How to Qualify for a Kaplan Refund via the Lawsuit & Student Loan Forgiveness Program
UPDATED Tuesday March 24th, 2020
I’ve got great news for students who attended Kaplan University, Kaplan Career Institute and Kaplan College – your federal student loans used for the school are eligible to be discharged, meaning that you may be able to get them eliminated without having to pay another cent!
Student loan forgiveness for former students of Kaplan University is readily available via two excellent Federal student loan forgiveness programs: the Borrower’s Defense To Repayment program (BDAR) and the Closed School Loan Discharge program.
In this article, I’m going to give you plenty of information about each of these powerful forgiveness programs, including who qualifies for the benefits, how to apply for them, and how to frame your Borrower’s Defense claim in order to increase your chance of getting it approved.
This is not a scam. These are real, legitimate loan forgiveness programs created by the Federal Government and designed to help former students of Kaplan University receive loan forgiveness.
NEWS ALERT: On Thursday, December 13th 2018 the Department of Education announced they will begin issuing Borrower’s Defense to Repayment Discharges for up to $150,000,000 in contested student loans.
Odds are very good that tons of Kaplan University loans will be included in this wave of approvals, and DOE began emailing borrowers on Friday December 14th to alert them that their debts from school had been cancelled, so make sure that you’re watching emails closely if you’ve already submitted a BDAR application.
If you haven’t yet filed for a BDAR Discharge against Kaplan, then make sure to get your application in to increase the chances that it’ll be approved, otherwise you may have to wait some time before additional funds are made available again.
But Before I Explain BDAR & The Closed School Discharge Program in Detail
Let me first offer you some really important advice – while I absolutely recommend trying to pursue a BDAR or Closed School Discharge, you need to be aware that the Department of Education has received so many applications that it’s taking them over 2 years to respond to people at this point, so if you need immediate financial relief, then you’ll almost certainly going to have to look elsewhere for help.If you're truly struggling with student debt, then you should also consider paying a Student Loan Debt Relief Agency for help. Why? Because the people working at these companies deal with student loans all day, every day, and they're your best chance at figuring out how to get your loans back under control.
I've interviewed all sorts of debt relief agencies over the past 10 years, talking to all sorts of so-called "experts", and I can tell you that in all honesty I've only found two companies I trust to offer actual financial relief to people struggling with student loans.
For help with FEDERAL Student Loans: Call the Student Loan Relief Helpline at 1-888-906-3065. They will review your case, evaluate your options for switching repayment plans, consolidating your loans, or pursuing forgiveness benefits, then set you up to get rid of the debt as quickly as possible.
For help with PRIVATE Student Loans: Call McCarthy Law PLC at 1-877-317-0455. They will negotiate with your lender to settle your private loans for much less than you owe, then get you a new loan for the much lower, settled amount. NOTE: McCarthy Law can ONLY help with Private student loans.
If you do decide to call one of these companies and you have a bad experience with either of them, PLEASE make sure to come back and let me know about it in the Comments!
The Kaplan University Lawsuit
One of the main reasons that Kaplan loans are eligible for the Borrower’s Defense program is that the school has been accused of defrauding the US Government to the tune of a whopping $4 billion, which is basically a record when it comes to higher education fraud.
The school was doing so many illegal things, and running such fraudulent business practices, that the US Government investigation, lawsuit and punitive measures basically forced it into closing down, which isn’t surprising if you consider just how bad they were behaving.
In fact, within the class action lawsuit against Kaplan University, we found out that they were involved in enrolling unqualified students, changing grades, and even falsifying legal documents so that their substandard programs would receive accreditation.
That’s some serious stuff, and the reason why virtually anyone who attended any of their schools should have no problem in getting their loans completely discharged via Borrower’s Defense to Repayment.
Two Ways to Discharge Kaplan University Loans
If you’re a former student of Kaplan University seeking student loan forgiveness then there are two different programs available to you, the Borrower’s Defense To Repayment and the Closed School Loan Discharge program.
To skip to the section of this Guide where I go through each of these programs in detail, please click the hot links below.
