Borrower Defense Student Loan Relief Guide
Borrower Defense Relief Could Wipe Out Loans for Thousands of Defrauded Students
- Borrowers of defunct for-profit schools may be eligible for Borrower Defense loan forgiveness.
- Borrowers should check their federal student-loan accounts for updates on their eligibility.
- Gathering documentation of school's misconduct can help support Borrower Defense claims.
A Major Student-Loan Relief Update
Student-loan borrowers who attended certain for-profit schools may have a reason to check their accounts. A federal court ruling in late July cleared the way for relief involving another 170,000 borrowers through the federal Borrower Defense program, according to financial planner and educator Jackie Cummings Koski.
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The update is welcome news for former students who say their schools used misleading, deceptive or illegal practices to get them enrolled. Some borrowers have waited five or even 10 years for their claims to move through the process, making the recent ruling a major moment for people seeking student-loan forgiveness.
Borrower Defense is intended to provide a pathway for federal student-loan borrowers whose schools made false promises or otherwise engaged in misconduct. It is especially relevant to students who were affected by defunct for-profit institutions and left with debt after receiving an education that did not deliver what was advertised.
Who May Be Eligible?
Eligibility depends on a borrower’s school, enrollment dates, loan details and whether the Department of Education has approved a group discharge connected to that institution. In some group discharge cases, borrowers may be included automatically and do not need to submit a new application.
However, borrowers should not assume their loans will disappear without confirming the status of their specific account. Koski encouraged listeners who believe they were misled by their school to review the information available through the federal student aid system.
Former students of ITT Tech and the Art Institutes should pay particular attention. Both school groups are among the institutions discussed in relation to recent group discharges, and the Art Institutes operated campuses in the Carolinas. That means some local borrowers may be eligible for relief or may need to take action to have their claim reviewed.
Check Before You Keep Paying
The first step is visiting StudentAid.gov and logging in to review your federal student-loan account. Borrowers can look for Borrower Defense updates, check whether their school and attendance dates are included in a discharge, and determine whether their forgiveness is automatic or requires an application.
Keep copies of enrollment agreements, promotional materials, emails, financial-aid records and any evidence that a school made promises it did not fulfill. That documentation may be helpful if an application or additional review is needed.
Student loans remain a stressful issue for millions of Americans, but this ruling offers a measure of relief for borrowers who were harmed by bad actors in higher education. If you attended a for-profit school and still carry federal student debt, take time to check your status—you could be closer to having that balance erased than you realize.
