Background

Federal Closed-School Relief is designed to protect students from bearing the full financial burden when a school ceases operations unexpectedly. The U.S. Department of Education (FSA) administers closed‑school discharges for federal student loans; it outlines eligibility rules and the application process on Studentaid.gov. This relief applies when a school closes while a borrower is enrolled or if the borrower withdrew not more than 120 days before the school closed (exceptions exist in special circumstances).

Who is eligible?

  • Borrowers who were enrolled at the institution when it closed.
  • Borrowers who withdrew within 120 days before the school’s closure (in many cases).
  • Holders of federal student loans — commonly Direct Loans, FFEL Program loans, and Perkins loans. Private student loans do not qualify for federal closed‑school discharge.

Note: Eligibility can vary with unusual circumstances (for example, if a program was discontinued but the school remained open). Always confirm your specific case with your loan servicer and Studentaid.gov.

Evidence and documentation the Department of Education commonly requires

Collecting clear documentation is the most important step. Typical evidence that supports a closed‑school discharge claim includes:

  • Official transcripts or enrollment verification showing dates of enrollment and last date of attendance.
  • An enrollment letter, class schedule, or registration confirmation for the term in which you were attending.
  • School communications (emails, letters, website notices) announcing the closure or changes to program availability.
  • Billing statements, loan disbursement records, and payment history tied to the closed school.
  • Records of attempts to transfer credits or communications with prospective receiving institutions.

How to apply — practical steps

  1. Confirm the school’s closure and the relevant date. The Department of Education maintains closure information and you can also document press releases or official notices from the school.
  2. Gather documentation showing your enrollment and last date of attendance (see list above).
  3. Contact your loan servicer to report the closure and ask for the closed‑school discharge process. You can also find guidance and forms at studentaid.gov.
  4. Submit the requested evidence to your servicer or via the Department’s application process. Keep copies of everything and send records by a traceable method if mailed.
  5. Continue to communicate with your servicer. In many cases the servicer will place your loans in an administrative forbearance or suspend collection while the application is under review.

What to expect after you apply

  • If approved, affected federal loans will be discharged and your obligation to repay will end. You may also receive a refund for recent payments made on those loans; the servicer/Department will detail refunds.
  • If denied, you’ll receive an explanation and information about appealing or providing additional evidence.

Examples and context from practice

In my practice I’ve helped borrowers win discharges by producing clear enrollment records plus contemporaneous school notices of closure. A common successful case is when a borrower shows a registration confirmation for a term that was never completed and an official school closure date that interrupts the program.

Common mistakes to avoid

  • Waiting too long to apply or to contact your servicer. Start immediately after a closure.
  • Submitting incomplete documentation — missing enrollment dates or absence of official school notices is a common reason for denial.
  • Assuming private loans are covered — they are not; contact your private lender to discuss options.

Quick FAQs

  • How long do I have to apply? Apply as soon as possible. Time limits can depend on the specifics of your loan and the closure; check Studentaid.gov and consult your servicer for deadlines that apply to your case.
  • Can I still qualify if I transferred to another school? Possibly — you can qualify if you were enrolled at the closed school and meet the other eligibility rules. Provide transfer records and enrollment proof for both institutions.
  • Are forgiven/discharged amounts taxable? Tax rules can change. Check IRS guidance or consult a tax professional for your situation.

Related FinHelp resources

Authority and sources

  • U.S. Department of Education, Federal Student Aid — Closed School Discharge pages (studentaid.gov).
  • National Center for Education Statistics (nces.ed.gov) for school and institution data.

Professional disclaimer

This article provides general information about Federal Closed‑School Relief and is not personalized legal or financial advice. Rules and processes change; consult your loan servicer, the official Studentaid.gov guidance, or a qualified advisor for decisions about your situation.