How Borrower Defense To Repayment Works In 2025

If your school defrauded or misled you, you might be eligible for federal student loan discharge through borrower defense to repayment. While billions of dollars have been forgiven through the federal program, the qualifications are stringent and not every borrower defense application will get approved. That’s as true as ever, given pending litigation and recent leadership changes at the U.S. Department of Education.

What is borrower defense to repayment?

Borrower defense to repayment — or borrower defense — allows you to seek the discharge (or cancellation) of federal student debt if your school violates certain state laws or engages in misleading or deceitful practices or fraud. It can also include:

• Reimbursement for past loan payments made toward qualifying loans.
• Requesting that the credit bureaus remove negative reporting on affected accounts.
• Reinstatement of eligibility for Federal Student Aid (FSA).

The borrower defense program has been around since 1994 but gained traction in 2015 when for-profit Corinthian Colleges shut its doors due to a lack of federal funds, only to face multiple lawsuits. The Education Department found Corinthian Colleges had mislead students regarding their future job prospects and ability to transfer class credits.

Borrower defense in the news

Unfortunately, qualifying for borrower defense relief remains challenging. That’s because the Biden Administration’s 2022 attempt to “expand eligibility, remove barriers to relief and encourage automatic discharges” for borrower defense (and total and permanent disability) remains stalled in the courts.

The pending rules would have:

• Required that borrowers receive full (not partial) relief if their application is approved, including capitalized interest.
• Allowed the Education Department to judge applications individually or collectively (perhaps in response to a state attorney general’s or other organization’s request) and to adjust a school’s closure date when reviewing applications.
• Prevented schools that receive Direct Loan funding from requiring former students to “engage in pre-dispute arbitration or sign class action waivers” that could limit their ability to file suit.

Given the legal limbo, the Education Department can’t apply the rule changes when evaluating borrower defense applications. However, it’s still reviewing and accepting new borrower defense applications under the preexisting (read: more stringent) rules. For instance, if your application is deemed incomplete — perhaps it’s missing a key detail about when or how your school’s misdeeds occurred — it will be denied.

You may also need to wait longer for a response, because as of early 2025, about a tenth of the Federal Student Aid office’s staff accepted buyout offers from the Trump administration. That included employees in the division that handles the borrower defense program. Further staffing cuts are likely.

Who qualifies for borrower defense?

Anyone who feels their school misled them can apply for borrower defense to repayment. However, this form of debt relief is only for those with a qualifying federal Direct student loan, which includes:

If a school made misrepresentations to you in any of the following areas, you might be eligible to have your student loans discharged or forgiven:

• Admissions practices or selectivity issues, including the percentage of applicants accepted, open enrollment details or school ranking.
• Educational services details, like internships or externships, faculty members’ qualifications, your course of study or how many credits were needed to graduate.
• Employment prospects for the school’s graduates, such as promises about finding positions, the school’s job placement rate, the true demand for people in your area of study and whether your school or degree program was accredited.
• True program costs, including tuition, fees or expenses associated with living on campus.
• Loan details, such as the repayment terms, total loan cost or promises of grants and scholarships instead of a loan.
• Credit-transferring issues, including being led to believe your credits would transfer to other schools when they would not, or vice versa.
• Availability of career services, including help with writing a resume, conducting mock interviews with you or looking for a job on your behalf.
• Representations to third parties, including information provided to accrediting agencies, the Veterans Administration, the Department of Education or an organization that ranks schools, like U.S. News and World Report or Barron’s Profiles of American Colleges.

Some schools may make you feel an urgency to enroll. If you felt pressured to make a written commitment to attend a school quickly, this detail might strengthen your case. However, communicating an urgency to enroll doesn’t automatically qualify you for a borrower defense claim.

<Bankrate tip>If you took out private student loans to attend any of these schools, only your federal loans could potentially qualify for a borrower defense claim.

How to file a borrower defense claim application

You can apply for borrower defense loan discharge online with the U.S. Department of Education (via StudentAid.gov). If you prefer, you can download a PDF version of the application and mail it to the following address:

U.S. Department of Education
Federal Student Aid Information Center
P.O. Box 1854
Monticello, KY 42633

Be prepared to share the name of the school you attended, where the campus is or was located, your enrollment dates, your program or major and the type of certification or degree you were pursuing.

You may also need to provide documentation to verify your identity and support your claim. These documents may include:

• Transcripts
• Enrollment agreements
• Promotional materials from your school
• Communication with school officials or staff
• Student manual
• Course catalog
• Legal documents
• Findings or determinations made by government entities
• Copies of documents or information provided to third parties
• Any other documentation you believe is relevant

Finally, be sure to list any refunds, remedies, loan reductions or tuition recoveries you have received.

Keep in mind that you may have a long wait ahead. The Education Department has up to three years to evaluate your application (after determining that it’s not missing key information). You can track your application at StudentAid.gov or by calling 855-279-6207.

If you’re approved for a borrower defense loan discharge, you’ll be notified via email. In addition to (or perhaps instead of) a discharge, you might qualify for a refund of past payments you made toward the affected loans.

What about borrower defense forbearance?

When seeking borrower defense, you can request a forbearance — or postponement — of your monthly loan dues while your application is under review. To qualify for the reprieve, your federal loans must not be in default. (If they are, you can alternatively seek a halt to debt collection as part of your application.)

Just be aware that forbearance allows interest to accrue onto your outstanding loan balances. So, if you pause your repayment and your borrower defense application is denied, you’ll face a larger balance than before.

Borrower defense to repayment claims statistics

Besides the stalled rule changes to borrower defense, the federal loan forgiveness program has also made headlines for the amount of relief it has awarded to distressed borrowers. For instance, in the case of Sweet v. Cardona — a rollercoaster of a court case upheld in 2023 — about 200,000 borrowers received $6 billion in relief.

The Biden Administration’s Education Department was especially aggressive about approving borrower defense loan discharges. In fact, it approved 1.8 million borrowers between 2021 and 2025, compared with just 53,500 borrowers approved between 2015 and 2020. The announced payouts were, more often than not, in the millions and billions of dollars.

Bottom line

The borrower defense to repayment program is among various legitimate routes to student loan forgiveness — and if you feel you were wronged by your school, it could be the best route to relief. Just be aware: The Trump Administration’s recent decision to not defend the Education Department’s proposed rule changes to borrower defense could be a signal that getting a discharge could be challenging. Confirm that every detail of your borrower defense application is accurate and complete before you click submit.