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Department of Education Belatedly Implements Protections for Student Borrowers

Dec. 14, 2018

Department of Education Belatedly Implements Protections for Student Borrowers

Statement of Adam Pulver, Attorney, Public Citizen Litigation Group

Note: Yesterday the U.S. Department of Education announced that it would begin to implement the Borrower Defense rule, an Obama-era regulation intended to protect students from predatory colleges and universities. The rule requires the department to provide automatic discharges of federal loans to certain borrowers who cannot complete their programs of study because the borrowers’ schools close prematurely.

The department’s first efforts will benefit approximately 15,000 borrowers. Roughly half of these borrowers received loans for attendance at Corinthian Colleges, Inc., a notorious for-profit college that closed in 2015 under the weight of its own wrongdoing. The department expects to automatically discharge $150 million, approximately $80 million to former Corinthian students, in this first wave of implementation. Public Citizen played a key role in fighting to ensure that the 2016 Borrower Defense Rule would prohibit schools that receive federal funds from using forced arbitration agreements and class-action waivers, and challenged in litigation the department’s illegal delay of the rule’s effective date under Secretary Betsy DeVos.

This announcement is long overdue. Public Citizen is glad to see the first wave of discharges is on its way, but many thousands of students are still waiting for relief. The department must do more to implement this rule quickly. After the department’s unlawful 18-month delay, there’s no time to spare. It should not have taken litigation to force the department to do its job to protect students.