Final Rule

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F. Environment
We have analyzed this rule under
Department of Homeland Security
Directive 023–01, Rev. 1, associated
implementing instructions, and
Environmental Planning COMDTINST
5090.1 (series), which guide the Coast
Guard in complying with the National
Environmental Policy Act of 1969(42
U.S.C. 4321–4370f), and have
determined that 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 safety
zone lasting 18 total days that will
prohibit entry within a portion of the
Potomac River. It is categorically
excluded from further review under
paragraph L60(a) of Appendix A, Table
1 of DHS Instruction Manual 023–01–
001–01, Rev. 1. A Record of
Environmental Consideration
supporting this determination is
available in the docket. For instructions
on locating the docket, see the
ADDRESSES section of this preamble.
G. Protest Activities
The Coast Guard respects the First
Amendment rights of protesters.
Protesters are asked to call or email 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.
List of Subjects in 33 CFR Part 165
Harbors, Marine safety, Navigation
(water), Reporting and recordkeeping
requirements, Security measures,
Waterways.
For the reasons discussed in the
preamble, the Coast Guard amends 33
CFR part 165 as follows:
PART 165—REGULATED NAVIGATION
AREAS AND LIMITED ACCESS AREAS
1. The authority citation for part 165
continues to read as follows:

■

Authority: 46 U.S.C. 70034, 70051; 33 CFR
1.05–1, 6.04–1, 6.04–6, and 160.5;
Department of Homeland Security Delegation
No. 0170.1.

2. Add § 165.T05–0650 to read as
follows:

■

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§ 165.T05–0650 Safety Zone; Potomac
River, Between Charles County, MD and
King George County, VA.

(a) Location. The following area is a
safety zone: All navigable waters of the
Potomac River, encompassed by a line
connecting the following points
beginning at 38°21′50.96″ N,
076°59′22.04″ W, thence south to

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38°21′43.08″ N, 076°59′20.55″ W, thence
west to 38°21′41.00″ N, 076°59′34.90″
W, thence north to 38°21′48.90″ N,
076°59′36.80″ W, and east back to the
beginning point, located between
Charles County, MD and King George
County, VA. These coordinates are
based on datum NAD 83.
(b) Definitions. As used in this
section—
Captain of the Port (COTP) means the
Commander, U.S. Coast Guard Sector
Maryland-National Capital Region.
Designated representative means any
Coast Guard commissioned, warrant, or
petty officer, including a Coast Guard
coxswain, petty officer, or other officer
operating a Coast Guard vessel and a
Federal, State, and local officer
designated by or assisting the Captain of
the Port Maryland-National Capital
Region (COTP) in the enforcement of the
safety zone.
Marine equipment means any vessel,
barge or other equipment operated by
Skanska-Corman-McLean, Joint Venture,
or its subcontractors.
(c) Regulations. (1) Under the general
safety zone regulations in subpart C of
this part, you may not enter the safety
zone described in paragraph (a) of this
section unless authorized by the COTP
or the COTP’s designated representative.
(2) To seek permission to enter,
contact the COTP or the COTP’s
representative by telephone number
410–576–2693 or on Marine Band Radio
VHF–FM channel 16 (156.8 MHz).
Those in the safety zone must comply
with all lawful orders or directions
given to them by the COTP or the
COTP’s designated representative.
(d) Enforcement officials. The U.S.
Coast Guard may be assisted in the
patrol and enforcement of the safety
zone by Federal, State, and local
agencies.
(e) Enforcement. This safety zone will
be enforced during the period described
in paragraph (f) of this section. A
‘‘BRIDGE WORK—DANGER—STAY
AWAY’’ sign facing the northern and
southern approaches of the navigation
channel will be posted onthe sides of
the marine equipment on-scene within
the location described in paragraph (a)
of this section.
(f) Enforcement period. This section
will be enforced from 7 a.m. on August
23, 2021, through 8 p.m. on September
11, 2021.
Dated: August 17, 2021.
David E. O’Connell,
Commander, U.S. Coast Guard, Captain of
the Port Sector Maryland-National Capital
Region.
[FR Doc. 2021–17978 Filed 8–20–21; 8:45 am]
BILLING CODE 9110–04–P

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DEPARTMENT OF EDUCATION
34 CFR Parts 674, 682 and 685
[Docket ID ED–2019–FSA–0115]
RIN 1840–AD48

Total and Permanent Disability
Discharge of Loans Under Title IV of
the Higher Education Act
Office of Postsecondary
Education, Department of Education.
ACTION: Final regulations.
AGENCY:

The Department of Education
(Department) adopts as final regulations,
with changes, the interim final
regulations for total and permanent
disability (TPD) student loan discharge.
DATES:
Effective date: These regulations are
effective July 1, 2022.
Implementation date: For the
implementation date of these regulatory
changes, see the Implementation Date of
These Regulations section of this
document.
SUMMARY:

FOR FURTHER INFORMATION CONTACT:

Jennifer M. Hong, Director, Policy
Coordination Group, U.S. Department of
Education, Office of Postsecondary
Education, 400 Maryland Avenue SW,
Washington, DC 20202–2241.
Telephone: (202)453–7805. Email:
[email protected].
If you use a telecommunications
device for the deaf (TDD) or a text
telephone (TTY), call the Federal Relay
Service (FRS), toll-free, at (800) 877–
8339.
SUPPLEMENTARY INFORMATION:

Executive Summary
Purpose of This Regulatory Action:
On November 26, 2019, the Department
published in the Federal Register (84
FR 65000) an interim final rule (IFR) to
amend and update the regulations for
TPD student loan discharge for veterans
by removing administrative burdens
that may have prevented at least 20,000
totally and permanently disabled
veterans from obtaining discharges for
their student loans. These final
regulations adopt and amend the
regulations established in the IFR as
further described below. These
regulations do not address the process
of obtaining a TPD student loan
discharge through the physician’s
certification process.
Summary of Major Provisions of This
Regulatory Action:
These regulations—
• Expand the automatic discharge
process to borrowers who are eligible for
TPD loan discharge through their SSA

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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations
data. Borrowers who qualify for TPD
through Social Security Administration
(SSA) data are those who are eligible for
Social Security Disability Insurance
(SSDI) and/or Supplemental Security
Income (SSI) benefits and whose next
scheduled disability review is no earlier
than five nor later than seven years;
• Clarify that borrowers determined
to be eligible for a TPD discharge based
on data that the Secretary obtains from
the Department of Veterans Affairs (VA)
or the SSA are not required to submit
a TPD application to have their Federal
student loans discharged;
• Describe the process by which the
Secretary will automatically discharge
the Federal student loans of a borrower
who is determined to be eligible for a
TPD discharge based on data obtained
from either VA or the SSA, unless the
borrower notifies the Secretary by a
specified date that the borrower does
not wish to receive the discharge;
• Specify the contents of the notice
the Secretary sends to borrowers who
are determined to be eligible for a TPD
discharge based on data that the
Secretary obtains from VA or from the
SSA; and
• Provide for the return of payments
to the person who made payments on
the loan on or after the effective date of
the determination by VA or SSA for
borrowers who receive the automatic
TPD discharge.
Authority for this Regulatory Action:
Section 410 of the General Education
Provisions Act provides the Secretary
with authority to make, promulgate,
issue, rescind, and amend rules and
regulations governing the manner of
operations of, and governing the
applicable programs administered by,
the Department. 20 U.S.C. 1221e–3.
Furthermore, under section 414 of the
Department of Education Organization
Act, the Secretary is authorized to
prescribe such rules and regulations as
the Secretary determines necessary or
appropriate to administer and manage
the functions of the Secretary or the
Department. 20 U.S.C. 3474. Under 20
U.S.C. 1087(a)(1)(FFEL), 20 U.S.C.
1087a(b)(2)(Direct Loans), and 20 U.S.C.
1087dd(c)(1)(F)(ii)(Perkins), the
Department has authority to cancel or
discharge certain loans due to a total
and permanent disability.
Costs and Benefits: Veterans and
recipients of SSDI and/or SSI benefits
who qualify for a TPD discharge will
benefit from these final regulations.
Qualifying veterans and recipients of
SSDI and/or SSI benefits will be
relieved of a financial burden related to
Federal student loans, including the
stress associated with repayment or
potential defaults and collections. This

