DEPARTMENT OF EDUCATION 

OFFICE OF POSTSECONDARY EDUCATION 

AFFORDABILITY AND STUDENT LOANS COMMITTEE 

 SESSION 2, DAY 3, MORNING 

November 3, 2021 

 

 

 

 

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Committee Meetings - 11/03/21 

On the 3rd 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 - 11/03/21 

P R O C E E D I N G S 

MR. TOTONCHI: Good morning and welcome 

to day three of the second session of the Affordability 

and Student Loans Committee Negotiated Rulemaking 

Process. My name is Emil Totonchi and I'll be 

facilitating this morning. Before we dive into 

substantive discussion, I just want to take a roll call 

of everyone that's here. I will start with Heather 

Perfetti and Michale McComis, who are primary and 

alternates for accrediting agencies. 

DR. PERFETTI: Good morning, everyone. 

Heather Perfetti here. 

MR. MCCOMIS: Good morning, Michale 

McComis. 

MR. TOTONCHI: Next, I'd like to 

welcome Dixie Samaniego and Greg Norwood, who are the 

primary and alternate negotiators for dependent students. 

MS. SAMANIEGO: Good morning, everyone. 

MR. NORWOOD: Good morning, Greg 

Norwood. 

MR. TOTONCHI: I would like to welcome 

Rajeev Darolia, who is an adviser for economic and/or 

higher education policy analysis and higher education 

data. 

MR. DAROLIA: Morning. 
 

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Committee Meetings - 11/03/21 

MR. TOTONCHI: I'd like to welcome Jaye 

O'Connell and Will Shaffner, who are the primary and 

alternate negotiators for federal family education loan 

lenders and/or guarantee agencies. 

MS. O'CONNELL: Morning, Jaye 

O'Connell. 

MR. TOTONCHI: Is Will Shaffner 

present? 

MR. SHAFFNER: I'm having a 

conversation by myself, sorry, I'm on mute. Hi, everyone, 

I need more coffee. 

MR. TOTONCHI: Fair enough. Welcome. 

Alyssa Dobson and Daniel Barkowitz, the alternate of the 

and I apologize, I reversed those, the alternate and 

primary for financial aid administrators and 

postsecondary institutions. 

MR. BARKOWITZ: Morning, everyone, 

Daniel Barkowitz here. 

MS. DOBSON: Good morning, Alyssa 

Dobson. 

MR. TOTONCHI: Marjorie Dorime-Williams 

and Rachelle Feldman, the primary and alternate 

negotiators for four-year public institutions of higher 

education. 

DR. DORIME-WILLIAMS: Good morning, 
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Committee Meetings - 11/03/21 

everyone, Dr. Dorime-Williams here. 

MR. TOTONCHI: Rachelle Feldman 

present? Okay. Michaela Martin and Stanley Andrisse, the 

primary and alternate negotiators for independent 

students. 

MS. MARTIN: Morning. 

DR. ANDRISSE: Good morning, everyone. 

Pleasure to be here with you. 

MR. TOTONCHI: Bethany Lilly and John 

Whitelaw, primary and alternate negotiators for 

individuals with disabilities or groups representing 

them. 

MS. LILLY: Morning, everybody. 

MR. WHITELAW: Good morning, all. 

MR. TOTONCHI: Persis Yu and Joshua 

Rovenger, primary and alternate negotiators for legal 

assistance organizations that represent students and/or 

borrowers. 

MS. YU: Good morning, everyone. 

MR. ROVENGER: Morning, everyone. 

MR. TOTONCHI: Noelia Gonzalez, 

alternate for minority serving institutions. 

MS. GONZALEZ: Morning, everybody. 

MR. TOTONCHI: Misty Sabouneh and 

Terrence McTier, primary and alternate negotiators for 
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Committee Meetings - 11/03/21 

private nonprofit institutions of higher education. 

MS. SABOUNEH: Good morning. 

DR. MCTIER: Morning, Dr. McTier here. 

MR. TOTONCHI: Jessica Barry and Carol 

Colvin, primary and alternate negotiators for proprietary 

institutions. 

MS. BARRY: Good morning, everyone. 

Jessica Barry here. 

MS. COLVIN: Good morning. 

MR. TOTONCHI: Heather Jarvis, adviser 

on qualifying employers on the public on the topic of 

Public Service Loan Forgiveness. 

MS. JARVIS: Good morning, Emil. Good 

morning, everyone. 

MR. TOTONCHI: Good morning. Joseph 

Sanders and Eric Apar, primary and alternate negotiators 

for State Attorneys General. 

MR. SANDERS: Morning, everyone. 

MR. APAR: Morning, everyone. 

MR. TOTONCHI: David Tandberg and 

Suzanne Martindale, primary alternate negotiators for 

state higher education executive officers, state 

authorizing agencies and/or state regulators of 

institutions of higher education and/or and/or loan 

servicers. 
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Committee Meetings - 11/03/21 

MR. TANDBERG: Good morning, everyone. 

MS. MARTINDALE: Morning. 

MR. TOTONCHI: Jeri O'Bryan-Losee and 

Jen Cardenas, and I'm being deliberate about Jen, primary 

and alternate negotiators for student loan borrowers. 

MS. O'BRYAN-LOSEE: Good morning, 

everyone. 

MS. CARDENAS: Buenos dias, good 

morning, everyone. 

MR. TOTONCHI: Bobby Ayala and 

Christina Tangalakis, two-year public inst primary 

alternate negotiators for two-year public institutions of 

higher education. 

MR. AYALA: Good morning, everyone. 

MS. TANGALAKIS: Morning. 

MR. TOTONCHI: Justin Hauschild and 

Emily DeVito, primary and alternate negotiators for U.S. 

military service members, veterans or groups representing 

them. 

MR. HAUSCHILD: Morning. 

MS. DEVITO: Good morning. 

MR. TOTONCHI: And also, Jennifer Hong 

of the Department of Education. 

MS. HONG: Good morning, welcome back. 

MR. TOTONCHI: And who is present here 
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Committee Meetings - 11/03/21 

for the Department of Education, Office of General 

Counsel this morning? 

MR. DAVIS: Good morning, everyone. 

Todd Davis back again. Thank you. 

MR. TOTONCHI: Excellent. Did I miss 

anyone? Excellent. Okay, well, let's get rolling with the 

program today. Before we jump into Borrower Defense, 

which is our next big topic to discuss, I understand 

Jennifer from the Department has a few general remarks. 

MS. HONG: Morning everybody just 

wanted to flag, today is Wednesday. We're midway through 

session two of the negotiations. We have a lot on our 

agenda, as you all know and a lot to discuss. We really 

appreciate the discussions thus far. It sounds like, just 

to review, I want to backtrack because I'm growing a 

little bit concerned about where we are on different 

issues. Sounds like interest capitalization is the one 

issue where we are all in consensus under the current 

proposal. So I'm pleased about that. We're pleased about 

that. I realize, Jaye is still interested in the FFEL 

language if we're being able to vote on the discharge 

issues, however, I felt like TPD was an encouraging 

discussion. We're going to go back and we're going to 

review for the end of the week again because I think it 

bears repeating what the sticking points are for some of 
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Committee Meetings - 11/03/21 

these issues. And as I mentioned before, you know, going 

back on the five years with TPD, we're taking that under 

consideration. I believe that was the main issue for 

total permanent disability discharge. So I think that is 

in a good place as well. With regard to closed school, 

I'm a little concerned about where some of the committee 

is with regard to reenrollment and then the institutional 

representatives in terms of the definition. 

MS. HONG: I don't know if that's 

something that we can carve out some time for you all to 

discuss and find a meeting place. We are we are bound by 

the master calendar, the master calendar stipulated in 

the Higher Education Act that we that we've got to 

publish any, you know, the outcome of these rules if we 

reach consensus by November 1st, the following year. So I 

just want to remind people that this is our goal here is 

consensus. We want to have everybody on board. We're here 

in good faith. But if we don't reach consensus, then the 

Department will publish, you know, whatever rule or 

policy direction that we see fit. So we just we really 

want to remind folks about the goal of consensus. It is 

Wednesday in session two, so as much as we can remedy 

kind of sticking points, articulate those sticking points 

so that we can be clear on where we are with these 

things, I think that would be very fruitful going 
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Committee Meetings - 11/03/21 

forward. And I thank you all for your continued 

commitment to this process. 

MR. TOTONCHI: (Inaudible) hands before 

doing so, I'd like to recognize that Josh is present for 

legal aid and that Greg is present for dependent 

students. If there were any other folks who don't intend 

to be at the main table right now that still have their 

cameras on, please turn off your cameras at this time. 

Alright, thank you, David. 

MR. TANDBERG: Appreciate those points 

by Jennifer. We are working under a, you know, fewer 

hours than typically are operated under with a negotiated 

rulemaking. And the last negotiated rulemaking that I 

was, I participated in, which was the last one before 

this one, we actually added an hour per day and actually 

added days in order to reach consensus. And so I, none of 

us want to spend any more time on Zoom than we have to, 

but it may necessitate us going to perhaps 5:00 Eastern 

Time if that worked for folks. I know that people out 

east may have obligations to pick up kids, et cetera, but 

I wonder about adding start going to five moving forward 

or perhaps even adding a day or two, or keep open the 

option of adding a day or two on on the back end if we 

reach that point. But it sure does seem like we have 

short days, even though they also feel long at the same 
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Committee Meetings - 11/03/21 

time. But we have five hours each day, which actually for 

a negotiated rulemaking is not much time. So just wanted 

to put that on the table of going until five each day 

Eastern Time. 

MR. TOTONCHI: Daniel? 

MR. BARKOWITZ: Thank you. In response 

to Jennifer, and again, thank you, and I appreciate the 

fair and accurate representation of the desire to move to 

consensus. It would be helpful. I had asked yesterday if 

Raj could present some data on closed schools. And I 

wonder if we have or can make time today if Raj is ready 

with those data. Again, I think that would be helpful to 

give us the context. So we have a sense of how big of an 

issue this is and and where this takes place. Because 

again, my sense is this is a much larger issue than I 

think we understand. 

MR. TOTONCHI: I understand that Raj 

will have something to share at some point today, most 

likely the afternoon. Bethany. 

MS. LILLY: Jessica was actually ahead 

of me, I'm not sure why she bumped over. 

MR. TOTONCHI: I don't know why, 

either. Jessica, please proceed and thank you, Bethany, 

for for that. 

MS. MACK: Really quickly. Sorry, 
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Committee Meetings - 11/03/21 

Jessica, if you put your hand up and then take it down 

and then put it back up, it will move you to the end of 

the line. So I just want you to know that folks move 

themselves when their hands go up and down. So we'll 

continue to call on the first person. So if you do 

inadvertently lower your hand, please put it right back 

up and we'll get to you in that sequence list. 

MS. BARRY: Yeah, which is exactly what 

I did. So thank you and thank you, Bethany. Jennifer, I 

just wanted to ask. I know there was a lot of support for 

the proposal that we put forth on closed school 

discharge, but I know you said the Department had some 

concerns with it. Is there any way we could get feedback, 

even like a red line document with feedback on it? I 

think that would help us come to consensus. 

