supporting statement.1845-0022

SUPPORTING STATEMENT

Information Collections Under the Final Regulations Governing the Student Assistance General Provisions.

A. Justification

1. Necessity of Information Collected

The General Provisions regulations revise current regulations in the areas of program administration.

These final regulations are a result of regulatory review of the program regulations to reduce administrative burden for program participants, provide benefits to Title IV, HEA program recipients, and protect the taxpayers' interest. This request is for approval of reporting and recordkeeping requirements contained in the attached regulations related to the General Provisions administrative requirements for the Title IV, HEA programs. The information collection requirements in these regulations are necessary to determine eligibility to receive program benefits and to prevent fraud and abuse of program funds.

General Provisions: (OMB control number: 1845-0022)

Sections 668.4, 668.10, 668.22, 668.164, 668.165, 674.16, 676.16, 682.200, 682.603, 682.604, 685.301, 685.303, contain information collection requirements. Sections 668.3, 668.183 and 668.193 also contain information collection requirements but are currently approved by OMB. The Department is requesting continued approval for these sections.

The following changes were made to these sections:

Sections 668.4, 668.22, 668.164, 682.200, 682.604, 685.301 -- Payment periods and disbursements of Title IV grant and loan funds.

These regulations would, with few exceptions, align disbursements for all Title IV grant and loan programs by making a number of changes to the payment period definitions and disbursement requirements for all Title IV grant and loan programs.

Inconsistent requirements for disbursing Title IV grant and loan funds for certain types of programs can result in a student receiving the subsequent disbursements of his or her grant funds or Perkins Loan funds at a different point in time than second disbursements of his or her FFEL or Direct Loan funds. The regulations align Title IV disbursements to the same point in time and thus reduce burden for institutions and students. Changes to the regulations that would achieve greater consistency in the timing of the disbursements of Title IV grant and loan funds are proposed to reduce this burden and confusion for institutions and students. These proposed changes include (1) specifying that an institution must disburse all Title IV grant and loan funds on a payment period basis; (2) requiring, generally, that an institution disburse all Title IV grant and loan funds once each payment period; (3) adding a time component to the payment period definitions for clock hour programs to make the disbursements of Title IV grant and Perkins Loan funds conform with the disbursements of FFEL and Direct Loan funds, which must, by law, include a time component; (4) using weeks of instructional time as the time component for determining all Title IV grant and loan disbursements; (5) removing the institutional option to have more than two payment periods for nonterm credit hour programs and clock hour programs; and (6) extending to clock hour programs the provision that addresses how to identify the end of a payment period when an institution is unable to determine whether a student in a nonterm credit hour program has completed half the credit hours in a program, academic year, or remainder of a program.

The changes will decreased burdens for schools and students.

Section 668.22 –- Post-withdrawal disbursements of grant funds directly to a student.

The regulations eliminate the current requirement that an institution notify a student who has withdrawn from school, and receive confirmation from the student, before making a post-withdrawal disbursement of Title IV grant funds directly to the student. Generally, since Title IV grant funds are the foundation of Title IV funds awarded to students for their educational costs, often few of these grant funds remain after direct costs are paid. However, when the amount of Title IV grants exceeds a student’s costs as a post-withdrawal disbursement, the amount would be paid directly to the student. The regulations eliminate the requirement for the institution to send notification of the direct disbursement to the student and waiting for the student’s confirmation that the direct disbursement of the Title IV grant funds are needed. Therefore, burden associated with the current notification and confirmation process is eliminated, thus under the proposed rule, the student would receive his or her direct disbursement of Title IV grant funds from a post-withdrawal disbursement more rapidly.

A change makes post-withdrawal disbursement of Title IV loan proceeds which, although retaining the borrower notice and confirmation process currently set out in the regulations, requires the disbursement “as soon as possible” but no later than 120 days after determination of the student’s withdrawal.

The changes to the requirements for disbursement of post-withdrawal grant proceeds reduce burden to the institutions by eliminating a notification and confirmation process, in those cases where the student is eligible to receive a disbursement of Title IV grant funds directly. Adding the language “as soon as possible” to the existing 120-day limit for disbursement of post-withdrawal Title IV loan proceeds will have no affect on paperwork burden.

2. Purpose and Use of Information Collected

General Provisions:

The information collected, recorded, and/or disclosed in §668.22 will continue to be used as necessary in the calculation of earned and unearned portions of Title IV funds when a student does not complete the payment period or period of enrollment for which he or she received Title IV program assistance, or was eligible to receive Title IV program assistance. The information collected, recorded, and/or disclosed in §§668.183 and 668.193 will continue to be used as necessary in the calculation of cohort default rates. If we did not require the collection, recordation, and/or disclosure of information as specified in §§668.183 and 668.193, we would not be able to calculate cohort default rates.

3. Consideration of Improved Information Technology

General Provisions:

We maximize the use of available technology in determining the earned and unearned amounts of Title IV funds when a student withdraws and for calculating cohort default rates. This effort reduces some of the burden associated with the calculation for the Return of Title IV Funds. This effort also extends to requirements that the cohort default rate regulations impose on schools.

