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The Department of Education on Tuesday outlined qualifications for potential negotiators taking up the borrower-defense and gainful-employment regulations in separate rule-making panels later this year.
Education Secretary Betsy DeVos announced in June that she would block the borrower-defense rule from going into effect and establish separate panels to reconsider both sets of regulations. The borrower-defense rule outlined a process for student borrowers defrauded by their institutions to seek discharge of their student loans. The gainful-employment rule sought to hold career education programs accountable for graduating students with more debt than they could pay off.
The department is seeking nominations for negotiators from a range of constituencies as is typical in the rule-making process. Among them, are students, consumer advocacy groups, service member organizations and representatives of higher education institutions. It is also seeking representation from lawyers and compliance officers as well as business officers for universities, which reflects calls for more subject-area expertise on the panel. And the department created two slots for representatives from the for-profit sector on both panels -- one representing institutions with 450 students or fewer, and another representing larger institutions. And it added a slot for a representative of business and industry, such as a labor economist, to the gainful-employment panel.
The department also created a subcommittee for the borrower-defense panel that will focus on a review of the financial responsibility provisions of the rule. It plans to name negotiators from groups with expertise in financial accounting and the department's financial responsibility standards.
Both sets of rules were heavily criticized by for-profit colleges. But traditional higher ed institutions, including private nonprofits and historically black colleges, had warned that the financial triggers in the borrower-defense rule -- which were designed to protect the taxpayer when institutions failed -- would have negative consequences for their sectors.
The negotiations over both rules will take place over three four-day sessions. The borrower-defense committee will meet Nov. 13-15, Jan. 8-11 and Feb. 12-15. The financial responsibility subcommittee will meet Nov. 16-17, Jan. 4-5 and Jan. 29-30, although its meetings will not be public. The gainful-employment committee will meet Dec. 4-7, Feb. 5-8 and March 12-15.
