Department of Education: Repeal of the restriction on the subsidized use limit of the federal direct loan program William D. Ford

B-333378

July 1, 2021

The Honorable Patty Murray
Chair
The Honorable Richard Burr
Ranking Member
Committee on Health, Education, Work and Pensions
United States Senate

The Honorable Robert C. “Bobby” Scott
President
The Honorable Virginie Foxx
Ranking Member
Education and Labor Commission
House of Representatives

Matter: Department of Education: Repeal of the restriction on the subsidized use limit of the federal direct loan program William D. Ford

Pursuant to Section 801 (a) (2) (A) of Title 5, United States Code, this is our report on a major rule promulgated by the Department of Education (Department) entitled “Repeal of the William D. Ford Federal Direct Loan Program Subsidized Limit Restriction ”(RIN: 1840-AD60). We received the rule on June 17, 2021. It was published in the Federal Register as final settlement on June 14, 2021. 86 Fed. Reg. 31432. The effective date is August 13, 2021.

According to the ministry, the Secretary of Education, thanks to this action, removed and amended the regulations to comply with the changes made by the 2021 Consolidated Appropriations Act. See in general Pub. L. n ° 116-260, 134 Stat. 1182 (December 27, 2020). The ministry said the secretary removed the Subsidized Use Loan Limit (SULA) restriction for any borrower who receives a Stafford Direct Federal Subsidized Loan first disbursed on or after July 1, 2021, regardless the grant year associated with the loan. The Department has also stated that all grants will be reinstated retroactively to the date the grant loss was applied for all Federal Direct Granted Stafford loans with an outstanding balance as of July 1, 2021, and for all award years. since 2013-2014. award year. Finally, the ministry added that the secretary had also removed the regulations related to SULA and made other technical changes.

The Congressional Review Act (CRA) requires 60 days for the effective date of a major rule from the date of publication in the Federal Register or receipt of the rule by Congress, whichever is later. 5 USC § 801 (a) (3) (A). The 60-day period from the effective date may be waived, however, if the agency for good reason believes the delay is impractical, unnecessary or contrary to the public interest, and the agency incorporates a statement of the findings and its grounds in the rule Posted. 5 USC § 808 (2). Here, although the Ministry did not specifically mention the CRA’s 60-day deadline for the effective date, the Ministry stated that the notice and comment procedures were not necessary for this. final regulatory action and that it has found good reason to waive these procedures under Section 553 (b) (3) (B) of the Administrative Procedure Act. The Ministry says there are good reasons for waiving the Notice and Comment because this final regulatory action removes the regulations for which the legal authorization has been revoked. In addition, the Ministry stated that this final regulatory action does not adopt any new regulations and does not establish or affect substantive policy. The Ministry noted that the development of rules for notices and comments is not necessary because it does not have the discretion to retain these regulations or to implement them in a different way, independently. public opinion and comments. Therefore, according to the department, the Secretary, under 5 USC § 553 (b) (B) (3), determined that the proposed regulations are unnecessary and, therefore, waived the development of notification rules. and commentary.

Attached is our assessment of Commerce’s compliance with the procedural steps required by Section 801 (a) (1) (B) (i) through (iv) of Title 5 with respect to the rule. If you have any questions about this report or would like to contact the GAO officials responsible for the assessment work relating to the purpose of the rule, please contact Shari Brewster, Deputy General Counsel, at (202) 512-6398.

Shirley A. Jones
Associate Legal Director

Pregnant

cc: Amanda Amann
Deputy Deputy Advocate General
Regulatory Services Division
Department of Education

PREGNANT

REPORT UNDER 5 USC § 801 (a) (2) (A) ON A MAJOR RULE
ISSUED BY THE
DEPARTMENT OF EDUCATION
ENTITLED
“REPEAL OF THE FEDERAL DIRECTIVE WILLIAM D. FORD
RESTRICTION OF THE LIMIT OF SUBSIDIZED USE OF THE LOAN PROGRAM ”
(RIN: 1840-AD60)

