BORROWER DEFENSE APPLICATION AND PROCESS

Project on Predatory Student Lending

ALERT

THE DEPARTMENT OF EDUCATION ANNOUNCED IT WILL TAKE ACTION TO HELP SOME BORROWERS DURING THE CORONAVIRUS EMERGENCY. FOR UPDATES, SEE THE DEPARTMENT'S WEBSITE AND THE NATIONAL CONSUMER LAW CENTER'S STUDENT LOAN BORROWER ASSISTANCE WEBSITE.

Borrower Defense Process and Decisions

1. When will the Department decide my borrower defense application?

We don’t know when you will get a decision on your borrower defense application. We do not have information about individual borrower defense applications. In the Sweet v. DeVos lawsuit,  we challenge how long the Department has taken to make decisions. If you would like an update on your borrower defense application, please call the Department’s borrower defense hotline at 855-279-6207 (open from 8 a.m. to 8 p.m. ET Monday through Friday) and ask about the status of your application.

2. Will the Department fix my credit report when I file a borrower defense? What about after my borrower defense application is granted?

We do not know what actions the Department will take regarding credit reporting, but we will update this page if we learn more.  

3. I have not yet received a decision on my borrower defense application and I’m not sure about the status of my loans. What are my options?

We don’t know when you will get a decision on your borrower defense application. While you are waiting, you can put your loan accounts on hold by requesting loan forbearance or stopped collection. In fact, the Department is supposed to place your loans in forbearance or stopped collection status unless you opt out. However, it is always a good idea to verify your status. Your loans should stay in this status until you get a decision, but it is a good idea to call your loan servicer to make sure.

If you aren’t sure what your forbearance status is, you should call the borrower defense hotline at 855-279-6207 (open from 8 a.m. to 8 p.m. ET Monday through Friday) and ask about your loan status. You can also check with your loan servicer. It’s not too late if you didn’t request forbearance or stopped collection when you first applied for borrower defense. You can still call your loan servicer or holder and ask to change your account status.

If you do not want to request forbearance or stopped collection, see the Repayment and Getting Out of Default section below for information to help you with repayment or getting out of default.

If you are not sure who your loan servicer is, you can look up this information at the National Student Loan Data System (NSLDS) website or by calling 1-800-4-FED-AID. There is also a separate section of the Department’s web site on servicing and collections.

You can follow these steps to get a copy of your NSLDS loan summary information:

1. Go to the Federal Student Aid Website: studentaid.gov

2. Click “Log In”

3. You are now on the Login page. Input your FSA ID Username and Password and then click Log In.

4. If you have an FSA ID, skip to step number 6. If you do not have a FSA ID, click create an account.

5. You are now on the Create an FSA ID page. Fill out the form and click Continue. This will take you through a series of steps to set up the security of your profile.

6. Once you have accessed your account, you will be directed to the Account Dashboard page.

7. You will see “My Aid” to the left above the blue and green circle(s) with your loan and/or grant amounts. Click “View Details” to right of the circles.

8. You will now be at the “Aid Summary” screen.

  • Scroll toward the bottom of the “Aid Summary” page to “Loan Types”
  • Expanding each Loan Type to see how many and what kind of loans you have.

 

9. To find who your servicer is, keep scrolling past Loan Types, to “Loan Breakdown.” You will see the name of your servicer on the left-hand side. For each loan, you can click “view details” to get more information about the loan. You may have different servicers for different federal loans.

 

 

4. How do I figure out who my loan servicer is so that I can check on the repayment status of my loans?

If you are not sure who your loan servicer is, you can look up this information at the National Student Loan Data System (NSLDS) website or by calling 1-800-4-FED-AID. There is also a separate section of the Department’s web site on servicing and collections.

You can follow these steps to get a copy of your NSLDS loan summary information:

1. Go to the Federal Student AidWebsite: studentaid.gov

2. Click “Log In”

3. You are now on the Login page. Input your FSA ID Username and Password and then click Log In.

4. If you have an FSA ID, skip to step number 6. If you do not have a FSA ID, click create an account.

5. You are now on the Create an FSA ID page. Fill out the form and click Continue. This will take you through a series of steps to set up the security of your profile.

6. Once you have accessed your account, you will be directed to the Account Dashboard page.

7. You will see “My Aid” to the left above the blue and green circle(s) with your loan and/or grant amounts. Click “View Details” to right of the circles.

8. You will now be at the “Aid Summary” screen.

  • Scroll toward the bottom of the “Aid Summary” page to “Loan Types”
  • Expanding each Loan Type to see how many and what kind of loans you have.

9. To find who your servicer is, keep scrolling past Loan Types, to “Loan Breakdown.” You will see the name of your servicer on the left-hand side. For each loan, you can click “view details” to get more information about the loan. You may have different servicers for different federal loans.

5. Will interest accrue while my borrower defense is pending?

Yes, interest will accrue while your borrower defense application is pending. The Department has said a number of different things about whether it will waive this interest, and we will post more information when we know more.

6. How can I get a copy of my borrower defense application?

You can check with your loan servicer to see if they have a copy. (see Question 4 above for tips if you aren’t sure who your servicer is). If you submitted the application through another organization such as the Debt Collective, you can check with them to see if they have a copy.

