Guide to Capella University Loan Forgiveness, Lawsuit & Refunds.

Student Loans Are Complicated.

See if you are eligible for Student Loan Forgiveness

Table of Contents

If you are a former student of Capella University, you might qualify for student loan forgiveness via the Borrower’s Defense To Repayment program. This could provide substantial assistance for individuals still struggling with student loan debt.

In this article, we will cover the Borrower’s Defense To Repayment and other options for student loan forgiveness.

We’re here to help you get your loans forgiven and manage your finances like a pro!

Ready to get started? Let’s dive right in!

Capella University Overview

Capella University is a for-profit institution based in Minneapolis, Minnesota, with a broad offering of career-focused degrees from business to health sciences, education, IT, and public service.

Capella University holds accreditation from the Higher Learning Commission, meaning that credits earned here may be transferable to other universities. However, it’s always subject to the policies of the receiving institution.

Want to get in touch? Contact Capella University directly at (888) 227-2736 or visit their official website at for more information.

According to data from the College Scorecard, the average tuition fee for a full-time student at Capella University in 2023 is around $14,000 per year. 

However, it’s important to note that the actual cost may vary depending on the degree program and other factors. 

The average debt per student stands at approximately $25,000. Unfortunately, Capella University has a slightly high default rate, with about 9.3% of students defaulting on their loans within three years of leaving school.

Capella University: Lawsuits

Despite its recognition in online education, Capella University hasn’t been immune to legal hurdles. It’s faced several class-action lawsuits over the years.

A notable one in 2014 involved doctoral students accusing Capella University of unnecessarily lengthening programs, causing higher fees and increased student debt. The university’s profit-driven approach was called into question.

Another lawsuit hit in 2018, claiming Capella University misled students about the duration and cost of online doctoral degrees. Despite Capella University’s denial, this lawsuit intensified scrutiny of for-profit university practices.

As a former Capella University student, it’s essential to understand these lawsuits, as they can influence your rights, options, and potential eligibility for loan forgiveness for Capella University. 

Borrower Defense to Repayment: Recent Settlements Impacting Student Loan Forgiveness

The Borrower Defense to Repayment program provides relief to students who have been defrauded by their college or university. Recently, there has been news of a significant settlement that could impact students seeking Capella University Loan Forgiveness through this program. 

The settlement aims to provide financial compensation for eligible borrowers and strengthen the borrower defense process, ensuring more students can access the relief they deserve.

In recent years, there have been several settlements involving for-profit colleges due to allegations of deceptive marketing, fraudulent practices, and predatory lending. Some notable examples include:

1. ITT Technical Institute: In 2018, ITT Tech agreed to a $600 million settlement, which provided debt relief to former students who had taken out loans from the college. This settlement came after ITT Tech filed for bankruptcy in 2016 and closed all its campuses. The college was accused of misleading students about job placement rates, accreditation, and overall quality of education.

2. Corinthian Colleges: Corinthian Colleges, which operated Everest Institute, Heald College, and Wyotech, reached a $1.1 billion settlement in 2016. The college was accused of false advertising, inflating job placement rates, and using high-pressure sales tactics to enroll students. The settlement included more than $800 million in loan forgiveness for students who had been defrauded.

3. DeVry University: DeVry agreed to a $100 million settlement in 2016 with the Federal Trade Commission (FTC) after being accused of misleading students about job placement rates and potential earnings. The settlement provided $49.4 million in cash compensation for affected students and $50.6 million in debt relief.

4. University of Phoenix: In 2019, the University of Phoenix agreed to a $191 million settlement with the FTC, with $50 million in cash and $141 million in debt forgiveness for students who were misled by the university’s deceptive marketing practices. The university was accused of falsely claiming partnerships with major companies to provide job opportunities for graduates.

5. Education Corporation of America (ECA): In 2020, ECA, which operated Virginia College, Brightwood College, and other institutions, agreed to a $3 million settlement over allegations of misleading prospective students about accreditation, job placement rates, and other critical information. The settlement provided debt relief to affected students.

These settlements represent just a few examples of the ongoing efforts to hold for-profit colleges accountable for their actions and provide relief to students who have been defrauded. 

Capella University Loan Forgiveness Options

After facing legal troubles, Capella University graduates may be eligible for federal loan forgiveness programs to alleviate the burden of their student loan debt.

Some of the programs that graduates may qualify for include:

1. Borrower Defense to Repayment: This program offers loan forgiveness to students who have been defrauded by their college or university. Graduates who can prove that Capella University misled them about job placement rates, accreditation, or other important aspects of their education may be eligible for full or partial forgiveness of their federal student loans. For example, if a student was promised a certain job placement rate upon graduation, but the actual rate was significantly lower, they might qualify for this program.

2. Closed School Discharge: If a Capella University campus was closed while a student was enrolled or shortly after they withdrew, the student may be eligible for a full discharge of their federal student loans. This program is specifically for students who were unable to complete their education due to the closure and were not offered a teach-out plan or a comparable program at another institution.

3. Income-Driven Repayment (IDR) ForgivenessCapella University graduates experiencing financial hardship may qualify for an IDR plan. Under these plans, monthly loan payments are based on the borrower’s income and family size, and after 20-25 years of qualifying payments, the remaining loan balance may be forgiven. For example, if a graduate is struggling to find a well-paying job in their field and meets the eligibility requirements, they could enroll in an IDR plan and potentially have their remaining loan balance forgiven after the repayment period.

