UNITED STATES DEPARTMENT OF EDUCATION

OFFICE OF POSTSECONDARY EDUCATION

Proposed Regulatory Text for Issue Paper #2: Closed School Discharge

Session Three: December 6 -10, 2021

Part 674—Federal Perkins Loan Program

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§ 674.33 Repayment.

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(g) Closed school discharge - (1) General. (i) The holder of an NDSL or a Federal Perkins Loan 

discharges the borrower's (and any endorser's) obligation to repay the loan if the borrower did not 

complete the program of study for which the loan was made because the school at which the borrower 

was enrolled closed. 

(ii) For the purposes of this section -

(A) A school's closure date is the earlier of the date that the school ceases to provide educational 

instruction in all most programs, as determined by the Secretary, or a date chosen by the Secretary that 

reflects when the institutionschool had ceased to provide educational instruction for most of its 

students; 

(B) “School” means a school's main campus or any location or branch of the main campus

regardless of whether the school or its location or branch is considered eligible; and

(C) The “holder” means the Secretary or the school that holds the loan.; and

(D) “Program” means the credential defined by the level and Classification of Instructional Program 

code in which a student is enrolled, except that the Secretary may define a borrower’s program as 

multiple levels or Classification of Instructional Program codes if:

(1) The enrollment occurred at the same institutionschool in closely proximate periods;

(2) The school granted a credential in a program while the student was enrolled in a different 

program; or

(3) The programs stack or were presented as necessary for borrowers to complete in order to 

succeed in the relevant field of employment. 
Closed school discharge proposed regulatory text session three 2

(2) Relief pursuant to discharge. (i) Discharge under this section relieves the borrower of any past 

or present obligation to repay the loan and any accrued interest or collection costs with respect to the 

loan. 

(ii) The discharge of a loan under this section qualifies the borrower for reimbursement of amounts 

paid voluntarily or through enforced collection on the loan. 

(iii) A borrower who has defaulted on a loan discharged under this section is not considered to 

have been in default on the loan after discharge, and such a borrower is eligible to receive assistance 

under programs authorized by title IV of the HEA. 

(iv) The Secretary or the school, if the school holds the loan, reports the discharge of a loan under 

this section to all credit bureaus consumer reporting agencies to which the status of the loan was 

previously reported. 

(3) Determination of borrower qualification for discharge by the SecretaryDischarge without an 

application. (i) The Secretary may discharge the borrower's obligation to repay an NDSL or Federal 

Perkins Loan without an application from the borrower if the-- if the Secretary determines that -

(A) The bBorrower qualified for and received a discharge on a loan pursuant to 34 CFR 682.402(d)

(Federal Family Education Loan Program) or 34 CFR 685.214 (Federal Direct Loan Program), and was 

unable to receive a discharge on an NDSL or Federal Perkins Loan because the Secretary lacked the 

statutory authority to discharge the loan; or 

(B) The Secretary determines that the borrower qualifies for a discharge Bbased on information in 

the Secretary's possession. , the borrower qualifies for a discharge The Secretary discharges the loan 

without an application from the borrower if the borrower did not complete an institutional teach-out 

plan performed by the school or a teach-out agreement with another school, approved by the school’s 

accrediting agency and, if applicable, the school’s State authorizing agency. 

(ii) With respect to schools that closed on or after November 1, 2013, the Secretary will discharge 

the borrower's obligation to repay an NDSL or Federal Perkins Loan without an application from the 

borrower if the Secretary determines that the borrower did not subsequently re-enroll in any title IVeligible institution within a period of three years from the date the school closed. If the borrower 

accepts but does not complete an institutional teach-out plan performed by the school or a teach-out 

agreement at another school approved by the school’s accrediting agency and, if applicable, the school’s 

State authorizing agency, then the Secretary discharges the loan within one year of the borrower’s last 

date of attendance in the teach out program.

(4) Borrower qualification for discharge. Except as provided in paragraph (g)(3) of this section, in 

order to qualify for discharge of an NDSL or Federal Perkins Loan, a borrower must submit to the holder 

of the loan a written request and sworn statementa completed closed school discharge application on a 

form approved by the Secretary, and the factual assertions in the application statement must be true. 

The statement need not be notarized but and must be made by the borrower under penalty of perjury. 

In the statement the borrower mustThe application explains the procedures and eligibility criteria for 

obtaining a discharge and requires the borrower to -
Closed school discharge proposed regulatory text session three 3

(i) State that the borrower--

(A) Received the proceeds of a loan, in whole or in part, on or after January 1, 1986, to attend a 

school;

(B) Did not complete the program of study at that school because the school closed while the 

student was enrolled, or the student withdrew from the school not more than 120180 days before the 

school closed. The Secretary may extend the 120180-day period if the Secretary determines that 

exceptional circumstances as described in paragraph (g)(9) of this section related to the school's closing

justify an extension. Exceptional circumstances for this purpose may include, but are not limited to: the 

school's loss of accreditation; The school's discontinuation of the majority of its academic programs; 

action by the State to revoke the school's license to operate or award academic credentials in the State; 

or a finding by a State or Federal government agency that the school violated State or Federal law; and 

(C) Did not complete and is not in the process of completingOn or after July 1, 2023, did not 

complete an institutional teach-out plan performed by the school or a teach-out agreement at another 

school, approved by the school’s accrediting agency and, if the applicable, the school’s State authorizing 

agency. the program of study through a teachout at another school as defined in 34 CFR 600.2 and 

administered in accordance with 34 CFR 602.207(b)(6), by transferring academic credit earned at the 

closed school to another school, or by any other comparable means; 

(ii) State whether the borrower has made a claim with respect to the school's closing with any third 

party, such as the holder of a performance bond or a tuition recovery program, and, if so, the amount of 

any paymeint received by the borrower or credited to the borrower's loan obligation; and 

(iii) State that the borrower -

(A) Agrees to provide to the holder of the loan upon request other documentation reasonably 

available to the borrower that demonstrates that the borrower meets the qualifications for discharge 

under this section; and 

(B) Agrees to cooperate with the Secretary in enforcement actions in accordance with paragraph 

(g)(6) of this section and to transfer any right to recovery against a third party to the Secretary in 

accordance with paragraph (g)(7) of this section. 

(5) Fraudulently obtained loans. A borrower who secured a loan through fraudulent means, as 

determined by the ruling of a court or an administrative tribunal of competent jurisdiction, is ineligible 

for a discharge under this section. 

