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OMB Number: 1845-NEWA 6/4/2015

RIN Number: XXXX-XXXX (if applicable)

SUPPORTING STATEMENT

FOR PAPERWORK REDUCTION ACT SUBMISSION

Information on Borrower Defense to Repayment Loan Discharge Claims

A. Justification 

1. Explain the circumstances that make the collection of information necessary. Identify any

legal or administrative requirements that necessitate the collection. Attach a hard copy of the 

appropriate section of each statute and regulation mandating or authorizing the collection of 

information, or you may provide a valid URL link or paste the applicable section1. Specify the 

review type of the collection (new, revision, extension, reinstatement with change, reinstatement 

without change). If revised, briefly specify the changes. If a rulemaking is involved, make note 

of the sections or changed sections, if applicable.

Section 455(h) of the Higher Education Act of 1965, as amended (20 U.S.C. 1087e(h) 

provides that the U.S. Department of Education (Department) defines by regulation 

which claims against a school constitute defenses to repayment of a loan under the 

Federal Direct Loan (Direct Loan) program. Following a negotiated rulemaking process, 

the Department published amendments to the Direct Loan program regulations on 

December 1, 1994. These regulations included borrower defenses specified in 34 CFR 

685.206(c). The regulation, in part, states “(c)(1) [i]n any proceeding to collect on a 

Direct Loan, the borrower may assert as a defense against repayment, an act or omission 

of the school attended by the student that would give rise to a cause of action against the 

school under applicable State law.” 

A subsequent negotiated rulemaking process was established for the purpose of 

developing regulations for borrower defenses for both the Direct Loan and the Federal 

Family Education Loan Program (FFEL) programs. However, during the first session of 

the negotiations, the non-Federal negotiators recommended to the Department of 

Education (the Department) that no additional sessions were warranted and that no 

further regulatory provisions for borrower defenses would be needed. It was determined 

that borrower defenses could be adequately addressed by current regulation and 

administrative procedures. A further discussion of this is in the Federal Register, Vol. 

60, No, 140, July 21, 1995, 37767-37770.

Prior to 2015, the borrower defense identified above was rarely asserted by any 

borrowers and no specific methods of collecting information was defined or found

necessary.

Corinthian Colleges, Inc. (CCI) was the owner of a number of for-profit postsecondary

education institutions across the country. In January 2010, CCI purchased Heald 

College, which had 14 locations in California, Oregon, and Hawaii. At the time of its 

 

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OMB Number: 1845-NEWA 6/4/2015

RIN Number: XXXX-XXXX (if applicable)

purchase by CCI, Heald College participated in the federal student financial assistance 

programs authorized under Title IV of the Higher Education Act of 1965 (HEA), as 

amended. CCI was also the owner of other title IV eligible institutions, including the 

Everest and Wyotech chains of schools. 

In January 2014, the Department sent a letter to CCI in which the Department requested 

that CCI provide a copy of school performance disclosure documents for every CCI

location, including Heald College institutions, for the calendar years 2010, 2011, 2012,

and, when available, 2013. The Department also asked that CCI provide the evidence 

upon which CCI relied to derive each of the placement rates cited in the disclosures, 

including a list of all students either placed or omitted from the placement calculation due 

to any type of waiver, and the academic, employment, and/or waiver information 

specified by the Department. 

In June 2014, the Department placed CCI on an increased level of financial oversight 

after the company failed to address concerns about its practices, including falsifying job 

placement data used in marketing claims to prospective students and allegations of 

altered grades and attendance. CCI subsequently agreed to gradually wind down 

activity as part of an operating agreement with the Department. As a part of this, CCI

sold 56 Everest and Wyotech campuses to the ECMC Group in November 2014. Over 

70,000 students were enrolled in the programs that were transferred to ECMC.

In April 2015, the Department issued a notice of intent to fine Heald College $30 million 

upon findings that Heald misrepresented placement rates for a number of its programs 

going back to 2010. Upon the issuance of the Department’s fine letter, CCI announced it 

would close its remaining programs immediately, including all its Heald locations and 

several Everest and Wyotech locations that were not part of the sale to the ECMC group. 

