Throughout the course of the COVID-19 pandemic, colleges and universities across the country have been forced to close their doors as a result of economic instability. This sudden finality has left many students in a precarious position, especially those with unresolved loan debt. If you took out student loans to attend a school that’s now closed, you likely have a lot of questions about whether or not you’re still obliged to pay off these credits.
If your college or career school left you stuck with debt and no degree after closing while you were enrolled, you have options that may help restabilize your life and finances. First, you may choose to transfer your credits and attend college elsewhere. Likewise, if you have a federal loan, those who qualify may opt to have their student debt discharged. If you have a private student loan, an experienced student loan lawyer at McCarthy Law can contact your student loan lenders and begin negotiating to significantly reduce your interest and principal.
Begin by giving our offices a call and telling us about your unusual circumstances during a free consultation. We’ll then describe your options and provide you with a plan of action.
What Types of Student Loan Forgiveness Programs Are Available If Your School Closes?
Whether your school closed due to COVID-related uncertainty or some other financial problem, you may be either navigating life as a new transfer student or focusing on the financial implications of your student loan debt. Fortunately, there are rules in place to help students in this position get their loans forgiven if they fit into certain categories. Whether or not you qualify depends on a few factors.
Closed School Discharge
Under Closed School Discharge, students who qualify for loan discharge will no longer be required to make payments and may be entitled to receive a refund. This pertains if you attended a school that closed while you were enrolled or if you withdrew 120 days before the school’s closure. The government may extend the 120-day period under certain circumstances. For instance, in new rules announced in September 2019, the time period changed to 180 days for loans issued after July 1, 2020, but this could change again due to legal challenges or other factors.
Note that this only applies for those with federal student loans, not private loans. Other criteria include:
- You were enrolled in college when the school closed
- You were on a leave of absence sanctioned by your school at the time the school closed
- You left school and your school closed within 120 days of that period
On the other hand, you’re disqualified from getting your student loans discharged if the school you attended closed and:
- You withdrew from school 120 days before its closure
- You are enrolled in another educational program
- All of your coursework for your program is done
For those with private loans who are looking for the most effective student loan strategy, look no further than the expert debt settlement lawyers at McCarthy Law.
How Do You Know Whether You Have a Federal or Private Loan?
To best understand your options moving forward, first see whether you have private or federal loans. The most crucial distinction is that federal student loans are funded by the U.S. Department of Education, while private student loans are made by private lenders such as banks or credit unions.
To understand whether or not you have a private or federal loan, first check if the federal government granted it. You can do so by going to the National Student Loan Data Services website, which the U.S. Department of Education maintains, and seeing if your student loan is listed. If not, it’s most likely a private student loan. An experienced student debt lawyer can also help you understand what kind of loans you have if you’re unsure.
If You’re Seeking Assistance for Your Private Loans, McCarthy Law Can Help
If you have a private student loan, we may be able to help. Under our student loan debt settlement program at McCarthy Law, a lawyer will contact your student loan lenders and begin that negotiation process to reduce your private loan’s interest and principal. Following an effective student loan settlement, you may only have to pay a small portion of the original balance claimed by the lender. The rest of the debt may be excused by the lender, and the settlement will be full and final, leaving the borrower without the weight of student loan debt moving forward.
Contact a Skilled Student Loan Lawyer at McCarthy Law
If you attended a school that shut its doors and are wondering what to do next, don’t fret. Even if you have a private loan and aren’t qualified for Closed School Discharge, you may still be able to reduce the interest and principal on your student loans. When you contact our seasoned team at McCarthy Law, one of our skilled attorneys can give you useful legal advice after fully assessing your situation and establishing the most tactical method that will have you feeling financially secure.
The lawyers at McCarthy Law understand the stress of student debt, especially if your school suddenly closed as a result of financial instability. We’re dedicated to getting you out of this jam and fighting for your financial freedom. To schedule a free consultation with a knowledgeable and experienced debt settlement professional, call our office at (855) 976-5777 or complete our contact form today.