The Department of Education today proposed regulations to further protect student borrowers and taxpayers against predatory practices by postsecondary institutions. The regulations clarify, simplify, and strengthen existing regulations that grant students loan forgiveness if they were defrauded or deceived by an institution. The proposed regulations would also hold financially risky institutions accountable for their behavior and ban schools’ use of legal clauses to sidestep accountability.
This new regulatory effort builds on the Obama Administration's commitment to protect taxpayers' and students' investments and ensure that all Direct Loan borrowers can engage in a process that is efficient, transparent and fair when applying for a loan discharge based on the misconduct of the institution.
"We won’t sit idly by while dodgy schools leave students with piles of debt and taxpayers holding the bag," said U.S. Secretary of Education John B. King Jr. "All students who are defrauded deserve an efficient, transparent, and fair path to the relief they are owed, and the schools should be held responsible for their actions."
Read more from the U.S. Department of Education: http://www.ed.gov/news/press-releases/education-department-proposes-new-regulations-protect-students-and-taxpayers-predatory-institutions