MS. HONG: You know, that's why I tried 

to address it as succinctly as I could. Unfortunately, 

and you got you all know that you submitted more 

proposals yesterday that we appreciate. I urge you to do 

so, and getting the proposed language allows us to review 

that more expeditiously. We can't provide written 

feedback to you guys on every single proposal. We can 

discuss them here at the table. And just in general in 

the definition, we appreciate that discussion and what 

you're trying to address in terms of mergers and and 
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Committee Meetings - 11/03/21 

those issues, but in general in general. You know, the 

idea here and the policy direction from the Department is 

to just has to cast a net to capture students and address 

the proprietary, I'm sorry, the predatory actions of some 

of the institutions with regard to closed school 

discharge. And we have that being said, to the extent 

possible, we've tried to address in the proposed language 

through comments verbally, through quick emails, you 

know, any issues that you have with your proposals, but 

we can't do a red line back to each and every proposal. 

We just don't have that bandwidth. 

MS. BARRY: Can I just comment on that 

real quick? I totally understand that. I just think there 

are some situations that we presented that are not coming 

from a predatory place that I think we're where 

discharges are being applied, that is just not the 

Department's intent. So I hope when we're talking about 

closed school discharge next time and maybe if we see 

this data to that Daniel's talking about, maybe we can 

continue that conversation just a little bit further. 

MS. HONG: Nor nor was I suggesting I 

was suggesting that we were trying to address the 

predatory practices for the additions that we made after 

session one. 

MR. TOTONCHI: A few more hands up, you 
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Committee Meetings - 11/03/21 

know, we'll welcome those comments, obviously, we want to 

get into Borrower Defense. But go ahead, Bethany. 

MS. LILLY: I'll be very brief. I just 

I appreciate the Department's very clear focus on getting 

us to consensus, but I also want to just acknowledge that 

I think there are going to be things we're not going to 

reach consensus on. I think there are just large gaps 

between perspectives, and so I appreciate the reminder 

that that is our goal and that is something that we have 

agreed to in in the protocols, but that I think sometimes 

we just end up at that point where we're not going to be 

able to get there. And I I want to acknowledge that as 

part of this discussion, because I don't think that's a 

bad thing. I think people are just going to have 

different perspectives. 

MS. HONG: If I if I could just quickly 

respond to that. Thank you, Bethany, and we realize that 

that's always a possibility. I would just ask you to 

think and contemplate whether the current regulations, as 

written, is something that you would prefer than in the 

alternative, because that is the alternative, as are the 

current regulations, we're trying to improve upon them. 

So that is really the the issue that I wish I would like 

for you to consider when you look through these 

regulations, whether they are an improvement and whether 
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Committee Meetings - 11/03/21 

you can kind of move the thumb toward the middle or 

whether you prefer the current regs as written, so that 

that's the standard that we're looking at right now. 

MR. TOTONCHI: Josh. 

MR. ROVENGER: I just initially was 

just coming on here to voice support for adding time if 

needed, because I do think the discussions have been 

fruitful. But I do also want to respond to two points 

that have just been made. One, I actually respectfully 

disagree with the Department's framing of what we're 

doing here. The Undersecretary and Secretary and 

President have made very clear commitments to borrowers, 

and so I don't think it's I don't think the question 

we're faced here is current regulations, many of which 

were entirely decimated by the prior administration and 

what the Department has put forward. I think the question 

we need to be asking when we're evaluating these 

regulations is do these meet the commitments that the 

Secretary and the President and the Undersecretary have 

made to borrowers and students? And I think that's where 

a lot of the pushback that's coming towards the 

Department's positions is anchored. I also just want to 

address Jessica's comment and that proposal. Just to 

clarify the recordMR. TOTONCHI: Excuse me, one second, 
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Committee Meetings - 11/03/21 

Josh. Someone has unmuted themselves and we can hear 

them, which means we can't hear you clearly. Can everyone 

ensure that they are muted if they're not currently 

speaking? Thank you. Josh, proceed. 

MR. ROVENGER: Sure. So while those 

specific proposals may not be coming from a predatory 

place, I think I think from the legal aid constituency 

they’re, as written, a nonstarter. And so I don't think 

they had a significant consensus, as was alluded to. 

MR. TOTONCHI: I see a few more hands 

up. Daniel. 

MR. BARKOWITZ: Thank you. I want to 

just circle back to something that Dixie, I believe it 

was Dixie had said yesterday or asked yesterday about the 

question of again going back to school, the question of 

liability. In re-reviewing the document last night, I 

didn't see anything in the closed school discharge 

section about institutional liability. Dixie had asked 

the question about whether this was borne out of a 

concern for institutional liability, and it is in part 

for me. Again, if a campus of an institution shuts down, 

which I think we're going to find happens often, not the 

entire institution, the question of liability becomes 

germane. So I don't know, Jennifer, if there's any 

ability to provide any context on that or if I'm just 
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Committee Meetings - 11/03/21 

missing this. It doesn't appear in the regulatory 

proposal that was provided by the Department, so I'm not 

sure if it's in a different subsection or if there's a 

different place where institutional liability is 

mentioned as part of closed school discharge. So that 

would be an open question for me. 

MR. TOTONCHI: If you can note that in 

the chat, that would be great, Daniel. Justin. 

MR. HAUSCHILD: Yeah, I just I also 

understand what the Department is getting at here in 

terms of timeline and improvement in the regulations. But 

I also have to disagree with the framing that in a an 

improvement on currently deficient regulations is somehow 

adequate or sufficient. I mean, I think if we're going 

to, it's not. It's not the appropriate framing to be 

looking at deficient regulations and saying that simply 

approving them is good enough. Just improving bad 

regulations isn't enough, and we should be looking to see 

how we can make them as sufficient as possible. Ok. 

That's it. Thanks. 

MR. TOTONCHI: Yeah. All I ask as 

facilitators, you know, this means you're there and you 

like it [indicates thumbs up]. Here is you can live with 

it [indicates sideways thumb]. Just make sure that this 

accurately matches where you're at. If that if that's 
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Committee Meetings - 11/03/21 

fair. Okay? David. 

MR. TANDBERG: Yeah, I'd just like to 

call the question on adding an hour to each of our days 

if we could discuss it or just skip straight straight to 

a vote. 

MR. TOTONCHI: Oh, I. Jennifer, go 

ahead. 

MS. HONG: Yeah, I just want to jump in 

here and thank you, David, for the suggestion. All of, 

please note that my comments are in the context that 

we're doing this for the first time virtually. I think 

it's gone very well. We extended it to, you know, 

rulemaking is usually three days when we do it live. We 

extended it to five days purposefully and made the days a 

little bit shorter because there's a real Zoom fatigue or 

virtual meeting fatigue that's very real and I think the 

facilitators have had a lot of experience with this. So 

it becomes, strenuous hours together, I think becomes 

counterproductive at some point. But more than that, we 

have real limitations in terms of our technology and our 

commitments in terms of the people that are making this 

possible. So we would not be able to add time and I don't 

want to belabor this discussion anymore. My my point was 

simply, you know, great job, guys, thank you, and we just 

a reminder let's let's remember what the end goal is here 
 

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Committee Meetings - 11/03/21 

and that we are we we is we are dealing with a limited 

time frame that's the whole pressure of negotiated 

rulemaking, whether it's live, whether it's virtual. So 

to the extent that we can caucus or do whatever we need 

to do to kind of build some bridges on these sticking 

points before the end of the week, that would be really 

great. 

MR. TOTONCHI: Jessica, and then I'm 

going to call on myself. 

MS. BARRY: This will be quick, just to 

Josh's comment, I don't want to over-represent the 

support for that proposal. I just got excited about some 

support, so I just wanted to say that. 

MR. TOTONCHI: Folks, thanks so much 

for the comments. I'm sure you can see us in terms of the 

facilitators and what we're trying to help the parties 

accomplish is really zeroing in on where those gaps are. 

Anything you can do to help us with that is appreciated 

in your comments. Again, solution-oriented comments, you 

know, specific changes are ideal at this stage. So with 

that, keeping that mindset in our minds, if we could move 

to Borrower Defense. And with that, Jennifer, I'll ask 

you to tee that up for us. 

MS. HONG: Okay, thank you, Emil. I 

believe Vanessa's on if she could queue again, just 
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Committee Meetings - 11/03/21 

there's three Borrower Defense to repayment documents. 

The one has a proposed language, the lengthy one has a 

proposed language for our proposal. There is a cross 

reference to another set of regulations under our General 

Provisions section that has to do with an existing 

definition of misrepresentation that we will be cross 

referencing. But first, we will begin with the with the 

proposed language on Borrower Defense to repayment. 

Yesterday, I went through the general title so you can 

see from the titles the different processes that we're 

proposing and we'll go through each each one of them. So. 

Alright, this is the applicability, we we started getting 

into that, I believe Josh put some language forward to 

ensure that we're clear in terms of the new sub part 

being applicable to all loans pending before the 

Secretary, as well as applications received on or after 

July 1st, 2023 is when we're aiming to effectuate these 

regulations so we can just start in on page four. That is 

where we left off. The black, all this is new proposed 

language again and and definition. So we have definitions 

under the general sub-part. We did flag some areas where 

we've had some questions. If we pull stuff in from 2016, 

the first one that you will see on the middle of page 

four, subparagraph five is the term for provision of 

educational services. And I'll just read the definition 
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Committee Meetings - 11/03/21 

aloud aloud, it means the educational resources provided 

by the institution that are required by an accrediting 

agency or state licensing or authorizing agency for the 

completion of the student's educational program. And so 

we just wanted to tee that up to you guys from 2016. Are 

there any comments on that? And I see Joe's hand up. 

MR. TOTONCHI: Joe, please proceed. 

MR. SANDERS: Thanks, Jennifer. I'm 

going back to look at this. On the document that's 

Borrower Defense proposal. Sorry. I don't know what it's 

called the first Borrower Defense document, which just 

has language that I sent you guys. And the violation of 

State Law section, it talks about the provision of 

educational services. So I can hold these comments until 

we get to that State Law section. But in caucusing with 

my constituency, I did have people raise some concerns 

about the scope of provision of educational services as 

it relates to a State Law claim of Borrower Defense to 

repayment. Very brief overview, the concern was that 

there have been some very high profile cases of sexual 

harassment and sexual abuse of students at play. For 

example, the sports program cases like Michigan State or 

Penn State football and gymnastics programs. And so my 

constituency raised the concern, does provision of 

educational services cover things such as participating 
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Committee Meetings - 11/03/21 

in a sports program or using the pool at the campus gym. 

Situations where students could come to sexual harm and 

then not feel safe at the school and so have to withdraw, 

so that may that, I think applies to this definition and 

something that we just ask the Department to consider. 

MS. HONG: Thank you for that, Joe, and 

we'll unless are there any other comments on the 

definition, we can proceed and we're going to be pulling 

down your document shortly to discuss the other 

components of what constitutes the claim under the 

proposed federal standard. Okay, so moving along on page 

four. Okay, under the General Definitions, school and 

institution can be used and interchangeably, that's 

existing language. Okay, so so paragraph B is a federal 

standard for Borrower Defense applications. Again, we've 

repeated here that it's not based on disbursement, but 

receipt on or after July 1st, 2023 or applications 

pending before the Secretary. This also includes a Direct 

Loan or other federal student loan that could be 

consolidated into a federal direct consolidation loan may 

assert a defense to repayment under this subpart. And 

we've identified five bases for a claim; 

misrepresentation, omission of fact, breach of contract, 

aggressive, deceptive recruitment tactics, judgment 

against a school or, the Department's adverse action 
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Committee Meetings - 11/03/21 

against the school. So moving on to page five, we are 

going to pull up the misrep documentation just a moment, 

but before we do that, while we're on the discussion 

about educational services, there is a comment under 

paragraph three on page five, which comes again from 2016 

and whether this should be tied to the provision of 

education services or not. And that is the institution 

that the borrower received the direct loan or other 

federal student loan that could be consolidated into the 

Federal Direct Consolidation Loan Program to attend 

failed to perform its obligations under the terms of a 

contract with a student. So we'll tee that up for you to 

kind of chew on. In the meantime, I would like to use 

this time to kind of get into the misrepresentation 

discussion and if we could queue that document now. 

