Borrower Defense Student Loan Forgiveness: Borrowers who believe their college misled them or engaged in misconduct may qualify to have their federal student loans discharged through the U.S. Department of Education’s Borrower Defense to Repayment program. The relief is available to eligible borrowers with federal Direct Loans, and the Department has resumed reviewing many pending claims under applicable borrower defense regulations, making it an important option for students seeking debt relief.
What is Borrower Defense Student Loan Forgiveness?
A federal student loan discharge program that provides loan forgiveness for borrowers when their school committed violations of state law or made misrepresentations that a student relied on in deciding to attend or continue attending school. This can include when a college or university has engaged in deceptive practices, such as advertising that is misleading, providing inaccurate employment statistics for graduates, and making false claims about accreditation. If they have also misled students about whether their credits will transfer, or committed other fraudulent activities.
You will not be approved for a borrower defense loan discharge based solely on your general dissatisfaction with your program of study, the faculty, the physical campus facilities, or your overall educational experience.
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Who Could Be Eligible?
The primary requirement for a borrower defense loan discharge is demonstrating that the student’s school misled them or committed fraud that affected their decision to enroll and/or take on loans. A borrower may be eligible if:
- Misrepresented job placement rates or graduate employment outcomes.
- Provided false information about accreditation or licensing requirements.
- Made misleading claims regarding credit transfers.
- Offered deceptive information about tuition costs or financial aid.
- Violated applicable state consumer protection laws.
How Do You Apply?
To apply for borrower defense loan discharge, you will need to complete an application with the U.S. Department of Education’s Federal Student Aid.
This requires your personal information, including your contact information, your loan information, and the name of the school you attended. A detailed explanation of the school’s conduct, which can include evidence of misrepresentations made about employment, accreditation, transfers, or other issues.
Borrowers can also apply by mail. PPSL lists the mailing address as U.S. Department of Education, Borrower Defense to Repayment, P.O. Box 1854, Monticello, KY 42633.
Applications are free to submit, and the Department advises borrowers to avoid companies that charge fees for assistance with federal loan relief programs.
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What Happens After You Apply?
Once an application is received, the Department determines which borrower defense regulation applies based on the loan and filing timeline. For many claims governed by the 1994 and 2016 regulations, institutions are notified and generally have 60 days to respond before the Department conducts a substantive review.
The Department has also confirmed that it has resumed adjudicating many borrower defense applications that are not covered by the Sweet settlement. Processing times vary depending on the complexity of individual cases.
Can Your Loans Be Paused?
Borrowers can request forbearance or decide to keep paying while they wait for their application to be reviewed. It really depends on what’s going on with their situation, plus the current status of the loan. In some cases, interest still keeps building up during this time, so borrowers should take a close look at the choices they have using what their loan servicer provides.
Borrower Defense mainly relates to federal student loans, not private education loans. Getting approved isn’t automatic, and applicants are expected to put forward enough proof behind what they say. Even if a school closes, borrowers still need to satisfy the program’s eligibility requirements unless they happen to qualify under some other federal loan discharge program.
