Nearly 300 students at the defunct Charlotte School of Law have become eligible to have their student loans discharged.
According to federal regulations, students are eligible for federal loan dismissal if they are either enrolled in a college that closed or withdrew from that college within 120 days of its closing. However, this deadline can be extended for extenuating circumstances.
Last week, the Department of Education announced it was extending the window of loan forgiveness from 120 days to 224 days. Charlotte School of Law students who withdrew on or after Dec. 31, 2016, are eligible for closed-school discharge. This means a dozen more students are eligible for loan forgiveness, according to the American Bar Association Journal.
Secretary of Education Betsy DeVos issued a statement saying: “Several students, through no fault of their own, fell through the cracks as Charlotte School of Law closed.” She added that it was important for those students to be eligible for loan discharge as well.
In 2016, the American Bar Association put the law school on probation for accepting too many unqualified students that were unable to pass the bar exam. Shortly after, the Obama Administration cut off Charlotte School of Law’s access to Title IV aid, which was a major blow to the law school. The for-profit school was forced to close in August 2017. Allegedly, the school hid many of its problems from students in order to maintain enrollment, according to Inside Higher Ed.
In November, members of Congress sent a letter to Secretary DeVos asking that she grant an extension to Charlotte students. According to the letter, the average loan debt for Charlotte School of Law students is $200,000, and these students have “nothing to show for it.”
North Carolina attorney general Josh Stein praised DeVos’ decision to extend the deadline, saying it was the right decision. Stein added that it sends a message to other for-profit colleges that they would be held accountable for deceiving students.
For-profit schools have received intense scrutiny in recent years. Well-publicized school closings like Corinthian Colleges and ITT Tech left thousands of students without a degree and saddled with debt. And many other for-profit schools lost their accreditation, giving little weight to any degree their students might earn.
However, students who find themselves in this situation do have options. First, students should make sure they have a copy of their financial documents and transcripts. For students attending a for-profit college that suddenly closes, they can apply for a closed school discharge with their federal loan servicer.
For students attending a school that loses its accreditation, it is possible to transfer to another school or teach-out program. However, students that do this will not be eligible for discharge in the event that the school eventually closes.