How Borrower Defense to Repayment Works for 2025

Student Finance & Loan Expert

Schools that have engaged in illegal activities and misconduct can significantly harm students, especially regarding their education and student loans. Many students are burdened by debt from schools that misled them or closed down unexpectedly. A statement from the White House in 2024 revealed that in the past three years, nearly $29 billion in debt relief has been approved for 1.6 million borrowers misled by their colleges or affected by sudden closures.

I've been helping students with career planning for over ten years. I understand that this situation leaves students struggling to repay loans for a degree that didn't provide the promised value. Using this expertise, I've researched data from credible sources to create this guide. By reading this article, you'll learn how to navigate the borrower defense repayment process, find out if you qualify, and get tips on submitting a successful application.

Key Things You Should Know About Borrower Defense to Repayment for 2025

Borrower Defense to Repayment allows students to discharge loans if their school misled them.
The average loan amount forgiven per borrower through the program is $13,549.
It can take up to 3 years to process a Borrower Defense application.
Approximately 76 million federal direct loan recipients are potentially eligible.
You can apply for Borrower Defense to Repayment at no cost.

What is Borrower Defense to Repayment?
Who qualifies for Borrower Defense to Repayment for 2025?
What types of loans are covered under Borrower Defense to Repayment?
What are the requirements for Borrower Defense to Repayment?
How do I apply for Borrower Defense to Repayment for 2025?
Are there any fees associated with applying for Borrower Defense?
How long does the Borrower Defense application process take?
How to Prevent Future Financial Strain After a Borrower Defense Decision
Should I hire a lawyer to help with my Borrower Defense claim?
Can Borrower Defense outcomes impact my credit score?
Should I Explore a New Degree for Improved Career Prospects?
What evidence strengthens a Borrower Defense claim?
Could Advanced Education Strengthen Your Post-Relief Career Prospects?
How Can Affordable Online Programs Support Your Career Transition?
What supplemental funding options can I consider while awaiting Borrower Defense resolution?
Are There Tax Implications or Financial Considerations After a Borrower Defense Discharge?
What are common reasons for Borrower Defense claim denials?
What can I do if my Borrower Defense claim is denied?
What affordable education alternatives can I pursue as I plan my future?
How to Address Outstanding Tuition Balances While Applying for Borrower Defense
Should I Consider an Accelerated Degree Program to Enhance My Career Prospects?
Other Things You Should Know About Borrower Defense to Repayment

What is Borrower Defense to Repayment?

Borrower Defense to Repayment is a federal program that helps students get loan relief if their school misled them or engaged in misconduct. It was created to protect students from fraudulent practices by educational institutions. This program allows borrowers to apply for forgiveness of their federal student loans if their school did something wrong or violated specific laws.

The Borrower Defense to Repayment process involves submitting a claim to the Department of Education. This claim should detail how the school's actions harmed the student's education and financial situation. If the claim is approved, the borrower could have some or all of their cost of college over time paid through student loans forgiven. This program aims to relieve students who were deceived and hold institutions accountable for their actions. Understanding borrower defense repayment can help you take action if your school has wronged you.

The chart below shows the outstanding federal direct student loans in 2024, as reported by the FSA.

Who qualifies for Borrower Defense to Repayment for 2025?

Borrower Defense to Repayment for 2025 allows borrowers to seek loan forgiveness under specific circumstances outlined by the Department of Education. Each criterion for borrower defense repayment aims to protect students who have been misled or harmed by their educational institution's actions. Qualifying grounds include:

Substantial Misrepresentation: When a school provides false or misleading information about its educational services, costs, or the employability of its graduates, it can influence your decision to enroll or take out loans. For instance, a school falsely claims high job placement rates to attract students, but graduates struggle to find jobs in their field after graduation.
Substantial Omission of Fact: If a school does not share crucial information that a reasonable person would want to know when deciding to enroll or take out a loan. For example, a school failing to disclose its accreditation is on probation, which could affect students' ability to transfer credits or obtain professional licenses.
Breach of Contract: You could be affected when a school fails to fulfill its contractual obligations related to your educational program or loans. For example, your school could have promised small classes and personalized attention but consistently overcrowded classrooms, impacting the quality of your education.
Aggressive and Deceptive Recruitment: This happens when a school uses forceful strategies to push you into enrolling or taking out loans, takes advantage of your lack of knowledge, or uses dishonest practices in recruiting efforts. A school that pressures students to enroll immediately, discouraging them from reviewing financial details or consulting with family, may be liable under this guideline.
Judgment Against the School: If a court has ruled that the school violated laws related to your educational loans or services, this can qualify you for Borrower Defense to Repayment.
Prior Secretarial Action: Approval may be granted if the Department of Education has taken action against your school due to conduct that aligns with the borrower defense criteria above.

