Disclaimer: As of August 7, 2023, a federal court delayed the effective date of the latest regulations for closed school loan discharges. The Education Department (ED) will receive applications and process applications using earlier regulations. The 2023 regulations will not be used unless and until ED is legally able to do so.
Closed school discharge is available if your school closes while you’re enrolled or soon after you withdraw. This program is only available for federal Direct Loans, Federal Family Education Loans (FFEL), or Perkins loans.
Loan Discharge Criteria
To be eligible, you must not have been able to complete your education due to one of the following reasons:
- You were enrolled when your school closed
- You were on an approved leave of absence when your school closed
- Your school closed within 180 days after you withdrew
Things to Note
- The 2023 regulations state that you may automatically receive the discharge if ED has the necessary information to determine that you qualify.
- If you believe you qualify you can contact your loan servicer to request an application to have the loan(s) related to this school discharged.
- Continue making payments on your loans until your loan is officially discharged.
- If approved, you will receive reimbursement for payments made voluntarily or through forced collection.
- If approved, the record of the loan and all repayment history associated with the loan will be deleted from your credit report.
For more information, visit the Federal Student Aid (FSA) page on Closed School Discharge.