A borrower defense to repayment (“borrower defense”) allows borrowers who were misled, defrauded, or subject to illegal behavior by their school to discharge the federal student loan debt they borrowed to attend the school. Borrowers can request a discharge by submitting an application to the Department of Education (“ED”) detailing the school’s misconduct. Given recent […]

Yesterday, the Department announced an important first step toward fixing the badly broken borrower defense program by rescinding the deeply flawed and unsupported “partial relief” policy adopted by former Secretary DeVos. The Borrower Defense rules were intended to provide relief for borrowers who took on federal student loan debt to attend schools that used deceptive […]

Today, new U.S. Department of Education (the Department) regulations will go into effect, erasing many of the protections students had against school fraud. These regulatory changes could not have come at a worse time. As students are trying to weather the economic instability caused by the coronavirus, the Department has given predatory schools the green […]

This month, in a victory by and for student loan borrowers, a court ordered that the Department of Education had illegally delayed giving effect to an important rule from 2016 designed to protect student loan borrowers and taxpayers from school closures and misconduct.  The court’s order meant that the rule—often called the 2016 “Borrower Defense” […]

By the Project on Predatory Student Lending at the Legal Services Center of Harvard Law School, which is representing the plaintiffs in Calvillo Manriquez v. DeVos. This post originally appeared on https://predatorystudentlending.org/updates/update-preliminary-injunction-granted-what-it-means-and-what-happens-next/. On May 25, 2018, a federal court in San Francisco granted former Corinthian borrowers’ motion for a preliminary injunction in Calvillo Manriquez v. DeVos, ordering the Department of […]

Today, the Department of Education announced that it does not plan to implement new rules designed to protect students in online degree programs from being taken advantage of by schools that load students up with debt but offer useless degrees. The “Program Integrity and Improvement” rules (also known as the “State Authorization of Distance Education” […]

Advocates for student loan borrowers breathed a sigh of relief on March 30, when the deadline passed for Congress to introduce a resolution to roll back the new “borrower defense” rules.  These rules are designed to protect students and taxpayers from harm by predatory schools.  After rumblings from Washington that these rules would be in […]

According to the IRS, if you went to a Corinthian school and had your loans canceled under the borrower defense rule, you should not owe taxes on the canceled amount. Unfortunately, we have learned that the Department of Education and its servicers sent IRS forms 1099-C to Corinthian students whose loans were canceled in 2016. […]

On Friday, the U.S. Department of Education announced final regulations to protect federal student loan borrowers and taxpayers against closures and misconduct by predatory schools like we saw with the now closed Corinthian Colleges. The regulations, most of which are scheduled to go into effect July 1, 2017, include significant amendments to the rules governing borrower defenses to […]

We wrote in a previous post about our coalition letter to the Department of Education’s “Special Master”, urging him to create a fair and accessible “defense to repayment” process for borrowers.  While the special master Joseph Smith works on this project, the Department also announced that it will be holding hearings and creating a negotiated […]