Borrower Defense to Repayment (BDR) claims can present significant compliance and financial risk for institutions participating in the federal student aid programs. When a claim is received, how an institution responds—and the documentation it can provide—may play an important role in the Department of Education’s review.
For institutions, the best defense often begins long before a Borrower Defense claim is filed. Strong documentation, consistent policies and procedures, and evidence demonstrating that students received the education and services promised can help an institution respond effectively if a claim arises.
Based on DJA’s BDR Best Practice Recommendations, here are several practices schools should keep in mind.
1. Do Not Ignore a Borrower Defense Notification
Institutions generally have 60 days from the notification date to respond to a Borrower Defense claim. The Department is not granting extensions, making it important for institutions to have a process in place for identifying and reviewing notifications promptly. Even when documentation is limited, institutions should submit a response. Failure to respond may be interpreted as agreement with the allegations and could affect future financial liability determinations.
This makes internal ownership particularly important. Institutions should know who is responsible for monitoring BDR notifications, who gathers supporting records, and who has authority to approve the institution’s response.
2. Documentation Is Critical
A strong response should be supported by as much contemporaneous documentation as possible. Depending on the allegations involved, relevant records may include:
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Enrollment agreements
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Catalogs and student handbooks
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Transcripts
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Attendance records
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Surveys
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Required disclosures
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Policies and procedures
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Other records relevant to the allegations
When the original records are no longer available, institutions may be able to provide blank forms or sample documents from the same period to demonstrate the policies, disclosures, or processes that were in place. Schools should also explain the circumstances surrounding unavailable records and identify any applicable record-retention requirements rather than simply leaving documentation out of the response.
3. Demonstrate the Institution’s Compliance
A BDR response should not focus exclusively on disputing an allegation. It is also an opportunity to establish the institution’s compliance during the student’s period of enrollment. Consider including documentation demonstrating that the institution maintained accreditation and complied with applicable accreditor standards, state requirements, federal regulations, and required consumer disclosures.
Institutions should also demonstrate the steps taken to provide the student with a positive educational experience. The goal is to provide the Department with a complete picture of the institution’s practices—not simply a denial of the student’s allegations.
4. Tell the Story Through Student Outcomes
Student outcome information can provide important context. Where appropriate, institutions should consider including information regarding the student’s completion or credential attainment, along with relevant employment outcomes or program completion data. Successful outcomes do not necessarily resolve the allegations contained within a BDR claim, but they can provide additional context regarding the student’s experience and the education provided by the institution.
5. Keep the Response Professional and Fact-Based
Remember that an institution’s response may ultimately become part of the public record. Responses should remain factual, professional, and respectful—even when the institution strongly disagrees with the allegations. Avoid emotional or argumentative language and do not make derogatory statements about the borrower, the Department, or the BDR process.Focus instead on documented facts and supporting evidence that directly address the allegations.
6. Know When Legal Review May Be Appropriate
Depending upon the circumstances surrounding a claim, an institution may wish to consult legal counsel before submitting its response. Legal review may be particularly important when multiple claims have been filed, significant potential financial liability exists, or allegations involve institutional misrepresentation or misconduct. Establishing in advance when a BDR response should be elevated for legal review can help institutions avoid making that determination under the pressure of a response deadline.
7. Include a Signed Institutional Affidavit
DJA recommends including a signed institutional affidavit with the response documentation. The affidavit can provide additional context regarding the institution’s relationship with the student and may address items such as:
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Relevant facts regarding the student’s enrollment
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Institutional policies and procedures in effect at the time
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Supporting information that may not otherwise be reflected in the documentation
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The institution’s commitment to compliance and student success
The Department of Education has published an Official Borrower Defense to Repayment affidavit-school-certification, which institutions are encouraged to include when responding to a Borrower Defense claim.
Where Can Schools Find Borrower Defense Claims?
Borrower Defense notifications are available through the Common Origination and Disbursement (COD) System.After logging into COD, select the School menu and navigate to Borrower Defense in the left navigation panel. Institutions should regularly review this area for pending claims and associated response deadlines. Importantly, institutions must have access to COD to respond. Responses are submitted by uploading the institution’s documentation directly through COD.
Preparation Should Begin Before a Claim Arrives
Borrower Defense response preparation should not begin on the day an institution receives a notification.Schools should periodically evaluate whether they can readily produce the documentation necessary to substantiate the representations made to students—from enrollment and required disclosures to educational delivery and student outcomes.
Consider asking:
If we received a Borrower Defense claim today involving a student who attended several years ago, could we document what that student was told, what policies were in effect, what education was provided, and how we complied with applicable requirements?
If the answer is uncertain, now is the time to review your institution’s documentation and record-retention practices.
Ultimately, the strongest Borrower Defense response is one supported by the institution’s everyday compliance practices. Respond on time. Document thoroughly. Remain professional. Demonstrate compliance and student outcomes. Those practices can help institutions both prepare for BDR claims and protect their interests when a claim is received.
DJA Financial Aid Services is available to assist institutions in navigating federal student aid administration and compliance. Institutions should consult legal counsel when legal advice is appropriate.
Thank you,
Renee Ford, Vice President