(6) Cooperation by borrower in enforcement actions. (i) In order tTo obtain a discharge under this 

section, a borrower must cooperate with the Secretary in any judicial or administrative proceeding 

brought by the Secretary to recover amounts discharged or to take other enforcement action with 

respect to the conduct on which the discharge was based. At the request of the Secretary and upon the 

Secretary's tendering to the borrower the fees and costs that are customarily provided in litigation to 

reimburse witnesses, the borrower must -

Commented [A1]: Removed language regarding reenrollment/comparable program criterion, retaining only the 

completion of a teach-out agreement. 
Closed school discharge proposed regulatory text session three 4

(A) Provide testimony regarding any representation made by the borrower to support a request for 

discharge; 

(B) Provide any documents reasonably available to the borrower with respect to those 

representations; and 

(C) If required by the Secretary, provide a sworn statement regarding those documents and 

representations. 

(ii) The holder denies the request for a discharge or revokes the discharge of a borrower who -

(A) Fails to provide the testimony, documents, or a sworn statement required under paragraph 

(g)(6)(i) of this section; or 

(B) Provides testimony, documents, or a sworn statement that does not support the material 

representations made by the borrower to obtain the discharge. 

(7) Transfer to the Secretary of borrower's right of recovery against third parties. (i) In the case of a 

loan held by the Secretary, upon discharge under this section, the borrower is deemed to have assigned 

to and relinquished in favor of the Secretary any right to a loan refund (up to the amount discharged) 

that the borrower may have by contract or applicable law with respect to the loan or the enrollment 

agreement for the program for which the loan was received, against the school, its principals, its 

affiliates and their successors, its sureties, and any private fund, including the portion of a public fund 

that represents funds received from a private party. 

(ii) The provisions of this section apply notwithstanding any provision of State law that would 

otherwise restrict transfer of those rights by the borrower, limit or prevent a transferee from exercising 

those rights, or establish procedures or a scheme of distribution that would prejudice the Secretary's 

ability to recover on those rights. 

(iii) Nothing in this section limits or forecloses the borrower's right to pursue legal and equitable 

relief regarding disputes arising from matters unrelated to the discharged NDSL or Federal Perkins Loan. 

(8) Discharge procedures. (i) After confirming the date of a school's closure, the holder of the loan 

identifies any NDSL or Federal Perkins Loan borrower who appears to have been enrolled at the school 

on the school closure date or to have withdrawn not more than 120180 days prior to the closure date. 

(ii) If the borrower's current address is known, the holder of the loan mails the borrower a 

discharge application and an explanation of the qualifications and procedures for obtaining a discharge. 

The holder of the loan also promptly suspends any efforts to collect from the borrower on any affected 

loan. The holder of the loan may continue to receive borrower payments. 

(iii) In the case of a loan held by the Secretary, if the borrower's current address is unknown, the 

Secretary attempts to locate the borrower and determine the borrower's potential eligibility for a 

discharge under this section by consulting with representatives of the closed school or representatives 

of the closed school's third-party billing and collection servicers, the school's licensing agency, the school 

accrediting agency, and other appropriate parties. If the Secretary learns the new address of a borrower, 
Closed school discharge proposed regulatory text session three 5

the Secretary mails to the borrower a discharge application and explanation and suspends collection, as 

described in paragraph (g)(8)(ii) of this section. 

(iv) In the case of a loan held by a school, if the borrower's current address is unknown, the school 

attempts to locate the borrower and determine the borrower's potential eligibility for a discharge under 

this section by taking steps required to locate the borrower under § 674.44. 

(v) If the borrower fails to submit the completed application a written request and sworn 

statement described in paragraph (g)(4) of this section within 6090 days of the holder of the loan's 

mailing the discharge application, the holder of the loan resumes collection and grants forbearance of 

principal and interest for the period during which collection activity was suspended. 

(vi) Upon resuming collection on any affected loan, the Secretary provides the borrower another 

discharge application and an explanation of the requirements and procedures for obtaining a discharge. 

(vii) If the holder of the loan determines that a borrower who requests a discharge meets the 

qualifications for a discharge, the holder of the loan notifies the borrower in writing of that 

determination and the reasons for the determination. 

(viii) In the case of a loan held by the Secretary, if the Secretary determines that a borrower who 

requests a discharge does not meet the qualifications for a discharge, the Secretary notifies that 

borrower, in writing, of that determination and the reasons for the determination. 

(ix) In the case of a loan held by a school, if the school determines that a borrower who requests a 

discharge does not meet the qualifications for discharge, the school submits that determination and all 

supporting materials to the Secretary for approval. The Secretary reviews the materials, makes an 

independent determination, and notifies the borrower in writing of the determination and the reasons 

for the determination. 

(x) In the case of a loan held by a school and discharged by either the school or the Secretary, the 

school must reimburse its Fund for the entire amount of any outstanding principal and interest on the 

loan, and any collection costs charged to the Fund as a result of collection efforts on a discharged loan. 

The school must also reimburse the borrower for any amount of principal, interest, late charges or 

collection costs the borrower paid on a loan discharged under this section.

(9) Exceptional circumstances. For purposes of this section, exceptional circumstances include, but 

are not limited to—

(1) The revocation or withdrawal by an accrediting agency of the school's institutional 

accreditation;

(2) The school is or was placed on probation or issued a show-cause order, or placed on an 

accreditation status that poses an equivalent or greater risk to its accreditation, by its accrediting agency 

for failing to meet one or more of the agency's standards;

(3) The revocation or withdrawal by the State authorization or licensing authority to operate or to 

award academic credentials in the State;
Closed school discharge proposed regulatory text session three 6

(4) The termination by the Department of the school's participation in a title IV, HEA program;

(5) A finding by a State or Federal government agency that the school violated State or Federal law 

related to education or services to students;

(6) A State or Federal court judgment that a School violated State or Federal law related to 

education or services to students;

(76) The teach out of the student’s educational program exceeds the 180 day look back period for 

a closed school discharge;

(87) The school responsible for the teach out of the student’s educational program fails to perform 

the material terms of the teach-out plan or agreement, such that the student does not have a 

reasonable opportunity to complete his or her program of study;

(98) The school discontinued a significant share of its academic programs. 

(109) The school permanently closed all or most of its ground-based locations while maintaining 

online programs.

(110) The school was placed on the heightened cash monitoring payment method as defined in 

section 668.162(d)(2).

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Part 682—Federal Family Education Loan (FFEL) Program

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§ 682.402 Death, disability, closed school, false certification, unpaid refunds, and bankruptcy 

payments.

