Has your school shut its doors? Or have you received the dreaded news that your for-profit college is shutting down? If you took out student loans to attend a school that’s now closed or in the process of being closed, you may have a lot of questions about closed school discharge.
There are colleges out there that have closed their doors for good. Westwood college loan forgiveness is an option because it is one of the schools that has permanently closed. It can be a jarring experience to have your school close and you’re left wondering what will happen. One big question you may have is: “Do I have to pay my student loans if my school closed?”. I know this answer is frustrating, but it depends.
Read on to learn more about what to do with your student loans if your school closed.
Closed school discharge
Let’s start with some good news. It is possible to get your federal student loans 100 percent discharged, under certain circumstances. So if you’re wondering if you have to pay your student loans if your school closed, the answer is (hopefully) no, if you meet the eligibility requirements.
If you have Direct Loans, FFEL Loans or Perkins Loans, you may be eligible for student loan discharge if you meet the following criteria:
- You were a student and enrolled in college at the time the school closed
- You were on a leave of absence that was approved by your school at the time the school closed
- You withdrew from school and your school closed within 120 days of that period
If you meet one of these criteria, you may be eligible for 100 percent student loan discharge.
On the other hand, you are disqualified from getting your student loans discharged if the school you attended closed and:
- You withdrew from school within a period that exceeds 120 days, except in rare cases
- You are enrolled and part of another educational program
- All of your coursework for your program is done — this is still true even if you have not yet obtained your diploma or certificate
It’s important to note that this information is regarding federal student loans only. If you have private student loans and your school has closed, you will need to contact the lender to see about their policy and procedures.
Applying for student loan discharge
If your school closed and you have federal student loans, they will not be automatically dismissed. You will have to apply to get your loans discharged.
First, fill out the Closed School Loan Discharge Application and send it to your loan servicer. Secondly, ask your loan servicer about the application process for getting your student loans discharged. There is not a set deadline for the application but you’d want to submit it as soon as you can.
If you are currently making payments, be sure to continue doing so until you are approved or denied for the discharge.
Once approved for student loan discharge, you’ll be off the hook for any repayment going forward.
If your application for student loan discharge is denied, you legally still have to make payments per your promissory note. If you are denied and think there has been a mistake, get in touch with your loan servicer and explain your reasoning.
Regarding what to do next with your schooling, you can take a look at the Department of Education’s Closed Schools list to see if your school is on there and learn about next steps.
Paying back your student loans
In what cases might you not qualify for a student loan discharge if your school closed? You may not be eligible if you have private student loans. Awful, I know, but it really depends on your lender. Contact them ASAP to find out about any student loan discharge options.
You may also be offered a “teach out”, which allows you complete remaining coursework toward your original program and earn your diploma through another school. In this case, you’d still be on the hook for student loans as you’re still able to complete your education and obtain a degree.
On the other hand, if you say no to a “teach out” offer, it’s likely you will not have to pay back your federal student loans.
Stay informed about your closed school discharge options
If you have attended a school which shut its doors and are wondering what to do next, don’t fret just yet.
In many cases, your federal student loans may be eligible for student loan discharge. The key is to fill out the student loan discharge form, talk to your loan servicer about the application process, and figure out the next steps for your education.
It might make sense to transfer to another program and forgo closed school loan discharge. For example, if you have $200,000 of student loans from attending Argosy University’s psychology doctoral program, you might be confident you’ll earn $80,000 with a PsyD. Without one, you think you’ll earn $50,000.
Since $200,000 in federal student debt is a lot like $400,000 in student debt (meaning you pay the same percentage of income), you want to think about your loans as a tax, not as a debt.
In that case, a payment of 10% of your income at $80,000 could be the better financial deal over paying nothing but only earning $50,000.
You must analyze closed school student loan discharge on a case by case basis. Feel free to reach out to us or share your experience in the comments below.
Did your college close? What are some of your tips for other borrowers going through the same thing?
