The Department of Education will now presume that borrowers with approved borrower defense to repayment claims should be awarded full relief, unless evidence is presented that states otherwise. The change comes following the rescission earlier this year of the partial relief formula that was used under the Trump administration.
“The Department understands that there may be some cases where partial relief could be appropriate,” said the announcement, posted Tuesday. “However, we have not yet identified a formula-based partial relief methodology that would result in consistent determinations and not run into flaws with data availability or other issues.”
The most recent partial relief methodology used by the department had “significant flaws,” including the use of data sources that may not have accurately represented borrowers with approved claims and misapplied standard deviation for looking at earnings distribution. Instead, the department will rely on evidence presented by the institution, borrower or other sources to determine if partial relief for borrowers defrauded by their institutions would be more appropriate.
The department said it will continue to explore the issue and solicit stakeholder input and may consider addressing it through the development of new regulations.