Borrower Defense to Repayment Regulations Letter - APLU

Aug 1, 2016 - Department too much authority, first, to forgive and repay debt to students based upon ambiguous definitions of the kind of conduct which would ...
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August 1, 2016 Mr. Jean-Didier Gaina U.S. Department of Education 400 Maryland Ave., SW Room 6W232B Washington, DC 20202 Re: Docket ID ED-2015-OPE-0103, Borrower Defense to Repayment Regulations The Association of Public and Land-grant Universities (APLU) appreciates the opportunity to comment in response to the Department of Education’s proposed rule on Borrower Defense to Repayment (BDR). APLU is a research, policy, and advocacy organization representing 236 public research universities, land-grant institutions, state university systems, and affiliated organizations. Founded in 1887, APLU is North America's oldest higher education association with member institutions in all 50 states, the District of Columbia, four U.S. territories, Canada, and Mexico. Annually, member campuses enroll 4.7 million undergraduates and 1.3 million graduate students, award 1.2 million degrees, employ 1.2 million faculty and staff, and conduct $42.7 billion in university-based research. We wholeheartedly agree with Secretary King’s statement that “all students who are defrauded deserve an efficient, transparent, and fair path to the relief they are owed, and the schools should be held responsible for their actions.” Strengthening BDR is critical to provide recourse for harmed students and for holding institutions accountable. APLU supports the Department of Education taking action to improve BDR regulations. However, as outlined below, changes in the proposed regulations are necessary to prevent unintended consequences. While it helps students and facilitates the government’s response to fraud, BDR is inherently reactive in nature. By the time a meritorious claim is filed, students have already been harmed. Individual students suffer most acutely from fraud, but public confidence in the entire higher education system and in the federal financial aid system are also weakened each time a student is taken advantage of by unscrupulous actors and federal dollars must be deployed. We hope policymakers recognize it would be much more effective for the federal government to have and to abide by strong policies that would prevent schools like Corinthian from receiving Title IV funding in the first place. Institutions that are chronically terrible performers and burden students with debt without improving their career and life prospects should be identified and subjected to greater scrutiny and the looming specter of sanctions, including the potential loss of access to federal financial aid. Though attempts to recover sums from the institutions that defrauded students are creditable, students can never truly be made whole again given loss of time, effort, and money. Hence, BDR should be a last resort. 1307 New York Avenue, NW, Suite 400, Washington, DC 20005-4722  202.478.6040  fax 202.478.6046  www.aplu.org

The costly consequences of the Corinthian Colleges collapse strengthen the imperative for the U.S. Department of Education and Congress, through the reauthorization of the Higher Education Act, to adopt appropriate, proactive institutional accountability measures. In addition to strengthening BDR regulations, further action needed to protect students and taxpayers includes reforming and strengthening the cohort default rate test for Title IV eligibility as APLU has proposed, closing the 90/10 loophole, and ensuring accreditors are focused on outcomes as part of a risk-based review. The Corinthian case, which involved falsified job placement rates, also highlights the need for Congress to lift the ban on student–level data so the federal government can comprehensively and accurately report on employment outcomes of students by institutions and academic programs. Data provided by the federal government would be free of institutional bias. Strengthening BDR is understandably necessary to ensure students have appropriate recourse when defrauded. We agree the Department should take regulatory action. If not done carefully though, BDR could have significant repercussions throughout higher education, including public universities. APLU is