January 1, 1970

What to Do If Your College Closes: A Complete Student Guide

Abandoned college campus building with faded university seal

The email lands in your inbox on a Tuesday morning. "An important message regarding the future of [Your College]..." By the third sentence, you know. Your school is closing. Maybe you saw the signs—enrollment dropping, staff cuts, a vague letter about "financial challenges"—or maybe this is a complete blindside. Either way, you're now in a situation that roughly 53,440 students at private nonprofit colleges have navigated since March 2020. Here's what actually matters and what to do first.

The Scale of This Problem Is Bigger Than Most People Know

From 2008 through 2024, approximately 312 colleges and universities granting associate degrees or higher have closed in the United States. That's not a rounding error—it's a structural shift.

The old story was for-profit colleges collapsing under government scrutiny. That story has changed. Private nonprofits, many of them small regional schools with loyal alumni and genuine community ties, are now running out of road. The enrollment cliff that demographers warned about for years is real: fewer 18-year-olds, higher operating costs, thinner endowments.

In 2025, 16 colleges closed. The 2026 list is already filling up—Trinity Christian College in Illinois, Siena Heights University in Michigan, Lourdes University in Ohio, Anna Maria College in Massachusetts. A December 2024 Federal Reserve Bank of Philadelphia report estimated that in worst-case scenarios involving abrupt enrollment drops, 80 more colleges could close, affecting over 100,000 students and 20,000 staff members.

You didn't cause this. But you're the one who has to respond to it.

Your First 48 Hours Matter More Than You'd Expect

Time compresses fast when a closure is announced. Registrar offices get flooded, staff leave, and access to systems shuts down sooner than anyone expects. There are a few things that simply cannot wait.

Get your transcript immediately. Request at least three copies—one for your records, one to send to a new school, one as a backup. If your college uses a third-party service like Parchment or the National Student Clearinghouse, download electronic copies you control directly. Don't assume the school will handle this for you.

Save your academic catalog from the year you enrolled. This document is evidence. When a receiving institution evaluates whether your Introduction to Organic Chemistry satisfied their science requirement, your catalog is what proves it. Screenshot it, print it, email it to yourself—do all three.

Also pull your complete financial aid history from studentaid.gov. You'll need your loan balances, disbursement dates, and servicer information before you can make any smart decisions about what comes next. Gather any institutional scholarship letters too; some of those commitments may be negotiable with teach-out partners.

Attend every information session your closing school offers. These often include representatives from partner institutions, financial aid advisors, and officials from your state's higher education agency. The 90 minutes you spend in one of those sessions can save you months of confusion.

Teach-Out Agreements: The Path Most Students Take

Most students who go through a college closure don't end up with discharged loans or tuition refunds. They finish their degree somewhere else through a teach-out program. For many students, that's genuinely the right call.

A teach-out agreement is a formal contract between your closing school and one or more partner institutions. The partner commits to admitting students in good standing and, ideally, accepting your credits so you can finish without starting over. When Lourdes University in Ohio announced its closure, it partnered with the University of Toledo, which agreed to admit Lourdes students and honor comparable coursework. That's how a good teach-out works.

Before signing anything with a teach-out partner, get answers to these questions:

How many of my specific credits will transfer, and into which programs?
Will my GPA carry over, or do I start fresh?
Is tuition comparable? Is any bridge funding available?
Does this institution hold the accreditation that matters for my career or graduate school plans?

Here's the tradeoff most students don't know about until it's too late: accepting a teach-out agreement makes you ineligible for federal closed school loan discharge. If you're a junior with two semesters left and a teach-out partner who accepts 90% of your credits, finishing the degree probably wins. But if you're 18 months in with $16,000 in federal loans and the teach-out partner will only take 8 of your 24 credits, the math shifts considerably toward discharge and a fresh start.

Neither option is automatically better. These two roads don't converge again once you choose, so run the numbers for your exact situation before you commit.

Transferring on Your Own Terms

If your school's teach-out partners don't fit—wrong location, wrong program mix, weaker accreditation—you can transfer independently. It requires more legwork, but it gives you the full range of options.

Credit transfer is never guaranteed. Most four-year institutions accept somewhere between 60 and 90 transfer credits, but acceptance depends heavily on how their programs align with what you studied. A statistics course at one school might transfer as a general elective rather than satisfying a major requirement at another. That distinction can add an entire semester and thousands of dollars.

A few things that meaningfully improve your odds:

Apply to schools with the same regional accreditation type as your closed school. Transfers from nationally accredited institutions to regionally accredited ones face much steeper credit evaluation hurdles.
Bring your course syllabi to meetings with admissions staff. A registrar reviewing a syllabus is far more likely to grant equivalency than one looking only at a course title.
Ask specifically about "substantial equivalency" policies—some schools have formal processes for evaluating coursework that doesn't map neatly to their catalog.

Once you've identified a new school, update your FAFSA to add that institution's school code. Federal aid follows the student, not the school—but only after you make that update. If your old school used state grant programs, contact your state's higher education agency to ask whether those funds are portable.

Federal Student Loan Discharge: When It Actually Applies

If you don't take a teach-out and don't transfer your credits into a comparable program elsewhere, you may qualify for closed school discharge of your federal student loans. This cancels what you owe entirely—but eligibility rules are strict.

Your Situation	Eligible for Discharge?
Enrolled when school closed	Yes
On approved leave when school closed	Yes
Withdrew within 180 days of closure (loans after July 1, 2020)	Yes
Withdrew within 120 days of closure (older loans)	Yes
Accepted a teach-out agreement	No
Transferred to a comparable program elsewhere	No
Withdrew more than 180 days before closure	Generally no

To apply, download the Closed School Loan Discharge Application from studentaid.gov and submit it to your federal loan servicer—MOHELA, Nelnet, or whichever servicer holds your loans. The process is straightforward on paper.

