Reboot Your Life: Tampa Student Loan and Bankruptcy Attorney Blog
Whoo Hoo! In a class action Sweet v. Cardona, the parties, including the Department of Education, have just announced a settlement of Borrower Defense to Repayment claims (“BDTR”). It’s still early, and we don’t yet know if this settlement will be approved by the Court or if some of the named schools will oppose it. We anticipate that the listed schools who are still in business will oppose the settlement or petition to have their school removed from the presumptive list. Here is a copy of the filed settlement agreement. So while this isn’t final, it’s certainly a huge step in the likely direction of where these BDTR applications are headed. It’s been a long time coming, and will result in much needed relief for student loan borrowers.
What should you know? Well, first of all, here is a list of schools that are presently in line for a full discharge.
For a FAQ, please go here. One of the parties who has been instrumental in obtaining this settlement, the Project on Predatory Student Lending, has prepared detailed questions and answers for those who attended these schools or have allegations of fraud under the BDTR program.
- People who apply for borrower defense after the execution date of the settlement agreement (June 22, 2022) but before the date of final approval of the settlement will not formally be part of the class. However, as part of the settlement, the Department agrees that these people will get a decision on the merits of their application within 36 months of the final effective date of the settlement, and will receive full settlement relief if the Department fails to issue a decision in that time.
So if your school is listed, please get your BDTR application filed before this settlement is approved (that could be a couple months or more, we don’t know specifically how long that will take). This will put a timeline on when the Department will issue forgiveness of 36 months. I imagine that the Biden Administration will do all that it can to rule on every BDTR application before the end of its term however. That’s roughly 2.5 yrs. If you attended one of the listed schools, it’s our belief that you will receive full forgiveness within that time frame.
For those who have already filed an application, and your school is listed, the timeline to expect the forgiveness to occur is 12 months from the approval of this settlement.
If your school is not on the list, you should still file a BDTR application if your school misled you in some way. However, you’ll want to be specific as possible with your allegations, and provide documents or proof where you can. Those applications will not receive the benefit of a presumption of wrongdoing. That doesn’t mean that you can’t win, it just means that your loans won’t be forgiven based solely upon what school you attended.
It appears from this settlement, that you do need to file an application for relief. We were encouraged by the recent Department of Education decision where Corinthian students would receive forgiveness without even filing an application. But it appears that is not going to be the case for other schools.
Here is a link to a prior blog of ours to help file your application. To assist you in filling out each section of the application, the New York Legal Assistance Group has created a guide with some helpful tips you should review before submitting your application. If you’ve been thinking about filing a BDTR application asserting that your school misled you and you relied on those false representations in taking out federal loans, but haven’t yet done so, here is where you file your BDTR application: https://studentaid.gov/borrower-defense/.
Remember, this settlement doesn’t cover private loans. If you have questions about this Sweet settlement, or have private loans, please reach out to us for a 1 on 1 consultation on what you should do to get your loans settled, discharged or forgiven if possible.
