Borrower Defense to Repayment: The 2026 Guide

By Aaron Hansome, Legal Touch. Working on Borrower Defense since May 2019. Last updated October 9, 2026.

Borrower Defense to Repayment is a federal program that can cancel your federal student loans if your school misled you or broke certain laws. It is run by the U.S. Department of Education, and the application is free at StudentAid.gov/borrower-defense.

This plain-English guide covers who can apply, which rules apply to your loans, what evidence helps, how to apply for free, and where group discharges and the Sweet settlement fit in. It is general information, not legal advice.

What Borrower Defense is, and what it is not

Borrower Defense (often shortened to “BD”) lets you ask the Department of Education to cancel the federal loans you took out to attend a school that misled you. If you are approved, the Department can discharge all or part of those loans, and in some cases refund payments you already made.

Borrower Defense is not:

• A general forgiveness program. It is tied to what your school did, not to your income or your job.
• A reward for a bad experience. A disappointing teacher or a degree that did not pay off is usually not enough by itself. The claim has to connect something specific the school said or did to your decision to enroll or borrow.
• Something you have to pay for. You can apply on your own for free. The FTC has warned that nobody can move you up in line or guarantee approval (FTC consumer alert).
• A way to cancel private loans. Private loans (including private refinance loans) are not covered.

Who can apply

You may be able to apply if all of these are true:

1. You have federal student loans from a school that misled you. These include Direct Loans, Direct PLUS loans (including Parent PLUS), and Direct Consolidation Loans. If you have FFEL or Perkins loans, read the FFEL section below before you do anything.
2. You still owe at least one loan from that school. The Project on Predatory Student Lending (PPSL) explains that if you already paid off the loans from that school, your application will not be accepted.
3. The school’s conduct relates to your enrollment or your loans. Parents with Parent PLUS loans can apply based on what the school told the student or the parent.

You can apply even if you are still enrolled, have no paperwork, or are in default.

Which rules apply to your loans

This is the part most people get wrong. The Department has written several versions of the Borrower Defense rules, and the one that applies depends on when each loan was first paid out (disbursed), or when it was consolidated. In July 2025, Congress kept the 2022 rule from applying to loans first originated before July 1, 2035 and put the 2019 rule back in place (Public Law 119-21, Sec. 85001).

The 3-year limit is not universal

The 3-year limit comes from the 2019 rule, which covers many newer loans. Under that rule, you must file within 3 years from the date you were no longer enrolled at the school (34 CFR 685.206(e)(6)). For older loans under the 1994 and 2016 rules, Federal Student Aid said in March 2026 that “there is no time bar” on applying, as long as you still have active federal student loans.

The 2019 rule also asks for more. You have to show the school knew its statement was false or misleading (or recklessly ignored the truth), that you reasonably relied on it, and that you lost money because of it. If you were denied under the 3-year limit, read our article on Borrower Defense denials and the 3-year rule.

Watch out for consolidation

The Department’s own application form says that if you consolidated your loans, it evaluates your application “based upon when your loan was consolidated.” PPSL reports that the Department’s current policy is to decide claims under the 2019 rule for older loans that were consolidated into a Direct Consolidation Loan on or after July 1, 2020, so a time-limit denial can follow. This is the Department’s current policy, not a settled court ruling, and PPSL says it is investigating it. If your older loans were never consolidated, do not consolidate them without getting informed advice first.

What counts as being misled

Under the 2019 rule (34 CFR 685.206(e)(3)), examples of school misrepresentations include:

• Job placement or employment rates that were very different from what the school advertised
• Licensing exam pass rates, or claims that the program would qualify you for a license, that turned out to be false
• Accreditation or program approvals the school claimed but did not have
• Promises that credits would transfer when they generally would not
• Tuition, fees, financial aid, or the total cost of the program that turned out very different from what you were told
• Claims about the school’s resources, such as clinical placements, equipment, or qualified staff

The older rules are different. The 2016 rule looks for a substantial misrepresentation you reasonably relied on, a breach of contract, or a court judgment against the school. The 1994 rule asks whether the school’s conduct would give you a claim under your state’s law. For real examples of documented school misconduct, see our usable misconduct library, and look up your school on our Borrower Defense school list.

