If you borrowed federal student loans to attend Florida Career College, you likely qualify for full loan forgiveness. FCC permanently closed all campuses on February 15, 2024, after the U.S. Department of Education revoked its eligibility for federal student aid, and that closure opens two federal relief paths: a closed school discharge for students who were still enrolled, and Borrower Defense to Repayment for students who were misled by the school. Both cancel the federal loans you took out to attend FCC, and neither is taxed as income.
Closed School Discharge
This is the fastest route and the one most former FCC students should look at first. You qualify if you were enrolled when FCC closed on February 15, 2024, or if you withdrew within 180 days before that date and did not complete your program. It covers Direct Loans, Federal Family Education Loan (FFEL) Program loans, and Federal Perkins Loans you received to attend FCC.1Federal Student Aid. Closed School Discharge
An approved discharge wipes out the entire loan balance for attending FCC, and any payments you already made are refunded. There is one significant disqualifier: if you finished your program at another school through a teach-out agreement or by transferring credits, you generally lose eligibility.2eCFR. 34 CFR 685.214 – Closed School Discharge
You May Not Need to Apply
Because FCC closed after July 1, 2023, eligible borrowers should receive an automatic closed school discharge one year after the Department of Education’s official closure date, without submitting anything. The Department starts the process on its own and your loan servicer notifies you, provided you did not complete your program through a teach-out or at another branch.1Federal Student Aid. Closed School Discharge3eCFR. 34 CFR 685.214 – Closed School Discharge
If you don’t want to wait, contact your loan servicer and request the application directly. Keep making payments while the application is pending. Approved discharges trigger refunds of what you paid.
FFEL Borrowers
Older FFEL loans qualify too. The rule at 34 CFR 682.402 tracks the Direct Loan version: enrolled at closure or withdrawn within 180 days, and no completion of the program elsewhere.4eCFR. 34 CFR 682.402 – Closed School Discharge (FFEL) Reach out to your FFEL loan holder or guaranty agency to begin.
Borrower Defense to Repayment
Borrower Defense is a separate cancellation program for students who were deceived or misled by their school. Unlike the closed school discharge, it can help even if you completed your program at FCC, so this is the route for graduates and for students who transferred credits and finished elsewhere. It asks more of you: a formal application describing how the school misled you, ideally with supporting evidence such as marketing materials, enrollment documents, or written communications from staff.5eCFR. 34 CFR 685.206 – Borrower Responsibilities and Defenses
FCC applicants have a real advantage. Florida Career College appears on Exhibit C of the Sweet v. Cardona settlement (now Sweet v. McMahon), a list of schools the Department already identified as having strong indicators of institutional misconduct.6Federal Student Aid. Sweet v. Cardona Settlement Agreement Exhibit C That settlement is final and being implemented, with quarterly progress reports from the Department.7Federal Student Aid. Sweet v. McMahon Settlement Exhibit C listing is not automatic approval, but the Department has already recognized a pattern of misconduct at FCC, which strengthens an individual claim.
You can submit the application online through studentaid.gov with your FSA ID or download the PDF and mail it in.8Federal Student Aid. Borrower Defense Application Be specific about what FCC told you and what turned out to be false. The strongest claims tend to involve inflated job placement rates, misleading salary projections, and false statements about accreditation or the transferability of credits.
Which One Should You Use
If you were enrolled at FCC when it closed and didn’t finish your program somewhere else, start with the closed school discharge. It is faster, simpler, and asks for less documentation.
Borrower Defense fits better if you completed your program before FCC closed, or if you transferred credits and graduated from another school, since either situation disqualifies you from the closed school discharge. It also reaches conduct the closed school discharge doesn’t, like deceptive recruiting that cost you money even though you finished.
Some borrowers have grounds for both. A closed school discharge covers loans from the enrollment period ending at closure; Borrower Defense could address loans tied to an earlier, completed program. If you attended FCC across multiple enrollment periods, walk through your situation with your servicer or a student loan counselor before choosing.
Private Loans Are a Different Story
Federal closed school discharge and Borrower Defense apply only to federal student loans. There is no government equivalent for private loans, and options are limited.
