Change Is Coming: U.S. Department of Education Regulations Regarding Student Loan Borrower Defenses, Closed School Discharge, Arbitration Requirements and Class Action Waivers, and Institutional Financial Responsibility

In November 2016 the U.S. Department of Education published final regulations to establish new standards and processes for determining whether a Federal Direct Loan borrower has a defense to repayment of a loan based on an institution's act or omission.

The final regulations, which generally are scheduled to become effective July 1, 2017, also add new requirements related to the Department's measurement of institutional financial responsibility, discharge of federal education loans from closed schools and campuses, and the use of pre-dispute resolution agreements and limits on class actions. Although the regulations are largely a response to developments in the for-profit education sector, most portions of the rule apply to all institutions that participate in the Title IV federal student financial aid programs. While institutions prepare to comply, it is possible that the new Congress or the Trump Administration will scale back the new regulations.

Please join NASASPS members for a discussion with partner Elizabeth Meers and senior associate Michelle Tellock about the new regulations, potential changes to the regulations, and the impact of these developments on institutions and students.


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