DRAFT

# U.S. Department of Education

# Title IV Loans

# Borrower Defenses

# Meeting Summary

# March 16-18, 2016

The third and final session of the Borrower Defenses Negotiated Rulemaking commenced at approximately 9:00 am on March 16, 2016, as scheduled, and adjourned on March 18, 2016, at 6:00 p.m. Negotiators for all communities of interest and the facilitators were present. 

**Welcome**

Deputy Under Secretary Jeff Appel welcomed the members of the Committee to the final negotiating session and thanked them for their hard work and strong commitment to assist the Department in developing proposed regulations for determining which acts or omissions of an institution of higher education a borrower may assert as a defense to repayment. 

**Review Agenda**

Susan Podziba, one of the facilitators, reviewed the meeting agenda. It was approved with no changes.

**Petition for Membership**

The Committee agreed to add Derek Fronabarger, Director of Policy at Student Veterans of America, as a new alternate for groups representing U.S. military servicemembers or veterans. He replaces the former alternate, Will Hubbard, who was called to active duty. 

**Review of Meeting Summary for Session One**

The meeting summary was approved with one minor change.

**Members of Congress**

Senator Elizabeth Warren of Massachusetts and Congresswoman Maxine Waters from the 43rd District of California addressed the Committee.

# Public Comment

# Opportunities were provided at the end of each meeting day for members of the public in attendance to provide comments.  No public comments were made during the meeting.

**Discuss Issues and Proposed Regulatory Language**

The Committee discussed and reviewed draft regulatory language for each outstanding issue in great detail. Multiple alternative proposals were offered and considered as negotiators sought to reach tentative agreements on each issue subject to negotiations. 

Tentative agreements were reached on regulatory language for the following:

Issue 1, 2, 3: Borrower Defense Federal Standard, Process, and Statute of Limitations

Section 682.211(i) Mandatory Forbearance

Section 668.71 Scope and special definitions

Section 685.206 Borrower responsibilities and defenses

Section 685.205 Forbearance

Issue 5:  Financial Responsibility

Section 668.93 Limitation

Section 668.90 Initial and Final Decisions

Issue 6:  Electronic Death Certificates

Issue 7:  Nurse Faculty Loan Consolidation

Issue 8:  Interest Capitalization

Issue 9:  REPAYE

Issue 10: Compromise Authority

Issue 11: Closed School Discharge

No agreements were reached on the following: 

Issue 1, 2, 3:  Borrower Defense Federal Standard, Process, and Statute of Limitations

Section 685.212 Discharge of a loan obligation

Section 685.222 Borrower defenses

Section 685.308 Remedial Actions

Issue 4:  False Certification

Issue 5:  Financial Responsibility

Section 668.171 General

Section 668.175 Alternative standards and requirements

Section 685.300 Agreements between an eligible school and the Secretary for participation in the Direct Loan Program

During discussions related to Issue 1, 2, 3, Section 685.212, the Department offered to convene a working group to address issues related to the consolidation of FFEL loans into direct loans for the purpose of asserting borrower defenses. 

**Conclusion of the Negotiations**

As time wound down on the negotiations, the Committee reached impasse on the outstanding sections of Issue 5. The goal of the negotiations was to reach final consensus on all issues within the Committee’s scope of issues to be negotiated. Dissent on proposals offered for the outstanding sections of Issue 5 made it impossible to reach final consensus on a complete “package” of issues.

The negotiations concluded without final consensus on all issues.  As a result, the Department is not obligated to use any of the negotiated language in its Notice of Proposed Rulemaking, and all negotiators are free to comment negatively on any such proposed regulations.

**Members Present**

Non-Federal Members

Ann Bowers

Dennis Cariello

Eileen Connor

Chris DeLuca

Alyssa Dobson

Bernard Eskandari

Mike Firestone

Derek Fronabarger

Wanda Hall

Angela Johnson

Emily London Jones

Mark Justice

Darin Katzberg

Kay Lewis

Chris Lindstrom

Betsy Mayotte

Michale McComis

Christine McGuire

Walter Ochinko

Jaye O’Connel

Sharon Oliver

Jean McDonald Rash

Margaret Reiter

Shannon Sheaff

David Sheridan

Karen Solinski

Becky Thompson

Maggie Thompson

Noah Zinner

Federal Members

Gail McLarnon

Fred Marinucci

Facilitators

Susan Podziba

Jacqueline Wilson

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U.S. Department of Education, Borrower Defenses Negotiated Rulemaking

1

Summary of Meeting Three – March 16-18, 2016

Draft --  3/24/16