I’m
still waiting to be pleasantly surprised by the Trump Department of Education
(ED) under Secretary DeVos. It has not happened yet.
From
the recent actions to remove critical information from consumer notices to
wanting to get a single loan servicer to handle all federal loans, the current
incarnation of ED seems to be moving in a direction that provides less support
and help for debtors.
On
October 2016, the then ED announced new regulations to go into force on July 1,
2017. “The U.S. Department of Education today announced final regulations to
protect student borrowers against misleading and predatory practices by
postsecondary institutions and clarify a process for loan forgiveness in cases
of institutional misconduct. These final regulations further cement the Obama
Administration’s strong record and steadfast commitment to protecting student
loan borrowers, deterring harmful practices by institutions, safeguarding
taxpayer dollars and holding institutions accountable for their actions.” – Source
The Betsy
DeVos ED is delaying the implementation of the Borrower Defense to Repayment
rules. The ED announced today “Postsecondary institutions of all types have
raised concerns about the BDR regulations since they were published on Nov. 1,
2016. Colleges and universities are especially concerned about the excessively
broad definitions of substantial misrepresentation and breach of contract, the
lack of meaningful due process protections for institutions and “financial
triggers” under the new rules.” – Source
So the
current ED is going to start over again and says, “The Department plans to
publish its Notice of Intent to Conduct Negotiated Rulemaking on BDR and GE in
the Federal Register on June 16, 2017. The Department will conduct public
hearings on BDR and GE on July 10, 2017, in Washington, D.C. and July 12, 2017,
in Dallas, Texas.” Goodness knows how long this new process if going to take
and what opportunities student loan debtors will have to actually have their
loans discharged due to misrepresentation by colleges and schools who received
federal student loans.
For
example, the ED previously said, “Many of these claims are from borrowers who
attended programs that the Department found had been publicized with misleading
job placement rates.” – Source
What
do you think, should schools who misrepresented the success of their programs
or actual employment rates to induce students to enroll, get a free pass and
eliminated from the new rules? Let me know what you think by posting your
comment below.
Even
under the old administration the Borrower Defense to Repayment processing was
less than optimal. There are students that have been waiting years for a
conclusion to their claims and the next changes will only serve to slow down
the entire process of assisting harmed student loan debtors.
As an
example, ED previously said they had ” received a total of approximately 82,000
claims.” And while a previous report on the status of the program said 16,000
had been processed and approved, the current ED press release says, “Nearly
16,000 borrower defense claims are currently being processed by the Department,
and, as I have said all along, promises made to students under the current rule
will be promises kept,” said Secretary DeVos. So where are the rest of the
claims?
Steve
Rhode
This article by Steve Rhode first appeared
on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.
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