NAICU Washington Update

States Sue to Block Borrower Defense Regulations

July 17, 2020

Attorneys general from 22 states and the District of Columbia have filed a lawsuit challenging the Trump Administration’s regulations on borrower defenses to repayment. The lawsuit, which claims that the Department of Education violated the Administrative Procedure Act (APA) when it developed the new rules, is the latest twist in the lengthy and tortured history of the regulations.
The borrower defenses to repayment regulations originated during the Clinton Administration in the mid-1990s. Following the rash of precipitous closures of several for-profit colleges in the mid-2010s, the Obama Administration responded by publishing updated regulations in 2016.
One of the first actions of the Trump Administration was to delay the implementation of the Obama Administration’s regulations, a move that was later ruled by a federal court to violate the APA. Following the court’s decision, the Trump Administration engaged in negotiated rulemaking and issued its revised regulations in 2019. Those regulations became effective on July 1, 2020.
The Trump Administration’s regulations have been controversial for the relatively limited relief offered to defrauded students, especially when compared to the much more student-friendly regulations published by the Obama Administration.

MORE News from NAICU