Burr and Foxx say Department Ed is rushing rules to help student loan borrowers – Forbes | Vette Leader

Last week, the Department of Education (ED) officially released draft regulations designed to increase borrower protections and make it easier for them to access credit relief in certain situations. ED will accept public comments on the proposals for 30 days (until August 12). Rep. Virginia Foxx (R-NC) and Sen. Richard Burr (R-NC) — ranked members of the House of Representatives and Senate committee responsible for higher education law, respectively — believe ED gives the public too little time to weigh and weigh points point out that politics determines the timing of regulations.

The proposed rules cover seven topics, including Borrower Defense Until Repayment (BD). This scheme offers students who have been cheated by a university the opportunity to have their loan forgiven. In addition, there are improvements to the Public Sector Loan Forgiveness (PSLF) process, which grants loan forgiveness after 120 qualifying payments for those working in government or non-profit organizations.

In their letter to the department, Rep. Foxx and Senator Burr accused ED of rushing through the rules to help Democrats with the November midterms. They say: “It’s evident that this proposal is part of a maniacal effort to fulfill a campaign pledge to write off as much student debt as possible before the November midterm elections. In doing so, this proposal seeks to override the legislative process and ignore input from the American people.”

These comments will provide notification of any rule changes before they become final and take effect next year, and Foxx and Burr are asking ED to extend the public comment period to 60 days.

How were the new rules created and what’s next?

The proposed rules have been developed following an extensive rulemaking process unique to ED, referred to as “negotiated rulemaking”. The Higher Education Act, the law that governs many aspects of post-secondary education, requires ED to bring together representatives from across higher education, including those from colleges and universities, students and legal aid organizations that assist students in filing BD claims. These representatives spend weeks reviewing ED’s proposed regulations and proposing changes and improvements with the aim of reaching a consensus on the proposed rules. Even if negotiators do not reach consensus on a proposed rule, the negotiations feed into the final draft rule.

After negotiations, the proposed regulations go through a long journey through several government departments before being released for comment. This includes a review by the Office of Management and Budget to determine how much a proposed rule might cost and a legal review to ensure it does not violate any law.

How will the new rules help students?

The proposed BD rule will make it easier for students to receive a credit waiver if the institution they attended misrepresented things like placement rates or used aggressive and deceptive recruitment tactics to enroll students. The existing BD rule was recently used to cancel billions of dollars in student loans cheated by for-profit colleges such as the Corinthian Colleges and is applied in the proposed settlement in Sweet V. Cardona. If approved, it would provide loans to many students attending institutions such as Ashford and the University of Phoenix1.

The changes to PSLF are intended to simplify the application process and allow some periods of deferral and forbearance to count towards the 120 payments required to qualify for forgiveness under this program, among other reforms.

In addition to strengthening the BD rule and improving the PSLF, the other proposed rules – representing seven out of fourteen reform issues – will make it easier for students to apply for credit waivers if they become disabled or the school they attend closes. ED will release another set of four proposed rules this summer — including a new income-based loan repayment schedule. But it will delay the submission of regulations on the remaining issues, including regulations designed to ensure students don’t leave their pre-employment programs with more debt than they can afford by next spring.

It was implied that other issues were deferred due to concerns that there was not enough time for the rules to be properly drafted, and that ED had had sufficient time to receive, consider and respond to public comments.

Once the public comment period closes on August 12, ED must review all material comments, decide whether to make changes to the rules, and then publish the final rule along with responses to the public comments. If ED sticks to its current schedule, the final rules proposed in early July will be released in November and take effect in 2023.

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