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House Republicans Call on DOJ to Intervene in ED’s Drafting of Borrower Defense Regulations

By Hugh T. Ferguson, NASFAA Senior Staff Reporter

As the Department of Education (ED) gets closer to drafting final rules on several issues addressed by its recent negotiated rulemaking committees, a dozen congressional Republicans are demanding that the Department of Justice (DOJ) intervene in the process, citing concerns over how ED will draft the borrower defense regulation.

In a letter to DOJ, spearheaded by Rep. Virginia Foxx (R-N.C.), ranking member of the House Education and Labor Committee, Republicans call on the agency to “participate actively in the review process” of ED’s negotiated rulemaking, arguing that the public needs to be protected from “improper” rulemaking over borrower defense to repayment regulations.

During ED’s Affordability and Student Loans committee work, which wrapped up in December, the committee did not reach consensus on language concerning borrower defense, meaning the department can go about drafting the regulation as it sees fit, without incorporating specific language from the committee. After reviewing public comments on proposed rules, ED will draft final rules. If the final regulations are published on or before Nov. 1, 2022 they will go into effect July 1, 2023.

“Congress empowered the Secretary of Education to specify which acts or omissions of an educational institution a student borrower may assert as a defense to repayment of an educational loan, and we support protecting student borrowers from injurious misconduct in this manner,” members write. “But the Department of Education is contemplating regulatory changes that are inconsistent with both the Department of Justice’s fundamental commitments and its representations in court over the past decade in litigation.”

The lawmakers take issue with ED’s rulemaking process and its efforts to revise the “much litigated” borrower defense regulations and potential impacts on due process rights for institutions of higher education, which in this instance would only apply to proprietary institutions.

The letter also expresses worry that ED is considering using the regulation to impose financial consequences on conduct that would pre-date the proposed regulation and create taxpayer burdens that do not have “meaningful analysis” to demonstrate its need.

Republicans argue that ED’s potential action could put DOJ in a position where the institutional integrity of the Justice Department could be undermined.

“The Department of Education’s contemplated regulatory changes will put the Department of Justice in the impossible position of defending a regulation that defies ‘common sense,’” the lawmakers write. “The Department of Justice should assert itself in the interagency review process to demonstrate its commitment to consistency in the rule of law.”

Stay tuned to Today’s News for more coverage of negotiated rulemaking and alerts on the rulemaking process.

 

Publication Date: 6/1/2022


Jeff A | 6/1/2022 12:58:19 PM

They are exactly right about this. The way proposed will, or certainly should,, be concerning for all IHEs. Common sense reference is correct.

David S | 6/1/2022 10:35:38 AM

Congress's number one recipient of cash from for-profit schools? Rep. Virginia Foxx (R-NC). What a coincidence!

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