Author Topic: Any experience discharging student loans? $35K debt, college is dead, no degree  (Read 1255 times)

isaakthepirate

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Looking for some help for a sticky situation.

SO cosigned her friend "John's" $35K college loan. He's paying it back, but just above the minimums which means SO has $35K of debt attached to her for at least 10yrs. We're hoping to buy a home next year, but her debt is sunk with this.

From my research, refinancing all requires a completed degree for the student loan. John did not complete his BA degree, and the crappy, for-profit art school is now closed.The credits aren't easily transferable, and it seems like he isn't super motivated to finish this degree now that he's working.

I read that you can get loans "discharged" if the school is closed and you can't complete your degree.

Does anyone have any experience with this or any advice?

Much appreciated!!







partgypsy

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I've never heard that. But I did a quick google search and found this. You will have to see if it fits the criteria. Looks like it applies to Federal school loans, probably does not apply to private school loans.

https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/closed-school

Discharge Criteria

You may be eligible for a 100% discharge of your Direct Loans, Federal Family Education Loan (FFEL) Program loans, or Federal Perkins Loans under either of these circumstances:
Your school closes while you're enrolled, and you do not complete your program because of the closure. If you were on an approved leave of absence, you are considered to have been enrolled at the school.
Your school closes within 120 days after you withdraw.

You are not eligible for discharge of your loans if your school closes and any of the following is true:
You withdraw more than 120 days before the school closes.
You are completing a comparable educational program at another school through a teach-out agreement with the school,
by transferring academic credits or hours earned at the closed school to another school,
or by any other comparable means.

You have completed all the coursework for the program, even if you have not received a diploma or certificate.



« Last Edit: December 16, 2017, 12:21:52 PM by partgypsy »

Peachtea

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You could ask John to request a release of his co-signer with his student loan servicer, if hes been making on-time payments for more than a year. Although there might also be some graduation requirement for co-signer release too. But maybe if hes been paying long enough and can show the school is closed, making degree completion there impossible, that will cut it. Worth a shot.

isaakthepirate

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I've never heard that. But I did a quick google search and found this. You will have to see if it fits the criteria. Looks like it applies to Federal school loans, probably does not apply to private school loans.

https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/closed-school

Discharge Criteria

You may be eligible for a 100% discharge of your Direct Loans, Federal Family Education Loan (FFEL) Program loans, or Federal Perkins Loans under either of these circumstances:
Your school closes while you're enrolled, and you do not complete your program because of the closure. If you were on an approved leave of absence, you are considered to have been enrolled at the school.
Your school closes within 120 days after you withdraw.

You are not eligible for discharge of your loans if your school closes and any of the following is true:
You withdraw more than 120 days before the school closes.
You are completing a comparable educational program at another school through a teach-out agreement with the school,
by transferring academic credits or hours earned at the closed school to another school,
or by any other comparable means.

You have completed all the coursework for the program, even if you have not received a diploma or certificate.
Yep, I found that same info. Looking to hear anyones experience, since Id also never heard of that!