[Federal Register Volume 87, Number 196 (Wednesday, October 12, 2022)]
[Rules and Regulations]
[Pages 61512-61514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-22205]


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DEPARTMENT OF EDUCATION

34 CFR Parts 674, 682, and 685


Federal Student Aid Programs (Federal Perkins Loan Program, 
Federal Family Education Loan Program, and William D. Ford Federal 
Direct Loan Program)

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Waivers and modifications of statutory and regulatory 
provisions.

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SUMMARY: The Secretary of Education (Secretary) is issuing updated 
waivers and modifications of statutory and regulatory provisions 
governing the Federal student financial aid programs under the 
authority of the Higher Education Relief Opportunities for Students Act 
of 2003 (HEROES Act or Act). The waivers and modifications in this 
document apply only to the national emergency concerning the 
coronavirus disease 2019 (COVID-19 pandemic).

DATES: The waivers and modifications of statutory and regulatory 
provisions are effective October 12, 2022. Unless specifically noted 
within a waiver or modification identified below, a waiver or 
modification identified in this document expires at the end of the 
award year in which the COVID-19 national emergency expires, unless the 
waiver or modification is otherwise extended by the Secretary in a 
document published in the Federal Register.

FOR FURTHER INFORMATION CONTACT: Richard Blasen, by telephone: (202) 
987-0315 or by email: [email protected].
    If you are deaf, hard of hearing, or have a speech disability and 
wish to access telecommunications relay services, please dial 7-1-1.

SUPPLEMENTARY INFORMATION: On December 11, 2020, the Secretary 
published a document in the Federal Register announcing waivers and 
modifications of statutory and regulatory requirements governing the 
Federal student financial aid programs under the authority of the 
HEROES Act, as codified at 20 U.S.C. 1098aa-1098ee. 85 FR 79856 (Dec. 
11, 2020). On January 19, 2021, the Secretary published corrections to 
those updated waivers and modifications. 86 FR 5008 (Jan. 19, 2021). 
The Secretary is issuing this document to provide certain updated 
waivers and modifications under the HEROES Act.
    The HEROES Act authorizes the Secretary to waive or modify any 
statutory or regulatory provision applicable to the Federal student 
financial assistance programs under title IV of the Higher Education 
Act of 1965, as amended (HEA), 20 U.S.C. 1070 et seq., as the Secretary 
deems necessary in connection with a war or other military operation or 
national emergency to fulfill certain purposes enumerated in the 
statute. 20 U.S.C. 1098bb(a). Such waivers or modifications may be 
provided to affected individuals who are recipients of Federal student 
financial assistance under title IV of the HEA; and to institutions of 
higher education (IHEs), eligible lenders, guaranty agencies (GAs), and 
other entities participating in the Federal student financial 
assistance programs under title IV of the HEA that are located in areas 
declared disaster areas by any Federal, State, or local official in 
connection with a national emergency, whose operations are 
significantly affected by such a disaster (affected entities). Id. 
1098bb(a)(2)(A), (E). Affected individuals include, among others, any 
individual who ``resides or is employed in an area that is declared a 
disaster area by any Federal, State, or local official in connection 
with a national emergency'' or any individual who ``suffered direct 
economic hardship as a direct result of a . . . national emergency, as 
determined by the Secretary.'' Id. 1098ee(2)(C), (D). The Secretary may 
issue waivers and modifications ``as may be necessary to ensure that'' 
such individuals ``are not placed in a worse position financially in 
relation to [their] financial assistance because of their status as 
affected individuals.'' Id. 1098bb(a)(2)(A). Affected entities ``may be 
granted temporary relief from requirements that are rendered infeasible 
or unreasonable by a national emergency, including due diligence 
requirements and reporting deadlines.'' Id. 1098bb(a)(2)(E).
    In 20 U.S.C. 1098bb(b)(1), the HEROES Act further provides that 
section 437 of the General Education Provisions Act (20 U.S.C. 1232) 
and section 553 of the Administrative Procedure Act (5 U.S.C. 553) do 
not apply to this waiver or modification of student financial 
assistance program provisions.
    The Department recently published a memorandum outlining its 
interpretation of the HEROES Act. See Notice of Debt Cancellation Legal

[[Page 61513]]

