How to Apply for Student-Debt Forgiveness for Victims of School Fraud -- At A Glance

How to Apply for Forgiveness

The program is open to anyone who borrowed from the government’s Direct Loan program for any institution. The Education Department explains the program. Borrowers can apply for forgiveness. (Even though each page addresses Corinthian Colleges students, the program is open to all borrowers with direct federal loans.)

What's Required to Get Forgiveness

That’s not entirely clear yet. The law says students are entitled to forgiveness of existing debt—and, possibly, reimbursement of any repaid loans—if they can show their school violated state law in getting them to take out the debt. (An example might be if a school lied in its advertisements about how many of its graduates landed jobs.) However, it’s not clear what documentation the borrower needs to prove fraud. The Education Department is currently drafting rules to clarify that. The agency has made clear that the program isn’t intended to reimburse students who simply are frustrated about their job prospects and regret taking on the debt.

The History of Borrower Defense

The program’s been in place since 1994, though it hasn’t been used much. The Education Department says that before last year, it received five applications for forgiveness—three of them granted. Higher education expert Ben Miller wrote about the history of the law in a post for the New America Foundation last year.

How Are Existing Applications Being Reviewed?

The Education Department hired a “special master” to make recommendations to the agency on existing applications, most of them tied to the collapse of Corinthian Colleges. The special master has issued two reports, here and here.