What do to about student loans if your school shuts down

Thursday, May 07, 2015

More than 5,000 students at 15 Art Institute campuses around the country will find themselves without a school to attend. Education Management Corporation, owner of the for-profit art school, announced that it plans to close its doors over the next two years. The news is just the latest among a series of closures and sell-offs in the for-profit education industry. Corinthian Colleges filed for Chapter 11 bankruptcy protection on Monday, leaving 16,000 students deeply in debt with incomplete or worthless degrees.

The Consumer Financial Protection Bureau (CFPB) offers advice to students on what to do if their school is shut down:

• Students with federal loans may be able to discharge (cancel) their loans by applying for a closed school discharge. Students must first fill out a discharge form.
• Students with private loans may still be responsible for repaying them. However, some states have programs that help students with private loans in the event of a school closure. Students should contact their servicer directly to learn more about their options. The CFPB provides a helpful guide for those dealing with their private loan servicers.

Still need help? You can file a complaint a complaint with the CFPB online or by calling (855) 411-CFPB (2372).

Para presentar una queja en español, llamar al (855) 411-2372.

For more information on your rights regarding closed schools, read here.
For more information on Corinthian Colleges’ bankruptcy, read here.