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Notice

Federal Perkins Loan Program: Federal Family Education Loan Program and William D. Ford Federal Direct Loan Program

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AGENCY:

Office of Postsecondary Education, Department of Education.

ACTION:

Requirements, definitions, eligibility criteria, and procedures for the Civil Legal Assistance Attorney Student Loan Repayment Program for fiscal year (FY) 2010.

SUMMARY:

The Secretary announces the requirements, definitions, eligibility criteria, and procedures for the implementation of the Civil Legal Assistance Attorney Student Loan Repayment Program, authorized under section 428L of the Higher Education Act of 1965, as amended (HEA), 20 USC 1078-12. Under this program, civil legal assistance attorneys who meet certain qualifications may have a portion of their Federal Perkins Loan (Perkins Loan), Federal Family Education Loan (FFEL), and William D. Ford Federal Direct Loan (Direct Loan) program loans repaid by the Secretary based on qualifying full-time employment for at least three years.

DATES:

Availability and Beginning Receipt Date for Applications and Service Agreements: The Civil Legal Assistance Attorney Student Loan Repayment Application and Service Agreement, along with the beginning date for the Secretary's receipt of Applications and Service Agreements, can be found at: www.studentaid.ed.gov.

Deadline date for receipt of Applications and Service Agreements: August 16, 2010.

Additional information about the awarding of funds to eligible borrowers under this program on a first-come, first-served basis, based on the receipt date by the Secretary of the borrower's Application and Service Agreement, can be found in the Background section of this notice.

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FOR FURTHER INFORMATION CONTACT:

Ms. Pamela Moran, U.S. Department of Education, 1990 K Street, NW., room 8023, Washington, DC 20006-8502. Telephone: (202) 502-7732 or via Internet: Pamela.Moran@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.

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SUPPLEMENTARY INFORMATION:

Background

This notice implements the Civil Legal Assistance Attorney Student Loan Repayment Program authorized by Section 428L of the HEA. This program is intended to encourage qualified individuals to enter and continue employment as civil legal assistance attorneys. The HEA authorizes the Secretary, contingent upon annual appropriations, to repay a portion of the outstanding balance of eligible Perkins Loan, FFEL, and Direct Loan Program loans obtained by borrowers who are employed full time as civil legal assistance attorneys. Congress has appropriated $5,000,000 for the program for FY 2010.

Under the Civil Legal Assistance Attorney Student Loan Repayment Program, a Perkins Loan, FFEL, or Direct Loan Program borrower with one or more eligible loans (as defined in the “Program Definitions” section of this notice) who has executed a Service Agreement with the Secretary and who performs service as a civil legal assistance attorney for a period of not less than three years (as “year” is defined in the “Program Definitions” section of this notice) may receive up to $6,000 in student loan repayment each year up to an aggregate total of $40,000 for any borrower.

The borrower must be employed, full-time, as a civil legal assistance attorney by either: (1) A nonprofit organization that provides legal assistance, without a fee, on civil matters to low-income individuals; or (2) a protection and advocacy system or client assistance program that provides legal assistance on civil matters to clients and receives funding under specific Federal programs identified in this notice.

Subject to available funding, student loan repayment benefits will be paid after the borrower completes each year of service required under the borrower's Service Agreement with the Secretary. The Secretary does not reimburse a borrower for any payments the borrower made on a student loan prior to the date on which the borrower entered into a written Service Agreement with the Secretary. Upon an employer's certification of a borrower's completion of a given year of required service under the borrower's Service Agreement, the Secretary sends the approved repayment amount to the borrower's loan holder(s) to be applied to the outstanding balance of the borrower's eligible student loans, not to exceed the annual maximum of $6,000. A borrower who voluntarily ceases qualifying employment before completing the full period of service required under the borrower's agreement with the Secretary, or who is involuntarily separated from qualifying employment due to misconduct, will be required to repay any repayment benefit the borrower received.