4. Efforts to Identify Duplication

A thorough review of procedures indicates that current requirements are minimal and avoid duplication. This review was done in conjunction with affected parties who have a vested interest in eliminating duplication.

5. Burden Minimization as Applied to Small Business

No small businesses are impacted by this collection.

6. Consequences of Less Frequent Data Collection

Recordkeeping requirements are imposed to assure accountability of program participants for proper program administration and less frequent collection could impair accountability of program participants.

7. Special Circumstances Governing Data Collection

The collection of this information will be conducted in a manner that is consistent with the guidelines in 5 CFR 1320.5(d)(2).

8. Consultation Outside the Agency

The Notice of Proposed Rulemaking (NPRM) has been published in the Federal Register for comment. The public has been the provided the opportunity to comment on this collection at the same time. The Final regulation was published on Nov. 1, 2007.

9. Payments or Gifts to Respondents

No payments or gifts will be provided to the respondents.

10. Assurance of Confidentiality

A Privacy Act Notice is included on the Application Form and Promissory Note. In this notice, the borrower is informed of the statutory authority for collecting the information requested. Although disclosure of the information is voluntary, the borrower is informed that in order to be considered for Perkins Loan, FFEL, or Direct Loan Program funds, the information must be provided. The information provided is used to verify the borrower's identity, to determine the borrower's eligibility to receive an Perkins Loan, FFEL, or Direct Loan Program loan and benefits, to permit the servicing of the borrower's loan(s), and to locate the borrower and collect on the loan(s) if the loan(s) become delinquent or default. A listing of the persons and entities to which the information may be disclosed and for what purposes the information may be disclosed is also included.

11. Questions of Sensitive Nature

The Department is not requesting any sensitive data.

12. Annual Hour Burden for Respondents/Recordkeepers.

General Provisions:

Sections 668.4, 668.22, 668.164, 682.200, 682.604, 685.301 -- Payment periods and disbursements of Title IV grant and loan funds.

These regulations, with few exceptions, align disbursements for all Title IV grant and loan programs by making a number of changes to the payment period definitions and disbursement requirements for all Title IV grant and loan programs.

Inconsistent requirements for disbursing Title IV grant and loan funds for certain types of programs can result in a student receiving the subsequent disbursements of his or her grant funds or Perkins Loan funds at a different point in time than second disbursements of his or her FFEL or Direct Loan funds. The regulations align Title IV disbursements to the same point in time and thus reduce burden for institutions and students. Changes to the regulations that achieve greater consistency in the timing of the disbursements of Title IV grant and loan funds reduce this burden and confusion for institutions and students. These changes include (1) specifying that an institution must disburse all Title IV grant and loan funds on a payment period basis; (2) requiring, generally, that an institution disburse all Title IV grant and loan funds once each payment period; (3) adding a time component to the payment period definitions for clock hour programs to make the disbursements of Title IV grant and Perkins Loan funds conform with the disbursements of FFEL and Direct Loan funds, which must, by law, include a time component; (4) using weeks of instructional time as the time component for determining all Title IV grant and loan disbursements; (5) removing the institutional option to have more than two payment periods for nonterm credit hour programs and clock hour programs; and (6) extending to clock hour programs the provision that addresses how to identify the end of a payment period when an institution is unable to determine whether a student in a nonterm credit hour program has completed half the credit hours in a program, academic year, or remainder of a program.

The changes will decrease burdens for schools and students, which will be reflected in OMB Control Number 1845-0022.

Burden Hour Assessment:

# of R2T4 OTW calculations: 52,467

Est. # of other R2T4

calculations X 2.56

Annual est. # of R2T4

calculations 134,316

# of R2T4 calculations

in the current inventory: +_ 15,650

Total R2T4 calculations: 149,966

burden per calculation X 1 hour

Burden for total

R2T4 calculations 149,966 hours

Est. % affected by

proposed regulation X .12 %

17,996 hours of burden reduction

Affected Entities:

INDIVIDUALS:

17,996 hours of burden reduction X 20% = 3,599 hours

INSTITUTIONS:

17,996 hours of burden reduction X 80% = 14,397 hours

17,996 hours

Respondents, Responses and Burden Hours:

# of Respondents # of Responses #Hrs/Response #Hrs

Burden

134,316 149,966 .12 hours - 17,996

Section 668.22 –- Post-withdrawal disbursements of grant funds directly to a student.

The regulations eliminate the current requirement that an institution notify a student who has withdrawn from school, and receive confirmation from the student, before making a post-withdrawal disbursement of Title IV grant funds directly to the student. Generally, since Title IV grant funds are the foundation of Title IV funds awarded to students for their educational costs, often few of these grant funds remain after direct costs are paid. However, when the amount of Title IV grants exceeds a student’s costs as a post-withdrawal disbursement, the amount would be paid directly to the student. The regulations eliminates the requirement for the institution to send notification of the direct disbursement to the student and waiting for the student’s confirmation that the direct disbursement of the Title IV grant funds are needed. Therefore, burden associated with the current notification and confirmation process is eliminated, thus under the rule, the student would receive his or her direct disbursement of Title IV grant funds from a post-withdrawal disbursement more rapidly.

