The Evolution of Borrower Defense to Repayment:

From Legal Obscurity to the Supreme Court

What Is Borrower Defense to Repayment?

Borrower Defense to Repayment (BDR) is a federal program allowing student loan borrowers to seek forgiveness if their school misled them or violated state laws. Grounded in 34 CFR § 685.206, BDR was initially a little-known clause in student loan regulations, dormant for decades until rising into national prominence.

1994: The Original Regulation

In 1994, the Department of Education added a simple clause to student loan rules allowing borrowers to assert school misconduct as a legal defense against loan repayment. However, the rule lacked definitions, processes, or enforcement mechanisms. It was rarely used and virtually unknown outside of legal and regulatory circles.

2016: Obama-Era Expansion (where most individual claims were discharged under Trump administration. 

After the collapse of Corinthian Colleges, the Obama administration issued a sweeping update to BDR:

• Introduced definitions for "substantial misrepresentation"

• Allowed for group discharges

• Removed the burden of proving intent to deceive

• Created a formal claim process

This marked the transformation of BDR into a major relief mechanism for defrauded borrowers.

2019: DeVos-Era Contraction

Under Secretary Betsy DeVos, the Department reversed many of the Obama-era reforms:

• Narrowed the definition of misrepresentation

• Required proof of financial harm

• Enforced a 3-year statute of limitations

• Eliminated group claims

Though Congress passed a resolution to block the rule, President Trump vetoed it, and the more restrictive 2019 version took effect in July 2020.

2019–2022: Claims Delayed, Legal Battles Begin

During the DeVos era, the Department slowed or stopped processing BDR claims, leading to a lawsuit: Sweet v. DeVos, later Sweet v. Cardona. Plaintiffs argued that the Department was unlawfully stalling legitimate applications.

2022: Historic Settlement

In 2022, the Biden administration reached a settlement in Sweet v. Cardona, agreeing to:

• Forgive $6 billion in loans

• Provide automatic discharges to borrowers from dozens of listed schools (e.g., DeVry, ITT Tech, University of Phoenix)

• Revert to the more generous 2016 rules for claim processing

This resulted in a flood of new claims and brought renewed urgency to the BDR program.

January 2025: Supreme Court Review

In a major legal development, opponents of the Sweet v. Cardona settlement escalated the case to the U.S. Supreme Court in January 2025. As of that moment, the future of Borrower Defense to Repayment hangs in legal limbo.

No new rules have taken effect since, and with the program's path forward depending on the outcome of the Supreme Court's review, that review was paused by the Trump administration while proposing the One Big Beautiful Bill. 

Internal Links:

• Borrower Defense program overview

• Forgiveness options by school

• Other discharge programs

• Public Service Loan Forgiveness

Start your loan relief request today or Speak with a specialist now to check if your school qualifies.