The Debt Collective's Comment to the Department of Education about Negotiated Rulemaking

The Department of Education is now accepting comments on the their proposed negotiated rulemaking process for how to create a Defense to Repayment enforcement process. Below is what we submitted. You can submit your thoughts to the Department here.

Here we are again commenting on another process to decide a process to enact a process. If we didn’t know any better, we might think that the Department of Education were trying to delay this process interminably so that enraged strikers and an engaged press turn into fatalistic debtors and bored journalists. If we didn’t know any better, we’d think the Department of Education were trying to sweep all of this under the rug without the bad press that comes with it.

Our comments about the scope of the proposed negotiated rulemaking will be short and to the point.

First, the possibility of collective automatic discharge must be on the table. As the Special Master’s first preliminary report made clear, the Department rightly does not think that evidence of wrongdoing needs to come from students. Nor do applications. When the Department has evidence of a school having violated the relevant laws during a particular time period--from whistleblowers, other regulators, student reports, etc.--all of the students who attended that school during that time period should simply be granted relief. And if the Department is not going to set up such a process, it should provide a good reason. So far it has simply ignored the possibility.

Second, the rulemaking should pertain to all student loans--direct, FFEL, subsidized, unsubsidized, etc. There is no reason to artificially restrict to a given class of loans. The Department has already made clear that FFEL loans in particular are subject to the Defense to Repayment regulation. If it changes its mind it must provide a good reason.

Third, there should be a diversity of student debtors on the committee. Not all student experiences are the same. At the least there should be a Corinthian student debtor and a for-profit debtor not from Corinthian. At least one student should have FFEL loans and one direct. At least one should have private loans as well. The full range of student experience should be represented to the greatest extent possible.

Fourth, there should be no for-profit college representative. It is absurd to be engaging in a rulemaking process about how to deal with consumer fraud in particular sector and then to invite representatives from repeat offenders to have a veto in that process. It would be an insult to students on the committee and to the advocates who have been working so hard to hold these wrongdoers accountable.

Fifth, the process for granting students relief should be considered separately from who should pay for that relief. This is important especially if a for-profit college is invited to the committee notwithstanding the previous point. The question of when the law should provide defrauded debtors relief should not depend on the alleged defrauders’ concerns about their pocketbook.