The borrower defense to repayment offers a lifeline to students defrauded by their colleges, allowing them to cancel federal student loans and receive refunds for previous payments. This provision, authorized by the Higher Education Act of 1965, has seen over 700,000 claims submitted, with approximately 40% approved. If you suspect you’ve been a victim of institutional misconduct, understanding this process could be your path to financial relief.
Navigating the complexities of borrower defense claims can be daunting, but knowing the key aspects can significantly improve your chances of success. From understanding eligibility criteria to gathering necessary evidence, this guide will walk you through the essential steps to file a successful claim.
The Evolution of Borrower Defense Regulations
The regulations governing borrower defense to repayment have evolved over time, with significant changes occurring in 2017, 2026, and 2026. The current regulations, known as the 2019 Rule, were adopted during the first Trump Administration and have narrowed the eligibility criteria. To qualify under these rules, borrowers must prove that the school made a misrepresentation of material fact with knowledge of its false, misleading, or deceptive nature or with a reckless disregard for the truth.
The Biden Administration attempted to loosen these standards in 2026, but these efforts were blocked by the courts. Despite this setback, the U.S. Department of Education announced plans to rescind the partial relief formula and provide full relief to all borrowers with approved claims. Additionally, the Department intends to issue new regulations, with further developments to be announced on their Borrower Defense Updates page.
Eligibility and Evidence for Borrower Defense Claims
To determine eligibility, the federal government looks for misconduct that includes fraudulent or illegal acts by the college under federal or state law, as well as misrepresentations. Examples of misconduct include false endorsements, false certifications, providing false information to ranking organizations, and misrepresentations concerning admissions rates, graduation rates, employment rates, and more.
If any of these types of misrepresentations influenced you to take out student loans, you may qualify for a borrower defense claim. It’s important to note that the college does not need to have closed for you to be eligible. Borrower defense claims are evaluated under a preponderance of evidence standardmeaning there needs to be more evidence in favor of your conclusion than against it.
Recent Legal Developments
In a significant legal development, the Biden Administration settled the class action lawsuit Sweet v. Cardonaproviding billions of dollars in discharges to about 200,000 borrowers who attended 153 colleges. This settlement highlights the potential for substantial relief for borrowers who have been defrauded by their institutions.
Filing a Borrower Defense Claim
Borrowers can file a claim online, by calling 1-855-279-6207, or by completing the Borrower Defense to Repayment Application Form. The completed form can be sent by email to [email protected] or by postal mail to the U.S. Department of Education’s designated address.
When filing a claim, it’s crucial to attach evidence supporting your case. This can include copies of advertising and promotional materials, correspondence with the college, course catalogs, enrollment agreements, and proof of enrollment dates. Legal action taken against the college by federal or state authorities can also serve as evidence.
Beware of organizations that charge fees to file a borrower defense claim on your behalf. Charging up-front fees for such services is a violation of federal and state laws.
Financial Relief Options Beyond Borrower Defense
In addition to borrower defense, there are other financial relief options for students who have been defrauded by their colleges. If your college shut down while you were enrolled or within 180 days of withdrawal, you may be eligible for a closed school discharge. This requires proving that you were unable to transfer credits or complete your education at another college.
If your college applied for financial aid on your behalf or signed your name to a Master Promissory Note without authorization, you may qualify for a false certification discharge. Additionally, students may qualify for compensation under state tuition recovery funds and surety/performance bonds, which can provide compensation for out-of-pocket costs not covered by student loans.
