After the Department of Education's (ED) indefinite postponement of borrower defense issued in June was challenged in court by 19 state attorneys general, ED issued time-specific delays in the Federal Register today, with the opportunity for public comment.
Interim final rules delay the effective date of borrower defense rules, originally scheduled to be in effect as of July 1, 2017, until July 1, 2018. In addition, a Notice of Proposed Rulemaking (NPRM) would further delay the effective date until July 1, 2019. Public comments on both the interim final rules and NPRM are due on or before Nov. 24, 2017 and must be submitted through regulations.gov. As noted in the Federal Register, ED will consider comments on the further delayed effective date only and will not consider comments on the wording or substance of the final regulations.
Re-negotiations on borrower defense are scheduled to begin in November and are not affected by the interim final rules nor the NPRM.
Until July 1, 2019, ED would continue to process borrower defense claims under the existing regulations that will remain in effect during the delay so that borrowers may continue to apply for the discharge of all or a part of their loans. Under the existing 685.206(c), the borrower may assert as a defense against repayment, any act or omission of the school that would give rise to a cause of action against the school under applicable state law.
Publication Date: 10/24/2017