Disclaimer: As of August 7, 2023, a federal court delayed the effective date of the latest regulations for borrower defense discharges. On April 4, 2024, the court issued further instructions to postpone the effective date of the regulations until a final judgment is reached. The Education Department (ED) will receive applications but will not process or approve any discharges unless and until they are legally able to do so.
Borrower Defense Loan Discharge is a legal ground for discharging federal Direct Loans. Under the law, you could have your loans discharged if your school caused you harm by participating in misconduct related to making a federal loan or the educational services it provided to you. If your application is approved, the Education Department (ED) will discharge the remaining loan balance related to that school and may refund payments you made on the loan.
Parent PLUS borrowers are also eligible if their child experienced the aforementioned conduct.
Eligibility for Borrower Defense Under 2023 Regulation
- Substantial misrepresentation
- Substantial omission of fact
- Breach of contract
- Aggressive and deceptive recruitment
- Judgment
- Prior secretarial action
Things to Note
- You must have an outstanding balance on loans related to that school to be eligible for this program.
- When submitting your application, you must do so under the penalty of perjury confirming that your application is accurate and true to the best of your knowledge
- To ensure that your account is considered for borrower defense loan discharge, you should submit a detailed application if you believe you qualify.
Before You Apply
- You’ll want to decide what information to include in your application regarding the type of misconduct that you experienced.
- You’ll need to obtain and gather all documents that can support your application. The more documentation you provide, the better.
For a full list of the required documentation and information needed to complete your application, as well as the application itself, visit the Federal Student Aid (FSA) page on Borrower Defense Loan Discharge.