Borrower Defense for Federal Student Loans Explained

Borrower Defense for Federal Student Loans Explained

[MUSIC] All right, so thanks for
tuning in to DebtBytes, our YouTube channel. I’ve got Steve Rhode with me. Steve’s a good friend of
mine and a debt relief and credit expert, has been working
in the field for decades. Look at him.>>[LAUGH]
>>Steve, we have a purpose. You and I get together and
we can get on and off topic all the time. But our main topic today
that we wanna try and focus on is borrower defense and what the means to student
loan borrowers right now. In the last six months, since
it’s become all the rage, and on a moving forward basis too. So you cover student loans more
than I think anybody I know of online, any of the personal
finance blogs, or anything. So listen, first,
straight out of the gate, what’s your take on
borrower defense?>>So, borrower defense
is this idea that you can ask to have all of your
federal student loans forgiven if you were screwed
over by the school. Fraudulent recruiting practices, they lied to you about
success rates, etc. And this is, I think it’s now
been more than a year since I first wrote about it, and
it was a little tiny known section of law that nobody ever
utilized before last year. And Department of Education
had put out a little warning, saying they expected the number
of people to use it to increase, which made me go, hm?>>[LAUGH]
>>[LAUGH] So, I think it could be
a very valuable tool for people who were actually screwed
over by their schools and deceived to enroll,
only to incur massive debt. However, for most people
this could be a sand pit. And I’m sure you’ll
talk about that.>>Okay, so look, what we’ve got here in some data
that’s available from the second report by Joseph Smith that was
available in December of 2015. We’re recording this right now,
and it’s mid-March, right, of 2016. And the last available report
was is that, historically, up until last year,
there were five submissions, three approved over a couple
of decade period of time. So this, for all intents and
purposes didn’t exist. So the DOE department
coming out and saying, hey, we’re expecting a few more
of these, boy, did they. Because in that report
it talks about close to 15,000 submissions up to,
from last summer to December at the time he was, well,
actually even November 18th was the last date that he gave for
updated numbers. So, we saw that influx, right? And in that amount of time, I’ve
been dealing with phone calls, I’ve been dealing with emails, corresponding with people
in virtually every way and even other debt relief and
credit experts. And, the resounding kind
of response to this, at least initially,
is that people aren’t prepared, to put forward with
that information.>>No.
>>They’re not in a position to understand what it
is essentially. And I think you do a fantastic
job at reporting on this, but I think that there’s a, I guess
it’s an excitement, right? Because at least from my-
>>I would say that the problem facing this borrower defense
a way to get your student loans forgiven is the same basic
problem that you and I face in helping people with
all sorts of debt relief. Which is people, I love people,
but it seems like a lot of people, when they’re in
this situation, they’re not necessarily in a mindset to
research all the ins and outs. And they go as far as
the headline or the title and then they think everything
applies to them. And that’s just not the case. Whether it’s student
loan assistance or this borrower defense thing,
there is a huge pothole that could actually cause people
to increase their student loan balances if they
are not prepared. [SOUND] For submitting these
borrower defense claims. And I-
>>Sure, cuz they go into deferment,
yeah.>>You and I have talked
a lot on the phone. It feels like we talk
almost every day or every other day about this now. And this is something that I
think that, while it seems simple, it requires either
a professional touch, professional approach,
some expertise. And it’s just not something
you throw against the wall and hope that your loans go away.>>All right, so let me just
talk about a technicality, right, where it’s like,
I’m excited! Everybody’s talking about this. It’s all abuzz in the social
media and a branch of Occupy Wall Street or Occupy
Debt or however that’s worded. Has got ahold of this, right and there’s just a lot
of energy behind it. Fine, great, right?>>Yep,
getting people excited about it.>>Yeah,
here’s a technicality, right? And this is right in Smith’s,
and he’s the special master for borrower defense, appointed by
the Department of Education, that’s who he reports to. And he talks about in his second
report about what students are getting, or
who they’re looking for. They’re looking for students
who relied upon false or misleading placement rate
disclosures in enrolling. And he specifically calls
out Heald Colleges, which were part of
the Corinthian Colleges, who have established a borrower
defense claim as to which relief would be granted
under California law. Well, this report and
much of the submissions are coming out of Corinthian
campuses out of California. The vast, vast majority of them that he
had up to date in this report. So what they’re looking for
is, and what they’re talking about is something that
was already pre-established. It was a Attorney General action
against the colleges, right? They have-
>>This is all unintended consequences.>>Yeah.
>>I mean, the Department of Education really raised this out
of this dark closet it was in, this defense, because they
had to deal with all those Corinthian loans that they had
already felt were deceptive. So once they opened that door,
[SOUND]>>Well, and you know what, it does apply, right? So here,
here’s a good example, right? So we’re talking about this. In different states,
the Corinthians, but amount of art institute,
for example.>>Right.
>>These aren’t Corinthian College campuses. They were up just under 14%, 13.9% of the submissions
[CROSSTALK] yeah, ITT was 2.4. And of course, just after this
report we saw that sensational claim, which you covered on your
site, about that Tallahassee campus for ITT Tech, and that
whistleblower lawsuit there. So, I expect to see more
of these things, sure. But I mean, right now as of
today, I have had consults, emails and
comment exchanges online. Where I’ve only really had one
that kinda came at me with like no, they were ready, right? They understood what’s
required of them to submit for borrower defense. And they had a really
good situation. They’d all ready
done the homework.>>Now here’s the important
thing, while we’re talking about Corinthian,
DeVry, ITT Tech, WyoTech, all these schools that’s getting
all these negative press, these very same principles
apply to every college. For years now, I have covered that fact that
colleges have been deceiving and just downright lying to
prospective students. But even four-year colleges, non-profit colleges,
that fudge their numbers. And there are now, finally, in the last year there’s
some good online tools for checking to see exactly what
their performance rate is, and up until now they didn’t have
to tell people the truth. So this will become
more mainstream and it’s why people need to
pay attention to this now.>>I’ll put a couple of links
up, when I publish this video, when it’s available
to the public. You’ll be able to look above and
see a couple of links to some of those tools where you can check
on the completion rates and the employment rates at your
different colleges cuz those tools are really helpful. So Steve, you actually showed me
a app that was created to submit these borrower defense claims,
right? So this is a problem,
or it’s again, it’s great to have the attention
and the excitement but there’s a problem in
that I looked at the app. I saw what they’re just
three bulleted items as far as the most important
aspect of your submission is that what went wrong? Whatever it was, why, okay? And three bullet points that
you’re just saying yes or no to, does not. Yeah, here’s what Smith’s
asking for, right? So their team at the borrower
defense team that is reviewing all of these. They’re talking about, in this
regard, it is important to note that the statements by
claimants, in their own words, of how they were treated by the
schools against which they have made a claim will be helpful
to our resolution of claims. So how is it than an app
highlighting three maybes, maybe nots, yes, no. Does somebody even have
somebody to encourage them to, why are they checking no,
why are they checking? There’s none of that. And none of it is something
that is contained in their own words, right? So, I think it’s problematic
that okay, let’s get excited about these things, but at the
same time, let’s do it right. LIke you said, okay, so
the religious objection organization [CROSSTALK]
>>That is an objection that I like to put in
the category of bullshit. [LAUGH]
>>Yeah, and I just wonder how many, I mean it’s a lot like,
okay, so I’m gonna tie this into something probably
more consistent, especially in the debt relief
space, is credit repair, okay? So, you’ve got these
things on there, you don’t want them on there. You’ve got this
student loan debt. You don’t want
the student loan debt. And if wishes were fishes,
right? So, you send off this bullshit
dispute to the credit reporting agencies that has no bearing in
fact, these are accurate things. You just don’t want to
deal with it, right?>>Yeah, but you know the
interesting thing is that doing that doesn’t have the same
consequence of sending in this borrower defense
that we’re talking about. The huge pothole in that
borrower defense claim is once you submit your application
whether it’s total bullshit or not the problem is it triggers
a process that puts your loan in forbearance, which
sounds wonderful, no more payments for
a while, and removes you from collections
again, sounds wonderful. But that process can last up to
a year and for these initial waves of people submitting them
the numbers are gonna be huge. The Department of Education is
not gonna be able to handle these Submissions and while
your loan is in forbearance the balance continue to increase,
so if you submit a crap claim, and a year later your claim is
denied the only thing that’s going to happen out of this
you’re gonna owe more money.>>You owe more, yeah. Couple of things that
are interesting that have come out of this recently though is a
student loan borrower assistance which is a program that I
think Ron’s still with, NCLC, the National
Consumer Law Center. And a whole bunch of other
consumer advocate organizations put out a report to
the DOE wanting them to consider certain things and
there are active discussions and dialog
>>Mm-hm.>>Going on right?>>Yeah.
>>So, some interesting stuff on there is that Parent PLUS
loans apply, right? That it’s clear that
FFEL loans apply. And so while much of this borrow
the fence so much of it consists of things dating around a
certain time frame of loans and it’s most of coverage is,
again, like you talked about tech Corinthian colleges,
the Hill colleges. That it has much, vast,
wider applicability and even now, we’re just starting to
talk about this in this video. But it’s been, like you said,
you covered it a year ago. We’re gonna see a whole bunch
more, and what I’d love to see is that people actually get
a grip and start to factor in. And I don’t care, I’ll have a one hour a week live
Google Hangout or something. And we’ll have nine heads, or ten heads talking
on the screen and coming together with the state