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I wanted to know if I qualify. I left the college and was supposed to be back. Everyone knew and was okay with it. I recently am coming back and I’m notified that the massage therapy program of my school Brandford Hall is closed. I still have 10,000 to pay for a license/internship/job/experience I did not receive. I’m confused as to what I could do.
Your first step is to apply with your loan servicer and continue making payments because you don’t have anything to lose in applying.
If my school loses accreditation and I’ve completed all the classes, but not the internship required for graduation, will I be eligible for Closed School Loan Discharge if I withdraw before they close?
The closed school discharge mainly has to do with if the Dept of Ed decides the school was defrauding people. I’m not so sure a loss of accreditation will do it for you.
I was attending a automotive school in az,I’m from California. They were not able to certify me for Smog due to the fact there program didn’t cover the clean air act .needed to receive a license in California. They shut the doors and told me the tuition recovery fund would cover the loans but took the money and ran .American tec center Phoenix Az.
Grrr. Try hiring an attorney. Jay Fleischman handles cases in Cali: jay@moneywiselaw.com
I got a letter from the school I attended Sandford Brown in 06-07 I didn’t finish but I started paying back loans in 2010 I’m in default and working on a payment plan, however I got a letter in the mail advising me that due to a recent settlement with the state attorney’s general, including the Tx attorney general beginning Feb 1 2019 we are foregoing collection on any outstanding balance including interest and fees you owe to Sanford brown such balance will be reduced to 0. This action is limited to the amounts you owe to Sanford brown college and does not remove, replace or cancel any payment responsibilities that you have regarding any federal student loans or any loans owed to other institutions or 3rd parties that are outstanding. My question is does this mean that I don’t have to pay back the student loans since they are collecting on there behalf?
Certainly sounds like it! I would highly suggest reaching out to a student loan attorney like jay@moneywiselaw.com. Ask him for a connection to a competent attorney located in Texas. I would want to verify that the debt is cancelled and an attorney licensed in your state should be able to confirm that.
@Domniono Robertson if you have any information that you could share with me that would be wonderful. I also attended Sanford-Brown College and have a $27K student loan with a bogus degree. Thanks in advice!
I attended Sanford Brown College in 2003 and graduated. Because of the misleading, deceiving, and non-accreditation I have been stuck putting my loan in forbearance all this time because I simply can not afford to pay on my student loan. My loans (now with Navient) are at $27k.
I have not received any letters that my loans will be forgiven because of settlement. Is the settlement only for private student loans or federal? I believe that my student loan is federal but I am not for sure.
Any advice on this would help or what can be done to have my loans removed?
This has been a burden on myself for so many years financially and emotionally.
I’d suggest applying for borrower defense to repayment and see what happens. https://borrowerdischarge.ed.gov/s/?language=en_US That’s the online application. These forgiveness rulings are being held up by the Dept of Ed right now, but you should go ahead and try to get the loans discharged
I went to long technical college in Phoenix Arizona and I was supposed to get refresher courses for life. I now have a medical assistant diploma that has become worthless to me and I still owe 6k on it. I graduated over 10 years ago and was out of work for 4 years. So I have any recourse?
Probably not Rachel if it was me I’d just try to eliminate it so I could move on. If it was 60k I might have a different answer. If you wanted a second opinion consider hiring a student loan lawyer.
Does getting a closed school loan discharge prevent you from getting aid in the future?
I don’t believe so but I’d definitely check on that
Do you have any information about any other loans? I took out a loan at Mr J’s hair Academy In 1989 in the amount of 5,000 dollars. Now they are saying that I owe 39,000. How is that possible. When the cost of the class only cost 5,000 dollars?
Probably because it’s been compounding since payments didnt get made and since student loans cant be discharged in bankruptcy that’s how it happened. Sorry to hear. I’d definitely contact an attorney like jay@moneywiselaw.com to see if you can do something about it.
