Negotiated Rulemaking - 10/5/2021

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DEPARTMENT OF EDUCATION

OFFICE OF POSTSECONDARY EDUCATION

AFFORDABILITY AND STUDENT LOANS COMMITTEE

NEGOTIATED RULEMAKING SESSION 1, DAY 2, AFTERNOON

OCTOBER 5, 2021

On the 5th day of October, 2021, the

following meeting was held virtually from 1:00 p.m. to

4:00 p.m., before Andrea González, Shorthand Reporter

in the state of New Jersey.
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P R O C E E D I N G S

MR. TOTONCHI: Good afternoon, everyone. 

Welcome back. Hope you've had a good lunch break and are 

ready to dive deep into discussion this afternoon. My 

name is Emil Totonchi. You can call me Emil. I'll be 

facilitating this afternoon, right? First, a couple of 

comments. Number one, some initial good news. We have a 

robust public comment list developing, as well as a 

waitlist. So, we expect, again, a robust 30 minutes’

worth of comments at the end of this meeting.

Just for clarity's sake, we want to make 

sure that everyone understands when signing up for those 

public comments, that it is for those final 30 minutes of 

the session, not at various points throughout the day. We 

understood there was some confusion there. Just wanted to 

clarify that. Other than that, I think we can proceed. 

So, Jen, I see your hand is raised. I was going to ask 

you to speak anyways, but go ahead.

MS. HONG: Hey, thank you, Emil. While you 

are on the topic of public comments, I just wanted to put 

(audio) for that process. I realized that we’re filled up 

today, but for the remainder of the week, I just want to 

be sure that folks feel like they can avail themselves on 

that (audio). Particularly, I want to invite students 

with experiences on borrower defense, as well as closed 
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school discharge, to address the committee. And we're 

going to do our best to accommodate these public 

commenters. We are very interested in hearing about 

(audio) those claimants, and we realize they have 

important experiences to share with this committee, and 

we'd like to learn more about their experiences. So, just 

wanted to put that on.

MR. TOTONCHI: Yes, thanks, Jen. We do still 

have a developing waitlist today, as well. So, we 

appreciated that suggestion from yesterday and we're glad 

that we're able to put that into place to make sure we 

make the best use of our 30-minute comment period.

Okay. With that, thank you all for the 

robust discussion of the morning. We're going to go ahead 

and proceed with the next issue. So, Jennifer, if you 

could please introduce the issue.

MS. HONG: Sure. We are moving on to issue 

paper three on interest capitalization. I believe, 

Vanessa, if you could cue that issue paper that does also 

have associated regulatory text at the end.

Basically, we are putting forth our 

proposal to eliminate interest capitalization for nonstatutory capitalizing events. And, just by way of 

background, section 428 H(e)(2) of the HEA provides that 

interest capitalization occurs when any accrued unpaid 
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interest becomes part of the principal balance of a 

borrower's loan.

In student loan programs, capitalization 

occurs by designated capitalizing events. Once the 

interest is capitalized, it begins to accrue interest, 

which ultimately increases the overall balance of the 

loan. Borrowers see balances rise faster as interest 

accrues on interest. 

Interest capitalization is not a common 

practice across other consumer financial products. We 

find that borrowers are many times unaware when the 

interest on their loan has been capitalized. So, we are 

proposing to eliminate interest capitalization wherever 

we have the discretion to do so. And that includes areas 

where the statute is silent on. 

So, we've identified the following 

capitalizing events where we would eliminate interest 

capitalization. Briefly, these are the bulleted points on 

the paper, and they include when you -- failure to 

recertify enrollment on an IDR plan, when you leave an 

ICR plan, negative amortization under the ICR plan, 

exiting forbearance, entering repayment, and default. So, 

those are all areas which the Department has discretion 

to remove interest capitalization, and we've done that in 

the attendant texts that we've provided. 
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Unfortunately, there are some areas where 

we cannot change, because the capitalization occurs -- is 

authorized under the statute, and that is during -- for

IBR and for deferments. So, those are statutory. We 

cannot change those. So, that's it, it’s pretty 

straightforward. So, I will open it up for your feedback.

MR. TOTONCHI: Thank you, Jen -- Jennifer. 

If -- Vanessa, if you wouldn't mind zooming in just a 

bit, just for our folks using the side-by-side mode. 

Thank you so much. I’ll first ask -- I see some hands up. 

Bethany.

MS. LILLY: Strong, strong support of this. 

We're really grateful the Department is taking these 

steps. And I did have one clarifying question that I was 

hoping you could explicate a little bit on. How will this 

impact borrowers who have had interest capitalization 

before? Are you thinking about retroactivity? Because I 

certainly have stories from my network of individuals who 

would have already paid off their loans, were it not for 

this, and I'm just -- I'm curious how you're thinking 

about retroactivity.

MS. HONG: So, typically, when we propose 

regulations, when the regulations go into effect, they're 

prospective. That would be the case here.

MR. TOTONCHI: Okay. Thank you for the 
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question. Jaye.

MS. O’CONNELL: So, just for education 

purposes, I've looked at this statute, the 428H(e)(2), 

which had applied to the FFEL program, in my 

understanding, and it has the word "shall", which is 

"must", and there's a cross-reference from 455 for DL 

back to 428H(e)(2). So, several of -- not all of these 

capitalizing events, as I was reading it, looked like 

they fell under the "shall" provision. So, I just -- I 

didn't know if there was a history there or 

interpretation the Department could provide a little more 

context on.

MR. TOTONCHI: Jen, do you have an immediate 

reaction to that?

MS. HONG: So, I don't. I'd have to go back 

and look at it. Our interpretation was that we did have 

the discretion to remove these capitalizing events for 

the -- for only these circumstances, but we can go back 

and look at the language that you are pointing at.

MR. TOTONCHI: I see Brian has popped on 

onto the screen, (interposing) comments?

MS. HONG: There are -- Yeah. Go further, 

Brian.

MR. SIEGEL: No, we took a careful look at 

all the instances in which the Department capitalizes 
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interest. In some cases, there are differences between 

Direct Loan and FFEL. In other cases, yeah, we -- the 

authority is under 428. We think we've made the 

appropriate choices. If you have specifics on where you 

think we may have overstepped, we'll take another -- we 

can take a look at it. And we can reconsider or revisit 

the specific situations.

MR. TOTONCHI: Thank you. I see David is 

next in the queue, but, Jaye, do you have a quick followup question?

MS. O’CONNELL: Yeah. And so, perhaps I know 

the citations are all for direct loans and it said there 

would be conforming changes in FFEL. So, is it fair to 

say that not all of these are the same for FFEL?

MR. SIEGEL: In FFEL, some of them are 

clearly voluntary on the part of the lender. I mean, they 

say the lender may capitalize. And we know we don't 

regulate except to say -- in some cases -- we can say the 

regs reflect that "may". So, yeah, we can't impose 

enough. We're totally -- we can't prohibit a lender from 

doing that where the statute says the lender may.

MS. O’CONNELL: Okay.

MR. TOTONCHI: Thank you. David.

MR. TANDBERG: I’m really thrilled to see 

the Department take these steps. I support each of them. 
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I'm also interested if there are things where the 

capitalization is statutorily mandated, if we also have 

some flexibility there, where maybe we can't eliminate 

it, but we could cap the amount of interest that could 

occur in a month, pause it under certain circumstances, 

or during deferment or forbearance. 

Are there other steps we could take to 

limit it? I'm not sure. I know these have been 

recommended by different groups. And so, I'd like to 

consider them here as to what additional steps we might 

pick, what flexibility is statutorily allowed to kind of 

limit this. It's just such an awful thing to think that a 

student could be paying on their loans, but the balance 

is growing larger as they go. Just seems insulting, which 

I know we're all in agreement on. Anything -- any 

additional steps. So, I'd like to hear about that or at 

least explore it. Also, my alternate would like to speak 

to this too. So, I'd like to get her in the queue. That's 

Suzanne Martindale.

MR. TOTONCHI: Thank you. Real quick. I see 

Persis has her hand up. Suzanne, if you could go ahead 

and raise your hand, you'll be next in the queue. Persis, 

go ahead.

MS. YU: Thank you. So, I would also like to 

echo the sentiments that I was -- we were very pleased to 
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see this on the table. Interest capitalization is a huge 

problem for our clients. I have seen borrowers who took 

out $5,000 of loans in the late 80s, who now, because of 

interest capitalization, have a principal balance of over 

$100,000. It's a huge problem to see your balance grow. 

And the number of events, especially recertification from 

income driven payment, is a time when a lot of folks do 

see their balances grow. And it's a pretty traumatizing 

event for folks and I think it makes the programs less 

effective. So, I do appreciate that. 

I have a couple of questions. One, I would 

like to know how the Department thinks about 

consolidation in this process as well. This is another 

time in which outstanding interest gets rolled into the 

principal. It's not addressed here. It's not clear to me 

whether or not that is a capitalizing event and whether 

or not that is an opportunity that the Department could 

also look at breaking out, keeping the interest out of 

the principal going forward. 

I echo the sentiments on flexibility and 

hope that we can be creative in thinking about how we can 

protect borrowers and students while they are going 

through -- especially the deferments, which are largely 

based upon economic harm. 

And then, the last thing is about the 
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retroactivity. I think that this is such an important 

point. We have borrowers who have been in this program 

for decades, and their balances have been growing. And as 

we are acknowledging that this is a problem, it is worth 

acknowledging that these borrowers are in need of relief. 

So, I'm -- I understand that it is the practice of the 

Department to make these rules prospective, but I'm 

wondering if there is any prohibition on making it 

retroactive. And to that point, I'd also like to request 

some data with regards to the student loan portfolio to 

see if this is something that we can really explore in 

greater detail, the percentage of the balance of the 

entire portfolio that is outstanding that has -- or that 

has been capitalized. If we can break that down by race 

and gender, as we know that loan balances -- personal 

loan borrowers -- do disproportionately impact borrowers 

of color and women. And then, I'm also just curious about 

how many people experience the capitalizing events that 

the Department is going to -- (interposing)

MS. MACK: 30 seconds.

MS. YU: -- Thank you -- that the Department 

maintains is statutorily required. Thank you.

MR. TOTONCHI: Okay, thank you so much for 

that comment and the data request. If you wouldn't mind 

typing the data request specifics in the chat, that would 
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be helpful. And I do know you have two outstanding 

questions for the Department. If we could -- I know 

Suzanne was following up on David's question -- so, if we 

could actually have Suzanne speak, and then I'm going to 

turn it over briefly to the Department to address 

Persis's questions as well as Suzanne and David's 

questions. Okay?

MS. MARTINDALE: Am I up next? 

MR. TOTONCHI: Yes, please.

MS. MARTINDALE: Okay. Thank you so much. 

So, yeah, I want to echo the strong, strong, strong 

support for eliminating interest capitalization wherever 

possible. This is out of step with most consumer 

financial products to even allow this to happen, to allow 

negative amortization on a loan like this. And I can say 

this is one of the most confusing things that people --

for borrowers. When people talk to me, and they say, "How 

is this possible that my loan balance could be growing?" 

I also have concerns that it has a chilling effect on 

enrollment in IDR plans for people who actually could 

really benefit from them. And in addition, I think that 

the failure to recertify on time -- I want to put a final 

point on that, because in many cases I've heard these 

stories over the years. It also happened to me 

personally, that in some cases, the failure to recertify 
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on time is actually a paperwork processing delay on the 

part of the loan servicer, and also loan servicers had in 

the past -- sort of pushed people into administrative 

forbearance to buy themselves more time to do the 

paperwork, and I have concerns about the ways in which 

some of the challenges in loan servicing have also 

contributed to negative amortization due to interest 

capitalization. So, I would be strong in supporting this 

wherever we could do it. We'd love to see the 

retroactivity piece be researched. 

And in addition, I would love to see 

updated numbers from the Department about recert -- IDR 

recertification and how many people are falling behind

and the interest capitalization that is happening as a 

result. And I'm happy to put that in the chat. Thank you.

MR. TOTONCHI: Thank you, Suzanne, and just 

a housekeeping point. Okay, it looks like Suzanne went 

off screen. Just again, reminders of practice. When the 

alternate comes to speak, the primary could turn off 

their camera, okay? So, before we turn over to Marjorie, 

I'd like to give a moment to Jennifer and the Department 

to respond, because there are a few outstanding 

questions.

MS. HONG: Yes. I just wanted to answer to 

Persis’ question about consolidations. And yes, the 
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effect is a capitalizing event for consolidation. And I 

just pose a question back to this group in terms of 

whether this is something that we should eliminate for 

consolidate -- for consolidation as well in terms of 

keeping the interest and the principal separate? And I 

see thumbs up from Bethany.

MR. TOTONCHI: So, I mean, for what it's 

worth, I know we're not taking a temperature check on the 

specific part here. But, yeah, I mean, Jennifer has asked 

for folks to indicate their initial support here. So, if 

you can give me a thumbs-up, sideways, or down pursuant 

to what Kayla mentioned this morning.

MS. HONG: I'm sorry, Emil, that was to 

solicit feedback on the question that Persis asked about 

something that's not explicitly included in the issue 

paper about consolidation. So, she asked the question, 

and we're happy to hear feedback from the committee on 

that on that particular issue.

MR. TOTONCHI: Okay.

MS. HONG: And yeah, on consolidation.

MR. TOTONCHI: Okay. Marjorie.

MS. DORIME-WILLIAMS: So, again, like 

everyone has shared before, I appreciate efforts to 

improve this process and alleviate some of the challenges 

that students -- and even some of us -- have faced in 
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sort of dealing with this issue of loans.

I think it's also important to think about 

the students who often trouble in these areas, and the 

fact that these loans were supposed to provide 

opportunity for advancement, and instead serveas almost 

roadblocks to those very reasons that students enrolled 

in college in the first place. 

And again, I think it's really important to 

point out -- and I shared an article in the chat if folks 

are interested, it's a little bit dated, but the content 

is important -- that the students who often face these 

issues with paying off their loans are students who are 

already marginalized. So, low-income students who go to 

college to get a degree, who then can't pay off those 

loans, end up sort of repeating these cycles. And I think 

that this issue of capitalizing the interest -- and I 

appreciate David's recommendation on putting a cap on it 

-- is really important, because otherwise, what's the 

point of having students take out these loans in the 

first place? Unless we're saying it's to make money. And 

I would hope that that's not what we're doing. And so, I 

think that -- I encourage us to think a little bit 

radically about how we can make sure that we're not 

already taking advantage of students who are 

disadvantaged in the first place. 
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MR. TOTONCHI: Thank you for your comment, 

Marjorie. Brian, do you have -- I see your hand is up. Do 

you have an immediate reaction to what was just raised?

MR. SIEGEL: Yeah, particularly in the 

consolidation issue. I just want to explain why interest 

is consolidate -- is capitalized. It's because if you 

take the FFEL loan program -- a lender makes a loan and -

- which is then consolidated, so the new lender pays off 

the old lender. The amount they pay is interest -- is 

principal and interest. So, the amount of the new loan is 

principal and interest, is the combined principal and 

interest. That's how much the new lender put out. 

So, a consolidation loan is a new loan. 

It's -- the way we've thought about it regularly is know 

that the amount that's been put out is the total amount 

of principal and interest that was paid by the 

consolidating lender.

That applies as well when the Department 

makes a consolidation loan. This is not a refinancing, 

it's a new debt. Whether there's something we can do in 

this area, I don't know, but that's where the background 

of it is, so --

MR. TOTONCHI: Thank you, Brian. Daniel. And 

I think we'll take a few more comments, and then we may 

go into a temperature check on this item. 
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MR. BARKOWITZ: Thank you. I would also add 

support for the proposal as written. As we're talking 

about retroactivity, the other question we may want to 

put on the table is early adoption. If retroactivity is 

not possible, is there a way to rather than wait until 

July 23, look into early adoption for this as a potential 

-- The students who were probably most impacted, at least 

in recent times, are students who were facing challenges 

prior to the payment pause. I'm nervous about payment 

resumption coming into place as well at the end of 

January. So, doing some early adoption here may actually 

allow for addressing concerns as we head into payment 

resumption for students.

MR. TOTONCHI: Thanks, Daniel. Joe.

MR. SANDERS: Thanks, Emil. I would just 

point out State Attorneys General support for the removal 

of the capitalization events. We identified -- and I'm 

speaking specifically about Illinois here -- our office 

identified interest capitalization as a significant form 

of student harm in our Navient lawsuit. We sued Navient

for a host of misrepresentations, including 

misrepresentations around the consequences of delaying 

recertification on income-driven repayment plans. 

We have an allegation in our complaint that 

Navient made misrepresentations about the fact that 
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capitalization occurs. So, this is something that we've 

seen in investigations. We think it's a very good change 

and support the removal of capitalization events wherever 

possible.

MR. TOTONCHI: Thank you for your comment, 

Joe. Misty.

