Office of Postsecondary Education; Title IV, Part I, Section 499 of the Higher Education Act of 1965, as Amended-Competitive Loan Auction Pilot Program, 9232-9234 [E9-4447]
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9232
Federal Register / Vol. 74, No. 40 / Tuesday, March 3, 2009 / Notices
Register. Free Internet access to the official
edition of the Federal Register and the Code
of Federal Regulations is available on GPO
Access at: https://www.gpoaccess.gov/nara/
index.html.
Delegation of Authority: The Secretary
of Education has delegated authority to
Joseph C. Conaty, Director, Academic
Improvement and Teacher Quality
Programs for the Office of Elementary
and Secondary Education to perform the
functions of the Assistant Secretary for
Elementary and Secondary Education.
Dated: February 26, 2009.
Joseph C. Conaty,
Director, Academic Improvement and
Teacher Quality Programs.
[FR Doc. E9–4497 Filed 3–2–09; 8:45 am]
BILLING CODE 4000–01–P
DEPARTMENT OF EDUCATION
Office of Postsecondary Education;
Title IV, Part I, Section 499 of the
Higher Education Act of 1965, as
Amended—Competitive Loan Auction
Pilot Program
mstockstill on PROD1PC66 with NOTICES
AGENCY: Office of Postsecondary
Education, U.S. Department of
Education.
ACTION: Notice inviting eligible lenders
to participate in the Competitive Loan
Auction Pilot Program for the right to
originate PLUS loans to parent
borrowers under the Federal Family
Education Loan (FFEL) Program.
SUMMARY: Through this notice, the
Secretary of Education (the Secretary)
invites eligible lenders to participate in
the Competitive Loan Auction Pilot
Program (Auction Program) for the
rights to originate PLUS loans to parent
borrowers under the FFEL Program.
Through the Competitive Loan Auction
(Auction), the Secretary will award the
rights to originate PLUS loans to new
parent borrowers under the Federal
PLUS Program authorized by section
428B of Title IV of the Higher Education
Act of 1965, as amended (HEA), for loan
periods beginning on or after July 1,
2009 and ending June 30, 2011. This
notice establishes the dates for
submission of information to participate
in the Auction, describes the
information that lenders must submit
and the auction process, and describes
the statutory requirements a lender must
meet if it is selected as a winning bidder
in the Auction.
DATES: Deadline for Submission of PreQualification Information: FFEL
Program eligible lenders that wish to bid
in the Auction must submit the required
prequalification information to the
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Jkt 217001
Secretary at the address provided in the
section of this notice by
April 1, 2009.
Deadline for Submission of PLUS
Lender of Last Resort Applications:
FFEL Program eligible lenders
interested in serving as a PLUS lender
of last resort must submit their
applications to the Secretary at the
address provided in the ADDRESSES
section of this notice by April 1, 2009.
Date of Auction: The Auction will be
conducted on April 15, 2009. Bids for
origination rights must be submitted on
the date of the Auction to the Secretary
at the address provided in the
ADDRESSES section of this notice. Bids
will only be accepted during the time
period the Auction is open on that date,
as designated by the Secretary. The time
period the Auction will be open will be
included in an Auction Information
Sheet that will be sent to those eligible
lenders meeting the prequalification
requirements to participate in the
Auction. The Auction Information Sheet
will: (1) Describe the procedures for
submitting bids, (2) provide the Web
address of the on-line Auction, and (3)
assign eligible bidders a password to
submit a bid during the period the
Auction is open. When the Auction is
complete, the Secretary will notify
winning bidders and announce the
winning bidders for each State no later
than April 24, 2009. Further information
on the Auction procedures is in the
SUPPLEMENTARY INFORMATION section of
this notice.
ADDRESSES: Pre-qualification
information, PLUS Lender of Last Resort
applications, and bids should be sent by
e-mail to: plus-auction@ed.gov.
FOR FURTHER INFORMATION CONTACT: For
information about the Auction Program
go to https://www.ed.gov/ope/plusauction or contact: Donald Conner, U.S.
Department of Education, 1990 K Street,
NW., room 8030, Washington, DC
20006. Telephone (202) 502–7818, or by
fax to (202) 502–7873. You may also email your questions about the Auction
to: donald.conner@ed.gov.
If you use a telecommunications
device for the deaf (TDD), call the
Federal Relay Service (FRS), toll free, at
1–800–877–8339.
Individuals with disabilities can
obtain this document in an accessible
format (e.g., braille, large print,
audiotape, or computer diskette) by
contacting the program contact person
listed in this section.
