Carlos Lopez By Carlos Lopez

Training & Education · Student Loans

Borrower Defense to Repayment in 2026: Which Rules Actually Apply Now

If your school closed or defrauded you, you may be able to get your federal student loans discharged — but the rules governing that process changed significantly in 2025, and older guidance online may point you to a standard that's no longer in effect.

The 2019 Rules Govern Now, Not the 2022 Rules

Borrower defense to repayment lets federal student loan borrowers seek discharge of their loans if their school engaged in misconduct — misrepresentation, fraud, or a violation of state law that caused them financial harm. The Department of Education has issued several different versions of the rules governing this process, and which version applies has changed significantly and recently.

The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, provided that the borrower-friendly 2022 borrower defense rule "shall not be in effect" for loans originating before July 1, 2035, and restored the stricter 2019 regulations as the governing standard for loans first disbursed on or after July 1, 2020. The Supreme Court affirmed dismissal of a challenge to this rollback on August 11, 2025. In practical terms: if you're applying for borrower defense now, expect your claim to be evaluated under the 2019 standard, which requires you to prove your school misrepresented something material and that the misrepresentation caused you financial harm — a higher bar than the 2022 rule would have set, which allowed broader group discharges and a lower burden of proof in some circumstances.

The Sweet Settlement Only Covers a Specific Claim Window

Separately, the Sweet v. McMahon settlement (formerly Sweet v. Cardona) covers borrower defense claims filed between June 23 and November 15, 2022 specifically — under that settlement, the Department agreed to issue final decisions on these "post-class applicant" claims by January 28, 2026, or borrowers would be entitled to automatic full relief. As of early 2026, the Department had not met this deadline for most claims and sought an 18-month extension, which the district court largely denied — this litigation remains unresolved as of this writing.

If your claim was filed on or after November 16, 2022, it falls outside the Sweet settlement entirely and is being evaluated as a standard claim under current regulations. The Department resumed sending borrower defense claim notices to institutions in March 2026 for this category of claims, confirming they're being actively processed, separate from the Sweet litigation.

How to Apply

  1. Download the borrower defense application form from the Department of Education, or complete it online if that option is available at the time you apply.
  2. The application covers: your personal information, school information, other forgiveness options already pursued, a description of the school's alleged fraudulent activity, a description of your financial harm, and a forbearance request.
  3. Request forbearance at the same time you submit your claim — this pauses your payments and prevents default while your claim is under review, though interest continues to accrue.
  4. Gather specific evidence of misrepresentation: marketing materials, enrollment agreements, communications with school staff, and anything showing what was promised versus what was actually delivered.
  5. Save a complete copy of your submitted application and any confirmation of receipt.

Processing has been slow, and staffing reductions at the Department in 2025 have contributed to further delays — plan for a long wait and keep records of your submission date.

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