All institutions of higher education (not just law schools or just proprietary schools) should consider filing comments to the US Department of Education (ED) proposed regulations on Borrower Defense to Repayment. Much clarification is needed. The comment deadline is fast approaching on August 1.
Driven by the recent collapse of the Corinthian schools, the ED's Notice of Proposed Rulemaking (NPRM) proposes several processes that would apply to all institutions of higher education. The NPRM proposes a process for borrowers to have their loans forgiven by the ED for reasons including alleged misrepresentations, including those allegedly made on college websites, in college catalogs and by college personnel. The NPRM proposes no statute of limitations for many claims, and proposes that claimants need not prove either intent or damages. Most troubling, the proposed rules are very unclear about how and when and if ED would have to involve an institution in the process before assessing liability on the institution and before assessing conditions on the institution's continued participation in federal financial aid.
Links to the NPRM and FAQs can be found here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
