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Dept. Of Education Cancels Loans Of 1500 Students Affected By School Closure

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U.S. Secretary of Education Betsy DeVos announced that 1500 students who were impacted by the closure of Dream Center Schools will have their student loans canceled and their Federal Pell Grant eligibility restored.

A press release by the U.S. Department of Education said students who attended Art Institute of Colorado or the Illinois Institute of Art between January 20, 2018, and December 31, 2018, will be eligible for the loan waiver.

The Department said students who attended another 24 Dream Center schools that closed in December 2018 also will be eligible for a closed school loan discharge.

It also announced automatic loan cancellations for students who attended five DCEH-owned schools.

"By canceling these students' loans and restoring their Pell eligibility, as well as extending the closed school discharge period, we hope that these impacted students will now have the tools and resources they need to complete their education," DeVos said.

More than 1,500 borrowers who attended the Art Institute of Colorado or the Illinois Institute of Art will have an estimated 4,000 loans canceled.

The schools were closed because the Higher Learning Commission's classification of the institutions in a newly developed accreditation status after January 20, 2018.

The Department has made it clear that those students who received loans prior to this date will have to repay them.

The extension of the closed school discharge look back period to June 29, 2018, will help approximately 300 additional borrowers.

The Education Department said that students who were enrolled when a school closes or who withdrew not more than 120 days before the school closed can have their federal student loans from that school forgiven if they meet certain requirements.

The 120-day window can be extended in exceptional circumstances at the discretion of the Secretary.

Borrowers who do not qualify for a cancellation or a closed school discharge, but who struggle to make student loan payments, have been advised to contact their student loan servicer to discuss repayment options.

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