Student Defense filed a class-action lawsuit on Wednesday that says the Education Department is refusing to process closed school discharge relief for borrowers whose schools shut down, even after a January 2025 decision broadened who can qualify. The case was brought on behalf of Kendrick Gaussoin, who says he is still carrying tens of thousands of dollars in debt for a school that closed years ago.
Gaussoin took out loans to attend the Brooks Institute, which shut down in 2016 after financial distress and new regulation on for-profit colleges. He says he has no degree and is still trying to make ends meet while the debt remains on his account. The timing of the lawsuit matters because it comes after the Biden administration's January 2025 decision expanded the timeframe for closed school discharge relief, a change that was supposed to open the door to more borrowers.
Student Defense says that has not happened. In the lawsuit, borrowers who qualify for relief are described as being left to keep paying balances that should have been erased, with the risk of default hanging over them if they cannot keep up. That can mean wage garnishment or seizure of federal benefits such as Social Security, according to the filing. Alexander Elson, representing Student Defense, said the Department cannot make promises to students and then pretend those promises do not exist, and added that thousands of borrowers are entitled to discharges under the 2025 decision.
The central dispute is not over whether closed school discharge exists. It is over whether the Education Department is following the expanded timeframe set out in the January 2025 decision. The lawsuit says it is not, and that the department has kept eligible borrowers in limbo instead of processing their discharges. The filing also points to a broader problem: borrowers who should have been made whole are still stuck with debt from schools that are gone.
Gaussoin says the delay is personal as well as financial. He said that when the Department expanded relief for Brooks students, he was overjoyed because he believed he qualified, only to see his application denied anyway. He also said he is a father of two and still burdened by debt from a school that failed him. The next move now belongs to the court, which will have to decide whether the Department must honor the expanded relief window and clear the discharges that borrowers say they are owed.
