You should’ve been worrying about where your next job would be or passing your semester finals. Instead, Argosy University’s school closure gave you a financial headache.
The University was financially irresponsible with federal student aid funds, leaving thousands of students to scramble with their finances mid-semester. The U.S. Department of Education suspended Argosy University, owned by Dream Center Education Holdings, from receiving any more financial aid due to its failure to pay credit balance refunds to students and parents.
If you’re a student or parent who was affected by this event, you probably have pressing questions about your options.
Argosy University Closed: What you can do first
Gather your student loan information in one place. If you’re unsure, find your record at the National Student Loan Data System. This database tells you what loans you have and who your loan servicers are.
Next, get your educational records by ordering transcripts. Keep an unofficial copy with you to weigh your next steps.
5 financial options after Argosy University
A closed school doesn’t have to mean a mountain of debt with no degree to show for it. You have financial options, but the one you choose depends on your future plans. Here’s what you can do.
1. Apply for closed school discharge for federal loans
Closed school discharge dismisses all of your federal student loans, except PLUS loans, if you qualify. The amount discharged won’t count as taxable income.
You can only discharge the amount borrowed while at Argosy University. Any amount borrowed for previous programs or while in attendance at another school won’t be eligible.
You must have been:
- Enrolled in Argosy University at the time of closure, or
- On an approved leave of absence from Argosy University when the school closed, or
- Argosy University closed within 120 days of when you withdrew
If you’re eligible, you can apply using the closed school loan discharge form and send it to your loan servicer. Continue making payments and stay in contact with your loan servicer for updates.
What disqualifies you from closed school discharge?
- If you withdrew from Argosy University within a period that exceeds 120 days from the closure date
- You opted for “teach-out” or a transfer of credits to another university program
- You completed your coursework or program at Argosy University, even if you didn’t receive a diploma or certificate
Essentially, you can’t use the credits earned at Argosy and still receive closed school discharge. But there are still financial options for continuing on with your education.
When do you apply for closed school discharge?
You can apply for closed school discharge as soon as Argosy University’s school closure date is confirmed by the Department of Education. Updates are posted for Argosy University on the Federal Student Aid Announcements for Dream Center page. The Federal Student Aid school closure list is also updated regularly.
Don’t wait for Automatic Closed School Discharge. The Department of Education will automatically discharge federal loans taken out for closed schools after Nov. 1, 2013. They’ll do so within a span of three years if you have not enrolled in another program that offers federal student aid.
In the case of Argosy University, there’s no need to wait for three years. If you choose to go for closed school discharge, file right away.
2. Know the rules for private student loans, Pell Grants or used GI Bill benefits
Unfortunately, if you have private student loans, a Pell Grant or utilized GI Bill benefits, you can’t discharge or receive a refund for that aid.
If you have private student loans, contact your lender for payment plan options.
The Pell Grant doesn’t need to be paid back, which is the good news. There’s no way to have those funds reimbursed. What you used will still be a part of your eligibility term of 12 semesters.
GI Bill benefits can’t be reset even if the school closes. You can transfer to another school and continue to use your military benefits.
Is pursuing a degree after Argosy University worth it?
Quitting school and giving up your career dreams doesn’t have to be your only option. You can continue on in another program and still be able to manage your student loans. It’ll be worth it if you can make at least 10 percent more than you would with your last degree earned.
3. Consider a “teach-out” with the same or similar degree program
Argosy University may have offered you a teach-out opportunity. A “teach-out” is an agreement between the closed school and nearby schools for the fair transfer of credits to complete a program of study. You can’t discharge your student loans, but you can look at forgiveness programs for your repayment plan.
WASC Senior College and University Commission, Argosy’s accreditor, published an official list of schools offering teach-out programs to Argosy University students.
4. Transfer to a new school with the same or similar degree program
Transferring is another viable option, but it makes you ineligible for closed school discharge.
When transferring, you typically can’t use all of the credits you’ve earned from coursework. The school you transfer to determines which credits, if any, are compatible with its degree program.
Shop around for programs and pay attention to the credits they take. To get the best transfer options, reach out to an admissions counselor for accurate information.
5. Transfer to an entirely different program of study
If you decide your current degree program isn’t what you want to pursue, you can transfer your Argosy University credits to a new program of study and still be eligible for closed school discharge.
The language used by the Department of Education is “comparable.” You can’t use your credits for any comparable program of study. Otherwise, you’re ineligible for closed school discharge. This means a complete career pathway change.
Loan eligibility when continuing your education
If you choose to continue your education and forgo closed school loan discharge, you’re still eligible for federal aid. That said, the previous student loan limits are not reset. To find out how much federal aid you have received, and what your remaining eligibility is, log into your Federal Student Aid account. The time limit doesn’t apply for Direct Unsubsidized Loans.
If you’re nearing your federal financial aid limits, you’re still eligible for Grad PLUS loans. Check with your new school to learn how to apply.
You can also consider a private student loan as an option to fund your education. Do so with awareness, since these types of loans come with fewer borrower protections than federal student loans.
What about student loan forgiveness?
Utilizing a forgiveness program can make continuing school worth it if you owe $50,000 or more. There are two major forgiveness programs that are the most beneficial for borrowers. The often discussed Public Service Loan Forgiveness (PSLF) program offers complete loan forgiveness after working 10 years full-time at a government or non-profit employer, and utilizing an income-driven repayment (IDR) plan for your loans. The amount forgiven with PSLF program is not considered taxable income.
If PSLF isn’t an option because you work in the private sector or as a part-time employee, you can opt for an IDR plan and be eligible for loan forgiveness after 20 to 25 years.
These plans are available to almost everyone, but read the complete guide to IDR plans before jumping in. You’ll make payments for 20 to 25 years that are capped at 10 percent of your discretionary income. The remaining balance is then forgiven. The amount forgiven is taxed income.
The amount you pay with an IDR plan is based on your income, not the amount you owe. So whether you leave school $100,000 in debt or $300,000 in debt, the payment would be the same. This is important to consider because as long as your income is at least 10 percent higher than without the degree, you can afford to continue your educational pursuits.
The choice to pursue student loan forgiveness or pay off your student loans aggressively depends on your income and the amount you’ll owe at the end of your educational pursuits.
Need help making your decision?
Now that Argosy University is closed, you need to make some hard choices in your career and decide how much student debt to take on for your future.
We’re here to help with these complicated decisions. If you want a personal discussion about your plans going forward from Argosy University, consider scheduling a consultation with a professional who can provide individualized advice.