Finding a job after you graduate college can be rough. Ordinarily, if you can't find a job with your degree, you still aren't entitled to cancel your student loans. However, there are some provisions in the law that will allow it. If you're struggling with debt related to student loans that you think were unfair, this is what you should know about the "Defense Against Repayment" provision.
What is the provision?
The provision exists within the framework of the U.S. Higher Education Act of 1965, but it didn't receive much attention over the years until students who had graduated from one or more branches of the Corinthian Colleges began alleging they'd received worthless degrees. Worse, they alleged that their school lied to them about graduation and job rates, essentially tricking them into high levels of debt for worthless degrees.
Eventually, many of the Corinthian schools closed, leaving students without any support and some without degrees. Ultimately, the Department of Education announced it was supporting steps by some students to arrange for the forgiveness of their federal student loans through the Defense Against Repayment provision, which has brought this somewhat under-utilized clause to light.
How could this apply to you?
This opens the door for other students, however, who feel that they have been similarly misled. You may be one of those students:
- if you were attending a school that suddenly closed or terminated your degree program
- if you didn't have the basic ability to benefit from the degree program
- you couldn't meet the state requirements for employment in the occupation for which you are being trained due to some disqualifying status
- you left school early and were entitled to a refund that was never paid and the school didn't return the money to the lender as required
Each of these categories represents different possible situations. An "ability to benefit" discharge, for example, could include something like a school accepting you to its programs despite your inability to pass a regular admittance exam. Alternately, you might be entitled to one because the school knew that it wasn't accredited to even license you in the nursing program it offered. A disqualifying status discharge could be due to something like a school training you as a truck driver despite your medical history as a brittle diabetic, which would automatically prevent you from getting a license. People who withdrew from their classes early may never have even known that they were due a refund.
How do you file for forgiveness?
Because of the complex nature of the student loan programs and the fact that the provision has seen little use over the years, the students from the Corinthian schools sought legal help to get their loans discharged. Others have followed. It may take a careful legal argument to show that your school knew that your degree was worthless from the start. Talk to an attorney from a firm like Vandeventer Black LLP in your area who can help determine if you meet the criteria for loan forgiveness.