Almost 16,000 students were enrolled in these programs. 

Over the past several months, as the events related to CCI have unfolded, former CCI 

students, supported by various organizations and non-profits, have organized a campaign 

to assert that the Department should discharge their student loan debt pursuant to the 

borrower defense regulations. Over 1,000 students have already submitted borrower 

defense claims to the Department. 

In the 20 years prior, the Department received 5 claims for borrower defense. Over the 

last several months, the Department has received over 1,000 such claims due to a 

building debt activism movement as well as the notoriety of Corinthian’s collapse, 

creating a need for a clearer process for potential claimants. This exponential increase in 

demand was unexpected and outside of the Department’s control.

Given that borrowers have a right to assert a defense to repayment claim and that the 

Department has made findings against a number of CCI’s former programs, we expect 

thousands of more claims to be submitted as several advocacy groups are working to 

organize CCI borrowers. Because borrowers have a right to submit defense to repayment 

claims, the Department must set up a process to review and adjudicate them. 
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OMB Number: 1845-NEWA 6/4/2015

RIN Number: XXXX-XXXX (if applicable)

To respond to these events and protect harmed borrowers the Department seeks to 

provide assistance to allow:

 Student borrowers who attended the Heald College programs that the Department has 

found made misrepresentations to have their loans discharged if they complete the 

attached attestation. These borrowers need not prove that Heald College’s actions 

violated State law as the Department’s findings show a State law violation. The 

Department estimates that there are potentially 50,000 borrowers in this category. 

 A process to be set up to review and adjudicate borrower defense claims from other 

borrowers, including other CCI borrowers. This process will be the subject of a 

separate information collection and although we will advise that borrowers hold their 

submissions until this process is made public, we cannot bar the submission of 

claims. Thus, while the Department is developing this process, it will post on its 

website the attached language, which will direct borrowers who choose not to wait 

for development of the review process, to send their claims to the address provided 

and to include a short list of information in support of their claim. The Department 

estimates that there are potentially 100,000 borrowers who may exercise this defense. 

It is important to note that borrowers from other schools could also submit borrower 

defense claims if they believe that their school has engaged in a State law violation 

related to their education that has harmed them. 

2. Indicate how, by whom, and for what purpose the information is to be used. Except for a new 

collection, indicate the actual use the agency has made of the information received from the 

current collection.

The Department will utilize the information provided by the borrower to confirm 

eligibility for the borrower defense against repayment. The information will be provided

through a paper request with a borrower signature and attachments evidencing enrollment 

in a Heald College, as well as the information provided by non-Heald College borrowers 

who can provide evidence that their school has engaged in a State law violation related to 

their education that has harmed them. 

3. Describe whether, and to what extent, the collection of information involves the use of 

automated, electronic, mechanical, or other technological collection techniques or forms of 

information technology, e.g. permitting electronic submission of responses, and the basis for the 

decision of adopting this means of collection. Also describe any consideration given to using 

technology to reduce burden.

The collection of information can be submitted to U.S. Department of Education, P.O. 

Box 194407, San Francisco, CA 94119, or FSAOperations@ed.gov .

4. Describe efforts to identify duplication. Show specifically why any similar information 

already available cannot be used or modified for use for the purposes described in Item 2 above.
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OMB Number: 1845-NEWA 6/4/2015

RIN Number: XXXX-XXXX (if applicable)

The information requested of the borrower is needed for processing the borrower defense 

claim request. While borrower and loan information is held by the Department, there is 

no other mechanism for the Department to investigate or apply the discharge except for 

the borrower to make the voluntary request. This request must be initiated by the 

borrower.

