State tuition recovery funds (STRFs) can be a valuable source of relief for defrauded students when a school is insolvent and when the student cannot obtain a federal discharge. STRFs contain deposits of money collected from schools approved to operate in the state. The funds are disbursed to students under specified conditions.
State relief for students is critical because relief at the federal level is limited. The greatest harm to most students is the amounts they owe on federal or private loans. There are limited discharges available from the federal government for students harmed by abusive school practices. The government has narrowed these discharges through regulations so that few students qualify.
Many states have either a STRF or a bond program to reimburse defrauded students. States with STRFs tend to have two different funds–one for degree-granting institutions and one for schools that offer non-degree-granting vocational programs.
We have updated the STRF section of our web site, including contact information for each state that has this type of fund. If your state is not on this list, you should still check with the state regulator to see if there are any bond funds available. These are usually only offered to students when a school closes, but this can vary by state.