fb tracking

Comments on Department of Education’s Proposed Borrower Defense Rule

Comments on Department of Education's Proposed Borrower Defense Rule

In August 2018, Public Citizen submitted comments to the Department of Education to express concerns regarding the Department’s proposal to rescind provisions of a 2016 regulation that governs the “borrower defense” process with respect to student loans and requirements for institutions that receive federal financial assistance. In its 2018 proposal, the Department proposes to rescind provisions addressing forced arbitration, class-action waivers, mandatory internal dispute resolution processes, and schools’ submission of arbitral and judicial records to the Department.

As Public Citizen explained in its comments, the Department has not justified rescinding these provisions, which are supported by overwhelming evidence and the solid rationale that the Department advanced in 2016. Moreover, the Department’s proposal to replace these meaningful provisions with notice requirements regarding a school’s predatory contractual agreements would have no meaningful benefit for students. Disclosure cannot make a fundamentally unfair practice fair, and the Department’s own rationale and evidence before it in 2016 refute the efficacy of its “information-only” proposal. The Department’s Regulatory Impact Assessment is also riddled with errors and based on unsupported and illogical factual conclusions.