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Legal Updates

New Mandatory Federal Reporting Requirements Under Borrower Defense Rule

Posted by Unknown | Jun 26, 2019 | 0 Comments

On March 15, 2019, following the implementation of the Borrower Defense Rule, the Department of Education issued guidance on the reporting obligations of institutions of higher education.

These regulations seek to ensure the fiscal responsibility of both private and public institutions for the purposes of continued financial aid. This Legal Update has been issued to address common questions regarding the impact of these regulations for state community colleges.

What Must be Reported to the Department of Education?

Under 34 CFR 668.171, a college is required to make multiple reports to the Department of Education regarding all litigated matters brought on or after July 1, 2017, regardless of whether the matter is an agency-initiated borrower defense lawsuit.[1]  The regulation discusses multiple events that trigger a college's reporting obligations, including first, the filing of a lawsuit, and second, following any one of three “summary judgment triggers” under 34 CFR 668.171(c)(1)(ii).  (See below for more details regarding the “summary judgment triggers.”)

With regard to the first report, CFR 668.171(h)(ii)(A)-(C) states that a college must report the filing of a lawsuit filed against the college within ten (10) days after service of a summons and complaint.  While the Department of Education has not provided details on the specific information required to be reported, our office recommends the following for initial reports:

  • The date the complaint was filed;[2]
  • All parties listed on the complaint (including both Plaintiff(s) and Defendant(s)); and
  • The case number.

In addition to the first report regarding the notice of a lawsuit, the regulation also requires additional reporting based on “summary judgment triggers” outlined in 34 CFR 668.171(c)(1)(ii).

What are “Summary Judgment Triggers” that Require Additional Reporting?

34 CFR 668.171(c)(1)(ii) states that within ten (10) days, a college must report any litigation brought on or after July 1, 2017 when:

  1. The institution has filed a motion for summary judgment or summary disposition and that motion has been denied or the court has issued an order reserving judgment on the motion;
  2. The institution has not filed a motion for summary judgment or summary disposition by the deadline set for such motions by the court or by agreement of the parties; OR
  3. If the court did not set a deadline for filing a motion for summary judgment and the institution did not file such a motion, the court has set a pretrial conference date or trial date and the case is pending on the earlier of those two dates.

The regulation also requires the college to report the court's deadline for summary judgment motions on each litigated matter within ten (10) days of the deadline being set by the court (CFR 668.171(h)(ii)(B)).

Does the Borrower Defense Rule Apply to State Community Colleges?

Yes.  Although public institutions of higher education are considered financially responsible under 34 C.F.R. § 668.171(i), the reporting requirements in 34 C.F.R. § 668.171(h) do not distinguish between institutions based on their public or private nature.  As a result, the reporting requirements apply to all schools participating in the Title IV, HEA programs.

How do we make a report?

Reports to the Department of Education are to be made via email to: [email protected]  Reports should be made within ten (10) days of the “triggering event.”

Conclusion and General Takeaway:

While this regulation is somewhat convoluted, the rule requires institutions to make multiple reports on all litigated matters, regardless of whether the matter is related to a borrower defense lawsuit.  The first report must occur within ten (10) days of service of a complaint, and the remaining reports should occur in conjunction with the “summary judgment triggers” outlined in 34 CFR 668.171(c)(1)(ii).  Under the new rule, if an institution fails to make a required notification, 668.171(h)(2) empowers the Department of Education to take administrative action against the institution, including initiating a proceeding to fine, limit, suspend, or terminate the institution's participation in federal financial aid programs.

Should you have any follow-up questions or comments on this information, please contact our Southern California office at (714) 573-0900 or our Northern California office at (916) 245-8677, or visit our website at

[1] This includes any and all litigation involving the college, including but not limited to, personal injury, wage and hour, negligence, etc.

[2] If the summons and complaint includes a trial date, the college must also report the statutory deadline for a summary judgment motion (105 days before the trial date in State court) in its initial report to the Department of Education.

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