KNOW YOUR RIGHTS! Student loan borrowers who are eligible for automatic Closed School Discharges are not receiving them. If this sounds like you, you should apply for a discharge immediately. Read the details below to see if you are eligible.
Students have long been eligible for a total discharge of their federal student loans (and refund of any amounts paid) if they: (1) attended a school at the time it closed (or withdrew less than 120 days before it closed) and (2) did not subsequently transfer any credits to a similar program at another school. This type of relief is known as a Closed School Discharge.
Unfortunately, many students do not know what a Closed School Discharge is. In fact, less than half of students who qualify ever apply to receive this type of relief. For that reason, the Department of Education established a rule in 2016 that would grant automatic Closed School Discharges to eligible students.
Under the leadership of Secretary DeVos, the Department of Education has refused to grant automatic Closed School Discharges. Then, in September 2018, a federal court ruled that the Department’s attempts to delay implementing automatic relief were illegal.
Unfortunately, even though automatic Closed School Discharge is now the law, HERA continues to hear from students who are eligible for relief, but are still paying back their loans. These students are not receiving the automatic discharges to which they are entitled.
If you meet the criteria described above, it is important that you apply for a closed school discharge as soon as possible. Here is the Loan Discharge Application: School Closure.
If you have questions about this post, you can reach HERA at firstname.lastname@example.org.