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final rule should result in a quicker,
more efficient process and many more
qualified borrowers receiving the
discharge to which they are legally
entitled. In addition, the paperwork
burden will be reduced as no
application will be needed for
borrowers who qualify for an automatic
TPD discharge.
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, as well as
the conditions of early implementation.
The Secretary is exercising his
authority under section 482(c) of the
HEA to designate the regulatory changes
to parts 674, 682, and 685 of the Code
of Federal Regulations included in this
document for early implementation
effective September 30, 2021. The
Secretary takes this action for the
reasons set forth in the Summary,
Background, and Need for Regulatory
Actions sections included in this
document.
Public Comments: When the IFR was
published in the Federal Register on
November 26, 2019 (84 FR 65000), the
Department requested public comment
on whether we should make any
changes to the interim final regulations.
We received 18 comments. The final
regulations include changes from the
IFR.
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 regulations to
which they pertain. Generally, we do
not address minor, non-substantive
changes, or recommended changes that
the law does not authorize the Secretary
to make.
Analysis of Comments and Changes:
An analysis of the comments and of the
changes in the regulations since
publication of the IFR follows.
General Comments
Comments: Commenters were
generally supportive of the provision
added by the IFR stating that veterans
who are identified as eligible for TPD
discharge based on data that the
Secretary obtains from VA are not
required to provide any additional
documentation to have their loans
automatically discharged, noting it
reduces burden on disabled veterans.
Several commenters explained that

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many disabled veterans lack a
supportive caregiver who can assist
them in the application process and
ensure that they understand the
implications of not having their Federal
student loans discharged. The
commenters further noted that many
veterans who received letters notifying
them that they were eligible for
discharge, and that to receive the
discharge they needed only to sign and
submit a TPD discharge application,
failed to subsequently submit an
application. These commenters stated
that these veterans are clearly eligible
for the discharge, and they are pleased
that the Department is making it easier
for them to have their loans discharged.
Discussion: We thank the commenters
for their support. We note that the IFR,
which provided that veterans identified
as TPD based on data obtained from VA
are not required to submit additional
documentation to have their loans
discharged, may not have made it
sufficiently clear that ‘‘additional
documentation’’ meant a TPD discharge
application. Therefore, we are clarifying
this point in the final regulations.
Changes: In final §§ 674.61(d),
682.402(c)(10), and 685.213(d), we have
clarified that a borrower who qualifies
for a TPD discharge based on data
obtained from VA or from the SSA is
not required to submit a TPD
application, or any other documentation
of eligibility for discharge.
Comments: One commenter expressed
concern that the automatic discharge
process was paused because the
regulations that were previously in
effect required borrowers to submit a
discharge application. Another
commenter asked that the Department
provide a copy of the Office of
Management and Budget memo that
determined rulemaking was required
before the Department could discharge
veterans’ loans without an application.
Discussion: As we explained in the
IFR, former Secretary Betsy DeVos
exercised her authority under section
482(c) of the Higher Education Act of
1965, as amended (HEA), to designate
the regulatory changes to parts 674, 682,
and 685 of the Code of Federal
Regulations, as reflected in the IFR, for
early implementation effective
immediately. Accordingly, the
automatic TPD discharge process for
veterans identified as eligible for
discharge based on data obtained from
VA was implemented immediately upon
publication of the IFR.
We have forwarded the request for the
Office of Management and Budget
memo to the Department’s Freedom of
Information Act (FOIA) Service Center.
All FOIA requests made to the

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Department are handled by the
Department’s FOIA Service Center.
Changes: None.
Comment: One commenter suggested
that VA should be more involved in
communicating to veterans regarding
the discharge process. The commenter
was concerned that some veterans might
think the discharge letter was ‘‘too good
to be true’’ since it was not something
they had asked for. The commenter
stated that if VA were more involved in
the process, it might be able to confirm
the validity of the letter and assist
veterans in understanding the
ramifications of allowing the discharge
to go forward versus opting out of the
discharge.
Discussion: The Department plans to
work closely with VA in implementing
these regulations. However, we believe
that the notification of eligibility for the
TPD discharge should come from the
Department, not VA. The notification
relates to student loan programs
administered by the Department, not to
any VA benefit program. If a borrower
has questions about the notification, the
borrower should contact the
Department, not VA.
Changes: None.
Opt-Out Provision (§§ 674.61(e)(1),
682.402(c)(11)(i), 685.213(e)(1))
Comment: One commenter was
concerned that the automatic discharge
process could harm a veteran who is
enrolled in school and obtaining loans
and recommended that the Department
include the opt-out provision discussed
in the preamble to the IFR.
Another commenter urged the
Department to consider the moral
hazard of lending to a borrower who has
been deemed unable to work prior to or
concurrent with enrollment.
Discussion: As suggested by the first
commenter, a veteran who is enrolled in
school and receiving loans might wish
to opt out of the automatic discharge so
that the veteran could continue
receiving loans without having to meet
the additional eligibility requirements
that apply to borrowers seeking new
loans after having previously received a
TPD discharge of earlier loans. We agree
with the first commenter that we should
include the opt-out provision in the
regulatory language.
We do not agree with the commenter
who suggested that providing an opt-out
provision creates a moral hazard that is
sufficiently worrisome to outweigh the
benefits of providing automatic
discharges. As noted in the Regulatory
Impact Analysis the opt out rate for
borrowers identified through the VA
process was just four percent through
the two rounds of discharges processed

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since September 2019. This suggests the
opt out is used in rare circumstances
and is not a widespread practice that
would indicate a significant moral
hazard. Veterans who qualify for
automatic TPD discharges, as well as
recipients of SSDI and/or SSI benefits,
should have the ability to decline the
discharge without fear that declining the
discharge will affect their ability to
continue to obtain Federal student
loans.
Changes: In §§ 674.61(e)(1),
682.402(c)(11)(i), and 685.213(e)(1), we
have specified that the notification to a
borrower of eligibility for an automatic
TPD discharge informs the borrower
that the borrower may opt out of the
discharge. We have revised
§§ 674.61(e)(5), 682.402(c)(11)(vii), and
685.213(e)(3) to clarify that, if borrowers
choose not to receive the automatic TPD
discharge, they remain responsible for
repaying the loan in accordance with
the terms and conditions of the
promissory note that the borrower
signed.
Post-Discharge Monitoring Period
Comments: One commenter urged the
Department to make it clear to
borrowers that if they accept the TPD
discharge, there will be a monitoring
period that may prevent the borrower
from receiving loans in the immediate
future, and that these borrowers would
need a physician’s certification if they
are going to use loans to return to
school.
Discussion: For TPD discharges based
on a disability determination from VA,
there is no post-discharge monitoring
period. 20 U.S.C. 1087(a)(2). However,
under §§ 674.9(g)(1) and (2),
682.201(a)(6)(i) and (ii), and
685.200(a)(1)(iv)(A)(1) and (2), once
borrowers’ loans have been discharged
due to TPD, they cannot obtain
additional Federal student loans unless
the borrower (1) obtains a certification
from a physician that the borrower is
able to engage in substantial gainful
activity; and (2) signs a statement
acknowledging that any new loan the
borrower receives cannot be discharged
in the future on the basis of any
impairment present when the new loan
is made, unless that impairment
substantially deteriorates. This
information is included in the notice
that is sent to veterans informing them
that they qualify for a TPD discharge
based on data obtained from VA.
For borrowers who receive discharges
based on SSA disability determinations,
§§ 674.61(b)(3)(iv), 682.402(c)(3)(iv),
and 685.213(b)(4)(iii) provide that the
notification the borrower receives after
the discharge has been granted explain

