Consumer Group Sues ED for Documents to Justify Delay of Borrower Defense Implementation

By Allie Bidwell, NASFAA Senior Reporter

The National Consumer Law Center (NCLC) is suing the Department of Education (ED) and demanding the agency justify its delay of the borrower defense regulation finalized during the Obama administration, and release communications records between ED officials and representatives of the for-profit community.

The lawsuit, filed last week under the Freedom of Information Act (FOIA), seeks to compel ED to release any correspondence with for-profit representatives "concerning current or potential litigation against ED's borrower defense regulations." Education Secretary Betsy DeVos in June 2017 announced she would halt the implementation of both the borrower defense and gainful employment regulations and convene new negotiated rulemaking sessions to rewrite them both. ED said at the time that due to a pending lawsuit, it had the authority to halt the effective date of the regulation under section 705 of the Administrative Procedures Act, which states that when an agency finds "that justice so requires, it may postpone the effective date of action taken by it, pending judicial review."

The borrower defense negotiated rulemaking (neg reg) session concluded in February without consensus. ED is in the process of writing the regulations as it sees fit, presumably taking into account the information gathered during the neg reg process. ED will publish a Notice of Proposed Rulemaking (NPRM), which will have a period of public comment. Final regulations will be published by Nov. 1, 2018, and would be set to take effect July 1, 2019.

NCLC shortly after ED's June 2017 announcement submitted a FOIA request to obtain correspondence from senior ED officials regarding potential or current litigation over the regulations, including correspondence with representatives of the California Association of Private Postsecondary Schools, which sued ED over the implementation of the 2016 rules.

"NCLC is seeking to determine whether the responsive records would reveal the extent to which department officials communicated with industry representatives regarding how and whether the department would delay the Borrower Defense Regulations," NCLC said in a press release.

In the lawsuit, NCLC claimed ED failed to conduct an adequate search of its records and failed to disclose responsive records.

"Delaying the Borrower Defense Regulations harms borrowers struggling with student loan debt taken out to attend a school that lied to them to get them to enroll, or that closed before they could complete their degree," said Abby Shafroth, an attorney with NCLC and a committee member for the 2018 neg reg session, in a statement. "These borrowers – and the public – deserve to know why rules designed to protect borrowers and taxpayers from predatory school conduct have not been implemented."


Publication Date: 4/24/2018

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