Negotiated Rulemaking 10/6/2021

1

 

DEPARTMENT OF EDUCATION

OFFICE OF POSTSECONDARY EDUCATION

AFFORDABILITY AND STUDENT LOANS COMMITTEE

NEGOTIATED RULEMAKING SESSION 1, DAY 3, MORNING

OCTOBER 6, 2021

On the 6th day of October 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. 
Negotiated Rulemaking 10/6/2021

2 

 

P R O C E E D I N G S 

MS. JEFFRIES: Good morning. This is 

Commissioner Cindy Jeffries with Federal Mediation and 

Conciliation Service. I will be your (inaudible) 

facilitator for this morning’s session. Welcome back, 

everyone. Welcome to those that are listening in on the 

live stream. At this point, I am going to do a roll call 

for the record of the primary negotiators at the table 

this morning, and I will do that by constituency. When I 

call your constituency, please give your name how you 

want to be addressed, and we’ll move forward this rather 

quickly. Okay? So, from accrediting agencies. 

MS. PERFETTI: Good morning. Heather 

Perfetti.

MS. JEFFRIES: Good morning, Heather. 

From dependent students. Dixie, Greg? Okay. Moving on. 

Federal family education loan lenders and/or guaranty 

Agencies. 

MS. O’CONNELL: Jaye O’Connell. Good 

morning.

MS. JEFFRIES: Good morning, Jaye. 

Financial aid administrators at postsecondary 

institutions.

MR. BARKOWITZ: Good morning. Daniel.

MS. JEFFRIES: Good morning, Daniel. 
Negotiated Rulemaking 10/6/2021

3 

 

Four-year public institutions of higher education. 

DR. DORIME-WILLIAMS: Good morning. 

Dr. Marjorie Dorime-Williams.

MS. JEFFRIES: Good morning. 

Independent students.

MS. MARTIN: Michaela Martin.

MS. JEFFRIES: Good morning, Michaela. 

Individuals with disabilities or groups representing 

them. Bethany or John? 

MR. WHITELAW: John is here. I was 

expecting Bethany, but I will sub in until she gets here.

MS. JEFFRIES: Okay, so the alternate, 

John Whitelaw will substitute for Bethany Lilly until 

such time as she arrives.

MR. WHITELAW: Yeah if that’s okay.

MS. JEFFRIES: Thank you. Minorityserving institutions. 

MS. GONZALEZ: Good mor -- good

morning. Noelia Gonzalez.

MS. JEFFRIES: Noelia, thank you. And 

Noelia will be serving as the lead negotiator today in 

the absence of the primary. Private non-profit 

institutions of higher education.

MS. SABOUNEH: Good morning. Misty 

Sabouneh here.
Negotiated Rulemaking 10/6/2021

4 

 

MS. JEFFRIES: Good morning. 

Proprietary institutions. 

MS. BARRY: Good morning. It’s 

Jessica Barry.

MS. JEFFRIES: Good morning, Jessica. 

Qualifying employers on the topic of public service --

oh, I’m sorry. Scratch that. That is an advisor and a 

non-voting member. State Attorneys General office.

MR. SANDERS: Morning. Joe Sanders on 

behalf of state Attorneys General. 

MS. JEFFRIES: Good morning, Joe. 

State higher education executive officers, state 

authorizing agencies, and/or state regulators of 

institutions of higher education and/or loan servicers.

DR. TANDBERG: Wow. That is one long 

name for a category. This is David. I’m here.

MS. JEFFRIES: Hi, David. Thank you. 

Student loan borrowers. 

MS. CARDENAS: Good morning, 

everyone. Jeri here.

MS. JEFFRIES: Good morning, Jeri. 

Two-year public institutions of higher education.

MR. AYALA: Good morning. Bobby Ayla.

MS. JEFFRIES: Good morning, Bobby. 

U.S. military service members, veterans, or groups 
Negotiated Rulemaking 10/6/2021

5 

 

representing them.

MR. HAUSCHILD: Hello. Justin 

Hauschild.

MS. JEFFRIES: Thank you, Justin. Can 

we circle back? Dependent students. 

MS. SAMANIEGO: Dixie.

MS. JEFFRIES: There, Dixie. Welcome. 

Okay. And then last but not the least, the Department of 

Education.

MS. HONG: Good morning. Welcome back, 

everybody. Jennifer Hong. 

MS. JEFFRIES: Okay. Did I miss 

anyone?

MR. ROVENGER: Good morning. Josh 

Rovenger for legal assistance organizations on behalf of 

students and borrowers. 

MS. JEFFRIES: Hi.

MS. LILLY: I’m Bethany Lilly on behalf 

of organizations representing people with disabilities 

and people with disabilities.

MS. JEFFRIES: Okay. I apologize for 

that oversight to both of you. It was not intentional. 

MR. ROVENGER: No problem.

MS. JEFFRIES: Okay. So, moving on, we

do have a very robust agenda today. The plan is to 
Negotiated Rulemaking 10/6/2021

6 

 

complete the borrower defense to repayment-- both issue - 

all issue statements of number six, seven, and eight. 

And then move to PSLF. This is subject to change since 

that is a robust agenda. I’d like to remind all 

committee members that in respect to the BDR packets 

there is no proposed regulatory text at this point. So, 

it will just be discussions on the sub-issues within each 

of those papers, and a temperature check on the concept 

of what is there. Please, along the protocol, please 

remember you will have up to three minutes to speak and 

to try to the best of your ability not to repeat 

something that’s already been said. Al -- also, I want 

to remind committee members and/or tech people that Kayla 

will be the tech person for discussions today, so if you 

have problems or questions please contact her. Kayla, 

did you put your information in the chat? Okay. You 

should find it in there. So, along those lines can we go 

ahead and get started with the completion of moving 

through issue statement number six? My notes show that 

there is an em -- we are at emphasis on group process. 

MS. HONG: Excellent. Thank you. 

Thank you, Cindy. Real quick before we jump into that 

issue, I just had a quick announcement. I wanted to 

acknowledge, as you all know, that the Department has 

made a major announcement this morning regarding public 
Negotiated Rulemaking 10/6/2021

7 

 

service loan forgiveness, and several immediate and 

temporary relief efforts to assist borrowers and provide 

debt relief to those working in public service. This is 

why we switched the agenda around to (inaudible) before -

- excuse me, before P -- PSLF, because we wanted this 

message prior to our discussion around PSLF. So, I just 

-- I want to request that we finish discussing all the 

issues for BD and then we’ll go into PSLF today. We will 

have someone from our office of Federal Student Aid come 

and talk about the announcement and have a more detailed 

discussion on what the Department is doing for borrowers. 

We feel this will inform the regulatory proposals we have 

on the table. So, if we could just hold the discussion 

and questions regarding that public service loan 

forgiveness announcement until we finish borrower 

defense, we will be happy to go into more detail with you 

all about today’s announcement. And with that, I can 

just jump into as, as Cindy had mentioned, we left off on 

emphasis on group process, so I think we took a 

temperature check on admissions. Now we are on emphasis 

(inaudible) group process in the borrower defense to 

repayment paper regarding the adjudication process. In 

brief, we want to bring the group process back and make 

it a default approach. So, we propose to identify and 

define groups based on occurrences such as actions by the 
Negotiated Rulemaking 10/6/2021

8 

 

federal government, State Attorneys General, other state 

agencies or officials, or other law enforcement activity, 

any losses related to educational programs filed against 

institutions for judgments rendered against institutions, 

individual borrower defense claims with common facts, and 

requests by Attorneys General or law enforcement 

organizations. So, individual applications covered by a 

group process would be adjudicated through that group 

process, and the Department would request additional 

information from institutions. Decisions on whether to 

approve claims associated with the group would only made 

by the Department with institutional recruitment 

operating through a separate process. And we’ll talk 

about institutional recruitment a little bit later. So, 

I already see hands up. So, I will put myself on mute.

MS. JEFFRIES: Thank you, Jen. David, 

you had your hand up first, and then we’ll move to Joe 

and then to Justin.

DR. TANDBERG: I’ll just reveal my 

ignorance here. I don’t know what we’re referring to 

when we say group process, what it is, what it’s used 

for. If we could just back it up and talk about what it 

is we’re talking about here so that I can better 

understand what’s being proposed.

MS. HONG: Sure. Thank you, David. 
Negotiated Rulemaking 10/6/2021

9 

 

Basically, in 2016 we had a group process that 

individuals with -- individuals could -- they could 

basically process a group borrower defense claim, for 

example, in the case of Corinthian Colleges. Once we 

knew that there had been a borrower defense claim 

approved we could apply it to all individuals that were 

affected, all borrowers that were affected. That was 

rescinded in 2019 and so we want to bring that process 

back.

MR. SANDERS: Hi. Good morning, 

everyone. State AGs just want to voice strong support 

for this provision. The group process allows our offices 

and others who work in this area to submit evidence that 

there were many instances of fraud or other bases for 

borrower defense to repayment. Oftentimes there are 

repositories like State Attorneys General other than 

individual borrowers that are going to have access to 

evidence that the borrower would not be able to get, and 

we think that this evidence should be considered by the 

Department. You know, we think this is a great piece to 

have back in. We voice our strong support for it. One 

minor question. The emphasis on group process section of 

the issue paper refers to requests by Attorneys General

or law enforcement organizations. Does the Department

MS. JEFFRIES: Okay, Joe?
Negotiated Rulemaking 10/6/2021

10 

 

contemplate regulatory agencies like a, a state 

authorizer, or a state banking regulator to fall within 

the organizations that could potentially make a, a group 

application?

MS. HONG: Yes. The short answer is 

yes. We wanted to make that as encompassing (inaudible)

as possible to include those agencies.

MS. JEFFRIES: Okay. Thank you, Joe 

and Jennifer, your response. Justin.

MR. HAUSCHILD: Yeah. Thank you so 

much, Cindy. (Inaudible) just want to voice strong 

support for the group process. I, I think it’s important 

to recognize and, and I’m preaching to the choir here a 

little bit, but you know, when it comes to the group 

discharge process, oftentimes, you know, we’re aware of 

instances where thousands of service members or veterans 

have attended institutions and have been impacted by a 

similar strain of conduct that, that is kind of a common 

threat. And so, we think it’s more than appropriate that 

the discharge be used. I mean it’s I think, you know, 

appropriate to consider the fact that when there’s other 

enforcement actions, the necessary basis is kind of 

already established, right? We have the date range of 

the effective students, the type of fraud. A lot of it 

is already laid out when there’s enforcement action 
Negotiated Rulemaking 10/6/2021

11 

 

against an institution, and, and we think it’s 

appropriate that those students who are coming to that 

institution have, have access to a (inaudible) on a 

similar basis. Thank you.

MS. JEFFRIES: Thank you, Justin, for 

that. Josh.

MR. ROVENGER: Thank you. The legal 

aid community also strongly supports the return of the 

group process provision. And as has been said, it’s 

particularly important to ensure that individuals who 

might not even know that they’re entitled to relief get 

the relief that they are due. We would ask and think 

it’s particularly important that in addition to requests 

by Attorneys General or law enforcement organizations 

that other third-party entities are also included in the 

group process and have the ability to make these 

requests, in particular, legal services organizations, 

consumer advocate groups, and student organizations and 

borrower collectives themselves. We think this is an 

additional way that will ensure that everyone who has 

been subject to widespread fraud obtains relief even when

they individually are not aware that they are entitled to

the relief. And then as a practical matter, we think the

more expansive the group process, the less burden there 

actually would be for the Department. 
Negotiated Rulemaking 10/6/2021

12 

MS. HONG: Thank you, Josh. If I could 

just jump in there. Anytime you guys have a suggestion 

for language or to expand what we’ve added here if you 

could just drop it in the chat just to ensure that we 

capture that suggestion.

MR. ROVENGER: Sure. So, I’ll, I’ll 

draft something up and circulate it later on.

MS. HONG: Thank you.

MS. JEFFRIES: Thank you, Josh. And 

thank you, Jen, for reminding people to put it in the 

chat. Jessica.

MS. BARRY: Good morning, everyone. I 

think, you know, what Jen said that there are certain 

instances, obviously, that a group process would make 

sense. You know, Jen brought up Corinthian Colleges, and 

obviously, when there’s a large number of students who 

were all defrauded in a similar way this makes a lot of 

sense. What, what concerns me is it being the default

approach especially with some of the new categories that 

we are thinking about adding that are very intricate and 

there’s going to be a lot of nuance in those. I think 

that there -- that this shouldn’t be the default, but 

there should be the option to use it.

