Borrower Defense to Repayment

Think of Borrower Defense to Repayment as a consumer protection rule for your education. If you purchase a car based on false claims from the dealer, lemon laws might help you get your money back. Borrower Defense operates on a similar principle for federal student loans when a school makes false promises or breaks the law.

For instance, a for-profit college might guarantee a high-paying job upon graduation using fabricated placement data, or assure you that your credits will transfer to a university when they won’t. These situations are what Borrower Defense to Repayment is designed to address, holding schools accountable and offering financial relief to students.

Who Is Eligible for Borrower Defense?

Eligibility is primarily tied to your loan type and your school’s actions. The main requirement is that you must have federal Direct Loans. Borrowers with older loans from the Federal Family Education Loan (FFEL) Program must first consolidate them into a Direct Consolidation Loan to become eligible to apply.

Simply being dissatisfied with your education is not enough. You must demonstrate that your school engaged in specific forms of misconduct.

What Counts as School Misconduct?

Under regulations effective July 1, 2023, the Department of Education defines several categories of misconduct that can form the basis of a claim:

• Substantial Misrepresentation: This is the most common basis for a claim. It involves the school making false or misleading statements about its programs, costs, job placement success, student outcomes, or accreditation.
• Aggressive and Deceptive Recruitment: This includes using high-pressure tactics or lies to persuade you to enroll and take out loans.
• Breach of Contract: If the school failed to deliver on promises made in its enrollment agreement or other official documents.
• Favorable Legal Judgment: If a court or government agency has already ruled that the school violated a state or federal law related to your loan or education.
• Closure or Mismanagement: In some cases, if the school closed and your claim is not covered by a standard Closed School Discharge.

The Borrower Defense Application Process

Applying for Borrower Defense requires submitting a formal application and providing evidence to substantiate your claim.

1. Submit the Application: The official application must be completed on the Federal Student Aid website. Here, you will detail your experience and explain how the school’s misconduct harmed you.
2. Provide Evidence: This is a critical step. Strong evidence may include enrollment agreements, school brochures or catalogs, email correspondence with school officials, and advertisements containing false information. Be specific about dates, names, and the content of the misconduct.
3. Department of Education Review: After you apply, the Department reviews your claim and the evidence. During this period, your federal student loans are typically placed into student loan forbearance, pausing your payment obligation, though interest may still accrue on some loans.
4. Receive a Decision: The Department will issue a decision that either approves or denies your application. An approval can result in a full or partial discharge of your eligible federal loans.

Borrower Defense vs. Other Forgiveness Options

It’s important to distinguish Borrower Defense from other student loan forgiveness programs.

External Resources:
For more information or to start an application, visit the official Borrower Defense page on StudentAid.gov.