Home News Colleges Should Prepare: ED Loan Discharge Letters on the Way – Thompson Coburn

Colleges Should Prepare: ED Loan Discharge Letters on the Way – Thompson Coburn

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Though much has changed at the U.S. Department of Education over the years, at least one thing has remained constant: the agency’s penchant for releasing guidance right before a holiday. Indeed, each year, as we glaze our hams and deck our halls, we can be sure that the Department is about to post a Q&A, publish a DCL, or put out a pamphlet. Last week was no exception. As we all were searching for grandma’s recipe book, the Department quietly dropped not one, but two significant announcements.

Here come the borrower defense claim letters
The first of the two electronic announcements is titled “Implementation of School Notice Requirements Under the 2016 Borrower Defense Regulations,” and concerns the roll out of the 2016 borrower defense claim process. Pursuant to the rule, borrowers can apply to the Department to have their loans discharged on the basis that the institution they attended committed a prohibited act or omission. If the Department grants the discharge, the agency then has the right to recover the amount discharged from the offending school. As readers know, we have devoted considerable time to the evolution of this claim process in recent years, including two webinars examining the latest version published this past September.

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