MS. JEFFRIES: Thank you, Jessica. I 

have Daniel and then Josh. And after that, I think we’ll 

 
Negotiated Rulemaking 10/6/2021

13 

 

take a temperature check on the concept of this.

MR. BARKOWITZ: Thank you, Cindy, and 

thank you, Jennifer. I also and our constituency 

supports the group process. 

MS. JEFFRIES: Daniel if you can hear 

me you froze up. I’m going to go ahead and move to Josh. 

If you get your audio repaired, we will bring you back on 

for comment. 

MR. ROVENGER: Thanks, I, I just had a 

follow-up question to Jessica’s comment that the group 

process shouldn’t be the default approach. And I’m 

wondering, Jessica, if you could say a little bit more 

about that just because to my mind, if, if our concern 

here is getting relief to the widest array of borrowers, 

I, I don’t know why we wouldn’t have it be the default 

approach. 

MS. BARRY: Sure. I think, you know, 

Corinthian is an -- a -- an example where there were a 

large number of borrowers, but I think if we open up this 

process there are going to be a lot more one-off type of 

situations. So, I would just want to make sure that 

we’re really considering each claim and, and making sure 

that we’re giving them the attention that those students 

deserve. 

MS. JEFFRIES: Josh, did you have a 
Negotiated Rulemaking 10/6/2021

14 

 

follow-up to that? I see you put your hand right back 

up.

MR. ROVENGER: Yeah. I guess -- 

I guess wouldn’t that -- what about the group process, 

though, would make it more difficult for the Department

to focus on whether the institution provided -- an

institution committed widespread fraud? I guess -- I 

guess I’m just not clear what impediment it would create 

for the Department to have it be the default.

MS. BARRY: I just think each claim 

should be considered on its merits.

MR. ROVENGER: And again, I guess I --

so, so I, I hear that, but if, if the goal here is to 

provide relief to as many borrowers as possible and we’re 

facing a situation like Corinthian or ITT or the art 

institutes and the Department is considering the 

specifics of the school and how it impacted it let’s say 

every student who attended the school, I mean, why -- in 

this instance, why shouldn’t it be the default?

MS. BARRY: I didn’t say it shouldn’t 

be the default in that process. I just don’t think it 

should be the default for the entire process.

MS. JEFFRIES: Jen, you raised your 

hand. Did you have something you wanted to say on that?

MS. HONG: Yeah. I just, you know -- I 
Negotiated Rulemaking 10/6/2021

15 

 

just wanted to add that, you know, the reason that we 

want to emphasize a group process as a default is, is 

because to date almost all the approved borrower defense 

claims that we have come about through common evidence 

including information obtained by State Attorneys 

General. So, right now in the absence of a group 

process, we are adjudicating individual applications off 

of that common evidence. So, we think having the group 

for -- group process upfront better reflects how the 

evidence we get works and it’s just a -- just a more 

sensible path for, for borrowers and for the Department. 

MS. BARRY: Do you think that will 

always be the case in the future?

MS. HONG: Well, based -- if, if we’re 

to predict the future based on, you know, what we’ve seen 

to date, that -- yeah, that seems -- that’s exactly why 

we’re proposing the remedy is because we have -- most, 

most of the applications that we adjudicate are based on 

common evidence.

MS. JEFFRIES: Okay. Thank you. 

Daniel, welcome back.

MR. BARKOWITZ: Sorry for the signal 

interruption. And what I was just saying is in general I 

would support this proposal or this part of the proposal. 

My question is whether we’re missing an opportunity to 
Negotiated Rulemaking 10/6/2021

16 

 

include adverse actions by accreditors as a reason for 

inclusion in the group process. So, the adverse action 

by an accreditor is usually a result of significant 

problems at the institution, and I wonder if that is a 

legitimate or specific reason we could include as a group 

process inclusion. And I’ll type the language around 

that in the chat.

MS. JEFFRIES: Thank you, Daniel. I’m 

showing Jeri, Michaela, and David, and then we will take 

a temperature check. So, Jeri?

MS. O’BRYAN-LOSEE: Okay. I think I 

just want to agree with Joe, Justin, and Josh. And me 

not being a lawyer I just have a couple things. So, in a 

group process if there isn’t a problem, if there’s 

nothing to be found, nothing will be found and it will 

take a lot of time to clear people who are good actors, 

let’s say, if they are good actors. And I also want to 

point out that the support for this from me comes from 

the communication to the students who are affected. Like 

this will make it easier for people who don’t have, you 

know, appropriate internet access or don’t look at the 

bottom of some web page to see that there’s something 

going on or, you know, it’s the most inclusive way to 

have relief for the most people. So, I just wanted to 

throw that in.
Negotiated Rulemaking 10/6/2021

17 

 

MS. JEFFRIES: Thank you, Jeri. 

Michaela?

MS. MARTIN: Yeah, I -- my question -- I 

just have a question relating to what Jeri mentioned 

which is how does this impact the institutions and 

Jessica’s concerns about how each claim needs one, but 

like do those claims have any bearing on that 

institution? And will this impact what the institution’s 

responsibility is? Because my understanding was that 

this was purely between the student and the Department of 

Education regarding their loans, not anything related to 

the inst -- like directly to what they need to do.

MS. HONG: Michaela, that’s a great 

question. I mean, we -- this is precisely -- we’ll get --

we’ll get to this later, but this is exactly why we want 

to separate the concept of recovering from the 

institutions because we believe that this adjudication 

process is about the borrower. So, so yes. I mean, this 

is -- this process is about the borrower. There is a 

piece about institutional recruitment which we will get to 

later. But, but you’re absolutely right, and we believe 

that that’s just a cleaner way to approach it by 

separating the adjudication process and institutional 

recruitment process. So, there are implications for 

institutional improvement but we can talk about that 
Negotiated Rulemaking 10/6/2021

18 

 

later.

MS. JEFFRIES: Thank you. Seeing no 

more hands, I am going to move for a temperature check 

for tentative agreement on the concept that has been put 

forth here. So, by (interposing) --

MR. TOTONCHI: There, there is a --

Heather (inaudible). Heather, can we take a take a 

temperature check?

MS. JEFFRIES: Oh, I’m sorry. Yeah. 

Heather, can we go ahead and take the temperature check 

and then come back, or is it something that you’d like to 

put out there first?

MS. PERFETTI: So, I think that’s up to 

you as the facilitator. I certainly had a, a comment to 

make, but I’m happy to hold it if you feel you need to 

take the temperature check.

MS. JEFFRIES: Okay. Thank you for 

that, Heather. As a reminder, put your thumbs up clearly 

so that we can see them. If 100 percent you can live 

with it, or no, you cannot. So, let’s go ahead and see 

those thumbs. Okay. We have one thumbs down. Jessica, 

do you want to share with us your serious reservation on 

this?

MS. BARRY: Yeah, just for the reasons 

that I’ve already stated.
Negotiated Rulemaking 10/6/2021

19 

 

MS. JEFFRIES: Okay. Heather, did you 

want to comment now?

MS. PERFETTI: Sure. Thank you. So, I 

did just want to present a question and also add some 

insight into the adverse action comment that was made by 

someone else. So, an adverse action is the withdrawal of 

accreditation not warning, not probation, not show-cause. 

It is removal of accreditation by an agency that is also 

subject to appeal. And as you can imagine, the timing of 

how long that may continue is dictated by each agency, 

but the timeliness of decision, a final decision, is 

dictated by the processes of each agency. So, I think 

that would play a role in this particular set of 

circumstances. I appreciated the question about the 

impact upon institutions. My question is more for 

Jennifer from the Department is how are accreditors 

notified of institutions that are coming to the attention 

of the Department relating to borrower defense, because 

accrediting agencies also have standards that speak to 

these very issues of misrepresentation and trying to 

think through an agency that may take action as a result 

of some of this coming to our attention. Is there a 

current process for notification to the accrediting 

agency? Or how are we involved in the regulatory triad 

piece?
Negotiated Rulemaking 10/6/2021

20 

 

MS. HONG: So, yeah. I mean, my, my 

answer is yes, I think there are -- the success of all 

this depends on the spoken communication that we have 

with the triad, with the states and accrediting agencies. 

And it’s interdependent so I would assume that our, our 

Department would reach out to the accreditor as well. 

But I can confirm that a bit later if you give me time.

MS. JEFFRIES: Thank you, Jennifer. 

I’m going to take one more comment on that -- on this, 

and then we’re going to move to individual applications. 

Dixie, do you have something new to add?

MS. SAMANIEGO: Yeah. My -- I have a 

question for Jessica, really. So, you know, I saw that 

you put your, your thumb down and I just want to like get 

into that. Like I feel like I’m picking up what you’re 

putting down, but is the point of this not like -- is the 

point of this emphasizing the group process not to help 

and support students who have been defrauded, right? And 

so, what it feels like from your comment is that you’re 

not really in support of that and so it’s confusing for 

me because why wouldn’t we? Is that not why we’re all 

here to center students in these conversation -- and so -

- in these conversations? So, I really want to see if 

you have a new or a new perspective or a new, you know, 

comment from what you previously stated. Because for me, 
Negotiated Rulemaking 10/6/2021

21 

 

as a student, that’s really confusing in terms of like 

that not being the default. Like shouldn’t the default 

be we’re here to support students? We’re here to make --

making these claims easier for them especially when, you 

know, when a lot of these times these -- the infor --

like the information or the evidence that students gather 

is not like enough by itself in one case? And so, they 

need other students to -- like other students who have 

(inaudible) like who have gone through this and their 

evidence, right, to also support them? So, I’m just 

confused as to where you stand and why you stand there. 

So, if you have anything new to add, please enlighten me, 

enlighten us. Yeah.

MS. BARRY: Yeah, sure. And thanks, 

Dixie. Thanks for asking me instead of just assuming how

I feel. I really appreciate that. No. In cases where 

students have been defrauded, obviously, I want them to 

get the relief that they -- that they deserve. They, 

they definitely deserve to have that relief. I just want

to make sure that we’re considering all the facts in 

those cases. And that’s the reason why. And, you know, 

this is the very first, you know, couple of days of the 

negotiations. I, you know, I know it’s been questioned 

of whether I’m here in good faith. I am here in good 

faith. I’m, I’m voicing my concern for some of these 
Negotiated Rulemaking 10/6/2021

22 

 

things up front. That doesn't mean that certain 

negotiations as I learn more from students like you and 

from other people on the committee that I won't, you 

know, start to change my mind on some of these things and 

make compromises that are best for students. So, thank 

you for asking me the question, though. I really 

appreciate it.

MS. JEFFRIES: Thank you both. So, 

with that, I’m going to move on to the individual 

applications piece. So, Jen, do you want to outline that 

for them, please?

MS. HONG: Sure. This is for -- this 

is actually non-regulatory. It’s probably more of a subregulatory remedy, but we just wanted to share it with 

you guys to see your thoughts. In, in brief, our current 

practice is to deny an application if it -- if it doesn’t 

state a claim. And rather than -- rather than continue 

with that practice, we just wanted to provide more 

guidance on the front end of what is the claim and 

provide some examples. Just having more kind of 

touchback with the Department on the front end with 

borrowers to give them guidance on the individual

applications on what it means to state a claim rather 

than to outright deny the claim just be -- because it 

doesn’t, you know, fulsome state a claim. So, that’s all 
Negotiated Rulemaking 10/6/2021

23 

 

this is. This does not need to be in the regulation, but 

we did want to share that we were going to provide that 

back and forth up front. 

MS. JEFFRIES: Thank you, Jennifer. 

Justin and then Bethany.

MR. HAUSCHILD: Thanks, Cindy. I would 

just -- and I think I had previously perhaps brought this 

up at the wrong opportunity but wanted to just reiterate

this idea of the Department liberally construing these. 

I think it’s consistent with what the Department frankly 

is, is currently proposing, and simply just to ensure 

that applications aren’t being denied on the basis of 

technicality or not meeting, you know, maybe form 

requirements and things of those nature. So, things of 

that nature, excuse, me. Thank you.

MS. JEFFRIES: Thank you, Justin. 

Bethany.