issues right, the state laws. Let’s put a finer tip
point pen to this and really start to designate
why you’re submitting. What state laws, if it’s UDAP,
if it’s unfair, deceptive acts and practices that every state
has, okay, are you finding that? Let’s talk about that stuff and
give consumers, give student loan
borrowers more of a chance.>>Yeah, chance to
actually have it forgiven. Now, what is gonna happen
before any of this process gets squared away at
the Department of Education. And they come up with a smooth
way to handle these things is, it feels like it’s only
minutes away that our dear debt relief scammer
brethren are gonna jump on this. And they’re gonna start selling
programs to people where, we can have all of your federal
student loans forgiven for 599 or something. And essentially, all they’re gonna do is fill out
that crap online questionnaire. They’re not gonna
research these things. I think that the claims for having all of your federal
student loans forgiven that have the most chance of success
are those that actually have some legal basis under
your individual state law. For why it is deceptive and
unfair. And you have to give
the Department of Education an opportunity to say this is
a good and valid claim, and we will accept it. Because as you noted
in the beginning, they have accepted these
claims in the past.>>Well yeah,
just a couple of them, right, until we saw
this last year. But over a thousand of
these have now been, Smith’s team has submitted them
to the department you know with their recommendation for
approval of complete and total loan discharge which by
the way they’ve got an IRS, administrative letter that these
aren’t going to be taxable, you know that forgiven debt,
which is awesome.>>But
here’s the backside of this. And this is why this is going
to be an ongoing fight. Because under this borrower
defense claim while the student has their loans forgiven,
if it’s approved, the Department of Education
is going to go back and claw back the money
from the school.>>If they’re open. Yeah, [CROSSTALK] those schools
are gonna fight like crazy. And this is gonna be a mess for
awhile, so right now we’re at just the very tip of people
being aware of this. People are gonna do stupid
uninformed things jumping into the program.>>Or that’s sold to them.>>Yeah, or sold to them, right. And I would expect this is
gonna be a big mess for awhile. But it will eventually have some
clarity, will have some rules, will have some understanding,
and exactly who’s appropriate, and moving forward,
it would be a good program.>>Yeah, and it could be. Right now, based on this last
report that I’ve been referring to today right now there’s
another report due out any minute, but Smith had four
attorneys working with him for all of those submissions. Now, you and I were
talking the other day, and you talked about that app and
there being a couple hundred thousand
submissions through that app.>>There’s a,
what I like to call, a shitload.>>[LAUGH] That
seems to be theme. Shit. [LAUGH] That’s what they’re saying
with Florida attorneys. They’re gonna need resources, they’re gonna need a more
methodical plan to go about it. I want people to be more
methodical when they go about it, and I can’t help but make this correlation of
the debt relief industry, and their willingness to try and
profit off of whatever they can.>>Yeah.
>>This is important stuff.>>But
let’s be clear about this for a second, that this is
a fine point that I fail to get people to understand is,
we talk about debt relief scammers when we talk about
people paying for service. The fine point here is that
if you don’t have the skills to do this, and you have
found somebody who does have the skills to do it, and you’re
willing to pay an expert to do it for you, that’s certainly a
valid and logical consideration. It’s like some of the advice is
everybody needs to run off and do this themselves and
not pay anybody for help. But that’s so much like
putting in your own filling. [LAUGH] I’m not a dentist,
I’m not going to be out there drilling my tooth in the garage
trying to do my own filling. I’m going to rely on an expert. So, find an expert
because the consequences of not doing this correctly
could cost you lots of money.>>Well, and then the motivation
of the person sometimes.>>But here’s a good one. Lots of law schools in
the United States had fudge their employment figures
for a long period of time. The have said that, you know
graduates are graduates are 80% employed and come to find out
that, yes, they were employed temporarily while they
were doing the survey. They might have actually been
employed by the school for a week or two while they
were doing the survey. And those things are now
subject to court actions. There’s one in California
that’s still ongoing. So, it is not unheard of, of schools promoting false
information to encourage students to enroll, even if
they are mainstream schools.>>So Steve, we can’t help because of how
much you cover student loans and have been for years,
especially this next aspect. I can’t let you get away with
not talking about the fact that a lot of folks think that,
even in the legal field, that student loans just
categorically are near impossible to get discharged
in a chapter 7 bankruptcy. But you’ve been
out there proving people wrong-
>>Yeah.>>For a couple of years now. Tell me.
This is going to be for viewers What are some of the
things that you’re seeing people succeed with in getting their
student loans discharged in bankruptcy.>>Well there
are a couple things. This is an evolving topic, but
certainly one of the easiest things is people with
private student loans. So, big organizations like Sally
Mae originated private student loans, but come to find out that
they originated these loans for lots of schools that were not
