What is Defense to Repayment?

Many people dropped out of or graduated from the dozens of schools which have recently closed. If you are one, you are probably wondering if there is anything you can do about your student loans. You should visit the Department of Education’s website by clicking here. There is more information about your options such as a Defense to Repayment.

Who Can Use Defense to Repayment?

The Defense to Repayment option can be used for anyone not enrolled at the time of the school closure. It does not matter if you dropped out or graduated. It does not matter how long ago you attended or duration This option was focused on when Corinthian schools closed. Before this time, DTR was rarely used. For Corinthian, the Department of Education attempted to create a streamlined approach to DTR. While this sounds positive, it’s problematic as the DTR regulations have never been finalized.

Federal Student Loans

Defense to Repayment would be the only option available to you if you were not a student when the school closed. If you have earned credits from completed classes and the credits can be transferred to another school which accepts the credits, you are most likely not eligible for this discharge. However, some Federal student loans may still be discharged. If you transferred the credits to another school, you are stuck with the loan and cannot request this option.

Private Loans

The Defense to Repayment option only applies to Federal student loans. Private loans are more complicated as there are no specific provisions for closed schools. Any relief available for those borrowers will be based primarily on State law. What is required for fraud? Is there an Unfair Trade Practices Act, and is it any good? Will your claim pay? For those answers, you should consult with a student loan lawyer.