(i) Cost-benefit analysis

The Ministry of Education (the Ministry) provided an accounting statement for this final regulatory action. The Ministry said there would be a reduction in the paperwork burden on students and institutions through the elimination of information on subsidized usage limits in entry and exit counseling requirements. The Department estimates this benefit at $ 4.8 million at a discount rate of 3% and 7%. The ministry also said the costs to modify government student loan administration systems to implement the repeal of the subsidized use loan restriction would be $ 0.06 million at a discount rate. 7% and $ 0.05 million at a 3% discount rate. The Ministry added that there would be an increase in transfers of subsidized loans to eligible students. The transfers would amount to $ 96.2 million at a 7% discount rate and $ 98.7 million at a 3% discount rate. Finally, the Ministry said restoring the benefits of subsidized loans to affected borrowers would transfer $ 85.4 million at a 7% discount rate and $ 82.7 at a 3% discount rate.

(ii) Agency actions relating to the Regulatory Flexibility Act (RFA), 5 USC §§ 603-605, 607 and 609

The Department said the RFA did not apply to this final regulatory action because there were good reasons to forgo notice and comment procedures under 5 USC § 553.

(iii) Agency Actions Regarding Sections 202-205 of the Unfunded Mandates Reform Act 1995, 2 USC §§ 1532-1535

In its brief, the Department indicated that it considered that the preparation of a cost-benefit analysis of this final regulatory action was not applicable.

(iv) Other relevant information or requirements under laws and decrees

Administrative Procedure Act, 5 USC §§ 551 et seq.

According to the Ministry, there are good reasons to forgo the notice and comment procedures in this case because this final regulatory action removes the regulations for which the legal authorization has been revoked. The Ministry stated that this final regulatory action does not adopt any new regulations and does not establish or affect substantive policy. The Ministry noted that the elaboration of rules relating to opinions and comments is not necessary because it does not have the discretion to retain these regulations or to implement them in a different way, regardless of public opinion and comments. Therefore, according to the Department, the Secretary, under 5 USC §553 (b) (B) (3), determined that the proposed regulations are unnecessary and, therefore, waived the development of rules relating to reviews and comments.

The ministry also explained that under section 492 of the Higher Education Act 1965 (HEA), all regulations proposed by the ministry for programs authorized under Title IV of the HEA are subject to negotiated regulatory requirements. See in general 20 USC § 1098a. However, according to the ministry, Article 492 (b) (2) of the HEA provides that the development of negotiated rules may be waived for just cause when its use would be impracticable, unnecessary or contrary to the interest. public. Commerce asserts that there are good reasons to waive the negotiated rule-making requirement in this case, since, as explained above, rule-making by notice and comment is not necessary in this case. the species.

Red Tape Reduction Act (PRA), 44 USC §§ 3501-3520

The Ministry said this final regulatory action does not create any new intelligence gathering requirements. The Ministry noted that this final regulatory action removes the requirements related to the limit on the use of subsidized loans which was repealed by section 705 (a) of the Consolidated Appropriations Act, 2021. Pub. L. n ° 116-260 § 705 (a), 134 Stat. 1182, 3200 (Dec. 27, 2020). According to the Department, the total hourly burden is expected to decrease by $ 188,079 and the total decrease in costs is estimated at $ 4,742,901. This burden was associated with the collection of information entitled “William D. Ford Federal Direct Loan Program – 150% Limitation”, Office of Management, and Budget (OMB) Control Number
1845-0116.

Legal authorization of the rule

The Ministry promulgated this final regulatory action in accordance with Section 2401 of Title 28; articles 1070g, 1087a, et seq.., from Title 20; and Section 3702 of Title 31, United States Code.

Executive Decree No. 12866 (Planning and Revision of Regulations)

The Ministry said that the OMB has determined that this final regulatory action is an economically important measure and that it would have an annual effect on the economy of more than $ 100 million.

Executive Decree No. 13132 (Federalism)

The ministry did not specifically refer to the decree, but said it had determined that this final regulatory action would not unduly interfere with state, local or tribal governments in carrying out their governmental functions.