A change is made to the post-withdrawal disbursement of Title IV loan proceeds which, although retaining the borrower notice and confirmation process currently set out in the regulations, requires the disbursement “as soon as possible” but no later than 120 days after determination of the student’s withdrawal.

The changes to the requirements for disbursement of post-withdrawal grant proceeds reduce burden to the institutions by eliminating a notification and confirmation process, in those cases where the student is eligible to receive a disbursement of Title IV grant funds directly. The reduction in burden will be reflected in OMB 1845-0022. Adding the language “as soon as possible” to the existing 120-day limit for disbursement of post-withdrawal Title IV loan proceeds will have no affect on paperwork burden.

Current Inventory:

# of Respondents attributable to

Return to Title IV Funds (R2T4) 18,150

# of R2T4 OTW calculations: 52,467

Est. # of other R2T4

calculations X 2.56

Total Est. # of R2T4

calculations 134,316

New respondents attributable to

R2T4 + 134,316

Total # Respondents 152,466

# of Respondents with a post-withdrawal

disbursement consisting of Title

IV grant funds not used to pay

direct costs X .01 hours

# of affected respondents 1,525

Amount of burden reduction X .33 hours

503 hours

Affected Entities:

INDIVIDUALS:

503 burden hours X 40% = 201 hours of burden reduction

INSTITUTIONS:

503 burden hours X 60% = 302 hours of burden reduction

503 hours

Respondents, Responses and Burden Hours:

# of Respondents # of Responses #Hrs/Response #Hrs

Burden

152,466 1,525 .33 - 503

13. Annual Cost Burden to Respondents

General Provisions:

Previously, burden to the government was incorrectly reported here, but has been reduced to zero.

14. Estimated Annual Cost to the Federal Government

There are no additional costs to the Federal government as a result of the final regulations.

15. Reasons for Changes to Burden Hour Estimated

Current Burden Inventory:

	OMB 1845-0022 Version 3.0
#	Reg Section	# of respondents	Hrs/response	Burden hours
1	668.3	1200	5	6000
2	668.8	80	1	80
		80	1	80
3	668.12	2398	1	2398
		200	0.25	50
4	668.13	10	3	30
5	668.14	2000	1	2000
6	668.16	8500	6	51000
7	668.19	17600	0.17	2934
8	668.22	300	4	1200
		850	2	1700
		8500	1	8500
		8500	0.5	4250
	Sub-total
	for 668.22	18150		15650
9	668.23	10000	1	10000
		400	1	400
10	668.24	10000	79.9	798164
11	668.25	5000	1	5000
12	668.26	400	3	1200
13	668.32			0
14	668.33			0
15	668.34			0
16	668.37			0
17	668.42	8500	0.5	4250
		8500	3	25500
18	668.43	8500	0.5	4250
19	668.46	8500	4	34000
		8500	25	212500
20	668.90	30	161	4830
		45	5	225
21	668.96	160	4	640
22	668.98	15	8	120
23	668.113	120	1	120
24	668.124	15	8	120
25	668.171	2125	1	2125
26	668.174	5	0.5	2.5
27	668.175	964	0.25	424.5
28	668.181	160	128	20480
29	668.182	20	96	1920
30	668.183	20	16	320
31	668.184	320	0.5	175
32	668.185	16	3	48
33	668.186 thru	9	281.56	2534
	668.198
	Total	122,582		1,209,890

Summary Current Burden Inventory:

Respondents, Responses and Burden Hours:

# of Respondents # of Responses #Hrs

Burden

122,582 93,877 1,209,890

The implementation of the proposed regulations as a result of the Negotiated Rulemaking process created additional information collections burden. A summary below is provided:

New Burden Associated with the regulatory changes:

Respondents, Responses and Burden Hours:

# of Respondents # of Responses # Hrs/Response #Hrs

Burden

Sections 668.4, 668.22, 668.164, 682.200, 682.604, 685.301 -- Payment periods and disbursements of Title IV grant and loan funds

134,316 149,966 .12 -17,996

Section 668.22 – Post-withdrawal disbursements of grant funds directly to a student

152,466 1,525 .33 -503

Sub-total:

# of Respondents # of Responses #Hrs

Burden

286,782 151,491 -18,499

Revised Burden Inventory:

Respondents, Responses and Burden Hours:

# of Respondents # of Responses #Hrs

Burden

409,364 245,368 1,191,391

16. Collection of Information with Published Results

The results of the collection of information will not be published.

17. Approval to Not Display Expiration Date

ED is not seeking this approval.

18. Exception to the Certification Statement

ED is not requesting any exceptions to the "Certification for Paperwork Reduction Act Submissions".

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