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Does a Borrower Need to Show that They Were Financially Harmed by School Misrepresentations?

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The student loan crisis in the United States affects more than just the borrowers, and while there are over 45 million students in the country who have taken out sometimes enormous loans, the impacts can be felt within their entire families too. Parents of older children often may be stressed as they took out their own, separate loans to pay for their children’s tuition, or they may have served as cosigners later finding themselves on the line for large amounts of money if the original debtor defaults.

Young adult family households may be under significant duress as younger (or older) parents may be struggling to put food on the table while also paying off an average student monthly loan payment of almost $400. And while that is a lot for a graduate in the 20 to 30-year-old range to handle, the truth is that a payment that large would be daunting in many cases—even for an adult who already had a career on the ground.

Sadly, there has been little protection for student loan borrowers, aside from the borrower defense rule which offers retribution financially for borrowers who have basically been ‘taken’ by schools. The rules have tightened up, and the windows of opportunity have become more restricted in regards to the borrower defense rule; in fact, now it is even more difficult for a borrower to prove or show that they were harmed by a school’s misrepresentation, usually in the form of overly aggressive marketing and promises regarding the educational experience and potential for income later.

Under the 2016 Rule, borrowers could state that they had taken a loan based on misrepresentation, and that was enough. Under the 2019 Rule, borrowers must provide documents proving that they did experience financial harm ‘beyond the obligation’ to repay the loan. It must also be proven that any financial firm was not ‘due to the economy overall.’

Speak with an attorney from Fitzgerald & Campbell, APLC as soon as possible to examine your options. Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include student loan issues, bankruptcy, and other debt management processes. We are here to help! Click here to schedule a free 30-minute consultation, call us at (844) 431-3851, or email us at

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