DEPARTMENT OF EDUCATION 

OFFICE OF POSTSECONDARY EDUCATION 

AFFORDABILITY AND STUDENT LOANS COMMITTEE 

SESSION 2, DAY 4, MORNING 

November 4, 2021 

 

 

 

 

 

 

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Committee Meetings - 11/04/21 

On the 4th day of November, 2021, the 

following meeting was held virtually, from 10:00 a.m. 

to 12:00 p.m., before Jamie Young, Shorthand Reporter 

in the state of New Jersey. 
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Committee Meetings - 11/04/21 

P R O C E E D I N G S 

MS. JEFFRIES: Good morning, everyone 

and welcome back to session two, day four. I am 

CindyJeffries from FMCS and I will be your facilitator 

today. We're going to start this morning with a roll 

call. I will call the constituency then the primary and 

then the alternates. So for the Department of Education, 

Jennifer Hong. 

MS. HONG: Good morning, everyone. 

MS. JEFFRIES: Good morning Jennifer 

and assisting her this morning from General Counsel is 

Todd Davis. 

MR. DAVIS: Good morning everyone. 

MS. JEFFRIES: Good morning Todd. 

Accrediting agencies Heather Perfetti. 

DR. PERFETTI: Good morning, everyone. 

MS. JEFFRIES: Good morning. Michaela 

McComas, Michale McComis, I'm sorry. 

MR. McCOMIS: Good morning. 

MS. JEFFRIES: I should put my glasses 

on I think. Dependent Students, Dixie Samaniego. 

MS. SAMANIEGO: Morning, everyone. 

Happy Thursday. 

MS. JEFFRIES: Morning. Greg Norwood. 

MS. SAMANIEGO: It'll just be me this 
 

 

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Committee Meetings - 11/04/21 

morning Greg will join the afternoon session. 

MS. JEFFRIES: Great thanks, Dixie. 

Federal Family Education Loan lenders and/or guaranty 

agencies Jaye O'Connell. 

MS. O'CONNELL: Morning. Welcome to 

the second half of neg reg. We're halfway. 

MS. JEFFRIES: Yes. Thank you, Jaye. 

Will Shaffner. 

MR. SHAFFNER: Hi everyone. 

MS. JEFFRIES: Financial Aid 

Administrators at Postsecondary Institutions Daniel 

Barkowitz. 

MR. BARKOWITZ: Hey everyone. Happy 

Friday eve. 

MS. JEFFRIES: Alyssa Dobson. 

MS. DOBSON: Good morning. 

MS. JEFFRIES: Good morning. Four-year 

Public Institutions Marjorie Dorime-Williams. 

DR. DORIME-WILLIAMS: Good morning 

everyone. Dr. Dorime-Williams here. 

MS. JEFFRIES: Good morning. Rachelle 

Feldman. 

DR. DORIME-WILLIAMS: Rachelle will 

join us in the afternoon. 

MS. JEFFRIES: Okay great, thank you. 
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Committee Meetings - 11/04/21 

Independent Students. Michaela Martin. 

MS. MARTIN: Good morning and my 

alternate will be in later this morning. 

MS. JEFFRIES: Okay great, thank you. 

Individuals with Disabilities or Groups Representing 

them. Bethany Lilly. 

MS. LILLY: Good morning. 

MS. JEFFRIES: Good morning. John 

Whitelaw. 

MR. WHITELAW: Good morning. 

MS. JEFFRIES: Morning. Legal 

assistance organizations that represent students and/or 

borrowers. Persis Yu. 

MS. YU: Morning everyone. 

MS. JEFFRIES: Good morning. Joshua 

Rovenger. 

MR. ROVENGER: Morning everyone. 

MS. JEFFRIES: Minority-serving 

Institutions, Noelia Gonzalez. 

MS. GONZALEZ: Good morning everyone. 

MS. JEFFRIES: Good morning. Private 

nonprofit institutions Misty Sabouneh. 

MS. SABOUNEH: Morning everyone. 

MS. JEFFRIES: Good morning. Terrence 

McTier. 
 

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Committee Meetings - 11/04/21 

DR. MCTIER: Dr. McTier, good morning. 

MS. JEFFRIES: Proprietary 

institutions Jessica Barry. 

MS. BARRY: Good morning everyone. 

MS. JEFFRIES: Morning and Carol 

Colvin. 

MS. BARRY: She was having problems 

with her equipment this morning. But she will be joining 

us shortly. 

DR. COLVIN: Good morning. 

MS. JEFFRIES: Good morning. Okay. 

state attorneys general Joseph Sander. 

MR. SANDERS: Good morning, everyone. 

MS. JEFFRIES: Good morning and Eric 

Apar. 

MR. APAR: Morning everyone. 

MS. JEFFRIES: Morning. state higher 

education executive officers, state authorizing 

agencies, and/or state regulators David Tandberg. 

MR. TANDBERG: Morning. 

MS. JEFFRIES: Suzanne Martindale. 

MS. MARTINDALE: Good morning, 

everyone. 

MS. JEFFRIES: Morning to both of you. 

Student Loan Borrowers Jeri O'Bryan-Losee. 
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Committee Meetings - 11/04/21 

MS. O'BRYAN-LOSEE: Morning everybody. 

MS. JEFFRIES: And Jennifer Cardenas. 

MS. CARDENAS: Buenos dias good 

morning, everyone. 

MS. JEFFRIES: Morning, both of you. 

two-year public institutions Robert Ayala. I'm having 

trouble with my tongue this morning I think. 

MR. AYALA: There's a lot of As in 

there. Good morning, ladies and gentlemen. 

MS. JEFFRIES: Good morning, Bobby. 

U.S. military service members, veterans, or groups 

representing them Justin Hauschild. 

MR. HAUSCHILD: Good morning. 

MS. JEFFRIES: Morning. Emily DeVito. 

MS. DEVITO: Morning. 

MS. JEFFRIES: And we have our two 

esteemed advisors with us this morning, Heather and Raj. 

MS. JARVIS: Hello. Good morning. 

MR. DAROLIA: Hi all, good to see you. 

MS. JEFFRIES: Good morning. Did I 

miss anyone? Okay, then let's go ahead and jump into 

what we left off yesterday with the Borrower Defense. 

MR. BARKOWITZ: Can I raise just a 

process question? Thank you, I'm sorry to interrupt. I'm 

wondering I had asked on Tuesday, if it might be 
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Committee Meetings - 11/04/21 

possible to get an update from the Department on the 

processing of public service loan forgiveness in the 

temporary waiver. And I just wanted to check in before 

the week gets too much later if we'll be able to 

schedule that for today or tomorrow. I don't know 

Jennifer if you've been able to hear from anyone else in 

the Department if there is someone who can provide us an 

update. 

MS. HONG: Yeah thank you, Daniel. We 

to the extent that that is you know, those issues are 

pertinent to this, the proposed regulations for PSLF and 

with respect to the time that we have left we are going 

to we are update you we did commit to that. It may be a 

written correspondence, either via chat, or maybe we'll 

send an email, quick summary update but we want to just 

preserve the time that we have on the table to talk 

about the issues rules. 

MR. BARKOWITZ: Thank you very much. 

MS. JEFFRIES: Okay, thank you. So 

let's jump back into BD. I did switch from my headset, 

it look like maybe it was cutting in and out is is my 

mic better for everyone? Great. Thanks. So I think we 

were at going through 685.406. Jennifer. 

MS. HONG: Yeah, I'll take, I'll take 

over. So just to review, it's a, it's a big rule so we 
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Committee Meetings - 11/04/21 

want to go back and review. We went over Borrower 

Defense generally the definitions, the federal standard, 

we talked about the group process, then we went on to 

the individual process. The what we are deeming the Fast 

Track group process for any issues identified in, for 

example, final program reviews or any other information 

that the Secretary has available to him. Institutional 

response and then we are at the top of 406, which is 

adjudication where we inserted the kind of the 

compromise proposal from state AGs regarding how they 

could get a review for state standard before us if they 

reviewed it upfront, and provided it to us. And we will 

consider that probably, we’ll, we’llwe’ll, take it into 

under consideration, but it's more likely that that 

would be more feasible under a group process, but we 

appreciate the discussion on that, that compromise 

language. So now we are we're at the top of section 

685.406 adjudication of Borrower Defense applications. 

And we just get into this. Okay, so what we have in 

front of us, we're gonna start with (b)(1) which is the 

group process adjudication. So I'll just summarize and 

go through all this. Basically, the Department official 

considers evidence related to the claim, any materials 

and application that are part of the group, any evidence 

that the Department has within its possession, evidence, 
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Committee Meetings - 11/04/21 

and information from the school and other relevant info. 

And we are operating under a rebuttable presumption that 

everyone in the group was affected . In other words, if 

there is an allegation of misrep, you know, college 

catalog, for example, presumed everyone in the group 

experienced that misrepresentation, rather than 

individual reliance. Next, we need to talk about the 

individual process adjudication where the Department 

official adjudicates based on the info available to it. 

Again considers all the materials and application 

evidence that we have evidence from the school and other 

relevant information and if we request more information 

from the school the school must respond to reasonable 

timeframes. Okay written decision if, if the Department 

approves some or all the BD claim, we issue a written 

decision on the relief provided. Borrowers’ loans 

associated with a BD claim are placed in an interest 

free forbearance until the Department discharges the 

loan. And then I'm just going to quickly add on to 

because I think this question came up when we went over 

group process an individual process for Borrower 

Defense, I believe it was Daniel that raised it. And 

then individual process under 403, we specifically talk 

about notification to the borrower regarding the 

forbearance and I believe it was Daniel pointed out the 
 

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Committee Meetings - 11/04/21 

absence of that language under 402 for the brief process 

and that's because it's here under adjudication. We 

would it was intentional because of our ability to 

operationalize that for the group and be able to 

identify those individuals and be able to put them on 

forbearance on the front end, so we've put that in the 

adjudication piece under section 406. Let's see, okay, 

so if there is a full denial for the group, there will 

be a written decision base reasons for the denial 

evidence that was relied upon, and a question of the 

loans due and payable to the Department. And we will 

return those loans into prior status we’ll resume 

collection on the loan those loans no earlier than 90 

days from date of decision. And then we will also the 

Department official will also notify members of the 

group of opportunity to request reconsideration, which 

we will get to later on. For individual denials, the 

written decision again will state reasons for the denial 

evidence that was relied upon and same thing. Portion of 

the loans due and payable to the Department, same thing 

90 days, no earlier than 90 days of written decision, we 

will resume collections. And again, the Department 

official notify members of the group has opportunity to 

request reconsideration. Written decisions are made 

available to again the individual members of the group 
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Committee Meetings - 11/04/21 

for group claims and the institution. And that is my 

review. And I see a lot of hands up. 

MS. JEFFRIES: Okay. Thank you, 

Jennifer. Josh? 