MS. SABOUNEH: First, commend the Department 

for bringing this up. I think this is a crucial piece. 

I'm glad we're talking about it in full support of 

removing this interest capitalization. 

I did want to comment. So, for deferments, 

any deferment that is in PLUS loan, unsubsidized or 

direct -- federal direct consolidation does still accrue 

interest and it'll capitalize. So, I wonder, if that is 

one area where we're not able to make a change, if that 

would lead us to counsel students more towards 

forbearance, if that's a better option without interest 

capitalization. And maybe we have a little ability to 

extend forbearance time or make that more advantageous 

for students who fall into those subgroups to make sure 

that they can take advantage if they fall into those 

parameters. Additionally, I support what Daniel was 

saying earlier about the early adoption, I think, going 

into January 31. We've had a 23-month moratorium on 

student loan payments, and we have a huge bottleneck of 
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students who aren't prepared for those payments. So,

anything we can do to adopt this quickly and ensure that 

they're protected is fully in support of.

MR. TOTONCHI: Thanks for your comment, 

Misty. We're now going to Jessica and Justin, and then we 

will take a temperature check, okay?

MS. BARRY: Just wanted to second Daniel's 

proposal of early implementation. And then I also just 

wanted to make a point. All students have a consolidation 

event upon entering repayment after their grace period. 

So, this will help all student borrowers. I just wanted 

to make sure that was clear.

MR. TOTONCHI: Thanks, Jessica. Justin.

MR. HAUSCHILD: Thanks so much, Emil. Just 

want to say that we're fully supportive of these proposed 

changes and also supportive of additional consideration 

of this issue of retroactivity. So, thank you.

MR. TOTONCHI: Okay. So, let's take a 

temperature check on this item as proposed by the 

Department. Just a recollection of what the consensus 

standard is. This is an agreement. This is that you, at 

minimum, agree and can live with it and support it, and 

this is that you disagree, okay? So, thumbs on this item.

I see, at minimum, we have consensus 

initially on this, just in terms of the temperature 
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check. So, thank you for that. Alright. With that, we can 

move on to the next issue. Jennifer.

MS. HONG: Great, thanks, Emil. I also want 

to acknowledge that my esteemed legal colleagues are 

doing some musical chairs here so we can let them get 

situated and have Todd introduce himself when he's 

available?

MR. TOTONCHI: Please do so, Todd.

MR. DAVIS: Hi, everyone. I've been watching 

a lot in the last couple of days. I'm looking forward to 

joining you for borrower defense. I'll be stepping in for 

Brian on this one issue. So, thank you all.

MR. TOTONCHI: Alright. Thank you. Alright, 

Jennifer.

MS. HONG: Thank you.

MR. TOTONCHI: I understand that Josh is 

coming to the table for Persis for this topic. Is that 

right? Okay, thank you. Go ahead, Jen.

MS. HONG: Great. Vanessa, if you could cue

issue paper number six, “borrower defense to repayment.”

We do not have -- We don't have proposed regulatory texts 

ready for you guys on this one. There are a lot of 

subtopics for this issue. 

So, you have the paper in front of you. Let 

me just get myself situated. Okay. So, this paper, issue 
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paper number six, is the first of three borrower defense 

repayment papers, and it contains proposals pertinent to 

the adjudication process. 

Just by way of background. Section 455(h)

of the HEA requires the Secretary to specify a regulation 

which acts or omissions by an institution of higher 

education a borrower may assert as a defense to repayment 

of a direct loan. 

As you may know, current regulations 

governing BD have changed multiple times in recent years. 

We first promulgated regulations in 1995, which were 

amended in 2016 and 2019. The 2016 regulations laid out 

standards and processes for adjudicating borrower defense 

claims. The 2019 regulations, however, changed these 

standards and effectively barred relief for borrowers who 

would have likely received relief under the ‘95 or 2016 

BD regulations, or both. 

Needless to say, these three different sets 

of rules depending on loan disbursement date, complicates 

adjudications because a single borrower with multiple 

loans may fall under multiple rules depending on a loan’s

disbursement date. So, we believe that borrowers must 

have a path to relief when their institution takes 

advantage of them. And our proposal builds upon lessons 

learned from implementing prior regulations. 
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You'll notice that we have several 

subtopics in this area for discussion, the first one 

being a single standard that applies to all BD claims, 

regardless of when the loan was first disbursed. And 

before -- we're going to get into the content of what 

that federal standard is, and the other subtopic areas, 

but this first idea -- Vanessa, if could scroll to, I 

guess, page two -- on the applicable -- we're looking at 

applicable regulations for the borrower retroactivity. I 

realize -- I think, also the (audio) issue with closed 

school discharge. 

And I just want to be clear that we're 

going to face the same kind of complications with BD. And 

that is something that we've -- over the years, the 

regulations have changed, different rules apply to 

different loans depending on when they were disbursed.

And that was a challenge and that's one of the things 

that we're trying to remedy both in BD and in closed 

school discharge. That's why we have made that table to 

let you know that this is what we're looking at in terms 

of very simply auto-discharge for all those populations. 

That wasn't the case in the previous regs or the 

iteration before. Now for borrower defense, we have three 

sets of rules, and it's complicated.

MS. HONG: And so, we’re trying to 
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streamline it, we’re trying to simplify it, and if you 

could just look at this discrete piece as applying to, 

conceptually, one federal standard. Again, we’ll talk 

more about what that federal standard contains.

But the concept is to -- that the standard 

would be more generous. We would remove limitations 

periods and cover a broader range of conduct.

Borrowers would also be able to request 

that their claims be adjudicated under otherwise 

applicable state law through a reconsideration period if 

they are not satisfied with the outcome under the federal 

standard.

But what we’re looking at here is whether 

people are -- how people feel on one single standard that 

applies to all BD claims, regardless of when the loan was 

first dispersed.

So, if we could just focus on that issue 

and then we’ll get into the subtopic areas where we 

discuss what constitutes the federal standard.

MR. TOTONCHI: Thank you for that 

introduction, Jennifer. First, I just want to acknowledge 

and thank Aaron Washington, from the Department, who is 

now our screen share guide. Okay. So, thank you, Aaron.

I see the first comment is from Josh. 

Please proceed. 
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MR. ROVENGER: Thanks. So, we generally 

support the Department’s move to one standard overall, it 

makes a lot of sense. And we also appreciate -- I know 

we’re not diving into substance right now, but the 

standard is more fair. I did have a question, though, as 

to how the Department landed on the process for the 

reconsideration under the state law claim.

For a lot of our borrowers, it’s just --

that just adds an additional step and burden for them to 

have to request reconsideration, most likely pro se, 

before they can assert that state law claim. And so, I’m 

just curious how the Department landed on that as the 

decision rather than try to incorporate that concept into 

the federal standard itself.

MR. TOTONCHI: Any additional feedback from 

the Department?

MS. HONG: The idea here was just to 

acknowledge that other states might have more generous 

standards, and there’s a lot of variability among the 

states. So, we wanted to be sure after the student had 

gone through the process and in the off chance that the -

- that they wouldn’t be able to get a positive 

determination on-- based on the federal standard that 

they would have a chance to have their claim reconsidered 

under applicable state law. 
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MR. TOTONCHI: Okay, thank you, Jennifer.

Joe.

MR. SANDERS: So, State Attorneys General 

firmly believe that we need to have a state law standard 

in the first instance. 

We appreciate that state law has been 

included here, but having it as a second to 

reconsideration or an appeal standard feels a lot like 

what was going on with Public Service Loan Forgiveness 

and temporary expanded Public Service Loan Forgiveness 

where people would have to apply, it would get denied, 

and then they would come back -- have to come back and do 

another process. So, we would like to see the state law 

standard instituted at the outset.

In addition, removal of -- and to make 

sure, Jennifer, correct me if I’ve got this wrong, but my 

understanding -- my concern with single standard is that 

it would remove consideration of state law as the 

standard prior to 2016, which is the current standard. 

So, that certainly would be an issue for State Attorneys 

General.

We think that a state law standard affords 

borrowers a broader array of claims. For example, states 

have certain rules around authorization of schools. That 

wouldn’t be captured here. States have certain 
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regulations around lending or financing a product that 

could apply for -- to -- even though these loans are 

federal, they could technically be applied to federal 

student loans.

For example, our office had a lawsuit 

against Westwood College. We alleged that they had 

violated our consumer fraud act by making private student 

loans that they knew would default -- default rates in --

upwards of 90 percent. They did that, we alleged, in

order to capture the federal student loans. And so, that 

type of claim, where a school has a loss leader that 

violates state law, could be used to discharge federal 

student loans. So --

MS. MACK: (interposing) more seconds, Joe.

MR. SANDERS: -- we think that there are 

large swaths of claims that have been made by State 

Attorneys General and others that would not be captured 

if state law standard is not used at the outset.

MR. TOTONCHI: Thanks, Joe. Justin.

MR. HAUSCHILD: Thanks, Emil. I actually 

appreciate the opportunity to follow Joe here because I’m 

going to talk a little bit and express support for what 

Joe just mentioned a second ago, but just want to say 

broadly that we’re supportive of the Department 

establishing a single standard where “free” had otherwise 
26

Negotiated Rulemaking - 10/5/2021

been the case, that we think this is going to simplify 

the process and also help ensure that borrowers --

generally speaking -- have access to a more appropriate 

level of relief in many instances.

So, I want to make that point first, but 

then wanted to follow up on what Joe said. We appreciate 

that the Department is bringing back a state standard at 

all since it had been previously eliminated, but not 

necessarily supportive of the fact that it seems to be 

relegated simply to the reconsideration process.

As Joe pointed out, we think it should 

serve as the basis -- broadly speaking -- for claims 

under borrower defense and we think ED can and should 

review law to accept it on that basis. I think to the 

extent that the Department is willing to consider it at 

all, in the reconsideration process, it’s not clear to us 

why it’s not being considered at the very outset. 

It seems to establish an artificial, 

unnecessary administrative burden for a student to 

prevail under a standard that the Department is otherwise 

willingly -- willing to contemplate as the basis for 

relief just at a later stage in the process. That doesn’t 

seem appropriate to us. And it seems like an unnecessary 

burden to the borrower. So, thank you.

MR. TOTONCHI: Thank you, Justin. David, I
27

Negotiated Rulemaking - 10/5/2021

see your hand is up.

MR. TANDBERG: I really appreciate the 

Department’s efforts on this. I’m supportive of the 

recommendations as far as they’ve been articulated. And I 

look forward to engaging in the process of actually 

establishing the standard, getting the regulatory 

language worked out.

I too, from the perspective of the states, 

I think it is important that the state standard be 

recognized at the outset. I think that properly 

recognizes the role of the states in higher education, 

the role as the kind of the first step regulators of 

higher ed, and the role they play within the triad.

Also, I think it could reduce the burden on 

the student, which I think is probably the most important 

consideration. So, I would suggest making that change. 

Otherwise, like I said, really supportive of this, and 

look forward to kind of getting the language worked out 

into the regulatory text.

MR. TOTONCHI: Great. Thank you. Justin, is 

that a new hand or a lingering hand? Okay, I thought so. 

Josh, go ahead.

MR. ROVENGER: Thanks. I just want to say 

that in response to the Department’s explanation, I do 

appreciate that as the explanation for why the Department 
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Negotiated Rulemaking - 10/5/2021

to -- decided to include that state standard backup, but 

I will echo the sentiment that’s just been expressed that 

it makes sense to have that as a part of the standard. 

But if it’s going to be the standard, let’s make it the 

standard from the get-go.

MR. TOTONCHI: Seeing as there are no other 

hands right now, I’d like to take an initial temperature 

check. So, (audio) the specific change proposed by the 

Department regarding the applicable regulation for the 

borrower and retroactivity, can I see thumbs?

Okay. So, I see two thumbs down or three. 

Well, I would just -- as succinctly as possible, Josh and 

Joe, could you quickly state why you’re here and not here 

at least? So, yeah, Josh, (interposing)

MR. ROVENGER: Sure. I just don’t think it 

makes any sense to include the state law standard as a 

backup, that someone has to go through an additional 

burden -- hurdle to be able to assert a claim under.

MR. TOTONCHI: Okay. Joe.

MR. SANDERS: Same. If I find fraud at a 

school, if I find a violation of state law at a school, I 

want to be able to just submit that to the Department as 

a basis for discharge in the first instance.

MR. TOTONCHI: And Justin, you also had a 

thumb down as well. Would you like to add something? 
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Negotiated Rulemaking - 10/5/2021

MR. HAUSCHILD: Yeah, that -- well, frankly, 

it’s just the same points that have already been made. If 

the Department’s going to consider this, as you consider 

at the outset, in order to reduce administrative burdens 

on the student. Or borrower.

MR. TOTONCHI: I appreciate your point. And 

by the way, if I think you have an extra comment to make, 

but if you’re just going to be duplicitous, feel free to 

say “No, I’m good”, alright? Alright, so, thank you for 

that. Department, do you need any further guidance before 

we move on to the next issue? Or I should say, the next 

subtopic.

MS. HONG: No, thank you. That’s helpful 

feedback.

MR. TOTONCHI: Great. As I understand, the 

next subtopic is evidentiary standard. Is that correct,

Jennifer?

MS. HONG: Yes, that’s correct. Thank you, 

Aaron. So, the new single federal standard, we would 

continue to maintain that a decision on the claim will be 

based on a preponderance of evidence. The same standard 

of evidence. However, borrowers would not be required to 

prove they relied upon the institutional wrongdoing if a 

reasonable person could have been expected to rely upon 

that wrongdoing. 
30

Negotiated Rulemaking - 10/5/2021

So, we just believe that allowing 

inferences on a reasonableness standard is appropriate, 

because borrowers may not always understand the nuances 

of this process, right? So, we want to remove that they 

would have to show that they relied upon the 

institutional wrongdoing. We’re going to make it if a 

reasonable person infers that they did.

MR. TOTONCHI: Okay. Thanks, Jennifer. 

Comments? Michaela.

MS. MARTIN: Just to clarify this standard, 

this whole new section is new, right? Or was there a 

previous section or a previous standard upon (audio)?

MS. HONG: Sure, Michaela. Just to clarify. 

So, there was an extra step in 2019 added that the 

borrower had to prove that he or she relied upon the 

institutional wrongdoing. We are removing that burden 

from the borrower in saying that, if a reasonable person 

would have been expected to rely on that information, 

that wrongdoing, then that’s enough, in other words, 

removing that burden from the borrower, to have to prove 

that.

MR. TOTONCHI: Thanks, Michaela and Jen. 

David, please, come in.

MR. TANDBERG: Yeah, I’d like to recognize 

my alternate who has a comment on this topic. 
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MR. TOTONCHI: Okay, sounds good. There are 

no other hands up, so you can go straight ahead, Suzanne.

MS. MARTINDALE: Thank you. Yeah, so very 

much appreciate the Department returning to the 

preponderance of the evidence standard. The borrower 

still has the burden of persuasion. It’s not like they --

this is in line with a typical consumer protection claim, 

with most kinds of claims. And I was on the previous 

borrower defense committee and was concerned about the 

consideration of clear and convincing evidence as the

standard. So, I appreciate to be here.

I also think it’s very appropriate that the 

borrower not have to prove they somehow relied on the 

wrongdoing. How would one even prove that? That would be 

very challenging.

And also, typical consumer protection 

claim, they’re -- you look at the conduct of the company 

and see if the behavior is, for example, such that it 

would have a tendency to mislead someone. So, I think 

this is going in the right direction and I appreciate 

this approach.

MR. TOTONCHI: Thank you, Suzanne. Joe, go 

ahead.

MR. SANDERS: Hi, yeah, so, glad to see a 

return to preponderance of the evidence. 
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Negotiated Rulemaking - 10/5/2021

I’m glad to see that there can be a 

presumption of reliance, but I want to make a point here 

again about the state law, because if Illinois state law 

were applied to a borrower who was defrauded here, under 

a consumer fraud act, the (consumer) would not have to 

prove reliance at all. They wouldn’t have to worry about 

a presumption, they wouldn’t -- it’s not an element.

There’s Illinois Supreme Court law directly 

on point here. So, again, another area where a state law 

standard would be preferable for borrowers in my state 

and others.

MR. TOTONCHI: Thank you. Justin.

MR. HAUSCHILD: Thanks, Emil. I’m supportive 

of returning to the preponderance of the evidence.

I’m not sure this is necessarily the 

appropriate place to raise this, though, I don’t think 

it’s entire off base. I’m curious what others think about 

and I would propose the inclusion of a requirement that 

we’re -- of a provision that would require the Department 

of Education to liberally construe applications here, 

similar to how courts are to interpret pleadings by pro 

se litigants, for example. Just curious to see what folks 

might think about that.

MR. TOTONCHI: Thanks, Justin. Josh.

