NAICU Washington Update

Education Department Reiterates that Obama Borrower Defense Regulations are Still in Effect

May 28, 2019

The Department of Education once again provided notice to institutions that the Obama-era borrower defenses to repayment regulations are still in effect.  This notice was provided by the Department in response to a flood of questions it received as a result of guidance issued in March.

The Trump Administration had hoped to revise the Obama regulations before they went into effect, but missed a publication deadline that was needed in order to override the original rule.  A federal court ruled last September that because the Department had missed the publication deadline, the Obama rules would have to go into effect until new rules are written.

The new notice, issued on May 20, advises institutions to follow a plain reading of the regulation and alludes to a future question and answer document that could emerge from the Department.  It also states that institutions will have a future opportunity to amend their reports when such clarifications are published by the Department.