Update | Department of Education Stops Borrower Defense Denials; Reinstates Forbearance

November 23, 2020

The Department of Education has decided to stop issuing blanket denials of borrower defense to repayment applications, according to a recent filing in Sweet v. DeVos. It also said it was putting all borrowers who received blanket denials back into administrative forbearance.

The court recently denied the settlement agreement and ordered the Department of Education to provide evidence about its delay in deciding borrower defense claims, and threatened to stop (enjoin) the Department from issuing further denials. The Department voluntarily stopped the denials to stop the court from ordering an injunction. On November 23, the court ordered the Department to tell the court two weeks in advance if it intends to re-start issuing denials.

We will provide additional updates as the case moves forward.