Borrowers are generally obligated to repay their student loans, regardless of factors such as whether they liked the school they attended or completed the education. However, there are some limited circumstances in which it is possible to have a federal student loan discharged, including in cases when a school falsely certified a borrower’s eligibility to receive the loan.
False certification discharges can be granted on most federal student loans made to students and parents through the direct loan program or the Federal Family Education Loan Program on or after Jan. 1, 1986. If you qualify for a false certification discharge, you will no longer be required to repay the loan or any associated fees or charges, and will be reimbursed for all amounts you previously paid on the loan.
There are three types of false certification that a school can commit that could qualify a federal student loan for discharge:
— Ability to benefit
— Disqualifying status
— Unauthorized payment or signature
Ability to Benefit
Your eligibility to receive a federal student loan to attend a school is based on your ability to benefit from its training. You may be able to have your loan discharged if you can show that you did not meet the ability to benefit requirements at the time your school determined that you met those requirements and thus were eligible to receive federal student loans.
For most individuals, a high school diploma or a GED is required and is used to demonstrate the ability to benefit from a postsecondary education or training program.
[READ: What Is Borrower Defense and Does It Apply to My Student Loans?]
There are some exceptions, such as students who do not have a diploma because they have completed a high school equivalent education through qualified home schooling. Another exception is for students enrolled in certain eligible career pathway programs who demonstrate an alternative ability to benefit by either passing an approved test administered by the school or by finishing six credit hours or equivalent coursework toward a certificate or degree.
Disqualifying Status
You may be eligible for this type of false certification discharge if your education was tailored to a specific profession; you are unable to work in that field due to a status that disqualifies you from meeting your state’s legal requirements for employment in your field of study; that status existed at the time your loan was certified; and your school knew about the disqualifying status when certifying your loan eligibility.
For example, those with felony convictions are often excluded from certain occupations in some states. Among other disqualifying statuses are age and physical or mental condition.
[READ: Student Loan Disability Discharge: What to Know.]
Unauthorized Payment or Signature
You may qualify for a false certification discharge if your school signed your name on your promissory note or loan application without your consent or endorsed your loan check or accepted an electronic funds transfer without your knowledge.
If you apply for this type of false certification discharge, you will have to show that the money wasn’t given to you for use toward your education or applied to charges you owed to the school. If a school accepted money on your behalf and the funds were spent on your education, that does not count as fraud.
In this case, the fraudulent signature or authorization needs to have been committed by someone working for or affiliated with your school. If someone else forged your signature, such as a case of identity theft, you are not eligible for this discharge. You are, however, still the victim of a crime and you should report it to the student loan servicer.
How to Apply for False Certification Loan Discharge
If you feel that you are eligible for a false certification discharge, you should apply as soon as possible via the Department of Education’s Federal Student Aid website. Even though there is no deadline to apply, evidence can be harder to obtain over time. Not only that, but the sooner you apply, the sooner your discharge will be granted if you are eligible.
[Read: College Closings and Financial Aid: What to Know.]
There is a separate application for each of these three types of false certification discharge. Complete the loan discharge application that applies to your circumstance and send the completed application to your student loan servicer.
If discharge is denied, you will remain responsible for repaying the loan. However, you can ask the Department of Education to review your request if you believe that your application was denied in error or if you have additional information to support your claim.
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False Certification Discharge: What Student Loan Borrowers Should Know originally appeared on usnews.com
