Rule2022-22205
Federal Student Aid Programs (Federal Perkins Loan Program, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program)
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 12, 2022
Effective
October 12, 2022
Issuing agencies
Education Department
Abstract
The Secretary of Education (Secretary) is issuing updated waivers and modifications of statutory and regulatory provisions governing the Federal student financial aid programs under the authority of the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act or Act). The waivers and modifications in this document apply only to the national emergency concerning the coronavirus disease 2019 (COVID-19 pandemic).
Full Text
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<title>Federal Register, Volume 87 Issue 196 (Wednesday, October 12, 2022)</title>
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[Federal Register Volume 87, Number 196 (Wednesday, October 12, 2022)]
[Rules and Regulations]
[Pages 61512-61514]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-22205]
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DEPARTMENT OF EDUCATION
34 CFR Parts 674, 682, and 685
Federal Student Aid Programs (Federal Perkins Loan Program,
Federal Family Education Loan Program, and William D. Ford Federal
Direct Loan Program)
AGENCY: Office of Postsecondary Education, Department of Education.
ACTION: Waivers and modifications of statutory and regulatory
provisions.
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SUMMARY: The Secretary of Education (Secretary) is issuing updated
waivers and modifications of statutory and regulatory provisions
governing the Federal student financial aid programs under the
authority of the Higher Education Relief Opportunities for Students Act
of 2003 (HEROES Act or Act). The waivers and modifications in this
document apply only to the national emergency concerning the
coronavirus disease 2019 (COVID-19 pandemic).
DATES: The waivers and modifications of statutory and regulatory
provisions are effective October 12, 2022. Unless specifically noted
within a waiver or modification identified below, a waiver or
modification identified in this document expires at the end of the
award year in which the COVID-19 national emergency expires, unless the
waiver or modification is otherwise extended by the Secretary in a
document published in the Federal Register.
FOR FURTHER INFORMATION CONTACT: Richard Blasen, by telephone: (202)
987-0315 or by email: <a href="/cdn-cgi/l/email-protection#37655e545f56455319755b5644525977525319505841"><span class="__cf_email__" data-cfemail="580a313b30392a3c761a34392b3d36183d3c763f372e">[email protected]</span></a>.
If you are deaf, hard of hearing, or have a speech disability and
wish to access telecommunications relay services, please dial 7-1-1.
SUPPLEMENTARY INFORMATION: On December 11, 2020, the Secretary
published a document in the Federal Register announcing waivers and
modifications of statutory and regulatory requirements governing the
Federal student financial aid programs under the authority of the
HEROES Act, as codified at 20 U.S.C. 1098aa-1098ee. 85 FR 79856 (Dec.
11, 2020). On January 19, 2021, the Secretary published corrections to
those updated waivers and modifications. 86 FR 5008 (Jan. 19, 2021).
The Secretary is issuing this document to provide certain updated
waivers and modifications under the HEROES Act.
The HEROES Act authorizes the Secretary to waive or modify any
statutory or regulatory provision applicable to the Federal student
financial assistance programs under title IV of the Higher Education
Act of 1965, as amended (HEA), 20 U.S.C. 1070 et seq., as the Secretary
deems necessary in connection with a war or other military operation or
national emergency to fulfill certain purposes enumerated in the
statute. 20 U.S.C. 1098bb(a). Such waivers or modifications may be
provided to affected individuals who are recipients of Federal student
financial assistance under title IV of the HEA; and to institutions of
higher education (IHEs), eligible lenders, guaranty agencies (GAs), and
other entities participating in the Federal student financial
assistance programs under title IV of the HEA that are located in areas
declared disaster areas by any Federal, State, or local official in
connection with a national emergency, whose operations are
significantly affected by such a disaster (affected entities). Id.
