Biden Administration Introduces New Regulations to Protect Student Loan Borrowers and Increase Accountability for Colleges

New rule to take effect in July 2024, targeting financially unstable schools, prohibiting transcript withholding due to unpaid student bills, and requiring colleges to disclose financial risks to protect 3.6 million student borrowers and taxpayers from unexpected college closures.

The Biden administration's Department of Education has introduced new regulations to protect 3.6 million student loan borrowers, targeting colleges and universities at risk of unexpected closure primarily due to financial instability. The new rule will take effect in July 2024.
The regulations increase transparency, requiring schools to disclose events indicating financial struggle, such as failing financial responsibility scores, high cohort default rates or lawsuits against the institution.
Under new rules, the Education Department can regulate colleges more effectively, by implementing conditions on financially unstable institutions and banning the withholding of transcripts due to student debt.
These regulations are part of the administration's broader effort to reform the student loan program, with over $127 billion in federally held student loans currently discharged for 3.6 million borrowers through existing programs like the income-driven repayment program, the public service loan forgiveness program, and the Borrower's Defense of Repayment program.
The regulation's focus on transparency extends to financial aid, with colleges required to state clearly the net price students pay after aid, the total cost of attendance, and the difference between aid that does and does not need to be repaid.