MS. LILLY: I want to support Justin’s 

proposal and I also want to say that I think this is a 

great idea. I think trying to understand legal processes 

can be incredibly complex for folks and they are often 

not going to understand the basics required. And so, I 

really appreciate the Department being willing to be --

do more of that proactive outreach when folks raise an 

issue. And I wish all federal agencies did similar 
Negotiated Rulemaking 10/6/2021

24 

 

things.

MS. JEFFRIES: Okay. Thank you, 

Bethany. Joe.

MR. SANDERS: Jennifer, are you 

thinking something along the lines of, for example, 

releasing the, the bases for past successful 

applications? Is that what’s sort or envisioned here?

MS. HONG: Yeah, I think so. I think 

it’s a matter of kind of furnishing some raw examples of 

what constitutes a claim and just providing more guidance 

on the front end to assist borrowers in filing their

applications. Did you have some further ideas on that, 

Joe?

MR. SANDERS: No. I think that’s a 

good idea. Along those lines, you know, we think that --

and this may be getting too far afield from this section, 

so I’ll be brief. Having the basis for the denial, 

right? When you deny somebody letting them know why they 

were denied and presenting some reasoning would also be a 

positive step along these lines to provide some 

transparency to the process. And then my last question 

on this is just I’m wondering how the response from the 

school meshes with the post-adjudication issues which I’m 

thinking we’ll be getting to later today. 

MS. JEFFRIES: Sorry about that. Thank 
Negotiated Rulemaking 10/6/2021

25 

 

you, Joe. Heather, and then I’d like to take a 

temperature check on that.

MS. PERFETTI: Thank you. I was just 

curious if there is related data that the Department has 

or can provide?

MS. HONG: You mean in terms of denials 

based on that student claim? Yeah, we -- I -- we, we 

could check back. We have those data. I’m not sure 

(inaudible).

MS. PERFETTI: And I think this ties to 

what was stated earlier. If it proceeds then there’s a 

response from an institution and so how does it track 

along the continuum in terms of numbers and processing if 

that’s available?

MS. HONG: Sure. We’ll make a note of 

it.

MS. JEFFRIES: Thank you. Our last 

comment by David and then we will temperature check this 

for tentative agreement on the concept. 

DR. TANDBERG: I just want to check in 

because I believe Jennifer said this wasn’t regulatory or 

it was sub-regulatory and more information also. Do we 

actually need to do a temperature check if this isn’t --

if this isn’t regulatory and this is negotiated 

rulemaking? I -- I’ll say I support this. I think it’s 
Negotiated Rulemaking 10/6/2021

26 

 

great, but if it’s just informational I would propose 

that we move on.

MS. HONG: We’d support that as well. 

We just -- we, you know, we wanted to -- things come up 

in these discussions and sometimes, you know, subregulatory things are related to the overall process. We 

just want to come share with you. I, I, I agree we 

really don’t need a temperature check on this one.

MS. JEFFRIES: Okay. Unless I hear any 

objection from any other committee member, we will not do 

a temperature check on this as it is informational, and 

we will move to process based on prior Departmental 

action. Jennifer?

MS. HONG: Okay. Thank you. I, I 

should (inaudible) -- I think we’re on evidence solely 

from applications. They’re, they’re (inaudible). 

MS. JEFFRIES: Oh, I’m sorry. I’m 

sorry. Yes.

MS. HONG: Yeah. No problem. So, so 

the past two sessions on rulemaking raised questions on 

whether a borrower’s application or a group of 

applications should be considered sufficient evidence. I 

think this was broached earlier yesterday in terms of 

what constituted evidence and sufficient evidence maybe 

to Justin’s claim as well. So, what, what does the 
Negotiated Rulemaking 10/6/2021

27 

 

Department base its information, its evidence on when it 

receives a BD claim? And we are guided by the principle 

that the borrower defense application in it of itself is 

a form of evidence. So, statements made by borrowers in 

a borrower defense application could provide evidence for 

areas where the borrower would have knowledge of the 

issue. And an example of that would be a borrower’s 

interaction with admission staff, for example. That 

said, we would continue to -- we would like to continue 

to seek evidence from the institution, the Department, 

and any other relevant sources and consider any of that 

evidence as applicable plus what is in the application. 

Multiple applications asserting similar claims could be 

grounds for a group process or additional forms of 

corroborating evidence. And then when I, I talked about 

evidence from the Department that is going to be the next 

issue in terms of expanding what we consider for borrower 

defense, some information that we already have from 

program reviews. That’s the next issue. So, I open that 

up to discussion.

MS. JEFFRIES: Thank you. Any 

comments? Josh and then David.

MR. ROVENGER: Thanks. This is -- it’s

more just a clarifying question for the Department. Is 

this saying that if all you end up at the end of the day 
Negotiated Rulemaking 10/6/2021

28 

 

with is a borrower defense application, that alone could 

be sufficient to grant the -- to grant the borrower 

defense but notwithstanding that, the Department still 

wants as much evidence as it possibly can get? Is, is --

am I understanding this correctly? 

MS. HONG: Yes. That, that is correct

after we’ve gone to the institution and asked them or 

they provide any additional evidence to the contrary.

MS. JEFFRIES: Thank you, Josh, and 

Jennifer, for that Department response. David?

DR. TANDBERG: Yeah, apologies. I 

think -- I, I was processing whether Josh’s question 

answered my question and I, I, I, I believe it did. 

Essentially, you would -- the Department would be willing

to consider the merits of the claim based solely on the 

application if no other evidence is forthcoming. That 

doesn’t presuppose what the Department’s decision would 

be though, right? I guess that’s a question for 

Jennifer. Just I’m (interposing) --

MS. HONG: Yes. (Interposing). Yes.

DR. TANDBERG: Right. Okay.

MS. HONG: Yes, that’s I think how 

you characterized it was correct. And if I’m overspeaking, I know (inaudible) jump in here. But yeah. 

DR. TANDBERG: Right.
Negotiated Rulemaking 10/6/2021

29 

 

MS. HONG: That’s, that’s right, David.

DR. TANDBERG: Okay. Thank you. 

MR. DAVIS: Not, not to get too legal 

on this, but yes, a student who got the evidence in --

solely in the application, meets the standard of --

standard that we end up with, yeah, on, on its own, 

that’s possible. 

MS. JEFFRIES: Thank you. Michaela and 

then Jeri and then Justin.

MS. MARTIN: I wanted you to kind of 

like clarify or like just also, sorry. I think that it 

was asked if the actual, you know, if it was just the 

application that’s being considered. And it was like 

yes, but if we talk to the colleges or if we have other 

things, and I would imagine that that probably is to 

ensure that these colleges don’t typically close quietly, 

right, or like these kinds of issues. So, are you saying 

that like if what’s in the application like, you know, 

what is essentially evidence but not in the like was 

introduced in this other kind of like did that, that was 

the case? It’s not like someone’s going to write the 

application and you’d be like, oh, looks great and pass 

it? Because I know that there are probably folks within 

this board that are having that concern right now is 

they’re saying someone could fill out an application and 
Negotiated Rulemaking 10/6/2021

30 

 

then that’s it. Not me. I, I don’t (interposing) --

MS. HONG: Right. So, that’s next. 

So, we want to -- the, the institutions will have due 

process. In other words, they will have the opportunity 

to provide, you know, (interposing) evidence. However, 

if it’s favorable in the absence of other evidence, a 

borrower defense claim could be approved solely based on 

an application. That’s what this is saying. It is

possible. 

MS. MARTIN: Thank you.

MS. HONG: Mm-hmm.

MS. JEFFRIES: Thank you. We have Jeri 

and then Justin, and seeing no further hands after that, 

I will call for a temperature check.

MS. O’BRYAN-LOSEE: (Inaudible). I 

just want to just get a little clarification when you say 

any other relevant sources. Would that be something like 

accrediting agencies where the, you know, the colleges 

may have been on probation or, you know, whatever, but 

our notice does that include something like that?

MS. HONG: Yes, certainly could. Mmhmm.

MS. JEFFRIES: Thank you. Justin?

MR. HAUSCHILD: Yeah. Thank you, 

Cindy. Just want to say that we are supportive of this, 
Negotiated Rulemaking 10/6/2021

31 

this provision, and we think it’s more appropriate that, 

you know, the personal (inaudible) attestations of 

borrowers at these institutions be considered -- of, of 

these borrowers at these institutions be considered 

evidence. So, thank you.

MS. JEFFRIES: Thank you, Justin. 

Jessica, and then the temperature check.

MS. BARRY: Sure. I just had a 

question for Jennifer. So, if we go with just using 

applications, how will the Department monitor fraud? How 

will that be handled? 

MS. JEFFRIES: I’m going to ask you to 

put that question into the chat, Jessica, so that she has 

a chance -- the Department has a chance to look at it 

and, and respond. Thank you. Let’s go ahead and take a 

temperature check for tentative agreement on the concept 

surrounding evidence solely from applications. Let me 

see your thumbs, please. Okay, seeing no thumbs down, 

that is a positive temperature check on that. Thank you 

very much. Okay. Now let’s move to process based on 

prior Department action. Jennifer.

MS. HONG: Thanks, Cindy. So, this is 

again we want to codify a process to consider information

from existing Department findings as a basis of borrower

defense claims. So, again, just on the same topic of the 

 
Negotiated Rulemaking 10/6/2021

32 

 

evidence we would look at final program review 

determinations, what we call FPRDs or final audit 

determinations, FADs, to reveal that an institution, you 

know, misstated job placement rates, and if that’s the 

case the Department may use those findings to grant 

borrower defense discharges to affected borrowers. In 

the case of findings based upon either one of these 

program review determinations or audit determinations, 

the institution would not provide an additional response 

because they had already done so as part of the program 

review and audit determination process. So, they already 

had an opportunity to respond in -- through that process 

as well. So, that is -- I mean, we have the authority to 

do this already. We just wanted to codify it in 

regulation.

MS. JEFFRIES: Okay. Thank you, 

Jennifer. Josh?

MR. ROVENGER: Thanks. So, so we’re 

generally supportive of this. One question I had is why 

the Department settled on that May standard. And, and I 

ask that because to my mind if a final audit 

determination, for instance, reveals widespread fraud 

that would satisfy whatever standard we settle on for the 

borrower defense, it seems to me that at that point if we 

know it satisfies a borrower - the borrower defense 
Negotiated Rulemaking 10/6/2021

33 

 

standard, then the Department should have to grant the 

borrower defenses based on that finding. And, and so I’m 

just interested in hearing how the Department settled on 

the standard.

MS. JEFFRIES: Okay. I think that I, I 

want to thank you for that, Josh, and the Department may 

need some time to look into that, and, and give a 

response. So, if you want to capture that in chat, 

please feel free to do so. David?

DR. TANDBERG: So, is this only in 

instances where the institution misstated job placement 

rates? Or are there other violations or issues that 

would allow for prior Department action to be considered? 

Because as it’s written --

MS. HONG: Oh, no. Yeah. I’m sorry. 

That was -- that’s just an example we’ve provided that 

might be a (interposing) program revealed.

DR. TANDBERG: Okay. Oh, I see. Yeah, 

you have the sub-clause, for example. My, my apologies.

MS. JEFFRIES: Okay. Anyone else 

before we go to temperature check? Heather.

MS. PERFETTI: I just had a question 

more for Jennifer. Is this based on a timeframe? Or is 

it just any prior Departmental action in the history of 

the institution?
Negotiated Rulemaking 10/6/2021

34 

 

MS. HONG: Oh, I think -- I think the

timeframes will be relevant depending on, you know, the 

claim that the borrower is stating by when, when there 

has to be (inaudible) between, you know, any kind of 

misstated job placement rates, for example, and the claim 

that the borrower is asserting in terms of when, when 

this occurred, right? So, we would be okay with that if, 

if it’s re -- if it seems reasonable that based on the 

statements (inaudible) occurred during the period that 

the borrower attended the school. It seems like that 

would follow. We would use that information to support 

the borrower’s claim against the institution. So, I 

guess as, as to the relevancy of the time period that the 

borrower attended the school and when the 

misrepresentation occurred.

