Borrower Defense School Notification Process Under 1994 and 2016 Regulations

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Posted Date March 30, 2026 Author Federal Student Aid Electronic Announcement ID GENERAL-26-22 Subject School Notification Process Under the 1994 and 2016 Borrower Defense to Repayment Regulations (34 C.F.R. 685.206(c) and 34 C.F.R. 685.222)

The U.S. Department of Education (ED) has resumed adjudicating borrower defense to repayment applications that are not impacted by the Sweet v. McMahon settlement. These applications may fall under a combination of three borrower defense regulations: (1) the borrower defense regulation published in 1994, 34 C.F.R. 685.206(c) (the 1994 Regulation); (2) the borrower defense regulation published in 2016, 34 C.F.R. 685.222 (the 2016 Regulation); and (3) the borrower defense regulation published in 2019, 34 C.F.R. 685.206(e) (the 2019 Regulation). The 1994 and 2016 regulations require ED to notify institutions about all applications before they are substantively reviewed through the fact-finding process. Institutions have the option to respond to the notices, but there is no negative inference against a school that does not respond. This Electronic Announcement reminds institutions about the notification and adjudication process under the 1994 and 2016 regulations. This Electronic Announcement also discusses the separate recoupment process, which includes its own notification and response components, if ED approves applications and seeks to recoup the cost of the discharged loans .

As of this date, ED is only notifying institutions of applications that fall under the 1994 and 2016 regulations. When ED begins notifying institutions of cases that fall under the 2019 Regulation, we will issue a future announcement with additional details around the notification and adjudication process.

The Borrower Defense to Repayment Process

The 1994 and 2016 regulations require ED to notify institutions of all borrower defense to repayment applications filed by their former or current student borrowers and provide an optional opportunity for the schools to respond before adjudication. Such notification occurs prior to any substantive review of an application. ED notifies institutions by sending them relevant borrowers’ applications. ED’s policy is to provide institutions that wish to respond 60 days from the date they receive the notification. A nonresponse does not create an inference in favor of the borrower.

ED attempts to batch applications to provide institutions with all pending claims at one time and plans to issue batches of notifications periodically. More than 90% of institutions receiving recent notices have fewer than 100 applications. For the small number of institutions with more than 500 applications filed by former or current student borrowers during this period, ED will reach out to the school’s financial aid administrator and explain how it will pace the number of notifications to be sent each week.

After the notice period ends and the fact-finding process is complete, ED adjudicates the application(s) on the merits. The 1994 Regulation provides for approvals based on acts or omissions by the institution that relate to the making of the loan for enrollment at the school or the provision of educational services for which the loan was provided that would give rise to a cause of action against the school under applicable state law. The 2016 Regulation provides for approvals based on substantial misrepresentation; a nondefault, favorable contested judgment; or breach of contract. Substantial misrepresentations are the most common type of alleged misconduct. For substantial misrepresentations, ED must have evidence that demonstrates that a borrower’s school made a substantial misrepresentation that the borrower reasonably relied on to his or her detriment (34 C.F.R. 685.222). To meet this standard, ED requires facts to prove each of these elements; these facts typically answer the who, what, when, where, why, and how questions relating to the alleged misconduct. Applications are approved or denied based on these elements.

If the application and other available evidence do not satisfy the regulatory standard, ED will deny the application and notify the borrower. If the regulatory standard is satisfied, ED will approve the application, discharge the relevant loans, and may issue a refund of payments to the borrower.

The Recoupment Process

If ED approves a discharge, ED will—at a separate date—determine whether to engage in a separate proceeding to recoup borrower defense costs from the institution. If it chooses, the institution will have an opportunity to contest any recoupment action before a hearing officer. During that process, ED will send a second notification to the institution with the application form for all loans for which recoupment is requested, all attachments submitted by the borrower, and the rationale for ED’s decision to discharge.

