Stay in the loop! Subscribe to our mailing list

US Department of Education rewrites student protections in regulatory overhaul

Gradually the U.S.  Department of Education is proceeding on a comprehensive overhaul of regulations and policies in higher education, put in place during the Obama-era. The process is driven by a Regulatory Reform Task Force that over the last months has been cataloguing over 150 regulations and more than 1700 pieces of policy guidance, on the radar of the Department of Education under the Trump administration. Two major regulations instated during the Obama administration, are currently in the focus of Education Secretary Betsy DeVos with the Department announcing that these directives would be renegotiated and re-written. The measures are namely the Borrower Defence to Repayment rule and the Gainful-Employment rule, which address student protection of loan borrowers and accountability of for-profit colleges.

The defence to repayment regulation, intended to take effect this year, sought to simplify the process for student-loan borrowers, who held claims of being defrauded by their education institution, to obtain financial relief or be fully cleared from loan re-payment by the federal government.  The regulation aimed at offering critical protections for borrowers who were subjected to misleading and predatory practices by their institutions and improve both the Department and states’ ability to oppose harmful practices. The gainful employment rule, currently in force, evaluates programmes based on their graduates’ debt-to-earnings ratios, identifying those programmes that systematically leave students with more debt than they can repay with their income post-graduation. The regulation aims to increase accountability of the education marketplace, and confronts career training programs—specifically for-profit programs—that do not provide their graduates with a reasonable return on investment. Programmes failing to meet the requirements can be declared ineligible to award federal student aid.
By mid-June the Department of education under DeVos  announced that it would establish rulemaking committees to review the Borrower Defense to Repayment (BDR) and Gainful Employment (GE) regulations to better serve students and improve ‘overly burdensome and confusing’ procedures . Shortly after, at the end of June, the Department announced it would finally ‘press pause’ on the GE and grant institutions an additional year (till July 2018) to comply with disclosure requirements, that necessitated them to communicate their performance to students, and in promotional materials. The suspension of the Borrower Defence to Repayment rule before it could take force last month, caused Eighteen Democratic attorneys general, led by Attorney General Maura Healey, to sue DeVos and the Department of Education for delaying borrower protection rules.

Recent moves of the Education Department under Secretary Betsy DeVos, that seek a regulatory-reset on signature Obama-era regulations, can be seen as part of a broader effort to reduce regulatory burdens and a contended federal overreach into the management of higher education.  Heated debate has been sparked surrounding the rollback of the two measures, with arguments brought forth that the moves will reopen a timely process finally at the expense of taxpayers, and lead to for-profit colleges emerging as the clear winners.