When for-profit schools do not provide the promised education, many conflicts start. On the one hand, the students blame the schools for poor education while other stakeholders require their returns from the investment. Facing all these challenges, some for-profit schools fail or close.Such a chain of events is highly familiar to students who enrolled in schools of Career Education Corporation ( or with the current name- Perdoceo Education Corporation). This high education provider closed its many colleges and institutes, including Collins, Brooks, Missouri, Le Cordon Bleu, Sanford-Brown, and many other entities during the last ten years. This guide specifically helps the students of Sanford-Brown colleges and institutes while mainly focusing on the Sanford-Brown loan forgiveness options.
It is not a secret that for-profit schools require high tuition fees. Many students incur student loan debt to finance their education. So what happens to student borrowers when the schools close?
Sure, school closure is not desirable as all the time and effort can be lost if the credit transfers to a new school are not possible. However, in some cases, students might agree to continue education in new institutes. Besides, the ones who stop enrollment have options for Sanford-Brown loan forgiveness.
Check this guide for these forgiveness options designed for federal student loan borrowers. If you have private loans, we will also share several opportunities for you in the following sections.
But Before…
Before we explain Sanford-Brown loan forgiveness options, it is necessary to understand why Sanford-Brown schools closed. Later, when we discuss Borrower’s Defense to Repayment Option, you will realize why knowing the school closure can help you get the desired forgiveness amount.
Campuses of Sanford-Brown closed in May 2015 and no longer accepted students. However, till closure, the school came a long way. Since 2007, it has faced many claims against the Sanford-Brown schools. Twelve students started a lawsuit claiming that the school used misleading recruitment techniques to convince them to enroll. The school officials lied about the transferability of credits, curriculum elements, faculty and training quality, etc. Shortly after this lawsuit, another group of students- four nursing students- started a lawsuit. They alleged that the school officials again engaged in deceptive, unethical, and unfair actions to enroll them in its medical assistant program.
One of the main issues was the transferability of credits as no other schools accepted the credits earned in Sanford-Brown. The students also claimed that the instructors lacked experience, as most were graduates of Sanford-Brown. Soon this lawsuit turned into a class-action status.
How Did the Career Education Corporation Respond?
Career Education Corporation, or with its new name, the Perdoceo Education Corporation, was the Sanford-Brown education provider or college operator. After the allegations spread against the school, the Career Education Corporation took a step to solve the issue.
In 2011, it hired a third-party audit firm to check the operations of Sanford-Brown. Soon, the audits revealed many mismanaged transactions. As a result, fifteen employees, including the Chief Executive, were fired. However, such changes also could not stop Sanford-Brown from closing.
$10 Million Worth Settlement in 2013
During the operations, some students gained the victory for the misleading activities. In 2013, Career Education Corporation agreed to pay around $10 million in settlement with the New York Attorney General. This settlement involved a $1 million penalty, and the rest were the funds for misled students. Although the corporation agreed on a settlement, it did not accept nor deny any wrongdoing.
The main reason behind this lawsuit was the claims against Career Education Corporation. Allegedly, the corporation used false advertising such as exaggerated job replacement rates to attract students. This advertisement created a false expectation that many students get employment after graduation. Hence, it helped to boost the enrollment rates.
Several schools were claimed to benefit from this technique, including Sanford-Brown, American Intercontinental, and Colorado Technical University.
What are Sanford-Brown Loan Forgiveness Options?
The school closed as it could not deal with all the claims, and the Career Education Corporation changed its strategy. When a school closes, federal student loan borrowers have direct access to Closed School Discharge. This program benefits students who are studying or withdrawn a short period before the school closes. We will discuss the details in the following sections.
However, students of for-profit schools usually qualify for another program, called Borrowers’ Defense to Repayment. This Sanford-Brown college loan forgiveness option is designed to erase the debt of students whom the schools treated unfairly. Students should prove that they were misled. Otherwise, they would not choose to study in that school.
In this process, the prior lawsuits against Sanford-Brown come to the rescue. This is why you need to know why the school closed and what the previous allegations against the college and institute were. Using this information, you can make a strong case for Sanford-Brown loan forgiveness through the Borrowers’ Defense to Repayment. Now, let’s get familiar with the details of loan forgiveness options.