MR. ROVENGER: Thanks. So I have a few 

concerns about things that are not in here. But where I 

want to start is my very extreme disappointment that the 

Department recognized in its prior issue paper the need 

to have a timeline to decide these claims, but then 

didn't include one in this provision, or as far as I can 

see any any of the regulatory provisions. You know, I 

think we would propose that the Department set 180 days 

to decide individual borrower to 180 days to decide 

individual Borrower Defense claims that there's a remedy 

of the grant if they don't meet that and that relief is 

retroactive. You know, this was a proposal that my 

constituency put forward back in 2016 and we flagged 

some of the concerns. At that point, they were just, you 

know, potential concerns. But what we've seen over the 

last few years, is that the Department has utterly 

failed to decide Borrower Defense claims in a timely 

matter. And this has a real impact on people's lives. So 

for example, one borrower says the Department's refusal 

to grant or deny my Borrower Defense has caused me 

emotional harm, because the lack of a decision hangs 
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Committee Meetings - 11/04/21 

over me, it would almost be better just to get denied so 

that at least I know what my future looks like. Number 

two, quote, I've spent over three years waiting for a 

decision. In the meantime, the debt piles up and the 

clock on what time I have to live tick softly growing 

fainter. Another borrower, the Department's refusal to 

grant or deny my borrower defenses caused me to lose 

faith that the government will protect students like me, 

because the government subsidized my school, legitimized 

them by allowing me to get Federal loans, failed to 

provide proper regulatory oversight, allowed them to get 

away with a slap on the wrist for an $11 billion fraud 

lawsuit, promised that every student that was enrolled 

at one of these colleges that committed fraud would see 

every ounce of relief that we were entitled to, and has 

worked to destroy everything we had done to bring 

progress to a fundamentally broken higher education 

system. Another borrower, the Department's refusal to 

grant or deny my Borrower Defense has caused me to lose 

faith that the government will protect students like me, 

because I was preyed on and taken advantage of by a for 

profit school, I turned to my government to stand up for 

me and two years later, I'm still waiting. It doesn't 

feel like the government wants to help me succeed, it 

feels like they want to help me fail. I can't emphasize 
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Committee Meetings - 11/04/21 

enough that the lack of a timeline and lack of timely 

relief also is going to cause is also problematic to 

rectify... 

MR. TOTONCHI: Thirty seconds. 

MR. ROVENGER: to rectify the racial 

disparities, that the department's own policies and that 

the student loan infrastructure has exacerbated. We know 

what students are, we know which students are preyed 

upon by these schools and which are waiting for relief. 

We know that over a third, we know that while Black and 

Latino Latinx students make up less than 1/3 of college 

students, they represent half of all for profits. And we 

know that Black borrowers in particular who attend for 

profit schools 70% of them will default in 10 years. We 

know who these borrowers are and the Department just 

include a timely timeline in these regulations. 

MS. JEFFRIES: Thank you, Josh. Before 

we go to Daniel I'd like to acknowledge that Suzanne 

Martindale is in for State Regulators. Go ahead, Daniel. 

MS. HONG: Can I can I jump in there? 

I just want to respond to this on time periods for 

processing. We realized that there were questions about 

the time periods we did receive your proposal from Legal 

Aid. We just like, the past timelines here haven't been 

very instructive. As you're aware we had an exceptional 
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Committee Meetings - 11/04/21 

circumstance with the previous administration. There was 

a lengthy pause on adjudication, a large number of 

denials issued additional court activity that has paused 

any denials since last October. Given all those that 

those factors, there's that there's a clear lesson from 

the past data about what an ideal timeline should be. 

That said, it's not a short process to ensure an actual, 

thorough review of a Borrower Defense claim. And we just 

simply think that 180 days is not enough time. To review 

what this looks like, you know, there have, the claim 

has to be processed, this can take several weeks, 

depending on the volume, we need to look at the evidence 

that the student has included or touch to see what makes 

sense is sent to the institution. And as we're 

proposing, we would seek additional evidence from the 

institution. So we're currently proposing to have two 

months for that process. We have to then review all of 

that evidence and make a determination. And this is this 

is likely happening for 1000s or more claims at any 

given time. If you can imagine if this was a court 

process, it'd be occurring over years. And so we just 

believe any meaningful review of claims cannot possibly 

be completed within 180 days that have been suggested. 

Additionally, group clients have their own added work. 

We're interested in forming MOUs with states and ages to 
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Committee Meetings - 11/04/21 

find additional evidence. And we're also, anticipate 

that with a 60 day response period from this, we could 

end up with hundreds of 1000s, if not 1000s, of pages of 

material. So we want to ensure we understand the 

concerns here, we realize that a lot of it is a result 

of kind of these exceptional circumstances that many 

borrowers are put into. We want to balance what is 

realistic what we can perform in terms of a thorough, 

fair review for the borrower. But we, 180 days is not 

it. 

MR. ROVENGER: Cindy can I respond to 

that real quick? 

MS. JEFFRIES: Sure, Josh. 

MR. ROVENGER: Thanks. So, what if 180 

days doesn't work, like we are open to having a 

conversation about what time limit would work. And that 

includes, you know, a separate time limit potentially 

for individual claims and group claims, because we 

recognize that group claims will take longer, I think 

what's not acceptable in our view is having no time 

limit at all. And, in particular, I think the idea of 

justifying new time limit by exceptional circumstances, 

which is in reality is just the Department's unlawful 

behavior in the past isn't actually a justification for 

no time limit. 
 

 

 

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Committee Meetings - 11/04/21 

MS. JEFFRIES: Thank you, Josh. 

Daniel. 

MR. BARKOWITZ: Thank you. I 

appreciate that. So, so the comments of Josh and 

Jennifer, speak to what I'm gonna raise as well. First 

of all, I agree with Josh, I think a timeline is really 

important, especially for institutions to understand 

what their liabilities might be. And to have this open 

ended without end doesn't really give institutions 

clarity. But I want to focus on on student borrowers or 

borrowers particularly. And while Jennifer, I appreciate 

the mention that in this section, especially under (e) 

(1), romanette (ii), and I win the bingo for mentioning 

romanette first today. The the particular point I want 

to raise is that it says that borrowers will be placed 

under an interest free forbearance once approved, by 

either some or all the allegations have been approved by 

the Department. That differentiates from the individual 

process where upon receipt, students are placed into 

forbearance. And so my significant concern here, again, 

echoing the response you just made about timing, is that 

could be months from the initiation of the group claim 

before the borrower sees any protection. And I think 

that's that's not just unfortunate, that's wrong. And so 

I would strongly urge that the Department to match what 
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Committee Meetings - 11/04/21 

is placed with the individual claim to the group claim, 

I think, you know, having a different standard and a 

different process is not helpful for students, 

especially because what we've defined as groups 

processes are going to include many, many, many more 

students. And the Department can offer some important 

relief to those group of student borrowers at that 

point, which may ameliorat, won't solve, but it may 

ameliorate some of the concerns around timing. So again, 

I would strongly urge the Department to reconsider that 

position. 

MS. HONG: So we we understand the 

concern here and that that distinction is intentional in 

this case, and has to do with our ability to identify 

and apply those forbearances to each individual in the 

group on the front end. But your your point is well 

taken, and we continue to take it under consideration, 

we haven't found a solution to it at this point in time. 

MR. BARKOWITZ: Can I just ask I'd 

probe a little bit, Jennifer? So is the issue that would 

a group claim comes in it's simply a process of 

analyzing the data to determine who's in the group is 

that the problem? So if, for example, to use the ITT 

example, if a group of if it were a group process around 

ITT Tech's closure, is a difficulty identifying who 
 

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Committee Meetings - 11/04/21 

those impacted borrowers might be? 

MS. HONG: That's certainly part of 

it, and applying those forbearances, evenly and 

accurately, to all borrowers that were affected by the 

group process without, you know, on the front end, but 

we can certainly look back with you to provide more 

flesh to that issue. But generally that that is a 

concern. 

MR. BARKOWITZ: Yeah, again, I again, 

I really, I really want something in there for 

protection of borrowers, because as it currently states 

or currently is written, somebody who's part of the 

group wouldn't be protected, and correct me if I'm 

wrong, with a forbearance at all, until the Department 

approves or some or all of the claims. So you could be 

part of a group submission and it could take, you know, 

in Josh's example over 6 months for a review for some or 

all of those claims to be approved. In the meantime, 

that student is still responsible for those loan 

payments. That That to me is not acceptable. 

MS. JEFFRIES: Thank you both. Bethany 

you are next. 

MS. LILLY: I want to echo Daniel’s 

concerns because that also caught my attention. And I 

want to reiterate the concerns I raised when we 
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Committee Meetings - 11/04/21 

discussed this in the context of the group process 

yesterday, around whether or not be those, those loans 

being placed in forbearance. Presumably, this will also 

be all loans as it was last time, because you said the 

Department couldn't differentiate. And so if it is going 

to be all loans, making sure that any other loans that 

are a part of that that are in process for IDR for 

Public Service, Loan Forgiveness count towards those is 

very important to hear. 

MS. JEFFRIES: Thank you, Bethany. 

Joe. 

MR. SANDERS: Hi, thanks. So my first 

question. I believe that the proposal that we made to 

include the state law claim, and the first level of 

review would need to be placed into 685.403. As it's 

currently written, is that Jennifer or Todd, is that 

accurate? That where you guys would see to the extent 

that that the Department accepts that proposal, it would 

go into this section? 

MS. HONG: You mean 406? I'm sorry, 

we're on 406. 

MR. SANDERS: I'm sorry, we're on 406. 

Yes, that's what I mean. I'm sorry. I was looking at 

something else. 

MS. HONG: About about regarding the 
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Committee Meetings - 11/04/21 

state standard? 

MR. SANDERS: Correct. 

MS. HONG: I don't yeah, it could 

either go under 403 too, I guess, 403 or 406. We'd have 

to give thought to that. 

MR. SANDERS: Okay. Okay. Alright, and 

I'm going to give thought to that as well and provide 

you guys with something concrete to work with there. Let 

me just make a note of that. So we're looking at 406 or 

403. Okay. And thenMS. HONG: I apologize, Joe, I 

misspoke. Either, yeah, probably there 406. 403 

individual process we're likely not able to consider 

that proposal for so. I think 406 seems to be the mostMR. SANDERS: Okay. If you guys want 

to, you know, Todd or you want to email me with like, we 

think we'd go here to the extent we used it. That's 

great. I would just second what Josh said about the need 

for some kind of timeliness. I totally get what you're 

saying about there's a lot of stuff to look at and want 

to get it right and it's going to take time those are 

all correct. The problem is that, you know, what 

happened in the previous administration could totally 

happen again. And so there needs to be some kind of 

backstop on time, because, you know, I've had group 
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Committee Meetings - 11/04/21 

applications, I personally have written group 

applications, sent them in, and they'reMR. TOTONCHI: thirty seconds 

MR. SANDERS: still pending. So some 

kind of backstop on timeliness should be included, with 

consideration for, you know, the need for a thorough 

review. And last, one idea on this point that Daniel 

made about time frame and identifying the group being 

part of the problem, could you put in here something 

that would require schools to put stuff into NSLDS that 

makes it easier to identify groups? Just a thought. 

MS. JEFFRIES: Thank you, Joe. If you 

want to drop that in chat, that might be helpful. Dixie? 

MS. SAMANIEGO: Yeah. Also, before I 

start. I have chickens and a rooster, so if you hear him 

in the background, I'm sorry. It's 7:31 in California, 

so my rooster, yeah, going off. And so I've just really 

want to echo the points that have been made, 

specifically Josh's as well. Mainly, because Michaela 

and I were able to talk to three folks who were in the 

process of a BD application at like, varying different 

points. And it, it was really disheartening and like 

heartbreaking for me to hear those stories about how 

long just how long they've been here, like waiting to 

hear back. One specific person that we heard from, Ali 
 

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Committee Meetings - 11/04/21 

had been waiting for, like eight months for just a 

communication from the Department of Education, and he 

had just filed within the past year. And so it's just 

seeing no timeline of that in here is not something I'm 

comfortable with at all. It's something that I'm I'm not 

okay with. Because these students, these folks are just 

waiting, and waiting and waiting with no clear 

indication of what's to come, right. Until these folks, 

they're just up in the air, right. And so if the 

Department, while I understand administrative burden, 

and the need to or the need to wanting to fully flesh 

out a case, right or entire application, we also have to 

understand that these folks can't just be waiting a 

year, right, they can't just be waiting past a year for 

that. Because at the end of the day, like this isn't 

just something that's financially posing a burden on to 

them. It's also emotional, it's also physical for some 

folks, right. And it affects not only just them, but 

their entire families, and just their distrust of the 

entire system of higher education, right. But also the 

government. And so it's important to put a timeline in 

here. And so if the Department is not willing to look 

into putting a timeline, the Department should also be 

willing to improve its communications with borrowers, 

with folks within who have already put in an application 
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Committee Meetings - 11/04/21 

or looking to right just any form of way to make this 

process easier. But also, I would want to really push 

for the Department to put out like, and I know, it 

sounds really weird, like filing a BD claim 101 for 

folks who are filing, right? 

