Loans Covered Under Closed School Discharge

Loans Covered Under Closed School Discharge

If you are one of the many students or graduates of the dozens of schools which have recently closed, read on. You are probably wondering what to do about your student loans. ITT is one of the many schools we are referring to in this article. If you haven’t already visited the Department of Education’s website to see what they’ve got to say, click here to read more about what ED can offer such as a Closed School Discharge.

Federal Student Loans

If you were a student when the school closed or within 120 days of the closure date, you are eligible for a Closed School Discharge. Additional eligibility pertains to your credits. If you have completed classes and the credits earned from those classes can be transferred to another school which accepts the credits, then you are most likely not eligible for the discharge in full. You may still be able to have some of your federal student loans discharged. The Department of Education and State Education agencies have been working with community colleges to get them to accept these credits.

If you transfer the credits to another school, you must complete the program. If you do not, you are stuck with the loan and cannot request a Closed School Discharge. Additionally, if you do receive the discharge and then go back to school at a later date, your previously earned credits cannot be transferred. These credits cannot be counted towards your education in any way.

Private Loans

The Closed School Discharge can only be used for Federal student loans. Private loans are undoubtedly more complicated as there are no specific provisions for closed schools. Any relief available for private loan borrowers will be based primarily on State law. What is required for fraud? Is there an Unfair Trade Practices Act, and is it any good? Will your claim pay? For those answers, you should consult with a student loan lawyer.

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