One thing to keep in mind is that you can’t (or at least shouldn’t) apply to both of these programs, so what you need to do is research how each of them works, think about your specific situation and experience with Kaplan, then decide which one will work best for you.
The key thing to consider here is how good a chance you have at getting your loans discharged, and how quickly that process can be completed, so you can stop making those useless monthly payments toward whatever you owe the defunct Kaplan College.
To help you figure out which program will work best, let’s take a closer look at them in detail.
Discharging Kaplan University Loans via Borrower’s Defense Against Repayment
The Borrower’s Defense to Repayment Program (often abbreviated BDAR) was created to help people get rid of student loans that shouldn’t exist in the first place.
The way it works is that it provides an avenue for you to get your loans legally discharged if you can prove that they were only taken out because the school, student loan lender or servicer did something fraudulent that convinced you it was a good idea to borrow the money for their program in the first place.
Basically, what you have to do to get a BDAR discharge approved is make a crystal clear argument stating that you never would have thought borrowing money for Kaplan’s higher education programs was a good idea, had you known the truth about their value.
Because Kaplan University has been proven to have broken the law in so many serious ways, especially via things like false advertising, making false claims, and lying about the value of their programs, it’ll be relatively easy for you to prove that you deserve loan forgiveness benefits.
If you’re thinking it sounds too good to be true, then fear not, because as you read this, other former Kaplan students are getting their BDAR applications approved, and having their loans entirely forgiven. To make one thing crystal clear, this is NOT a Student Loan Forgiveness Scam, as the Borrower’s Defense program was created by the US Government, and is run by the Department of Education.
If your BDAR application is filled out correctly and properly processed, then not only will you receive debt forgiveness, but you might also qualify for a refund on whatever amount of money you’ve already paid out. That’s why how you write your Borrower’s Defense claim is so important. Let’s take a look at how that process.
How to Write Your Borrower’s Defense Claim
In your Borrower’s Defense Application, it’s very important that you stress the fact that Kaplan University defrauded the US government out of $4 billion dollars, and that part of that defrauding process was directed against YOU, the person who was sold a false bill of goods, promised things that never got delivered.
You need to really emphasize the point that you would never have taken out a student loan to attend Kaplan University if they hadn’t misrepresented the quality of their educational programs to you, and you need to be specific about what things they lied to you about in order to convince you to take out the loan (things like job placement rates, total costs, potential salaries for graduates, or whatever you were promised).
Since the school was found guilty of wrongdoing it will be easy for you to prove that they employed false advertising to mislead you, but remember, you have to have actually experienced something here or you could be putting yourself at legal risk. Do not lie on your BDAR application!
When you apply for the discharge, make sure that you hiighlight specific details about what Kaplan College enrollment advisors, advertisements or other official information told you in order to entice you take out the student loan.
Also, think about what happened after you enrolled. Did the school seem to care about your academic achievements or were they only interested in the student loan money? Be very specific when writing this stuff up, because it’s not enough to simply point out that the school broke the law and was deservingly punished. You need to show that they targeted you personally.
To help you brainstorm ideas for things you could include on your application, let’s take a closer look at what exactly Kaplan University was doing that got them into trouble in the first place. If any of these things happened to you, then remember that your loan should be forgiven, and more importantly, that you can use these as the reasons for why your loan should be discharged on your BDAR application.
What Fraudulent Activity has Kaplan University Been Accused Of?
Kaplan University has been accused of enrolling unqualified students, changing grades, and falsifying legal documents related to the school’s accreditation requirements.
As I pointed out above, you will need to link your Borrower’s Defense claim to the school’s legal troubles, pointing out that the school did some or several of the things mentioned in the lawsuit against to you personally, and that it was these illegal behaviors which convinced you to agree to take out a loan for their higher education program.
If you can’t be specific and explain this clearly, then your application will be rejected and you’ll have to continue paying off that Kaplan debt. If you do a good job and make it crystal clear that you were defrauded by Kaplan, then your loans will be discharged and you’ll be able to walk away from this without paying Kaplan another cent.