Closed School Discharge
Getting Sanford-Brown loan forgiveness through the Closed School student loan discharge program is comparatively easy. This program is designed to help students that are left with losses once their schools close. The program only benefits federal student loan borrowers. Whether you have Direct, FFEL, or Perkins loans, you can get rid of 100% of the debt with this opportunity.
However, there exist some requirements.
The timing is crucial when it comes to this Sanford-Brown loan forgiveness option. When the school closes, you need to be enrolled or on approved leave. Alternatively, you might have withdrawn before the school closure date. However, you are qualified if you withdrew within 120 days before the closure. This requirement is applicable to borrowers who received the loan disbursement before July 2020.
Due to the COVID-19 pandemic, now this requirement is extended to 180 days. If you received the loan disbursement on or after July 2020 and withdrew within 180 days of the closure, you will be eligible for such a program. Sanford-Brown closed before COVID-19, so you will mostly qualify for 120 days.
What Happens if You Transferred the Credits?
Some students are lucky to transfer their credits or use other methods to continue their education in a new school. Keep in mind that if you continue your education in a comparable program, you will not qualify for this Sanford-Brown loan forgiveness. If you stop studying or start all over again in a completely different program, you can get rid of the debt.
Forgiveness Process
If you are eligible for this loan forgiveness program, you will automatically receive a notice about your eligibility. Then you can submit this notice to the loan servicer to get debt cancellation. An automatic grant of forgiveness happens three years after the school closes. If, during this time, you did not continue education in a new school and you met the eligibility requirements (e.g., you were enrolled at the time of closure), your loan will be discharged. Alternatively, you might avoid waiting and can contact your loan servicer to explain the situation. In this way, you can apply for Sanford-Brown loan forgiveness through Closed School Discharge.
Keep in mind that you should not stop repaying the debt unless you receive approval and you are assured that your debt is forgiven. You can watch our short video about Closed School Discharge program application below:
Full Benefits of CSD
Closed school discharge brings immense benefits to students. First, the borrower gets rid of the whole debt incurred for studying in Sanford-Brown college and institutes. Next, the students receive reimbursements for the payments they made involuntarily, such as through wage garnishments.
Besides, the loan servicer will notify the credit rating agencies to delete any record related to the loan. If you previously missed payments or your credit score was hurt for any reason, your credit performance will boost after the deletion of records. Unfortunately, there is no compensation for the time and effort the borrower put into studying in Sanford-Brown. However, the Closed School Discharge program helps such borrowers avoid financial struggles due to incurred student loans.
Borrowers’ Defense to Repayment
For Closed School Discharge, you have to be enrolled at the time of closure or withdrawn shortly before the closure. There exist many student loan borrowers that graduated long before the school closed. They got their degrees and completed programs. Hence, they will not qualify for Closed School Discharge.
However, they might also struggle with debt repayment. Besides, their degrees might not be valued as the school faced many allegations regarding the quality of education. So what should be the solution in such cases?
One of the best options is the Borrowers’ Defense to Repayment program if you have a federal loan. This forgiveness option was created to protect the welfare of students whom the for-profit schools misled. Usually, for-profit school officials lie about the quality of education, job replacement rates, or the true cost of loans to attract more students.
The school might even offer benefits to enrollment employees based on the number of students enrolled. Such benefits stimulate enrollment officers to engage in fraudulent activities to convince the students. As a result, borrowers choose schools that they otherwise would not choose if they knew the truth.
Eligibility Conditions
Getting Sanford-Brown student loan forgiveness through Borrowers’ Defense to Repayment can be challenging. Generally, a Direct federal loan qualifies for this program. FFEL or Perkins loans do not qualify for this program. An important condition is proving the mismanagement of the school. The Education Department should believe that you made a decision under the influence of false promises of school officials. Proving such a case is not easy.
You need to gather a lot of evidence to present a strong case. For example, if the school lied to you about job replacement rates, you can submit email communications, brochures, contracts, or any other document showing the false claim of the school. Besides, the borrowers should explain the details of the case clearly and in a structured way. Organizing your arguments, supporting them with proofs is the best way to qualify for Borrowers’ Defense to Repayment.
