Publication Date: November 1, 2016

Posted Date: November 1, 2016

Subject: Borrower Defense; Final Rule

FR Type: Final

Effective Date: July 1, 2017

Borrower Defense; Final Rule in PDF Format, 3.41MB, 164 Pages


[Federal Register Volume 81, Number 211 (Tuesday, November 1, 2016)]
[Rules and Regulations]
[Pages 75926-76089]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25448]

[[Page 75925]]

Vol. 81

Tuesday,

No. 211

November 1, 2016

Part II


Department of Education

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34 CFR Parts 30, 668, 674, et al.

Student Assistance General Provisions, Federal Perkins Loan Program, 
Federal Family Education Loan Program, William D. Ford Federal Direct 
Loan Program, and Teacher Education Assistance for College and Higher 
Education Grant Program; Final Rule

Federal Register / Vol. 81 , No. 211 / Tuesday, November 1, 2016 / 
Rules and Regulations

[[Page 75926]]

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DEPARTMENT OF EDUCATION

34 CFR Parts 30, 668, 674, 682, 685, and 686

RIN 1840-AD19
[Docket ID ED-2015-OPE-0103]


Student Assistance General Provisions, Federal Perkins Loan 
Program, Federal Family Education Loan Program, William D. Ford Federal 
Direct Loan Program, and Teacher Education Assistance for College and 
Higher Education Grant Program

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Final regulations.

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SUMMARY: The Secretary establishes new regulations governing the 
William D. Ford Federal Direct Loan (Direct Loan) Program to establish 
a new Federal standard and a process for determining whether a borrower 
has a defense to repayment on a loan based on an act or omission of a 
school. We also amend the Direct Loan Program regulations to prohibit 
participating schools from using certain contractual provisions 
regarding dispute resolution processes, such as predispute arbitration 
agreements or class action waivers, and to require certain 
notifications and disclosures by schools regarding their use of 
arbitration. We amend the Direct Loan Program regulations to codify our 
current policy regarding the impact that discharges have on the 150 
percent Direct Subsidized Loan Limit. We amend the Student Assistance 
General Provisions regulations to revise the financial responsibility 
standards and add disclosure requirements for schools. Finally, we 
amend the discharge provisions in the Federal Perkins Loan (Perkins 
Loan), Direct Loan, Federal Family Education Loan (FFEL), and Teacher 
Education Assistance for College and Higher Education (TEACH) Grant 
programs. The changes will provide transparency, clarity, and ease of 
administration to current and new regulations and protect students, the 
Federal government, and taxpayers against potential school liabilities 
resulting from borrower defenses.

DATES: These regulations are effective July 1, 2017. Implementation 
date: For the implementation dates of the included regulatory 
provisions, see the Implementation Date of These Regulations section of 
this document.

FOR FURTHER INFORMATION CONTACT: For further information related to 
borrower defenses, Barbara Hoblitzell at (202) 453-7583 or by email at: 
Barbara.Hoblitzell@ed.gov. For further information related to false 
certification and closed school loan discharges, Brian Smith at (202) 
453-7440 or by email at: Brian.Smith@ed.gov. For further information 
regarding institutional accountability, John Kolotos or Greg Martin at 
(202) 453-7646 or (202) 453-7535 or by email at: John.Kolotos@ed.gov or 
Gregory.Martin@ed.gov.  If you use a telecommunications device for the
deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS),
toll free, at 1-800-877-8339.
 

Attachments/Enclosures:

Borrower Defense; Final Rule in PDF Format, 3.41MB, 164 Pages

   

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