SUPPLEMENTARY INFORMATION: The
Secretary announces his intention to
conduct and invites eligible FFEL
lenders to participate in the Auction for
the rights to originate PLUS loans to
ADDRESSES
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Fmt 4703
Sfmt 4703
parent borrowers under the FFEL
Program. Through the Auction, the
Secretary will award the rights to
originate PLUS loans to new parent
borrowers under the Federal PLUS
Program authorized by section 428B of
Title IV of the HEA, for loan periods
beginning on or after July 1, 2009 and
ending June 30, 2011. The right to
originate PLUS loans to parent
borrowers under the Federal PLUS
Program will be determined through a
competitive, sealed bid, one-round
auction to be conducted for each State,
the District of Columbia, Guam, the U.S.
Virgin Islands, the Commonwealth of
the Northern Mariana Islands, and
Puerto Rico (State). Loans to borrowers
attending schools outside of these areas
are not included in the Auction Program
and may be made by any eligible FFEL
Program lender.
Two winning bidders will be
identified for each State and will be the
only eligible lenders authorized to
originate Federal PLUS loans to parent
borrowers who are borrowing on behalf
of a dependent student who will be
enrolled in an eligible postsecondary
educational institution in that State and
who are new borrowers on or after July
1, 2009. Parents currently borrowing on
behalf of a dependent student enrolled
prior to July 1, 2009 may continue with
their current lender or secure a loan
from another eligible FFEL Program
lender. Loans to graduate and
professional student borrowers under
the PLUS Program are not included in
the Auction process.
All eligible Federal PLUS Program
loans originated under the Auction will
be insured by a guaranty agency against
losses. The insurance rate shall be in an
amount equal to 99 percent of the
unpaid principal and interest due on the
loan. The Secretary will not collect a
loan fee with respect to eligible Federal
PLUS Program loans originated under
this program.
To see a listing of the PLUS loan
volume by State for Award Years 2006–
07 and 2007–08, go to: https://
www.ed.gov/ope/plus-auction/.
Auction Requirements
Prequalification Requirements
All eligible FFEL Program lenders that
want to participate in the Auction for
PLUS loans to parent borrowers in a
State under the Federal PLUS Program
must meet the following
prequalification requirements:
Required Agreement: A lender with a
winning bid is obligated to enter into an
agreement with the Secretary in
accordance with section 499(b)(3)(G)(i)
of the HEA, to make PLUS loans to all
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Federal Register / Vol. 74, No. 40 / Tuesday, March 3, 2009 / Notices
eligible new parent borrowers in the
State(s) for which it has the winning
bid.
Borrower Benefits: The statute
requires the Secretary to establish the
borrower benefits lenders must provide
to participate in the Auction Program.
The only permitted borrower benefit for
PLUS loans to parents made under the
Auction Program is a reduction in
interest rate of 0.25 percent that is
contingent on the borrower’s use of an
automatic payment process for any
payments due. This benefit is required
to be offered to all parent PLUS
borrowers whose loans are made under
the Auction Program in all States for
which the lender is the winning bidder.
States in which a bid will be made:
An eligible lender participating in the
FFEL Program must identify the State(s)
in which the lender intends to bid. The
listing of a particular State(s) does not
limit the lender’s ability to bid in an
additional State(s) and it does not bind
the lender to bid in the State(s)
indicated. The listing will provide the
Secretary with information necessary to
assess the ability of the lender to
originate, service and raise the capital
necessary to make PLUS Loans in the
State(s) in which the lender has
indicated an interest in bidding.
Origination of PLUS Loans: The
lender must describe its capacity to
originate loans in compliance with
existing FFEL Program requirements in
the State(s) for which it intends to bid.
A lender must explain and provide any
supporting documentation that
demonstrates its ability to originate the
number and dollar volume of loans in
each State based on the number and
volume of new PLUS loans to parents
made in that State in the last complete
award year for which data is available.
mstockstill on PROD1PC66 with NOTICES
Note: As the winning bidder, a lender will
be one of only two lenders originating all
new PLUS loans to parents in each State. The
lender should provide any relevant
information to assist the Department in
determining its capacity to originate loans
timely and efficiently in the State(s) for
which it intends to bid, including the
technological compatibility with the
institutions in the State(s) and, the Statedesignated or other guaranty agency with
which the lender may not have previously
participated.