Vanessa, that is subpart F of proposed language. So what 

we were proposing under misrep, you see from the bottom 

of page four to page five in the main text, it makes a 

cross reference to made a misrepresentation as defined in 

34 CFR part 668 subpart F in connection with the 

Borrower's decision to attend or to continue attending 

the institution. And this is subpart F existing language, 

and you'll see the red lines are additions that we would 

like to make. So if we scroll down here. Yeah, if you 

could just scroll down to the first red line here, this 
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Committee Meetings - 11/03/21 

is this is the definition of misrep. We are also 

including here omissions of fact as defined under section 

668.75. We've added some language under 668.72 regarding 

the nature of education program or institution and adding 

the clause, “which may be included in the institution's 

marketing materials, website, or communications to 

students,” any misrep pertaining to those issues. Again, 

the black text is existing language.(b)(1), the general 

or specific transferability of coursescourse credits. 

clarified that language. Under 2, acceptance of credits 

earned through prior work at another institution toward 

the educational program at the institution. We can keep 

scrolling down. Size, location, facilities or 

institutionally provided equipment, books or supplies. 

Down. Yeah, and then there's a deletion there, and I 

think it's because we captured that elsewhere. And then 

the second deletion we've captured below some renumbering on the headings and then a new (m) (n) (o)and 

again, some of these are additions from above. But let me 

just read those aloud to summarize. “Actual institutional 

selectivity rates, rankings, or student mission profiles 

if they're materially different from those included in 

institution’s marketing materials,” and a representation 

regarding tax status of the institutionthat's different 

from the tax status as determined by the Secretary for 
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Committee Meetings - 11/03/21 

purposes of administering Title IV HEA programs. (o), 

specialized programmatic or institution certifications 

accreditation approvals that were not actually obtained 

or that the institution fails to remove from marketing 

materials, websites, or other communication. (p), 

assistance that will be provided in securing required 

externship or the existence of contracts for specific 

externship sites. And again, that is a new element that 

we would like to seek additional feedback on. Let's 

scroll down. I see your hand, Josh. Let me just get 

through this piece. Disclosures under those rules that 

are cross-referenced. And then, well, let's let's pause 

there because I see Josh's hand up, so it's a lot, and 

David. 

MR. TOTONCHI: Josh, you're on mute. 

MR. ROVENGER: Yep, there we go. 

Thanks. So I'll just start off by saying, I think there's 

a lot of good stuff in here that the Department has put 

forward, and we're generally supportive of these changes 

to the misrepresentation section in 668. My question, 

though, actually relates to subsection B in 685.401. And 

I'm I'm interested in hearing from the Department, 

whether it's a policy choice or whether the Department 

feels that there's a legal requirement for it to limit 

individuals who have a balance due to apply for Borrower 
 

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Committee Meetings - 11/03/21 

Defense at any time. I don't know, Jennifer, if you can 

answer that for me. 

MS. HONG: Well, this is the Borrower 

Defense regulations are with regard to discharges of 

loans, right, so if there's no loans outstanding, there's 

no claim to be brought. 

MR. ROVENGER: But isn't one of the, 

one of the remedies that the Department can offer a 

refund of monies paid? And if that's the case, is it a 

borrower who has paid off all of their loans but was 

defrauded, entitled to that money back under the Borrower 

Defense regulations? And so I guess that's where I 

struggle. I don't know if it's a policy choice then I 

would urge the Department to reconsider that choice 

because those borrowers would have a valid Borrower 

Defense claim and be entitled to their money back. If 

it's a legal restriction, I would be interested in 

hearing what the restriction is. 

MS. HONG: Thanks, Josh, I can take 

that back. 

MR. TOTONCHI: I see Todd has come off 

mute. Todd, do you have a response? 

MR. DAVIS: Yeah, Josh, I feel like we 

may have to circle back as far as fleshing this out a 

little more, but I think it's safe to say we have taken 
 

26 

Committee Meetings - 11/03/21 

the position and that it is a legal restriction and that 

this references outstanding money owed and you have to 

have, you know, a dollar and announce this specifically 

relates to loans and but you have to have some kind of 

outstanding direct loan balance. That's been consistent 

with our position about in pastimes consolidating FFEL 

into a Direct Loan program so that we can get this 

section of regulation, but if you'd like us to flesh that 

out a little more, I understand, and we can circle back 

on that. 

MR. ROVENGER: That would be good, 

yeah. 

MR. DAVIS: That was a legal position, 

not a policy choice in terms of the Department's current 

policy team. 

MR. ROVENGER: I understand. Yeah, that 

would be great if the Department could flesh that out a 

little bit. Thank you. 

MR. TOTONCHI: David. 

MR. TANDBERG: Within the existing text 

or the red lines when we're discussing misrepresentation 

is job placement rates included among the items that 

could be that considered misrepresentation. I didn't see 

it, so I'm thinking not, but that can be a more 

significant factor than some of the other admissions 
27 

Committee Meetings - 11/03/21 

factors that are included in the list. I guess I'm saying 

if it's not included, I would like to see job placement 

rates included among the items around the 

misrepresentation. 

MR. TOTONCHI: Thank you, David. Joe? 

MR. SANDERS: This is kind of a 

baseline question, but are the enumerated 

misrepresentations the only misrepresentations that can 

be considered or is or is this a non-exhaustive list? So 

if we're looking at 668.72, it's got all the, you know, 

this kind of gets at David's comment, right? Do we have 

to list job placement rates for that to be considered a 

misrep? 

MS. HONG: No, but to David's, David's 

point, we're going to get to it on page five there. We 

have captured job placement rates there, but it is not 

meant to be. It's, what does it say? It says not limited, 

Okay, which may, may be included. The point is it's not 

exhaustive. These are just examples that we're providing 

here. 

MR. SANDERS: Okay. Okay, thank you. 

MR. TOTONCHI: Justin. 

MR. HAUSCHILD: Yeah, and I think maybe 

I'll just limit my comments recognizing that this is a 

non-exhaustive list, we'd like to see a few other things 
 

28 

Committee Meetings - 11/03/21 

included, particularly when it comes to nontraditional 

credits earned and representations made by institutions 

in that regard, or accommodations available to folks with 

physical or mental health issues. But we'll just make 

some suggestions, understanding that this is 

nonexhaustive and just provide a general support for 

what's going on in this area. Thank you. 

MR. TOTONCHI: Yeah, please place those 

suggestions in the chat. Jessica. 

MS. BARRY: Thank you. I'm not sure if 

this is the right time to ask this question or not, but 

so I see that there's a definition of substantial 

representation and that that the student had to rely upon 

the misrepresentation or be harmed by it. Is that the 

basis of the Borrower Defense of the approved Borrower 

Defense claim is substantial or is it just 

misrepresentation? Because I think when you remove 

substantial, then you can get kind of back into that 

mistake standard of an inadvertent mistake, and I'm just 

not clear about it. So maybe someone can help you with 

that. 

MS. HONG: Thank you, Jessica. The the 

cross reference here is to cross-reference the 

misrepresentation definition generally. 

MR. TOTONCHI: Joe. 
 

29 

Committee Meetings - 11/03/21 

MR. SANDERS: Yeah, so to go to, to get 

back to Jessica's question is, is reliance required here? 

MS. HONG: So no, because we're not 

relying on the substantial misrep definition, just 

misrepresentation. 

MR. SANDERS: Okay. If for the record, 

you know, reliance is not an element of Illinois’s 

Consumer Fraud Act, I think Massachusetts and other 

states have the same standards, so we don't think 

reliance needs to be in there. It wouldn't be required 

under State Law claim. We don't think it should be 

required here either. 

MS. HONG: That is helpful, thank you. 

I can go ahead and proceed to 668.73 on page four. 

Unless, I see Heather's hand up, if you want to, if you 

had a comment on what we just talked about, Heather. 

DR. PERFETTI: Thank you, Jennifer, it 

was really relating to the provision on tax status, I 

think I understand what you're trying to convey. I just 

wondered if there was some clarity that could be offered 

there and certainly happy to post it in the chat. But I 

think that IRS tax status is trying to be distinguished 

from the Department status that it uses for Title IV 

access, is that right? 

MS. HONG: That's exactly right. You 
30 

Committee Meetings - 11/03/21 

know that we review changes of ownership and it's a 

different type of review, nature of review that IRS does. 

So the standard here is representing your tax status as 

understood by the Department. 

MR. TOTONCHI: Shall we proceed with 

the shared screen? 

MS. HONG: Great, thank you so. Some 

additions to page four. Major financial charges or 

financial assistance on date, we've added some language 

regarding to pay the cost of attendance at the 

institution to include part-time employment, housing, 

transportation assistance. There's a new (g), the amount, 

method or timing of payment of tuition and fees that the 

student would be charged for the program. And this is 

relevant to what was just raised regarding placement 

rates. Employability of graduates is the next section 

under 668.74. There's a comment on the bottom of page 

four regarding the incorporation of that element, which 

is actual licensure passage rates if they are materially 

lower than those included in the institution's marketing 

materials, website, or other communications made to the 

student. And then this is followed up by all the text on 

page five. We're really interested in getting your input 

on these, whether this language will address known 

examples of job placement rate manipulation and how it 
 

31 

Committee Meetings - 11/03/21 

will interact with existing rules for placement rates 

that accreditors in our states may use. Certainly 

interested in hearing from State AGs and Heather as well. 

If I could just go over some of these. I think it bears 

reading aloud. “Actual employment rates if they are 

materially lower than those included in the institution's 

marketing materials, website communications”. “Actual 

rates are calculated in a manner that is inconsistent 

with a calculation formula established by an accreditor, 

licensed body or the institution” or “actual rates that 

the institution does not disclose are inflated by means 

such as”, and you see some A through D examples there. 

Whether that's “including individuals in an employment 

rate calculation who are not bona fide employees, such as 

those individuals placed on a one-day job fair, an 

internship, externship or employment subsidized by the 

institution.” (B), “Including students in employment rate 

calculation who are employed in the field prior to 

graduation. (C), “Excluding students from an employment 

rate calculation due to the difficulty of placing that 

student” or (D), ”Excluding nonrespondents to a survey 

for calculating an employment rate.” And we ask that the 

institution furnish these documentation and other 

information used to calculate the institution's 

employment rate calculations. We can either we can sit on 
32 

Committee Meetings - 11/03/21 

this if you want to stew on it, I see hands raised so I'm 

going to go on mute. 

MR. TOTONCHI: I was on mute too. 

Misty. 

MS. SABOUNEH: Thanks. I think at least 

from my perspective and scenarios, I think that this 

touches on, I mean going through you can actually 

remember instances where all of these things happened. 

And so I think it's really important to include this for 

the intent but the thing I want to bring up, and I don't 

know that it's necessarily regulatory changes. Maybe it's 

a Dear Colleague Letter that comes out after. The idea is 

we want schools to disclose this kind of information, but 

it's kind of difficult so like unemployment rates, 

there's not really a standard that schools can measure 

apples to apples. So if there was some kind of definition 

on how you should measure your employment rates, I think 

that would help for students who are comparing. And then 

on (B), including students employment rate calculations 

that were employed in the field prior to graduation. I 

think this is important and we need to measure this. But 

from a school's perspective, I don't know how you would 

do that. Would we survey students before graduation and 

track that? So it's more just in the technicality of how 

schools could actually go about doing this in a 
 

33 

Committee Meetings - 11/03/21 

consistent way. 

