Student Loan Law: Borrower Defenses

Borrower responsibilities and defenses.A “borrower defense” refers to any act or omission of the school attended by the student that relates to the making of the loan for enrollment at the school or the provision of educational services for which the loan was provided that would give rise to a cause of action against the school under applicable State law. This is the provision that for-profit schools have violated.

Borrower defenses for loans disbursed after June 30, 2017.

Closed school discharge

Financial responsibility standards for educational institutions. If the the institution doesn't meet these standards, then borrower has a defense.

The regulations took effect July 1, 2020.

Business Insider 10/18/23

CNN 6/23/22

CNBC 9/20/23

CNBC 6/1/22

Yahoo Finance! 7/11/21 Includes ITT Technical Institute, Westwood College, Marinello Schools of Beauty and the Court Reporting Institute.

MarketWatch 2/17/22. Most of it is from DeVry.

NPR 6/17/22 This is the Sweet v. Cardona, formerly Sweet v. DeVos case. The judge approved the class action settlement, but some of the colleges will appeal.

Ohio Capital Journal 4/11/23 Three schools have appealed the class action settlement in Sweet v. Cardona.

4/13/23

National Consumer Law Center 8/27/20

Arizona Daily Star 12/10/19

A good summary of the modifications to borrower's defenses from JDSupra 9/20/19

Borrowers may be eligible for forgiveness of the federal student loans used to attend a school if that school misled them or engaged in other misconduct in violation of certain laws. This type of loan forgiveness is called “borrower defense to repayment,” sometimes abbreviated to “borrower defense.

US Dept of Education, 8/24/21. Biden's Education Dept. wants you to prove you were defrauded by a for-profit school — then it will forgive all your student debt.

5th Cir. Ct of Appeals preliminarily enjoins Biden's new borrowers' defenses rule 8/7/23.