D.C. Judge Sets Timeline for Reinstatement of 2016 BDR Regulations, Unless Something Changes – CSPEN
Late yesterday evening, U.S. District Court for the District of Columbia Judge Randolph D. Moss issued a Memorandum Opinion and Order building upon his Wednesday, September 12th decision which determined that the U.S. Department of Education unlawfully delayed implementation of the 2016 Borrower Defense to Repayment regulations. The Memorandum sought to determine what the appropriate remedy for the two student plaintiffs and the 18 States Attorneys General would be, ultimately determining that he would vacate the “Final Delay Rule”, but “stay that vacatur for 30 days …– that is, until October 12, 2018 @ 5:00 PM ET– to allow the Department to attempt to remedy the deficiencies identified in the Court’s original decision.” Sounds relatively simple and straightforward, right? Well it is not.
There are a considerable number of legal proceedings that will take place as a result of last week’s ruling and this week’s proposed window for remedy. Among other things that will happen include the opportunity for the California Association of Private Postsecondary Schools (CAPPS) to revise and renew their request for a preliminary injunction against some or all of the regulation. The court has yet to rule on partial requests for relief put forward by CAPPS, and based upon Judge Moss’ decisions, CAPPS may seek to renew and/or expand their request for injunctive relief.
If they do, as anticipated, it would trigger a legal timetable for consideration between now and October 9th that could impact the original opinion and the deadline for a remedy by the Department by October 12th. Confused yet? Let us make it even more interesting…
The Department has shown through their action and the on-going BDR Federal Negotiated Rulemaking process and Notice of Proposed Rulemaking that they are in fact more aligned with CAPPS. But they are required to figure out a remedy. So, what is the Department to do? And whatever they do, short of reinstatement of the 2016 regulations, do you think any of it will pass muster with the plaintiffs and AGs? Highly unlikely.
SO, what does this mean for you the institutions trying to figure this all out. The best advice that CSPEN can give you, based upon all of our conversations is for your institution to:
- Go back and review the 2016 BDR regulations, with particular attention paid to the Financial Responsibility requirements (automatic triggers, loan repayment data, consumer disclosures, contract revisions to remove arbitration et. al.) and review them in the context of your institution(s):
- Discuss with your staff, accountant, and possibly counsel whether or not, based upon the assessment above, there are steps that your institution needs to be prepared to take to address the potential full or partial implementation of the 2016 BDR regulations on or shortly after October 12th; and
- Plan and be prepared to implement those steps if changes don’t occur in the intervening period.
CSPEN will continue to monitor and provide you with more information as it becomes available, but for now, there are most certainly many, many more questions than answers based upon this latest action here in Washington DC.
For more information about CSPEN visit http://centralstatesedu.com