Notice of Submission for OMB Review: Electronic Debit Payment Option for Student Loans

Federal Register, Wednesday, August 29, 2012

Volume 77, Number 168

[Notice]

[Page 52319]

[PDF version of this document]

SUMMARY: The Preauthorized Debit Account (PDA) Application is used to establish electronic debiting for individuals who have requested to have their defaulted federal education debt payments debited from their bank accounts.

DATES: Interested persons are invited to submit comments on or before September 28, 2012.

Abstract: An Electronic Debit Account Program gives the borrower the option to repay federally funded student loans via automatic debit deductions from their checking or savings accounts. The PDA payment option allows individuals with defaulted federal education debts (student loans or grant overpayments) held by the U.S. Department of Education's (ED's) Federal Student Aid Default Resolution Group to have their payments automatically debited from their checking or savings accounts and sent to ED. Individuals who choose the use the PDA option to make their payments must authorize ED to debit their bank accounts. 

The PDA Brochure and Application (PDA Application) explains the PDA payment option and collects the applicant's authorization for electronic debiting of payments and the bank account information needed by ED to debit the applicant's account.

The authority for the PDA option is provided under the Deficit Reduction Act of 1984, Public Law 98-368, and 31 CFR part 202, Depositaries and Financial Agents of the Government. Operating rules and regulations approved and published by the National Automated Clearing House Association (NACHA) and 31 CFR part 210 also govern the use of the PDA Application. Finally, Regulation E, issued and maintained by the Board of Governors of the Federal Reserve System, implements Title IX of the Consumer Credit Protection Act, as amended in 15 U.S.C. 1601. This regulation is designed to implement the act, which primarily serves to protect the interests of the individual consumer participating in electronic transfers. ED has used the collection of information on the currently approved PDA Application to establish electronic debiting for individuals who have requested to have their defaulted federal education debt payments debited from their bank accounts.

 

Publication Date: 8/29/2012

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