ACE and a group of 13 other higher education associations submitted
comments this week on proposed regulations for discharge of federal
loans when colleges have defrauded students.
The Department of Education’s Notice of Proposed Rulemaking (NPRM) was published in the Federal Register on June 16.
The associations’ comments
(89 KB PDF) express strong support for the department’s effort to provide clear,
consistent processes through which borrowers who have been defrauded or
harmed by the higher education institutions they attended may seek debt
relief. But the groups also urge the department to continue to clarify
the regulatory language to ensure that it will best serve borrowers,
hold fraudulent institutions accountable for their misconduct, and
ensure a fair process for legitimate institutions.
The comments focus specifically on a limited number of issues related
to the borrower defense portion of the NPRM, including administrative
concerns, defining the type and nature of claims, due process, and
dealing with consolidated loans.
A companion letter
(73 KB PDF) submitted by ACE and nine other higher education groups discusses the
NPRM’s proposed changes to determining whether an institution is
financially responsible and the consequences for being found “not
financially responsible” in these situations. The associations assert
that the NPRM represents a significant shift in the department’s
approach which is likely to result in adverse and unintended
consequences for many colleges and universities, particularly smaller,
tuition-dependent nonprofit institutions.
The department expects to release the final set of regulations on Nov. 1, according to a department spokeswoman.