NASFAA submitted comments yesterday on the Department of Education’s (ED) announcement that it intends to renegotiate two controversial areas of regulation:
BDR final rules were scheduled to become effective July 1, but that date was indefinitely postponed to allow renegotiation. Although there was general support for many of the provisions facilitating discharge of defrauded borrowers’ loans, the package went beyond borrower defenses and included contested revisions to rules governing standards of financial responsibility that must be met by institutions wishing oi participate in the Title IV federal student aid programs.
Gainful employment rules went into general effect in 2015, but certain disclosure provisions with later effective dates have also been delayed.
In responding to the Department’s proposal to renegotiate, NASFAA recommended that financial responsibility standards be negotiated separately from borrower defense provisions. A major criticism of the revised regulations concerned lack of prior notice that ED would include that topic in the negotiations, and the resultant absence of nonfederal negotiators with expertise in those matters.
NASFAA reiterated its support for the loan discharge process on behalf of students harmed by school closure, substantial misrepresentation, or other clear cases of authorized discharge, and for holding schools accountable for fraudulent activities.
For gainful employment, NASFAA asked ED to recognize that use of proxies standing for “gainful employment” will always be imperfect and leeway should be built in that recognizes that fact. Further, any accountability metric must be completely transparent and challengeable by an institution. Metrics should be appropriate to the academic level and purpose of the program. Revised rules should be formulated with a view towards preventing some of the disruptions and problems that were experienced during implementation of the current rules.
Publication Date: 7/13/2017