Servicing of PLUS Loans: The lender
must describe its loan servicing
capability for the PLUS loans to parents
to be originated in the State(s) for which
the lender intends to bid. The lender
may provide any supporting
documentation that demonstrates that
capability. The lender should advise the
Department of any outstanding adverse
audit findings, or other compliance or
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Jkt 217001
performance issues that may negatively
affect the lender’s ability to originate or
service PLUS loans to parents originated
in the State(s) for which it intends to
bid. If the lender uses a third-party
servicer to originate and/or to provide
ongoing servicing of loans, please also
provide this information for that
servicer(s) and include the
organization’s name, address, and
contact information.
Capital to Make PLUS Loans: The
lender must provide any supporting
documentation necessary to
demonstrate that the lender will have or
be able to raise, as necessary, the capital
required to provide for the origination
and full disbursement of the anticipated
new volume of PLUS Loans to parents
for the period covered by the Auction
Program in the State(s) for which the
lender intends to bid.
Auction Procedures
Eligible lenders that meet the
prequalification requirements will be
permitted to submit a sealed and
confidential bid in a one-round auction.
A bid must consist of the amount of the
special allowance payment (SAP), as
defined in section 438 of the HEA, that
a lender proposes to accept from the
Secretary for the eligible Federal PLUS
Program loans that the lender will make
pursuant to this program.
Bids must be submitted on the
Auction Date during the time period the
Auction will be open as designated by
the Secretary. The Secretary will
announce the time period during which
the Auction will be open in an Auction
Information Sheet that will be sent to
eligible lenders after their
prequalification information has been
reviewed and approved. The Auction
Information Sheet will (1) describe the
procedures for submitting bids, (2)
provide the address to which the bid
must be submitted, and (3) assign
eligible bidders a password to use to
submit the bid during the period the
Auction is open. When the Auction is
complete, the Secretary will post the
results of the Auction, including the
winning bidders for each State, at
https://www.ed.gov/ope/plus-auction/ no
later than April 24, 2009. The winning
bidders will be the two eligible lenders
that submit bids that offer to accept the
lowest and second lowest SAP from the
Secretary on the Federal PLUS loans
made pursuant to the Auction. The
winning bidders within each State will
be the only FFEL Program lenders
permitted to originate loans under the
Federal PLUS Program for first time
borrower parents of dependent students
at institutions within that State until
those students are no longer enrolled at
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Sfmt 4703
9233
an institution in that State or they
graduate from those institutions.
Eligible lender bids will remain
confidential even after the
announcement of the winning bidders.
Winning Bidder Requirements
Each winning bidder in the Auction
must enter into an agreement with the
Secretary under which the eligible
lender agrees to originate eligible
Federal PLUS Program loans to each
eligible parent borrower that: (1) Seeks
an eligible Federal PLUS Program loan
to enable a dependent student to attend
an institution of higher education
within that State, (2) is eligible for a
Federal PLUS Program loan, and (3)
elects to borrow from the eligible lender.
Each winning bidder for a State also
must agree to accept a SAP from the
Secretary for eligible loans originated in
the amount proposed in the second
lowest winning bid.
If a winning bidder fails to enter into
the agreement with the Secretary as
required, or fails to comply with the
terms of such agreement, the Secretary
may sanction the eligible lender in one
or more of the following ways:
(1) The Secretary may assess a penalty
for any eligible Federal PLUS Program
loan that such eligible lender fails to
originate in accordance with the
agreement with the Secretary;
(2) The Secretary may prohibit that
lender from bidding in other auctions
under section 499 of the HEA;
(3) The Secretary may limit, suspend,
or terminate the lender’s participation
in the FFEL Programs; or
(4) The Secretary may take any other
enforcement action authorized under
Title IV, Part B, of the HEA. Should the
Secretary decide to levy a penalty on a
lender, the collection of those penalties
may be sought by reducing the amount
of any payments otherwise due to the
eligible lender from the Secretary by the
amount of the penalty or by requesting
that any other Federal agency reduce the
amount of any payments due to the
eligible lender from that agency by the
amount of the penalty.
Plus Lender of Last Resort
In the event that there are not two
winning bids in a given State, borrowers
and institutions of higher education in
that State will be served by a PLUS Loan
Lender of Last Resort (PLUS–LLR), as
determined by the Secretary, in
accordance with section 499 of the HEA.
