and fuel tanks will be fabricated using predominantly composite materials rather than conventional aluminum.

Transport category airplanes in operation today have traditionally been designed with aluminum materials. Conventional airplanes with aluminum skin and structure provide a well-understood level of safety during post-crash fires with respect to fuel tanks. Current regulations were developed and have evolved under the assumption that wing construction would be of aluminum materials.

Aluminum has the following properties with respect to fuel tanks and fuel-fed external fires:

• Aluminum is highly thermally conductive and readily transmits the heat of a fuel-fed external fire to fuel in the tank. This has the benefit of rapidly driving the fuel tank ullage to exceed the upper flammability limit of fuel vapors prior to fuel tank skin burn-through or heating of the wing upper surface above the auto-ignition temperature, thus greatly reducing the threat of fuel tank explosion.

• Aluminum panels at thicknesses previously used in wing lower surfaces of large transport category airplanes have been fire resistant as defined in 14 CFR 1.1 and Advisory Circular (AC) 20-135, Powerplant Installation and Propulsion System Component Fire Protection Test Methods, Standards, and Criteria.

• Heat absorption capacity of aluminum and fuel prevent burn-through or wing collapse for a time interval that generally exceeds the passenger evacuation time.

The ability of aluminum wing surfaces to withstand post-crash fire conditions when wetted by fuel on their interior surface has been demonstrated by tests conducted at the FAA Technical Center. Results of these tests have verified adequate dissipation of heat across wetted aluminum fuel tank surfaces so that localized hot spots do not occur, thus minimizing the threat of explosion. This inherent capability of aluminum to dissipate heat also allows the wing lower surface to retain its load-carrying characteristics during a fuel-fed ground fire and significantly delay wing collapse or burn-through for a time interval that usually exceeds evacuation times. In addition, as an aluminum fuel tank is heated with significant quantities of fuel inside, fuel vapor accumulates in the ullage space, exceeding the upper flammability limit relatively quickly and thus reducing the threat of a fuel tank explosion prior to fuel tank burn-through.

Fuel tanks constructed with composite materials may or may not have equivalent properties. AC 20-107B (Change 1), Composite Aircraft Structure, section 11b, “Fire Protection, Flammability and Thermal Issues,” states: “Wing and fuselage applications should consider the effects of composite design and construction on the resulting passenger safety in the event of in-flight fires or emergency landing conditions, which combine with subsequent egress when a fuel-fed fire is possible.” Pertinent to the wing structure, post-crash fire passenger survivability is dependent on the time available for passenger evacuation prior to fuel tank breach or structural failure. Structural failure can be a result of degradation in load-carrying capability in the upper or lower wing surface caused by a fuel-fed ground fire and also as a result of over-pressurization caused by ignition of fuel vapors in the fuel tank.

For the CSeries airplanes, composite materials will be used to fabricate the majority of the wing fuel tank. Hence, the current regulations may not be adequate for the certification of the CSeries airplanes featuring wing fuel tanks fabricated with composite material. Therefore, Bombardier must present additional confirmation by test and analysis that the CSeries airplanes' design provides an acceptable level of safety with respect to the performance of the wing fuel tanks when exposed to the direct effects of post-crash ground fire or under-wing fuel-fed fires.

These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

Notice of proposed special conditions No. 25-14-08-SC for the Bombardier CSeries airplanes was published in the Federal Register on July 16, 2014 (79 FR 41457). No comments were received, and the special conditions are adopted as proposed.

As discussed above, these special conditions are applicable to the Models BD-500-1A10 and BD-500-1A11 series airplanes. Should Bombardier Aerospace apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, the special conditions would apply to that model as well.

This action affects only certain novel or unusual design features on two model series of airplanes. It is not a rule of general applicability.

Background

On January 18, 2010, Boeing Commercial Airplanes applied for an amendment to Type Certificate No. A1NM to include the new Model 767-2C. The Boeing Model 767-2C, which is a derivative of the Model 767-200 currently approved under Type Certificate No. A1NM, is a transport category airplane, intended for use as a freighter, powered by two PW4062 engines with a maximum takeoff weight of 415,000 pounds.

The Boeing Model 767-2C will have more fuel capacity than a traditional freighter through the addition of four body fuel tanks. The Model 767-2C contains fuel systems that could, directly or as a result of failure or malfunction, affect the aircraft's structural performance. Current regulations do not take into account loads for the airplane due to the effects of fuel system failures on structural performance; therefore, special conditions are needed.

Under the provisions of Title 14, Code of Federal Regulations (14 CFR) 21.101, Boeing must show that the Model 767-2C meets the applicable provisions of 14 CFR part 25, as amended by Amendments 25-0 through 25-130, except for earlier amendments as agreed upon by the FAA. These regulations will be incorporated into Type Certificate No. A1NM after type certification approval of the Model 767-2C.

In addition, the certification basis includes other regulations, special conditions, and exemptions that are not relevant to these special conditions. Type Certificate No. A1NM will be updated to include a complete description of the certification basis for these model airplanes.

If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 25) do not contain adequate or appropriate safety standards for the Model 767-2C because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same or similar novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same or similar novel or unusual design feature, the special conditions would also apply to the other model under § 21.101.

In addition to the applicable airworthiness regulations and special conditions, the Model 767-2C must comply with the fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of 14 CFR part 36.

The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type-certification basis under § 21.101.

The Boeing Model 767-2C will incorporate the following novel or unusual design features: Fuel system changes including the addition of forward and aft body fuel tanks, a main-to-center-tank gravity transfer system, hydraulically-powered-pumps for jettison, a nitrogen generation system for inerting of all fuel tanks, and a pressure-regulating closed fuel tank vent system. Digital electronic controls (i.e., fuel management systems) are added for control and monitoring of these systems.

The fuel management system is designed to keep the fuel distributed in accordance with fuel usage requirements. System failures of these new and modified systems may result in adverse fuel distributions or center-of-gravity excursions that increase the airplane loads. For example, a failure of the main tank gravity drain valve may result in less wing main tank fuel than normal management; or failure of the body auxiliary tank transfer systems may result in excessive body fuel at landing. Additionally, failures of the nitrogen generation system, fuel transfer system, or vent/pressure regulating system may result in excessive fuel tank pressures. These types of failures are addressed by these special conditions.

Special conditions have been applied on past airplane programs in order to require consideration of the effects of systems on structures. These special conditions are similar to those previously applied except that the scope is limited to new fuel system features unique to the Model 767-2C. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

Notice of proposed special conditions No. 25-14-07-SC for the Boeing Model 767-2C airplane was published in the Federal Register on July 2, 2014 (79 FR 37670). No comments were received, and the special conditions are adopted as proposed.

As discussed above, these special conditions are applicable to the Boeing Model 767-2C airplane. Should Boeing Commercial Airplanes apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, the special conditions would apply to that model as well.

This action affects only certain novel or unusual design features on one model of airplanes. It is not a rule of general applicability.

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to add an AD that would apply to Pacific Aerospace Limited Model FU24-954 and FU24A-954 airplanes. The NPRM was published in the Federal Register on August 5, 2014 (79 FR 45383). The NPRM proposed to correct an unsafe condition for the specified products and was based on mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country. The MCAI states:

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (79 FR 45383, August 5, 2014) or on the determination of the cost to the public.

We reviewed the relevant data and determined that air safety and the public interest require adopting the AD as proposed except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (79 FR 45383, August 5, 2014) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (79 FR 45383, August 5, 2014).

We estimate that this AD will affect 1 product of U.S. registry. We also estimate that it would take about .5 work-hour per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour.

Based on these figures, we estimate the cost of this AD on U.S. operators to be $42.50, or $42.50 per product.

In addition, we estimate that any necessary follow-on actions would take about 8 work-hours and require parts costing $1,000, for a cost of $1,680 per product. We have no way of determining the number of products that may need these actions.

According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

(3) Will not affect intrastate aviation in Alaska, and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2014-0532; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 90-26-01, Amendment 39-6810 (55 FR 49611, November 30, 1990), (“AD 90-26-01”), and AD 91-20-02, Amendment 39-8036 (56 FR 55231, October 25, 1991), (“AD 91-20-02”), and AD 2009-05-02, Amendment 39-15826 (74 FR 8161, February 24, 2009), (“AD 2009-05-02”). AD 90-26-01 and AD 91-20-02 applied to all GE CF6-80C2 series turbofan engines. AD 2009-05-02 applied to all GE CF6-80C2 and CF6-80E1 series turbofan engines. The NPRM published in the Federal Register on January 17, 2014 (79 FR 3139). The NPRM was prompted by a report of an under-cowl fire caused by a manifold high-pressure fuel leak and several additional reports of fuel leaks. The NPRM proposed to retain the requirements of the superseded ADs: AD 90-26-01 and AD 91-20-02 required removal of certain fuel manifold P/Ns; AD 2009-05-02 required inspection of certain fuel manifold P/Ns and replacement of certain consumable components. The NPRM also proposed to require removal of additional fuel manifold P/Ns, performance of additional initial and repetitive inspections, replacement as required of certain fuel manifold P/Ns and tube (block) clamps, and replacement of loop clamps at each fuel manifold inspection opportunity. We are issuing this AD to prevent failure of the fuel manifold, which could lead to uncontrolled engine fire, engine damage, and damage to the airplane.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM (79 FR 3139, January 17, 2014) and the FAA's response to each comment.

Several commenters requested that we replace two incorrect fuel manifold P/Ns with the correct P/Ns.

We agree. We corrected the P/Ns in paragraph (c) of this AD from P/Ns 1308M31G12 and 1308M32G12 to P/Ns 1303M31G12 and 1303M32G12.

Several commenters requested that we make changes to Table 1 to paragraph (e) in the NPRM (79 FR 3139, January 17, 2014). Three commenters requested that we remove the compliance time of six months because this requirement is unjustified. Two commenters requested that we remove one row of information due to redundancy. One commenter requested that we reorder the rows to make the table easier to follow.

We partially agree. We agree that the table is problematic. A six-month compliance time was meant to be a “grace period” for products that might have already exceeded the threshold. But, including a “grace period” is unnecessary, since AD 2009-05-02, which we are superseding with this AD, mandates the same requirement. We removed the six-month compliance time period.

We disagree with making the other changes as suggested, but did reword paragraph (e) to this AD to eliminate the tables and clarify the AD.

Several commenters requested that we change the definition of shop visit to exclude certain maintenance visits because the current definition forces the replacement of the fuel manifold at the majority of shop visits.

We agree. We changed the definition of shop visit for the purposes of this AD to exclude shop visits for specified types of maintenance.

Virgin Atlantic Airways, Delta Air Lines, AIRDO, and GE requested that we allow reinstallation of fuel manifolds, P/Ns 1303M31G12, 1303M32G12, 2420M70G01, and 2420M71G01, during on-wing maintenance, and only mandate removal of these P/Ns during shop visits. The commenters state that modification of the fuel manifold configuration during on-wing maintenance is not practicable due to complexity, potential for maintenance error, and cost compared to replacement during shop visit.

We agree. The intent of this AD is to require removal of fuel manifolds, P/Ns 1303M31G12, 1303M32G12, 2420M70G01, and 2420M71G01, during shop visit, not during on-wing maintenance. We removed the installation prohibition statement that included these P/Ns.

Lufthansa Cargo requested that we exclude from the applicability of this AD certain CF6-80C2 engine models.

We disagree. All CF6-80C2 engine models are affected by the same unsafe condition. We did not change this AD.

KLM Royal Dutch Airlines (KLM) requested that we address pigtail cracking in this AD, instead of tube (block) clamp and loop clamp chafing, by retaining AD 2009-05-02, Amendment 39-15826 (74 FR 8161, February 24, 2009), AD 91-20-02, Amendment 39-8036 (56 FR 55231, October 25, 1991), and AD 90-26-01, Amendment 39-6810 (55 FR 49611, November 30, 1990), and by superseding AD 2007-11-20, Amendment 39-15077 (72 FR 30956, June 5, 2007). KLM states that the recent under-cowl fire event was related to pigtail cracking, which the FAA has not addressed, and not to tube (block) and loop clamp chafing.

We disagree. Pigtail cracking, tube (block) clamp chafing, and loop clamp chafing can all be caused by resonant vibration within the engine operation range. This AD requires removal of fuel manifolds susceptible to resonant vibration, which addresses pigtail cracking, tube (block) clamp chafing, and loop clamp chafing leading to fuel manifold leaks. We did not change this AD.

