False Certification Discharge

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This article will go into more detail about each of these types of false certification loan discharges. A discharge ends your loan like a cancellation or loan forgiveness program. The difference is that student loan forgiveness usually refers to the loan ending due to a period of time served in a teaching or public service job whereas discharge is for some other reason.

Did you receive federal loans to attend college, but didn't have a high school diploma or GED?

Did you receive federal loans to train for a job you wouldn't be able to qualify for even with the education?

Did someone else take out the federal student loan in your name?

Did someone at the school forge your name on loan documents without your authorization?

If so, you’re eligible for a false certification discharge of your loan. This article will go into more detail about each of these types of false certification loan discharges. A discharge ends your loan like a cancellation or loan forgiveness program. The difference is that student loan forgiveness usually refers to the loan ending due to a period of time served in a teaching or public service job whereas discharge is for some other reason.

There are three categories of false certification cancellations:

• ability to benefit,
• disqualifying status, and
• unauthorized signature/payment either in the form of
• • forgery by the school, or
  • identity theft.

  Ability to benefit. If your school falsely certified your eligibility for federal student aid, you, the borrower, can apply for a false certification discharge. So, if you as the borrower weren't given an "ability to benefit" exam or were given such an exam but it wasn't properly administered, you could meet the eligibility requirements for a false certification cancellation.

  Disqualifying status. You received federal loans to train for a job you don’t qualify for even with the education.

  Unauthorized signature. Someone else took out a loan in your name, or the school you attended authorized the transfer of loan funds without your permission.

  Regardless of the form of false certification, if you're approved, your repayment of the loan ends. False certification loan cancellations are only for William D. Ford Federal Direct Loan Program loans and Federal Family Education Loan Program (FFEL Program) loans made after January 1, 1986. These loans include Stafford Loans, Parent PLUS Loans, and Graduate PLUS Loans. Perkins Loans aren't eligible.

  False Certification Based on Ability to Benefit

  If you don't have a high school diploma, GED, or other high school equivalence such as home-schooling proof, you have two choices to qualify for aid. Ability to benefit exams are for proving your readiness for post-secondary education. The alternative to taking the exam is to accumulate six credit hours without financial aid. If you fail the exam, you aren't allowed to receive federal financial aid.

  Since July 1, 2012, ability-to-benefit exams only qualify students that are enrolled in "career pathway" programs. There's some guidance about these "career pathway" programs on the U.S. Department of Education website. In the past, a school had been able to accept a sworn statement that a student had a high school diploma in place of the actual diploma or school transcript. For loans extended on or after July 1, 2020, these sworn statements are no longer accepted.

  You're eligible for a false certification if the school was required to give you, the borrower, an "ability to benefit" exam and did not give the exam. Other examples of false certification due "ability to benefit" include:

  1. The school certified your ability to benefit when you reported not having a high school diploma or equivalent;
  2. The school gave you an ability to benefit test that wasn't approved by the U.S. Department of Education;
  3. The school allowed you to retake the ability to benefit test before the required waiting period had expired;
  4. The school helped you cheat on the ability to benefit test.

  Procedure for Ability to Benefit Status False Certification Discharge

  There's a special application form for the ability to benefit - false certification discharge. This is the latest form available and - even though it expired on 9/30/2020 should be used until the website has changed and an updated application is available.

  False Certification Based on Disqualifying Status

  Disqualifying status is when you receive a federal student loan for which at the time of the loan, you failed to meet your state's legal requirements for the occupation you were being trained for. The disqualifying status is anything the Department of Education considers "disqualifying." A few disqualifying conditions include: physical or mental conditions, age, or criminal record. An example might be that you’re training to be an elementary school teacher, when you have a felony conviction on your record. Your state of residence doesn't allow schools to hire teachers who have felony convictions. In this case, you could get a false certification loan discharge. Disqualifying status isn't available for discharges on loans taken out on or after July 1, 2020.

  Procedure for the Disqualifying Status False Certification Discharge

  As with the other false certification loan discharges, there's a form specifically for disqualifying status. File this form with your student loan lender.