Ineligibility notice re: borrow defense application

Borrower Defense to Repayment (DTR)
#13

I’ll be doing the following this week. As per Harvard’s page:

  1. I have a Direct Loan and I received a denial of my borrower defense application. What are my options?

You can submit a request for reconsideration if you want to challenge the denial. There is no deadline, and your loan will go into repayment or back into default (which could include the taking of your tax refund or wages) while the Department considers your request for reconsideration. (See Question 15 below for information to help you with repayment or getting out of default). Please note that the Department is saying that it will NOT put loans in forbearance while a reconsideration is pending.

If you decide to submit a request for reconsideration, you should ask for information about the reasons for the denial. You should also ask for the documents and evidence the Department used in deciding your borrower defense application. This is particularly important if the denial did not include a detailed explanation of the basis for the decision.

In addition, you should explain why the denial was wrong, including evidence supporting your application. This can be new evidence if you have any. The Department has said you cannot make new allegations without submitting a new borrower defense application, but you can provide new evidence to support the claims you made in the original application. You do not have to include new evidence. In these circumstances, you should explain why the evidence and information you previously submitted is grounds for an approval.

You should send the request for reconsideration by email or regular mail and keep a copy. The Department has not provided a specific form to fill out. You should be sure to write your name, contact information, and the borrower defense application number listed on the denial. You can call the borrower defense hotline at 855-279-6207 (open from 8 a.m. to 8 p.m. ET Monday through Friday) if you have more than one borrower defense application to make sure you are listing the correct number.

You should send the reconsideration by email to: BorrowerDefense@ed.gov or by regular mail to U.S. Department of Education, P.O. Box 1854, Monticello, KY 42633.

Please save all communications (emails and letters) from the Department of Education, including any decision on your borrower defense application, for your records.

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#14

If anyone asks for detail (as mentioned above) and gets a reply as to what their generic denials mean, please share?

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#15

@Dan_W & @Denise_J_Kent

My own sense is that you can certainly try to submit a request for reconsideration, but I personally don’t hold much hope for that option. It seems like the Department is going to try to get away with denying as many people as they can get away with denying. The most hopeful path to success will be the larger class based legal actions that folks like Harvard will eventually be able to mount, but it will be a long process. If we end up dealing with a different administration next year that would also give more hope for more discharges through DTR. I’d pour energies into making that happen.

Otherwise I think our other paths to full discharge are more fruitful, including organizing to get debt cancelled as a part of COVID related stimulus, a different administration we can fight against and get better results with, and College For All legislation.

If we are still dealing with DeVos next year the courts will likely force her to discharge more debt that she would prefer, but not as much as the law and justice requires. But a request for reconsideration will get denied more easily than the first DTR got denied I’m afraid.

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#16

@Thomas_Gokey I appreciate that.

Sure, but debt cancellation doesn’t mean much for me, and I don’t know if I have any other options. I went to Keller to try and jump-start my career into IT management, and the benefits of the degree / claims of future earning potential I was sold on never materialized / the degree made zero difference.

I had to put personal savings and retirement savings on hold for 10 years to pay off $50K in student loans, and my earnings progression continued on the same path it had been on if I had never gone to Keller at all solely on my own work and willingness to better myself on my own after Keller.

So I’m out $50K and where I would have been anyway in 2020. Not only that - but now I’m 10 years behind on family savings and retirement, as well as missing out on the incredible returns for the last 10 years my retirement accounts would have had.

So there’s no debt for me to cancel - just well over $50K of opportunity and 10 years of time lost. I asked for the original $50K because the basis it was paid on turned out to be blatantly and intentionally false - and at least it’s something to help recover my financial life, even if it’s 30% or so what it would be today if Keller hadn’t sold me on their schooling.

BoE gave me the same denial as everyone else, though.

#17

@Dan_W I’m not sure if this is good news or bad news, but even if your DTR had been approved, you wouldn’t have gotten your money back.

The DTRs are discharging remaining debts. There are a few rare exceptions where people are getting small partial refunds, but those are for special circumstances about how their DTR was handled, not past payments made before the DTR was filed.

