Student Loans

Borrower Defense to Repayment

Discharge where your school misled you. Which rules apply depends entirely on when your loans were first disbursed, and the newest and most generous set has been pushed back to 2035.

What it takes

  • Loans first disbursed on or after 1 July 2020 are judged under the 2019 rules: a misrepresentation made with intent to deceive or reckless disregard, reasonable reliance on it, and resulting financial harm. Individual claims only, and the evidentiary bar is high.
  • Loans first disbursed between 1 July 2017 and 1 July 2020 fall under the 2016 rules.
  • Loans first disbursed between 1 July 1995 and 1 July 2017 fall under the 1995 rules, which turn on a state-law cause of action.

What it does not cover

  • The 2022 regulations, which were considerably more generous, are delayed to 1 July 2035.
  • A challenge to the strict limits was dismissed in May 2026, so they stand.

Federally tax-free

Excluded from federal income under section 108(f)(5).

State treatment is separate and this site does not guess at it. Check your state.

Sources

  1. Public Service Loan Forgiveness, U.S. Department of Education. Checked on . Backs the 120 qualifying payments and which plans qualify; that Tiered Standard payments do not qualify; the qualifying and non-qualifying employer categories; that the vacated employer rule has no effect.
  2. Teacher Loan Forgiveness, U.S. Department of Education. Checked on . Backs the $17,500 and $5,000 amounts and who each applies to; the five complete and consecutive years requirement; that the same service cannot count towards PSLF.
  3. Total and Permanent Disability discharge, U.S. Department of Education. Checked on . Backs the three qualification routes; the automatic discharge through quarterly data matches; the three-year monitoring period and that a VA-based discharge has none.
  4. Closed School discharge, U.S. Department of Education. Checked on . Backs the 180-day window and the automatic discharge one year after closure; the refund of payments and deletion of adverse credit history.
  5. Court actions affecting income-driven repayment, U.S. Department of Education. Checked on . Backs that the tax exclusion covered discharges from 1 January 2021 to 31 December 2025; that a milestone reached before 2026 remains covered if the discharge is processed later.

Checked on .