Negotiated Rulemaking and the Borrower Defense Regulation

A proposed rule that the U.S. Department of Education issued last week marks just the next chapter of an ongoing saga to create workable rules keeping colleges accountable for the employment promises they made to students. It also reveals another limitation to a little-used process for making government regulations by engaging in formal negotiations with those entities that will be affected by the rules. Ever since government investigations led to the dissolution of for-profit institutions like Corinthian Colleges, thousands of college students have been awaiting relief from their student loans. During the final days of the Obama Administration, the Education Department used a negotiated rulemaking process to create a final rule, known as the “borrower defense to repayment” regulation, that would provide loan forgiveness to students defrauded by such institutions. Under the Trump Administration, however, the Department initiated a “do-over” of the…

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