Joint Trades Letter to Dept. of Education re Defense to Repayment

August 1, 2016


Mr. Jean-Didier Giana

U.S. Department of Education 400 Maryland Avenue, SW Room 6W232B

Washington, DC 20202


Submitted via email to


RE:  Docket ID ED-2015-OPE-0103


Dear Mr. Giana:


As the trade associations representing the majority of student loan providers (guaranty agencies, lenders and servicers) in the Federal Family Education Loan (FFEL) program, we thank you for the opportunity to participate in the 2016 negotiated rulemaking activities to establish a new Federal standard and process for determining when a Direct Loan borrower may have a defense to repayment based on an act or omission of a school. The committee also addressed revisions to other Perkins, FFEL, and Direct Loan program regulations. We understand the complexity of the borrower defense to repayment provisions, and are committed to helping borrowers understand the final process and to ensure it is as efficient and expeditious as possible.


The Department of Education’s (ED) June 29, 2016 report of the Special Master for Borrower Defense advises on page 5 that there are former FFEL loan students at schools owned by Corinthian Colleges, Inc. who have filed borrower defense claims with ED that are in the process of being reviewed. If any of  these FFEL borrowers have loans held by FFEL lenders or guarantors, we would appreciate working with ED to ensure, if necessary, that the borrowers are placed in the appropriate status (e.g., forbearance, collection suspension) while the borrowers await ED’s discharge eligibility determination.


Our attached comments focus on the provisions specific to the FFEL program along with recommendations for borrower parity and clarity in certain circumstances along with several technical corrections. Our closed school comments are extensive to ensure there is a timeframe during which a borrower can request an appeal of a denied closed school discharge by the guarantor. We also have proposed language to clarify that non-defaulted borrowers be afforded the same opportunity for an appeal option.


Thank you again for this opportunity and we remain committed to working with the Department in the implementation of these regulations and development of those to come.





Consumer Bankers Association (CBA)

Education Finance Council (EFC)

National Council of Higher Education Resources (NCHER)

Student Loan Servicing Alliance (SLSA)



cc: Gail McLarnon

(See full letter)