Borrower Defense to Repayment: How Defrauded Students Can Seek Loan Forgiveness


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Borrower defense to repayment is really a federal student loan forgiveness program for borrowers whose schools violated certain laws, or defrauded or misled students. Borrowers may also get relief if their school closed before they might complete a degree.

New rules have been in effect to simplify borrower defense guidelines, making it easier to acquire loan forgiveness, and extend eligibility to existing borrowers who consolidated their loans. The guidelines include financial responsibility and disclosure requirements for schools.

Rules were delayed for a time as state attorneys general and the Department of Education wrangled over implementation. But the borrower defense rules regarding fraud and misrepresentation went into effect on Oct. 16, 2018, after a federal court judge deemed the delays unlawful.

Borrowers who attended schools that closed before they could develop a degree got relief as of Dec. 14, 2018. The Department said $150 million in qualifying loans is going to be discharged, affecting 15,000 borrowers who attended schools that closed between Nov. 1, 2013 and Dec. 4, 2018. A big part were students at now-defunct Corinthian Colleges. Borrowers should receive a notification in the Department of Education. The process?may take as much as 90 days.

Do you be eligible for a borrower defense forgiveness?

You can submit claims for borrower defense at any time. You might be eligible for a federal loan discharge under the program if your school:

  • Misled you by any means regarding your loans or education program
  • Violated certain state laws, for example consumer protection statutes or laws related to your loan or educational services

You can submit claims whether or not your school closed as well as if you are entitled to other loan forgiveness programs. You can’t submit claims web hosting loans or costs you paid out of pocket.

Not sure if you need to apply? Determine whether your school has been the subject of law suit by the authorities, state attorneys general or even the Consumer Financial Protection Bureau.

“The biggest indicator is that if the school has been sued or could they be currently facing legal action for his or her practices,” says Robert Kelchen, assistant professor better education at Seton Hall University in South Orange, Nj. “Otherwise, it gets much more subjective: Can there be clear fraud? Is there misrepresentation? This is when it might take a court to determine.”

Forgiveness of loans, even those from the discontinued Federal Family Education Loan Program, shouldn’t be subject to a time limit.

How to apply for borrower defense to repayment

You can submit a borrower defense to repayment claim application electronically at or by filling out a PDF and returning it to the Education Department via email or regular mail. Submission details are available on the government student aid website.

To strengthen your claim, experts suggest submitting a detailed explanation of why your loans might qualify, together with any supporting evidence. This might include:

  • Confirmation of attendance
  • Emails or correspondence with school officials
  • Related promotional or school-produced materials

If you do not have communication records, you may still apply. “Just since it was verbal does not mean [the borrower] shouldn’t give a narration of this,” says Betsy Mayotte, president and founder of the Institute of Education loan Advisors. “If they believed … pressured to sign something quickly, for example, they ought to include that information since it is taken into account.”

For help with your claim, find clinics in your area, for example local nonprofits, law schools or legal aid, suggests Suzanne Martindale, a senior attorney for Consumers Union. You may also contact the National Consumer Law Center, suggests Ben Miller, senior director for postsecondary education at Center for American Progress, a nonpartisan policy institute.

Be cautious about debt settlement groups that request money to submit your application. You can complete this method yourself free of charge.

How applying can impact your loans

Once you submit a claim, you need to request that your loans be placed into forbearance or stopped collections status, which will halt payments and collections. Interest will accrue while the Education Department evaluates the application.

What’s next?

  • Want to take action?

    Get education loan forgiveness

  • Want to dive deeper?

    Find out what you can do in case your for-profit college closes

  • Want to understand more about related?

    Explore our list of shady debt settlement companies to influence clear of