Federal Family Education Loan Program -- state, local, or tribal gov't

1845-0020 Affected Public – State, Local or Tribal Governments 6/5/2015

The Department of Education (Department) recently held a series of Negotiated Rulemaking meetings to discuss with members of the affected communities and the public the need for changes to the current regulations on a variety of topics. These negotiations led to proposed changes to 34 CFR 682.405. The Department is requesting a revision of the current information collection as follows.

These Federal Family Education Loan (FFEL) Program regulations revise the current regulations. The proposed regulations would require a guaranty agency to engage in outreach to a borrower with whom it has entered into a rehabilitation agreement to ensure that the borrower understands the repayment options that will be available to the borrower after the borrower has successfully rehabilitated the defaulted loan.

Under 34 CFR 682.405, guaranty agencies will be required to communicate with borrowers with whom they have entered into a rehabilitation agreement to ensure that borrowers are fully aware of the repayment options that are available to them upon successfully completing their loan rehabilitation and to help the borrower choose a plan prior to rehabilitating the defaulted FFEL Program loan.

There are approximately 2,611,504 borrowers of FFEL Program loans who are in default, of which 799,904 have loans held by 20 public guaranty agencies. Of those borrowers, approximately 4.79 percent of those borrowers enter into a rehabilitation agreement with a guaranty agency to rehabilitate their default FFEL Program loans. Therefore, public guaranty agencies administer rehabilitation agreements with 38,315 borrowers.

We estimate that it will take a guaranty agency 10 minutes (0.17 hours) per borrower to send the required communication to a borrower and respond to borrower inquiries generated by the communication.

Under §682.405, for the 20 public guaranty agencies, we estimate that this regulation will increase burden by 6,514 hours per year (38,315 borrowers multiplied by 0.17 hours per borrower).

TOTALS

Responses 38,315

Respondents 20

Burden Hours 6,514