Notice Inviting Postsecondary Educational Institutions To Participate in Experiments Under the Experimental Sites Initiative; Federal Student Financial Assistance Programs Under Title IV of the Higher Education Act of 1965, as Amended, 54052-54056 [2016-19297]

Download as PDF sradovich on DSK3GMQ082PROD with NOTICES 54052 Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Notices Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public’s reporting burden. It also helps the public understand the Department’s information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records. Title of Collection: Race to the Top— Early Learning Challenge Annual Performance Report. OMB Control Number: 1810–0713. Type of Review: An extension of an existing information collection. Respondents/Affected Public: State, Local, and Tribal Governments. Total Estimated Number of Annual Responses: 11. Total Estimated Number of Annual Burden Hours: 1,320. Abstract: The Department of Education and the Department of Health and Human Services (Departments) are requesting renewal of the currently approved Annual Performance Report for RTT–ELC grantees, without making any material change to the collection instrument, instructions, frequency of collection or use. The information submitted in the Annual Performance Report is used to verify that grantees are making substantial progress toward the achievement of approved objectives. This grant awarded all funds up front, so the APR will not be used to determine continuation awards, but will be used to provide necessary performance information and data to program staff and to the public. Further, this APR form collects aggregate and quantifiable data needed to respond to the requirements of the Government Performance and Results Act (GPRA). VerDate Sep<11>2014 19:23 Aug 12, 2016 Jkt 238001 Information is collected under the authority of Sections 14005 and 14006, Division A, of the American Recovery and Reinvestment Act of 2009, as amended by section 1832(b) of Division B of Public Law 112–10, the Department of Defense and Full-Year Continuing Appropriations Act, 2011, and the Department of Education Appropriations Act, 2012 (Title III of Division F of Public Law 112–74, the Consolidated Appropriations Act, 2012). Dated: August 9, 2016. Tomakie Washington, Acting Director, Information Collection Clearance Division, Office of the Chief Privacy Officer, Office of Management. [FR Doc. 2016–19260 Filed 8–12–16; 8:45 am] BILLING CODE 4000–01–P DEPARTMENT OF EDUCATION Notice Inviting Postsecondary Educational Institutions To Participate in Experiments Under the Experimental Sites Initiative; Federal Student Financial Assistance Programs Under Title IV of the Higher Education Act of 1965, as Amended Office of Postsecondary Education, Department of Education. ACTION: Notice. AGENCY: The Secretary invites institutions of higher education (institutions) that participate in the Federal student financial assistance programs authorized under title IV of the Higher Education Act of 1965, as amended (HEA), to apply to participate in a new institutional experiment under the Experimental Sites Initiative (ESI). Under the ESI, the Secretary has authority to grant waivers of certain title IV, HEA statutory or regulatory requirements to allow a limited number of institutions to participate in experiments to test alternative methods of administering the title IV, HEA programs. The alternative methods of title IV, HEA administration that the Secretary is permitting under this ESI experiment are designed to facilitate efforts by institutions to evaluate certain innovative loan counseling practices that can prepare students to manage their college finances, inform them about their student loan repayment options, and ensure students are wellprepared to repay their loans on time. Under this experiment, participating institutions will have the flexibility to require additional loan counseling for student borrowers beyond the statutorily required one-time entrance and one-time exit counseling as a condition for the students to receive SUMMARY: PO 00000 Frm 00012 Fmt 4703 Sfmt 4703 Direct Loan funds, and to customize counseling based on students’ needs. DATES: Letters of Interest to participate in the experiment described in this notice must be received by the Department no later than September 29, 2016 to ensure that the Department considers the institution for participation in the experiment. Letters received after September 29, 2016 may, at the discretion of the Secretary, be considered for participation. ADDRESSES: Letters of Interest must be submitted by electronic mail to the following email address: experimentalsites@ed.gov. For format and other required information, see ‘‘Instructions for Submitting Letters of Interest’’ under SUPPLEMENTARY INFORMATION. FOR FURTHER INFORMATION CONTACT: Warren Farr, U.S. Department of Education, Federal Student Aid, 830 First Street NE., Washington, DC 20002. Telephone: (202) 377–4380 or by email at: Warren.Farr@ed.gov. If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1–800–877– 8339. SUPPLEMENTARY INFORMATION: Instructions for Submitting Letters of Interest: Letters of Interest should be in an Adobe Portable Document Format (PDF) attachment to an email message sent to the email address provided in the ADDRESSES section of this notice. The subject line of the email should read ‘‘ESI 2016—Additional Loan Counseling.’’ The text of the email should include the name and address of the institution. The Letter of Interest should be on institutional letterhead and be signed by the institution’s financial aid administrator. The Letter of Interest must include the institution’s official name and its Office of Postsecondary Education Identification (OPEID) number, and the name of a contact person at the institution, along with a mailing address, email address, FAX number, and telephone number of a person at the institution. The letter should also include the information described in the ‘‘Application and Selection’’ section in this notice. Upon receipt of a Letter of Interest, the Department will notify the institution by email that its Letter of Interest was received. This notification should be kept in the institution’s records. Background Accurate and timely loan information is crucial for students to make informed decisions about borrowing and to understand their repayment obligations E:\FR\FM\15AUN1.SGM 15AUN1 sradovich on DSK3GMQ082PROD with NOTICES Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Notices and options. However, there is limited research on the effectiveness of loan counseling, including which types of content and modes of delivery of loan counseling are most effective in helping students to understand and manage their debt, as well as when and how often counseling should occur to be most effective. Since the start of his Administration, President Obama has outlined an ambitious agenda to make college more affordable for American families and promote student success. In his June 9, 2014, Presidential Memorandum for the Secretary of Treasury and the Secretary of Education, the President directed the agencies to focus their efforts on providing initiatives that help Federal student loan borrowers manage their debt. In support of the President’s agenda, the Secretary, under the Experimental Sites authority in section 487A(b) of the HEA, is offering institutions the opportunity to participate in the experiment described in this notice. The experiment will provide institutions the flexibility to require, as a condition for a student to receive Direct Loan funds, loan counseling that is in addition to the entrance and exit counseling currently required under statute. Section 485(l)(1)(A) of the HEA requires that each institution ensure that first-time borrowers receive comprehensive information on the terms and conditions of the loan and of the responsibilities the borrower has with respect to the loan. This information must be provided in a simple and understandable format. The Department’s regulations at 34 CFR 685.304(a) require institutions to ensure that entrance counseling is conducted with each Direct Subsidized Loan or Direct Unsubsidized Loan student borrower prior to making the first disbursement of the proceeds of a loan to the borrower, unless the borrower has previously completed entrance counseling at that institution or at another institution, regardless of when that counseling occurred. These regulations do not allow institutions to require counseling as a condition of disbursement beyond the required firsttime entrance counseling and required exit counseling, though the institution may offer such counseling to students on a voluntary basis. The purpose of this experiment is to test the effectiveness of requiring additional loan counseling beyond the counseling that is statutorily required. The additional loan counseling is expected to help borrowers better