Appendix A to Subpart B of Part 685 - Examples of Borrower Relief
34:4.1.1.1.3.2.1.25.3 : Appendix A
Appendix A to Subpart B of Part 685 - Examples of Borrower Relief
As provided in 34 CFR 685.222(i)(4), the Department official or
the hearing official deciding a borrower defense claim determines
the amount of relief to award the borrower, which may be a
discharge of all amounts owed to the Secretary on the loan at issue
and may include the recovery of amounts previously collected by the
Secretary on the loan, or some lesser amount. The following are
some conceptual examples demonstrating relief. The actual relief
awarded will be determined by the Department official or the
hearing official deciding the claim, who shall not be bound by
these examples.
1. A school represents to prospective students, in widely
disseminated materials, that its educational program will lead to
employment in an occupation that requires State licensure. The
program does not in fact meet minimum education requirements to
enable its graduates to sit for the exam necessary for them to
obtain licensure. The claims are adjudicated in a group
process.
Appropriate relief: Borrowers who enrolled in this program
during the time that the misrepresentation was made should receive
full relief. As a result of the schools' misrepresentation, the
borrowers cannot work in the occupation in which they reasonably
expected to work when they enrolled. Accordingly, borrowers
received limited or no value from this educational program because
they did not receive the value that they reasonably expected.
2. A school states to a prospective student that its medical
assisting program has a faculty composed of skilled nurses and
physicians and offers internships at a local hospital. The borrower
enrolls in the school in reliance on that statement. In fact, none
of the teachers at the school other than the Director is a nurse or
physician. The school has no internship program. The teachers at
the school are not qualified to teach medical assisting and the
student is not qualified for medical assistant jobs based on the
education received at the school.
Appropriate relief: This borrower should receive full relief.
None of the teachers at the school are qualified to teach medical
assisting, and there was no internship. In contrast to reasonable
students' expectations, based on information provided by the
school, the typical borrower received no value from the
program.
3. An individual interested in becoming a registered nurse meets
with a school's admissions counselor who explains that the school
does not have a nursing program but that completion of a medical
assisting program is a prerequisite for any nursing program. Based
on this information, the borrower enrolls in the school's medical
assisting program rather than searching for another nursing
program, believing that completing a medical assisting program is a
necessary step towards becoming a nurse. After one year in the
program, the borrower realizes that it is not necessary to become a
medical assistant before entering a nursing program. The borrower's
credits are not transferrable to a nursing program.
Appropriate relief: This borrower should receive full relief.
Because it is not necessary to become a medical assistant prior to
entering a nursing program, she has made no progress towards the
career she sought, and in fact has received an education that
cannot be used for its intended purpose.
4. A school tells a prospective student, who is actively seeking
an education, that the cost of the program will be $20,000. Relying
on that statement, the borrower enrolls. The student later learns
the cost for that year was $25,000. There is no evidence of any
other misrepresentations in the enrollment process or of any
deficiency in value in the school's education.
Appropriate relief: This borrower should receive partial relief
of $5,000. The borrower received precisely the value that she
expected. The school provides the education that the student was
seeking but misrepresented the price.
5. A school represents in its marketing materials that three of
its undergraduate faculty members in a particular program have
received the highest award in their field. A borrower choosing
among two comparable, selective programs enrolls in that program in
reliance on the representation about its faculty. However, although
the program otherwise remains the same, the school had failed to
update the marketing materials to reflect the fact that the
award-winning faculty had left the school.
Appropriate relief: Although the borrower reasonably relied on a
misrepresentation about the faculty in deciding to enroll at this
school, she still received the value that she expected. Therefore,
no relief is appropriate.
6. An individual wishes to enroll in a selective, regionally
accredited liberal arts school. The school gives inflated data to a
well-regarded school ranking organization regarding the median
grade point average of recent entrants and also includes that
inflated data in its own marketing materials. This inflated data
raises the place of the school in the organization's rankings in
independent publications. The individual enrolls in the school and
graduates. Soon after graduating, the individual learns from the
news that the school falsified admissions data. Notwithstanding
this issue, degrees from the school continue to serve as effective,
well-regarded liberal arts credentials.
The Department also determines that the school violated the
title IV requirement that it not make substantial
misrepresentations pursuant to 34 CFR 668.71, which constitutes an
enforceable violation separate and apart from any borrower defense
relief.
Appropriate Relief: The borrower relied on the misrepresentation
about the admissions data to his detriment, because the
misrepresentation factored into the borrower's decision to choose
the school over others. However, the borrower received a selective
liberal arts education which represents the value that he could
reasonably expect, and gets no relief.
[81 FR 76086, Nov. 1, 2016 as amended at 84 FR 49933, Sept. 23,
2019]