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(d) Closed school - (1) General. (i) The Secretary reimburses the holder of a loan received by a 

borrower on or after January 1, 1986, and discharges the borrower's obligation with respect to the loan 

in accordance with the provisions of paragraph (d) of this section, if the borrower (or the student for 

whom a parent received a PLUS loan) could not complete the program of study for which the loan was 

intended because the school at which the borrower (or student) was enrolled closed, or the borrower 

(or student) withdrew from the school not more than 120180 days prior to the date the school closed. 

The Secretary may extend the 120180-day period if the Secretary determines that exceptional 

circumstances, as described in paragraph (d)(9) of this section, related to a school's closing justify an 

extension. Exceptional circumstances for this purpose may include, but are not limited to: the school's 

loss of accreditation; the school's discontinuation of the majority of its academic programs; action by 

the State to revoke the school's license to operate or award academic credentials in the State; or a 

finding by a State or Federal government agency that the school violated State or Federal law.

Commented [A2]: Added State or Federal Court judgment in 

exceptional circumstances throughout all loan programs.
Closed school discharge proposed regulatory text session three 7

(ii) For purposes of the closed school discharge authorized by this section –

(A) A school's closure date is the earlier of the date that the school ceases to provide educational 

instruction in all most programs, as determined by the Secretary, or a date chosen by the 

Secretary that reflects when the institutionschool had ceased to provide educational 

instruction for most of its students; 

(B) The term “borrower” includes all endorsers on a loan; and

(C) A “school” means a school's main campus or any location or branch of the main campus, 

regardless of whether the school or its location or branch is considered eligible; and.

(D) “Program” means the credential defined by the level and Classification of Instructional Program 

code in which a student is enrolled, except that the Secretary may define a borrower’s program as 

multiple levels or Classification of Instructional Program codes if:

(1) The enrollment occurred at the same institutionschool in closely proximate periods;

(2) The school granted a credential in a program while the student was enrolled in a different 

program; or

(3) The programs stack or were presented as necessary for borrowers to complete in order to 

succeed in the relevant field of employment 

(2) Relief available pursuant to discharge. (i) Discharge under paragraph (d) of this section relieves 

the borrower of an existing or past obligation to repay the loan and any charges imposed or costs 

incurred by the holder with respect to the loan that the borrower is, or was otherwise obligated to pay. 

(ii) A discharge of a loan under paragraph (d) of this section qualifies the borrower for 

reimbursement of amounts paid voluntarily or through enforced collection on a loan obligation 

discharged under paragraph (d) of this section. 

(iii) A borrower who has defaulted on a loan discharged under paragraph (d) of this section is not 

regarded as in default on the loan after discharge, and is eligible to receive assistance under the Title IV, 

HEA programs. 

(iv) A discharge of a loan under paragraph (d) of this section must be reported by the loan holder 

to all creditconsumer reporting agencies to which the holder previously reported the status of the loan, 

so as to delete all adverse credit history assigned to the loan. 

(3) Borrower qualification for discharge. Except as provided in paragraph (d)(8) of this section, in 

order to qualify for a discharge of a loan under paragraph (d) of this section, a borrower must submit a 

completed closed school discharge application on a form approved by the Secretary and the factual 

assertions in the application must be true and must be made under penalty of perjury. By signing the 

application,The application explains the procedures and eligibility criteria for obtaining a discharge and 

requires the borrower to state that the borrower (or the student on whose behalf a parent borrowed)—
Closed school discharge proposed regulatory text session three 8

certifies –

[NOTE: Subparagraphs (d)(3)(i),(ii), (iii) and (iv) are missing from the eCFR. We are proposing 

to replace the missing the subparagraphs as follows:]

(i) Received the proceeds of a loan, in whole or in part, on or after January 1, 1986 to attend a 

school;

(ii) Did not complete the program of study at that school because the school closed while the 

student was enrolled, or the student withdrew from the school not more than 180 calendar days before 

the school closed. The Secretary may extend the 180-day period if the Secretary determines that 

exceptional circumstances, as described in paragraph (d) (9) of this section, justify an extension

(iii) On or after July 1, 2023, state that the borrower did not complete an institutional teach-out 

plan performed by the school or a teach-out agreement at another school, approved by the school’s 

accrediting agency and, if applicable, the school’s State authorizing agency.

(iv) State that the borrower (or student)—

(A) Agrees to provide to the Secretary or the Secretary’s designee upon request other 

documentation reasonably available to the borrower that demonstrates that the borrower meets the 

qualifications for discharge under this section; and

(B) Agrees to cooperate with the Secretary or the Secretary’s designee in enforcement actions in 

accordance with paragraph (d)(4) of this section and to transfer any right to recovery against a third 

party to the Secretary in accordance with paragraph (d)(5) of this section.

(4) Cooperation by borrower in enforcement actions. (i) In any judicial or administrative proceeding 

brought by the Secretary or the Secretary's designee to recover for amounts discharged under 

paragraph (d) of this section or to take other enforcement action with respect to the conduct on which 

those claims were based, a borrower who requests or receives a discharge under paragraph (d) of this 

section must cooperate with the Secretary or the Secretary's designee. At the request of the Secretary 

or the Secretary's designee, and upon the Secretary's or the Secretary's designee's tendering to the 

borrower the fees and costs as are customarily provided in litigation to reimburse witnesses, the 

borrower shall -

(A) Provide testimony regarding any representation made by the borrower to support a request for 

discharge; and 

(B) Produce any documentation reasonably available to the borrower with respect to those 

representations and any sworn statement required by the Secretary with respect to those 

representations and documents. 

(ii) The Secretary revokes the discharge, or denies the request for discharge, of a borrower who –
Closed school discharge proposed regulatory text session three 9

(A) Fails to provide testimony, sworn statements, or documentation to support material 

representations made by the borrower to obtain the discharge; or 

(B) Provides testimony, a sworn statement, or documentation that does not support the 

material representations made by the borrower to obtain the discharge. 

(5) Transfer to the Secretary of borrower's right of recovery against third parties. (i) Upon discharge 

under paragraph (d) of this section, the borrower is deemed to have assigned to and relinquished in 

favor of the Secretary any right to a loan refund (up to the amount discharged) that the borrower (or 

student) may have by contract or applicable law with respect to the loan or the enrollment agreement 

for the program for which the loan was received, against the school, its principals, affiliates and their

successors, its sureties, and any private fund, including the portion of a public fund that represents 

funds received from a private party. 