The political environment around discharge has gotten complicated, though. The Biden administration's 2022 rules that expanded automatic discharge eligibility were effectively delayed by the 2025 reconciliation bill until July 1, 2035. That's a decade-long pause. For borrowers right now, the standards in place are closer to earlier rules that set a higher bar for relief. The Sweet v. Cardona lawsuit (now Sweet vs. McMahon) produced about $6 billion in forgiveness for roughly 200,000 borrowers—but that was specific to fraud-based cases, not routine closures.

The honest bottom line: if you're clearly eligible, apply. Processing may be slow, but the program still functions. Don't assume the political noise means it's unavailable to you.

Private Loans Are a Different Story

Everything above covers federal student loans. Private loans—Sallie Mae, Earnest, Discover, your state lending authority—operate under different rules entirely, and those rules are not in your favor.

Private lenders are not required by law to offer closed school discharge. Some have voluntary hardship or closure-specific policies; most don't. A student carrying $23,500 in private loans at a 7.5% interest rate will accumulate roughly $1,762 in additional interest per year during a forbearance period. Forbearance buys time but not resolution.

Call your lender the day you learn about the closure. Ask specifically whether they have a school closure accommodation policy. Document every conversation: who you spoke with, the date, what was said. If a lender refuses any accommodation and you believe the school misrepresented its financial stability when enrolling you, filing a complaint through the Consumer Financial Protection Bureau (CFPB) is worth doing—both for your own case and because complaint volume affects how regulators prioritize oversight.

Your Records and Degree After the Doors Close

Here's something students often worry about unnecessarily: a degree from a school that has since closed is still a valid degree. Employers and graduate programs don't hold institutional failure against you. What matters to them is that the school was accredited when you attended and when you graduated.

Transcript access after closure is a separate concern—and a legitimate one. When an institution closes, another organization typically assumes custodianship of its academic records. Often that's a state's Department of Higher Education. The U.S. Department of Education publishes a Closed School Guide for Students that walks borrowers through locating records from defunct institutions. The National Student Clearinghouse (studentclearinghouse.org) maintains enrollment verification records for many closed schools going back decades.

Most employers care far more about what you can do than whether you have a clean diploma from an institution that still exists.

If your school closes before you graduate, your incomplete coursework isn't worthless either. You can document your credits as "54 credits toward a B.S. in Nursing at [Institution Name]" and explain the closure plainly in an interview. It's not ideal. But it's far less damaging than most students fear.

Bottom Line

Get your records first—today. Request transcripts, save your academic catalog, and pull your loan history from studentaid.gov before anything else. Access windows close fast.
Understand the teach-out tradeoff before you sign. Accepting a teach-out helps you finish faster but makes you ineligible for federal loan discharge. Neither path is universally better.
Apply for closed school discharge if you qualify. You need to have been enrolled or withdrawn within 180 days of closure (for loans made after July 1, 2020) and must not have accepted a teach-out or transferred into a comparable program.
Update your FAFSA the moment you choose a new school. Federal aid follows you, but only if you update the system.
Your closed-school degree is valid. Accreditation at the time of attendance is what counts.

The single most consequential decision you'll make is whether to take the teach-out or pursue discharge. Everything else flows from that choice. Make it deliberately, with the specific numbers for your loan balance and credit situation in hand—not in a panic on a Tuesday morning.

Frequently Asked Questions

Can I get a tuition refund if my college closes mid-semester?

Possibly. If your school closes while a semester is in progress, you may be entitled to a pro-rated refund for tuition and fees already paid. Whether you actually receive one depends heavily on state law. California's Student Tuition Recovery Fund (STRF), for example, provides a state-backed safety net; many states have no equivalent. Check with your state's higher education consumer protection office immediately.

Does receiving a closed school discharge hurt my credit score?

No. Discharged federal student loan balances are removed from your outstanding debt, which can actually improve your debt-to-income ratio. The discharge event itself is not reported as a derogatory mark. Any late payments that occurred before the discharge may still appear, but the discharge does not add new negative information.

My school closed several years ago—can I still apply for discharge?

Yes. There is no hard expiration date on applying for a federal closed school discharge. Borrowers have successfully obtained discharge years—even more than a decade—after their school closed. Submit your application through studentaid.gov and be prepared for longer processing times on older cases.

Is a teach-out agreement always safer than transferring independently?

Not always. A teach-out is faster if the partner school accepts most of your credits and fits your academic goals. But if credit acceptance is poor or the partner institution is significantly weaker in reputation or program quality than what you need for your career, an independent transfer may serve you better. The key variable is how many credits transfer and how they transfer—not just whether the school will admit you.

How do I verify my degree or enrollment if my college no longer exists?

Start with the National Student Clearinghouse at studentclearinghouse.org, which maintains enrollment and degree records for many institutions including those that have closed. If that doesn't yield results, contact your state's Department of Higher Education—most states maintain archives of closed school records. The U.S. Department of Education's Closed School Guide is also a reliable starting point for locating the right custodian.

What if I was misled about my college's financial health when I enrolled?

This is the territory of borrower defense to repayment, a separate federal program from closed school discharge. Borrower defense applies when a school made material misrepresentations that led you to enroll. The program has faced significant legal and regulatory turbulence since 2022, but it remains open for applications through studentaid.gov. Document everything you can about what the school told you—marketing materials, enrollment counselor communications, financial aid presentations.