A few private lenders have created their own school misconduct discharge processes. Navient launched one in early 2024 for borrowers who can document fraud by their school. Approval rates under lender-run programs have been low and documentation demands are heavy. If you have private loans from FCC, ask your lender directly whether it offers relief for students of closed schools. A consumer protection attorney may also help, since state consumer fraud laws can sometimes support a challenge to private loan obligations tied to documented school misconduct. The Department of Education’s finding that IEC violated federal testing rules is part of that documented record.
Restoring Pell Grant Eligibility
Pell Grants have a lifetime eligibility limit, and semesters you funded with Pell at FCC counted against yours. The Department of Education can restore Pell eligibility used at a school that closed before you earned your credential. You must have been enrolled at FCC during the award year of the closure (2023–24) or the year immediately before. Students who graduated from their program do not qualify.
You don’t need to apply. If you qualify, the Department processes the restoration and notifies you, and you can verify updated eligibility through the National Student Loan Data System (NSLDS). This matters most if you plan to enroll somewhere new and need full Pell eligibility to pay for it.
GI Bill Entitlement Restoration for Veterans
Veterans and dependents who used GI Bill benefits at FCC can apply to have that entitlement restored. When a school permanently closes or loses VA approval, the VA can restore benefits for the enrollment period in which you did not receive usable credit.9Department of Veterans Affairs. VA Form 22-0989 – Education Benefit Entitlement Restoration Request Due to School Closure
Normally the VA restores only the single term you were in when the school closed. For affected enrollments between August 1, 2021 and September 30, 2025, however, the VA can restore entitlement for your entire program of education if you were unable to transfer at least 12 credits to a new school. FCC’s February 2024 closure falls inside that window, so many former students qualify for the broader restoration.9Department of Veterans Affairs. VA Form 22-0989 – Education Benefit Entitlement Restoration Request Due to School Closure
Restoration covers the Post-9/11 GI Bill (Chapter 33), Montgomery GI Bill (Chapter 30), Survivors’ and Dependents’ Educational Assistance (Chapter 35), Montgomery GI Bill-Selected Reserve (Chapter 1606), and VEAP (Chapter 32). Submit VA Form 22-0989 by mail to the Muskogee Regional Processing Office or electronically through Ask VA at ask.va.gov.
Taxes on the Cancelled Loans
Cancelled debt is often taxable, but FCC borrowers have specific protection. IRS Revenue Procedure 2020-11 establishes that federal student loans discharged through Closed School or Borrower Defense to Repayment are not taxable income. Borrowers within the scope of that guidance do not report the discharged amount on their federal returns.10Internal Revenue Service. IRS and Treasury Issue Guidance for Students With Discharged Student Loans and Their Creditors
That protection is separate from the American Rescue Plan Act’s broader exclusion, which covered all federal student loan forgiveness through December 31, 2025. The broader exclusion has now expired, and income-driven repayment forgiveness in 2026 or later is generally taxable.11Taxpayer Advocate Service. What to Know about Student Loan Forgiveness and Your Taxes Closed school and Borrower Defense discharges keep their non-taxable status under the IRS guidance regardless of the year they’re processed.
If you receive a Form 1099-C from your loan servicer after a discharge, you may still be covered and owe nothing. Ask a tax professional how to handle the form on your return.
Getting Your Transcripts
You’ll need your academic records to apply to a new school or to verify your education with employers. When an independent postsecondary school closes in Florida, student records typically transfer to the Commission for Independent Education (CIE), a division of the Florida Department of Education, which maintains a transcript request form for records on file.12Florida Department of Education. Request for Search of Student Academic Transcripts on File
Getting the records is easier than getting them accepted. Credits from a closed school carry no accreditation backing, and regionally accredited colleges are often cautious about coursework from schools that lost accreditation or closed under federal enforcement. Before you enroll anywhere new, ask the admissions office in writing exactly which FCC credits they will accept and toward which program. Get that answer in writing before you commit. For some students, starting fresh turns out faster than chasing partial credit that leaves them nearly as far from finishing.