Title 4 accredited or meeting the accreditation standards of
the Department of Education and the bankruptcy code does
not protect those loans. So if you went to a trade
school, a flight school, any sort of thing like
that I would direct you to a bankruptcy attorney
to talk about it. But, most bankruptcy attorneys
don’t understand this topic. Those loans are not
protected in bankruptcy, they would be instantly
dischargeable and those put forward those cases
had those loans discharged. The tough part is finding an
attorney who understands this. The other thing is you can
discharge federal student loans. Now, historically, this has been that you had
to prove an undue hardship. And basically, the undue
hardship was you had one leg, a dollar in your pocket,
and two breaths left. But these days,
it’s not like that.>>No.
>>And there are different tests and courts around the country are
applying different tests, and this is an evolving topic, but
more and more federal student loans are being discharged
through bankruptcy. Case in point is one gentleman
who contacted me recently. Use information from an article
of mine was talking about how the Department of Education
has said that they will pursue less of these cases. And he filed an adversary
proceeding and bankruptcy. He did it himself. And he was able to discharge
$130,000 in federal student loans without a trial or
any additional discovery by using this department of
education guidance, so it’s becoming more frequent. Right now, while the Department
of Education has said we’re going to stop fighting these
discharges in most cases. The process that deals with
these is like a huge ship and it just take a while to turn
the whole damn thing around. And so in the meantime,
you’ve got the Department of Education saying we’re
not gonna fight it and then you got their
lawyers fighting it. So, we will see more
times when the tests will become much more logical
to have these loans discharged. Right now, as it is, you can
take somebody who’s unemployed, disabled, and the lawyer for the student loan,
the Department of Education, or whoever is holding that loan,
will argue, Your Honor, they always have an opportunity to
get a better job in the future. Which, I mean,
that’s just not common sense.>>No, not today.>>Yeah, I mean,
that’s the Brunner test that people might hear about. But the one that’s more
important is this thing called the totality of circumstances,
that is a common sense test, and it will get weeded out,
and more people need to file. And if you go to your attorney,
you go to your bankruptcy attorney,
and they say just flat out, there’s no chance of
eliminating your student loans, you should probably go get
a second or third opinion. Because while your particular
student loans may not be dischargable because
you’re in good health and your circumstances
are fairly good and stuff. They need to be aware of all
the things that allow loans to be discharged.>>Yeah.
And you know what? On that note, any viewers, if
you have student loan questions post them in the comments below. We correspond on our YouTube
videos every day, so you can get some
dedicated feedback, and some suggestions about how to
look at either bankruptcy, or borrower defense,
which is the main topic of this. Steve, you have, and I’ll
have a link up to your site, you have tons of resources,
I mean, the most resources of anywhere
about this issue, especially student loans and bankruptcy or
just student loans in general. So, what would you suggest that,
based on the coverage that you’ve had so far, and
this new app that’s submitting things in bulk,
what are your top three ideas? Or top three
suggestions to people, to viewers,
dealing with student loan debts? That they think might apply
the borrower defense. What would you suggest they do?>>Well I would suggest that
they number one take a deep breath and understand that these
things are a good opportunity but they’re not as simple
as they appear to be. So don’t rush into something
that can cost you more in the long run if you
make a mistake. It’s the same advice
that I give people who are considering filing
bankruptcy themselves. If you don’t want to take
the time to research it and figure out all the ins and outs,
you should not do it yourself. The next thing is that you
need to do a lot of research. You need to find out which
of your state laws apply and build a case. This is not an opportunity for
you to send a letter to the Department of Education and
bitch at them. This is an opportunity for
you to tell them exactly how you were deceived and why and
what state law applies and why it is obvious that your
loan should be forgiven. So, deep breath, research,
and put together a professional presentation
would be my three days.>>Okay cool. I really, if I can get you back,
I think I’m gonna feel out this, cuz you and I have done
Google Hangouts before. We’ve not done them
in bulk with filling up the whole screen
with attendees.>>It’s good.
>>Yeah, but if I can get you back-
>>Yeah.>>And we can start talking
about this some more and like I said put a finer
point to state issues. And maybe we can tackle
a state at a time and bring on an attorney
from each state. You and I know many that
are part of collection defense and all that stuff. They care about these issues. All right, so thanks for
tuning into DebtBytes. Subscribe to our YouTube channel
right here and get more updates on student loan issues and some
of the other things that you might be interested in when
it comes to debt and credit?>>Well I urge everyone who is
watching this to subscribe to DebtBytes, and to subscribe to
Michael’s information, and to subscribe to the YouTube channel
because he is a brilliant guy.>>Wow, thank you for that sir. I’ll see you on the next video.>>Bye. [MUSIC]