MR. ROVENGER: Yes, I appreciate that Justin 
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Negotiated Rulemaking - 10/5/2021

raised that suggestion, and I would strongly urge the 

Department to consider that type of change. Most of the 

people that come to legal services in our constituency 

don’t actually get one on one representation, 

particularly in this context, and so most borrower 

defense applicants are going to be pro se. And the 

Department should make clear that there is a liberal 

pleading standard with all inferences taken in the 

applicant’s favor.

But also I don’t -- this is -- this crossed 

over to a later point. But I’ll just underscore the 

important (audio) why the group discharges also end up 

being so important.

MR. TOTONCHI: Thanks, Josh. Jennifer.

MS. HONG: I quickly thank you for raising 

that point. And yes, you’re right, we will get into that 

piece in just a few more subtopics. I think it’s 

encompassed in evidence solely from applications in terms 

of what we receive from the borrower, we’re relying on 

that information.

MR. TOTONCHI: Thanks. Jessica.

MS. BARRY: I understand what everybody’s 

saying here, but I still think that a heightened standard 

of proof is appropriate, especially in light of the 

proposed definition of misrepresentation that we’re going 
34

Negotiated Rulemaking - 10/5/2021

to consider, and for the ability for the borrower to 

submit an application without evidence. So, I support a 

clear and convincing evidentiary standard.

MR. TOTONCHI: Josh.

MR. ROVENGER: I’d just be curious to know 

why Jessica thinks there should be a heightened standard 

as compared to what a borrower would need to assert in 

court, for instance.

MR. TOTONCHI: Jessica, do you have a 

reaction?

MS. BARRY: Sure, just for the reasons that 

I just stated. Just because of what we’re beginning to 

be, considering, with misrepresentation and for 

eliminating that need for evidence.

MR. TOTONCHI: Josh?

MR. ROVENGER: But how’s that -- I get how 

is that different than it would be in a court setting. I 

mean, as Joe mentioned, in some states, reliance, for 

instance, is not required in some states. There are broad 

-- a borrower could bring a broad claim for unfair and 

deceptive practices, and they only have to (do so ) under 

a preponderance standard.

So, I understand the point you’re making, I 

just -- I don’t -- why should there be that distinction 

between what’s happening here and as compared to the 
35

Negotiated Rulemaking - 10/5/2021

court system?

MS. BARRY: Yeah, no, I think those are good 

points that you’re making and that we can keep 

considering.

MR. TOTONCHI: Okay. Michaela, I do see your 

hand up, but, Todd, if you could speak.

MR. DAVIS: Yeah, I just wanted to remind 

everyone -- I think in the 2019 rule, there was

discussion of this, but even that rule ended on 

preponderance.

So, we’ve been with preponderance all 

along, 2016, 2019, and now what we’re discussing now. 

Just want to clarify that in case there’s any confusion 

on that.

MR. TOTONCHI: Thank you. Michaela.

MS. MARTIN: For my benefit, and just so 

that we’re all on the same kind of level. Could somebody 

or folks maybe who feel strongly about not agreeing with 

what’s currently proposed, kind of identify what the 

difference really is in the standards in regards to this? 

What is it that folks would need to put up that’s 

different between those two fundamentally in practice? 

MR. TOTONCHI: Jessica, do you have a 

reaction to that?

MS. BARRY: Yeah, sure. With the evidentiary 
36

Negotiated Rulemaking - 10/5/2021

standard that I talked about, which is clear and 

convincing, the student would need to provide evidence 

that they relied upon what they were given by the college 

to make their decision.

MR. TOTONCHI: Okay. Jennifer. (interposing)

MS. MARTIN: So, you’re comparing that to 

the detrimental reliance? Those are synonymous? The clear 

and convincing and the detrimental are the same. As I was 

understanding --

MS. BARRY: Not to my knowledge they are the 

same. Maybe someone else can answer that question better 

than I can.

MR. TOTONCHI: Thank you. Jennifer.

MS. HONG: Just to Todd’s point. I think 

we’re getting confused because at the 2019 table they had 

talked about clear and convincing, but that never made it 

into the final regulations. It’s always been 

preponderance of the evidence. So that remains unchanged 

and we would not entertain clear and convincing as a 

standard. So --

MR. TOTONCHI: So, I see Josh has a hand up, 

and then I’d like to take a temperature check on the 

subtopic. Oh, after him, I see Bethany, too. So, after 

Josh, then Bethany.

MR. ROVENGER: In light of Jennifer’s 
37

Negotiated Rulemaking - 10/5/2021

comment, I’m good. Thank you.

MR. TOTONCHI: Thank you. Bethany.

MS. LILLY: I just want to try and provide 

an answer to Michaela’s question about clear and 

convincing versus preponderance of the evidence because I 

think it’s a lawyer term that many people don’t try and 

explain.

Basically, when you go to a court, there 

are different levels of evidence you have to provide. A 

preponderance of evidence is lower than a clear and 

convincing evidence standard. So, basically, the standard 

that the court’s applying is going to be higher with 

clear and convincing evidence rather than lower with a 

preponderance of evidence. So, it depends on kind of 

where you want to set the defaults for the students 

versus the -- whoever else is involved.

So, preponderance of an evidence would be a 

better standard for students. Because the barrier -- the 

evidentiary barriers would be lower. If that helps 

understand the dynamics there.

MR. TOTONCHI: Does that help, Michaela?

MS. MARTIN: Yeah, I am in law school right 

now. So, I kind of know the fundamental differences, but 

for the sake of this conversation, I just felt that we 

were having an operational definition difference of what 
38

Negotiated Rulemaking - 10/5/2021

that would actually look like in the context of this 

regulation. So, I do understand like that legal sense of 

it. I just wanted to put that into perspective in this 

context.

MS. LILLY: Sorry, I wasn’t sure you were in 

law school. I actually -- it slipped my mind you were in 

law school, and I figured they might be not lawyers --

MS. MARTIN: No, no, you’re good.

MS. LILLY: -- you’re like, what the heck is 

this? 

MR. TOTONCHI: Thank you so much. Let’s take 

a temperature check on the evidentiary standard topic. 

Remember, agreement, live with and support. When I say 

disagree, the protocol is actually specifically 

referenced serious objection or serious disagreement, 

okay? Thumbs on this topic?

Okay. Succinctly, Joe and Jessica, if you 

could voice your objection.

MR. SANDERS: So, under Illinois State Law, 

the consumer wouldn’t have to prove reliance. I, again --

state law standard was in -- I think that would be the 

controlling level of evidence, and so, I have a hard time 

giving up a better standard for my borrowers.

MR. TOTONCHI: Okay, thank you. Jessica. 
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Negotiated Rulemaking - 10/5/2021

MR. SANDERS: (interposing) That’s the basis 

of my objection.

MR. TOTONCHI: Jessica.

MS. BARRY: Yeah, I just wanted to think 

about this further. I think it needed more discussion.

MR. TOTONCHI: Okay, thank you. Well, real 

quick, in terms of the use of thumbs, what you see on 

your screen is how it appears to everyone else. So, put 

your thumb right in the middle of your screen.

Sometimes people are kind of over here or 

over there. Put it right next to your face, so we can see 

it clearly, okay? Josh.

MR. ROVENGER: Thanks, I just want to

clarify. I don’t know how other -- what are other 

people’s assumptions, but for me, it’s kind of a middle 

on the premise that a state law standard will exist 

ideally in the front end, in some form, just to clarify 

that about the (audio).

MR. TOTONCHI: Thank you. Jennifer, any 

further questions you have for the group before we move 

on?

MS. HONG: No.

MR. TOTONCHI: Alright. Thank you. Let’s 

proceed with the next subtopic, “Categories of acts that 

could lead to a borrower defense claim.”
40

Negotiated Rulemaking - 10/5/2021

MS. HONG: Okay, this proposal sets up 

everything that is going to be fleshed out again, I think 

you’re noticing that we’re getting -- inching, inching 

into more details around the adjudication process.

So, we’ve organized, conceptualized 

categories of acts that could lead to a BD claim, and 

we’ve identified five categories. These are -- the first 

one is substantial misrepresentation. Second one’s 

omissions. Third, breach of contract. Four, aggressive 

recruitment. And five, adjudications, which also include 

court judgments and findings by the Department of 

Education.

The first three categories have been 

included in prior regulations. The category of 

adjudication is a reinstatement and expansion of a cater

-- category that was included in 2016 regulation.

We propose adding aggressive recruitment 

because it is covered by many existing state standards, 

and results in a more comprehensive federal standard. I 

look forward to your thoughts on this.

MR. TOTONCHI: Thanks, Jennifer. Any 

clarifying questions or comments? David.

MR. TANDBERG: Yeah, I would be interested 

particularly to hear from my attorney friends. Sometimes 

it’s a little intimidating discussing these legal issues 
41

Negotiated Rulemaking - 10/5/2021

-- legal background, but ICBs -- So, number five -- and 

five, adjudications, which include court judgments and 

findings by the Department of Education.

Again, I would bring in whether we could 

add findings by State agencies, state governments -- the 

state authorizers and others are often in their own way, 

adjudicating relevant issues that I think could meet the 

standards of the Department and be therefore considered 

as either with five or within five or as a sixth 

category.

MR. TOTONCHI: I don’t see any hands up. Are 

there any questions or clarity that can be provided out 

of David’s comments and questions? Heather.

MS. PERFETTI: Thank you. So, I had a 

question about the addition of aggressive recruitment and 

what the Department’s ideas are to define that. I 

understand that some of that may refer to some state 

requirements or issues that they are considering for 

consumer protection, but if you could talk a little bit 

from the Department’s perspective of what you would be 

looking for more specifically there.

MR. TOTONCHI: Any initial reaction, Jen?

MS. HONG: We would like to hear from our 

state representatives on this committee to get more 

feedback. We recognize that many states have existing 
42

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state standards for aggressive recruitment. We’d like to 

open that up to discussion.

MR. TOTONCHI: Well, look who’s next. It’s 

Joe.

MS. HONG: Perfect.

MR. TOTONCHI: Well, I’ll note that.

MR. SANDERS: Yeah, I’ll talk a little bit 

about aggressive recruitment, but I wanted to go back to 

David’s point and the issue of, for example, a finding by 

a state authorizer.

Certainly, that’s something that we deal 

with all the time. Our authorizer will make 

determinations about schools in an administrative process 

and to the extent that that’s out there, we think that 

should be considered.

I defer to Jennifer a little bit because I 

think that there was somewhere in here where -- maybe it 

wasn’t on BD, but that there was a state findings 

section. So, I’d be interested to hear on that.

Again, in terms of aggressive recruitment, 

there is a rich body of state law out there on what 

constitutes aggressive recruitment that comes in both 

the form of consent judgment settlements that State 

Attorneys General have entered into, that comes in the 

form of judgments, which I think are included under 
43

Negotiated Rulemaking - 10/5/2021

number five.

So, again, I just think that reference to 

state law is an essential point here because states deal 

with this stuff so much. David’s point about the triad, I 

think, is well taken here as well. You’ve got State 

agencies -- would be an AG’s office, an authorizer, a 

banking department -- that are touching these things every 

day. So, I sound like a broken record here, but 

consideration of state law, I think, is something that 

would really strengthen everything we’ve got going 

forward.

MR. TOTONCHI: Thanks, Joe. Josh.

MR. ROVENGER: Thanks. So, I am pleased to 

see the addition of, well, a return to the more fair 

standard in the addition of something like aggressive 

recruitment. And we’ve seen schools that have sent 

recruiters to homeless shelters and methadone clinics, and 

certainly under any standard of unfair and deceptive, and 

abusive conduct, that’s it and should constitute the basis 

of a borrower defense claim.

Would add that I think -- I would invite the 

Department in this panel to think even more broadly about 

what should be the basis of a borrower defense claim, 

because there are state laws that would allow just more 

broadly unfair and abusive conduct, or high-pressure 
44

Negotiated Rulemaking - 10/5/2021

recruiting to constitute a BD claim. 

I think it is important that -- to 

constitute a claim, I think it’s important that borrower 

defense reflects that. I also think it’s worth discussion 

-- discussing whether a school violation of other 

eligibility provisions like the 90-10 rule or, when and if 

it exists again, GE, should be the basis of a borrower 

defense claim.

The last thing I’ll -- here is -- and I 

can’t do this justice because she would have been able to 

tell you the story if she were on this committee, but I’ll 

tell you the story of Ms. Theresa Sweet (phonetic) and her 

experience as to why this broad law standard is so 

important. This is all laid out in the case that she 

brought against the Department.

And she attended Brooks Institute of 

Photography, she was promised that 80 to 90 percent of the 

folks -- of students were placed in the field of their 

choice, she was promised help through the faculty network 

of the school. She was promised that there’d be a transfer 

of credits, and she faced high-pressure tactics to get her 

to enroll in the school. And she thought she was doing 

everything right, and she later learned that her credits 

wouldn’t transferred and that the degree was entirely 

useless, and that the only job services she would actually 
45

Negotiated Rulemaking - 10/5/2021

get were listings for unpaid jobs or job listings from 

Craigslist. So, I think it’s important for all of us to 

anchor and ground ourselves in these experiences when we 

think about what this standard should actually look like.

MR. TOTONCHI: Thanks, Josh. Justin, you’re 

next.

MR. HAUSCHILD: Thanks, Emil. I just want to

echo some of the things that have already been said, but 

hopefully add some additional points on -- we’re 

supportive of expanding findings by other federal and 

state bodies. I frankly think maybe we should be talking 

about those bodies and others that are sanctioned by the 

state to conduct oversight and enforcement activities. 

There are even other federal agencies and bodies: DA, DOD, 

CFPB perhaps. 

And when we’re talking about state 

authorizers in the context of -- of ED, it might be 

prudent to consider what interactions might take place by 

the state approving agencies in the Department of Veterans 

Affairs’ side of things when we’re talking about VA

education benefits. We’re also supportive of the addition 

of aggressive recruitment. I just talked to a student 

veteran. I think last week or the week before we talked 

about being wore down by the recruitment process and these 

are things that are -- as others have mentioned --
46

Negotiated Rulemaking - 10/5/2021

precluded, prohibited in other laws, and that’s the case 

with the Department of Veterans Affairs as well. They just 

recently passed -- legislation was recently passed that 

prohibits these activities, specifically, deceptive and 

persistent recruiting practices. So, I just want to flag

that for folks. Thank you.

MR. TOTONCHI: Thanks, Justin. We’ll take a 

few more comments and then a temperature check. Misty.

MS. SABOUNEH: (audio) a question for 

Jennifer. Can you tell me where the omission language is 

in the current regulations, if that’s referring to 

substantial misrepresentation?

MS. HONG: So, we -- so, we’re proposing to 

add that. We don’t have a definition for omissions 

currently. I’m sorry. Is that your question, Misty? Where 

to find omissions? We’re proposing to add it.

MR. TOTONCHI: Misty, any reaction to that?

MS. SABOUNEH: Thanks for clarifying. 

MR. TOTONCHI: Okay. Great. Dixie, you’re 

next.

MS. SAMANIEGO: Yeah. So, as a borrower or if 

someone was going to submit specific evidence to prove 

that there was aggressive recruitment, what does the 

Department of Education actually define that as and what 

does it actually look like in specific evidence to prove 
47

Negotiated Rulemaking - 10/5/2021

that it was aggressive recruitment? Because I’m trying to 

understand and it’s confusing. And it seems like the 

Department of Education doesn’t have a really -- a 

definition that is comfortable with saying to the 

negotiators, and so, I’m asking for one in terms of 

clarity for me trying to understand this and trying to --

when I was trying to gather a student’s perspective, it 

was really hard to, and so, trying to gather even more 

student perspective is hard when there’s no current 

working definition that the Department can provide to us. 

MS. HONG: So, this is why we’re -- this is 

precisely why we are raising it, Dixie. I think we have 

some ideas perhaps of what it might look like in terms of 

the examples that Joe provided. We are having this 

listening session with the committee and we are proposing 

this as a potential category because we would like to hear 

-- we’d also -- we want to hear from the students, for 

example, what kind of experiences have students had with 

regard to aggressive recruitment. I see my colleague Todd 

has his hand up, so he might be able to give you some more 

information on this as well.

MR. DAVIS: Well, I just wanted to try to 

clarify the omission question before Jennifer -- just that 

that is currently contained within the definition, in

Subpart F of 668 of misrepresentation. So, 
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Negotiated Rulemaking - 10/5/2021

misrepresentations currently include any statement that 

omits information in such a way to make the statement 

false, erroneous, or misleading. It’s not been a 

standalone thing. We’re sort of, I think, highlighting 

here -- I’ll leave that for Jennifer to discuss the intent 

-- but I think we’re highlighting it as its own category 

here where that’s been contained within the original 

misrepresentation definition previously.

MS. HONG: Thank you, Todd, and we’re --

okay, so let me -- I’ll go back to Misty and then we’ll 

circle back real quick (audio). So, we are going to get 

into those subtopic areas, but, yes, Todd’s absolutely 

right. So, it’s encompassed under the current definition 

of misrep. We want to pull it out and give it some more 

body and depth on all of its own.

