If you want the fastest way to get rid of your student debt, you have to use the U.S. Education Department’s Closed School Discharge Program. This program helps you to pay off your student debts from a school that closed down before you were able to complete a program.
The Closed School Discharge is mainly an excellent alternative for you if you attended one of the biggest for-profit institutions that closed their schools in recent years. If you want to find a way to get rid of your student loans for a closed school, follow our guide.
Who Is Eligible For a Closed School Discharge?
One vital thing to point out about the program is that they are only available to people who took out federal student loans. In other words, you need to have a federal loan under the FFEL loans, Direct Loans, or Perkins loans program to qualify for the Closed School Discharge Program.
Now, the particular terms of the program state that you must not have finished all your courses required for graduation. Also, you should’ve been attending the institution either within 120 days of the official closure date or attending the school before it closed down.
If you qualify for any of these requirements, what follows next should be an automatic process for the program approval. So we recommend that you pay close attention to this guide and follow the instructions closely. That’s because when you follow the instructions in this guide, you have a high chance of getting your student loans forgiven.
You Have Other Options To Consider
However, you may not qualify for the Closed School Discharge. Even still, you have a chance to prove your debt validity through the Borrower Defense to Repayment program.
This program is particularly effective against the type of institutions that have closed down in recent years.
Full Requirement Rules For The Closed School Discharge Program
You can be eligible for the Closed School Discharge if your institution shut down under one of the following circumstances:
- The school you attended shut down while you were still in school. However, you were not able to finish your program because of the school’s closure.
- The institution you attended closed within 120 days after you stopped the program.
This program has made news by numerous closures of the biggest for-profit schools. Some of the schools were the major institutions in the world.
First of all, the Corinthian Colleges (Everest, Heald, and Wyotech) had lawsuits against them which made things interesting in 2015. Then the lawsuits moved to huge schools like the Westwood College and ITT Tech lawsuits in 2016.
If you went to ITT Tech, for example, you could check out the ITT Tech student loan forgiveness options to help you get rid of your student loans.
Conditions That Can Disqualify You For A Discharge
If you find yourself in any of the following categories, then you won’t qualify for the Closed School Discharge:
- You stopped the program more than 120 days before the school closed
- You’re enrolled in a similar educational program at another institution after transferring your academic credits from the school that was closed down. And you did it through teach-out agreement or by any other similar means.
- You finished all the required coursework in a program, even though you didn’t get an official certificate or diploma for completion.
So the discharge program was created for people who were left disadvantaged when the school closed down. And it was shut down; the students had no way of continuing with the program they had taken out student loans to pay for.
Process For The Closed School Discharge
How the discharge program works is quite simple. Here’s what you need to do:
- Get in touch with whoever handles your student loans. This will be an organization or company that you send your monthly payments to. Every loan servicer has a different application process. So you need to contact them and find out what they’ll need to process your application.
- When you get your application paperwork from your servicer, fill it out completely and then submit it through whatever medium they allow.
Keep in mind that you’ll have to continue making payments until your loan lender tells you otherwise in writing. That’s because you won’t be approved of discharge until you get an official statement.
If you stop making the payments before you get the approval, it could lead to financial problems.
If your closed has closed down, you may also qualify for a refund from your state through the State Tuition Recovery Fund program. If you want to find out if you are eligible, contact your state’s Postsecondary Education Agency.
The agency is a group that runs higher education in your state. They are also responsible for monitoring compliance, determining laws, enforcing regulations, etc. Taking the time to know if you’re eligible could save you thousands of dollars.