KLM requested that we delete reference to the “Tube (Block) Clamp” from paragraph (e)(2) of this AD because instructions regarding inspection and replacement of the tube (block) clamp are not addressed in that paragraph.

We partially agree. The reference to the “Tube (Block) Clamp” in paragraph (e)(2) is inaccurate. We restructured the compliance paragraphs. Paragraphs (e)(2)(ii) and (e)(2)(iii) of this AD now reference “Tube (Block) Clamp.”

Lufthansa Technik AG and Deutsche Lufthansa AG requested that we provide additional details concerning the unsafe condition.

We partially agree. Although the AD Discussion section provides sufficient information regarding the fuel manifold leaks, we included a reference to additional information in the Related Information paragraph of this AD.

One commenter requested that we expand the compliance requirements of this AD to address other possible unsafe conditions in the designs of the accessory gearbox, spray shield, and fuel nozzle, and made reference to National Transportation Safety Board (NTSB) safety recommendations (SRs) A-13-022 and A-12-047.

We disagree. Unsafe conditions in the engine caused by designs of the accessory gearbox and spray shield are not the subjects of this AD. Fire caused by fuel manifold leak is the subject of this AD. SRs A-13-022 and A-12-047 do not address fire caused by fuel manifold leaks. We did not change this AD.

Delta Air Lines requested that we allow use of future revisions of the SBs referenced in compliance paragraphs because this would eliminate the need to request an alternative method of compliance (AMOC) if the SBs are revised.

We disagree. We are authorized to mandate use of procedures in SBs that are published and which we have reviewed. Since future revisions of SBs are not yet published, we are not authorized to mandate their use in advance. We did not change this AD.

Japan Airlines requested that we allow repetitive inspections of fuel manifolds that have PTFE-coated para-aramid tape at the tube (block) clamp locations. The NPRM (79 FR 3139, January 17, 2014) addressed initial inspections, but did not address repetitive inspections of fuel manifolds repaired with PTFE-coated para-aramid tape.

We agree. We changed the references to SBs in this AD to more recent versions that allow repetitive inspections of fuel manifolds that have PTFE-coated para-aramid tape at the tube (block) clamp locations.

Boeing Commercial Airplanes and another commenter requested that we require that manifolds be replaced using the method stated in the GE SBs. To substantiate the request, the second commenter referred to NTSB SR A-13-028.

We disagree. The regulations require that operators use acceptable methods, techniques, and practices to replace the fuel manifolds. The GE SBs contain one acceptable method to replace the fuel manifolds, but not the only acceptable method of doing so. We did not change this AD.

GE requested that we clarify, in the “Proposed AD Requirements” paragraph, the additional P/Ns of fuel manifolds to be inspected and replaced. GE also requested that we make clear, in the “Summary” paragraph, that on-wing replacement of tube (block) clamps and fuel manifolds is based on inspection results. GE also requested that we use alternative wording in paragraph (e) and Table 2 to paragraph (e) of this AD.

We partially agree. We agree that we needed to clarify the P/Ns to be removed before further flight, and those to be inspected until removed. We changed this AD to clearly identify both groups. We also agree that paragraph (e) of this AD required clarification. We reworded paragraph (e) of this AD to clearly identify the requirements to correct the unsafe condition.

Asiana Airlines, EVA Airways, Thai Airways, AIRDO, and Japan Airlines requested that for fuel manifold, P/Ns 1303M31G12, 1303M32G12, 2420M70G01, and 2420M71G01, we reduce the inspection interval or require non-destructive inspection at shop visits rather than require removal and prohibit installation. The operators state that their records do not indicate that these parts cause leaks or experience wear that would cause their replacement, and they expressed concerns that the reliability of the replacement fuel manifolds is lower than that of the prohibited fuel manifolds.

We disagree. A reduced inspection interval does not prevent pigtail cracking between shop visits. Our data does not justify a reduced inspection interval to prevent fuel leak events, or indicate that the new fuel manifold design has lower reliability. We did not change this AD.

Lufthansa Technik AG requested that we allow the use of fuel manifold, P/Ns 2420M70G01, 2420M71G01, 1303M31G12, and 1303M32G12, as replacement parts for drained (pre SB 73-0253) engine configurations. The commenter states that GE's service information allows use of fuel manifold, P/Ns 1303M31G12 and 1303M32G12, on engines with drain system installed, and this AD does not prohibit installation of fuel manifold, P/Ns 1303M31G10 and 1303M32G10.

We disagree. We have no data showing that drainless fuel manifolds installed in engines with a drain system are more reliable than when installed in engines with a drainless system. We did not change this AD.

Lufthansa Cargo requested that we remove from the applicability of this AD drainless fuel manifolds to which PTFE-coated para-aramid tape was applied and the loop and tube (block) clamps were inspected.

We disagree. We received several reports of fuel leaks and a report of under-cowl fire. The inspections alone required by this AD do not address pigtail cracking leading to fuel leaks, and therefore do not provide an acceptable level of safety. We did not change this AD.

Boeing Commercial Airplanes requested that we remove from the preamble the word “uncontrolled” from the description of fire caused by a fuel manifold leak because an uncontrolled fire in this scenario could only occur with a significant failure of the engine nacelle fire protection system.

We disagree. The data upon which we relied, including the Continued Airworthiness Assessment Methodologies (CAAM) database for transport category airplanes, includes data showing flammable fluid leaks leading to uncontrolled fires. We did not change this AD.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and editorial changes to improve clarity. We have determined that these changes:

• Are consistent with the intent that was proposed in the NPRM (79 FR 3139, January 17, 2014) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (79 FR 3139, January 17, 2014).

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

We estimate that this AD would affect 1,126 engines installed on airplanes of U.S. registry. We also estimate that required parts cost about $34,894 per engine. We also estimate that it will take about 6 hours to accomplish the actions required by this AD. The average labor rate is $85 per hour. Based on these figures, we estimate the total cost of this AD to U.S. operators to be $39,864,904.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

(3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction, and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Beechcraft Corporation (Type Certificate Previously Held by Hawker Beechcraft Corporation; Raytheon Aircraft Company; Beech Aircraft Corporation) Model 400, 400A, 400T, and MU-300 airplanes. The NPRM published in the Federal Register on June 30, 2014 (79 FR 36675). The NPRM was prompted by a report of a failure of the Acme nut threads in a PTA. The NPRM proposed to require an inspection to determine if PTAs having a certain serial number and part number are installed, and replacement if they are installed. The NPRM also proposed to require repetitive replacements of PTAs with new PTAs or certain overhauled PTAs. We are issuing this AD to prevent failure of the Acme nut threads in the PTA, which could lead to loss of control of pitch trim and reduced controllability of the airplane.

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (79 FR 36675, June 30, 2014) or on the determination of the cost to the public.

We reviewed the relevant data and determined that air safety and the public interest require adopting this AD as proposed except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (79 FR 36675, June 30, 2014) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (79 FR 36675, June 30, 2014).

We estimate that this AD affects 735 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

According to the manufacturer, the costs of this AD associated with Hawker Beechcraft Service Bulletin SB 27-4100, dated March 2012, may be covered under warranty, thereby reducing the cost impact on affected owners/operators. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate. The costs of the repetitive replacement are not covered under warranty. However, the PTA manufacturer states that it is already replacing the Acme nut and jackscrew at every overhaul, so the owners/operators should not see a cost increase due to this repetitive replacement requirement.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

(3) Will not affect intrastate aviation in Alaska, and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

Background

According to the Centers for Disease Control and Prevention (CDC), the current Ebola virus disease (Ebola) epidemic is the largest in history, affecting multiple countries in West Africa. Ebola, previously known as Ebola hemorrhagic fever, is a rare and deadly disease caused by infection with one of the Ebola virus strains. Ebola can cause disease in humans, nonhuman primates (monkeys, gorillas, and chimpanzees), and other animals. Ebola is caused by infection with a virus of the family Filoviridae, genus Ebolavirus. There are five identified Ebola virus species found in several African countries. The current outbreak is due to Ebola virus (Zaire ebolavirus) in Guinea, Sierra Leone, and Liberia.

In order to assist in preventing the further introduction and spread of this communicable disease in the United States, CBP, in coordination with other DHS components and offices, the CDC, and other agencies charged with protecting the homeland and the American public, is currently implementing enhanced screening protocols at five U.S. airports that receive the largest number of travelers from Liberia, Guinea, and Sierra Leone. To ensure that all travelers with recent travel to, from, or through the affected countries are screened, CBP directs all flights to the U.S. carrying such persons to arrive at the five airports where the enhanced screening procedures are being implemented. While CBP anticipates working with the air carriers in an endeavor to identify potential travelers from the affected countries prior to boarding, air carriers will remain obligated to comply with the requirement of this notice, particularly in the event that travelers who have recently traveled to, from, or through the affected countries are boarded on flights bound for the U.S.

Pursuant to 19 U.S.C. 1433(c) and 19 CFR 122.32, CBP has the authority to limit the location where all aircraft entering the U.S. from abroad may land. Under this authority, I hereby direct all operators of aircraft carrying persons to the U.S. whose recent travel included Liberia, Guinea, or Sierra Leone to land at one of the following five airports: John F. Kennedy International Airport (JFK), New York; Newark Liberty International Airport (EWR), New Jersey; Washington Dulles International Airport (IAD), Virginia; Chicago O'Hare International Airport (ORD), Illinois; and Hartsfield-Jackson Atlanta International Airport (ATL), Georgia. This list of affected countries and airports may be modified by an updated publication in the Federal Register or by posting an advisory to follow at www.cbp.gov. The restrictions will remain in effect until superseded, modified, or revoked by publication in the Federal Register or posting on www.cbp.gov.

The Washington State Department of Transportation, on behalf of the University of Washington Police Department, has requested that the Evergreen Point Floating Bridge (State Route 520) remain closed to vessel traffic, and need not open to vessel traffic to facilitate timely movement of pre-game and post-game football traffic. The Evergreen Point Floating Bridge provides three navigational openings for vessel passage, the movable floating span, subject to this closure, and two fixed navigational openings; one on the east end of the bridge and one on the west end. The fixed navigational opening on the east end of the bridge provides a horizontal clearance of 150 feet and a vertical clearance of 57 feet (the east end navigation channel is currently blocked due to construction). The opening on the west end of the bridge provides a horizontal clearance of 170 feet and a vertical clearance of 45 feet. These vertical clearance measurements are made in reference to the Mean Water Level of Lake Washington. Vessels which do not require a bridge opening may continue to transit beneath the bridge during these closure periods. Under normal conditions this bridge opens on signal if at least two hours notice is given in 33 CFR 117.1049.

This deviation period will cover the dates October 25, 2014, November 8, 2014, and November 22, 2014. The times for the closures will be determined and announced in the Coast Guard's Local Notice to Mariners and Broadcast Notice to Mariners as they become available. Due to NCAA television scheduling, the times for the games are not currently available.

The deviation allows the center span of Evergreen Point Floating Bridge (State Route 520) to remain in the closed position and need not open for maritime traffic for two hours before and after the University of Washington football game on October 25, 2014, November 8, 2014, and November 22, 2014. The bridge shall operate in accordance to 33 CFR 117.1049 at all other times. Waterway usage on the Lake Washington Ship Canal ranges from commercial tug and barge to small pleasure craft.

The bridge will be able to open for emergencies and there is no immediate alternate route for vessels to pass. The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessels can arrange their transits to minimize any impact caused by the temporary deviation.

In accordance with 33 CFR 117.35(e), the drawbridges must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.

Table of Acronyms DHS Department of Homeland Security FR Federal Register NPRM Notice of Proposed Rulemaking COTP Captain of the Port A. Regulatory History and Information

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because doing so would be impracticable. The Coast Guard received notice of the ordinance on September 10, 2014. Due to the emergent nature of this incident, the Coast Guard did not have time to issue a notice of proposed rulemaking. The ordinance was discovered during operations related to the grounded M/V PAUL RUSS which was covered under the temporary final rule USCG-2013-0203.

Under 5 U.S.C. 553(d)(3), for the same reason mentioned above, the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Due to the late notice and inherent danger in removal of ordinance, and a grounded vessel, delaying the effective period of this safety zone would be contrary to the public interest.