Memorandum, 87 FR 52943 (Aug. 30, 2022). That memorandum explained why 
a January 2021 memorandum authored by a former Principal Deputy General 
Counsel was substantively and procedurally deficient. See id. at 52944-
45 & n.5.
    On March 13, 2020, by Proclamation 9994, 85 FR 15337, the President 
declared a national emergency concerning the COVID-19 pandemic, which 
was extended on February 24, 2021 (86 FR 11599), and February 18, 2022 
(87 FR 10289). The waivers and modifications provided in this document 
apply only to the declared national emergency due to the COVID-19 
pandemic. Prior waivers granted by the Secretary under this Act remain 
in effect for affected individuals and affected entities, as defined in 
those waivers.
    In 20 U.S.C. 1098ee, the HEROES Act provides definitions critical 
to determining whether a person is an ``affected individual'' under the 
Act and, if so, which waivers and modifications apply to the affected 
individual. As noted above, the term ``affected individual'' includes 
any individual who ``resides or is employed in an area that is declared 
a disaster area by any Federal, State, or local official in connection 
with a national emergency'' or ``any individual who ``suffered direct 
economic hardship as a direct result of a national emergency, as 
determined by the Secretary.'' 20 U.S.C. 1098ee(2)(C), (D). Because the 
COVID-19 pandemic has been declared and continues to be a national 
emergency, and because the Federal Government has declared every State, 
the District of Columbia, and all five permanently populated United 
States territories to be disaster areas due to COVID-19, the ``affected 
individuals'' for purposes of the waivers and modifications described 
in this document include any person with a Federal student loan under 
title IV of the HEA.
    Next, the Act describes in 20 U.S.C. 1098bb(a)(2) the purposes for 
which the Secretary may grant relief to ``affected individuals.'' As 
relevant here, the Secretary may waive or modify statutory and 
regulatory provisions ``as may be necessary to ensure'' that 
``recipients of student financial assistance under title IV of the 
[HEA] who are affected individuals are not placed in a worse position 
financially in relation to that financial assistance because of their 
status as affected individuals.'' 20 U.S.C. 1098bb(a)(2)(A). The 
statute also authorizes the Secretary to minimize administrative 
requirements placed on affected individuals who are recipients of 
student financial assistance to the extent possible without impairing 
the integrity of the student financial assistance programs, to ease the 
burden on such individuals and avoid inadvertent technical violations 
or defaults. Id. 1098bb(a)(2)(B).
    The Secretary determined that the financial harm caused by the 
COVID-19 pandemic has made the waivers and modifications described in 
this document necessary to ensure that affected individuals are not 
placed in a worse position financially with respect to their student 
loans because of that harm.\1\ The Secretary further determined that 
the modifications and waivers as described in this document will help 
minimize the administrative burdens placed on affected individuals. The 
Secretary is publishing this document in the Federal Register in 
accordance with 20 U.S.C. 1098bb(b)(1). The waivers and modifications 
are discussed further below:
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    \1\ https://studentaid.gov/debt-relief-announcement.
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     The automatic suspension of payment and application of a 
zero percent interest rate for affected individuals with federally held 
Direct Loans, federally held Federal Family Education Loans (FFEL), 
federally held Perkins Loans, federally held Health Education 
Assistance Loans (HEAL), and defaulted FFEL loans subject to collection 
by a guaranty agency are further extended until December 31, 2022. The 
automatic suspension of payment and the application of a zero percent 
interest rate on loans held by the Department were extended to October 
1, 2020, under the Coronavirus Aid, Relief, and Economic Security 
(CARES) Act.\2\ The Secretary previously extended those benefits 
through August 31, 2022, and on August 24, 2022, the Secretary 
announced the extension of those benefits through December 31, 2022. 
Affected individuals will be required to make payments on their loans 
beginning in January 2023.
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    \2\ https://www.congress.gov/bill/116th-congress/house-bill/748/text.
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     On August 24, 2022, the Secretary announced that he 
intended to discharge loans to address the financial hardship arising 
out of the COVID-19 pandemic on individuals who owe student loans. 
Specifically, the Department announced it intended to discharge certain 
amounts of Federal Direct Loans and FFEL loans held by the Department 
or subject to collection by a guaranty agency and Federal Perkins Loans 
held by the Department (covered loans). The Department announced that, 
subject to certain income limitations, it intended to discharge up to a 
total of $20,000 in covered loans for affected individuals who received 
Pell Grants and up to a total of $10,000 in covered loans for affected 
individuals who did not receive a Pell Grant. Granting relief on a 
class-wide basis in this manner will also minimize administrative 
burdens and thus ``ease the burden'' on students who are affected 
individuals. 20 U.S.C. 1098bb(a)(2)(B); see also id. 1098bb(b)(3) 
(authorizing class-wide relief).
    Prior waivers granted by the Secretary under the HEROES Act that 
are not otherwise mentioned in this document remain in effect for 
affected individuals, as defined in those waivers. See 85 FR 79856; 86 
FR 5008.

