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A borrower defense to repayment (“borrower defense”) allows borrowers who were misled, defrauded, or subject to illegal behavior by their school to discharge the federal student loan debt they borrowed to attend the school. Borrowers can request a discharge by submitting an application to the Department of Education (“ED”) detailing the school’s misconduct. Given recent news about ED actions to discharge debt for students who attended specific programs at specific schools, this blog explains which groups of borrowers have had applications approved so far and how other borrowers can seek relief.
The borrower defense discharge process has been confusing for borrowers and advocates alike, but understanding the new borrower defense “findings” from the Department of Education (“ED”) may help borrowers complete successful applications for relief. Instead of simply providing relief to defrauded borrowers on a group basis, as it has the power to do, ED has issued “findings,” i.e. established that specific claims from borrowers–at particular programs at particular schools at particular times–are entitled to relief. To obtain a discharge based on these findings, borrowers must complete an application and explain how they experienced the wrongdoing that ED describes in its discharge findings. To help advocates and borrowers decode what they should include in an application, a summary of ED’s current findings (as of August 31, 2021) is below, followed by a summary of what borrowers should consider if they already submitted an application but may be covered by these new findings.
Borrowers and advocates should know that ED is still in the process of making additional findings and is determining which borrowers with other claims or from other schools are entitled to a loan discharge. So even borrowers who attended different schools or did not experience the basis for a discharge described below can still submit borrower defense applications and may receive relief.
When completing an application (available online here), borrowers should describe (in as much detail as possible) every way the school misled them when they were enrolling and they should explain how those misrepresentations harmed them. Borrowers should explain which school official made the misrepresentation, how they discovered the wrongdoing, and what they would have done differently had they known the truth. While not required for relief, borrowers should include any documentation they can find relating to their school that supports their claim, including transcripts, emails or text messages from school employees, copies of advertisements, or other school records. These types of evidence will make the borrower’s claim appear stronger.
What findings has ED made?
As of February 28, 2022, ED has made only a limited number of findings for particular schools. Borrowers who submitted applications stating that they experienced the school misconduct found below have received a complete discharge.
Corinthian Colleges (Heald College, Everest College, WyoTech)
Corinthian College borrowers should be aware that there are two methods of applying for relief, depending on what claims the borrower is asserting. A borrower who is asserting a job placement rate misrepresentation against a covered program (see below) can apply for relief using a shorter attestation form. Corinthian borrowers who are not covered by the job placement rate findings may be covered by other findings of misconduct (including lies about guaranteed employment transferability of credits) but will need to fill out the general borrower defense application and should explain in their application that they experienced the misconduct described in ED’s findings. Borrowers can select multiple categories of misconduct when completing the form and should be as comprehensive as possible when submitting an application.
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Job Placement Rate Misrepresentations Between 2010 and 2014:
ED found that between 2010 and 2014, Heald, Everest, and WyoTech misrepresented job placement rates (i.e. lied about how many students were able to obtain jobs in their field when graduating) when enrolling students in specific programs of study (see ED’s findings here and here) Borrowers can check if they are covered by the findings by looking at the Department’s website; Heald borrowers should look here, Everest and Wyotech borrowers should look here. Borrowers who are covered by the job placement rate findings do NOT need to detail what they experienced, and may instead fill out a short application (download the Heald application here, Wyotech and Everest application here) where they may check boxes indicating that they received job placement rate information and sign to attest that they relied on this information. Borrowers who instead use the online borrower defense application should make sure to check the box indicating that the school made job placement rate misrepresentations.
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Guaranteed Employment, all time periods:
ED found that there was a widespread practice throughout Corinthian Colleges of lying to students that they were “guaranteed” to get a job after graduation. Borrowers who attended any Corinthian College at any time and were falsely guaranteed employment should be eligible for discharge if they submit a borrower defense application. When completing a borrower defense application, borrowers who experienced this misconduct should explain as much as possible about which school official (admissions officer, counselor, etc) guaranteed they would get a job after graduation, what the school official said, how the borrower learned it was not true, and how the borrower was harmed by this lie (or what the borrower would have done had she or he known the truth). If possible, the borrower should attach emails, text messages, or advertisements containing the school’s claims that students were guaranteed employment (although this is not required). ED will discharge 100% of the loans of borrowers who successfully assert this finding.
