The U.S. Department of Education offers a lifeline for borrowers whose colleges engaged in fraud or deception. Known as Borrower Defense to Repayment, this program allows you to have your federal student loans discharged if your school misled you about job prospects, program quality, or the value of a degree.
What Is Borrower Defense?
Borrower Defense to Repayment is a federal program that cancels student loans for borrowers who were victims of illegal or misleading practices by their schools. It applies to Direct Loans and Federal Family Education Loans (FFEL) held by the Department of Education.
The Five Legal Bases for a Claim
To qualify, your school must have violated state law or made a false statement that you relied on. The five main bases are:
- Misrepresentation – The school lied about job placement rates, accreditation, transferability of credits, or the nature of its programs.
- Breach of Contract – The school failed to deliver the educational services promised in enrollment agreements.
- Unjust Enrichment – The school kept your tuition despite not providing a quality education.
- State Law Violations – The school broke consumer protection laws in your state.
- Emotional Distress or Fraud – Egregious misconduct such as targeting vulnerable populations with false promises.
Schools Most Frequently Involved
Many of the largest claims have come from for-profit colleges like Corinthian Colleges, ITT Technical Institute, and DeVry University. These schools were found to have inflated job placement statistics, misrepresented program length, and engaged in aggressive, deceptive recruitment tactics.
How to File and What Happens Next
You can submit a Borrower Defense application directly at StudentAid.gov. You'll need to provide the names of the school and program, dates of attendance, and any evidence of fraud (such as emails, advertisements, or recorded statements).
Once filed, the Department of Education investigates your claim. If approved, they may discharge your entire loan balance and refund any payments you made after the discharge date. They also remove negative credit history related to the loan.
Sweet v. Cardona and Automatic Relief
In a landmark class-action settlement known as Sweet v. Cardona, over 200,000 borrowers who attended specific schools (including many Corinthian and ITT Tech campuses) received automatic relief. If your school was on the settlement list, you may not even need to apply — the Department will process your discharge without a formal claim.
What Relief Looks Like — and What to Do Now
Relief means full discharge of your federal student loans and removal of any related credit damage. You should check your loans' current status and, if unsure whether your school is eligible, file a claim as soon as possible. The process is free, and you do not need a lawyer.
For more details, visit the Department's Borrower Defense page at StudentAid.gov.