Borrower defense to repayment is a legal ground for discharging federal Direct Loans. Under the law, you may have a borrower defense to repayment if your school engaged in certain misconduct related to the making of a federal loan or the educational services it provided which caused you harm warranting a full discharge of your applicable federal Direct Loans. If the U.S. Department of Education (ED) approves your application for borrower defense, we will discharge any remaining balance on the federal student loans you took out to attend the school and may also refund loan payments you already made.
Borrowers must submit applications under the penalty of perjury that an application is accurate and true to the best of their knowledge.
Reasons Borrowers Apply for Borrower Defense Discharge
Most borrowers file a borrower defense application because they believe that their school misled them or lied to them about something that was central to their decision to enroll. Under the borrower defense regulations, this is called a “misrepresentation.”
For example, some borrowers have qualified for borrower defense in the past when their school made false or misleading promises guaranteeing that they would get a job after graduation, earn a certain salary with their degree, or be able to transfer their credits to another school.
‘Materially Complete’ Standard Under the 2023 Regulation
The 2023 Regulation has a “materially complete” standard. Your application must be “materially complete” to be considered. If your application is not materially complete, your application will be denied. Just because your application is considered materially complete does not necessarily mean it will be approved.
In order to be materially complete, your application must contain the following information:
- A description of one or more acts or omissions by your school
This means you need to explain what your school did or failed to do that is covered by the kinds of misconduct that qualifies for borrower defense discharge discussed above. - The school or school representative who committed the act or omission
This means you need to include what school or representative of the school committed the misconduct. - Approximately when the act or omission occurred
This means you need to include when you experienced the misconduct that you allege. - How the act or omission impacted your decision to attend the school, to continue attending the school, or to take out the loan for which you are asserting a defense to repayment
This means you need to explain how the alleged misconduct affected your decision to enroll or to continue your enrollment at the school. - A description of the detriment you suffered as a result of the school’s act or omission
This means you need to explain what the result of the school’s misconduct was, specifically what harm you experienced because of the misconduct.
Do I Have To Submit an Application To Receive a Borrower Defense Discharge?
If you think your situation qualifies for borrower defense, you should submit an application. In some instances, ED has discharged loans for borrowers who didn’t apply for borrower defense; however, we can’t guarantee that similar discharges will be extended to students of any particular school. Therefore, it’s best to submit a detailed application if you believe you qualify.