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the terms and conditions of the postdischarge monitoring period. The notice
also includes the requirements for
obtaining a new loan discussed above.
Changes: None.
Defaulted Borrowers
Comments: Commenters noted that
the loans of many veterans who qualify
for a TPD discharge are in default. The
commenters asserted that in some cases
the loans were wrongly placed in
default, because the borrower met the
eligibility criteria for a TPD discharge at
the time the loan was placed in default.
Discussion: It is possible that some
veterans who defaulted on their loans
may have qualified for TPD discharge if
they had submitted a discharge
application. However, the Department
would not have known at the time the
loans defaulted that the veterans with
loans described in this example were
eligible for a TPD discharge. Prior to the
implementation of the process that
enables the Department to identify
borrowers who are determined to be
eligible for TPD discharge based on data
obtained from VA, the Department and
loan servicers had no means of knowing
that a disabled veteran qualified for
discharge unless the borrower submitted
a TPD discharge application. If such a
borrower became delinquent in making
payments on a loan, and did not apply
for forbearance, deferment, or discharge,
or take other actions to resolve the
delinquency, the loan would eventually
be placed in default, in accordance with
the terms and conditions of the
promissory note that the borrower
signed. Preventing this situation is a
major reason the Department automated
the process of discharges without the
need for an application. The automated
process will seek to avoid such an
outcome for a borrower who is eligible
for a TPD discharge.
Changes: None.
Return of Offset or Garnished Funds
Comments: Commenters asked that
any offsets from a defaulted borrower’s
benefits that were taken to pay on their
defaulted loans be returned to them, and
their credit reports updated, if the
borrower receives an automatic TPD
discharge.
Discussion: Any payments received
on or after the effective date of VA’s
disability determination or the date the
Secretary received disability data from
the SSA are returned to the person who
made the payments. This includes any
payments that were obtained through
offsets.
Section 674.61(c)(4)(ii) requires a
school that holds a Perkins Loan to
return the payments. Section

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682.402(c)(10)(vii) requires a FFEL
lender to return payments after the
guaranty agency has paid a disability
claim. Section 685.213(b)(4)(ii) and
(c)(2)(i) provides for the return of
payments for Direct Loans.
The discharge of a loan is also
reported to nationwide consumer
reporting agencies.
Changes: None.
Tax Implications
Comments: One commenter asked
that the Department take additional
action to ensure that veterans are
counseled regarding which States treat
loan amounts discharged due to TPD as
taxable income.
Discussion: The letter informing
borrowers that they are eligible for
discharge explains that, although loan
amounts discharged due to TPD are no
longer considered taxable income for
Federal tax purposes, some States still
consider discharged loan amounts as
income. The letter recommends that
borrowers scheduled to receive a TPD
discharge contact their State revenue
office or a tax professional before
deciding to accept or opt out of the TPD
discharge.
Changes: None.

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Deregulatory Action
Comment: One commenter asked why
the IFR was not treated as a significant
regulatory action under Executive Order
(E.O.) 13771, which requires that for
every significant regulatory action
proposed by an agency for notice and
comment or otherwise promulgated that
imposes a cost greater than zero, the
agency must repeal two regulatory
actions.
Discussion: On January 20, 2021,
President Joseph Biden issued E.O.
13992, which revoked E.O. 13771, so
the terms of E.O. 13771 no longer apply.
Regardless, the Department identified
the IFR as a deregulatory action because
it eliminates a regulatory requirement:
In this case, the requirement that a
disabled veteran submit an application
for a TPD discharge.
Changes: None.
Automatic Discharges for Borrowers
With SSA Disability Designations
Comments: Several commenters
supported the Department’s
implementation of automatic TPD
discharges for disabled veterans and
asked that the Department also allow for
automatic TPD discharges for borrowers
who are identified as eligible for a TPD
discharge through the existing data
match with SSA.
Discussion: We agree. Under
§§ 674.61(b)(2)(iv), 682.402(c)(2)(iv),

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and 685.213(b)(1), these borrowers are
eligible to receive a loan discharge but
are currently required to submit an
application before they may receive the
discharge. Eliminating the application
requirement for borrowers who are
identified as eligible for a TPD discharge
through the data match with SSA, so
they can receive an automatic discharge,
is a logical extension of the IFR. The
rationale for providing borrowers with a
TPD discharge based on a disability
determination by VA obtained through
a data match, thereby eliminating
unnecessary documentation burdens on
individuals determined by a
government agency to qualify for a TPD
discharge, applies equally to individuals
who qualify for TPD discharge based on
a disability determination by the SSA as
obtained through a data match.
The object of the logical outgrowth
standard ‘‘is one of fair notice.’’ Long
Island Care at Home, Ltd. v. Coke, 551
U.S. 158, 174 (2007). The standard is
well described in Mid Continent Nail
Corp. v. United States, 846 F.3d 1364,
1373–76 (Fed. Cir. 2017), which states
that ‘‘a final rule is a logical outgrowth
of a proposed rule only if interested
parties should have anticipated that the
change was possible, and thus
reasonably should have filed their
comments on the subject during the
notice-and-comment period.’’ Id. at
1373 (quoting Veteran’s Justice Grp.,
L.L.C. v. Sec’y of Veterans Affairs, 818
F.3d 1336, 1344 (Fed. Cir. 2016)). The
Federal Circuit indicated that the logical
outgrowth standard is very broad,
implying that it would even allow the
removal of ‘‘critical elements’’ of rules
so long as the NPRM contains ‘‘the
merest hint’’ of the agency’s actions in
the final rule. See id. at 1374, 1376.
As supported by public comment on
the IFR requesting this expansion of the
automatic TPD discharge, the public
could reasonably have anticipated that
the final rule would apply to borrowers
who are identified as eligible for a TPD
discharge through the data match with
SSA. The position taken in this final
rule—expanding the automatic TPD
discharge to apply to these borrowers—
is consistent with and responsive to
public comment, including comments
from several U.S. Senators, a State
Attorney General, legal aid societies,
and other non-governmental
organizations. The number of
comments, the diversity of the
commenters, and the universal support
for this expansion all demonstrate that
this rule is a logical outgrowth of the
IFR.
Changes: In §§ 674.61(d)(1)(ii),
682.402(c)(10)(i)(B), and
685.213(d)(1)(ii), we have provided that