35 thoughts on “Borrower Defense for Federal Student Loans Explained

  1. Question: I used the Post 9/11 GIBill to go to DeVry university between 2012-2014. I could not start classes unless I paid upfront for the classes, the loan adviser advised me that because I am a transfer student that I qualified for grants to cover the tuition until the post 9/11 Gibill kicked in because the post 9/11 Gibill does not disburse money until I was actively in class and going to school. Once the money was disbursed to DeVry, DeVry refunded me money. Every time I started a new class it was the same thing the adviser said I was covered by grants then I would get refunded money because when the post 9/11 Gibill money went through Devry and said I had extra money in my student account. After my last class before graduating I did not get that last refund because I used up all of my post 9/11 Gibill so I did some investigation and i found out I was $36,000 in debt with student loans I did not know I had. Do you think I qualify for Borrower Defense to Repayment?

  2. Add on: I also went to DeVry because they said they where the best and everything that the Federal Trade Commission sued them for I remember I used to decide to Go to DeVry. For example 90% of graduates get hired in their fields after graduation and Devry students get paid more than any other people with similar degrees. Lastly, I thought i was going for a bachelors in Security management Degree but ended up with a Bachelor in technical management. I felt like they did a bait and switch on me.

  3. I graduated from Wyotech, (Corinthian Colleges) in 2008 and I've been following along with borrowers defense for the past couple of years. The class that I attended was added to a massive list of classes that are apparently eligible for borrower's defense on an expedited level, however that list is for attendance from 2010-2014. The list is available on the Department of Education website. I'm not sure if I should wait a bit longer and see if the class I took is added to the list or if I should just go for it… Any advice would be fantastic.

  4. I am a former ITT Tech student. The high tuition cost was rationalized with their continuing education promise. As it was explained that any student could come back at any point in the future and receive career and resume services as well as retake any course in their degree program as long as they gave notice. Any new classes added to the degree program would be eligible to be taken for free in the future.

    Now onto the fact that they cannot possibly make good on this promise.. For any Itt tech student.. It seems that might be something to make note of when trying to apply for borrowers defense, do you agree? In that case they kind of screwed all alumni from further education.

    I am sure this has been brought up to you before. You seem to be ahead of this programs curve, so I thought I'd ask.

  5. Hey Michael, I graduated the Art Institute of Pittsburgh in 2006, and have been paying on my Federal loans for the last 7ish years. When I graduated I had around $32,000 in Federal loans, it's now $74,000. I do have a job in a similar field I graduated in but don't make nearly enough to pay them down. They said the placement rate was 86% when in reality it's much lower. I know that's not a ton of information to go on but do you think I should apply to the Borrower Defense for Federal Student loans? If so what would you recommend I do as a first step?

  6. What would be the correct state law in New York to cite in section 4? The school didn't send back portions of the loan after I withdrew from the class within two weeks, and got charged over $9,000?

  7. Can you help point me to Tennessee state law regarding BDR? I would like to read up on TN law regarding this before taking any possible action. Thanks for posting this video!

  8. hey Michael I just found out about the borrower defense program and I'm not confident in filling it out my self I want to make sure its done right could u give me any advice or recommendation on how do I go about finding an professional to fill out the form for me

  9. Michael, I went to the Art Institute of Salt Lake City. They closed the school before I could finish by degree (i had 2 classes left) now I am 94,000 in debt with nothing to show, nor could I transfer my credits to another school. I have been paying my federal loans for the past 4 years now but the private loans keep harassing me. They tell me to go on their income based program, but I keep hearing about this borrower defense program in a group I am a part of for the AI. What do you recommend?

  10. I have been running into the attitude that when it comes to student loans it is impossible to "get out of them" and I find this is the attitude of a lot of attorneys as well, which is why when it comes to a REAL AND TRUE student loan dispute MOST refuse to even mess with them, unless it's for bankruptcy or credit counseling.