MR. TOTONCHI: thirty seconds. 

MS. SAMANIEGO: So so that we're not 

just so that these folks are not just applying, and 

they're like, oh, I don't really know what's happening. 

So the Department needs to be able to connect with 

students in new ways that hasn't ever before. And a part 

of that is equipping students with equitable information 

and resources, like a filing a BD claim, 101 PDF. Right. 

And so I really want to hear what the Department is 

going to do if not include a timeline in here. How are 

you all going to improve timeliness and communications 

to student borrowers? 

MS. JEFFRIES: Thank you, Dixie. 

Justin. 

MR. HAUSCHILD: Yeah, thanks. I just 

want to express, you know, appreciation. I think the 

Department's overall efforts here broadly, I think 

there's a lot of good stuff going on. You know, this 

idea that we're making sure that borrowers are going to 

get an explanation and some commitment to a whole host 
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Committee Meetings - 11/04/21 

of other things when it comes to denials, that is. But, 

you know, I think generally speaking about adjudication, 

broadly, I would agree with the point that Josh and Joe 

have made about there needing to be some type of 

timeline and maybe 180 days isn't the appropriate 

marker. But you know, the court compared or the the 

Department compare this to the court process. And a 

thorough fair review is important. But even in the court 

process, there are timelines, timelines that constrain 

the court itself in the issuance of decision. So I mean, 

I think, you know, just because this is a complicated 

process that needs to be done fairly, and 

comprehensively doesn't mean that there shouldn't be a 

timeline involved. And I also take issue too, with the 

Department's news of what we might consider previously 

exceptional circumstances or currently exceptional 

circumstances as something that might never happen 

again. And I would just renew my plea for the Department 

to be a bit more forward thinking in the drafting of 

these regulations. And and I'll guess I'll leave it 

there for now. Thank you. 

MS. JEFFRIES: Thank you, Justin. 

Josh? 

MR. ROVENGER: Thanks. Two quick 

things on the timeline and then I just want to briefly 
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Committee Meetings - 11/04/21 

note two other issues. The first is that the Department, 

wouldn't be the Department wouldn't be the only agency 

that would be subject to a time limit. There are other 

restrictions on agencies to have to respond, for 

example, to citizens’ petitions for rulemaking. So like, 

this isn't, this isn't unprecedented. And then the 

second piece on the timeline is, if this is something 

that the Department takes seriously that borrowers are 

entitled to timely relief or a timely decision one way 

or the other then putting in the time limit will require 

the Department to then invest the resources internally 

to render those decisions in a timely way. And so it's 

not just helping the borrower, but it's also assisting 

the Department in helping the borrower if that's the 

Department's commitment. And then, so putting that issue 

aside, appreciate the language in here on what's 

required in the case of a denial. I am concerned that 

this is not as fulsome as it needs to be particularly in 

light of a federal judge just calling the Department's 

notices perfunctory. And I don't, I have concerns with 

in, particularly in E (2) (i) that this doesn't require 

much more than what the Department has previously put in 

to its decisions. And so I would urge the Department to 

consider the proposal that Persis and I put forward to 

include, to draw on language from other agencies that 
 

26 

Committee Meetings - 11/04/21 

require a more detailed analysis so a borrower actually 

understands why a claim is denied. And then the final 

issue I just wanted to flag which was also in our 

proposal relates to data disclosures on Borrower Defense 

decisions, and the importance for the Department to 

release this to release the at least the aggregate 

information to advocates on the public. 

MS. JEFFRIES: Thank you, Josh. 

MS. HONG: So yeah, I'll just respond 

briefly to the comment decision letters. Again, we did 

review and think about how we wanted to construct this 

case on decision letters as well as timeframes. It is a 

balance for us. We don't want to overregulate ourselves. 

Again, I mentioned this principle throughout the 

rulemaking, generally, we don't want to overregulate our 

the Secretary, the Department, because that can 

introduce unintended effects going forward in terms of 

operationalizing, finding road bumps in our practice, we 

do have to preserve some flexibility. So while we've 

tried to strike that balance here to make sure that 

we're including the basic concepts and principles that 

would go into a decision letter without over prescribing 

that could actually harm us, and our, you know, our path 

going forward. So, but but yes, we do we did consider 

your proposals from legal aid. 
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Committee Meetings - 11/04/21 

MS. JEFFRIES: Thank you, Jennifer. 

Josh, is your hand back up? 

MR. ROVENGER: Yeah, I just wanted to 

respond to that. So I appreciate the and I don't, I 

mean, including a time limit, and including the language 

that other agencies utilize for notices of decision I 

don't think is really a meaningful restriction on the 

department's discretion as it relates to kind of its its 

more general actions. I think, as other agencies have 

shown, they can survive and thrive and do their job not 

withstanding that language. I guess, you know, I guess 

to reiterate a point that Justin made previously. While 

I understand the Department doesn't want to overregulate 

itself, I also have to ask, has the Department learned 

anything from the last four years? Because it's 

possibly, it's very possible to have another Secretary 

of Education come in and if there aren't safeguards put 

into this process, just use that discretion to cause 

really significant harm to students and borrowers. 

MS. JEFFRIES: Thank you, Josh. 

Justin? 

MR. HAUSCHILD: Thank you. I continue 

to hear from the Department that they've considered 

certain proposals. And I'm trying to kind of sort out 

whether or not that is, you know, there's no longer a 
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Committee Meetings - 11/04/21 

willingness there to improve what the Department 

currently has proposed. So I think, you know, there's a 

lot of reasons to be happy about the direction the 

Department's moving but that doesn't necessarily mean 

that language that’s there is sufficient. And I think 

Josh has pointed that out, there have been proposals 

made along those lines. And I guess I'm curious if, you 

know, we've considered it, but is the same as the 

Department being unwilling to continue to consider 

improving on that language. And I just think, this idea 

that the Department doesn't want to overregulate itself, 

because it might complicate its current processes, or, 

or, or prevent, present some difficulties now, based on 

current processes. I don't know if that is the right 

lens to be viewing this through when we're talking about 

the academic and financial realities and futures of 

students impacted by misconduct at institutions. So I 

would just, I would encourage the Department while I 

understand the practical realities and the workability 

of regulations, to make sure that a student continues to 

be at the center of the conversation here. And that if 

regulations might require the Department to improve its 

own processes, that that would be something that 

Department willingly takes on in order to defend the 

student. Thank you. 
 

29 

Committee Meetings - 11/04/21 

MS. JEFFRIES: Thank you, Justin. 

Michaela? Oh, I'm sorry, Jennifer. 

MS. HONG: Yeah, just real quickly, I 

think, to Justin's point. Yes. Like we're in session 

two, we are, we are needing to kind of refine language. 

Certainly proposals continue to come in we're, we're 

taking them into consideration. As far as timelines, we 

haven't we just we haven't found the right parameters. 

We know that 180 days isn't it, that doesn't mean that 

we won’t consider other timeframes. As far as as far as 

a decision letters, we did chew on that for a while. And 

I think we have enough here to ensure that we, you know, 

given things that have happened in the past that we want 

to ensure that we have enough information in the 

decision letter, and that there's guidance in the 

regulations to point us for that direction. So, but 

overall, we're here and we're trying to take everything 

into consideration as we continue to refine the 

language, but we are on a constrained timeframe, where, 

again, I will emphasize a student and the borrower is 

the center of this conversation, we also have to balance 

the reality of there are very real, administrative, 

legal, operational realities that we have to strike a 

balance with, because we don't want to put words in 

regulation that we can commit or abide by. So we want to 
30 

Committee Meetings - 11/04/21 

be sure that there's enough flexibility while capturing 

the principles, all the principles that you mentioned. 

And yes, we want to bring, put the borrower front and 

center here. That's the point. 

MS. JEFFRIES: Thank you, Jennifer. 

Michaela, thanks for waiting. 

MS. MARTIN: For the timelines, I 

guess, so the question is, like, then how long is 

reasonable? Because Dixie and I met with another with 

one group of students, but I also met with other groups 

of constituencies. And some of these folks have been 

waiting, like, five, six years, right. And I understand 

that like in a trial or legal process like that could 

take years, but this also isn't a trial. And the courts 

have found that the need for expedited decision making 

within the agencies is just like the right to a speedy 

trial within our court, judicial system. Part of that is 

because the court and like I think that we all kind of 

view that our democracies or bureaucracies are really 

only as strong as people believe them to be. Right and 

so when we're not giving people that level of rights to 

have a decision and a reasonable amount of time five or 

six years is not reasonable to look at a claim. And then 

I think that it really lessons less more of the agency 

than then the potential burden that you might have to 
 

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Committee Meetings - 11/04/21 

create a new system to be able to have quicker 

decisions. And so I guess my question really is just how 

long is reasonable? 180 days isn't, then what would be? 

What are you ballparking? Five, six years? Like 

something's got to be in there. Five, six years is like 

insane. 

MS. JEFFRIES: Thank you, Michaela. 

Dixie? 

MS. SAMANIEGO: Yeah, so let me 

reframe the conversation then. If it's taking an absurd 

amount of time, I think I think the Department of 

Education really just has to question how committed they 

really are to issues of racial justice and economic 

justice, right. And for me, this, allowing folks to put 

in BD claims, right, that is also a part of racial and 

economic justice. And so if the Department is not 

willing to really invest into actually being transparent 

in putting a timeline, it is not committed to actually 

being transparent to Black and Latinos and Latinas. 

Right. It is not actually committed to bettering the 

lives of low-income people, right. Of poor folks, folks 

that if they could, they would most likely have a 

negative EFC right, folks like me. And so when there 

isn't a timeline put into it and there's a hesitancy, I 

also question the Department's commitment to racial and 
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Committee Meetings - 11/04/21 

economic justice, right. We see that Black and Latinos 

and Latinas are amongst the folks who have to apply to 

have to put in claims the most, right. And so I think 

there is a space to recognize administrative burden, 

right. But there's definitely a space to also recognize 

that there needs to be a timeline, there needs to be 

timeliness and transparency. And I also wanted to talk 

about just how, for me when folks are denied, 

individually or in a group, I don't feel comfortable, 

just them being denied fully. I feel that like, if 

you've been strung out in this long year-long, monthlong process, you should, at the bare minimum get some 

form of relief. And I know that there's a 

reconsideration process in section 407. But point blank 

period, if even if they go through the reconsideration 

process, at the bare minimum, they should find a way or 

there should be a possibility for for them to get 

partial, just partial relief, just because they just 

went through the process, right, and they were strung 

along. And so I just really want to re-emphasize that 

like, if the Department is going to be about itMR. TOTONCHI: thirty seconds 

MS. SAMANIEGO: then be about it be 

about racial economic justice point blank period, put in 

a timeline,be timely. I recognize that there is an 
 

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Committee Meetings - 11/04/21 

administrative burden, but also recognize that the 

Department has to make strides has to it. There's a lot 

to improve on, right. And so there needs to be 

transparency into there's no timeline, and the 

Department has to be able to send out a letter of said 

on a communication every two, three, weeks every month, 

updating the folksMR. TOTONCHI: time 

MS. SAMANEIGO: hey, this is where 

this is where the process is at. Folks are not being 

told anything. 

MS. JEFFRIES: Daniel? 

MR. BARKOWITZ: Thank you. So as as a 

financial administrator were subjected to a number of 

timelines and default and distinct time limits, I echo 

and support what Dixie and Michaela have offered. I'd 

like to offer a suggestion that maybe at least the 

Department can consider which is a one-year time frame. 

