When your school shuts down and you’re left with no degree, you could get out of your federal student loans. There’s even a chance the Department of Education (DoE) automatically discharges your loans if you meet certain criteria. But you can’t qualify if you continue your education elsewhere.
What is closed-school student loan discharge?
Closed-school student loan discharge is a cancellation program for students who were enrolled in or recently withdrew from a school that shut down. Qualifying for discharge means you won’t have to pay for loans you took out to attend that school.
It’s only available for federal loans, though some private providers might also discharge your loans separately if your school shuts down.
Eligibility requirements for closed-school student loan discharge
You might be eligible for student loan discharge if you meet the following requirements for student loans and enrollment:
|Eligible student loans||The following types of federal student loans are eligible for closed-school discharge:|
- Direct Loans
- FFEL Loans
- Perkins Loans
|Eligible enrollment||To qualify for closed-school discharge, you must meet one of the following criteria:|
- You were enrolled when the school shut down.
- You were on an approved leave of absence when your school shut down.
- You withdrew from school within 120 days of the school closing.
You’re disqualified from closed-school student loan discharge if you …
- Finished all of your coursework at the school — even if you didn’t get a diploma or certificate.
- Withdrew more than 120 days before your school closed.
- Are finishing your degree in a similar program at another school through a teach-out, by transferring credits or any other means.
What schools qualify for closed-school student loan discharge?
Not sure if your school qualifies for closed-school discharge? Check this list to find out if yours does:
- Argosy University
- The Art Institute
- Bramson ORT College
- Brightwood College
- Brightwood Career Institute
- Career Point College
- Charlotte School of Law
- The Chef’s Academy
- Coleman University
- Corinthian Colleges
- Culinary Academy of Long Island
- Dade Medical College
- Dowling College
- DuBois Business College
- Ecotech Institute
- Everest College
- Everest Institute
- Everest University
- Ex’treme Institute
- Globe University
- Golf Academy of America
- Harrison College
- Heald College
- Heritage College
- Heritage Institute
- International Career Development College (ICDC)
- ITT Technical Institutes
- L’Ecole Culinaire
- Marinello Schools of Beauty
- Mattia College
- McNally Smith College of Music
- Medtech College
- Medtech Institute
- Missouri College
- Mount Ida College
- Park West Barber School
- Radians College
- Regency Beauty Institute
- Ridley-Lowell Business and Technical Institute
- Sage College
- Star Career Academy
- University of Southernmost Florida
- Vantage College
- Vatterott College
- Virginia College
- Westech College
- Wright Career College
How do I apply for closed-school student loan discharge?
Follow these steps to apply for closed-school student loan discharge:
- Contact your servicer. Explain the situation to the company that handles your student loan repayments. They’ll give you a student loan discharge application if you haven’t already received one.
- Complete the closed-school discharge application. You can find step-by-step instructions for how to fill out the application below.
- Follow any additional instructions from your servicer. Depending on your school and situation, you might have to submit additional paperwork along with your application.
- Continue making repayments. You’re required to make repayments on your loan while your application is being processed.
How can I find my loan servicer?
Find your student loan servicer by checking your student loan statement — your servicer is the company that handles your repayments.
Still unsure? You can use the Federal Student Loan (FSA) ID you created when you filled out the FAFSA to log in to your account on the FSA website to find out who your servicer is.
What is automatic closed-school discharge?
Automatic closed-school discharge is when your loans are canceled three years after your school closes — even if you don’t apply. To qualify, you need to meet the following criteria:
- Attended a school that closed after October 31, 2013
- Never enrolled in another school that’s eligible for federal student aid
- Meet the requirements for standard closed-school discharge
If you meet all of these requirements, the DoE begins the automatic closed-school discharge process. When this happens, your servicer will let you know that your loans are about to be canceled.
How to fill out the Loan Discharge Application: School Closure
Got your application form? Follow these steps to fill it out correctly.
Section 1: Borrower identification
Enter the following personal information in the required fields:
- Social Security number
- Full name as it appears on your student loan statement
- Primary phone number
- Alternative phone number
- Email address (optional)
If any of this information has changed since you’ve last contacted your servicer, check the box at the top of the section.
Section 2: School closure information
Questions 1 through 22 provide information about your school and student loans.
- Item 1: If you’re a student borrower, check Student borrower and skip to Item 4. Parent borrowers should check Parent borrower and continue on to Item 2.