Evidence that helps

You do not need a perfect file. PPSL’s advice is to apply even if you did not keep paperwork, and to describe what happened in as much detail as you can. Your own clear, honest account counts. These records make it stronger:

• What the school told you. Who said it, when, and where. Write it down as close to word for word as you remember.
• Marketing and enrollment records. Emails, texts, brochures, catalogs, enrollment agreements, and old web pages. Many school websites are saved on the Internet Archive’s Wayback Machine.
• Why it mattered. Explain how the statement affected your decision to enroll, stay, or borrow.
• What actually happened. Credits that would not transfer, a license you could not sit for, a job placement program that did not exist.
• Your loan history. Download your aid data from StudentAid.gov. Our guide shows how to download your Student Aid data file.
• Public findings about your school. Government findings, lawsuits, and accreditor actions can support your story. Label them for what they are. An accreditor warning, for example, is not a fraud finding.

How to apply for free

1. Log in to StudentAid.gov with your own account. Never share your FSA ID or password with anyone, including a company helping you.
2. Write down your dates. Each loan’s first disbursement date, the school, any consolidation date, and your last day at the school.
3. Check whether you are already covered by a group discharge or the Sweet settlement (see below).
4. Fill out the application at StudentAid.gov/borrower-defense, or by mail to U.S. Department of Education, Borrower Defense to Repayment, P.O. Box 1854, Monticello, KY 42633. Our free Borrower Defense DIY guide walks through the form.
5. Decide about forbearance. You can ask to pause payments while your claim is pending. Interest keeps building during that time, and it is cancelled only if you are approved. Forbearance months also do not count toward income-driven repayment forgiveness or Public Service Loan Forgiveness.
6. Keep copies of everything you send, and write down your application number. The Borrower Defense hotline is 855-279-6207.

Group discharges and the Sweet list

There is no single official “Borrower Defense list.” Two kinds of lists matter.

Group discharges. For some schools, the Department found so much misconduct that it cancelled loans for whole groups of students, with no application needed. According to PPSL’s Group Discharges page, these include Corinthian Colleges (Everest, WyoTech, Heald), ITT Technical Institute, Westwood College, Marinello Schools of Beauty, the Art Institutes, the CEHE schools (CollegeAmerica, Stevens-Henager, Independence University, California College San Diego), Ashford University, Drake College of Business, and certain Globe University and Lincoln Tech programs, each for set enrollment dates. If you are covered, you should not pay anyone. If you attended outside the covered dates, or your school had a group approval limited to earlier applicants (as with DeVry and the University of Phoenix), the Department’s findings may still support your own application.

The Sweet v. McMahon settlement. This class action settlement covers many people who applied for Borrower Defense by November 15, 2022. Its “Exhibit C” list of schools (PDF) includes schools such as the University of Phoenix, Walden, Capella, and DeVry. Applicants from June 23 to November 15, 2022 are called “post-class” applicants. The court ruled that post-class applicants with no decision by January 28, 2026 (Exhibit C schools) or April 15, 2026 (other schools) are entitled to full settlement relief, and the Ninth Circuit upheld that on July 17, 2026 (PPSL case page). See our Sweet v. McMahon settlement page for more.

If you applied after November 15, 2022, you are not in the settlement, but you can still file or pursue a regular Borrower Defense claim.

FFEL, Perkins and consolidation: go slow

Many people with older loans have Federal Family Education Loan (FFEL) or Perkins loans instead of Direct Loans. Borrower Defense discharges Direct Loans. The Department’s application says that if you are approved and some of your loans are non-Direct federal loans, it will consolidate them into a Direct Consolidation Loan “to the extent allowed by law and regulation if necessary to effectuate” the discharge.

That matters because consolidating on your own, on or after July 1, 2020, can move older loans under the 2019 rule and its 3-year limit under the Department’s current policy, as PPSL reports it. Our article on FFEL and Perkins loans and Borrower Defense consolidation explains how this works and how to check your loan types and dates. Before you consolidate anything:

• Download your loan history and note which loans are FFEL, Perkins, or Direct.
• Note who holds each loan. FFEL loans held by a private lender work differently from FFEL loans held by the Department.
• If you are working toward Public Service Loan Forgiveness or income-driven forgiveness, weigh what consolidation does to those plans too.
• Get informed advice first. A free option is your local legal aid office.