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Transferability of Credit Misrepresentations at all Everest College schools and the Wyotech Laramie campus, all time periods:
ED found that all Everest College schools and the Laramie, WY Wyotech campus had a widespread practice of lying to students that the credits earned at the school would be generally transferable. Borrowers who attended any Everest school or the Laramie Wyotech campus at any time and who were falsely told that school credits would be generally transferrable elsewhere should be eligible for discharge if they submit a borrower defense application. In their borrower defense application, borrowers who experienced this misconduct should explain which school official or advertisement stated that credits would transfer, what the school official or advertisement said, and that the borrower relied on the school’s statement(s), and explain how the borrower was harmed by this misrepresentation (e.g. couldn’t transfer credits later). ED will discharge 100% of the loans of borrowers who successfully assert this finding.
ITT Tech
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Guaranteed Employment for California Students Who Attended Between 2005 and 2016:
ED found that school officials and admissions officers at the California campuses of ITT had a widespread practice of lying to students that they were guaranteed employment or would certainly get a job if they attended the school. Borrowers who enrolled in an ITT school in CA between 2005 and 2016 and were falsely guaranteed employment should be eligible for a complete discharge if they submit a borrower defense application. When completing a borrower defense application, borrowers who experienced this misconduct should explain which school official (admissions officer, counselor, etc) or advertisement guaranteed they would get a job after graduation, what the school official or advertisement said, how the borrower learned it was not true, and how the borrower was harmed by this lie (or what the borrower would have done had she or he known the truth). If possible, the borrower should attach emails or text messages containing the school’s claims that students were guaranteed employment. ED will discharge 100% of the loans of borrowers who successfully assert this finding.
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Job Placement and Earnings Misrepresentations Made from 2005 until 2016:
ED “found that ITT made repeated and significant misrepresentations to students related to how much they could expect to earn and the jobs they could obtain after graduation between 2005 and the institution’s closure in 2016.” Borrowers who attended any ITT school between 2005 and 2016 who were told that they would be able to obtain high-paying jobs after graduation should be eligible for a discharge if they submit a borrower defense application.. In their application, borrowers should explain which school official or advertisement told them they would earn specific amounts of money or obtain specific jobs, what they were told by the school official or advertisement, that they relied on those misrepresentations when enrolling, what job(s) they were able to obtain upon graduation and how much they made in those job(s), whether employers told them that an ITT degree was not respected during job interviews, and how they were harmed by the school’s misrepresentations. If possible, the borrower should attach emails, text messages, or advertisements containing the school’s job placement or earnings claims (although this is not required). ED will discharge 100% of the loans of borrowers who successfully assert this finding.
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Transferability of Credits Claims Made from January 2007 until October 2014:
ED also recently expanded discharge eligibility for students who were told by ITT officials that credits earned at ITT were transferable to other schools. Borrowers who enrolled in any ITT school between January 2007 and October 2014 and were told that their credits would be transferable to other schools should be eligible for a complete discharge if they submit a borrower defense application. When completing a borrower defense application, borrowers should describe, in detail, which school official told them that credits were transferrable, how they relied upon that information, and whether they were unable to transfer their credits. If possible, the borrower should attach emails, text messages, or advertisements containing the school’s credit transferability claims (although this is not required). ED will discharge 100% of the loans of borrowers who successfully assert this finding.
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Programmatic Accreditation Claims Made Between July 2007 until closure in 2016 Regarding its Nursing Program:
ED announced on February 16, 2022, that it would expand eligibility for students who attended ITT’s associate degree in nursing program who were told that the program had the necessary accreditation to get a job in nursing. In reality, ITT repeatedly lost that accreditation because the school failed to meet the accreditor’s standards. When completing a borrower defense application, borrowers should describe, in detail, that they relied on ITT’s misrepresentations that the school had sufficient accreditation for graduates to get nursing jobs. They should also include information about any problems they experienced getting nursing jobs after attending the program. If possible, the borrower should attach emails, text messages, or advertisements containing the school’s credit transferability claims (although this is not required). ED will discharge 100% of the loans of borrowers who successfully assert this finding. Additional information about this finding is here.
