# Borrower Defense to Repayment

# Negotiated Rulemaking Committee Meetings

# Opening Remarks of

# Jeff Appel, Deputy Under Secretary 

# U.S. Department of Education

# March 16, 2016

# 9 a.m.

Good morning and thank you for being here.  I am Jeff Appel, Deputy Under Secretary of the U.S. Department of Education, and I am pleased to welcome you to the Department and to the last of our three negotiating sessions.  I want to thank you for your dedication to this process and reiterate why these efforts are so critical not only to student loan borrowers,  but to our nation.  

As we said at the beginning of these sessions, college remains the best investment students can make in their future – and students deserve a fair and honest deal. While many colleges play a critical role in helping students succeed in their educational and training pursuits, some of these institutions have left students with lots of debt and few job prospects due to the institutions’ actions or omissions, putting both students and taxpayers at risk.  President Obama’s administration is committed to changing that, through actions to ensure Americans are protected from unscrupulous institutions that misrepresent educational opportunities and leave taxpayers holding the bag and holding institutions accountable for actions that violate the law, and it is a top priority of Secretary John King, who has charged our team with finding fair and clear ways to get borrowers relief.  These protections are needed for the continued support for the student aid programs that make postsecondary education accessible and affordable to all students, regardless of their backgrounds.

Our team is working to ensure that students who have been defrauded by their college receive every penny of the debt relief to which they are entitled, as efficiently and easily as possible.  As we’ve said from the beginning, an ideal borrower defense process should be easily understood, facilitate the submittal of sufficient evidence to adjudicate the claim, establish clear expectations for the borrower regarding next steps and timeframes, and assure claims are addressed fairly and equitably.  We have worked hard to present this committee with language that achieves those objectives.  

Drawing on your feedback and work from the last two sessions, we presented you with revised language for your consideration.  I hope you’ll note that we have incorporated this committee’s thoughts and proposals into this language. Throughout this session, we hope to discuss with you ways to include crucial elements of state consumer protection laws to create a simpler and more uniform federal standard; permit students to pursue discharges without the constrains of a statute of limitation; create borrower-friendly processes for granting relief, including the means for group discharges; and hold schools accountable when discharges result from their unlawful actions.  We also plan to discuss with you how to protect students from forced arbitration, which some schools use in their enrollment agreements–often buried in the fine print–to effectively prevent students from seeking redress for harm caused by their school and to hide wrongdoing from the Department and the public.

For our final three days of negotiated rulemaking, you will discuss and debate the provisions we have put forward. As non-federal negotiators, you have been asked to work to reach consensus on which acts or omissions of an institution of higher education a borrower may assert as a defense to repayment of a loan made under the Federal Direct Loan Program and the consequences of such borrower defenses for borrowers, institutions, and the Secretary.  We hope that you will use this time to help us improve the language on the page so that we can come to agreement on this regulation.

Those of you around the negotiating table represent years of experience and extraordinary dedication to postsecondary education access, affordability, and student success. Your work throughout these negotiated rulemaking sessions is critical to the development of sound regulations that will further these goals.  Thank you for your willingness to share your time and expertise with us.

I look forward to a productive discussion of the issues in this last session.  On behalf of Secretary King and Under Secretary Mitchell, thank you for participating in this important rulemaking effort.  

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