Obama-era rule requires colleges to disclose litigation and other possible indicators of financial instability to feds, with some college leaders complaining that the requirement is overly broad and confusing.
Starting Tuesday, colleges must tell the U.S. Department of Education if they’re being sued in connection with the federal student loan program.
The requirement promises a wealth of new information about student complaints for department officials who oversee higher ed institutions and could provide earlier warning signs to those officials of financial instability. Although it’s not clear if the new disclosures will be made public by the Trump administration, many see added transparency on the financial stability of colleges as a welcome development after a series of abrupt shutdowns by for-profit college chains as well as a number of closures by private nonprofits.
It has also created new headaches for college administrators, who have scrambled in recent weeks to identify litigation they must report.
The disclosure requirements are the latest piece of the Obama-era borrower-defense rule to take effect after Betsy DeVos, the education secretary, lost a legal fight last fall over her attempt to block the regulation. Although DeVos plans to issue her own borrower-defense regulation, her department must carry out provisions of the 2016 Obama rule.