The legal basis for this rule is the Coast Guard's authority to establish regulated navigation areas and other limited access areas: 33 U.S.C. 1231; 33 CFR 1.05-1, 6.04-6, 160.5; and Department of Homeland Security Delegation No. 0170.1.

A safety zone is a water area, shore area, or water and shore area, for which access is limited to authorized person, vehicles, or vessels for safety or environmental purposes. The purpose of this rulemaking is to protect mariners from the potential hazards associated with salvage operations. Approaching too close to such operations could potentially expose the mariner to hazardous conditions.

In order to protect the public from the hazards associated with the ordinance and subsequent removal operations, the Coast Guard is establishing a temporary safety zone, effective from September 19, 2014 until December 18, 2014. The enforcement period for this rule is from September 19, 2014 until December 18, 2014.

The safety zone is located within the Guam COTP Zone (See 33 CFR 3.70-15), and will cover all waters bounded by a circle with a 140-yard radius centered around the ordinance, located at approximately 15 degrees 13.370 North Latitude, 145 degrees 42.256 minutes East Longitude, from the surface of the water to the ocean floor.

The general regulations governing safety zones contained in 33 CFR 165.23 apply. Entry into, transit through or anchoring within this zone is prohibited unless authorized by the COTP or a designated representative thereof. Any Coast Guard commissioned, warrant, or petty officer, and any other COTP representative permitted by law, may enforce the zone. The COTP may waive any of the requirements of this rule for any person, vessel, or class of vessel upon finding that application of the safety zone is unnecessary or impractical for the purpose of maritime safety. Vessels or persons violating this rule may be subject to the penalties set forth in 33 U.S.C. 1232 and/or 50 U.S.C. 192.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on these statutes and executive orders.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders. The Coast Guard expects the economic impact of this rule to be extremely minimal based on the limited geographic area affected by it.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

This safety zone will not have a significant economic impact on a substantial number of small entities for the following reasons. Traffic will be allowed to pass through the zone with the permission of the Coast Guard Patrol Commander 671-355-4821. During the effective period, we will issue maritime advisories widely available to users of the Saipan shipping channel and surrounding waters.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT , above.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

This action is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a closed area of the Saipan Harbor, to vessel traffic and water sports above and below the water, until further notice. This rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

Executive Summary: Purpose of This Regulatory Action: We are amending § 685.200 of title 34 of the Code of Federal Regulations (CFR) to update the standard for determining if a potential parent or student borrower has an adverse credit history for purposes of eligibility for a Direct PLUS Loan (PLUS loan). Specifically, the final regulations will revise the definition of “adverse credit history” and require that parents and students who have an adverse credit history but who are approved for a PLUS loan on the basis that extenuating circumstances exist or who obtain an endorser for the PLUS loan must receive loan counseling before receiving the loan. The current regulations governing adverse credit history determinations have not been updated since the Direct Loan Program was established in 1994. The final regulations will reflect programmatic and economic changes that have occurred since 1994.

Summary of the Major Provisions of This Regulatory Action: These final regulations will—

• Revise the student PLUS loan borrower eligibility criteria to state more clearly that the PLUS loan adverse credit history requirements apply to student, as well as parent, PLUS loan borrowers.

• Add definitions of the terms “charged off” and “in collection” for purposes of determining whether an applicant for a PLUS loan has an adverse credit history.

• Specify that a PLUS loan applicant has an adverse credit history if the applicant has one or more debts with a total combined outstanding balance greater than $2,085 that are 90 or more days delinquent as of the date of the credit report, or that have been placed in collection or charged off during the two years preceding the date of the credit report.

• Provide that the combined outstanding balance threshold of $2,085 will be increased over time based on the rate of inflation, as measured by the Consumer Price Index for All Urban Consumers (CPI-U).

• Revise the provision that specifies the types of documentation the Secretary may accept as a basis for determining that extenuating circumstances exist for a PLUS loan applicant who is determined to have an adverse credit history.

• Specify that an applicant for a PLUS loan who is determined to have an adverse credit history, but who obtains an endorser, must complete PLUS loan counseling offered by the Secretary before receiving a PLUS loan.

• Specify that an applicant for a PLUS loan who is determined to have an adverse credit history, but who documents to the Secretary's satisfaction that extenuating circumstances exist, must complete PLUS loan counseling offered by the Secretary before receiving the PLUS loan.

Costs and Benefits: As further detailed in the Regulatory Impact Analysis section of this document, the final regulations will affect applicants for parent and student PLUS loans by modifying the standard for a determination of an adverse credit history. In particular, a student or parent will be considered to have an adverse credit history if the student or parent has one or more debts with a combined outstanding balance greater than $2,085 that are 90 or more days delinquent as of the date of the credit report, or that have been placed in collection or charged off during the two years preceding the date of the credit report.

The final regulations will also require that an applicant for a PLUS loan who is determined to have an adverse credit history but who documents to the satisfaction of the Secretary that extenuating circumstances exist or who obtains an endorser must complete PLUS loan counseling offered by the Secretary prior to receiving the loan.

In November 2011, the Department modified its procedures relating to adverse credit history determinations to be consistent with the regulations. This modification resulted in an increase in the number of PLUS loan applicants who were determined to have an adverse credit history. The Department expects that the final regulations will increase the number of PLUS loan applicants who pass the adverse credit history check. We estimate an increase of approximately 370,000 PLUS loan applicants who will pass the adverse credit history check under the final regulations. As a result of the changes in these final regulations, these applicants will not need to apply for reconsideration of an initial PLUS loan denial due to an adverse credit history, saving them time and effort.

Additionally, because the final regulations strike a balance between increased availability of PLUS loan funds to improve student access to postsecondary education and helping to limit overborrowing through improved financial literacy, we believe that there will be benefits for both borrowers and the Department.

On August 8, 2014, the Secretary published a notice of proposed rulemaking (NPRM) for this part in the Federal Register (79 FR 46640). 1 The final regulations contain changes from the NPRM, which are fully explained in the Analysis of Comments and Changes section of this document.

Implementation Date of These Regulations: Section 482(c) of the HEA requires that regulations affecting programs under title IV of the HEA be published in final form by November 1, prior to the start of the award year (July 1) to which they apply. However, that section also permits the Secretary to designate any regulation as one that an entity subject to the regulations may choose to implement earlier and the conditions for early implementation.

Consistent with the Department's objective to improve the loan application process for Direct PLUS loan borrowers, the Secretary is exercising his authority under section 482(c) to implement the new and amended regulations included in this document as soon as possible after the publication date of these final regulations. We will publish a separate Federal Register notice to announce when we are ready to implement these regulations.

Public Comment: In response to our invitation in the NPRM, 310 parties submitted comments on the proposed regulations. We group major issues according to subject, with appropriate sections of the regulations referenced in parentheses. We discuss other substantive issues under the sections of the proposed regulations to which they pertain. Generally, we do not address technical or other minor changes.

Analysis of Comments and Changes: An analysis of the comments and of any changes in the regulations since publication of the NPRM follows.

General Comments: The majority of commenters expressed strong support for the proposed regulations. One commenter described the proposed regulations as an important step in making PLUS loans work better for students.

Several commenters urged the Department to launch an aggressive awareness and outreach campaign so that parents and students are made aware of the changes to the PLUS loan eligibility requirements.

A small number of commenters objected to the proposed regulations. One commenter expressed disappointment that, in the commenter's view, only small changes were made to the regulatory definition of “adverse credit history.” This commenter felt that the revisions to the definition would make no difference for low-income families who may take on more debt than they can afford when borrowing PLUS loans.

We also received comments recommending additional changes to the PLUS loan regulations. One commenter recommended allowing parent borrowers to repay PLUS loans using the Income Based Repayment (IBR) plan. Another commenter recommended that we include “aggressive” loan forgiveness policies for PLUS loans. A commenter recommended that parent PLUS loans and graduate and professional student PLUS loans be separated into two different lending programs. One commenter recommended that parent PLUS loan borrowers not be allowed to borrow more for all their children than they can afford to repay in ten years, or by time the parent retires, whichever comes first.

Discussion: We appreciate the support from the overwhelming majority of commenters.

We disagree that the changes to the adverse credit history requirements are minor and will have little impact. We believe these changes will have a significant impact in providing low-income students with access to higher education and will make the financial aid process more transparent for students and their parents. In our view, the enthusiastic support for these regulations evidenced in comments submitted by students, alumni and employees of institutions of higher education, and by organizations representing students and institutions of higher education bolster that belief.

While we share the commenters' concerns about the ability of low-income students and parents who borrow PLUS loans to repay their loans, we disagree that these regulations will put low-income borrowers at risk. We believe that the enhanced consumer information that the Department will provide, which will include voluntary PLUS loan counseling for all student and parent PLUS borrowers, and the mandatory PLUS loan counseling for certain borrowers will help students and parents to understand the obligations associated with borrowing a PLUS loan and assist them in making careful decisions about taking on student loan debt.

The recommendations relating to IBR, loan forgiveness, creating two separate PLUS loan programs, and limiting the amount parent PLUS borrowers may borrow would require statutory changes.

Changes: None.

Comments: Several commenters requested that we implement these final regulations early, by making them effective no later than January 1, 2015. One commenter noted that the procedural modifications to the process for determining whether a borrower has an adverse credit history have been in effect for three years. This commenter stated that there is a critical need to restore access to PLUS loans for low-income borrowers who do not meet the current adverse credit history standards.

Discussion: We agree that it would be beneficial to student and parent borrowers for these final regulations to be implemented as soon as possible. As stated in the Implementation Date of These Regulations section of this document, the Department has designated these final regulations for early implementation. The Department will implement these regulations as soon as possible after the publication date. The Department will work with schools to inform parents and students of the changes to the PLUS loan adverse credit history standards and will publish a separate Federal Register notice announcing the implementation date.

Comments: One commenter agreed that the adverse credit history requirements should apply to both student and parent PLUS loan applicants. This commenter also stated that a parent's adverse credit history should not prevent an eligible student from obtaining a PLUS loan.

Another commenter recommended that the Department develop separate definitions of “adverse credit history” for student PLUS loan applicants and parent PLUS loan applicants. The commenter argued that the typical borrowing profiles of parents and of graduate and professional students are quite different, and believed that different definitions of “adverse credit history” would allow variations in the credit approval process tailored to each type of borrower.

Discussion: We appreciate the support of the commenter who agreed that the adverse credit history requirements should apply to both parent and graduate and professional student borrowers. These final regulations will state more clearly that the same requirement applies to all PLUS loan borrowers. We also note that a parent's credit history does not affect a student PLUS loan applicant's eligibility for a PLUS loan, nor does the dependent student's credit history affect the parent's PLUS loan eligibility.

We disagree with the commenter who recommended separate definitions of “adverse credit history” for parent and graduate and professional student borrowers. As noted in the NPRM, the HEA authorizes a single PLUS loan program and limits borrowing to graduate and professional students or parents who do not have an adverse credit history, as determined pursuant to regulations promulgated by the Secretary. This requirement applies equally to student and parent borrowers. The HEA does not support different definitions of “adverse credit history” for student PLUS loan applicants and parent PLUS loan applicants.

Changes: None.

Comments: Two commenters recommended alternative definitions for the terms “charged off” and “in collection.” One of these commenters believed these definitions should be consistent with definitions found on the Investopedia Web site. Another commenter recommended that the 90-day delinquent standard be incorporated into the definitions of “in collection” and “charged off.” This commenter interpreted the proposed regulations to provide that debts in an “in collection” or “charged off” status for less than 90 days would not be considered to represent an adverse credit history. This commenter also recommended incorporating language into the definitions stating that a debt would not be considered to be “in collection” or “charged off” unless an appropriate administrative or judicial body had determined that the debt was 90-days delinquent.

Discussion: While we appreciate the commenter's suggestion that the Department adopt the definitions of “charged off” and “in collection” from Investopedia, using commonly understood definitions that are used in the collections industry will provide greater clarity and transparency in the PLUS loan application process. We do not agree with the suggestion that we incorporate language into the definitions stating that an appropriate administrative or judicial body would have to determine that a debt was 90 days delinquent before the debt is considered “charged off” or “in collection.” It is unlikely that a creditor would incur the cost of putting a debt in collection, or would charge off a debt and stop collecting on it altogether, before the debt is at least 90 days delinquent. This is why we proposed the 90-day delinquency standard as separate from the “charged off” or “in collection” standards. Further, it is impractical, burdensome, and unnecessary to require an administrative or judicial body to determine that a debt is 90 days delinquent before it is appropriate to consider the delinquency as demonstrating an adverse credit history.

