Please see the information below regarding the benefits and consequences of closed school loan discharges. There is a link to the application at the bottom of this page.
If your school closes while you’re enrolled or soon after you withdraw, you may be eligible for discharge of your federal student loan.
Learn about the eligibility requirements for discharge and how you can apply.
There are certain eligibility requirements to qualify for a closed school discharge; you must apply to get a discharge.
It’s important for you to obtain your academic and financial aid records if your school closes since you might need those records if you plan to attend another school or want your student loans discharged.
You may be eligible for a 100 percent discharge of your William D. Ford Federal Direct Loan (Direct Loan) Program loans, Federal Family Education Loan (FFEL) Program loans, or Federal Perkins Loans if you were unable to complete your program because your school closed, and if
You are not eligible for discharge of your loans if your school closes and any of the following is true:
Contact your loan servicer about the application process for getting your loan discharged.
If you meet the eligibility requirements for a closed school discharge of your loans obtained to attend a school that closed on or after Nov. 1, 2013, and you have not enrolled at another school that participates in the federal student aid programs within three years of the date your prior school closed, you will receive an automatic closed school discharge. This discharge will be initiated by the U.S. Department of Education (ED), and you will be notified by your loan servicer.
Although this closed school loan discharge is granted automatically after three years have passed since your school’s closure, nothing prevents you from applying for and receiving a closed school discharge as soon as your school’s official closure date is confirmed by ED. If you 1) attended a school that closed less than three years ago, 2) meet the eligibility requirements for a closed school discharge, and 3) want your loans discharged, contact your loan servicer about applying for a closed school discharge now instead of waiting for three years to receive an automatic closed school discharge.
By receiving a closed school loan discharge,
You will need to contact the private lender that made the loan to get that information.
Only loans you received for a program that you were unable to complete because of the school’s closure are eligible for discharge.
For example, if you initially enrolled in Program A, but decided not to continue with that program and transferred to Program B, and you were then unable to complete Program B because the school closed, only loans you received for Program B could potentially be discharged.
In the example, you would not be eligible for discharge of any loans you received for Program A, because the school’s closure did not prevent you from completing that program.
No. Before closing, some schools may issue a diploma or certificate to students who did not complete the program of study. If you did not complete your program of study, the fact that the school gave you a diploma or certificate does not disqualify you for discharge.
No. Transfer of credits from the closed school to a completely different program of study at the new school does not disqualify you for discharge.
Contact the state licensing agency in the state where the school was located to find out if the state has the records.
A teach-out is a written agreement between schools that provides for the equitable treatment of students and a reasonable opportunity for students to complete their program of study if a school ceases to operate before all students have completed their program of study.
It depends. If you completed or are in the process of completing a comparable program of study at another school through a teach-out, by transferring academic credits or hours from the closed school, or by any other comparable means, you are not eligible for a closed school discharge.
However, you may be eligible for discharge if you completed or are in the process of completing a comparable program at another school, but you did not participate in a teach-out, transfer credits or hours from the closed school, or benefit from the training you received at the closed school by any other comparable means, and if you otherwise meet the eligibility requirements for a closed school discharge.