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Borrower Defense to Repayment Backlog is Obscene

By on June 27, 2017

Politico is reporting on information out yesterday on claims processed by the Department of Education under the Borrower Defense to Repayment program to help discharge student loan debt obtained under school fraud.

“The Trump administration is providing new numbers that show it’s making some progress in expunging the federal student loan debt of the 16,452 borrowers whose debt relief claims were already approved by the Obama administration. As of Monday, 7,085 of those previously-approved claims, totaling approximately $92 million, have been fully discharged, according to the Education Department. Another 7,358 “are at the servicer and in the pipeline to be discharged shortly,” and 2,010 approved claims “are actively being worked on” and will be sent to the loan servicer for discharge “shortly,” the department said in a statement.

Aside from the already-approved claims, the Education Department also has a backlog of 64,301 borrower defense to repayment claims received during the Obama administration that have not yet been adjudicated. Those claims “will be reviewed under the current [borrower defense to repayment] regulations,” the department said on Monday.”

The phrase “train wreck” comes to mind.

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About Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

2 Comments

  1. jlarson13

    June 28, 2017 at 10:33 am

    Are there any tips for making your case process faster? I submitted my Defense in Sept, 2015. I received no notice of receipt, except for a letter from Navient saying my loan had been placed in Administrative forbearance in October, 2015. After no other information, I started emailing the Dept of Ed every two weeks, starting in January, 2016. In April, 2016, I got my first response, email from them with simply, “We received your submission and it is in process.”

    In September, 2016, I got a notice saying my Admin Forbearance was expiring, so I started contacting the Dept of Ed, again, with no answer. At the same time, I contacted Navient. The two Navient reps, I spoke with, could also get not answer on the status of my case. They did say it is in the system and pending, so they extended my forbearance. In January, 2017, I got a letter from Dept of Ed, saying they had gotten my contact from Sept, and renewed my Admin Forbearance effective January, 2017, for another 12 months.

    2 weeks ago, I got my first “unsolicited” status, it was an email with a sentence basically saying it was still in process.

    • Steve Rhode

      June 28, 2017 at 11:19 am

      I’m sorry to say this is a total mess. To make the issue worse, while collections activity is halted during consideration the loan balance is increasing. Claims are not be processed on a timely basis and forbearance is expiring. If your claim is ultimately denied you will owe a much larger balance and there is no guarantee of approval. The only logical advice is for all people submitting claims to continue to make payments during the time the claim is being reviewed. Otherwise I predict large numbers of people are going to face eventually having their claim denied and owe so much more on their loans.

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