NAICU Washington Update

Notice of Proposed Rulemaking Released by the Department

July 22, 2022

The Department of Education released a Notice of Proposed Rulemaking (NPRM) on multiple topics that were discussed in the Affordability and Student Loans Committee from the negotiated rulemaking session in the fall of 2021. Interested parties must submit comments on the proposed regulations by August 12. The Department is expected to have a rule finalized by November 1, which would mean the new regulations would go into effect on July 1, 2023.

Topics covered in the NPRM include: total and permanent disability (TDP) discharge; closed school discharge; false certification discharge; public service loan forgiveness (PSLF); borrower defense to repayment (BDR); and interest capitalization. 

In an effort to better digest the length of the NPRM, the National Association of Independent Colleges and Universities (NAICU) prepared a summary for review. The summary captures the various issue topics of the NPRM and provides an overview of what is being proposed by the Department. Among the issues included in this NPRM, TDP discharge and interest capitalization reached consensus with negotiators. 

The issues of greatest concern to private, nonprofit institutions include: 
  • From the proposed closed school discharge regulations: The Department is changing the definition of a closed school from when an institution closes all its programs to when an institution closes most of its programs. 
  • From the proposed BDR regulations: The Department is removing the limitation period for when the Secretary of Education can recover funds from the institution for approved BDR claims. Also of concern are the due process provisions for institutions, aspects of how the Department defines aggressive and deceptive recruitment tactics, and the misrepresentation definition as it relates to the omission of facts. 
  • From the proposed PSLF regulations: The Department is not willing to consider a borrower’s job description as a qualifying event if the borrower is not employed by a non-profit.  This provision affects workers such as teachers or health professionals who work at for-profit entities but perform public service work.
NAICU is planning to submit comments regarding the concerns highlighted above and welcomes member institutions to do the same.

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