Education Department Releases Final Borrower Defense Rules September 06, 2019 Section 1 Content The Department of Education (ED) has released its final regulation on borrower defense to repayment, which cancels Direct Loans for students whose institutions misrepresented their educational offerings, job placement outcomes, or otherwise provided grossly misleading information to their students.“Borrower defense to repayment” allows student borrowers to seek loan forgiveness if a higher education institution misled them or engaged in other misconduct in violation of the law. This type of student loan forgiveness was rarely used prior to 2015, when several high-profile school closures—including Corinthian Colleges and ITT Tech—prompted the Obama administration to update the rule to help guide the process. The Trump administration’s rule—a revision to the Obama-era regulation finalized in 2016—was announced before the Labor Day weekend in an ED press release. Official publication in the Federal Register is pending. The new rule is likely to have a negative impact on borrowers in several ways. It narrows the window for filing such claims to three years and includes a rebuttable presumption that borrowers are not entitled to 100 percent cancellation. ED estimates the rule will save the government approximately $11 billion over 10 years. The department believes these savings stem from preventing unwarranted claims, but critics fear that many students who are due relief will not get it. Among the provisions, the rule imposes new burdens on students seeking debt relief who were enrolled at schools that closed or who withdrew just ahead of closure. It also rescinds the current prohibition against mandatory arbitration agreements and modifies the financial responsibility standards to allow the department to take immediate action when events occur, including lawsuits, that might impact an institution’s financial condition. ACE and 20 other associations submitted comments last year on the proposed rule, expressing concern that it would make asserting a successful borrower defense claim functionally impossible, eliminate accountability for the worst actors, and incentivize practices that are harmful to students.Politico reported this week that legal challenges over the final regulations are on the horizon. Harvard Law School's Project on Predatory Student Lending has said it will file a lawsuit to stop the rules from taking effect, and California Attorney General Xavier Becerra said in a statement that his office was prepared to fight the rule. Section 2 Content Section 3 Content Section 4 Content Section 5 Content Section 6 Content Button Content Rail Content 1Related Content U.S. Department of Education Finalizes Regulations to Protect Student Borrowers, Hold Higher Education Institutions Accountable and Save Taxpayers $11.1 Billion Over 10 YearsDepartment of Education press release | Aug. 30, 2019 ACE, Higher Ed Groups: Proposed Borrower Defense Rules Would Make Submitting a Successful Claim “Functionally Impossible” DeVos Finalizes 'Borrower Defense' Rules as Critics Plan LawsuitsPolitico | Sept. 3, 2019Ed Dept. Issues Final Rules for Defrauded Students; Activists Say the Rules Fall Short The Chronicle of Higher Education (sub. req.) | Aug. 30, 2019 Raising the Bar for Loan Forgiveness Inside Higher Ed | Sept. 3, 2019 Rail Content 2 Rail Content 3 Related News January 17, 2020 The House of Representatives voted 231-180 to pass a resolution to block Education Secretary Betsy DeVos' new borrower defense rule from going into effect. Read More News January 17, 2020 House Votes to Block Education Department Rule on Borrower Defense News January 13, 2020 The December webinar, “Whither Higher Education Act Reauthorization?” is now archived exclusively on ACE Engage®, ACE’s online community and learning platform. Read More News January 13, 2020 Missed Our Recent Webinar on HEA Reauthorization? No Problem, See It On ACE Engage. News December 13, 2019 Congress gave final approval Dec. 10 to the FUTURE Act, a bill that will restore and make permanent a $255 million per year funding stream for minority serving institutions. Read More News December 13, 2019 Congress Approves FUTURE Act Online Event December 10, 20191:00 PM to 1:45 PM This webinar will provide an overview of the prospects for HEA reauthorization, major issues involved with the legislation, and the implications for colleges and universities. Read More Online Event December 10, 20191:00 PM to 1:45 PM Whither HEA Reauthorization? News December 9, 2019 The Dec. 4 conversation, the first in a monthly series of Public Policy Pop-Ups, was hosted on ACE Engage®, ACE's peer-to-peer online community and learning platform. Read More News December 9, 2019 Public Policy Pop-Ups on ACE Engage Keep Campus Leaders in the Loop News December 9, 2019 The Senate has approved an amendment to the FUTURE Act that would permanently restore $255 million in funding for minority serving institutions and streamline the Free Application for Federal Student Aid (FAFSA). Read More News December 9, 2019 Senate Approves Compromise Measure to Extend MSI Funding, Simplify FAFSA News December 2, 2019 ACE is debuting a new feature called the Public Policy Pop-Up on ACE Engage®, ACE’s peer-to-peer online community and learning platform for higher education executives. Read More News December 2, 2019 Introducing Monthly Live Policy Updates on ACE Engage News November 25, 2019 ACE to host a webinar on the upcoming revised Title IX campus sexual assault regulations, and one on ED's proposed expansion of requirements for foreign gift and contract reporting. Read More News November 25, 2019 Coming Soon: ACE Webinars on Final Title IX Rule and Proposed Expansion of Foreign Gift and Contract Reporting Requirements News November 18, 2019 Register now for a Dec. 10 ACE webinar exploring whether the Higher Education Act (HEA) will be reauthorized anytime soon. Read More News November 18, 2019 ACE Webinar: Whither HEA Reauthorization?