Congress Could Undo Borrower Defense Relief
Republicans opposed the legislation when it was proposed. Lamar Alexander, who chairs the Senate committee on education, is considering introducing a resolution that would overturn the since nicknamed, “Borrower Defense” rule.
There has been a lot of talk coming from President-Elect Trump that he may reverse legislation completed by Barack Obama. There have been new measures issued by the Department of Education just before the election. Unfortunately, for borrowers, a Republican Congress still has time to reverse it. The regulations designed to help students who felt defrauded by for-profit colleges could be erased under the Congressional Review Act. The law written in 1996 gives Congress 60 legislative days to reverse regulation with a vote.
Republicans opposed the legislation when it was proposed. Lamar Alexander, who chairs the Senate committee on education, is considering introducing a resolution that would overturn the since nicknamed, “Borrower Defense” rule. It’s possible that without overturning this rule thing can still change for the borrower. Donald Trump ran an anti-regulation platform and started his own for-profit school. He could instruct agencies to be more restrictive in how they interpret the rule as well as other rules that are aimed at easing student loan burdens.
By the law now, students who attend technical and professional colleges that are struggling are entitled to relief on federal loans. The new rule gives the students the students a path to relief. The student can make a fraud claim with the Education Department and apply for a refund of federal money they borrowed that they then paid to the school.
Republicans are also on the books disliking the rule that lets students file class action lawsuits against these schools, instead of arbitrating all disputes. Under this new rule, Education Department has already approved $250 million in relief to over 15,000 applications from students who took out loans to attended Corinthian Colleges.
Students are seeing some light from this new law but who knows for how long. Steve Gunderson, president of Career Education Colleges and Universities, said Congress could block the new rule entirely. Either through an upcoming budget bill or education legislation.
Need help paying for your student loans?
Let Ameritech Financial pave the way towards financial freedom.Learn More