Eligible lenders that wish to be
considered as the PLUS–LLR for a given
State(s) must (1) prequalify by
submitting the prequalification material
described in this notice, (2) submit a
letter not less than 14 days prior to the
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Federal Register / Vol. 74, No. 40 / Tuesday, March 3, 2009 / Notices
mstockstill on PROD1PC66 with NOTICES
start of the Auction indicating that they
want to be considered as a PLUS–LLR
and list the State(s) they will service,
and (3) commit to making PLUS loans
to all eligible new parent borrowers in
the State(s) they have indicated until the
dependent student graduates or is no
longer attending an institution in that
State. The Secretary will not identify the
PLUS–LLR for a State until after the
Auction is completed and only if
needed. A prequalified lender that
requests to be a PLUS–LLR may still
participate as a regular eligible lender in
the Auction.
The Secretary is authorized to set a
SAP payable to a PLUS–LLR for a State.
That SAP will be kept confidential, both
before and after the announcement of
the winning bidders. To determine the
SAP payment to a PLUS–LLR the
Secretary will take into account the
lowest bid that was submitted in the
auction for the State and the lowest bid
that was submitted in a similar State in
terms of PLUS dollar volume and
number of loans.
loans consolidated (excluding Federal
Direct PLUS Program loans) or the
average of the bond equivalent rates of
the quotes of the 3-month average
commercial paper rate plus 1.59
percent.
An Auction Program lender who
consolidates a PLUS Program loan
under this program is not required to
pay the interest payment rebate fee on
the Consolidation loan under Section
428C(f) of the HEA.
Electronic Access to This Document:
You can view this document, as well as
all other documents of this Department
published in the Federal Register, in
text or Adobe Portable Document
Format (PDF), on the Internet at the
following site: https://www.ed.gov/news/
fedregister. To use PDF, you must have
Adobe Acrobat Reader, which is
available free at this site. If you have
questions about using PDF, call the U.S.
Government Printing Office (GPO), toll
free, at 1–888–293–6498; or in the
Washington, DC area at (202) 512–1530.
Additional Auction Program
Information
All eligible Federal PLUS Program
loans originated under the Auction
Program will be insured by a guaranty
agency with which the lender currently
has an agreement against losses. The
insurance on default claims on these
loans will be in an amount equal to 99
percent of the unpaid principal and
interest due on the loan.
The Secretary will not collect a loan
fee with respect to eligible Federal
PLUS Program loans originated under
this program.
If the parent borrower with FFEL
PLUS loans made under the Auction
Program requests to consolidate those
loans, the FFEL Program eligible lender
who made those loans may consolidate
the borrower’s Federal PLUS Program
loans made under this program into one
loan under certain conditions, as
described in section 499(L)(i)–(iii) of the
HEA. Similarly, an eligible lender with
a winning bid may consolidate a Federal
Direct PLUS Program loan or a loan
made to the parent borrower under
section 428B of the HEA under
conditions described in section
499(L)(iv)(I) and (II) of the HEA. For
Federal Direct PLUS Program loans, the
Auction Program eligible lender must
agree within 10 days to match the terms
and conditions available under the
Federal Direct Consolidation Loan
Program.
The SAP paid to Auction Program
eligible lenders on FFEL Program
Consolidation loans is the lesser of the
weighted average of the SAP on the
Note: The official version of this document
is the document published in the Federal
Register. Free Internet access to the official
edition of the Federal Register and the Code
of Federal Regulations is available on GPO
Access at: https://www.gpoaccess.gov/nara/
index.html.
VerDate Nov<24>2008
16:42 Mar 02, 2009
Jkt 217001
Delegation of Authority: The Secretary
of Education has delegated authority to
Daniel T. Madzelan, Director,
Forecasting and Policy Analysis for the
Office of Postsecondary Education to
perform the functions of the Assistant
Secretary for Postsecondary Education.
Dated: February 25, 2009.
Daniel T. Madzelan,
Director, Forecasting and Policy Analysis.
[FR Doc. E9–4447 Filed 3–2–09; 8:45 am]
BILLING CODE 4000–01–P
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
[Docket Nos. CP09–66–000; CP09–67–000]
Northwest Pipeline GP, Parachute
Pipeline LLC; Notice of Application
February 24, 2009.
Take notice that on February 12, 2009,
Northwest Pipeline GP (Northwest), 295
Chipeta Way, Salt Lake City, Utah
84108, filed an application in Docket
No. CP09–66–000, pursuant to section
7(b) of the Natural Gas Act and Part 157
of the Commission’s regulations,
requesting permission and approval to
abandon its certificate authority to
operate the Parachute Lateral and
PO 00000
Frm 00024
Fmt 4703
Sfmt 4703
associated facilities. Take further notice
that on this same date, Parachute
Pipeline LLC, One Williams Center,
Tulsa, Oklahoma 74172, filed an
application in Docket No. CP09–67–000,
pursuant to Rule 207 of the
Commission’s regulations, requesting a
declaratory order disclaiming
jurisdiction and declaring certain
facilities (The facilities Northwest
proposes to abandon in Docket No.