understand their repayment options and obligations and make more informed VerDate Sep<11>2014 19:23 Aug 12, 2016 Jkt 238001 decisions about their debt. The experiment may also identify the types of borrowers who have benefitted most from additional loan counseling. The Department hopes to learn if the additional loan counseling: • Positively influences students’ decision-making about borrowing; • Promotes successful repayment of student loans, including reducing delinquencies and defaults; and • Has an impact on students’ academic performance (e.g., grades and time-to-completion). We also seek to learn whether different types of content and modes of delivery of loan counseling are more or less effective in promoting the above outcomes. This experiment can inform any future policy changes around loan counseling and efforts to inform borrowers about repayment plans and progress. Details of this experiment are provided in the section titled ‘‘The Experiment’’ below. The Experiment Description Under the experiment, an institution will require all of its eligible Direct Loan borrowers who have previously completed first-time entrance counseling to participate in the experiment (or for some large institutions, a subset of those borrowers), with approximately half of those borrowers randomly assigned by the Department to complete additional required counseling beyond the entrance counseling normally provided to first-time borrowers as a condition of receiving their Direct Loan funds. Institutions with particularly large numbers of borrowers who would be eligible for the experiment may request to include in the experiment a subset of those borrowers each year. The size of the subset will be determined by the Department in consultation with the institution and will take into consideration the overall number of students needed to estimate impacts for groups of institutions using similar counseling models. Once the size of the subset is determined, students will be randomly selected by the Department from the larger group of borrowers to be included in the subset and to participate in the experiment, either in the treatment group or in the control group. The Department will assign all borrowers who have been determined to be participants in the experiment to either the treatment group or to the control group. Borrowers assigned to the treatment group will be required to participate in additional loan PO 00000 Frm 00013 Fmt 4703 Sfmt 4703 54053 counseling beyond the entrance counseling they completed as first-time borrowers, as a condition of receiving a Direct Loan. Borrowers assigned to the control group cannot be required to complete, but may do so voluntarily, any additional loan counseling beyond the already-completed entrance counseling and the statutorily required exit counseling. Under the experiment, institutions cannot require additional counseling more than once for each of the student’s Direct Loan loan periods (generally once for each academic year). Therefore, students who are already required to participate in entrance counseling in any year (i.e., a first-time borrower at any institution) will not be included in the experiment for that year. Only students who completed their loan counseling during a prior year (whether for enrollment at the participating institution or at a different institution) will be included in the experiment for subsequent years. If an institution participating in the experiment currently offers voluntary additional loan counseling to students, it may continue to do so during its participation in the experiment. If an institution does not provide voluntary additional loan counseling, it may not begin to do so during its participation in the experiment. To the extent possible, the Department will require institutions to provide information regarding the students in the control group who utilize the institution’s voluntary additional loan counseling. Institutional Flexibilities An institution participating in the experiment will have flexibility in the content and modes of delivery of its additional loan counseling (e.g., online, individual in-person, group in-person, student-to-student). The institution will be allowed to choose the counseling approach it will use for the required additional counseling by choosing one of the following: The Department’s Financial Awareness Counseling Tool (FACT); a third-party counseling product or third-party servicer; or institutionally developed alternative counseling. The additional required counseling provided to borrowers by participating institutions may vary based on the students’ expected remaining time to complete their program. That counseling may also vary for different groups of students depending on their prior borrowing. The institution may include, as part of its additional counseling, a test or other evaluation to assess the student’s knowledge of the information presented E:\FR\FM\15AUN1.SGM 15AUN1 54054 Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Notices sradovich on DSK3GMQ082PROD with NOTICES as long as the test or evaluation is presented in a format accessible to students with disabilities, including students with visual or hearing impairments, and is in a language understandable by students with limited English proficiency. This may require the use of interpreters for oral or written communications with such students, as well as translations of written materials provided to such students. However, any such evaluation may not impede a student’s ability to borrow, for example, by establishing a passing score for the test or evaluation before the student can receive Direct Loan funds. Institutional Requirements Institutions participating in this experiment will be required to: • Work with the Department to establish the number of its Direct Loan borrowers who will be included as participants in the experiment. • Track and provide data to the Department for its borrowers who were assigned by the Department to the treatment group and its borrowers who were assigned to the control group. • Ensure that the additional counseling required of the borrowers in the treatment group is reasonable as to time and effort, and is relevant to the student’s borrowing decisions; and that the additional counseling is not biased or restricted based on students’ religion, national origin, race, color, sex, socioeconomic status (including income), disability, place of residence, physical location where the student will be enrolled, or educational program. • Ensure that the additional loan counseling does not discourage students from taking on debt needed to successfully complete their studies, while not over-borrowing taking into account anticipated earnings. • Make loan counseling reasonable and not so burdensome that it becomes a barrier to receiving Direct Loan funds. • Ensure that for each particular year, Direct Loan borrowers already required to receive loan entrance counseling at that institution (i.e., first-time borrowers) are not subject to required additional counseling for that year. These students would be eligible to participate in this experiment in subsequent years. • Disclose to all borrowers included in the experiment (both those in the treatment group and those in the control group) that the institution is participating in an experiment related to loan counseling and that some of the students in the experiment may be required to participate in additional loan counseling as a condition of receiving Direct Loan funds. VerDate Sep<11>2014 19:23 Aug 12, 2016 Jkt 238001 • Inform students who have been selected to receive additional counseling that their Direct Loan disbursements are conditional upon completion of that counseling. • Ensure that the institution’s policy for providing counseling under the experiment remains consistent throughout the institution’s participation in the experiment. A participating institution is also expected to ensure that its delivery of counseling does not change significantly during the institution’s participation in the experiment. The Department will perform ongoing monitoring during the experiment to ensure that participating institutions meet these requirements throughout their participation in the experiment. All counseling provided to borrowers must deliver information that, at a minimum, includes the total amount of the borrowers’ student loan indebtedness. The institution may customize the counseling based on the borrower’s needs. However, the Department encourages participating institutions to include in its additional counseling the following information, where relevant, to assist students in making more informed borrowing decisions: • Comprehensive information on the terms and conditions of Federal student loans, including information about annual and aggregate limits, interest rates, how interest accrues, loan fees for Federal student loans, and the responsibilities the borrower has with respect to