MR. TOTONCHI: Joe. 

MR. SANDERS: Thanks. I'll be brief 

here. There's a lot that could be said, but I think the 

two points I want to make, one, this section upon 

request, the institution must furnish the Secretary 

documentation and other information used to calculate 

employment rate calculations. That's really important 

because it's hard to capture all the different ways that 

a job placement rate could be manipulated or calculated, 

and so providing the backup information is really 

important. The Department did that in their DeVry 

investigation and I think that requiring that in that 

instance led to a really good outcome. Second point I 

would make is is, you know, the best resource from the 

state attorney general's side that we have in terms of 

what to look at for job placement rates is probably the 

multistate consent judgment with Education Management 

Corporation. There were significant allegations of job 

placement rate manipulation in that case, and we 

negotiated a set of terms with the operator of the 

schools that the Department could look at in terms of, 

you know, an evidence-based investigation of these 

issues, and I'm searching for a link right now, and I'll 

throw that, a link to that consent judgment in the chat. 
34 

Committee Meetings - 11/03/21 

MR. TOTONCHI: Thank you, Joe. Daniel. 

MR. BARKOWITZ: Thanks, Emil. So I have 

two thoughts. The first is just a language question. And 

I believe number two, the way it needs needs to be 

clarified. So the way I interpret romanette two, it says 

actual rates the institution does not disclose are 

inflated, which means that the rates not disclosed are 

inflated by those means. I think the intention of the 

Department is the opposite. So actual rates that are 

disclosed are inflated by things that are that are actual 

rates are inflated by the following things not disclosed. 

So it's just a language construction question. I think 

the intention is reversed. In general, I have no issue 

with this. I think Misty raises a really interesting 

point and valid one on sub (B), and I would give a couple 

of examples for the Department to consider. For example, 

if I am employed, I'm thinking about my local economy, in 

a theme park local to where I live and I come into a 

program on hospitality and I graduate from that program 

and get a more advanced job in that theme park. By 

definition, I therefore have included my knowledge and 

grown my employability, but I would have to be excluded 

from the employment rate. So I would I would be, I would 

struggle a bit with that because again, you know, not 

necessarily. It's not necessarily the employability in 
 

35 

Committee Meetings - 11/03/21 

the field. It may be the skills are developing me for 

advancement in that field. I think the way this is 

written, this also again, sub (B) also provides 

disincentive for institutions to assist in externships 

and other programs that may lead to part-time employment 

prior to graduation. So at my institution, most of our 

students are part-time. It is likely that during their 

tenure, they will begin to find placement in the in 

employees in the field that could in fact lead to future 

opportunities. And we don't want to disincentivize that, 

and we don't want to penalize the school for encouraging 

students to explore the field prior to graduation. So 

again, I have some significant concerns about that sub 

(B) and thank you to Misty for highlighting that because 

I missed it on my first review. 

MS. HONG: Thank you. Thank you for 

your comment, Daniel, real quickly, I just want to point 

out that this is that's definitely not the intent of this 

action. Remember, this is this is applying to graduates. 

So I mean, with with the with the idea that those 

internships and externship placements would lead to 

meaningful full-time work for the graduate. 

MR. BARKOWITZ: Right. But I guess my 

feedback is that sometimes you're placed in an 

internship, say in your sophomore year that leads you to 
 

 

36 

Committee Meetings - 11/03/21 

part-time employment in your junior year. And by the time 

you graduate, you've already begun work in the field. 

That is not an internship or an externship. And by this 

definition, once I graduate, I would be, you know, I'd 

have to be excluded from that consideration. So, you 

know, the concept of prior to graduation is problematic. 

And again, it doesn't address my first point about 

further knowledge development in the field. 

MS. HONG: Point taken, thank you. 

MR. TOTONCHI: Thanks. I do want to 

note that Michale is now at the table on behalf of 

accrediting accrediting agencies. Michale, please. 

MR. MCCOMIS: Thanks. Nobody can 

pronounce that word, really. So just to echo and add on 

from a practical component what Daniel was just talking 

about that Misty brought up as well. So for just for my 

agency, there sub (B) about including students in the 

employment rate calculation who were employed in the 

field prior to graduation. Yes, to Daniel's point, 

oftentimes students will obtain employment in the field 

that stems from either an internship or externship or 

that they sought out and were able to get on their own. 

An HVAC technician who halfway through their program, 

starts working as a helper part-time before they get the 

full-time gig after graduation is an example of that. But 
37 

Committee Meetings - 11/03/21 

we we have guidelines and with my agency for, you know, 

employment classification, who can be classified as 

employed as part of our reporting mechanism. And one of 

the areas is career advancement. And so what we require 

from institutions for in order to count students as 

employed who were already employed is that they were able 

to maintain the employment position due to the training 

provided by the school because maybe technical elements 

of the position changed and they needed to get additional 

training, or that the student would be able to attest 

that from both the employer or the graduate, that the 

training supported the graduate’s ability to be eligible 

or qualified for advancement due to the training provided 

by the school. So we have those two carve-outs of what we 

call career advancement, and those are very important 

elements of the many programs that are offered, 

particularly in vocational fields. So I just offer that 

as probably being somewhat problematic to just a blanket 

you can't count anybody that was that was employed, you 

know, prior to graduating. I get what you're trying to do 

there. But the what happens more predominantly are these 

types of career advancement positions. 

MS. HONG: This discussion is helpful, 

I'm just wondering if that's easily remedied by 

qualifying that it's employment that is unrelated to the 
38 

Committee Meetings - 11/03/21 

program study that we're talking about. 

MR. MCCOMIS: If that's the case, then 

that would be a super useful clarification. I thought 

that what you what was intended here and reading it was 

that you were saying we've seen predatory practice where 

a student was enrolled, was employed as a medical 

assistant and they came out of graduation and they were 

still employed as a medical assistant. They didn't 

advance, they didn't get any gain, any gainful employment 

because of that. But if it's if it's no, you cannot count 

somebody in employment classification who was employed in 

an unrelated field, get the training and then still have 

that same job accomplished. If that's the intent, then 

that clarification would be very useful. 

MS. HONG: I think we certainly want to 

grab that those that population that you described 

Michale, and if either Michale or Daniel have any 

suggested language to send regarding the career 

advancement piece, that would be useful for us. 

MR. MCCOMIS: I'll post the, my 

agency's guidelines for employment classification in the 

chat and you'll see in there the specific language that 

we use. Would that be helpful? 

MR. TOTONCHI: Jessica. 

MS. BARRY: Yeah, I just wanted to 
 

39 

Committee Meetings - 11/03/21 

agree with Michale and Daniel on a lot of those points. I 

went through this with our career services director too, 

and he had some concern about internships being included 

because he's seeing that especially our highest-level 

employers, our most exclusive employers, a lot of them 

are starting almost every employment, at least at the 

entry level with an internship, and sometimes we have a 

really short window to place the graduate. And so he 

would hate to see for us to start shying students away 

from those internship opportunities when we have that 

short window, because sometimes those lead to the best 

employment opportunities. So just something to think 

about. 

MR. TOTONCHI: David. 

MR. TANDBERG: Just a point of 

clarification if, using the internship example, would 

those students under the red line text that we're reading 

now, would those students be excluded from both the 

numerator and the denominator? Or are they just excluded 

from the count of employed students? Because that that 

would make a big difference as to the incentives, right? 

If they count against the school, I could see an 

incentive being put there, but if they're not counted at 

all, then it wouldn't be the same kind of incentive that 

Jessica is highlighting. 
 

40 

Committee Meetings - 11/03/21 

MR. TOTONCHI: Michale. 

MR. MCCOMIS: Well, well, just to 

David's question, that would not be an allowance that 

most accreditors would have. So you don't get you don't 

get to pick and choose which graduates. Now you report on 

there are some exclusions. But one of those that that my 

agency doesn't include students that were employed 

before. So that's the only way you can take them out as 

from both the numerator and the denominator. Otherwise, 

we're counting all graduates. Of that number, how many 

are employed utilizing the guidelines for employment 

classification? 

MR. TANDBERG: And that was my 

assumption also. And I think that's the way most state 

agencies would calculate it. It wouldn't be an exclusion. 

MR. TOTONCHI: Josh. 

MR. ROVENGER: Thanks, I guess I'm a 

little confused by this discussion, just because, I mean, 

doesn't this provision only come into play if there are 

misrepresentations regarding what the institution is 

doing here? So let's say if an institution is puts 

forward an employment, a job placement rate and says this 

includes individuals who are placed in an internship or 

individuals who were employed in the field prior to 

graduation. I mean, that wouldn't constitute, I don't 
41 

Committee Meetings - 11/03/21 

think, a misrepresentation if the institution is being 

honest about it on the front end, though, if I'm 

incorrect about that, that would be helpful to know. 

MS. HONG: Josh, thank you. That's 

you're absolutely right, the qualifier preceding this 

section is misrepresentation regarding the employability 

of an eligible institution's graduates includes, but it's 

not limited to limited to false, erroneous or misleading 

statements concerning everything under that section. 

MR. TOTONCHI: Daniel, I see your hand 

is up. 

MR. BARKOWITZ: Yeah, thanks. I just 

want to respond to Josh, I think this is my question 

about the romanette. And again, Jen, thank you for 

teaching me the word romanette, but the the romanette 2, 

I just I don't understand the English construction of 

that clause. The actual rates of the institution does not 

disclose. So is it is it that the rate is not disclosed 

or the information is not disclosed? That's where I'm, 

Josh, that's where I'm struggling in concert with the sub 

(B). And I appreciate your clarification, but I just I 

need some help on understanding what's intended by that. 

And I'm not sure the language gets to what you've stated, 

Josh. So as I read it, is it the rate we're not 

disclosing or the fact that the rate is calculated based 
42 

Committee Meetings - 11/03/21 

on what's listed below that becomes the issue? 

MR. TOTONCHI: Michale. You're on mute, 

Michale. 

MR. MCCOMIS: That's right, I mean, I 

think that the construction of the language here is that 

the that the issue is that the rate is inflated by using 

these means. That any use of these means, by definition, 

inflates the rate, you can't qualify that away. 

MS. HONG: Yeah, I think that that 

wasn't intentional. I think we're talking about the 

inflation of the rate. That does not disclose 

(inaudible), Doesn't add anything (inaudible). 

MR. TOTONCHI: Thank you all. Jennifer, 

at this stage, do you want to continue to proceed? 

MS. HONG: Yes. Moving on to continuing 

on that same document. A new 668.75 in fact. And so we 

were just interested in your feedback. This is just an 

example of what we're considering and where we're 

considering placing it. I believe some of this was at 

least a result of our back and forth with state AGs and 

draws elements, terms from New Jersey's Consumer Fraud 

Act, including concealment, suppression or absence of 

material information. Except that Subpart (c)is drawn 

from language already in the federal regulations 

concerning misrepresentation. So we are open to feedback 
43 

Committee Meetings - 11/03/21 

on the appropriateness of this language and are open to 

feedback and alternate suggestions for the best ways to 

define omissions. Let me just read it again real quickly. 

