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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations
Changes: None.
Executive Orders 12866 and 13563

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Regulatory Impact Analysis Under Executive Order 12866, the Office of Management and Budget OMB must determine whether this regulatory action is significant and, therefore, subject to the requirements of the Executive order and subject to review by OMB. Section 3f of Executive Order 12866 defines a significant regulatory action as an action likely to result in a rule that may 1 Have an annual effect on the economy of $100 million or more, or adversely affect a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities in a material way also referred to as an economically significant rule;
2 Create serious inconsistency or otherwise interfere with an action taken or planned by another agency;
3 Materially alter the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or 4 Raise novel legal or policy issues arising out of legal mandates, the Presidents priorities, or the principles stated in the Executive order.
These final regulations, taken together with the IFR, are an economically significant action and will have an annual effect on the economy of more than $100 million because the changes to an opt-out process for borrowers identified as TPD eligible through the data matches with VA and SSA are expected to increase transfers from the Federal Government as more loans are discharged by $1,685.8 million when annualized at a seven percent discount rate. Pursuant to the Congressional Review Act 5 U.S.C. 801 et seq., the Office of Information and Regulatory Affairs designated this rule as a major rule, as defined by 5 U.S.C. 8042.
We have also reviewed these final regulations and the IFR under Executive Order 13563, which supplements and explicitly reaffirms the principles, structures and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, Executive Order 13563 requires that an agency 1 Propose or adopt regulations only upon a reasoned determination that their benefits justify their costs recognizing that some benefits and costs are difficult to quantify;
2 Tailor its regulations to impose the least burden on society, consistent with
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obtaining regulatory objectives and taking into account, among other things, and to the extent practicable, the costs of cumulative regulations;
3 In choosing among alternative regulatory approaches, select those approaches that maximize net benefits including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity;
4 To the extent feasible, specify performance objectives rather than the behavior or manner of compliance a regulated entity must adopt; and 5 Identify and assess available alternatives to direct regulation, including economic incentivessuch as user fees or marketable permitsto encourage the desired behavior, or providing information that enables the public to make choices.
Executive Order 13563 also requires an agency to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible. The Office of Information and Regulatory Affairs of OMB has emphasized that these techniques may include identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes.
The Department has assessed the potential costs and benefits, both quantitative and qualitative, of this regulatory action, and we issued the IFR, and are issuing these final regulations, in response to the pressing need for, and manifest public interest in, deregulatory relief from bureaucratic burdens that have denied tens of thousands of veterans who are totally and permanently disabled, due to service-related injuries, student loan discharges for which they are eligible.
Individuals who SSA has determined to be disabled have faced similar burdens and hurdles. The harm caused to our veterans, other disabled individuals, and to the public interest by the application process is significant and widely recognized. See Presidential Memorandum at 44677; S. Rep. No.
115150, at 182. Based on this analysis and the reasons stated in the preamble, the Department believes that these final regulations are consistent with the principles in Executive Order 13563.
We also have determined that this regulatory action does not unduly interfere with State, local, or Tribal governments in the exercise of their governmental functions.
Need for Regulatory Action The HEA provides that veterans who are totally and permanently disabled are
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eligible to have their Federal student loans discharged. Prior to the IFR, once determined by the Secretary of Veterans Affairs to be totally and permanently disabled due to a service-connected condition, the veteran was required to obtain documentation of that status from VA and provide it to the Secretary of Education, along with an application for total and permanent disability discharge, in order to receive the discharge of their student loans.
Similarly, borrowers who are identified as eligible for a TPD discharge through the data match with SSA had to submit an application to the Department in order to receive the discharge.
However, now that the Department has data sharing agreements with VA
and SSA in place, the Department obtains all of the information it needs directly from those two agencies to discharge loans. This makes the submission of the TPD application to the Department an unnecessary and burdensome step for both groups of borrowers. Consequently, the President and Congress have asked the Department to ensure that individuals who have received a qualifying disability determination from SSA or VA receive all benefits the law allows with as little burden on the borrower as possible. Under the IFR and this final rule, individuals who have received a qualifying disability determination from SSA or VA only need to contact the Department if they choose to opt out of the TPD discharge, in which case they would be responsible for full payment on the loan.
In terms of the potential impact on borrowers, the most significant change from the IFR is the extension of the automatic TPD discharge process to borrowers who are identified as eligible for a TPD discharge through the data match with SSA. Expanding TPD
discharges without an application to individuals identified as TPD by SSA is a logical extension of the IFR. The rationale for providing an automatic discharge to veterans based on a disability determination by VA
eliminating unnecessary documentation burdens on individuals determined by a government agency to have total and permanent disabilities that qualify them under statute to a discharge of their loans, particularly when those total and permanent disabilities may pose challenges to providing additional documentationapplies equally to individuals whose TPD has been identified by the SSA.
The Department has been working with VA since 2018 to facilitate a more expedited TPD discharge process and about 22,000 veterans have received
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