Skip Ribbon Commands
Skip to main content

 Email  Share  Print

ACE, Higher Ed Groups: Proposed Borrower Defense Rules Would Make Submitting a Successful Claim “Functionally Impossible”

September 04, 2018


​ACE and 20 other higher education associations submitted comments last week to the Department of Education (ED) on the new draft rule for “borrower defense to repayment,” which it has proposed as a substitute for the Obama-era regulation it blocked last year. 

That regulation, designed to assist student borrowers in determining their eligibility for loan forgiveness and to prevent predatory institutions from taking advantage of prospective students, was scheduled to take effect in July 2017. Borrower defense rules have existed since the 1990s but remained generally unused until the collapse of for-profit Corinthian Colleges in 2015, which triggered thousands of claims from former students. 

Following President Trump’s inauguration, the ED reportedly stopped approving thousands of pending claims filed under these earlier regulations. As of mid-2017, the number of outstanding claims climbed to more than 65,000.

Secretary of Education Betsy DeVos announced in June 2017 that the department would postpone the effective date of the Obama administration’s rule and undergo a new rulemaking process to revise the regulations. When that process failed to produce a consensus, the department proposed its own revisions to the rule, which is where the process stands today. 

In their comments​, the associations write that they strongly support regulatory measures that are targeted, effective, and provide a necessary balance between protecting students and ensuring appropriate responsibility on the part of institutions. However, when taken together, the provisions in the rule “would make asserting a successful claim functionally impossible,” impacting both student borrowers and eliminating accountability “for the worst actors and incentivize practices we know to be harmful to students.”

The groups focus on a number of specific provisions in their critique, including the proposal to limit the ability to assert a defense to repayment only to defensive claims (those made in response to collection actions following default by the borrower), the move to change the relief offered for a successful borrower defense claim from full relief to a more limited form of partial relief, and the elimination of state law causes of action as the basis for asserting a defense to repayment. 

The final version of the rule is expected sometime this fall. 

Other ACE News

  • September 19, 2018

    Today's Headlines

    HEADLINES: Today's Top Higher Education News

    Starting next fall, the University of Pennsylvania will offer what it says is the first online bachelor’s degree at an Ivy League college . . . Inside Higher Ed writes about the Alamo Colleges District in Texas, which has seen successes with its...

  • ACE Annual Meeting

    September 19, 2018

    ACE2019 Image

    Register Now for ACE2019

    Registration is open for ACE2019, ACE’s 101st Annual Meeting, March 9-12, 2019, in Philadelphia, PA.Nearly 2,000 college and university leaders from deans to presidents will gather at the Philadelphia Marriott Downtown for the nation’s most...

  • Student Mobility

    September 18, 2018

    Fees for Student and Exchange Visitor Program Set to Increase

    The proposal to increase programs fees for the Student and Exchange Visitor Program may have a negative impact on international students, scholars, and higher education institutions, according to ACE and 14 other higher education associations.

  • Innovative Practices

    September 17, 2018

    Innovative Leadership

    College Presidents Finding New Ways to Lead Amid Growing Challenges

    A newly released ACE report highlights how innovative college and university presidents are rising to a variety of daily challenges and empowering their own campuses to take risks and respond strategically.

  • Budget and Appropriations

    September 17, 2018

    Stairs leading up

    Spending Package for FY 2019 Includes Boosts for Pell Grants, NIH, Career and Technical Education

    Congress has reached an agreement on an appropriations package for FY 2019 that includes a $100 increase in the maximum Pell Grant award and a $2 billion boost in funding for the National Institutes of Health, among other priorities for higher...


 Related Content