MS. JEFFRIES: Thank you, Heather and 

Justin, Jennifer. Seeing no other hands, let’s move for 

a temperature check for tentative agreement on the iss --

sub-issuse of process based on prior Departmental 

actions. Can we see your thumbs, please? Okay. So, 

it’s a positive temperature check for TA on that one as 

well. Alright. Let’s forge ahead here, and the next 

subcategory in this is borrower, borrower status during 

and after adjudication. Jennifer?

 MS. HONG: Yes. So, as a default 
Negotiated Rulemaking 10/6/2021

35 

 

option, we propose that when a borrower initially files a 

BD claim that they be placed in forbearance if they want 

a re -- repayment and if there were indeed fallout that 

would stop collections while the Department adjudicates 

their claim. Borrowers would still have the opportunity 

to opt-out on forbearance or subcollections, and this 

would apply to all of the borrower’s loans even if not 

all of them are related to the BD claim. And then claims 

that have been in forbearance for more than 180 days 

would stop accumulating interest. Now after the 

adjudication happens, we propose several options for the 

borrower’s status. If, if we approve the claim, the 

borrower’s loans will stay in interest-free forbearance 

while the loan balance is discharged in accordance with 

the amount of relief that’s provided. If we provide --

if we grant partial relief or deny the claim, the 

borrower’s loans will stay in forbearance or stop 

collections for 90 days after the partial discharge to 

give the borrower an opportunity to request

reconsideration under the new proposed reconsideration 

process and also to help ease the borrower back into 

repayment and collect -- collection activities. If the 

borrower does avail themselves of the reconsideration 

process, they will remain in forbearance or stop 

collections while the Department reviews reconsideration 
Negotiated Rulemaking 10/6/2021

36 

 

costs. 

MS. JEFFRIES: Okay. Thank you, Jen. 

Questions? Comments? Marjorie and then Jaye.

DR. DORIME-WILLIAMS: Please, Jennifer, 

and I, I want to say I think that the (inaudible) I 

really appreciate these efforts to make this easier for 

borrowers. I just wanted to know if there’s any 

rationale behind the 180 days to stop accumulating 

interest and then on the other side 90 days for, for 

relief for borrowers before they would have to start 

paying again. I, I don’t know if that’s mandatory, if 

there’s some rationale behind that the Department’s

choice of those time periods. 

MS. HONG: I mean, there’s, there’s 

always a rational basis and that is just to -- that was 

the timeframe that we identified that would give them 

enough time to kind of get back on their feet and start 

back into repayment or, you know, stop collections 

whichever status they have-- just to give them some time.

MS. JEFFRIES: Okay. Thank you. Jaye?

MR. TOTONCHI: Really quick before 

Jaye, just want to recognize that Suzanne has come on 

screen for state regulators as the alternate. 

MS. JEFFRIES: Jaye, please proceed. 

No?
Negotiated Rulemaking 10/6/2021

37 

 

MS. O’BRYAN-LOSEE: Oh, I just put my 

hand down since they’re speaking. So, sorry. Just a 

question. So, as (inaudible) holders we are receiving 

notice from the Department to put borrowers in 

forbearance currently, and -- but a, a situation where we 

would basically have subsidy during forbearance isn’t 

something that exists in the program. So, I just would 

like some clarification on billing, you know, how, how 

the Department anticipates that would work if it were

applicable to file. Or is this specifically direct 

loans?

MS. JEFFRIES: Okay. Would, would you 

like to place that question in the chat for Jennifer to 

take a look at? Thank you, Jaye. Josh?

MR. ROVENGER: Thanks. So, I’ve just 

two points to raise. And the first I want to pick up on 

Marjorie’s point about the interest stopping after 180 

days. We would urge the Department to eliminate the 180 

days and just stop interest at the time the borrower 

applies for borrower defense and is put into forbearance. 

By, by asserting that claim the borrower is essentially

saying this loan was invalid from the beginning and the 

Department should be put in no worse -- that the student 

should be in no worse position making that claim to the 

Department. The other topic I’d like to talk about 
Negotiated Rulemaking 10/6/2021

38 

 

within this, this sub-issue is there needs to be some 

sort of redress put in here when the Department collects 

unlawfully for a borrower defense applicant who is in 

forbearance. We’ve seen this happen not only just based 

on Department policy but in violation of court order. 

The last Secretary of Education and the Department was 

held in contempt of court for unlawfully collecting on 

borrowers who had applied for borrower defense. They 

garnished the wages of over 2,000 borrowers or offset 

their taxes and they demanded payment from 45,000 

borrowers who had submitted a borrower defense 

application and not only should have been in forbearance 

but there was a court order saying the Department

couldn’t collect on that. And so, to kind of underscore 

why there needs to be some sort of redress put in here if 

the Department unlawfully collects, I just want to, want 

to highlight the story of a borrower who submitted an 

affidavit in that case. So, this borrower attended 

Everest College believing it would be a better -- a path 

towards a better life. She applied for borrower defense 

in 2016 and was part of that class action. She was 

waiting on her tax refund of about 5,000 dollars and was 

going to use it to (inaudible). In violation of the 

court order and in contrast to the Department’s policy 

about keeping those in forbearance, the Department seized 
Negotiated Rulemaking 10/6/2021

39 

 

that tax -- that tax refund. As a result, she was 

charged certain late fees. She fell behind and she had 

to take second -- a second job despite a disability. She 

had to borrow 3,000 dollars from family and friends and 

600 dollars from a local lender. I can’t underscore 

enough that there are harms beyond just a collection when 

the Department unlawfully collects even when a borrower 

should be in this forbearance status. And so, I think 

it’s really important that we discuss some sort of 

redress in that -- in that situation.

MS. JEFFRIES: Thank you, Josh. 

Jennifer, did you have a response to something or --

MS. HONG: Just real quick. I was 

listening to Josh. I, I saw June’s (phonetic) question 

about interest capitalization. Remember that interest 

would not be capitalized when the loan’s in forbearance 

(inaudible) for Joe. Joe asked that question. Yeah. 

And to his point, for forbearance situations it’s 

interest-free for the first (inaudible) for the first 180 

days and that’s the proposal. Thank you for sharing, 

Josh, everything else. We’ll take it into consideration. 

MS. JEFFRIES: Thank you, Jennifer. 

We’re going to take two more comments or questions, 

Suzanne and then Daniel, and then we will do a 

temperature check for tentative agreement on this. 
Negotiated Rulemaking 10/6/2021

40 

 

MS. MARTINDALE: Yes, thank you. So, 

I, I would support there being no interest accumulation 

at all. I appreciate that you would not capitalize it 

but I’m concerned about any accumulation of interest for 

a borrower who’s so distressed they’d filed a claim. In 

addition, I don’t see anything in the issue paper other 

than in the section talking about the notion of full 

versus partial relief. I think we should presume that if 

a borrower stated a claim, they get full relief. They’ve 

already taken on the burden of debt. That should be 

financial harm enough, so if there’s going to be any 

concept of partial relief, I hope we can talk about what 

that would be and what the methodology would be behind 

it. Thank you. 

MS. JEFFRIES: Thank you, Suzanne. 

Daniel?

MR. BARKOWITZ: Thank you. I also 

support the, the no interest and I, I, I have a question 

for the Department. Is it possible, rather than choose 

forbearance as the option, to put students in an 

affirming status, which by definition for students who 

are in subsidized, would include no interest and then, 

you know, allow for the opportunity to not assess 

interest during this period. I echo what Josh and others 

have said around the issues here, that students have 
Negotiated Rulemaking 10/6/2021

41 

 

already raised substantive issues and we don’t want the 

loan accruing interest during this timeframe while the 

documentation and decision is being made. 

MS. JEFFRIES: Thank you, Daniel. So, 

let’s go ahead and take a temperature check for tentative 

agreement on the borrower status during and after 

adjudication. Can we see your thumbs, please? Okay, I 

see two, three thumbs down, Joe, Josh, and David. Can 

you give some input to the committee, Joe, on yours?

MR. SANDERS: I just agree with Suzanne 

that we don’t think there should be any accrual at all. 

MS. JEFFRIES: Okay. Thank you. 

Josh?

MR. ROVENGER: Yeah, for me it’s no 

accrual and also I’d like further discussion on some sort 

of remedy if the Department unlawfully collects in the 

forbearance. 

MS. JEFFRIES: Thank you. David, I 

believe you were the other one. 

DR. TANDBERG: Yeah, exact same reasons 

as Josh. 

MS. JEFFRIES: Okay. Thank you. 

Alright, with that, let’s move on to limited periods for 

borrowers. Jennifer. 

MS. HONG: Okay. For the next issue 
Negotiated Rulemaking 10/6/2021

42 

 

here, we just want to eliminate limitations periods for 

borrowers. You know, we, we find that there, these 

limitation periods have been incredibly confusing for 

borrowers and they had operational complexity for the 

Department. They also make borrower defense discharges 

different from other programs, like closed school and 

that can result in borrowers needing to choose between 

programs. We think as long as a borrower still has an 

outstanding student loan, we should not apply a statute 

of limitations. However, we would keep, we would retain 

a special limitation for the Departments recovery from an 

institution. 

MS. JEFFRIES: Thank you, Jennifer. 

Questions, comments? Josh and then David. 

MR. ROVENGER: Thanks. So, we are

definitely in support of eliminating limitations periods. 

Often, a borrower is not even aware of either their right 

to relief or some of the evidence beyond the limitations 

period that was put in. And I, I would be curious to 

hear from the Department why this would be limited to 

individuals who have an outstanding direct loan 

(inaudible) and -- I’d be interested in hearing that from 

the Department. 

MS. JEFFRIES: Okay. Thank you. 

Alright. Do you want to put that in the chat for the 
Negotiated Rulemaking 10/6/2021

43 

 

Department to have a chance to review and -- David.

DR. TANDBERG: I had the same question 

but I want -- I don’t know if Jennifer has a response 

now. If she does have a response now, I’d love to hear 

it. Otherwise, I can certainly be patient. 

MS. JEFFRIES: Thank you. Jessica. 

MS. BARRY: Yeah, I’m just concerned 

with rec-recordkeeping from institutions being able to 

really respond to these and maybe some of the other 

institution’s representatives that are here could talk 

about this. There is a three-year recordkeeping rule now 

and so if a claim comes in that’s 20 years old, it’s, 

it’s going to be really hard for institutions to have the 

records available to really be able to respond to the 

claim. 

MS. JEFFRIES: Thank you. Jessica, or 

I’m sorry, Jennifer. 

MS. HONG: Thank you for that comment, 

Jessica. I just wanted to talk about having an 

outstanding direct loan. So, that, that’s actually, 

that’s actually meant to be more generous and less 

restricted than what we had before. So, so long as you, 

so long as you just have an outstanding direct loan, then 

you would still be able to submit a borrower defense 

claim. 
Negotiated Rulemaking 10/6/2021

44 

 

MS. JEFFRIES: Thank you, Jennifer. 

Daniel?

MR. BARKOWITZ: I think the response -

-– so I’m going to respond to Jessica as an institutional 

representative and financial aid representative. I think 

the issue here is it ties back to the institutional 

liability period. I’m pleased to see a limit on 

institutional liability under this section. If a 

borrower’s repayment is 25 years or longer, it’s nearly 

impossible to find records in that period of time. So, 

when we come to the institutional liability section, the 

number that I recall is a six-year period, which it seems 

to me is mostly reasonable given the audit timeframes and 

it’s really three years beyond the potential audit for 

that period. So, as long as there’s a tieback here 

between the two pieces, I think there’s reasonable 

(inaudible) that would make sense. And I, and I would 

support, you know, again, in, in both instances an 

expansion of the limitation period here as long as 

there’s a corresponding understanding of the 

institutional liability portion associated with that. 

MS. JEFFRIES: Thank you, Daniel. 

Josh?

MR. ROVENGER: Thanks. So, first, 

I’ll just echo Daniel’s point that so long -- I mean, I,
Negotiated Rulemaking 10/6/2021

45 

 

I hear Jessica’s concern but if we’re going to, as the 

Department proposes, completely bifurcate the borrower 

defense process with the recovery against the 

institutions, then I, I don’t see how that concern 

outweighs the really significant harm that the 

limitations periods would, would’ve had with (inaudible) 

for students. I also want to respond to the Department’s 

point about direct loans. So, appreciate that, that this 

would be broader. I am concerned though, one, the 

implications for (inaudible) borrowers and, two, for 

someone who has entirely paid off their loans and then 

submits a borrower defense claim, they’re still--they 

have been subject to the unlawful action of the school 

the same way as someone who has an outstanding direct 

loan. Their loan is equally invalid and so, I, I would 

urge the Department to eliminate any limitation period 

for them as well. 