1098bb(a)(2)(A), (E). Affected individuals include, among others, any
individual who ``resides or is employed in an area that is declared a
disaster area by any Federal, State, or local official in connection
with a national emergency'' or any individual who ``suffered direct
economic hardship as a direct result of a . . . national emergency, as
determined by the Secretary.'' Id. 1098ee(2)(C), (D). The Secretary may
issue waivers and modifications ``as may be necessary to ensure that''
such individuals ``are not placed in a worse position financially in
relation to [their] financial assistance because of their status as
affected individuals.'' Id. 1098bb(a)(2)(A). Affected entities ``may be
granted temporary relief from requirements that are rendered infeasible
or unreasonable by a national emergency, including due diligence
requirements and reporting deadlines.'' Id. 1098bb(a)(2)(E).
In 20 U.S.C. 1098bb(b)(1), the HEROES Act further provides that
section 437 of the General Education Provisions Act (20 U.S.C. 1232)
and section 553 of the Administrative Procedure Act (5 U.S.C. 553) do
not apply to this waiver or modification of student financial
assistance program provisions.
The Department recently published a memorandum outlining its
interpretation of the HEROES Act. See Notice of Debt Cancellation Legal
[[Page 61513]]
Memorandum, 87 FR 52943 (Aug. 30, 2022). That memorandum explained why
a January 2021 memorandum authored by a former Principal Deputy General
Counsel was substantively and procedurally deficient. See id. at 52944-
45 & n.5.
On March 13, 2020, by Proclamation 9994, 85 FR 15337, the President
declared a national emergency concerning the COVID-19 pandemic, which
was extended on February 24, 2021 (86 FR 11599), and February 18, 2022
(87 FR 10289). The waivers and modifications provided in this document
apply only to the declared national emergency due to the COVID-19
pandemic. Prior waivers granted by the Secretary under this Act remain
in effect for affected individuals and affected entities, as defined in
those waivers.
In 20 U.S.C. 1098ee, the HEROES Act provides definitions critical
to determining whether a person is an ``affected individual'' under the
Act and, if so, which waivers and modifications apply to the affected
individual. As noted above, the term ``affected individual'' includes
any individual who ``resides or is employed in an area that is declared
a disaster area by any Federal, State, or local official in connection
with a national emergency'' or ``any individual who ``suffered direct
economic hardship as a direct result of a national emergency, as
determined by the Secretary.'' 20 U.S.C. 1098ee(2)(C), (D). Because the
COVID-19 pandemic has been declared and continues to be a national
emergency, and because the Federal Government has declared every State,
the District of Columbia, and all five permanently populated United
States territories to be disaster areas due to COVID-19, the ``affected
individuals'' for purposes of the waivers and modifications described
in this document include any person with a Federal student loan under
title IV of the HEA.
Next, the Act describes in 20 U.S.C. 1098bb(a)(2) the purposes for
which the Secretary may grant relief to ``affected individuals.'' As
relevant here, the Secretary may waive or modify statutory and
regulatory provisions ``as may be necessary to ensure'' that
``recipients of student financial assistance under title IV of the
[HEA] who are affected individuals are not placed in a worse position
financially in relation to that financial assistance because of their
status as affected individuals.'' 20 U.S.C. 1098bb(a)(2)(A). The
statute also authorizes the Secretary to minimize administrative
requirements placed on affected individuals who are recipients of
student financial assistance to the extent possible without impairing
the integrity of the student financial assistance programs, to ease the
burden on such individuals and avoid inadvertent technical violations
or defaults. Id. 1098bb(a)(2)(B).
The Secretary determined that the financial harm caused by the
COVID-19 pandemic has made the waivers and modifications described in
this document necessary to ensure that affected individuals are not
placed in a worse position financially with respect to their student
loans because of that harm.\1\ The Secretary further determined that
the modifications and waivers as described in this document will help
minimize the administrative burdens placed on affected individuals. The
Secretary is publishing this document in the Federal Register in
accordance with 20 U.S.C. 1098bb(b)(1). The waivers and modifications
are discussed further below:
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\1\ <a href="https://studentaid.gov/debt-relief-announcement">https://studentaid.gov/debt-relief-announcement</a>.
