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Borrower Defense Program for Student Loans: Do You Qualify?

Feel like your college program misled you? Consider the borrower defense program for student loan forgiveness.

October 5, 2022

If you have federal student loan debt, you may be jumping for joy at the Biden administration’s plans to cancel up to $20,000 balances per borrower. But if this will still leave you with debt, and you feel your college misled you, the borrower defense program could offer further cancellation.

We’ll run through:

  • The program

  • Eligibility

  • The application process

What is the borrower defense program?

The borrower defense loan discharge (or borrower defense to repayment) is a program run by the U.S. Department of Education (ED) to right the wrongs of higher education that failed to deliver on its promises. It addresses predatory student lending by compensating anyone made to believe they would receive different educational services than the ones they experienced.

This could mean an institution broke a state law related to education or gave you false information about:

  • Exclusivity of admissions

  • Income prospects

  • Job placement rates

  • Credit transfers

  • Outcomes of previous graduates

  • Ranking

Those approved for student loan discharge could receive complete loan cancellation. Some applicants received partial cancellation previously, and now the ED has streamlined its process to only offer full relief. Borrowers may also receive refunds on loan payments and have the relevant credit lines removed from their credit reports.

A brief history of the borrower defense program

The borrower defense loan program first emerged in 2015, when the Obama administration gave borrowers a way to request a student loan discharge if they felt they were victims of fraud. However, it has faced legal challenges and endless bureaucracy, with the rules changing multiple times. 

Under the Trump administration, the standards for fraud became stricter, and many applications were denied or left unprocessed.

The lawsuit Sweet v. Cardona challenged how the ED handled the many pending applications. (Note: this was previously known as Sweet v. DeVos but was updated to reflect the current secretary of education, Miquel Cardona.)

As a result of the lawsuit, federal student loan borrowers from certain schools who have already made borrower defense program applications (before June 22, 2022) are fighting to get their student loans canceled and payments refunded by default. This is only a proposed measure (with the preliminary approval in August 2022), but the finalization should happen in November 2022.

Who is eligible for the borrower defense program?

Eligibility depends on the loan you took out and proving misconduct by your school.

The borrower defense program only applies to direct federal student loans. You’re not eligible If you only have a Federal Family Education Loan (FFEL), a Federal Perkins loan or private loans.

Other than loan type, to be eligible for the borrower defense program, the main requirement is proving the school you attended violated the law or carried out misconduct, as per the examples outlined above.

However, in some instances, the Department of Education has declared group relief for specific schools or determined certain categories of claims are credible. 

In some cases, eligible borrowers will have their loans discharged automatically. Others will still need to apply to place a claim. Schools with these decisions include:

  • Westwood College

  • Corinthian Colleges

  • ITT Technical Institute

  • DeVry University

  • Marinello Schools of Beauty

Plus, as part of Sweet v. Cardona, there’s a list of schools from which borrowers will be granted automatic approval as long as they applied before July 22, 2022.

How do I apply for the borrower defense program?

Anyone who went to one of the schools in the list above and submitted your application before June 22, 2022 will automatically benefit from the borrower defense program. But what about everyone else?

You can find the application to make a borrower defense claim on the website. You can also apply by mail.

Remember that the application is fairly complex and takes around 30 minutes. Two sections to pay particular attention to are the documentation surrounding your school’s misrepresentation and the option to put your loans in forbearance. 


You’ll need documentation to support your claim that the college misled you. Include previous communication with staff who gave you false information or promotional materials. Be specific and thorough. Take your time.

You can also check if there have been any legal proceedings against your school by the Consumer Financial Protection Bureau or state attorney generals.

The application might look daunting, but avoid organizations asking you to pay for them to apply on your behalf. This may be a scam or result in an unsuccessful application.


As part of your application, you’ll have the option to put your loans in forbearance (meaning a break from payments). If you opt for this, you should get more information by email. Contact your student loan servicer if you don’t receive anything, and continue to make payments until you get confirmation.

How long does it take to get a decision?

The borrower defense program has been notorious for making people wait years to get a decision. 

However, thanks to the lawsuit, things are changing, and those who have already made an application now have a clearer timeline to work with. As for those who make an application after the settlement is approved, clarity will likely come after the finalization.

If your application was pending before June 22, 2022, and you went to one of the schools named on the list above, you can expect a decision within 90 days and a refund within a year.

If your college isn’t named on the list, it could take up to 30 months after finalized settlement to receive a decision — but this could happen a lot sooner depending on how long ago you applied.

For anyone who applied after June 22, 2022 (but before the finalization of the settlement), you may have to wait up to 36 months after the finalization, regardless of the college you attended.


Alternatives to borrower defense 

Do you believe your school engaged in predatory practices, yet you’re not eligible for help or worried you don’t have enough evidence? You may be able to get loan relief elsewhere. 

There are many student loan forgiveness programs, especially for anyone working in the public sector. Some are even available to those with private student loans.

You could also consider seeking an income repayment plan to lower your monthly payments based on your salary. This can sometimes result in full or partial loan forgiveness.

If you’re not eligible for income repayment plans, you could consider student loan consolidation instead. This converts all your loan balances into a single loan, sometimes with a lower interest rate, making it easier to keep up with payments. 

Relief for wronged borrowers

The borrower defense program is a welcome road to debt relief for many misled borrowers. If you’ve been affected by misrepresentation or misconduct by your school and have a federal direct loan, you can apply to have your claim reviewed.

If you receive relief from the borrower defense program, you may find yourself with either a refund or more disposable income (or both). If so, consider using it to clear any outstanding credit card debt and set yourself up for a better financial future. 

Check out the Tally† credit card repayment app to help you take your higher-interest credit card debt and turn it into a lower-interest line of credit, so you can tackle your debt more efficiently.

To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR (which is the same as your interest rate) will be between 7.90% and 29.99% per year and will be based on your credit history. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.