What types of loans are covered under Borrower Defense to Repayment?

Borrower Defense to Repayment covers federal student loans taken out to attend schools that misled students or engaged in misconduct. The types of loans covered include:

Direct Loans: These are loans made directly by the federal government to students and parents.
FFEL Program Loans: Federal Family Education Loan (FFEL) Program loans, issued by private lenders but backed by the federal government, are also covered.
Perkins Loans: These are low-interest federal loans for students with exceptional financial need, administered by schools.

Private loans and online college scholarships are not covered by borrower defense repayment, so it's essential to verify your loan type before applying. Understanding which loans qualify can help you determine if you can seek relief through this program.

What are the requirements for Borrower Defense to Repayment?

To qualify for Borrower Defense to Repayment for 2025, your application must be "materially complete," meaning it includes all necessary details. The requirements are:

Description of Acts or Omissions: Explain what your school did wrong or failed to do, like providing false information about job placements.
Identification of the School or Representative: Name the school or the specific representative involved in the misconduct.
Timeline of the Incident: Include when the misconduct occurred, such as dates or time periods.
Impact on Your Decision: Describe how the misconduct influenced your decision to enroll, stay enrolled, or take out loans.
Description of the Harm Suffered: Detail the negative impact you experienced due to the school's actions, like financial loss or inability to get a job.

In addition to these general requirements, your application must meet specific criteria depending on the ‘type of misconduct:

For Substantial Misrepresentation: Explain how the school's statement was false or misleading, how it related to educational programs, costs, or job prospects, and why this justifies a full loan discharge.
For Substantial Omission: Identify the missing information, how it relates to the school's services, program availability, job barriers, certification issues, or educational value, and why this justifies a full loan discharge.
For Breach of Contract: Describe the contract, how the school broke its promises, how it affected your loan decisions or educational services, and why this justifies a full loan discharge. Attach the contract if possible.
For Aggressive and Deceptive Recruitment: Detail the aggressive tactics, how they influenced your decision to enroll or take out loans, and why this justifies a full loan discharge.
For Judgment: Provide information about a court ruling against the school, how it relates to your loans or education, and why this justifies a full loan discharge. Attach the judgment if possible or provide enough details to locate it.
For Prior Secretarial Action: Describe any sanctions by the U.S. Secretary of Education against the school, how they relate to misrepresentations, omissions, recruitment tactics, or breaches of contract, and why this justifies a full loan discharge. Attach the action if possible.

How do I apply for Borrower Defense to Repayment for 2025?

To apply for Borrower Defense to Repayment for 2025, follow these steps:

Are there any fees associated with applying for Borrower Defense?

No, there are no fees associated with applying for Borrower Defense to Repayment. The application process is free of charge. You do not need to pay anyone to help you complete or submit your application. Beware of scams or companies that promise to process your Borrower Defense application for a fee. These services are unnecessary, as you can complete the application yourself or seek free assistance from various organizations.

Organizations like legal aid societies, the National Consumer Law Center (NCLC), and Student Loan Borrower Assistance (SLBA) offer free guidance and support. Additionally, the Federal Student Aid website provides all the information and forms you need to apply. Remember, the Department of Education will never charge you for processing your Borrower Defense repayment application.

How long does the Borrower Defense application process take?

The Borrower Defense application process can take up to three years, though the timeline can be paused if your application becomes part of a group claim. Once you submit your application, it will be reviewed to ensure it is complete and meets the requirements. If your application is incomplete or lacks essential information, it may be delayed until you provide the missing details.

After the initial review, your application will be evaluated in detail, examining the evidence you provided and any additional information from your school. This thorough review can take a significant amount of time due to the complexity of the cases and the volume of applications.

During this period, it's essential to regularly check your StudentAid.gov account for updates on your application status. The Department of Education may contact you for further information or clarification. Patience is key, as the borrower defense repayment process is thorough to ensure fair and accurate decisions.