Changes: None.

Comments: A few commenters recommended that the PLUS adverse credit history regulations take into consideration an applicant's ability to repay the PLUS loan. These commenters argued that parent eligibility under the adverse credit history criteria should include some measure of likely ability to repay the loan based on the applicant's current financial circumstances. These commenters recommended including factors such as debt-to-income ratios, minimum income requirements, credit scores, or debt-service-to-income ratios in the definition of “adverse credit history.” One commenter recommended revising the PLUS loan eligibility criteria to prevent borrowing by parents whose income is below the poverty line.

These commenters stated that they did not agree with our position that consideration of a borrower's ability to repay would require an amendment to the HEA. These commenters offered several rationales to support their position.

One commenter recommended expanding the definition of adverse credit history to include those without a credit history. This commenter asked if lack of a credit history could be considered an indicator of a borrower's willingness or ability to repay a loan.

Another commenter recommended that any changes to the adverse credit history standards that would restrict PLUS loan access be implemented for new borrowers only, so as not to affect currently enrolled students who rely on PLUS loans to assist in financing their education.

Discussion: As noted in the NPRM, adverse credit history is a measure of an individual's history of repaying existing debt. It does not measure whether the individual will have the financial ability in the future to repay a specific debt; but whether the individual has paid debt in the past. As such, the commenters' recommendations to include measures of creditworthiness in determining whether an applicant has an adverse credit history are not supported by section 428B(a)(1)(A) of the HEA, which provides that an applicant is not eligible to borrow a PLUS loan if the applicant has an adverse credit history. Lack of a credit history is not an indicator that a borrower was unable or unwilling to repay a prior debt. Therefore, we do not consider lack of a credit history to be an indicator of an adverse credit history.

These final regulations will increase the number of applicants who qualify for PLUS loans based on the initial credit check and consequently decrease the total number of applicants who are approved through the extenuating circumstances process. We do not anticipate that the changes to the adverse credit history standards in these regulations will restrict access to PLUS loans for borrowers who are currently eligible for PLUS loans. Therefore, we do not see the need to limit the applicability of these final regulations to new borrowers.

Changes: None.

Comments: Many commenters supported the provision that would use the threshold amount of $2,085 in debts that are 90 or more days delinquent for determining whether the applicant has an adverse credit history. However, some commenters objected to the $2,085 amount as either too low or too high.

Two commenters recommended that the threshold amount be increased to $5,000. However, one commenter argued that the $2,085 threshold amount was too high and noted that this amount could lead to a determination that an applicant who has debts significant enough to warrant ongoing collection attempts and lawsuits does not have an adverse credit history for purposes of the PLUS loan program. This commenter recommended reducing the threshold amount to $1,000.

Another commenter asserted that there is no evidence to suggest that granting unlimited credit to applicants with $2,085 of delinquent debt will not harm borrowers and taxpayers.

Several commenters recommended that in determining whether an applicant has an adverse credit history, we should exclude debt that is not correlated with credit risk from consideration. Several commenters cited medical debt as an example of debt that does not affect the likelihood that a consumer will repay other debt. Commenters also recommended that delinquencies on debts relating to accidents, illness, or unemployment in the immediately preceding two years be disregarded. One commenter suggested that the Department disregard car loans under $7,000.

Discussion: We believe that the $2,085 threshold amount is the appropriate amount to use in determining whether a PLUS loan applicant has an adverse credit history. As explained in the NPRM, we arrived at the amount of $2,085 by calculating the estimated median debt level for the purposes of documenting extenuating circumstances for all debts with a status of in collection, charged off, or 90 or more days delinquent, for all parent PLUS loan denials resulting from all credit checks conducted between the spring of 2012 and the spring of 2013. In these regulations, we use the $2,085 threshold as a standard for the determination of an adverse credit history, rather than as part of the process for documenting extenuating circumstances to reduce the burden on borrowers. Lastly, the Department already provides special consideration for medical debt or delinquencies relating to accidents, illness, or unemployment when determining whether an applicant has an adverse credit history. Under § 685.200(c)(2)(viii)(D), the Secretary may consider the type of debt when deciding that extenuating circumstances exist with regard to an adverse credit history determination. However, we do not believe there is a justification for treating a delinquency on a car loan differently than other consumer debt which does not relate to accidents, illness or unemployment.

Changes: None.

Comments: Several commenters strongly supported the provision in the proposed regulations that would provide for the Department to adjust the $2,085 threshold amount over time. Most commenters recommended using the Consumer Price Index for All Urban Consumers (CPI-U) as the basis for indexing the threshold amount. One commenter pointed out that CPI-U is the most commonly used measure of inflation. Another commenter noted that using CPI-U would be consistent with inflation measures used in other Federal programs such as the Social Security Administration's Old-Age, Survivors, and Disability Insurance (OASDI) program. The commenter stated that as the CPI rises, what is considered as “negligible debt” should also rise.

Another commenter suggested that we utilize the same methodology we used to calculate the initial $2,085 threshold amount to recalculate the threshold amount annually. The commenter argued that the threshold amount is a function of total consumer debt and overall economic conditions and that it is not affected by inflation. The commenter noted that during the time period measured to arrive at the $2,085 threshold amount, consumers had just gone through a period of easy credit followed by a recession, resulting in larger debt levels and more delinquencies. The commenter stated that, in future years, the $2,085 threshold amount may need to be reduced as debt levels and delinquencies decrease.

One commenter recommended that the Department not adjust the $2,085 threshold amount. This commenter noted that the threshold amount is relatively high, and represents potentially significant financial trouble for an applicant. The commenter stated that the threshold amount should not be adjusted, to ensure that parents with substantial financial troubles do not overborrow. However, this commenter recommended that if the Department decides to adjust the threshold amount any future changes should be based on CPI, as a recognized measure of inflation. The commenter also recommended that we inform institutions and borrowers of the yearly adjustment when we announce the new Federal student loan interest rates.

One commenter recommended that the regulations require the Secretary to increase the threshold amount, rather than permit the Secretary to adjust the amount periodically. The commenter believed that a mandatory annual adjustment to the threshold amount would prevent the value of the threshold amount from eroding over time, and could have a significant impact in preventing future PLUS loan denials.

Several commenters recommended that there be no reduction in the threshold amount in years when the CPI-U is a negative number.

Discussion: We agree with the recommendation that we index the $2,085 threshold to the Consumer Price Index (CPI-U). As the commenters noted, indexing the threshold amount to inflation will help ensure that it remains a meaningful limit to the amount of delinquent debt a PLUS loan applicant may have and still qualify for a PLUS loan.

We disagree with the recommendation that, instead of using the rate of inflation, we use the median debt levels for all debts with a status of in collection, charged off, or 90 or more days delinquent. Although this calculation of delinquent debt of PLUS borrowers was a factor used in determining the $2,085 threshold amount, we do not believe that this methodology is appropriate for use for determining appropriate changes to the future threshold amount. As the commenter pointed out, debt levels and delinquencies may decrease in the future, meaning that we would have to either decrease or not adjust the threshold amount. Using the CPI-U index gives borrowers and schools transparency about the limit of debt that is not considered to reflect an “an adverse credit history”.

Similarly, we disagree with the commenter who recommended that we not index the threshold amount. In our view, if the threshold amount is not indexed to inflation, over time it would erode the value of the threshold amount due to inflation.

We agree with the commenters that the CPI-U is an appropriate measure of inflation for indexing the threshold amount. The CPI-U is used by the Social Security Administration and other Federal programs and by private firms in collective bargaining agreements. A more detailed discussion of the widespread application of the CPI-U is provided in the Threshold Amount Indexed to Inflation section.

Although we agree with the commenters who suggested adjusting for inflation, we disagree with the recommendation that the threshold amount be adjusted annually. An annual adjustment for inflation may result in minimal changes to the threshold amount that could cause confusion for institutions and loan applicants. Therefore these final regulations provide for increasing the $2,085 threshold amount periodically but only when the adjustment results in a significant change in the threshold amount. The Department will determine when the change in the CPI-U since the publication of these regulations or the most recent adjustment would result in an increase of at least $100. In addition, any inflation-adjusted increase to the threshold amount will be rounded upward to the nearest $5.

Changes: We have added § 685.200(c)(2)(viii)(C) and § 685.200(c)(2)(viii)(D) to provide that the Secretary adjusts the $2,085 threshold amount, or the most recent inflation-adjusted threshold amount, when the application of the percentage change in the CPI-U to the then current threshold amount results in an increase of $100 or more. The provision also specifies that the Secretary will round up adjustments, when made, to the nearest $5.

Comments: One commenter recommended that an applicant with delinquent debts not be considered as having an adverse credit history unless 40 percent or more of the applicant's total accounts are an average of 120 days or more past due.

Discussion: Under the commenter's proposal, an unlimited amount of delinquent debt would not be considered to be an indicator of an adverse credit history, as long as the debt represented less than 40 percent of the applicant's total accounts. Such an open-ended standard would not be in the best interests of the PLUS loan program, or of potential PLUS loan borrowers.

Changes: None.

Comments: One commenter objected to us considering debts that have been charged off as an indicator of an adverse credit history. This commenter asserted a creditor may charge off a debt for many reasons that are not indicative of a borrower's ability to repay. The commenter asserted that it is common practice in some fields, such as the agriculture industry, to charge off debts when there are significant changes beyond the control of the lender or borrower, such as natural disasters or unforeseen and unanticipated changes in economic circumstances.

This commenter also asserted that, in other industries, creditors will refer debts that are not delinquent to a collection agency as a way of escalating collection efforts. As a result, the fact that a debt is in collection does not necessarily mean that the borrower is delinquent in payment or even that the borrower owes the amount in question. Rather, it is an expression of the lender's intent to move the collection efforts to the next level.

One commenter stated that the Department had not provided evidence to demonstrate that the consideration of debts in collection or charged off as reflecting an adverse credit history will reduce PLUS loan default rates. The commenter argued that whether an applicant has accounts that are in collection or have been charged off does not provide insight into the applicant's likely repayment behavior. The commenter noted that the proposed regulatory changes may deny PLUS loans to borrowers who are capable of repaying the loans.

Several commenters expressed support for the proposal to change the period in which we consider debts in collection or charged off as reflecting an adverse credit history from the current five years to two years. One commenter suggested that two years is a reasonable time frame to demonstrate that borrowers are likely to be able to repay their loans. These commenters asserted that a longer look-back period might hamper parental access to PLUS loans due to the lingering effects of the recession. One commenter expressed the view that a one-year look-back period is not sufficient and that a five-year look-back period is not appropriate for PLUS loan applicants. This commenter stated that using a two-year look-back period, instead of a five-year look-back period, will limit the impact of unusual economic conditions.

One commenter recommended that the Department change the look-back period from two years to three years, because many States have a three-year statute of limitations on debts for written contracts. The commenter recommended extending the look-back period to reflect these statutes of limitations and to ensure that PLUS borrowers with debt that is delinquent, charged off, or in collection, are able to either rehabilitate that debt or avoid costly lawsuits that may hinder their ability to repay a PLUS loan.

Another commenter noted that the statute of limitations on a written contract varies from State to State. According to this commenter, the average statute of limitations period in all States and the District of Columbia is just over six years. The shortest statute of limitations in any State is three years, and the most common statute of limitations is six years.

Another commenter who recommended setting the look-back period at three years noted that applicants with debts in collection or that have been charged off for two years could still be subject to aggressive collection practices, which may cause further financial distress to the borrower in the near future. This commenter stated that such applicants are not good candidates for automatic approval for a PLUS loan.

Discussion: While it may be true that a debt can be charged off for reasons other than the debtor's ability or willingness to repay, generally, if a creditor has written off a debt as a loss it is an indicator that the applicant has had some difficulty repaying the amounts owed. If the reason for the charge off was something outside of the applicant's control, as suggested by the commenter, the applicant could document that reason during the extenuating circumstances process.

We are skeptical of the commenter's assertion that a creditor would refer a debt to a collection agency if a borrower is current on his or her payments. Referring a debt to a collection agency costs the creditor. Further, the commenter does not explain why a creditor would escalate collection efforts on a borrower who consistently makes on-time payments.