Waiver Granted Under the Heroes Act in Response to the COVID-19 
Pandemic

Suspension of Payments Under Section 3513 of the CARES Act

    Section 3513 of the CARES Act directs the Secretary to: (1) suspend 
all payments due, (2) cease interest accrual, and (3) suspend 
involuntary collections for loans that are held by the Department and 
made under parts D and B of title IV of the HEA through September 30, 
2020. The section also directs the Secretary to deem each month for 
which a loan payment was suspended as if the borrower of the loan had 
made a payment for the purpose of any loan forgiveness program or loan 
rehabilitation program authorized under parts D or B for which the 
borrower would have otherwise qualified. Lastly, this section directs 
the Secretary to ensure that, for the purpose of reporting information 
about the loan to a consumer reporting agency, any payment that has 
been suspended is treated as if it were a regularly scheduled payment 
made by a borrower.
    On August 8, 2020, President Donald J. Trump issued a memorandum 
directing the Secretary to continue to waive interest and payments on 
such loans until December 31, 2020. On December 4, 2020, at the 
direction of President Trump, the Department further extended the 
payment pause to January 31, 2021. On January 21, 2021, at the 
direction of President Joseph R. Biden, the Department further extended 
the pause through September 30, 2021. On August 6, 2021, the President 
authorized the Secretary to use his authority under the HEROES Act to 
extend the benefits provided under section 3513 of the CARES Act until 
January 31, 2022, for borrowers with federally held Perkins, HEAL, 
Direct, and FFEL loans. President Biden announced on December 22, 2021, 
that the Secretary would extend the waiver

[[Page 61514]]

on interest and payments on such loans through May 1, 2022, and the 
Secretary further extended the benefits until August 31, 2022. 
Following these prior announcements, on August 24, 2022, the Secretary 
announced he was using his authority under the HEROES Act to modify the 
terms of the CARES Act to extend the waiver on interest and payments on 
such loans through December 31, 2022.\3\
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    \3\ https://studentaid.gov/debt-relief-announcement.
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    The Secretary extends those waivers and modifications specified in 
the December 11, 2020, Federal Register document (85 FR 79856), that 
relate to the payment and collection of, and accumulation of interest 
on, Federal student loans, through December 31, 2022. The Department 
further extends the corresponding pause for FFEL loans held by guaranty 
agencies, as discussed in Dear Colleague Letter GEN-21-03, through 
December 31, 2022.

Debt Discharge

    Pursuant to the HEROES Act, 20 U.S.C. 1098bb(a)(1), the Secretary 
modifies the provisions of: 20 U.S.C. 1087, which applies to the Direct 
Loan Program under 20 U.S.C. 1087a and 1087e; 20 U.S.C. 1087dd(g); and 
34 CFR part 674, subpart D, and 34 CFR 682.402 and 685.212 to provide 
that, notwithstanding any other statutory or regulatory provision, the 
Department will discharge the balance of a borrower's eligible loans up 
to a maximum of: (a) $20,000 for borrowers who received a Pell Grant 
and had an Adjusted Gross Income (AGI) below $125,000 for an individual 
taxpayer or below $250,000 for borrowers filing jointly or as a Head of 
Household, or as a qualifying widow(er) in either the 2020 or 2021 
Federal tax year; or (b) $10,000 for borrowers who did not receive a 
Pell Grant and had an AGI on a Federal tax return below $125,000 if 
filed as an individual or below $250,000 if filed as a joint return or 
as a Head of Household,\4\ or as a qualifying widow(er) in either the 
2020 or 2021 Federal tax year. This waiver is applicable to borrowers 
with eligible loans who apply by the deadline established by the 
Secretary (to the extent an application is required) and who are 
determined to be eligible by the Department. Borrowers who are eligible 
for relief without applying will have the option to opt out of the 
program. Eligible loans include the following categories of loans, 
provided they were disbursed by June 30, 2022: Direct Loans, FFEL loans 
held by the Department or subject to collection by a guaranty agency, 
and Perkins Loans held by the Department.
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    \4\ Adjusted Gross Income is defined as in 26 Internal Revenue 
Code (I.R.C.) 61-62. Head of Household is defined in 26 I.R.C. 2.
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    Direct Consolidation loans disbursed after June 30, 2022, and for 
which the repaid loans were loans described in the paragraph above, are 
also eligible for relief. However, Direct Consolidation loans disbursed 
after June 30, 2022, and for which the repaid loans include a FFEL loan 
not held by ED, are only eligible for relief if the borrower submitted 
an application to consolidate such loans prior to September 29, 2022.
    Accessible Format: On request to Robin Moss, by telephone: (202) 
453-7106 or by email: [email protected], individuals with disabilities 
can obtain this document in an accessible format. The Department will 
provide the requestor with an accessible format that may include Rich 
Text Format (RTF) or text format (txt), a thumb drive, an MP3 file, 
braille, large print, audiotape, or compact disc, or other accessible 
format.
    Electronic Access to This Document: The official version of this 
document is the document published in the Federal Register. You may 
access the official edition of the Federal Register and the Code of 
Federal Regulations at www.govinfo.gov. At this site you can view this 
document, as well as all other documents of this Department published 
in the Federal Register, in text or Portable Document Format (PDF). To 
use PDF, you must have Adobe Acrobat Reader, which is available free at 
the site.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.
    (Assistance Listing Numbers: 84.032 Federal Family Education Loan 
Program; 84.038 Federal Perkins Loan Program; 84.063 and 84.268 William 
D. Ford Federal Direct Loan Program.)
    Program Authority: 20 U.S.C. 1071, 1082, 1087a, 1087aa, Part F-1.

Nasser H. Paydar,
Assistant Secretary for Postsecondary Education.
[FR Doc. 2022-22205 Filed 10-11-22; 8:45 am]
BILLING CODE 4000-01-P