Goddard College announced on April 9, 2026 that it will close, citing inflationary pressures, demographic shifts, and changing educational preferences. For students currently enrolled, federal protections exist — including teach-out agreements, credit transfer rights, and in some cases federal loan discharge. If you are at Goddard or attending a small college under financial pressure, here is what to know and what to do now.

Vermont's Goddard College, a small liberal arts institution known for its self-directed learning model, announced on April 9, 2026 that it will close.1 The college cited "inflationary pressures, demographic shifts and changing educational preferences" as the reasons for the decision.1

Goddard's closure is not an isolated event. Sixteen colleges closed in 2025, and the pace in 2026 is expected to stay at similar or higher levels.2 The same demographic and financial pressures that made small private colleges vulnerable have not eased.

For students currently enrolled at Goddard — and for anyone attending a smaller school that may be under financial strain — the most important question right now is: what are your rights, and what should you do next?

What Happens to Your Credits

When a college closes, your academic progress does not disappear. But protecting it requires action on your part.

Teach-out agreements are the primary mechanism schools use to help enrolled students finish their degrees. These are formal arrangements where a closing institution partners with other colleges to accept its students, recognize their existing credits, and allow them to complete their programs. Goddard is expected to develop teach-out arrangements for enrolled students as part of its closure process.1

Earlier in 2026, Labouré College of Healthcare signed a teach-out agreement with Curry College that allowed nursing students to complete their degrees and created a formal transition pathway for the program.2

When a teach-out agreement is in place, you generally can:

  • Transfer with your existing credits recognized
  • Continue in a comparable program at the partner institution
  • Complete your degree without starting over

If no teach-out agreement exists for your program, you can still transfer credits independently — but it requires more work on your end. Our guide on how to transfer colleges walks through what that process looks like and where to start.

Request official transcripts from your institution as early as possible — before the school winds down its records office. Some closing colleges designate a third-party agency to hold and issue transcripts permanently after closure. Ask your registrar now who that will be.

What Happens to Your Federal Student Loans

If your school closes while you are enrolled — or if you withdrew within 180 days before the announced closure — you may qualify for a closed school discharge. This federal program forgives some or all of your Direct Loans under specific conditions.

Key facts about closed school discharge:

  • You must have been enrolled at the time of closure, or withdrawn within 180 days before it
  • You cannot have completed the program you were enrolled in, or transferred those credits toward a comparable degree at another school
  • Applications go through your federal loan servicer via the studentaid.gov website

The rules have details that matter, so contact your loan servicer as soon as possible after a closure announcement to ask about your eligibility before making other decisions.

Do not stop making loan payments while waiting on a discharge decision. Missed payments create delinquency regardless of whether a discharge is pending. Keep making payments until you receive a formal written confirmation that discharge has been approved.

How to Pick Your Next Step

If you are enrolled at Goddard or another institution that has announced closure, you have real options. The right one depends on how far along you are and what you need to complete.

Option 1: Transfer to a teach-out partner. The path with the fewest credit losses. Ask your school which institutions they have partnered with and evaluate those programs against your academic goals before accepting.

Option 2: Transfer independently. This gives you more choice over where you go, but requires you to do more research. Start with schools that have strong records of accepting transfer students in your major. Our list of colleges that are easiest to transfer into is a starting point for schools actively recruiting transfer students.

Option 3: Move to community college first. If you are early in your academic career and want to minimize costs while you figure out your next step, community college transfer programs can preserve your credits and put you on a clear path toward a four-year degree.

Whichever route you take, look for transfer student scholarships. A number of institutions offer dedicated aid for students moving from closing schools, and you should not assume you need to start the financial aid process from scratch.

For more context on how many small colleges are under financial pressure right now, and how to evaluate whether a school is likely to remain open, see our overview of the 2026 enrollment cliff and college closure risk.

Footnotes

  1. University Business. (2026, April 9). The college closings and mergers of 2026. University Business. https://universitybusiness.com/the-college-closings-and-mergers-of-2026/ ↩ ↩2 ↩3

  2. The College Fix. (2026). 16 colleges closed in 2025 and more could shut down in 2026. The College Fix. https://www.thecollegefix.com/16-colleges-closed-in-2025-and-more-could-shut-down-in-2026/ ↩ ↩2