![]() This July, new federal regulations will go into effect. ![]() The Education Department has also recently published detailed guidance outlining the types of school misconduct that can give rise to a Borrower Defense claim the guidance also provides helpful tips for strengthening a borrower’s application and increasing the likelihood of approval. The Education Department will determine eligibility for relief on a case-by-case basis.īorrowers can review the Borrower Defense application via the Education Department’s online portal. However, any borrower can submit a Borrower Defense to Repayment application if they were misled or otherwise defrauded by their school. Borrowers Not Covered By Settlement Can Still Apply For Student Loan Forgiveness Through Borrower Defenseīorrowers who are neither class members nor post-class applicants are not covered by the Sweet v. “If the Department fails to provide any Post-Class Applicants with a decision during that time period, then they will receive Full Settlement Relief” - effectively converting them into a member of the “automatic discharge group” and entitling them to student loan forgiveness and other associated debt relief. “Under the settlement, Post-Class Applicants will receive decisions on their applications within 36 months” of the settlement agreement’s effective date, according to the Project on Predatory Student Lending. Cardona settlement agreement was approved by the court on November 16, 2022, are considered “post-class applicants.” These borrowers are not entitled to automatic relief under the settlement agreement, regardless of the school that they attended. Those who submitted a Borrower Defense to Repayment application after June 22, 2022, but before the Sweet v. Post-Class Applicants Could Receive Student Loan Forgiveness Under Settlement Under this procedure, the Education Department will “accept all allegations in the application as true will not require further supporting evidence will not require proof of reliance and will not apply any statute of limitations,” according to the Project on Predatory Student Lending. ![]() For applications submitted from January 1, 2021, through June 22, 2022, within 30 months of the effective date.īorrowers in this “decision group” will also be entitled to a “streamlined” Borrower Defense application review procedure.For applications submitted from January 1, 2020, to December 31, 2020, within 24 months of the effective date and.For applications submitted from January 1, 2019, to December 31, 2019, within 18 months of the effective date.For applications submitted from January 1, 2018, to December 31, 2018, within 12 months of the effective date.For Borrower Defense applications submitted on or before December 31, 2017, within six months of the effective date of the settlement agreement.These class members, which together comprise the “decision group,” will receive an individual decision on their eligibility for settlement relief in accordance with the below timeline, as outlined by the Project on Predatory Student Lending, the organization representing the class of student loan borrowers: Those who submitted a Borrower Defense application prior to June 22, 2022, but did not attend one of the schools on the list, could still receive relief under the settlement. Other Class Members Could Receive Student Loan Forgiveness Under Settlement The three schools are Lincoln Educational Services Corp., American National University, and Everglades College. Notably, settlement relief for borrowers who attended one of the three intervenor schools that challenged the agreement is still on hold while those schools appeal to a higher federal court. The Education Department will issue the relief on a rolling basis over a one-year period. These borrowers will receive automatic student loan forgiveness for their applicable federal student loans, as well as refunds of past payments and credit repair for negative credit reporting associated with relevant delinquent accounts.
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