As a part of the settlement reached in the Sweet v. Cardona litigation, the Department of Education (ED) is sending schools notice of borrower defense applications received from June 23, 2022, to Nov. 15, 2022. The Sweet v. Cardona settlement requires ED to adjudicate these applications under the 2016 Regulation. That regulation requires ED to notify schools of all applications before they are substantively reviewed. Schools have the option to respond to the notices, and there is no negative inference against a school if it does not respond. This Electronic Announcement explains the notification and adjudication process under the 2016 Regulation. It also discusses the separate recoupment process, which includes its own notification and response components, if ED approves applications and seeks to recoup the cost of the discharged loans.
The Borrower Defense Process
The 2016 Regulation requires ED to notify schools of all borrower defense applications filed by its former or current students and provides an optional opportunity for the school to respond before adjudication. Such notification occurs prior to any substantive review of the application. ED notifies schools by sending the school the borrower’s application form. ED’s policy is to provide schools that wish to respond 60 days from the date the school receives the notification. A nonresponse does not create an inference in favor of the borrower.
