Closed School Discharge

Closed School Discharge is a federal program that discharges your federal student loans if the school you were attending closed while you were enrolled — or shortly after you withdrew. It's a separate program from Borrower's Defense and has its own narrower (but easier) requirements.

Who qualifies

You may qualify for Closed School Discharge if all of the following are true:

• Your school closed while you were enrolled, or
• You withdrew within 180 days before the closure date (for closures on or after July 1, 2020; the window is 120 days for earlier closures)
• You did not complete your program through a teach-out agreement at another school

What gets discharged

Federal Direct Loans, FFEL Loans, and Perkins Loans you took out to attend the closed school can all be discharged. The Department of Education will refund payments you've already made on those loans, and the loan history is removed from your credit report.

How to apply

For some major school closures, the Department of Education automatically discharges affected borrowers without an application — you'll receive a letter. For others, you submit a Closed School Discharge Application to your loan servicer with documentation of your enrollment.

Closed School vs. Borrower's Defense

Closed School Discharge is narrower but easier: you don't have to prove your school misled you, only that it closed. Borrower's Defense is broader: it covers schools that misled you about anything material, whether they closed or not. If your school closed and misled you, talk to a strategist — sometimes filing both is the right move.

What you give up

If you completed your program at the closed school, or finished it through a teach-out at another institution, you generally don't qualify for Closed School Discharge. You may still qualify for Borrower's Defense if the school misled you.