$43M in Loans Forgiven for Students of Closed Colleges

September 6, 2019
by Susan Dutca-Lovell
$43M in Loans Forgiven for Students of Closed Colleges

The federal government discharged more than $43 million in student loan debt for former students of recently closed for-profit colleges. Students who attended programs operated by Education Corporation of America, Dream Center Education Holdings, Vatterott College and Charlotte School of Law will be able to qualify for a full discharge of their federal loans if they were enrolled when their college closed or withdrew within 120 days of the official closure date and didn’t transfer to another institution, according to Inside Higher Education.

So far, students who attended ECA campuses received more than $22.6 million in debt cancellation, while students at Dream Center saw more than $10 million in debt relief. Furthermore, more than $5 million in student loans were discharged for former Vatterott College and Charlotte School of Law students. The costs involving student loan discharge are determined by whether a college facing closure secured opportunities for students to complete their degree through a process titled teach-out. Through this process, students would be able to either finish their credential or transfer to a comparable college; such agreements were not in place for affected students in said programs. The number in discharged student loans is likely to grow as more students learn about their eligibility for loan relief and submit applications for closed-school discharge. If you were a former student at any one of the participating institutions/programs, you may qualify for closed-school discharge and have your student loans discharged.

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