Borrower-Defense Rulemaking Panel Fails to Reach Consensus

Negotiators on the borrower-defense rulemaking panel failed to reach consensus on proposed regulations, leaving the U.S. Education Department free to craft its own version of rules designed to protect defrauded student borrowers, Inside Higher Ed reported.

The Obama-era rule, which aimed to establish a national standard for student fraud claims after the collapse of Corinthian Colleges and ITT Tech, was originally set to take effect last year. However, Education Secretary Betsy DeVos blocked the rule and announced a new rulemaking process to rewrite the regulation.

The final rulemaking session concluded last week with panelists still clashing over proposals to impose a stricter standard for when federal student loan borrowers defrauded by their colleges can have their debt forgiven. Ahead of the gathering, the department issued draft plans that would require borrowers filing a loan forgiveness claim to meet a "substantial weight of the evidence" standard—essentially, the borrower's claim they were defrauded, plus some form of evidence. The proposal aimed to serve as a compromise position between the tougher "clear and convincing" standard sought by college representatives and the lower "preponderance of evidence" standard pushed by student advocates.

Without negotiators reaching consensus, the department will aim to issue its own proposed rule by November 1, reported Inside Higher Ed. Members of the public will have another opportunity to comment on the proposed regulation at that time.


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