Published: December 2017

Delaying Borrower Defense Rule costs student borrowers over $1 billion

The U.S. Department of Education under Betsy DeVos has delayed a critical rule that would help wronged student loan borrowers recoup their monetary losses and take sham schools to court. This Borrower Defense Rule is critically necessary to protect students from widespread and ongoing school fraud and closures.

Legal aid, civil rights and consumer protection organizations (among others) submitted comments to the U.S. Department of Education in response to its stated intentions to substantially delay approval of the Borrower Defense Rule (until 2019). This important rule was created to provide defrauded and cheated student loan borrowers with a process for pursuing financial relief and to give them the right to challenge school fraud in court. The rule was set to go into effect summer of 2017. By delaying the rule further, the Education Department exposes wronged student borrowers to over $1 billion in costs. Harmed borrowers who have a right to relief from their schools or to have their student debt wiped clean under the Higher Education Act will instead remain burdened by invalid—often unaffordable—debt and mounting interest. The group emphasizes that the Borrower Defense Rule is critically necessary to protect students from widespread and ongoing school fraud and closures.

Lead Organization

National Consumer Law Center

Other Organizations

Americans for Financial Reform Center for Responsible Lending | Consumer Action | Generation Progress | Higher Ed, Not Debt | Housing and Economic Rights Advocates | Lawyers’ Committee for Civil Rights Under Law | League of United Latin American Citizens | National Association for College Admission Counseling | National Association of Consumer Advocates | National Association of Consumer Bankruptcy Attorneys (NACBA) | National | Center for Law and Economic Justice | National Education Association Public Counsel Public Law Center | Service Employees International Union (SEIU) | Student Debt Crisis | U.S. Public Interest Research Group | UnidosUS | Veterans Education Success | Woodstock Institute | Young Invincibles | The Institute for College Access & Success | (For a full list, including state organizations, please click below)

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Delaying Borrower Defense Rule costs student borrowers over $1 billion   (BorrowerDefenseRuleLetter.pdf)