Closed School Discharge Calculator

What Is a Closed School Discharge?

A Closed School Discharge allows eligible borrowers to have their federal student loans canceled if their school closed before they completed their program.

If approved, you may receive:

• 100% cancellation of eligible federal loans
• A refund of payments you already made
• Removal of negative credit reporting tied to those loans

This applies only to federal loans, such as:

• Direct Loans
• FFEL Program Loans
• Perkins Loans

It does not usually apply to private loans.

What Is a Closed School Discharge Calculator?

A Closed School Discharge Calculator is an online tool that estimates:

• Your eligibility status
• How much federal debt could be wiped out
• Whether you may receive a refund
• How much debt would remain after discharge

It gives you a fast, personalized projection based on your answers.

Think of it as a preview. It does not submit your application. It helps you decide your next move.

Who Qualifies for Closed School Discharge?

Eligibility depends on three main areas:

1. Your Enrollment Status When the School Closed

You may qualify if:

• You were actively enrolled when the school closed
• You were on an approved leave of absence
• You withdrew within 180 days before closure

You may not qualify if:

• You withdrew more than 180 days before closure
• You completed your program through a teach-out
• You graduated before the school closed

2. The 180-Day Rule Explained

If you withdrew before the closure date, timing matters.

• If you withdrew within 180 days, you may qualify.
• If you withdrew more than 180 days, you are generally not eligible.

There are rare exceptions. In certain cases, the U.S. Department of Education may consider “exceptional circumstances.”

3. Academic Completion Status

You are usually not eligible if:

• You completed your program through a formal teach-out agreement
• You transferred credits and graduated elsewhere
• You graduated before the school closed

The calculator checks this first because it is a hard disqualifier.

How the Closed School Discharge Calculator Works

The calculator you shared collects information in three sections:

1. Loan Balances

You enter:

• Federal loan balance
• Federal payments already made
• Private loan balance

The calculator uses this to estimate:

• Debt that may be discharged
• Refund amount
• Remaining balance

2. Enrollment and Timeline

You select your status:

• Enrolled
• On leave
• Withdrew

If you withdrew, the tool calculates the number of days between your withdrawal date and the official closure date.

If that number exceeds 180 days, the calculator flags it.

3. Academic Transfer Status

You confirm whether you:

• Completed your program elsewhere
• Graduated
• Participated in a teach-out

If yes, the calculator marks you as ineligible.

What the Results Mean

After clicking “Evaluate Eligibility”, the calculator shows:

Eligibility Status

You may see:

• Likely Eligible – You meet standard criteria.
• Manual Appeal Required – You may need to request review.
• Not Eligible – You do not meet current criteria.

Projected Debt Wiped Away

This shows how much of your federal loan balance could be reduced to $0.

If eligible, the full federal balance is projected to be discharged.

Projected Cash Refund

If you made payments on eligible federal loans, you may receive a refund.

The calculator estimates that amount.

Remaining Debt

It also shows:

• Remaining federal balance
• Remaining private loan balance
• Total debt still owed

Important: Private loans remain your responsibility.

Automatic Discharge Rule (Important Update)

If your school closed on or after July 1, 2023, and you meet eligibility requirements, the Department of Education may automatically discharge your loans one year after closure if you do not re-enroll elsewhere.

You can still apply manually to speed up the process.

Private Loans Warning

Closed School Discharge applies strictly to federal loans.

If you have private loans from lenders such as Sallie Mae or SoFi:

• They are not canceled through this program.
• You may need to explore other options such as state tuition recovery funds or legal action.

The calculator clearly shows how much private debt remains.

Example Scenario

Let’s say:

• Federal balance: $25,000
• Federal payments made: $3,000
• Private loans: $10,000
• You were enrolled when the school closed
• You did not graduate or transfer

The calculator would project:

• $25,000 discharged
• $3,000 refunded
• $10,000 still owed (private loans)

This gives you a realistic picture before you apply.

Common Mistakes to Avoid

Many borrowers misunderstand eligibility. Here are common errors:

• Confusing private loans with federal loans
• Forgetting the 180-day withdrawal rule
• Assuming graduation does not affect eligibility
• Not entering correct closure dates

Double-check your dates before using the calculator.

Why a Closed School Discharge Calculator Matters

When your school shuts down, it can feel overwhelming. You might be dealing with:

• Incomplete education
• Collection notices
• Credit damage
• Financial stress

A calculator gives you clarity in minutes.

It turns confusion into numbers.
It shows what relief could look like.
And it helps you plan your next step.