New repayment loan options for Mid-Continent University students

Former Mid-Continent University students should expect letters from the school next week about new loan re-payment options.

The state attorney general's office announced Monday it entered into an assurance of voluntary compliance with MCU. The agreement restores the rights of MCU students to what they would have had if they got federal financial aid instead of private loans.

These changes would affect remaining balances for students who applied and qualified for, but did not receive federal loans from the 2011 to 2014 award years.

Jack Conway's communications director, Allison Martin, says they received a lot of calls from students after MCU began shutting down and stepped in.

Entering into an AVC resolves the Attorney General's allegations that from 2011 to 2014 MCU violated state consumer protection laws because MCU did not tell students that they couldn't receive federal financial aid

“The students were not informed that the school could receive federal student loans or were not eligible for federal student loans. It was simply signing students up for loans that were institutional loans and not federal student loans, which most students thought they were receiving,” Martin said.

Now students who thought they were receiving a federal loan have the option of a replacement loan that has federal loan benefits, and protections.

Those include options like:

  • A six-month repayment grace period that starts the day after students are no longer enrolled at least half-time in school.
  • Students can defer loan payments with no interest accrual while in school or during temporary periods of unemployment, economic hardship, or military service. 
  • You can postpone or lower loan payments with accrual of interest under certain economic or other conditions.
  • There are also choices of different re-payment plans, including income-based plans with reduced payments as well as teacher and public service loan forgiveness

Balance discharges or loan forgiveness are also offered to students who would have qualified for a federal closed school discharge of their feral loans. 

Upon application, MCU must offer a discharge of any portion of an MCU balance or loan for which a student anticipated receiving a federal loan if the student was enrolled at the school or on approved absence from the school at the time it closed on June 30, 2014 and has not completed his or her educational program at MCU or another institution through a teach-out program or by transferring credits earned at MCU to another school. 

Other students eligible for the closed school discharge would include those who withdrew from MCU within 120 days of its closure and have not completed their programs with MCU or another institution. 

The attorney general's office says students should be aware that if their MCU balance or loan is discharged, their transcripts will include a notation that the credits they earned at MCU will only be available for transfer to another institution if the discharge is reversed and the discharged loan is returned to repayment status.   

Mid-Continent University says more than 90 percent of former students who did not previously sign up for private institutional loans qualify for this option.

However, the Federal Bankruptcy Court in Louisville ,which is recovering obligations owed to the university, is also offering loan repayment alternatives.

Those include lowering your loan by 30 percent if the owed amount is paid in full or lowering the loan by 20 percent and paying it over 10 years with no interest.

The letter from MCU will include information on their balance, repayment options and how to apply for a discharge.

MCU says they encourage any students with questions to contact them by phone at 270-251-8900 or by e-mail at

Additional important information and the full text of the AVC is posted on the University’s web site  The full text of the AVC is also available on the KYOAG website at

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