(ii) The provisions of paragraph (d) of this section apply notwithstanding any provision of State law 

that would otherwise restrict transfer of such rights by the borrower (or student), limit or prevent a 

transferee from exercising those rights, or establish procedures or a scheme of distribution that would 

prejudice the Secretary's ability to recover on those rights.

(iii) Nothing in this section shall be construed as limiting or foreclosing the borrower's (or 

student's) right to pursue legal and equitable relief regarding disputes arising from matters otherwise 

unrelated to the loan discharged. 

(6) Guaranty agency responsibilities – (i) Procedures applicable if a school closed on or after January 

1, 1986, but prior to June 13, 1994. (A) If a borrower received a loan for attendance at a school with a 

closure date on or after January 1, 1986, but prior to June 13, 1994, the loan may be discharged in 

accordance with the procedures specified in paragraph (d)(6)(i) of this section. 

(B) If a loan subject to paragraph (d) of this section was discharged in part in accordance with the 

Secretary's “Closed School Policy” as authorized by section IV of Bulletin 89-G-159, the guaranty agency 

shall initiate the discharge of the remaining balance of the loan not later than August 13, 1994. 

(C) A guaranty agency shall review its records and identify all schools that appear to have closed on 

or after January 1, 1986 and prior to June 13, 1994, and shall identify the loans made to any borrower 

(or student) who appears to have been enrolled at the school on the school closure date or who 

withdrew not more than 120 days prior to the closure date. 

(D) A guaranty agency shall notify the Secretary immediately if it determines that a school not 

previously known to have closed appears to have closed, and, within 30 days of making that 

determination, notify all lenders participating in its program to suspend collection efforts against 

individuals with respect to loans made for attendance at the closed school, if the student to whom (or 

on whose behalf) a loan was made, appears to have been enrolled at the school on the closing date, or 

withdrew not more than 120 days prior to the date the school appears to have closed. Within 30 days 

after receiving confirmation of the date of a school's closure from the Secretary, the agency shall –

(1) Notify all lenders participating in its program to mail a discharge application explaining the 

procedures and eligibility criteria for obtaining a discharge and an explanation of the information that 
Closed school discharge proposed regulatory text session three 10

must be included in the sworn statement (which may be combined) to all borrowers who may be eligible 

for a closed school discharge; and 

(2) Review the records of loans that it holds, identify the loans made to any borrower (or student) 

who appears to have been enrolled at the school on the school closure date or who withdrew not more 

than 120 days prior to the closure date, and mail a discharge application and an explanation of the 

information that must be included in the sworn statement (which may be combined) to the borrower. 

The application shall inform the borrower of the procedures and eligibility criteria for obtaining a 

discharge. 

(E) If a loan identified under paragraph (d)(6)(i)(D)(2) of this section is held by the guaranty agency 

as a defaulted loan and the borrower's current address is known, the guaranty agency shall immediately 

suspend any efforts to collect from the borrower on any loan received for the program of study for 

which the loan was made (but may continue to receive borrower payments), and notify the borrower 

that the agency will provide additional information about the procedures for requesting a discharge 

after the agency has received confirmation from the Secretary that the school had closed. 

(F) If a loan identified under paragraph (d)(6)(i)(D)(2) of this section is held by the guaranty agency 

as a defaulted loan and the borrower's current address is unknown, the agency shall, by June 13, 1995, 

further refine the list of borrowers whose loans are potentially subject to discharge under paragraph (d)

of this section by consulting with representatives of the closed school, the school's licensing agency, 

accrediting agency, and other appropriate parties. Upon learning the new address of a borrower who 

would still be considered potentially eligible for a discharge, the guaranty agency shall, within 30 days 

after learning the borrower's new address, mail to the borrower a discharge application that meets the 

requirements of paragraph (d)(6)(i)(E) of this section. 

(G) If the guaranty agency determines that a borrower identified in paragraph (d)(6)(i)(E) or (F) of 

this section has satisfied all of the conditions required for a discharge, the agency shall notify the 

borrower in writing of that determination within 30 days after making that determination. 

(H) If the guaranty agency determines that a borrower identified in paragraph (d)(6)(i)(E) or (F) of 

this section does not qualify for a discharge, the agency shall notify the borrower in writing of that 

determination and the reasons for it within 30 days after the date the agency –

(1) Made that determination based on information available to the guaranty agency; 

(2) Was notified by the Secretary that the school had not closed; 

(3) Was notified by the Secretary that the school had closed on a date that was more than 120 days 

after the borrower (or student) withdrew from the school; 

(4) Was notified by the Secretary that the borrower (or student) was ineligible for a closed school 

discharge for other reasons; or 

(5) Received the borrower's completed application and sworn statement. 

(I) If a borrower described in paragraph (d)(6)(i)(E) or (F) of this section fails to submit the written 

request and sworn statement described in paragraph (d)(3) of this section within 60 days of being 
Closed school discharge proposed regulatory text session three 11

notified of that option, the guaranty agency shall resume collection and shall be deemed to have 

exercised forbearance of payment of principal and interest from the date it suspended collection 

activity. The agency may capitalize, in accordance with § 682.202(b), any interest accrued and not paid 

during that period. 

(J) A borrower's request for discharge may not be denied solely on the basis of failing to meet any 

time limits set by the lender, guaranty agency, or the Secretary. 

(ii) Procedures applicable if a school closed on or after June 13, 1994. (A) A guaranty agency shall 

notify the Secretary immediately whenever it becomes aware of reliable information indicating a school 

may have closed. The designated guaranty agency in the state in which the school is located shall 

promptly investigate whether the school has closed and, within 30 days after receiving information 

indicating that the school may have closed, report the results of its investigation to the Secretary 

concerning the date of the school's closure and whether a teach-out of the closed school's program was 

made available to students. 

(B) If a guaranty agency determines that a school appears to have closed, it shall, within 30 days of 

making that determination, notify all lenders participating in its program to suspend collection efforts 

against individuals with respect to loans made for attendance at the closed school, if the student to 

whom (or on whose behalf) a loan was made, appears to have been enrolled at the school on the closing 

date, or withdrew not more than 120180 days prior to the date the school appears to have closed. 

Within 30 days after receiving confirmation of the date of a school's closure from the Secretary, the 

agency shall –

(1) Notify all lenders participating in its program to mail a discharge application explaining the 

procedures and eligibility criteria for obtaining a discharge and an explanation of the information that 

must be included in the application to all borrowers who may be eligible for a closed school discharge; 

and 

(2) Review the records of loans that it holds, identify the loans made to any borrower (or student) 

who appears to have been enrolled at the school on the school closure date or who withdrew not more 

than 120180 days prior to the closure date, and mail a discharge application and an explanation of the 

information that must be included in the application to the borrower. The application shall inform the 

borrower of the procedures and eligibility criteria for obtaining a discharge. 