If I attend a school 14 years ago (never completed) and the school is currently closed down due to fraud do I qualify for loan forgiveness
Generally you have to have been a student while the school closed, but here’s the discharge form if you want to try https://studentaid.ed.gov/sa/sites/default/files/closed-school-loan-discharge-form.pdf
i attended a school that said they get you into the job once out. I completed associates and the continued to work on bachelors online where I had all kinds of problems and then was with drawn from the program cause I was told i took to long to complete even though they wouldnt help figure out my problems and still had no help on getting the job the said they would help get. not long after leaving the school closed and I was left with empty promises and loans I am fighting to pay and a job doing something I didnt go to school for
That’s tough. I don’t think you’d be able to get any discharged unless you were enrolled when it closed.
I took a leave of absence last July which was good for 6 months. However, I never received a follow up about that in January from the school and could not get in contact with anyone as employees were being let go then the school officially closed in March and merged with another school. I’m still trying to get in touch with someone at the merged school to see if am still listed as a student as I never did sign off anything about officially withdrawing. I’m assuming my loan discharge application was denied because it’s been past 120 days since I took a leave. Now I’m in the process of filling out another application to explain why I should not be denied. What “rare” cases are you referring to that would qualify me to have my loans discharged?
The rarest cases are borrower defense to repayment saying you were scammed essentially. The closed school discharge is easier to get if you were a student when it closed. Hence, I think you probably would be listed as a student and if you just want to quit entirely the closed school discharge is definitely worth applying for.
Hi I attended wyotech college for a trade in HVAC school was sued and closed for wrongful and misleading students on so many things my question is I attended in 2007 and lawsuit was I believe in 2015 or so I paid off my private loan but couldn’t afford my federal loan and now is and has been in default for some time am I eligible for a borrower discharge and get my life back thank you very much
Borrower defense to repayment sounds like it’d be your only option. https://borrowerdischarge.ed.gov/s/?language=en_US
Thanks alot travis I appreciate that any advice on how to verbalize it so I have a shot on getting this removed
Sure thing good luck!
It won’t let me unless my enrollment was on or after June 1st 2010 I was in 2007 but def misled with my loans and interest included 100% on job placement totally bogus
I am 100% disabled The only income is social security disability insurance (SSDI) and The Department Of Education has been taking money 10% out of my check. Because of this, I am currently now living in a homeless shelter. While I was attending Kapalan I had a loss of my son who was 19 and a donor. I was dealing with. I told the school about this but they continued to charge me they basically brushed me off.
How can I get this money back. I have tried several times and I have met deadlines and yet they continue to take money out. Can you direct me to where or whom I can get help with this situation?
Thank you,
Lora C
You should apply for a disability discharge. Perhaps one of the lawyers on this might be able to help https://www.studentloanplanner.com/student-loan-lawyer/
Travis – I attended Katharine Gibbs in 2008 school closed in 2009 while I was enrolled didn’t tell us the circumstance and changed name to SBI campus Stanford brown which is not accredited school… Fast forward there was a class action lawsuit to Stanford brown for fraud then they closed… I’ve been paying ppl to help with situation for years no help granted and I’m not understanding why I’m left with 41,000 loan due to a fraud school that they are aware of the credits don’t even transfer I couldn’t even continue my education because I would need to start over and I’m already in a scam debt… I’m in Ny any suggestions they are currently take my wages and tax offset… I’m finding out now there is school closed loan discharge ( do I qualify for that since I took out a loan for Katharine Gibbs that closed when I was enrolled I technically didn’t get a degree at Katharine Gibbs ) because when I finished it was Stanford Brown which I didn’t agree to that change and loan was taken out in beginning all together not like semesters
If you transferred schools from a teach out plan (voluntarily or not) then you wouldnt qualify for closed school discharge and your only option would be to apply for borrower defense to repayment.
Ok so being that they put me in Sanford Brown involuntarily I should be included in the discharge that NY AG passed please read https://ag.ny.gov/press-release/ag-schneiderman-announces-groundbreaking-1025-million-dollar-settlement-profit
I am seeking advice. I went to Westwood and graduated and a year later myfedloan consolidation came on my credit. I’ve done all I know and they won’t remove it. I even talked with myfedloan and I have never been in default and they were paid and consolidated. How can I get it removed from my credit, I don’t owe!