“An omission of fact includes the knowing concealment, 

suppression or absence of material information or 

statement with likelihood that others rely upon such 

concealment suppression or absence in connection with the 

nature of the institution's education programs, financial 

charges or the employability of the institution's 

graduates. An omission of fact includes, but is not 

limited to, the knowing concealment, suppression or 

absence of material information or statement concerningthe entity that is actually providing the educational 

instruction. (b), the availability of slots or 

requirements for obtaining admission in a program where 

the institution placed the students in a preprogram at 

the time of enrollment. (c), factors that would prevent 

an applicant for reasons such as prior criminal records 

or preexisting medical conditions from qualifying to meet 

requirements that are generally needed to be employed in 

the field for which the training is provided. (d), the 

nature of the institutions, educational programs, 

institutions, financial charges or the employability of 

institution's graduates.” 

MR. TOTONCHI: Joe. 
 

44 

Committee Meetings - 11/03/21 

MR. SANDERS: So I want to make one 

point and then I'd like my alternate actually to weigh in 

here as well. I'm concerned by the term “knowing”. I 

think it's very difficult to prove a school's state of 

mind on an omission, and, you know, that's not a part of, 

that's not under Illinois's Consumer Fraud Act, that's 

not required. And so I think any student is not going to 

be in a position to prove what the school knew or didn't 

know. And I think even from a law enforcement 

perspective, you know, we don't normally have to prove 

that. So it would be a higher standard than we are 

currently held to by our State Laws. That being said, you 

mentioned New Jersey, so I want to refer to my my 

colleague from New Jersey to the extent that he knows 

whether that would be an element in his state. 

MR. TOTONCHI: Eric, if you could come 

on camera. There you are. 

MR. APAR: Yeah, thanks, Joe, so I 

would have to go back to some of my colleagues and ask 

whether they've had experience interpreting the term 

“knowing” I don't want to speak out of turn here. 

MR. TOTONCHI: There are no other 

comments at this stage, Jennifer. 

MS. HONG: Yeah, I think. And then the 

last part is just a severability piece. Unless there are 
45 

Committee Meetings - 11/03/21 

any other comments, we can maybe take a, I see Heather. 

MR. TOTONCHI: Heather, please proceed. 

DR. PERFETTI: Thank you. And this may 

be a question for Jennifer, I'm trying to gain a sense 

for the interconnectedness of what is here with 

institutional information that's required under 668.43 or 

668.45. So just trying to understand if there is a 

mapping certain information is required by institutions, 

is the misrepresentation and omission intended to be 

reflective at all of what institutions are required to 

provide for enrolled and prospective students under those 

other regulations? 

MS. HONG: Right, so remember that, 

yes, the answer is yes, this is from this is under 

general provisions, so this is not under the BD 

regulatory section. We are just cross-referencing it for 

consistency sake. So this is under general provisions 

because we have an existing definition. We want to make 

sure that we can just as opposed to proposing or being 

redundant in the effort to streamline. We're just going 

to cross reference what already exists. And we've 

provided more other examples to the nonexhaustive list. 

DR. PERFETTI: Thank you. 

MR. TOTONCHI: Justin. 

MR. HAUSCHILD: Yeah, thanks. I just 
46 

Committee Meetings - 11/03/21 

wanted to flag that I'm going to drop some alternative 

language into the chat on this. I think we're generally 

supportive of what the Department is trying to do here, 

but harbor some of the same concerns that Joe mentioned 

with regard to the word “knowing” and “reliance”, 

generally speaking. And we'd like to see some additional 

categories included here to address things like omissions 

of back with regard to the academic experience and 

instruction who who's providing that at the institution 

specifically with regard to ineligible third parties, how 

academic terms are initiated in instances where a student 

isn't notified or they may be enrolled in a term without 

their express consent or knowledge. And then similarly, 

with regard to the structuring of programs and the 

student not having affirmative information with regard to 

how those programs are structured or bundled or staffed. 

So I'll drop that language in the chat. Thank you. 

MR. TOTONCHI: Thanks, Justin. So at 

this stage, Jennifer, unless you would like any other 

guidance, let's take a temperature check for tentative 

agreement on the red line text that's currently in front 

of you now. So give me, please provide your thumbs and 

please be ready if you are, you know, if you haven't 

spoken up and if you have a serious reservation to speak 

up. Oh, we're cutting you off Joe and Daniel. Go ahead, 
 

47 

Committee Meetings - 11/03/21 

Joe and Daniel, and then we'll see if we can do a temp 

check after your comments. 

MR. SANDERS: There's a lot that we 

just went through, and I don't feel like I'm in a 

position to temp check all that, right, that's like. And 

I understand that it's kind of a standard thing, but I 

mean, and in terms of we're dealing with a lot, but I 

don't know that I can temp check everything we just went 

through up to this point this morning in one go. 

MR. TOTONCHI: Fair. Fair enough. That 

was a lot. Daniel, is your, the same comment? 

MR. BARKOWITZ: Well, sort of, I guess 

I'm asking. I wanted to ask, is it specifically the 

misrepresentation section? Because we started on the much 

larger section. So I'm just trying to understand what it 

is we're temp checking. Are we temp checking the 

misrepresentation section or the language that also is 

included in the general overarching overarching language 

in the reg text pages one through five that we've already 

discussed? So I'm comfortable taking a temp check on the 

misrepresentation section. I just, I want to understand 

what it is we're temp checking. 

MR. TOTONCHI: Yeah. Well, let's let's 

I actually appreciate. I mean, Jennifer, if you have 

another way of that, you'd like some feedback, please 
 

48 

Committee Meetings - 11/03/21 

suggest it. But you know, for example, Suzanne in the 

chat has suggested by section, we can do that. But 

Jennifer, do you have another suggestion? 

MS. HONG: Yeah, if I would just if 

it's helpful to break it up. Like we've gotten to the 

federal standard, what, you know, the five bases that 

constitute a federal standard in the general BD 

regulations. If we could do a temp check to where we are 

for that and then another temp check on 

misrepresentation. I realize there's a lot in 

misrepresentation. I don't know if that's what Joe's 

concerned about, but just it's just a temperature check 

just to see generally how people are feeling up to this 

point on those issues. So two different temperature 

checks, one where we are generally, we talk about the 

structure of the BD regs, the probability of the BD regs 

and what the five bases for claim. And so that's one. And 

then and then temperature check on the definition of 

misrepresentation. 

MR. BARKOWITZ: And again, I'm sorry, 

but one of the five representations is aggressive 

recruitment, I know we have yet to discuss that. So 

again, in theory, I could vote, but until we have, the 

particular conversation, it's going to hard. 

MR. TOTONCHI: Are you referring to the 
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Committee Meetings - 11/03/21 

proposal that's been made by committee members, not the 

Department or? 

MR. BARKOWITZ: No, the Department's 

proposal that is a separate document from the Department 

on what constitutes aggressive recruitment. And then 

there was a counter proposal made as well. 

MS. HONG: You're right, we can ask, so 

would it be better because we're just going to get into 

the aggressive recruitment, that discussion is more, you 

know, more of a, I guess less refined. So if we what if 

we could take it, how about a temperature check on misrep 

and then we can move into the aggressive recruitment 

discussion if people are comfortable with that? 

MR. TOTONCHI: Okay, is everyone clear 

with a temp check is on at this stage? You can say no if 

you're not. So let's take a temp check for tentative 

agreement on the misrepresentation section. Let me see 

thumbs please. Alright, I know a number of you have 

raised a number of points during our conversation, if 

there are any additional points you haven't raised, 

please do so. I can't tell if there are any thumbs down 

for for folks that did not speak during this section. If 

you haven't spoken, please share your serious 

reservation. Jessica, go ahead. 

MS. BARRY: I've spoken, but I just 
 

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Committee Meetings - 11/03/21 

want to be clear, because I've been thinking about the 

conversation that's been going on. I just think that the 

Department should have to determine that there was a 

reliance upon the misrepresentation and the student was 

harmed or the borrower was harmed. So that's why I voted 

no. 

MR. TOTONCHI: Joe. 

MR. SANDERS: It's possible that I 

could be a sideways on this, but I have a 3:00 p.m. 

central time call with my constituency where this is 

going to be covered and so I don't want to give the 

Department that false sense that we're all behind this 

before I get feedback from, you know, I've got 50 other 

members that I should, because this is so central to kind 

of what we do, I want to get that feedback before I 

before I give the thumbs up, so that's that's the only 

addition I have. 

MR. TOTONCHI: Thanks. David. 

MR. TANDBERG: Yeah, I could likewise 

very easily be a sideways, and maybe if you'd asked me 

five minutes later, I would have been a sideways. The big 

concern I have is that just I need to, there was really 

important (inaudible) now written, and I'm not clear as 

to which points the Department has agreed with us on. And 

until I have clarification on those points, I can't 
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Committee Meetings - 11/03/21 

really be a yes. But I'm, you know, very close to it. 

MS. HONG: Just just to follow up with 

that, David, you broke up a little bit. If you could 

speak more specifically about what, you broke up, so what 

points were keeping you from sideways? 

MR. TANDBERG: Yeah, it was it's mainly 

around the language regarding the disclosure and 

misrepresentation. Are we, are the items there, things 

that cannot be used in the calculation, for example, of a 

job placement rate or are they items that must be 

disclosed if they are being included in the job placement 

rate? That's a huge difference or any of the 

misrepresentation, you know? And so, you know, 

clarification on that is the Department, what's the 

department's intent? That never became clear to me. 

MS. HONG: Is that the same concern 

with the accrediting agency constituency? 

MR. TOTONCHI: You're on mute, Heather. 

DR. PERFETTI: You're asking about 

accrediting agencies, I was agreeing, yes, with David, I 

think until we can see the language and process how that 

would be implemented, it's hard to give us thumbs 

sideways even right now. 

MS. HONG: Right, but we're we're 

talking specifically about the employability of graduates 
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Committee Meetings - 11/03/21 

section, the placement rate. 

DR. PERFETTI: And I think also some of 

the conceptual language that Daniel was referencing, once 

that gets clarified, I think it would be helpful for us 

to see it rewritten as well. 

MR. TOTONCHI: Well, at this stage, 

just before we move on, oh, Greg, you have a comment. 

Please. 

MR. NORWOOD: Yeah, real quick and we 

were thumbs sideways, but I was just wondering how we 

could even prove, and I think Josh mentioned this, I 

mean, State AGs mentioned just earlier, how can you even 

prove reliance or how the Department of Education could 

prove that? And if like, if that is a prohibitor, I would 

just caution to maybe develop, how could we even as 

students know, you know, we're talking about students? 

Not not legal experts, but but students. How could we 

prove that an institution or whatever the case may be? 

Thank you. 

MR. TOTONCHI: Thanks, Greg. Jennifer, 

before we move on, seeing as there’s no hands up, does 

the Department, would the Department like any other 

guidance from the committee before we move on? 

MS. HONG: No, I think this is helpful. 

We'll move on, we can move on to the document. The third 
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Committee Meetings - 11/03/21 

document, Vanessa, this is the one that says draft 

Borrower Defense to repayment language there is, it's a 

separate document, and this will help us talk about 

aggressive recruitment. Great, thank you. So this is, 

this is a document we've kind of collated suggestions 

from State AGs, some 2016 language, BD language and 

language from the CFPB. Let's put a, I wanted to jump 

down to, well, okay, we'll talk the violation of State 

Law. Actually, Joe, if you're on, can you talk about this 

piece on the violation of State Law? This is this is what 

you, your constituents have provided and then we can go 

into aggressive recruitment. 

MR. SANDERS: Yeah, sure. So, you know, 

our concern here was with consideration of State Law 

claims and not wanting to create additional burdens for 

students who wanted to have a State Law claim considered. 