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<bullet> The automatic suspension of payment and application of a
zero percent interest rate for affected individuals with federally held
Direct Loans, federally held Federal Family Education Loans (FFEL),
federally held Perkins Loans, federally held Health Education
Assistance Loans (HEAL), and defaulted FFEL loans subject to collection
by a guaranty agency are further extended until December 31, 2022. The
automatic suspension of payment and the application of a zero percent
interest rate on loans held by the Department were extended to October
1, 2020, under the Coronavirus Aid, Relief, and Economic Security
(CARES) Act.\2\ The Secretary previously extended those benefits
through August 31, 2022, and on August 24, 2022, the Secretary
announced the extension of those benefits through December 31, 2022.
Affected individuals will be required to make payments on their loans
beginning in January 2023.
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\2\ <a href="https://www.congress.gov/bill/116th-congress/house-bill/748/text">https://www.congress.gov/bill/116th-congress/house-bill/748/text</a>.
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<bullet> On August 24, 2022, the Secretary announced that he
intended to discharge loans to address the financial hardship arising
out of the COVID-19 pandemic on individuals who owe student loans.
Specifically, the Department announced it intended to discharge certain
amounts of Federal Direct Loans and FFEL loans held by the Department
or subject to collection by a guaranty agency and Federal Perkins Loans
held by the Department (covered loans). The Department announced that,
subject to certain income limitations, it intended to discharge up to a
total of $20,000 in covered loans for affected individuals who received
Pell Grants and up to a total of $10,000 in covered loans for affected
individuals who did not receive a Pell Grant. Granting relief on a
class-wide basis in this manner will also minimize administrative
burdens and thus ``ease the burden'' on students who are affected
individuals. 20 U.S.C. 1098bb(a)(2)(B); see also id. 1098bb(b)(3)
(authorizing class-wide relief).
Prior waivers granted by the Secretary under the HEROES Act that
are not otherwise mentioned in this document remain in effect for
affected individuals, as defined in those waivers. See 85 FR 79856; 86
FR 5008.
Waiver Granted Under the Heroes Act in Response to the COVID-19
Pandemic
Suspension of Payments Under Section 3513 of the CARES Act
Section 3513 of the CARES Act directs the Secretary to: (1) suspend
all payments due, (2) cease interest accrual, and (3) suspend
involuntary collections for loans that are held by the Department and
made under parts D and B of title IV of the HEA through September 30,
2020. The section also directs the Secretary to deem each month for
which a loan payment was suspended as if the borrower of the loan had
made a payment for the purpose of any loan forgiveness program or loan
rehabilitation program authorized under parts D or B for which the
borrower would have otherwise qualified. Lastly, this section directs
the Secretary to ensure that, for the purpose of reporting information
about the loan to a consumer reporting agency, any payment that has
been suspended is treated as if it were a regularly scheduled payment
made by a borrower.
On August 8, 2020, President Donald J. Trump issued a memorandum
directing the Secretary to continue to waive interest and payments on
such loans until December 31, 2020. On December 4, 2020, at the
direction of President Trump, the Department further extended the
payment pause to January 31, 2021. On January 21, 2021, at the
direction of President Joseph R. Biden, the Department further extended
the pause through September 30, 2021. On August 6, 2021, the President
authorized the Secretary to use his authority under the HEROES Act to
extend the benefits provided under section 3513 of the CARES Act until
January 31, 2022, for borrowers with federally held Perkins, HEAL,
Direct, and FFEL loans. President Biden announced on December 22, 2021,
that the Secretary would extend the waiver
[[Page 61514]]
on interest and payments on such loans through May 1, 2022, and the
Secretary further extended the benefits until August 31, 2022.
Following these prior announcements, on August 24, 2022, the Secretary
announced he was using his authority under the HEROES Act to modify the
terms of the CARES Act to extend the waiver on interest and payments on
such loans through December 31, 2022.\3\
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\3\ <a href="https://studentaid.gov/debt-relief-announcement">https://studentaid.gov/debt-relief-announcement</a>.