(C) If a loan identified under paragraph (d)(6)(ii)(B)(2) of this section is held by the guaranty agency 

as a defaulted loan and the borrower's current address is known, the guaranty agency shall immediately 

suspend any efforts to collect from the borrower on any loan received for the program of study for 

which the loan was made (but may continue to receive borrower payments), and notify the borrower 

that the agency will provide additional information about the procedures for requesting a discharge 

after the agency has received confirmation from the Secretary that the school had closed. 

(D) If a loan identified under paragraph (d)(6)(ii)(B)(2) of this section is held by the guaranty agency 

as a defaulted loan and the borrower's current address is unknown, the agency shall, within one year 

after identifying the borrower, attempt to locate the borrower and further determine the borrower's 

potential eligibility for a discharge under paragraph (d) of this section by consulting with representatives 

of the closed school, the school's licensing agency, accrediting agency, and other appropriate parties. 

Upon learning the new address of a borrower who would still be considered potentially eligible for a 
Closed school discharge proposed regulatory text session three 12

discharge, the guaranty agency shall, within 30 days after learning the borrower's new address, mail to 

the borrower a discharge application that meets the requirements of paragraph (d)(6)(ii)(B) of this 

section. 

(E) If the guaranty agency determines that a borrower identified in paragraph (d)(6)(ii)(C) or (D) of 

this section has satisfied all of the conditions required for a discharge, the agency shall notify the 

borrower in writing of that determination within 30 days after making that determination. 

(F) If the guaranty agency determines that a borrower identified in paragraph (d)(6)(ii)(C) or (D) of 

this section does not qualify for a discharge, the agency shall notify the borrower in writing of that 

determination and the reasons for it, the opportunity for review by the Secretary, and how to request 

such a review within 30 days after the date the agency -

(1) Made that determination based on information available to the guaranty agency; 

(2) Was notified by the Secretary that the school had not closed; 

(3) Was notified by the Secretary that the school had closed on a date that was more than 120180

days after the borrower (or student) withdrew from the school; 

(4) Was notified by the Secretary that the borrower (or student) was ineligible for a closed school 

discharge for other reasons; or 

(5) Received the borrower's completed application. 

(G) Upon receipt of a closed school discharge claim filed by a lender, the agency shall review the 

borrower's completed application in light of information available from the records of the agency and 

from other sources, including other guaranty agencies, state authorities, and cognizant accrediting 

associations, and shall take the following actions –

(1) If the agency determines that the borrower satisfies the requirements for discharge under 

paragraph (d) of this section, it shall pay the claim in accordance with § 682.402(h) not later than 90 

days after the agency received the claim; or 

(2) If the agency determines that the borrower does not qualify for a discharge, the agency shall, 

not later than 90 days after the agency received the claim, return the claim to the lender with an 

explanation of the reasons for its determination.

(H) If a borrower described in paragraph (d)(6)(ii)(E) or (F) of this section fails to submit the 

completed application within 6090 days of being notified of that option, the lender or guaranty agency 

shall resume collection. 

(I) Upon resuming collection on any affected loan, the lender or guaranty agency provides the 

borrower another discharge application and an explanation of the requirements and procedures for 

obtaining a discharge. 

(J) A borrower's request for discharge may not be denied solely on the basis of failing to meet any 

time limits set by the lender, guaranty agency, or the Secretary. 
Closed school discharge proposed regulatory text session three 13

(K) (1) Within 30 days after receiving the borrower's request for review under paragraph 

(d)(6)(ii)(F) of this section, the agency shall forward the borrower's discharge request and all relevant 

documentation to the Secretary for review. 

(2) The Secretary notifies the agency and the borrower of the determination upon review. If the 

Secretary determines that the borrower is not eligible for a discharge under paragraph (d) of this 

section, within 30 days after being so informed, the agency shall take the actions described in paragraph 

(d)(6)(ii)(H) or (I) of this section, as applicable. 

(3) If the Secretary determines that the borrower meets the requirements for a discharge under 

paragraph (d) of this section, the agency shall, within 30 days after being so informed, take actions 

required under paragraphs (d)(6)(ii)(E) and (d)(6)(ii)(G)(1) of this section, and the lender shall take the 

actions described in paragraph (d)(7)(iv) of this section, as applicable. 

(7) Lender responsibilities. (i) A lender shall comply with the requirements prescribed in paragraph 

(d) of this section. In the absence of specific instructions from a guaranty agency or the Secretary, if a 

lender receives information from a source it believes to be reliable indicating that an existing or former 

borrower may be eligible for a loan discharge under paragraph (d) of this section, the lender shall 

immediately notify the guaranty agency, and suspend any efforts to collect from the borrower on any 

loan received for the program of study for which the loan was made (but may continue to receive 

borrower payments). 

(ii) If the borrower fails to submit a completed application described in paragraph (d)(3) of this 

section within 6090 days of being notified of that option, the lender shall resume collection and shall be 

deemed to have exercised forbearance of payment of principal and interest from the date the lender 

suspended collection activity. The lender may capitalize, in accordance with § 682.202(b), any interest 

accrued and not paid during that period. Upon resuming collection, the lender provides the borrower 

with another discharge application and an explanation of the requirements and procedures for 

obtaining a discharge. 

(iii) The lender shall file a closed school claim with the guaranty agency in accordance with § 

682.402(g) no later than 60 days after the lender receives a completed application described in 

paragraph (d)(3) of this section from the borrower, or notification from the agency that the Secretary 

approved the borrower's appeal in accordance with paragraph (d)(6)(ii)(K)(3) of this section. 

(iv) Within 30 days after receiving reimbursement from the guaranty agency for a closed school 

claim, the lender shall notify the borrower that the loan obligation has been discharged, and request 

that all consumer reporting agencies to which it previously reported the status of the loan delete all 

adverse credit history assigned to the loan. 