And so, we also heard the Department on the 

administrative burden of considering State Law in all 

instances, and so we tried to come up with a compromise 

here and so we pulled language from the 2016 rule, that's 

the language in red. And I should note that we had 

feedback and actual help drafting from the legal services 

community, so kudos to Josh and Persis's colleagues at 

the National Consumer Law Center for their work on this. 

So we pulled the language from the 2016 rule that's in 
 

 

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Committee Meetings - 11/03/21 

red, then we tried to create this compromise between the 

Department's original proposal, which was that you'd have 

to appeal and bring your State Law claims separately 

after denial. And so if you look at section (a), section 

(a) has a requirement that the State Law be alleged in 

the application. And it gives the Department the 

discretion to look at the State Law piece prior to the 

federal piece should they choose to do so. And then in 

(b), we have a component that allows the Department to, 

should the Department choose to do so, they could 

consider it without the allegation. So bottom line here, 

we're trying to bridge a gap that would reduce a burden 

on students, but also not place an un-administrable 

burden on on the Department, that's the goal. Happy to 

take questions if I can clarify for this. 

MS. HONG: Actually, I did. I put you 

on the spot and I asked you to talk about this. If we 

could put a pin on this piece, I did want you to present 

it so that folks can kind of sit with it. We're going to 

talk about this proposal and the state review generally 

when we get into the adjudication. If we could put a pin 

on that discussion and then continue with aggressive 

recruitment. But thank you for that, Joe. And again, this 

is, this continues with language that the State AGs had 

put forward and that is, I can read that out loud, 
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Committee Meetings - 11/03/21 

aggressive, “aggressive recruitment means exerting 

unreasonable pressure upon a consumer to enroll in an 

institution without limiting the general application of 

foregoing the following conduct is a violation of the 

section” and again, and Joe, you can jump in here as 

well, because I realize you provided this, these are all 

different citations where some of these subsections come 

from. But just to give a quick review, “Exploiting a 

consumer’s fears, anxieties, insecurities, or any 

specific misfortune or circumstances of such gravity as 

to impair the consumer's judgment to influence the 

consumer's decision with regard to the institution. (b), 

Interfering with the ability of a consumer to understand 

a term or condition of enrollment or a financial product 

or service related to enrollment. (c), Taking 

unreasonable advantage of someone's lack of understanding 

of higher education and financial aid by reason of 

socioeconomic background, lack of familiar experience and 

higher education or other reason.” We've heard a lot 

about that throughout this discussion session one. “(d), 

taking unreasonable advantage of someone who recently 

relies on the recruiting individual or entity to act in 

their interests; Reasonable reliance shall be presumed if 

the recruiting individual uses a title that implies 

they're acting in the best interest of the student, 
 

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Committee Meetings - 11/03/21 

including but not limited to admissions for guidance 

counselor or academic adviser. (e), unsolicited contact 

with a borrower that has previously requested not to be 

contacted. (f), the use of threatening or abusive 

language or behavior. And (g), exerting unreasonable or 

unsubstantiated time pressures upon a consumer.” Just to 

go back to the issue of reliance. I just wanted to loop 

back to Greg and I think Jessica. Remember, we're 

inferring reliance if a reasonable person could have 

relied upon it. And let's let's pause there and see if 

there's any questions or concerns about that. Everything 

under aggressive recruitment in that first paragraph. 

MR. TOTONCHI: Daniel. 

MR. BARKOWITZ: Thank you, Emil. So, 

first of all, I note that this is one of I think, three 

options that are listed from the Department or, you know, 

captured in this document. And then a group of us 

provided a fourth definition and concept for discussion 

as well. I do have, so first of all, I want to be very 

clear, none of these things are good and appropriate. And 

so I have I have reasonable agreement with with this 

definition in terms of the the fact that all of these are 

bad actors and bad actions. I have a concern, though, 

about the subjective nature versus objectivity and 

reliance on objective statistics for some of these. So, 
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Committee Meetings - 11/03/21 

for example, I'm not sure how one would demonstrate the 

exploiting of a consumer's fears or the interfering with 

the ability to understand the term. So I'm looking for 

some help with some of that. And again, this is, others 

of this piece are very objective. So the use of 

threatening or abusive language is objective and can be 

documented. But the subjectivity concerns me on some of 

these. And while I understand the intent and support the 

intent, I wonder if there's another way to get to this 

without it being a subjective piece. So if we're in a 

meeting, I could be accused of subjecting or exploiting 

your fears or anxieties without without knowledge. So 

that's that's really, I think the objective and and I 

would suggest again, I know we're not there yet, 

Jennifer, but let's, you know, if we can also look at the 

group of proposals that that some of us put forward as 

part of this conversation. We've tried to be objective in 

our in our assessment. 

MS. HONG: Thank you. Thank you, 

Daniel. And yes, let's revisit some of the language that 

you put for you and others put forward. And the point is 

well taken. We have the same concerns here, so we are 

open to, you know, these these are the concepts that 

we're trying to get out. What does that look like in 

terms of when you're adjudicating these claims? And I 
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Committee Meetings - 11/03/21 

think getting to language that is measurable in terms of 

what this result in, I think that's we would appreciate 

any feedback or proposals or proposal language on those 

issues. 

MR. TOTONCHI: We have a number of 

hands up. And I am curious as to whether the hands have 

to do with this specific option or if it's another 

option. So just if your comment is going to be regarding 

another option that we haven't gone over yet, just please 

be clear about that, okay? David. 

MR. TANDBERG: Yeah, in all of these 

items, one of the concerns that I have in my constituency 

is whether these can be written to apply to agents of a 

college. So we see increasingly that nonprofit and public 

institutions are contracting with external for-profit 

firms for their recruitment admissions, enrollment 

management services, often their contracts are written in 

such a way that they try to provide themselves protection 

against such regulations and laws. And so we would want a 

misrepresentation, aggressive recruitment and other rules 

that we write to apply to the institutions or the agents 

of the institutions. And so I see Joe. Yeah, yeah. Thank 

you, Joe. So that that hopefully it sounds like is in the 

language that we work with Joe on. And but something to 

keep in mind for all of the rules that we're considering 
 

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Committee Meetings - 11/03/21 

is when do we want them to apply to other entities 

contracted acting on behalf of the institution? Because 

that's a growing problem. 

MR. TOTONCHI: Thanks, David. Greg. 

MR. NORWOOD: Yeah. Quickly, I just 

wanted to, first of all, appreciate fin-aid for, 

financial aid, for for the comments. But I think again, I 

think when when you come, I think context matters and 

when you're talking about individuals from low income 

communities, from, you know, people of color, or even our 

veterans, I think that some institutions know how to play 

on some of the fears that that the future isn't possible 

without a college education from this particular 

institution or that, you know, just there are different 

ways by which institutions use context to try to almost 

suggest that without this collegiate experience, there is 

no hope type, type, type of thing. So I think that is 

something that is relatively easily, relatively easy to 

approve. And I think that while it would be a challenge, 

maybe towards institutions, I understand your object and 

subject of conversation or comment, but I think that I 

think that this is one that that happens all the time. 

And certainly, I think a lot of students have an 

experience whereby they were contacted by a recruiter, 

contacted by someone who essentially told them that this 
 

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Committee Meetings - 11/03/21 

institution is the only institution and there's no other 

way to go about success. And that's not necessarily true 

at all, particularly those within the context of the one 

that I come from. Right, low-income, you know, colored 

community. 

MR. TOTONCHI: Alright, Joe. 

MR. SANDERS: Yeah, so I want to push 

back on the idea that this standard is somehow subjective 

and can never be proved because that's just not the case. 

This was common practice in the industry, the for-profit 

school industry for a long time. We have investigations 

where we have training manuals that talk about things 

like the pain funnel, right? This is a term that a lot of 

us on the call today have heard that exploit the 

borrower's pain funnel. And this is the type of thing 

that Greg's talking about. Schools would train their 

recruiters to specifically get the person talking about 

their hopes and goals and dreams. And then they would 

push the person to enroll by saying, well, don't you want 

to provide a better life for your family? Don't you want 

to do this? Don't you want to do that? You know, you can 

do it. Just sign up with us today. Right? So this is 

well-established activity. It can be proven through 

internal documents from the company. It can be proven 

through call recordings. I have listened to a lot of 
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Committee Meetings - 11/03/21 

recruiting phone calls in my eight years at the Attorney 

General's Office and they're the type of things that make 

you blush when you when you hear the stuff that 

recruiters tell students in order to get them to enroll. 

And so, this standard here, you know, we have to get at 

this conduct, this is what aggressive recruitment has 

looked like for the last 10 years. Happy to talk about 

tweaking the language, but am 100 percent against 

removing it, because it's too subjective or anything 

along those lines. 

MR. TOTONCHI: Thanks, Joe. Jeri. 

MS. O'BRYAN-LOSEE: I'm going to agree 

both with Joe and with what Greg was saying, It's, you 

know, consistent phone calls. It's, you know, blowing up 

emails, which is one of the reasons students don't answer 

their emails, they get blown up with all of these, you 

know, time's running out. You're not going to be able to 

have the future you want unless you go through us. I 

don't think it's it's it's hard to prove at all. And it's 

I think it's necessary language to make sure that our 

students are protected in in these cases. 

MR. TOTONCHI: Thanks, Jeri. Justin. 

MR. HAUSCHILD: Yeah, thank you. Just 

want to say that I think, broadly speaking, we're 

generally supportive of this particular approach to 
 

 

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Committee Meetings - 11/03/21 

aggressive recruitment, we'd be supportive of it actually 

being strengthened further to include some additional 

instances or categories of things that would satisfy or 

qualify as aggressive recruitment and also be supportive 

of that being strengthened, strengthened further. And I 

think there's some indication that that's in the works 

with regard to third parties that that is not a novel 

idea. There are examples of that very thing, both within 

DOD and in more more recent policy focused on the 

Department of Veterans Affairs. So I just wanted to 

express general support and support for it being 

strengthened further, especially in both of those areas. 

Thank you. 

MR. TOTONCHI: Heather. 

DR. PERFETTI: Thank you, and thank you 

to Joe for offering to tweak some of the language because 

I know I was a part of some of the discussions with 

Daniel in this smaller group, and I think that we were 

looking at some of the more specific areas that made it 

clear what the behaviors were to those that may not have 

the years of experience that that you all have seeing the 

behavior. So I certainly wanted to express appreciation 

for that. I also wanted to speak to David and Justin's 

comments from the accreditor perspective in terms of the 

contracts that may exist with institutions or what we may 
 

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Committee Meetings - 11/03/21 

call as third party providers. Certainly, there's an 

increased reliance on that by institutions and 

accreditors do hold institutions responsible for any 

activities or actions under their name. And so for us, we 

do have requirements for institutions relating to those 

arrangements and where they are problematic, we can 

certainly pursue noncompliance actions against the 

institution. So I did want to offer some support for that 

as well. And I did note that in the chat, Michale placed 

a comment there as well about his agency that they 

require recruitment to be done by institutional 

employees. So we do see some activities from the 

accrediting perspective that I think lend well here. 

MR. TOTONCHI: Great, thank you, I do 

want to note that new language has just been circulated 

via email. So please take a look at that. Noelia. 