So if 180 days is not sufficient, would the Department 

be willing to accept a one year limitation, which would 

allow, again, a timeframe that could be measurable? And 

if at the end of that one year, if the Department has 

not reached a decision, the presumption would be to 

grant the borrower's request. So you know, again, to try 

to move this conversation forward to practical reality, 
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Committee Meetings - 11/04/21 

again, 180 days may be insufficient. I would echo the 

question of what is and one year might be a reasonable 

accommodation. The one thing I would add, though, is if 

there is a time limit, and this is now coming from the 

institutional perspective, and the Department has not 

contacted the institution, I wouldn't want there to be 

liability to the institution because of the Department's 

delay. So that's the one piece I think we'd have to at 

least explore. But I would support, again, a time limit. 

We live with time limits in the financial aid space all 

the time. And there are hard and fast rules. And so you 

know, there's, there's got to be a presumption of 

benefit for the student in this case, if the Department 

can't respond in a timely manner. 

MS. HONG: So thank you for that 

suggestion. And we will also go back and try to discuss 

this internally and come back with some reasonable 

timeframes. 

MS. JEFFRIES: Thank you. Last hand 

that's up is Josh and then I think we'll move to a 

temperature check. 

MR. ROVENGER: Thanks. So just want to 

reiterate that we're very open to hearing ideas for 

specific time limits and interested in hearing the 

Department's position once you have internal discussions 
 

35 

Committee Meetings - 11/04/21 

on whether a year is feasible. I also agree with Daniel 

that if you grant the relief, because the Department 

failed to decide the claims in a timely manner, that's a 

procedural violation, not a substantive one that the 

school should be liable for, and would add on it that 

relief, given the amount of students who have been 

waiting for five, six years should be retroactive. The 

last thing I want to say on a timeline is just to take a 

step back and say that the context of all of this is the 

Department of Education at the at the point of student 

is going through the Borrower Defense process, the 

Department of Education has already failed in its 

oversight responsibilities for the schools. And so it is 

difficult for me to accept the argument that the 

Department's logistical hurdles should prolong a 

student's ability to get relief for four or five years. 

It just, that just something that I I can't accept as a 

reasonable argument. Putting that aside, on the notices 

of decision, I'd ask for the Department to reconsider 

whether this language is fully sufficient, because I 

don't think it would take a particularly clever 

Secretary of Education to use this, to look at this 

language and issue, particularly perfunctory notices of 

denial. So for example, right now, this requires the 

written decision states the reasons for the denial. 
 

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Committee Meetings - 11/04/21 

Okay, so we denied this claim, because the borrower 

didn't satisfy the standard. Okay, the evidence that was 

relied upon, we considered everything in the borrower's 

application. I mean, that that's what we like that 

basically, what we saw in this language doesn't add any 

additional actual analysis that would allow a borrower 

to fully understand the decision. And so I would 

continue to urge the Department, you know, if the 

examples of of the other agencies, regulations are 

insufficient, we're happy to try and find some other 

examples. But we would continue to urge the Department 

to reconsider that position. 

MS. JEFFRIES: Thank you, Josh. So 

with that, I'm going to ask for a temperature check on 

section 685.406 adjudication of Borrower Defense 

application. May I please see your hands or your thumbs? 

Okay, there are numerous thumbs down. Unless you have, 

you know, something new to add, we will move on to 

section 685.407. And, Jennifer, do you want to say 

something? 

MS. HONG: Yeah, I just noticed 

they're there I think I can generally understand the 

thumbs down as a result of trying to land a, wanting a 

timeframe and a more fulsome decision letter. And I see 

now it's was there anything else? I know, Jessica, you 
37 

Committee Meetings - 11/04/21 

have, there you go. I would. If there's anything else, 

we'd like to hear what they are. 

MS. BARRY: Yeah sure, we voted no, 

because we still have some concerns with the group 

process in general. But I want everybody to know we're 

we're working through those positions. We're talking 

with negotiators. We're working through that. So this is 

a note A but we're still working through the process. 

MS. JEFFRIES: Thank you, Jennifer. 

MS. HONG: Thank you for that. Shall 

we move on to reconsideration? 

MS. JEFFRIES: So I'm moving into this 

I'd like to remind everyone of your protocols. That in 

order to preserve time when it is your turn to speak if 

you could please refrain from repeating previously made 

points so that we can make the best use of our time. So 

with that, we'll move to 685.407, reconsideration. 

MS. HONG: Thank you, Cindy. Section 

407 is the reconsideration proposed checks. Basically, 

the Department officials written notice as final for any 

relief in a group claim. But if denied, in full or part 

individual members of the group can request 

reconsideration. If if a state or state AG requests 

reconsideration, we would ask that they identify the 

local state law standard. Also why the Department should 
38 

Committee Meetings - 11/04/21 

use why the Department should use the state law standard 

and why the application of state law would result in a 

different outcome and why the applicable state law 

standard would lead to a Borrower Defense claim. The 

reconsideration request must be made no later than 90 

days from the Department official’s written decision. 

The Department official then follows the institutional 

response regulations. If the Department, if the 

Department accepts reconsideration requests, it follows 

the placement of the borrower in forbearance from 

stopped payment collections. A Department official then 

adjudicates as usual and follows written notice 

regulations. The Secretary may reopen a BD application 

at any time and it follows the rules for placing 

borrowers in forbearance or stopped payment collections. 

I see Joe's hand up. 

MS. JEFFRIES: Thank you, Jennifer. 

Joe? 

MR. SANDERS: Yeah, you know, we just 

want to continue to voice our opposition to have the 

state law standard be only on reconsideration. We think 

that this shuts out borrower state law claims. You know, 

in particular, items in here, like requiring a borrower 

to explain why the state law standard would result in a 

different outcome. You're talking about people would 
39 

Committee Meetings - 11/04/21 

have to have legal counsel in order to do that. You 

know, we think we've put forward a reasonable compromise 

that takes into consideration the Department's 

administrative burden. But, you know, in sticking with 

the theme of keeping this Negotiated Rulemaking student 

centered, we're talking about affordability here, big 

picture. And that means making processes accessible to 

students. You know, we're in negotiating good faith, 

there's a compromise on the table. We think it's 

reasonable, we think it works, and we think that the 

Department should move state law claims out of the 

reconsideration process and into a singular review on 

the first round, where the state law claim only need be 

considered where a federal law denial has been made, and 

where the student has identified the applicable state 

law. So we're absolutely taking the Department's 

position into consideration we ask for the same in 

return. Thank you very much. 

MS. JEFFRIES: Thank you, Joe. Josh? 

MR. ROVENGER: Thanks. So I have a 

number of concerns with the reconsideration provision as 

read, although I will say at the front end, appreciate 

that the Department is putting in a reconsideration 

provision in the regs. My, my first concern, though, is 

just the limitation as to who can bring a 
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Committee Meetings - 11/04/21 

reconsideration request. I don't, I'd be interested in 

hearing from the Department why this is limited to group 

claims and not individuals? It seems like an individual 

should have the right to a reconsideration of their 

request, just as much as a group. The second concern I 

have and this, this is actually just a broader concern 

about Borrower Defense that may not be something we can 

decide or deal with in this neg reg, but it's it's 

particularly acute at the reconsideration stage, which 

is who's deciding these claims. So as I see this, it 

refers to the Department official. So number one, is 

that the same Department official who just decided the 

initial plan, because if that's the case, that doesn't 

make sense to me for purposes reconsideration. And 

second, just as a more general point, again, if the 

Department official is going to be somebody in FSA, I 

struggle to see how, I see a structural problem with 

someone who is part of the entity that is responsible 

for overseeing these schools in the first instance, who 

has not succeeded in doing so, is able to then render a 

fair judgement on the back end when a student is 

petitioning for relief. The third concern I have is, 

just with respect to the standard for reconsideration, 

it's not particularly clear to me why the 

reconsideration process is so limited. If I mean, I 
41 

Committee Meetings - 11/04/21 

think the Department is making this much more 

complicated than it needs to be. It seems like there's 

going to be a reconsideration process. The Department 

should follow a lot of what other entities do, which is 

just you can have a neutral, and another individual 

review the evidence and arguments that you submitted, in 

addition to whether irrespective of whether there's 

there's new evidence or not, although certainly, you 

know, that may be another another reason for 

reconsideration. And then the final concern I have is 

just with respect to subsection E, about reopening a 

Borrower Defense application at any time. As we put in 

our proposal, we don't thinkMR. TOTONCHI: thirty seconds 

MR. ROVENGER: this should just be 

limited circumstances in which the Department needs to 

consider evidence that was not considered before. The 

Department should have you know, that if the Department 

doesn't want to limit its discretion, this is a place 

where it shouldn't limit its discretion, the Department 

should be able to reopen a denied claim at any point. 

Thank you. 

MS. JEFFRIES: Thank you, Josh. Todd, 

I see you put your hand up, did you have a response? 

MR. DAVIS: Yeah, I just wanted to hit 
 

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Committee Meetings - 11/04/21 

the first part there, Josh. The Department doesn't 

intend to limit this to group, the reconsideration 

process to groups. So you know, if the language doesn't 

reflect that, just know that we're noting that. And 

then, you know, the same thing goes for that's the 

second point on who the deciding official is and what is 

the structural process? Just, you know, I don't have the 

answer for you at the moment. But I, your point is well 

taken, and he's under considers. 

MR. ROVENGER: Appreciate that. Thank 

you. 

MS. JEFFRIES: Thank you, Todd. 

Justin? 

MR. HAUSCHILD: Yeah, thanks. I want 

to say again, you know, for the first time, if I 

haven't, we certainly appreciate the inclusion 

reconsideration process. I wanted to draw attention to 

the fact that it seems to be limited. And this is 

something I mentioned the first time around to to new 

evidence. And we're not sure why we can't consider 

errors in process and application of the standard to 

previously submitted evidence. We would like to see that 

be a part of the reconsideration process. We think 

that's, you know, a particularly salient point to make 

in the in the context of the last several years, and 
 

43 

Committee Meetings - 11/04/21 

again, would be something that would be relevant now and 

going forward. So maybe the Department's identified a 

reason why that's just simply practically not possible. 

But in the absence of that, we would certainly encourage 

the Department to consider procedural error and 

misapplication of the standard to facts previously 

presented, and not just the submission of new evidence 

during reconsideration process. Thank you. 

MS. JEFFRIES: Thank you, Justin. Joe? 

MR. SANDERS: Yeah, just very quickly 

want to make the point. So state UDAAP laws are some of 

the laws that are often applied to claims against 

schools where borrowers have been defrauded. Those laws 

govern unfair, or deceptive acts and practices. That's 

the acronym UDAAP. Unfair acts, or deceptive practices. 

Right. So I want to point out that there is no 

consideration in the Federal standard for unfairness 

claims. So if you don't have state law review, at the 

first level, these claims, which are common in cases 

involving student loans, involving schools, are just not 

considered. And so we really think that this is an 

important point that the Department needs to somehow 

work in unfairness in the first level review. We think 

the easiest way to do that is to use the existing body 

of case law out there at the state level. I've provided 
 

 

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Committee Meetings - 11/04/21 

the Department with multiple examples of cases where my 

office has brought unfairness claims involving student 

loans. In particular, these, we have a claim against 

Navient, one of the biggest student loan servicers, and 

previously one of the biggest private student loan 

lenders in the country. We allege that the that Navient 

put people into loans that they knew would default in 

order to get federal loan volume. Right. So in order to 

get the money from the federal loans, Navient gave 

students loans that they knew the students couldn't pay 

back. And we think that that is a defense to the 

repayment of the federal student loans. Similarly, in 

Westwood, our litigation against Westwood, we alleged 

that Westwood in order to get federal money, made 

private student loans to get the 10% of income that has 

to come from non-federal sources that they knew would 

default. 90% of the students defaulted on these loans. 

And they did that in order to get the federal money. We 

think that is unfair under state law. Federal courts 

have agreed with us on that point. And we think that the 

unfairness standard absolutely needs to be considered 

hereMR. TOTONCHI: Thirty seconds. 

MR. SANDERS: It's something that we 

use all the time. And the easiest way to do that is with 
45 

Committee Meetings - 11/04/21 

the state law claims at the first level. Thank you. 