Upon completion of the required period of service, a borrower and the Secretary may enter into an additional agreement. Under an additional agreement, the Secretary may repay additional loan amounts for additional periods of qualifying employment. An additional agreement may require a borrower to be employed as a civil legal assistance attorney for less than a three-year period.

Loan repayment commitments are limited to the amount appropriated for the program for a given fiscal year by Congress and are only available to eligible applicants until those funds are fully committed. Therefore, eligibility to participate in the Civil Legal Assistance Attorney Student Loan Repayment Program will be available to eligible borrowers on a first-come, first-served basis, based on the receipt date by the Secretary (under the submission instructions of the Secretary) of the borrower's Application and Service Agreement. A loan repayment commitment to a borrower in one fiscal year does not guarantee a commitment for the remainder of the years covered by the borrower's Service Agreement or in future years. The Secretary is required to give priority for student loan repayment in any fiscal year to borrowers who have received forgiveness benefits during the preceding fiscal year and have not yet completed the three years of service under their first service agreement and to new applicants who have practiced law for a period of five years or less and have spent not less than 90 percent of that period working as civil legal assistance attorneys.

Loan repayment benefits will only be paid for years in which Congress appropriates money for the program. If Congress does not appropriate money, benefits will not be paid even if a borrower has a Service Agreement with the Secretary. A borrower is obligated to complete the entire period of service covered under the Service Agreement even if additional loan repayments are not made.

Procedures

Funding for this program in the amount of $5,000,000 was included in the Consolidated Appropriations Act, 2010, enacted on December 16, 2009 (Public Law 111-117) for FY 2010. In light of the limited amount of funds available and the uncertainty surrounding the availability of future funding, the Secretary is issuing this notice to announce the program and establish the requirements, definitions, eligibility criteria, and procedures for awarding benefits under the Civil Legal Start Printed Page 39000Assistance Attorney Student Loan Repayment Program in accordance with section 437(d)(1) of the General Education Provisions Act, 20 U.S.C. 1232(d)(1). The eligibility criteria, requirements, definitions, and application and repayment procedures specified in this notice are based on section 428L of the HEA. If continued funding for the program is provided through annual appropriations, the Secretary intends to undertake formal rulemaking.

Eligibility Criteria for Borrowers: (A) To qualify for the Civil Legal Assistance Attorney Student Loan Repayment Program, a borrower must:

(1) Have an “eligible loan,” as defined in the “Program Definitions” section of this notice;

(2) Not be in default on a loan for which the borrower seeks repayment;

(3) Be employed as a “civil legal assistance attorney”, as defined in the “Program Definitions” section of this notice;

(4) Be continually licensed to practice law; and

(5) Execute a Service Agreement with the Secretary.

(B) A borrower may not receive benefits for the same service under both the Civil Legal Assistance Attorney Student Loan Repayment Program and the Loan Forgiveness for Service in Areas of National Need Program under section 428K of the HEA, 20 U.S.C 1078-11, or the Public Service Loan Forgiveness Program under section 455(m) of the HEA, 20 U.S.C 1087e(m).

Requirements

Terms of Service Agreement with the Secretary: (A) To be eligible to receive and retain payment benefits under the Civil Legal Assistance Attorney Student Loan Repayment Program, the borrower must enter into a written Service Agreement with the Secretary that specifies that:

(1) The borrower is, at the time the Service Agreement is signed by the borrower, employed as a civil legal assistance attorney and will remain employed as a civil legal assistance attorney for a period of not less than three years after the Service Agreement is signed, unless the borrower is involuntarily separated from that employment.

(2) If the borrower fails to meet the continued employment condition, the borrower must repay the Secretary the amount of any benefits received by the borrower under the Service Agreement;

(3) If the borrower is involuntarily separated from qualifying employment as a result of misconduct or voluntarily separates from employment before the end of the service period specified in the Service Agreement, the borrower must repay the Secretary the amount of any benefits received by the borrower under the Service Agreement;

(4) If a borrower who is required to repay an amount to the Secretary fails to do so, the amount will be collected by the Federal Government as a Federal debt using all the methods provided by law for recovery of amounts owed to the Federal Government;

(5) On a case-by-case basis, the Secretary may waive, in whole or in part, the right to recover an amount owed under this program if, in the Secretary's judgment, the recovery would be contrary to the public interest; and

(6) The Secretary makes student loan payments on behalf of the borrower for the period of the agreement, subject to the availability of annual appropriations.

