Episode•October 10, 2019•9 min

My School Lost Accreditation, Now What? | Ep. 13

Tiffany answers a listener's question about student loan payback if the school that they attended closes. While on the topic, she also covers other ways your student loans can be discharged or forgiven. This is a listener request episode. If you want to have your question featured, please submit on our website. Links www.moneytalkwitht.com Connect with Tiffany on Social Media Facebook: Money Talk With Tiff Twitter: @moneytalkwitht Instagram: @moneytalkwitht LinkedIn: Tiffany Grant YouTube: Money Talk With Tiff Channel Pinterest: Money Talk With Tiff This podcast uses the following third-party services for analysis: Podcorn - https://podcorn.com/privacy OP3 - https://op3.dev/privacy

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Key Takeaways

1
School closure discharge eligibility is limited to specific timing and circumstances
Must have been enrolled when school closed and unable to complete program
Credits must not have transferred to another school
Eligible if school closes within 120 days after withdrawal
2
False certification provides multiple pathways for loan discharge
Ability to benefit: school enrolled student without high school diploma/GED or proper testing
Disqualifying status: school knew of medical/legal condition preventing employment in field
Identity theft: someone used your identity to take out loans
3
Unpaid refunds from schools can trigger discharge regardless of school status
Applies when school fails to pay required federal tuition refund
Must have withdrawn during school's published refund period
School can be open or closed
4
Public Service Loan Forgiveness requires 10 years of qualifying payments and employment
Must work full-time at nonprofit or as AmeriCorps/Peace Corps volunteer
Need 120 qualifying payments on eligible repayment plan
Risk of program changes or application denials
5
Teacher Loan Forgiveness offers up to $17,500 after 5 consecutive years
Must teach full-time in low-income elementary/secondary school or educational service agency
Applies to Direct Loans and FFEL program loans
Requires coordination with loan servicer

Intro

Tiffany addresses a listener question about what happens to student loans when a school loses accreditation and closes, expanding into broader discharge and forgiveness options.
Tiffany Grant is the host of Money Talk with Tiff, a podcast focused on personal finance, debt reduction, and money management strategies.

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– School Closure Discharge Rules

Tiffany explains the narrow circumstances where student loans can be discharged due to school closure after losing accreditation.

The only time you can get your loans discharged if a school lost accreditation and subsequently closed, you have to, the school had to have closed while you were enrolled and you couldn't complete the program.

School closed while enrolled and unable to complete program
Credits would not transfer to another school
School closes within 120 days after withdrawal

– False Certification Discharge Options

Three types of false certification that can lead to loan discharge are covered in detail.

If a school, let's say you never graduated with your high school diploma or your GED, and they still allowed you to enroll... that does open up a way for you to go ahead and get your loans discharged.

Ability to benefit - improper enrollment without credentials or testing
Disqualifying status - known medical/legal barriers to employment
Identity theft - loans taken in your name without permission

– Unpaid Refund Discharge

Students may qualify for discharge if schools fail to issue required federal tuition refunds.

If your school failed to pay a tuition refund required under federal law and you withdrew during the refund period published by the school, you may be able to get that loan discharged regardless of whether the school is open or closed currently.

– Public Service Loan Forgiveness (PSLF)

Tiffany discusses the 10-year PSLF program requirements and potential risks.

Who knows how long this is going to be around. How mad would you be if you were, depending on this, you have been waiting for this and you're on year eight and then all of a sudden the government's like, you know what? Never mind.

10 years (120 payments) on eligible repayment plan
Full-time employment at qualifying nonprofit or Peace Corps/AmeriCorps
Must verify all payments qualify with loan servicer

– Teacher Loan Forgiveness

Teachers in low-income schools can receive up to $17,500 in forgiveness after five consecutive years.

If you teach full time for five complete and consecutive academic years in a low income elementary school, secondary school or educational service agency, you may be eligible for forgiveness for up to $17,500 of your direct loan or FFEL program loans.

– Action Steps and Resources

Tiffany encourages listeners to contact their loan servicer immediately if they qualify for any discharge or forgiveness programs.

Student loans do not go anywhere. And they're even getting to a point where they are taking people's social security checks.

Submit questions for future episodes via the contact form at moneytalkwitht.com

Resources

Topics

student loansloan forgivenessloan dischargeschool closureaccreditationfalse certificationPSLFteacher forgivenessfinancial aiddebt relief