Reviewed program guide

Closed School Discharge

A federal discharge for borrowers whose school shut down while they were enrolled, or shortly after they left, and who did not finish the program another way. The rules governing that lookback are in genuine conflict right now, and anyone quoting you a firm number is quoting one side of it.

Closed School Discharge can clear federal loans taken for a program you could not finish because the school closed. It reaches borrowers who were enrolled on the closure date, borrowers who were on an approved leave of absence then, and borrowers who withdrew within a lookback period before the closure. That lookback is where the honesty has to start. Congress reinstated an earlier version of these regulations, and the Department has said the older text applies and said it would publish a Federal Register notice restoring it. No such notice has appeared. Meanwhile the text in the Code of Federal Regulations still reads as the newer rule, and the only application the Department publishes is built on the newer rule as well. Different sources therefore state different windows, and each has been correct for different loans. Applying is free and you can do it yourself.

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At a glance

Overview

Who it may help

This is for a borrower whose school closed during or shortly after enrollment, and who did not complete the program. The test is the location you actually attended: the Department treats a school as its main campus together with each of its locations and branches, so a satellite campus shutting down counts even when the parent institution kept operating elsewhere. A branch closing is not what rules you out, so it is worth asking rather than assuming. Parent PLUS borrowers belong here too, though eligibility is measured against the student's enrollment rather than the parent's. Two things push a person out of this path: finishing the program at another location of the same school, and finishing it through a teach-out agreement approved by the accreditor. Transferring credits elsewhere defeated eligibility under the older framework and does not appear on the current application, so tell us about it either way while the conflict between the two texts remains unresolved. Screening can organize preliminary facts and records, but screening cannot determine qualification or select a final path.

How it works

The Department publishes one application, the Loan Discharge Application: School Closure, signed under penalty of perjury. It asks for the school's name and address, your dates of attendance, the program you were in, the dates of any approved leave of absence, your withdrawal date, whether you took part in a teach-out or continued at another location, and whether you have claimed or received money from the school or anyone else. Watch which copy you get. An expired version of that application still sits on the Department's own website and circulates on third-party pages, and filing on an outdated copy invites avoidable delay. Before any of this, check whether a discharge has already been granted without an application, because some versions of the rule provide for that. Administrative support can help organize forms, records, and communications; it does not replace the decision-maker's review.

Documents and next steps

Bring whatever fixes dates. Enrollment agreements, class schedules, transcripts, tuition statements, the closure notice or the email announcing it, and any state or accreditor notices you received all help pin down when you attended and when the doors shut. The application lets you answer that you do not know your attendance dates, but a documented date is worth far more than a remembered one. Also gather what happened afterward: teach-out offers, transfer credit evaluations, admission letters from the school you moved to, and records of any refund, settlement, or tuition recovery fund claim you have made. Finally, pull your federal loan record so the loans tied to that school can be separated from the rest. The next step is to compare the records with the cited official source and any current instructions issued by the responsible agency, court, creditor, or other decision-maker.

Read this carefully

Important considerations

Signing the application assigns to the Department any refund claim you have against the school, its owners, and third parties, up to the amount discharged. For a California borrower that runs straight into the Student Tuition Recovery Fund, so the order in which you pursue the two claims deserves thought before you file either one. Keep evidence of anything that made the closure foreseeable or the school unusable: loss of accreditation, the school dropping a large share of its programs, action by a state agency, findings that it broke the law. Those facts support extending the lookback under either version of the rule, and they are the fallback if the window is read narrowly. The application also includes your consent for the loan holder to reach you with automated calls, prerecorded messages, and texts. Attorney judgment is separate from administrative help and is required for individualized legal strategy or advice.

Common questions

Frequently asked questions

These answers provide general information. Your facts and records determine what may apply.

I keep seeing different answers for how long after leaving my school I can still qualify. Which one is right?

Both numbers in circulation have appeared in official material, and each was correct for particular loans at particular times. The window has been written differently depending on when your loan was disbursed and on which version of the regulation governs. Right now the statute and the codified rule point in different directions, and the correction the Department said it would publish has not appeared. Rather than pick a number for you, we work from your actual disbursement and withdrawal dates and preserve the arguments available under either reading.

I transferred my credits to another school. Am I finished before I start?

Not necessarily. The current application asks a narrower question than people expect: whether you completed the program at another branch or location of the closed school, or through an approved teach-out agreement. Credit transfer by itself is not on that form. Under the older framework Congress restored, transferring credits or completing by comparable means could defeat eligibility, so it may still matter. Tell us what you transferred and where you finished, and we will document it either way.

I have a claim with California's Student Tuition Recovery Fund. Does that conflict?

It interacts. Signing the discharge application assigns to the Department your right to recover from the school and from third parties, up to the amount discharged, and the recovery fund is a third party. That does not make the two mutually exclusive, but the order and the timing matter, and it is a California-specific question worth settling with an attorney before you file. Disclose any claim you have made or money you have received, because the application asks.

Official sources

Federal Student Aid, U.S. Department of Education (opens in a new window)
Retrieved Jul 24, 2026

Important disclosure

This page provides general information, not a qualification or legal determination. Screening and services cannot guarantee approval, forgiveness, discharge, settlement, timing, or any particular result. The responsible agency, court, creditor, or other decision-maker applies the controlling requirements.

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