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a borrower who is identified as eligible
for TPD discharge through the data
match with SSA does not need to
submit a TPD application as a condition
of receiving a loan discharge.
Additional Proposals
Comments: Some commenters
suggested that all veterans with a
service-related disability should have
their loans discharged. One commenter
recommended that student loans for all
veterans be paid or forgiven, not just
veterans who are totally and
permanently disabled. Another
commenter recommended that all
veterans with a disability should qualify
for a TPD discharge, regardless of
whether their disability is serviceconnected.
Two commenters stated that veterans
who have never been deployed can
receive a 100 percent disability rating
from VA. These veterans would qualify
for TPD, while veterans who were
deployed, but who are less than 100
percent disabled, would not qualify.
This commenter believed that veterans
who have not been deployed should not
have priority over veterans who were
deployed.
One commenter recommended
eliminating the post-discharge
monitoring period for all TPD discharge
borrowers.
Discussion: The statutory section
authorizing a TPD discharge for veterans
does not take a veteran’s deployment
status into account and, therefore,
deployment status has no bearing on
whether a student loan is discharged. In
addition, the Department does not have
the statutory authority to grant a TPD
discharge to a veteran who is not totally
and permanently disabled. A veteran
who is totally and permanently
disabled, but whose disability is not
service connected, may receive a TPD
discharge under the other TPD
discharge processes, which require
either an SSA disability determination
or a physician’s certification.
There is no post-discharge monitoring
period for borrowers who received TPD
discharges based on VA disability
determinations. Because the IFR only
addressed automatic TPD discharges for
veterans for whom there are no postdischarge monitoring periods, any
changes to the post-discharge
monitoring periods for other recipients
of TPD discharges are outside the scope
of this final rule. However, the
Department has heard from the public
on ways to improve the rules governing
total and permanent disability discharge
and may consider these policies through
upcoming negotiated rulemaking. See
86 FR 28299 (May 26, 2021).

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Changes: None.
Executive Orders 12866 and 13563

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Regulatory Impact Analysis
Under Executive Order 12866, the
Office of Management and Budget
(OMB) must determine whether this
regulatory action is ‘‘significant’’ and,
therefore, subject to the requirements of
the Executive order and subject to
review by 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.
These final regulations, taken together
with the IFR, are an economically
significant action and will have an
annual effect on the economy of more
than $100 million because the changes
to an opt-out process for borrowers
identified as TPD eligible through the
data matches with VA and SSA are
expected to increase transfers from the
Federal Government as more loans are
discharged by $1,685.8 million when
annualized at a seven percent discount
rate. Pursuant to the Congressional
Review Act (5 U.S.C. 801 et seq.), the
Office of Information and Regulatory
Affairs designated this rule as a ‘‘major
rule,’’ as defined by 5 U.S.C. 804(2).
We have also reviewed these final
regulations and the IFR 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

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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
providing 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.’’
The Department has assessed the
potential costs and benefits, both
quantitative and qualitative, of this
regulatory action, and we issued the
IFR, and are issuing these final
regulations, in response to the pressing
need for, and manifest public interest
in, deregulatory relief from bureaucratic
burdens that have denied tens of
thousands of veterans who are totally
and permanently disabled, due to
service-related injuries, student loan
discharges for which they are eligible.
Individuals who SSA has determined to
be disabled have faced similar burdens
and hurdles. The harm caused to our
veterans, other disabled individuals,
and to the public interest by the
application process is significant and
widely recognized. See Presidential
Memorandum at 44677; S. Rep. No.
115–150, at 182. Based on this analysis
and the reasons stated in the preamble,
the Department believes that these final
regulations are consistent with the
principles in Executive Order 13563.
We also have determined that this
regulatory action does not unduly
interfere with State, local, or Tribal
governments in the exercise of their
governmental functions.
Need for Regulatory Action
The HEA provides that veterans who
are totally and permanently disabled are

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eligible to have their Federal student
loans discharged. Prior to the IFR, once
determined by the Secretary of Veterans
Affairs to be totally and permanently
disabled due to a service-connected
condition, the veteran was required to
obtain documentation of that status
from VA and provide it to the Secretary
of Education, along with an application
for total and permanent disability
discharge, in order to receive the
discharge of their student loans.
Similarly, borrowers who are identified
as eligible for a TPD discharge through
the data match with SSA had to submit
an application to the Department in
order to receive the discharge.
However, now that the Department
has data sharing agreements with VA
and SSA in place, the Department
obtains all of the information it needs
directly from those two agencies to
discharge loans. This makes the
submission of the TPD application to
the Department an unnecessary and
burdensome step for both groups of
borrowers. Consequently, the President
and Congress have asked the
Department to ensure that individuals
who have received a qualifying
disability determination from SSA or
VA receive all benefits the law allows
with as little burden on the borrower as
possible. Under the IFR and this final
rule, individuals who have received a
qualifying disability determination from
SSA or VA only need to contact the
Department if they choose to opt out of
the TPD discharge, in which case they
would be responsible for full payment
on the loan.
In terms of the potential impact on
borrowers, the most significant change
from the IFR is the extension of the
automatic TPD discharge process to
borrowers who are identified as eligible
for a TPD discharge through the data
match with SSA. Expanding TPD
discharges without an application to
individuals identified as TPD by SSA is
a logical extension of the IFR. The
rationale for providing an automatic
discharge to veterans based on a
disability determination by VA
eliminating unnecessary documentation
burdens on individuals determined by a
government agency to have total and
permanent disabilities that qualify them
under statute to a discharge of their
loans, particularly when those total and
permanent disabilities may pose
challenges to providing additional
documentation—applies equally to
individuals whose TPD has been
identified by the SSA.
The Department has been working
with VA since 2018 to facilitate a more
expedited TPD discharge process and
about 22,000 veterans have received

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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations
approximately $650 million in
discharges under the opt-in process in
effect prior to the IFR. However,
thousands more have not applied for the
discharge for which they were eligible.
A similar match has been in place with
the Social Security Administration since
2016 and approximately 141,000
borrowers have received $8.2 billion in
discharges under the opt-in process for
the period 2016–2021. While veterans
do not have to complete a postdischarge monitoring period, other
borrowers who receive a TPD discharge
are subject to a three-year post-discharge
monitoring period during which a loan
discharge could be reversed, so the final
number of discharges associated with
SSA matches from 2016–2021 may shift
somewhat.
The amendments in the IFR and these
final regulations provide a quicker,
more efficient process and will likely
result in many more qualified veterans
and individuals SSA determined to
have a qualifying disability status
receiving the discharge for which they
are eligible.
In the past, loan discharge amounts
were subject to Federal and, in some
States, State tax, which may have
dissuaded some veterans or other
borrowers who could otherwise navigate
the TPD application process from
seeking a discharge. However, under the
Tax Cuts and Jobs Act of 2017 (Pub. L.
115–97), all Federal tax was eliminated
on loan discharges of borrowers based
on death or total and permanent
disability through 2025. Some small
percentage of these eligible veterans or
other borrowers may opt out due to
concerns over State tax treatment that
was not affected by the 2017 Federal
law.
In addition, borrowers who are
enrolled in a postsecondary institution
at the time of the disability
determination, or who plan to enroll in
the future, may opt to forego loan
forgiveness through TPD discharge so
that they can continue to receive new
Federal student loans for such
enrollments. Although a borrower who
accepts loan forgiveness through TPD
discharge may still be able to borrow in
the future, the Department requires such
a borrower to obtain a certification from
a physician that the borrower is able to
engage in substantial gainful
employment and to sign a statement
acknowledging that the new Direct Loan
the borrower receives cannot be
discharged in the future on the basis of
any impairment present when the new
loan is made, unless that impairment
substantially deteriorates. In addition,
borrowers who want to receive new
loans after receiving a TPD discharge

