As recently as this April, we explained that Congress chose not to roll back the important protections for defrauded student loan borrowers provided by the Department of Education’s borrower defense rules. Unfortunately, the Department has not only delayed implementation of the bulk of the borrower defense and gainful employment rules, but has also announced that it intends to rewrite both sets of rules. Fortunately, the Department must go through a series of steps to get input about these rules before it proposes new versions of them. Written comments are due July 12th.
The Higher Education Act provides certain rights and protections to borrowers of federal student loans. It also imposes specific responsibilities on the Department of Education. The borrower defense rules, finalized in fall 2016, and the gainful employment rules, finalized in fall 2014, explain the standards that schools must meet in order to continue to receive federal aid dollars, and the process by which students can vindicate their right to discharge their loans due to their school’s misconduct. Together, these rules are designed to ensure that students who do (or would) borrow federal loans to pay for college reap the benefit of that investment.
These rules provide many important safeguards for borrowers, including empowering students who have disputes with their schools to have their day in court instead of allowing schools to shuffle them into secret arbitration proceedings. The rules provide important information to prospective students about the employment and earnings outcomes of students who attended the schools they are now considering. The rules require certain schools to set aside funds to reimburse students if the school closes or runs afoul of the law. And these rules provide for automatic loan discharges for certain students whose schools shut down. The list could go on, as these are simply highlights of the ways that the borrower defense and gainful employment rules protect students and other taxpayers.
What do the delays and rewrites mean for student loan borrowers? Importantly, neither the delay and nor the rewrite of the borrower defense rules alters the fact that borrowers have a right to raise their defenses. During this time, borrowers can continue to ask the Department of Education to review their borrower defense claims. However, revising the rules creates considerable uncertainty. Policymakers, student borrower advocates, and state attorneys general are concerned that Education Secretary Betsy DeVos’s decision to revisit these rules is another sign that she is siding with predatory for-profit schools instead of fighting for students.
Since the rulemaking process requires the Department to get input, now is the time to stand for strong rules—and with all of the other individuals and groups that support strong protections for students and other taxpayers, and against predatory schools. Now is the time to act.
Speak Up: Submit written comments to the Department of Education by Wednesday, July 12, 2017. In addition, you can sign up to speak at a public hearing in Washington, DC, on Monday, July 10, 2017, or Dallas, Texas on Wednesday, July 12, 2017.
Tell the Department of Education what your rights and these rules mean to you:
- Urge the Department to continue to grant relief to the tens of thousands of students who have applied, but are still waiting for borrower defense relief.
- Ask the Department to stop giving federal loans and grants to schools that do not equip their graduates to succeed in their careers.
- Insist that the forced arbitration ban go into effect immediately, affirming that student loan borrowers have the right to go to court if their schools break the law or break their promises to them.