(v) Within 30 days after being notified by the guaranty agency that the borrower's request for a 

closed school discharge has been denied, the lender shall resume collection and notify the borrower of 

the reasons for the denial. The lender shall be deemed to have exercised forbearance of payment of 

principal and interest from the date the lender suspended collection activity, and may capitalize, in 

accordance with § 682.202(b), any interest accrued and not paid during that period. 
Closed school discharge proposed regulatory text session three 14

(8) Discharge without an application. (i) A borrower's obligation to repay a FFEL Program loan may 

be discharged without an application from the borrower if the –

(A) Borrower received a discharge on a loan pursuant to 34 CFR 674.33(g) under the Federal 

Perkins Loan Program, or 34 CFR 685.214 under the William D. Ford Federal Direct Loan Program; or 

(B) Secretary or the guaranty agency, with the Secretary's permission, determines that the 

borrower qualifies for a discharge based on information in the Secretary or guaranty agency's 

possession. The Secretary or guaranty agency discharges the loan without an application from the 

borrower if the borrower did not complete an institutional teach-out plan performed by the school or a 

teach-out agreement at another school, approved by the school’s accrediting agency and, if applicable, 

the school’s State authorizing agency.

(ii) With respect to schools that closed on or after November 1, 2013, a borrower's obligation to 

repay a FFEL Program loan will be discharged without an application from the borrower if the Secretary 

or guaranty agency determines that the borrower did not subsequently re-enroll in any title IV-eligible 

institution within a period of three years after the school closed.

(ii) If the borrower accepts but does not complete an institutional teach-out plan performed by the 

school or a teach-out agreement at another school, approved by the school’s accrediting agency and, if 

applicable, the school’s State authorizing agency, then the Secretary or guaranty agency discharges the 

loan within one year of the borrower’s last date of attendance in the teach out program.

(9) Exceptional circumstances. For purposes of this section, exceptional circumstances include, but 

are not limited to—

(1) The revocation or withdrawal by an accrediting agency of the school's institutional 

accreditation;

(2) The school is or was placed on probation or issued a show-cause order, or placed on an 

accreditation status that poses an equivalent or greater risk to its accreditation, by its accrediting agency 

for failing to meet one or more of the agency's standards;

(3) The revocation or withdrawal by the State authorization or licensing authority to operate or to 

award academic credentials in the State;

(4) The termination by the Department of the school's participation in a title IV, HEA program;

(5) A finding by a State or Federal government agency that the school violated State or Federal law 

related to education or services to students;

(6) A State or Federal court judgment that a School violated State or Federal law related to 

education or services to students;

(76) The teach out of the student’s educational program exceeds the 180 day look back period for 

a closed school discharge;

Commented [A3]: See above regarding removal of reenrollment/comparable program criterion.

Commented [A4]: See above regarding inclusion of State or 

Federal court judgment.
Closed school discharge proposed regulatory text session three 15

(87) The school responsible for the teach out of the student’s educational program fails to perform 

the material terms of the teach-out plan or agreement, such that the student does not have a 

reasonable opportunity to complete his or her program of study ;

(98) The school discontinued a significant share of its academic programs. 

(109) The school permanently closed all or most of its ground-based locations while maintaining 

online programs.

(110) The school was placed on the heightened cash monitoring payment method as defined in 

section 668.162(d)(2).

* * * * * *

Part 685--William D. Ford Federal Direct Loan Program

* * * * *

§685.214 Closed school discharge.

(a) General. (1) The Secretary discharges the borrower's (and any endorser's) obligation to repay a 

Direct Loan in accordance with the provisions of this section if the borrower (or the student on whose 

behalf a parent borrowed) did not complete the program of study for which the loan was made because 

the school at which the borrower (or student) was enrolled closed, as described in paragraph (c) of this 

section.

(2) For purposes of this section—

(i) A school's closure date is the earlier of the date that the school ceases to provide educational 

instruction in all most programs, as determined by the Secretary, or a date chosen by the Secretary that 

reflects when the institutionschool had ceased to provide meaningful educational instruction for most of 

its students; and

(ii) “School” means a school's main campus or any location or branch of the main campus, 

regardless of whether the school or its location or branch is considered eligible;

(iii) “Program” means the credential defined by the level and Classification of Instructional Program 

code in which a student is enrolled, except that the Secretary may define a borrower’s program as 

multiple levels or Classification of Instructional Program codes if:

(A) tThe enrollment occurred at the same institution in closely proximate periods;

(B) The school granted a credential in a program while the student was enrolled in a different 

program; or

(C) The programs stack or were presented as necessary for borrowers to complete in order to 

succeed in the relevant field of employment
Closed school discharge proposed regulatory text session three 16

: and

(iii) “Comparable program” means--—

(A) For schools that closed before [MONTH/DAYJuly 1, /2014] a program at the same credential 

level and in the same field of study that the borrower was enrolled in at the closed school and which 

accepted most of the credits transferred from the closed school.

(B) For schools that closed on or after [MONTH/DAY/July 1, 2014] and before [MONTH/DAY/June 

30, 2019] a program at the same level and with the same Classification of Instructional Program (CIP) 

code as the program that the borrower was enrolled in at the closed school.

(C) For schools that closed on or after [MONTH/DAY/July 1, 2019] a program designed to be a 

continuation of the program that the borrower was enrolled in at the closed school.

(b) Relief pursuant to discharge. (1) Discharge under this section relieves the borrower of any past 

or present obligation to repay the loan and any accrued charges or collection costs with respect to the 

loan.

(2) The discharge of a loan under this section qualifies the borrower for reimbursement of amounts 

paid voluntarily or through enforced collection on the loan.

(3) The Secretary does not regard a borrower who has defaulted on a loan discharged under this 

section as in default on the loan after discharge, and such a borrower is eligible to receive assistance 

under programs authorized by title IV of the Act.

(4) The Secretary reports the discharge of a loan under this section to all consumer reporting 

agencies to which the Secretary previously reported the status of the loan, so as to delete all adverse 

credit history assigned to the loan.

(c) Discharge without an application. (1) If the Secretary determines based on information in the 

Secretary’s possession that the borrower qualifies for the discharge of a loan under this section, the 

Secretary discharges the loan without an application from the borrower., if the borrower did not 

subsequently re-enroll in any title IV-eligible institution within a period of one year from the school’s 

closure date. if the borrower did not complete an institutional teach-out plan performed by the school 

or a teach-out agreement at another school, approved by the school’s accrediting agency and, if 

applicable, the school’s State authorizing agency.

(2) If a borrower accepts but does not complete an institutional teach-out plan performed by the 

school or a teach-out agreement at another school, approved by the school’s accrediting agency and, if 

applicable, the school’s State authorizing agency, then the Secretary discharges the loan within one year 

of the borrower’s last date of attendance in the teach out program.

