By: Michael T. Wherry, CPA
On March 15, 2019, the U.S. Department of Education (ED) issued a long-awaited announcement providing guidance for the implementation of the Borrower Defense to Repayment (BDTR) regulations, which the U.S. District Court ruled was unlawful back in October. You might remember ED proposed a new set of regulations determining if borrowers may be eligible for federal student loan forgiveness if that school misled them or engaged in other misconduct in violation of certain laws.
The most recent announcement explains institutions’ reporting responsibilities and next steps regarding reporting mandatory and discretionary triggers as part of the financial responsibility standards, class action bans and pre-dispute arbitration agreements and submission of arbitral and judicial records pending as of July 1, 2017 or initiated after that date.
Given that these may affect schools differently, we recommend that all institutions discuss this announcement with their regulatory counsel and their CPA firm to ensure they maintain full compliance with the new BDTR regulations.
This recent announcement is just another example of how Title IV regulations are constantly changing. We believe it is important to regularly review your processes and controls to ensure that you’re up to date and in compliance.
If you’re not sure what regulations may have recently changed or if you’re looking for a second pair of expert eyes, we can help. As part of our Financial Aid Report Card program, we can review your files and processes to identify potential issues before ED does. Some of these review areas include:
- A sample of student files
- Standard forms (verification forms, credit balance authorization forms, Title IV award letters)
- Consumer information (graduation/completion rates, Clery Act, campus security, drug and alcohol awareness, etc.)
- Gainful Employment reporting and disclosure template
- Contracts with third-party service providers
At McClintock & Associates, our goal is to communicate changing regulations with postsecondary schools that care about providing life-changing education. Contact Mike Wherry by email at email@example.com or by phone at 412-257-3680 to find out how we can help so you can focus on what really matters – your students!