; (ii) provide evidence described in subparagraph (B) that supports a borrower defense to repayment of the loan; and (iii) indicate whether the borrower has made a claim with respect to the information underlying the borrower defense with any third party and, if so, the amount of any payment received by the borrower or credited to the borrower’s loan obligation. (B) Evidence The borrower has a borrower defense if— (i) the borrower, whether as an individual or as a member of a class, or a governmental agency, has obtained against the institution of higher education a nondefault, favorable contested judgment based on State or Federal law in a court or administrative tribunal of competent jurisdiction; (ii) the institution of higher education for which the borrower received the loan made under this part failed to perform its obligations under the terms of a contract with the student; or (iii) the institution of higher education described in clause (ii) or any of its representatives engaged directly in marketing, recruitment or admissions activities, or any other institution of higher education, organization, or person with whom such institution has an agreement to provide educational programs, or to provide marketing, advertising, recruiting, or admissions services, made a substantial misrepresentation within the meaning of section 487(c)(3)(B)(i)(II) that the borrower reasonably relied on when the borrower decided to attend, or to continue attending, such institution. (3) Secretarial notification requirements (A) Receipt of application Upon receipt of a borrower’s application, the Secretary— (i) if the borrower is not in default on the loan for which a borrower defense has been asserted, shall grant a forbearance and notify the borrower of the option to decline the forbearance and to continue making payments on the loan