Consumer complaint received 2025-10-05 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Struggling to repay your loan — Problem with forgiveness, cancellation, or discharge
Company: MOHELA
State: CA

Complaint narrative:
I respectfully submit this complaint and request for CFPB action regarding the Department of Educations failure to issue a decision on my Borrower Defense to Repayment ( BDR ) application, which I submitted via XXXX in XX/XX/2025. The institution at issue is XXXX XXXX  ( now operating under XXXX XXXX  XXXX ), and my BDR claim alleges fraudulent inducement, false marketing, aggressive recruitment tactics, and misleading representations of job placement and accreditation. 

Because of the serious misconduct by XXXX and the DOEs delay, I ask the CFPB to investigate, press the DOE to act, and ensure my loans are cancelled and credit reporting is corrected under the applicable laws and regulations.

Factual & Legal Grounds 1. Delay and Agency Inaction in BDR Processing Under the Sweet class-action ( originally Sweet v. DeVos, then Sweet v. Cardona, now Sweet v. McMahon ) , the Department of Education has agreed to implement a streamlined system to decide pending BDR claims and to provide relief for class members.

Higher Ed Dive +3 Federal Student Aid +3 Federal Student Aid +3 Yet despite settlement obligations and public pressure, delays persist : class members, including many with institutions like XXXX, still await decisions beyond a reasonable timeframe.

Higher Ed Dive +2 Federal Student Aid +2 My application submitted in XX/XX/2025 ( well after the XXXX process existed ) remains unanswered. This delay constitutes a failure to act in a timely fashion and deprives me of meaningful adjudication of a valid claim. 

2. Misconduct by XXXX / XXXX : Basis for Borrower Defense My claim is grounded on the following misconduct by XXXX ( now under Purdues umbrella ) : False, misleading marketing and inflated job placement claims : XXXX has been publicly accused of exaggerating job outcomes, overstating program benefits, and failing to deliver promised career services.

The Century Foundation +3 Debt Collective +3 Veterans Education Success +3 Deceptive recruiting and aggressive sales tactics : In multiple states, XXXX settled claims regarding harassing sales tactics and false and misleading representations to induce enrollment. 
XXXX XXXX Whistleblower / False Claims Act litigation : XXXX settled a Department of Justice case where it refunded federal aid because of allegations it knowingly requested and retained funds for courses taught by instructors who did not meet legal requirements. 
Department of Justice Regulatory scrutiny and compliance failures : XXXX had issues with failing to report program data under gainful employment rules, triggering program reviews by the Department of Education. 
Veterans Education Success +2 Higher Ed Dive +2 Continuity under XXXX XXXX XXXX XXXX : After XXXX acquired XXXX for {$1.00}, XXXX retained XXXX XXXX, marketing, advertising, and recruitment functions. 
Inside Higher Ed +3 Inside Higher Ed +3 Higher Ed Dive +3 Misleading representations during acquisition : XXXX officials presented XXXX as having clean records and ethical conduct, despite known litigation and regulatory issues, which misled oversight bodies and prospective students. 
Imgix +2 Inside Higher Ed +2 Because of this misconduct, I was fraudulently induced to enrollKaplans representations materially affected my decision, and I would not have borrowed but for their misrepresentations. 

3

. Legal and Regulatory Framework A. Borrower Defense Rights & Sweet Settlement The BDR rule ( 34 C.F.R. Part 685, Subpart N ) gives DOE authority to cancel federal loans if a school misled or defrauded a student. The Sweet settlement aims to remedy systemic delays and grant relief to
borrowers with pending claims.

Credible +4 Federal Student Aid +4 Federal Student Aid +4 Under the settlement, DOE is obligated to issue decisions, provide discharges, and repair credit
for eligible borrowers.

Project on Predatory Student Lending +3 Federal Student Aid +3 Federal Student Aid +3 B. Consumer Protection / Enforcement Jurisdiction The CFPB has authority over consumer financial products and practices, including federal student loans insofar as they affect credit reporting, collection actions, and unfair or
abusive practices.

C. Credit Reporting & Fairness Concerns If my loans remain on credit reports or are being collected while my BDR claim is pending, there is a risk of harm to my credit standing, contrary to expectations of fairness and due process.

Under the FCRA and other consumer protection law, reporting inaccurate, misleading, or disputed obligations constitutes a harmful practice that may warrant enforcement.

Company response to consumer: In progress