Comments of National Consumer Law Center (on behalf of its low-income clients) to the Department of Education Re: Intent to Establish Negotiated Rulemaking Committee; on Borrower Defense and Gainful Employment (Docket ID ED-2017-OPE-0076) Submitted: July 12, 2017 Introduction The National Consumer Law Center (NCLC) submits these comments on behalf of its low-income clients. NCLC is a nonprofit organization specializing in consumer issues on behalf of low-income people. We work with thousands of civil legal aid, government, and private attorneys and their clients, as well as community groups and organizations that represent lowincome and older individuals on consumer issues. NCLC’s Student Loan Borrower Assistance Project provides information about rights and responsibilities for student borrowers and advocates. We also seek to increase public understanding of student lending issues and to identify policy solutions to promote access to education, lessen student debt burdens, and make loan repayment more manageable.1 Persistent abuses and fraud, particularly apparent in the for-profit college sector, shatter the hopes and aspirations of many students seeking higher education. At NCLC’s Student Loan Borrower Assistance Project, we see the harm to students on a regular basis through our direct client representation work. We also consult with civil legal aid and other attorneys across the country who represent borrowers, many of whom have been harmed by for-profit schools. The Department’s borrower defense and gainful employment rules provide critical protections to students and taxpayers. As we have written during prior comment periods, these rules need to do more—not less—to protect student loan borrowers. Therefore, we oppose any actions that weaken either the borrower defense rules that were finalized on November 1, 2016, or the gainful employment rules finalized on October 31, 2014. We further oppose delaying 1
See the Project’s web site at www.studentloanborrowerassistance.org. NCLC also publishes and annually supplements treatises which describe the law currently applicable to all types of consumer transactions, including Student Loan Law (5th ed. 2015).
implementation of the rules and the Department’s intention to redo the lengthy process of negotiating and writing the rules before they are even implemented. Our comments on these rules are not based on a belief that there should be just one particular model of education. As lawyers for low-income clients, we agree that there is a need to offer educational programs that meet the needs of many low-income and “non-traditional” students. Most of our clients are older than “traditional” students, often with their own children. We understand that many seek career education programs that provide practical, job-oriented training that will help them secure a steady job. For that reason, we are keenly aware of the need to hold schools accountable for delivering the kind of education and assistance they promise. These rules are essential to help ensure that these individuals will be given a real opportunity to succeed if they choose to pursue career training. The Department has a responsibility to help students distinguish between effective and predatory programs. By fulfilling that responsibility, the Department will protect not only students, but also taxpayers and the schools that play by the rules. In addition to borrower defense and gainful employment, the Department has indicated that it intends to review, as part of these rulemakings, the authority of guaranty agencies in the Federal Family Education Loan Program to charge collection costs to defaulted borrowers who enter into repayment agreements. The Department has explained that its regulations forbid the imposition of collection costs on borrowers who act swiftly to cure default by entering into rehabilitation agreements. The Department should not change course now. To avoid repetition, we are not submitting detailed comments on the specifics of the regulations. Instead, we inc