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Business and Policy Areas
Business and Policy Areas

ED Offers Further Opportunity for Comment on New Borrower Defense Rules

January 23, 2017

The Department of Education is seeking public comment on its recent rules on borrower defense to repayment. The invitation to comment states, "Although these regulations are final regulations, we are interested in whether you think we should make any changes in these regulations and thus we are inviting your comments."

ED issued an expansive update to its previous borrower defense rules in November 2016, after the demise of several for-profit institutions left many students with loan debt and no clear path to completing their degrees.

ED’s initial proposed changes raised concerns for NACUBO primarily due to suggested provisions of burdensome and costly financial requirements. These requirements, in NACUBO’s opinion, threatened the financial security of smaller institutions without actually providing students or regulators a more accurate picture of the institution’s financial stability. NACUBO expressed its concerns in a comment letter submitted to the department in August 2016.

The final rule ED issued in November included several positive changes from the proposed version, but many of the worrisome provisions that created both automatic and discretionary triggers requiring a recalculation of an institution’s composite score and letters of financial surety remain.

Unexpectedly, ED has allowed for an additional 60-day comment period on the final regulations for the public to offer input on various aspects of the rule including its clarity, formatting, and use of technical terms. Comments are due on or before March 20, 2017.

NACUBO intends to utilize this additional comment period to offer suggestions and improvements to the rule that will make it a better tool for both students and institutions. 


ED Establishes New Financial Accountability Rules for Private Institutions
November 15, 2016


Liz Clark
Senior Director, Federal Affairs