Mid-Continent University

college money

Thank you for visiting the Office of the Attorney General's page regarding Mid-Continent University.

The Office of the Attorney General is investigating events related to the closure of Mid-Continent University, including Mid-Continent’s June 26, 2014 letter informing certain students that they owe balances to the university and will be offered institutional loans.

We have informed Mid-Continent that we have concerns about the institutional loans, including the fact that they do not offer certain protections afforded by federal loans, such as forbearance or deferment options or other flexible payment schedules. We have demanded further information from Mid-Continent related to this issue.

Further, the Office of the Attorney General informed Mid-Continent that it should advise students with outstanding federal loans that they may be entitled to a closed-school discharge of those loans under federal law should they choose not to participate in a teach-out agreement or transfer their credits to another university.

As our investigation continues, we encourage students with relevant information to e-mail us at mcu3@ky.gov. If you wish to leave us a message you may do so at (502) 696-5395. Please say and spell your full name and provide your telephone number and email address. Due to the number of calls we are receiving we may not be able to return each call.

You may also mail the Office of Consumer Protection, 1024 Capital Center Drive, Frankfort, KY, 40601. Please continue to check our website at ag.ky.gov for more information.

The Consumer Financial Protection Bureau has published some additional information on the impact of school closures on federal and private student loans on their "Ask CFPB" page.

U.S. Department of Education's Frequently Asked Questions for Students of Closed Schools

NOTE: These FAQs and links contain general information and are not specific to Mid-Continent University. More specific information for Mid-Continent students will be provided as it becomes available.

Q: I attended a school that is now closed. Where can I obtain a copy of my academic transcript?

A: If you are trying to locate your academic records from a closed school, you should contact the State licensing agency in the state in which the school was located to ask whether the State made arrangements to store the records. This link will assist you in your search.

Q: I attended a school that has been bought by another school. Does the new school have my transcripts?

A: Generally yes. You will need to contact the new institution and inquire about your records.

Q: I am not sure who currently holds federal student loan(s). Where can I find this information?

A: This information can be found at the National Student Loan Data System for Students. Please note that for any private school loans, you will need to contact the financial institution where the loan was originated as this information is not stored in NSLDS.

Q: I am a student and the school I was attending closed. Do I qualify for a closed school loan discharge?

A: Yes, IF you meet the specific eligibility criteria to have your loans discharged based on the closed school regulations. This link will help you determine if you qualify for a school loan discharge.

Q: I feel that I qualify for a school loan discharge. How and where do I apply?

A: Download and complete the Loan Discharge Application due to School Closure. Send the completed form to the entity that currently holds your federal student loans(s). Your loan holder will review your claim and render a decision as to whether or not you have been approved for the loan discharge.

Q: I have loans for several different programs of study, but was unable to complete any of the programs or transfer credits from one program to another prior to the school's closure, can all the loans be discharged?

A: All loans are dischargeable. As long as you did not complete any of the programs of study and you meet all other applicable eligibility criteria for a closed school loan discharge, your loans may be discharged.

Q: If I did not complete their program, but received a diploma or certificate, would I still qualify for a loan discharge?

A: Before closing, some schools may have issued a diploma or certificate to students who did not complete the program of study. The issuance of a diploma to a student who did not complete the training program will not disqualify the borrower for discharge if the other requirements for discharge are met.

Q: I am a borrower in the Department of Defense (DOD) Loan Repayment Program (the DOD makes the required payments on the loan, rather than the borrower), and I now qualify for a closed school discharge, who should the payments be refunded to, myself or the DOD?

A: Neither. It would be inappropriate to reimburse the borrower for payments made on their behalf by the DOD. In addition, since only the borrower is entitled to a closed school discharge, there is no requirement or authority for reimbursing the DOD.

Q: I transferred credits from a closed school and enrolled in a different program of study at a new school and completed the new program. Are the previous loans from the closed school dischargeable?

A: Yes, because the program of study at the new school is different than that of the closed school, for which the loans were intended. A student can transfer as many credits as they want, as long as they do not transfer credits into the same program and complete it.

Q: If a school closes and a student then enrolls (either through a teach-out arrangement or by transferring academic credits or hours earned from the closed school) in a similar program at another school for the purpose of completing the program for which a loan was made at the closed school, can that student still receive a discharge?

A: Not if the student completed or is in the process of completing a comparable program of study.

Q: If I am able to continue my program of study at a new school following the closure of the old school without transferring any credits or hours, can I still receive a closed school loan discharge if I have received effective benefit from the program? (i.e., a cosmetology student has their hours registered with the state board, so transferring hours from the closed school is not necessary. Once the student has accumulated a certain number of additional hours at the new school; the student can take the licensing test without ever graduating and become a licensed cosmetologist.)

A: Yes, Section 437(c)(1) of the HEA allows for a discharge if the student is unable to complete the program. De facto completion of the program or effective benefit from the program is not the same as completion of the program.

Q: Which guaranty agency is responsible for paying the claim to a lender on a closed school discharge that has been part of a consolidation loan, the underling guarantor or the holder of the consolidation loans?

A: The guarantor of the consolidation loan.

Q: If a lender receives a request for a closed school loan discharge from a borrower and the underlying loan was consolidated at a different lender, who is responsible for obtaining loan history, copies of all documents in file and other information? The borrower? New or old lender?

A: The consolidating lender is responsible for obtaining loan history information from the prior lender. If the consolidating lender is unable to obtain the information from the prior lender or other sources, the borrower will be required to submit evidence to prove that the loan was in fact made for attendance at a school that closed. (Note: Acceptable "evidence" includes a promissory note or loan application. In the event that neither is available, a payment history is acceptable if it shows that payments were made on a loan for attendance at a closed school.) Payment histories would only be required if payments were made on the loan prior to the date of consolidation.

Q: A student had three loans at a closed school, one for one program and two for another program. (Student decided to transfer most, if not all, previous credits from the first program to the other program.) Can all three loans be discharged?

A: Yes, since Section 437(c)(1) of the HEA says, if a borrower received a loan and "is unable to complete the program in which such student is enrolled due to the closure of the institution…then the Secretary shall discharge the borrower's liability on the loan…"

Q: Should I continue to pay my loan while I wait for a decision on my application?

A: Yes, you should continue to make payments on your loan as you signed a legally binding agreement to repay that loan. The holder of your loan may grant forbearance until a decision is made on your application. This means that no one should try to collect on your loan until the holder of your note determines whether you are eligible for a loan discharge.

Q: What if my discharge application is denied?

A: There is no appeals process if your application is denied for a closed school discharge. However, if a guaranty agency denies your application for a false certification discharge, you may ask the Department to review that decision.