(dc) Borrower qualification for discharge. (1) UnlessExcept as provided in paragraph (h) of this 

section, For loans first disbursed before July 1, 2020, in order to qualify for discharge of a loan under this 

section, a borrower must submit to the Secretary a written request and sworn statement,a completed 

application and the factual assertions in the statementapplication must be true The statement need not 
Closed school discharge proposed regulatory text session three 17

be notarized but and must be made by the borrower under penalty of perjury. In the statement,The 

application explains the procedures and eligibility criteria for obtaining a discharge and requires the 

borrower to must—

(i) State that the borrower (or the student on whose behalf a parent borrowed)—

(A) Received the proceeds of a loan, in whole or in part, on or after January 1, 1986 to attend a 

school;

(B) Did not complete the program of study at that school because the school closed while the 

student was enrolled, or the student withdrew from the school not more than 120180 calendar days 

before the school closed. The Secretary may extend the 120180-day period if the Secretary determines 

that exceptional circumstances, as described in paragraph (i) of this section, related to a school's closing

justify an extension. Exceptional circumstances for this purpose may include, but are not limited to: the 

school's loss of accreditation; the school's discontinuation of the majority of its academic programs; 

action by the State to revoke the school's license to operate or award academic credentials in the State; 

or a finding by a State or Federal government agency that the school violated State or Federal law; and; 

and

(C) On or after July 1, 2023, state that the borrower did not complete an institutional teach-out 

plan performed by the school or a teach-out agreement at another school, approved by the school’s 

accrediting agency and, if applicable, the school’s State authorizing agency.

(C) Did not complete the program of study or a comparable program through either an 

institutional teach-out plan performed by the school or a teach-out agreement at another school, 

approved by the school’s accrediting agency and, if applicable, the school’s State authorizing agency.an 

approved teach-out at another school or by transferring academic credits or hours earned at the closed 

school to another school;

(ii) State whether the borrower (or student) has made a claim with respect to the school's closing 

with any third party, such as the holder of a performance bond or a tuition recovery program, and, if so, 

the amount of any payment received by the borrower (or student) or credited to the borrower's loan 

obligation; and

(iii) State that the borrower (or student)—

(A) Agrees to provide to the Secretary upon request other documentation reasonably available to 

the borrower that demonstrates that the borrower meets the qualifications for discharge under this 

section; and

(B) Agrees to cooperate with the Secretary in enforcement actions in accordance with paragraph 

(d) of this section and to transfer any right to recovery against a third party to the Secretary in 

accordance with paragraph (e) of this section.

Commented [A5]: See above regarding removal of reenrollment/comparable program criterion.
Closed school discharge proposed regulatory text session three 18

(2) For loans first disbursed on or after July 1, 2020, in order to qualify for discharge of a loan under 

this section, a borrower must submit to the Secretary a completed application, and the factual 

assertions in the application must be true and made by the borrower under penalty of perjury. The 

application explains the procedures and eligibility criteria for obtaining a discharge and requires the 

borrower to—

(i) Certify that the borrower (or the student on whose behalf a parent borrowed)—

(A) Received the proceeds of a loan, in whole or in part, on or after July 1, 2020 to attend a school;

(B) Did not complete the program of study at that school because the school closed on the date 

that the student was enrolled, or the student withdrew from the school not more than 180 calendar 

days before the date that the school closed. The Secretary may extend the 180-day period if the 

Secretary determines that exceptional circumstances, as described in paragraph (i) of this section,

related to a school's closing justify an extension;. Exceptional circumstances for this purpose may 

include, but are not limited to: The revocation or withdrawal by an accrediting agency of the school's 

institutional accreditation; revocation or withdrawal by the State authorization or licensing authority to 

operate or to award academic credentials in the State; the termination by the Department of the 

school's participation in a title IV, HEA program; the teach-out of the student's educational program 

exceeds the 180-day look-back period for a closed school loan discharge; or the school responsible for 

the teach-out of the student's educational program fails to perform the material terms of the teach-out 

plan or agreement, such that the student does not have a reasonable opportunity to complete his or her 

program of study or a comparable program; and

(C) Did not complete the program of study or a comparable program through a teach-out at 

another school or by transferring academic credits or hours earned at the closed school to another 

school;

(ii) Certify that the borrower (or the student on whose behalf the parent borrowed) has not 

accepted the opportunity to complete, or is not continuing in, the program of study or a comparable 

program through either an institutional teach-out plan performed by the school or a teach-out 

agreement at another school, approved by the school's accrediting agency and, if applicable, the 

school's State authorizing agency.

(3) If the Secretary determines, based on information in the Secretary's possession, that the borrower 

qualifies for the discharge of a loan under this section, the Secretary—

(i)Mmay discharge the loan without an application from the borrower; and

(ii) With respect to schools that closed on or after November 1, 2013, and before July 1, 2020, will 

discharge the loan without an application from the borrower if the borrower did not subsequently reenroll in any title IV-eligible institution within a period of three one years from the date the school 

closed.

(ed) Cooperation by borrower in enforcement actions. (1) In order tTo obtain a discharge under this 

section, a borrower must cooperate with the Secretary in any judicial or administrative proceeding 

brought by the Secretary to recover amounts discharged or to take other enforcement action with 
Closed school discharge proposed regulatory text session three 19

respect to the conduct on which the discharge was based. At the request of the Secretary and upon the 

Secretary's tendering to the borrower the fees and costs that are customarily provided in litigation to 

reimburse witnesses, the borrower must—

(i) Provide testimony regarding any representation made by the borrower to support a request for 

discharge;

(ii) Produce any documents reasonably available to the borrower with respect to those 

representations; and

(iii) If required by the Secretary, provide a sworn statement regarding those documents and 

representations.

(2) The Secretary denies the request for a discharge or revokes the discharge of a borrower who—

(i) Fails to provide the testimony, documents, or a sworn statement required under paragraph 

(d)(1) of this section; or

(ii) Provides testimony, documents, or a sworn statement that does not support the material 

representations made by the borrower to obtain the discharge.

(fe) Transfer to the Secretary of borrower's right of recovery against third parties. (1) Upon 

discharge under this section, the borrower is deemed to have assigned to and relinquished in favor of 

the Secretary any right to a loan refund (up to the amount discharged) that the borrower (or student) 

may have by contract or applicable law with respect to the loan or the enrollment agreement for the 

program for which the loan was received, against the school, its principals, its affiliates and their 

successors, its sureties, and any private fund, including the portion of a public fund that represents 

funds received from a private party.

(2) The provisions of this section apply notwithstanding any provision of State law that would 

otherwise restrict transfer of those rights by the borrower (or student), limit or prevent a transferee 

from exercising those rights, or establish procedures or a scheme of distribution that would prejudice 

the Secretary's ability to recover on those rights.

