The final borrower-defense rule would have made it easier for the department to provide loan discharge to groups of students -- even those who have not filed an application -- where common facts and claims exist that indicate fraud or misrepresentation occurred at a program. The borrower-defense regulations were crafted with the for-profit college sector in mind, but they were opposed by a broad swath of higher ed institutions, notably including historically black colleges. The week of the delay, two HBCU groups urged DeVos in a letter to rewrite the regulation through another rule-making process. In announcing the delay, the department cited pending litigation by a group of California for-profit colleges. Two former for-profit students intervened the next day as defendants in the lawsuit and said they had planned to sue their institution over misrepresentations after the ban on mandatory arbitration went into effect. “The reason why arbitration is so critical and why this is a key part of the rule making in my view is we hoped for the courts to resolve disputes and address harms that are posed to victims even when regulators are unwilling or unable to act,” said Joe Valenti, director of consumer finance at the Center for American Progress. The inclusion of arbitration language in the vast majority of for-profit college contracts mean individual borrowers MSN education jobs are not able to take their claims to court -- or band together in a class action lawsuit, he said. The Century Foundation has urged for-profits to not restrict students in contracts from going through to courts to pursue complaints. Two large for-profit chains, University of Phoenix and DeVry University (now Adtalem Global Education), said last year they would not enforce arbitration clauses in anticipation of new federal regulation. When announcing the rule would be delayed, the department did say it would carry out provisions involving administrative forbearance for Federal Family Education Loan borrowers, provisions relating to documentation for discharges for death, consolidation of nursing student and nursing faculty loans, and some technical corrections.
For the original version including any supplementary images or video, visit https://www.insidehighered.com/news/2017/06/26/advocates-say-department-inaction-forced-arbitration-leave-defrauded-borrowers-bind
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