ED Refuses to Discharge Eligible Student Debt

A group of former students filed a class action lawsuit against the Department of Education Wednesday for refusing to discharge their student loans. 

The plaintiffs, represented by the nonprofit consumer protection group Student Defense, took out loans to attend for-profit colleges owned by Career Education Corporation, Education Management Corporation, Education Corporation of America and Bay State College. Days before President Joe Biden left office in January 2025, his Education Department determined that those colleges had closed under “exceptional circumstances,” which expanded the number of borrowers who were eligible for student loan forgiveness. 

For more than 30 years, the department’s regulations have made discharges available to borrowers who were enrolled at the time of a college’s closure or who withdrew within a certain time prior to closure, known as the “look-back period.” Those regulations also allow for the  education secretary to extend the look-back period if they decide a college closed under “exceptional circumstances.”

However, the lawsuit filed in federal district court this week alleges that the department, now controlled by President Donald Trump’s second administration, has “without explanation rescinded, abandoned, or failed to implement” the Biden-era decision. As a result, the borrowers “remain obligated to repay federal student loans that the Secretary has already determined are eligible for discharge” and “continue to accrue interest on those loans and many may face collection—including, for borrowers in default, involuntary collection through Treasury offset and administrative wage garnishment.”

Kendrick Gaussoin, the named plaintiff in the lawsuit, is still carrying debt from the degree he wasn’t able to finish at the CEC-owned Brooks Institute before it shut down in 2016.  

“When the Department expanded relief for Brooks students, I was overjoyed. I qualify, but my application was denied anyway,” he said in a news release. “Now I am a father of two, struggling to get by and still carrying debt for a school that failed me. The Department must honor its decision and give students like me the relief we were promised.”

The department, which sent Gaussoin a letter explaining that he didn’t meet the pre–Biden regulation requirements for a loan discharge, has defended its refusal to acknowledge the Biden-era expansion.  

“The Biden Administration was laser-focused on implementing unlawful policies to shift student loan debt onto the back of every single hardworking American taxpayer,” Ellen Keast, a department spokesperson, told NPR. “Literally days before leaving office, the former Biden Under Secretary used the stroke of a (digital) pen to inappropriately expand the closed-school discharge period for certain institutions targeted by the previous Administration.”  

But the first Trump administration had no issue expanding the look-back period for some borrowers. In 2019, then–Education Secretary Betsy DeVos also cited “exceptional circumstances” to expand the look-back period for students who had taken out loans to attend the now-defunct Art Institute of Colorado or Illinois Institute of Art.