Student Defense filed a closed school discharge program lawsuit on Wednesday, saying the Education Department is denying relief to borrowers whose schools shut down. The case was brought on behalf of Kendrick Gaussoin, who says his application was denied even though he qualifies under the expanded January 2025 decision.
Gaussoin said he took out loans to attend the Brooks Institute, which shut down in 2016. He said he is still carrying that debt and remains responsible for payments tied to a school that no longer exists.
January 2025 decision
The lawsuit centers on a January 2025 decision that expanded the timeframe for closed school discharge relief. Student Defense says the Education Department has not been following that extension, even as borrowers who qualify under it continue to be told to keep paying down their balances.
Alexander Elson, vice president of Student Defense, said, "The Department cannot make promises to students and then pretend that those promises do not exist." He also said, "Thousands of borrowers are entitled to discharges under the Department's 2025 Decision, and we are going to court to make sure they receive them."
Brooks Institute borrowers
Gaussoin said, "When the Department expanded relief for Brooks students, I was overjoyed. I qualify, but my application was denied anyway." He added, "Now I am a father of two, struggling to get by and still carrying debt for a school that failed me."
The lawsuit says borrowers who do not get the discharge can face default consequences, including wage garnishment and the seizure of federal benefits such as Social Security. For affected borrowers, the immediate issue is whether the department treats the January 2025 expansion as a real basis for cancellation or continues denying applications tied to closed schools.
Education Department
The Education Department did not immediately respond to a request for comment. The lawsuit now moves into court, with the dispute focused on how many borrowers should receive relief under the expanded timeframe and whether denials already issued should stand.