(B) Upon completion of a required period of service, the Secretary may enter into an additional agreement with the borrower. An additional agreement may require the borrower to remain employed as a civil legal assistance attorney for a period of less than three years. The Secretary would make additional student loan payments on the borrower's behalf for this additional period of service.

Repayment Amounts

(A) A borrower employed as a civil legal assistance attorney who meets all of the criteria for student loan repayment under the borrower's Service Agreement with the Secretary may receive repayment of up to $6,000 for each year of completed service under a service agreement, up to a total amount of $40,000.

(B) The Secretary does not reimburse a borrower for any payment on a loan made by the borrower prior to the date the Secretary determines that the borrower has met each year's employment commitment under the borrower's Service Agreement.

(C) The Secretary pays the approved repayment amount to the borrower's loan holder(s) to be applied to the outstanding balance of the borrower's eligible loans, not to exceed the annual maximum of $6,000.

Program Definitions

Year means a consecutive 12-month period that begins on a date identified by the Secretary that is on or after the date of the signed written Service Agreement between the borrower and the Secretary.

Civil legal assistance attorney means an attorney who is a full-time employee of—

(A) A nonprofit organization that provides legal assistance, without a fee, with respect to civil matters to low-income individuals; or

(B) A protection and advocacy system or client assistance program that provides legal assistance to clients with respect to civil matters and that receives funding under—

(1) Subtitle C of Title I of the Developmental Disabilities Assistance and Bill of Rights Act of 2000 (42 U.S.C. 15041 et seq.);

(2) Section 112 or 509 of the Rehabilitation Act of 1973 (29 U.S.C. 732, 794e);

(3) Part A of Title I of the Protection and Advocacy for Individuals with Mental Illness Act (42 U.S.C. 10801 et seq.);

(4) Section 5 of the Assistive Technology Act of 1998 (29 U.S.C. 3004);

(5) Section 1150 of the Social Security Act (42 U.S.C. 1320b-21);

(6) Section 1253 of the Public Health Service Act (42 U.S.C. 300d-53); or

(7) Section 291 of the Help America Vote Act of 2002 (42 U.S.C. 15461).

Eligible Student Loan is a loan made under the Perkins Loan, FFEL, or Direct Loan Program, excluding PLUS loans made under the FFEL and Direct Loan Programs to parents of dependent undergraduate students and Federal Consolidation Loans and Direct Consolidation Loans that repaid a parent PLUS loan.

Employee means an individual who, under Federal tax law, is considered an employee of the non-profit organization, protection and advocacy system, or client assistance program.

Full-time employment (A) Means working in qualifying employment in one or more jobs for the greater of—

(1) An annual average of at least 30 hours per week, or

(2) Unless the qualifying employment is with two or more employers, the number of hours the employer considers full-time.

(B) Vacation or leave time provided by the employer or leave taken for a condition that is a qualifying reason under the Family and Medical Leave Act of 1993, 29 U.S.C. 2612(a)(1) and (3), is not considered in determining the average hours worked on an annual basis.

Non-profit organization means an organization, under section 501(c)(3) of the Internal Revenue Code, that is exempt from taxation under section 501(a) of the Internal Revenue Code.

Involuntary separation due to misconduct means termination from Start Printed Page 39001employment which results in the borrower not being eligible to receive unemployment benefits under applicable State law.

Application Procedures for Loan Repayment and Payment Processing

(A) A borrower may request loan repayment by completing the Application and Service Agreement approved by the Secretary and providing any required supporting documentation.

