If a for-profit school misled you into taking out federal student loans, you have probably heard mixed messages this year. Some people say Borrower Defense is “dead.” Others say it is “back.” Here is the plain answer.
Yes. You can still apply for Borrower Defense to Repayment in 2026, and the application is free at StudentAid.gov/borrower-defense. But the rules that apply to you depend on when your loans were first paid out, and some people now face a strict deadline.
1. Congress set the rules for the next decade. The July 2025 budget law (often called the “One Big Beautiful Bill”) says the 2022 Borrower Defense rule does not apply to loans that first originate before July 1, 2035. It also restored the 2019 rule. Borrowers can still file. What changed is which standard is used.
2. The Department of Education restarted decisions. On March 30, 2026, the Department told schools it had resumed reviewing Borrower Defense applications that are not part of the Sweet v. McMahon settlement. Under the older rules, schools are notified first and get 60 days to respond if they want to.
3. The school side of the system is changing. Starting in October 2026, schools respond to Borrower Defense notices through FSA Partner Connect. FSA finished that switch on October 4, 2026. On October 7, it announced that it had temporarily removed the school-response function to fix a problem and would extend school response deadlines (FSA GENERAL-26-62). This affects schools, not the borrower application at StudentAid.gov, which you can still file. Some extra processing delay is possible.
The Department uses the date your loan was first disbursed (paid out):
| Loan first disbursed | Rule used | What it means in plain English |
|---|---|---|
| Before July 1, 2017 | 1994 rule | Based on whether the school’s conduct would give you a claim under your state’s law. No application deadline while you still owe the loans |
| July 1, 2017 to June 30, 2020 | 2016 rule | You show a “substantial misrepresentation” you reasonably relied on. No application deadline while you still owe the loans |
| July 1, 2020 or later | 2019 rule | Stricter standard and a 3-year filing limit |
This limit is not universal. It applies to the 2019 rule, which covers many newer loans. FSA said in March 2026 that under the 1994 and 2016 rules “there is no time bar” on applying, as long as you still have active federal student loans. Under the 2019 rule, you must file within 3 years from the date you stopped attending the school. The regulation (34 CFR 685.206(e)) also requires you to show that 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.
Watch out for consolidation. The Project on Predatory Student Lending (PPSL) reports that if you took out loans before July 1, 2020, but consolidated them into a Direct Consolidation Loan on or after July 1, 2020, the Department’s current policy is to judge your claim under the 2019 rule. That can mean a denial for missing the 3-year window. PPSL says it is investigating this policy. This is the Department’s current policy as PPSL reports it, not a court ruling, and it could change.
The 2019 rule lists examples of evidence that a school misrepresented something, including:
A bad teacher, a disappointing class, or a degree that did not pay off is usually not enough by itself. The claim has to connect a specific statement from the school to your decision to enroll or borrow. For examples of documented school misconduct, see our usable misconduct library.
Some schools had so much documented misconduct that the Department cancelled loans for whole groups of students without an application. That includes ITT Technical Institute, Corinthian Colleges (Everest, WyoTech, Heald), the Art Institutes, Westwood College, Marinello Schools of Beauty, Ashford University, and the CEHE schools (CollegeAmerica, Stevens-Henager, Independence University, California College San Diego), each for set enrollment dates. If you are covered, you should not pay anyone. PPSL’s Group Discharges page lists the schools and dates. A school finding is not a dead end if you fall outside it: if you attended outside the covered dates, or the school had a group approval limited to earlier applicants (as with DeVry and the University of Phoenix), the Department’s findings may still support an individual application.
Separately, the Sweet v. McMahon settlement covers many people who applied by November 2022. On July 17, 2026, the Ninth Circuit rejected the Department’s attempt to extend the decision deadlines for “post-class” applicants (PPSL case page).
“I’ve worked on Borrower Defense since May 2019, and 2026 is the year dates matter most,” says Aaron Hansome of Legal Touch. “Before anyone writes a single word of a claim, we look at when the loans were paid out and when the person left school. That tells you which rules you are under.”
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
FFEL or Perkins loans? Consolidating on or after July 1, 2020 can trigger the Borrower Defense 3-year limit. Learn the rules and check your dates first....
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