Sounds like you should talk to a student loan lawyer like Jay: jay@moneywiselaw.com
Deville Asset Management is the creditor that is trying to collect on student loans already paid and consolidated within myfedloan. That won’t provide me with anything and dispute comes back as verified but won’t give what has been verified or how.
My collage closed in 2015 a few years after I dropped my classes due to fraud. I recieved a letter from the attorney general a year later reguarding student loan forgiveness. Enclosed was a list of things to complete. I wasnt able to do so because I couldnt remember my loggin and other codes for my classes I was in. My question is do you think I would be able to get my student loans erased?
I think if I was you I’d reach out to your state AG’s office sounds like they cared
I keep seeing that if you attended a school and graduated within 120 days of the school closing that you may qualify for the Closed School Discharge. Is this correct? I’m seeing conflicting information.
I believe that’s the case. Basically the closed school discharge if you qualify is much easier to get than borrower defense to repayment.
I attended CHI institute in the 2004 , later it changed to Brightwood Institute. I was paying for it out of pocket; then later I had agreement with this school to pay monthly in the amount of $50 after I graduated. I had setup an autopayment with my bank for this remaining balance since graduation. Recently, Brightwood rejected my payments. The money sent back to my bank. Next, the debt collector sent me a letter which asked me to pay for the amount on the behalf of Brightwood. I did not want to pay to the debt collector, ONLY to Brightwood. Should I continue to pay for the balance with the debt collector? I greatly appreciate for any advise!
You really need an attorney I think in your state that knows consumer protection laws.
I went to Everst in Rochestet by, graduated in 08, school closed prob 5 to 8 years ago. I owed 16,000 when I left, couldnt make payments of close to 500 a month after graduation between the 2 loans. I ignored them. Over time they kept taking my taxes. Have taken close to 15,000 over time. Made a repayment plan. Couldnt keep paying $305 a month, went in default again, 2018 taxes, just took $11,400 in taxes again and I still owe around $20,000…my credit is around 500 becuz of loan..no in a program that I pay $25 a month for to keep in standing, but still defaulted
Can you try to consolidate it. Call the default resolution group at the Dept of Education. Their number is 800-621-3115. Consolidate it and get it on the REPAYE plan and that should start to fix your credit and spare you the tax refund garnishment.
I attended ITT Tech back in 2012-2015 and got 2 degrees. Now ITT is closed and I owe close to $86k due to student loans. I was in deferment for a while and now they said I can’t do it again and now I have to pay close to $435 per month. Between my health conditions, doctors and more, I can not make these payments. They threaten me to garnish my wages and my taxes unless I settle this. ITT lied to all of their students and I felt cheated on my education. What can I do to settle this?
I’d try to rehab the debt and get it on an income based payment option while you attempt to get the debt discharged. It’s unfortunately not easy right now w the new Trump rules for discharge.
Hello my name is George Davenport, I attend it ITT and the school closed down. last year my income tax was taken from not paying on student loan. what can i do to get my income tax back. or not have to go through my taxes being taken again?
Sign up for the REPAYE program George. You can do this by calling your loan servicer or consolidating the loan to a direct loan.
Hiya,
I attended Westwood College ’07-’11, I recently discovered they closed when trying to retrieve a copy of my transcripts. Was initially under the impression that my loans were deferred but quickly discovered they had been sent to collection and sold countless times. Like many, it was next to impossible landing a gig in the preferred area of study so after years of being homeless or unemployed I’m finally in a place to start working on all of this. I don’t believe I qualify for the
loan discharge program but I’m curious how you would tackle the smoldering wreckage that is my life. As an Army Vet, I do feel like I was taken advantage of initially but I’m not looking for sympathy, just a way to start making things right. I’m certain the collection balance has increased pass ($80-90k) and my credit score is probably in the negatives by now, but I still want to try. Where would you start if you were me… consolidation? borrower defense? assume a new identity?