(3) Nothing in this section limits or forecloses the borrower's (or student's) right to pursue legal 

and equitable relief regarding disputes arising from matters unrelated to the discharged Direct Loan.

(fh) Discharge without an application. (1) If the Secretary determines based on information in the 

Secretary’s possession that the borrower qualifies for the discharge of a loan under this section, the 

Secretary mayshall discharges the loan without an application from the borrower, if the borrower did 

not subsequently re-enroll in any title IV- eligible institution within a period of one year from the 

school’s closure date the school closed.

(gf) Discharge procedures. The discharge procedures in this paragraph (f) apply to loans first 

disbursed before July 1, 2020.
Closed school discharge proposed regulatory text session three 20

(1) After confirming the date of a school's closure, the Secretary identifies any Direct Loan 

borrower (or student on whose behalf a parent borrowed) who appears to have been enrolled at the 

school on the school closure date or to have withdrawn not more than 120 180 days prior to the closure 

date.

(2) If the borrower's current address is known, the Secretary mails the borrower a discharge 

application and an explanation of the qualifications and procedures for obtaining a discharge. The 

Secretary also promptly suspends any efforts to collect from the borrower on any affected loan. The 

Secretary may continue to receive borrower payments.

(3) If the borrower's current address is unknown, the Secretary attempts to locate the borrower 

and determines the borrower's potential eligibility for a discharge under this section by consulting with 

representatives of the closed school, the school's licensing agency, the school's accrediting agency, and 

other appropriate parties. If the Secretary learns the new address of a borrower, the Secretary mails to 

the borrower a discharge application and explanation and suspends collection, as described in 

paragraph (f)(2) of this section.

(4) If a borrower fails to submit the application described in paragraph (c) of this section within 960

days of the Secretary's providing the discharge application, the Secretary resumes collection and grants

forbearance of principal and interest for the period in which collection activity was suspended. The 

Secretary may capitalize any interest accrued and not paid during that period.

(5) Upon resuming collection on any affected loan, the Secretary provides the borrower another 

discharge application and an explanation of the requirements and procedures for obtaining a discharge.

(6) If the Secretary determines that a borrower who requests a discharge meets the qualifications 

for a discharge, the Secretary notifies the borrower in writing of that determination.

(7) If the Secretary determines that a borrower who requests a discharge does not meet the 

qualifications for a discharge, the Secretary notifies that borrower in writing of that determination and 

the reasons for the determination.

(g) Discharge procedures. The discharge procedures in this paragraph (g) apply to loans first 

disbursed on or after July 1, 2020.

(1) After confirming the date of a school's closure, the Secretary identifies any Direct Loan 

borrower (or student on whose behalf a parent borrowed) who appears to have been enrolled at the 

school on the school closure date or to have withdrawn not more than 180 days prior to the closure 

date.

(2) If the borrower's current address is known, the Secretary mails the borrower a discharge 

application and an explanation of the qualifications and procedures for obtaining a discharge. The 

Secretary also promptly suspends any efforts to collect from the borrower on any affected loan. The 

Secretary may continue to receive borrower payments.

(3) If the borrower's current address is unknown, the Secretary attempts to locate the borrower 

and determines the borrower's potential eligibility for a discharge under this section by consulting with 
Closed school discharge proposed regulatory text session three 21

representatives of the closed school, the school's licensing agency, the school's accrediting agency, and 

other appropriate parties. If the Secretary learns the new address of a borrower, the Secretary mails to 

the borrower a discharge application and explanation and suspends collection, as described in 

paragraph (g)(2) of this section.

(4) If a borrower fails to submit the application described in paragraph (c) of this section within 60 

days of the Secretary's providing the discharge application, the Secretary resumes collection and grants 

forbearance of principal and interest for the period in which collection activity was suspended. The 

Secretary may capitalize any interest accrued and not paid during that period.

(5) If the Secretary determines that a borrower who requests a discharge meets the qualifications 

for a discharge, the Secretary notifies the borrower in writing of that determination.

(6) If the Secretary determines that a borrower who requests a discharge does not meet the 

qualifications for a discharge, the Secretary notifies that borrower in writing of that determination and 

the reasons for the determination, and resumes collection.

(28) Notwithstanding paragraph (fh)(41) of this section, a borrower who re-enrolled at another 

school does not qualifiesy for a discharge without an application if the school the borrower was enrolled 

in—

(i) Closed before July 1, 2014] ;

(ii) Closed on or after July 1, 2014 and before June 30, 2019 and the borrower did not re-enrolled in 

a program at the same level and with the same four-digit CIP code as the program that the borrower 

was enrolled in at the closed school; or

(iii) Closed on or after July 1, 2019 and the borrower. did not accepted and completed an 

approved teach out program.

(hi) Exceptional circumstances. For purposes of this section, exceptional circumstances include, but 

are not limited to—

(1) The revocation or withdrawal by an accrediting agency of the school's institutional 

accreditation;

(27) Tthe institutionschool is or was placed on probation or issued a show-cause order, or placed 

on an accreditation status that poses an equivalent or greater risk to its accreditation, by its accrediting 

agency for failing to meet one or more of the agency's standards;

(23) The revocation or withdrawal by the State authorization or licensing authority to operate or to 

award academic credentials in the State;

(43) The termination by the Department of the school's participation in a title IV, HEA program;

(54) A finding by a State or Federal government agency that the school violated State or Federal 

law related to education or services to students;
Closed school discharge proposed regulatory text session three 22

(6) A State or Federal court judgment that a School violated State or Federal law related to 

education or services to students;

(576) The teach out of the student’s educational program exceeds the 180 day look back period for 

a closed school discharge;

(687) The school responsible for the teach out of the student’s educational program fails to 

perform the material terms of the teach-out plan or agreement, such that the student does not have a 

reasonable opportunity to complete his or her program of study or a comparable program;;

(7) the institution is or was placed on probation or issued a show-cause order, or placed on an 

accreditation status that poses an equivalent or greater risk to its accreditation, by its accrediting agency 

for failing to meet one or more of the agency's standards;

(8698) Tthe school discontinued a significant share of its academic programs. 

(97109) The school permanently closed all or most of its ground-based locations while maintaining 

online programs.

(108110) The school was placed on the heightened cash monitoring payment method as defined in 

section 668.162(d)(2).

Last updated 11/29/2021

Commented [A6]: See above regarding inclusion of State or 

Federal court judgment.