How Borrower Defense To Repayment Works: A Complete Guide

By Mentor Staff | Edited By Mentor Staff

Updated On October 8, 2022

Editorial Note: This content is based solely on the author's opinions and is not provided, approved, endorsed or reviewed by any financial institution or partner.

How do we make money? The products featured on this website are from our partners who compensate us. This may impact which companies we review, the products we evaluate, and where and how a product appears on a page. We receive compensation from a partner when you apply for and receive a product through Mentor. This helps us to support our website, offer free content, tools and calculators, and continue to be one of the leading sources on personal finance.

Borrower defense to repayment gives student loan forgiveness to student loan borrowers who were defrauded by their schools or whose school closed before they earned a degree. However, it’s important to understand the details about borrower defense to repayment to learn if you can qualify for student loan relief.

Top Picks For Student Loan Refinancing

December 2022

Variable APR ?APR, or Annual Percentage Rate, is the price you pay to borrow money. Variable APR means that your interest rate can fluctuate over time, which can increase or decrease your monthly student loan payment. Typically, a variable-rate loan has a lower introductory rate than a fixed-loan rate loan. Variable APR includes a 0.25% discount when you enroll in autopay.
Fixed APR ?APR, or Annual Percentage Rate, is the price you pay to borrow money. Fixed APR means that your interest rate will always stay the same. Even if interest rates change, your interest rate or monthly payment will not. Fixed APR includes a 0.25% discount when you enroll in autopay.
APR
4.49% - 8.99%
4.49% - 8.99%
4.49% - 8.99%

View Details

on SoFi's website

Overview

Variable APR:
4.49% - 8.99%
Fixed APR:
4.49% - 8.99%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000 ($10,000 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states
Hardship Deferment:
Yes
Co-signer Option:
Yes
3.99% - 8.29%
4.39% - 8.99%
3.99% - 8.99%

View Details

on Earnest's website

Overview

Variable APR:
3.99% - 8.29%
Fixed APR:
4.39% - 8.99%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5-20 years
Borrower Residency:
All States except NV
Hardship Deferment:
Yes
Co-signer Option:
No
3.99% - 8.29%
4.39% - 8.99%
3.99% - 8.99%

View Details

on NaviRefi's website

Overview

Variable APR:
3.99% - 8.29%
Fixed APR:
4.39% - 8.99%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,001 ($10,001 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5-20 years
Borrower Residency:
All States except NV
Hardship Deferment:
Yes
Co-signer Option:
No
3.53% - 7.24%
4.48% - 7.29%
3.53% - 7.29%

View Details

on ELFI's website

Overview

Variable APR:
3.53% - 7.24%
Fixed APR:
4.48% - 7.29%
Minimum Credit Score:
680
Minimum Income:
$35,000
Fees:
None
Minimum Loan Amount:
$10,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All States
Hardship Deferment:
Yes
Co-signer Option:
Yes
2.50% - 8.65%
3.99% - 8.49%
2.50% - 8.65%

View Details

on Splash's website

Overview

Variable APR:
2.50% - 8.65%
Fixed APR:
3.99% - 8.49%
Minimum Credit Score:
640
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5 – 25 years
Borrower Residency:
All states
Hardship Deferment:
Varies
Co-signer Option:
No
5.09% - 11.67%
5.39% - 11.87%
5.09% - 11.87%

View Details

on Citizens' website

Overview

Variable APR:
5.09% - 11.67%
Fixed APR:
5.39% - 11.87%
Minimum Credit Score:
Not disclosed
Minimum Income:
$24,000
Fees:
No prepayment or origination fees
Minimum Loan Amount:
$10,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states
Hardship Deferment:
Yes
Co-signer Option:
Yes
2.50% - 6.80%
4.49% - 6.90%
2.50% - 6.90%

View Details

on Laurel Road's website

Overview

Variable APR:
2.50% - 6.80%
Fixed APR:
4.49% - 6.90%
Minimum Credit Score:
660
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All States
Hardship Deferment:
Yes
Co-signer Option:
Yes
3.27% - 6.87%
3.99% - 10.68%
3.27% - 10.68%

