If you want to know why students need protection from predatory schools, just read the stories of Jennifer Wilson, who borrowed $40,000 for a worthless degree from Everest University, or veteran Kendrick Harrison, who lost his home when Argosy University took his G.I. Bill money and then closed.
However, some of those protections are on the way.
This fall, the U.S. Department of Education finalized rules on borrower defense to repayment and on the 90⁄10 rule, both of which will help student borrowers harmed by unscrupulous programs. Borrower defense gives students relief from federal loans when their schools or programs have misled them with false claims or fraudulent acts. The 90⁄10 rule makes sure that schools and programs must get at least 10% of their revenue from a source other than federal education funds; the veteran education aid in the G.I. Bill is now included as federal education aid (in the past it was not, and this loophole was exploited by predatory schools).
These regulations are the result of years of advocacy and litigation on behalf of cheated borrowers to secure a basic promise Congress made in the Higher Education Act: If your school cheats you, you are not on the hook for that loan.Kelly McManus vice president of higher education for Arnold Ventures
These two are part of a series of finalized rules intended to ensure that federal student financial aid is properly disbursed, and that students who have been defrauded of their federal aid have recourse to be made whole. The rules were created and finalized through the negotiated rulemaking process, which involves input from schools, students, advocacy organizations, and other involved parties.
“These regulations are the result of years of advocacy and litigation on behalf of cheated borrowers to secure a basic promise Congress made in the Higher Education Act: If your school cheats you, you are not on the hook for that loan,” said Arnold Ventures’ Vice President of Higher Education Kelly McManus in her statement about finalized regulations for targeted debt relief programs. “These final regulations will also ensure borrowers whose colleges closed before they could graduate, borrowers who are totally and permanently disabled, and others will have access to the targeted debt relief benefits Congress established years ago.”
Read more about the finalized borrower defense and 90⁄10 rules as well as other resources from our Higher Education team here.