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based on SSA documentation (or based
on a physician’s certification) are also
required under §§ 674.61(b)(6),
682.402(c)(4) and (5), and 685.213(b)(6)
and (7) to resume payment on the
discharged loans if they receive a new
loan during the three-year postdischarge monitoring period.
Some borrowers may elect to simply
forego loan forgiveness to preserve
future borrowing opportunities and
avoid the need to obtain medical
certification regarding their ability to
engage in substantial gainful
employment. Although borrowers could
opt out of an automatic discharge before
we issued the IFR, that option was not
specified in the regulations. Currently,
the opt-out rate for veterans is low, at
four percent (approximately 2,100
borrowers of nearly 48,000 opted out
from the two rounds of discharges
processed since September 2019).
Accordingly, the Department expects a
small percentage of borrowers who
qualify for an automatic discharge based
on SSA data to choose to opt out of the
discharge.
Nevertheless, this final rule removes
barriers and allows many more qualified
veterans and other borrowers to receive
the TPD discharge to which they are
entitled.
Costs, Benefits, and Transfers
The primary parties affected by the
IFR and these final regulations will be
the veterans and recipients of Social
Security benefits who qualify for the
discharge; and the taxpayers, through
the transfers from the Federal
government. Qualifying borrowers will
be relieved of a financial burden related
to Federal student loans, including the
stress associated with repayment or
potential defaults and collections.
VA estimates that approximately
150,000 veterans a year will reach a
qualifying disability rating over the next
10 years, of which approximately 18
percent will be 50 years old or under
and approximately 20 percent will have
at least some postsecondary education
at the time of their separation from the
armed services. Many more will likely
use education benefits and loans to
pursue postsecondary credentials after
separation. Therefore, we expect that
thousands of current and future veterans
will be affected by these final
regulations.
The match with the Social Security
Administration is for individuals with
Social Security Disability Insurance
(SSDI) or Supplemental Security Income
(SSI) benefits indicating that the
borrower’s next scheduled disability
review will occur in no less than five
and no more than seven years. The

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46977

number of borrowers eligible for a
discharge depends on the age profile,
student loan borrowing history, and
repayment history of those with a
qualifying disability status. The
Department estimates that
approximately 21,000 borrowers are
newly identified through the SSA match
on a quarterly basis, and the quarterly
average of borrowers who apply for a
discharge and successfully complete the
monitoring period is just over 10,000.
This is based on borrowers from existing
loan cohorts who have already received
a qualifying disability status. More
borrowers from past loan cohorts could
qualify for a disability status in future
years, and future cohorts of borrowers
will also be affected by these final
regulations, so many thousands of
borrowers from existing loan cohorts
and those in the 10-year budget window
will benefit from the opt-out process.
As described in the Paperwork
Reduction Act section of this preamble,
the elimination of the application will
reduce the burden on borrowers who
qualify for the automatic TPD discharge.
The elimination of the application is a
reduction in burden of 5,000 hours and
$140,900 for veterans and 11,586 hours
and $326,493 for other borrowers,
calculated at a wage rate of $28.18.1
The increase in transfers for
discharges will affect taxpayers, through
the Federal government, as more
borrowers receive the loan discharge for
which they qualify. This effect is
described in the Net Budget Impacts
section of this Regulatory Impact
Analysis. Estimated annualized
transfers are $1,685.8 million at a 7
percent discount rate. The servicing
contractor that processes disability
discharges for the Department could see
an increase in the number of discharges
to process, which could require system
upgrades or other resources. However,
they have already adjusted to an opt-out
process for veterans and manage the
notifications for eligible borrowers
identified through the match with the
SSA, so we do not expect significant
changes would be required.
Additionally, the Department is
required to pay the cost of SSA
providing Medical Improvement Not
Expected status as part of the match
agreement. This is estimated to cost
approximately $8,000 annually, but this
cost would be incurred whether or not
the results of the match were used for
1 Bureau of Labor Statistics, Economic News
Release Table B–3. Average hourly and weekly
earnings of all employees on private nonfarm
payrolls by industry sector, seasonally adjusted.
Applying average hourly wage rate for October 2019
for total private industry. Available at www.bls.gov/
news.release/empsit.t19.htm.

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the existing opt-in process or the opt-out
process established by these final
regulations.
Net Budget Impacts
We estimate that the IFR and these
final regulations will have a net Federal
budget impact over the 2022–2031 loan
cohorts of $13.3 billion in outlays and
a modification to past cohorts of $20.9
billion, for a total net impact of $34.1
billion. A cohort reflects all loans
originated in a given fiscal year.
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.
The Net Budget Impact is compared to
the 2022 President’s Budget baseline
(PB2022) that includes the estimated
effects of the student loan related
provisions in the Coronavirus Aid,
Relief, and Economic Security Act
(CARES Act) and subsequent
extensions.
As discussed throughout this
preamble, the IFR and these final
regulations changed the discharge
process of loans for veterans with a
service-related disability to an opt-out
process instead of the opt-in process
associated with the match between the
Department and VA prior to the IFR.
While the match has been processed
since 2018 and the Department has
accepted VA determinations of
disability status without additional
medical information since 2013, a
significant percentage of veterans who
would qualify for the discharge did not
submit applications. Of approximately
58,000 qualifying veterans identified in
the match process since 2018, only
about 22,000 veterans have received
discharges, totaling approximately $650
million. According to Federal Student
Aid, approximately 4,000 additional
veterans are identified in each quarterly
match. For the SSA match,
approximately 21,000 additional
borrowers are identified in each
quarterly match. Since the start of the
SSA match with the opt-in process in
2016, approximately $8.2 billion in TPD
discharges have been processed.
To estimate the effect of the opt-out
procedure, the Department adjusted the
disability component of its Death,
Disability, and Bankruptcy assumption
(DDB), which also includes closed
school and borrower defense discharges
that have been the subject of recent
regulations. To calculate the effect on
past cohorts from borrowers currently
eligible for the discharge, the
Department summarized the balances,
collections, and payments associated

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with veterans identified in the August
2018 match who had not received a
disability or death discharge by the end
of FY 2019. These potential claims were
grouped by population identification
(non-consolidated, consolidated notfrom-default, and consolidated from
default), and offset between the fiscal
year of loan origination and fiscal year
of disability. Baseline disability claims
were also summarized by these factors
and an adjustment factor for the
increase represented by the potential
claims was calculated.
The change to the opt-out approach
will increase the level of disability
discharges going forward, but not to the
same degree as the significant
adjustment in FY2020 that captures the
build-up of years from those who did
not submit applications. To estimate the
adjustment for future claims, the
Department focused on those newly
identified as disabled in 2018 and
calculated an adjustment factor based
on those who received a discharge
versus those borrowers with potential
discharges who were in the match but
did not submit applications. This
adjustment was applied to future
cohorts and future disability
determinations for borrowers in past
cohorts.
A separate adjustment was added to
the disability rate to capture the effect
of the SSA match switching to opt-out.
A review of existing borrowers
identified in the SSA match file prior to
September 30, 2020, indicates that there
are approximately $11.5 billion in
outstanding balances of borrowers who
would be eligible for a TPD discharge.
This confirms that the potential increase
in claims from existing and future
cohorts is significant. The disability
component of the DDB rate was almost
doubled to estimate the effect of the
SSA match opt-out process, resulting in
the increase to $34.1 compared to the
$1.96 billion estimated for only VA
match in the IFR.
A number of factors may affect the
estimated cost of these final regulations.
The estimate does not include any
reduction in defaults associated with
the borrowers’ loans, but borrowers’
repayment profile will affect the cost of
this discharge. For borrowers in the SSA
match prior to September 30, 2020,
approximately 62 percent of loan
disbursements across all loan cohorts
have been in default at some point.
While the estimate for these final
regulations is conservative and does not
include any reduction in defaults, we
know from prior analysis that a change
such as this can have an impact on
defaults going forward. As an example,
a sensitivity analysis was done for the