MS. JEFFRIES: Thank you, Josh. 

Alright. Seeing no additional -- okay, one additional. 

Michaela? 

MS. MARTIN: Yeah, I just wanted to 

make a comment that the, the question about the records 

doesn’t sound like it’s coming from a place that’s really 

–- this is a to-this is another issue where it’s 

completely separate from like the liability or any impact 
Negotiated Rulemaking 10/6/2021

46 

 

on the institutions and the impact on the student. And 

so, if the records don’t exist at the institution and the 

student submits a request, that, you know, is it like a 

prima facie case where like on its face you can see that 

the application is valid and the school doesn’t have any 

info and they find that they’re, you know, like that 

student just doesn’t qualify. Then, they don’t qualify 

and that sucks and I, I wish that student maybe submitted 

the request when the institution still had records. 

However, that has no bearing on the institution itself 

and I just would really love to see a perspective that 

comes from ensuring that the student has access to 

resources. 

MS. JEFFRIES: I’ll give Jessica the 

floor and then we will take a temperature check on, on 

the limitation period for borrowers. Jessica?

MS. BARRY: Yeah, sure and I 

appreciate that comment, Michaela. A student should 

definitely be discharged of their loans if there was 

fraud, even if it was a long period ago. I’m not saying 

that. It shouldn’t be. But there is reputational damage 

that comes when a, when a claim is processed and approved 

and so we just want to make sure that institutions have 

the ability to respond to, to claims if possible. 

MS. JEFFRIES: Thank you. Josh and 
Negotiated Rulemaking 10/6/2021

47 

 

then a temperature check will be taken. 

MR. ROVENGER: Yeah, I just want to 

briefly respond to that last part. I may -- the 

Department can correct me but I don’t believe any 

borrower defense claim has actually been granted against 

a school that still exists today. And so, I don’t 

believe there would be any actual evidence reflecting any 

type of reputational harm if a school, if a borrower 

defense is granted. 

MS. JEFFRIES: Thank you, Josh. Okay. 

So, let’s go ahead and take our temperature check for 

tentative agreement on the limited period for borrowers. 

Let me see your thumbs, please. Okay, looks like a 

positive check on that one. Thank you. With that being 

said, let’s keep moving on here to institutional response 

process. 

MS. HONG: Thanks. So, we’re just 

going to, we’re going to build in some timeframes for an

institutional response process that would be required of

the institution. Again, as we’ve mentioned several 

times, this would be separate from the process used to 

access liabilities to the institutions. And, generally, 

what we’re thinking about for both individual and group 

claims is that institutions would have 60 days to respon

to the Department’s requests for relevant evidence. The

d 
Negotiated Rulemaking 10/6/2021

48 

 

midpoint of the current timelines generally afforded for 

responding to program reviews. So, that’s where we get 

that, those 60 days. If, if the institution did not have 

evidence, it would provide an affidavit to that effect, 

certified by the institution’s leadership. If the 

institutions waive the institutional response process or 

choose not to respond, the Department will assume the 

institution does not contest the allegations made by the 

borrower. 

MS. JEFFRIES: Thank you, Jennifer. 

Open for discussion. Heather and then Marjorie. 

MS. JARVIS: Thank you. Jennifer, I 

just wanted to verify what the current institutional 

response time is for institutions and then if you have a 

sense for how many fall into these categories of not 

responding or responding with evidence. 

MS. JEFFRIES: Thank you, Heather. I 

think that may be a question that they need a little time 

for so please put that in the chat. Appreciate it. 

Marjorie?

DR. DORIME-WILLIAMS: So, this is 

specifically about not having evidence and so I’m not 

sure if that’s common and what’s to stop an institutional 

leader from simply falsifying a statement saying that 

they have no evidence to provide. I think that there’s 
Negotiated Rulemaking 10/6/2021

49 

 

some concern about how that’s established and if there 

are other processes besides simply because the president 

said so. 

MS. JEFFRIES: Okay. I, I think that 

if you’d be so kind as to put that in the chat, that they 

can look further into it. Appreciate it. Any further 

questions or comments before -- okay, Heather.

MS. JARVIS: The other question that I 

had is whether it’s an individual or a group process. 

Does that warrant more time for an institutional response 

or not based on your experience with processing borrower 

defense? And that’s for anyone on the committee or 

Jennifer. 

MS. JEFFRIES: Anyone? Thank you, 

Heather. It doesn’t seem to have an immediate response 

so, again, please be so kind as to put that in the chat. 

Alright. Seeing no further hands, let’s move -- okay, 

Joe? 

MR. SANDERS: Very quickly to 

Marjorie’s point about, you know, what’s to keep 

leadership honest in that affidavit and one thought that 

comes to mind is that the Department could consider 

whatever the response is as binding in the post 

adjudication process. So, if they say we don’t have 

anything, there could be some kind of limitation on them 
Negotiated Rulemaking 10/6/2021

50 

then providing evidence in the post adjudication period. 

MS. JEFFRIES: Thank you, Joe. 

Alright, no further hands. Oh, Daniel?

MR. BARKOWITZ: Sorry. Thank you. 

Very quickly. The concern around the 60 days, I just 

wanted to address around the group versus individual. 

Generally, the group, if there’s a group filing, it would 

be under one condition or one status or one issue, which 

could be responded to, I think, within the 60 days. I 

have, I have little concern around the ability to respond 

in that timeframe since the underlying issue would be 

similar. If it’s multiple issues, then, then I would ask 

the Department for some, some understanding but, again, 

with a, with a group coming under one particular issue, I 

don’t think there’s a, there’s a concern around the 60-

day timeframe. 

MS. JEFFRIES: Thank you, Daniel. 

Alright. One last question or comment with Jessica and 

then we’ll move for the temperature check. 

MS. BARRY: Yeah, I just wanted to 

support Heather in her cons-in her question. I know for 

a really small school, if it was a very complicated claim 

and there were lots of students involved, it would take a 

lot of time for small schools to respond. So, I think 

it’s just something we should consider. 

 
Negotiated Rulemaking 10/6/2021

51 

 

MS. JEFFRIES: Thank you, Jessica. 

So, let’s go ahead and move for a temperature check for 

tentative agreement on the institutional response process 

subcategory. Let me see your thumbs, please. Okay, it 

looks like we have another positive temperature check. 

Thank you for that. Alright. Just a few more 

subcategories in this one. Time to process and 

adjudicate applications. Jen?

MS. HONG: Okay. We just wanted to 

get your thoughts. You know, we, we strive for 

expediency and thoroughness in administering the borrower 

defense claim process and we just wanted to get some 

general ideas on establishing reasonable timeframes for 

the adjudication. If we could just spend a few, few 

minutes talking about what folks are feeling in terms of 

a reasonable timeline to adjudicate BD claims and would 

that be the same, would that timeframe apply both to 

individuals versus group claims. Should the clock stop 

or reset on an individual claim if it’s captured within a 

group process before the Department issues an 

adjudication decision? And how should the Department

treat evidence or cases that are in ongoing unresolved or 

settled litigation because I know that that’s, you know, 

been an issue? So, those are the questions we wanted to 

kind of get somebody around in terms of times for 
Negotiated Rulemaking 10/6/2021

52 

 

processing adjudicated applications. 

MS. JEFFRIES: Thank you, Jennifer. 

Josh?

MR. ROVENGER: Thanks. So, with 

respect to the first question, I think, you know, I’m, 

I’m open, very open to hearing what others think as to a 

reasonable time constraint. For me, the most important 

thing here is, number one, there is a specified time in 

the regulation that the Department has to decide these 

claims. And, number two, that there’s a penalty if the 

Department procedurally violates that regulation. And 

what I would propose is that the Department grants the 

borrower defense if it doesn’t decide it within the 

specified time limit. And the reason why this is the 

most important thing to me is I cannot emphasize enough 

how much the Department’s inaction compounds the harm 

that borrowers are facing already by virtue of the way 

they were treated by their school. It impacts their 

ability to financially plan for the future. It impacts 

decisions they make related to their families and it 

causes them to lose trust in their government entirely. 

And I, I had a lot, lot of the kind of concrete, like 

very specific thoughts that I’ll share as the 

conversation gets going but I, I just want to use my, the

rest of my three minutes here to convey to the entire 
Negotiated Rulemaking 10/6/2021

53 

 

committee what some borrowers who have been waiting four 

or five years have said about this process. I mean, 

they’ve done this in affidavits in the Sweet litigation 

which challenged the Department’s delay in deciding 

borrower defense claims. So, one borrower says it 

becomes overwhelming and depressing some days, especially

when I’m working so hard each day just to make ends meet.

Another says not because of the way they were treated by 

the, well, because the Department’s failure one way or 

another, whether to grant the borrower defense claim 

quote I won’t buy a house. I stopped fertility 

treatments. I don’t have the future I was promised. 

Another said the continued inaction of the government is 

what has caused me to lose faith. Another said when I 

first submitted my borrower defense claim, as I, I was 

told it would take six months to decide. Six months 

turned into a year and now it is four years later and I 

have no decision. It’s disheartening to want to do the 

right thing, follow the rules, get an education, and then

contribute to my community with a small business, that 

gives back to the local economy and then have such an 

uphill battle to even get any information. Another 

borrower, hard to imagine a future that doesn’t end in 

financial ruin. Cannot purchase a home. Cannot figure 

out a payment plan within budget that’ll ever get me out 

 
Negotiated Rulemaking 10/6/2021

54 

 

of this debt due to the interest. No way to plan for 

retirement. No way to plan for my children’s college 

fund. Do not foresee a way for myself, my wife, or my 

parents (inaudible) debt. Again, I cannot emphasize 

enough the importance of the Department recognizing that 

there should be some specified time limit in the 

regulation and, two, there being real consequences if the 

Department doesn’t live up to that time limit because of 

the compounding harm that its inaction causes on 

borrowers. 

MS. JEFFRIES: Thank you, Josh. 

David?

DR. TANDBERG: I just really 

appreciate, Josh, thank you sharing both your insights 

but, in particular, the quotes from those who have been 

harmed by this process. Just really, really helpful. I 

guess I’d want to know if, if, Jennifer, more about the 

details of how this process is carried out within the 

Department. I mean, who’s hearing these claims, 

adjudicating these, these, these claims and, and what 

might lead to such prolonged delays? I, I guess for me I

understand the process but it’s, but actually the nuts 

and bolts of how it’s carried out. I’ll be honest, it’s 

a bit of a black box and I’m sure if it is for me, it’s 

much more of a black box for many other people. 
Negotiated Rulemaking 10/6/2021

55 

 

MS. JEFFRIES: Thank you, David. That 

sounds like a question that’s going to need a little bit 

of delving into so if you could please put that question 

and/or information that you would like to see in the chat 

box, I would appreciate it. Michaela?

MS. MARTIN: Yeah, I don’t, I don’t 

mean to like rehash old topics but I also want to take 

the moment to acknowledge that Josh had to share student 

stories because we don’t have a student on this committee 

to speak for themselves. And that I feel very 

passionately about that. And as a single student parent 

and, and a lot of these closed schools, they really --

that’s how they get you, right? They play on parents and 

especially single moms. Like oh, you’ll have time to go 

to school because you can go online and you can do these 

things. And having to navigate all of that and then 

finding out that everything that I’ve been working for 

didn’t matter. Like, I feel like (inaudible) I can’t 

imagine actually going through that and I just 

(interposing). 

MS. JEFFRIES: Thank you, Michaela. 

Oh -- 

MS. MARTIN: Thank you. 

MS. JEFFRIES: Sorry. Thank you, 

Michaela. Justin?
Negotiated Rulemaking 10/6/2021

56 

 

MR. HAUSCHILD: Yeah, thank you so 

much, Cindy. I just want to support what Josh has 

already said about a very specific timeline being 

included. What Josh raised about compounding issues is a 

very real thing. We, we have countless stories from 

veterans who’ve been impacted. I just recently spoke 

with one who attended ITT Tech, exhausted her earned VA 

education benefits, went on to take out additional 

federal student loans at the institution and then waited 

a ridiculous, frankly, period of time for those, for her 

borrower defense claim to be addressed. And during that 

time, there were difficulties paying for rent, paying for 

expenses related to children because of reliance on 

government assistance. All of these things are very real 

and compounding issues and so the need for a very 

specific hard deadline in the regulation I don’t think 

can be overstated. Thank you. 

