Lori Meadows
Argosy University's abrupt closure in 2019 left students with significant debt and negative credit ratings but no degrees. The university lost its accreditation and access to federal financial aid, and its students were left with few options to manage or forgive their student loans. However, Argosy University students qualify for several student loan forgiveness programs, including Closed School Discharge, Borrower Defense to Repayment, Income-Driven Repayment Forgiveness, and Public Service Loan Forgiveness. The eligibility criteria for these programs vary, and some require individual applications. Additionally, a settlement agreement secured $2.1 million in student debt relief for Argosy University students, addressing issues related to the university's misleading marketing and recruitment practices.
| Characteristics | Values |
|---|---|
| Loan Forgiveness Programs | Closed School Discharge, Borrower Defense to Repayment, Income-Driven Repayment Forgiveness, Public Service Loan Forgiveness |
| Eligibility Criteria | Students with pending applications by June 22, 2022, and attended Argosy University |
| Application Process | Submit a detailed account of your experience on the Federal Student Aid website |
| Benefits | Full discharge of federal loans, reimbursement for payments made, correction of negative credit reporting, reinstatement of eligibility for federal student aid |
| Total Debt Relief | $2.1 million across 12 Argosy campuses and online programs |
| Specific Relief for Minnesota | $135,000 for students of the Eagan campus and online programs |
| Other Options | Student loan refinancing, income-driven repayment plans, public service loan forgiveness |
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What You'll Learn
Argosy University closed mid-semester, leaving students with debt
Argosy University's abrupt closure in 2019 left students with debt and negative credit ratings but without the degrees they were promised. The university closed mid-semester, leaving students in a difficult position.
Former students of Argosy University qualify for many student loan forgiveness programs. These include the Closed School Discharge, which is applicable when a school closes while students are still enrolled; the Borrower Defense to Repayment Program, which can be used if the school did something wrong or misled students; Income-Driven Repayment Forgiveness, which is based on income; and Public Service Loan Forgiveness, for students who plan to work in public service jobs.
Students can also apply for loan forgiveness through the Sweet v Cardona lawsuit, which is based on Argosy University's misleading actions. The lawsuit provides a full discharge of federal loans, reimbursement for any payments made, correction of negative credit reporting, and reinstatement of eligibility for federal student aid.
Additionally, a multi-state agreement secured $2.1 million in debt relief for former Argosy University students, specifically addressing "institutional" loan debt from the university's abrupt closure. This agreement included financial relief for students across multiple states, such as Illinois and Georgia.
It is important to note that loan forgiveness programs may vary depending on individual circumstances, and seeking professional advice can help students make informed decisions about their specific situations.
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Argosy falsely marketed itself as a non-profit institution
Argosy University was a large-scale, predatory, low-value, for-profit institution of post-secondary education in operation from 2001 until its abrupt closure in 2019. The university was owned by the Education Management Corporation (EDMC) until it was sold to Dream Center in 2017. EDMC managed over 20 Argosy University campuses and had over 25,000 students enrolled per year at Argosy University alone.
In 2017, the faith-based non-profit Dream Center Foundation took its first steps in the higher education world when it acquired Argosy University from EDMC. At the time, the Department of Education (ED) tentatively approved the sale but did not formally approve the institution's transition to non-profit status. Argosy's finances suffered under the Dream Center's ownership, and the organization faced insolvency only a year later.
In February 2019, the ED revoked Argosy's eligibility for federal financial aid due to its poor finances and denied the change in ownership. The university abruptly closed campuses a month later. Although the Dream Center successfully sold some campuses, several were shut down.
As a result of Argosy's misleading practices, ten attorneys general announced a bipartisan agreement that will cancel nearly $2.1 million in student loans ("institutional debt") that students borrowed from Argosy University. The agreement includes financial relief for students in multiple states, such as $90,000 for Illinois students and more than $150,000 for Georgia students.
Former Argosy University students qualify for many student loan forgiveness programs, but they need to apply for these programs themselves. The four main forgiveness programs available for students with federal student loans are Closed School Discharge, Borrower Defense to Repayment, Income-Driven Repayment Forgiveness, and Public Service Loan Forgiveness.
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Students can apply for a closed school discharge
Argosy University's closure has left many students in a difficult situation with their student loans. Students can apply for a closed school discharge, but there are a few things to keep in mind. Firstly, you can apply for a closed school discharge as soon as Argosy University's school closure date is confirmed by the Department of Education. The Federal Student Aid school closure list is updated regularly, so keep an eye on that.
It's important to note that you should not wait for Automatic Closed School Discharge. The Department of Education will automatically discharge federal loans taken out for closed schools after November 1, 2013, within three years if you have not enrolled elsewhere. However, in the case of Argosy University, there is no need to wait for three years. If you choose to apply for closed school discharge, it is recommended to file right away. Unfortunately, this option is not available for private student loans, Pell Grants, or GI Bill benefits.
