ED Borrower Defense Analysis Breaks Down Thousands of Claims

By Allie Bidwell, Communications Staff

In a newly-released analysis, the Department of Education (ED) gave a detailed breakdown of the more than 100,000 borrower defense claims it has received since 2015, presenting information on claims per state, claim status, and changes over time. Among other things, ED found that since 2015 it has received more than 4,000 claims per month. Prior to 2015, ED had received fewer than 10 claims.

The analysis comes just after a committee of higher education stakeholders gathered for their second session of negotiated rulemaking, or neg reg, to rewrite the federal borrower defense regulations. The committee will reconvene next month to debate proposed regulatory language from ED, with the goal of coming to a consensus on a new regulation.

Because ED is currently using the existing regulation, created in the mid-1990s, it’s important to determine which state jurisdiction should be used, which can be difficult with distance education. The states with the highest number of claims included California, Florida, Illinois, Indiana, Pennsylvania, Texas, and Wyoming. Overall, there were more than 1,500 institutions associated with claims. However, the vast majority of claims — 95 percent — came from just 15 unnamed institutions, the analysis said.

ED also provided information on the status of the thousands of claims it has received: intake, adjudication, post-review, and completed. As of Oct. 30, 2017, the majority of the 135,050 claims — 58 percent — were in adjudication. Another 18 percent were in intake, 2 percent were in post-review, and 22 percent were completed.

Further breaking down those claims by changes over time, ED’s analysis showed that most of the completed claims were received in 2016. Of the 29,780 claims completed as of Oct. 30, 2017, about 80 percent (or 23,940 claims) were received in 2017. The most total claims — 77,340 — were also submitted in 2016. In 2017, ED received 47,540 claims — 12,750 of which are in intake. Another 31,830 are in adjudication, 360 are in post-review, and 2,610 had been completed as of Oct. 30, 2017.

Finally, ED also provided information on claims that were sent to loan servicers for disbursement or refund. According to the analysis, the mean number of days between the date the claim was received and the date approved claims were sent to the servicer was 264 days, with a standard deviation of 101 days.  ED resolved 14,980 claims in 2016, and 16,150 claims in 2017.

These numbers do not include the 21,500 claims ED ruled on in December.


Publication Date: 1/18/2018

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