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How to apply for closed-school student loan discharge

Cancel your federal debt if you never earned that degree.

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.

Can my federal loans be discharged due to coronavirus?

There is no coronavirus student loan discharge option as of March 16, 2020. Even if your school closed temporarily, you’re still responsible for repaying your student loans. Contact your servicer and look into income-driven repayments, deferment and forbearance if you’re struggling with your bills during the coronavirus outbreak.

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:

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.
  • You withdrew more than 120 days before your school closed.
  • You’re finishing your degree in a similar program at another school through a teach-out, by transferring credits or any other means.
  • How do I apply for closed-school student loan discharge?

    Follow these steps to apply for closed-school student loan discharge:

  1. 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.
  2. Complete the closed-school discharge application. You can find step-by-step instructions for how to fill out the application below.
  3. Follow any additional instructions from your servicer. Depending on your school and situation, you might have to submit additional paperwork along with your application.
  4. 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?

You can 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.

  • 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?

    You can reach out 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:

    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.

    Name Product Min. Credit Score Loan amount
    Purefy Student Loan Refinancing (Variable Rate)
    $7,500 - $300,000
    Refinance all types of student loans — including federal and parent PLUS loans.
    Credible Student Loan Refinancing
    Good to excellent credit
    Starting at $5,000
    Get prequalified offers from top student loan refinancing providers in one place.
    SoFi Student Loan Refinancing Variable Rate (with Autopay)
    Starting at $5,000
    A leader in student loan refinancing, SoFi can help you refinance your loans and pay them off sooner.
    Splash Financial Student Loan Refinancing
    Starting at $7,500
    Save on your student loans with this market-leading newcomer.
    Education Loan Finance Student Loan Refinancing
    Starting at $15,000
    Lower your student debt costs with manageable payments, affordable rates and flexible terms.
    Earnest Student Loan Refinancing
    $5,000 - $500,000
    Get a tailored interest rate and repayment plan with no hidden fees.

    Compare up to 4 providers

    Bottom line

    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

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