CP09–66–000) and services to be
exempt from regulation under the
Natural Gas Act, all as more fully set
forth in the application which is on file
with the Commission and open to
public inspection. The filing may also
be viewed on the Web at https://
www.ferc.gov using the ‘‘eLibrary’’ link.
Enter the docket number excluding the
last three digits in the docket number
field to access the document. For
assistance, please contact FERC Online
Support at
FERCOnlineSupport@ferc.gov or toll
free at (866) 208–3676, or TTY, contact
(202) 502–8659.
Any questions regarding this
application, Docket No. CP09–66–000,
should be directed to Lynn Dahlberg,
Manager, Certificates and Tariffs,
Northwest Pipeline GP, PO Box 58900
Salt Lake City, Utah 84158, telephone:
(801) 584–6851, Fax: (801) 584–7764, email: lynn.dahlberg@williams.com.
Any questions regarding this
application, Docket No. CP09–67–000,
should be directed to Mari Ramsey,
Senior Counsel, The Williams
Companies, Inc., One Williams Center
47th floor, Tulsa, Oklahoma 74172,
telephone: (918) 573–2611, Fax: (918)
573–4503.
Pursuant to section 157.9 of the
Commission’s rules, 18 CFR 157.9,
within 90 days of this Notice the
Commission staff will either: Complete
its environmental assessment (EA) and
place it into the Commission’s public
record (eLibrary) for this proceeding; or
issue a Notice of Schedule for
Environmental Review. If a Notice of
Schedule for Environmental Review is
issued, it will indicate, among other
milestones, the anticipated date for the
Commission staff’s issuance of the final
environmental impact statement (FEIS)
or EA for this proposal. The filing of the
EA in the Commission’s public record
for this proceeding or the issuance of a
Notice of Schedule for Environmental
Review will serve to notify federal and
state agencies of the timing for the
completion of all necessary reviews, and
the subsequent need to complete all
federal authorizations within 90 days of
the date of issuance of the Commission
staff’s FEIS or EA.
E:\FR\FM\03MRN1.SGM
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Agencies
[Federal Register Volume 74, Number 40 (Tuesday, March 3, 2009)]
[Notices]
[Pages 9232-9234]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-4447]
-----------------------------------------------------------------------
DEPARTMENT OF EDUCATION
Office of Postsecondary Education; Title IV, Part I, Section 499
of the Higher Education Act of 1965, as Amended--Competitive Loan
Auction Pilot Program
AGENCY: Office of Postsecondary Education, U.S. Department of
Education.
ACTION: Notice inviting eligible lenders to participate in the
Competitive Loan Auction Pilot Program for the right to originate PLUS
loans to parent borrowers under the Federal Family Education Loan
(FFEL) Program.
-----------------------------------------------------------------------
SUMMARY: Through this notice, the Secretary of Education (the
Secretary) invites eligible lenders to participate in the Competitive
Loan Auction Pilot Program (Auction Program) for the rights to
originate PLUS loans to parent borrowers under the FFEL Program.
Through the Competitive Loan Auction (Auction), the Secretary will
award the rights to originate PLUS loans to new parent borrowers under
the Federal PLUS Program authorized by section 428B of Title IV of the
Higher Education Act of 1965, as amended (HEA), for loan periods
beginning on or after July 1, 2009 and ending June 30, 2011. This
notice establishes the dates for submission of information to
participate in the Auction, describes the information that lenders must
submit and the auction process, and describes the statutory
requirements a lender must meet if it is selected as a winning bidder
in the Auction.
DATES: Deadline for Submission of Pre-Qualification Information: FFEL
Program eligible lenders that wish to bid in the Auction must submit
the required prequalification information to the Secretary at the
address provided in the ADDRESSES section of this notice by April 1,
2009.
Deadline for Submission of PLUS Lender of Last Resort Applications:
FFEL Program eligible lenders interested in serving as a PLUS lender of
last resort must submit their applications to the Secretary at the
address provided in the ADDRESSES section of this notice by April 1,
2009.
Date of Auction: The Auction will be conducted on April 15, 2009.
