Home » Letters to Regulators

Letter to Regulators: AFR Calls on the Dept of ED to Make Wronged Students Whole in the Borrower Defense Rule

Submitted by on August 1, 2016 – 9:00 pm
Share this Page: Tweet about this on TwitterShare on FacebookEmail this to someone

Americans for Financial Reform submitted comments to the Department of Education suggesting ways to ensure that their borrower defense proposal can truly provide a fair and transparent processes for students seeking debt relief following illegal acts by their schools.

AFR was pleased to see the Department propose a process for group-based, automatic discharges; the automatic granting of closed school discharges in certain instances; language to end the use of mandatory, pre-dispute arbitration agreements at schools that receive Federal financial aid funding; and warnings to students when loan repayment rates at for-profit institutions are less than or equal to zero.

However, AFR believes that there are several changes that need to be made to the final rule in order to realize this potential. AFR asked the Department to not repeal current rights by eliminating the ability to pursue relief based on State law claims, presume full (not partial) relief for harmed borrowers, include updates to consumer reporting agencies to remove adverse credit reports, create a formalized process for attorneys general and nonprofits to petition for group relief, for both state and Federal claims, ensure that there is no statute of limitations on unpaid or paid debts, and fix loopholes in forced arbitration prohibition.

In addition, Americans for Financial Reform separately submitted 10,139 individual comments by our members in support of strengthening the Borrower Defense rule.

You can view or download the complete letter here.

Tags: ,