Although applications for student loan forgiveness went live in October, due to several legal challenges, plans to forgive the student loans of millions of borrowers have been blocked. The U.S. Supreme Court is set to hear arguments on the issue this month, and if litigation is not resolved by June 30, deferred payments will resume 60 days after that. Meanwhile, the Biden administration is now providing “borrower defense to repayment” for borrowers who have been misled by a college or university. According to the U.S. Department of Education, if you feel that your school misled you or engaged in other misconduct in violation of certain laws, you may have legal grounds for discharging your federal student loans.
The borrower defense program has forgiven $14.5 billion for nearly 1.1 million borrowers since President Biden took office, and the new Borrower Defense Loan Discharge webpage makes the application process more straightforward and concise.
Understanding Borrower Defense Loan Discharge
If your college misrepresented details that led you to enroll, you have grounds to apply for borrower defense loan discharge. Common examples of misrepresentation that may qualify you for this program include your university lying about your ability to transfer credits, promising job placement after graduation, or guaranteeing a specific salary upon graduation.
Eligible Reasons for Borrower Defense
Less common, but valid, reasons for borrower defense involve breaches of contract and judgments issued against the school. However, in any case, the misrepresentation, breach of contract, or judgment must have affected your decision to enroll and to take out federal loans, or it must be related to the school’s educational services.
If the U.S. Department of Education approves your claim, any federal student loans taken out to attend that school could be discharged, and you may also receive a refund of any loan payments already made.
How to Write a Strong Claim for Borrower Defense
The Department of Education lists two key points you’ll want to include in your borrower defense application to strengthen your case:
- Provide Detailed Information: Include documentation supporting your claim that the school mislead you, along with materials confirming your dates of enrollment.
- Address Required Elements: Choose between one of the three types of borrower defense claims: substantial misrepresentation, judgment, or breach of contract, and ensure you include all required elements as specified by the Department of Education.
Completing an application for one school may take approximately 30 minutes; once submitted with supporting documentation, it will be reviewed by the U.S. Department of Education.
Conclusion
While the ability to submit a borrower defense claim has existed for some time, it is now more clearly established with comprehensive information available. If you’ve been misled or wronged by a school, and your borrower defense claim is approved, it could lead to the cancellation of all associated federal loans.
There’s also the possibility of receiving a refund on any previous payments made. To check the status of your application, you can either visit the official website online or contact the Borrower Defense Hotline at 1-855-279-6207.