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FY 2020 financial statements that
showed that a 5 percent reduction in
defaults for the last 5 originated cohorts
saves $849 million. The Department
will monitor the effect of these final
regulations on defaults as the opt-out
process is implemented and reflect it in
future student loan program costs. Some
borrowers may have lacked awareness
of the potential discharge or found the
application process difficult. To the
extent borrowers previously chose to
not apply for Federal tax reasons, the
tax provision granting that relief is
currently scheduled to expire on
December 31, 2025. While that tax
provision may be renewed, the opt-out
rate for future discharges occurring in
2026 and later could increase if it is not.
In estimating the net budget impact of
these final regulations, the Department
reduced the adjustment factor for 2027
and later by 15 percent to account for
this. If that provision is extended, or if
more of the unfiled applications were
for process reasons and did not reflect
deliberate tax planning, the opt-out rate
may decrease and the costs could go up.
We also assumed that the nonapplicants and future qualifying
veterans and other borrowers will have
a similar profile to applicants in terms
of the amount of loans, repayment
profiles, and the timing of their
qualifying disability. It is possible that
those who applied for a discharge as the
result of the match had higher balances
and thus more incentive to file,
especially once the Federal tax
consequences were removed.
Applicants and non-applicants could
vary by debt level, educational
attainment, nature of their disability,
availability of support, or other factors
that could result in the discharges
granted through the opt-out process
having a different average amount or
subsidy cost for the Department.
Another challenge is predicting the
effect on future loan cohorts. We assume
the level and timing of service-related
and other disabilities will remain
similar to that for existing borrowers.
Clearly, geopolitical and global health
factors that the Department cannot
predict could affect the number of
veterans and other borrowers who
qualify for the discharge. Additionally,
student loan borrowing among those
who may serve in the military and
eventually qualify for a discharge could
increase depending upon recruitment
patterns and further education pursued
by those serving in the military.
However, it is possible that the
relatively generous provisions of the
Post 9/11 GI bill will reduce borrowing
by more recent and future cohorts of
veterans relative to past cohorts. An

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analysis conducted by Veterans
Education Success of National
Postsecondary Student Aid Survey
(NPSAS) data for the most recent three
survey cycles (NPSAS:08, NPSAS:12
and NPSAS:16) concluded that the
percentage of veterans borrowing at
proprietary schools decreased from 78
percent in NPSAS:08, which surveyed
students prior to passage of the Post-9/
11 GI Bill, to 42 percent in NPSAS:16,
which surveyed students after, and the
average annual amount borrowed
decreased slightly from $8,680 to $8,630
in 2015 dollars.2 The percent of veterans
borrowing declined slightly in other
sectors (38 percent to 32 percent for
public 4-year institutions) and the
average annual amounts borrowed also
declined ($10,410 for 4-year private
non-profit in NPSAS:08 to $8,980 in
NPSAS:16).3

Medical or technical advances that
affect the classification of disability
could potentially be a factor reducing
the estimated costs associated with
future loan cohorts. In its report, Trends
in Social Security Disability,4 published
in August 2019, SSA indicated a decline
in disability incidence since 2010 after
an increase between 2007–2010. While
SSA identifies economic conditions as a
contributing factor to disability
incidence, the report indicates that the
decline is more significant than would
be expected by economic conditions
alone. Other factors identified that
could affect disability rates in the future
include availability of health insurance,
a change in the mix of jobs to ones with
less physically demanding labor, and
policy and administrative procedural
changes. For estimation purposes, we
assume future cohorts will look like

existing cohorts but acknowledge that a
number of factors could shift the
estimated costs in either direction.
Accounting Statement
As required by OMB Circular A–4
(available at www.whitehouse.gov/sites/
default/files/omb/assets/omb/circulars/
a004/a-4.pdf), in the following table we
have prepared an accounting statement
showing the classification of the
expenditures associated with the
provisions of these final regulations.
This table provides our best estimate of
the changes in annual monetized
transfers as a result of these final
regulations. Expenditures are classified
as transfers from the Federal
government to veterans or borrowers
eligible for SSDI and/or SSI benefits
who qualify for a total and permanent
disability discharge.

TABLE 1—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURES
[In millions]
Category

Benefits

Increased share of qualifying veterans or borrowers eligible for SSDI and/or SSI benefits who receive a total
and permanent disability discharge .....................................................................................................................

Not Quantified

Reduced paperwork burden on veterans or borrowers eligible for SSDI and/or SSI benefits whose next disability review is no earlier than five and no later than seven years who qualify for a TPD discharge ...............
Category

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Paperwork Reduction Act of 1995
(PRA)
As part of its continuing effort to
reduce paperwork and respondent
burden, the Department provides the
general public and Federal agencies
with an opportunity to comment on
proposed and continuing collections of
information in accordance with the PRA
(44 U.S.C. 3506(c)(2)(A)). This helps
ensure that: The public understands the
Department’s collection instructions,
respondents provide the requested data
in the desired format, reporting burden
(time and financial resources) is
minimized, collection instruments are
clearly understood, and the Department
can properly assess the impact of
collection requirements on respondents.
Sections 674.61, 682.402, and 685.213
of these final regulations contain
information collection requirements.

Under the PRA, the Department has
submitted a copy of these sections and
an Information Collections Request to
OMB for its review. These final
regulations do not impose any new
information collection burden. OMB
previously approved the information
collection requirements under OMB
control number 1845–0065. The forms
that are part of this information
collection do not change as a result of
these final regulations.

2 Walter Ochinko and Kathy Payea, Veterans
Education Success, Veteran Student Loan Debt:
Data from NPSAS: 08,12,16, January 2019, Figure
1, p.4. Available at https://vetsedsuccess.org/

veteran-student-loan-debt-7-years-afterimplementation-of-the-post-9-11-gi-bill/./
3 Id.

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Sections 674.61(c), 682.402(c)(9), and
685.213(c)
Discussion: Prior to the IFR, a veteran
was required to submit an application
with documentation from VA to receive
a TPD discharge of a loan under the
Federal Perkins Loan Program, Federal
Family Education Loan Program, or
Federal Direct Loan Program. This

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3%
$[.35]

Transfers

Increased loan discharges for veterans or borrowers eligible for SSDI and/or SSI benefits with a qualifying
total and permanent disability status ...................................................................................................................

VerDate Sep<11>2014

7%
$[.34]

Fmt 4700

Sfmt 4700

7%
$[1,685.8]

3%
$[1,138.6]

information has been collected under
OMB approved form control number
1845–0065. The IFR and these final
regulations eliminate the application
requirement.
Requirements: These changes allow
the Secretary to offer a Federal student
loan borrower who is identified through
a data match with VA as being totally
and permanently disabled a discharge of
his or her loans without requiring the
borrower to submit a separate TPD
application. The veteran may elect to
opt out of the TPD discharge and will
continue to be responsible for repaying
the loans.
Burden Calculation: These changes
eliminate burden on the veteran. The
currently approved form, 1845–0065,
estimates 30 minutes (.50 hours) to read,
gather documentation, and complete the
discharge application. We estimate that
4 Social Security Administration, Office of
Retirement and Disability Policy, Trends in Social
Security Disability, August 2019. Available at
https://www.ssa.gov/policy/docs/briefing-papers/
bp2019-01.html.

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annually approximately 10,000 veterans
have submitted the application for
discharge due to total permanent
disability. This regulatory change

1845–0065

reduces the burden assessed on the
approved form by 5,000 hours (10,000
applicants × .50 hours = 5,000 hours).
This will be a one-time reduction in

DISCHARGE APPLICATION—TOTAL AND PERMANENT DISABILITY
Number of
respondents

Affected entity

Number of
responses

Hours per
response

Total
burden

Estimate
costs
individual
$28.18

Individual Veteran ................................................................