You could also try submitting a Privacy Act request to the Department of Education requesting a copy of your borrower defense application. The Department’s website has more information about how to do this. You might also be able to get a copy of the application if you get a decision and decide to request reconsideration, but you should not count on this. You should try to get a copy before the Department issues a decision if possible.

7. Are there other ways to get my loan discharged besides borrower defense?

Yes. The Student Loan Borrower Assistance web site has information about the range of other discharge options. Some of these options are related to your school experience. For example, you may be eligible for false certification discharge if did you not have a high school diploma or G.E.D. when you enrolled. With some important exceptions, this discharge is available for borrowers who enrolled before July 2012. If you attended a school that closed while you were attending, or if you withdrew up to 120 days before the school closed, you may qualify for a closed school discharge. Some discharges are not related to your school experience.  For example, you are eligible for a discharge if you are totally and permanently disabled or if you have a Direct Loan and work in a public service job full-time for ten years.

8. Am I eligible for these discharges if I have a parent PLUS loan?

For most of the discharges, yes. Some, such as disability discharge, only apply to a parent PLUS borrower based on your own disability, not the disability of your child.

9. I have a Direct Loan and I received a denial of my borrower defense application. What are my options?

You can request reconsideration or you can challenge the decision in court. We will post more information about requesting a reconsideration as more information becomes available and the Department clarifies the process.

10. I have a Direct Loan and my application was approved, but I did not get 100% relief. What are my options?

You can request reconsideration or you can challenge the decision in court. We will post more information about requesting a reconsideration as more information becomes available and the Department clarifies the process.

11. In what circumstances can I submit a new borrower defense application?

You can submit a new application if you have claims that you did not describe in the prior application. For example, you may not have submitted information about problems you had transferring credits from the school even though the school promised you would be able to transfer without any problems. You should explain your basis for the new claims and submit evidence. If you choose, you can request forbearance or stopped collection when you submit this new application.

12. What if I got a decision on a borrower defense application and I have another pending borrower defense application?

If you have another application pending and you requested forbearance or stopped collection, the loans should remain in that status until you receive decisions on all of the borrower defense applications.

If you are unsure of how many applications you have pending, you can call the borrower defense hotline at 855-279-6207 (open from 8 a.m. to 8 p.m. ET Monday through Friday) and ask them. Each application should have a claim number associated with it.

13. I do not have a Direct Loan and I received a decision on my borrower defense application.

The Department says that its decisions apply only to Direct Loans and not to Federal Family Education Loans (FFEL) or other government loans. There are separate borrower defense rights for FFEL loans, but the Department has not explained how borrowers can get relief through this separate process. We will post information for borrowers with government loans other than Direct Loans when we have it.

Please save all communications (emails and letters) from the Department of Education, including any decision on your borrower defense application, for your records.

14. Does this borrower defense process apply to private student loans?

No. The process we describe in these FAQs is for federal government loans only. You may be able to raise similar claims for private loans. If you refinance your federal student loans with a private refinance loan company, you will convert your federal student loans into private loans. For more information about borrower defense eligibility, visit this webpage.

15. I want to submit a request for reconsideration of the Department’s decision, but I’m concerned about what will happen to my loans while I’m waiting for a decision. What are my options?

We are working on providing an answer to this question. Please check back soon for more information.

Loans Not in Default

 

If you were not in default, your loan(s) will go into repayment while the Department is considering your request for reconsideration. It is very important that you check with your servicer and ask about affordable repayment options. You might also want to consider a short-term way to postpone your loan payment such as deferment or forbearance.

If you are not sure who your loan servicer is, you can look up this information at the National Student Loan Data System web site or by calling 1-800-4-FED-AID.   There is a separate section of the Department’s web site on servicing and collections.  (See Question 4 above for more information).

You can find out more about all of these repayment options on the Department of Education website and the National Consumer Law Center’s Student Loan Borrower Assistance website.

You should start thinking about repayment options right away because your loans will likely go into repayment within 30 to 60 days of the (although you should check if the Department is offering assistance to borrowers during the Coronavirus on the Department’s site and on the National Consumer Law Center’s Student Loan Borrower Assistance Site).

Loans in Default

If you were in default before you submitted your defense to repayment application, your loan will likely go back into default while the Department considers the reconsideration. This is a serious situation because you will be subject to the government’s powerful collection tools including tax offset and administrative wage garnishment.

You can stop the collection by getting out of default. Rehabilitation is the best way to get out of default without possibly impacting your borrower defense application. Be aware that this process usually takes nine months. If collection starts in the meantime, you should consider stopping or at least reducing the collection by requesting a hearing and showing that the collection is a financial hardship for you. The hardship process is clearly available if you are facing garnishment. It should also be available if you are facing offset, but the standard for proving hardship is generally higher when you are facing offset than when you are facing wage garnishment.

You can also get out of default through consolidation, but there are potential risks to this choice. If you have Direct Loans, consolidating out of default while a reconsideration is pending may mean that you have to submit a new application and start all over again. If you have a FFEL or Perkins loan, you may lose certain rights such as the ability to request relief through a separate process that is only for borrowers with these loans. We will post more information if the Department provides more clarity.