2022 Final Rule on Borrower Defense to Repayment and Other Issues
On November 1, 2022, the U.S. Department of Education (Department) published in the Federal Register (87 Fed. Reg. 65,904) its final rule establishing new regulations, as well as amending existing ones, governing the William D. Ford Federal Direct Loan (Direct Loan) Program. The final rule overhauls regulations for borrower defenses to repayment (BDR rule or 2022 BDR rule); pre-dispute arbitration agreements and class action waivers; total and permanent disability; closed school and false certification loan discharges; and interest capitalization (collectively, the final rule). As things currently stand, the final rule will take effect on July 1, 2023.
Prior to the issuance of the final rule, the Department published an NPRM on July 13, 2022. On August 12, 2022, CECU submitted a 137-page comment submission to the Department explaining in painstaking detail the many legal and regulatory reasons why the Department should not promulgate the BDR rule or other proposed amendments, as drafted. CECU identified amendments to existing rules that were without legal basis in the Department’s authorizing statute, violated the separation of powers and the constitutional rights of schools, and otherwise constituted agency overreach. The Department adopted some changes but disregarded the vast majority of our and the sector’s significant concerns, proceeding with haste to promulgate the final rule.
Additional resources for CECU members:
Analysis of the Department of Education’s November 2022 Final Borrower Defense Rule and Call to Action
In CECU's comprehensive report, we present our extended analysis of the 781-page final rule, with a focus on those provisions that will have the greatest impact on CECU education members. As previously and extensively reported, CECU is perhaps most concerned about the BDR rule, which eliminates essential due process and other legal protections in an effort to “streamline” claim approvals. (Published on Nov. 21, 2022)
Department of Education Releases Final Rule on Borrower Defense and Other Issues
In this GR update, we provide a summary analysis of three components of the final rule, and the changes implemented by the Department. (Published on Oct. 31, 2022)
Prior to the issuance of the final rule, the Department published an NPRM on July 13, 2022. On August 12, 2022, CECU submitted a 137-page comment submission to the Department explaining in painstaking detail the many legal and regulatory reasons why the Department should not promulgate the BDR rule or other proposed amendments, as drafted. CECU identified amendments to existing rules that were without legal basis in the Department’s authorizing statute, violated the separation of powers and the constitutional rights of schools, and otherwise constituted agency overreach. The Department adopted some changes but disregarded the vast majority of our and the sector’s significant concerns, proceeding with haste to promulgate the final rule.
Additional resources for CECU members:
Analysis of the Department of Education’s November 2022 Final Borrower Defense Rule and Call to Action
In CECU's comprehensive report, we present our extended analysis of the 781-page final rule, with a focus on those provisions that will have the greatest impact on CECU education members. As previously and extensively reported, CECU is perhaps most concerned about the BDR rule, which eliminates essential due process and other legal protections in an effort to “streamline” claim approvals. (Published on Nov. 21, 2022)
Department of Education Releases Final Rule on Borrower Defense and Other Issues
In this GR update, we provide a summary analysis of three components of the final rule, and the changes implemented by the Department. (Published on Oct. 31, 2022)
Recorded Webinar and Slides
Overview and How to Prepare for the Biden Administration’s Final Borrower Defense to Repayment Rule
The presenters discussed the major provisions of the final regulations, such as how new categories of acts that could lead to a borrower defense claim could be used to form group claims, and how information from non-Federal entities can be used in those claims. The presenters also highlighted significant changes between the proposed and final regulations and provided practical advice for institutions preparing for the July 1, 2023, effective date. The slides and recording are available on demand here.
The presenters discussed the major provisions of the final regulations, such as how new categories of acts that could lead to a borrower defense claim could be used to form group claims, and how information from non-Federal entities can be used in those claims. The presenters also highlighted significant changes between the proposed and final regulations and provided practical advice for institutions preparing for the July 1, 2023, effective date. The slides and recording are available on demand here.
Please direct any questions regarding the regulations to Nicholas Kent, Chief Policy Officer, at (571) 800-6524 or Nicholas.Kent@career.org.