Defrauded borrowers’ experiences with student loan relief

When Kyle Sudhoff was trying to decide between DeVry University and the University of Missouri, DeVry’s promises of job placement and a high starting salary after graduation sealed the deal.

But when he graduated in 2011 with a degree in technical management, those promises didn’t pan out. Months passed and Sudhoff still couldn’t find a job, even with the help of the school’s placement office. Finally, with payments on his $35,000 in student loan debt due, Sudhoff took a job as an operations coordinator at a manufacturing company that paid $15 an hour, far less than the starting salaries of more than $50,000 that DeVry had announced.

“It was a lot less than I thought I would make upon graduation,” Sudhoff says. “I made the decision to go there based on the expected job placement in my field and ultimately that didn’t happen.”

But that’s life, thought the now 34-year-old. And for the next few years, she forgot about DeVry and his broken promises and paid off her $380 student loan every month while she looked for better-paying work and struggled to pay her bills. Then, while perusing Reddit one day in 2017, he found information about a federal program called Borrower Defense for Repayment (BDTR), which forgives the student loan debt of borrowers who were defrauded by their schools.

The U.S. Department of Education has found that DeVry has “repeatedly misled prospective students across the country,” so Sudhoff filled out the application to cancel his debt, not thinking much would come of it. And he did nothing, until February 2022, when he received an email saying his loans would be written off. Even so, the balance remained, until this month. Not only is all of his debt gone, a balance of about $22,000, but Sudhoff will receive a refund of the $13,000 he has paid on his loans since graduation.

“It’s a little surreal,” Sudhoff says of having his loans canceled after five years of waiting. “I was hoping for the best, but this was not something I was expecting at all.”

Defrauded borrowers finally get relief

The borrower defense program is different from other loan forgiveness programs, including Biden’s recently announced blanket write-off and public service loan forgiveness.

To qualify for BDTR, applicants must be able to prove that the school they attended misled them or violated state consumer protection laws. Borrowers who were not defrauded should not apply for BDTR; doing so will only delay the process for those who are actually eligible and will not get ineligible borrowers forgiven for their own loans any faster.

Delinquent borrowers can fill out an application on the federal student aid website to discharge their federal student loans. Private loans and other loans from programs administered by federal or state agencies, including loans from the Federal Family Education Loan Program, do not count toward forgiveness.

Sudhoff says it took a while to fill out the form — she had to search online for DeVry ads in 2009 that showed how they duped prospective students — but it was worth the effort. He advises anyone who attended a predator school to apply, even if they have to hire a lawyer to help them with the paperwork. “I would never expect my case to be approved or my loans to be zero,” he says. “Fill out an application as soon as you can.”

BDTR was put on ice under the Trump administration. In fact, then-Secretary of Education Betsy DeVos tried to tighten the standard for defrauded borrowers seeking forgiveness, and a federal judge found that she was illegally denying the application of the cancellation rules. lation of program debts.

The Biden administration has been working to reverse this. It has also been investigating predatory schools and forgiving borrowers’ loan debt without requiring an application process. So far, that includes group discharges for people who attended Westwood College, ITT Technical Institute, Corinthian College and Marinello Schools of Beauty, among others.

As of late August, the administration has unloaded about $14.5 billion through the BDTR program.

In addition, the US Department of Education recently announced a borrower defense claims settlement Sweet v. cardona which will provide hundreds of thousands of defrauded student loan borrowers with $7.5 billion in debt relief.

The settlement has yet to be approved, but if it is, borrowers who applied for BDTR before June 2022 and attended any of the 153 mostly for-profit colleges will receive student loan forgiveness, and repayments of the payments you have made on your loans and black marks are removed from your debt credit reports.

For Sudhoff, the discharge provides peace of mind, especially since she is recently married and has a six-month-old daughter.

“I’m very lucky,” he says. “The money I’m getting back will come in handy. It’s a big relief.”

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