If you withdrew from school and the school didn’t make a required return of loan funds to the loan servicer, you might be eligible for a discharge of your federal student loans.

Learn more about the unpaid refund discharge to see whether you might qualify.

Unpaid Refund Discharge

If you withdrew from school after receiving a loan made under the William D. Ford Federal Direct Loan (Direct Loan) Program or Federal Family Education Loan (FFEL) Program, the school may have been required under federal regulations to return some or all of the loan money to your loan servicer. If the school didn’t make a required return of the loan funds after you withdrew, you might be eligible for a discharge of the portion of your loan that the school failed to return.

How do I apply for unpaid refund discharge?
How much of my loan will be discharged if I’m approved for a loan discharge?
I’m a parent who received a Direct PLUS Loan to help pay for my child’s education. Can my loan be discharged due to unpaid refund?


How do I apply for unpaid refund discharge?

If the school that you attended is still open, you should contact that school and attempt to resolve the issue with the school before applying for an unpaid refund discharge. If the school that you attended has closed, you should first determine if you may be eligible for a closed school discharge instead. Contact your loan servicer for more information. Find out who your loan servicer is by logging in to “My Federal Student Aid.”

If you’re ready to apply for the unpaid refund discharge, you must complete the Loan Discharge Application: Unpaid Refund and send the completed form to your loan servicer.


How much of my loan will be discharged if I’m approved for a loan discharge?

Only the portion of your loan that your school should have returned will be discharged. Contact your loan servicer for more information.


I’m a parent who received a Direct PLUS Loan to help pay for my child’s education. Can my loan be discharged due to unpaid refund?

Yes, if your child withdrew from school but the school didn’t make a required return of your parent PLUS loan funds, the amount of the loan that the school should have returned will be discharged. Contact your loan servicer for more information.