such loans. • A reminder that students will be required to repay their loans even if they do not complete the academic program. • Information that indicates that completing an academic program will increase the students’ ability to successfully repay their loans. • Information about the requirement to complete additional counseling and to complete exit counseling upon leaving the institution. • A statement that, when determining whether and how much to borrow, students should consider how much they can reasonably expect to earn after leaving their academic program of study. As part of this statement, the institution may provide other relevant information, such as earnings data, Gainful Employment disclosures required under 34 CFR 668.412(a), and cohort default rate, if available and/or applicable. • Comprehensive information about the different terms and features of Direct Loan repayment options and forgiveness benefits, including information about PO 00000 Frm 00014 Fmt 4703 Sfmt 4703 income-driven repayment plans, Public Service Loan Forgiveness, and Teacher Loan Forgiveness, and information about student loan deferments and forbearances. • A reminder that information and assistance with Federal student loans, such as loan consolidation, rehabilitation, and participation in income-driven repayment plans, are provided by the Department at no charge and that the borrower does not need to pay someone for help. • Information about establishing a relationship with a loan servicer, including, among other things, keeping address and contact information up-todate and learning who to contact and how to ask questions. • Information about the Department’s Federal Student Aid Ombudsman Group, including a description of the services it provides and contact information. • Information about the Department’s Federal Student Aid Feedback System (see Electronic Announcement published July 1, 2016, ‘‘Federal Student Aid Launches Online Feedback System,’’ located on the Information for Financial Aid Professionals (IFAP) Web site). Waivers Institutions selected for this experiment will be granted flexibility in implementing their Direct Loan counseling program. Section 485(l)(1)(A) of the HEA and 34 CFR 685.304(a)(1) and (a)(2) provide that an institution must ensure that entrance counseling is conducted with each Direct Loan student borrower prior to making the first disbursement of the loan, unless the borrower has received a prior Direct Loan or a Federal Family Education Loan. However, institutions participating in this experiment will require additional counseling for their Direct Loan borrowers included in the treatment group. The additional counseling approaches to be used (i.e., the Department’s FACT product; a thirdparty counseling product or third-party servicer; or institutionally developed alternative counseling) must be identified by the institution in its Letter of Interest. If the institution enters into an agreement with a third party to provide the additional counseling, that agreement is subject to the third-party servicer requirements of the regulations in 34 CFR 668.25. As is required for all third-party servicers, such third parties must protect all student information they receive from the institution. E:\FR\FM\15AUN1.SGM 15AUN1 Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Notices sradovich on DSK3GMQ082PROD with NOTICES All other provisions and regulations of the title IV, HEA student assistance programs will remain in effect. Reporting and Evaluation The Department is interested in assessing the impact of requiring additional loan counseling for students attending different types of institutions. The evaluation will allow the Department to examine the effectiveness of requiring additional counseling across all of the institutions and students participating in the experiment, as well as for groups of institutions using similar types of content and modes of delivery of loan counseling for groups of borrowers. To support an evaluation of the impact of a policy change similar to the one tested in this experiment, the design of the evaluation requires data from both a treatment group of students required to participate in additional loan counseling and a control group of students who received their student aid under existing rules. Participating institutions will, on a regular basis, provide to the Department a list containing identifying information for each of the institution’s Direct Loan student borrowers who had previously received entrance counseling from the institution or from a different institution. Those borrowers will be considered for inclusion in the experiment for the subsequent year. The Department will assign each eligible borrower to either the treatment group, which will receive the additional loan counseling, or to the control group, for which the institution may not require any additional loan counseling. Once a borrower is placed into the treatment or control group, the borrower must remain in that group throughout the borrower’s enrollment at the institution during the institution’s participation in the experiment. To obtain some key outcome measures (e.g., receipt and amount of loan funds, academic progression, completion or withdrawal), the Department will draw on information contained in the Department’s systems. In addition, each institution will be required to provide to the Department existing school records for all students participating in the experiment (whether assigned to the treatment or control group) for the purpose of assessing the impacts of the additional loan counseling intervention. The records will likely include the borrower’s academic information (e.g., credits taken, credits earned, grade point average, completion information, and credentials earned) as well as financial information (e.g., cost of VerDate Sep<11>2014 19:23 Aug 12, 2016 Jkt 238001 attendance, State and institutional aid received, non-Federal loans received, and other information relating to financial aid received by the borrower). Finally, on an annual basis, institutions participating in the experiment will be required to provide information about the method and content of the loan counseling and of their experiences with the experiment. The Department will collect from each participating institution the details and components of the additional counseling that the institution requires, including the content and method of delivery (e.g., individual in-person counseling, group counseling, Webbased counseling) for each cohort of students. Institutions will receive more specific information about evaluation and reporting requirements prior to the start of the experiment. Institutions participating in this experiment will be required to submit a narrative description and selfassessment of their implementation of the experiment. At a minimum, the narrative should include any unforeseen challenges and unexpected benefits. Application and Selection Institutions are invited to apply to participate in the experiment described in this notice. The Department is interested in information such as: (1) An estimate of the number of the institution’s Direct Loan borrowers who, for an award year, have previously completed entrance counseling and, if the institution believes it does not have the capacity to include all of those borrowers in the experiment, an estimate of the number of borrowers it wishes to include in the experiment (both in the control and treatment groups) for each award year; (2) how the additional counseling will be provided, e.g., through the Department’s FACT product, a third-party counseling product or a third-party servicer, or an institutionally developed alternative; (3) a brief description of the additional counseling that the institution proposes to use in the experiment, including its content and mode of delivery; and (4) how the institution’s proposed approach to additional loan counseling is supported by relevant and available research or evidence (if applicable) and the source of such research or evidence. We understand that the actual number of students who will be included in the experiment may be different than the estimate provided in the Letter of Interest, as may the proposed counseling method. From the institutions that apply, the Secretary will select a limited number that represent a diverse cross-section of PO 00000 Frm 00015 Fmt 4703 Sfmt 4703 54055 title IV participating institutions to participate in this experiment. In choosing participants, the Secretary will consider, among other institutional characteristics, the institution’s history of compliance with the Department’s regulatory and statutory requirements for participation in the title IV, HEA programs; the institution’s administrative capability and financial responsibility; and whether the institution has adequately described in its Letter of Interest how it will comply with the requirements of the experiment outlined