Thanks for taking the time to hear me out.
You need to contact a student loan attorney. Thank you for your service. https://www.studentloanplanner.com/student-loan-lawyer/
Hi- I attended a nursing school that knowingly was losing it’s accreditation. But didnt notify us until after we signed up for the semesters and and too late to drop. I am having problems finding a bsn or msn program to take me from no accrediting school. I applied for a BorrowerDefense a few months ago. Do you think i have a chance of getting it and a refund? I make less $$ because i cant get into a school- thank you-
There’s certainly a shot but the govt has made it harder to get. I’d get on an income driven plan for now and work hard to get into a new program.
I graduated from the art institute of portland back in 2012, I started a post back at another Portland State shortly after. I’ve returned from army service to find the institute is shut down and I can’t seem to get any info on my records. I’ve summited twice for my transcript and nothing has come back. I’m contacting my states records to see what they have. Should I seek some kind of discharge on my student loans? Let me know if you would need more info to answer the question. Thanks for your help.
Try applying for the closed school discharge (you’re generally only eligible if the school closed down before you were able to earn a degree)
https://studentaid.ed.gov/sa/sites/default/files/closed-school-loan-discharge-form.pdf
They’re making it way harder to get any forgiveness just so you know, so I wish I could help more.
Thanks for getting back to me and I’ll give it a try.
I enrolled in a program offered by America Career Training Travel School, it was 20 home-study lessons along with the three-week residential training.(between 1988-1990). Upon further research the school closed in 1990, due to fraud, misuse loans and lost its accreditation. I applied for a School Closure Loan Discharge.
The loan service provider was unable to approve my request based on additional information needed such as a transcript showing dates of attendance, separation dates, etc. I am unable to obtain this information as the school is no longer valid. The collection agency that has it now is showing an outstanding balance of $19, 397.04. With a notice of potential wage garnishment. Would I qualify for a School Closure Loan Discharge?
You def need a student loan lawyer could be past the statute of limitations
Any private student loan forgiveness for argosy after graduation? even if paid back, can I get it?
Very unlikely
I attended ITT tech from 2010-2012. I had to withdraw from the program due to family issues with my mother on law who passed away in early November of 2012. I went on a LOA and then received a letter about 4 weeks later saying that I have been discharged from school. Since the school has been shut down since 2016, would I qualify for this?
There’s tons of lawsuits around ITT Tech forgiveness right now, so I would suggest signing up for an income driven plan right now or exhausting your forbearance options and not going into default on it.
I’m currently on REPAYE program through fedloan servicing
I was wanting to change careers at middle age. In 2014, I got my Bachelor’s degree in Web Design & Development when I was 49 years old. I was not told that the technology field only hires the young people. I never could find a job in web design. I am now 56 years old and paying on students loans (Dept. of Education mostly)…..for myself…..and I don’t even have children! What a waste of time and money! Does this mean that I am NOT qualified for the Student Loan Discharge?
It’s generally very hard to get so I wouldn’t be able to say without knowing lots of details about your situation.
I was attending Silicon Valley College but they closed and i never finished the program for Graphic Designing. Later, it was bought by western career College, they took off the IT part, now its known as Carrington college, then, Silicon Valley University. The same campus. In Fremont CA. The state now shut the school down. My question is am still paying for loan, am i still qualified for school closure loan cancellation? How can i proof the school closed when it exchanged so many owners?
You’ll need to google the dept of ed closed school page and they have info to contact about it
My Son attended the Colorado Art Institute of Denver and wasn’t able to finish the 4 because of the cost. Since then the school closed their door’s in 2018 and now that he is ready to go back to school we find that he lost all of his credits because the school was no longer accredited. He is paying for student loans and is getting nothing out of. What course of action can we can take? He would like to try and get some of his loans forgiven if at all possible. Any guidance you can give would be appreciated.
