Borrower Defense

Federal law allows students whose schools have defrauded or cheated them to have their loans discharged.  In 2016, the Obama Administration issued a rule to articulate clear processes for applying for and granting borrower defense discharges. Today, the Trump Administration released a new rule that will make it almost impossible for students to get relief.

Claiming to protect students and hold colleges accountable, on Friday the Department of Education finalized its so-called borrower defense rule. The rule allows students to seek to cancel student loans connected to fraud and other illegal activity by their colleges.

The Trump Administration has neglected 180,000 borrowers seeking relief from illegal acts by their colleges, many for years. If that wasn’t clear enough evidence that they are not an ally to students, its final borrower defense rule published today is resounding proof.

Fifty-six organizations wrote to Representatives Lee and DeLauro in support of the PROTECT Students Act.

Fact sheet on the Borrower Defense to Repayment (BD) rule. The Borrower Defense to Repayment Rule offers students relief from federal loans borrowed based on fraudulent, misleading or illegal acts by their schools. Borrower defense is an established legal right for many forms of consumer credit, and it has been a part of the Higher Education Act for many years.

Today’s court decision is landmark news for student loan borrowers who were cheated by their colleges. The borrower defense rule that became effective at noon today protects students against illegal conduct by their college, offering relief that more than 100,000 borrowers have been waiting too long for already.  By holding colleges accountable, the rule will also deter bad...