Thursday, September 17, 2015

ED Exploring Borrower Defenses, Including State Deceptive Practices Laws, Against Loan Repayment

The Huffington Post reports on an ED notice extending its information-gathering efforts about possible borrower's defenses for student loan debt from non-traditional or unaccredited post-secondary schools. With the recent troubles of some for-profit schools, including the massive Corinthian College network, the Obama administration has been looking for avenues of debt relief for students of those institutions. In its September 17 notice, the ED seeks continued collection of information from borrowers who believe they have cause to invoke the borrower defenses against repayment of a student loan as noted in regulation 34 CFR 685.206(c)(i) which states in part that “[i]n any proceeding to collect on a Direct Loan, the borrower may assert as a defense against repayment, an act or omission of the school attended by the student that would give rise to a cause of action against the school under applicable State law.” The ED notes that "[p]rior to 2015, the borrower defense identified above was rarely asserted by any borrowers and no specific methods of collecting information was defined or found necessary," prompting, Huffington Post writer Steve Rhode writes, "clever attorneys to show how the schools violated state unfair and deceptive practice laws and that could possibly lead to an elimination of the student loans in full." Read the story at the Huffington Post here and the ED's notice here.

https://lawprofessors.typepad.com/education_law/2015/09/ed-exploring-borrower-defenses-including-state-deceptive-practices-laws-against-loan-repayment-.html

Federal policy, News | Permalink

Comments