Kaplan University’s Illegal Marketing Activities
In the lawsuit against Kaplan University, several serious accusations were made, and the school was found to have been guilty of the following illegal marketing activities:
- Misrepresenting their academic programs to make them sound better than they really were (by doing things like inflating graduation rates, shortening time required to complete the program, underestimating total program costs, etc.)
- Enrolling students that they knew weren’t qualified for the programs, because they didn’t have the right educational background, obviously weren’t going to be able to complete program requirements,, or something else, in order to get their student loan money
- Changing the grades of those students so that they would “pass” their courses and remain in the program, allowing Kaplan to continue collecting student loan benefits (and mostly Federal student loan benefits, which is why the school was shown to have defrauded the US Government and American Taxpayer)
But probably the worst thing that Kaplan did was falsifying legal documents so that their substandard academic programs would be accredited, which flies in the face of the entire accreditation process, and makes Kaplan one of the worst actors in a very bad industry (for-profit schools).
Did Kaplan lie to you about the prospects or value of their higher education programs? Do you feel that they enrolled you even though you weren’t qualified? Did they care about your academic performance, or were they only keeping you around to collect your Federal student loan dollars? Did they change your grades to keep you enrolled, even though you should have been dropped for poor performance?
If any of this sounds familiar to you, then you need to apply to the Borrower’s Defense Against Repayment program because you’re absolutely entitled to claim student loan forgiveness since your loans were created based on deception and lies.
Where Can I File My Borrower’s Defense Claim?
You can find the official US government application for the Borrower’s Defense program here. If you want to read through the application before you start the wizard scroll down and click the “View Form” button.
A quick word of warning to help keep you safe: do not file your Borrower’s Defense claim anywhere else!
It’s extremely important that you file it at the official US government website devoted to the program. If you Google around, you’ll probably find all sorts of people claiming that they can take your Borrower’s Defense applications for you, then supply them to the US Government, but this is not a good idea.
Not only do you not need anyone else’s help with Borrower’s Defense, but you also shouldn’t be willing to give out all the details required to complete the application to anyone other than an official US Government entity, or perhaps an attorney.
If you’re having trouble filling out the application, ask your questions in the comments section below and I’ll give you advice on how to take care of different parts of the process.
Checking The Status of My Application
Unfortunately, Borrower’s Defense claims aren’t being processed quickly because the Department of Education has been inundated with them over the past couple years, but also because the DOE is outright hostile to the benefit itself.
In fact, Betsy DeVos, our Education Secretary, has been trying to eliminate the Borrower’s Defense program entirely ever since she was appointed by President Donald Trump, who also seems to be against BDAR’s existence.
Which leads me to my next important point: if you’re eligible for a BDAR discharge, then you need to fill out the application immediately! Why? Because if DeVos successfully cancels it by defunding it or changing the law, then your only hope for receiving the discharge will be to have your application submitted BEFORE it’s dismantled.
There’s a very good chance that anyone who applies for BDAR while the program is still in existence will be grandfathered in and allowed to receive loan forgiveness, even if the program gets cut.
Discharging Kaplan University Loans via the Closed School Loan Discharge Program
If you don’t qualify for a Borrower’s Defense Discharge, then the good news is that you may have another path to forgiveness via the simple fact that Kaplan is no longer operational.
The closing of Kaplan University, Kaplan College and Kaplan Career Institute entitles former students to use the Closed School Loan Discharge program in order to obtain loan forgiveness, under certain conditions.
The Closed School program can help anyone who was studying at Kaplan University at the time it closed. or who left the school prior to the time it closed, but within 120 days of the closure.
And this program is actually the better option for receiving forgiveness benefits because even though it’s harder to qualify for them, it’s much easier to actually receive them.
While BDAR approvals are taking over a year to complete, people submitting Closed School Applications are hearing back far more quickly.
Eligibility Requirements for Closed School Discharges
For complete details of everything you could possibly want to know about the Closed School Loan Discharge program, visit my page on it here.
Alternatively, if you just want to know how to take advantage of it, then here’s the main details you need to know.
In order to qualify for a Closed School program discharge, you need to have either been still studying at Kaplan at the time it closed, or you need to have left the school no more than 120 days prior to its closing.
