Key facts
- A lawsuit claims the Department of Education is illegally denying debt relief to thousands of student-loan borrowers.
- The borrowers are those whose schools shut down.
- The lawsuit was filed by advocacy group Student Defense.
- The "closed school discharge" mechanism allows debt relief for borrowers whose schools closed.
- An expanded timeframe for relief was established in January 2025.
A new class-action lawsuit alleges that the Department of Education is illegally denying student-loan debt relief to thousands of borrowers whose schools have shut down. The suit, filed by advocacy group Student Defense on behalf of borrower Kendrick Gaussoin, claims the department is not adhering to an expanded timeframe for "closed school discharge" relief, which allows borrowers to have their loans forgiven if their institution closes. Gaussoin, who attended the Brooks Institute before it shut down in 2016, stated his application for relief was denied despite qualifying under the expanded rules. The lawsuit asserts that affected borrowers are still being required to repay their loans, facing consequences of default.