Student Defense lawsuit challenges Education Department loan relief denials for closed-school borrowers

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Highlights

Student Defense filed a lawsuit alleging the Education Department denied closed-school loan relief despite a January 2025 Biden rule expanding discharge eligibility.
Plaintiff Kendrick Gaussoin, a former Brooks Institute student, claims tens of thousands in debt persist even after relief measures supposedly included his cohort.
Lawsuit highlights ongoing payment requirements, risk of default penalties, and intensifies policy and legal pressure on the Education Department over student-debt relief obligations.

Legal challenge over 2025 discharge rules

As first reported by Business Insider, advocacy group Student Defense files the lawsuit on behalf of Kendrick Gaussoin, a former Brooks Institute student who says he qualifies for loan cancellation but was denied relief. The complaint alleges the Education Department is not following a January 2025 Biden administration decision that expanded the timeframe for closed school discharge, a mechanism that cancels federal student debt for eligible borrowers after a school closure.

Brooks Institute, a visual arts college, shut down in 2016 amid financial distress and tighter regulation of for-profit colleges. Gaussoin says he is left with tens of thousands of dollars in debt and no degree, even after the department broadened relief for former Brooks students.

In a statement, Student Defense Vice President Alexander Elson says the department cannot promise relief to students and then ignore those commitments. He says thousands of borrowers are entitled to discharges under the department's 2025 decision, and that the group is going to court to ensure they receive them.

Financial risks for borrowers and broader policy pressure

The lawsuit says borrowers who qualify for relief are still being required to make payments on their balances. It adds that those who do not or cannot repay face default-related penalties, including wage garnishment and the seizure of federal benefits such as Social Security.

The case adds to a wider set of legal challenges facing the Trump administration over delayed student-debt relief. Advocacy groups are also pressing the department to process claims from borrowers who say they were defrauded, as well as from borrowers tied to a Biden-era repayment plan that lowered monthly payments.

The Education Department did not immediately respond to a request for comment. The department has previously denied wrongdoing in related debt-relief cases.

In our earlier article, we covered a Court of Appeal ruling in Malaysia that a lawyer with commission-partner status at a law firm could still be treated as a “partner” under the Partnership Act 1961 and held personally liable for an unpaid property sale balance. The court overturned lower-court findings and signaled that even non-equity, commission-based partnership structures may carry exposure for firm-related debts and misconduct.

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