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Talks begin to rewrite rules protecting students from fraud

AP  |  Washington 

Education Department officials opened formal negotiations today to rewrite federal rules meant to protect students from by colleges and universities.

The talks with university representative and student advocates are taking place as the department faces criticism for delaying consideration of tens of thousands of loan forgiveness claims from students who say they were defrauded by for-profit colleges.

The 1994 rule, known as borrower defense, allowed loan forgiveness if it was determined that the college had deceived them. But the rule was rarely used until the demise of Corinthian and ITT Tech for-profit chains several years ago, when thousands of students flooded the department with requests to cancel their loans.

In 2016, the Obama administration passed revisions to the rule, which clarified the process and added protections for students. DeVos froze those revisions until new rules can be written.

Student advocates hope to put in place additional checks on schools to prevent them from acting dishonestly. For-profit colleges say the Obama changes were unfair to schools and hope for a more balanced approach this time.

Annmarie Weisman, a representative for the department, said the starting point for the negotiations today, will be the initial 1994 rule, not the Obama revisions.

As the negotiations kicked off, department officials sparred with advocacy groups about whether the event would be live-streamed. Officials objected to the idea, saying a more intimate atmosphere will allow for more fruitful negotiations, while activists called for greater transparency.

The Education Department has accumulated a backlog of some 87,000 loan cancellation claims, according to a report published this week.

The Associated Press reported last month that DeVos is considering abandoning the Obama administration practice of fully erasing student loans and instead granting defrauded students only partial relief.

DeVos has hired Robert Eitel as her senior counselor. Eitel served as a top lawyer for Career Education Corporation, an umbrella organization for SBI. She also appointed a former dean at DeVry University to serve as head of the department's enforcement unit.

Meanwhile, earlier this year, President Donald Trump paid USD 25 million to settle charges that his Trump University misled customers.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, November 14 2017. 00:02 IST