Future of Borrower Defense May Look Different - Commentary

Jonathan Helwink, an attorney with Duane Morris and former advisor to the U.S. Secretary of Education, writes: On July 1, the U.S. Department of Education’s new borrower defense to repayment (BDTR) regulations will go into effect. Now in its fourth iteration, the latest BDTR rule will be much stronger than its predecessors in terms of the protections it offers to student loan borrowers who claim they were misled by their colleges. Among many other significant changes, the new BDTR rule makes it easier to file claims. In fact, new provisions allow for third parties to file massive claims on behalf of borrowers—sometimes without their knowledge. The result is a BDTR rule that carries the potential for institutions to face significant adverse findings, negative publicity and substantial liabilities.