Teach-out is a plan or agreement that allows students to finish their programs when an institution or program closes.
How it works
When closure is anticipated, the institution submits a teach-out plan to its accreditor and, when required, to the Department. If the institution cannot complete the teach-out itself, it executes agreements with one or more partner institutions. Students are notified of their options, transcripts are made available, and aid eligibility is managed through the closing process. Partner institutions apply incoming credits according to the agreement.
Example: an online institution announces it will close in six months. It executes a teach-out agreement with a second online university that agrees to accept all completed credits and charge no more than the original tuition for the remaining requirements. Students transfer and finish their degrees at the partner school.
How it differs
Ordinary transfer is voluntary and offers no special guarantees. A letter of credit provides funds that may support teach-out costs but is not itself a plan. State authorization withdrawal can trigger teach-out obligations for students located in that state.
Common errors
Waiting until after closure to arrange teach-out options. Assuming students can automatically transfer all credits without an agreement. Failing to notify online students located in multiple states.
References
- 1. Federal Student Aid teach-out requirementsClosure and teach-out obligations
- 2. Accreditor teach-out standardsPlan and agreement expectations
Teach-out is a plan or agreement that allows students to finish their programs when an institution or program closes.