Earlier this year when ITT Tech closed down, students were forced to make a difficult decision. They could keep their credits and repay their student loans or they could get their student loans forgiven and lose their credits.

Those who chose to keep their credits could, in theory, transfer them to another institution and continue their degree while those who chose to have their loans forgiven would have to start their programs again from the beginning.

This isn’t the first time that students had to make this kind of choice. When schools like Everest College and Corinthian Colleges, students who were left with incomplete degrees were faced with the same difficult decision. That’s because it’s the official policy of the federal student aid’s Closed School Discharge program.

While students might not like the prospect of having to repay their student loans for an incomplete degree, they will undoubtedly not appreciate having to start over again from scratch. The restrictive policy therefore makes a difficult experience even more stressful for thousands of students across the country.

Even if these students do decide to keep their credits and try to get them transferred, they might find that not all of their credits are actually transferable and end up paying back loans for classes that they have to retake.

The hardship that students who attend these shuttered schools have to deal with is extreme and for that reason I believe that the government should both allow them to get their student loans forgiven and keep their credits.

Time Wasted

The biggest loss that students from shuttered schools experience is the loss of time. The schools that have been shuttered in recent years have been career colleges that often offered flexible hours for those who were working full-time while going to school. Many of the students who attended these schools took courses in the evenings and weekends for years working towards their degrees. It is devastating for many of them to find out that they will not be graduating with a degree as they hoped and must now either start over or try to get their credits transferred.

Depending on what program they were taking and where they live, it might not be possible to go to another nearby school and transfer their credits to finish their diploma or degree. If they are lucky enough to find a school that offers the same program and provides them with the flexibility that they might need, that school will likely not accept all their credits. That could mean that it becomes impossible for them to graduate or their graduation date is pushed back by months or even years.

The Smart Approach to Student Loans

If they have to start fresh, that will mean redoing everything and it might make some students decide to abandon their plans. By allowing them to keep their credits and have their loans forgiven, the students will have more options and will be able to minimize the amount of time that they lose.

Quality and Price Concerns

Another thing to consider is why these schools are closing down in the first place. Some schools shut down over concerns about quality and lack of proper accreditation. This will make it more difficult for students to transfer their credits to other schools.

On top of this, most of these for-profit colleges are known for being extremely expensive. That means that if students do decide to keep their credits, they will have much higher student loans than they might have had if they had done their degrees elsewhere. That means that they could end up maxing out their federal student loan eligibility and having a difficult time finishing their degrees at other colleges.

By forgiving their loans, the government could make it easier for them to finish their degrees and less difficult for them to repay their loans once they graduate.

It Makes a Big Difference

Allowing students of shuttered schools to both keep their credits and discharge their loans would make a big difference to students who are left stranded by these school closures. It would allow them to rebuild their lives and get back on track towards their futures without having to worry about their big student loan balances or having to start from scratch.

Ultimately, the question is what benefit does the government get by forcing students to cancel their credits when they discharge their student loans? Once the government forgives their loans, it doesn’t make a difference to the federal aid program whether they can use those credits elsewhere. In fact, it makes more sense for the government to let them keep their credits so that they can get their diploma or degree and start working in a higher paid job.

The reason why the federal student aid program force students to decide then is so that they can limit the amount of students who apply for a discharge. But the fact that the government even offers a discharge option seems to suggest it recognizes the difficulties that students from shuttered schools face.

So, why not help more students during a very difficult and stressful time in their lives?