Under the law, you may be eligible for a borrower defense to repayment discharge of the federal Direct Loans you took out to attend a school if that school committed fraud by doing something or failing to do something, misrepresented its services, or otherwise violated applicable state law related to your loans or the educational services you paid for. This can apply to you regardless of whether your school closed or you are otherwise eligible for a loan discharge under other applicable laws. The law requires borrowers to submit a claim in order to receive debt relief. Through borrower defense to repayment, you may be able to have your entire outstanding federal Direct Loan forgiven and be reimbursed for amounts you have already paid. Please note that the U.S. Department of Education will acknowledge a borrower's claim under state law as a defense to repayment of a loan only if the cause of action directly relates to the loan or to the school's provision of educational services for which the loan was provided. It will not recognize, as a defense against repayment of the loan, borrower claims that are not directly related to the loan or the educational services, such as personal injury tort claims or claims based on allegations of harassment.
The U.S. Department of Education is creating a process to make it as easy as possible for borrowers who attended schools that did not meet legal obligations to seek loan forgiveness (discharge) based on borrower defense to repayment. More information on borrower defense to repayment, including a borrower defense claim form for borrowers to use, and how to get your loan discharged will be made available on this page at a later date.
Borrowers may therefore wish to wait for those updates before applying for a Borrower Defense to Repayment Loan Discharge. However, if you choose instead to submit your claim before the new process is available, you may submit materials via e-mail to FSAOperations@ed.gov or by mail to: U.S. Department of Education, PO Box 194407, San Francisco, CA 94119. Information on what to include in your borrower defense submission is provided below.
In your Borrower Defense to Repayment submission materials, you should include at a minimum:
- A statement that the borrower wishes to assert a borrower defense to repayment based on state law
- First, middle, and last name
- Date of birth
- The last four digits of the borrower’s Social Security number
- Home address
- Telephone number
- E-mail address
- Name and location of the school
- The program of study
- Degree, certificate, or other credential attained or sought
- Dates of enrollment
- Documentation to confirm the borrower’s school, program of study, and dates of enrollment. Suggested items include transcripts and registration documents indicating your specific program of study and dates of enrollment.
- Any details about the conduct of the school that the borrower believes violated state law including, but not limited to:
- The state and applicable law or cause of action (if available)
- Specific acts (including failures to act) of alleged misconduct by the school
- How the alleged misconduct affected the borrower’s decision to attend the school and take out a loan to pay to attend the school
- The injury suffered by the borrower as a result of the school’s alleged misconduct
- Any other supporting information that would help the U.S. Department of Education review the borrower’s claim
Once we receive this information, eligible loans will be placed in forbearance, and collections will cease on eligible defaulted loans while your claim is evaluated. Interest will continue to accrue while your claim is evaluated. More information on forbearance and stopped collections is available below.
Students who submit complete borrower defense claims can have their federal loans placed into forbearance or stopped collections if those loans are owned by the U.S. Department of Education (ED) and are being serviced by a federal loan servicer (or defaulted and serviced by a private collection agency). All Direct Loans and some Federal Family Education Loan (FFEL) program loans are owned by ED. You can determine if your loan(s) are owned by ED by logging onto the National Student Loan Data System (NSLDS) and reviewing the “Servicer/Lender/Guaranty Agency/ED Servicer Information” portion for each individual loan. If you have a “Current ED Servicer” listed under your “Contact Type” column, your loan is serviced by a federal loan servicer, and can be placed into forbearance. If you have a “Current Servicer” and/or “Current Guaranty Agency” listed under your “Contact Type” column, your FFEL loan is not owned by ED and cannot be placed into forbearance.
Your federally held loans will be placed in forbearance, or collections will stop for up to 12 months unless you request not to be placed in forbearance when submitting your claim. Only borrowers with accounts that are being serviced by a federal loan servicer are eligible for forbearance or stopped collections. The forbearance or stopped collections would include all federally serviced loan accounts that may be eligible for forgiveness based on borrower defense. Note that private loans cannot be placed into forbearance or stopped collections.
During any period that your loans are in forbearance, you do not have to make payments on those loans, and the loans will not go into default. If your loans are already in default, collections will stop. This will continue until the loan discharge review process is completed. Your servicer will notify you when your loan has been placed into forbearance or stopped collections if those loans are being serviced by a federal loan servicer. Until you receive that notice, you should continue to make payments.
The forbearance or stopped collections will affect all of a borrower's federal loans that are serviced by a federal loan servicer (or defaulted and serviced by a private collection agency), including loans that are not eligible for a borrower defense to repayment loan discharge, such as loans taken out to attend a different institution than the one related to your claim. Note that interest will continue to accrue on all of these federal loans, including subsidized loans, during the forbearance or stopped collections period. Remember, if you have loan(s) that are not owned by the U.S. Department of Education, the loan(s) will not be placed into forbearance or have collections stopped as a result of your submission of a claim.
If you want the forbearance or stopped collections to apply only to those loans related to your borrower defense claim, or if you do not want your loans to continue in forbearance or stopped collections, you must notify your loan servicer after you hear from them confirming the forbearance or stopped collection. At any time during the forbearance or stopped collections period, you may voluntarily make payments on your loans, including payments for accrued interest, or end the forbearance or stopped collections by contacting your servicer.
If your borrower defense claim is successful, your federal loans related to your claim against your school will be discharged (please note that any federal loans associated with your attendance at another school would not be discharged unless you made a separate successful claim). Also at that time, the forbearance or stopped collections period for your other federal loans will end. You will be responsible for repaying these other loans, including interest that accrued during the forbearance or stopped collections period, under the terms of your promissory note.
If your borrower defense claim is denied, you will not receive a discharge of any of your loans and the forbearance or stopped collections period will end for all of your loans. You will be responsible for repaying these loans, including interest that accrued during the forbearance or stopped collections period, under the terms of your promissory note.
If you have questions about borrower defense, you may call our borrower defense hotline: (855) 279-6207. Representatives are available Monday through Friday from 8:00 a.m. to 8:00 p.m. Eastern time. If you have questions about borrower defense, you may also send an e-mail to FSAOperations@ed.gov.