DeVry University
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Claims that 90% of Graduates who actively sought employment obtained jobs in their field of study within 6 months of graduating:
ED recently announced that it granted the claims of 1,800 borrowers who relied upon DeVry’s misrepresentation that 90% of graduates obtained jobs within their field of study within 6 months of graduating. In reality, the actual placement rate was around 58%, and DeVry often counted the jobs mid-career students already had before enrolling in the school, even though DeVry did nothing to help them find that employment. This finding follows settlements DeVry entered into with the FTC and the Massachusetts and New York Attorneys General pertaining to the similar job placement misrepresentations. This finding is the first time that ED has granted borrower defense claims from an open school, and ED has indicated it will seek to recoup amounts discharged from DeVry.
Borrowers filing borrower defense applications should describe in detail whether they saw DeVry’s advertisements regarding these job placement claims or other conversations or emails where DeVry employees made similar claims. Borrowers should disclose whether they received a check from the FTC or state attorneys general settlements. When applying for a discharge, borrowers should attach to their application any advertisements, emails, texts, or written communications they received from the school that made the job placement claims. Borrowers should also describe whether the job placement claims were an important factor in their decision to enroll in the school. Further, applicants should include information about any difficulties they had in obtaining a job after graduating from DeVry. More information about this finding is here.
Westwood College
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Transferability of Credits Claims Made from 2002 until 2015:
ED has discharged the loans of borrowers who alleged in their borrower defense application that Westwood College officials or advertisements told borrowers that the credits they earned at Westwood were transferrable to other schools. Borrowers who attended Westwood between 2002 and 2015 and enrolled, in part, because the school claimed that the credits earned at Westwood would be transferable should be eligible for a discharge if they submit a borrower defense application to the Department. When completing a borrower defense application, borrowers should describe, in detail, which school official told them that credits were transferrable, how they relied upon that information, and whether they were unable to transfer their credits. If possible, the borrower should attach emails, text messages, or advertisements containing the school’s credit transferability claims (although this is not required).
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Misrepresentation that Graduates In the Criminal Justice Program Could Get Jobs As Police Officers Made from 2004 until 2015:
ED found that Westwood college made substantial misrepresentations when it told students in its criminal justice program that they would be able to obtain jobs as police officers, particularly in the Chicago area. Borrowers who attended a criminal justice program at a Westwood school after being told by school officials or advertisements that the program would lead to a job as a police officer should be eligible for a discharge if they submit a borrower defense application. When applying, borrowers should specify which school official or advertisement claimed criminal justice program graduates got jobs as police officers and should explain what they said. Borrowers should also explain how this misrepresentation harmed them and what they would have done had they known the truth about the program. If possible, the borrower should attach emails, text messages, or advertisements containing the school’s misrepresentations (although this is not required).
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Misrepresentations Regarding Employment Prospects Made From 2002 until 2015:
ED recently announced that it granted the claims of over 1,600 students who alleged that Westwood College made substantial misrepresentations to students about their likelihood of finding a job after graduating. Specifically, ED discharged the federal student loan debts of borrowers stated in their application that they relied upon Westwood’s “employment pledge” that graduates would find a job within six months of graduating or would receive help paying their bills, and/or Westwood’s promises that graduates had a placement rate of 80% or more and earned over $50,000. Borrowers applying for relief should provide as much detail in their application as possible about what they were told about graduates’ placement and earnings, including any emails, texts, advertisements, or school brochures documenting these promises. Borrowers should describe how they were unable to find a job after graduating and how Westwood College failed to help pay their bills. More information about this finding is here.
Marinello Schools of Beauty
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Misrepresentations about Instruction Quality, All Campuses from 2009-2016:
ED announced that it granted over 200 claims from Marinello students who submitted borrower defense applications and asserted that the school made widespread, substantial misrepresentations about the quality of instruction that would be offered at its campuses, including claims that the school did not teach them basic elements of cosmetology, like how to cut hair, and routinely left students without instructors for weeks or months at a time. ED acknowledged that the poor quality of instruction at Marinello made it very difficult for students to pass licensing tests. When completing a borrower defense application, Marinello borrowers should describe in detail what school officials or advertisements told them about instruction at their school, describe the poor instruction they received (particularly if they too experienced periods without an instructor), and describe the harm they experienced because of this misconduct. Borrowers should highlight if they were unable to pass state licensing exams after attending a Marinello school. If possible, the borrower should attach emails, text messages, or advertisements containing the school’s claims about instructional quality, and any documentation relating to failing state licensing exams (although this is not required).