in this notice. In addition to the above items, when selecting institutions to participate in the experiment, the Secretary will consider all available information, including, but not limited to: Institutional type and control, the institution’s geographic location, the institution’s cohort default rate, the median amount of Direct Loan funds borrowed by the institution’s students, student outcomes (e.g., retention and completion rates and loan repayment rates), and the type of counseling the institution intends to offer (i.e., FACT, third-party product or third-party servicer, or institutionally developed counseling). The Secretary’s selection of institutions will be guided by the purpose of the experiment, which is to evaluate alternative delivery modes, content, and timing to current counseling requirements, and to inform policymakers about any recommended changes to those requirements. The ESI does not provide broad regulatory relief or general exceptions to the Department’s statutory and regulatory requirements. If a selected institution consists of more than one location (e.g., campus), the Secretary may limit the experiment to a single location, unless the institution provides the Secretary with a rationale for expanding the experiment to one or more of the institution’s other locations. The Secretary will consult with those institutions that have been invited to participate in the experiment on the final design of the experiment through Webinars or other outreach activities. Institutions selected for participation in an experiment will have their Program Participation Agreement (PPA) with the Secretary amended to reflect the specific statutory or regulatory provisions that the Secretary has waived for participants in the experiment at the institution. The institution must acknowledge its commitment to adequately establish the procedures necessary to successfully administer the experiment. The amended PPA will also E:\FR\FM\15AUN1.SGM 15AUN1 54056 Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Notices document the agreement between the Secretary and the institution about how the experiment will be conducted and will specify the evaluation and reporting requirements for the experiment. Accessible Format: Individuals with disabilities can obtain this document in an accessible format (e.g., braille, large print, audiotape, or compact disc) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT. Electronic Access to This Document: 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 via the Federal Digital System at: www.gpo.gov/fdsys. At this site you can view this document, as well as all other documents of this Department published in the Federal Register, in text or PDF. To use PDF, you must have Adobe Acrobat Reader, which is available free at the site. You may also access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department. Program Authority: 20 U.S.C. 1094a(b). Dated: August 9, 2016. Lynn Mahaffie, Deputy Assistant Secretary for Policy, Planning and Innovation, Delegated the Duties of Assistant Secretary for Postsecondary Education. [FR Doc. 2016–19297 Filed 8–12–16; 8:45 am] BILLING CODE 4000–01–P DEPARTMENT OF EDUCATION Applications for New Awards; Performance Partnership Pilots Office of Career, Technical, and Adult Education, Department of Education. ACTION: Notice. AGENCY: sradovich on DSK3GMQ082PROD with NOTICES Overview Information: Performance Partnership Pilots Notice inviting applications for new awards for fiscal year (FY) 2016. Catalog of Federal Domestic Assistance (CFDA) Number: 84.420A. Dates: Applications Available: August 15, 2016. Deadline for Notice of Intent to Apply: September 29, 2016. Note: Submission of a notice of intent to apply is optional. VerDate Sep<11>2014 19:23 Aug 12, 2016 Jkt 238001 Deadline for Transmittal of Applications: October 31, 2016. Deadline for Intergovernmental Review: December 28, 2016. Full Text of Announcement I. Funding Opportunity Description Purpose of Program: Performance Partnership Pilots (P3), first authorized by Congress for FY 2014 by the Consolidated Appropriations Act, 2014 (2014 Appropriations Act) and reauthorized for FY 2015 by the Consolidated and Further Continuing Appropriations Act, 2015 (2015 Appropriations Act) and for FY 2016 by the Consolidated Appropriations Act, 2016 (2016 Appropriations Act) (together, the Acts), enable pilot sites to test innovative, outcome-focused strategies to achieve significant improvements in educational, employment, and other key outcomes for disconnected youth using new flexibility to blend existing Federal funds and to seek waivers of associated program requirements. Background: The Acts authorize the Departments of Education (ED or the Department), Labor (DOL), Health and Human Services (HHS), Housing and Urban Development (HUD),1 and Justice (DOJ),2 the Corporation for National and Community Service (CNCS), and the Institute of Museum and Library Services (IMLS) (collectively, the Agencies), to enter into Performance Partnership Agreements (performance agreements) with State, local, or tribal governments to provide additional flexibility in using certain of the Agencies’ discretionary funds,3 including competitive and formula grant funds, across multiple Federal programs. Entities that seek to participate in these pilots will be required to commit to achieving significant improvements in outcomes for disconnected youth in exchange for this new flexibility. The authorizing statute states that ‘‘ ‘[t]o improve outcomes for disconnected youth’ means to increase the rate at which 1 The 2016 Appropriations Act authorizes HUD to enter into performance agreements with respect to FY 2016 Homeless Assistance Grants. 2 DOJ’s Office of Justice Programs was first authorized to enter into performance agreements by the 2015 Appropriations Act. 3 Discretionary funds are funds that Congress appropriates on an annual basis, rather than through a standing authorization. They exclude ‘‘entitlement’’ (or mandatory) programs such as Social Security, Medicare, Medicaid, most Foster Care IV–E programs, Vocational Rehabilitation State Grants, and Temporary Assistance to Needy Families (TANF). Discretionary programs administered by the Agencies support a broad set of public services, including education, job training, health and mental health, and other low-income assistance programs. PO 00000 Frm 00016 Fmt 4703 Sfmt 4703 individuals between the ages of 14 and 24 (who are low-income and either homeless, in foster care, involved in the juvenile justice system, unemployed, or not enrolled in or at risk of dropping out of an educational institution) achieve success in meeting educational, employment, or other key goals.’’ Government and community partners have invested considerable attention and resources to meet the needs of disconnected youth. However, practitioners, youth advocates, and others on the front lines of service delivery have observed that flexibility can be a key tool to address certain programmatic and administrative obstacles to achieving meaningful improvements in education, employment, health, and well-being for these young people. P3 tests the hypothesis that additional flexibility for States, local governments, and tribes, in the form of blending funds and waivers of certain programmatic requirements, can help overcome some of the significant hurdles that States, local governments, and tribes face in providing intensive, comprehensive, and sustained service pathways and improving outcomes for disconnected youth. For example, P3 can be used to better coordinate and align the multiple systems that serve youth. P3 may help address the ‘‘wrong pockets’’ problem, where entities that observe improved outcomes or other benefits due to an intervention are unable to use Federal funds to support that intervention due to program restrictions. P3 flexibility may also allow the testing of an innovative approach to help build additional evidence about what works. If this hypothesis proves true, providing necessary and targeted flexibility to remove or overcome these hurdles will help to achieve significant benefits for disconnected youth, the communities that serve them, and the involved agencies and partners. The statutory definition of ‘‘disconnected youth’’ specifically identifies several high-need subpopulations of low-income youth, including youth who are homeless, youth in foster care, youth involved in the juvenile justice system, and youth who are unemployed or not in school or at risk of dropping out. We wish to note that there are a number of other highneed subpopulations of disconnected youth who are not specifically enumerated in statute but are also at risk of dropping out. For example, English learners (ELs) are at great risk of dropping out; the average cohort graduation rate for ELs during the 2013– 14 school year was only 62.6 percent, while the national average cohort E:\FR\FM\15AUN1.SGM 15AUN1

