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Subject: Notice of Proposed Rulemaking on the Borrower Defense to Repayment Regulations

Publication Date: June 16, 2016

Posted Date: June 16, 2016

Subject: Notice of Proposed Rulemaking on the Borrower Defense to Repayment Regulations

FR Type: Notice of Proposed Rulemaking (NPRM)


[Federal Register Volume 81, Number 116 (Thursday, June 16, 2016)]
[Proposed Rules]
[Pages 39329-39422]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-14052]


Vol. 81

Thursday,

No. 116

June 16, 2016

Part II

Department of Education

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34 CFR Parts 30, 668, 674, et al.

Student Assistance General Provisions, Federal Perkins Loan Program, 
Federal Family Education Loan Program, William D. Ford Federal Direct 
Loan Program, and Teacher Education Assistance for College and Higher 
Education Grant Program; Proposed Rule

Federal Register / Vol. 81 , No. 116 / Thursday, June 16, 2016 / 
Proposed Rules

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DEPARTMENT OF EDUCATION

34 CFR Parts 30, 668, 674, 682, 685, and 686

RIN 1840-AD19
[Docket ID ED-2015-OPE-0103]


Student Assistance General Provisions, Federal Perkins Loan 
Program, Federal Family Education Loan Program, William D. Ford Federal 
Direct Loan Program, and Teacher Education Assistance for College and 
Higher Education Grant Program

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Secretary proposes to amend the regulations governing the 
William D. Ford Federal Direct Loan (Direct Loan) Program to establish 
a new Federal standard and a process for determining whether a borrower 
has a defense to repayment on a loan based on an act or omission of a 
school. We propose to also amend the Direct Loan Program regulations by 
prohibiting participating schools from using certain contractual 
provisions regarding dispute resolution processes, such as mandatory 
pre-dispute arbitration agreements or class action waivers, and to 
require certain notifications and disclosures by schools regarding 
their use of arbitration. We propose to also amend the Direct Loan 
Program regulations to codify our current policy regarding the impact 
that discharges have on the 150 percent Direct Subsidized Loan Limit. 
We also propose to amend the Student Assistance General Provisions 
regulations to revise the financial responsibility standards and add 
disclosure requirements for schools. Finally, we propose to amend the 
discharge provisions in the Federal Perkins Loan (Perkins Loan), Direct 
Loan, Federal Family Education Loan (FFEL), and Teacher Education 
Assistance for College and Higher Education (TEACH) Grant programs. The 
proposed changes would provide transparency, clarity, and ease of 
administration to current and new regulations and protect students, the 
Federal government, and taxpayers against potential school liabilities 
resulting from borrower defenses.

DATES: We must receive your comments on or before August 1, 2016.

FOR FURTHER INFORMATION CONTACT: For further information related to 
borrower defenses, Barbara Hoblitzell at (202) 453-7583 or by email at: 
Barbara.Hoblitzell@ed.gov. For further information related to false 
certification and closed school loan discharges, Brian Smith at (202) 
453-7440 or by email at: Brian.Smith@ed.gov. For further information 
regarding institutional accountability, John Kolotos or Greg Martin at 
(202) 453-7646 or (202) 453-7535 or by email at: John.Kolotos@ed.gov or 
Gregory.Martin@ed.gov.
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.
 


Last Modified: 06/15/2016