The Borrower Defense for Repayment program, on which I reported a few years ago, is an obscure student loan forgiveness scheme (BDR). If an applicant can prove that their school misled students about career changes in order to persuade them to enroll, this program will forgive their whole student loan debt without any repercussions on their federal income taxes.
Regulations issued in 2016 by the Obama administration’s Department of Education established who might receive loan forgiveness as a result of the BDR. Forgiveness could be granted in full or in part to those who could demonstrate that their school had committed misbehavior.
However, under President Trump, Betsy DeVos, the department’s secretary, made it more difficult to get BDR forgiveness.
Claims were made that DeVos dragged her feet on updating the BDR regulations and processing current application forms.
In addition, the Department of Education implemented new regulations in 2019 that made it more difficult for unhappy students to receive compensation and easier for predatory institutions to make false claims. Trump vetoed legislation that would have overridden the requirements.
Department of Education Secretary Miguel Cardona is using BDR today to provide targeted relief for student loans. According to a government announcement made on March 18, 2021, it would alter how relief is determined for students who were deceived by their institutions.
Because of the department’s belief that for-profit colleges misled students about their employment prospects, BDR has been used to cancel student loan debt for thousands of people. The federal student loans of those who were eligible were discharged in full.
An application for a BDR must be submitted online at the website of the Department of Education. The application usually asks for information about the school you went to and the wrongdoing that occurred there.
Some examples of this kind of misrepresentation include claims about the quality of admissions selection, the quality of educational resources available to a student, and the accessibility of post-graduation employment opportunities.
Also requested are copies of school promotional materials, correspondence with school authorities or third parties, and any other outside sources (such as law school rankings magazines). Student loans are put into forbearance while the application is being reviewed.
Which of the following people has the best likelihood of becoming eligible for BDR relief? About a decade ago, there were rumblings in the legal community that some law schools were fabricating post-graduate job numbers to boost their US News rankings.
As a result, only a small number of graduates from lower-ranked legal schools were hired by high-paying businesses.
Reputable publications have since highlighted the realities of post-graduate employment, and the ABA and US News have demanded more extensive disclosures to prospective students studying law schools. Since then, the disclosures have become mandatory.
Other legal schools have been forced to close or are under investigation or lawsuits have been filed against them.
For others, this means that only individuals who went to a for-profit law school a long time ago would be entitled to BDR relief. For example, if a student can demonstrate that they were misled by their institution about their post-graduation employment prospects, they may be eligible for compensation.
As a result, recent graduates may have a difficult time showing that they were duped by their law school.
In light of the upcoming midterm elections, it seems unlikely that the federal government would eliminate all student loan debt any time soon, and instead, the moratorium on new student loans will likely be extended until 2023.
Students who were deceived by their schools can now receive full discharge relief through the increased usage of BDR by the Department of Education. BDR may not be available to everyone, but those who can demonstrate that their schools misled them may have the highest chance of receiving compensation under this government.