What Is Borrower Defense to Repayment? How to Apply in 2026

Borrower defense to repayment can cancel part or all of your federal student loans if your school defrauded you. Under the 2019 regulations now in effect, you’ll need to prove your school misled you about its programs or broke state laws — and that you suffered financial harm as a result.

Borrower defense to repayment — often shortened to “borrower defense” — is a federal process for canceling Direct Loans based on school fraud. Congress created this right in 1965 through the Higher Education Act, but almost no one used it until the mid-2010s when large-scale fraud at for-profit colleges came to light.

The 2019 regulations govern borrower defense today. The One Big Beautiful Bill Act, signed July 4, 2025, restored them as the standard for loans disbursed after July 1, 2020. The 2022 Biden administration rules — which would have lowered the burden of proof and created a group discharge process — never took effect and are now suspended through at least 2035.

The bar is higher than it would have been under the 2022 rules. You need to show individual financial harm beyond just having to repay your loans, and there’s no group discharge process.

You may be eligible if all three of these are true:

You have federal Direct Loans. Borrower defense only applies to Direct Loans, including Direct PLUS Loans and Direct Consolidation Loans. If you have FFEL or Perkins loans, you’ll need to consolidate them into a Direct Loan at studentaid.gov.

Your school misled you or broke state laws. You must show that your school intentionally misrepresented its programs — things like inflated job placement rates, fake graduation statistics, or false claims about credit transferability. Being unhappy with your education isn’t enough.

You can demonstrate financial harm. Under the 2019 rules, you need to show harm beyond just owing money on your loans.

A strong indicator that you may qualify: your school has been investigated or sued by the Department of Education or state attorneys general.

Filing deadline. Under the 2019 rules, you generally need to file within three years of leaving your school. This can vary based on when your loans were disbursed and your state’s laws.

I keep a complete list of schools with borrower defense findings with blanket discharge details, parent company groupings, and what relief is available for each school.

If your school appears on that list, you’ll have an easier path to approval. And if you already received a blanket discharge — for Corinthian Colleges, ITT Tech, Art Institutes, Westwood College, or Marinello Schools of Beauty — that relief is final and cannot be reversed.

Related: Sweet v. McMahon Settlement Update — If you filed a borrower defense claim before June 22, 2022, you may be part of this class action settlement. Automatic relief has been triggered for Exhibit C school applicants after the Department of Education missed court-ordered processing deadlines.

1. Gather your documentation

Collect these before you start the application:

School records. Transcripts, enrollment agreements, student manual, and course catalog.

Evidence of fraud. Promotional materials with misleading claims, emails or letters from admissions staff or faculty, and anything showing a gap between what the school promised and what it delivered — especially claims about job placement rates, credit transferability, and school resources.

Legal records. Any judgments or enforcement actions against your school. For loans disbursed before July 1, 2020, a legal judgment can serve as the sole basis for your claim.

2. Submit your application

You can apply three ways:

Online (recommended). Log in at studentaid.gov/borrower-defense and complete the application.

Email. Download the PDF application, fill it out, and email it to BorrowerDefense@ed.gov.

Mail. Print and mail the completed PDF to: U.S. Department of Education, 4255 W Hwy 90, Monticello, KY 42633.

The application has seven sections: personal information, school information, other forgiveness options you’ve pursued, the school’s fraudulent activity, your financial harm, a forbearance request, and your certification signature.

Plan for 30 to 45 minutes. Save a copy of your completed application.

3. Request forbearance

When you submit, request forbearance at the same time. Forbearance pauses your payments and prevents default while your claim is reviewed.

Interest continues accruing during forbearance. If you can, make interest-only payments to keep your balance from growing.

4. Follow up

The Department of Education has been slow to process claims, and staffing cuts in early 2025 have slowed processing further. There’s no firm timeline — some applications take months, others years.

Check your application status at the FSA Status Center.

If approved:

Partial or full loan cancellation. The amount depends on the findings against your school and the financial harm you demonstrated.

Refund of past payments. Whether you get a refund depends on when your loans were disbursed.

Loans disbursed before July 1, 2017. State law generally allows you to seek reimbursement of previous payments.

Loans disbursed between July 1, 2017 and July 1, 2020. You have six years from disbursement to request reimbursement for claims based on breach of contract or substantial misrepresentation. There’s no time limit if your claim is based on a judgment against the school.

Loans disbursed after July 1, 2020. The Secretary of Education determines whether your forgiveness amount exceeds your remaining balance, which would trigger a refund.

Credit reporting adjustments. Your loan servicer should update your credit report to reflect the discharge.

Restored federal aid eligibility. If you need to go back to school, you may be able to borrow again.

If denied, you’re still responsible for the full loan balance, including any interest that accrued during forbearance.

Requesting reconsideration. Not all denials are eligible. Check for a “Request Reconsideration” button in your Case Details on the FSA Status Center.

When requesting reconsideration, explain which decision you disagree with and why. You can submit supporting evidence, but only for the allegations in your original application. New allegations will get your reconsideration denied — file a new claim instead.

You can also mail reconsideration requests to: U.S. Department of Education, P.O. Box 1854, Monticello, KY 42633.

Your loans are not automatically placed in forbearance during reconsideration. Continue making payments unless told otherwise.

The regulatory history matters because it affects which standard applies to your loans.

1994 regulations. The original borrower defense framework. Sparse and largely unused — only five people applied in the first 20 years.

2016 regulations (Obama administration). Created a group discharge process and a lower burden of proof. Apply to loans disbursed between July 1, 2017 and July 1, 2020.

2019 regulations (Trump administration). Raised the burden of proof, eliminated the group discharge process, and added a three-year filing deadline. Apply to loans disbursed after July 1, 2020. Restored by the One Big Beautiful Bill Act.

2022 regulations (Biden administration). Would have returned to a lower standard and restored group discharges. Blocked by a Fifth Circuit injunction and never took effect. Now suspended through at least July 1, 2035 under the OBBB.

If your loans were disbursed after July 1, 2020, you’re filing under the 2019 rules. The Department of Education estimated that roughly 3% of affected loans would be discharged under this standard.

No. Federal student loans discharged through borrower defense are not considered taxable income by the IRS.

Even if your claim is denied, other paths to relief are available:

Closed school discharge. If your school closed while you were enrolled or shortly after you withdrew, you may qualify. This is often faster and easier than borrower defense — I recommend filing for both at the same time if you’re eligible.

Income-driven repayment forgiveness. After 20 or 25 years of qualifying payments, your remaining balance is forgiven.

Public Service Loan Forgiveness. If you work for a government or nonprofit employer, your loans can be forgiven after 10 years of qualifying payments.

Total and Permanent Disability Discharge. If you’re permanently disabled, your federal loans can be discharged.