MS. JEFFRIES: Thank you, Joe. Okay, 

Jennifer, I'm not seeing any more hands. Does the 

Department have what, have what you need? 

MS. HONG: Yes. 

MS. JEFFRIES: Okay, so with that, 

let's go ahead and take a temperature check on 685.407, 

reconsideration. May I see the thumbs please? Okay, 

thank you. Those of you with your thumbs down, if you 

have something additional to add as to why your thumb 

was down, please raise your hand so that Department can 

hear what what your concern is. I don't see any thumbs 

or any hands, Jennifer, for additional information for 

you. Are you ready to move on? 

MS. HONG: I think so just to review, 

what I'm understanding is the thumbs down has to do with 

many of Joe's comments during the inclusion of the state 

standard and the reconsideration. You want to move that 

out of reconsideration and replace it with the proposal 

that we talked about yesterday. Okay, and then to 

capture the unfairness issue. If there, am I missing 

anything else under reconsideration? Oh, the Justin's 

comments regarding inclusion of procedural errors etc. I 

think we're good. 

MR. ROVENGER: And also my concerns 
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Committee Meetings - 11/04/21 

which I stated before as well, in addition to the ones 

stated by Joe and Justin. 

MS. HONG: Thank you, Josh. 

MS. JEFFRIES: Thank you. Alright, 

with that, let's continue moving forward 685.408, 

relief. Jennifer? 

MS. HONG: So relief, again, just 

pointing towards the rebuttable presumption that a 

borrower with a proof claim is eligible for full relief 

unless presented with countervailing evidence. The 

Department's official’s rebuttal to full relief could 

include the borrower or borrower's to cover certain 

problems at school, or the borrowers harmless de minimis 

value. As prominent official may use examples from Table 

A and Table A is an addendum to one of the regulations 

on page 16, going on to 17. We can go through those 

together. The Department official recommends a relief 

amount full or less than full to the Secretary. The 

Secretary then renders renders the final decision based 

on the Department official's recommendation and the 

records available to it. Information from the group 

individual group formation, fast track process, 

(inaudible) response for consideration everything that 

came before. The Secretary then issues a written 

decision about the relief granted to include the relief 
 

 

47 

Committee Meetings - 11/04/21 

relief determined there may be tax implications if the 

borrower does not receive full discharge gives him for 

gives information about the reconsideration request. 

Upon determining relief, the Department discharges the 

loans and or reimburses the borrower amounts they paid. 

For further relief, determine the borrower is not in 

default and eligible to receive Title IV aid . And also 

update reports to consumer reporting agencies, the total 

amount of relief cannot exceed the loan amount less any 

benefit the borrower received in connection with the 

Borrower Defense claim. And then no relief would be 

granted for non-pecuniary damages. I’ll stop there. 

MS. JEFFRIES: Sorry about that. 

MS. HONG:no. I was gonna say, I said 

that we would go through these examples in the table, 

but I see hands up to people want to go through these 

examples? Yes, I see nods. Okay, so let me go through 

these examples quickly. These are just sample scenarios, 

okay. For, for instance, where issues that just speak to 

systemic problems. For example, a school would 

represents in its marketing materials that one of its 

faculty members in a particular course, received the 

highest award in their field. But that course is not 

foundational or part of the academic program, a borrower 

enrolls in that program in reliance on the 
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Committee Meetings - 11/04/21 

representation about this renowned faculty member. 

School failed to update the marketing materials to 

reflect the fact that the award-winning faculty is on 

sabbatical for the next two years. So the appropriate 

relief in that scenario would be that the borrower 

should receive no relief. Although the borrower 

reasonably relied on a misrepresentation about the 

faculty in deciding to enroll at this school, she still 

received the value of the program and that of course, is 

not foundational or are part of the academic program. 

Furthermore, the faculty member’s absence and one course 

does not speak to systemic problems at the institution, 

therefore, no relief is appropriate. And then there's 

two other scenarios and these are regarding easily 

quantifiable de minimis levels of harm. Example one is a 

school presents to current and prospective students and 

widely disseminated materials, that is required books 

and materials to complete the program costs $1,200 and 

can only be purchased from the institution, then charges 

students $1,500 to purchase the materials. So the 

appropriate relief in that scenario with borrowers 

should receive partial relief of $300. This is this is 

pertinent to our discussion about partial relief, 

although rebuttable presumption is full relief. Although 

the Department presumes that students and prospective 
 

49 

Committee Meetings - 11/04/21 

students all rely on widely disseminated published 

materials, the harm is a quantifiable, de minimis 

amount. The school provided the education that the 

student was seeking but misrepresented the cost of books 

and materials and it said the prices students were 

required to pay therefore, the student is entitled to 

relief. Second example of that, an institution promises 

a borrower free set of materials valued at $150. 

Institution ultimately provides the material but was not 

for free, the borrower takes out $5,000 in loans to 

attend the institution the appropriate relief in this 

scenario is the borrower should receive partial relief 

equal to the total cost of the materials, which is $150. 

The institution promised to provide a specific item with 

a clear value and did not do so therefore the borrower 

is entitled to the amount of the materials provided. 

I'll stop there. 

MS. JEFFRIES: Thank you, Jennifer. 

Suzanne. 

MS. MARTINDALE: Yes, thank you. So 

appreciate that the Department is starting with a 

presumption that a borrower who has met the standard 

should be entitled to full relief. That said, I have 

substantial concerns about the Department going down 

this path of seeking to determine partial relief and I 
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Committee Meetings - 11/04/21 

also have to say those examples in the boxes. I'd be 

curious to know if those are based on actual claims that 

have been filed to the Department because I I've never 

heard of someone filing a claim with those kinds of 

facts. Meanwhile, we've been talking about 

administrative burden and the backlog and you know, just 

to put a finer point in some previous remarks, there are 

people with claims pending before the Department today 

who attended Corinthian Colleges and can't get their 

loans canceled. So I, you know, as I'm thinking about 

all these pieces fitting together, you know, this, I 

think, is an administrative minefield for the 

Department. I think that on balance, it would probably 

be more equitable for everyone concerned, if the 

Department went thumbs up, thumbs down, and if someone 

really thinks that, you know, they the misrepresentation 

about textbooks is legitimate, and they still deserve 

relief, let him file for reconsideration. But I don't, I 

just I think that this is gonna create more problems 

than it solves to have this, this sort of inquiry into 

partial relief, and think that if someone has stated a 

claim, cancel their loans, they've already gone into 

debt, they've already been charged interest, they've 

already spent all this time, which may turn it turns up 

in months or years to get the claim adjudicated. And, 
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Committee Meetings - 11/04/21 

and I think many of us take the view that that these 

folks will, in many cases, you know, never be made 

whole, even when they get every dollar cancelled. So, 

again, significant concerns about going down this path 

of adjudicating partial relief. In fact, when the 

Department previously tried to come up with a 

methodology along those lines, they ended up in 

litigation. So let's let's let's reflect on that as 

well. 

MS. JEFFRIES: Thank you, Suzanne. 

Justin. 

MR. HAUSCHILD: Yeah, I think 

everything that Suzanne said was very well said. And I'm 

going to just maybe, first off, appreciate that, that 

we're talking about a presumption here about full 

relief, I think that was another great point made by 

Suzanne, but to the effect of repeating what Suzanne 

said, I'm going to try to keep what I what I have to say 

here in the form of a question because I very well may 

just be (inaudible) here, but I'm, I'm thoroughly 

confused about the reliance the Department is putting on 

this, this idea of something being systemic. I just 

simply do not understand the relevance there. And then 

I'm really concerned about how we're going to determine 

what exactly systemic is. And Josh, very well may speak 
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Committee Meetings - 11/04/21 

to this more eloquently than me, but I'm very concerned 

about that. And I and I know, nobody likes 

hypotheticals, but I would, I would like the 

Department's input on a hypothetical. This woman's 

situation, individual application by a borrower who has 

seen incredible misconduct based on the allegations and 

evidence presented in the application, we're talking 

about lies based, you know, what lies about the nature 

of accreditation, financial aid available, you know, 

credits credits that may or may not transfer and job 

employment rates, but it came from a single recruiter, 

and there's no evidence that it's part of a more broad 

widespread package, or strategy by the institution to 

deceive, folks in the recruitment process seems to be 

that could reasonably be considered non systemic in 

nature, that to me does not diminish the harm done to 

this borrower in any way whatsoever. And I just don't 

understand why that borrower should be disadvantaged by 

by the ability, even just the ability to rebut a 

presumption of full relief. So I just I I'm not 

understanding and I would just really appreciate some 

clarification, because I just (inaudible). Thanks. 

MS. JEFFRIES: Thank you, Justin. 

Josh? 

MR. ROVENGER: Thanks. So I think 
 

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Committee Meetings - 11/04/21 

we'll, you know, just going to reiterate the point that 

I made the first session, that full relief is never 

actually full relief, and that the Department is kind of 

tying itself in knots here to try and preserve some 

ability to give partial relief in hypothetical 

situations that at least, you know, I don't think those 

of us who practice in this space are aware of them 

actually getting a Borrower Defense granted. With that 

said, if the Department is going to insist on 

maintaining a partial relief provision in here, number 

one, I'm not it's not clear to me what countervailing 

evidence, like what standard that is. I you know, I 

think we propose the clear and convincing evidence 

evidence standard to rebut the presumption of full 

relief. I think it should be a I just I worry about a 

future Secretary of Education coming in and saying, 

well, there was one piece of evidence suggesting partial 

relief, and that was enough to be countervailing. I 

share the concern about not only the hypothetical but 

the use of the freeze did not cover systemic problems. 

It almost it almost it leads to the question of why then 

even allow individual Borrower Defense claims in the 

first place. Like if I'm an individual who was defrauded 

by a one bad actor at a school, I have a claim to a 

borrower to the Borrower Defense relief, but to Justin's 
 

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Committee Meetings - 11/04/21 

point, that may not constitute systemic, a systemic 

problem. With respect to the de minimis value issue, I 

do worry there that without more explanation of what 

that's trying to capture, not not through hypotheticals, 

but through regulatory language itself, that we're going 

to run into the same problem we did in the prior 

administration. And I also, it just strikes me that the 

the hypothetical is given what like, the claims to just 

be denied on the front end deal with this in the 

standard and the adjudication of the Borrower Defense, 

rather than preserving this, this category of partial 

relief that is kind of ripe for manipulation in the 

future. The final question I have and this, so for this, 

this is not something that's new to this in this 

proposal, but in H (2), respecting updating credit 

reportsMR. TOTONCHI: Thirty seconds. 

MR. ROVENGER: it seems to me that the 

Department is required under FCRA to update credit 

reports, if it grants the Borrower Defense and had 

previously been negatively reporting on the individual's 

credit. And so I guess I am curious why that's 

discretionary relief. 

MS. JEFFRIES: Thank you, Josh. Joe? 

MR. SANDERS: You know, I think 
 

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Committee Meetings - 11/04/21 

Justin's point on lack of systemic problems as a basis 

for partial relief, really is problematic. And I'm going 

to add an example here. So in our Westwood litigation, 

we allege that the admissions representatives for the 

school were telling prospective students that they could 

become a Chicago police officer by enrolling in the 

school's criminal justice program. We obtained phone 

calls from the company, listened to a lot of phone 

calls, and there were phone calls where those exact 

words were said. Somebody called up and said, oh, well, 

my dream is to be a Chicago police officer, you know, I 

really want to be in public service and, you know, being 

a Chicago police officer is my dream. And the admissions 

representative says, yeah, yeah, our criminal justice 

program is perfect for that. Right. Criminal Justice 

Program was nationally accredited, and until 2010, the 

Chicago Police Department did not accept nationally 

accredited credits. So it was wrong on its face. But for 

our investigation, you could have had somebody who was 

told that went and paid 70 grand to get this criminal 

justice degree and then couldn't become a Chicago police 

officer. On an individual claim that Department may or 

may not know whether that's systemic. And so I think 

that in that situation, that individual would be 

entitled to full relief. It's a material 
 

 

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Committee Meetings - 11/04/21 

misrepresentation. It's why the students going to the 

school and they can't do that. So I think there there is 

significant problem with that, that romanette, i 

romanette vi under under 408 here. 

