Comment on Borrower Defense Rule
August 30, 2018
On July 25th, Secretary of Education Betsy DeVos proposed changes to the “Borrower Defense Rule”. The changes would make it more difficult for students to obtain financial relief after being defrauded by predatory for-profit colleges. The draft rule is a clear signal from the Department of Education that they are more interested in protecting for-profit institutions than alleviating the financial harm suffered by thousands of vulnerable students.
Association of Young Americans submitted a comment to the Department on behalf of its 8,000 members, highlighting the following
- The rule places an unnecessarily high burden on students to prove their defense to repayment claims.
- The rule denies students their basic rights to be heard in court by allowing institutions to force arbitration.
- The rule limits the ability of individuals in similarly situated situations to file a group claim and benefit from automatic loan discharges if the school closed down, engaged in widespread misconduct or systematic fraud.