If you choose to continue your education and forgo closed school loan discharge, you're still eligible for federal aid. However, the previous student loan limits are not reset. To find out your remaining eligibility, log into your Federal Student Aid account. Additionally, if you're nearing your federal financial aid limits, you may still be eligible for Grad PLUS loans.
There are other options available to students beyond closed school discharge. Argosy University students qualify for many student loan forgiveness programs, such as the Borrower Defense to Repayment Program, Income-Driven Repayment Forgiveness, and Public Service Loan Forgiveness. These programs are based on employment and repayment plans. Additionally, there has been a multi-state agreement to secure significant debt relief for Argosy University students, totalling $2.1 million across 12 campuses. This agreement cancels "institutional debt" that students borrowed from Argosy University.
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Borrower Defense to Repayment: For students who were misled
Argosy University's abrupt closure in 2019 left students with debt and negative credit ratings but without the degrees they were promised. The university lost its accreditation and the US Department of Education pulled its access to federal financial aid. Former Argosy University students qualify for many student loan forgiveness programs, including the Borrower Defense to Repayment program.
The Borrower Defense to Repayment program is a federal student loan forgiveness initiative for borrowers whose schools violated certain laws, defrauded or misled them. The program is managed by the US Department of Education and assists students who were misled by their college. If Argosy University gave you false information, such as unrealistic job prospects or misrepresented the quality of education, you can apply for loan forgiveness. The misleading actions of the school must have played a role in your decision to enrol and take out loans.
To qualify for the Borrower Defense to Repayment program, you must submit a detailed account of your experience on the Federal Student Aid website. If your claim is successful, you may receive a full discharge of your federal loans, reimbursement for any payments made, correction of negative credit reporting, and reinstatement of eligibility for federal student aid. The application process is straightforward and free.
It is important to note that the Borrower Defense to Repayment program has specific deadlines and requirements. For example, to be eligible for certain procedures under the Sweet v. McMahon class-action lawsuit, borrowers needed to have applied for the program before November 16, 2022. Additionally, the program only applies to federal student loans, and private loans or costs paid out of pocket are not eligible for forgiveness under this program.
In addition to the Borrower Defense to Repayment program, former Argosy University students can explore other loan forgiveness options, such as Closed School Discharge, Income-Driven Repayment Forgiveness, or Public Service Loan Forgiveness. These programs offer different paths to loan forgiveness based on employment, repayment plans, or the closure of the school. It is recommended that students evaluate all their options to find the best strategy for their unique financial situation.
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Income-Driven Repayment Forgiveness: Based on your income
Argosy University's closure left its students in a difficult position, with many seeking student loan forgiveness. While Argosy University students qualify for many student loan forgiveness programs, these must be applied for and will not be granted automatically.
One option for former Argosy University students is Income-Driven Repayment Forgiveness. IDR plans are designed to make student loan payments more affordable by adjusting monthly payments based on income and family size. All IDR plans offer forgiveness on the remaining loan balance after 20 to 25 years of qualifying payments. It's important to note that forgiveness under the Saving on a Valuable Education (SAVE) plan is currently blocked by a court injunction, and forgiveness on any IDR plan may be temporarily impacted.
To apply for an IDR plan, you must complete the Income-Driven Repayment Plan Request form and provide proof of income, such as tax returns or pay stubs. This can be done by linking to the IRS database or submitting copies of the relevant documents. It's also important to update your income and family size annually. Only on-time monthly payments based on the required minimum payment amount listed in your billing statement will count toward forgiveness. You can enrol in automatic payments to avoid missing due dates.
If your income drops or you become unemployed, you can recertify your income on the spot via studentaid.gov and qualify for lower monthly payments, potentially as low as $0. After making the required number of qualifying payments, your remaining loan balance will be forgiven. You can track your progress and qualifying payments via your studentaid.gov and loan servicer accounts.
It's worth noting that under current law, the amount of debt discharged after 25 years is treated as taxable income. Therefore, you will need to pay income taxes on the discharged amount. However, if you pursue a career in public service, a new loan forgiveness program will discharge the remaining debt after 10 years of full-time employment.
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Frequently asked questions
The Department of Education will automatically discharge federal loans taken out for closed schools after November 1, 2013. Former Argosy University students can apply for a closed school discharge on StudentAid.gov.
This program assists students who were misled by their college. If Argosy University gave you false information, you can apply for loan forgiveness. If your claim is successful, you could receive a full discharge of your federal loans.
This lawsuit was filed by nearly 300,000 affected students, including those who had a pending application by June 22, 2022, and attended Argosy University. If your application was submitted after June 22, 2022, but before November 16, 2022, you won't get automatic relief, but you could still benefit if the Department of Education doesn't decide on your application within 36 months of the settlement's effective date.
You can consider other forgiveness programs based on employment and repayment plans, such as Income-Driven Repayment Forgiveness or Public Service Loan Forgiveness.