¥10,000

¥10,000

.50

¥5,000

¥$140,000

Total ..............................................................................

¥10,000

¥10,000

........................

¥5,000

¥140,000

Discussion: The TPD discharge
regulations currently require a borrower
who qualifies for discharge of a Federal
Perkins Loan Program, Federal Family
Education Loan Program, or Federal
Direct Loan Program loan based on total
and permanent disability certified by
the SSA to submit an application in
order to receive a TPD discharge. This
information was collected under OMB
control number 1845–0065. Under these
final regulations, a borrower who
qualifies for a TPD discharge based on
total and permanent disability as
identified by the SSA will no longer be

1845–0065

gather documentation, and complete the
discharge application. In 2020 the
Department received 23,171
applications from borrowers who were
required to submit the application for
discharge based on a total permanent
disability determination from SSA. This
regulatory change reduces the burden
assessed on the approved form by
11,586 hours (23,171 applicants × .50
hours = 11,586 hours). This will be a
one-time reduction in burden. We are
not changing the TPD Discharge
Application to remove the section
applicable to a borrower’s request for a
discharge based on SSA documentation.

required to submit a TPD application in
order to receive a TPD discharge.
Requirements: These changes allow
the Secretary to offer a Federal student
loan borrower who is identified through
SSA data as being totally and
permanently disabled a discharge of his
or her loans without requiring the
borrower to submit a separate TPD
application. The borrower may elect to
opt out of the TPD discharge and will
continue to be responsible for repaying
the loans.
Burden Calculation: These changes
eliminate burden on the borrower. The
currently approved form, 1845–0065,
estimates 30 minutes (.50 hours) to read,

DISCHARGE APPLICATION—TOTAL AND PERMANENT DISABILITY
Number of
respondents

Affected entity

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burden. We are not changing the TPD
Discharge Application to remove the
section applicable to a veteran’s request
for such a discharge.

Number of
responses

Hours per
response

Total
burden

Estimated
costs
individual
$28.18

Individual SSA Disability ......................................................

¥23,171

¥23,171

.50

¥11,586

¥$326,493

Total ..............................................................................

¥23,171

¥23,171

........................

¥11,586

¥326,493

In total, we are revising the total
burden assessment for the Information
Collection 1845–0065 to be 221,629
respondents, 221,629 responses, and
110,814 hours. There are no changes to
any of the forms in this collection.
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 the 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.
Regulatory Flexibility Act Certification
The Secretary certifies that these
regulations will not have a significant
economic impact on a substantial

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number of small entities. The U.S. Small
Business Administration Size Standards
define for-profit institutions as small
businesses if they are independently
owned and operated, are not dominant
in their field of operation, and have total
annual revenue below $7,000,000. Nonprofit institutions are defined as small
entities if they are independently owned
and operated and not dominant in their
field of operation. Public institutions are
defined as small organizations if they
are operated by a government
overseeing a population below 50,000.
This regulation would not affect any
small entities. Small entities do not
qualify as borrowers under these
Federal loan programs, nor do small
entities provide or fund Federal loans or
their discharge.

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Intergovernmental Review
This program is not subject to
Executive Order 12372 and the
regulations in 34 CFR part 79.
Assessment of Educational Impact
In the IFR we requested comments on
whether the 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 IFR and our own
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.
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

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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations
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 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.
List of Subjects
34 CFR Part 674
Loan programs—education, Reporting
and recordkeeping, Student aid.
34 CFR Part 682
Administrative practice and
procedure, Colleges and Universities,
Loan programs—education, Reporting
and recordkeeping requirements,
Student aid, Vocational education.
34 CFR Part 685
Administrative practice and
procedure, Colleges and Universities,
Loan programs—education, Reporting
and recordkeeping requirements,
Student aid, Vocational education.
Annmarie Weisman,
Deputy Assistant Secretary for Policy,
Planning, and Innovation, Office of
Postsecondary Education.

Accordingly, the interim rule
amending 34 CFR parts 674, 682, and
685, which published on November 26,
2019 (84 FR 65000), is adopted as final
with the following changes:
PART 674—FEDERAL PERKINS LOAN
PROGRAM
1. The authority citation for part 674
continues to read as follows:

■

Authority: 20 U.S.C. 1070g, 1087aa–
1087hh; Public Law 111–256, 124 Stat. 2643;
unless otherwise noted.

2. Section 674.61 is amended by:
a. In paragraph (c)(2)(iv), removing
‘‘The veteran’’ and adding in its place
‘‘Except as provided in paragraph (d) of
this section, the veteran’’.
■ b. Removing paragraph (c)(2)(x).
■ c. Redesignating paragraphs (d) and
(e) as paragraphs (f) and (g),
respectively.
■ d. Adding new paragraphs (d) and (e).
■ e. Removing the parenthetical
authority citation at the end of the
section.
The additions read as follows:

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■
■

§ 674.61

*

*

Discharge for death or disability.

*

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*

*

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(d) Discharge without an application.
(1) The Secretary may discharge a loan
under this section without an
application or any additional
documentation from the borrower if the
Secretary—
(i) Obtains data from the Department
of Veterans Affairs (VA) showing that
the borrower is unemployable due to a
service-connected disability; or
(ii) Obtains data from the Social
Security Administration (SSA) showing
that the borrower qualifies for SSDI or
SSI benefits and that the borrower’s next
scheduled disability review will be no
earlier than five nor later than seven
years.
(2) [Reserved]
(e) Notifications and return of
payments. (1) After determining that a
borrower qualifies for a total and
permanent disability discharge under
paragraph (d) of this section, the
Secretary sends a notification to the
borrower informing the borrower that
the Secretary will discharge the
borrower’s title IV loans unless the
borrower notifies the Secretary, by a
date specified in the Secretary’s
notification, that the borrower does not
wish to receive the loan discharge.
(2) Unless the borrower notifies the
Secretary that the borrower does not
wish to receive the discharge, the
Secretary notifies the borrower’s lenders
that the borrower has been approved for
a disability discharge.
(3) In the case of a discharge based on
a disability determination by VA—
(i) The notification—
(A) Provides the effective date of the
disability determination by VA; and
(B) Directs each institution holding a
Defense, NDSL, or Perkins Loan made to
the borrower to discharge the loan; and
(ii) The institution returns to the
person who made the payments any
payments received on or after the
effective date of the determination by
VA that the borrower is unemployable
due to a service-connected disability.
(4) In the case of a discharge based on
a disability determination by the SSA—
(i) The notification—
(A) Provides the date the Secretary
received the SSA notice of award for
SSDI or SSI benefits; and
(B) Directs each institution holding a
Defense, NDSL, or Perkins Loan made to
the borrower to assign the loan to the
Secretary within 45 days of the notice
described in paragraph (e)(2) of this
section; and
(ii) After the loan is assigned, the
Secretary discharges the loan in
accordance with paragraph (b)(3)(v) of
this section.
(5) If the borrower notifies the
Secretary that they do not wish to

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46981

receive the discharge, the borrower will
remain responsible for repayment of the
borrower’s loans in accordance with the
terms and conditions of the promissory
notes that the borrower signed.
*
*
*
*
*
PART 682—FEDERAL FAMILY
EDUCATION LOAN (FFEL) PROGRAM
3. The authority citation for part 682
continues to read as follows:

■

Authority: 20 U.S.C. 1071–1087–4, unless
otherwise noted.