As to the question about aggressive 

recruitment -- you know, a -- If I were to characterize 

it, any act of misrepresentation where an institution is 

making promises that it hasn’t kept to students. That’s a 

very general term, but anything, any feedback that you can 

offer -- in terms of questions of what students have 

experienced and what Joe has seen in the states under 

their state standards -- would be helpful for us to give 

this more body as a committee. 

MR. TOTONCHI: Thanks, Jennifer. I see 
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several hands up. We’ll go -- we’ve got Daniel, Jeri, Joe, 

David, Marjorie, and Justin. At that stage, we will either 

take a break or a temperature check after Justin’s spoken. 

MR. BARKOWITZ: So, thank you. First of all, 

I want to go back to something that Justin said earlier 

about other standards that already are in place. And as an 

administrator at a school, we do follow a limitation on 

aggressive recruitment as defined by the DOD. In our memo 

of understanding, there’s a formal definition -- which I’m 

happy to paste into the chat -- that I would suggest the 

Department take a look at as a possible standard for 

aggressive recruitment, especially because institutions 

are already abiding if they’re in agreement with the DOD 

for a service provision, they are already abiding by that 

definition. So, that (audio) address some of the concerns 

that are already placed about what exactly constitutes 

aggressive recruitment. So, I’ll paste that language in 

the chat for folks to review.

MR. TOTONCHI: Thanks, Daniel. Jeri. 

MS. O’BRYAN-LOSEE: Hi, just a couple of 

things. So, if we go back to the omission thing, I think 

it would be great that, if the school is on some sort of 

probation with their accrediting organization, that that 

would be important for people to know, so that’s omitted. 

The other thing is just a question more 
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about where the states fall, so it’s probably great Joe’s 

right after me. So, how would that work if the student has 

residency in one state, going to an institution at another 

state using the term “branch campus”, for example, so the 

main campus is in a third state? How would that kerfuffle 

what -- who would actually be the state you go to -- yes, 

“kerfuffle” is one of my favorite words. How would that 

work, I guess, is my question. 

MR. TOTONCHI: Any initial reaction to that 

from the Department of Ed? Alright, the question is 

pending so we can come back to it. Joe, you’re next.

MR. SANDERS: Yeah, I’ll address Jeri’s 

question real quick and then I have -- I can better form 

my question to Jennifer from earlier. 

So, you’ve got a choice of law kerfuffle 

there, Jeri. I think that, again, if we’re talking about 

state law, there’s a couple of different lenses you could 

look at it from. You could look at where the school is 

located, that’s where the defendant is. That’s going to be 

a traditional venue for anyone bringing a claim against 

that school. 

If the act occurred in the state where the

student lived, that certainly -- potentially -- another 

basis. And I think that, to the extent the Department 

doesn’t want to embroil itself in questions of state law
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that can get complicated, I think State Attorneys General 

can be a great resource to help the Department work 

through any reservations they may have about applying 

state law. I know my office would certainly be receptive 

to working through issues with the Department. We are 

currently dealing with that now with the Borrower Defense 

Team on some applications that we have been in. 

To get back to my question about where the 

state law standard was included on this issue paper. In 

the group -- it mentions a preference for the group 

process, which we think is great. And in that group 

process, it mentions that groups could be defined based on 

actions by State Attorneys General, other State agencies -

- and we think that’s positive. 

I want to know how that would interact with 

a standard that didn’t look at state law. So, for example, 

a higher education authorizer in Illinois, right? They 

have a bunch of requirements to authorize schools. I’m 

just going to take that as an example. Certain information

has to be included on the enrollment agreements, right? 

And, in the case of Corinthian, we found that, while they 

were including the information on the enrollment 

agreements, it wasn’t accurate. And so, if a state 

authorizer were to make a finding around, “Okay, we will

require you to put this information in,” and the 
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information is either missing or false, or whatever else. 

How would that interact with this federal law standard? 

So, you have a standard, you have a sort of an organizing 

principle that’s based on state law, but then you have a 

standard that’s not. So, we’d be interested to hear any 

thoughts on that -- on that.

MR. TOTONCHI: Okay. Thank you, Joe. David, 

please proceed. 

MR. TANDBERG: Yeah, I’d like to add my 

alternate to the queue.

MR. TOTONCHI: Okay, thank you. So, just so 

you know what we’re going to be doing. We will take a 

break after Justin, but then Dixie, Misty, and Suzanne 

will have the first three words after the break. Okay? So,

I just want to be clear with everyone. So, Justin, you go 

ahead and proceed, we’ll take a break, and then we’ll go 

from there.

MR. HAUSCHILD: Thanks, Emil. I think this 

may have been flagged, but in the case it hasn’t been, I 

just wanted to express support for the idea of court 

judgments, including state judgments. I think that’s been 

kind of brought up. I also want to point out that we also 

think it should probably include settlements -- it should 

include settlements within that context. In addition, I 

wanted to talk about aggressive recruitment real quick. 
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Daniel pointed out something very important. There are 

standards out there already. DOD is a great example, VA 

already has a standard out there as well. And I think 

there’s probably some value in considering keeping any 

definition elaboration non-exhaustive. Thank you.

MR. TOTONCHI: Thank you. Okay, so Dixie, 

Misty, and Suzanne, please keep your hands raised, okay? 

When we’re going through the break, I don’t want to break 

the order. We are going to round up to -- I’m on Central 

Time so I have to think about this, okay, 2:30 p.m. 

Eastern Time, so please be returned promptly. We’ll 

continue this discussion, a few more comments, and then we 

will likely take a temperature check. Thanks, everyone.

(Recess from 2:30 p.m. to 2:43 p.m.)

MR. TOTONCHI: Hello, everyone. Welcome back 

from the break. Let’s dive right back in. Dixie, you were 

our next commenter. Please proceed.

MS. SAMANIEGO: Yes, so I wanted to share my 

experience as one of the students who did get a form of

aggressive recruitment, so just kind of plugging or going 

back -- circling back. So, I got these calls and mail for 

around six to seven months before I started at Cal State 

Fullerton. So, it was incredibly aggressive phone calls 

where I was basically forced to make a decision on the 

phone, but thankfully I was just like, “I’m not dealing 
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with this right now.” But specifically, for-profit 

institutions prey on low-income people, on people of 

color, and also first-generation students, and they prey 

on the fact that most of us do not know what we’re doing 

in navigating higher ed, but also us being seniors in high 

school -- for me those calls started as soon as I finished 

applying to colleges, and it was my spring semester of my 

senior year, and up until all the way into the summer and 

quite literally the first week of school. That was in my 

first year of university at Cal State Fullerton. I would 

still get these phone calls where these for-profit 

institutions pose like trusted agencies and organizations 

to gain the trust of students who don’t have any 

experience in higher ed or who don’t have people that they 

can turn to, like me. First-gen, low-income, and poor 

students, and students of color do not have people that we 

can trust in our own family in terms of having experience 

within higher ed. We can’t turn to them. We simply do not 

have them. So, it is crucial when we are talking about 

aggressive recruitment and figuring out a definition that 

the Department of Education wants us to figure out that we 

have to include these experiences and at the very least 

include the understanding that low-income, firstgeneration, and students of color do not know what is 

going on, but also that they are more likely to be 
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targeted by aggressive recruiters, like people who are in

for-profit institutions preying on these students, right? 

And I am not just one case. I’m the case of millions of 

students across this nation who figure out that, “Oh, wow! 

These people are pressuring me to do something that I 

don’t know what I’m doing.” And I feel incredibly 

pressured, but I don’t know who to turn to because we 

don’t have people in our high schools who come -- who 

advise us, right? I was incredibly lucky to have one 

teacher at my high school who cared enough to be like,

“Hey, Dixie, this is really concerning. Don’t answer any 

more calls anymore.” (interposing)

MS. MACK: 30 seconds.

MS. SAMANIEGO: Thank you. And also, we have 

to recognize that these low-income high schools were 

preyed upon, right? -- were preyed upon by these people 

and so we need to include also in our definition of 

aggressive recruitment that -- we need to include specific 

evidence that we can turn it in to because we can’t turn 

in phone calls. We can’t turn in mailings that we get. So,

we need to be specific and we need to be intentional about 

this when we go about creating this definition for 

students. Thank you.

MR. TOTONCHI: Thank you, Dixie, for sharing 

your story. Misty, I believe you’re next.
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MS. SABOUNEH: Thanks. So, I just wanted to 

circle back to my question earlier about omission and now 

that it was brought up, that we are kind of using that 

substantial misrepresentation as a guide. So, in the 

proposed document that ED put out, the sentence addressing 

omission would then read: “misrepresentation includes any 

statement that omits information in such a way as to make 

the statement false, erroneous, or misleading.” And the 

concern is this would permit claims of misrepresentation 

even if it occurred unintentionally or inadvertently, and 

having such an expansive definition of misrepresentation 

could place folks in our career advising, academics or 

financial aid in a place where they are so nervous to say 

anything that they withhold counseling to our students. 

So, I just want to take a look at defining that a little 

bit further. And also with that broad definition, from a 

school’s perspective, it would be a pretty big push 

financially and from a resource standpoint to go back and 

look at all of our content and make sure from marketing, 

website, any advertisements that it fit that definition. 

MR. TOTONCHI: Thank you, Misty. Suzanne, 

you’re up.

MS. MARTINDALE: Thank you. I’ll lower my 

hand. So, I appreciate the Department moving in the 

direction of an expanded standard. I appreciate that. At 
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its core this process, the type of claim that the student 

is bringing forward, is a consumer protection claim. So, I 

think that it would be wise to hew to consumer protection 

principles, and others have already said this, but in 

state and federal law, there have long been prohibitions 

on unlawful, unfair, deceptive, more recently, abusive 

acts and practices, so I would encourage the Department to 

consider those laws and those standards as a helpful 

guide. 

I also want to put a quick note on 

“abusive”. We’ve been talking about some additional types 

of activities including aggressive recruitment. Abusive is 

a standard that was put into the Dodd-Frank Act in 2010. 

It’s a consumer financial law. We now have a similar 

standard here in California under our equivalent state 

consumer financial laws and it gets -- I’m heavily 

paraphrasing -- but it gets at a business -- so, in this 

context, we’d be talking about a school -- taking 

unreasonable advantage of an individual’s confusion or a 

lack of understanding about what they are getting into. 

So, I also encourage the Department to take a look at that 

definition and that term of art “abusive”. 

In this context, I think that -- I would 

also urge in the regulatory text that the Department 

retain flexibility here. My concern would be that if the 
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standard was enumerated to too much of an extent there 

could be -- you could be hemming in your own discretion to 

determine whether the standard has been met. And the folks 

on this call who are consumer protection attorneys can 

back me up, I mean, there are the concepts that I’m 

talking about have decades of case law precedent that are 

very, very helpful, and I think -- to the extent that we 

can weave in concepts here, where there is precedent -- I 

think that might also just help guide the Department as it 

weighs claims. 

In addition, just one quick thing about 

number five, which is -- I would expand beyond 

adjudications. Some folks have talked about this as well. 

State regulators and law enforcement may take different 

kinds of public actions. It may not always be an 

adjudication. I heard someone mention settlements. We 

often enter into consent orders with our enforcement 

activities, so I would encourage maybe looking at 

something that’s a little broader, but then nonetheless 

incumbent --

MS. MACK: (interposing) 30 seconds, Suzanne.

MS. MARTINDALE: -- evidence of wrongdoing 

that could be very, very helpful here. But to Dixie’s 

point, to the extent that the Department may want to 

consider guidance to students for how to file claims with 
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some examples, I think that might be a great opportunity. 

I’m outside of the regulatory text, where, again, I think 

the Department should retain broad and flexible standards. 

Thank you.

MR. TOTONCHI: Thanks, Suzanne. Josh.

MR. ROVENGER: Thanks. So, first I’ll start 

off by echoing the gratitude in the comments for Dixie --

for her sharing her story. I think it was really important 

for all of us to hear. And then I’ll also echo a lot of 

what Suzanne just said about the importance of -- not

getting too specific in the language here that it becomes 

more of a barrier than something that actually provides 

relief.

And where I wanted to add something was on 

specific high-pressure and wrongful action that we’ve seen 

and that investigators have reported on. And so, for 

instance, the use of lead generators to find students who 

are applying for jobs and then all of a sudden are getting 

harassing phone calls from predatory schools.

Infamously, the use of pain funnels in which

school admission officers are trained to drill down to get 

as many painful facts as possible, and then use those to 

convince students to attend their school. I’ll enter into 

the comments shortly. The Senate Health Report from about 

a decade ago which has an image of this pain funnel on 
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page 67 of the pdf for everyone to take a look at.

When I step back and think about what we --

what we’ve seen, some words that come to mind to help kind 

of put a definition to it would include extreme 

persistence, the creation of pressure or a sense of 

urgency, and the use and creation of a boiler room sales 

atmosphere towards -- in the recruitment process. 

The final thing I would say just to Misty’s 

point -- I appreciate that there will be -- I appreciate 

that in any conversation that we may be having there are 

going to be costs and burdens. For the last 50 years, the 

Government and the Department respectfully have

prioritized those burdens and costs at the expense of 

students, and I’m excited to hear the Department’s 

commitment to helping low-income borrowers and borrowers 

of color, and borrowers more generally, in a way that it 

has not done before. And so, I would urge everyone in the 

committee and the Department specifically to constantly at 

every step of the way prioritize what’s in the best 

interest of students and borrowers, even if there is a 

cost, even if there is a burden on the school, and/or 

others. 

MR. TOTONCHI: Thanks, Josh. Marjorie, you’re

next. Let’s take a few more comments and then just take a 

temperature check to see where we are at. Okay? So, go 
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ahead, Marjorie.

MS. DORIME-WILLIAMS: Okay. So, I want to 

thank my alternate for sort of sharing this information. 

And this is more maybe of a question or point of 

clarification, but if we have more vulnerable students who 

are in online programs, how does that jurisdiction issue 

play out? And I’m not sure if there’s language or 

standards for that right now, but I can imagine an issue 

where a student lives in one state, and maybe a program is 

based in a different state, and so, back to just the point 

about sort of state law and policy versus federal law and

policy, how that would be addressed in an issue where the 

student isn’t in person? I think it’s an important one 

because, again, we often see students who already may be 

in more non-traditional positions or difficult situations 

who do choose to participate in online programs. So, just 

being aware of how that would also play out under this --

under sort of these new regulations’ and rules.

MR. TOTONCHI: Thanks, Marjorie. Joe. 

MR. SANDERS: Yeah, I have a question and 

then I will -- I do have a little feedback on Marjorie’s 

last point. One area that I’m concerned -- and I know 

others in the State Attorneys General community are 

concerned, maybe missed by not having a state law standard 

here -- concerns state laws around sexual harassment and 
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State Civil Rights laws. 

So, for example, in Illinois, we have the 

Preventing Sexual Violence in Higher Education Act, which 

requires schools to have policies and procedures around 

reporting sexual harassment on campus. 

I could see a world where somebody who 

doesn’t feel comfortable attending class or campus because 

of sexual violence could be taken as a legitimate defense 

to the repayment of the loan in that they can’t complete 

the degree. Similarly, the Illinois Human Rights Act has 

protections around sexual harassment in higher education. 

I think that these are substantive areas that are missed 

by not including a state law Standard.

To Marjorie’s point about online, it’s a 

great question. To the extent where we’re using state law, 

there is one reading that would -- NC-SARA is a state 

compact whereby certain authorization laws are limited 

only to the state where the school is based. So, without 

passing judgment up or down on whether you like the 

compact, certainly, the laws of this state where the 

school is based could be a basis. 

I would argue, and others would argue that 

you’d have to look at the authorizing law in the state 

where the student lived to see whether NC-SARA would apply 

or not, but those are some basic principles that you’d
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need to look at when you’re talking about online students 

and state law. 

MR. TOTONCHI: Thanks, Joe. Jennifer, go 

ahead. Did you still want to speak? Okay.

MS. HONG: Yes. I was just lowering my hand. 

Thanks. First of all, Dixie, thank you so much for sharing 

your experiences. I really would like to encourage you to 

continue to do that throughout these proceedings. We want 

to start -- we carved out this space for students because 

we want to hear more about your experiences.

Also, one thing that you may have noticed 

and I just want to take Joe and Suzanne’s advice to heart 

regarding consideration of state law. One thing you may 

have noticed is that we’ve tried to encompass that in our 

proposed federal standard. Not explicitly, we have --

here’s the thing -- we have 50 states, right? And all with 

varying degrees of Consumer Protection Laws. And the point 

of this is to create a comprehensive federal standard to 

make it easier for borrowers. Our concern was that -- by 

including an option for states on the front end -- that 

would create a lot of back and forth between the 

Department, borrower, what’s my state law -- and we wanted 

to eliminate that by creating a comprehensive federal 

standard that would encompass those issues that are 

already captured by those states. And if by chance we were 
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to miss something, that could get picked up on the 

reconsideration process.

