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AG Coalition Calls for Stronger Protections for Student Loan Borrowers

  • In a letter to Secretary of Education Miguel Cardona and Department of Education (ED) Analyst Brian Schelling, a coalition of AGs from twenty states and the District of Columbia submitted comments on ED’s proposed rulemaking regarding improvements to the 90/10 rule, which limits the percentage of revenue for-profit educational institutions can receive from federal student aid to 90%.
  • In their letter, the AGs lauded ED’s overall regulatory goals and expressed support for many of the measures developed in the proposed rulemaking. The letter then went on to call for enhancements to a number of provisions. These included expanding the definition of “nonprofit institution” to forbid any revenue-sharing agreements or service arrangements with entities affiliated with former owners following the conversion of a for-profit institution into a nonprofit one.
  • The AGs also recommended that ED retain the current definition of “change in institutional control” as control of 25% of the outstanding voting stock of a corporation rather than, as proposed, raising it to 50%, due to concerns that the higher threshold will make evading ED oversight easier.