Bids for origination rights must be submitted on the date of the
Auction to the Secretary at the address provided in the ADDRESSES
section of this notice. Bids will only be accepted during the time
period the Auction is open on that date, as designated by the
Secretary. The time period the Auction will be open will be included in
an Auction Information Sheet that will be sent to those eligible
lenders meeting the prequalification requirements to participate in the
Auction. The Auction Information Sheet will: (1) Describe the
procedures for submitting bids, (2) provide the Web address of the on-
line Auction, and (3) assign eligible bidders a password to submit a
bid during the period the Auction is open. When the Auction is
complete, the Secretary will notify winning bidders and announce the
winning bidders for each State no later than April 24, 2009. Further
information on the Auction procedures is in the SUPPLEMENTARY
INFORMATION section of this notice.
ADDRESSES: Pre-qualification information, PLUS Lender of Last Resort
applications, and bids should be sent by e-mail to: plus-
auction@ed.gov.
FOR FURTHER INFORMATION CONTACT: For information about the Auction
Program go to https://www.ed.gov/ope/plus-auction or contact: Donald
Conner, U.S. Department of Education, 1990 K Street, NW., room 8030,
Washington, DC 20006. Telephone (202) 502-7818, or by fax to (202) 502-
7873. You may also e-mail your questions about the Auction to:
donald.conner@ed.gov.
If you use a telecommunications device for the deaf (TDD), call the
Federal Relay Service (FRS), toll free, at 1-800-877-8339.
Individuals with disabilities can obtain this document in an
accessible format (e.g., braille, large print, audiotape, or computer
diskette) by contacting the program contact person listed in this
section.
SUPPLEMENTARY INFORMATION: The Secretary announces his intention to
conduct and invites eligible FFEL lenders to participate in the Auction
for the rights to originate PLUS loans to parent borrowers under the
FFEL Program. Through the Auction, the Secretary will award the rights
to originate PLUS loans to new parent borrowers under the Federal PLUS
Program authorized by section 428B of Title IV of the HEA, for loan
periods beginning on or after July 1, 2009 and ending June 30, 2011.
The right to originate PLUS loans to parent borrowers under the Federal
PLUS Program will be determined through a competitive, sealed bid, one-
round auction to be conducted for each State, the District of Columbia,
Guam, the U.S. Virgin Islands, the Commonwealth of the Northern Mariana
Islands, and Puerto Rico (State). Loans to borrowers attending schools
outside of these areas are not included in the Auction Program and may
be made by any eligible FFEL Program lender.
Two winning bidders will be identified for each State and will be
the only eligible lenders authorized to originate Federal PLUS loans to
parent borrowers who are borrowing on behalf of a dependent student who
will be enrolled in an eligible postsecondary educational institution
in that State and who are new borrowers on or after July 1, 2009.
Parents currently borrowing on behalf of a dependent student enrolled
prior to July 1, 2009 may continue with their current lender or secure
a loan from another eligible FFEL Program lender. Loans to graduate and
professional student borrowers under the PLUS Program are not included
in the Auction process.
All eligible Federal PLUS Program loans originated under the
Auction will be insured by a guaranty agency against losses. The
insurance rate shall be in an amount equal to 99 percent of the unpaid
principal and interest due on the loan. The Secretary will not collect
a loan fee with respect to eligible Federal PLUS Program loans
originated under this program.
To see a listing of the PLUS loan volume by State for Award Years
2006-07 and 2007-08, go to: https://www.ed.gov/ope/plus-auction/.
Auction Requirements
Prequalification Requirements
All eligible FFEL Program lenders that want to participate in the
Auction for PLUS loans to parent borrowers in a State under the Federal
PLUS Program must meet the following prequalification requirements:
Required Agreement: A lender with a winning bid is obligated to
enter into an agreement with the Secretary in accordance with section
499(b)(3)(G)(i) of the HEA, to make PLUS loans to all
[[Page 9233]]
eligible new parent borrowers in the State(s) for which it has the
winning bid.
Borrower Benefits: The statute requires the Secretary to establish
the borrower benefits lenders must provide to participate in the
Auction Program. The only permitted borrower benefit for PLUS loans to
parents made under the Auction Program is a reduction in interest rate
of 0.25 percent that is contingent on the borrower's use of an
automatic payment process for any payments due. This benefit is
required to be offered to all parent PLUS borrowers whose loans are
made under the Auction Program in all States for which the lender is
the winning bidder.
