diff --git a/python/educational/src/com/jetbrains/edu/stepic/EduStepicConnector.java b/python/educational/src/com/jetbrains/edu/stepic/EduStepicConnector.java
index 46a02a0b3a94..54ca40cc5a5b 100644
--- a/python/educational/src/com/jetbrains/edu/stepic/EduStepicConnector.java
+++ b/python/educational/src/com/jetbrains/edu/stepic/EduStepicConnector.java
@@ -132,6 +132,7 @@ public class EduStepicConnector {
     }
     catch (UnsupportedEncodingException e) {
       LOG.error(e.getMessage());
+      ourClient = null;
       return false;
     }
 
@@ -144,11 +145,13 @@ public class EduStepicConnector {
       final StatusLine line = response.getStatusLine();
       if (line.getStatusCode() != 302) {
         LOG.error("Failed to login " + EntityUtils.toString(response.getEntity()));
+        ourClient = null;
         return false;
       }
     }
     catch (IOException e) {
-      LOG.error(e.getMessage());
+      LOG.warn(e.getMessage());
+      ourClient = null;
       return false;
     }
     return true;
diff --git a/python/educational/src/com/jetbrains/edu/stepic/LoginDialog.java b/python/educational/src/com/jetbrains/edu/stepic/LoginDialog.java
index d71c6206bf86..0424f47af716 100644
--- a/python/educational/src/com/jetbrains/edu/stepic/LoginDialog.java
+++ b/python/educational/src/com/jetbrains/edu/stepic/LoginDialog.java
@@ -39,13 +39,15 @@ public class LoginDialog extends DialogWrapper {
   @Override
   protected void doOKAction() {
     AuthDataHolder authData = myLoginPanel.getAuthData();
-    StudySettings.getInstance().setLogin(authData.email);
-    StudySettings.getInstance().setPassword(authData.password);
     final boolean success = EduStepicConnector.login(authData.email, authData.password);
     if (!success) {
-      setErrorText("Log in failed");
+      setErrorText("Login failed");
+    }
+    else {
+      StudySettings.getInstance().setLogin(authData.email);
+      StudySettings.getInstance().setPassword(authData.password);
+      super.doOKAction();
     }
-    super.doOKAction();
   }
 
   public void clearErrors() {