If your college or career school closed while you were enrolled, or shortly after you withdrew, read below to learn more about your options and eligibility for loan discharge and about what happens if your loan discharge is denied.
Learn more about the factors that may make you ineligible for a closed school discharge here.
You may explore this option if you received any of the following:
Having your federal loans discharged means that you will have no further obligation to repay some or all of the loan and may receive reimbursement of any payments that were made by you or paid through a forced collection. There is no deadline to apply for a closed school federal loan discharge after your school has closed.
You may be eligible for a closed school federal loan discharge if any of the following apply to you:
If any of the above applies to you, you can apply for a closed school federal loan discharge by completing and returning the Loan Discharge Application: School Closure form to your loan servicer.
If you are unsure of the date your school closed, please refer to the current list of closed schools and resources found on the Office of Federal Student Aid’s webpage. Please note that this list is constantly updated and is likely to change as there is the potential for additional school closures.
Instead of applying for a closed school federal loan discharge, you may wish to keep the credits you have earned and transfer those credits to another school with a comparable program. If you do transfer into a comparable program offered by another school, that school will evaluate your coursework and decide whether to give you credit for the work you have already completed, as well as determine what courses you will need to take to complete the program of study at their institution. Some closed schools may facilitate this transfer process through an arrangement with other open schools via a written agreement called a “teach-out” plan. A teach-out plan is a written agreement that a school puts into place to make sure its students are treated fairly when finishing their program of study. If your institution has entered into a teach-out agreement with another institution, you will find information on the institution’s fact sheet.
It is important to know that if you transfer the credits you have earned toward a comparable program at another school and complete, or are in the process of completing that program, you will not be eligible to receive a closed school federal loan discharge.
However, if you enroll in a completely different program of study at a new school, you may qualify for a closed school loan discharge because the program of study at the new school is completely different from the program of study at your closed school for which the loans were intended. Please note that there is no separate application or process if you enroll at a new school in a completely different program from your program of study at your school that has closed.
If your loan discharge is denied, you remain responsible for repaying the loan. For most discharges, the decision on whether to discharge the loan is final and cannot be appealed. The two exceptions are False Certification and Forged Signature discharges. If you receive these types of discharges, you may ask the U.S. Department of Education to review the denial. In this case, you may be eligible for a discharge of your Direct Loan or FFEL Program loan if any of these circumstances are true:
If your school has closed and your closed school federal loan discharge application has been denied, you should research the following options: