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 loans made under the William D.… 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

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

As we reported, the Department of Education announced earlier this month that it would begin implementing its “borrower defense” final rule which was issued in November 2016 by providing discharges of federal student loans made to any borrowers who, in addition to other conditions, could not complete his or her program of study because the borrower’s school closed. … Continue Reading

The “borrower defense” final rule (Final Rule) issued by the Dept. of Education in November 2016 took effect at noon yesterday after Judge Randolph D. Moss of the D.C. federal district court refused to grant the renewed motion for a preliminary injunction filed by the California Association of Private Postsecondary Schools (CAPPS) seeking to preliminary enjoin the arbitration ban and class action waiver provisions in the Final Rule. … Continue Reading

Earlier this week, Judge Randolph D. Moss of the D.C. federal district court heard oral argument on the renewed motion for a preliminary injunction filed by the California Association of Private Postsecondary Schools (CAPPS) seeking to preliminary enjoin the arbitration ban and class action waiver provisions in the “borrower defense” final rule (Final Rule) issued by the Dept.… Continue Reading

The Department of Education, in an issue paper submitted as part of negotiated rulemaking on its final “borrower defense” rule, is proposing to require schools that use pre-dispute arbitration agreements and class action waivers in agreements with students to provide disclosures to students regarding their use of such agreements and waivers.… Continue Reading

Eighteen states and the District of Columbia have filed suit against Secretary of Education Betsy DeVos seeking an injunction of the Department of Education’s indefinite postponement of the Obama Administration’s Borrower Defense Rule. While generally providing for loan forgiveness for borrowers deceived by postsecondary institutions, the Borrower Defense Rule also created a joint state-federal enforcement scheme by providing that any judgment obtained by a government agency against a postsecondary institution under state law would give rise to a borrower defense to loan repayment.… Continue Reading

In a notice published in today’s Federal Register, the Dept. of Education announced that it is postponing  “until further notice” the July 1, 2017 effective date of various provisions of the “borrower defense” final rule issued by the ED last November, including the rule’s ban on arbitration agreements.  In a second notice also published in today’s Federal Register, the ED announced that it plans to establish two negotiated rulemaking committees, with one committee to develop proposed regulations to revise the “borrower defense” rule and the other to develop proposed revisions to the “gainful employment” rule that became effective in July 2015 and includes requirements for schools to make various disclosures such as graduation rates, earnings of graduates, and student debt amounts.… Continue Reading

The California Association of Private Postsecondary Schools (CAPPS) has filed a complaint in D.C. federal district court against the Dept. of Education and Education Secretary Betsy DeVos to overturn the “borrower defense” final rule issued by the ED last November.  CAPPS describes itself in the complaint as “a non-profit association of California private postsecondary schools” that has a membership of about 150 institutions, most of which are smaller institutions averaging less than 400 students and one or two locations.… Continue Reading