Dept. of Education

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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. … Continue Reading

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 all remain in effect. … Continue Reading

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 of a memorandum (the “Memorandum”), continues student loan payment relief during the COVID-19 crisis for certain federal student loans held by the Department of Education.… Continue Reading

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 60 days.
… Continue Reading

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 and federal student loan servicers and debt collectors, the letter requests that OCR:

  • “Detail all current and ongoing activities to address alarming racial disparities in student borrowing and student loan outcomes, including any relevant enforcement actions OCR has taken since the beginning of the Trump Administration in January 2017;
  • “Launch a comprehensive investigation into the roles that predatory colleges and the student loan industry play in contributing to racial disparities in student borrowing and student loan outcomes, including recruitment and loan counseling practices, servicing and debt collection practices (including the charging of fines and fees on defaulted loans), and access to repayment plans and debt cancellation options for borrowers of color; [and]
  • “Develop a new plan to address racial disparities, which should include new policy guidance to all entities involved in federal student aid programs regarding their current responsibilities under federal civil rights law, and any recommendations to Congress for how to legislatively address racial disparities in student borrowing and student loan outcomes.”
… 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

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, Massachusetts, and Washington, sent a letter to the Department opposing a new policy limiting cooperation with state law enforcement.… Continue Reading

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 on or after that date.… Continue Reading

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.… Continue Reading

In December 2018, the Department of Education announced that it would begin implementing its “borrower defense” final rule which was published in November 2016.  In addition to its provisions that address a student’s ability to assert a school’s misconduct as a defense to repayment of a federal student loan and its ban on all pre-dispute arbitration agreements for borrower defense claims by schools receiving Title IV assistance under the Higher Education Act, the final rule also includes financial responsibility standards for schools participating in Title IV programs.… Continue Reading