Independence University: Stealing Student Loans?

Independence University, formerly a for-profit college, abruptly closed in 2021, leaving students with outstanding loans and no degree. The Department of Education has offered some relief to students, allowing them to apply for a closed school discharge to wipe away federal student loans. However, this relief does not extend to private loans, and some students are still seeking loan forgiveness or considering legal action against the university. The university's closure has raised questions about the exploitative environment that was allowed to thrive under the Department of Education, with taxpayers also bearing the cost of the school's targeting of vulnerable borrowers.

Independence University's abrupt closure left students with debt and no degree

Independence University's abrupt closure in July 2021 left its students in a lurch, burdened with debt and no degree to show for it. The for-profit college's conversion to non-profit status was rejected by the Obama Department of Education but later reversed by Betsy DeVos. This reversal set the stage for the university's eventual closure, with students bearing the brunt.

The closure of Independence University has had a significant impact on its students, many of whom are now struggling with the burden of student loan debt. The university's abrupt shutdown left students with limited options for completing their degrees or managing their financial obligations. The situation has been further complicated by the distinction between federal and private loans, with different rules and relief options applying to each type of loan.

In the aftermath of the closure, students have explored various avenues for relief and a way forward in their academic pursuits. One option available to students is a "closed school discharge," which allows them to wipe away federal student loan debt incurred while attending Independence University. This option is particularly relevant for those who decide not to complete their programs through alternative means, such as transferring credits to another institution. However, it's important to note that this relief measure does not apply to private loans, which presents a different set of challenges.

Students grappling with private loans from Independence University have encountered difficulties in seeking relief. Some have expressed concerns about the legitimacy of these loans, arguing that the university breached its agreement by not providing the promised education. However, pursuing legal action or discharge of private loans can be a complex and challenging process, often requiring the assistance of legal professionals.

The impact of Independence University's closure extends beyond the financial realm. Students have also been affected academically, with many facing the daunting task of transferring credits to other institutions. To facilitate this process, organizations like the Utah System of Higher Education have provided resources and guidance on credit transfers, transcript acquisition, and exploring transfer credit options. Nonetheless, the abrupt closure of Independence University has undoubtedly disrupted the academic journeys of its students, leaving them to navigate a complex path forward.

Students are eligible for federal loan relief if they withdrew within 180 days of the closure

The abrupt closure of Independence University has left students and borrowers in a challenging situation, with allegations of fraud and financial repercussions. Students who had taken out federal loans were able to have them wiped, as the school's closure qualified them for loan forgiveness. However, the situation with private loans is more complex.

Federal student loan borrowers are typically eligible for an automatic closed school discharge if they meet specific criteria. Firstly, they must have been enrolled at the school when it closed or withdrawn within 120 days (some sources state 180 days) of the closure date. Secondly, they must not have completed their educational program, either at the closed school or by transferring credits to another school. Lastly, they should not have reenrolled in another school participating in the federal student loan program within three years of the closure date.

In the case of Independence University, students who withdrew within 180 days of its closure would likely be eligible for federal loan relief. This relief is typically provided through an automatic closed school discharge, which does not require the student to apply. However, in some cases, borrowers may need to apply for a discharge, especially if they withdrew more than 120 days before the closure.

It is important to note that the eligibility criteria and processes for federal loan relief may vary based on location and other factors. Students affected by the closure of Independence University should refer to official sources or seek legal advice to understand their specific rights and options for loan discharge or forgiveness.

Regarding private loans, the situation is more complex. While some sources suggest that private loans may be discharged through a lawsuit against the school, it is not guaranteed. Students may need to take legal action against the private loan company demanding repayment. It is advisable for students to review their loan agreements and seek legal counsel to understand their options and protect their rights.

The Department of Education allows students to apply for a closed school discharge to wipe away federal student loans

It is important to note that if you choose to continue your education through a "teach-out plan", where another institution allows you to finish your program, you will not be eligible for loan cancellation under the Closed School relief program. However, if you transfer your credits to a program outside of the teach-out plan, you will still be eligible for loan discharge. Additionally, if you transferred even one credit from your closed school to a comparable program, you will not be able to discharge your loans from the closed school under the current rules.

In the case of Independence University, former students have reported issues with the school closing down abruptly and the challenge of dealing with student loan debt. Some students have had their federal loans wiped clean due to the school's closure, but the situation with private loans remains more complex and may require legal action.

If you are facing issues with student loans due to the closure of Independence University or any other institution, it is advisable to seek guidance from a legal professional or a student loan expert to understand your specific options and rights.

Students can apply for a closed school discharge to wipe away federal student loans

Independence University, a for-profit college, has been accused of exploiting its students and targeting vulnerable borrowers. In 2020, the college's conversion to non-profit status was rejected by the Obama Department of Education, but the decision was reversed by the for-profit college profiteers of Betsy DeVos. Now, students are facing the consequences of the college's abrupt closure.

Students who have taken out federal student loans to attend a college or university that closes while they are enrolled, or shortly before, may be eligible for a closed school discharge. This means that the federal government will forgive their federal student debt. To be eligible for a closed school discharge, the student must have been enrolled when the school closed or withdrawn from the school within 120 or 180 days of its closing. Additionally, if the campus a student was attending closed but the rest of the school's campuses remained open, they may still be eligible for a closed school discharge.

If a closed school discharge application is approved, the Department of Education will cancel the loans taken out to attend the closed school, refund any payments made on those loans, and delete any negative credit history associated with those loans from the borrower's credit report.

It is important to note that if a student chooses to complete their program through a "teach-out" plan, either at the same school or another institution, they will not be eligible for a closed school discharge. A teach-out plan is created by a school that is closing to allow students to finish their programs. However, transferring credits to an institution outside of the teach-out agreement does not disqualify a borrower from loan discharge.

Students seeking a closed school discharge should fill out an application and submit it to their federal loan servicer. They may also need to contact the state licensing agency in the state where the school was located to access their academic records.

Independence University's conversion to non-profit status was rejected by the Obama Department of Education

Independence University, formerly a for-profit college, had its conversion to non-profit status rejected by the Obama Department of Education. This decision was later reversed by Betsy DeVos, a for-profit college advocate. The university, which was the largest school owned by the Center for Excellence in Higher Education (CEHE), shut down in 2021, leaving students and borrowers to pay the price.

The Department of Education's rejection of Independence University's non-profit status was not an isolated case. Other schools with similar conversions, such as Keiser University, have faced legal troubles and allegations of deceptive and unlawful recruiting practices. There is a pattern of predatory behaviour among these institutions, including targeting vulnerable borrowers and recruiting low-income individuals who seem unprepared for college programs.

The closure of Independence University has had significant financial implications for those involved. Former students have had their federal loans wiped due to the school's closure, but they may still be responsible for repaying private loans. The Department of Education demanded $23 million from CEHE to reimburse the government for "closed-school discharges," which are cancellations of federal student loan debts owed by former students. This demand for reimbursement is part of a legal battle between CEHE and the Department, with CEHE suing the agency for $500 million in damages.

The situation has also impacted taxpayers, who have paid more than $2 billion to Independence University over the last decade. The university was known for targeting vulnerable borrowers and has been accused of misconduct. As a result, the Department of Education cancelled $130 million in federal loan debt for former CEHE students, indicating that the school's actions had consequences for both students and taxpayers.

The closure of Independence University and its failed conversion to non-profit status highlight the complex and often challenging nature of the for-profit education sector. It underscores the need for better regulation and oversight to protect students, borrowers, and taxpayers from predatory institutions.

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