Keep in mind that you can only get this Sanford-Brown loan forgiveness if you faced an education-related fraud. Such cases include, but are not restricted to, false information on education quality, curriculum nature, transferability of credits, job replacement rates, the true cost of student loans for tuition fees. You cannot apply to this forgiveness program if you face non-education-related issues such as physical abuse or harassment.
Application
Application to Borrowers’ Defense rule takes around thirty minutes. You will need to provide personal information, education-related information, and explain the issue. Besides, you need to submit any proofs you have to support your claims. You can watch our short video on the Borrowers’ Defense to Repayment application below. Alternatively, you can check the official Student Aid website for further information.
How Much Debt is Forgiven?
When it comes to discharging percentage, it is a complicated issue for now. Previous Education Secretary developed a new way of calculating discharge percentage. This technique involved comparing the earning of a misled borrower with the earning of another student who completed a similar program.
However, this method did not work for some students. Even some borrowers got approval for such Sanford-Brown institute student loan forgiveness, but their discharge percentage was 0. Besides, during the Trump Administration, this program lacked support from the government and the Education Department. The application review process was delayed, and many students received rejections.
Luckily, President Biden shared his support for Borrower’s Rule and claimed that he would bring this program to its glorious days in his education plan. When he was elected, he appointed a new Education Secretary. Soon, the news was announced that those who got partial discharge after the approval would receive a full discharge. Such change creates a hope that more borrowers will get 100% discharge with the upcoming renewed earning calculation method.
What about Private Student Loan?
Unfortunately, neither Closed School Discharge nor Borrowers’ Defense to Repayment is available to private student loan borrowers. Government cannot interfere with private lenders’ operations. Hence, federal student aid programs do not involve private loans.
If you have such a loan, the first thing you need to do is contacting your loan servicer. Explain your challenges for debt repayment and ask for your options. Mostly the loan servicers grant a short-term loan forbearance to borrowers in need of support. During forbearance, debt repayment is stopped. However, interest will continue to accrue.
Once the repayment is resumed, the borrower should pay both the accumulated interest and the following payments. The interest can also be capitalized and added to the original balance. In general, forbearance can be a short-term solution, but it also has many disadvantages.
Student Loan Refinancing
One of the best options for private student debt is loan refinancing. Refinancing a loan means the borrower gets a new loan and uses the money to pay out the existing debt. For some people, such a strategy might sound vague. However, it can bring huge benefits if applied properly.
The new loan should have better characteristics than the existing loan. For example, if the borrower can find a different private lender with lower interest rates, he/she can get the money to pay out the loan. In this way, the borrowers save money. Besides, as one of the loans is completely repaid, the credit performance can increase.
Refinancing works best when the market interest rates decline. In this case, it is easy to find a lender with lower interest rates. Alternatively, if many years passed after your first loan and improved your credit performance during this time, you can qualify for better loan terms. Borrowers with better credit history can get shorter repayment periods or low monthly payments. Moreover, if you are not satisfied with the lender and want to change it, you can refinance.
We understand that student loan refinancing cannot be a total replacement to Sanford-Brown loan forgiveness through discharge or Borrowers’ Defense to Repayment. However, refinancing is almost the best option that private lenders can access.
Eligibility Conditions
Borrowers need to have a stable income, good credit performance, and a co-signer to qualify for refinancing. Good credit performance usually requires 600 or more scores. A co-signer is a third party like a friend or a relative who can guarantee the payments if you fail to do so.
Usually, if the borrower is still a student, he/she would not have a stable income or great credit history. Therefore, co-signer is almost inevitable. Besides, bad debt refinancing requires a co-signer because there is a lower probability that the borrower will repay the new loan. If the debtor has excellent conditions, a co-signer might not be required.
Final Words
The closure of Sanford-Brown college and institutions was bad news, but luckily students can get rid of debt incurred for a closed school. This guide explains two programs that Sanford-Brown students can qualify to eliminate the debt- Closed School Discharge and Borrowers’ Defense to Repayment. Sure, some other loan forgiveness options exist, such as Public Service Loan Forgiveness, but they are available to any federal loan borrower.
For private loan borrowers, Sanford-Brown loan forgiveness options are not available. There is not any complete forgiveness program that can eliminate private debt. However, it is possible to reduce debt obligations and save money through student loan refinancing. If you cannot decide which option to choose or have further questions or concerns, you can immediately get a free consultation from Student Loans Resolved experts.