We also disagree that whether an applicant has accounts in collection or a charged off status does not provide insight into likely repayment behavior. The HEA requires us to determine whether an applicant has an adverse credit history and we believe that past repayment behavior is a necessary part of this required adverse credit history determination.

We thank the commenters for their support for a two-year look-back period. The Department reviewed other lenders' look-back periods (as discussed in the NPRM) and determined that the two year look-back period presents a more accurate sample of an applicant's recent credit history than the longer periods recommended by a small number of commenters.

Changes: None.

Comments: Commenters generally expressed support for adding a provision to require loan counseling for PLUS loan applicants who are determined to have an adverse credit history, but who qualify for a PLUS loan by demonstrating that extenuating circumstances exist. However, one commenter questioned the premise that loan counseling is helpful and reduces overborrowing. This commenter was not aware of any studies demonstrating that requiring additional counseling for parent borrowers has a positive effect on loan repayment. Another commenter echoed this statement, citing a report that questions the benefit of financial education programs.

One commenter recommended that, before requiring PLUS loan counseling, the Department conduct a comprehensive review of how such counseling would add value to the PLUS loan borrowing experience and how it would affect PLUS loan outcomes. This commenter recommended that the Department conduct focus groups to evaluate future PLUS loan counseling.

The proposed regulations would not have required PLUS loan counseling for a borrower with an adverse credit history who qualifies for a PLUS loan by obtaining an endorser. In the NPRM, the Department requested comment on whether an applicant who qualifies for a PLUS loan by obtaining an endorser who does not have an adverse credit history should be required to complete PLUS loan counseling. Several commenters expressed support for a counseling requirement for these applicants. One commenter noted that, although the applicant has an endorser, the applicant is still primarily responsible for repaying the loan. Another commenter stated that the change requiring counseling for these two groups would target some of the most vulnerable borrowers, and would help to ensure that they understand the terms and conditions of the PLUS loan.

Another commenter asserted that the Department should establish standards for documentation of extenuating circumstances. Examples of documentation that this commenter stated should be acceptable include income tax returns, bank statements or a documented lack of alternative financial support.

One commenter recommended that the extenuating circumstances that the Department would consider should be all-inclusive. The commenter stated that an applicant's good faith effort to submit documentation of extenuating circumstances should be sufficient for the applicant to obtain the loan.

Another commenter contended that the new standards for PLUS loan eligibility should apply to endorsers as well as parent and student PLUS loan borrowers. This commenter pointed out that, while an applicant with an adverse credit history may still qualify for a PLUS loan if extenuating circumstances exist, an endorser does not have the opportunity to demonstrate extenuating circumstances.

Discussion: We believe that loan counseling is a helpful tool for all borrowers but especially borrowers who may have experienced difficulties in repaying debts in the past. The Department will make voluntary counseling materials available to all PLUS loan borrowers and endorsers but require counseling for borrowers who receive PLUS loans due to extenuating circumstances or by obtaining an endorser. The counseling will provide borrowers with information specific to PLUS loans and with information that can help them successfully manage debt. The mandatory counseling will include information on the borrowers' current loan indebtedness, provide estimated loan repayment amounts, describe ways to avoid delinquency and default and provide additional financial aid literacy information. The voluntary counseling is discussed in the “Enhanced PLUS Borrower Consumer Information” section of this document. We will consider the suggestion to conduct consumer testing to evaluate PLUS loan counseling tools and materials.

We thank the commenters who responded to our request for comment on whether an applicant who qualifies for a PLUS loan by obtaining an endorser should be required to complete PLUS loan counseling. We agree with the commenters that these applicants, as well as applicants who qualify for PLUS loans based on extenuating circumstances, should be required to complete PLUS loan counseling.

We thank the commenter for recommendations on the types of documentation that the Secretary should accept to document extenuating circumstances. We agree that the types of documentation that the commenter described would be helpful in making extenuating circumstances determinations, but we do not believe it is necessary to include the examples in the regulations.

We disagree with the recommendation that extenuating circumstances be all inclusive. Under this proposal, a borrower with an adverse credit history could obtain a PLUS loan under the extenuating circumstances provisions for any reason at all, regardless of whether the extenuating circumstance was truly justified.

We disagree with the recommendation that an individual with an adverse credit history be permitted to act as an endorser for a PLUS loan applicant if the endorser can demonstrate that extenuating circumstances exist. While the “adverse credit history” definition is the same for endorsers as it is for borrowers, we do not believe that it would provide sufficient protection for taxpayers to allow an applicant who has been determined to have an adverse credit history to qualify for the loan by obtaining an endorser who also has an adverse credit history.

Changes: We have revised § 685.200(c)(2)(viii)(A)( 2 ) to specify that an applicant with an adverse credit history and who has obtained an endorser must complete PLUS loan counseling offered by the Secretary to receive a PLUS loan.

In the NPRM, the Department announced its intention to modify its procedures so that a credit check indicating that a PLUS loan applicant does not have an adverse credit history will remain valid for 180 days, instead of the current 90 days.

With this change to the Department's procedures, any action that would normally trigger a credit check (for example, the submission of a Direct PLUS Loan Request or a PLUS loan origination record) will not do so if a prior credit check on the applicant that revealed no adverse credit issues was conducted within the past 180 days. We plan to implement this procedural change as soon as possible, and will inform schools in advance of the effective date of the change through an announcement on the Department's Information for Financial Aid Professionals Web site.

Comments: Several commenters expressed support for this increase in the length of the period during which a credit check is valid. One commenter encouraged the Department to continue to review this issue, with the goal of eventually extending the validity of an approved credit check for at least one award year, so that PLUS borrowers would have additional certainty about their continued eligibility to receive PLUS loan funds. Another commenter agreed that the current 90-day period was too short, but felt that a period longer than 180 days may be too long.

Discussion: We appreciate the support for this change. We believe that extending the window for more than 180 days would result in individuals receiving PLUS loans based on credit checks that do not reasonably reflect their current financial circumstances.

In the NPRM, the Department stated that it intends to collect and, where appropriate, publish information about the performance of parent and graduate and professional student PLUS loans, including default rate information based on credit history characteristics of PLUS loan applicants and individual institutional default rates.

Comments: Several commenters responded to the Department's plan to collect and publish this information. One organization stated that it is not opposed to the Department improving transparency by providing more information about participation in the PLUS Loan program, such as the number of applications; approval, denial and reconsideration rates; and amounts borrowed. However, the commenter expressed concerns about the Department's intent to publish PLUS loan default rate information. The commenter argued that, in its view, the overall PLUS loan default rate is relatively low. The commenter also argued that since the Department, not institutions, establishes PLUS loan eligibility criteria and makes the loans, it would not be fair to publish institutional PLUS loan default rates.

Another commenter asserted that it would make sense to provide institutional default rates for PLUS loans made to graduate and professional students, but expressed concerns about publishing parent PLUS loan default rates. The commenter asserted that there is no correlation between a parent PLUS borrower's repayment behavior and the earnings capacity of an institution's graduates.

One commenter supported the Department's plan to release more information about the PLUS loan program, including default rate information, but felt that default rates alone do not provide a complete picture of how widespread financial distress might be. The commenter urged us to collect, analyze, and publish robust data on the repayment patterns of PLUS loan borrowers, and to disaggregate the data for student and parent borrowers.

One commenter noted that the Department provided the members of the negotiated rulemaking committee that considered the draft proposed regulations with data on this topic, including PLUS loan application rejection rates, reasons for rejection, sector-level default rates, and other information ( see the discussion in the NPRM at 79 FR 46640, 46641-46643 (August 8, 2014)). The commenter urged the Department to continue providing this information annually, keeping student and parent PLUS borrower data separate, so that researchers and policymakers can better understand the performance of the PLUS loan program. The commenter also strongly recommended that the Department create a process for institutions to review PLUS loan default rate data and then publish institutional PLUS loan cohort default rates annually.

Discussion: We appreciate the feedback and will take the commenters' concerns and recommendations into consideration as we formalize our plans to collect and publish information on the performance of PLUS loans. The Department will collect and, where appropriate, publish information about the performance of parent and graduate and professional student PLUS loans, including default rate information based on credit history characteristics of PLUS loan applicants and individual institutional default rates.

In the NPRM, we invited suggestions for specific types of enhanced consumer information that the Department should develop for PLUS applicants, particularly parent PLUS applicants who may be planning to borrow for more than one dependent over multiple academic years.

Comments: Several commenters supported the Department's plans to develop enhanced consumer information for PLUS loan borrowers and provided suggestions for topics to be covered. These suggestions included the following:

• An explanation of the definition of “adverse credit history” and a description of consumer credit reports;

• For parent PLUS loan borrowers, a reminder that the parent, not the student on whose behalf the loan is obtained, is responsible for repaying the loan, and that a parent PLUS loan cannot be transferred to the student;

• An explanation of the repayment options available to parent PLUS loan borrowers;

• A reminder to borrowers who take out more than one PLUS loan on how future PLUS loans will affect loan payments; and

• A calculator to permit PLUS loan applicants to enter non-mortgage debt and net income to determine whether they can manage additional debt.

One commenter strongly encouraged us to explore ways for PLUS loan borrowers and their families to receive personalized, customized, and sustained counseling from subject-matter experts on navigating the financial aid process, avoiding over-borrowing, the importance of managing student loan debt, and budgeting and personal financial management skills. The commenter noted that such specialized counseling services should be available to those with adverse credit histories to help prevent delinquency and default and promote long-term financial well-being.

Discussion: We agree that it would be helpful to include some of the recommended items in our enhanced consumer information for all PLUS applicants. The enhanced consumer information will include voluntary PLUS loan counseling for all student and parent PLUS borrowers. The voluntary PLUS loan counseling will be easily accessible to borrowers who are seeking PLUS loans and will also be made available through links on other Department Web sites. The following are some of the items that will be included in the voluntary counseling for all PLUS borrowers:

• A calculator that will allow borrowers to estimate their future required monthly payment amount under available repayment plans.

• Tools to assist borrowers in determining how factors such as taking out additional PLUS loans or deferring repayment until the student leaves school will affect the required monthly payment amount and total loan amount to be repaid.

• Available repayment plans for student and parent PLUS borrowers.

• Information about loan consolidation.

• Budgeting information, with an emphasis on borrowing only the minimum amount needed.

• Strategies for avoiding delinquency and default.

In the NPRM, we invited comments on what other types of information about parent PLUS loans would be helpful for institutions and consumers, and suggestions on the most effective way for the Department to communicate with parent PLUS loan borrowers.

Comments: We received suggestions that included some of the recommendations for enhanced PLUS loan borrower consumer information described earlier in this section, as well as the following:

• Resources for borrowers to learn how to improve their credit history to qualify for future borrowing;

• The definition of “endorser” and an explanation of the responsibilities assumed by a PLUS loan endorser;

• The importance of understanding debt-to-earnings considerations before an individual takes on new loan debt; and

• The penalties for fraudulent PLUS loan applications.

One commenter suggested that effective ways to communicate with parent PLUS loan borrowers include the following:

• In-person counseling with qualified professionals;

• Online counseling that is engaging, interactive, and includes knowledge checks;

• Online tutorials on specific topics; and

• Customer service using certified financial counselors who understand the concepts and tools needed to assist parents throughout the PLUS loan process.

Another commenter suggested that it may be helpful for the Department to provide paper informational materials to parent PLUS borrowers in addition to providing online resources, since some parent borrowers may have computer literacy challenges or may not have access to a computer.

Discussion: We appreciate these comments. The commenters provided many useful recommendations that will assist the Department as we consider options for better communicating with parent PLUS borrowers and providing enhanced information about parent PLUS loans to borrowers and institutions. Consistent with these goals, the voluntary PLUS loan counseling that the Department is developing will make use of graphs and charts to more clearly and effectively explain important concepts. The counseling will include knowledge checks to assess the borrower's understanding of the material. Borrowers will be able to download the content of the voluntary counseling for future reference.

The Department makes Direct PLUS Loans to graduate and professional students and to parents of dependent undergraduate students to help them pay for education expenses not covered by other financial aid. According to data from the Department's Federal Student Aid (FSA) office, approximately 3.9 million borrowers owe a combined balance of $100 billion in total Direct PLUS loans. The Department is amending these regulations to update the standard for determining if a potential borrower has an adverse credit history for purposes of eligibility for a Direct PLUS loan.