How to Prevent Future Financial Strain After a Borrower Defense Decision

Managing education-related debt can be a major challenge, even after securing Borrower Defense relief. To ensure long-term financial stability, graduates must focus on proactive steps to rebuild their finances and minimize future liabilities. Here are actionable strategies:

Understand Your Post-Relief Financial Status

Once you've received a Borrower Defense decision, review all loan statements and correspondence from your loan servicer. Confirm the extent of forgiveness, refunded amounts, and any remaining balance. If discrepancies arise, promptly contact the Department of Education to address them.

Rebuild Credit and Financial Health

If the borrower defense process included forbearance or delinquencies on the account, you might want to monitor and rebuild your credit score. Check your credit reports for accuracy and address errors that may affect your financial standing. Utilize free or low-cost credit monitoring tools to stay on top of your credit health.

Explore Supplemental Loan Options for Advanced Education

For graduates considering further education, such as pursuing a law degree, understanding loan options is critical. Specialized funding, such as bar loans for law students, can provide tailored solutions without excessive financial strain. Carefully compare benefits, interest rates, and repayment plans before committing to new student loans.

Establish an Emergency Fund

With reduced or discharged loan obligations, allocate funds toward creating a robust emergency fund. Building this financial safety net can protect you from unexpected expenses and reduce reliance on loans during challenging times.

Seek Career Counseling and Skill Development Opportunities

Graduates benefiting from Borrower Defense forgiveness often face challenges re-entering the workforce or transitioning into new fields. Leverage programs offering career coaching, networking opportunities, and skill-building workshops to enhance employment prospects.

Stay Informed About Policy Changes

Federal and state policies around student loans frequently evolve. Keep yourself updated on new repayment programs, financial aid options, or legislation that may impact your financial commitments.

By taking these steps, you can set a solid foundation for your financial future while minimizing risks of excessive debt in the years ahead.

Should I hire a lawyer to help with my Borrower Defense claim?

No, you do not need to hire a lawyer to file a borrower defense repayment claim, but getting legal help can be beneficial. Here are some options and organizations that can support you:

Legal Aid Societies: Many cities have legal aid societies that provide free legal assistance to low-income individuals. They can help you understand your rights and assist with the application process.
National Consumer Law Center (NCLC): The NCLC offers resources and support for student loan borrowers. They provide guidance on borrower defense repayment and can help you navigate the process.
Student Loan Borrower Assistance (SLBA): This organization provides information and resources to help you with your Borrower Defense claim. They offer advice on how to complete the application and what evidence to include.
State Attorney General's Office: Some state attorney generals have departments dedicated to consumer protection. They can assist with borrower defense claims and may offer legal support.
Nonprofit Organizations: Groups like The Institute of Student Loan Advisors (TISLA) offer free advice and support for student loan borrowers. They can help you with your application and ensure it is as strong as possible.

Can Borrower Defense outcomes impact my credit score?

An approved Borrower Defense decision often leads to a reduction in outstanding debt, which can positively reflect on your credit profile by lowering your overall loan burden. However, delays in processing or multiple filings may result in temporary reporting of unresolved obligations if payments continue to be recorded as delinquent by your loan servicer. Proactively monitoring your credit and ensuring accurate reporting from all stakeholders are essential measures during this transition period. For those considering alternative strategies to manage any residual debt, a detailed comparison of refinancing options can be beneficial. For further analysis, refer to Sallie Mae vs Discover Student Loan.

Should I Explore a New Degree for Improved Career Prospects?

Post borrower defense relief, reevaluating your academic and career trajectory can be a pivotal strategy for long-term financial stability. Analyzing emerging industry trends and determining the return on investment for additional education can guide you in making informed career decisions. Leverage reliable resources to assess program benefits and market demand, and explore professional advising to align your skills with future opportunities. Consider reviewing insights on which degree is best for future as part of your decision-making process.

What evidence strengthens a Borrower Defense claim?

Compile all relevant documents that directly substantiate any misrepresentations or misconduct by the institution, such as enrollment agreements, advertising materials, official correspondence, and meeting records. Include verified financial statements and proof of tuition payments to clearly demonstrate the financial impact of the school's actions. In some cases, third-party documentation or expert analysis—such as outcomes from high paying master's degrees—can further enhance the credibility of your claim. Ensure each piece of evidence is clearly annotated and organized with corresponding dates to facilitate a precise review by the Department of Education.

Could Advanced Education Strengthen Your Post-Relief Career Prospects?

