U.S. Department of Education Announces Final Regulations to Protect Students and Taxpayers from Predatory Institutions
The U.S. Department of Education today announced final regulations to protect student borrowers against misleading and predatory practices by postsecondary institutions and clarify a process for loan forgiveness in cases of institutional misconduct. These final regulations further cement the Obama Administration's strong record and steadfast commitment to protecting student loan borrowers, deterring harmful practices by institutions, safeguarding taxpayer dollars and holding institutions accountable for their actions.
"Since taking office, the Obama Administration has worked tirelessly to protect students and taxpayers and crack down on dodgy schools," said U.S. Secretary of Education John B. King, Jr. "Today's regulations build on that progress by ensuring that students who are lied to and mistreated by their school get the relief they are owed, and that schools that harm students are held responsible for their behavior."
The Department began the negotiated rulemaking process after it received an unprecedented influx of borrower defense claims following the closure of Corinthian Colleges. The then-current regulation, promulgated in 1995, provided little detail on how borrowers could submit, and how the Department would adjudicate claims. The final regulations include key provisions from the proposed regulations that will protect the rights of borrowers and hold institutions accountable by:
•Giving borrowers access to consistent, clear, fair, and transparent processes to file claims;
•Empowering the Secretary to provide debt relief to borrowers without requiring individual applications in instances of widespread misrepresentations;
•Protecting taxpayers by ensuring that financially troubled institutions provide the government with protection against the risks they create and that institutions whose actions lead to discharges of Federal student loans are held responsible;
•Helping students make more informed decisions by requiring proprietary schools with poor loan repayment outcomes to include a plain-language warning in their advertising and promotional materials;
•Ensuring affected borrowers have information about loan discharge when schools close and access to an automated process; and
•Banning schools from inducing students to sign pre-dispute arbitration agreements that waive their rights to go to court and bring class action lawsuits based on borrower defense claims.
The final regulations strengthen several provisions in response to public comment on the proposed regulations, including:
•Early Implementation of Automatic Closed School Discharge: The final regulations provide for the automatic discharge of the loans of borrowers whose school closed on or after Nov. 1, 2013 and have not re-enrolled in another Title IV participating institution within three years. The Department intends to designate this provision for early implementation as soon as operationally possible before July 1, 2017, which will allow eligible Corinthian borrowers to benefit from this streamlined process sooner.
Read and learn more HERE!:
http://www.ed.gov/…/us-department-educat...
Posted By: agnes levine
Friday, October 28th 2016 at 10:05AM
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