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 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 upon 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 final regulations only on a reasoned determination that their benefits would justify their costs. In choosing among alternative regulatory approaches, we selected those approaches that maximize net benefits to borrowers and institutions. Based on the analysis that follows, the Department believes that these final regulations are consistent with the principles in Executive Order 13563.

We have also determined that this regulatory action does 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 we have determined as necessary for administering the Department's programs and activities.

This Regulatory Impact Analysis is divided into six sections. The “Need for Regulatory Action” section discusses why updating the regulatory requirements governing PLUS loan adverse credit history determinations is necessary.

The “Summary of Changes from the NPRM” section summarizes the most important revisions the Department made in these final regulations since publication of the NPRM. These changes were informed by the Department's consideration of the comments of 310 parties who submitted comments on the proposed regulations. The changes are intended to clarify the Department's regulations on adverse credit history determinations and eligibility for PLUS loans. In these final regulations, the Department is making two major changes in the proposed rules since the NPRM: (1) Permitting the Secretary to increase the debt threshold amount of $2,085 based on a measure of inflation; and (2) requiring borrowers who qualify for a PLUS loan by obtaining an endorser to complete PLUS loan counseling provided by the Department.

The “Discussion of Costs, Benefits, and Transfers” section considers the cost and benefit implications of these regulations for institutions of higher education, students, and parents. We anticipate that the final regulations will result in a lower denial rate for PLUS loan applicants and a decline in the number of applicants who are subject to the extenuating circumstances process. For some parents and graduate and professional students who would be denied PLUS loans under the current standards, the final regulations will allow them to borrow a PLUS loan.

Under “Net Budget Impacts,” the Department presents its estimate that the final regulations will not have a significant net budgetary impact on the Federal government.

In “Alternatives Considered,” we describe other approaches we considered for key provisions of these regulations, including an automatic annual adjustment of the $2,085 threshold based on the CPI-U.

Finally, the “Final Regulatory Flexibility Analysis” considers issues relevant to small businesses and nonprofit institutions.

Elsewhere in this section under Paperwork Reduction Act of 1995, we identify and explain burdens specifically associated with information collection requirements.

Executive Order 12866 emphasizes that “Federal agencies should promulgate only such regulations as are required by law, are necessary to interpret the law, or are made necessary by compelling public need, such as material failures of private markets to protect or improve the health and safety of the public, the environment, or the well-being of the American people.” In this case, there is indeed a compelling public need for regulation. Congress amended the HEA in 2010 to end the origination of new loans under the Federal Family Education Loan (FFEL) Program. All new subsidized and unsubsidized Stafford loans, PLUS loans, and Consolidation loans are made under the Direct Loan Program. To be eligible for a Federal Direct PLUS loan, under the statute, an applicant must not have an adverse credit history. To determine if an applicant has an adverse credit history, the Department conducts a credit check on the applicant. Under current regulations, a PLUS loan applicant is considered to have an adverse credit history if the credit report shows that the applicant is 90 days delinquent on any debt, or has been the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a title IV, HEA program debt in the five years preceding the date of the credit report.

Since 2011, we have made operational changes to the Direct Loan Program to improve compliance with the applicable regulations. In accordance with those regulations, the Department has applied standards for adverse credit history determinations for PLUS loan applicants under which an applicant with debts in collection or charged off is considered to have an adverse credit history because the applicant is 90 or more days delinquent on a debt. Based on these standards, more PLUS loan applicants were determined to have an adverse credit history and had to request reconsideration of the PLUS loan denial through the Department's process for determining whether there are extenuating circumstances for an adverse credit history. After these changes resulted in an increase in PLUS loan denials, the Department made operational changes to the extenuating circumstances process to ensure that the statutory adverse credit history requirement was applied fairly without burdening borrowers or restricting access to higher education. In the interest of providing transparency to institutions and families, we concluded that the Department's operational changes should be reflected in the regulatory requirements governing PLUS loan adverse credit history determinations, which were originally established in 1994.

The final regulations will amend the definition of “adverse credit history” and will update the standard for determining if a potential PLUS loan borrower has an adverse credit history. In addition, the final regulations require that a parent or student with an adverse credit history who is approved for a PLUS loan as a result of the Secretary's determination that extenuating circumstances exist or who qualifies for a PLUS loan by obtaining an endorser must complete PLUS loan counseling before receiving the loan.

In the NPRM, the Department solicited comments on the appropriate inflation measure to use to index the $2,085 threshold debt amount. Most of the commenters that responded to this solicitation agreed that the Department should index the $2,085 to an inflation measure, and that the CPI-U produced by the Bureau of Labor Statistics would be the most appropriate measure. The Department believes that indexing the threshold amount to inflation will ensure that it remains a meaningful limit on the amount of delinquent debt a PLUS applicant may have. The CPI-U is the most commonly used measure of inflation and it is also commonly used as a means of adjusting dollar values. The CPI-U is used to adjust consumers' income payments (for example, Social Security), to adjust income eligibility levels for government assistance and to provide cost-of-living wage adjustments to workers. Over 50 million Social Security beneficiaries and military and Federal Civil Service retirees, have cost-of-living adjustments tied to the CPI-U. In addition, eligibility criteria for millions of food stamp recipients are tied to the CPI-U. 2 Along with other agencies, the Department also uses the CPI-U for many purposes such as determining various amounts under the Individuals with Disabilities Education Act (IDEA) and the Rehabilitation Act of 1973. To be consistent with the practice of other Federal agencies and the Department itself, we have determined that the CPI-U is the most appropriate inflation measure to use to adjust the threshold debt amount.

The initial threshold amount will be $2,085. The Department will adjust this amount for inflation, using the CPI-U, only when doing so will result in a cumulative increase in the threshold amount of $100 or more. The adjustments will be determined by multiplying $2,085, or the most recent inflation adjusted amount, by the sum of all subsequent annual average percentage changes of All Items CPI-U, before seasonal adjustment, for the 12-month periods ending in December. When the product of this calculation equals or exceeds $100, the product will be rounded up to the nearest $5. This adjustment amount will then be added to the threshold amount to derive a revised higher threshold amount that reflects inflation. When the recalculated adjustment amount increases by $100 or more, the Department will notify the public of the new threshold amount and apply it to PLUS loan eligibility determinations after it is announced.

Some commenters recommended an annual adjustment of the threshold amount based on inflation. The Department believes that adjusting the threshold amount for inflation annually would result in minimal annual increases and is unnecessary. Therefore these final regulations provide for increasing the $2,085 threshold only when applying the CPI-U for prior years would result in an increase of $100 or more.

The proposed regulations in the NPRM did not include a requirement that an applicant with an adverse credit history who qualifies for a PLUS loan by obtaining an endorser must receive PLUS loan counseling before receiving the loan. The Department solicited comments on whether these applicants should be required to complete PLUS loan counseling. Most commenters expressed support for a counseling requirement for these applicants. One commenter noted that, although the applicant has an endorser, the applicant is still primarily responsible for repaying the loan. Another commenter stated that the change requiring counseling for these two groups would target some of the most vulnerable borrowers, and would help to ensure that they understand the terms and conditions of the PLUS loan.

The Department agrees with the comments suggesting that loan counseling is a helpful tool for all borrowers, especially borrowers who may have experienced difficulties in repaying debts in the past. Counseling designed to provide borrowers with information specific to PLUS loans and to help borrowers successfully manage debt is important. The Department has revised these regulations to require that an applicant who has an adverse credit history and who has obtained an endorser complete PLUS loan counseling offered by the Secretary in order to receive a PLUS loan.

The Department expects that, as a result of these regulations, the number of approved applications for parent and graduate and professional student PLUS loans will increase from current levels and that this will result in a series of costs, benefits, and transfers. The most significant factor leading to this increase is expected to be the establishment of a new standard for the determination that an applicant has an adverse credit history. In particular, under these final regulations, an adverse credit history means that the applicant has one or more debts with a total combined outstanding balance greater than $2,085 that are 90 or more days delinquent as of the date of the credit report, or that have been placed in collection or charged off during the two years preceding the date of the credit report.

These final regulations also clarify the process by which PLUS loan applicants who were denied a loan may request reconsideration, and may increase the percentage of denied loan applicants who eventually qualify for PLUS loans after requesting reconsideration or obtaining an endorser who does not have an adverse credit history.

As discussed in the NPRM, parent PLUS loan applicants and their dependent students would be affected by these final regulations. Under these regulations, a larger number of parent PLUS loan applicants would be approved for PLUS loans on behalf of their dependent students without the extenuating circumstances process. As a result, some families could accrue higher loan debt amounts.

Parents who take out PLUS loans on behalf of their dependent children are acquiring some of the debt burden associated with their child's education and in some cases, most of the burden since there are no loan limits on how much parents may borrow, unlike the subsidized and unsubsidized loan limits for undergraduate students. Parent PLUS loans have higher interest rates and origination fees than Direct Subsidized and Direct Unsubsidized loans.

Increased access to PLUS loans may allow some students to continue their attendance in programs that they otherwise would not be able to afford. While some applicants may use additional Direct Unsubsidized loans to cover their educational expenses after their applicant parents have been denied PLUS loans, others may be unable to make up the difference because of annual or lifetime aggregate limits on Stafford loans and the larger cost of their selected institution. This could result in a student having to withdraw from a particular education program, transfer to another less-expensive program or institution, or find additional means of financing education, such as private student loans. Since PLUS loans can be borrowed up to the cost of attendance, they may be used to more fully cover funding gaps for dependent students who have exhausted their annual or lifetime aggregate limits for Direct Subsidized and Unsubsidized loans or allow students to attend more expensive institutions. PLUS loans often help lower-income students whose parents may lack the personal or family resources to pay for college. PLUS loans can also help graduate and professional students without their own personal resources achieve graduate degrees.

Applicants with an adverse credit history who qualify for a PLUS Loan by demonstrating that extenuating circumstances exist, or who qualify for a PLUS loan by obtaining an endorser, will be required to participate in loan counseling provided by the Department. This requirement could help PLUS loan applicants make better-informed decisions and avoid overborrowing for their own or their child's education.

As detailed in the NPRM, many of the changes are already reflected in the baseline budget estimates related to the PLUS loan program. However, due to data limitations, the net budget impact of this proposal could not be determined at this time. Consistent with the requirements of the Credit Reform Act of 1990, budget cost estimates for the student loan programs reflect the estimated net present value of all future non-administrative Federal costs associated with a cohort of loans. (A cohort reflects all loans originated in a given fiscal year.)

As described in the NPRM, the Department's changes to the process for making adverse credit history determinations in 2011 have already been incorporated into the Department's budget baseline. A commenter argued that the Department should have compared the effects of the proposed regulations to a baseline that did not include the 2011 changes so that the effect of the regulations would be a net increase in the level of PLUS loan application denials. The Department appreciates the comment. However, the Department believes that using the President's Budget 2015 baseline that reflects current operations and any changes in PLUS loan volume from the 2011 changes in the process for adverse credit determinations is appropriate

As discussed in the NPRM, the changes in the regulations, including (1) using $2,085 as an upfront threshold amount in the determination of an adverse credit history, and (2) the reduced look-back period of two years for accounts in collection and accounts that have been charged off to trigger a determination of adverse credit, will likely decrease the number of PLUS loan applicants who are denied loans based on an adverse credit history determination.

However, loans made to borrowers who would have been considered to have an adverse credit history before the changes in the regulations could have a higher incidence of default or could be difficult for borrowers to repay. If that were the case, potential savings from any increased PLUS volume resulting from the regulations would be reduced or even reversed. The Department does not have data to determine if borrowers who would have been considered to have an adverse credit history in the absence of the regulations have a greater incidence of default or repayment difficulty but, if a subsidy rate were available for this subgroup of PLUS borrowers, it would likely differ from the overall PLUS subsidy rate. The budget baseline already reflects the $2,085 threshold amount as currently used in the Department's process for considering requests for reconsideration and most of the charged-off accounts or accounts in collection that would result in an adverse credit history determination fall within the two-year period that is in the final regulations. Therefore, the Department has not estimated a significant net budget impact from the regulations.

In developing these estimates, a wide range of data sources were used, including data from the National Student Loan Data System; operational and financial data from Department of Education systems, including especially the Fiscal Operations Report and Application to Participate (FISAP) from institutions; and data from a range of surveys conducted by the National Center for Education Statistics, such as the 2011-2012 National Postsecondary Student Aid Survey and the 2004/09 Beginning Postsecondary Student Survey. Data from other sources, such as the U.S. Census Bureau, were also used.

