Left an Art Institute, Le Cordon Bleu or Virginia College Without a Degree? Washington Made Your Loans Dischargeable in 2025. Now It's Saying No.

If you took federal loans for Le Cordon Bleu, an Art Institute, Argosy, Virginia College, Brightwood, Sanford-Brown, Brooks Institute or Bay State College, and the school closed before you finished, your loans may already be eligible to disappear. Every dollar you’ve paid on them could come back too.

Washington decided that in January 2025. Then it never followed through.

The promise nobody delivered

The rule for a closed school discharge is simple: if your school shut down while you were enrolled, or within a short window after you left, your federal loans are canceled. For older loans that window is 120 days. The Education Department can stretch it when a school dies under “exceptional circumstances.”

On January 16, 2025, it did, and it pushed the window back years. For Career Education Corp. campuses that later closed (Le Cordon Bleu, Brooks Institute, Missouri College, Briarcliffe, Sanford-Brown), the new start date is May 6, 2015. For Education Corporation of America campuses (Virginia College, Brightwood, EcoTech, Golf Academies), it’s December 16, 2016. For EDMC campuses (the Art Institutes, Miami International University of Art & Design, Argosy), it’s October 17, 2017. For Bay State College, it’s April 23, 2021.

Here’s the catch. According to a class action filed October 28, the department never put that decision into effect.

The lead plaintiff, Kendrick Gaussoin, was enrolled at Brooks on May 6, 2015, and never finished. He applied on August 23, 2026, and wrote “The look back window was extended please review” right on the form. MOHELA denied him eight days later. The letter said he “withdrew more than 180 days before the school closed.” It never mentioned the 2025 decision, and per the complaint, 180 days isn’t even the right window for his loans.

The department told NPR the old administration used “the stroke of a (digital) pen to inappropriately expand” the window. Fair argument to have about who pays. But in 2019, Betsy DeVos used the same authority for two Art Institute campuses. If the department thinks the 2025 decision is wrong, the honest move is to withdraw it in public with a reason. Ignoring it and mailing form denials isn’t that.

What it’s worth

Gaussoin owes about $22,000. His mother owes about $28,000 in Parent PLUS loans for the same school, and her application was denied this month.

A discharge wipes the balance and refunds what you’ve paid. If you’ve sent $150 a month for eight years, that’s $14,400 back. It also clears a default and scrubs the loan’s late marks from your credit report.

Real money. Worth the paperwork.

Do this now

Check your dates. Find your last day of attendance from a transcript or your loan records at StudentAid.gov. If you were enrolled on or after your school’s date above and left without finishing, you’re likely in.

File the School Closure discharge application. In the eligibility section, certify that you withdrew more than 180 days before closure “due to exceptional circumstances,” and write in that your school is covered by the January 16, 2025 extended look-back period. Keep a copy and the date you sent it.

If you’re denied, keep the letter. The proposed class covers every eligible borrower who hasn’t gotten a discharge, so you don’t need your own lawyer to be part of it. If your loan is in default and wages are at risk, read our garnishment explainer now.

Model your payment in the meantime with our loan calculator, and find more student loan coverage on the education hub. If your college is closing right now, the rules are different. Read our teach-out warning first.

The detail

The case is Gaussoin v. McMahon, No. 1:26-cv-03784, in federal court in Washington, D.C., brought by Student Defense. It asks the court to make the department carry out the 2025 decision, tell borrowers they’re eligible, and stop collections until discharges go through. The 2025 decision also told Federal Student Aid to pursue automatic discharges for borrowers whose schools closed between 2013 and 2020 and who didn’t re-enroll elsewhere within three years. The lawsuit says that hasn’t happened either.

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