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Latest from FSA: Secretary DeVos Approves New Methodology for Providing Student Loan Relief to Borrower Defense Applicants

December 11, 2019

Per a press release from the Department of Education, FSA has implemented a new methodology for assessing borrower defense to repayment (BDR) claims.

As noted in the release, “… the new borrower defense relief methodology relies on publicly available data to compare median earnings of graduates who have made BDR claims to the median earnings of graduates from comparable programs. If the earnings from the school in question under the BDR application are lower than the median for that program at all comparable schools, then they will be determined to have suffered harm and will receive student loan relief, either in full or in part:

  • Earnings lower than two standard deviations from the median will result in full relief.
  • Successful BDR applicants whose program earnings are lower than the median but higher than two standard deviations from the median will receive tiered relief of either 25%, 50%, or 75%, based on their program’s earnings deviation from the median.”

For more information, see the press release.

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