MS. HONG: So just to follow up on 

that, Joe, was in that in that case was it only one 

student alleging that misrepresentation? 

MR. SANDERS: No, but I'm saying in 

the absence of, right, our office or some other office 

investigating that claim and bringing to light the fact 

that it was systemic, that Department may not know that 

that was the case. Now, you may be able to tell if you 

get a bunch of claims on that, right, that oh, yeah, 

that was systemic. But I still think that in that 

example, let's say it had been one student. I still 

think that in that case, the person would be entitled to 

full relief there. If they're saying I want to go to 

school to be a Chicago police officer and the person 

says, yeah, criminal justice, and that's not true, 

right. If it was a single student, I think that student 

has, should receive full relief there. If that person 

had brought just that claim for just themselves in a 

state court in Illinois, they would be entitled to all 

the all the money back that they paid for that program. 

MS. JEFFRIES: Thank you, Joe. Justin? 
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Committee Meetings - 11/04/21 

MR. HAUSCHILD: Yeah, thanks. So this 

is here is I think some of what the other commenters 

have said and what the Department’s responded with has 

helped me clarify my understanding here and frankly, I'm 

as concerned if not more concerned than I was to begin 

with, when it comes to the systemic issue, you know, 

particularly this question about, you know, was it just 

a single student that submitted that claim? Or were 

there multiple students? To me, that question suggests 

that really, what we're doing here is saying that the 

group process is the path for the full, to full relief, 

one way or the other, either through a formal group 

being established, or the Secretary determining that 

there really is a functional group by a certain 

threshold being met of so many other borrowers 

submitting individual applications alleging similar 

behavior. And again, it just, you know, I continue my 

refrain here about it not making sense, you know, you 

could have a veteran that alleges the most predatory, 

you know, things you could think of, in an individual 

application at an institution, but doesn't include any 

evidence that it's, you know, part of a systemic issue 

at the school. And, and then that's, you know, that's a 

partial relief setup. To me, it seems like it 

functionally builds in another element for a BD claim 
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Committee Meetings - 11/04/21 

here, that the individual applicant has to demonstrate 

not only that there's this fraudulent activity 

happening, been impacted by it or whatever else, but 

also that it's somehow linked to more systemic problems 

of behavior at the institution broadly, I'm just, again, 

confused and I don't think that's appropriate, if that's 

how this is intended to function. Thanks. 

MS. JEFFRIES: Alright, thank you. I 

see one more hand, Suzanne, and then we'll see if the 

Department has what they need for the temperature check. 

Suzanne? 

MS. MARTINDALE: Yeah, just real 

quick. I mean, this is recalling, you know, I was on the 

prior Borrower Defense Negotiated Rulemaking a couple 

years ago, when the Department at the time was 

considering requiring borrowers to allege specific 

financial harm. And this kind of feels like a roundabout 

way of implicitly wrapping that into the burden of 

persuasion. And that also gives me a lot of concern. 

MS. JEFFRIES: Thank you. So Jennifer, 

I'm gonna check in with you to see if the Department has 

what they need before we proceed with temperature check. 

MS. HONG: Yes. 

MS. JEFFRIES: Okay. So with that, 

could I see a show of thumbs on 685.408, relief? Okay, 
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Committee Meetings - 11/04/21 

thank you. There are numerous thumbs down of those who 

had their thumbs down that hadn't expressed their 

concerns, do you have something you would like to add at 

this point? Jennifer, do you want to do a recap? 

MS. HONG: I just, so I'm hearing 

again, and again, I think this while it identified the 

whole, you know, the idea of the systemic speaking to 

systemic problems in the first bucket of this table 

there, you know, there, that's the last bucket talks 

more about the value of the program, whether it was 

foundational, (inaudible) to the part of that. So I 

think it's just it is one piece. I understand that we 

need to clarify that a bit better. So, in my 

understanding the issue with regard to that the systemic 

problems pointing to systemic problems, as well as the 

partial relief issue, are those the sticking points here 

that I'm hearing for those people that didn't make 

suggestions hand up. 

MS. JEFFRIES: Justin? 

MR. HAUSCHILD: Yeah, and Jennifer, I 

think that's broadly right. But just for us 

specifically, I don't want to speak for anybody else. It 

is it is kind of the clarification around systemic but 

also the the the reason for it in the first place. So 

not just like what systemic means, but the justification 
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Committee Meetings - 11/04/21 

for for that as a part of the standard. Thanks. 

MS. JEFFRIES: Thank you. 

MS. HONG: Also, am I understanding 

that from both Suzanne and I think Justin that, in the 

scenarios presented on the bottom half of the table, 

that, kind of doing away with the concept of partial 

relief, therefore, those borrowers, these borrowers, for 

example, and these actually are based on real, real 

scenarios that that our staff receives, that they would 

not be entitled to a claim, is that, is that what I'm 

hearing? Or did I hear that wrong? 

MR. HAUSCHILD: I'm sorry, Jennifer, 

I'm not sure I understand the question. 

MS. HONG: Alright. I was hearing that 

that in, for example, in the examples provided on easily 

quantifiable de minimis levels of harm, that these 

because these, these are the kinds of claims that we 

receive, I understand that, you know, when we think of 

Borrower Defense think of, but when we when we have this 

option available, I mean, this speaks again, to the type 

of volume that the Department receives, we, it's across 

the board. So that I mean, these are kind of like real 

situations that might come across, you know, the 

adjudicator’s desk. And I'm just wondering if I just 

want to be clear, if I, if and I see Suzanne's hand 
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Committee Meetings - 11/04/21 

raised, so I just want to be clear on understanding your 

point and your suggestion with regard to that piece on 

partial relief. 

MS. JEFFRIES: Suzanne? 

MS. MARTINDALE: Yeah, I mean, this is 

the challenge of crafting public policies, you can't hit 

every single fact pattern, I think we're trying to 

balance equities here. If a borrower is going to, you 

know, wait three years to find out, they're getting 150 

bucks back versus, you know, after six months hearing, 

they're getting zero, I think, on balance, that probably 

the math probably works out better in the second 

scenario, versus a Corinthian borrower who filed in 

December 2016, who's still waiting today. Like that 

that's what we're trying to balance here. And I do think 

that a more efficient process that really is focused on 

swift adjudication, where there was very clear harm, 

whether it's individual or systemic, is probably better 

than creating a backlog that impacts absolutely 

everybody where you're also contemplating potentially 

charging interest for a while before you stop charging 

interest. And then at the end of the day, you know, 

maybe someone gets 150 bucks when I, helpful to know 

that's an example, however, that is definitely not the 

archetypal example we've been hearing about for the last 
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Committee Meetings - 11/04/21 

several years. 

MS. JEFFRIES: Thank you, Suzanne. 

Justin? 

MR. HAUSCHILD: Yeah. Appreciate your 

requests for clarification there, Jennifer. I certainly 

appreciate that, you know, these are modeled off real 

world examples that that's helpful. I will get probably 

too specific here. I think, you know, again, our main 

issues with “systemic” how it could be interpreted I 

think, in the example that's, you know, that that's been 

provided that's most susceptible to, you know, kind of 

some of the concerns that I've outlined is the first 

one, you know, where essentially misrepresentations made 

to a student that caused them to then enroll at an 

institution. And you know, just how that could be 

different in all the different variations that those 

misrepresentations might might, you know, how all those 

how all the different types of misrepresentations might 

play out in that example. But I we understand the 

Department's need to, you know, look at things from a 

practical perspective based on the types of applications 

that they receive. So certainly understand that, but 

just very concerned about how systemic could really be a 

major loophole here for instances where the full relief 

is otherwise appropriate. 
 

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Committee Meetings - 11/04/21 

MS. JEFFRIES: Thank you, Justin. 

Dixie? 

MS. SAMANIEGO: Yeah. So also, I think 

I just want to provide a little bit more perspective to 

what Justin was saying about the first example provided, 

while the course that the student and I appreciate that 

this is like a real world example, right. This is a 

claim that was sent in right, while the course that the 

student, right, what literally there for or like the 

professor, right, specifically, the course is not 

foundational to the degree, I would argue that it kind 

of is because as a student, you're then left to figure 

out what courses you're going to take right. You're left 

to like, for me, my specific your degree program, I'll 

have to take 21 elective courses, like elective credits. 

And so for me, I really only attended my program at 

CSUF, because I was looking at this one professor. 

Right. And so if that was happening to me, I'd be so 

mad, I'd be so mad. Right, that is miss like you are 

that I think that speaks to broader issues within the 

institution that are systemic. And so for that students 

who have not been given any relief, that's problematic, 

deeply problematic. And I, I just, I'm just so confused 

as to what the Department is, you know, defining a 

systemic. And so I'm just going to echo what everyone 
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Committee Meetings - 11/04/21 

has said. But that first example, that students should 

have given at least some form of relief. And it does 

speak to systemic issues within the institution, like I 

said earlier, and our first session that like, if the 

university is misrepresenting course availability, but 

also professor available availability, that is 

misleading for students, because what the way that we 

commit to universities, most first gen students coming 

to universities is what is publicly available to us, but 

also what recruiters and admission officers tell us, 

right, what we what we're given by the university until, 

if we're given marketing materials that say, XYZ 

professor in XYZ field is going to teach these classes, 

right, irregardless if it's foundational, or a core part 

of the degree program completion, that is problematic. 

And so I'm just confused as the rest of the negotiators 

are probably as to what the Department of Education is 

defining as systemic. And I've asked the Department to 

drop a definition to what they're using are systemic in 

the chat earlier. And so moving forward, I would like 

to. Thank you. 

MS. JEFFRIES: Thank you, Dixie. 

Michaela? 

MS. MARTIN: Building off ofthat if 

it's one, you know, I might be able to understand, but 
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Committee Meetings - 11/04/21 

then how many of those would would qualify as 

“systemic”? So just kind of want to articulate Dixie's 

question of where or, or if there's consideration of 

where that line would be crossed. 

MS. JEFFRIES: Thank you. Okay, 

Jennifer? 

MS. HONG: Thank you for the feedback 

on this session. 

MS. JEFFRIES: Okay. So with that, we 

are going to move in this will be the final grouping for 

a temperature check on Borrower Defense. We are going to 

address 410. The, I'm sorry, 409, recovery from 

institution, or 10, cooperation by the borrower, or 11, 

transfer to the Secretary of the borrower's right of 

recovery against third parties. And finally, 499, 

severability. Those are all relatively small, so we will 

group them together. Jennifer, do you want to walk the 

committee through those please? 

MS. HONG: Sure. I'll just summarize 

all the remaining sections in the proposed reg text. 

Recovery from institution first and foremost, for loans 

first disbursed on or after July 1st, 2023, the 

Department will collect from the school or in the case 

of a closed school another principal from common 

ownership, the amount that the Department discharges. 
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Committee Meetings - 11/04/21 

The Department may have action to not collect if the 

cost of collecting will be more than the amount to 

recover. If it's outside the limitations period, there's 

a preexisting settlement agreement, or the Department 

has already collected in a separate proceeding. And that 

limitations period is no later than six years from 

borrower’s last date of attendance. The limitations 

period does not apply if the Department official 

notifies the school of the BD claim prior to the end of 

the limitation period. So that's what we have under 

recovery. The remaining section 34 CFR 685.410 

cooperation by the borrower, it's just noting that the 

borrower has to reasonably incorporate with the 

secretary. 411, transfer to the Secretary of the 

borrower's right to recovery and third parties. Again, 

this just upon granting relief, the borrower assigns a 

right to recover to a third party to the Secretary. And 

if nothing prevents the borrower from pursuing legal 

channels or recovering above the discharge amount or 

other matters unrelated to the claim on other matters 

unrelated to the claim. And then general (inaudible) 

section. So we can begin our discussion regarding 

recovery. 

