Former Students Sue to Keep Expanded Loan Forgiveness

Federal student loan debt cancellation rules shifted abruptly at the end of 2024. A lawsuit filed Wednesday claims the current government is violating those new rules by denying relief to specific borrowers.

The legal action targets the U.S. Department of Education. It alleges that agency staff are rejecting applications under the old standards rather than the expanded guidelines established in January 2025. The suit was submitted in federal court by Student Defense, a borrower advocacy nonprofit. It represents Kendrick Gaussoin and potentially thousands of others in similar situations.

Gaussoin attended the Brooks Institute in Ventura, California. The for-profit school closed its doors in 2016. Under standard federal law, borrowers must have been enrolled or recently graduated to qualify for a discharge. Gaussoin had taken an eight month leave of absence before the closure. That gap placed him outside the traditional six month eligibility window.

Then Undersecretary James Kvaal changed that calculation on Jan. 6, 2025. The order cited exceptional circumstances and extended eligibility to anyone enrolled at Brooks and other schools as of May 6, 2015. Gaussoin applied for the discharge on Aug. 23, 2026. The department denied his request in a letter dated Aug. 31, citing the pre 2025 rules.

Department spokesperson Ellen Keast said the Biden administration pursued unlawful policies. She claimed the previous undersecretary inappropriately expanded the discharge period just before leaving office. However, the Trump administration used the same authority in November 2019 to widen the window for students at the Art Institute of Colorado and the Illinois Institute of Art.

Bonnie Latreille, a former senior official at Federal Student Aid, stated the secretary has the legal power to make such expansions. She reported that a top department official told her not to process discharges under the new window without approval from the incoming team. Two other former officials corroborated this account. Attorneys familiar with higher education law note that reversing the change requires a public legal explanation. The department has not provided that justification.

Gaussoin now works for an online retailer and owes nearly $22,000 in student debt. He holds no degree. His mother, Christine Gaussoin, owes about $28,000 in Parent PLUS loans. Her own discharge application was also denied this month. The Brooks Institute was founded in 1945 and sold in 1999. Enrollment declined after the sale amid complaints about sales tactics and job placement claims.