Following a Borrower Defense decision, evaluating advanced education options can offer a pathway to enhanced career opportunities. Assess available academic programs with an emphasis on market demand and return on investment. For instance, explore dual graduate degree programs that integrate complementary disciplines, potentially broadening professional skill sets and providing a competitive edge. Consider factors such as program accreditation, flexible learning formats, and financial implications to determine if pursuing further studies aligns with your long-term career goals.

How Can Affordable Online Programs Support Your Career Transition?

In the wake of a Borrower Defense decision, considering additional education can offer a pathway to enhanced career prospects and financial recovery. By exploring cost-effective options, you can acquire new skills aligned with current labor market demands and bolster your professional profile. Evaluating program quality, accreditation, and career placement services is critical to ensure the chosen course of study meets your long-term goals. For instance, researching options like the cheapest online college can provide access to flexible programs that accommodate working adults and facilitate a smooth transition into emerging industries with growing opportunities.

What supplemental funding options can I consider while awaiting Borrower Defense resolution?

While waiting for a decision on your Borrower Defense claim, investigating additional funding sources can help sustain your educational progress. Evaluating supplemental financing options may provide the necessary support to continue your studies without significant interruption. Compare programs that offer competitive interest rates, flexible repayment terms, and clear eligibility criteria to ensure they align with your long-term financial strategy. For instance, some students explore options such as private loans for nursing school to cover specialized training and maintain enrollment in career-advancing courses. Conduct thorough research and consider financial counseling to determine the best supplemental funding option for your unique circumstances.

Are There Tax Implications or Financial Considerations After a Borrower Defense Discharge?

After a discharge decision, evaluate whether the forgiven loan amount may be considered taxable income under current federal or state regulations. Consult IRS guidelines and a qualified tax professional to understand any potential tax liabilities. Additionally, reassess your financial strategy to manage future expenses and opportunities, such as exploring alternative funding options like a bank loan for students for further education. Maintain up-to-date information on policy changes to effectively manage any residual financial obligations.

What are common reasons for Borrower Defense claim denials?

Common reasons for Borrower Defense claim denials include incomplete applications, lack of evidence, and ineligibility. Here are some specific reasons why claims might be denied:

Incomplete Applications: If your application is missing essential information, such as details about the misconduct, the school involved, or the timeline, it may be denied.
Lack of Evidence: Providing insufficient evidence to support your claim can lead to a denial. This includes not having documents like emails, contracts, or other proof of the school’s wrongdoing.
Ineligibility: Your application may be denied if your claim does not meet the eligibility criteria, such as the types of misconduct covered or the time frame in which the misconduct occurred.
Misunderstanding of Regulations: Some applicants may not fully understand the specific regulations and requirements for Borrower Defense repayment, leading to claims that do not align with the program’s guidelines.
Misrepresentation of Facts: If the information provided in your application is found to be false or misleading, your claim will be denied, and you could face penalties.

The chart below illustrates the average amount forgiven by different loan forgiveness programs.

What can I do if my Borrower Defense claim is denied?

If your Borrower Defense claim is denied, you can submit a new application or seek legal assistance. Here are several options to consider:

Review the Denial Reason: Understand why your claim was denied. The denial notice should provide specific reasons. This can help you identify any missing information or areas that need improvement.
Submit a New Application: If your claim was denied due to incomplete information or lack of evidence, you can gather the necessary documents and submit a new application. Ensure you provide all required details and supporting evidence.
Request a Reconsideration: You can request the Department of Education to reconsider your application. This may involve providing additional evidence or clarifying your initial submission.
Seek Legal Assistance: Consult with a legal aid organization or attorney specializing in student loan issues. They can help you understand your options and guide you through appealing or resubmitting your claim.
Contact Your State Attorney General: Your attorney general's office may assist with Borrower Defense claims. They can provide guidance and may help in advocating for your case.
Explore Other Relief Options: Look into other student loan relief programs or forgiveness options. Programs like Public Service Loan Forgiveness (PSLF) or Income-Driven Repayment (IDR) plans might offer alternative ways to manage your student debt.

What affordable education alternatives can I pursue as I plan my future?

Consider exploring accredited programs that offer flexible scheduling and cost-effective tuition options to help rebuild your academic pathway. Evaluate institutions that provide comprehensive financial aid and streamlined admissions processes, which can ease the transition during uncertainty. For example, reviewing programs at online colleges that take FAFSA can offer a viable, lower-cost alternative without compromising academic quality or support services.