MS. JEFFRIES: Thanks, Justin. Bobby. 

DR. AYALA: Oh, just a thank you to 

Josh for sharing those stories again and echoing what 

Michaela said there. But I have a specific question 

perhaps for the Department. Do we have any data with 

regards to what the timeline currently is to adjudicate 

borrower defense claims? And do we have any data on the 

same process for group claims so that we could take a 
Negotiated Rulemaking 10/6/2021

57 

 

look at that and look at perhaps the, some of the 

barriers that cause it to, to go on for such an extended 

period of time like we just recently heard?

MS. JEFFRIES: Okay. Again, Bobby, 

please put that in the, in the chat so that ample time 

can, consideration can be given to –- oh, Jennifer, you 

have your hand up?

MS. HONG: Yes, and I, I know someone 

else raised that question, Bobby, and we’ll, we’ll loop 

back on that one. I just, to the extent, if I could 

point you to question three, to the extent that some of 

these delays are due to pending litigation or ongoing 

litigation. Do, does anybody have any kind of thoughts 

to share with regard to the treatment of evidence? And, 

and also, Josh, I appreciate your thoughts on the 

borrower experiences and Michaela’s thoughts. So, we are 

definitely eager to hear about more of those. 

MS. JEFFRIES: Thank you, Jennifer. 

Yeah, gentle reminder that we’re (audio) specific 

questions here the Department is looking for feedback on. 

And so, any new comments focused on those would be 

appreciated from what Jennifer just said. Marjorie?

DR. DORIME-WILLIAMS: So, I, I think 

that my question is about question number three and I’m 

not really sure what the Department is asking. It seems
Negotiated Rulemaking 10/6/2021

58 

 

that these are three very different cases and so is it 

what should they do with evidence with respect to other 

cases? Is it between individual and group process? Is 

it how long to hold onto evidence because I would assume 

maybe some of those timeline problems might come up 

because they have to reexamine perhaps individual cases 

that are related? So, I, I don’t know if there’s maybe a 

little bit more clarity that you could provide on that 

last question. 

MS. JEFFRIES: Okay. Thank you, 

Marjorie. Josh? Oh, Jennifer, are you ready?

MS. HONG: Yeah, real quick. 

There’s no current, there’s no current timeframes in the, 

in the regulation to answer that question. As to 

clarifying these questions, Marjorie, this is all in the 

context of timeframes by which to adjudicate these 

claims. We realize, you know, we want to balance 

thoroughness and expediency. Sometimes, sometimes these 

delays are due to ongoing litigation and that’s what, why 

question number three is, is relevant, Marjorie, in terms 

of trying to understand or garner ideas on how the 

Department should treat pending BD adjudication case, 

adjudications when there’s pending litigation. 

MS. JEFFRIES: Thank you, Jennifer. 

Josh?
Negotiated Rulemaking 10/6/2021

59 

 

MR. ROVENGER: Thanks. I’m just going 

to tick through my thoughts on each of the three 

questions real quickly. So, on the first one, in, in 

choosing a specific date, I think, you know, or a 

specific time period, I do think we need some more 

information from the Department, in particular for 2021. 

How long on average has it taken the Department to decide 

any claim? As I mentioned before, the biggest thing 

though for me for question one is a specified time limit, 

violation, a real remedy, and penalty if the Department

violates that requirement. And that, frankly, should be 

retroactive given how long folks have been waiting. On 

the second question, so, so I, I think we understand that 

a group claim could take longer to decide than and 

individual claim. I think our concern would be if 

someone applies on their own and then gets moved into the 

group process, that they should receive really clear 

notice within whatever we decide for question number one, 

is that their claim has been moved over to that group 

process. So, they’re not just sitting in this limbo of I 

don’t know what’s going on with my claim. On the final 

question, so certainly the Department should draw on 

evidence for cases that are ongoing, unresolved. I don’t 

think that the Department should use that as a reason to 

hold off on deciding borrower defense claims and, in 
Negotiated Rulemaking 10/6/2021

60 

 

particular, since the evidence or the elements of, of the 

claims in like a (inaudible) might be quite different 

than what needs to be established to satisfy the borrower 

defense standard that we settle on. I think one way, and 

I was going to propose this later on that the Department

could address this is, so if the Department is concerned 

that there may be evidence that comes out in cases that 

would change a decision to deny granting, the Department

should just make explicit in its regulations that it can 

always reopen a denied claim for reevaluation. 

MS. JEFFRIES: Thanks, Josh. Justin?

MR. HAUSCHILD: Yeah, thank you, 

Cindy, Cindy. I’m going to apologize because I’m not 

specifically addressing one of the three questions but I, 

but I have my own question concerning the interest pause 

and how the Department reached a determination of six 

months as maybe opposed to just, you know, pausing 

immediately or something of that nature. Is there any 

clarification on that?

MS. HONG: Alright. So, I mean, 

(inaudible) six months or longer if you have a pending BD 

claim. You know, that, again, the, the point of this is 

to ensure that the borrower, you know, has an interest 

pause as we continue to adjudicate their claim. 

MS. JEFFRIES: Thank you, Jennifer. 
Negotiated Rulemaking 10/6/2021

61 

 

Joe. 

MR. SANDERS: Hi. So, these are all 

really good questions, Jennifer. I am going to address a

few key points in here. So, in number three, there’s a 

question of settled litigation. You know, state AGs 

think that the Department should consider evidence from 

settled litigation. As the Department itself I’m sure is

aware, there are a number of reasons why the litigation 

might settle. For example, State Attorneys General or 

another law enforcement entity might not choose to take a

case to trial where an entity does not have the resources

to fulfil the damages or restitution or civil penalties 

that are on the table and appropriate. So, the costs for

the office greatly outweigh any actual recoupment and 

cases might settle on that basis. Similarly, there are 

factors like litigation risk or other complicating 

matters that might make a settlement the best option in 

the short-term but not be definitive on the question of 

whether there was wrongdoing that the borrower might have

a claim on as a defense to the repayment of their federal

student loan. As to number two, and specifically -- so, 

number two, you know, we think there should be a timeline

for group claims but, you know, I’m certainly cognizant 

of the, the points raised by the proprietary schools and 

the accreditors said, you know, those are likely to be 
Negotiated Rulemaking 10/6/2021

62 

 

more complicated. And so, certainly, I don’t think it’s 

unreasonable to have a longer time length for a more 

complicated claim that deals with more borrowers. As to 

the individual clock on the individual claims if it’s 

captured within a group claim, again, these are all 

really tough questions so I think Josh’s point of needing 

more information on these before we have definitive 

answers is a good one. I would just say I don’t think it 

would be prudent or efficient to, for the Department to 

be required to answer individual claims where there’s a 

pending group claim that might have much more robust 

evidence. Alright? So, a borrower might say, you know, I 

was defrauded. They made me feel terrible on the 

telephone and I was pressured into enrolling. That’s, 

you know, a relevant thing that should be considered but 

then in the group claim you might have, you know, 

transcripts or recordings of phone calls that bear that 

out, right? And so, it would be we don’t think it would 

be sensible to dismiss a borrower claim for, you know, 

insufficient evidence when you have this group claim 

that’s much more robust sitting on it. So, based on the 

questions that we have here, those are my thoughts. 

Happy to give more when there’s more information 

available. 

MS. JEFFRIES: Thank you, Joe. 
Negotiated Rulemaking 10/6/2021

63 

 

Daniel. 

MR. BARKOWITZ: Thank you, Cindy. So, 

I’m going to make an assumption that the -- first of all, 

I want to echo what Joe and Justin and Josh have said. 

I, I agree wholeheartedly again that interest should not 

be accruing during this timeframe. However, the remedy 

the Department is putting forward that after six months 

interest should pause seems to indicate the Department

thinks in some measure that six months is a reasonable 

timeframe. So, I wonder -- this is an I wonder question, 

I wonder if, if we look at the 180 days as a benchmark 

timeframe, subtract from that 60 days for an institution 

to respond, which we’ve talked about in process, and that 

would give the Department the remainder of the 120 days. 

Again, not, not giving up on the interest assessment 

question, I still want to return to that, but I wonder if 

120 days is a reasonable timeframe given the six-month 

allocation for adjudication of individual borrower 

defense claims. That, if we’re adopting six months as 

sort of a standard, maybe it is within that timeframe 

that we want an answer . I’m, you know, I’m, I’m 

cognizant of the default risk, I’m cognizant of, of 

Josh’s point earlier about lifetime financial risks by 

these claims going on and on. I don’t really have a good 

answer for number three but I think, you know, a 
Negotiated Rulemaking 10/6/2021

64 

 

reasonable timeframe for the individual maybe that, that 

total of 180 days is a possibility. I also would like to 

see some data about what the current timeframe is but, 

but that seems to tie in well with what the Department

has put on the table to date. 

MS. JEFFRIES: Thanks, Daniel. Josh?

MR. ROVENGER: Thanks. So, first, I 

do want to echo Joe’s point that if an individual submits 

a borrow-a borrower defense application and there’s a 

group process that has additional information, you know, 

certainly that should be considered. Again, I just want 

to reiterate the point though that the borrower should be 

notified by the Department that that’s why their 

application that they individually submitted might be 

taking a little bit more time to evaluate. I also just 

want to respond or, or note that to the extent the 

interest provision that we discussed earlier reflects 

that kind of the Department’s starting point is 180 days 

and that the remedy for violating that would just be 

cutting off interest accrual and, to the points I was 

making earlier, I think that would be wholly inadequate 

to, to even come close to remedying the, the pain and 

harm that the Department causes through delay. 

MS. JEFFRIES: Thank you, Josh. 

Daniel. 
Negotiated Rulemaking 10/6/2021

65 

 

MR. BARKOWITZ: And just to respond to 

Josh, I forgot to say in my comments that I did support 

the remedy Josh put forward which is if we set an 

individual timeframe and the Department doesn’t respond 

in that timeframe, then the presumption would be a remedy 

of discharge. So, if 180 days, I agree with you that 

it’s not, once we set a timeframe, it’s not sufficient to 

just simply waive interest as a result of that. So, I’m 

supportive of that as well. 

MS. JEFFRIES: Thank you, Daniel. 

Josh?

MR. ROVENGER: Thanks. And I, I 

appreciate that, Daniel, and I, I do want to just take, 

take the time to emphasize that that relief really should 

be resurrected given that there are 200,000 plus 

borrowers who have been waiting an unreasonable amount of 

time for their decision. And so, they should also not be 

left out if we decide on that sort of remedy.

MS. JEFFRIES: Thanks, Josh. Alright. 

Seeing no further hands, I think we can move to 

temperature check for tentative agreement on this. 

Before we do that, I do want to remind everyone to please 

put your questions or solutions into the chat box so that 

the Department can utilize those. Alright. Now, we have 

three more hands up and then we will do a temperature 
Negotiated Rulemaking 10/6/2021

66 

 

check. David. 

DR. TANDBERG: I’ll be honest, I have 

no idea what we’re doing the temperature check on because 

there’s no official proposal on the table. There was 

just some questions asked and a bunch of ideas suggested, 

some of which I agree with, some were more of questions. 

And so, I don’t know that I could vote in temperature 

check at this time. 

MS. HONG: Cindy, if I could just -– 

David, I think, if we could just take a temperature check 

on the concepts, right? Because even building a process 

for a timeframe for adjudication, I think that’s, that’s 

the issue on the table. 

DR. TANDBERG: That, that works for 

me.

MS. HONG: Okay. 

DR. TANDBERG: So that we’re saying do 

we want a process--

MS. HONG: Yes. 

DR. TANDBERG: -with the timeframe. 

MS. HONG: There you go. 

DR. TANDBERG: Okay. 

MS. HONG: Right. 

MS. JEFFRIES: Jaye. 

MS. O’CONNELL: One thing I’m thinking
Negotiated Rulemaking 10/6/2021

67 

 

about are frivolous claims. So, if you get to the point 

where you, you have a timed box claim that ends up in a 

discharge if the Department doesn’t meet the timeline. 

We’re just familiar with bad actors filling the space to, 

to flood, you know, flood the Department with claims. 