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The Secretary extends those waivers and modifications specified in
the December 11, 2020, Federal Register document (85 FR 79856), that
relate to the payment and collection of, and accumulation of interest
on, Federal student loans, through December 31, 2022. The Department
further extends the corresponding pause for FFEL loans held by guaranty
agencies, as discussed in Dear Colleague Letter GEN-21-03, through
December 31, 2022.
Debt Discharge
Pursuant to the HEROES Act, 20 U.S.C. 1098bb(a)(1), the Secretary
modifies the provisions of: 20 U.S.C. 1087, which applies to the Direct
Loan Program under 20 U.S.C. 1087a and 1087e; 20 U.S.C. 1087dd(g); and
34 CFR part 674, subpart D, and 34 CFR 682.402 and 685.212 to provide
that, notwithstanding any other statutory or regulatory provision, the
Department will discharge the balance of a borrower's eligible loans up
to a maximum of: (a) $20,000 for borrowers who received a Pell Grant
and had an Adjusted Gross Income (AGI) below $125,000 for an individual
taxpayer or below $250,000 for borrowers filing jointly or as a Head of
Household, or as a qualifying widow(er) in either the 2020 or 2021
Federal tax year; or (b) $10,000 for borrowers who did not receive a
Pell Grant and had an AGI on a Federal tax return below $125,000 if
filed as an individual or below $250,000 if filed as a joint return or
as a Head of Household,\4\ or as a qualifying widow(er) in either the
2020 or 2021 Federal tax year. This waiver is applicable to borrowers
with eligible loans who apply by the deadline established by the
Secretary (to the extent an application is required) and who are
determined to be eligible by the Department. Borrowers who are eligible
for relief without applying will have the option to opt out of the
program. Eligible loans include the following categories of loans,
provided they were disbursed by June 30, 2022: Direct Loans, FFEL loans
held by the Department or subject to collection by a guaranty agency,
and Perkins Loans held by the Department.
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\4\ Adjusted Gross Income is defined as in 26 Internal Revenue
Code (I.R.C.) 61-62. Head of Household is defined in 26 I.R.C. 2.
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Direct Consolidation loans disbursed after June 30, 2022, and for
which the repaid loans were loans described in the paragraph above, are
also eligible for relief. However, Direct Consolidation loans disbursed
after June 30, 2022, and for which the repaid loans include a FFEL loan
not held by ED, are only eligible for relief if the borrower submitted
an application to consolidate such loans prior to September 29, 2022.
Accessible Format: On request to Robin Moss, by telephone: (202)
453-7106 or by email: <a href="/cdn-cgi/l/email-protection#14667b767d7a3a797b67675471703a737b62"><span class="__cf_email__" data-cfemail="077568656e69296a68747447626329606871">[email protected]</span></a>, individuals with disabilities
can obtain this document in an accessible format. The Department will
provide the requestor with an accessible format that may include Rich
Text Format (RTF) or text format (txt), a thumb drive, an MP3 file,
braille, large print, audiotape, or compact disc, or other accessible
format.
Electronic Access to This Document: The official version of this
document is the document published in the Federal Register. You may
access the official edition of the Federal Register and the Code of
Federal Regulations at <a href="http://www.govinfo.gov">www.govinfo.gov</a>. At this site you can view this
document, as well as all other documents of this Department published
in the Federal Register, in text or Portable Document Format (PDF). To
use PDF, you must have Adobe Acrobat Reader, which is available free at
the site.
You may also access documents of the Department published in the
Federal Register by using the article search feature at
<a href="http://www.federalregister.gov">www.federalregister.gov</a>. Specifically, through the advanced search
feature at this site, you can limit your search to documents published
by the Department.
(Assistance Listing Numbers: 84.032 Federal Family Education Loan
Program; 84.038 Federal Perkins Loan Program; 84.063 and 84.268 William
D. Ford Federal Direct Loan Program.)
Program Authority: 20 U.S.C. 1071, 1082, 1087a, 1087aa, Part F-1.
Nasser H. Paydar,
Assistant Secretary for Postsecondary Education.
[FR Doc. 2022-22205 Filed 10-11-22; 8:45 am]
BILLING CODE 4000-01-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.