5. If the collection of information impacts small businesses or other small entities, describe any 

methods used to minimize burden. A small entity may be (1) a small business which is deemed 

to be one that is independently owned and operated and that is not dominant in its field of 

operation; (2) a small organization that is any not-for-profit enterprise that is independently

owned and operated and is not dominant in its field; or (3) a small government jurisdiction, 

which is a government of a city, county, town, township, school district, or special district with a 

population of less than 50,000.

This information collection does not impact any small businesses or other small entities.

6. Describe the consequences to Federal program or policy activities if the collection is not 

conducted or is conducted less frequently, as well as any technical or legal obstacles to reducing 

burden.

If the Department did not collect the information on either the specific form or through 

the website, we would not have the information needed to apply the discharge and could 

not provide borrowers with allowable recourse to loan repayment. 

7. Explain any special circumstances that would cause an information collection to be conducted 

in a manner:

 requiring respondents to report information to the agency more often than quarterly;

 requiring respondents to prepare a written response to a collection of information in 

fewer than 30 days after receipt of it;

 requiring respondents to submit more than an original and two copies of any document;

 requiring respondents to retain records, other than health, medical, government contract, 

grant-in-aid, or tax records for more than three years;

 in connection with a statistical survey, that is not designed to produce valid and reliable 

results than can be generalized to the universe of study;

 requiring the use of a statistical data classification that has not been reviewed and 

approved by OMB;

 that includes a pledge of confidentiality that is not supported by authority established in 

statute or regulation, that is not supported by disclosure and data security policies that are 

consistent with the pledge, or that unnecessarily impedes sharing of data with other 

agencies for compatible confidential use; or

 requiring respondents to submit proprietary trade secrets, or other confidential 

information unless the agency can demonstrate that it has instituted procedures to protect 

the information’s confidentiality to the extent permitted by law.

This application is consistent with all of the guidelines in 5 CFR 1320.5(d)(2).
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OMB Number: 1845-NEWA 6/4/2015

RIN Number: XXXX-XXXX (if applicable)

8. As applicable, state that the Department has published the 60 and 30 Federal Register notices 

as required by 5 CFR 1320.8(d), soliciting comments on the information collection prior to 

submission to OMB. Summarize public comments received in response to that notice and 

describe actions taken by the agency in response to these comments. Specifically address 

comments received on cost and hour burden.

Describe efforts to consult with persons outside the agency to obtain their views on the 

availability of data, frequency of collection, the clarity of instruction and record keeping, 

disclosure, or reporting format (if any), and on the data elements to be recorded, disclosed, or 

reported.

Consultation with representatives of those from whom information is to be obtained or those 

who must compile records should occur at least once every 3 years – even if the collection of 

information activity is the same as in prior periods. There may be circumstances that may

preclude consultation in a specific situation. These circumstances should be explained.

This is the request for a six month emergency clearance of the process for gathering 

information from Heald College borrowers to submit a borrower defense against 

repayment claim. 

This is also the request for a six month emergency clearance for the gathering of 

information from any federal student loan borrower who believes they have met the 

circumstances under the borrower defense against repayment claim allowed by

regulation. 

9. Explain any decision to provide any payment or gift to respondents, other than remuneration 

of contractors or grantees with meaningful justification.

There are no payments or gifts to respondents.

10. Describe any assurance of confidentiality provided to respondents and the basis for the 

assurance in statute, regulation, or agency policy. If personally identifiable information (PII) is 

being collected, a Privacy Act statement should be included on the instrument. Please provide a 

citation for the Systems of Record Notice and the date a Privacy Impact Assessment was 

completed as indicated on the IC Data Form. A confidentiality statement with a legal citation that 

authorizes the pledge of confidentiality should be provided.2If the collection is subject to the 

Privacy Act, the Privacy Act statement is deemed sufficient with respect to confidentiality. If 

there is no expectation of confidentiality, simply state that the Department makes no pledge 

about the confidentially of the data.

