What to Do if Your University Closes its Doors

By Elizabeth Rittiman - May 13th, 2019

what to do if your school closes

A recent rash of colleges and universities have gone out of business, leaving students in a precarious position. What do you do when your college or university closes? Alumni are often left wondering if their degrees or certificates from closed schools are still valid, while current students must navigate transferring to new schools and the financial implications of their college closing.

Schools are closing for reasons that range from financial troubles to suspended or revoked accreditations. (Education Drive, an education-industry publication, lists more than 50 schools that have, since 2016, either closed or merged with other institutions.)

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If your college or university closes, don’t panic: There are still ways to complete your education or obtain proof of earned degrees.

Continuing Your Education If Your University Shuts Down

You’ve already invested a lot of time and money into your education. Don’t quit now! Your current school may provide information on transfer or degree-completion options; be sure to review them before considering alternatives.

  • Teach-out – A teach-out is an agreement between schools that provides for the equitable treatment of students and an opportunity for students to complete their program of study. If your school is offering a teach-out option, and you are comfortable with their ability to deliver on that promise, you can stay the course.
  • Transfer to a new school – If you can’t or are hesitant to stay at your current school, it’s time to explore other options. Check to see if your school has made arrangements with another institution to make transferring easier. If they have, make sure that school can provide you exactly what you are looking for. Don’t settle or take unnecessary risks. Find the school that provides the programs you desire, with the credibility and stability to support your long-term goals.

Transferring credits does have limits. Most schools will only take up to 60 or 90 credits, depending on the length of the degree program you’re choosing. Be involved when your transcripts are being reviewed — and don’t be afraid to ask for a second review if you feel something was missed in your credit evaluation. 

During this process, be sure to ask about transferring traditional credits as well as past work experience. CSU Global accepts all applicants who have completed an Associate degree from an accredited community college, and accepts junior, community, and career college transfer credit. Additionally, CSU Global may transfer previous work or life experience to college credit through self-study assessments, prior learning assessments, or credit by exam

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Paying Student Loans or Tuition Bills If Your College Closes

Most students wonder how their school’s closing will affect their loans. The answer isn’t simple, as it actually depends on how the school was closed. If the school completely shut down, you may be eligible to discharge your federal student loans. If the school is offering a teach-out option, you can opt out and still may qualify to have your loans discharged — though this option is not available if the school merged with or was purchased by another school.

If you are planning on discharging your student loans, please remember:

  • You cannot discharge your loans if you are transferring to another school.
  • If you discharge your loans, and then complete your degree elsewhere, you could be liable for those loans again.
  • Because a discharged loan is counted as taxable income, make sure you understand the financial implications of discharging loans.

For more information about discharging a student loan because of a school closure, visit https://studentaid.ed.gov/repay-loans/forgiveness-cancellation/closed-school.

Transcripts and Completed Degrees From Closed Universities and Colleges

When your school closes, it’s critical to consider where documentation for your education stands.

Alumni may be concerned about how to explain or prove their education to an employer. If your college closed after you graduated, don’t worry: Your degree from a closed school is valid! Still, it’s a good idea to have a copy of the certificate or diploma that was given when you completed your degree.

Some shuttered schools will set up a document repository with another institution, while others may use a transcript service. We recommend ordering multiple copies of your transcripts, as well as saving a copy of the current catalog, for your records. Additionally, another school or the state’s Department of Higher Education will assume responsibility for storing records. The U.S. Department of Education has a “Closed School Guide for Students” to help you get your official transcripts.

Transferring To A New School After Your University Becomes Virtual 

If your college or university goes virtual in lieu of closing down completely, measure your options. Your education is an important investment, and successful online learning requires robust tools and systems in place. Many schools may have just incorporated online classes, but don’t have the best tools to make online learning work for their students. 

If you’re not confident about your university’s ability to provide an excellent virtual education, you have options. Look into transferring to a different college, or investigate online universities. CSU Global has always been an online college and was built with the systems and tools needed to support online learning. With certificate, undergraduate, graduate degree programs, you can take charge of your future and elevate your career path with confidence.

Updated 4/23/2020

Comments 17

  • What happens if you haven’t taken out loans and the school doesn’t teach out. I’m in a medical coding program and am told none of the classes I’ve taken will transfer to another school and I don’t believe they will teach out. I’ve put around $2500 in and will likely get nothing out of this. Is there legal recourse for me since they didn’t deliver on their end?

    • Hi Patty. Thank you for your comment. While this blog article provides advice on what to do if your university closes, we are are unable to provide legal advice.

  • My school has been closed for a few years why should I still be responsible for paying for the student loans that I had when I was there is there a way that I can be discharged from paying those long because they are garnishing my federal refund

  • Where cAn I go to get my degree/diploma if my schools is already closed. I attended Heald in 2000 – 2002 and because they screwed up my classes, I was not able to pay the extra charge so they never gave me my degree.

  • Ok I went to Brightwood college in Mcallen Texas and as soon as I finished school they closed! How can I get my transcripts and diploma from them? Is there a number I can call?

    • Some shuttered schools will set up a document repository with another institution, while others may use a transcript service. We recommend ordering multiple copies of your transcripts, as well as saving a copy of the current catalog, for your records. Additionally, another school or the state’s Department of Higher Education will assume responsibility for storing records. The U.S. Department of Education has a “Closed School Guide for Students” to help you get your official transcripts.

  • I attended Demarge in oklahoma, I graduated in april had my son the same week, due to complications I was hospitalized for two months in which the school was forced to close due to federal charges for stealing money. They never sent me my diploma or transcript and every person I call says I’m basically out of luck. I dont want my loans discharged I want my diploma that I earned. Please help me, I have literally been trying for 16 years to get it.

    • Hi Jennifer. Thank you for your comment and I’m sorry to hear about the difficulties you have had trying to get your diploma from the school you went to that closed. The U.S. Department of Education has a “Closed School Guide for Students” to help you get your official transcripts.

  • But where is the file? The guide does not have a link.

  • My grandfather passed away and we found 15 – $1,000.00 Investment Certificates from a College in Michigan that has since went bankrupt. Are these certificates worth anything? Thank You!

    • Thank you for your comment. Is the school listed in this guide? If so, I suggest reaching out to the contact listed in the guide and seeing if they can provide additional information.

  • Dear Mrs. Rittiman,

    I attended a college institute working towards my associates degree in business administration. I have 96 credits and was one class away from graduating, and the day I went to pick up my last book for my last course, they were locking the doors.

    The institute had filed bankruptcy and did not tell the campus administration or the students. I have a 3.96 GPA and I was just devastated! Needless to say, I have had difficulty transferring my credits and I don’t even know what to list on my resume. I made the choice to go back to school in my fifties and I was so excited about my accomplishments! My two daughters were in school at the same time & my GPA was hire. (But not by much)😊

    Two Questions:
    (1) What do I put on my resume for my eduction since I did not graduate? (I do have a diploma from the first year)
    (2) I keep being advised that some institutions except life experience that can be added towards to completion of a degree, which I don’t understand, (I have over 25 years of customer service, including management, money handling and bookkeeping), how do I go about finding these kinds of things out to help me navigate this mess?

    Thank you for your time

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