Many Americans carry student loan debt for programs that didn’t live up to their promises. Some students were misled about job placement rates, program costs, or accreditation status. Others discovered too late that their credits wouldn’t transfer or that their degree didn’t qualify them for the careers they were promised.

For borrowers who were misled or defrauded by their schools, there may be a path to real relief. It’s called Borrower Defense to Repayment, a federal program that allows qualifying borrowers to have some or all of their federal student loans discharged.

As a former attorney at the U.S. Department of Education, I’ve seen firsthand how powerful this program can be — and how complicated it often seems from the outside. This article was written to help you understand whether you might qualify and what to expect if you decide to apply.

What Is Borrower Defense to Repayment?

Borrower Defense to Repayment (often called “Borrower Defense”) is a legal process that allows borrowers to seek forgiveness of their federal student loans if their school engaged in certain types of misconduct.

Under federal regulation 34 C.F.R. § 685.206, the U.S. Department of Education can cancel federal Direct Loans if a borrower can prove that their school violated certain laws or made false, misleading, or deceptive statements that caused them harm.

In simpler terms, Borrower Defense is designed to protect students who were lied to or deceived by their schools. If approved, the Department of Education can discharge the borrower’s federal student loans and, in some cases, refund payments already made.

This program is separate from other forms of student loan forgiveness, such as:

• Public Service Loan Forgiveness (PSLF), which cancels loans for public employees after 10 years of service.
• Teacher Loan Forgiveness applies to certain teachers in low-income schools.
• Closed School Discharge, which applies if your school shut down while you were enrolled.

Borrower Defense is specifically focused on school misconduct.

What Kinds of School Misconduct Qualify?

The Department of Education recognizes several types of actions that can support a Borrower Defense claim. Misconduct must generally involve false or misleading statements, omissions of fact, or violations of state law related to the educational services provided.

Common examples include:

• Misrepresentation of job placement rates or employment guarantees after graduation.
• False claims about accreditation or the ability to transfer credits to other schools.
• Deceptive advertising about program quality, faculty credentials, or facilities.
• Untrue statements about licensing or certification outcomes, such as suggesting graduates would qualify for a professional license that the program didn’t meet requirements for.
• Misleading financial information, such as underreporting costs or exaggerating financial aid availability.

To qualify, a borrower must provide evidence showing that the school’s misconduct was material, meaning it likely affected the decision to enroll or take out loans, and that it caused financial harm.

Who May Be Eligible for Loan Discharge?

Borrower Defense applies only to federal Direct Loans. Private student loans are not covered.

You may be eligible if:

• You attended a school that misrepresented key facts about its program, outcomes, or accreditation.
• You took out federal loans to attend that school or program.
• You can show that you relied on the school’s false statements or omissions when deciding to enroll or borrow money.
• You suffered financial harm as a result. 

Even if your school has since closed, you may still qualify if you can show that it engaged in qualifying misconduct while you were a student.

Borrower Defense claims may be filed individually or as part of a group claim, which can happen when multiple students from the same institution experienced similar misconduct.

How to Apply for Borrower Defense

You can apply for Borrower Defense online through the U.S. Department of Education.

Here’s an overview of the process:

1. Complete the Application

• The online form asks for details about your school, your program, and the specific misconduct you experienced.
• You’ll need to describe how the school’s false or misleading statements influenced your decision to attend or borrow.
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2. Gather Supporting Evidence

• Strong applications include documentation such as:
  • Enrollment agreements and catalogs.
  • Emails, brochures, or advertisements from the school.
  • Course descriptions or job placement statistics used in recruiting materials.
  • Correspondence with the school or financial aid office.
  • Statements from classmates or others with similar experiences.
• The Department of Education also reviews other evidence it may already have on file, including prior group claims or enforcement actions.

3. Submit Your Application

• Applications can be submitted online and are free. 
• Applications may also be submitted via mail, although this option is less preferable.
• You don’t need to pay a company to file on your behalf.
  • “Student debt relief” companies that charge for this service are not affiliated with the Department of Education.

What Happens After You Apply

Once submitted, your application is reviewed by the U.S. Department of Education. This review process can take a considerable amount of time, depending on the volume of claims and the complexity of your case. 

Possible Outcomes

• Full Discharge: Your entire federal loan balance for that program is canceled. You may also receive refunds for prior payments or wage garnishments related to those loans.
• Partial Discharge: Only part of your loan is canceled if the Department determines that some, but not all, of the school’s actions caused financial harm.
• Denial: If the Department finds that the evidence doesn’t meet the Borrower Defense standard, your loans remain in repayment status. You may be able to appeal or reapply if new information becomes available.

Tax Implications

Under current federal law, most Borrower Defense discharges are not treated as taxable income through at least 2025. However, state laws vary, so it’s always wise to consult a tax professional.

Common Misunderstandings About Borrower Defense

Because the program has evolved over time and been the subject of national settlements, there’s considerable confusion about who qualifies and how it works. Here are a few important clarifications:

• Borrower Defense is not based on financial hardship. It’s about school misconduct, not inability to pay.
• Not every misleading statement qualifies. You must show that the misrepresentation was material and caused financial harm.
• It’s separate from Closed School Discharge. If your school closed while you were enrolled, you may have a different, sometimes simpler, path to forgiveness.
• You don’t need to pay anyone to apply. The federal application is free. Be cautious of third-party companies offering “guaranteed” approval for a fee.
• You can apply even if you’re still repaying loans. You may choose to place your loans into a forbearance while your Borrower Defense claim is reviewed.

When Legal Guidance Can Help

While the Borrower Defense process is designed for individuals to file on their own, legal assistance can make a significant difference — especially in complex or borderline cases.

An attorney experienced in Borrower Defense can:

• Evaluate whether your school’s actions meet the legal standard for misconduct.
• Help organize and strengthen your evidence.
• Clarify how your state’s consumer protection laws interact with federal Borrower Defense rules.
• Assist with appeals or other loan-related remedies if your application is denied.

As someone who worked on Borrower Defense matters at the Department of Education, I understand the importance of a clear, well-supported application for Borrower Defense. 

Borrower Defense offers a legitimate path to loan forgiveness for borrowers who were misled by their schools, but many people who qualify never apply because they assume they won’t succeed or don’t know the program exists.

If your school made false promises about job placement, accreditation, or costs, you may be entitled to a full or partial discharge of your federal student loans.