As required by OMB Circular A-4 (available at www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a004/a-4.pdf ), in Table 1, we have prepared an accounting statement showing the classification of the expenditures associated with the provisions of these regulations. Expenditures are classified as transfers from the Federal Government to student loan borrowers.

The regulatory alternatives that were considered were discussed in the NPRM (79 FR 46653). Further, as discussed in the Analysis of Comments and Changes section of this document, we received comments from 310 parties during the comment period following publication of the NPRM. These comments covered a range of issues, including indexing the $2,085 minimum threshold amount to an inflation measure. The Department considered the suggestion made by commenters that the $2,085 debt threshold amount be automatically adjusted each year based on CPI-U but decided that adjusting for inflation annually for what may be a minimal increase is unnecessary.

The regulations will affect institutions that participate in the title IV, HEA programs, including alternative certification programs not housed at institutions, and individual borrowers. The U.S. Small Business Administration (SBA) Size Standards define for-profit institutions as “small businesses” if they are independently owned and operated and not dominant in their field of operation, with total annual revenue below $7,000,000. The SBA Size Standards define nonprofit institutions as “small organizations” if they are independently owned and operated and not dominant in their field of operation, or as “small entities” if they are institutions controlled by governmental entities with populations below 50,000. The number of title IV, HEA-eligible institutions that are small entities would be limited because of the revenues involved in the sector that would be affected by the regulations and the concentration of ownership of institutions by private owners or public systems. However, the definition of “small organization” does not factor in revenue. Accordingly, several of the entities subject to the regulations are “small entities,” and we have prepared this Final Regulatory Flexibility Analysis.

These regulations will update the standards for determining whether a parent or student has an adverse credit history for purposes of eligibility for a Direct PLUS Loan. The regulations will require PLUS loan counseling for a parent or student with an adverse credit history who obtains a PLUS loan as a result of the Secretary's determination that extenuating circumstances exist or who receives a loan after obtaining an endorser.

Current Direct Loan regulations (34 CFR 685.200(b) and (c)) specify that graduate and professional students, and parents borrowing on behalf of their dependent children, may borrow PLUS loans. PLUS loan borrowers must meet applicable eligibility requirements.

The regulations will affect the approximately 7,500 institutions that participate in the title IV, HEA loan programs, as the amount and composition of title IV, HEA program aid that is available to students affects students' enrollment decisions and institutional choice. Approximately 60 percent of institutions of higher education qualify as small entities. Using data from the Integrated Postsecondary Education Data System, we estimate that 4,365 institutions qualify as small entities—1,891 are nonprofit institutions, 2,196 are for-profit institutions with programs of two years or less, and 278 are for-profit institutions with four-year programs.

The new regulations will not change the reporting requirements related to PLUS loans for institutions. Accordingly, the Department does not expect a change in institutional burden from the current regulations. However, PLUS loan borrowers with an adverse credit history who request reconsideration based on extenuating circumstances must provide satisfactory documentation that extenuating circumstances exist, and will be required to complete loan counseling offered by the Secretary. In addition, PLUS loan borrowers who qualify for a PLUS loan after obtaining an endorser will also be required to complete loan counseling.

The regulations are unlikely to conflict with or duplicate existing Federal regulations.

The Department conducted a negotiated rulemaking process to develop the proposed regulations and considered a number of options for some of the provisions. No alternatives were aimed specifically at small entities.

Section 685.200 contains information collection requirements. Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3507(d)), the Department has submitted a copy of the section, and will submit the Information Collections Request (ICR) to the Office of Management and Budget (OMB) for its review.

A Federal agency may not conduct or sponsor a collection of information unless OMB approves the collection under the PRA and the corresponding information collection instrument displays a currently valid OMB control number. Notwithstanding any other provision of law, no person is required to comply with, or is subject to penalty for failure to comply with, a collection of information if the collection instrument does not display a currently valid OMB control number.

Requirements: Under the final regulations in § 685.200(b)(5)and (c)(2)(viii)(A)( 3 ), we require that a PLUS loan applicant who is determined to have an adverse credit history, in addition to providing documentation to the Secretary demonstrating that extenuating circumstances exist, must complete enhanced PLUS loan counseling to receive the PLUS loan. We believe that enhanced loan counseling will help these PLUS loan applicants to understand the ramifications of incurring this additional debt.

Based on comments received on the NPRM, we are expanding the requirement that PLUS loan applicants receive new enhanced PLUS loan counseling to also apply to PLUS loan applicants who have an adverse credit history, but who qualify for a PLUS loan by obtaining an endorser who does not have an adverse credit history. The PLUS loan applicant (but not the endorser) will be required to complete enhanced PLUS loan counseling under § 685.200(c)(2)(viii)(A)( 2 ).

General: Since the publication of the NPRM, we have continued to examine available data and have based our revised burden calculation on the actual number of borrowers with adverse credit histories who documented extenuating circumstances, and the actual number of borrowers with adverse credit histories who obtained an endorser who does not have an adverse credit history during the period of March 23, 2013, through February 26, 2014, instead of basing our burden estimate on derived numbers.

Burden Calculation: During the period of March 23, 2013 through February 26, 2014, there were 785,734 PLUS loan denials. Our records indicate that, of those denials, 147,400 PLUS loans were approved after the extenuating circumstances process was completed and 63,126 PLUS loans were approved after the borrower obtained an endorser who does not have an adverse credit history.

All graduate and professional students who are first-time PLUS borrowers are currently required to undergo PLUS loan entrance counseling. We estimate that the enhanced PLUS loan borrower counseling requirements for each graduate and professional student who qualifies for a PLUS loan based on extenuating circumstances will, on average, increase loan counseling by 0.50 hours (30 minutes).

We estimate that, on average, each borrower's submission of documentation for the Secretary's consideration of the borrower's extenuating circumstances will take 1 hour.

We estimate that, on average, a borrower with an adverse credit history who elects to obtain an endorser who does not have an adverse credit history will require 1 hour to obtain such an endorser.

For applicants that qualify for a PLUS loan after obtaining an endorser, we estimate that, on average, each borrower will require an additional 0.50 hours to complete the enhanced PLUS loan counseling.

Of the 29,179 applicants for PLUS loans to pay for attendance at private for-profit institutions whose applications were denied, our data show that there were 10,984 graduate and professional students who received a loan after the initial denial of a PLUS loan request using the extenuating circumstances process review or after obtaining an endorser who does not have an adverse credit history. Of the 10,984 PLUS loan applicants, 7,607 were approved by documenting that extenuating circumstances existed and 3,377 PLUS loan applicants were approved after the applicant obtained an endorser who does not have an adverse credit history.

Our data show that there were 7,607 borrowers who were approved for a loan based on documentation of existing extenuating circumstances and we estimate that the burden will increase by 3,804 hours (7,607 approved requests multiplied by 0.50 hours per enhanced counseling session). Our data show that there were 3,377 borrowers who received a loan after obtaining an endorser who does not have an adverse credit history and we estimate that the burden will increase by 1,689 hours (3,377 approved requests multiplied by 0.50 hours per enhanced counseling session).

We estimate a total increase of 16,477 hours of burden for graduate and professional student PLUS borrowers at private for-profit institutions (10,984 hours for the collection and submission of documentation of existing extenuating circumstances or to obtain an endorser who does not have an adverse credit history, plus an additional 3,804 hours of enhanced counseling for borrowers who qualify for a loan after demonstrating that extenuating circumstances exist, and an additional 1,689 hours of enhanced counseling for the borrowers who receive a loan after obtaining an endorser who does not have an adverse credit history) under OMB Control Number 1845-0129.

Of the 56,484 applicants for PLUS loans to pay for attendance at private non-profit institutions whose applications were denied, our data show that there were 33,594 graduate and professional students who received a loan after the initial denial of a PLUS loan request using the extenuating circumstances process review or after obtaining an endorser who did not have an adverse credit history. Of the 33,594 PLUS applicants, 21,424 were approved by documenting that extenuating circumstances existed and 12,170 PLUS applicants were approved after the applicant obtained an endorser who does not have an adverse credit history.

Our 2013-14 data show that there were 21,424 borrowers who were approved for a loan based on documentation of existing extenuating circumstances and we estimate that the burden will increase by 10,712 hours (21,424 approved requests multiplied by 0.50 hours per enhanced counseling session). Our data show that there were 12,170 borrowers who received a loan after obtaining an endorser who does not have an adverse credit history and we estimate that the burden will increase by 6,085 hours (12,170 approved requests multiplied by 0.50 hours per enhanced counseling session).

We estimate a total increase of 50,391 hours of burden for graduate and professional PLUS borrowers at private non-profit institutions (33,594 hours for the collection and submission of documentation of existing extenuating circumstances or to obtain an endorser who does not have an adverse credit history plus an additional 10,712 hours of enhanced counseling for borrowers who received a loan after demonstrating that extenuating circumstances exist and an additional 6,085 hours of enhanced counseling for the borrowers who received a loan after obtaining an endorser who does not have an adverse credit history) under OMB Control Number 1845-0129.

Of the 40,385 applicants for PLUS loans to pay for attendance at public institutions whose applications were denied, our data show that there were 18,503 graduate and professional students who received a loan after the initial denial of a PLUS loan request using the extenuating circumstances process review or after obtaining an endorser who does not have an adverse credit history. Of the 18,503 PLUS applicants, 12,650 were approved by documenting existing extenuating circumstances and 5,853 were approved after the applicant obtained an endorser who does not have an adverse credit history.

Our data show that there were 12,650 borrowers who were approved for a loan based on documentation of existing extenuating circumstances and we estimate that the burden will increase by 6,325 hours (12,650 approved requests multiplied by 0.50 hours per enhanced counseling session). Our data show that there were 5,853 borrowers who received a loan after obtaining an endorser who does not have an adverse credit history and we estimate that the burden will increase by 2,927 hours (5,853 approved requests multiplied by 0.50 hours per enhanced counseling session).

We estimate a total increase of 27,755 hours of burden for graduate and professional student PLUS borrowers at public institutions (18,503 hours for the collection and submission of documentation of extenuating circumstances or to obtain an endorser who does not have an adverse credit history plus an additional 6,325 hours of enhanced counseling for borrowers with extenuating circumstances and an additional 2,927 hours of enhanced counseling for the borrowers who receive a loan after obtaining an endorser who does not have an adverse credit history) under OMB Control Number 1845-0129.

Of the 3,052 denials of applicants for PLUS loans to pay for attendance at foreign institutions whose applications were denied, our data show that there were 2,426 graduate and professional students who received a loan after the initial denial of a PLUS loan request using the extenuating circumstances process review or after obtaining an endorser who does not have an adverse credit history. Of the 2,426 PLUS loan applicants, 1,505 were approved by documenting existing extenuating circumstances and 921 PLUS applicants approved after the applicant obtained an endorser who does not have an adverse credit history.

Our data show that there were 1,505 borrowers who were approved for a loan based on documentation of existing extenuating circumstances and we estimate that the burden will increase by 753 hours (1,505 approved requests multiplied by 0.50 hours per enhanced counseling session). Our data show that there were 921 borrowers who received a loan after obtaining an endorser who does not have an adverse credit history and we estimate that the burden will increase by 461 hours (921 approved requests multiplied by 0.50 hours per enhanced counseling session).

We estimate a total increase of 3,640 hours of burden for graduate and professional student borrowers at foreign institutions (2,426 hours for the collection and submission of documentation of extenuating circumstances, or to obtain an endorser who does not have an adverse credit history, plus an additional 753 hours of enhanced counseling for borrowers who qualify for a loan after demonstrating that extenuating circumstances exist, and an additional 461 hours of enhanced counseling for the borrowers who receive a loan after obtaining an endorser who does not have an adverse credit history) under OMB Control Number 1845-0129.

The total increase in burden for § 685.200(b)(5) will be 98,263 hours under OMB Control Number 1845-0129.

Based on comments received on the NPRM, these final regulations provide that any parent PLUS loan applicant who has an adverse credit history, but who qualifies for a loan after demonstrating extenuating circumstance or after obtaining an endorser who does not have an adverse credit history, must complete enhanced PLUS loan counseling before receiving a PLUS loan. Under the proposed regulations only a parent with an adverse credit history who was approved for a loan after demonstrating extenuating circumstances would have been required to complete the enhanced PLUS loan counseling before receiving a PLUS loan.