Agencies

[Federal Register Volume 81, Number 157 (Monday, August 15, 2016)]
[Notices]
[Pages 54052-54056]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-19297]


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DEPARTMENT OF EDUCATION


Notice Inviting Postsecondary Educational Institutions To 
Participate in Experiments Under the Experimental Sites Initiative; 
Federal Student Financial Assistance Programs Under Title IV of the 
Higher Education Act of 1965, as Amended

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Notice.

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SUMMARY:  The Secretary invites institutions of higher education 
(institutions) that participate in the Federal student financial 
assistance programs authorized under title IV of the Higher Education 
Act of 1965, as amended (HEA), to apply to participate in a new 
institutional experiment under the Experimental Sites Initiative (ESI).
    Under the ESI, the Secretary has authority to grant waivers of 
certain title IV, HEA statutory or regulatory requirements to allow a 
limited number of institutions to participate in experiments to test 
alternative methods of administering the title IV, HEA programs. The 
alternative methods of title IV, HEA administration that the Secretary 
is permitting under this ESI experiment are designed to facilitate 
efforts by institutions to evaluate certain innovative loan counseling 
practices that can prepare students to manage their college finances, 
inform them about their student loan repayment options, and ensure 
students are well-prepared to repay their loans on time.
    Under this experiment, participating institutions will have the 
flexibility to require additional loan counseling for student borrowers 
beyond the statutorily required one-time entrance and one-time exit 
counseling as a condition for the students to receive Direct Loan 
funds, and to customize counseling based on students' needs.

DATES: Letters of Interest to participate in the experiment described 
in this notice must be received by the Department no later than 
September 29, 2016 to ensure that the Department considers the 
institution for participation in the experiment. Letters received after 
September 29, 2016 may, at the discretion of the Secretary, be 
considered for participation.

ADDRESSES: Letters of Interest must be submitted by electronic mail to 
the following email address: experimentalsites@ed.gov. For format and 
other required information, see ``Instructions for Submitting Letters 
of Interest'' under SUPPLEMENTARY INFORMATION.

FOR FURTHER INFORMATION CONTACT: Warren Farr, U.S. Department of 
Education, Federal Student Aid, 830 First Street NE., Washington, DC 
20002. Telephone: (202) 377-4380 or by email at: Warren.Farr@ed.gov.
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.

SUPPLEMENTARY INFORMATION:  Instructions for Submitting Letters of 
Interest: Letters of Interest should be in an Adobe Portable Document 
Format (PDF) attachment to an email message sent to the email address 
provided in the ADDRESSES section of this notice. The subject line of 
the email should read ``ESI 2016--Additional Loan Counseling.'' The 
text of the email should include the name and address of the 
institution. The Letter of Interest should be on institutional 
letterhead and be signed by the institution's financial aid 
administrator. The Letter of Interest must include the institution's 
official name and its Office of Postsecondary Education Identification 
(OPEID) number, and the name of a contact person at the institution, 
along with a mailing address, email address, FAX number, and telephone 
number of a person at the institution. The letter should also include 
the information described in the ``Application and Selection'' section 
in this notice. Upon receipt of a Letter of Interest, the Department 
will notify the institution by email that its Letter of Interest was 
received. This notification should be kept in the institution's 
records.