How to Address Outstanding Tuition Balances While Applying for Borrower Defense

If you still owe tuition to a closed or fraudulent institution, resolving these balances is crucial to avoiding additional complications during the Borrower Defense process. Outstanding tuition can cause holds on transcripts or diplomas, limiting your ability to transfer credits or apply for further education.

One viable solution is exploring funding options like obtaining student loans for past due balances. These loans are designed specifically to cover unpaid tuition and help unlock opportunities to continue your education or transition to a more reputable institution. When considering this route, research thoroughly to ensure the terms and interest rates align with your financial situation.

Additionally, consult with a trusted financial advisor before committing to any new loan plan. By addressing unpaid tuition proactively, you can better position yourself for financial stability while pursuing Borrower Defense relief.

Should I Consider an Accelerated Degree Program to Enhance My Career Prospects?

Accelerated degree programs offer a focused pathway for borrowers seeking to quickly transition into high-demand fields after receiving Borrower Defense relief. These programs are structured to provide intensive coursework and enable faster career advancement without compromising academic integrity. When evaluating such options, consider the program’s accreditation, curriculum relevance, and return on investment relative to your career objectives. For instance, exploring an online masters degree in one year may align with your goals by delivering advanced skills in a condensed timeframe, ultimately supporting a smoother re-entry into competitive job markets.

Here’s What Graduates Have to Say About Their Borrower Defense Repayment Cases

"Applying for Borrower Defense repayment was a straightforward process that relieved my financial stress. I received a full loan discharge, and the weight of my student debt was lifted. I can now focus on my future without the burden of past loans." - Kelly

"Getting approved for Borrower Defense repayment changed my life. I didn't expect to get my payments refunded, but it happened, and I can now plan my career with a clean slate. This program truly made a difference for me." - Ali

"The Borrower Defense process was simple and gave me hope. My application was approved, and I got a refund for the payments I had made. It feels amazing to have that financial relief and a fresh start." - Senna

Key Findings

Under the Borrower Defense to Repayment program, students can have their loans forgiven if their school misled them or engaged in misconduct.
The typical amount of loan forgiveness per borrower through borrower defense repayment is $13,549.
A Borrower Defense application can take three years to process.
If approved, you can get refunds for previous loan payments.
If denied, you can reapply or request reconsideration with additional evidence.

Other Things You Should Know About Borrower Defense to Repayment

Do you get money back from borrower defense?

Yes, you can get money back from Borrower Defense to Repayment. If your claim is approved, you may receive a refund for payments made on the loan. This includes both principal and interest. Your remaining loan balance may also be discharged, meaning you won't have to repay it. The exact amount of the refund and loan discharge depends on the specifics of your case and the extent of the school's misconduct.

How do I check my borrowers' defense status?

You can check your Borrower Defense status by logging into your StudentAid.gov account. Once logged in, navigate to the Borrower Defense page, where you can view the status of your application. The website will update you on whether your claim is under review, approved, or denied. Additionally, you may receive email notifications about any changes or required actions. If you have questions, you can also contact the Borrower Defense hotline for assistance.

Do I have to keep paying my loans while my Borrower Defense application is pending?

No, you don't have to keep paying your loans while your Borrower Defense application is pending. You can request forbearance, temporarily pausing your loan payments during review. To do this, select this option on your Borrower Defense application. Keep in mind that interest may still accrue on your loans during forbearance. It's essential to stay informed about your application status and any potential changes to your forbearance period.

References:

Federal Student Aid (FSA). (2024a). Apply for Borrower Defense Loan Discharge. FSA.
Federal Student Aid (FSA). (2024b). Borrower Defense Loan Discharge. Student Loan Forgiveness. FSA.
Federal Student Aid (FSA). (2024c). Borrower Defense Updates. Announcements & Events. FSA.
Federal Student Aid (FSA). (2024d). Interest Rates and Fees for Federal Student Loans. Loans. FSA.
Federal Student Aid (FSA). (2024e). Federal Student Loan Portfolio. FSA.
Korhonen, V. (2024). Federal student loan forgiveness programs in the United States in April 2023, by average amount forgiven per borrower. Education & Science. Statista.
The White House. (2024). Statement from President Joe Biden on $6.1 Billion in Student Debt Cancellation for 317,000 Borrowers who Attended the Art Institutes. Statements and Releases. The White House.