(B) The Secretary makes a student loan repayment commitment for each consecutive 12-month period of service to a qualified applicant on a first-come, first-served basis, according to the date that the borrower's complete and accurate signed Application and Service Agreement is received by the Secretary, contingent upon the availability of funds for the fiscal year on that date. The date the application is received by the Secretary is:

(1) No earlier than the first receipt date established by the Secretary;

(2) No later than the deadline date for receipt of applications specified in this Notice; and

(3) If the borrower's application is incomplete or inaccurate, the date the Secretary considers the borrower's application to be complete and accurate.

(C) The Secretary notifies applicants of—

(1) Their eligibility or ineligibility for a student loan repayment commitment;

(2) For eligible borrowers, the required service period covered under the borrower's Service Agreement with the Secretary;

(3) For eligible borrowers, the loan repayment amount to be paid following completion of the first consecutive 12-month period of service covered under the borrower's Service Agreement; and

(4) Any other terms and conditions of the Secretary's payment of benefits.

(D) No later than 90 days after the end of each consecutive 12-month period for which the Secretary committed a loan repayment amount for the borrower, the borrower must submit to the Secretary a certification of completed service certified by the borrower's employer on a form approved by the Secretary.

(E) Upon receipt of the borrower's certification of completed service, the Secretary will send the approved repayment amount for which the borrower qualified to the holder of the borrower's highest current outstanding unsubsidized loan, if any, for payment on that loan. If the borrower has no outstanding unsubsidized loans, the Secretary forwards the repayment amount to the holder of the borrower's highest outstanding subsidized loan.

(F) If the holder of the borrower's loan(s) determines that the repayment amount received from the Secretary exceeds the remaining balance of the loan for which it is designated in accordance with paragraph (E) of this section, the holder must apply the remaining balance to another eligible loan of the borrower held by the holder, if applicable. If the holder has no other eligible loans of the borrower, the holder must return the balance to the Secretary. If applicable, the Secretary will forward that balance to another holder of the borrower's eligible loans.

Repayment Procedures

(A) A borrower must repay to the Secretary any repayment benefit received if the borrower—

(1) Fails to complete all of the service required under the Service Agreement; or

(2) Before the end of the period of employment required by the Service Agreement, is involuntarily separated from eligible employment due to misconduct or voluntarily leaves that eligible employment.

(B) Upon notification of a borrower's involuntary separation due to misconduct or voluntary separation from eligible employment, or upon a borrower's failure to submit a certification of completed service within 90 days of the end date of the second or subsequent consecutive 12-month service period required to retain the repayment benefit, the Secretary notifies the borrower that the borrower must repay any benefit received under the Service Agreement unless the borrower provides the Secretary, within 30 days of the date of the Secretary's notice, with documentation that establishes to the satisfaction of the Secretary that such repayment should not be required.

(C) If, within 30 days of the date of the Secretary's notice under paragraph (B) of this section, the borrower fails to provide the Secretary with documentation that establishes to the satisfaction of the Secretary why the borrower should not be required to repay a benefit received, the Secretary treats the payment amount as a Federal debt and provides the borrower with a repayment schedule that includes a monthly payment amount, the first payment due date, the applicable interest rate, and any accrued interest. The Secretary also informs the borrower of any other terms and conditions of repayment.

(D) If a borrower who is required to repay a benefit received under a Service Agreement fails to make a monthly payment within 20 days of the due date, the Secretary undertakes collection of the amount owed by the borrower using all the methods provided for by law for the recovery of Federal debts.

Accessible Format: Individuals with disabilities can obtain this document in an accessible format (e.g., braille, large print, audiotape, or computer diskette) on request to the program contact person listed under FOR FURTHER INFORMATION CONTACT.

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: http://www.ed.gov/​news/​fedregister. To use PDF you must have Adobe Acrobat Reader, which is available free at this site.

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: http://www.gpoaccess.gov/​nara/​index.html.

Catalog of Federal Domestic Assistance (CFDA) Number: 84.409.

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 and duties of the Assistant Secretary for Postsecondary Education.

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Dated: June 30, 2010.

Daniel T. Madzelan,

Director, Forecasting and Policy Analysis.

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[FR Doc. 2010-16360 Filed 7-6-10; 8:45 am]

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