4. Section 682.402 is amended by:
a. In paragraph (c)(9)(iv), removing
‘‘The veteran’’ and adding in its place
‘‘Except as provided in paragraph (c)(10)
of this section, the veteran’’.
■ b. Removing paragraph (c)(9)(xiii).
■ c. Adding paragraphs (c)(10) and (11).
■ d. Removing the parenthetical
authority citation at the end of the
section.
The additions read as follows:
■
■

§ 682.402 Death, disability, closed school,
false certification, unpaid refunds, and
bankruptcy payments.

*

*
*
*
*
(c) * * *
(10) Discharge without an application.
(i) The Secretary may discharge a loan
under this section without an
application or any additional
documentation from the borrower if the
Secretary—
(A) Obtains data from the Department
of Veterans Affairs (VA) showing that
the borrower is unemployable due to a
service-connected disability; or
(B) Obtains data from the Social
Security Administration (SSA) showing
that the borrower qualifies for SSDI or
SSI benefits and that the borrower’s next
scheduled disability review will be no
earlier than five nor later than seven
years.
(ii) [Reserved]
(11) Notifications and return of
payments. (i) After determining that a
borrower qualifies for a total and
permanent disability discharge under
paragraph (c)(10) of this section, the
Secretary sends a notification to the
borrower informing the borrower that
the Secretary will discharge the
borrower’s title IV loans unless the
borrower notifies the Secretary, by a
date specified in the Secretary’s
notification, that the borrower does not
wish to receive the loan discharge.
(ii) Unless the borrower notifies the
Secretary that the borrower does not
wish to receive the discharge, the
Secretary notifies the borrower’s loan
holders that the borrower has been
approved for a disability discharge.
With this notification the Secretary

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46982

Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations

provides the effective date of the
determination by VA or the date the
Secretary received the SSA notice of
award for SSDI or SSI benefits, and
directs the holder of each FFELP loan
made to the borrower to submit a
disability claim to the guaranty agency
in accordance with paragraph (g)(1) of
this section.
(iii) If the claim meets the
requirements of paragraph (g)(1) of this
section and § 682.406, the guaranty
agency pays the claim and must—
(A) Discharge the loan, in the case of
a discharge based on data from VA; or
(B) Assign the loan to the Secretary,
in the case of a discharge based on data
from the SSA.
(iv) The Secretary reimburses the
guaranty agency for a disability claim
after the agency pays the claim to the
lender.
(v) Upon receipt of the claim payment
from the guaranty agency, the loan
holder returns to the person who made
the payments any payments received on
or after—
(A) The effective date of the
determination by VA that the borrower
is unemployable due to a serviceconnected disability; or
(B) The date the Secretary received
the SSA notice of award for SSDI or SSI
benefits.
(vi) For a loan that is assigned to the
Secretary for discharge based on data
from the SSA, the Secretary discharges
the loan in accordance with paragraph
(c)(3)(iv) of this section.
(vii) If the borrower notifies the
Secretary that they do not wish to
receive the discharge, the borrower will
remain responsible for repayment of the
borrower’s loans in accordance with the
terms and conditions of the promissory
notes that the borrower signed.
*
*
*
*
*
PART 685—WILLIAM D. FORD
FEDERAL DIRECT LOAN PROGRAM
5. The authority citation for part 685
continues to read in part as follows:

■

Authority: 20 U.S.C. 1070g, 1087a, et seq.,
unless otherwise noted.

*

*
*
*
*
6. Section 685.213 is amended by:
a. In paragraph (b)(1) introductory
text, removing the words ‘‘To qualify’’
and adding, in their place, ‘‘Except as
provided in paragraph (d)(2) of this
section, to qualify’’.
■ b. In paragraph (c)(1) introductory
text, removing ‘‘To qualify’’ and adding
in their place ‘‘Except as provided in
paragraph (d)(1) of this section, to
qualify’’.
■ c. Removing paragraph (c)(1)(v).

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■
■

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d. Adding paragraphs (d) and (e).
■ e. Removing the parenthetical
authority citation at the end of the
section.
The additions read as follows:

DEPARTMENT OF VETERANS
AFFAIRS

§ 685.213 Total and permanent disability
discharge.

Extension of Veterans’ Group Life
Insurance (VGLI) Application Periods
in Response to the COVID–19 Public
Health Emergency

■

*

*
*
*
*
(d) Discharge without an application.
(1) The Secretary may discharge a loan
under this section without an
application or any additional
documentation from the borrower if the
Secretary—
(i) Obtains data from the Department
of Veterans Affairs showing that the
borrower is unemployable due to a
service-connected disability; or
(ii) Obtains data from the Social
Security Administration (SSA) showing
that the borrower qualifies for SSDI or
SSI benefits and that the borrower’s next
scheduled disability review will be no
earlier than five nor later than seven
years.
(2) [Reserved]
(e) Notification to the borrower. (1)
After determining that a borrower
qualifies for a total and permanent
disability discharge under paragraph (d)
of this section, the Secretary sends a
notification to the borrower informing
the borrower that the Secretary will
discharge the borrower’s title IV loans
unless the borrower notifies the
Secretary, by a date specified in the
Secretary’s notification, that the
borrower does not wish to receive the
loan discharge.
(2) Unless the borrower notifies the
Secretary that the borrower does not
wish to receive the discharge the
Secretary discharges the loan—
(i) In accordance with paragraph
(b)(4)(iii) of this section for a discharge
based on data from the SSA; or
(ii) In accordance with paragraph
(c)(2)(i) of this section for a discharge
based on data from VA.
(3) If the borrower notifies the
Secretary that they do not wish to
receive the discharge, the borrower will
remain responsible for repayment of the
borrower’s loans in accordance with the
terms and conditions of the promissory
notes that the borrower signed.
*
*
*
*
*
[FR Doc. 2021–18081 Filed 8–20–21; 8:45 am]
BILLING CODE 4000–01–P

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38 CFR Part 9
RIN 2900–AR24

Department of Veterans Affairs.
Final rule.

AGENCY:
ACTION:

This document adopts as a
final rule, without change, an interim
final rule amending the Department of
Veterans Affairs (VA) regulation
regarding Veterans’ Group Life
Insurance (VGLI). The amendment was
necessary in order to extend the
deadline for former members to apply
for VGLI coverage following separation
from service to address the inability of
former members directly or indirectly
affected by the 2019 Novel Coronavirus
(COVID–19) public health emergency to
purchase VGLI.
DATES: Effective September 22, 2021.
FOR FURTHER INFORMATION CONTACT: Paul
Weaver, Department of Veterans Affairs
Insurance Service (310/290B), 5000
Wissahickon Avenue, Philadelphia, PA
19144, (215) 842–2000, ext. 4263. (This
is not a toll-free number.)
SUPPLEMENTARY INFORMATION: An
interim final rule amending VA’s
regulation regarding the deadline for
former members to apply for VGLI
coverage following separation from
service was published in the Federal
Register on June 9, 2021 (86 FR 30541).
VA provided a 30-day comment
period that ended on July 9, 2021. No
comments were received. Based on the
rationale set forth in the interim final
rule, we now adopt the interim final
rule as a final rule without change.
SUMMARY:

Administrative Procedure Act
In the June 9, 2021, Federal Register
notice, VA determined that there was a
basis under the Administrative
Procedure Act for issuing the interim
final rule with immediate effect. We
invited and did not receive public
comment on the interim final rule. This
document adopts the interim final rule
as a final rule without change.
Paperwork Reduction Act
This final rule contains no provisions
constituting a collection of information
under the Paperwork Reduction Act (44
U.S.C. 3501–3521).
Executive Orders 12866 and 13563
Executive Orders 12866 and 13563
direct agencies to assess the costs and

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