Student Defense sues Education Dept. over closed-school loan discharges

DeVos used same authority to expand loan discharges in 2019

Student Defense, a nonprofit borrower advocacy group, filed the lawsuit in federal court on behalf of Gaussoin and potentially thousands of other borrowers. The suit alleges the Trump administration is illegally refusing to fully follow all of the program’s rules for closed school discharge, the federal process that cancels the debts of qualified borrowers whose colleges close suddenly.

Gaussoin enrolled at Brooks Institute, a private, for-profit college in Ventura, Calif., where he was working toward a bachelor’s degree in photography. Founded in 1945, the school was once well regarded, but after its sale in 1999 enrollment declined as borrowers accused Brooks of high-pressure sales tactics, lying about graduation and job placement rates, and misleading students about the school’s high cost. On an August day a decade ago, Gaussoin drove to campus to find classmates and friends milling outside and the school’s doors chained shut. “It was very eerie,” he said. “Everyone was crying. Everyone felt like they’d lost everything.” The school had been shut down by its parent company, leaving Gaussoin and some classmates with heavy student loan debts and no clear path to a degree.

“I was completely discouraged,” Gaussoin said. “I basically gave up, and I’ve spent the past nine years really just trying my best to move forward.”

Federal law has required the secretary of education for more than three decades to cancel the debts of qualified borrowers whose schools close suddenly. According to a review by the nonpartisan Government Accountability Office, more than 1,100 colleges closed between 2010 and 2020, including Brooks, leaving 246,000 borrowers eligible for a closed school discharge. Under the program’s traditional rules, borrowers qualify if they were enrolled at the time of closure or left school no more than six months before the closure.

Gaussoin fell outside that window. In December 2015, he took an eight-month leave of absence to work as a photographer. Because Brooks closed in August 2016 as he was returning, the leave put him beyond the program’s standard look-back period.

His eligibility changed near the end of the Biden administration. In an order dated Jan. 6, 2025, then-Undersecretary James Kvaal expanded the look-back window for borrowers who had attended several closed schools, including Brooks, ruling that the schools had closed under “exceptional circumstances” that justified more leniency for borrowers. Under the change, any borrower enrolled as of May 6, 2015 would qualify for a discharge and a refund of any past payments.

Gaussoin applied on Aug. 23, 2026, noting in his application that he fell within the expanded window. A week later, in a letter dated Aug. 31, the Trump administration denied his request, telling him he did not meet the traditional pre-Biden eligibility requirements.

Asked why the department appeared to be ignoring the Biden-era expansion, Education Department spokesperson Ellen Keast said: “The Biden Administration was laser-focused on implementing unlawful policies to shift student loan debt onto the back of every single hardworking American taxpayer. Literally days before leaving office, the former Biden Under Secretary used the stroke of a (digital) pen to inappropriately expand the closed-school discharge period for certain institutions targeted by the previous Administration.”

The “unlawful” characterization is new for a Trump Education Department. In November 2019, during the first Trump administration, Education Secretary Betsy DeVos used the same authority, citing “exceptional circumstances,” to expand the look-back window for borrowers who had attended the Art Institute of Colorado and the Illinois Institute of Art. “Students were failed and deserve to be made whole,” DeVos said at the time.

Bonnie Latreille, a former top official in the office of Federal Student Aid during the Biden administration, said the secretary has the legal authority to expand the window. If the Trump administration is trying to quietly ignore or revoke that rule change, she said, “then I think that raises legal flags.” Latreille said a top department official instructed her not to immediately process closed school discharges using the expanded window without approval from the incoming Trump team. Two other former department officials corroborated her account, speaking on condition of anonymity because they feared professional repercussions.

Attorneys at Student Defense argue that the department cannot simply ignore or abandon the Biden-era changes because they were made well within the bounds of the department’s legal authority. Multiple higher education attorneys not associated with the case told NPR that reversing the changes would require the department to build a reasoned, legal explanation and share it with the public. The department did not respond to a request to share its legal justification, and it told NPR it stands by its implementation of the program.

Gaussoin is now married with two young children and works for an online retailer, carrying nearly $22,000 in student loan debt, including interest, with no degree. “I’ve been working hard at just trying to survive off minimum wage,” he said. “It’s been really tough.”

His mother, Christine Gaussoin, took out Parent PLUS loans to pay for his education after the school led her to believe the loans would cover his costs and keep him debt-free. When a counselor emailed that more money was needed, she said she was “tapped out,” living on disability while recovering from a total knee replacement. Her son then took out federal loans to finish the degree; when he called to tell her the school’s doors had been chained shut, she said she thought, “This is a joke, right?”

Christine Gaussoin works in retail and owes about $28,000 that she worries she may never pay off. Her debts also technically qualify for discharge under the Biden-era change, and her own application was denied this month. “The school promised us that this was gonna be his ticket — to make the most money he will ever be able to [as a photographer],” she said. Instead, a decade later, she said, the school and the family’s unpaid debts are still holding them back.