Background

    Accurate and timely loan information is crucial for students to 
make informed decisions about borrowing and to understand their 
repayment obligations

[[Page 54053]]

and options. However, there is limited research on the effectiveness of 
loan counseling, including which types of content and modes of delivery 
of loan counseling are most effective in helping students to understand 
and manage their debt, as well as when and how often counseling should 
occur to be most effective.
    Since the start of his Administration, President Obama has outlined 
an ambitious agenda to make college more affordable for American 
families and promote student success. In his June 9, 2014, Presidential 
Memorandum for the Secretary of Treasury and the Secretary of 
Education, the President directed the agencies to focus their efforts 
on providing initiatives that help Federal student loan borrowers 
manage their debt.
    In support of the President's agenda, the Secretary, under the 
Experimental Sites authority in section 487A(b) of the HEA, is offering 
institutions the opportunity to participate in the experiment described 
in this notice. The experiment will provide institutions the 
flexibility to require, as a condition for a student to receive Direct 
Loan funds, loan counseling that is in addition to the entrance and 
exit counseling currently required under statute.
    Section 485(l)(1)(A) of the HEA requires that each institution 
ensure that first-time borrowers receive comprehensive information on 
the terms and conditions of the loan and of the responsibilities the 
borrower has with respect to the loan. This information must be 
provided in a simple and understandable format.
    The Department's regulations at 34 CFR 685.304(a) require 
institutions to ensure that entrance counseling is conducted with each 
Direct Subsidized Loan or Direct Unsubsidized Loan student borrower 
prior to making the first disbursement of the proceeds of a loan to the 
borrower, unless the borrower has previously completed entrance 
counseling at that institution or at another institution, regardless of 
when that counseling occurred. These regulations do not allow 
institutions to require counseling as a condition of disbursement 
beyond the required first-time entrance counseling and required exit 
counseling, though the institution may offer such counseling to 
students on a voluntary basis.
    The purpose of this experiment is to test the effectiveness of 
requiring additional loan counseling beyond the counseling that is 
statutorily required. The additional loan counseling is expected to 
help borrowers better understand their repayment options and 
obligations and make more informed decisions about their debt. The 
experiment may also identify the types of borrowers who have benefitted 
most from additional loan counseling. The Department hopes to learn if 
the additional loan counseling:
     Positively influences students' decision-making about 
borrowing;
     Promotes successful repayment of student loans, including 
reducing delinquencies and defaults; and
     Has an impact on students' academic performance (e.g., 
grades and time-to-completion).
    We also seek to learn whether different types of content and modes 
of delivery of loan counseling are more or less effective in promoting 
the above outcomes. This experiment can inform any future policy 
changes around loan counseling and efforts to inform borrowers about 
repayment plans and progress.
    Details of this experiment are provided in the section titled ``The 
Experiment'' below.

The Experiment

Description

    Under the experiment, an institution will require all of its 
eligible Direct Loan borrowers who have previously completed first-time 
entrance counseling to participate in the experiment (or for some large 
institutions, a subset of those borrowers), with approximately half of 
those borrowers randomly assigned by the Department to complete 
additional required counseling beyond the entrance counseling normally 
provided to first-time borrowers as a condition of receiving their 
Direct Loan funds.
    Institutions with particularly large numbers of borrowers who would 
be eligible for the experiment may request to include in the experiment 
a subset of those borrowers each year. The size of the subset will be 
determined by the Department in consultation with the institution and 
will take into consideration the overall number of students needed to 
estimate impacts for groups of institutions using similar counseling 
models. Once the size of the subset is determined, students will be 
randomly selected by the Department from the larger group of borrowers 
to be included in the subset and to participate in the experiment, 
either in the treatment group or in the control group.
    The Department will assign all borrowers who have been determined 
to be participants in the experiment to either the treatment group or 
to the control group. Borrowers assigned to the treatment group will be 
required to participate in additional loan counseling beyond the 
entrance counseling they completed as first-time borrowers, as a 
condition of receiving a Direct Loan. Borrowers assigned to the control 
group cannot be required to complete, but may do so voluntarily, any 
additional loan counseling beyond the already-completed entrance 
counseling and the statutorily required exit counseling.
    Under the experiment, institutions cannot require additional 
counseling more than once for each of the student's Direct Loan loan 
periods (generally once for each academic year). Therefore, students 
who are already required to participate in entrance counseling in any 
year (i.e., a first-time borrower at any institution) will not be 
included in the experiment for that year. Only students who completed 
their loan counseling during a prior year (whether for enrollment at 
the participating institution or at a different institution) will be 
included in the experiment for subsequent years.
    If an institution participating in the experiment currently offers 
voluntary additional loan counseling to students, it may continue to do 
so during its participation in the experiment. If an institution does 
not provide voluntary additional loan counseling, it may not begin to 
do so during its participation in the experiment. To the extent 
possible, the Department will require institutions to provide 
information regarding the students in the control group who utilize the 
institution's voluntary additional loan counseling.

Institutional Flexibilities

    An institution participating in the experiment will have 
flexibility in the content and modes of delivery of its additional loan 
counseling (e.g., online, individual in-person, group in-person, 
student-to-student). The institution will be allowed to choose the 
counseling approach it will use for the required additional counseling 
by choosing one of the following: The Department's Financial Awareness 
Counseling Tool (FACT); a third-party counseling product or third-party 
servicer; or institutionally developed alternative counseling.
    The additional required counseling provided to borrowers by 
participating institutions may vary based on the students' expected 
remaining time to complete their program. That counseling may also vary 
for different groups of students depending on their prior borrowing.
    The institution may include, as part of its additional counseling, 
a test or other evaluation to assess the student's knowledge of the 
information presented

[[Page 54054]]

as long as the test or evaluation is presented in a format accessible 
to students with disabilities, including students with visual or 
hearing impairments, and is in a language understandable by students 
with limited English proficiency. This may require the use of 
interpreters for oral or written communications with such students, as 
well as translations of written materials provided to such students. 
However, any such evaluation may not impede a student's ability to 
borrow, for example, by establishing a passing score for the test or 
evaluation before the student can receive Direct Loan funds.