    My case is a one in a million….and trust me I'm sure many of you think, we'll aren't they all?

    But really, my situation stems from the Federal Student Aid/US Dept of Ed offsetting my 2015 Federal Tax Refund over a 20 year Federal Consolidated loan from 1996 that not only did I not know existed, but I knew as fact I never did. Easy peasy discharge right? WRONG.

    Imagine the shock. Imagine wondering HOW such a loan existed and WHY wait 20 years to offset my tax refund.

    In my 2 year battle with Federal Student Aid, I have come to learn that this lender never existed at all. NEVER. Yet, this lender was also supposed to have paid them directly in 1996 as well….which stems off the back of yet of other accused loans they claimed I did that is also missing EVERY single trace of a lender AND any single trace of my involvement.

    So HOW can the Federal Student Aid/US Dept of Ed pursue for lender claimed defaulted loans that is missing lenders? Something to this day I am still not understanding.

    No lender equals no lender claimed default which was the basis of their "settling" with such lenders, without a single legal proof internally or externally of these lender's existence.

    Funny, all my rightful and true student loans I have done, and paid off, ALL show provable trace of the lender's involvement, ALL show provable trace of my involvement.

    Yet for these disputed loans within the US Dept of ED/FSA internal loan history….NONE of these lenders/servicers are named in their own internal database system as ever being the holder of these disputed loans, even when such lender was supposed to have paid them directly.

    Every single direct document of a lender and/or requires a borrowers signature is of course ALL missing. ALL of them.

    When the lender claims default against a borrower there is a multitude of things the lender must do. They must file a claim form called the Lender Reimbursement Claim form and they must prove a borrower defaulted (due diligence) such as collective pursuit, forbearance/hardship documentation, and a multitude of other required applicable documents.

    The Lender claim form was completely bypassed on that consolidated loan, and not only was it bypassed, the Federal Guarantor actually notates that the lender never filed a claim.

    The consolidated promissory note, which I retracted PRIOR to borrowing a dime and before any loan was finalized was signed months in advance, no lender or their terms were even listed on the note and the note directly outlines a contract to be honored called the Repayment Schedule. This contract is of course the contract the lender directly holds and is the contract between lender/borrower.

    Weeks after my retraction (because they would NOT prove the original debt they accused me of doing that was not even my SSN) a typed sticker was affixed to the note in the lender section. After they failed to prove the original debt was mine, after I retracted I never heard another word from anyone.

    So imagine my shock 20 years later to find out this consolidated loan existed. Imagine my further shock to discover that this named lender that I never borrowed a dime from only existed by way of a typed sticker at the beginning stuck to a note and a notated bypassed lender claim form at the end. The "servicer" used on this loan wasn't even the lender's true servicer because while the lender is no longer a viable company I was able to obtain their investment portfolio to prove this and for what years.

    Nothing within those documents matches this missing lender. Not the address, phone number and more importantly not even the lender ID is a match. Not a single direct lender document, not their lender terms, not even a solicitation for this company—who was never their true servicer—to service this loan on their behalf.

    This servicer was able to service this loan without a single trace of the lender.

    So, as it stands, the US Dept of Ed has NO internal proof of this lender that was supposed to have paid them directly for the accused underlying loans. The Federal Guarantor they handed it to in 1996 settled this debt and breaking every single procedure and policy when they did so and even their own documentation clearly states that the claim form MUST be submitted for payment. The out of the blue servicer shows signing these documents by the servicer rep on the same date they notate the claim as "filed".

    3 entities through this entire loan's existence and NOWHERE does this lender exists and I am now 1000% convinced NEVER existed and in NO WAY could have paid the department.

    And of course, the Repayment Schedule that outlines the direct promissory note as the contract to be honored, and even the controlling document, not a single one of these 3 entities involved in this loan ever obtained a copy of it. It doesn't exist. Naturally.

    And how was this ANY of my fault that it doesn't exist? I had absolutely NO control in any of the as to why EVERYTHING is missing when it comes to these lenders DURING THE ACTUAL DEFAULT. Even if a borrower IGNORES a debt, that has NOTHING to do with a lender not being able to still prove they were the HOLDER of your loan (s).

    So when my 2015 Federal refund was taken, absolutely NO WHERE could the US Dept of Ed look, internally or externally and ever once see a trace of this lender's provable existence.

    And in ALL my disputing process for 2 long years….never ONCE has any aspect of the US Dept of ED ever addressed these missing lenders directly in any single way whatsoever.

    As far as the underlying loans, ALSO is no trace I have ever done, NO provable lender to that as well and it is only an ACCUSED ASSUMPTION AND NOT BY ANY DIRECT PROOF I received a dime for those loans as well….with another completely vanished lender.