4. Public Service Loan Forgiveness (PSLF): Graduates working in qualifying public service jobs, such as government or non-profit organizations, may be eligible for PSLF. After making 120 qualifying monthly payments under a qualifying repayment plan, the remaining loan balance may be forgiven. For instance, a Capella University graduate working for a non-profit healthcare organization and making consistent, on-time payments under an IDR plan could qualify for PSLF after 10 years of service.

5. TPD Discharge (Total & Permanent Disability Discharge): Graduates who are unable to work due to a total and permanent disability may be eligible for a Total and Permanent Disability Discharge. This program provides forgiveness for federal student loans if the borrower can provide documentation from the U.S. Department of Veterans Affairs, the Social Security Administration, or a physician certifying their disability. For example, a Capella University graduate who becomes permanently disabled and is no longer able to maintain employment in their field could qualify for TPD discharge.

6. Temporary Expanded Public Service Loan Forgiveness (TEPSLF): TEPSLF is an extension of the Public Service Loan Forgiveness (PSLF) program and offers loan forgiveness for borrowers who were initially denied PSLF due to being enrolled in a non-qualifying repayment plan. Graduates must still meet the PSLF requirements, such as working in a qualifying public service job and making 120 qualifying monthly payments. If a Capella University graduate applied for PSLF but was denied because they were on a non-qualifying repayment plan, they may be eligible for TEPSLF after switching to a qualifying repayment plan and fulfilling the requirements.

By considering these additional loan forgiveness options, Capella University graduates can further explore potential avenues for alleviating their student loan debt and achieving financial stability.

Capella University – Other Student Loan Repayment Options

For Capella University graduates who have private student loans or have defaulted on their loans, there are additional repayment options that can help alleviate the burden of student loan debt. Some of these strategies include:

1. Private Loan Refinancing: Graduates with private student loans may consider refinancing to obtain a lower interest rate or better repayment terms. Refinancing involves taking out a new loan to pay off the existing loan, and borrowers with good credit scores and stable incomes are more likely to secure favorable terms. Keep in mind that refinancing federal loans into a private loan will result in the loss of federal loan benefits, such as income-driven repayment plans and loan forgiveness programs.

2. Loan Consolidation: Consolidating multiple loans into a single loan can simplify the repayment process and potentially lower the overall interest rate. While federal loan consolidation is only available for federal loans, some private lenders offer consolidation options for private loans. Be cautious when consolidating federal loans with private loans, as this will result in the loss of federal loan benefits.

3. Loan Rehabilitation: Borrowers who have defaulted on their federal student loans may qualify for loan rehabilitation. This process involves making nine voluntary, reasonable, and affordable monthly payments within 20 days of the due date for ten consecutive months. Successful loan rehabilitation can remove the default status from the borrower’s credit history and restore eligibility for federal loan benefits, such as income-driven repayment plans and loan forgiveness programs.

Find Professional Help

Feeling overwhelmed by all this information? It’s perfectly normal. Student loan debt, lawsuits, and the intricacies of loan forgiveness programs can be a tough maze to navigate on your own. 

Getting in touch with a student loan advisor can make a difference. They have the knowledge and experience to guide you through the process, helping you understand your options and potentially saving you from financial distress. 

Reach out to a student loan advisor today, and take the first step towards regaining control over your financial future.


Where can I find more information about federal student loans and loan forgiveness programs?

For more information about federal student loans and various loan forgiveness programs, visit

Has Capella University been involved in any lawsuits?

Yes, Capella University has faced several lawsuits, mainly alleging that the university misled students about program length and costs.

What is the Borrower Defense to Repayment program, and how does it work?

The Borrower Defense to Repayment program is a federal initiative that allows students who believe their school defrauded them to apply for loan forgiveness. Specific details can vary, making it important to seek professional advice or visit for more information.


Join our newsletter.

Read other articles.

You're Our Priority, Every Step of the Way!

Here at Debt Management Success, we believe that financial decisions should be made with absolute confidence. While we might not showcase every financial product out there, we take pride in offering unbiased, straightforward guidance, information, and innovative tools — all at no cost to you.

Unveiling How We Sustain Our Platform:

We keep our lights on through partnerships with financial institutions. These partnerships may influence the products we choose to spotlight and their positioning on our platform. However, let us emphasize that this does not sway the authenticity of our recommendations or advice. Our insights are backed by countless hours of meticulous research.

It’s important to note that our partners cannot buy favorable reviews or endorsements. Our commitment remains steadfast in delivering impartial, well-researched opinions, ensuring your trust and confidence in our platform.

Feel free to further personalize this disclosure to align with your brand’s voice and style.

See Your Student Loan Forgiveness Eligibility

Join the over 50 Thousand people who have received help from!

Contact Information
Do You Owe Over $10,000 in Federal Student Loans?
What is The Current Loan Status of Your Loans?
Do you have Unsecured Debts Over $10,000?
Did You Attended a For-Profit College?
Are you Currently Enrolled in College or Going Through Active Bankruptcy?
Are You Employed Full-Time?

See Your Student Loan Forgiveness Eligibility

Join the over 50 Thousand people who have received help from!

Contact Information
Do You Owe Over $10,000 in Federal Student Loans?
What is The Current Loan Status of Your Loans?
Do you have Unsecured Debts Over $10,000?
Did You Attended a For-Profit College?
Are you Currently Enrolled in College or Going Through Active Bankruptcy?
Are You Employed Full-Time?
Student Loan Forgiveness Deadline Extended