 

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Requests for this information are in accordance with the following ED and OMB policies: Privacy Act of 1974, 

OMB Circular A-108 – Privacy Act Implementation – Guidelines and Responsibilities, OMB Circular A-130 

Appendix I – Federal Agency Responsibilities for Maintaining Records About Individuals, OMB M-03-22 – OMB 

Guidance for Implementing the Privacy Provisions of the E-Government Act of 2002, OMB M-06-15 –

Safeguarding Personally Identifiable Information, OM:6-104 – Privacy Act of 1974 (Collection, Use and Protection 

of Personally Identifiable Information)
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OMB Number: 1845-NEWA 6/4/2015

RIN Number: XXXX-XXXX (if applicable)

A Privacy Act statement will be included based on the Common Services for Borrowers 

System of Records Notice, 18-11-16, revised in the Federal Register Volume 79, Number 

177, September 12, 2014.

11. Provide additional justification for any questions of a sensitive nature, such as sexual 

behavior and attitudes, religious beliefs, and other matters that are commonly considered private. 

The justification should include the reasons why the agency considers the questions necessary, 

the specific uses to be made of the information, the explanation to be given to persons from 

whom the information is requested, and any steps to be taken to obtain their consent.

There are no questions of a sensitive nature in this collection.

12. Provide estimates of the hour burden of the collection of information. The statement should:

 Indicate the number of respondents by affected public type (federal government, 

individuals or households, private sector – businesses or other for-profit, private 

sector – not-for-profit institutions, farms, state, local or tribal governments), 

frequency of response, annual hour burden, and an explanation of how the burden was 

estimated, including identification of burden type: recordkeeping, reporting or third 

party disclosure. All narrative should be included in item 12. Unless directed to do 

so, agencies should not conduct special surveys to obtain information on which to 

base hour burden estimates. Consultation with a sample (fewer than 10) of potential 

respondents is desirable. If the hour burden on respondents is expected to vary widely 

because of differences in activity, size, or complexity, show the range of estimated 

hour burden, and explain the reasons for the variance. Generally, estimates should 

not include burden hours for customary and usual business practices.

 If this request for approval covers more than one form, provide separate hour burden 

estimates for each form and aggregate the hour burdens in the ROCIS IC Burden 

Analysis Table. (The table should at minimum include Respondent types, IC activity, 

Respondent and Responses, Hours/Response, and Total Hours)

 Provide estimates of annualized cost to respondents of the hour burdens for 

collections of information, identifying and using appropriate wage rate categories. 

The cost of contracting out or paying outside parties for information collection 

activities should not be included here. Instead, this cost should be included in Item 

14.

This is a new information collection. 

The Department is estimating an average of 60 minutes (1 hour) per respondent to 

complete the Heald College borrower attestation/application for borrower defense to 

repayment loan discharge request. This time includes reviewing the instructions for 

completion of the attestation/application, locating and providing the required evidence of 

enrollment, and submission to the Department.
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OMB Number: 1845-NEWA 6/4/2015

RIN Number: XXXX-XXXX (if applicable)

Respondents Responses Burden Hours

Application 50,000 50,000 x 1 hour 50,000

Totals 50,000 50,000 50,000

Additionally, the Department is estimating an average of 60 minutes (1 hour) per 

respondent to respond to the minimum requested items identified on the 

studentloan.ed.gov website for borrowers wishing to assert their claim to the borrower 

defense against repayment loan discharge. This time includes reviewing the instructions 

needed for filing a claim, locating and providing the required evidence of enrollment and

State law violation and other information, and submission to the Department.

Respondents Responses Burden Hours

Application 100,000 100,000 x 1 hour 100,000

Totals 100,000 100,000 100,000

NEW COLLECTION TOTAL

Respondents Responses Burden Hours

Individuals 150,000 150,000 150,000

13. Provide an estimate of the total annual cost burden to respondents or record keepers 

resulting from the collection of information. (Do not include the cost of any hour burden shown 

in Items 12 and 14.)

