Multistate AG Coalition Urges Enhancement and Clarification of Federal Student Loan Rules and Processes

Cozen O'Connor
Contact

Cozen O'Connor

  • In a letter to Secretary of Education Miguel Cardona and Analyst Jean-Didier Gaina, a coalition of AGs from nineteen states, the District of Columbia and the State of Hawaii Office of Consumer Protection submitted comments on the U.S. Department of Education’s (ED) proposed rulemaking regarding borrower defenses to repayment, Public Service Loan Forgiveness (PSLF), and closed school discharges of loans.
  • In the letter, the AGs lauded the ED’s overall regulatory goals and many of the measures adopted in the proposed rulemaking. The letter then went on to call for specific modifications to a number of provisions. These included allowing states and individuals to raise claims under state law and based on state AG actions, which the ED would consider automatically and without requiring applications for reconsideration. The AGs also recommended that an approved borrower defense claim be presumptively entitled to a full discharge, and for determinations of limited relief to be done with precision and with a detailed explanation to the borrower.
  • The AGs went on to further recommend that in the case of pending or undecided borrower defense claims, interest not accrue on the debt for 180 days following the filing; to add Federal Family Education Loan program borrowers to those eligible for PSLF and to add additional forms of forbearance and deferment to the PSLF program, and to automate and strengthen the PSLF reconsideration process.
  • Finally, the AGs recommended revisions to the proposed rule to make discharge of repayment obligations mandatory in the event a school closes before a borrower completes a course of study; to extend the current 180-day window for withdrawal prior to the closing in the event of exceptional circumstances; and allowing a school’s communication that it will close to serve as the official date of closure.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Cozen O'Connor | Attorney Advertising

Written by:

Cozen O'Connor
Contact
more
less

Cozen O'Connor on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.