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loans personal debt podcasts Oct 10, 2019

Tiffany answers a listener's question about student loan payback if the school that they attended closes.  While on the topic, she also covers other ways your student loans can be discharged or forgiven.  
This is a listener request episode.  If you want to have your question featured, please submit on our website.



Welcome to Money Talk with Tiff, a podcast where we discuss everything money – from tips and tricks to current events. Follow me on my journey to become debt-free, and meet other cool people along the way. I’m your host, Tiffany Grant, now let’s talk money.



Hey everyone, so I’m back with another listener request episode. I decided to take a little break from the interviews because I’ve been hitting you all heavily with them. So, I’ll do a couple of episodes of just me, and then we’ll head right back into those interviews, because I know you all love to hear other people’s stories, and not just me talking all day.

So, with that being said, I had someone ask me: “What happens if my school loses accreditation after I graduate? Do I need to pay those student loans back?”



It depends. The only time you can get your loans discharged is if a school lost accreditation and subsequently closed. The school should have closed while you were enrolled and you couldn’t complete the program and also you couldn’t transfer to another school (your credits wouldn’t transfer).

Also, you’re eligible if your school closes within 120 days that you withdraw from classes. In those cases, no, you do not need to pay your student loans back. You can go to your student loan servicer and put in a request to have them discharged.

Because think about it, is that fair? Let’s say you’re in school or you just graduated, you spend all that time, effort, and money; and lo and behold the school closes down – for something that’s not in your control. It’s not fair to the student to have to pay that back. So, the federal government did make a way for you to not do that.



Just to go over a few other things, a few other ways you can get your loans discharged.

  • False Certification of Ability to Benefit

One of them is false certification of ability to benefit. So how you qualify for that is if you never graduated with your high school diploma or your GED and they still allowed you to enroll. First of all, the whole admissions department should be fired! But not only that, that does open up a way for you to go ahead and get your loans discharged.

Or in a situation where they did not properly test you or did not completion of remedial courses as a condition of admission, you know, there are a few other things that fall under that. But if that’s you, you can go ahead and put in an application to get your loans discharged.

  • False Certification as Disqualifying Status

Another way is false certification as disqualifying status. What that means is when you were enrolling, you had a physical or medical condition or legal status or condition that would legally bar employment in your field of study at the time that your loans was originated.

That means that the school and the loan originator knew that you were not going to be successful in this because you have a legal reason or a medical condition or a physical condition where it just wasn’t going to work, and they still gave you the student loan. In that situation, you may be eligible for a discharge.

  • False Certification as a Result of Identity Theft

Another one is false certification as a result of identity theft. So I if somebody went to school using your name or social information, if you can prove it, that’s another reason why you can qualify for a discharge.

  • Unconsented or Fake Signage

Another one is if the student loan office falsely signed your name on the loan application or did something without your permission, that’s another way you can get it discharged. So think about that.

  • Withdrawal during Unpaid Tuition Refund

If a college issued an unpaid refund, for instance, if your school failed to pay a tuition refund required under federal law, and you withdrew during the refund period published by the school, you may be able to get that loan discharged regardless of whether the school is open or closed currently. So, that’s another thing you can look out for.

  • 9/11 Victims

If you are the spouse or a parent of someone who dies or became severally/permanently disabled during 9/11, that’s another way you can get your student loan discharged.

  • Public Service Loan Forgiveness

And of course, you have the public service loan forgiveness program which most people are aware of – that’s if you work in a non-profit for 10 years and make your payments for 10 years, the rest can be discharged. You are “forgiven!” That’s the term they use.

The caveat with that is that who knows how long this is going to be around? So how mad would you be if you were depending on this? If you’ve been waiting for this year on year and the government is like “You know what, never mind!” You know what I mean (no more “forgiveness”). So I don’t recommend waiting on this type of stuff, cos you never know how long it’s going to be in effect.

Also, I’ve heard stories of people who thought they qualified, but then they put in their application and they got denied. So, if this is the route that you’re going to go, just keep in mind that you need to work very closely with your loan service provider to make sure that you’re following all the rules, that you need to follow to make it happen. Part of the stipulations with that is that you have to have 120 qualifying payments (10 years worth) on an eligible repayment plan.

So it’s up to you to make sure that you are following these stipulations because I would hate for you to spend 10 years paying the bare minimum on your student loans meanwhile interest is accruing and then you come to this, and they’re not going to forgive it for you. So, you should definitely check that out if you’re employed full-time with any of the qualified public service organizations or serving as a full-time AmeriCorps or Peace Corps volunteer.

  • Teacher Loan Forgiveness Program

You may also have Teacher Loan Forgiveness which I think is awesome because Teachers have a very difficult job every day. I send my kids to school and I’m like “I don’t know how to deal with the whole classroom of these little people.”Anyway, if you teach full-time for 5 complete and consecutive academic years in a low-income elementary or secondary school or an educational service agency, you may be eligible for forgiveness for up to $17,500 of your direct loan or FFEL (Federal Family Education Loan) program. So again this is one of those things that you need to work very closely with your student loans servicer, and see if you qualify.



So, I just wanted to do a quick episode since I got the question on different ways that your student loan can be forgiven or discharged. If you fall into any of these categories, definitely reach out immediately and see if you can get those “bad boys” gone, because like I said before and I always say – Student loans do not go anywhere! And they’re even getting to a point where they are taking people’s social security checks, garnishing social security checks to pay for student loans, so you don’t want that to happen to you.

Alright, you all have a good one! That was a good question. Thank you to the listener for submitting. If you have a question and you want me to answer, be sure to submit it on my website. Simply fill out the contact form with your question and it may or may not make it to the show.

Thank you for listening to the Money Talk with Tiff Podcast. For free resources and materials, head over to, and while you’re there, why not sign up for our newsletter, so you’ll never miss an episode. Talk to you soon…

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