Borrower Defense to Repayment
Under the law, you may be eligible for student loan forgiveness (a discharge) of the federal Direct Loans you took out to attend a school if that school committed fraud by doing something or failing to do something, or otherwise violated applicable state law related to your loans or the educational services you paid for. This can apply to you regardless of whether your school closed.
This process is called borrower defense to repayment, and the law requires borrowers to submit a claim in order to receive debt relief. Through borrower defense to repayment, you may be able to have your entire outstanding federal Direct Loan debt forgiven, and possibly be reimbursed for amounts you have already paid. Parent PLUS borrowers may also be eligible for borrower defense to repayment.
Specifically, you may be eligible for loan forgiveness if you are in one of two situations:
- You attended a Corinthian school that closed on April 27, 2015.
- You believe you were defrauded by the Corinthian school you attended or that the school otherwise engaged in actions that violated applicable state law—regardless of whether that school closed.
For-Profit Schools like itt tech, devry university and sanford brown college are one of the schools that went through several investigations between 2010 and 2016. What the investigations revealed that in some cases the colleges had over 50% dropout rate, they were overcharging students, using illegal recruitment tactics, misleading students about their accreditation, and especially job placement. Some colleges were even encouraging students to forge documents to get approved for loans they never should have gotten. At this point, these schools have cost the taxpayer around $24 billion dollars.
Here is a list of some of For-Profit closed schools.
- Anthem Career College – multiple locations in Tennessee, closed 2014
- Anthem College – multiple locations, closed in 2014
- Anthem Institute – formerly the Chubb Institute; multiple locations, closed 2014
- Briarcliffe College – Long Island, New York; a subsidiary of Career Education Corporation; closed 2016
- Brooks College – California, closed in 2008
- Brooks Institute of Photography – multiple locations, closed in 2016
- Career Colleges of America – California, closed in 2014
- Collins College – Phoenix, Arizona area
- Corinthian Colleges
- Le Cordon Bleu – multiple locations, subsidiary of Career Education Corporation; closing 2017
- Crown College – Tacoma, Washington; lost accreditation in 2007 and closed
- Dade Medical College
- [Decker College] – 2002
- Drake College of Business – New Jersey; closed 2015
- Eagle Gate College – Utah; closed 2015
- Everest College – multiple locations, a subsidiary of Corinthian Colleges, closed 2015
- Everest Institute – multiple locations, a subsidiary of Corinthian Colleges, closed 2015
- FastTrain College – Florida, closed in 2014 after FBI raid
- Gibbs College – multiple locations; closed 2009
- Harrington College of Design – a subsidiary of Career Education Corporation; closed 2016
- Heald College – multiple locations, a subsidiary of Corinthian Colleges; closed 2015
- ITT Technical Institute – all locations (closed September 6, 2016)
- Kee Business College – multiple locations in Virginia, subsidiary of Corinthian Colleges, Inc.
- Lighthouse College – closed 2015
- Metro Business College – closed 2015
- Miami-Jacobs Career College – closed 2016
- Omega Institute – closed in 2014
- Oregon Polytechnic Institute – closed 6/28/1996
- Sanford-Brown College – multiple locations; subsidiary of Career Education Corporation; not to be confused with either Stanford University or Samford University;closed 2016
- Tahlia Business Institute – Northern Alaska; closed 2016
- Trump University – New York City, New York; closed 2010
- University of Southernmost Florida – closed 2015
- Victory University – Memphis, Tennessee; closed in 2014
- Westwood College – multiple locations; closed 2016
- Wright Career College – multiple locations; closed 2016
- Yorktowne Business Institute – York, Pennsylvania; closed 2015
Closed School Discharge
If you attended a Corinthian school (itt tech, Everest, WyoTech, or Heald and more) that closed while you were attending or soon after you withdrew, you may be eligible for a closed school discharge.
A student who qualifies for a closed school discharge can receive a 100% discharge of the federal Direct Loans, Federal Family Education Loan (FFEL) Program loans, or Federal Perkins Loans they took out to attend the closed school and a reimbursement of amounts they have already paid to the Government.
You have the option of closed school loan discharge as long as:
- You did not finish your program at a Corinthian school.
- You did not already transfer your Corinthian credits to another school in a similar program (for instance, if you were taking a criminal justice program and you transferred to another criminal justice program, that would be a transfer to a similar program).
- You were attending the school when it closed, or withdrew on or after June 20, 2014. A closed school discharge normally only applies to students who withdrew (without completing their program) within 120 days of the school’s closing date, or were attending when the school closed. But for Corinthian students, the Secretary of Education has extended the timeframe to include any Corinthian student who withdrew from one of its closed schools on or after June 20, 2014.