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Volume XI, Number 101

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Deadline Approaches for Higher Education Institutions to Submit Judicial and Arbitral Records to U.S. Department of Education

As described in an earlier alert, regulations promulgated by the U.S. Department of Education in November 2016 (the “Department”) concerning borrower defenses to repayment (the “2016 BDR Rules”), which the current administration had postponed from coming into effect, were reinstated pursuant to an October 2018 federal court order and are now effective. Among other things, the 2016 BDR Rules establish additional financial responsibility standards, prohibit class action waivers and pre-dispute arbitration clauses in student enrollment agreements, and require the submission of certain arbitral and judicial records to the Department if related to borrower defense claims. On March 15, 2019, the Department issued guidance regarding its delayed implementation of the 2016 BDR Rules.

Under this guidance, no later than Thursday, June 13, 2019, institutions must submit existing arbitral and judicial records as described below, and on a going-forward basis must comply with regulatory deadlines set forth in the 2016 BDR Rules for all such submissions. 

Borrower defense claims in arbitration. In connection with any matter filed in arbitration regarding a borrower defense claim, whether filed by or against the institution, the institution must submit:

  1. The initial claim and any counterclaim;

  2. The arbitration agreement itself, as filed with the arbitrator or arbitration administrator;

  3. The judgment or award, if any, issued by the arbitrator or arbitration administrator;

  4. If applicable, any communication received by the institution from the arbitrator or arbitration administrator dismissing or refusing to administer a claim due to the institution’s failure to pay required filing or administrative fees; and

  5. If applicable, any communication received by the institution from the arbitrator or arbitration administrator determining or relating to a determination that the institution’s pre-dispute arbitration agreement regarding educational services does not comply with the arbitrator’s “fairness principles, rules, or similar requirements.”

These arbitral records must be provided for any dispute based on a borrower defense claim that was pending on or initiated since July 1, 2017. Following its initial submission to the Department of any applicable claims or records on or before June 13, 2019, an institution must provide all such arbitral records on an ongoing basis within 60 days of filing or receipt, as applicable.

Borrower defense claims in judicial proceedings. In connection with any borrower defense claim filed in a lawsuit by the institution against the student, or by any party (including a governmental agency) against the institution, the institution must submit:

  1. The complaint and any counterclaim;

  2. Any dispositive motion filed by a party; and

  3. The court’s ruling on any dispositive motion and the judgment issued by the court.

These judicial records must be provided for any dispute based on a borrower defense claim that was pending on or initiated since July 1, 2017. Following its initial submission to the Department of any applicable judicial records on or before June 13, 2019, an institution must provide all such judicial records on an ongoing basis within 30 days of filing or receipt, as applicable.

Again, for any of the above-described records in connection with an arbitration or judicial proceeding pending as of July 1, 2017, or initiated thereafter, a copy of the specified records must be sent to the Department via email no later than June 13, 2019. Going forward, institutions must submit such records within the timeframe established in the 2016 BDR Rules; that is, within 30 days for pertinent judicial records and within 60 days for pertinent records in connection with an arbitration. The specific email address for such submissions is borrowerdefense@ed.gov.

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© 2021 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.National Law Review, Volume IX, Number 156
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About this Author

Jonathan Tarnow, Education and Government affairs lawyer, Drinker Biddle
Partner

Jonathan D. Tarnow advises clients on a wide range of education law matters involving the U.S. Department of Education, accrediting bodies, state agencies and other government regulators. He has extensive experience advising public, non-profit and proprietary institutions of higher education on the statutory and regulatory requirements of federal student financial aid programs under Title IV of the Higher Education Act, and has represented institutions in Title IV compliance reviews and audits, including administrative hearings and appeals related to...

(202) 354-1357
Sarah Pheasant, Education and Compliance Lawyer, Drinker Biddle
Associate

Sarah L. Pheasant advises clients on various aspects of education law and regulatory compliance, including issues pertaining to the Higher Education Act, Title IV federal student aid programs, state educational licensing laws and the accreditation of postsecondary institutions. She has helped to advise non-profit and for-profit educational institutions and private investors on complex transactions, including changes of ownership involving institutions of higher education.

Before joining Drinker Biddle, Sarah handled a diverse range of litigation,...

(202) 230-5675
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