I’m sorry that all of this happened to you. It makes me furious. Let’s fight to make sure it never happens to anyone else.

#18

What I am confused about is that it is being suggested we resubmit our claims but what is THE “proper legal claim”? If all of the documentation that we have all submitted against these schools- schools who have already been found at fault and have had confirmed legal action taken against them- what else can we say? I wish I could find somewhere this “proper legal claim” lingo and I would be all over resubmitting. One of my claims was against University of Phoenix. I find yesterday that they settled in Dec 2019 $141 million dollar claim and if you attended from 2012-2017 ?? you were able to get your loans dismissed. I graduated in 2009… are we supposed to be believe they were upstanding in 2009 but became deceptive in 2012?? What about the negative effects to my degree now on my resume? When applying for a job will the hiring manager look at where I went and think that my degree is “less than” because the school has admitted to charges and agreed on settlements. It is so frustrating to not have a voice or resources to fight any of this… I just don’t know what to do anymore. :frowning:

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#19

I think it is important for people to understand how this process is really working, rather than how it is supposed to work in some ideal world where the law and facts actually matter.

The only thing the Department of Education is looking at when someone submits a DTR is the program of study they attended at a particular school, and they dates they were there. That is literally it. The rest of the paperwork they are making you fill out is just window dressing. It literally doesn’t matter. You could submit a photo of the president of your school holding up a big sign that says “we are defrauding our students” and it wouldn’t matter.

The Department of Education already has a list of programs/schools and dates for programs that were previously found to violate the law. This was done largely through state-led investigations by AG offices, but some was Department findings from the previous administrations. DeVos & Trump would love nothing more than to deny everyone’s claim, but they can’t deny the claims for the people who attended programs that courts or the Department have already determined violated the law. So that is all they are looking at. The program you attended and the dates you were there. If that is on their list of lawbreaking programs/dates, you get at least some debt discharged. If not, they are denying the claims outright without caring at all if what you are telling them is true.

That is how this works folks. This is all about power.

They are going to try to get away with it. There will be legal challenges that work their way through the courts over the next several years. With luck, those will result in some additional discharges as the courts force the Department of Education to abide by the law to a greater degree than they currently are. But this will be a long process and a very imperfect result. Not everyone will get their debts discharged that way.

What we need to do is see DTR for what it is. It is a limited tool, that we have used to the greatest extent we can, against people who are working in bad faith who have a TON of power to ignore the law and ignore the facts and get away with it.

If we are really going to win discharges for everyone we need to think beyond the DTR process. We need to organize and build power, enough power to force mass cancelation for everyone through.

That is going to take a ton of time and a ton of work. But we can totally do it and we can win. No one is going to save us except ourselves.

7 Likes
#20

I really appreciate the candid honesty. Hard to hear and face but certainly appreciated!

#21

Hello All,

I got the same denial on 2 borrower defense applications back to back. I applied for borrower defense October 2016 and got denied May 18, 2020 for Failure to State Legal Claim and Ineligible. I called the DOE May 19 and they said I can submit my request for reconsideration or also file a “universal borrower defense application” which the person lied about. This universal application supposedly incorporates all enrollment dates not just a period of enrollment certified by ED. Today, June 10, my universal borrower defense application was denied for the same thing, Failure to State Legal Claim and Ineligible. It’s like they pressed deny again and I told them Heald College Honolulu closed down for good because its graduates were working at Taco Bell and Macy’s! I didn’t enroll at the University of Taco Bell and I put this on my borrower defense application word for word.

“…Heald College counted placements that were clearly out of the student’s field of study as in-field placements. For example, one campus (Honolulu) classified a 2011 graduate of an Accounting program as employed in the field based upon a food service job she started at Taco Bell in June 2006. Another campus counted a 2011 Business Administration graduate as placed in the field based upon a seasonal clerk position she obtained in Macy’s Shipping and Receiving Department during November 2010, which the student stated ended prior to her graduation. …”

Read it here: Feds Cite Honolulu Taco Bell Placement in $30M Fine Against Heald College > Hawaii Free Press

I’m not sure what else to do anymore because if my school closed down for fraud, all students with student loans taken out from closed schools should have their loans forgiven or erased without having to pay back on income taxes.

