If you have student loans, you’re probably already familiar with the U.S. Department of Education’s (ED) Borrower Defense Loan Relief Program. But did you know that there was a lawsuit and a proposed settlement in the case of Sweet vs. Cardona could this mean that thousands more people with borrower defense claims will be able to have their eligible federal loans forgiven? Read on to learn more and see how to avoid scammers looking to cash out.
Details are not yet in place, but here’s what you need to know now:
- If your borrower defense request was pending on June 22, 2022, you don’t have to do anything else. Students who attended certain schools will have their loans canceled, along with other benefits. Otherwise, decisions will be made on a rolling basis based on when you submitted your application. See ED’s website for more details.
- If you haven’t made a Borrower’s Defense (but think you should), do it now. There are benefits to filing your Borrower’s Defense Claim before final settlement approval (which has not yet been announced, but should be soon). Find out what types of claims may be eligible for borrower defense.
Some of the names on the list of schools included in the Sweet regulations may sound familiar – and they should. The FTC also sued the University of Phoenix, DeVry, and operators of American InterContinental University and Colorado Technical University for their allegedly deceptive practices. Students who took out loans to attend these schools have secured more than $300 million in payments and debt forgiveness through these FTC actions. If you received a check from one of these settlements: you can still get your federal loans canceled through the Borrower Defense Program, so file your claim.
This settlement is not a scam. It’s true. And it’s free to apply. Remember:
- Do not pay anyone for anything related to your borrower defense claim. No one can move you in the queue, give you special access, or guarantee a successful application. Not for free, and certainly not for money. And only scammers will ask for it. And if you spot a scam, report it to the FTC: ReportFraud.ftc.gov.