Institutional Requirements

    Institutions participating in this experiment will be required to:
     Work with the Department to establish the number of its 
Direct Loan borrowers who will be included as participants in the 
experiment.
     Track and provide data to the Department for its borrowers 
who were assigned by the Department to the treatment group and its 
borrowers who were assigned to the control group.
     Ensure that the additional counseling required of the 
borrowers in the treatment group is reasonable as to time and effort, 
and is relevant to the student's borrowing decisions; and that the 
additional counseling is not biased or restricted based on students' 
religion, national origin, race, color, sex, socioeconomic status 
(including income), disability, place of residence, physical location 
where the student will be enrolled, or educational program.
     Ensure that the additional loan counseling does not 
discourage students from taking on debt needed to successfully complete 
their studies, while not over-borrowing taking into account anticipated 
earnings.
     Make loan counseling reasonable and not so burdensome that 
it becomes a barrier to receiving Direct Loan funds.
     Ensure that for each particular year, Direct Loan 
borrowers already required to receive loan entrance counseling at that 
institution (i.e., first-time borrowers) are not subject to required 
additional counseling for that year. These students would be eligible 
to participate in this experiment in subsequent years.
     Disclose to all borrowers included in the experiment (both 
those in the treatment group and those in the control group) that the 
institution is participating in an experiment related to loan 
counseling and that some of the students in the experiment may be 
required to participate in additional loan counseling as a condition of 
receiving Direct Loan funds.
     Inform students who have been selected to receive 
additional counseling that their Direct Loan disbursements are 
conditional upon completion of that counseling.
     Ensure that the institution's policy for providing 
counseling under the experiment remains consistent throughout the 
institution's participation in the experiment. A participating 
institution is also expected to ensure that its delivery of counseling 
does not change significantly during the institution's participation in 
the experiment.
    The Department will perform ongoing monitoring during the 
experiment to ensure that participating institutions meet these 
requirements throughout their participation in the experiment.
    All counseling provided to borrowers must deliver information that, 
at a minimum, includes the total amount of the borrowers' student loan 
indebtedness. The institution may customize the counseling based on the 
borrower's needs. However, the Department encourages participating 
institutions to include in its additional counseling the following 
information, where relevant, to assist students in making more informed 
borrowing decisions:
     Comprehensive information on the terms and conditions of 
Federal student loans, including information about annual and aggregate 
limits, interest rates, how interest accrues, loan fees for Federal 
student loans, and the responsibilities the borrower has with respect 
to such loans.
     A reminder that students will be required to repay their 
loans even if they do not complete the academic program.
     Information that indicates that completing an academic 
program will increase the students' ability to successfully repay their 
loans.
     Information about the requirement to complete additional 
counseling and to complete exit counseling upon leaving the 
institution.
     A statement that, when determining whether and how much to 
borrow, students should consider how much they can reasonably expect to 
earn after leaving their academic program of study. As part of this 
statement, the institution may provide other relevant information, such 
as earnings data, Gainful Employment disclosures required under 34 CFR 
668.412(a), and cohort default rate, if available and/or applicable.
     Comprehensive information about the different terms and 
features of Direct Loan repayment options and forgiveness benefits, 
including information about income-driven repayment plans, Public 
Service Loan Forgiveness, and Teacher Loan Forgiveness, and information 
about student loan deferments and forbearances.
     A reminder that information and assistance with Federal 
student loans, such as loan consolidation, rehabilitation, and 
participation in income-driven repayment plans, are provided by the 
Department at no charge and that the borrower does not need to pay 
someone for help.
     Information about establishing a relationship with a loan 
servicer, including, among other things, keeping address and contact 
information up-to-date and learning who to contact and how to ask 
questions.
     Information about the Department's Federal Student Aid 
Ombudsman Group, including a description of the services it provides 
and contact information.
     Information about the Department's Federal Student Aid 
Feedback System (see Electronic Announcement published July 1, 2016, 
``Federal Student Aid Launches Online Feedback System,'' located on the 
Information for Financial Aid Professionals (IFAP) Web site).

Waivers

    Institutions selected for this experiment will be granted 
flexibility in implementing their Direct Loan counseling program. 
Section 485(l)(1)(A) of the HEA and 34 CFR 685.304(a)(1) and (a)(2) 
provide that an institution must ensure that entrance counseling is 
conducted with each Direct Loan student borrower prior to making the 
first disbursement of the loan, unless the borrower has received a 
prior Direct Loan or a Federal Family Education Loan.
    However, institutions participating in this experiment will require 
additional counseling for their Direct Loan borrowers included in the 
treatment group. The additional counseling approaches to be used (i.e., 
the Department's FACT product; a third-party counseling product or 
third-party servicer; or institutionally developed alternative 
counseling) must be identified by the institution in its Letter of 
Interest. If the institution enters into an agreement with a third 
party to provide the additional counseling, that agreement is subject 
to the third-party servicer requirements of the regulations in 34 CFR 
668.25. As is required for all third-party servicers, such third 
parties must protect all student information they receive from the 
institution.

[[Page 54055]]

    All other provisions and regulations of the title IV, HEA student 
assistance programs will remain in effect.