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#22

@Ed1979 I agree. My original borrower defense application which I filed October 2016 got denied May 18, 2020. My universal borrower defense application which I submitted May 28, 2020 got denied today June 10, 2020. I don’t think Betsy is even looking. Makes me mad considering my school closed down for fraud because Heald College Honolulu graduates were working at Taco Bell and Macys.

Well good luck to all of us hopefully a huge class action lawsuit fines Betsy and all our student loans are forgiven.

#23

So my question is, because we need to think outside the box, now that they have “falsely” denied BDs, are they closed out of their “system”? So let’s say, a new president wins and they say, ok we need to cancel the debt of BD claims of people who went to for profits, would they be able to go back and re open all of those or would they say, there is no claim to process for cancellation because they have been closed out or “resolved”? I think this is my main question.

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#24

Same for me I did Jellar graduate school for a certificate in project management… This certifi e does nothing for me and not recognized… Even though the school said they have all the opportunities… Now all I have is more debt

#25

Typo above Kellar Graduate school

#26

What if 98% of applications get denied, what then? Will we have a new lawsuit? It looks like we are headed that way. This is unfair and illegal!

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#27

@Suzie, my understanding is that the Department of Education as wide latitude for how to deal with this in the future, including the ability to process group wide discharges on their own. In other words, if we have a new president come Jan, they could reexamine all BD claims, or they could just say that everyone who attended these schools during these dates will get a discharge. They don’t need to make it so complicated. But as we saw with Obama, they make it unnecessarily complicated, and with DeVos even more so and even more cruel. Maybe Biden will be different? Or maybe we can get organized and be powerful enough to force them to be different.

@PR90057, I don’t know what the percentages will be but I think it is safe to say that DeVos is going to try to get away with denying as many people as she can, even if that means violating their rights or the law. I feel confident in saying some kind of legal challenges will be mounted against these denials, but it will take time and I’m not sure exactly what form it will take.

#28

I got the same response for my Devry Borrower Defense application and I did submit documents. All of them were denied for “Failure to State a Legal Claim.”

I don’t understand considering that Devry is known to have engaged in these practices.

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#29

I received my denial letter today and filed a BD because I attended Devry University. So now what? Will our credit be ruined while this mess continues? What are your thoughts?

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#30

@Valondran, as posted above here is an FAQ with more info about your options:

In terms of how this affects your credit, it depends on your situation. If you were previously in default before you filed DTR then it might still be affecting your credit. In that case probably the best option for you would be to call your servicer (which might end up being the default resolution group, they are very difficult to work with and hard to get on the phone, so plan to wait on hold for a long time), and go through the steps of getting on whatever income driven repayment plan offers you the lowest monthly payment. Hopefully that plan would lower your monthly payment all the way down to $0 a month. That should get your loans out of default and improve your credit.

For the time being due to COVID-19 most federal student loans & interest are suspended until Oct. 1. They may or may not extend that moratorium, we are waiting to see. I think it is possible they will extend it but of course we don’t know the future and we can count on nothing when it comes to Congress. Maybe call your reps about this.

If your loans were never in default, then this isn’t going to impact your credit very much. This debt will still be screwing up your debt-to-income ratio which can create problems if you are trying to do things like buy a house.

#31

My wife and I just got a similar letter. All clauses with “Failure to State a Legal Claim”

The irony of this is we attended a school (15-18 years or so ago) that was owned by Career Education Corp which a year or two ago was met with cases brought forth by 48 State attorney generals:
https://www.azag.gov/press-release/ag-brnovich-announces-22-million-debt-relief-arizona-students-who-attended-certain

CEC actually settled and forgave their nearly half a billion of student debt they owned (all of it) and the case was on basically most of the allegations in the borrowers defense documentation.

Honestly thought our forgiveness would be a shoe in (despite being skeptical with the current running of it of course) since basically 48 States thought it was and the school itself forgave their held debt in response to it.

#32

Good to know. We paid 3 months and hubby said he thought we would not get it back so we stopped