FOR IMMEDIATE RELEASE:
June 14, 2017
Contact: Sarah Schultz, sarah.schultz@younginvincibles.org, 202.734.6510

[Washington]- Today, the Department of Education announced its plans to roll back two essential regulations in place to protect students from predatory colleges and allow them to get justice when they’ve been defrauded: the Gainful Employment rule and the Borrower Defense rule. This announcement, championed by the for-profit college industry, will result in fewer protections for defrauded students and taxpayers, making it much more difficult for students to get their fraudulent loans discharged, and will allow predatory schools to operate unchecked.

The Department of Education will delay the Borrower Defense rule and begin a new negotiated rulemaking process to weaken and possibly eliminate the rule altogether. The Borrower Defense rule provides an easier process for defrauded borrowers to apply for loan discharge, bans mandatory arbitration clauses in enrollment contracts, requires mandatory disclosures from troubled schools to their students about legal actions pending against them, and establish triggers that may require schools to set aside funds to reimburse taxpayers in the case of future malfeasance or closure.  Additionally, the Department is expected to begin a new negotiated rulemaking process on the Gainful Employment rule, which holds schools accountable by requiring all schools receiving federal funding to publish information about student outcomes, including how much graduates typically earn and how much debt they have. It also holds institutions accountable-by requiring those that consistently produce high debt borrowers who cannot repay to improve or lose federal funding.

Over 50 organizations working on behalf of students, consumers, veterans, active service members, faculty and staff, civil rights, and college access all support the rules, as well as 20 state Attorneys General, and several US Senators. Furthermore, 78 percent of Americans say they support loan relief for borrowers whose schools provided deceptive information about their programs or outcomes. It is also unclear if the delay of the Borrower Defense rule will stand up to judicial scrutiny.

Young Invincibles’ Executive Director Jen Mishory commented on the Department’s plans:

“By moving to roll back these protections for students, the Department of Education is sending a clear, alarming message – they will put the interests of the for-profit college industry over the interests of students and taxpayers. Eliminating these two regulations serves as a toxic combination, simultaneously stripping students of protections and allowing poorly performing, predatory schools to proliferate. By delaying implementation and seeking to roll back the Borrower Defense rule, countless students who have been defrauded by predatory schools  will be left without meaningful options for relief.  By rolling back the Gainful Employment protections, students seeking an education will face an environment where poor-quality predatory schools can take taxpayer dollars and put students into insurmountable debt  without oversight.  Both put too many students in harm’s way.”

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