Borrower-Defense Claims Could Be Paid by Colleges
Meghan Brink
July 11, 2022
Newly proposed regulations from the Education Department would create clear steps to hold colleges accountable to paying for recouped federal student loans.
The Education Department has big plans to make it easier for borrowers who attended predatory colleges to apply for relief of their student debt, and to hold the institutions accountable for their wrongdoing—and possibly make them repay the costs, too.
A set of newly proposed regulations released July 6 would create a new, separated process to review borrower-defense claims, the process to adjudicate wrongdoing by a college in order to get debt relief, and to determine whether the department will recoup the costs of the debt relief from a college, which were once both considered at the same time.
According to the department, this change would shorten the length of time for borrower-defense claims to be approved and would give the department the chance to “recover the costs to taxpayers” for loan discharges.
