Borrower Defense Repayment Calculator

What Is Borrower Defense to Repayment?

Borrower Defense to Repayment is a federal student loan forgiveness program. It allows borrowers to request loan discharge if their school:

• Misled them about job placement rates
• Lied about accreditation
• Made false salary claims
• Used deceptive recruiting practices

If your claim is approved, the U.S. Department of Education may:

• Cancel some or all of your federal student loans
• Refund qualifying payments you already made
• Remove negative credit reporting related to those loans

Important: Borrower Defense only applies to federal loans. It does not apply to private loans.

What Is a Borrower Defense Repayment Calculator?

A Borrower Defense Repayment Calculator is an online tool that estimates:

1. Total federal debt that could be wiped away
2. Refund amount for past payments
3. Remaining federal balance after discharge
4. Remaining private loan balance
5. Total debt still owed

It does not guarantee approval. It simply shows a projection based on your numbers.

Think of it as a financial preview of what approval could look like.

How the Borrower Defense Calculator Works

The calculator uses four main inputs:

1. Current Federal Loan Balance

This is the total principal and interest you still owe on eligible federal loans connected to the disputed school.

Example:
If you owe $45,000 in Direct Loans from that school, you enter 45000.

2. Total Amount Already Paid

This is the total amount you previously paid toward those specific federal loans.

Example:
If you paid $15,000 before applying, enter 15000.

If you paid nothing, enter 0.

3. Expected Relief Tier

The calculator allows two relief levels:

• 100% Full Relief
• 50% Partial Relief

Under current Department of Education standards, approved claims often receive 100% discharge. However, some situations may result in partial relief.

The calculator multiplies your balance and payments by this percentage.

4. Private Loan Balance

This field is for private loans such as:

• Sallie Mae
• Discover
• SoFi
• Other private lenders

Private loans are strictly excluded from Borrower Defense.

This field helps you see what debt would still remain even if your federal loans are discharged.

How the Calculator Calculates Your Results

The logic is simple and transparent.

Step 1: Calculate Debt Discharged

Formula:

Federal Balance × Relief Percentage

Example:
$40,000 × 100% = $40,000 discharged

If partial relief (50%):

$40,000 × 50% = $20,000 discharged

Step 2: Calculate Refund Amount

Formula:

Total Paid × Relief Percentage

Example:
$10,000 paid × 100% = $10,000 refund

This refund is typically sent as a U.S. Treasury check if approved.

Step 3: Calculate Remaining Federal Balance

Formula:

Federal Balance − Discharged Amount

If 100% relief, this becomes $0.

Step 4: Add Private Loan Balance

Private loans remain untouched.

Total Debt Still Owed:

Remaining Federal Balance + Private Loan Balance

Example Scenario

Let’s say:

• Federal balance: $50,000
• Amount already paid: $12,000
• Relief tier: 100%
• Private loans: $18,000

The calculator would estimate:

• $50,000 discharged
• $12,000 refunded
• $0 remaining federal balance
• $18,000 still owed in private loans

Total debt still owed: $18,000

This makes it easy to see your real financial outcome.

Important Warnings About Private Loans

Borrower Defense only covers:

• Direct Loans
• Certain FFEL loans

It does not cover private loans.

If you still owe private debt, you may need to:

• Negotiate settlements
• Refinance
• Consider civil litigation in rare cases

The calculator includes a clear warning if you enter a private balance.

What About Administrative Forbearance?

While your Borrower Defense application is pending, you can request Administrative Forbearance.

This means:

• You do not have to make monthly payments
• Interest may continue to accrue
• If approved, accrued interest is typically wiped out

Processing can take 1 to 3 years. The calculator reminds users of this waiting period.

Tax Implications

Borrower Defense discharges are not subject to federal income tax.

That means if $50,000 is wiped away, you do not receive a tax bill for $50,000 in income.

Special Cases: Loan Consolidation

Refund calculations can become complex if you consolidated your loans.

Refunds may:

• Only apply to payments made after consolidation
• Be limited depending on how loans were grouped

The calculator provides a general estimate. Consolidation cases may require detailed review.

Why Use a Borrower Defense Repayment Calculator?

Here’s what makes it useful:

• Clear financial expectations
• Helps decide whether to apply
• Shows impact of full vs partial relief
• Separates federal and private debt
• Encourages realistic planning

Instead of guessing, you see real numbers.

Who Should Use This Calculator?

You should consider using it if:

• You attended a school that misrepresented job placement or salary data
• You believe your school engaged in misconduct
• You have federal loans connected to that school
• You want to estimate potential loan discharge

It is especially helpful before submitting your Borrower Defense application.