Having stood up and promoted the whistleblower program at the CFPB, it appears that Richard Cordray may now be taking similar steps at Federal Student Aid (“FSA”). On November 10, the Department of Education (“ED”) and FSA issued a bulletin inviting whistleblowers to provide information about potential violations of the Higher Education Act (“HEA”) and its implementing regulations. … Continue Reading
The U.S. Department of Education recently announced final regulations, effective July 1, 2023, designed to expand and improve the major student loan discharge programs authorized by the Higher Education Act. Among other things, the final regulations prohibit institutions that participate in the Federal Direct Loan program from requiring borrowers to sign mandatory pre-dispute arbitration agreements or class-action waivers that would be applicable to disputes about Direct Loans. … Continue Reading
The U.S. Department of Education recently announced proposed regulations designed to expand and improve the major student loan discharge programs authorized by the Higher Education Act. Among other things, the proposed regulations would prohibit institutions that participate in the Federal Direct Loan program from requiring borrowers to sign mandatory pre-dispute arbitration agreements or class-action waivers. … Continue Reading
The CFPB has created a student loan infographic to highlight the state of student loans in the pandemic. Among the statistics included in the infographic is that, based on Department of Education data current as of September 2020, 87% of federal student loan borrowers had their federal student loans in administrative forbearance.… Continue Reading
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
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.
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