Borrower Defense: Current Rules, Evidence, and Group Relief

Borrower Defense to Repayment may provide relief when school misconduct connected to enrollment or educational services satisfies the rule governing a borrower's federal loan. The governing rule depends on when each loan was made or consolidated; one application can be evaluated under more than one rule.

Which rule applies?

The federal application identifies three date bands. Loans made or consolidated on or before June 30, 2017 are generally evaluated under 34 C.F.R. § 685.206(c). Loans made or consolidated from July 1, 2017 through June 30, 2020 are evaluated under § 685.222. Loans made or consolidated on or after July 1, 2020 are evaluated under § 685.206(e). Public Law 119-21 restored the July 1, 2020 framework for covered loans, so a borrower should identify the dates of every original and consolidation loan before assessing a claim.

For a covered post-2020 loan, the borrower generally must establish by a preponderance of the evidence that the school knowingly made a material misrepresentation related to enrollment, continued enrollment, or educational services; that the borrower reasonably relied on it in deciding to borrow; and that the misrepresentation caused financial harm. The normal limitations period is three years after the student is no longer enrolled, subject only to the rule's specified extensions. Older-loan standards differ.

Application and evidence

The application asks for a detailed account of what the school said, wrote, did, concealed, or failed to do; who was involved; when and how it occurred; why it mattered to the enrollment or borrowing decision; how it was false or misleading; and what harm followed. Applicants should provide supporting material that is available, such as emails, advertisements, catalogs, enrollment records, contracts, court judgments, or government findings. Department-held evidence may also be considered, but it should not be assumed to replace the borrower's facts or required proof.

Submitting an application does not guarantee relief. The school may respond, and adjudication may take years. Forbearance may pause payments, or stopped-collections status may pause collection efforts, while a claim is pending. During that pause, interest can accrue, the balance may be higher if the claim is denied, and that time may not count toward PSLF or IDR forgiveness unless another credit rule applies. Borrowers may decline forbearance and continue payments; they should compare the consequences with their servicer and current federal account notices.

Historical group determinations

The Department issued specific historical group determinations. Its Corinthian summary covers all borrowers enrolled in a Corinthian-operated school and their related federal loans. Its ITT summary covers federal loans for attendance from January 1, 2005 through ITT's September 2016 closure. The DeVry common facts are used in individual adjudication of applications involving particular 2008-2015 job-placement representations; they do not establish universal DeVry relief. A borrower should rely on the exact determination and current account notice, not a generalized school list.

Relief, refunds, and taxes

If a claim is approved, the Department determines the covered loan and amount of relief under the applicable rule. Refund and credit-reporting treatment follow that determination. The broad federal tax exclusion that applied to many student-loan discharges through 2025 expired; a discharge completed in 2026 or later may be taxable unless a separate exclusion applies. State treatment may differ.