And I’m not saying that against students, just something 

that we see sometimes in the, all the debt relief 

companies and things like that. So, just something to 

keep in mind as we’re building the guardrails.

MS. JEFFRIES: Thank you, Jaye, for 

that. Josh. 

MR. ROVENGER: Thanks. So, Jaye, to 

that point, I mean, if you have data on that, that would 

be really helpful to see because I don’t think it’s -- I 

personally am not persuaded just by the abstract idea 

that there may be instances of fraud that should, should 

dictate how we’re making broad policy decisions. I mean, 

so, would be interested in like specific instances and 

examples and dates. More broadly, though, the Department

of Education has this obligation to de-decide these 

claims within a reasonable time period and if the 

Department is not doing that, frankly, the Department

should be held to account for not doing that. And if a 

few frivolous applications, frivolous applications get 

through, if that’s the cost of the Department complying 
Negotiated Rulemaking 10/6/2021

68 

 

with its statutory obligations, that’s something I’m 

personally (audio). 

MS. JEFFRIES: Thank you, Josh. 

Alright. Let’s go ahead and do the – 

MS. O’CONNELL: Oh, can I respond to 

Josh’s question? The data, I’m thinking specifically 

about the Fair Credit Reporting Act. There is a section 

where it enumerates how we respond to a frivolous credit 

claim. So, it, it was more in that name that there was a 

way that we are, I guess, guided through the regulation 

about how to respond so that they don’t end up taking the 

space of the real claims.

MS. JEFFRIES: Thank you, Jaye. Josh. 

MR. ROVENGER: Yeah, I, I appreciate 

that. I guess the, the main point I just want to make is 

I don’t, I don’t want abstract concerns about fraud to, 

to drive what we end up do, what we do here. 

MS. JEFFRIES: Okay. Thank you, thank 

you all. Let’s go ahead and take a temperature check for 

a tentative agreement on the concept here. Can we go 

ahead and see your thumbs, please? Alright. It looks 

like we are good on that one for positivity. Thank you. 

Alright. 

MS. HONG: Okay. 

MS. JEFFRIES: We’ve got treatment of 
Negotiated Rulemaking 10/6/2021

69 

 

FFEL program loans. Jennifer. 

MS. HONG: Yes. This is the last 

issue on the adjudication process for BD. This may go to 

Jaye’s earlier question. Basically, we want to 

streamline the process for borrowers with FFEL program 

loans. We would ask -– right now, you know, we, we have 

to consolidate those loads into direct loans to process 

the claim. But if a claim is approved, we propose that 

FFEL lenders for FFEL, for FFEL loans be required to 

execute the relevant amount of relief, including 

relieving the borrower from further repayment of their 

FFEL program loan and issuing refunds to the borrower of 

amounts they paid. The lender would then submit a claim 

to the guaranty agency and the guaranty agency would 

submit a claim to the Department to repay the lender. 

Basically, this just accomplishes the same outcome as if 

the borrower consolidated without requiring the borrower 

to go through that process. So, it’s much cleaner for 

the borrower, everybody gets paid and we just feel like 

it’s a good option for FFEL program loans. Yes, 

otherwise, the process of consolidation has the effect of 

adding work for the borrower and this proposed claim 

process would streamline the process for, for those 

borrowers. So, eager to hear from everyone and, Jaye, as 

well regarding this proposal. 
Negotiated Rulemaking 10/6/2021

70 

MS. JEFFRIES: Thank you, Jennifer. 

Jaye?

MS. O’CONNELL: Yeah, so we, we 

definitely support streamlined procedures but the concern 

that we have is this statutory authority to provide 

borrower defenses to FFEL loans. So, 455H indicates that 

borrower defenses are applicable to loans in part D. So, 

while this process, you know -- we could -- it’s a lot 

like a TPD claim but as we started to look at, at how 

that works, I mean, you would implicate an SLDS and 

federal reporting. So, I think the concern is if it’s, 

if the FFEL loan truly by statute is not eligible for a 

borrower defense, what authority do we have to create a 

new claim process and run it through this preexisting 

reporting process? 

MS. JEFFRIES: Thank you, Jaye. 

MS. HONG: I think, I think through 

this process we’re, we’re no, we’re no longer conceiving 

it as a FFEL loan through this proposal. I don’t know if 

my – let me just if Todd has more to add on that in terms 

of this, you know -- currently, we consolidate the loan. 

It’s a direct loan, we process it. But once, once the 

claim is submitted, the idea here is that it is, it is an 

eligible loan for BD purposes. But, if, if Todd has 

anything to add on that point, please go ahead, Todd.

 
Negotiated Rulemaking 10/6/2021

71 

MS. JEFFRIES: Todd. 

MR. DAVIS: (Interposing) but I think 

this is important. I -– so there’s kind of two parts to 

this, Jaye, and I think there’s the overall authority 

piece and then the authority piece for the streamlining 

part. And, and just to not (inaudible) confuse anybody 

here but I, I think you’re right on the 455H piece that 

the Department has taken a position that what we do on 

borrower defense on direct loans is consistent with the 

protections provided by the FFEL MPN, master promissory 

note. But those provisions don’t allow Ed to adjudicate 

the defense, the defense to repayment on its own. It 

requires that the borrowers start the claim as a defense 

to collection of the loan by the lender. So, in this --

it came up in our last couple of sessions really, or 

couple of sessions or a couple of talks because 

sometimes, you know, as well that there, there does need 

to be a direct loan made and some outstanding dollar 

amount on the direct loan, I think. But then the – and I 

think what we’re asking here is that we consider, you 

know, the broad regulatory authority for the loan 

programs kind of – is we would consider a proposed 

regulation within that and that we’re just trying to ease 

the process for everyone here. In the past, we’ve asked 

borrowers to consolidate direct loans with their FFELs 
Negotiated Rulemaking 10/6/2021

72 

 

before they applied for borrower defense and we’re trying 

to kind of eliminate that (inaudible) if the Department

owes money back to FFEL folks or guaranty agencies or 

lenders, you know, the Department can address that point 

later in the process if it needs to. I -- to, to make it 

easier on the borrower upfront and not have to do that 

extra step. I -- like, I hope that hit both parts but 

that’s where – 

MS. JEFFRIES: Alright. Thank you, 

Todd. Joe. 

MS. O’CONNELL: Can I respond, no?

MS. JEFFRIES: Joe took his hand down. 

Did you have a direct response to that, Jaye? 

MS. O’CONNELL: Yeah. I, I think some 

of it just the channel, you know, how, how we’re repaid 

by the Department under our preexisting requirements and 

the lot is, this isn’t that we, we don’t want to make it 

easier but it, it’s – if we’re using federal billing like 

on our guarantor side, at least that, we have multiple 

hats. Like getting payment from Ed through that channel, 

the existing channels just seems inconsistent with sort 

of our accounting and uses of funds and, and I’m not, you 

know, probably not giving enough detail. But, so maybe 

there’s just something else that we do in terms of the, 

how the repayment, you know, flows through or something. 
Negotiated Rulemaking 10/6/2021

73 

 

I don’t know what that would be. Probably more 

operational but, but thank you. 

MS. JEFFRIES: Thank you, Jaye. Jeri. 

MS. O’BRYAN-LOSEE: Hi. First, I just 

want to say I’m, I’m sorry that there’s no one in BD that 

can speak specifically to this but as somebody’s who’s 

dealt with FFEL personally, anything that would 

streamline that process would be greatly appreciated by 

every person I’ve ever talked to in my life. So, that 

would be, that would be wonderful. 

MS. JEFFRIES: Thank you, Jeri. Joe. 

Where’d you go, Joe? 

MS. LILLY: Joe, you’re on mute. 

MS. MACK: Muted. 

MR. SANDERS: Sorry, everybody. I 

want to echo Jeri. FFEL borrowers bear a lot of burdens 

that direct loan borrowers don’t. For example, you know, 

all of the Cares Act relief, FFEL borrowers didn’t get 

it. This is a -- the announcement by the Department

today on PSLF, has issued (inaudible) provide relief to 

(inaudible). You know, I think that, hopefully, FFEL 

holders can get over the form questions here because I 

think it’s, it’s really placing (inaudible) function to 

say oh, well you’re, the borrower has got to bear this 

administrative burden and we, we can’t do anything about 
Negotiated Rulemaking 10/6/2021

74 

 

that when you have the Department, you know, trying to 

make an effort to, to make everybody whole here, you 

know, in, in good faith. So, I appreciate Todd’s 

feedback. Appreciate Jaye’s support of the concept 

generally and certainly hope that we can stop placing 

burdens, administrative burdens like this on borrowers 

and, and find a way to get this done to bring some parity 

between FFEL borrowers and direct loan borrowers. 

MS. JEFFRIES: Thank you very much, 

Joe. I see no additional hands. I’m going to move this 

towards tentative agreement, a temperature check for 

tentative agreement on this. Could I please see your 

thumbs? Okay. We have one thumbs down. Jaye, can you 

please speak to your serious reservations on this?

MS. O’CONNELL: I think I just need 

more clarity on the, you know, how, how we’re supported 

in this method when there’s a statutory prohibition, then 

the same issues I raised previously. Thank you. 

MS. JEFFRIES: Thank you, Jaye. 

Alright. That does conclude the subtopic and the issue 

paper number six, borrower, borrower defense to repayment 

adjudication process. We do have 10 minutes before your 

scheduled lunch break. Your next issue paper is number 

seven, which is a relatively short one on borrow, 

borrower -- blah, I can’t speak now, borrower defense to 
Negotiated Rulemaking 10/6/2021

75 

 

repayment post adjudication. Jennifer, do you feel 

comfortable introducing this in the time we have 

remaining?

MS. HONG: Yes, absolutely. 

MS. JEFFRIES: Okay. Thank you.

MS. HONG: It is short so maybe we can 

even get through it. So, issue paper number seven, post 

adjudication for BD. Basically, after adjudicating a BD 

claim in accordance with process we just proposed and as 

outlined in issue paper number six, we would notify the 

borrower of the Department’s decision, including any 

amounts discharged via decision letter. Again, that’s 

sub regulatory. I think maybe it was Joe that mentioned 

that to, you know, make sure that decision letter is, 

clearly outlines what the decision is and the amounts 

discharged. So, that, that is what we’re proposing. We 

wanted to address two issues specifically in this paper 

and one is the concern that borrowers have not received 

sufficient release under the current regulations. And 

two, that the 2019 regulations do not include a 

reconsideration process. So, that’s, that’s it for this 

paper. For, for, for the first subtopic, we propose to 

adopt a presumption of full relief for an approved borrow

defense claim, I think as Kayla (inaudible) or maybe 

Suzanne brought it up. So, the presumption is full 
Negotiated Rulemaking 10/6/2021

76 

release for an approved borrower defense claim. It is a 

rebuttable presumption of full release, meaning we are 

going to resume, assume full release unless there’s 

evidence showing that the harm to the borrower is less 

than what they would receive from a full discharge, which 

could be held by the Department or provided by an 

institution. So, there’s still possibility the borrower 

would receive partial release. However, the presumption 

is full release. Second subtopic -- well, let’s just 

stop there and we could discuss that piece. 

MS. JEFFRIES: Thank you, Jennifer. 

Josh. 

MR. ROVENGER: Thanks. So, I, so I 

appreciate the Department’s presumption of full release. 

It’s not clear to me when partial relief would ever be 

appropriate or why the Department is maintaining a 

partial relief provision that isn’t required by the 

statute. You know, to my mind, when a borrower defense 

is granted, the Department is agreeing that the loan is 

invalid and partial relief just doesn’t rectify that, 

that claim. More practically, I think we saw from the 

last administration that if this discretion to grant 

partial relief is maintained, the Department can abuse it 

and deny full relief notwithstanding a presumption to 

individuals who are entitled to it. So, I would strongly 
Negotiated Rulemaking 10/6/2021

77 

urge simply eliminating the possibility of partial 

relief, having it say full relief or if the Department or 

the group insists on having some partial relief method, I 

would then ask that we have some sort of high evidentiary 

standard to overcome any sort of presumption, make it 

clear we (inaudible) evidence that only partial relief is 

proper. But again, I, I, I struggle to see when partial 

relief would ever actually be appropriate.

MS. JEFFRIES: Thank you, Josh. 

Dixie. 

