We discuss the Biden Administration’s recent change in tone on forgiveness, alternative approaches to full forgiveness the President might take, potential legal sources of the President’s authority to take such actions, including the status of the Education Dept.’s analysis of the President’s forgiveness authority, and likely timetable for Presidential action. We also look at the Administration’s recent initiatives involving income driven repayment plans and public service student loan forgiveness and explore the perspective of interests opposed to forgiveness.… Continue Reading
With the return to repayment of federal student loans on February 1, 2022 quickly approaching, the Department of Education’s Office of Federal Student Aid (FSA) recently notified the private collection agencies (PCAs) under contract with FSA to collect Direct Loans that it would begin the process of recalling approximately 5.1 million borrower accounts and winding down the PCAs’ contracts. … Continue Reading
The U.S. Department of Education has issued a new interpretation “to revise and clarify its position on the legality of State laws and regulations that govern various aspects of the servicing of Federal student loans.” The new interpretation revokes and supersedes the ED’s 2018 preemption determination. It was not unexpected, as the ED has taken a number of steps in recent months to reverse Trump Administration policies that hindered state oversight of federal student loan servicers. … Continue Reading
The Biden transition has announced the members of its agency review teams.
The team leaders include the following individuals:
CFPB. The team will be led by Leandra English, who is currently with the New York Department of Financial Services. As our blog readers may recall, Ms. English was appointed CFPB Deputy Director by former CFPB Director Cordray upon his departure from the Bureau. … Continue Reading
At the end of last week, the Department of Education announced that Education Secretary Betsy DeVos has directed Federal Student Aid (FSA) to extend until December 31, 2020 the relief that was provided to federal student loan borrowers by the CARES Act. The CARES Act suspended loan payments on federal student loans and temporarily reduced interest rates to zero until September 30, 2020. … Continue Reading
A group of 22 state attorneys general joined by the District of Columbia AG filed a lawsuit in a California federal district court against Secretary of Education Betsy DeVos and the U.S. Department of Education (ED) seeking to invalidate the ED’s final “Institutional Accountability Regulations” issued in 2019 (“2019 Rule”) which replaced the Obama administration’s “Borrower Defense” rule issued in 2016 (“2016 Rule”). … Continue Reading
The Connecticut federal district court has ruled in Pennsylvania Higher Education Assistance Agency v. Perez that demands by the Connecticut Department of Banking (DOB) to the Pennsylvania Higher Education Assistance Agency (PHEAA) for federal student loan documents are preempted by federal law. PHEAA was represented by Ballard Spahr.
PHEAA services federal student loans made by the Department of Education (ED) under the Direct Loan Program pursuant to a contract between the ED and PHEAA. … Continue Reading
Taking a step that undoubtedly presages further coordinated action, state officials holding the title of Student Loan Ombudsman or comparable titles sent a joint letter to Department of Education Secretary Betsy DeVos and Social Security Commissioner Andrew Saul urging the ED and SSA to establish an automatic process for discharging federal student loans of disabled civilian borrowers.… Continue Reading
My colleagues and I have the privilege of advising numerous clients on income share agreements (ISAs), including universities, service providers, and institutional investors. So we were excited by reports that the U.S. Department of Education (ED) plans to publish a Federal Register notice for an Experimental Sites Initiative (ESI) that would facilitate ISA programs at Title IV schools.… Continue Reading
A group of 22 state Attorneys General have sent a letter to the Department of Education seeking information “to determine whether the [ED] is providing relief to thousands of former ITT Tech students as required by federal law.” The use of the seals of the Kentucky, Massachusetts, and Oregon AGs on the first page of the letter suggests that these AGs are taking the lead on the inquiry.… Continue Reading