But keep in mind this is also -- this is for 

streamlining the process for borrowers. Not every state is 

like Illinois, unfortunately. So, we want to make sure 

that we have a strong federal floor for -- to start with -

- for borrowers and that we are encompassing all the 

issues to include aggressive recruitment situations that 

Dixie just described because we want that encompassed in a 

federal standard so that borrowers can get a fair shake at 

this on the front end. 

Also, to Misty’s point, I know you’re eager 

to talk about omissions. Remember, we are going to get to 

that. Right now, we are still just talking about the 

general categories of which omissions is one, so we are 

going to get into that shortly. I just wanted to look back 

on that. So, that’s it, thanks.

MR. TOTONCHI: Thank you. Josh, I see your 

hand, but I’m going to take a temperature check at this 

time. So, folks, I’d like to see your thumbs -- here, 

here, here -- on the proposed -- current proposed text on 

categories of acts that can lead to a borrower defense 

claim. May I see your thumbs please? Remember to put it 

right next to your head, like this. Okay. So, I see a few 

thumbs down. Succinctly, Josh, Jessica, Justin, and 
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Bethany, very quickly, if you could give us some guidance 

as to why your thumbs down.

MR. ROVENGER: Sure, I don’t think the 

standard as written encompasses everything that it needs 

to. And what I was going to ask before it’s along the same 

lines as to just whether the Department -- when trying to 

incorporate state law into the federal standard --

considered evaluating a state like Illinois, or could it 

be (inaudible) -- a particularly borrower-friendly state 

and using that as a starting place.

MR. TOTONCHI: Okay. Jessica. 

MS. BARRY: I’m just not comfortable 

supporting it yet until we figure out what aggressive 

recruitment is really going to mean, how we are going to 

define that. So, if we have a chance to really define 

that, then I could in the future support it. 

MR. TOTONCHI: Thank you. Justin. 

MR. HAUSCHILD: Yeah, I just think there are 

enough points of uncertainty here and maybe downright 

omission of things that should be included that we’ve 

talked about quite a bit, to warrant further discussion 

here. It’s a little bit -- I guess, I might be in my own 

boat here, but I’m also wondering a little bit 

procedurally how this is working because -- differently 

than some of the other stuff we’re looking at, we don’t 
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have proposed language, I understand that. It’s a pretty 

big topic, but we are seemingly taking a temperature check 

on something to establish draft -- draft regulations, 

excuse me. Then we’d perhaps be taking another temperature 

check in some -- I’m just wondering how exactly this is 

all coming together.

MR. TOTONCHI: Now, that’s fair. I’ll be 

mindful of that going forward, okay? It’s generally going 

to be on the proposed redline. To the extent we can 

provide clarity on that going forward we will do so, 

Justin. Thank you for raising that. Bethany.

MS. LILLY: I put this in the chat. I have 

nothing to add.

MR. TOTONCHI: Oh, I just saw it. Thank you 

so much.

MS. JEFFRIES: Emil, Emil? I think, Jeri, 

correct me if you’re -- if I’m wrong, you were a thumbs 

down as well?

MS. O’BRYAN-LOSEE: Yes, it’s been covered by 

both Josh and Justin (interposing). (audio).

MS. JEFFRIES: Okay. Alright.

MR. TOTONCHI: Thanks, Cindy, thanks, Jeri. I 

just didn’t catch it. Yeah, please be proactive just like 

that going forward, folks. I appreciate it. Okay. With 

that, let’s move on to the next issue, “Revise the 
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definition of misrepresentation.” Jennifer, if you could 

take us through it.

MS. HONG: Sure. So, we are proposing to 

revise the definition of misrepresentation by adopting the 

current definition which we can pull up for you as well 

under 34 CFR 668, Subpart F, except that we would expand 

the current non-exhaustive list of potential examples of 

potential topics where misrepresentation may occur to 

include: job placement rates, program costs, and the tax 

status of the institution.

MR. TOTONCHI: Okay. Any initial clarifying 

questions or comments? Marjorie.

MS. DORIME-WILLIAMS: So, I’m aware that the 

list is not meant to be exhaustive, but would 

accreditation status be helpful? Because it seems that 

some of the issues that we’ve discussed coming up are --

right, students finding out that their degrees are 

worthless or that they can’t do anything with them, they 

can’t go to other programs. So, I think that that might be 

a significant one. I would -- I guess defer to Heather on 

this, if that would be helpful so that institutions 

couldn’t say, “Yeah, you can do anything you want.” And 

then you find out, “Well, I wanted to go to graduate 

school and I can’t.” 

MR. TOTONCHI: Thank you. Jessica.
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MS. BARRY: Yeah. I have a couple of -- I’ve 

got a concern about program cost. I know there are times 

throughout the students’ education when the program costs 

will change due to a variety of different factors, so I 

think we would have to know that that happens to a certain 

degree. And then, when it comes to tax status, I’m just 

wondering who will determine that. Will that be the 

Department, the IRS, the creditor state? We know that that 

can vary. So, that’s a question actually for Jennifer, if 

she could clarify that.

MR. TOTONCHI: Do you have initial feedback, 

Jennifer?

MS. HONG: I’m sorry. So, who would determine 

the tax status? Right, so, I mean, we have our own

definition and we would determine that. 

MR. TOTONCHI: Okay. Thank you. Justin.

MR. HAUSCHILD: Thanks, Emil. Similar to 

Marjorie’s points, I think I would support this idea of 

including accreditation, misrepresentations, credit 

transfer policies, or another one. Sometimes -- often 

there are misrepresentations involved in a closed school 

discharge process or at the junction point where the 

school is closing. So, I think those are all worthy of 

consideration. I understand again too that these are 

illustrative examples, but I think the Department is 
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putting out illustrative examples, it’s important to 

include some of the top -- some of the really flagrant 

issues. I think the Department is trying to do that, but 

there might be value in considering some additional 

categories as well. Thank you.

MR. TOTONCHI: Thank you. Dixie.

MS. SAMANIEGO: I’m wondering if it would be 

helpful to change the language to “where misrepresentation 

may occur to include”, to include--add in “but is not 

limited to.” I’m wondering if that may be helpful for 

folks and may address some of the stuff that previous 

negotiators have mentioned.

MR. TOTONCHI: Thank you, Dixie. Noelia.

MS. GONZALEZ: Yes, a quick question about 

the program cost. Sometimes our -- campuses will -- do

have a slight increase in tuition fees from year to year 

based on cost of living or the CPI, a Consumer Price 

Index, is that -- as long as a student is told ahead of 

time before they become an actual student -- is that --

would that still be allowable or would that not be 

allowable under this rule? 

And when I’m talking about cost increases, 

tuition fees, it could be five percent, three percent --

small percentages. I’m thinking about the public 

universities who have campus fees, who have a CPI increase 
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on a yearly basis just based on the -- on inflation rates.

MR. TOTONCHI: Okay. Okay, Jennifer, if you 

have an initial reaction to that.

MS. HONG: Yeah. My initial reaction to that 

is, I mean, certainly we’re aware of these fluctuations 

and tuition costs. This is not what we’re talking about, 

we’re talking about as it relates to the definition of 

misrepresentation under 668, Subpart F. So, that’s more 

what we’re focused on.

MR. TOTONCHI: Okay. David.

MR. TANDBERG: Yeah. I’m trying to pull up 

what examples are currently in the regulation. I’m having 

a little bit of trouble, but I -- it does look like

accreditation is included, whether a student may transfer 

course credit. There’s a good number of things. The list 

goes on and on. There’s quite a list. I -- perhaps we 

should put this up so that we know what’s already included 

before we start suggesting other things that may already 

be in there.

MS. HONG: Can we pull that up, Aaron? If we 

could just give him a minute to pull that up on the eCFR.

That would -- that way everybody can look at it. 

MR. TOTONCHI: Yeah. And Aaron, if you’re 

having difficulty doing so, just let us know. 

I just want to confirm that (interposing).
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MR. Washington: You’re looking for 668.71?

The definition of misrepresentation? 

MS. MACK: Can we specify again what we are 

looking for (interposing)?

MR. Washington: Are you looking for 668.71, 

the definition of misrepresentation, or somewhere else

(interposing)? 

MR. TANDBERG: Yeah. It’s that, and then you 

got to scroll down -- that has 668.72, “Misrepresentation 

regarding the nature of the educational program,” 668.73,

“Misrepresentation concerning the nature of financial 

charges,” and then 668.74, “Misrepresentation regarding 

employability of graduates.”

MR. Washington: Alright. Let me try and find 

the link (interposing).

MS. HONG: I’ll just drop it in the chat for 

you. 

MR. TOTONCHI: Okay.

MS. HONG: (audio).

MR. TOTONCHI: Folks can actually reference 

that link. I don’t -- is there still a need to screenshare that or can folks just reference that link? 

I’m not hearing either way, so I assume the 

link is sufficient. Okay. Go ahead, David. Does anyone 

want to take us through this? (interposing). Yeah, go 
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ahead, David.

MR. TANDBERG: Yeah. So, this is 

misrepresentation, the definition. And then below it is 

the actual examples of misrepresentation, so you have 

things related. If you just scroll down just a bit, the 

nature of the educational program, and then there’s a 

bunch of other -- another category related to financial 

charges, and then another category of employability of 

graduates. So, there’s a lot. It may just be best to open 

it up on your computers, so you look at what’s there. I 

will say, while I have the mic, I support the inclusion, 

adding those categories that the Department has proposed,

I think those are all important. 

MR. TOTONCHI: Alright. Thank you, David. So,

in light of that, I think you can stop the screen share,

please, Aaron. Okay. If you could please bring up the 

text. It’s not the redline text, but the concept that the 

Department has introduced. Thank you. Heather.

MS. PERFETTI: Thank you. So, I did want to 

address just briefly the comment about accreditation 

status. I think what David just directed us to give some 

more nuances about the academic programs at the 

institution, even institutions in non-compliance remain 

accredited in terms of the information that they provide 

to the public. Now certainly, if they are in a non-
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compliant status, some agencies also require that to be 

disclosed in specific ways at their website, and then 

accrediting agencies certainly make that public disclosure 

with our own agencies. I did want to ask Michale McComis, 

the alternate, to speak to job placement rates when you’re 

ready for that.

MR. TOTONCHI: Thank you. He can come on 

camera and raise his hand and speak after Michaela.

MS. MARTIN: I had just a couple kind of 

clarifying, and also kind of a comment -- was that in the 

program costs? I don’t think that we are talking about 

tuition increases. All colleges do that basically yearly. 

We are talking about hidden costs, right? And I would 

imagine that that’s going to probably be specified within

-- I would hope -- the text that comes accompanying this, 

that would say how -- where that kind of line is. Because 

what happens -- and I’ve had friends that have had this --

they sign on for online school, and I go, “Yeah, here’s 

how much it’s going to be,” and then you register for 

classes and you buy your books, and then you’re slapped 

with some weird 300-dollar class distance learning fees 

except for it’s an online school, so why was that not just 

a part of the discussion or conversation prior to 

enrollment? 

And then, I’m a little bit confused about 
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the tax status of the institution and the question that 

Jessica had. Maybe I’m just not understanding what would 

accompany that because we don’t have the language yet. I’m

just kind of -- is that just saying “Folks who 

misrepresent themselves as being a nonprofit and they’re

for-profit”? Or is that -- or someone that’s a non-profit 

looking too much a public university or what that will 

look like? Maybe that’s too soon, maybe that’ll come with 

the language, but that’s where my question is, what that 

means.

MR. TOTONCHI: Thank you, Michaela. And just 

before Michale starts, I just want to recognize that Eric 

has come on to the table for State Attorneys General.

Michale.

MR. MCCOMIS: Good afternoon. So, I’m in 

support of adding to the exhaustive lists or illustrative 

list with regard to misrepresentation and definitions and 

that are being laid out here. And David mentioned the 

section that has to do with employability of graduates. 

I just want to speak to the job placement 

rate issue because it can be a little thorny and a little 

problematic. It kind of goes to, I think, what Misty was 

pointing out before -- is that it’s difficult to get this 

information oftentimes, and not all the creditors or 

other regulatory entities require programs or 
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institutions to report on it. Those that do, do have 

parameters typically, but the calculation methods for 

them can be quite different and certainly not consistent 

across all the creditors or other regulatory entities.

And just in our own experience, we 

sometimes find that a school, maybe reports, one rate, 

and when we go through and scrutinize the data, we say, 

“Well, we’re not going to count this one student,” and 

instead of 85 percent, it’s 84 percent.

So, so long as we’re mindful of nuances 

that perfection is not the standard, then I think that 

finding some way to ensure that that information is 

correct and accurate and reliable is really important.

But just wouldn’t want institutions to be 

penalized if it was a non-intentional error or a 

differentiation in a calculation method.

We third-party test almost all of the job 

placement information that we get and we find it to be 

about 95 percent accurate. But that’s not 100 percent, 

and typically, the differences are we just can’t track 

certain people down. So, it’s problematic data. Students 

have to have it accurately, absolutely. But let’s just be 

mindful that it’s difficult to make it be perfect.

MR. TOTONCHI: Thanks, Michale. Jessica.

MS. BARRY: Yeah, I agree with what 
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Michale’s saying. I wonder if replacing job placement 

rates and focusing on the data would be better to, say, 

employment outcomes. So, if someone is grossly 

misrepresenting employment outcomes for the program, then 

that could be considered misrepresentation, but these 

small calculation issues that happen between schools and 

the accreditors might not be where we want to focus.

MR. TOTONCHI: Thanks, Jessica, for that 

comment. If you would be able to just drop that 

suggestion in the chat. It seems like it was a short 

straightforward suggestion. Thank you. David.

MR. TANDBERG: Yeah, I’d like to bring my 

alternate up to the front in the queue, Suzanne. 

MR. TOTONCHI: Okay. After Josh, Suzanne can 

go. Josh, go ahead.

MR. ROVENGER: Thanks. I just want to 

respond to Jessica and Michale’s concern, which I 

actually think is addressed in the definition of 

misrepresentation itself. It’s not going to capture a 

small data error between one job -- what the job 

placement rate was reported as and what it should be.

So, I don’t think removing job placement 

rate actually solves the problem. I think it’s one that’s

already addressed in the broader definition of what 

constitutes misrepresentation. 
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On the flip side, intentionally falsifying 

job placement rates has been something that is very 

common in the for-profit industry, particularly notorious 

with Corinthian Colleges. And so, I think it’s 

particularly important to include that as one of the nonexhaustive examples. 

MR. TOTONCHI: Thanks, Josh. Suzanne.

MS. MARTINDALE: Thank you. I just wanted to 

make an observation, because I’m remembering what it was 

like a few years ago when I negotiated borrower defense 

and it was challenging for the committee at times to talk 

about these discrete parts because they’re kind of 

interconnected. In borrower defense, I think it’s just 

inherent to the issue, unfortunately, but in response to 

some of what I’ve been hearing from institutional 

representatives, I just want to take a step back and 

reflect back that we’re talking about what a borrower 

needs to do to get their loans discharged.

I’m previewing a little bit. There will be 

a separate process to determine whether or not a school 

needs to repay the Department in any way. So, I think 

those are two separate things. They are two separate 

processes.

And so, I think we need to think about what 

is a reasonable standard to ask. If it’s between the 
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Department of Education and the borrower, what does the 

borrower need to do to demonstrate that they have a 

viable borrower defense claim? So, I suspect that there 

may be -- it may feel like there’s some gray areas here, 

but it’s not automatically the case that the school ends 

up having to repay the Department simply because a 

borrower got $2,000 discharged because they dropped out 

of a vocational program that simply did not meet their 

needs, and was not what they expected or were promised. 

I just want to call that out and just 

observe that we need to think about some of these 

discrete pieces in the broader context of the entire 

borrower defense process. Thanks.

MR. TOTONCHI: Thank you, Suzanne. Just 

really quick, Michale, if you could turn off your camera 

that would be great. Thank you.

Okay. At this stage I’d like to take a 

temperature check. And in line with Justin’s comment from 

earlier, this is on the concept, okay? This is not on 

specific redline language. So, I’d like to see thumbs on 

the concept that the Department has put forward -- put 

forth at this stage.

Unless I’m missing one, I see that there 

aren’t any thumbs down at this stage. Thank you for that 

feedback, everyone. I see it’s 3:10. 
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Let’s present -- let’s proceed rather to 

the next issue: “definition of omissions”. Jennifer, can 

you please take us through that?

MS. HONG: Yes, probably Misty will have 

some comments, I’m assuming, as you had some questions 

earlier about it. But in brief, we are proposing to 

define a misleading or deceptive omission by an 

institution as an act that could lead to a successful 

borrower defense claim. We also propose to provide 

examples of omissions that could be grounds for BD claim. 

And those are bulleted right there.