 The cost estimate should be split into two components: (a) a total capital and start-up cost 

component (annualized over its expected useful life); and (b) a total operation and 

maintenance and purchase of services component. The estimates should take into account 

costs associated with generating, maintaining, and disclosing or providing the 

information. Include descriptions of methods used to estimate major cost factors 

including system and technology acquisition, expected useful life of capital equipment, 

the discount rate(s), and the time period over which costs will be incurred. Capital and 

start-up costs include, among other items, preparations for collecting information such as 

purchasing computers and software; monitoring, sampling, drilling and testing 

equipment; and acquiring and maintaining record storage facilities.

 If cost estimates are expected to vary widely, agencies should present ranges of cost 

burdens and explain the reasons for the variance. The cost of contracting out information 

collection services should be a part of this cost burden estimate. In developing cost 

burden estimates, agencies may consult with a sample of respondents (fewer than 10), 

utilize the 60-day pre-OMB submission public comment process and use existing 

economic or regulatory impact analysis associated with the rulemaking containing the 

information collection, as appropriate.

 Generally, estimates should not include purchases of equipment or services, or portions 

thereof, made: (1) prior to October 1, 1995, (2) to achieve regulatory compliance with 

requirements not associated with the information collection, (3) for reasons other than to 
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OMB Number: 1845-NEWA 6/4/2015

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provide information or keep records for the government or (4) as part of customary and 

usual business or private practices. Also, these estimates should not include the hourly

costs (i.e., the monetization of the hours) captured above in Item 12

Total Annualized Capital/Startup Cost : 

Total Annual Costs (O&M) : 

____________________

Total Annualized Costs Requested : 

There are no start-up costs for any respondent.

14. Provide estimates of annualized cost to the Federal government. Also, provide a description 

of the method used to estimate cost, which should include quantification of hours, operational 

expenses (such as equipment, overhead, printing, and support staff), and any other expense that 

would not have been incurred without this collection of information. Agencies also may

aggregate cost estimates from Items 12, 13, and 14 in a single table.

To begin this new process, the Department will be hiring additional personnel to review 

the initial applications and refine the intake process. We anticipate hiring additional staff 

for a total annual cost of approximately $3.6 million.

15. Explain the reasons for any program changes or adjustments. Generally, adjustments in 

burden result from re-estimating burden and/or from economic phenomenon outside of an 

agency’s control (e.g., correcting a burden estimate or an organic increase in the size of the 

reporting universe). Program changes result from a deliberate action that materially changes a 

collection of information and generally are result of new statute or an agency action (e.g., 

changing a form, revising regulations, redefining the respondent universe, etc.). Burden changes 

should be disaggregated by type of change (i.e., adjustment, program change due to new statute, 

and/or program change due to agency discretion), type of collection (new, revision, extension, 

reinstatement with change, reinstatement without change) and include totals for changes in 

burden hours, responses and costs (if applicable).

This is a new information collection. There is no change to statutory or regulatory

requirements. We estimate a total of 150,000 responses, resulting in a total of 150,000

new burden hours for 150,000 borrowers. This new burden is necessary to ensure Heald 

College borrowers who wish to invoke the borrower defense against repayment of federal 

student loans can do so in a uniform and informed manner. It will also allow for the 

uniform and directed collection of minimum borrower defense information from other 

federal student loan borrowers who believe they can provide evidence of such a claim for 

repayment relief.

16. For collections of information whose results will be published, outline plans for tabulation 

and publication. Address any complex analytical techniques that will be used. Provide the time 

schedule for the entire project, including beginning and ending dates of the collection of 

information, completion of report, publication dates, and other actions.
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OMB Number: 1845-NEWA 6/4/2015

RIN Number: XXXX-XXXX (if applicable)

This information will not be published.

17. If seeking approval to not display the expiration date for OMB approval of the information 

collection, explain the reasons that display would be inappropriate.

The Department is not seeking this approval. The OMB control number and expiration 

dates will be displayed on any form and website.

18. Explain each exception to the certification statement identified in the Certification of 

Paperwork Reduction Act.

There are no exceptions to the certification statement.