If you took out federal student loans to attend Virginia College, you have three routes to Virginia College loan forgiveness: a closed school discharge, a borrower defense to repayment application, and relief under the Sweet v. McMahon class action settlement. The Department of Education has estimated that more than $185 million in federal loans tied to the Virginia College and Brightwood College closures are eligible for discharge.1National Student Legal Defense Network. The Missing Billion Which route fits you depends on when you were enrolled, whether you finished your program, and whether you have already filed a borrower defense claim.
Virginia College and its sister brands — Brightwood College, Brightwood Career Institute, the Golf Academy of America, and Ecotech Institute — were owned by Education Corporation of America (ECA), which shut down abruptly on December 5, 2018 after its accreditor pulled recognition. About 20,000 students were enrolled across the chain when it collapsed, and Virginia College alone accounted for roughly 15,000 of them.2Higher Ed Dive. Education Corporation of America Shuts Down After ACICS Pulls Accreditation
Closed School Discharge
A closed school discharge cancels federal student loans you took out to attend a school that closed before you could finish your program. If your discharge is approved, you are also entitled to a refund of what you already paid on those loans, whether voluntarily or through collection.3Federal Student Aid. Closed School Loan Discharge
To qualify under the standard rules, you must have been unable to complete your program because of the closure, and you must fit one of the following:
- You were enrolled when the school closed.
- You were on an approved leave of absence when the school closed.
- You withdrew within 180 days before the closure date.
You generally do not qualify if you finished your program, withdrew more than 180 days before closure, or completed a teach-out at another institution. Transferring credits to another school, on its own, does not disqualify you.3Federal Student Aid. Closed School Loan Discharge
The Expanded ECA Discharge Announced in January 2025
In January 2025, the Department of Education announced an extended closed school discharge specifically for Virginia College, Brightwood College, Ecotech, and Golf Academy students. Under that action, you qualify for an automatic discharge if you were enrolled at any point between December 16, 2016 and the school’s closure date, borrowed federal Direct or FFEL loans, did not complete your degree before the school closed, and did not re-enroll at another institution within three years of the closure.4Project on Predatory Student Lending. Group Discharge This is much broader than the standard 180-day window and covers many more former Virginia College borrowers.
Because Virginia College closed before July 1, 2023, the automatic one-year discharge process that now applies to newer closures does not apply here by default. The January 2025 announcement is what provides an automatic pathway for many former ECA students.
How to Apply
The form you need is the “Loan Discharge Application: School Closure” (OMB No. 1845-0058), available from the Department of Education.5Federal Student Aid. Loan Discharge Application: School Closure Submit it to your federal loan servicer along with any academic and financial aid records you still have. If you cannot get records from the school, contact the state licensing agency where the campus operated. Keep making your loan payments while the application is pending; if the discharge is approved, those payments come back to you.3Federal Student Aid. Closed School Loan Discharge
Borrower Defense to Repayment
Borrower defense is a separate cancellation program for students whose school defrauded them or engaged in serious misrepresentation. Virginia College faced years of complaints and lawsuits over inflated job placement claims, inadequate training, and deceptive enrollment practices, which gives former students grounds to file an individual borrower defense application.
Borrower defense matters most if you completed your program, since finishing the degree can disqualify you from a closed school discharge. It is also the route for students whose enrollment dates fall outside the closed school windows described above.4Project on Predatory Student Lending. Group Discharge
As of 2026, the Department of Education has not issued a standalone group discharge for Virginia College based on institutional misconduct findings outside the Sweet v. McMahon settlement framework, despite calls from members of Congress to do so.6U.S. Senate. Department of Education Borrower Defense Discharges
Relief Under the Sweet v. McMahon Settlement
Virginia College appears on Exhibit C of the Sweet v. Cardona class action settlement (now Sweet v. McMahon), listed under the school owner “Willis Stein & Partners (ECA).”7Federal Student Aid. Sweet v. Cardona School List8The New York Times. Borrower Defense Schools Approved in Sweet Settlement If you attended an Exhibit C school and filed a borrower defense application, the settlement provides what it calls “full settlement relief”: discharge of the outstanding loan balance, refunds of amounts you already paid on those loans, and deletion of the associated tradeline from your credit reports.9Project on Predatory Student Lending. Sweet v. McMahon Class Members
The district court set January 28, 2026 as the deadline for the Department to decide all post-class borrower defense applications tied to Exhibit C schools. Applicants who did not receive a decision by that date are entitled to full settlement relief, and the Department was required to issue eligibility notices by March 30, 2026. The Department appealed those deadlines, but the Ninth Circuit denied its request for a stay on March 25, 2026. Over 271,000 borrowers across all covered schools had received relief as of May 2025.10Project on Predatory Student Lending. Sweet v. McMahon
If you believe you are eligible and have not received relief, you can contact the Federal Student Aid Ombudsman at sweet@ed.gov.9Project on Predatory Student Lending. Sweet v. McMahon Class Members
What Discharge Actually Returns to You
Loan forgiveness through any of these routes cancels the remaining federal loan balance. Under both closed school discharge and the Sweet settlement, you are also entitled to a refund of payments you already made on the discharged loans.3Federal Student Aid. Closed School Loan Discharge9Project on Predatory Student Lending. Sweet v. McMahon Class Members The Sweet settlement adds one thing the standard closed school process does not: removal of the loan tradeline from your credit report. Private student loans and payments to non-federal creditors are not covered by these federal programs.
The $28 Million Receivership Settlement Is Not Loan Forgiveness
You may have seen news of a $28 million settlement paid in March 2023 by former ECA executives, funded through directors and officers insurance policies. The receiver sued chairman Avy Stein, CEO Stuart Reed, and CFO Chris Boehm for breach of fiduciary duty, alleging among other things that they refused to implement a teach-out plan that would have let students finish their programs.11Republic Report. For-Profit College Operators Will Pay $28 Million After Students Were Locked Out That money is being distributed among nearly 2,000 creditors and former students through the receivership estate.12Robins Kaplan LLP. Robins Kaplan Announces $28 Million Settlement
This is a separate track from federal loan discharge. Receiving a share of the receivership distribution, if you get one, does not replace your right to pursue closed school discharge, borrower defense, or relief under Sweet v. McMahon, and pursuing loan forgiveness does not disqualify you from the receivership process.