Borrower defense to repayment is a federal student loan forgiveness program designed to help students who have been defrauded or misled by their school. Under this program, borrowers may be eligible for loan forgiveness and have their loans discharged. In this article, we’ll take a closer look at what borrower defense to repayment is, how it works, and who may be eligible.
What is Borrower Defense to Repayment?
Borrower defense to repayment is a provision under the Higher Education Act that allows borrowers to seek loan forgiveness if their school engaged in illegal or deceptive behavior. This can include false advertising, breach of contract, or other violations of state law.
The program was originally created in the 1990s, but it gained more attention in recent years due to high-profile cases of for-profit colleges engaging in deceptive practices. In response, the Department of Education streamlined the borrower defense to repayment application process and established more concrete guidelines for borrowers to qualify for loan forgiveness.
How does Borrower Defense to Repayment work?
If you believe that your school engaged in misconduct or violated state laws, you can submit a borrower defense to repayment claim. This claim should include a description of the misconduct or violation, how it affected you, and any supporting documents or evidence.
Once your claim is received, the Department of Education will review it and determine if you are eligible for loan forgiveness. If your claim is approved, your federal student loans will be discharged, and any payments you have made towards those loans will be refunded. Additionally, any negative information on your credit report related to the discharged loans will be removed.
Who is eligible for Borrower Defense to Repayment?
To be eligible for borrower defense to repayment, you must have federal student loans from a school that engaged in misconduct or violated state laws. The misconduct must have directly affected you, and you must have been enrolled in the school at the time the misconduct occurred, or within 120 days of the school’s closure. Examples of misconduct that may qualify for borrower defense to repayment include:-
- False or misleading advertising about job placement rates or program accreditation
- Failure to provide required educational services or equipment
- Violations of state consumer protection laws
If you are eligible for borrower defense to repayment, it’s important to act quickly. The Department of Education has a limited time frame for processing claims, and the process can take several months. Additionally, you may want to consider enrolling in an income-driven repayment plan or forbearance to temporarily pause your loan payments while your claim is being processed.
Conclusion
Borrower defense to repayment is a federal student loan forgiveness program designed to help students who have been defrauded or misled by their school. If you believe that your school engaged in misconduct, you may be eligible for loan forgiveness under this program. Be sure to gather all the necessary documentation and act quickly to maximize your chances of success.