MS. SAMANIEGO: Yeah, so I’m reading 

in relief amounts the last sentence, this evidence could 

be held by the Department or provided by an institution 

or other party. What evidence would the Department of 

Education be asking and considering to, you know, be 

harmful or like would be proof that the loan that the 

borrower got would be less than harmful because -- why 

would they be filing in the first place if they didn’t

believe that the loan that they had taken out, right, was

harmful? So, what kind of evidence does the Department

of Education look for and does it have to be clear and 

convincing, right, like Josh just had stated, but for 

(inaudible)? What evident does the Department of 

Education look for in terms of, you know, (inaudible) was

not harmful for them? 

 
Negotiated Rulemaking 10/6/2021

78 

 

MS. JEFFRIES: Thank you, Dixie. If 

you could please capture that in the chat for, for the 

review, that would be appreciated. David. 

DR. TANDBERG: Yeah. I would, I 

guess, just ask more directly. Well, first off, I 

disagree with what Josh said and so I’ll phrase it as a 

question. What would be the circumstances where partial 

relief, relief would be appropriate? All (audio) I don’t 

see them but then this isn’t an area of work that I work 

in so maybe there, there are examples. But I, I -- so if 

you could provide some examples of where partial relief 

would be appropriate, that would be great. Otherwise, I 

don’t see why it would be an option. 

MS. JEFFRIES: Thank you, David. 

Jennifer. 

MS. HONG: I think, I think the idea 

here is just having the presumption of full release. I 

think the, the point being is that we want to err on the 

side of the, the borrower getting, providing full relief 

to the borrower. That is what all this is about, right? 

We’re addressing an issue about borrowers not receiving 

sufficient release. We can look back regarding possible 

examples. That clause is there just to maintain, you 

know, maintain the stance that there, there is a 

possibility that the institution might submit evidence, 
Negotiated Rulemaking 10/6/2021

79 

 

that the Department might have information available to, 

to it that would suggest that partial relief might be 

warranted. But, again, I would think that that would be 

very limited circumstances. We’ve, we left that in just 

to, you know, maintain that due process on the 

institutional side. So, the point being is that we want 

to provide the presumption of full release for the 

borrower. That’s, that’s the point of this subtopic 

here. 

MS. JEFFRIES: Thank you, Jennifer. I 

see two additional hands, Josh, and Bethany, and then I 

would like to move to temperature check for tentative 

agreement on this prior to your lunch recess. I will 

include Justin in that lineup of comments before. Thank 

you. Josh. 

MR. ROVENGER: Thanks. So, so I 

appreciate that the Department had created this 

presumption and I have to imagine that the reason for 

proposing this presumption and I have to imagine that the

reason it’s doing so is because it recognizes that full 

relief is what should be given when a borrower defense 

claim is successful. I think if the Department wants to 

retain the ability to give partial relief, number one, it

would be helpful to see concrete data or concrete 

examples that the Department is relying on here to 
Negotiated Rulemaking 10/6/2021

80 

 

justify maintaining partial relief. And then, two, I 

guess I would respectfully push back on the Department’s 

point that the, that it preserves like a due process 

element because the Department is going to be getting 

evidence from the school as to whether the borrower 

defense should be granted or not. And, and so I struggle 

to see how there’s some enhanced due process protection 

with respect to the relief amount. 

MS. JEFFRIES: Thank you, Josh. 

Bethany and then Justin and then we will do the 

temperature check. 

MS. LILLY: I’ll be very brief. 

MS. JEFFRIES: Oh, okay. 

MS. LILLY: Because I think Josh said 

a lot of this as did Dixie. I just don’t understand what 

circumstances would justify partial relief and I need the 

Department to explain that to me before I would support 

partial relief being an option. 

MS. JEFFRIES: Thank you, Bethany. 

Justin. 

MR. HAUSCHILD: Thank you, Cindy. I, 

I’m just going to support what I think has already been 

conveyed by Josh but I would also like to see the data 

where partial relief would be appropriate. You know, I 

think when we’re thinking about certain instances, right,
Negotiated Rulemaking 10/6/2021

81 

 

maybe even the majority of borrower defense claims being 

based on misrepresentations or omissions in that very 

beginning process dealing with recruitment enrolling at 

the institution, you know, that, that student would’ve 

taken out a federal student loan but for those mismisrepresentations in that very beginning stage. So, I 

think that’s something that’s, you know, it deserves some 

focus here in this, in this conversation. And then maybe 

this, I think this was raised earlier but some 

consideration of what the standard should be in 

determining when partial relief is appropriate. Are we 

talking about, you know, the presumption maybe only being 

overcome when there’s an overwhelming amount of evidence 

that would, you know, tend to show that the borrower 

deserves less that what they would’ve received from a 

full claim? You know, it’s, I think this needs a little 

bit more robust discussion in terms of some of the 

standards and data that would support, support this idea 

of partial relief. Thanks. 

MS. JEFFRIES: Alright. Let’s go to 

temperature check. I did indicate Justin was -- we were 

going to call for that afterwards. So, can we see a show 

of thumbs on the relief amounts for tentative agreement? 

Can I please see your thumbs? Okay. So, there are 

multiple no’s on, on that one. If you want to take a few 
Negotiated Rulemaking 10/6/2021

82 

 

minutes to identify why you were a no or if you’re 

comfortable that you’re, you know, you’ve already 

articulated what that is. Okay. I have one question for 

you. You have one additional item on this issue 

statement before you wrap it up, reconsideration of 

process. Is that something that you think you want to 

quickly discuss before your lunch or would you prefer to 

defer it to after your lunch? 

MS. MARTIN: Would we still get an 

hour for lunch?

DR. DORIME-WILLIAMS: Could we say 

after lunch?

MS. JEFFRIES: After lunch? I’m 

seeing a lot of shakes on that. Okay. So, it is 12:01, 

so we will recess for lunch. We will resume promptly at 

1:00 p.m. Thank you very much for your hard work this 

morning. And we will see you at 1 o’clock. 

FEMALE SPEAKER: Thank you. 

(Proceedings concluded at 12:00 p.m.)
Negotiated Rulemaking 10/6/2021

83 

 

Appendix

Department of Education, Office of Postsecondary Education 

Zoom Chat Transcript 

Affordability and Student Loans Committee - Session 1, Day 3, 

Morning, October 6, 2021 

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 Dixie Samaniego (ella/she) to Everyone: 

wifi issues but I am here :D 

From Kayla, FMCS Facilitator to Everyone: 

Please direct message me if you have any tech 

questions/concerns. 

From Kayla, FMCS Facilitator to Everyone: 

kmack@fmcs.gov 

From Michaela [P] Ind. Student (She/Her) to Everyone: 

Thank you 

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

+1 on Joe, Justin, Josh 

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

For group process, consider adding "negative or adverse 

actions taken by accreditors". 
Negotiated Rulemaking 10/6/2021

84 

 

From Joe (P); State AGs to Everyone: 

Personal attestations from students are evidence and should 

be considered such. 

From Jessica (P) Proprietary Schools to Everyone: 

How will the Department monitor fraud if applications are 

accepted without supporting evidence? 

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

My alternate Suzanne Martindale is going to join to ask a 

question 

From Kayla, FMCS Facilitator to Everyone: 

Thank you, David. 

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

+1 to Josh! 

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

+2 to Josh! 

From Joe (P); State AGs to Everyone: 

Would there be a capitalization event when loans that are 

not discharged exit forbearance, given the elimination of 

interest capitalization in issue paper 3? Does the answer 

matter if the loan is FFEL? Direct? 

From Jaye FFEL agencies P to Everyone: 

Is the forbearance provision - specifically re: stopping 

interest applicable to Direct Loans only? If applies for 

FFEL, need to understand how holders are reimbursed for 

interest charges because there is no subsidy during 

forbearance on FFEL. 

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

Also support the no interest accrual at all. 
Negotiated Rulemaking 10/6/2021

85 

 

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

I'm not sure I understood what Jen just said--are the first 

180 days in forbearance already no interest? 

From Suzanne (state regulators) (A) to Everyone: 

Q: Default for accepted claims should be full relief - how 

would partial relief be determined? 

From Marjorie (P), 4 Yr Institutions (she/her) to Everyone: 

Agreed on no interest for the same reasons as everyone 

stated. 

From Josh (A), legal aid (he/him) to Everyone: 

Why is the limitations period limited to having an 

outstanding direct loan 

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

+1 

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

+1! 

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

+1 

From Heather (P) - Accrediting Agencies to Everyone: 

Institutional response: Current time frame to respond; #s 

of responses, admissions, waivers, etc. 

From Heather (P) - Accrediting Agencies to Everyone: 

Would group process require more time for institutional 

response? 

From Marjorie (P), 4 Yr Institutions (she/her) to Everyone: 
Negotiated Rulemaking 10/6/2021

86 

 

Institutional response: What prevents an institution from 

falsely claiming that they have "no evidence"? 

From Greg Norwood to Everyone: 

Thank you for sharing, Josh! 

From Marjorie (P), 4 Yr Institutions (she/her) to Everyone: 

Thank you for sharing their stories Josh. 

From Joe (P); State AGs to Everyone: 

Agree with Josh that holding claims in limbo is extremely 

harmful to borrowers. We get regular complaints from 

borrowers on this issue emphasizing how this uncertain 

financial burden puts their future on hold. 

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

How are the applications adjudicated? Who hears these 

claims and what might cause these prolonged delays? 

From Jeri (P) (she/her), Student Loan Borrowers, 

Primary to Everyone: 

Agreed Michaela! 

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

+1 

From Greg Norwood to Everyone: 

+1 

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

+1 

From Joe (P); State AGs to Everyone: 

Agree with Michela. It is powerful to hear student stories.

More stories directly from borrowers in this process would 

help inform the committee. 
Negotiated Rulemaking 10/6/2021

87 

 

From Todd Davis - ED OGC to Everyone: 

In re: Heather's earlier question about current 

Institutional Response timeframe: the current (2019 BD) reg 

at https://www.ecfr.gov/current/title-34/subtitleB/chapter-VI/part-685#p-685.206(e)(10) states "within the 

specified timeframe included in the notice, which shall be 

no less than 60 days. 

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

In order to help us establish a reasonable timeline are 

there any data for past adjudication process timelines for 

both individual and group claims? Can we disaggregate data 

to help identify barriers to expediency to establish a 

reasonable timeline. 

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

Had the same comment. 

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

Same here not sure what we are voting on 

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

Timeframe of 180 days for individual claims then subtract 

the 60 days institutional response, leaving the Department

with 120 days to respond. As a remedy, if the Department

does not respond in that timeframe, then the decision would 

be automatically approved. 

From Michaela [P] Ind. Student (She/Her) to Everyone: 

Is there data on that? 

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

Have a generalized question on student impact for BDTR. If 

a student has been making payment, and the BDTR is 

approved, are previously paid amounts refunded or is the 

relief only the outstanding balance? 
Negotiated Rulemaking 10/6/2021

88 

 

From Suzanne (state regulators) (A) to Everyone: 

+ 1 Josh 

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

Agree w/ Josh that I don't see a purpose for partial relief 

From Suzanne (state regulators) (A) to Everyone: 

Q: how would partial relief be calculated? And could this 

cause delays in processing, competing with goal of prompt 

adjudication? 

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

Relief Amounts Q: What evidence does the Department of 

Education look for when considering the harm done to the 

borrower is less than what they would receive from a full 

discharge? 

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

What are examples of when partial relief would be 

appropriate? 

From Heather (P) - Accrediting Agencies to Everyone: 

Data on full v. partial relief would be helpful along with 

examples. 

From Joe (P); State AGs to Everyone: 

I would like to see some specific language on the 

presumption. 

From Jeri (P) (she/her), Student Loan Borrowers, 

Primary to Everyone: 

For the reasons Josh outlined. 

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

I think it was clearly explained 
Negotiated Rulemaking 10/6/2021

89 

 

From Marjorie (P), 4 Yr Institutions (she/her) to Everyone: 

Agree with everyone's request for examples and data. 

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

+1 ^ 

From Joe (P); State AGs to Everyone: 

After lunch 

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

Question on impact on aggregate limits. Does relief also 

provide an immediate reduction of aggregate loans so that a 

student may be able to borrow additional loans? 

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

After 

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

Michaela is asking all the right q's HAHA