On November 1, 2016, the U.S. Department of Education published its final “borrower defense” rule, a sweeping and complex set of regulations with significance for all institutions of higher education. The new rule, which becomes effective July 1, 2017, introduces a streamlined process for borrowers to seek loan discharge based on institutional misconduct, expands the financial responsibility standards, requires the elimination of pre-dispute arbitration agreements, revises the closed school and false certification discharge provisions, and includes a new repayment rate for proprietary schools.
In an effort to assist institutions to understand the final rule and its implications, Thompson Coburn’s Higher Education Team is offering a series of four in-depth, 90-minute webinars, each focused on a different aspect of the regulatory package. The CLE-certified series is offered free of charge, and will be recorded and available on demand following the presentations.
- The New Borrower Defense Framework (Nov. 29)
We’ll closely examine the new borrower defense framework, with particular attention to what constitutes a valid “claim,” the risk of misrepresentation, and the Department’s decision to “punt” on fully-formed, procedural rules. We’ll also offer our thoughts regarding where the new framework is problematic, and what institutions can do to head off future borrower defense claims.
- The Revised Financial Responsibility Standards (Dec. 1)
This part of the regulation creates a significant number of new “triggering events” that automatically require institutions to provide financial protection to the Department (e.g., letter of credit). In this webinar, we’ll walk through the triggering events and associated processes, and discuss significant risks.
- Changes to Closed School and False Certification Discharge (Dec. 6)
Here we focus on the commentary that accompanied the final rules, and the potentially surprising ways in which the new rules may impact institutions of higher education, nonprofit and for-profit, alike.
- The Elimination of Pre-Dispute Arbitration Clauses and the New Repayment Rates for Proprietary Schools (Dec. 8)
In this webinar, we’ll examine the ban on pre-dispute arbitration agreements and class action waivers. We’ll discuss the impact of these rules on past and future agreements, and approaches institutions might use to implement the new requirements. In addition, we’ll discuss the new repayment rate for proprietary institutions.
Aaron Lacey is a partner in Thompson Coburn’s Higher Education practice, and editorial director of REGucation, the firm’s higher education blog. You can find Aaron on Twitter (@HigherEdCounsel) and LinkedIn, and reach him at (314) 552-6405 or firstname.lastname@example.org.