News

The regulations for the Perkins Loan Program regarding Cohort have been finalized. The changes are effective July 1, 2000, although, some of the changes may be implemented on or after October 28, 1999. The full text of the changes are available in the Federal Register (Volume 64, Number 210). Below is the summary of changes.

SUMMARY: The Secretary amends the loan default reduction and prevention measures in the Student Assistance General Provisions regulations in 34 CFR part 668. These regulations reflect changes made by the Higher Education Amendments of 1998 to the Higher Education Act of 1965, as amended (HEA).

DATES: These regulations are effective July 1, 2000.

SUPPLEMENTARY INFORMATION: The Higher Education Amendments of 1998 (Pub. L. 105-244, enacted October 7, 1998, and referred to in the preamble to these final regulations as the ``1998 Amendments'') changed some requirements relating to the calculation of a school's Federal Family Education Loan (FFEL) Program cohort default rate, William D. Ford Federal Direct Loan (Direct Loan) Program cohort rate, or weighted average cohort rate. The Secretary is revising 34 CFR 668.17 of the Student Assistance General Provisions regulations to reflect these changes.
      On July 30, 1999, we published a notice of proposed rulemaking (NPRM) for the Student Assistance General Provisions in the Federal Register (64 FR 41752). In the preamble to the NPRM, we discussed on pages 41753 through 41758 the major changes proposed in that document for the loan default reduction and prevention measures in the Student Assistance General Provisions:
      <bullet> Amending Sec. 668.17(a)(1) and 668.17(j) to change the process that schools use to identify and challenge or request an adjustment to incorrect data.
      <bullet> Amending Sec. 668.17(b)(4) to reflect the amendment to the HEA that makes a school ineligible to participate in the Federal Pell Grant Program when it becomes ineligible to participate in the FFEL or Direct Loan Program due to excessive rates.
      <bullet> Amending Sec. 668.17(b)(5)(ii) and 668.17(b)(6) to implement the statutory amendments that make a school liable for the loans it certifies and delivers or originates and disburses while it is appealing a loss of participation.
      <bullet> Amending Sec. 668.17(c)(1)(ii)(A) and 668.17(j)(4) to reflect the statutory changes that modify the requirements for a school's appeal on the basis of its participation rate index (PRI).
      <bullet> Amending Sec. 668.17(c)(1)(ii)(B) and 668.17(c)(7) to reflect the amendments that modify requirements for a school's mitigating circumstances appeal based on its economically disadvantaged rate and completion or placement rate.
      <bullet> Adding Sec. 668.17(c)(1)(ii)(C) and (D) to permit a school to appeal its loss of participation on the basis of two new mitigating circumstances.
      <bullet> Amending Sec. 668.17(e), 668.17(f), and 668.17(h)(2)(iii) to conform to statutory changes in the definition of ``default.''
      <bullet> Adding Sec. 668.17(k) and Appendix H to implement the statutory changes relating to the treatment of special institutions.
      Except for minor editorial and technical revisions and revisions that provide clarification, there are no differences between the NPRM and these final regulations. As in the NPRM, to avoid confusion in the preamble to these final regulations, we use the word ``rate'' by itself to refer to an FFEL Program cohort default rate, Direct Loan Program cohort rate, or weighted average cohort rate. We use the complete term if we are referring to another type of ``rate'': an ``economically disadvantaged rate,'' a ``completion rate,'' a ``placement rate,'' or a ``participation rate.''