- Items 2 and 3: Parent borrowers enter the student’s name and Social Security number. Student borrowers skip these questions.
- Items 4 through 7: Provide the name, address, dates you attended the closed-school and the name of the program attended. Write dates as mm/dd/yyyy.
- Item 8: Check whether you or the student completed the program. If you check Yes, you aren’t eligible for closed-school discharge.
- Item 9: Check whether you or the student was on an approved leave of absence when the school closed. If you check Yes, provide the dates.
- Item 10: Check Yes if you or the student was still enrolled in school when it closed and skip to Item 13. Otherwise, check No and continue to Item 11.
- Items 11 and 12: Check Yes if you withdrew from the school before it closed and provide the date of withdrawal. Otherwise, check No on Item 11 and skip to Item 13.
- Item 13: Check whether or not you’re attending a similar program at a different school. If you check No, skip to Item 16.
- Item 14: Check Yes if you’re currently attending school on a teach-out agreement — in that case, you aren’t eligible for discharge. If not, check No and continue the application.
- Item 15: Check Yes if you were able to transfer your credits to another school — you also aren’t eligible for discharge. Otherwise, check No and continue to Item 16.
- Items 16 through 18: Check Yes if you received a refund from your school and provide the amount and reason for the refund. If not, check No and move on to Item 19.
- Item 19: Check whether you made a claim for payment from the school or a third party related to attending the school. If you check No or Don’t know, continue on to Section 3. Otherwise, complete Items 20 through 22.
- Items 20 through 22: Provide details about the claim, including the name, address and phone number where you made the claim. Include the amount and status of the claim, as well as the payment you received.
Section 3: Borrower certifications, assignment and authorization
Before signing the agreement, make sure your name and Social Security number are written clearly at the top of the second page of the application.
Read the certification, assignment and authorization before signing your name and writing the date.
Once you complete the form, fax or mail it to your student loan servicer. If you’re not sure where to send it, reach out to your servicer for the correct address or fax number.
Some servicers might also offer an online version that you can send electronically through their website.
My loan discharge was approved. Now what?
Once you’re approved for closed student loan discharge, you no longer have to make repayments. And if your loan was in default, the discharge could erase the default status, improving your credit and making you eligible for more federal student aid.
If you have private or federal loans used to pay for another school, you’re still responsible for paying those off according to your repayment plan.
What can I do if my loan discharge was denied?
Contact to your student loan servicer to find out why. If you believe it was an error, ask if it’s possible to resubmit your application or provide additional documents.
Otherwise, you might want to consider alternative ways to reduce or cancel your student debt.
Alternatives to student loan discharge
Applying for discharge isn’t the only way to cancel your student loans. You can also:
- Apply for federal forgiveness. The popular Public Service Loan Forgiveness (PSLF) program can get your loans canceled after 10 years if you have an eligible job — and it’s not the only program out there.
- Apply for state forgiveness. Teachers, healthcare professionals and anyone working in public service might be eligible for state student loan forgiveness.
- Find a job that offers forgiveness benefits. Some companies also offer partial student loan forgiveness as a benefit.
- Apply for another type of student loan discharge. There are six other ways to get your federal student loans discharged — such as if you attended a school that misled you or broke the law.
Compare student loan refinancing options
If you have loans that can’t be discharged but you want to change your repayments, you could consider refinancing.
Closed-school discharge is one of several ways to have your student loans canceled. If your school closes and you never attend a similar program, the Department of Education will automatically cancel your loans within three years. And it can potentially get your student loans out of default and repair your credit.
Find out more about how it all works with our guide to student loans.
Frequently asked questions
What if my school offered me a teach-out program but I didn’t take it?
You can still qualify for closed-school student loan discharge if you reject a teach-out program. However, if you attend another similar program outside the teach-out offer, you won’t be eligible for cancellation.
Can I qualify for student loan discharge from ITT Tech?
Yes. If you’re a former ITT Tech student, you can apply for closed-school discharge through your student loan servicer.
Want to complete your degree? You can also apply to have your credits transferred to another program.
If you have state or private student loans, you might also be eligible for a refund from the State Tuition Recovery Fund. Eligibility varies by state.
Is there a Corinthian College student loan forgiveness program?
There is. You could qualify for closed-school student loan discharge if you attended a Corinthian school that closed on April 27, 2015. Otherwise, you might be able to apply for borrower defense to repayment student loan discharge if you believe Corinthian defrauded you or broke state law.