What To Do If School Closes Down and You Have Student Loans

Here are just a few stories that I recently came across of schools shutting their doors. 

• Connecticut School of Broadcasting shuts doors in Chicago and nationwide this month.
• Falcon Airlink flight training school of Fletcher, North Carolina shut its doors in early February.

If your school is shutdown and you have loans, loan relief is available.  According to the Department of Education website, if you have a federal loan serviced through the National Payment Center: 

You may be eligible to have your loan discharged, if you did not complete the program of study and either of the following is true:

• the school closed while you were attending, or
• the school closed within ninety days after you withdrew from the school

What to Do:

You must complete and submit a closed school discharge application form. You can request this form from the agency that holds your loan, or you can download it now. Check a recent demand letter or bill for this loan; if the address to which you are requested to send payment is the National Payment Center in Greenville, TX, you should submit your completed form to:

UNITED STATES DEPARTMENT OF EDUCATION
FEDERAL STUDENT AID
Processing Group Regional Office, Room 8633
50 Beale Street
San Francisco, CA 94105-1813

You may request a copy of this discharge application form by calling 1-800-621-3115.

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If you have a private loan or a federal loan serviced by a private lender (e.g., Sallie Mae) be sure to contact them immediately. 

Comments

[anonymous]

The problem is that some of these schools -- particularly the flight training ones don't participate in the federal loan programs. Private loan providers are not as forgiving!

[M. M.]

Isn't that the truth. Based on my own circumstances I can pretty much say that private lenders, like Sallie Mae, are pretty darn horrible when it comes to treatment of debtors.

I attended a private accredited institution that participated in federal loan programs, but you needed money beyond that in order to foot the bill. I doubt if it closed that Sallie Mae, who they pushed, would forgive any of the debt.