Key Takeaways
- ED is notifying most institutions of all applications for borrower defense to repayment claims received and will periodically send newly submitted applications. For institutions that have started receiving applications already, ED has issued approximately 70%  of the notifications.
- Institutions are notified of all applications prior to any substantive review by ED. This is due to the requirements of fact finding required under the 1994 Regulation and 2016 Regulation before ED adjudicates applications, and the notification process is part of the fact-finding step.
- Under the 1994 Regulation and 2016 Regulation, it is optional for an institution to respond to the applications, and a nonresponse does not give rise to a negative inference against the school.
- For cases adjudicated under the 1994 Regulation, ED will approve applications that allege a misrepresentation only if it has evidence that demonstrates that all elements of the applicable state law are met.
- For cases adjudicated under the 2016 Regulation, ED will approve applications that allege substantial misrepresentations only if it has evidence that demonstrates that a borrower’s school made a substantial misrepresentation that the borrower reasonably relied on to his or her detriment. ED will separately decide whether to recoup funds on any approved claim. Any recoupment actions ED chooses to initiate have their own notification and response processes, which include providing additional evidence to the institution.
1994 and 2016 Notification Letter Information

Does ED review the applications substantively before sending notice?

No. The 1994 Regulation and 2016 Regulation require ED to conduct a fact-finding process before it substantively reviews the application for a borrower defense to repayment claim.

Will I keep receiving additional claims?

ED’s goal is to send all claims against an institution at a single time and then periodically send recently submitted applications in a subsequent send. The small number of schools with more than 500 claims may receive them in batches.

What should I expect to receive as part of the notice process?

During the school notification process, ED sends the borrower’s application form and a notification email.

How long do I have to respond?

ED’s policy is to give institutions 60 days to respond.

What kind of information is helpful to send back?

Institutions should review the application and consider how best to respond, if at all, to the information in the application. Each application is unique and will require a review to determine what information would be helpful to provide. Under the 1994 Regulation and 2016 Regulation, ED does not draw an adverse inference against an institution that does not respond to an application.

What should I do if the application is vague or doesn’t have a clear allegation against my school?

Institutions must decide—without ED input—about how to respond, if at all, to any application. If a school concludes that an application is vague or does not have a clear allegation against it, the school may include that conclusion in its response to ED, if it decides to respond.

Why am I seeing claims from borrowers who separated from my school years ago?

Under the 1994 and 2016 regulations, there is no time bar on a borrower’s ability to apply for borrower defense. As long as the borrower still has active federal student loans, the borrower may submit a borrower defense application.

How should I deal with record retention policies for older claims?

Institutions must decide—without ED input—about its record retention policy. If a school no longer has records relating to a borrower due to how long ago the borrower attended the school, the institution may include that information in its response to ED, if it decides to respond.

Why am I receiving duplicative claims?

ED attempts to combine multiple applications from a single borrower relating to a single institution into one application. However, in some instances, multiple cases for a single borrower may be sent to a school. When this occurs, a school may respond to each case,  refer to its response in a previous case, or choose not to respond.

Why am I receiving claims against a different institution?

ED attempts to send cases to the institution for which the application directly relates to the claim. Infrequently, an intake error may result in a case being tagged to the wrong school. In these instances, a school may respond by stating the case does not relate to their school or choose not to respond. During the adjudication process, ED will ensure the case is sent to the correct school.

Is an affidavit required under the 1994 and 2016 regulations?

ED requests that schools provide an affidavit if they choose to respond, but it is not required.

Can I receive an extension on the days given to respond, as stated in the notification requirement?

ED is willing to work with schools through this process and may grant extensions if the request is reasonable. Send reasonable requests for extensions to bdschoolevidence@ed.gov.

Will I have a second opportunity to respond if ED grants a discharge and decides to seek recoupment?

Yes. Under the 1994 and 2016 regulations, if the borrower’s application is approved and ED seeks recoupment, you will be able to respond a second time during the recoupment process. Institutions are not party to the process which ED uses to resolve claims made to ED in pending borrower defense applications. At the fact-finding stage, the information you provide assists ED in determining how to adjudicate the application. If the application is denied, your initial school notification letter will be the only time you will hear about the application. If the application is approved and ED seeks recoupment, you will be a party to the recoupment process and will have an additional opportunity to respond to the borrower’s application.

Logging into the Common Origination and Disbursement (COD) System

The notification letter for the 1994 and 2016 regulations explains how to receive assistance with uploading your responses to COD.

If you have questions about how to use COD or how to upload your response, please contact COD School Relations at CODSupport@ed.gov or 1-800-848-0978.

We Are Here to Help

If you have questions about a specific application, you may contact the Borrower Defense Customer Support line at 1-855-279-6207 to speak to a representative.

We strive to provide the most up-to-date information available for borrowers on our website at StudentAid.gov/borrower-defense.