Reporting and Evaluation

    The Department is interested in assessing the impact of requiring 
additional loan counseling for students attending different types of 
institutions. The evaluation will allow the Department to examine the 
effectiveness of requiring additional counseling across all of the 
institutions and students participating in the experiment, as well as 
for groups of institutions using similar types of content and modes of 
delivery of loan counseling for groups of borrowers.
    To support an evaluation of the impact of a policy change similar 
to the one tested in this experiment, the design of the evaluation 
requires data from both a treatment group of students required to 
participate in additional loan counseling and a control group of 
students who received their student aid under existing rules.
    Participating institutions will, on a regular basis, provide to the 
Department a list containing identifying information for each of the 
institution's Direct Loan student borrowers who had previously received 
entrance counseling from the institution or from a different 
institution. Those borrowers will be considered for inclusion in the 
experiment for the subsequent year.
    The Department will assign each eligible borrower to either the 
treatment group, which will receive the additional loan counseling, or 
to the control group, for which the institution may not require any 
additional loan counseling.
    Once a borrower is placed into the treatment or control group, the 
borrower must remain in that group throughout the borrower's enrollment 
at the institution during the institution's participation in the 
experiment.
    To obtain some key outcome measures (e.g., receipt and amount of 
loan funds, academic progression, completion or withdrawal), the 
Department will draw on information contained in the Department's 
systems.
    In addition, each institution will be required to provide to the 
Department existing school records for all students participating in 
the experiment (whether assigned to the treatment or control group) for 
the purpose of assessing the impacts of the additional loan counseling 
intervention. The records will likely include the borrower's academic 
information (e.g., credits taken, credits earned, grade point average, 
completion information, and credentials earned) as well as financial 
information (e.g., cost of attendance, State and institutional aid 
received, non-Federal loans received, and other information relating to 
financial aid received by the borrower).
    Finally, on an annual basis, institutions participating in the 
experiment will be required to provide information about the method and 
content of the loan counseling and of their experiences with the 
experiment. The Department will collect from each participating 
institution the details and components of the additional counseling 
that the institution requires, including the content and method of 
delivery (e.g., individual in-person counseling, group counseling, Web-
based counseling) for each cohort of students. Institutions will 
receive more specific information about evaluation and reporting 
requirements prior to the start of the experiment.
    Institutions participating in this experiment will be required to 
submit a narrative description and self-assessment of their 
implementation of the experiment. At a minimum, the narrative should 
include any unforeseen challenges and unexpected benefits.

Application and Selection

    Institutions are invited to apply to participate in the experiment 
described in this notice. The Department is interested in information 
such as: (1) An estimate of the number of the institution's Direct Loan 
borrowers who, for an award year, have previously completed entrance 
counseling and, if the institution believes it does not have the 
capacity to include all of those borrowers in the experiment, an 
estimate of the number of borrowers it wishes to include in the 
experiment (both in the control and treatment groups) for each award 
year; (2) how the additional counseling will be provided, e.g., through 
the Department's FACT product, a third-party counseling product or a 
third-party servicer, or an institutionally developed alternative; (3) 
a brief description of the additional counseling that the institution 
proposes to use in the experiment, including its content and mode of 
delivery; and (4) how the institution's proposed approach to additional 
loan counseling is supported by relevant and available research or 
evidence (if applicable) and the source of such research or evidence.
    We understand that the actual number of students who will be 
included in the experiment may be different than the estimate provided 
in the Letter of Interest, as may the proposed counseling method.
    From the institutions that apply, the Secretary will select a 
limited number that represent a diverse cross-section of title IV 
participating institutions to participate in this experiment. In 
choosing participants, the Secretary will consider, among other 
institutional characteristics, the institution's history of compliance 
with the Department's regulatory and statutory requirements for 
participation in the title IV, HEA programs; the institution's 
administrative capability and financial responsibility; and whether the 
institution has adequately described in its Letter of Interest how it 
will comply with the requirements of the experiment outlined in this 
notice.
    In addition to the above items, when selecting institutions to 
participate in the experiment, the Secretary will consider all 
available information, including, but not limited to: Institutional 
type and control, the institution's geographic location, the 
institution's cohort default rate, the median amount of Direct Loan 
funds borrowed by the institution's students, student outcomes (e.g., 
retention and completion rates and loan repayment rates), and the type 
of counseling the institution intends to offer (i.e., FACT, third-party 
product or third-party servicer, or institutionally developed 
counseling).
    The Secretary's selection of institutions will be guided by the 
purpose of the experiment, which is to evaluate alternative delivery 
modes, content, and timing to current counseling requirements, and to 
inform policymakers about any recommended changes to those 
requirements. The ESI does not provide broad regulatory relief or 
general exceptions to the Department's statutory and regulatory 
requirements.
    If a selected institution consists of more than one location (e.g., 
campus), the Secretary may limit the experiment to a single location, 
unless the institution provides the Secretary with a rationale for 
expanding the experiment to one or more of the institution's other 
locations.
    The Secretary will consult with those institutions that have been 
invited to participate in the experiment on the final design of the 
experiment through Webinars or other outreach activities.
    Institutions selected for participation in an experiment will have 
their Program Participation Agreement (PPA) with the Secretary amended 
to reflect the specific statutory or regulatory provisions that the 
Secretary has waived for participants in the experiment at the 
institution. The institution must acknowledge its commitment to 
adequately establish the procedures necessary to successfully 
administer the experiment. The amended PPA will also

[[Page 54056]]

document the agreement between the Secretary and the institution about 
how the experiment will be conducted and will specify the evaluation 
and reporting requirements for the experiment.
    Accessible Format: Individuals with disabilities can obtain this 
document in an accessible format (e.g., braille, large print, 
audiotape, or compact disc) on request to the contact person listed 
under FOR FURTHER INFORMATION CONTACT.
    Electronic Access to This Document: 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 via the Federal Digital System 
at: www.gpo.gov/fdsys. At this site you can view this document, as well 
as all other documents of this Department published in the Federal 
Register, in text or PDF. To use PDF, you must have Adobe Acrobat 
Reader, which is available free at the site.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at: 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.

    Program Authority: 20 U.S.C. 1094a(b).

    Dated: August 9, 2016.
Lynn Mahaffie,
Deputy Assistant Secretary for Policy, Planning and Innovation, 
Delegated the Duties of Assistant Secretary for Postsecondary 
Education.
[FR Doc. 2016-19297 Filed 8-12-16; 8:45 am]
 BILLING CODE 4000-01-P
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