MS. JEFFRIES: Thank you, Jennifer. 

Daniel? 
 

 

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Committee Meetings - 11/04/21 

MR. BARKOWITZ: Thank you. And 

Jennifer, I first want to say I appreciate that the 

Department has moved from the initial position in terms 

of recovery, which had no limitation at all and in this 

has moved to a six-year period. So I want to recognize 

that adjustment. However, I would say the six-year 

period is still problematic for the following reason. 

The current guidelines that are published in 668.24, on 

record retention, specifically 668.24, E (2), and E (3), 

specify that if an institution makes a direct loan or 

FFEL loan, they're only required to retain records for 

three years after the end of the award year in which the 

student last attended the institution. So record 

retention wouldn't allow an institution necessarily to 

respond. There is an exception granted, and I would urge 

the Department to think about three years of the same 

exception, which is, if there's an action against the 

institution, then the three years is extended to the end 

of the action. So if an action is initiated against an 

institution during those three years, the institution 

must retain the records until the end of the action. But 

otherwise, you're putting institutions in an untenable 

position to try to respond to a claim where there may be 

no records available to respond to that claim. Again, 

I'm trying to, in my principle here is bad actors or bad 
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Committee Meetings - 11/04/21 

actors and I'm not trying to defend bad actors, I'm 

trying to defend institutions that may be snared and 

want to respond and need to respond, but don't have the 

ability to respond because of conflicting guidance. On 

the one hand, that Department is saying no need to 

retain records beyond three years, at what point at 

which point the student has graduated, or left the 

institution. And in this particular piece, six years, so 

if a borrower claims initiated four years out to use a 

specific example, and the Department reaches out to the 

institution, there will be no records available to 

substantiate the institution's response. And so again, 

that seems to me to be problematic. My hope is, that 

Department will identify bad actors before three years, 

at which point if an action has begun, the institution 

will need to retain those records and be required to and 

then you have the response you need. So again, I would 

urge the Department to conform this timeframe with the 

record retention timeframe of three years. Thank you. 

MS. JEFFRIES: Thank you, Daniel. 

Marjorie? 

DR. DORIME-WILLIAMS: So, I support 

and echo what Daniel said about institutional record 

keeping that's that's really difficult, particularly if 

there's already regulatory language that seems to 
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Committee Meetings - 11/04/21 

contradict this. And then my question would be, if 

there's limitations on periods to recover, no later than 

six years but borrowers are still waiting to get their 

claims even adjudicated, is there a conflict there? So 

if we've already heard from borrowers they've been 

waiting, right, five, six years already, does that then 

release the institution from any liabilities based on 

this regulatory language? So I'm just asking for 

clarification, and maybe I'm not understanding this 

correctly. And we know that students are in this 

position because we again, we've heard numerous 

testimonies, sharing information that makes this a 

little bit difficult to understand. 

MS. HONG: So just real briefly, the 

recovery from the institution, six years begins after 

the loans have been discharged to the borrower. So those 

so for Marjorie, the, those timeframes don't overlap in 

terms of the adjudication of the borrower's claim, and 

then the recovery for the from the institution. 

MS. JEFFRIES: Thank you, both. Josh 

you're next. 

MR. ROVENGER: Thanks. So we very much 

support in the prior in the issue paper on this the 

separation of the Borrower Defense determination and 

then recovery from the institution. I'm a little, little 
 

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Committee Meetings - 11/04/21 

concerned that the Department unlike in other places 

where we are pushing to the Department to limit its 

discretion. I'm a little concerned that the Department 

has done that too much here. I'm worried that the four 

specific categories where the Department can choose not 

to try and recover from a school are quite limited, and 

I think the reg would benefit from a fifth, if the 

Department is going to maintain this structure. I think 

it would benefit from a fifth romanette there saying 

something like in the interest of justice, or a broad 

kind of catch all, that would allow the Department in 

various circumstances to choose not to go after school. 

MR. SANDERS: Thank you, Josh. Joe? 

Oh, Jennifer. 

MS. HONG: Sorry, I'm a little delayed 

here. Just just to put a finer point on it for Marjorie, 

that to to Josh's point, that was part of bifurcating 

the process is to make it to clarify that that recovery 

process is distinct from the adjudication process. And 

that's one of the things that we're proposing, through 

these regulations. To Daniel's point on the records 

retention, you know, those those, those records that we 

may be requesting under Borrower Defense claim may not 

be, you know, exclusively under financial aid materials, 

right. So, you know, and there's nothing precluding an 
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Committee Meetings - 11/04/21 

institution from retaining those records longer. If 

we're thinking about bad actors, I mean, retaining the 

records and complying with those retention rules 

privately, (inaudible), so we wouldn't want to change 

our limitations period to conform with records 

retention. And we would hope that you know, that that 

information, whatever information, we need to follow up 

with an institution about as a result of their bad 

acting, that they would be more provided. 

MS. JEFFRIES: Thank you, Jennifer. 

Joe? 

MR. SANDERS: Hi. I'd like to talk 

about 685.411, transfer to the Secretary of the 

borrower's right of recovery. I have some concern that 

the transfer of the right may be broader than what the 

borrower gets. So upon the granting of relief, the 

borrower is deemed to have assigned to and relinquished 

in favor of the Secretary any right to a loan refund, up 

to the amount discharge of the borrower may have by 

contract or applicable law with respect to the loan or 

contract for educational services. So it's that phrase 

right there, or the contract for educational services, 

that gives me the most concern. Because, you know, many 

students have to obtain money, I would say, like, I say, 

most students have to obtain money beyond federal 
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Committee Meetings - 11/04/21 

student loans to pay for school. And if the school 

defrauded them, they need to have the right to go after, 

you know, the instance, the the case that we see the 

most is private student loans. Whether made by a third 

party or made by the institution, we wouldn't want the 

institution, if the borrower is then going back to the 

institution say, hey, I shouldn't have to pay this 

institutional loan. You know, you guys told me I could 

be a cop when I couldn't. We don't want the school to be 

able to come back and say, oh no, you gave that right to 

the Department, like you have to pay your institutional 

loan. So and this is something we've addressed. I have 

old language from like, 2015, when we were commenting on 

the forms that the Department was creating for BD that 

addresses this issue. I'm happy to provide that. We just 

want to make sure that they can recover stuff beyond the 

loan against third parties, should they need to do that. 

Second point I want to I want to make here, state AGs 

are certainly willing to cooperate against schools with 

the Department, you know, at any point, we wouldn't want 

any kind of interpretation where we have to give our 

claims to the DepartmentMR. TOTONCHI: Thirty seconds. 

MR. SANDERS: And so, you know, we'd 

love to hear from the Department on their interpretation 
 

 

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Committee Meetings - 11/04/21 

of that, and we may have to look at some carve out 

language here that would say, if it's a state AG that's 

doing it, you know, they're not relinquishing any claims 

that they may have. Thanks. 

MS. JEFFRIES: Thank you, Joe. Todd, 

did you have a something you wanted to say? 

MR. DAVIS: Yeah, just, good point 

Joe, on the first one didn't mean to, did not recognize 

that. So, you know, we will definitely be happy to 

review any suggested fixes here on both those points, I 

think. And in particular that first one about not 

needing to assign a right that isn't really ours to 

take. So thank you. 

MS. JEFFRIES: Thank you, Daniel? 

MR. BARKOWITZ: Thank you. I want to 

respond to Jennifer's response to my response. So one of 

the concerns I have is specifically that, and this 

addresses a comment I made yesterday, the way that 

Borrower Defense is written, it's extensive and includes 

and I'll go back and refer to the language in 685.401 

that I questioned in Joe's language it includes, quote, 

the making of Direct Loan for enrollment at the school. 

And so I think it does directly relate to financial aid 

retention information, FAFSA filing, promissory note, 

entrance interviews, I mentioned these issues 
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previously, and was and the response was, yes, those are 

included. And those are specifically related to record 

retention. So I don't see a distinction between, at 

least as it's written today, the broad nature of what 

could be considered a Borrower Defense to Repayment, and 

the very, you know, open window. I also want to clarify, 

Jennifer, something you said, struck me is different 

than when I'm reading the text, I'm trying to get a 

better understanding. You said six years from the 

discharge. And what I'm reading in the particular 

section says six years from last attendance. So I want 

to be clear that that is on the record, as written, and 

make sure I'm understanding the intention of Department, 

which is I read this to be if a discharge takes place 

eight years after graduation, then there would be no 

ability to collect from the school at that point, unless 

there was an action that was still open, related to 

other issues. So am I missing misreading that or is that 

was there a misstatement earlier in terms of the the 

understanding of that section? 

MS. JEFFRIES: Okay, thank you. Misty? 

MR. BARKOWITZ: I'm sorry, can I get, 

can I get a response to that? Or do you want me to 

what's the. 

MS. JEFFRIES: I'm not sure that 
 

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Jennifer has a response right now. She may need to get 

back to you, Jennifer? 

MS. HONG: I think it's it, yeah, I 

think you're generally right. It's just it's a bit more 

complicated than that. Because when we know, when we 

inform the school, the limitation period effectively 

stops. So six years from the last attendance, your 

correct, but when we tell the school about the claims, 

it's your clock stops. 

MR. BARKOWITZ: And I appreciate and 

understand that I would just ask that the number of 

years be reconsidered. I think that's absolutely 

appropriate, and intentional, that the clock stops when 

the when the institution is notified. Similar to any 

other legal case, we must retain records when a legal 

case is in process. I think the issue here is the six 

years versus three years. But thank you for that 

clarification. 

MS. HONG: Understood. Yeah, thank 

you. 

MS. JEFFRIES: Thank you. Okay, 

Heather? 

DR. PERFETTI: Was Misty teed up to 

provide remarks? 

MS. JEFFRIES: Misty, were you? 
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MS. SABOUNEH: Yeah, thank you. 

Thanks. I just I put some of this in the chat. But I 

just wanted to say this on record. My support with 

Daniel regarding the limitation period. Schools are 

consistently a target for cybersecurity scams, and we 

have so much personal and sensitive data. And so again, 

I support the three years on that basis that we have to 

make sure that we're doing the best to protect that 

data. And then I also just wanted to add in so on 

685.405 (E) the waiver of the limitation period. I have 

some concerns with that again, as it relates to how long 

we would have to retain data for. 

MS. JEFFRIES: Okay. Thank you, Misty. 

Heather? 

DR. PERFETTI: Thank you. So I was 

just going to flag here because I know Josh and Daniel, 

in a previous provision referenced a potential automatic 

award for procedural issues, and that that would not 

produce liability for the institution. So if that is 

considered in the previous provision, then there would 

need to be language added here to reflect that. 

MS. JEFFRIES: Thank you, Heather. 

Seeing no additional hands. Jennifer, do you have what 

you need at this point? 

MS. HONG: Yes, yes, thank you for the 
 

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feedback. 

MS. JEFFRIES: Okay, great. So let's 

go ahead and take that temperature check on the four 

sections 409 recovery, 410 cooperation by the borrower, 

411 transfer to the Secretary of the borrower's right of 

recovery against third parties, and 499 severability. So 

with that, could I please see thumbs? Okay, I see about 

five thumbs down and most of those we've already heard 

from, is there additional information from anyone who 

had their thumb down that they would like to provide to 

the Department? 

MS. BARRY: I didn't speak earlier, 

because Daniel and Misty covered it so well, but the 

record retention issue is is serious for institutions. 

MS. JEFFRIES: Thank you, Jessica. 

Anyone else? Okay, Jennifer, with that, do you need to 

recap your understanding just for clarity? 

MS. HONG: No, I think I've got it in 

this case. I realized we only have a couple more minutes 

left. I did want to go back. I know there were a lot of 

questions, Daniel, and I believe Jessica, yesterday 

regarding abilities, and where those regulations are. 