MS. GONZALEZ: Oh, yeah, thanks. I just 

wanted to make sure that we differentiate between some of 

the aggressive practices we're talking about and what 

maybe some of the publics and nonprofit campuses are 

doing, specifically the marketing and outreach to 

students around the May 1 national intent to enroll 

deadline. There are a lot of emails that go out to 

students during that May 1 or just prior leading up to it 

to ensure that students don't miss that specific, very 
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Committee Meetings - 11/03/21 

important deadline. Because if they're not committing by 

that May 1 date, they may not come, attend that campus 

after that. So I do want to differentiate some of these 

email blasts that go out from the from the nonprofits and 

the the public institutions to ensure that students 

aren't missing vital deadlines. 

MR. TOTONCHI: David? 

MR. TANDBERG: Yeah. Thank you, Noelia, 

that was something that Joe and I and others discussed 

via email and comments to the document quite a bit 

because recruitment can be a very good thing. And for, 

particularly students who don't think they are college 

material to be recruited wakes them up. They see more 

options. And and so we don't want to restrict helpful 

recruitment that is reasonable, that helps keep campuses 

alive, that helps students see their options. And so we 

actually did cut some language in order to allow for 

that. If there is more that needs to be done, I think we 

should because we do want students to be recruited. We 

want them getting mailers and emails. It can get annoying 

as a parent for two students who went through the college 

process, but at the same time, my student, my kids were 

so flattered, you know, it was kind of cool to be wanted. 

So absolutely. 

MR. TOTONCHI: Thank you, David. 
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Committee Meetings - 11/03/21 

Jessica. 

MS. BARRY: I just want to just support 

what Noelia and David were saying. I just want to add a 

comment. I started my career as a graphic designer and 

then moved into higher ed. So I've been working on 

marketing for a long time. And when I think about what we 

used to do 20 years ago to let even students know about 

an open house, you know, we used to send them an 

invitation and maybe follow up with some phone calls to 

get their RSVP. But because now there are so many 

different communication channels and not all students pay 

attention to the same channels. You know, I look at our 

marketing campaigns now, and they are so much more 

complicated because we're having to send emails and texts 

and we're still calling and sending direct mail. And 

we're also doing some social campaigns just because we're 

trying to reach the students. And I know everybody's 

recruiting students for different reasons. You know, it 

could be because in my case, their artistic talent, it 

might be academic or athletic talents. So yes, I agree 

with what's been said that we don't want to stifle that 

because that helps students make good decisions. 

MR. TOTONCHI: Thank you. Jeri. 

MS. O'BRYAN-LOSEE: Okay, I understand 

all that, but that's not what we're talking about. We're 
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Committee Meetings - 11/03/21 

not talking about the can you please come to my school? 

Here's my catalog. We're talking about predatory, the 

pain funnel. If you've never lived in the pain funnel, 

the pain funnel is real. It's it's not about general 

admissions that, you know, you go to a college fair. 

That's not what we're talking about here. We are talking 

about people who are targeted because of their economic 

status, because their first gen, because of that, they're 

targeted for a reason to get money that then students 

can't pay back. So I just want to like make sure we're 

really clear on the student aspect of this. This happens 

all of the time. And it's not a, we mean well, and we 

want you to do well because you're not represented, 

there's a way to recruit people who are underrepresented, 

who don't know the process and doing it through a pain 

funnel. I love that phrase. It'll be on a hat at some 

point, because that is the truest thing about what we're 

actually talking about here, is really what individuals 

are going through. Thank you. 

MR. TOTONCHI: Thanks, Jeri. And I see 

Dixie is at the table for dependent students now. Please 

proceed, Dixie. 

MS. SAMANIEGO: Yeah, so I really 

wanted to kind of push back a little bit on what folks 

were saying and especially as a CSU student. So I attend 
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Committee Meetings - 11/03/21 

Cal State Fullerton, which is housed within the largest 

four-year public university system in the nation. The Cal 

State University system, which is where Noelia is from as 

well, so, hey, but I also I do recognize and also there 

is important right to like, hey, May 1st deadline is 

coming up, right? That was particularly helpful for me. 

But the difference here is that students are being preyed 

upon on our inexperience and not having right the 

knowledge that we really need to differentiate like, oh, 

this, this campus or this university system is like 

reminder, right? We I when I was a senior, could not 

really differentiate like May 1st deadline with, hey, 

we're going to aggressively recruit you to our campus 

because you're a first gen Latina, right? You're the 

first person in your family to graduate high school, 

which was the case for me, right? Like, even despite 

having an older sibling like I was the first to graduate 

from high school and I went to a poor high school filled 

with brown students. And I'm a brown student myself. So 

of course I'm going to like, I'm going to be aggressively 

recruited. And so I want to push back on that idea that 

like, well, you know, these public institutions, right? 

Whatever, these institutions are doing it for the good of 

their heart and like, right, there is a difference, yes. 

But also the majority of these recruiting tactics are 
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Committee Meetings - 11/03/21 

aggressive. And so we need to, yes, that reminder email 

is helpful. But the difference, the difference in that 

and getting phone calls all the time to come to an event 

and this and that and this and that every every couple of 

weeks, that is aggressive, that is aggressive and it's 

tiring and it's emotionally and mentally, and at some 

point for me, physically taxing right to be someone 

trying to navigate an entire educational system, not 

knowing. And so I think a lot of what the points made 

here lacked a lot of perspective from students. And 

specifically, I shared my perspective and my experience 

as a first gen Latina student being aggressively 

recruited the first session. And so I wanted to bring 

that that experience back because that the reminders are 

helpful, like May 1st deadline. Right. That's different 

than getting phone calls from an institution consistently 

every week or every two weeks on the clock, on the hour, 

right? That's different. And I wish I could submit 

through the entire committee. Thank you. I could I wish I 

could submit could submit phone call records from 

institutions that I would like, cause I would be getting 

every week to attend things that weren't even pertinent 

to my degree pathway or what I was interested in, right? 

And so, right, we're being exploited until there is a 

difference between a reminder, then what is what we're 
 

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Committee Meetings - 11/03/21 

talking about here. And that's what the perspective and 

the point point of views that were shared that it lacked 

that perspective from a student that was aggressively 

recruited based on their identities. 

MS. MACK: We're at time. 

MR. TOTONCHI: Thanks, Dixie. Joe. 

MR. SANDERS: Just very briefly, the 

definition of aggressive recruiting that we're looking at 

here, it wouldn't, we specifically excluded stuff that 

would have implicated what Noelia was talking about or 

what Jessica was talking about. They're, the only thing 

that would apply is unsolicited contact with the borrower 

that has previously requested not to be contacted. Right, 

so there's nothing in here that puts a bar on schools 

talking about May 1st or other substantiated time 

concerns. So we really did try to, you know, be 

thoughtful in protecting protecting students, but also 

allowing institutions to communicate with people that 

want to be communicated with. 

MR. TOTONCHI: Thanks, Joe. Daniel. 

MR. BARKOWITZ: Yeah, sorry, trying to 

find the mute and open up Word and everything at the same 

time, sorry about that. So Joe, if you can, and this is 

really helpful. Let me back up. First of all, Dixie, Greg 

and others, I appreciate the the voice you're raising. 
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Committee Meetings - 11/03/21 

And again, my concern is that I want to make sure that 

the way the the regulations are written, that we're not 

catching the good actors with the bad. I have no, I have 

no, and Jeri, I have exception to the pain funnel as 

well. I think it's that is ridiculous and and 

exploitative, and I just want to be very clear, right? My 

concern all along has been, though, that we not be so 

broad as to catch the good actors with the bad actors. 

And so I'll go back to where I started, which is, you 

know, I'm looking for something objective, something that 

that says this is the behavior that cannot be done. And I 

get that, Joe, to your point, earlier, these may fall 

under objective standards, but is written exploiting the 

consumer's fears as an example. Right? You know, 

documented how? So, is there a way for us to show or talk 

about how that could be documented so that again, we 

don't, you know, by casting a wide net, and I want to be 

careful because I want to cast a net wide enough to catch 

the examples that you've given. But by the same token, I 

don't want to cast it so wide that we snare institutions 

that aren't in place, and I'll use a a point of view that 

has been shared before. You know, this is going to depend 

on the administration, I think, in place at the time. I 

want to be careful that different administrations don't 

take a different view on this. To the students credit, I 
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Committee Meetings - 11/03/21 

want to be careful that we're protecting and and careful 

about student perspective. So I want to I want to cast 

the net wide enough, but also not cast it so wide. And so 

I look for some help. It also would would like us, we 

spent a lot of time on this first definition. I'd like us 

to look at some of the others because I think there may 

be pieces that we can pull and and, you know, reflect in 

to the to those pieces. 

MR. TOTONCHI: Thank you. I see we have 

a few comments, we have about five minutes left in the 

morning session. I don't want to prematurely cut off the 

discussion. It would be nice before the lunch hour to 

take some kind of temp check given that there has been a 

lot of discussion and I don't want it to be lost. If 

that's not appropriate, that's fine but that's just as 

facilitator something I'm thinking about doing. Josh. Oh, 

Jen, Jennifer, go ahead. 

MS. HONG: I was just wanted to we 

might need to take that temp check after lunch because we 

still we still don't. Yeah, but this is all good, it 

sounds like in general, people feel positively about the 

inclusion of this concept, so I feel good about this 

discussion. 

MR. TOTONCHI: Well, I'll ask when we 

go to lunch, keep the conversation fresh in your head so 
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Committee Meetings - 11/03/21 

when we get back to it, we can pick up from where we left 

off. Josh. 

MR. ROVENGER: Thanks. So we're very 

supportive of, in particular, the new proposal that Joe 

just circulated. I do have concerns, though, to Daniel, 

your comment. I understand, like I totally get that we 

want to distinguish between good actors acting 

appropriately and unfair and deceptive conduct. My 

concern is that if we get too specific in what we're 

listing out, bad, we've seen schools, particularly in the 

for-profit industry, find new ways to exploit people and 

take advantage of people. And if we're not, I don't want 

to use, if we're not broad enough in our language, we're 

going to end up creating a situation where these schools 

will just find new ways to take advantage of people. So 

for example, one school that has just been subject to a 

class action lawsuit school lawsuit, a former teacher 

testified in an affidavit that on smoke breaks, 

admissions officers would bring unhoused individuals into 

the office and get them, to exploit their financial 

situation and get them to sign up for their school. You 

know, I don't think we need to list that specifically in 

the regs, but it needs to be covered with whatever we end 

up with. And I think the language that Joe just circulate 

would capture that and does a nice job of distinguishing 
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between what we're what we're trying to get after here. 

MR. TOTONCHI: Thank you. I just do I 

do want to note that Emily is at the table for veterans 

and military group. Joe. Joe, where did you go? 

MR. SANDERS: Sorry, I'm here. I 

lowered my hand after you called my name. Two very quick 

things. 

MR. TOTONCHI: Oh, go ahead. Sorry. 

MR. SANDERS: Yeah, that's alright. Two 

very quick things, one, the Department asked for cites as 

to where we got these concepts, and so this is included 

in what you see here. Moving down from the first one, 

many of these are pulled from the Dodd-Frank Consumer 

Financial Protection Act. One of the reasons that we did 

that is because there are concepts in that law that are 

flexible in ways that Josh talked about. It's an 

established federal standard which should appeal to the 

to the Department here. And then, if you look at B and C, 

these are concepts that are pulled directly from Federal 

Law and that we saw as directly applicable to schools' 

conduct in lawsuits and investigations that we've been 

involved with. So we are trying to get definable 

standards here, to Daniel's point, we don't want 

something that isn't grounded in fact and law. So, second 

thing, I'm sorry for distributing the second version of 
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Committee Meetings - 11/03/21 

aggressive recruitment right as we're talking about it, 

but I got a lot of feedback from negotiators from my 

constituency. And so although the timing isn't the best, 

it was my best effort to consolidate everything I got and 

get and get it out there for the group to consider. Thank 

you. 

