Thousands of student-loan borrowers whose schools shut down have been illegally denied debt relief, a new lawsuit says

What happened: Student Defense filed a class-action lawsuit saying the Education Department is not processing closed school discharge relief for borrowers whose schools shut down, including plaintiff Kendrick Gaussoin, who attended the Brooks Institute. Key numbers: Brooks Institute shut down in 2016. A January 2025 decision expanded the relief timeframe. Why it matters: The lawsuit says qualifying borrowers are stuck paying balances and facing default, including wage garnishment and seizure of federal benefits. The department did not immediately respond to a request for comment.

Student Defense filed a class-action lawsuit saying the Education Department is not processing closed school discharge relief for borrowers whose schools shut down, including plaintiff Kendrick Gaussoin, who attended the Brooks Institute.

The lawsuit says qualifying borrowers are stuck paying balances and facing default, including wage garnishment and seizure of federal benefits. The department did not immediately respond to a request for comment.