Student Defense Sues Education Department Over Closed School Loan Discharges

Kendrick Gaussoin applied for student loan forgiveness on Aug. 23, 2026, and received a denial letter seven days later. The U.S. Department of Education rejected his request for a closed school discharge because he did not meet the traditional eligibility requirements, despite a rule change from the previous administration that would have qualified him. Gaussoin, who attended the for-profit Brooks Institute in Ventura, California, now carries nearly $22,000 in debt and no degree. He is one of potentially thousands of borrowers represented in a lawsuit filed Wednesday in federal court by the nonprofit Student Defense. The suit claims the current administration is illegally refusing to follow the program's established rules.

Brooks Institute closed its doors in August 2016, leaving students stranded with large balances. Gaussoin had taken an eight-month leave of absence in December 2015 to work as a photographer. That absence placed him outside the standard six-month look-back window for debt cancellation. However, in January 2025, the Biden-era Department of Education expanded eligibility for borrowers from several closed schools, including Brooks. An order signed by then-undersecretary James Kvaal on Jan. 6, 2025, allowed any borrower enrolled as of May 6, 2015, to qualify for discharge and a refund of past payments.

The Trump administration rejected Gaussoin's application on the basis of the older rules. Education Department spokesperson Ellen Keast stated that the Biden administration used "unlawful" policies to shift debt onto taxpayers. Keast argued that the former undersecretary inappropriately expanded the discharge period for institutions targeted by the previous administration. This stance conflicts with actions taken during the first Trump term. In November 2019, Secretary Betsy DeVos used the same legal authority to expand the look-back window for borrowers at the Art Institute of Colorado and the Illinois Institute of Art, citing exceptional circumstances.

Bonnie Latreille, a former top official at the Federal Student Aid office, said the secretary has the legal authority to expand the eligibility window. She noted that a top department official instructed staff not to process discharges under the expanded rules without approval from the incoming Trump team. Two other former officials confirmed this internal pause. Attorneys for Student Defense argue that the department cannot simply ignore the previous changes without providing a reasoned legal explanation to the public. The department did not respond to a request to share its specific legal justification for the denials.

Gaussoin’s mother, Christine, also faces a denied application. She took out Parent PLUS loans to support her son, believing the school’s promises that he would graduate debt-free. She now owes about $28,000 and works in retail. The Gaussoins argue that the school misled them about costs and job placement rates. The lawsuit seeks to force the administration to honor the expanded eligibility criteria for borrowers like Gaussoin.

The next step in the legal process is for the federal court to review the arguments presented by Student Defense and the Department of Education. The department has stated it stands by its implementation of the closed school discharge program.