What happens to my student loans after my school closes?

With the explosion of for-profit schools geared towards online and distance learning, many students have been saddled with mountains of debt and little job prospects with their new degrees.  Even some of the more unscrupulous institutions receive accreditation, something that the U.S. Department of Education has been cracking down on in recent years.   For-profit colleges often have financial issues in correlation to the lack of meeting accreditation criteria. This leads to colleges being faced with investigations that cause many to close their doors. When closing college doors, this puts a hardship on students, and they do not know what to do with the costs of their degree. A way for any student to attempt to be relieved of their student loan debt, they must show proof that the college defrauded them, which is often a daunting challenge. Enrolled students, at the time of the closing, may be eligible to be discharged from their loan by the Federal Student Aid office. The U.S. Department of Education helps the student to make a decision.
The most recent case of this has come from the decision of ITT Technical Institute, one of the nation’s largest, for-profit vocational schools to close its doors.  Students who are at ITT technical institutes have been informed that they may be eligible to have their federal state loans discharged or potentially be able to transfer their credits.
The law firm of Massey & Duffy has represented students with a wide variety of academic issues.  Any student who has dealt with financial aid and other school administrations knows the difficulty of communicating and collecting the necessary documentation.  Our office can assist you in navigating the process of discharging your student loans or any other academic issues you may be facing.  Please call our office today at (352) 505-8900 to schedule your consultation with one of our attorneys.