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# Department of Education Announces Action to Streamline Borrower Defense Relief Process

# Department of Education Announces Action to Streamline Borrower Defense Relief Process

March 18, 2021

**Contact:  **press@ed.gov

                                    -        
Today, the U.S. Department of Education  (Department) announced it will streamline debt relief determinations for  borrowers with claims approved to date that their institution engaged in  certain misconduct. The Department will be rescinding the formula for calculating  partial relief and adopting a streamlined approach for granting full relief  under the regulations to borrower defense claims approved to date. The  Department anticipates this change will ultimately help approximately 72,000  borrowers receive $1 billion in loan cancellation.

“Borrowers deserve a simplified and fair  path to relief when they have been harmed by their institution’s misconduct,”  said Secretary of Education Miguel Cardona. “A close review of these claims and  the associated evidence showed these borrowers have been harmed and we will  grant them a fresh start from their debt.”

Current provisions in federal law called  "borrower defense to repayment" or "borrower defense" allow  federal borrowers to seek cancellation of their William D. Ford Direct Loan  (Direct Loan) Program loans if their institution engaged in certain misconduct.  Beginning today, the Department will ensure that borrowers with approved  borrower defense claims to date will have a streamlined path to receiving full  loan discharges. This includes borrowers with previously approved claims that  received less than a full loan discharge.

Full relief under the regulations will  include:
- 100 percent discharge of       borrowers’ related federal student loans.
- Reimbursement of any       amounts paid on the loans, where appropriate under the regulations.
- Requests to credit       bureaus to remove any related negative credit reporting. And,
- Reinstatement of federal       student aid eligibility, if applicable.

This new approach replaces a methodology first announced in December 2019 to determine the amount of relief granted to borrowers with approved claims.  After completing a comprehensive review of that methodology, the Department  determined that it did not result in an appropriate relief determination.

This is the Department’s first step in  addressing borrower defense claims as well as the underlying regulations. The  Department will be pursuing additional actions, including re-regulation, in the  future.

The Department will begin applying this  new approach today and affected borrowers will receive notices from the  Department over the next several weeks with discharges following after that.  Updated information for borrowers will be posted to StudentAid.gov/borrower-defense.
   -  Tags: Student Loan ProgramsBorrower DefensePress Releases
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