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Borrowers Defense to Repayment Offers New option for Forgiveness

Updated: Jun 14

Borrowers defrauded by their schools may seek loan forgiveness through borrower defense to repayment.


The Department of Education has extended borrower defense debt cancellation to an increasing number of misled borrowers throughout 2021. In March 2021, the government announced numerous revisions to the borrower defense to repayment rules, which means that borrowers whose claims have been authorized can now expect:

Federal student loans are discharged in their entirety (100 percent).


Reimbursement of any loan payments made in accordance with requirements.

• Requests for bad credit reporting to be removed from credit bureaus.

• For those who have lost their federal student aid eligibility, it will be reinstated.


Table of Contents

The Department of Education Makes Internal Changes

More Loan Forgiveness Announced

Do you qualify for borrower defense forgiveness?

Discharge Programs


The Department of Education stated on March 18, 2021, that it would withdraw the previous administration's calculations for partial relief for federal student loan borrowers approved for borrower defense debt cancellation and instead provide full relief to those borrowers. According to the education administration, this will result in the cancellation of $1 billion in loan debt for 72,000 borrowers.


The education department stated in June that it will forgive debts for 18,000 debtors who previously attended ITT Technical Institute, a for-profit school chain that was shut down in 2016 due to federal charges. These borrowers are expected to receive $500 million in relief as a result of the move.


The Department of Education stated on July 9 that 1,800 new borrower defense claims for borrowers who attended Westwood College, Marinello Schools of Beauty, and the Court Reporting Institute had been authorized. All eligible debtors received a full discharge of their loans, totaling $55.6 million in cancellation.


Borrower defense claims for students attending institutions other than Corinthian Colleges, ITT Technical Institute, and American Career Institute were accepted for the first time since 2017, according to the education department.


On August 26th, the Department of Education announced that another 115,000 ITT Tech students would have their student loan debt forgiven. The overall amount of aid is $1.1 billion.

The BDTR process allows student loan borrowers to seek discharge of their federal student loan obligations if their institution deceived them or participated in other misconduct in violation of state laws.

Borrowers seeking discharge must file an application for relief and detail the reason for their claim, as well as provide any additional evidence relevant to their claim to the Department. If accepted, the Department will utilize successful claims as a basis for suing the institution for reimbursement up to the full sum discharged.


Do you qualify for borrower defense forgiveness?

You might qualify for federal loan forgiveness under this program if you believe your school defrauded you in one or both of the following ways:

  • Intentionally misled you about your education program.

  • Violated certain state laws, such as consumer protection statutes or laws related to your loan or educational services.

You can submit a claim whether or not your school closed and even if you’re eligible for other loan forgiveness programs. Your submission should include detailed explanation of why your loans might qualify, along with any supporting evidence such as:

  • Actual licensure passage rates that are different from what the school advertised.

  • Actual employment rates that are different from what the school advertised.

  • Actual selectivity and admissions profiles that are different from what the school advertised.

  • Dishonest representation of school held certifications or approval for programs.

  • Dishonest representation of the education resources the school provided.

  • Dishonest representation of the transferability of credits.

  • Dishonest representations of graduate placement rates and salaries.

  • Dishonest representations regarding financial assistance.

Are you unsure whether or not you should apply? Find out if the federal government, state attorneys general, or the Consumer Financial Protection Bureau have taken legal action against your institution.

A judgment against your school can be the basis for a successful borrower defense if your loans were disbursed before July 1, 2020.


A borrower defense claim can result in loan forgiveness in its entirety, in part, or not at all. The current guidelines, until they are changed soon by the Biden administration, raise the bar for full loan forgiveness; favoring partial relief based on financial losses. While the Education Department assesses your application, interest will accumulate, and you will be accountable for interest on any portion of your loans that is not cancelled.

Want more information about the BD program or how to apply? Contact TitanPrep today.

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