Office of Postsecondary Education - U.S. Department of Education

WReier-Aviles on DSKGBLS3C1PROD with RULES266930 Federal Register / Vol. 75, No. 209 / Friday, October 29, 2010 / Rules and RegulationsConcerning the request for a delay inimplementing these regulations, webelieve that an institution has ampletime to make any administrative andsoftware changes required since theregulations are not effective until the2011–2012 award year.Changes: None.Comment: Some commentersquestioned whether the anticipatedcredit balance for a student under theproposed regulations is calculated basedonly on Federal Pell Grant funds; alltitle IV, HEA program funds; or allfinancial aid funds.In determining whether an institutioncould disburse title IV, HEA programfunds to an eligible student 10 daysbefore the beginning of a paymentperiod, several commenters requestedthe Department to clarify how aninstitution treats a student who (1) Isselected for verification, (2) is subject tothe 30 day delayed disbursementprovisions for first-time, first-yearundergraduate borrowers, (3) isattending a term-based program withminisessions, (4) has a ‘‘C’’ code on theSAR or ISIR, or (5) has other unresolvedeligibility issues.Some commenters requested that theregulations provide that an institution isonly required to provide a student withthe funds or bookstore vouchers forbooks and supplies after the student hasattended at least one day of class.One commenter noted that underFederal law a bank must have acustomer identification program to helpthe government fight the funding ofterrorism. Under that program, a bankmust verify the identity of any personwho opens an account and haveprocedures in place to resolveconflicting identity data. Thecommenter was concerned that forinstitutions using bank-issued storedvaluecards or prepaid debit cards todeliver funds for books and supplies,any delays by the bank in resolving theconflicts would delay the delivery offunds to students. Consequently, thecommenter requested that theregulations allow for this type of delay.One commenter asked how theproposed regulations would applyunder a consortium agreement betweentwo eligible institutions if the student isenrolled in a course at the hostinstitution with the class starting priorto the payment period at the homeinstitution and the home institution isprocessing and paying the title IV, HEAprogram assistance. Another commenterasked what action would be required byan institution if it includes books andsupplies in the tuition and provides allof those materials to the student whenhe or she starts class.Discussion: With regard to which aidfunds are used to determine whether acredit balance would be created 10 daysbefore the beginning of a paymentperiod, an institution must consider allthe title IV, HEA program funds that astudent is eligible to receive at that time.The institution does not have toconsider aid from any other sources.To be eligible, the student must meetall the eligibility requirements insubpart C of 34 CFR part 668 at least 10days before the start of the student’spayment period. A student who has notcompleted the verification process, hasan unresolved ‘‘C’’ code on the SAR andISIR, or has unresolved conflictinginformation is not covered by theregulations if those issues have not beenresolved at least 10 days before the startof the student’s payment period. Withregard to the 30-day delayeddisbursement provisions for StaffordLoans, the institution would notconsider the amount of the loandisbursement in determining the creditbalance because the institution may notdisburse that loan 10 days before thestart of that student’s payment period.Also, the institution would not considertitle IV, HEA program assistance thathas not yet been awarded to a studentat least 10 days before the start ofclasses because the student missed afinancial aid deadline date.The amount that the institution mustprovide to a qualifying student to obtainor purchase books and supplies is thelesser of the presumed credit balance orthe amount needed by the student asdetermined by the institution. Indetermining the amount needed, aninstitution may use the actual costs ofbooks and supplies or the allowance forthose materials used in the student’scost of attendance for the paymentperiod.Since an institution has until theseventh day of a student’s paymentperiod to provide the way for thestudent to obtain or purchase the booksand supplies, the institution maydetermine whether the student hasattended classes if it has, or chooses toimplement, a process for taking ormonitoring attendance. However, by theseventh day of the payment period, thatstudent must be able to obtain booksand supplies unless the institutionknows that the student is not attending.When an institution uses a bankissuedstored-value or prepaid debitcard that is supported by a federallyinsured bank account to deliver fundsfor books and supplies, a student musthave access to the funds via the card bythe seventh day of his or her paymentperiod. If a bank delays issuing a storedvalueor prepaid debit card to theVerDate Mar2010 14:10 Oct 28, 2010 Jkt 223001 PO 00000 Frm 00100 Fmt 4701 Sfmt 4700 E:\FR\FM\29OCR2.SGM 29OCR2student because it must resolveconflicting identity data under Federallaw, the Department will not hold theinstitution accountable as long as theinstitution exercises reasonable care anddiligence in providing in a timelymanner any identity information aboutthe student to the bank. Likewise, theinstitution is not responsible if thestudent provides inaccurate informationor delays in responding to a requestfrom the bank to resolve anydiscrepancies.Under a consortium agreementbetween two eligible institutions, if astudent is enrolled in a course at thehost institution and classes start beforethe payment period begins at the homeinstitution that is paying the title IV,HEA program assistance, the regulationsrequire that the student obtain the booksand supplies by the seventh day of thestart of the payment period of the homeinstitution. If the host institution ispaying the title IV, HEA programassistance, the student must be able toobtain the books and supplies by theseventh day of the start of the paymentperiod of the host institution.An institution that includes the costsof books and supplies in the tuitioncharged and provides all of thosematerials to the student at the start ofhis or her classes meets therequirements of these regulations.Changes: None.Comment: Several commenters wereconcerned over who would be liable foradvancing funds to a student for booksand supplies if the student fails to startall of his or her classes. Somecommenters indicated that the potentialdebt owed to an institution by studentsunder the proposed regulations is not inthe best interest of the student. A fewcommenters noted that the use ofbookstore vouchers as the way for astudent to obtain books and suppliesappears to increase the amount ofunearned title IV funds that theinstitution must return when a studentwithdraws.Discussion: These regulations do notchange the provisions under 34 CFR668.21 concerning the treatment of titleIV grant and loan funds if the recipientdoes not begin attendance at theinstitution. In the case where theinstitution has credited the student’saccount at the institution or disburseddirectly to the student any Federal PellGrant, FSEOG, Federal Perkins Loan,TEACH Grant, ACG, or NationalSMART Grant program funds and thestudent fails to begin attendance in apayment period, the institution mustreturn all of those program funds to therespective program.