    It is MY firm belief that the ONLY reason why the FSA refuses to discharge this debt is because in order to do so it is an ACKNOWLEDGEMENT that this lender NEVER could have paid them….and that means LOAN FRAUD….and off the back of what I also am insisting was another fraudulent and illegal loans.

    The OIG USDE Hotline office is silent despite my repeated requests for an investigation into those that handled my case file.
    The FSA internal fraud department refuses to do a fraud review on those servicer documents that were withheld from me for a year!
    The FSA Ombudsman's Office refuses to approach FSA with just one single question….where is the legal trace of this lender—a lender that was supposed to have paid you directly. Nope, we can't have an affiliated agency putting FSA into position of acknowledgement.

    So what's left for me to do but now be forced to pay out God only knows how much in attorney fees to get this garbage discharged. I only have to prove ONE thing, that every one of these promissory notes are VOID…and despite ALL the provable and justifiable reasons as to why they are void and have been this ENTIRE time, every legal aspect of the US Dept of Ed refuses to address this one simple thing.

    this whole student loan industry is nothing but a travesty with everyone having their hands in the greedy pot of this multi billion dollar industry. Schools ripping off students. Lender's ripping off borrowers to the tunes of billions, and now having to deal with such deplorable misconduct by all offices of the US Dept of Ed?

    If the Government agrees to guarantor these loans, they should agree to protect our rights and yet mine were crushed every time this case was handled, for a span of 30 long years of loan deception that TO THIS DAY has not a single shred of proof I ever did, not a single shred of proof any lender claimed I defaulted….and not a single shred of proof such lenders ever even existed at all….and YET were settled as lender claimed defaulted loans.

    Do you know WHY I can make these allegations? Because it's PROVABLE. Two years on and I am STILL trying to pursue accountability and justice for what was done to me.

  11. Thank you for your video. I've been dealing with over 150K worth of student loans both federal and private for a school which has now closed its doors (Brooks Institute of Photography), and who also used deceptive methods in recruiting students. What type of attorney can I reach out to help me expedite my claim?

  12. how does this devry vs FTC settlement effect defense for students. does this proves devry guilt automatically or as a student you still have to provide the proof?

  13. I attended Itt tech online in Connecticut but moved to South Carolina what state laws would I file a claim under Connecticut or South Carolina?

  14. I graduated from the Art Institute of York, PA in 2009. They have since been sued and closed their doors. I am drowning in student loan debt and was given misleading information about salaries and job markets prior to enrolling. I just found out that I potentially am eligible for the Borrower's Defense Program but I need help to fill out the paperwork properly so that I can be approved. I almost paid out $1400 in a scam to receive this help and luckily got out of that (I think). I am strapped and don't have money for an attorney. Please advise me. Thank you.

  15. Thank you, great video. In debt 150k federal loans, Navient, from Art Center College of Design, Pasadena, California. The school said they would provide job assistance, but did nothing at all. I’ll have to research more to know if I can prove unfair or deceptive practices. It was 20 years ago. I live in Hawaii now. Can you recommend attorney either in ca or hi. And also just an expert to help direct me any other direction to pursue. I do have health challenges but not legally disabled. Been out on fmla on off for years. I have a chronic illness. Fiancé can’t marry me with this debt. So where to start…He would be willing to settle up to 50k. Any and all advise helpful. Thanks

  16. Hi, I heard that you could have your student loans discharged if you are placed on permanent and debilitating disability. Is this accurate? And if so, what steps should I take to achieve this? Thanks for your time.

  17. I attended Med Vance in Houston , Texas in 2009. When I talked to the recruiter, she told me I qualify for a government grant that paid 80% of my loan and I pay 20% over the 18 months that I attended. Needless to say my tuition was $35k and I got screwed. Now the school is closed or was brought out. Will this defense help me

  18. I went to The Art Institute International of Minnesota… I'm researching into this Borrower Defense and don't want to screw up my one shot. Has anything changed in the last 2 years? I'm trying to find an expert but I'm not sure where to look. Any ideas? Thank you for the video. This did help.

  19. Im.out of Washington and just submitted for borrower. I from ITT tech and graduated 11 years ago. I started 16 years ago. Im calling in the morning and asking more questions. My case definitely a whistleblower case

  20. If I consildate my student loans can I still fight for loan forgiveness from itt tech even though I graduate and was not enrolled when they closed down

  21. If, for whatever reason, my borrower's defense application is denied or dismissed – is there still a chance to appeal or am I done for good?