But that’s not all, because there are two other conditions you need to satisfy as well:
- You did not transfer your Kaplan University credits to another school which you’re currently attending.
- You did not complete all your coursework at Kaplan University, but failed to receive your diploma prior to the school’s closing.
If you satisfy these requirements there’s a very good chance that you’ll be able to obtain student loan forgiveness for your Kaplan loans.
How Do I Apply for a Closed School Discharge?
To apply for the Closed School Loan Discharge program simply download the official application, fill it out, and submit it to your loan servicer, the company that receives your monthly loan payment.
Every servicer has a slightly different way of processing these applications, so once you’ve submitted your paperwork, you’ll need to listen to them and follow their instructions in order to get the discharge approved.
Which Program is Better? Borrower’s Defense or Closed School Discharges?
They’re both good programs in that they both have the ability to wipe out your student loans and reimburse you for past payments.
The main difference between BDAR and Closed School Discharges is that applications for the Borrower’s Defense program are taking quite some time to process, with many people reporting waiting over a year to even hear back from the Department of Education.
So, assuming that you qualify for both programs, I would choose the Closed School program simply because it provides a quicker resolution. However, the choice is ultimately up to you. Read through the details about each program, think about which one will actually work for you, then fill out your application.
Will I Owe Taxes on Forgiven Debt?
Yes, unfortunately, you will end up owing taxes on the amount of forgiven student loan debt. This is because the IRS considers the forgiven debt to be taxable income, meaning that you have to claim it as income on your annual IRS tax return.
Here’s how that would work:
If you have $100,000 forgiven, then the IRS would consider you as having made an extra $100,000 for the year that your debt was forgiven. At an income tax rate of 30%, you’d need to pay the IRS $30,000, but the worst part about it is that the IRS typically wants you to pay them in a single, lump-sum payment all at once, unlike student loans which are broken up and stretched out over a period of years.
Obviously, anyone struggling with student loan debt isn’t going to have that kind of cash laying around, which is why I think we all need to be aware of the potential for what I call a “student loan forgiveness taxpocalypse” coming on the horizon.
In fact, I think this is going to create such a big problem for so many people that I’ve set up a new website called Forget Tax Debt to offer IRS tax-related advice, just like I do here for student loans.
If you’re having any problems with the IRS, or with taxes, then you need to visit Forget Tax Debt, where I’ll walk you through things like applying to the IRS Fresh Start Program, negotiating for an IRS Tax Debt Settlement, qualifying for IRS Tax Debt Forgiveness or simply Filing & Paying IRS Back Taxes.
What If I Have Other Questions About Student Loans?
If you need help with questions about general student loan topics, be sure to look at the other pages of my site, which go through both Private and Federal student loan options in detail.
For help getting Federal Student Loan Relief, look at my pages on Federal Loan Forgiveness, Federal Student Loan Bankruptcy Discharges, Federal Loan Consolidation Programs and Federal Student Loan Repayment Plans.
For help getting Private Student Loan Relief, check out my pages on Private Loan Forgiveness, Private Student Loan Consolidation, Private Student Loan Bankruptcy Discharges and Private Student Loan Default Help.
And if you have specific questions about the Borrower’s Defense Program or the Closed School Discharge Program, check out my pages on them, or look at the official US Government student loan relief website. You can find the official Borrower’s Defense program page here and the official Closed School program page here.
Please be careful about getting your information from anywhere else! While you can certainly find good information about these programs from non-governmental websites, there are also a lot of scammers taking advantage of desperate people, and you don’t want to become one of their next victims.
In the spirit of full disclosure: I do not work for the US Department of Education in any capacity. I’m not a representative of the US government. However, I would be happy to answer any questions you might have about either of these programs, or about student loan forgiveness in general. Feel free to leave your question in the comments section below and I’ll get you an answer as quickly as possible.
Disclaimer:Information obtained from Forget Student Loan Debt is for educational purposes only. You should consult a licensed financial professional before making any financial decisions. This site receives some compensation through affiliate relationships. This site is not endorsed or affiliated with the U.S. Department of Education.