Minnesota School of Business/Globe University
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Misrepresentations That The Criminal Justice Program Would Allow Graduates to Become a Minnesota Police Officer or Probation/Parole Officer:
- ED recently discharged the debts of over 1,000 students from the Minnesota School of Business/Globe University. ED determined that borrowers would be eligible for a discharge if they asserted that the Minnesota School of Business/Globe University misled them when claiming that the criminal justice programs would qualify graduates to become police, parole, or probation officers in Minnesota. That program did not have the right certifications or accreditations for those graduates to get those jobs. This borrower defense finding follows a September 2016 judgement from a Minnesota court that the schools committed fraud when disseminating these claims to students. When applying for relief, students should describe in detail the advertisements or claims the school made regarding the eligibility to become a Minnesota police officer, should explain that the borrower relied on those claims, and should describe the borrower’s difficulties in getting a job after graduation. If possible, the borrower should attach emails, text messages, or advertisements containing the school’s misrepresentations (although this is not required). More information about this finding is here.
Court Reporting Institute (CRI)
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Misrepresentations About the Length of Time to Complete The Program, 1998-2006:
ED has granted 18 claims from former CRI students who submitted a borrower defense application and explained that CRI lied about the amount of time needed to complete their program. ED acknowledged that just two to six percent of students graduated. When submitting a borrower defense application, borrowers who experienced this misconduct should make sure to explain what school officials or advertisements told them about the length of the program when enrolling, who made those statements, what their experience was in attempting to complete the program, whether or not they completed the program, what they would have done had they known that only two to six percent of students graduated, and how they were otherwise harmed by the school’s conduct. If possible, the borrower should attach emails, text messages, or advertisements containing the school’s claims about how long the program would take and any documents that demonstrate how difficult it was to complete the program (although this is not required). ED will discharge 100% of the loans of borrowers who successfully assert this finding.
What should borrowers do if they attended one of the above schools and already submitted a borrower defense application?
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If a borrower’s application alleged claims covered by one of the above findings and the application was denied:
The borrower should seek out the help of a student loan attorney. An attorney can help the borrower figure out whether to submit a new application or to try to request a reconsideration of the denial. Additionally, borrowers who applied for relief before October 2019 or who received denials between December 2019 and October 2020 are members of the class-action lawsuit Sweet v. Cardona, which is being litigated by the Project on Predatory Student Lending. That lawsuit challenges ED’s failure to decide borrower defense applications and the unexplained mass denials ED began issuing in December 2019. Borrowers and advocates should watch this case to see if it resolves their applications and to determine whether they need to request a reconsideration of their denial. Borrowers might also consider whether they are eligible for cancellation via a closed school discharge (for example, many ITT students who did not graduate are newly eligible for closed school discharges), a false certification discharge, or a total and permanent disability discharge and apply for that relief instead.
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If a borrower experienced misconduct covered by one of the above findings but did not include those allegations in a borrower defense application he or she already submitted:
The borrower should consider submitting a second borrower defense application that raises the misconduct covered by the findings and should review the information above regarding what information to include in the application.
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If a borrower’s application alleged claims covered by one of the above findings but the borrower has not been notified of a decision on the application:
The borrower may contact ED’s borrower defense hotline at 1-855-279-6207 to ask about the status of their application. There is often a delay between when ED announces a new borrower defense finding and when the relevant applications are approved and borrowers are notified.
The Bottom Line
While the Department’s recent announcement of additional borrower defense findings is encouraging, too many borrowers are still waiting for relief. We anticipate that ED will continue to announce more findings. But, we hope that it will begin issuing group discharges so that borrowers who do not know they can apply for a discharge can finally get much-needed relief. Unless and until that happens, borrowers harmed by even widely documented and found school misconduct must apply for relief to get their loans discharged, and borrowers who attended schools that are the subject of existing misconduct findings should understand those findings to increase their chances of accessing relief.