States in which a bid will be made: An eligible lender
participating in the FFEL Program must identify the State(s) in which
the lender intends to bid. The listing of a particular State(s) does
not limit the lender's ability to bid in an additional State(s) and it
does not bind the lender to bid in the State(s) indicated. The listing
will provide the Secretary with information necessary to assess the
ability of the lender to originate, service and raise the capital
necessary to make PLUS Loans in the State(s) in which the lender has
indicated an interest in bidding.
Origination of PLUS Loans: The lender must describe its capacity to
originate loans in compliance with existing FFEL Program requirements
in the State(s) for which it intends to bid. A lender must explain and
provide any supporting documentation that demonstrates its ability to
originate the number and dollar volume of loans in each State based on
the number and volume of new PLUS loans to parents made in that State
in the last complete award year for which data is available.
Note: As the winning bidder, a lender will be one of only two
lenders originating all new PLUS loans to parents in each State. The
lender should provide any relevant information to assist the
Department in determining its capacity to originate loans timely and
efficiently in the State(s) for which it intends to bid, including
the technological compatibility with the institutions in the
State(s) and, the State-designated or other guaranty agency with
which the lender may not have previously participated.
Servicing of PLUS Loans: The lender must describe its loan
servicing capability for the PLUS loans to parents to be originated in
the State(s) for which the lender intends to bid. The lender may
provide any supporting documentation that demonstrates that capability.
The lender should advise the Department of any outstanding adverse
audit findings, or other compliance or performance issues that may
negatively affect the lender's ability to originate or service PLUS
loans to parents originated in the State(s) for which it intends to
bid. If the lender uses a third-party servicer to originate and/or to
provide ongoing servicing of loans, please also provide this
information for that servicer(s) and include the organization's name,
address, and contact information.
Capital to Make PLUS Loans: The lender must provide any supporting
documentation necessary to demonstrate that the lender will have or be
able to raise, as necessary, the capital required to provide for the
origination and full disbursement of the anticipated new volume of PLUS
Loans to parents for the period covered by the Auction Program in the
State(s) for which the lender intends to bid.
Auction Procedures
Eligible lenders that meet the prequalification requirements will
be permitted to submit a sealed and confidential bid in a one-round
auction. A bid must consist of the amount of the special allowance
payment (SAP), as defined in section 438 of the HEA, that a lender
proposes to accept from the Secretary for the eligible Federal PLUS
Program loans that the lender will make pursuant to this program.
Bids must be submitted on the Auction Date during the time period
the Auction will be open as designated by the Secretary. The Secretary
will announce the time period during which the Auction will be open in
an Auction Information Sheet that will be sent to eligible lenders
after their prequalification information has been reviewed and
approved. The Auction Information Sheet will (1) describe the
procedures for submitting bids, (2) provide the address to which the
bid must be submitted, and (3) assign eligible bidders a password to
use to submit the bid during the period the Auction is open. When the
Auction is complete, the Secretary will post the results of the
Auction, including the winning bidders for each State, at https://
www.ed.gov/ope/plus-auction/ no later than April 24, 2009. The winning
bidders will be the two eligible lenders that submit bids that offer to
accept the lowest and second lowest SAP from the Secretary on the
Federal PLUS loans made pursuant to the Auction. The winning bidders
within each State will be the only FFEL Program lenders permitted to
originate loans under the Federal PLUS Program for first time borrower
parents of dependent students at institutions within that State until
those students are no longer enrolled at an institution in that State
or they graduate from those institutions.
Eligible lender bids will remain confidential even after the
announcement of the winning bidders.
Winning Bidder Requirements
Each winning bidder in the Auction must enter into an agreement
with the Secretary under which the eligible lender agrees to originate
eligible Federal PLUS Program loans to each eligible parent borrower
that: (1) Seeks an eligible Federal PLUS Program loan to enable a
dependent student to attend an institution of higher education within
that State, (2) is eligible for a Federal PLUS Program loan, and (3)
elects to borrow from the eligible lender. Each winning bidder for a
State also must agree to accept a SAP from the Secretary for eligible
loans originated in the amount proposed in the second lowest winning
bid.
