The Department of Education announced last week that it is changing how it determines relief for borrowers who assert “borrower defense claims.” Such claims allege that the borrower was misled by his or her school or that the school engaged in other misconduct in violation of certain laws. Borrower defense claims only apply to federal
Dept. of Education
Biden Administration orders extensions of student loan and mortgage relief
In response to directions from the Biden Administration, the following actions have been taken:
Federal student loans. The Acting Secretary of Education has extended the following relief on ED-held federal student loans until September 30, 2021:
- Suspension of loan payments
- Suspension of collection efforts
- Setting of interest rate at 0%
Foreclosures and Evictions. HUD…
Department of Education extends pandemic-related benefits
Without elaborating on its authority for doing so, the Department of Education recently announced the extension, through January 31, 2021, of certain pandemic-related benefits for federal student loan borrowers.
In particular, the administrative forbearance period, the 0% interest rate (pause in interest accrual), and the suspension of administrative wage garnishment and other collection activity will…
President Trump Takes Executive Action to Continue Federal Student Loan Relief During the COVID-19 Pandemic
On August 8, 2020, President Trump signed four executive orders that are designed to provide additional COVID-19 relief as talks on Capitol Hill collapsed on August 7 between White House negotiators and Democratic leaders over a fifth coronavirus stimulus package. One of those actions, which is directed to the Secretary of Education in the form…
U.S. Department of Education Announces Student Loan Relief Due to COVID-19 Crisis
Today, U.S. Secretary of Education Betsy DeVos announced that the office of Federal Student Aid is executing on President Trump’s promise to provide student loan relief during the COVID-19 pandemic through several initiatives:
- All borrowers with federally held student loans will automatically have their interest rates set to 0% for a period of at least
…
Senate Dems Target For-Profit Colleges and Federal Student Loan Servicers and Collectors in Letter to Dept. of Education
Last week, Senators Elizabeth Warren, Kamala Harris and Cory Booker sent a letter to the U.S. Department of Education’s Office of Civil Rights (OCR) requesting information about how OCR “plans to address alarming racial disparities in our federal student loan system through vigorous enforcement of the nation’s civil rights laws.” Taking aim at for-profit colleges…
Dept. of Ed close to releasing proposal that would facilitate income share agreement programs at selected Title IV schools
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…
New Jersey Attorney General Leads Actions Against the U.S. Department of Education for Restricting Information Sharing with State Law Enforcement Agencies
Last week, New Jersey Attorney General Gurbir Grewal took the lead in pursing two actions against the U.S. Department of Education related to the Department’s alleged refusals to cooperate with state investigations of student loan servicers and for-profit schools.
On September 16, 2019, New Jersey, along with 16 other attorneys general, including New York, Colorado,…
Dept. of Education finalizes regulations allowing use of pre-dispute arbitration agreements by schools receiving Title IV aid for student borrowers
In less than a year, pre-dispute arbitration agreements will be clearly permissible again now that the Department of Education has finalized its proposal to rescind the Obama administration’s “Borrower Defense” rule issued in November 2016 and replace it with “Institutional Accountability Regulations.” The final regulations are effective July 1, 2020 and apply to loans disbursed…
Congressional Chairs Concerned About State of Student Loan Industry Seek Answers from CFPB, Department of Education and Student Loan Servicers
Last week, Congressional representatives Maxine Waters, D-CA, Bobby Scott, D-VA, and Elijah Cummings, D-MD, as chairs of committees with oversight responsibility for the student loan servicing market, sent letters to CFPB Director Kathleen Kraninger and Department of Education Secretary Betsy DeVos about their concerns with the current state of the student loan industry. The letters…