If You Are a Student Loan Borrower Who Was Defrauded by a School, You Can Apply For a Discharge.




The Department of Education regulations are intended to both help borrowers who have been defrauded by their schools receive relief on their federal student loan debt and try to ensure that the federal taxpayer isn't on the hook for it.
The Department of Education issued a report showing that, to date, it had approved full or partial discharge for 15,000 claims that had been filed by former Corinthian Colleges students for a total of more than $270 million.
These borrowers were generally approved for the discharge if they attended during a time when the school advertised false job placement rates of its graduates. Some have also been approved due to the school claiming that credits were transferable to other institutions when in fact they were not. Several hundred borrowers had their claims denied because as they were not attending the school during the time these violations of state or federal law took place.



How and When to Apply
Borrowers with direct loans, FFELP or Perkins loans made prior to July 1, 2017, who think they meet the eligibility criteria for borrower defense under this new standard may apply and, if approved, consolidate into the direct loan program to take advantage of this new standard. 
To ensure that you don't lose any current benefits you have, such as progress toward an income-driven repayment or public service forgiveness program, it's important to apply for the discharge before consolidating your loans. You cannot reverse consolidation, and consolidating wipes away any progress you've made in other repayment programs.
The Department of Education has appointed a "special master" to manage a unit dedicated to the review of these claims. The special master will let borrowers know whether they are eligible for this discharge, at which point they can consolidate, if necessary, to gain access to the broader eligibility definition.

Click Here to Apply to the Borrower Defense to Loan Repayment