Some examples might be significant 

exclusions from -- or methodological problems with -- job 

placement rates. So, this might go to Michale’s point in 

terms of these little tweaks with job placement. We’re 

talking about significant exclusions, omissions, problems 

with methodology for job placement.

Second bullet point: “If additional 

education is needed in the field, such as obtaining 

additional credentials in a field that requires program 

completers to go into that line of employment.”

Thirdly, “If the academic program lacks

certification or approvals.” And then fourth, 

“Transferability of credits.”

So, I’m happy to hear what others feel 
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about these.

MR. TOTONCHI: Thanks, Jennifer. Clarifying 

questions or comments from the committee? Jeri, please.

MS. O’BRYAN-LOSEE: I just want to talk 

about the last point, the transferability of credits, 

because that can mean several different things. Somebody 

could accept credits to be a million elective credits or 

a -- as something that doesn’t quite transfer into the 

actual program they’re coming into, so, where people may 

be accepting credits. I’ve had so many students that have 

lost credits because they only need 20 elective credits, 

but they transferred in 46, and were told that they could 

transfer in 46, even though they don’t fit directly into 

the program. And it also comes a little bit -- somebody 

mentioned earlier about residency requirements. So, I’ll 

just throw that out there when we talk transferability.

MR. TOTONCHI: Thank you, Jeri, for your 

comments. Jessica.

MS. BARRY: Yeah, I just have a question for 

Jennifer. And so, on the second bullet, when we talk 

about additional education, is the Department talking 

about additional education for entry level employment? 

Because, obviously, with lots of professions, there’s 

different educational requirements that might happen 

later in your career, so I’ve wondered if that’s 
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something we would need to clarify that this is for entry 

level.

MS. HONG: That’s right, but we wouldn’t 

want to limit it to that either.

MR. TOTONCHI: Okay. Daniel.

MR. BARKOWITZ: I want to swing back to the 

transferability of credits issue that was raised. I’m 

just -- it’s hitting me that transferability is really 

subject to individual transferring institutional 

perspective. 

So, if I’m attending a school that I’m then 

asking for consideration. The subject transferability is 

going to differ based on whether I’m going to a

university, a college, a tech school. It may differ by 

program, it may differ by type of institution, and 

different institutions may have different reads on that 

transferability. So, I just wonder how that could be 

claimed, and what the set of rules and opportunities 

around that would be, and how that would play out.

MR. TOTONCHI: Heather.

MS. PERFETTI: Thank you. I’d like to call 

on Michale again. He has a few comments he’d like to 

make.

MR. TOTONCHI: Okay, yeah, he can stick 

immediately because there are no other hands in the 
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queue.

MR. MCCOMIS: Just real quick. Under this, I 

wonder if given that the definition of misrepresentation 

says any of false, erroneous or misleading, I think, is 

how -- it’s -- I have to scroll back and forth -- any 

false, erroneous or misleading statement. So, I wonder 

if, in this definition of omissions, we say, “the 

Department proposes defining a misleading or deceptive,” 

would that also be misleading, erroneous or deceptive 

omission?

MR. TOTONCHI: Jennifer, if you have an 

immediate reaction --

MR. MCCOMIS: Yeah, I’m getting to the point 

that it looks like, from the first bullet, that we’re 

talking about erroneous data, is not something as a 

significant error -- significant exclusion, not just 

these one or two kind of cases that were a close call 

kind of thing. So, I’m just wondering -- just to be 

mindful that if we’re talking about erroneous is because 

it’s in the definition and might be useful to include 

that in the definition of omissions as well. I just bring 

it up as a parallel construction comment.

MR. TOTONCHI: Thanks, Michale. Ah, Eric.

MR. APAR: I have a question with respect to 

the first bullet, “significant exclusions from, or 
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methodological problems with, job placement rates.” So, 

would that include, for instance, inflating the job 

placement rate by including students who obtained jobs in 

unrelated fields, so, fields unrelated to the course of 

study?

MS. HONG: I think so. I mean, we’ve seen 

very kind of egregious instances of that where students 

are working their regular jobs totally unrelated to the 

fields in which the field of study is supposed to be 

preparing them for, and they’re counting that job, but 

I’m eager to hear more from you or if you have any 

feedback based on your experience. (audio).

MR. APAR: Sorry, Jennifer. Not based on my 

experience in particular. I just know that’s a common 

practice where schools will inflate their employment 

numbers by including, say, somebody who’s working at 

Starbucks or something like that, where it has virtually

nothing to do with the course of study.

MR. TOTONCHI: Thank you. Bobby.

MR. AYALA: For -- maybe something for us to 

consider with regards to certificates and job placement, 

with regard to omission, or this may be representation 

where a school -- they might say they need a level two 

certificate and when they actually need a level one 

certificate or less, less time for completion of a 
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certificate for a particular job, say, would it be 

allowed to be considered as a possible omission?

MS. HONG: Can you put that proposal in the 

chat, Bobby? Just want to make sure we all (audio).

MR. AYALA: Sure, yeah. For example, I was 

thinking of Welding, for instance, in a two-year program 

or one of these technical schools. Welding certificates 

have level one, level two, all the way up to associates, 

but many times, at least here in Texas, with regard to

the oilfield, you can get a level one certificate and get 

a 6-figure job. So, just something to consider, but I’ll 

go ahead and place them in the chat.

MR. TOTONCHI: Thanks, Bobby. Dixie.

MS. SAMANIEGO: I’m also wondering -- and if 

anyone could provide any feedback or perspective -- but 

adding lying about course offerings as well, because I 

know that a lot of students, even when they do transfer 

or whatever, other institutions most likely lie about 

what they’ve offered, but also, in a lot of cases, 

they’ll have on their website or in pamphlets and stuff 

like that their course offerings. But a lot of those 

courses haven’t been offered in X amount of years, and 

sometimes it’s like five to ten years, right? And so, 

could that be added as a part of the definition of 

omissions? If anyone has perspective to that or would be 
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willing to comment on that? 

MS. HONG: Again, Dixie, if you could add 

that to the chat so that we could -- our staff could take 

a closer look at it. And yeah, obviously I’m happy to 

hear what other members have to say.

MR. TOTONCHI: Thanks, Dixie. Heather.

MS. PERFETTI: Thanks to Dixie. I don’t have 

a response to your question, but I did want to ask 

Jennifer, if you could -- I know you spoke a little bit 

already about pulling omissions out of the general 

category of misrepresentation. Can you talk a little bit 

more about the Department’s motivation to do that 

separately as we see it here?

MS. HONG: We felt -- We felt it was 

deserving of its own category and was sufficiently 

distinctive from misrepresentation. Well, we felt -- I 

mean, you could omit certain information from students --

from -- how you calculate job placement rates, for 

example. That may not be exactly conforming with our 

current definition of misrepresentation. 

So, we wanted to kind of build that piece 

out more, I guess, if that’s helpful. So, that it’s not, 

I guess, in a sort of misrepresentation, necessarily, but 

just an act of omission by an institution that we felt 

was sufficiently distinctive that we needed -- deserving 
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of its own category.

In other words, if a student is just 

completely blindsided and is not aware of what they’re 

getting into in terms of transferability of credits, for 

example. We felt that that fit more neatly in an 

omissions category, rather than misrepresentation. Is 

that helpful? 

MS. PERFETTI: It is. I think that the 

current definition includes any statement that omits 

information in such a way to make the statement false, 

erroneous or misleading. So, I was just curious as to the 

motivation to separate it and I think you’ve answered 

that. 

This does include the word “deceptive” 

here, too, that I don’t think it’s included in the 

current language. I don’t know if that was intentional or 

you thought that was (audio) necessary in a separate 

description on the category.

MS. HONG: Yeah, I think it was intentional. 

I kind of wanted to separate that out in terms of not 

being forthcoming about how an institution may be 

operating and the claims that they’re making to students 

versus an erroneous claim. There’s an erroneous claim, 

and then there’s the claim that they’re hiding. So, 

there’s some deception involved. So, I realized it’s a 
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fine distinction but we felt like it was worthy of 

pulling out.

MR. TOTONCHI: Thank you. Just a quick 

comment before Marjorie. We are about eight to nine 

minutes away from public comments. 

We have instituted a waitlist as you all 

know. However, only four people of those public 

commenters are currently in the waiting room. Okay? 

So, if there’s someone you’ve arranged with 

to make public comments, you should probably doublecheck 

with them to make sure that they’re actually signed in 

into the zoom link, okay? Because we only have several 

people in the waiting room right now, okay?

Another comment before Marjorie goes. I 

just want to give everyone -- I want to continue to 

encourage the solution-oriented comments. The questions 

are great, these chats that you’re putting in with 

language in the chat are very helpful. I just want to 

continue to encourage that kind of feedback. Marjorie, 

please.

MS. DORIME-WILLIAMS: So, I think this might 

be maybe a point of clarification. This is from the 

perspective of being an administrator in a lot of 

different institutional settings. And so, there are 

sometimes omissions that aren’t malicious or intentional, 
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but certainly have to do with course offerings, I think. 

Thank you, Dixie, for that example. And it’s not 

necessarily due to ill intent on the part of the 

institution. It’s just the administrative assistant 

hasn’t updated the webpage in who knows how long because 

there are lots of other issues.

So, I guess, I wonder how are we maybe 

creating that distinction, because I think I would hate 

for institutions to be held responsible for something 

that they’re not actually doing, if that makes sense.

And so, I’m just concerned by some of these 

-- or even the example of job placement. Lots of students 

don’t necessarily pursue careers in what their “degrees” 

are in. 

But that doesn’t necessarily mean a 

negative educational outcome or a negative career 

outcome. And again, certainly that’s not always within 

the realm of responsibility of the institution, right? 

It’s our economy, people can’t find jobs.

So, I guess I just want to be -- I know, 

we’re talking about language, I just want to be careful 

about avoiding making these too broad where anything that 

can just sort of be a part of institutional functioning 

now falls under these definitions of omission.

MR. TOTONCHI: Thank you, Marjorie. Bethany.
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MS. LILLY: Jennifer wants to go first.

MR. TOTONCHI: I apologize. I just saw that.

MS. HONG: No, no, I didn’t raise my hand. 

Just real quickly, Marjorie, your point is very well 

taken. And I think the key here is the words “misleading” 

and “deceptive”. We try to put those qualifiers and 

descriptors in there to exclude the situations that you 

just described.

MR. TOTONCHI: Thank you. We have time for -

-

MS. LILLY: That was going to be my guess, 

which is why I wanted Jennifer to come before I did. That 

was the intent, statutory -- or regulatorily to adjust 

that. 

But I do want to emphasize here that we’re 

trying to protect students. And to some degree, I don’t 

have a ton of sympathy for institutions in this context. 

I mean, if you haven’t updated your class list in a 

couple of years, you should be taking a look at it. 

And not -- I understand that everyone has 

ten billion things going on. I get that. So, I don’t mean 

to be too critical of that. I also know students who have 

particularly gone to a college because it’s the only one 

that into their district offers this class, and then had 

to wait years to take that class. 
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That’s not helpful for anyone involved. And 

so, I do think that it’s helpful to have this list. I 

like Dixie’s addition and I just wanted to say all of 

that.

MR. TOTONCHI: Thank you. Dixie, please 

stick, and then we’re going to take a temperature check.

MS. SAMANIEGO: No worries. So, I will be 

critical of institutions who don’t update their course 

listings, especially speaking as a first-generation high 

school student -- first-generation high school graduate 

first off, and may even have an older brother who dropped 

out of high school and specifically for him, he’s making 

right now his decision to transfer out of a community 

college into a four-year institution, specifically on 

course listings that are available to students. And so, 

Jeri, in the comments or in our chat, had made a perfect 

point that, as students, we make these decisions to 

attend these institutions, based on public course 

listings. 

So, if folks at institutions are not 

updating that they should be held responsible because, at 

the end of the day, students are making decisions on 

public information, things that are provided publicly for 

students, right?

So, yeah, we need to add omission of course 
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list -- listings, excuse me -- because we’re making these 

decisions to attend these institutions based on what we 

publicly made available.

So, if those aren’t up to date, we are not 

making the best decision for ourselves based on what the 

institution has put out outwardly and to -- We have to be 

critical of institutions who don’t regularly update their 

course listings, because these are most of the time 

courses that aren’t made available or haven’t been made 

available in five, ten plus years.

And so, when an institution isn’t updating 

their course listings, isn’t that wrong? That’s shady.

That’s not in support of students. And so, we have to be. 

We have to be critical of institutions who don’t do that 

regularly, right? That’s all I really wanted to add, but, 

yeah.

MR. TOTONCHI: Thanks, Dixie, for your 

comments. Okay. On the concept, I’d like some initial 

group feedback on this topic, okay? Can I see thumbs for 

the concept as proposed by the Department? 

Okay. I see no thumbs down. Thank you 

everyone. Okay. 

MR. HAUSCHILD: Emil, (audio).

MR. TOTONCHI: Oh, go ahead, Justin.

MR. HAUSCHILD: Apologies for interjecting. 
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Can I just get a sense -- are we finished with discussion 

on this point? It seems to be kind of consistent with how 

we’ve been operating. I think I’d like to maybe revisit 

this or have additional conversation. I’m just curious if 

we’re intending to move on entirely from this.

MR. TOTONCHI: Yeah, that’s generally the 

intent at this stage. However, we certainly have not 

reached a consensus on this topic. We’re certainly going 

to return to this topic. This is just an initial kind of 

gut check, a temperature check from the group for the 

Department. But we’ll definitely come back to this topic 

at some point during the overall negotiation. Does that 

help, Justin?

MR. HAUSCHILD: Thank you.

MR. TOTONCHI: Okay, excellent. David, I see 

your hand is raised. I can give you about 30 seconds.

MR. TANDBERG: Yeah, it’s just at some point 

it would be nice to know a kind of timeline for when we’d 

be getting redlines and revised redlines and considering 

those, because that sounds like the next step for each of 

these.

MS. TOTONCHI: Jen, do you have quick 

feedback on that?

MS. HONG: Yeah, we really wanted to get you 

some for this session. Unfortunately, we weren’t able to, 
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so we plan to get that out at least a week before the 

second session.

MR. TOTONCHI: Alright, thank you all. We 

are prepared to move into our public comments. I 

understand the first public commenter is Pam Hewitt 

(phonetic), who’s representing the parent with a Parent 

PLUS Loan. So, if you could -- I believe she has been 

admitted.

I don’t see her on screen yet. There she 

is. Welcome. You have three minutes to make your 

comments. I want to make sure that your audio is 

connected first. Yeah, you can unmute yourself, Pam, we 

should be able to hear you.

MS. HEWITT: There you go. Can you hear me?

MR. TOTONCHI: We can hear you.

MS. HEWITT: Awesome.

MR. TOTONCHI: Go ahead, Pam. You may start.

MS. HEWITT: (audio).

MR. TOTONCHI: Yeah.

MS. HEWITT: Okay. Hi, I’m Pam Hewitt and I 

took out a Parent PLUS Loan to help my son pay for 

college, only to be defrauded by Full Sail University’s 

predatory tactics, lack of upfront communication from my 

lender and no help from my government. Freddy (phonetic) 

is my youngest child and going to school for graphic art 
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and design was his dream. We were misled about the 

acceptance into his desired major and ultimately felt 

forced to enroll in a different major. 

Sadly, that major did not lead him where he 

hoped to go and left him with a degree that would not 

benefit him in his future. I have over $248,000 in Parent 

PLUS Loan debt. I’ve applied for borrower defense to try 

to get some relief, but our claim was denied with no real 

explanation as to why.

My husband and I are on fixed incomes. 

We’ve attempted to refinance our house, but we were 

denied due to the student loan debt. We were also told 

that no banks would help us as the monthly payment on the 

student loan wipes out my income, leaving just my 

husband’s income for all of our cost of living, including 

the mortgage.

We sold our condo in the hopes of 

downsizing our mortgage, and we the housing situation 

now, we ended up spending more hoping that eventually 

we’ll be able to buy something again.

My loan servicer has continued to (audio) 

the loan but failed to make clear that interest would 

continue to be added on, constantly increasing my debt 

obligation.

I consolidated the loans in hopes of 
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getting into one of the programs with a smaller payment 

that may be affordable, but with lower payment comes in 

fact more interest, so the balance will continue to grow 

even though payments are being made.

It isn’t widely known how seriously student 

debt impacts parents. Payments may be able to be paused, 

but that only makes the debt increase. You start sinking. 

And by the time you fully understand the magnitude, well, 

there’s no way to stop. What do you do? And who do you 

turn to?

We are in just as much trouble with this 

Parent PLUS Loan as the kids are, perhaps worse as our 

income has no chance of increasing. I’ll never see an end 

to this loan. It will impact me for the rest of my life. 

This is devastating. And a worst-case scenario is that we 

could end up unable to put a roof over our heads. Where 

do we get help? Who do we turn to? The parents need to be 

heard. Thank you for your time today.

MR. TOTONCHI: Thank you for your comments.

MR. HEWITT: Thank you.

