Colleges Confounded by Flood of Borrower-Defense Claims
Katherine Knott
October 24, 2023
The Education Department is working to clear a backlog in applications for debt relief through its borrower-defense program. Colleges aren’t sure how to respond to notifications of the claims.
Colleges and universities beyond the for-profit sector are seeing a rise in the number of borrowers alleging that they were misled or defrauded by their institution, as the Education Department works to clear a backlog in claims.
Under federal borrower defense to repayment rules, those who believe they were defrauded or misled by a college can file a claim seeking relief and potentially have their loans discharged. The department doesn’t publicly release information about the claims—and colleges aren’t eager to talk about them, either. The program was rarely used until 2015 and has mostly discharged the loans of students who attended for-profit colleges.
Now, community colleges, public research universities, religious colleges and other types of institutions are hearing from the Education Department that their students have filed borrower-defense applications. A lot of them, in some cases. According to higher education groups that are hearing from colleges about the claims, one flagship public university received 80 such notices in a day, while one midsize private college has gotten 30 in a day.