As a result of the Department's development of enhanced PLUS loan counseling, the amount of time that it will take a parent to complete the PLUS loan counseling has been increased from the NPRM estimate. We now estimate that, on average, each parent PLUS loan borrower who is required to complete the enhanced PLUS loan counseling will take 0.75 hours (45 minutes) to complete the loan counseling session. This is an additional 15 minutes from the NPRM estimate.

We estimate that, on average, each borrower submission of documentation for the Secretary's consideration of the borrower's extenuating circumstances will take 1 hour.

We estimate that, on average, a borrower who elects to obtain an endorser who does not have an adverse credit history will require 1 hour to obtain an endorser.

For applicants who receive a PLUS loan after obtaining an endorser, we estimate that, on average, each borrower (but not the endorser) will require an additional 0.75 hours to complete the enhanced PLUS loan counseling.

Of the 83,432 applicants for parent PLUS loans to pay for attendance at private for-profit institutions whose applications were denied, our data show that there were 10,480 parent borrowers who received a loan after the initial denial of a PLUS loan using the extenuating circumstances review process or after obtaining an endorser who did not have an adverse credit history. Of the 10,480 PLUS applicants, 7,612 were approved by documenting that extenuating circumstances existed and 2,868 PLUS applicants were approved after the applicant obtained an endorser who does not have an adverse credit history.

Our data show that there were 7,612 parent borrowers who were approved for a loan based on documentation of existing extenuating circumstances and we estimate that the burden will increase by 5,709 hours (7,612 approved requests multiplied by 0.75 hours per enhanced PLUS loan counseling session). Our data show that there were 2,868 parent borrowers who received a loan after obtaining an endorser who does not have an adverse credit history and we estimate that burden will increase by 2,151 hours (2,868 approved requests multiplied by 0.75 hours per enhanced loan counseling session).

We estimate a total increase of 18,340 hours of burden for parent PLUS borrowers at private for-profit institutions (10,480 hours for the collection and submission of documentation of extenuating circumstances or to obtain an endorser who does not have an adverse credit history, plus an additional 5,709 hours of enhanced counseling for parent borrowers who qualify for a loan after demonstrating extenuating circumstances, and an additional 2,151 hours of enhanced counseling for the parent borrowers who received a loan after obtaining an endorser who does not have an adverse credit history) under OMB Control Number 1845-0129.

Of the 210,621 applicants for parent PLUS loans to pay for attendance at private nonprofit institutions whose applications were denied, our data show that there were 56,192 parent borrowers who received a loan after the initial denial of a PLUS loan using the extenuating circumstances process review or after obtaining an endorser who did not have an adverse credit history. Of the 56,192 parent PLUS applicants, 38,707 parent applicants were approved by documenting that extenuating circumstances exist and 17,485 parent applicants were approved after the applicant obtained an endorser who does not have an adverse credit history.

Our data show that there were 38,707 parent PLUS borrowers who were approved for a loan based on documentation of existing extenuating circumstances and we estimate that the burden will increase by 29,030 hours (38,707 approved requests times 0.75 hours per enhanced loan counseling session). Our data show that there were 17,485 parent PLUS borrowers who received a loan after obtaining an endorser who does not have an adverse credit history and we estimate that burden will increase by 13,114 hours (17,485 approved requests multiplied by 0.75 hours per enhanced PLUS loan counseling session).

We estimate a total increase of 98,336 hours of burden for parent PLUS applicants at private non-profit institutions (56,192 hours for the collection and submission of documentation of existing extenuating circumstances or to obtain an endorser who does not have an adverse credit history, plus an additional 29,030 hours of enhanced counseling for parent applicants who qualify for a loan after demonstrating that extenuating circumstances exist, and an additional 13,114 hours of enhanced counseling for parent applicants who receive a loan after obtaining an endorser who does not have an adverse credit history) under OMB Control Number 1845-0129.

Of the 361,894 applicants for PLUS loans to pay for attendance at public institutions whose applications were denied, our data show that there were 78,039 parents borrowers who received a loan after an initial denial of a PLUS loan using the extenuating circumstances process review or after obtaining an endorser who does not have an adverse credit history. Of the 78,039 PLUS applicants, 57,706 were approved by documenting that extenuating circumstances exist and 20,333 parent applicants were approved after the applicant obtained an endorser who does not have an adverse credit history.

Our data show that there were 57,706 parent borrowers who were approved for a loan based on documentation of existing extenuating circumstances and we estimate that the burden will increase by 43,280 hours (57,706 approved requests multiplied by 0.75 hours per enhanced loan counseling session). Our data show that there were 20,333 parent applicants who received a loan after obtaining an endorser who does not have an adverse credit history, and we estimate that burden will increase by 15,250 hours (20,333 approved requests multiplied by 0.75 hours per enhanced loan counseling session).

We estimate a total increase of 136,569 hours of burden for parent PLUS applicants at public institutions (78,039 hours for the collection and submission of documentation of existing extenuating circumstances or to obtain an endorser who does not have an adverse credit history, plus an additional 43,280 hours of enhanced counseling for parent applicants who qualify for a loan after demonstrating that extenuating circumstances exist, and an additional 15,250 hours of enhanced counseling for parent applicants who received a loan after obtaining an endorser who does not have an adverse credit history) under OMB Control Number 1845-0129.

Of the 687 applicants for parent PLUS loans to pay for attendance at foreign institutions whose applications were denied, our data show that there were 308 parent borrowers who received a loan after the initial denial of a PLUS loan using the extenuating circumstances process review or after obtaining an endorser who does not have an adverse credit history. Of the 308 PLUS applicants, 189 were approved by documenting that extenuating circumstances exist and 119 parent applicants were approved after the applicant obtained an endorser who did not have an adverse credit history.

Our data show that there were 189 parent borrowers who were approved for a loan based on documentation of existing extenuating circumstances and we estimate that the burden will increase by 142 hours (189 approved requests review multiplied by 0.75 hours per enhanced loan counseling session). Our data show that there were 119 parent applicants who received a loan after obtaining an endorser who does not have an adverse credit history and we estimate that burden will increase by 89 hours (119 approved requests multiplied by 0.75 hours per enhanced loan counseling session).

We estimate a total increase of 539 hours of burden for parent PLUS loan applicants at foreign institutions (308 hours for the collection and submission of documentation of extenuating circumstances or to obtain an endorser who does not have an adverse credit history, plus an additional 142 hours for enhanced counseling for parent PLUS loan applicants who qualify for a loan after demonstrating extenuating circumstances and an additional 89 hours of enhanced counseling for applicants who receive a loan after obtaining an endorser who does not have an adverse credit history) under OMB Control Number 1845-0129.

The total increase in burden for § 685.200(c)(2)(viii)(A)( 2 ) and ( 3 ) will be 253,784 hours under OMB Control Number 1845-0129.

Overall, burden would increase by 352,047 hours under OMB Control Number 1845-0129.

Consistent with the discussion above, the following chart describes the sections of these final regulations involving information collections, the information being collected, the collections that the Department will submit to OMB for approval, and the estimated costs associated with the information collections. The monetized net costs of the increased burden on applicants and borrowers, using wage data developed using BLS data, available at www.bls.gov/ncs/ect/sp/ecsuphst.pdf, is $5,738,366, as shown in the chart below. This cost was based on an hourly rate of $16.30 for applicants and borrowers.

In the NPRM we requested comments on whether the proposed regulations would require transmission of information that any other agency or authority of the United States gathers or makes available.

Based on the response to the NPRM and 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 .

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For the reasons discussed in the preamble, the Secretary of Education amends part 685 of title 34 of the Code of Federal Regulations as follows:

For the purpose of this document, we are giving meaning to certain words or abbreviations described here. The words or abbreviation “the Act” or “CAA” mean or refer to the Clean Air Act, unless the context indicates otherwise. The terms “we,” “us,” and “our” refer to the United States Environmental Protection Agency.

Ground-level ozone is formed when oxides of nitrogen (NO X ) and volatile organic compounds (VOC) react in the presence of sunlight. Referred to as ozone precursor compounds, these two pollutants are emitted by many types of pollution sources, including on- and off-road motor vehicles and engines, power plants and industrial facilities, and area-wide sources, such as consumer products and lawn and garden equipment. Scientific evidence indicates that adverse public health effects occur following a person's exposure to ozone, particularly children and adults with lung disease. Breathing air containing ozone can reduce lung function and inflame airways, which can increase respiratory symptoms and aggravate asthma or other lung diseases. 1 As a consequence of this scientific evidence, we promulgated the 0.12 part per million (ppm) 1-hour ozone National Ambient Air Quality Standard (NAAQS) in 1979 (44 FR 8202, February 8, 1979).

On July 18, 1997, EPA promulgated a revised ozone NAAQS of 0.08 ppm, averaged over eight hours (62 FR 38855). This standard was determined to be more protective of public health and more stringent than the previous 1979 1-hour ozone standard. On April 30, 2004, we designated areas as attaining or not attaining the 1997 8-hour ozone NAAQS and classified Imperial County as a marginal non-attainment area with an applicable attainment date of June 15, 2007 (69 FR 23858). On February 13, 2008, EPA found that Imperial County failed to attain the 1997 8-hour ozone standard by this June 15, 2007 deadline (73 FR 8209). Consequently, Imperial County was reclassified by operation of law as a moderate ozone non-attainment area with a new attainment date of as expeditiously as practicable, but no later than June 15, 2010.

Subsequently, EPA revised the 8-hour ozone NAAQS from 0.08 to 0.075 ppm (73 FR 16436, March 27, 2008). We finalized designations for the 2008 8-hour ozone standard on May 21, 2012 (77 FR 30088). Imperial County was designated marginal for the more stringent 8-hour ozone standard. In a separate and future rulemaking, EPA will finalize the requirements that must be implemented as part of meeting the 2008 8-hour ozone standard. 2 In this action today, however, we are addressing requirements related to the 1997 8-hour ozone NAAQS only.

On December 3, 2009, EPA published our determination that Imperial County had met the 1997 8-hour ozone NAAQS based on certified ambient air monitoring data for the 2006-2008 monitoring period (74 FR 63309). 3 Pursuant to 40 CFR 51.918 and this clean data determination, EPA suspended the requirements for Imperial County and California to submit the following air quality plan elements: An attainment demonstration, reasonably available control measures, a reasonable further progress plan, and contingency measures. These requirements remain suspended for so long as Imperial County continues to attain the 1997 8-hour ozone NAAQS. Under CAA section 172(c)(3), Imperial County is required to submit emissions inventories for VOC and NO X . These ozone precursor emissions inventories are the subject of today's action.

On December 21, 2010, California submitted Imperial County's “Final 2009 1997 8-hour Ozone Modified Air Quality Management Plan” (2009 Ozone AQMP) to EPA for incorporation into the SIP. 4 Imperial County adopted the 2009 Ozone AQMP on July 13, 2010 and the California Air Resources Board (CARB) adopted the plan on November 18, 2010. 5 The Imperial County and CARB adoptions were each preceded by a 30-day public comment period, therefore, the State has met the requirement for adequate public notice.

As explained earlier, the elements of California's 2009 Ozone AQMP that we are acting on today consist of 2002 base year VOC and NO X emissions inventories. These emissions inventories and the 2009 Ozone AQMP as a whole were complete by operation of law on June 21, 2011. 6

EPA is approving the 2002 VOC and NO X emissions inventories elements of the 2009 Ozone AQMP that California submitted to address moderate nonattainment area requirements for Imperial County under the 1997 8-hour ozone NAAQS. Our rationale and basis for this action is discussed below.

A comprehensive, accurate and current inventory of actual emissions from all sources of the relevant pollutant or pollutants is required by CAA sections 172(c)(3). Imperial County's 2009 Ozone AQMP includes complete VOC and NO X emissions inventories for the base year of 2002. 7 Emissions from different source types vary by season, time of day, or day of the week. The months from May through October are known as the “summer planning inventory” and are the months when ozone formation is pronounced and exceedances of ozone air quality standards are most likely to occur. Consequently, California used the summer planning emissions inventory for the 2009 Ozone AQMP to provide a worst case representation and a daily emissions inventory in tons per day (tpd). This summer planning inventory includes data for the pollutants reactive organic gas (ROG) and NO X , the two primary precursors in the formation of ground-level ozone pollution. 8 We have summarized Imperial County's 2002 base year emissions inventories for ozone precursors in Table 1.