MR. TOTONCHI: We will next admit, and I 

apologize if I’m not pronouncing this correctly, Matthew 

Collenge (phonetic). Good afternoon. Is it Mr. Collenge 

(phonetic)? How do you pronounce your name?

MR. COLLEH: It’s Colleh (phonetic)
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MR. TOTONCHI: Colleh? Thank you. Please --

MR. TOTONCHI: Please proceed. You have 

three minutes.

MR. COLLEH: Awesome. Thank you. I’m ready. 

Hello, everybody. My name is Matthew Colleh (phonetic) 

and I’m a board-certified behavior analyst or BCBA, and I 

work in the field of Applied Behavior Analysis or ABA, 

which is the only evidence-based treatment that we have 

right now for people on the autism spectrum disorder.

I know we haven’t gotten to it today. I 

wasn’t sure how fast this would move along, but I want to 

comment concerning the Public Service student Loan 

Forgiveness program and the redefinition. So, I hope you 

guys can take my comment into account when you guys start 

discussing this. But the agenda stated that the 

Department proposes to establish a primary service 

definition to ensure that employers perform one of the 

public services included in the law as a primary function 

of the organization. 

The Department seeks ideas on what should 

be included in such a definition, which is what I’d like 

to do today. I’d like to kind of advocate and just 

explain why I believe that ABA service providers should 

be included in this new definition, because we do 

actively engage in public service. 
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First, just some statistics, the prevalence 

of autism was last recorded by the CDC as one in every 54 

births in 2016, which is up from one in every 150 births 

in 2000.

And the average cost in the United States 

over the lifespan of an autistic person is $2.4 million. 

But with early diagnosis and early intervention, this 

cost can be reduced up to two thirds.

What ABA service providers do is we do that 

in early intervention. And we actively contribute to 

saving millions of dollars from both the families of 

these people and the government, as the government funds 

through Medicare a lot of the services we provide, which 

is, I believe, a huge benefit to the public and the 

public service.

Also, ABA providers are frequently 

contracted by schools to aid teachers and students on 

students who are (audio) autism spectrum, and students of 

other disabilities. 

And so, again, we do a lot of things. We 

look at these public service jobs like schools, we were 

right there with them doing a lot of these jobs and 

helping them with these particular students who are on 

the autism spectrum. And then just the --

MS. MACK: (interposing) 30 more seconds, 
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Mr. Colleh (phonetic).

MR. COLLEH: Right, thank you. The ABA 

providers are considered a part of the medical field, 

such that we are given NPI numbers, and that healthcare 

is commonly regarded as a public service. ABA services 

are considered a medical necessity, and those engaging 

ABA services are engaging in a public service. I would 

say such that -- it’s such a medical necessity that 

during the course of the pandemic, we continue to go into 

people’s homes to provide this central therapy for our 

clients.

And so, just -- we’re attempting to define 

what qualifies an organization for public service --

MS. MACK: (audio).

MR. COLLEH: -- public service that 

function, then we should --

MR. TOTONCHI: Thank you, Mr. Colleh 

(phonetic). I’m so sorry, but time is finished. Just out 

of respect for other commenters. 

MR. COLLEH: Absolutely.

MR. TOTONCHI: Okay, I understand who we 

have next is Stephanie Stiefel (phonetic), and I 

apologize if I’ve mispronounced your name. Please, 

correct my pronunciation if it’s incorrect.

MS. JEFFRIES: And Emil, this for the record 
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-- I want to say that Ms. Stiefel (phonetic) is a veteran 

representing herself.

MR. TOTONCHI: Thank you. Is Ms. Stiefel 

(phonetic) here?

MR. ROBERTS: She’s in the meeting, but she 

has to enable her sound and video, if you can hear me.

MR. TOTONCHI: Thank you. If you can hear 

me, Ms. Stiefel, in the lower left-hand corner, there’s a 

mute button or as an audio button. We’d ask you to 

connect to audio, the computer audio option. Are we 

having any success yet?

MR. ROBERTS: No, it still looks like she 

needs to enable audio and video. I can let in the next 

person if you’d like.

MR. TOTONCHI: Please do, and if someone 

could work with her to get her video and audio enabled 

during the next commentary, that would be great. Thank 

you.

MR. ROBERTS: I’m admitting Michelle Poitier 

(phonetic) who is a veteran representing herself.

MR. TOTONCHI: Thank you so much. Hello, Ms. 

Poitier (phonetic). Is that the correct pronunciation?

MS. POITIER: Yes, it is. Good afternoon.

MR. TOTONCHI: Good afternoon. You have 

three minutes to comment. 
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MR. POITIER: Okay. Well, good afternoon, my 

name is Michelle Poitier (phonetic). I’m a veteran who 

served in the U.S. Navy for 13 years as a cryptologist. 

I’m here today to ask the Department of Education to 

prevent for-profit colleges from targeting veterans with 

false promises, leaving us with crushing loan debt and 

worthless degrees.

After I was honorably discharged from the 

military in 2003, I decided to use my GI Bill and Voc 

Rehab benefits to pursue a college degree.

In 2006, I enrolled in the University of 

Phoenix in the business management program. As I was in 

the process of getting my benefit set up, the school had 

me sign a lot of documents, which I didn’t realize at the 

time that I was also signing up for loans that I never 

requested, and I did not want.

I graduated with a bachelor’s degree in 

2010, but remained in the dark about the loans. I first 

found out about them when I tried to purchase my first 

home.

I applied for a home loan and then I 

started receiving letters in the mail that I had about 

$30,000 worth of student loan debt. 

The University of Phoenix had told me that 

my GI Bill and my Voc Rehab benefits would cover 
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everything. And that wasn’t bad enough, but after looking 

for a job in my field for more than a year, I realized 

that I couldn’t get an interview, let alone a job. 

So, the Phoenix degrees really aren’t worth 

the paper that they’re printed on, and certainly not 

worth going into $30,000 worth of debt for.

I enrolled in Phoenix hoping to secure a 

six-figure salary as a business executive then. They told 

me it was all but guaranteed, but I graduated in pretty 

much the same situation that I was in before I enrolled, 

except now that I had debt hanging over my head.

I could never find a job that paid the 

bill, let alone work in the chosen field that I desire. 

So, I ended up starting my own company as an 

inspirational speaker.

This has worked out for me professionally, 

but my credit is still in ruins. Even after my loans were 

discharged, I’m still fighting tooth and nail for more 

than 11 years to get the loan debt that never should have 

been there in the first place wiped from my credit

report, and to this day, it still hasn’t happened. 

So, all of this has greatly impacted my 

quality of life, my mental health and stress levels. I 

have complex post-traumatic stress from my days in the 

military and I’m now 100 percent disabled. So, problems 
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that have only been exasperated [sic] by the hassles with 

(inaudible). I want to --

MS. MACK: (interposing) You have 30 more 

seconds, ma’am.

MS. POITIER: I wanted to share my story 

with you today in hopes that no other student is allowed 

to be targeted by a school like Phoenix and forced to go 

through what I’ve been through. I also want to thank you 

for the TPD process because I did get my loans cancelled 

after the VA gave me that 100 percent disability rating, 

so thank you for making the TPD work for veterans.

MR. TOTONCHI: Thank you, Ms. Poitier 

(phonetic).

MS. POITIER: Thank you.

MR. TOTONCHI: I understand that Stephanie 

Stiefel (phonetic) is ready to speak. However, she will 

be joining us via audio only. Ms. Stiefel (phonetic), are 

you there? 

MS. STIEFEL: Yes.

MR. TOTONCHI: Please, correct my 

pronunciation.

MS. STIEFEL: No, you said it perfectly. I’m 

so sorry. I didn’t hear anything before.

MR. TOTONCHI: Okay, yeah. Okay, so, Ms.

Stiefel (phonetic), you are a veteran representing 
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yourself. You have three minutes to make a public 

comment.

MS. STIEFEL: Thank you. Good afternoon, my 

name is Stephanie Stiefel (phonetic). I’m here today to 

tell my story in the hope that what happened to me will 

not happen to anyone else. When I was 18 years old and 

attending the University of South Florida, I attended a 

career fair to look for employment outside of the normal 

minimum wage retail jobs. 

The International Academy of Design and 

Technology was at this career fair and their counselors 

spoke highly of their programs. I told the counselors at 

IADT that I was really struggling with the large class 

sizes at USF. And they told me that the class sizes at 

IADT were small and that getting one on one time with 

professors was simple. These counselors also made the 

program at IADT sound appealing because they said 

graduating from their programs would provide a promising 

lucrative career in big name design firms. 

At this point, I was very interested and I 

set up a tour at their school. During the tour, I was 

told that it was a great school and even if things didn’t 

work out, or if I didn’t like it, whatever classes I took 

there could transfer to any other school that I wanted.

So, shortly after, in October of 2005, I 
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enrolled at IADT. I started taking classes. I felt pretty 

quickly that most of the classes I was taking were just 

to check in the box. I was not trained on some of the 

advanced software that was needed for certain projects 

that were assigned to me and I was given minimal 

instructions.

It did not matter if the work that myself 

and my peers turned in was stellar or just terrible, we 

could receive passing grades regardless. 

IADT told me that they help their students 

get jobs. After graduation, I moved from Tampa to Los 

Angeles, and I called IADT’s Career Services Office to 

get career assistance, but I was told that since I still 

did not live near school, they could not help me.

I applied to every interior design related 

job I could find for both big and small firms. Many firms 

didn’t even call me back. And then when I did get lucky 

enough to have an interview, it was always with the 

reception or for a receptionist or an assistant type job, 

doing clerical work, jobs that I could have gotten with a 

high school diploma without ever attending college. 

All of these jobs paid minimum wage, and I 

certainly was not going to make ends meet making minimum 

wage in Los Angeles.

In fact, I found out that I could not even 
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be a junior interior designer until I spent a certain 

amount of time practicing under a licensed interior 

designer and became licensed myself.

IADT did not tell me any of this. They made 

it seem like it was likely to be working as interior 

designer and making more than minimum wage right out of 

school upon graduation. 

MS. MACK: (interposing) You have 30 more 

seconds.

MS. STIEFEL: To this day, I have not found 

a career in interior design. Instead, I work for the 

Department of Homeland Security as an explosive canine

handler. I also served in the United States Army.

And after many years of mental health 

deterioration -- like the previous speaker said, I was 

lucky enough to have my loans discharged upon receiving 

100 percent disability rating. 

I do thank you for that benefit that I 

receive now. But my time spent at the IADT where I 

graduated with a bachelor’s degree was a complete waste 

of my time. And the year spent after that fighting for 

loan discharge and to be heard with this story was very 

negative for my life.

 MR. TOTONCHI: Thank you, Ms. Stiefel 

(phonetic), for your comments. I understand the next 
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public commenter is Mike Pierce, representing Student 

Borrower Protection Center. Please proceed, Mr. Pierce. 

You have three minutes.

MR. PIERCE: Thank you so much for the 

opportunity to join everybody today. My name is Mike 

pierce. I am the policy director of the Student Borrower 

Protection Center and I’m here on behalf of 45 million 

Americans who owe student loan debt today. 

For far too long administrative fixes to 

consumer protections for student loan borrowers in 

distress, particularly IDR, have been prospective. 

They’ve shut out millions of people that have debt today 

from any possibility of debt cancellation, and in some 

cases, even from immediate debt relief. 

Any effort here to be able to reform 

income-driven repayment, Public Service Loan Forgiveness, 

and even some of the discharges for borrowers that are 

disabled or in distress, as a result of a school closure 

or due to fraud by their school -- these changes need to 

be retrospective, not just prospective, they need to look 

backward.

It’s also important that any changes to 

these consumer protections are inclusive, make sure to 

offer the same kind of safety net to parent borrowers or 

borrowers in default. 
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The two-tiered system that we’ve created in 

particular for borrowers in default has really undermined 

the principles that Congress intended when creating a 

student loan safety net, whether that is income-driven 

repayment or Public Service Loan Forgiveness.

We’d also urge that any action here taken 

through rulemaking is paired with executive action to 

ensure faster implementation. And in that vein, we were 

heartened to see on Friday that NPR reported big changes 

were coming to the Public Service Loan Forgiveness 

program to provide additional avenues to access PSLF for 

many borrowers who’ve been shut out to the -- by the 

program to date. 

It’s critical that negotiators be fully 

briefed on what these changes are before they’re asked to 

negotiate new rules for PSLF. Any new changes to PSLF 

executive action need to work hand in glove with new 

rules to ensure the program lives up to its promises.

I want to close by emphasizing that the 

student loan system itself is brutally punitive. From 

interest capitalization to payment shocks, the costs for 

borrowers in programs are mishandled or when ED’s vendors 

lie or cheat student loan borrowers is appalling.

The past decade has showed us that when 

things go wrong, it is always student loan borrowers that 
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are asked to pay the price, and that these administrative 

failures are inevitable. So the system needs to not 

assume perfection. 

Instead, it needs to be able to tolerate 

failure, and it needs to make sure that borrowers are 

protected when things go wrong. Thank you again for the 

opportunity to comment today.

MR. TOTONCHI: Thank you for your public 

comment, Mr. Pierce. I understand our next public 

commenter is Karen Cody-Hopkins, an attorney.

MS. CODY-HOPKINS: (audio).

MR. TOTONCHI: Hello. Ms. Cody-Hopkins, 

there’s background noise on your end. Can you hear me?

MR. ROBERTS: No, I think it’s actually the 

livestream. So, if you wouldn’t mind just turning that 

off or pausing it while you’re speaking, you won’t get 

that feedback.

MR. TOTONCHI: Thank you, Brady. Ms. CodyHopkins, are you able to turn off the public stream? 

MS. CODY-HOPKINS: Yeah, I’m not sure. I can 

hear you. Can you hear me now?

MR. TOTONCHI: Yes, I can hear you.

MS. CODY-HOPKINS: Hang on.

MR. TOTONCHI: That’s okay. That’s okay.

MS. CODY-HOPKINS: Now? 
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MR. TOTONCHI: We can hear you and we can 

also hear someone else. (audio)

MS. CODY-HOPKINS: If I turn off the public 

stream, I turn off the sound, but let me try. Just a 

second.

MR. TOTONCHI: We can hear you, but the 

sound quality is very poor. And it’s, I think, because we 

hear the public stream in the background.

MS. CODY-HOPKINS: If I change the sound --

MR. TOTONCHI: That’s better. That’s better. 

Let’s go with that. Okay? 

(audio)

MR. TOTONCHI: We’ll move on to the next 

person. We’ll see if you can get this sorted out on your 

own, but please close out of the public stream 

completely, and then we’ll come back to you hopefully 

after the next speaker. Okay?

MR. ROBERTS: And I’ll message you, but 

right now I’m admitting Theresa Sweet, who’s representing 

herself.

MR. TOTONCHI: Thank you. Ms. Sweet, are you 

there? Ms. Sweet, can you hear me? Is Ms. Sweet’s audio 

and video on? I see neither are on. Ms. Sweet, someone 

will have to (inaudible) because you cannot hear what I’m 

saying right now because your audio is not on. Here we 
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go. Excellent. Ms. Sweet, can you hear me?

MR. ROBERTS: It looks like her audio is not 

connected, but I’m talking to her now. Do you want me to 

admit the next person?

MR. TOTONCHI: If you could, that would be 

great. Ms. Sweet, please standby if you can hear me.

MR. ROBERTS: It’s Tyler Johnson, who is an 

attorney.

MR. TOTONCHI: No, it just looks like Ms. 

Sweet just connected. Ms. Sweet, can you please speak?

MS. SWEET: Hi, can you hear me?

MR. TOTONCHI: Yes, we can. Thank you so 

much. 

MS. SWEET: Okay.

MR. TOTONCHI: You have three minutes to 

make your public comments.

MS. SWEET: Okay, and I have my own timer 

set, so please don’t interrupt. 

Hi, my name is Theresa Sweet, I’m named 

plaintiff in Sweet v. Cardona. I’m here mostly to address 

members of the public who are watching because there are 

things that you all deserve to know about this committee, 

and I feel it’s fair that I should scorch a little earth.

Despite having taken part in federally 

mediated interest-based bargaining in the past and 
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despite having the endorsement of more than 1500 members 

of the public, DOE did not see fit to grant myself or 

anyone else a seat at the table to represent borrower’s 

defense to repayment, claiming long standing Department 

policy not to seat individuals who are named plaintiffs 

in active litigation against DOE. 

Two additional and very well-versed BDTR 

advocates were also nominated and then voted down. DOE’s 

claim about named plaintiffs does not hold up to 

scrutiny.

I think it’s important to acknowledge that 

there are some true advocates on this committee, but I 

only have three minutes, so please understand the public 

does appreciate what you are doing. I’m available to 

speak to you anytime.

Now I’d like to address just a few of the 

committee members who have conflicts of interest so 

egregious that it’s almost laughable to me that you could 

claim to be negotiating in good faith to protect 

students. 

