Department of Education Refuses to Forgive My Loan. – Paula

“Dear Steve,

I have a student loan from 1986 that was 2,200 dollars and I owe 46,000 dollars now because of interest and penalties and the school was a fraud and i never finished or go a degree and i have tried for years to get a foregiveness on it and the dept of ed tells me i do not qualify because i was not inrolled at the school at the time it closed yes this is true but only because they wanted my to apply for more loans and i said no and i was discharged. please help me this has been hanging over my head for over 20 years and they still say i owe it

Can you help me only to have this loan forgiven and i would even be willing to only pay the2,200 dollars even though I did not finish school but to have it all forgiven would be great .


Dear Paula,

Wouldn’t it be great if you could turn back the clock and have paid the $2,200 back then.

The advice you got is correct. If you had been enrolled at the time the school was closed the loan may have been forgiven.

The loan can be discharged if you were enrolled when the school closed and couldn’t complete the program because of the closure. If you were on an approved leave of absence, you are considered to have been enrolled at the school. If your school closed within 90 days after you withdrew, you are also considered eligible for the discharge. However, your loan cannot be cancelled because of personal circumstances that caused you to withdraw more than 90 days before the school closed. If you need to find out the day when your school officially closed, you can visit our Closed School Search Page. – Source

At this point the best course of action would be for you to negotiate a settlement with the student loan agency and pay if off. Otherwise it won’t be long before this becomes $90,000.

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Steve Rhode

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