  22. I went to Kaplan online for a year or so 7 years ago. I remember being told that they were accredited and credits transferable. I withdrew from the program (bachelor's of social work) and when I went to try and attend a local school I discovered the majority of my credits were not able to be transfered. Would this be enough apply with? In fact when I told my local college what degree I was working toward, they looked at me like I was crazy.

  23. HI! Quick question, I've heard that "creditors can't attempt to collect a debt" while a debtor is going through the bankruptcy process. Would this apply to student loans, also? What about federal student loans, not just private? Thanks!

  24. My husband has a federal student loan from a cosmetology school. At the time he did not have a High School diploma or GED and they still enrolled him. The school is now closed due to 11 counts of embezzlement of federal funds and falsifying student information he was definitely taken advantage of. Would he qualify for discharge?

  25. I went to Le Cordon Bleu Orlando and I have Stafford loans ( I think are federal). My circumstances indicate I should do Borrowers defense. Do you offer assistance with Borrower Defense?

  26. I went to the Art Institute of North Hollywood CA in 2009 right out of high school which I did not know at the time was not an accredited school. Along with that the school gave false statements about job placement and funding. A few fellow class mates of mine where told they could not continue class unless they started paying monthly. During this time 18 year old me really did not have an understanding of what the financial aid and student debt I was involved in. But a red flag went up when I heard you both talking about Sally May.
    Around 2013 my father was diagnosed with cancer and I took time off to take care of him for a semester. I went back to the school and saw that a lot of my former students had not had any luck finding work when finished and I was considering leaving the school. II left in 2014 and started attending community college but found that none of my credits transferred over. Due to the school not being an accredited program. I'm still attending college and I would be so grateful to have The Art Institute Student debt gone seeing as I did not even receive a degree or transferable credits.

    What is your advice to the situation? Where should I start? Who should I contact?

    I appreciate any help. 🙂

  27. You guys gave some great info but would it be possible to make an updated video on this topic since there have been some changes which I don't understand.

  28. I attended Everest college Phoenix Corinthian college In AZ from 2011-2012 which is now shut down. will I be eligible for the Borrower’s defense? I have found the application but have not filled it out yet. I am currently current on my loans more than half paid off. But to me Everest did not keep their word on their end. Job placement etc..i received the genesis loan. Especially after the lawsuit against Corinthian colleges I’ve been considering the borrows defense. Ive been trying to research on how to go about it the correct way. Currently I am an unemployed stay at home mother for the past year.

  29. I graduated from the Art Institute a year ago and just a few days ago they closed ALL the schools abruptly without telling its students. There are a lot of students now discussing DTR and applying blindly without doing research. So we will see in increase in this as we speak.

    I would like to apply for the borrower defense as I do feel I was mislead. Recruiters came to my high school and after attending I realized a majority of our "qualified" instructors didn't know the subjects they were teaching. One even flat our said it in class. We were also promised industry equipment and software but that fell through as well. Not to mention financial Aid lost my paperwork and faculty would quit and class registration paperwork would be forgotten or lost.

    There is much more I can get into about The Art Institute of Hollywood. Fortunately I am working in my field of study and being paid decently but it was not at all thanks to the school. If anything it literally did hold me back from certain great opportunities and being there were the worst four years of my life. I'm willing to pay for professional help to see if I'm eligible

  30. I am dealing with this right now and talking to a company called Allied Financial Services, via a link from National Claim filing. They require five payments of $199.80 to settle, and have said they have been in business for 10 years, are accredited throught the BBB and are legit. My question is, is it? And are they?

  31. I just graduated from UEI College as a Medical Biller and Insurance Coder, and I've been applying for work since last month. I'm constantly being told that I don't have enough experience to work in this field and I also need to be "certified" as well. Well I wasn't told any of that information when the recruiter took me in. He told me that, I was able to get an entry level position in this field, basically no experience necessary, wasn't told about no additional licenses to take, and that I can earn up to about $20 dollars an hour. All false, except for that pay, BUT only if you have the experience and license of course. I felt like I was lied to and misleaded, it's very depressing.

  32. My case is a bit of an oddball one. I was homeschooled, and by the homeschool laws in the state I lived in, I dont have a GED and I never graduated/have a high school diploma. The FSA handbook states if their admission requirements is a diploma that they have to obtain a copy. The CFR also states that in order to get Title IV funds that I need one of the two. The college I went to never gave me an ATB test, nor received a copy of my high school diploma (which is nonexistent), my guess is that they lied which allowed me to get student loans that I shouldnt have been able to be granted. Do you think I have a case for Borrowers Defense?

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