View Details

on LendKey's website

Overview

Variable APR:
3.27% - 6.87%
Fixed APR:
3.99% - 10.68%
Minimum Credit Score:
680
Minimum Income:
$24,000
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states, except ME, ND, NV, RI, WV
Hardship Deferment:
Yes
Co-signer Option:
Yes
-
3.94% - 9.08%
3.94% - 9.08%

View Details

on ISL's website

Overview

Variable APR:
-
Fixed APR:
3.94% - 9.08%
Minimum Credit Score:
670
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000 ($10,000 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states, except OR and ME
Hardship Deferment:
Yes
Co-signer Option:
Yes

In this complete guide to borrower defense to repayment, we will discuss:

What is borrower defense to repayment?

Borrower defense to student loan repayment is a federal rule created in 2016 during the Obama administration that helps student loan borrowers get student loan forgiveness for their federal student loans.

Both student loan borrowers and Parent PLUS Loan borrowers can get their federal student loan debt cancelled if they were defrauded by their school or their schools closed before a degree could be earned.

The fraud must relate directly to the student loans borrowed or the education that required financial aid. Specifically, the school must have engaged in deceptive or misleading conduct in violation of state law.

Examples of borrower defense to repayment claims include misrepresentations made by your school regarding:

  • Cost of the program
  • Accreditation of the school
  • Employment prospects
  • Ability to transfer credits
  • Career services offered

How to qualify for borrower defense and get student loan forgiveness

To qualify for get student loan forgiveness, make sure that your student loans are eligible.

Borrower defense requires that you have Direct Loans, which include federal student loans such as Stafford Loans and Subsidized or Unsubsidized Student Loans, for example. Importantly, you must have borrowed the student loans to pay education costs at the school against whom you’re making a claim.

If you have a FFEL or Perkins Loan, these federal student loans aren’t eligible. However, you can consolidate FFEL or Perkins Loans into a Direct Consolidation Loan, which is eligible.

If you’re unsure if your student loans qualify, then log in to Federal Student Aid with your FSA ID to check which student loans you have.

How do you apply for borrower defense to repayment?

You may be wondering, “How do you apply for borrower defense to repayment?”

To apply, submit an application online. If you have questions, you can call the U.S. Department of Education hotline at 1-855-279-6207 Monday through Friday from 8 a.m. to 8 p.m. Eastern time.

The application takes 30 minutes to complete, and you will need the following documentation:

  • Federal Student Aid (FSA) ID and password
  • School name and program of study
  • Your enrollment dates
  • Documentation to support why you believe you qualify and to demonstrate financial harm to you

According to the U.S. Department of Education, you should apply to get student loan forgiveness if:

  • attended a school that you believe misled you or engaged in other misconduct, or
  • can demonstrate that the school violated state law related to your student loan or to the educational services provided.

When you apply, your federal student loans will be placed into temporary student loan forbearance. Once the U.S. Department of Education determines your eligibility, you will be notified of the decision by email.

If your claim is successful, then your federal student loans can be canceled partially or completely. Alternatively, if your claim is denied, your federal student loans will be taken out of forbearance and you will be financially responsible to pay off your student loans, plus any interest that accrued during student loan forbearance.

Student loan relief: examples of borrower defense claims

President Joe Biden and the U.S. Department of Education have processed a significant number of borrower defense to repayment claims. Biden has processed billions of dollars of student loan forgiveness for student loan borrowers who attended for-profit colleges.

Recent examples include:

  • Nearly $8.0 billion of student loan cancellation for 690,000 borrowers under borrower defense to student loan repayment and school closures.
  • $5.8 billion of student loan cancellation for 560,000 student loan borrowers who attended Corinthian College.
  • $238 million for 28,000 borrowers who attended Marinello Schools of Beauty.
  • $415 million for 16,000 student loan borrowers who attended DeVry, Westwood College, ITT Tech and other schools; and
  • $1.1 billion for 115,000 student loan borrowers who attended ITT Tech.

Let's mentor your money

Get the latest personal finance advice delivered directly to your inbox.