One of you works for ACCSC, an accrediting 

body that has a documented track record of poor oversight 

capabilities. 

ACCSC has in the past allowed known bad 

actors to maintain accreditation in some cases for more 
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than a decade before finally shutting them down, 

including schools owned by the company that caused me to 

file my borrower’s defense claim in the first place.

One committee member worked for a company 

called Education Corporation of America for nearly a 

decade. ECA was a for-profit education company that 

couldn’t hold up to the scrutiny of gainful employment, 

and in 2018 they closed 70 of their campuses literally 

under the cover of night, leaving 19,000 students out in 

the cold with no answers, mountains of debt, and 

uncertain futures.

Another member of this committee was also a 

head Neg Reg negotiator under Betsy DeVos, when the 

decision was made to scrap the gainful employment rule, 

which had been one of the best protections available to 

protect students against fraud.

It is important to note that 98 percent of 

schools who failed the standards of gainful employment 

were for-profit schools and whose former students make up 

the overwhelming bulk of BDTR applications.

This committee member actually owns and 

operates their very own for-profit school.

Jessica Barry, based on your votes in your 

comments so far, you should have shown yourself to be a 

self-serving shill and you do not deserve a place on this 
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committee that will write rules specifically to protect 

students from people like you. 

Like the more than 150,000 class members of 

Sweet v. DeVos, I’ve been waiting more than five years 

for a lawful decision on the merits of my claim.

The judge in my case has described the 

situation as disturbingly Kafkaesque and has said that 

students may have already suffered irreparable harm.

His words are not hyperbole. I have 

literally had class members who I have never met reach

out to me and tell me they were considering suicide 

because of this inescapable debt. I have to talk 

strangers off suicide off a cliff.

You -- Yeah, here we are today. Hundreds of 

thousands of BDTR applicants have been shut out of the 

rulemaking process in favor of sharks suited for-profit 

lackeys and bankers, foxes guarding the henhouse.

DOE, in summation, your job is to protect 

students, not to welcome education profiteers to the 

table. You have let us down, and you should be ashamed of 

yourselves. BDTR deserves a vote.

MS. MACK: That’s three minutes.

MR. TOTONCHI: If that was the three minutes 

-- Okay, thank you. Thank you for your public comments. 

Brady, who’s next?
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MR. ROBERTS: So, if Karen’s audio is 

working, she is in the meeting. Karen, do you want to say 

something just to test out your audio?

MS. CODY-HOPKINS: Now can you hear me 

without the background?

MR. TOTONCHI: Yes, we can. Excellent.

MS. CODY-HOPKINS: My name is -- Go ahead.

MR. TOTONCHI: Please proceed. You have 

three minutes.

MS. CODY-HOPKINS: Thank you. My name is 

Karen Cody-Hopkins. I’m a student loan and bankruptcy 

lawyer in Denver, Colorado. I didn’t ever expect to 

become a student loan lawyer. But in 2006, I went to 

bankruptcy discharge for a client with a very disabled 

child, and all the other attorneys in Colorado who knew 

nothing about student loans started referring clients to 

me.

So now I’m a student loan lawyer, and I’ve 

spoken to thousands of people in Colorado and sometimes 

other states who have had significant student loan 

problems. 

You folks are here to represent the 45 

million student loan borrowers, and if you add in their

families, like Pam, who’s also a borrower, but as a 

family member, then you are talking about probably a 
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third of the population who are going to be affected by 

what’s going on.

And so, I’m going to skip over the kinds of 

comments the previous person made because -- although I 

agree with some of them about the fact that you’re 

terribly unrepresentative for those 45 million borrowers 

-- it’s important to remember that those 45 million 

borrowers are facing a broken system.

Yes, there are some people who navigate the 

federal student loan system successfully, but there are 

such a huge number in default or with other kinds of 

problems.

So, what I’m going to ask is that when you 

look through these rules and you get to the end, and 

before you finalize them, look for the broadest economic 

justice that you can provide and then you give the 

Secretary and the federal student aid operating officer 

as much discretion to deal with the incredible variety, 

and the many problems that come not so much just from the 

rules, but from faulty practices and policies that come 

out of these.

Specifically, I’d like to address -- I 

myself am disabled and for the TPD proposals, I thank the 

Department for making some very positive recommendations.

The only thing I would say about TPD beyond 
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what you’re recommending is you were leaving out an 

entire class of people that I would appreciate it if you 

look at and that is TPD caregivers. The people whose 

children, spouses or family members or parents are 

totally disabled and they are trapped in the disable by 

having to be the caregiver sometimes paid for it but not 

very much. 

And I believe eventually there should be a 

category for those people, but it may not be this round. 

But I’d ask that you start studying that because it’s 

critical.

The second is under the closed school. 

Again, please give the Secretary more discretion. 

MS. MACK: (interposing) 30 more seconds.

MS. CODY-HOPKINS: -- because the 

circumstances that come up are broader than the rules are 

going to cover.

Interest capitalization. We have 

generations now of people whose interest capitalization 

is leaving them with no retirement and no ability to do 

anything but feel hopeless. 

The amount of hopelessness I see -- because 

I see borrowers in their 20s, 30s, 40s, 50s, 60s, 70s and 

a few 80s, and many of them feel hopeless, and the system 

of the interest capitalization --
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MS. MACK: (interposing) we’re on time.

MS. CODY-HOPKINS: -- (interposing) tripling 

their debt.

MR. TOTONCHI: Ms. Cody, please --

MR. HOPKINS: (interposing) Thank you for

your work. We appreciate your work no matter who you are, 

but there is so much work to do. Thank you.

MR. TOTONCHI: Yeah. Thank you for your 

comment. To future commenters, going forward, you are to 

hard stop it. Okay? But thank you so much for your 

comments. Tyler Johnson, attorney, I understand you’re 

our final public commenter of the day. You have three 

minutes to make your public comment.

MR. TYLER: (audio) Can you hear me okay?

MR. TOTONCHI: We can.

MR. TYLER: Thanks for holding this 

negotiated rulemaking. So, I am an attorney at legal 

service. My first name is Johnson, my last name is Tyler. 

Everyone gets that wrong, except for my parents.

I want to talk about the TPD rule -- our 

proposal here -- and why automation is really important.

So, in 2019, about 175,000 people applied 

for TPD, but the administration this year, when they 

automated it, they found over 300,000 people who are 

eligible hadn’t applied for it. That’s a huge number, 
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that’s almost twice the number of people who apply.

In addition, that’s in a category -- that’s 

a minor category. It’s a pretty small category. It’s only 

one out of every ten Social Security Disability 

recipients fall into that category. 

So, consequently, there are a lot of other 

disabled people who are very disabled, who should be 

getting their loans discharged, who are not. And in fact, 

people who go on Social Security Disability generally 

stay on for about ten years whereupon they either pass 

away or they retire and get social security retirement 

then, so it’s a large group.

The other thing I want to talk about is 

what happens when you don’t apply for this discharge. 

Often people have their social security benefits reduced 

by 15 percent. That’s what happens when you’re in 

default, that half people who have been applying on their 

own have been in default when they apply, and they’re 

trying to stop that.

That has a huge impact on people, because 

with disability comes a low-income generally. It’s very 

costly.

I have a client, Linda, who was on for ten 

years, during which time about $6,000 were taken from her 

in social security, disability benefits. 
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And, consequently, she came to my attention 

because she’s being evicted. And so, we had an attorney 

and the public assistance people involved in trying to 

save her housing and keep her out of a shelter, but she 

had been very sick. She’d been on dialysis. She’d had a 

kidney transplant and she never fell into any category 

that would have automatically discharged her.

So, I really want to applaud this idea that 

Bethany and John had been advancing, of measuring the 

automatic time period from the onset of disability.

Everyone who applies for disability has 

(audio) their onset, and the Social Security 

administration adjudicates a finding of when the 

disability began.

And just to -- it takes quite a bit of time 

to adjudicate a case. The average time is a little over 

two years for a claim that goes in front of an ALJ for 

their decision to be rendered, and most people end up at 

that stage.

There’s just a lot of people who by the 

time anyone starts measuring it, they’ve been disabled 

within the meaning of the social security act for many 

months, if not years, prior their application.

That information is recorded in the onset 

date in the social security file. That’s where I would 
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say the measurement should be happening, 60 months from 

that date --

MS. MACK: (interposing) You’re out of time, 

Mr. Tyler.

MR. TYLER: Okay. Thank you very much.

MR. TOTONCHI: Thank you for your public 

comment, and thank you to all of the public commenters 

today.

Just a few final notes before we close for 

the day, we are just over time. Those who were on the 

waiting list that registered for public comments today, 

we encourage you to register for tomorrow since you 

didn’t get to speak today. Okay, that’s number one.

Number two, we recognize that there are a 

number of emails for the committee that we have seen 

throughout the day. We will respond to those as soon as 

possible, okay? including mailing out the language of 

documents that have been provided.

Last comments, I believe David asked a 

question as to when the Department would provide updated 

added edits of the language. That would be one week prior 

to the start of the November session.

So with that, I want to thank the 

committee. I want to thank the advisors. I want to thank 

everyone involved in the public commenters for their time 
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today. Thank you for the productive discussion.

We very much look forward to continuing 

with this very important discussion tomorrow morning, 10 

a.m. Eastern. Thank you all and have a good evening.
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Appendix

Department of Education, Office of Postsecondary 

Education

Zoom Chat Transcript

Affordability and Student Loans Committee - Session 1, 

Day 2, Afternoon, October 5, 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 Bethany (P) Disability (she/hers) to Everyone: 

One other question--do we have demographic data on 

the population? 

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

Just a reminder of my data requests: 
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From David (P) - State hi ed agencies to Everyone: 

1. What data does the Department need "to define 

this more broadly and give more borrowers the 

opportunity to still re-enroll and get relief."? 

2. What share of students who continue their 

education and apply for discharge get their request 

approved? 

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

In response to a question from Bethany (and a DM), 

there is not demographic data reported in the GAO 

report. It would be possible, with some work, to get 

an approximation of the demographic characteristics 

on the student bodies of the students who attended

closed schools (from publicly available IPEDS data), 

but I cannot think of a good public source that 

would give demographic information on borrowers at 

those schools 

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

Thank you! 

From Raj - Advisor Econ/Higher Ed/Data to Everyone: 
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A few other takeaways from slides 3-8 in the 

presentation that I sent you but did not have an 

opportunity to cover: - Slides 3-7: Generally, 

for fields that are commonly offered at proprietary 

institutions, and where students typically get 

credentials, there are comparable programs at public 

institutions nationally (but not necessarily 

locally) - Slide 8: Research evidence suggests 

that when FP institutions lose ability to disburse 

federal financial aid, a prominent proportion have 

local options (within the same county) and enrolls 

at them (transparently my own work, so at the risk 

of seeming self-serving, but I believe it largely 

considered some of the best available evidence on 

this topic). To be clear, none of this work 

speaks to the costs of transfer, including financial 

costs and the difficulty of transferring credits 

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

Everyone: 

Apologies, I'm here. My connection is unstable. 

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

Everyone: 

Research on loan debt | College on Credit: A 

Multilevel Analysis of Student Loan Default | 

https://doi.org/10.1353/rhe.2014.0011 

From David (P) - State hi ed agencies to Everyone: 
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Could we "cap the amount of unpaid interest that can 

accrue each month in IDR plans, waive interest for 

low-income borrowers, or pause interest accrual 

during periods of deferment or forbearance when 

borrowers are enrolled in such plans." 

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

These ideas came from here: 

https://www.pewtrusts.org/en/research-andanalysis/articles/2021/09/24/upcoming-rule-makingprocess-should-redesign-student-loanrepayment?utm_campaign=LM+-+GP+-+PSBS+-

+Negotiated+Rulemaking+092421&utm_medium=email&utm_s

ource=Pew&subscriberkey=0030P00001zA3RBQA0 

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

-share of total loan portfolio balance that is 

interest (broken out by capitalized and accrued and 

by repayment plan)

-share of total loan portfolio balance that is 

interest broken out by race and sex

-Data related to the frequency of how often interest 

is capitalized for each of the capitalizing events 

-How many borrowers have recurring capitalizing 

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

I would appreciate any available data from ED on the 

# of borrowers on IDR who are not recertifying on 

time and the resulting $$ of interest capitalization 

From Joe (P); State AGs to Everyone: 

Does return to repayment raise any capitalization 

events? 

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

Hi Todd! 

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

Josh the legal aid will also take over the seat 

From Joe (P); State AGs to Everyone: 

State attorneys general would be happy to provide 

legal guidance to the Department on discreet issues 

of state law to the extent that a state law standard 

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

One standard and the state standard up front. 

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

https://s3.amazonaws.com/dodmou/dodmouwebsite/docume

nts/Appendix%20to%20Enclosure%203%20DoDI132225p_Chan

ge%204_SAMPLE.pdf - see paragraph 3j 

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

j. Have policies in place compliant with program 

integrity requirements consistent with the 

regulations issued by ED (34 C.F.R 668.71-668.75 and 

668.14) related to restrictions on 

misrepresentation, recruitment, and payment of 

incentive compensation. This applies to the 

educational institution itself and its agents 

including third party lead generators, marketing 

firms, or companies that own or operate the 

educational institution. As part of efforts to 

eliminate unfair, deceptive, and abusive marketing 

aimed at Service members, educational institutions 

will: 

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

(1) Ban inducements, including any gratuity, favor, 
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discount, entertainment, hospitality, loan, 

transportation, lodging, meals, or other item having 

a monetary value of more than a de minimis amount, 

to any individual or entity, or its agents including 

third party lead generators or marketing firms other 

than salaries paid to employees or fees paid to 

contractors in conformity with all applicable laws 

for the purpose of securing enrollments of Service 

members or obtaining access to TA funds. Educational 

institution sponsored scholarships or grants and 

tuition reductions available to military students 

are permissible 

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

(2) Refrain from providing any commission, bonus, or 

other incentive payment based directly or indirectly 

on securing enrollments or federal financial aid 

(including TA funds) to any persons or entities 

engaged in any student recruiting, admission 

activities, or making decisions regarding the award 

of student financial assistance. 

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

(3) Refrain from high-pressure recruitment tactics 

such as making multiple unsolicited contacts (3 or 

more), including contacts by phone, email, or inperson, and engaging in same-day recruitment and 

registration for the purpose of securing Service 

member enrollments 
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From Greg Norwood to Everyone: 

Thank you for sharing your story! 

From Michaela (P) Ind. Students to Everyone: 

Thank you Dixie! 

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

Thank you, Dixie! 

From Rachelle - 4 Yr Public (A) to Everyone: 

Thank you for sharing examples Dixie 

From Dr. McTier (A) Priv. & Non-Profit to Everyone: 

I agree with Dixie! 

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

https://www.help.senate.gov/imo/media/for_profit_rep

ort/PartI.pdf 
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From Josh (A), Legal Aid (he/him) to Everyone: 

P 67 of the pdf, 61 of the report 

From Joe (P); State AGs to Everyone: 

I appreciate Dixie's comments. Student voices are 

very important in this process. I support including 

more. 

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

I feel the same way 

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

I have nothing to add to Josh's and Justin's 

comments. 

From Heather (P) - Accrediting Agencies to Everyone: 

I had a thumbs down on the last ... no new reasons 

other than what was mentioned. 
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From Joe (P); State AGs to Everyone: 

Eric, the state AG alternate, will be taking over 

for our constituency at 3pm EST. Thanks to all for 

the robust discussion today,. 

From Jennifer - ED negotiator to Everyone: 

https://www.ecfr.gov/current/title-34/subtitleB/chapter-VI/part-668/subpart-F 

From Jessica (P) Proprietary Schools to Everyone: 

Replace “job placement rates” with “employment 

outcomes” 

From Rachelle - 4 Yr Public (A) to Everyone: 

Transfer credits are different than applicability to 

program requirements. Good point Jeri. 

From Michale - Accreditation (A) to Everyone: 

ACCSC has a definition that would not allow an 

"employed-in-field" classification for non program 

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

With regard to omission/misrepresentation: An 

institution may misrepresent a requirement for job 

placement by stating a need for a level 2 

certificate or AAS certificate when a level one will 

suffice for appropriate job placement. 

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

Everyone: 

Definition of omissions: Lying about course 

offerings (especially courses that have not been 

offered in a certain number of years but will have 

the courses listed on their course listings and 

websites and/or a part of a degree completion 

pathway) 

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

to Everyone: 

students make decisions based on those outward 

facing advertising. 

From Michale - Accreditation (A) to Everyone: 

DEfinition of Misrepresentation: 
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From Michale - Accreditation (A) to Everyone: 

https://www.ecfr.gov/current/title-34/subtitleB/chapter-VI/part-668/subpart-F/section-668.71 

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

sideways with the addition of course offerings 

From Heather (P) - Accrediting Agencies to Everyone: 

Program length may capture the concern about the 

steady offering of courses in an academic 

credential.