I’m not sure you’ll have luck given he wasnt enrolled when it closed. I’d suggest attempting to apply for “borrower defense to repayment.” This kind of loan forgiveness is available in some situations where the Dept of Ed determined that students were lied to or misled by a school or program, and it sometimes results in the loans being completely discharged. The acceptance rate is not super high, but it’s worth a shot
https://borrowerdischarge.ed.gov/s/?language=en_US
I attended a school operating for profit. I withdrew because a death in the family. I tried to return and the school lost accreditation in the degree I was pursuing. I asked what I should do and they said pursue another degree even though I already completed 30 out 36 required hours. The degree they offered was not even related to the field I wanted to pursue. I waited and a month later I received a notice saying the school was closing. This time period was outside the 120 day window. They offered schools but they would only take 10 of my 30 hours and I never got to finish my initial degree. I applied for the loan discharge 2 years ago. My loans are still in forbearance because they are still investigating my case. How do I follow up on what is happening and is it likely the Dept of Ed will grant me a discharge?
Likely with a new administration and unlikely with the current one. That’s my thought at least
I attended Esatern International College in Jersey City, NJ. I took off a year for medial reasons. After i attempted to return the associates program that I was enrolled in converted into a BSN program. I was told I had to either return As a bachelors student or not at all. I completed all my coursework. The only only thing left to complete is my internship. Help I owe almost 40,000 in loans for a degree i cant complete.
So sorry Tay hopefully you can transfer? If not then you actually want to take out more debt to get the nursing degree then go work for a non profit hospital and get it all forgiven with PSLF: https://www.studentloanplanner.com/public-service-loan-forgiveness
Hi I attended ATI in Richardson Tx in 2009 and withdrew to have my baby so I loans from there . I went back to ATI in garland to finish my medical assistant program in 2012 where I got more loans I finished all the courses but had to withdraw to take care of my mother before I did my extern hours they closed after I left . I haven’t really looked into it much but they did close because of fraud . I have never paid on my loans I’m not employed I stay at home with kids they have been in forbearance and deferment this whole time. Is it possible I could get any of my loans forgiven since they enrolled me without a GED
Only option would be borrower defense to repayment which is not working well right now https://borrowerdischarge.ed.gov/s/?language=en_US
I’m in default of my student loans. I attended a court reporting school which closed in March 24, 2017. I withdrew in September 7, 2016. I would like to know if It would be possible to get any of my student loans forgiven.
You had to be enrolled when it closed, so you’re probably not eligible but check with Dept of Ed
My fiancé, Jose L Quintana, has an offset against his taxes from the DOE for over $9,000. The school he attended Watterson School of Business and Tech of PA was closed down in 1992, while he was attending, for fraud. Would he be eligible for loan forgiveness and how would he go about fighting something that happened over 20 years ago? Please see a book named Clearinghouse Review article name is Case Study: False Certification of ability to benefit at the Watterson School in Philadelphia..
Wow w the loans being that old I’d guess there’s no remedy. One of my attorney friends might know https://www.studentloanplanner.com/student-loan-lawyer/
Hi,I know you’ve probably been asked this question a billion times. I have almost 30k in student loans (Federal), I went to school in West Palm Beach, Florida @ Lincoln College of Technology in 2015. A year after graduating the school here in West Palm went bankrupt and closed their doors. How is it fair that they can file bankruptcy but I’m stuck with a 30k bill. Is there anything I can do to minimize or get rid of these loans? I tried getting my payments lowered and IMMEDIATE CREDIT RESPONSE (the debt collector) lowered it to where the minimum payment would be $5 a month. Forward them seeing my tax return where it shows I made $34,xxx that year, they changed it to where my minimum payment is $229 a month. What do you recommend I do? Thank you so much for you help in advance. I am in default and my income tax returns have been taken for the last 3 years but I have not had my wages garnished yet. Thank you in advanced.
If these are private loans then there’s nothing you can do. If they’re federal you need to consolidate or rehabilitate them and sign up for REPAYE. Agree it’s not fair. Your only recourse is “borrower defense to repayment” because you got a degree. But that’s not an option until there’s a different administration.