If a winning bidder fails to enter into the agreement with the
Secretary as required, or fails to comply with the terms of such
agreement, the Secretary may sanction the eligible lender in one or
more of the following ways:
(1) The Secretary may assess a penalty for any eligible Federal
PLUS Program loan that such eligible lender fails to originate in
accordance with the agreement with the Secretary;
(2) The Secretary may prohibit that lender from bidding in other
auctions under section 499 of the HEA;
(3) The Secretary may limit, suspend, or terminate the lender's
participation in the FFEL Programs; or
(4) The Secretary may take any other enforcement action authorized
under Title IV, Part B, of the HEA. Should the Secretary decide to levy
a penalty on a lender, the collection of those penalties may be sought
by reducing the amount of any payments otherwise due to the eligible
lender from the Secretary by the amount of the penalty or by requesting
that any other Federal agency reduce the amount of any payments due to
the eligible lender from that agency by the amount of the penalty.
Plus Lender of Last Resort
In the event that there are not two winning bids in a given State,
borrowers and institutions of higher education in that State will be
served by a PLUS Loan Lender of Last Resort (PLUS-LLR), as determined
by the Secretary, in accordance with section 499 of the HEA.
Eligible lenders that wish to be considered as the PLUS-LLR for a
given State(s) must (1) prequalify by submitting the prequalification
material described in this notice, (2) submit a letter not less than 14
days prior to the
[[Page 9234]]
start of the Auction indicating that they want to be considered as a
PLUS-LLR and list the State(s) they will service, and (3) commit to
making PLUS loans to all eligible new parent borrowers in the State(s)
they have indicated until the dependent student graduates or is no
longer attending an institution in that State. The Secretary will not
identify the PLUS-LLR for a State until after the Auction is completed
and only if needed. A prequalified lender that requests to be a PLUS-
LLR may still participate as a regular eligible lender in the Auction.
The Secretary is authorized to set a SAP payable to a PLUS-LLR for
a State. That SAP will be kept confidential, both before and after the
announcement of the winning bidders. To determine the SAP payment to a
PLUS-LLR the Secretary will take into account the lowest bid that was
submitted in the auction for the State and the lowest bid that was
submitted in a similar State in terms of PLUS dollar volume and number
of loans.
Additional Auction Program Information
All eligible Federal PLUS Program loans originated under the
Auction Program will be insured by a guaranty agency with which the
lender currently has an agreement against losses. The insurance on
default claims on these loans will be in an amount equal to 99 percent
of the unpaid principal and interest due on the loan.
The Secretary will not collect a loan fee with respect to eligible
Federal PLUS Program loans originated under this program.
If the parent borrower with FFEL PLUS loans made under the Auction
Program requests to consolidate those loans, the FFEL Program eligible
lender who made those loans may consolidate the borrower's Federal PLUS
Program loans made under this program into one loan under certain
conditions, as described in section 499(L)(i)-(iii) of the HEA.
Similarly, an eligible lender with a winning bid may consolidate a
Federal Direct PLUS Program loan or a loan made to the parent borrower
under section 428B of the HEA under conditions described in section
499(L)(iv)(I) and (II) of the HEA. For Federal Direct PLUS Program
loans, the Auction Program eligible lender must agree within 10 days to
match the terms and conditions available under the Federal Direct
Consolidation Loan Program.
The SAP paid to Auction Program eligible lenders on FFEL Program
Consolidation loans is the lesser of the weighted average of the SAP on
the loans consolidated (excluding Federal Direct PLUS Program loans) or
the average of the bond equivalent rates of the quotes of the 3-month
average commercial paper rate plus 1.59 percent.
An Auction Program lender who consolidates a PLUS Program loan
under this program is not required to pay the interest payment rebate
fee on the Consolidation loan under Section 428C(f) of the HEA.
Electronic Access to This Document: You can view this document, as
well as all other documents of this Department published in the Federal
Register, in text or Adobe Portable Document Format (PDF), on the
Internet at the following site: https://www.ed.gov/news/fedregister. To
use PDF, you must have Adobe Acrobat Reader, which is available free at
this site. If you have questions about using PDF, call the U.S.
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in
the Washington, DC area at (202) 512-1530.
Note: The official version of this document is the document
published in the Federal Register. Free Internet access to the
official edition of the Federal Register and the Code of Federal
Regulations is available on GPO Access at: https://www.gpoaccess.gov/
nara/.
Delegation of Authority: The Secretary of Education has delegated
authority to Daniel T. Madzelan, Director, Forecasting and Policy
Analysis for the Office of Postsecondary Education to perform the
functions of the Assistant Secretary for Postsecondary Education.
Dated: February 25, 2009.
Daniel T. Madzelan,
Director, Forecasting and Policy Analysis.
[FR Doc. E9-4447 Filed 3-2-09; 8:45 am]
BILLING CODE 4000-01-P