My School Closed Because the President Was Stealing From It


Dear Steve,

I went to Hallmark Institute of Photography, took out almost 80K in student loans from both Granite State and Sallie Mae. Maybe 6 months after I finished the program (10 month accelerated photography program supposed to equal a bachelors degree) the school closed due to the president being caught embezzling 2.6 million for personal use, come to find out the “director of financial aid” was in marketing beforehand, they accepted pretty much anyone who applied and advertised as all aspects of photography but received maybe a handful of “business lessons” which basically taught me how to do taxes.

Am I eligible for private and federal loan discharge and reimbursement due to closure or fraud?



Dear Margaret,

The Hallmark Institute of Photography situation was quite a mess.

Your federal student loans can be discharged under the closed school discharge program.

Your private loans are still due and no discharge is available for those unless your individual lender has a special program. Which I doubt. This is one of the reasons I advise people to avoid private student loans.

If you 1) attended a school that closed less than three years ago, 2) meet the eligibility requirements for a closed school discharge, and 3) want your loans discharged, contact your loan servicer about applying for a closed school discharge now instead of waiting for three years to receive an automatic closed school discharge.

By receiving a closed school loan discharge,

  • you have no further obligation to repay the loan,
  • you will receive reimbursement of payments made voluntarily or through forced collection, and
  • the record of the loan and all repayment history associated with the loan, including any adverse history, will be deleted from your credit report.

Be sure to keep a record of all of your communications and copies of correspondence,


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