Quick overview

Closed‑school discharge lets eligible borrowers cancel federal student loan debt when their school closes while they were enrolled or within 120 days after they withdrew. This protection prevents students from paying for education they could not finish because the institution shut down (U.S. Dept. of Education, accessed 2025-10-18).

Who qualifies and which loans are covered?

  • Eligibility: You generally qualify if you were enrolled when the school closed, withdrew within 120 days before the school closed, or were on an approved leave of absence. The Department of Education may make exceptions in special situations—always check your servicer’s instructions (U.S. Dept. of Education).
  • Covered loans: Most federal student loans are eligible, including Direct Loans and many FFEL or Perkins loans, though the process can differ if a private lender or guaranty agency holds the loan. Private student loans are not eligible for this federal discharge (U.S. Dept. of Education; CFPB, accessed 2025-10-18).

Evidence you should gather

Collect clear, dated records before you apply. The stronger and more specific your documentation, the faster the review:

  • Enrollment records or transcript showing full‑ or part‑time status
  • Official school closure notice (email, website announcement, state licensing board notice)
  • Withdrawal forms or date-stamped communications showing when you left
  • Receipts for tuition payments, class schedules, or instructor communications

In my practice I’ve seen applications denied for lack of a clear closure notice; a state or accreditor announcement can serve as evidence if the school’s site is offline.

Step‑by‑step: Apply and track the timeline

  1. Contact your loan servicer immediately. They are the point of contact for discharge requests. Use studentaid.gov to find your servicer if you’re unsure (U.S. Dept. of Education).
  2. Submit requested evidence to the servicer or via the process they specify. There isn’t a single universal form—the servicer will tell you what they need.
  3. Servicer reviews your file and may request additional documentation. Provide everything promptly and keep copies.
  4. Decision and discharge: Processing times vary by case and servicer. Some decisions take a few weeks; complex cases or appeals can take several months. If approved, the servicer will cancel eligible loan balances and stop collection activity.

Tip: Ask for the decision in writing and confirm whether interest and payments will be adjusted retroactively.

If your application is denied: appeals and reconsideration

  • Ask the servicer for a written denial explanation and the evidence gap.
  • Submit additional documentation or clarifications and request reconsideration.
  • If the servicer remains opposed, you can escalate to the Department of Education’s borrower services or file a complaint with the Consumer Financial Protection Bureau (CFPB).
  • Different relief pathways exist—if denial is due to allegations of fraud or misrepresentation by the school, explore Borrower Defense to Repayment (see differences below).

In practice, successful appeals focus on closing documentation and contemporaneous enrollment records; new proof often changes the outcome.

How this differs from Borrower Defense to Repayment

Closed‑school discharge is narrowly for school closure situations. Borrower Defense is for loans made because the school committed misconduct (fraud, false claims, bad job‑placement promises). Both can cancel loans, but they have different evidence standards and timelines. See our deeper comparisons for when each applies: “Closed School Discharge vs Borrower Defense to Repayment: Key Differences”.

Related: How the federal process works in detail — “How Closed School Discharges Work for Federal Student Loans” and a practical checklist — “Applying for Closed-School Student Loan Discharge: Step-by-Step”.

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Common mistakes to avoid

  • Waiting too long to contact your servicer or failing to collect contemporaneous evidence.
  • Treating private loans like federal loans—private loans aren’t eligible for this federal relief.
  • Confusing closed‑school discharge with borrower defense; pursuing the wrong path delays relief.

Practical checklist (what to do now)

  • Locate enrollment and payment records and any closure notice. Save screenshots and PDFs.
  • Contact your loan servicer and request their closed‑school discharge instructions.
  • Submit documents and get a written confirmation of receipt.
  • Track deadlines and follow up every 2–4 weeks. Escalate to ED or CFPB if you hit an impasse.

Additional resources

Professional disclaimer

This article is educational and does not replace personalized legal, tax, or financial advice. Your situation may have unique facts—consult a qualified student‑loan attorney or a licensed financial advisor for case‑specific guidance.

Sources: U.S. Department of Education (studentaid.gov) and Consumer Financial Protection Bureau (CFPB), accessed 2025-10-18.