Borrower Defense Claims

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    Good afternoon PASSHE Sector,

    As some of us may be aware, the Dept. of Ed. notified all schools about Borrower Defense claims. Borrower defense is a federal process that allows students who have been defrauded by a college, university, or career school to seek forgiveness for their federal student loans. Click on the following link to see more information regarding this process.

    Although we are not required to take immediate action, Millersville University’s Financial Aid Office will act on these borrower defense claims, and we have 60 days to respond to the U.S. Department of Education. Now that the loan repayment pause is over and millions of borrowers are back into repayment, former students are claiming they never borrowed these loans, and are claiming all sorts of situations as to why their loans should be forgiven. These individuals are being encouraged by advocacy and other entity groups to file these claims. Unfortunately, Financial Aid Offices all over the nation are being bombarded with these claims. If we, as an institution do not respond there will be the presumption that we do not oppose the claims made about us, and it can be treated as true and correct by the U.S. Depart. of Ed, thus granting loan forgiveness for these students. This will impact the reputation of Millersville University and has the potential to create an additional institutional financial burden if we are required to return loan funds from many years ago (as i was told, “the funds need to come out of somewhere”).

    Millersville have received 6 claims thus far. We have been encouraged to share this information with our legal counsel and have them possibility review our responses and provide legal input prior to submitting to DOE. An affidavit will also need to be signed and submitted along with each individual response. We have been advised to provide as much information as possible, whether it is their admissions application, enrollment information, transcript, billing/account activity, financial aid awards, date/stamped documents/ signatures anything that will support our defense. We will need to reach out to other offices to help with the investigations. Our office’s approach in treating these borrower defense claims will be like what we do for federal audits.

    Have your school received any claims?
    How is your school handling these claims?

    Francis Ozuna

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