The Student Loan Ranger receives quite a few emails from student loan borrowers who want to know if they will be required to pay back their loans even if they aren’t working in their field. Others aren’t happy with the quality of the education they received or just don’t think it was worth the debt.
Unfortunately, most of the time, the answers to questions like these aren’t going to be what the borrower was hoping to hear.
As a rule, student loan borrowers are required to pay back their loans even if they are unhappy with their school or the education they received, or even if they didn’t complete their credential. This is outlined in the entrance counseling borrowers are required to complete and may even be listed in your promissory note.
However, if the school did not properly certify your federal aid eligibility, it is possible to receive a discharge. The following scenarios all fall under the discharge called “false certification.”
[Discover five steps to file a student loan complaint.]
Lack of High School Diploma or Equivalent
With some exceptions, a student must have a high school diploma or its equivalent to be eligible for federal student loans. In most situations, students could have also passed what’s called an ability-to-benefit test or completed six credits at an institution of higher education to be considered eligible. If you did not meet these criteria, you may submit an application for discharge to your loan holders.
If you apply for this discharge, proving the negative, such as not having a high school diploma when you received your loans, can be difficult. Submitting proof of a GED obtained after you received your loans, for example, is one way to show that the school may have approved your loans inappropriately. Submitting a copy of your high school transcript showing you did not complete can also help.
[Learn ways to avoid being duped by a student loan service.]
Lack of Benefit From the Education Due to a Disqualifying Condition
Some occupations — such as attorneys, most teachers and law enforcement — exclude those convicted of felonies. Others, such as truck driving, require that the student be able to obtain a driver’s license, something a person legally blind may not be able to do.
If a school was aware, or should have been aware, of a condition that legally prohibits you from working in that field in that state when it certified your loans, you may be eligible to have them discharged. The education must have been tailored to that specific profession.
You may be required to provide proof of the state law being cited as well as proof the condition existed at the time the loans were made. You can submit your application directly to the loan holder .
[Find out aboutthree student loan discharges you should never have to use.]
False Certification by the School or Identity Theft
Borrowers can also receive a discharge if their school forged their signature on the promissory note, electronic funds transfer authorization or loan check. The caveat is that the student will also have to show that the funds from the loan were not used for their tuition, fees or other components of their cost of attending that school, or that they otherwise did not receive benefits from that money.
To apply for the discharge, submit this form to your loan holder, along with no fewer than five copies of your signature. Two of those signatures must be from within a year of the disputed signature. The best way to find old signatures tends to be with cashed personal checks you’ve written, of which your bank can likely get you copies.
If the loan was obtained through identity theft, however, the burden can be heavier. While the discharge application is the same one used for claims of school forgery, you’ll also need a court verdict that states that the loans were obtained through identity theft. This can be difficult, especially if you aren’t sure who forged the documents.
Remember, you typically aren’t eligible for this discharge if you benefited from the loans. So if you are claiming that someone forged your name on the promissory note, but the loan was sent to the school you attended and used to pay your tuition, your chances of discharge are slim.
These claims usually involve a parent who signed the student’s name to a Stafford loan promissory note or a student who signed a parent’s name to a Parent PLUS loan promissory note.
In the Student Loan Ranger’s experience, these are almost never discharged because the money was used to pay the student’s tuition, and family members are generally hesitant to pursue each other in court over such matters. It may be best to convince the family member to reimburse you for the loan or work out some other arrangement in exchange for not reporting the identity theft — a serious crime — to police or suing in civil court.
If you feel that you have been the victim of one of these claims, file your application as soon as possible. Evidence that could be used to prove your claim can be harder to obtain over time. Also, be sure to file the discharge paperwork with all loan holders that maintain loans you feel were obtained fraudulently.
Finally, remember that these eligibility criteria are listed out in federal regulations. This means that there is very little wiggle room allowed when your loan holder evaluates your discharge claim and it doesn’t fully meet the criteria. As you build your claim and gather evidence, ensure the loan holder will have everything needed to approve your request if possible.
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3 Times a Student Loan Could Be Discharged originally appeared on usnews.com
