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What Happens to Your Debt if Your College Closes for Good?

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Illustration for article titled What Happens to Your Debt if Your College Closes for Good?

Image: Kzenon (Shutterstock)

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The pandemic has created worldwide economic challenges, and colleges and universities are feeling the strain. While only a few schools have permanently shuttered, experts say there could be more in the future. If this happens while you’re enrolled, you may have two options: transfer credits, or apply for discharge. Here’s what to know about each option.

Transfer your credits

If your non-profit school is closing for good, you should receive some advanced warning. (Unfortunately, this wasn’t the case for ITT Tech students in 2016.) The alert may offer some time to transfer your credit or make another move.

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The Department of Education keeps a list of closed schools here. They also provide instructions for how to transfer, get access to your transcripts, apply for a loan discharge (more on that below), and more.

Apply for federal student loan discharge

If your school closes, it may be possible to discharge your federal student loans. The Department of Education says you may be eligible to discharge Direct Loans, FFEL Program Loans, or Federal Perkins Loans.

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You may qualify if you couldn’t complete the program because the school closed. Other reasons you may be eligible: you were on an approved leave of absence, or the school closed within 120 days after you withdrew.

To start the process, contact your loan servicer. They can provide more details about the discharge application process and what to expect.

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If you qualify for loan discharge

If you qualify for a discharge, your loan balance goes away—but until then, you must keep making payments. In some cases, you may also qualify for a refund. Your servicer may also remove delinquency or default from your credit reports.

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If you don’t qualify for loan discharge

If you don’t qualify for discharge, you will have to keep paying the loans according to the terms of your promissory note. You may discuss other repayment options to ease the burden, though.

If the loans are in default, there are a couple of ways to fix it: apply for loan consolidation, or loan rehabilitation. You can see the pros and cons of each option here.

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Explore borrower defense to repayment

You won’t qualify for discharge if you graduated before your school closed, but you may be eligible for borrower defense to repayment. This may also be an option if your school closed before you could complete your degree.

Unfortunately, it has become more difficult to qualify for borrower defense to repayment. As NerdWallet reports, no forgiveness is automatic. You must prove the school misled you or engaged in misconduct that broke the law—and prove specific financial harm. The loans themselves don’t count as harm; being unemployable might, though. Also, your window for possible relief is only three years, so don’t wait to apply.

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You may submit a claim through the Department of Education’s website or by filling out a PDF and sending it via email or regular mail. You can see the complete instructions to submit a claim here.

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Charge Your Phone Wirelessly With 50% off a Multifunctional LED Lamp

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Best Tech DealsBest Tech DealsThe best tech deals from around the web, updated daily.

White Wireless Charge Lamp | $18 | Amazon | Clip coupon + code ABC88699
Black Wireless Charger Lamp | $20 | Amazon | Promo code ABC88699

When you’re ready to turn in for the night, you don’t want to forget to charge your phone— especially if your mobile device doubles as your alarm clock.

With this wireless charger lamp, you can make this crucial step of your nightly routine even easier by just setting your phone on the wireless charging pad and… well, that’s all there is to it!

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Other functions include multiple lighting modes as well as a sleep timer option for auto shut-off of the light after 30 or 60 minutes.

This lamp can be yours in white for $18 if you clip the coupon on Amazon (it’s below the original $40 price) and add promo code ABC88699 at checkout.

You can snag the black version for $20 using the same code—no coupon though, sorry.

Don’t sleep on this deal! Who knows how long stock or the coupon code will last?

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Keep That Hotdish Hot With 65% Off a Luncia Casserole Carrier, Only $11 With Promo Code

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Best Home DealsBest Home DealsThe best home, kitchen, smart home, and automotive deals from around the web, updated daily.

Luncia Double-Decker Dish Carrier | $11 | Amazon | Promo code SDDU9S7F

It has been a long time since the days we could safely have a potluck or other gatherings, but we have a fantastic deal perfect for once those times return. These double-decker Luncia dish carriers can be had for 65% off when you add promo code SDDU9S7F at checkout and clip the coupon on the site (it’s just below the price). These holders fit 9″x 13″ sized baking dishes.

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That means you can insulate and keep two dishes of food warm for only $11 instead of $30. What’s more, your Luncia carrier will arrive by Christmas if you order today as a Prime member.

Just add promo code SDDU9S7F and clip the 5% off coupon to bring the price down to $11 for the blue or the grey option.

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Grab this offer while it’s still around!


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Conquer Your Pup’s Dander and Fur With $700 Off a Cobalt or Charcoal Bobsweep PetHair Plus Robot Vacuum

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Best Home DealsBest Home DealsThe best home, kitchen, smart home, and automotive deals from around the web, updated daily.

Bobsweep PetHair Plus Robot Vacuum & Mop (Cobalt) | $200 | Best Buy

Bobsweep PetHair Plus Robot Vacuum & Mop (Charcoal) | $200 | Best Buy

Allergies can be bad enough as the seasons change. Don’t let pet hair and dander add to that by vacuuming it up early and often. That chore is easier said than done— unless you have a robot vacuum to do the work for you. This lovely bright cobalt Bobsweep PetHair Plus robot vacuum and mop, only $200 today at Best Buy seems like an ideal option. That’s a whopping $700 off, by the way.

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You can get the same deal for the charcoal version of the robot vac, too. This model is not only specially made for picking up pet hair, it self docks and charges when it’s finished with the work.

It also comes with a mop attachment, so it can take care of those kitchen floors for you as well. Grab it while it’s still available for this fantastic price!

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