MR. TOTONCHI: So I see David and Emily 

have their hands up. We are at lunchtime, so David and 

Emily, you will be the first two to go when we resume the 

conversation, okay? Excellent. Well, with that, we are at 

12 o'clock Eastern. We'll take a one-hour lunch. Thank 

you for the hard work of the committee this morning. Look 

forward to continuing the discussion this afternoon. 
Appendix 

Department of Education 

Office of Postsecondary Education 

Zoom Chat Transcript 

Affordability and Student Loans Committee 

Session 2, Day 3, Morning, November 3, 2021 

 

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Committee Meetings - 11/03/21 

DISCLAIMER: 

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 Brady FMCS to Everyone: 

Morning all! I am handling tech issues today. Feel 

free to email me at broberts@fmcs.gov with any 

questions. 

From Michaela Martin to Everyone: 

I had to resist the urge to say "Here" like for class 

role call lol 

From Will (A) FFEL Agencies to Everyone: 

;) 
 

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Committee Meetings - 11/03/21 

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

Lol 

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

HA HA HA!!!! 

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

Is it "here" or "present" that is the proper response? 

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

Everyone: 

I vote for "present" 

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

David and Suzanne win for the longest title... 

From Brady FMCS to Everyone: 

Would alternates mind switching off their cameras? 

From Greg, A - Dependent to Everyone: 

Sitting in for Dixie this morning 

From Michaela [P] Ind. Students to Everyone: 

I support this 

From Will (A) FFEL Agencies to Everyone: 

+ 1 David 

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

Everyone: 

+1 David 

From Raj - Advisor Econ/Higher Ed/Data to Everyone: 

I am ready 

From Justin (P) Service Members/Veterans to Everyone: 
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Committee Meetings - 11/03/21 

+1 Josh 

From Joe; P, State AGs to Everyone: 

+1 Josh 

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

Is Institutional Liability considered through Closed 

School Discharge? There is no mention of Liability in 

the section on Closed School as currently mentioned. 

Is this something addressed in a different subsection? Or is there no liability envisioned by the 

Department to a school if they close a campus or have 

a merger? 

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

Thank you, Jessica 

From Jessica (P), Proprietary Schools to Everyone: 

You’re welcome! 

From Suzanne Martindale (A) state regulators to 

Everyone: 

+1 josh 

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

+1 Josh 

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

David, I think job placement is addressed by 668.74 

(g) 

From Joe; P, State AGs to Everyone: 

We support use of Department's tax status here 

(subsection n) 

From Heather (P) - Accrediting Agencies to Everyone: 

Is "tax status" a term reserved to the IRS? The 
 

 

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deletion of the term "tax" and a more general 

reference to the status determined by the USDE may 

improve the clarity of this provision. 

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

We'd like to ensure that misrepresentation also 

includes misrepresentations made concerning: 

Accommodations available to students designed to 

assist with physical or mental health issues. 

The award, acceptance, or transfer of credit 

related to non-traditional learning, including 

military experience and training. 

The availability or nature of accommodations or 

resources for students impacted by military service 

obligations. 

From Heather (P) - Accrediting Agencies to Everyone: 

Alternate Michale will be joining to provide feedback. 

I'll turn my video off. 

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

Everyone: 

+1 David 

From Jessica (P), Proprietary Schools to Everyone: 

+1 Daniel 

From Joe; P, State AGs to Everyone: 

The EDMC consent judgment with 30+ states is a good 

starting point to evaluate job placement rate 

manipulation: https://www.oag.state.va.us/consumerprotection/files/Lawsuits/EducationMgmtEnteredConsentJudgment.pdf 

From Jessica (P), Proprietary Schools to Everyone: 
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+1 Michale 

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

+1 Michale as well... 

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

I think both are important to capture 

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

+1 David 

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

I don't. Michale can you help? 

From Suzanne Martindale (A) state regulators to 

Everyone: 

+1 josh 

From Rachelle (A) 4 year Pbulics to Everyone: 

"The rates disclosed by the institution are inflated 

by means such as" 

From Heather (P) - Accrediting Agencies to Everyone: 

I am back now for Accrediting Agencies. 

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

Or "the institution does not disclose that they have 

inflated their rates by means such as" 

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

+1 joe 

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

+1 Joe 

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

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+ Joe RE "knowing" 

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

+1 Joe 

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

+1 Joe 

From Greg, A - Dependent to Everyone: 

+1 

From Suzanne Martindale (A) state regulators to 

Everyone: 

+1 joe, deception/misrepresentation in the civil 

context does not include an intent standard 

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

+1 Justin (particularly on the "who is providing the 

instruction" item) 

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

+ Justin 

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

+1 Justin 

From Suzanne Martindale (A) state regulators to 

Everyone: 

we could temp check by section, as we did and the end 

of yesterday? 

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

Agreed. My assumption is that the Dept has agreed with 

some changes we've suggested but I'm not sure about 

other suggested changes. 

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

 

 

 

 

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+1 by section 

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

An omission of fact includes the concealment, 

suppression, or absence of material information or 

statement that deceives or tends to deceive. An 

omission of fact includes, but is not limited to, the 

concealment, suppression, or absence of material 

information or statement concerning— 

[...] 

the nature of the institution’s educational 

programs, financial charges, or the employability of 

the institution’s graduates 

The entity that is actually providing the 

academic services or educational instruction, 

including failing to affirmatively disclose that such 

service or instruction is provided substantially by an 

otherwise ineligible third-party entity; 

The initiation of academic terms, including 

failing to affirmatively disclose a student’s 

participation in an academic term and obtain a 

student’s consent to participate in the academic term, 

such as automatic course renewals, or sequencing 

course offerings in a manner that precludes dropping a 

course without penalty... 

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

Enrollment in programs of education, including failing 

to affirmatively disclose a student’s participation in 

an academic program and obtaining a student’s consent 

to participate in an academic program. 

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

Everyone: 
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Committee Meetings - 11/03/21 

How do you prove that then? 

From Persis (P) Legal Aid (she/her) to Everyone: 

swapping in for legal aid just for a few minutes 

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

That's the clarity I am looking for as well... 

From Jessica (P), Proprietary Schools to Everyone: 

+1 David 

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

I’m back in for legal aid 

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

+1 Greg 

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

+ 1 Greg 

From Joe; P, State AGs to Everyone: 

+1 Greg 

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

+1 Greg 

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

+1 Greg 

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

+1 Greg 

From Joe; P, State AGs to Everyone: 

We have updates to aggressive recruitment compiled 

from our constituency and other negotiators. I can 

forward that now. 
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From Dixie (P) Dependent Students (ella/she) to 

Everyone: 

I caution to include that in the language because 

there is no outright way for students to prove 

reliance. Especially with no guidance from ED. If ED 

and the negotiators who want to include reliance could 

provide examples and ways for students to prove 

reliance and the "knowing" aspect of the text it would 

actually be helpful.11:33:19 From Jessica (P), 

Proprietary Schools to Everyone: 

+1 Daniel 

From Joe; P, State AGs to Everyone: 

I just distributed a version of aggressive recruitment 

to FMCS that covers agents, as David is expressing 

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

+1 David 

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

+1 David 

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

+1 David 

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

+1 David 

From Joe; P, State AGs to Everyone: 

+1 Greg 

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

+1 Greg 

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

+1 Greg 
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From Jeri (P) Student Borrower (she/her) to Everyone: 

+1 Greg 

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

Everyone: 

+1 Greg 

From Michale (A) Accreditation to Everyone: 

To David's point, ACCSC only allows "employees" to 

engage in recruitment activities. No contractors. This 

is a huge problem, especially in the recruitment of 

international students. 

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

+ Greg 

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

Wow, "the pain funnel". That brings back horrible 

memories of when I was dealing with these issues while 

working in the PA state hi ed department. 

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

+1 Joe 

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

+1 Joe 

From Joe; P, State AGs to Everyone: 

+1 Jeri 

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

+1 Joe and Jeri 

From Joe; P, State AGs to Everyone: 

I have included suggestions from Justin and his 

constituency in the version I just sent to FMCS for 
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distribution 

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

Justin - Do please check the version Joe had sent to 

your e-mail. I think it hits on what you're talking 

about. 

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

Thanks, David. Will do. 

From Joe; P, State AGs to Everyone: 

We cut some language to account for the situation 

Noelia described. 

From Joe; P, State AGs to Everyone: 

Happy to discuss if helpful. 

From Greg, A - Dependent to Everyone: 

THAT IS NOT WHAT WE ARE TALKING ABOUT!! 

From Greg, A - Dependent to Everyone: 

Thank you, Jeri! 

From Suzanne Martindale (A) state regulators to 

Everyone: 

+1 jeri - key terms like "exploiting" fear and taking 

"unreasonable" advantage show the distinction 

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

Everyone: 

I'll be in for Dependent Students right now. 

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

+1 Jeri 

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

 

 

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+Jeri!! 

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

+1 +1 - Absolutely 

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

+ Jeri 

From Michaela [P] Ind. Students to Everyone: 

+1 

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

+1 Jeri 

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

I agree with you Jeri, and the concern is to make sure 

that the way the regs are written doesn't by accident 

include the good actors. 

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

+Dixie 

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

+1 Dixie 

From Michaela [P] Ind. Students to Everyone: 

+1 

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

+1 Dixie 

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

Exactly - that is the difference we're trying to hit 

at. 

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

 

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Committee Meetings - 11/03/21 

+1 Joe 

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

Everyone: 

+1 Joe 

From Jessica (P), Proprietary Schools to Everyone: 

+1 Joe 

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

Everyone: 

Importance is the consent of students to be contacted 

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

and students forced to sit in the audience no mater 

what 

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

Everyone: 

^ 

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

*matter 

From Suzanne Martindale (A) state regulators to 

Everyone: 

@Daniel, school opportunity to respond with 

information can address that 

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

In addition to the most recent langauge submitted by 

Joe, we'd also offer the following additional 

categories of aggressive reruitment: 

Providing inducements, including any gratuity, 

favor, discount, entertainment, hospitality, loan, 

transportation, lodging, meals, or other item having a 
 

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monetary value of more than a de minimis amount, to 

any individual or entity, or its agents including 

third party lead generators or marketing firms other 

than salaries paid to employees or fees paid to 

contractors in conformity with all applicable laws. 

Institutional scholarships or grants, tuition 

reductions, and other awards related to a student’s 

completion of a program of education are permissible. 

(modeled off DOD MOU) 

Refrain from providing any commission, bonus, or 

other incentive payment based directly or indirectly 

on securing enrollments or federal financial aid to 

any persons or entities engaged in any student 

recruiting or admissions. (modeled off DOD MOU) 

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

Our alternate, Emily, will be stepping in to comment. 

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

For example, I would support the second proposal 

language -- namely "demanding that the borrower make 

enrollment... immediartely". 

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

How about "including but not limited to"... language? 

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

+1 Josh 

From Suzanne Martindale (A) state regulators to 

Everyone: 

+1 josh, it's all but impossible to regulate for every 

fact pattern 

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

Josh perhaps the language "Without limiting the 
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general application of the foregoing, the following 

conduct is a violation of this section" allows for the 

smoke break example? 

From Heather (P) - Accrediting Agencies to Everyone: 

Option 2 has ... include but not limited to ... perhaps 

that was intended for each of them but was not 

included in each one. 

From Michaela [P] Ind. Students to Everyone: 

Sorry forgot I was already off camera lol