Defrauded students may be eligible for federal loan cancellation under a program intended to combat school misconduct.
Recently, both student loan borrowers and the Biden administration have taken steps that might significantly extend student loan forgiveness eligibility.
This guide will explore what’s happening with ITT tech student loan forgiveness and what you can do about it.
Let’s begin.
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Student Loan Cancellation Through School’s False Misrepresentations And Promises
Among the new changes is a federal loan discharge program called Borrower Defense to Repayment (BDR). In addition, you could cancel your federal loans if a school misled you on essential aspects of their program, such as income prospects, career, or admissions selectivity.
Since its inception in 2016, the Borrower Defense to Repayment (BDTR) program has been beset with legal, political, and administrative roadblocks.
As a result, some applications have been rejected or stayed processing for years, and the program’s regulations have been amended multiple times.
But things may be about to change.
A New Settlement Agreement Covers Loan Forgiveness For Borrowers
One of the most high-profile lawsuits against the U.S. Education Department, Sweet v. DeVos, was settled last week between student loan borrowers and the Department, which had been accused of taking too long to process Borrower Defense applications.
Any borrower who applied for a Borrower Defense to Repayment application before June 22, 2022, and attended one of the institutions covered by the deal would have their federal student loans canceled and any payments reimbursed under the terms of the settlement.
The deal might help over 200,000 borrowers. In addition to, but not limited to, the following schools are covered:
- ITT Technical Institute
- Argosy University
- American Career Institute
- Colorado Technical Institute
- The Art Institute
- Kaplan College
The Court Must Approve Before Any Loan Forgiveness Begins
Before any student loan forgiveness can be enacted, the court must approve the settlement arrangement. But borrowers who haven’t applied for Borrower Defense yet still have time.
You’ll get the settlement’s automatic loan cancellation benefits if you submit your Borrower Defense application by June 22, 2022.
However, if you submit your application between June 22, 2022, and the settlement’s final approval date, you’ll be entitled to a final decision from the U.S. Education Department within 36 months. Keep in mind that the date of the final approval could be months away.
You’ll be entitled to a student loan cancellation if no final decision comes out.
What Is Borrower Defense To Repayment?
Borrower defense to repayment” can cancel all or part of your outstanding debt if you can prove that your institution intentionally deceived or defrauded you. The program has been around for a while.
But it took off in 2015 when for-profit Corinthian Colleges were accused of participating in fraud and utilizing unethical methods to collect student loans and forced to close.
The Education Department eventually agreed to the loan discharge request made by students who had taken out loans for college. So if you think your school lied to you to get you to enroll (or keep enrolling), you might be entitled to tuition reimbursement.
How Do You Qualify For Borrower Defense To Repayment?
Anyone can petition for borrower defense if they believe their school deceived them. This misrepresentation can result from what school administrators did or didn’t do.
But only those with a federal Direct student loan that meets the following criteria are eligible for this type of debt relief:
- Direct PLUS Loans.
- Direct Consolidation Loans.
- Direct Subsidized Loans.
- Direct Unsubsidized Loans.
Other aspects of your education or schooling, such as your classes, living situation, or grades, may also be causing you dissatisfaction. However, under the borrower’s defense to repayment clause, these problems won’t be eligible for student loan forgiveness.
You might be qualified to have your student loans dismissed or forgiven if a school makes false statements to you regarding any of the following:
- Admissions procedures or concerns with selectivity, such as the proportion of accepted applicants, school rankings, or information on open enrollment.
- Details on educational services, such as externships or internships, the qualifications of its teachers, the number of credits required to graduate, etc., are also provided.
Some schools could pressure you into enrolling. This information might help your case if you were under duress to sign a formal enrollment contract immediately. However, expressing a need to enroll doesn’t entitle you to make a borrower defense claim.
Final Thoughts
More students now qualify for student loan forgiveness through borrower defense, thanks to new categories added by the U.S. Education Department. Consider the application thoroughly if you believe you are entitled to compensation.
You can complete the form on the Education Department’s website, which might save you hundreds of dollars in student loans.