And I just wanted to point them to 685.308. Those are 

the remedial actions. And basically, it's where the 

Secretary requires repayment of funds and purchase of 
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loans by the school if the Secretary determines that the 

school is liable as a result of and then it lists out 

all the loan discharge discharges. Because I think there 

was a question from Daniel why they're not stipulated in 

in the regs we went over it’s because they are under 

that section, 685.308. 

MS. BARRY: Thanks Jennifer for that 

answer, I appreciate it. 

MS. JEFFRIES: Thanks Jessica and 

Jennifer. So with that it is 11:59am. We will go ahead 

since you wrapped up Borrower Defense. Thank you very 

much for all your hard work on that and the rules 

discussions. We will go ahead and break for lunch and 

when we come back, you will be picking up issue paper 

number nine, predispute arbitration and class action 

waivers. Have a nice lunch. 

Appendix 

Department of Education 

Office of Postsecondary Education 

Zoom Chat Transcript 

Affordability and Student Loans Committee 

Session 2, Day 4, Morning, November 4, 2021 

DISCLAIMER: 
 

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Committee Meetings - 11/04/21 

Note: The following is the output of transcribing from a 

recording. Although the transcription is largely accurate; 

in some cases, it is incomplete or inaccurate due to 

inaudible passages or transcription errors. It is posted as 

an aid to understanding the proceedings at the meeting, but 

should not be treated as an authoritative record. 

From Jen (she/ella): (A) Student Borrower to Everyone: 

Awwwwww Daniel what a cute dog! 

From Daniel (P) - Fin Aid Admin (he/his) to Everyone: 

Thanks Jen! His sister is cute too! :) 

From David (P) - State hi ed agencies to Everyone: 

My dog is approaching that time, Cynthia, and I'm so 

dreading that moment 

From Will (A) FFEL Agencies to Everyone: 

...they truly become family members.... 

From Heather - PSLF Advisor to Everyone: 

My doggo is at my feet too, but too heavy to pick up 

and show -- he's a big boy 

From Kayla Mack to Everyone: 

I believe I have covered all CEMS as co-hosts. Please 

let me know if I missed one. 

From Jeri (P) Student Borrower (she/her) to Everyone: 

+1 Will 

From Josh (A), Legal Aid (he/him) to Everyone: 

+1 

From Heather - PSLF Advisor to Everyone: 
 

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+1 

From Kayla Mack to Everyone: 

Everyone can come on screen to check-in! 

From Michaela [P] Ind. Studnets to Everyone: 

For how many times I have been called Michael I am 

stoked rn 

From Daniel (P) - Fin Aid Admin (he/his) to Everyone: 

Michaela. lol! 

From Kayla - FMCS to Everyone: 

If anyone has tech issues, please let me know. You 

can message me in chat or send an email to 

kmack@fmcs.gov 

From David (P) - State hi ed agencies to Everyone: 

Better now 

From Jeri (P) Student Borrower (she/her) to Everyone: 

Much! 

From Daniel (P) - Fin Aid Admin (he/his) to Everyone: 

Josh is probably going to say what I want to. Shucks. 

Didn't raise my hand fast enough... 

From David (P) - State hi ed agencies to Everyone: 

My alternate, Suzanne, will jump in. 

From Joe; P, State AGs to Everyone: 

+1 Josh on lack of timeliness 

From Dixie (P) Dependent Students (ella/she) to 

Everyone: 

+1 Josh 
 

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From Jeri (P) Student Borrower (she/her) to Everyone: 

+1 Josh 

From Bethany (P) Disability (she/hers) to Everyone: 

+1 Josh 

From Michaela [P] Ind. Studnets to Everyone: 

+1 

From Justin (P) Service Members/Veterans to Everyone: 

+1 to Josh Re need for some type of timeline 

From Jen (she/ella): (A) Student Borrower to Everyone: 

+ 1 Josh 

From Daniel (P) - Fin Aid Admin (he/his) to Everyone: 

Just a reminder that I had my hand up... LOL... I can 

put it back up but will go to the end of the line... 

From Justin (P) Service Members/Veterans to Everyone: 

+1 Josh 

From Bobby (P) Two Year Public Colleges to Everyone: 

+1 Josh 

From Josh (A), Legal Aid (he/him) to Everyone: 

+1 Bethany 

From Bethany (P) Disability (she/hers) to Everyone: 

+1 Joe 

From Josh (A), Legal Aid (he/him) to Everyone: 

+1 Joe 

From Jeri (P) Student Borrower (she/her) to Everyone: 

+1 Joe 
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From David (P) - State hi ed agencies to Everyone: 

That is awesome, Dixie! 

From Jeri (P) Student Borrower (she/her) to Everyone: 

Need to see them on camera like the dogs.. 

From Joe; P, State AGs to Everyone: 

One idea to speed up identification of groups is to 

require information from schools, either through NSLDS 

or as part of the review process. Schools are in the 

best position to identify students that are part of 

the group. 

From Jen (she/ella): (A) Student Borrower to Everyone: 

+ 1 Dixie 

From Josh (A), Legal Aid (he/him) to Everyone: 

+1 Dixie 

From Jeri (P) Student Borrower (she/her) to Everyone: 

+ Dixie 

From Bethany (P) Disability (she/hers) to Everyone: 

+1 Dixie 

From Suzanne Martindale (A) state regulators to 

Everyone: 

+1 Dixie 

From Daniel (P) - Fin Aid Admin (he/his) to Everyone: 

To Joe's point, our information in NSLDS should 

already be able to identify students as reported as 

enrolled with effective dates and program level data. 

From Joe; P, State AGs to Everyone: 

+1 Dixie on good BD filing info for borrowers (and on 
 

 

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backyard chickens!) 

From Bethany (P) Disability (she/hers) to Everyone: 

+1 Justin 

From Jeri (P) Student Borrower (she/her) to Everyone: 

+1 

From Josh (A), Legal Aid (he/him) to Everyone: 

+1 

From Marjorie (P), Four Yr Publics (she/her) to 

Everyone: 

+1 Justin 

From Jeri (P) Student Borrower (she/her) to Everyone: 

+1 Justin 

From Joe; P, State AGs to Everyone: 

+1 Josh on the need for robust decisions 

From Dixie (P) Dependent Students (ella/she) to 

Everyone: 

For ED: Create resources for folks filing BD claims 

(Topics: Filing a BD Claim 101, What to do when you've 

been denied, timeline PDF, something that can help) In 

the style of something you would normally see a 

university/college student government put out for its 

students (informational and accessible knowledge) 

From Justin (P) Service Members/Veterans to Everyone: 

+1 to Josh on further improving denial explanations 

From Dixie (P) Dependent Students (ella/she) to 

Everyone: 
 

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From Jeri (P) Student Borrower (she/her) to Everyone: 

+1 Josh - transparency! 

From Jen (she/ella): (A) Student Borrower to Everyone: 

+ 1 Josh 

From Bethany (P) Disability (she/hers) to Everyone: 

+1 Josh 

From Bethany (P) Disability (she/hers) to Everyone: 

+1 Justin 

From Jeri (P) Student Borrower (she/her) to Everyone: 

+1 Justin - a timeline of correspondence of where 

people are in the process should be included. I.e. we 

will send you a letter every 3 weeks to make you aware 

of movement. 

From Jen (she/ella): (A) Student Borrower to Everyone: 

+ 1 Dixie! 

From Bethany (P) Disability (she/hers) to Everyone: 

+1 Dixie 

From Misty (P) Priv. Non-Profit to Everyone: 

+1 Daniel 

From Daniel (P) - Fin Aid Admin (he/his) to Everyone: 

+1 for retroactivity (Josh) 

From Justin (P) Service Members/Veterans to Everyone: 

+1 Josh on current logistical hurdles being barrier to 

timeline 

From Josh (A), Legal Aid (he/him) to Everyone: 

Data 
 

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From Michaela [P] Ind. Students to Everyone: 

A quote from my Administrative law Final "The court 

likened it to the right to speedy trial being required 

for people to maintain faith in the criminal system. 

This is because when a people loose faith in the 

efficacy of the system the system holds no power. 

Essentially our democracy, bureaucracy, and criminal 

justice system is like fairies in the movie Peter Pan. 

They only exist if we believe in them. 

Tinkerbell must live in our mind in order for her to 

be real at all." 

From Justin (P) Service Members/Veterans to Everyone: 

+1 Joe 

From Marjorie (P), Four Yr Publics (she/her) to 

Everyone: 

+1 

From Josh (A), Legal Aid (he/him) to Everyone: 

+1 Joe 

From Suzanne Martindale (A) state regulators to 

Everyone: 

+1 joe 

From Bethany (P) Disability (she/hers) to Everyone: 

+1 Josh! 

From Dixie (P) Dependent Students (ella/she) to 

Everyone: 

+1 Josh 

From Joe; P, State AGs to Everyone: 

+1 Josh on individuals should be able to apply for 

reconsideration 
 

 

 

 

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From Michaela [P] Ind. Students to Everyone: 

What is "less any benefit received"? 

From Joe; P, State AGs to Everyone: 

+1 on support for the presumption of full relief 

From Bethany (P) Disability (she/hers) to Everyone: 

+1 on presumption of full relief 

From Josh (A), Legal Aid (he/him) to Everyone: 

+1 on whether this is just hypothetical 

From Michaela [P] Ind. Students to Everyone: 

+1 

From Joe; P, State AGs to Everyone: 

+1 on pending Corinthian claims. It is not tenable to 

have pending claims in the cohorts where the 

Department already made findings of fraud. 

From Josh (A), Legal Aid (he/him) to Everyone: 

+1 

From Dixie (P) Dependent Students (ella/she) to 

Everyone: 

+1 

From Suzanne Martindale (A) state regulators to 

Everyone: 

+1 

From Dixie (P) Dependent Students (ella/she) to 

Everyone: 

Could ED drop what definition they are using for 

systemic? 
 

 

 

 

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From Bethany (P) Disability (she/hers) to Everyone: 

+1 Josh 

From Justin (P) Service Members/Veterans to Everyone: 

+1 Josh - precisely. "systemic" suggests that 

individual applications must be linked to broader 

misconduct to qualify for full relief. 

From Bethany (P) Disability (she/hers) to Everyone: 

+ Joe and Justin on this 

From Daniel (P) - Fin Aid Admin (he/his) to Everyone: 

2nd mention of romanette! Who has the bingo card? 

From Josh (A), Legal Aid (he/him) to Everyone: 

+1 

From Dixie (P) Dependent Students (ella/she) to 

Everyone: 

Re: Suzanne, Justin, and Josh's points 

From Bethany (P) Disability (she/hers) to Everyone: 

Echoing Justin, Joe, and Suzaane here 

From Jeri (P) Student Borrower (she/her) to Everyone: 

+ Bethany 

From Daniel (P) - Fin Aid Admin (he/his) to Everyone: 

+1 Suzanne 

From Josh (A), Legal Aid (he/him) to Everyone: 

+1 

From Jeri (P) Student Borrower (she/her) to Everyone: 

+1 
 

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From Dixie (P) Dependent Students (ella/she) to 

Everyone: 

There is no clear indication as to what crosses into 

the systemic area - ED needs to provide a definition 

as to what systemic is. 

From Jessica (P), Proprietary Schools to Everyone: 

+1 Daniel 

From Misty (P) Priv. Non-Profit to Everyone: 

+1 Daniel There is risk to students from a cyber 

security standpoint the longer data is retained 

From Jessica (P), Proprietary Schools to Everyone: 

+1 Misty 

From Bobby (P) Two Year Public Colleges to Everyone: 

+1 Daniel 

From Jessica (P), Proprietary Schools to Everyone: 

+1 Misty 

From Daniel (P) - Fin Aid Admin (he/his) to Everyone: 

+1 Heather 

From Jessica (P), Proprietary Schools to Everyone: 

+1 Heather 

From Joe; P, State AGs to Everyone: 

I can get behind this section with a clean-up of 

685.411 on the issues I raised 
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