New Borrower-Defense Rules Blocked
Katherine Knott
August 8, 2023
The new rules, which make it easier for a defrauded borrower to seek debt relief, apply to claims pending on July 1 or received on or after that date.
Note: This article has been corrected to reflect that the recent actions to provide relief to borrowers in Colorado was done under a previous set of borrower-defense rules, not those subject to the court’s order.)
A federal appeals court has blocked the latest version of U.S. Education Department rules that allow borrowers to apply for relief from their student debt if their college or university misled them or violated certain state laws.
Known as borrower defense to repayment, the regulations—which took effect July 1—made it easier for borrowers who were defrauded or misled by a college to seek relief and potentially see their loans discharged. The Biden administration recently used the previous set of borrower-defense rules to forgive $130 million in student loans for 7,400 borrowers who were enrolled at a for-profit college in Colorado that closed in 2020.
