SUPPORTING STATEMENT
Information Collections Under the Proposed Regulations Governing the William D. Ford Direct Loan Program.
A. Justification
1. Necessity of Information Collected
The William D. Ford Direct Loan (Direct Loan) Program proposed regulations revise current regulations in the area of program administration as described below.
The proposed regulations are a result of regulatory review of the program regulations to reduce administrative burden for program participants, provide benefits to borrowers, and protect the taxpayers' interest. This request is for approval of reporting requirements contained in the attached proposed regulations related to the administrative requirements of the Direct Loan program. The information collection requirements in these proposed regulations are necessary to determine eligibility to receive program benefits and to prevent fraud and abuse of program funds.
Direct Loan Program: (OMB control number: 1845-0021)
Section 685.304 contains information collection requirements currently approved by OMB. Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), the Department of Education is submitting a copy of this section to the Office of Management (OMB) for its review. We are making the following change to this section:
Section 685.304 – Counseling borrowers.
The proposed regulations in 685.304 require that institutions provide initial counseling for Direct Loan borrowers and graduate or professional student PLUS Loan borrowers. Comprehensive information on the terms and conditions of the loan and on the responsibilities of the borrower with respect to the loan must be provided. Institutions are encouraged to use interactive programs that provide online borrower acknowledgement of receipt. The increase in burden for borrowers and institutions is as a result of expanding the counseling from the current requirements.
2. Purpose and Use of Information Collected
Direct Loan Program:
The information collected, recorded, and/or disclosed in §685.212 will continue to be used as necessary in the discharge of loans.
3. Consideration of Improved Information Technology
Direct Loan Program:
We continue to maximize the use of available technology in making and servicing Direct Loan Program loans. This effort extends to requirements that the Direct Loan regulations impose on borrowers and schools.
4. Efforts to Identify Duplication
A thorough review of procedures indicates that current requirements are minimal and avoid duplication. This review was done in conjunction with affected parties who have a vested interest in eliminating duplication.
5. Burden Minimization as Applied to Small Business
No small businesses are impacted by this collection.
6. Consequences of Less Frequent Data Collection
Recordkeeping requirements are imposed to assure accountability of program participants for proper program administration and less frequent collection could impair accountability of program participants.
Special Circumstances Governing Data Collection
The collection of this information will be conducted in a manner that is consistent with the guidelines in 5 CFR 1320.5(d)(2).
8. Consultation Outside the Agency
These proposed regulations were discussed with members of the higher education community and other interested parties in a series of Negotiated Rulemaking sessions in March, April and May of 2009. Additionally, we will publish relevant 30 and 60 day notices in the Federal Register allowing for public comment by all interested parties.
9. Payments or Gifts to Respondents
No payments or gifts will be provided to the respondents.
10. Assurance of Confidentiality
A Privacy Act Notice is included on the Application Form and Promissory Note. In this notice, the borrower is informed of the statutory authority for collecting the information requested. Although disclosure of the information is voluntary, the borrower is informed that in order to be considered for Direct Loan Program funds, the information must be provided. The information provided is used to verify the borrower's identity, to determine the borrower's eligibility to receive a Direct Loan Program loan and benefits, to permit the servicing of the borrower's loan(s), and to locate the borrower and collect on the loan(s) if the loan(s) become delinquent or default. A listing of the persons and entities to which the information may be disclosed and for what purposes the information may be disclosed is also included.
11. Questions of Sensitive Nature
The Department is not requesting any sensitive data.
12. Annual Hour Burden for Respondents/Recordkeepers.
Direct Loan Program: (OMB 1845-0021)
Section 685.304 – Counseling borrowers.
We estimate that the additional burden on borrowers and institutions will increase slightly.
AFFECTED ENTITIES and BURDEN:
Entrance Counseling:
Number of Direct Loan (DL) borrowers: 2,723,751
Estimate of additional burden: X .08 hours (5 minutes)
Total additional burden on BORROWERS: 217,900 hours
Number of DL Institutions:
Public institutions in the DL program: 1,363
Estimate of the additional burden: X 3 hours
4,089 hours
Private institutions in the DL program: 1,536
Estimate of the additional burden: X 3 hours
4,608 hours
Proprietary institutions in the DL program: 1,295
Estimate of the additional burden: X 3 hours
3,885 hours
Total additional burden on INSTITUTIONS: 12,582 hours
Exit Counseling:
Number of DL borrowers: 2,669,275
Estimate of additional burden: X .08 hours (5 minutes)
Total additional burden on BORROWERS: 213,542 hours
Number of DL Institutions:
Public institutions in the DL program: 1,363
Estimate of the additional burden: X 3 hours
4,089 hours
Private institutions in the DL program: 1,536
Estimate of the additional burden: X 3 hours
4,608 hours
Proprietary institutions in the DL program: 1,295
Estimate of the additional burden: X 3 hours
3,885 hours
Total additional burden on INSTITUTIONS: 12,582 hours
Annual Cost of Burden to Respondents
Direct Loan Program:
We estimate that the cost will be insignificant.
13. Start-up Cost Burden to the Respondent
There are no new system start-up costs associated with these proposed regulations.
14. Estimated Annual Cost to the Federal Government
There are no additional costs to the Federal government as a result of the final regulations.
15. Reasons for Changes to Burden Hour Estimated
This is a new collection that is required by a proposed change in the regulation due to implementing the statutory changes made by the Higher Education Opportunity Act (HEOA) (Pub. L. 110-315) that amends the Higher Education Act of 1965, as amended (HEA). A summary is provided below.
Respondents, Responses and Burden Hours:
# of Respondents # of Responses #Hrs
Burden
Section 685.304 – Counseling borrowers.
2,727,945 2,727,945 230,482
2,673,469 2,673,469 226,124
TOTAL 5,401,414 5,401,414 456,606
Current Inventory:
# of Respondents # of Responses #Hrs
Burden
927,119 1,202,253 79,392
Revised Inventory:
# of Respondents # of Responses #Hrs
Burden
6,328,533 6,603,667 535,998
16. Collection of Information with Published Results
The results of the collection of information will not be published.
17. Approval to Not Display Expiration Date
ED is not seeking this approval.
18. Exception to the Certification Statement
ED is not requesting any exceptions to the "Certification for Paperwork Reduction Act Submissions" of OMB Form 83-1.
| File Type | application/msword |
| File Title | SUPPORTING STATEMENT |
| Author | I.R.G. |
| Last Modified By | Authorised User |
| File Modified | 2009-07-02 |
| File Created | 2009-07-02 |