After you apply

• School response. For claims under the 1994 and 2016 rules, the Department notifies the school, which gets 60 days to respond if it chooses (FSA GENERAL-26-22). In October 2026, schools began responding through FSA Partner Connect, and on October 7 FSA said it had temporarily removed that school-response function to fix a problem (FSA GENERAL-26-62). This affects schools, not your application.
• Timing. There is no set deadline for a decision. PPSL reports a backlog of more than 200,000 applications.
• Relief. An approval can cancel all or part of the loans and may include a refund of amounts you paid. Under the 2019 rule, the decision is final within the Department.
• Taxes. IRS Revenue Procedure 2020-11 addresses the tax treatment of many closed school and Borrower Defense discharges. Ask a tax professional about your own situation.

Where to get help

Free help comes first:

• The Department of Education: the application, instructions, and the hotline at 855-279-6207.
• The New York Legal Assistance Group (NYLAG) publishes a free Borrower Defense application guide (PDF).
• PPSL publishes Borrower Defense FAQs and group discharge updates. It cannot help with individual applications.
• Veterans can contact Veterans Education Success, which offers free help to student veterans.
• Local legal aid offices can advise on legal questions, including court options.

Some people prefer paid help to organize their records and draft their application. That is what Legal Touch does. We are not a law firm, and we cannot promise any result. Before we take anyone on, we look at their dates and their school, and if a group discharge or the free StudentAid.gov route already covers them, we tell them that.

Frequently asked questions

Is Borrower Defense still available in 2026?

Yes. You can still apply for free at StudentAid.gov/borrower-defense. Which rule applies depends on your loan dates. See Is Borrower Defense Still Available in 2026?

Is there a deadline to apply?

Only for some loans. Loans under the 2019 rule (first disbursed or consolidated on or after July 1, 2020) have a 3-year limit from the date you left school. FSA says loans under the 1994 and 2016 rules have no application time bar while you still owe them.

My school is not on any list. Can I still apply?

Yes. Lists only show schools with group action or schools in the Sweet settlement. Anyone with eligible federal loans can file their own claim if the school misled them.

Do I have to stop paying my loans?

No. You can choose forbearance while your claim is pending, but interest keeps building and is cancelled only if you are approved. Forbearance months do not count toward income-driven repayment forgiveness or PSLF.

Can Parent PLUS borrowers apply?

Yes. The application covers parents who borrowed for a child who attended the school.

Should I consolidate my FFEL loans first?

Not without informed advice. Under the Department’s current policy, as reported by PPSL, consolidating older loans on or after July 1, 2020 can bring them under the 2019 rule and its 3-year limit. The application already lets the Department consolidate eligible loans if that is needed to carry out an approved discharge. See what to know about FFEL or Perkins loans before you consolidate.

Does anyone guarantee approval?

No. Only the Department of Education decides Borrower Defense claims. Be wary of anyone who promises a result, quotes a success rate, or asks for your StudentAid.gov password.

Talk it through for free

Call Legal Touch at 800-261-2946 or request a free review at defenseclaims.com. We will look at your dates and your school, and if a group discharge or the free StudentAid.gov route already covers you, we will tell you that.

Legal Touch Borrower Defense is a private company. We are not a law firm, we do not give legal advice, and we are not affiliated with the U.S. Department of Education or any government agency. You can apply for Borrower Defense on your own, for free, at StudentAid.gov/borrower-defense. Results are not guaranteed. Only the Department of Education decides Borrower Defense claims. We will never ask for your StudentAid.gov username or password.

Sources

• Public Law 119-21, Sec. 85001 (One Big Beautiful Bill Act, July 4, 2025)
• 34 CFR 685.206 and 34 CFR 685.222 (Cornell Legal Information Institute)
• U.S. Department of Education, Borrower Defense to Repayment application (PDF), OMB No. 1845-0163
• Federal Student Aid, GENERAL-26-22 (March 30, 2026) and GENERAL-26-62 (October 7, 2026)
• Project on Predatory Student Lending, Borrower Defense FAQs, Group Discharges, and Sweet v. McMahon
• Sweet settlement school list, Exhibit C (PDF)
• Federal Trade Commission, “Got student loans? Spot scams related to the Sweet lawsuit” (September 16, 2022)
• IRS, Revenue Procedure 2020-11 (PDF)
• New York Legal Assistance Group, Borrower Defense application guide (PDF)

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