Read on to learn more about student loan false certification and whether or not you may qualify.
How Much Can Be Discharged Due to False Certification?
If you qualify, false certification discharge can mean 100% forgiveness of your loan and any associated fees and costs, as well as the reimbursement of any payments you may have already made.
Which Loans Qualify for False Loan Certification?
Only federal student loans are eligible for false loan certification discharge by the U.S. Department of Education, including the following:
- Stafford (Direct) Loans
- Grad PLUS Loans
- Parent PLUS Loans
- Consolidation Loans
Four Types of Student Loan False Certification
Student loan false certification falls into four different categories: ability to benefit, disqualifying status, forgery, and identity theft.
1. Ability to Benefit
With this type of false certification, a school admits a student who doesn’t meet the school’s admission requirements.
In the eyes of the Department of Education, this means that the student does not have the ability to benefit from the education he or she would receive.
This type of false certification is most common with non-traditional students, including those who applied without a GED or high school diploma or those who were educated in a nontraditional setting, like homeschool.
Most students without high school diplomas or GEDs are not eligible for federal financial student aid, but exceptions to this rule include students who have completed secondary education in a homeschool setting and students who are enrolled in certain eligible “pathway” programs. For these students, an Ability to Benefit exam must be administered following a set of rules.
Ability to Benefit false certification may occur under the following circumstances (this is not a complete list):
- The Ability to Benefit test was not approved by the U.S. Department of Education;
- The school failed to administer the test;
- The school allowed more time than permitted on the test or supplied answers to the test;
- The school passed a student whose score did not meet the minimum standards.
Example:
Amy applied to the University of Oregon. She was administered an Ability to Benefit Exam, since she was homeschooled. However, the exam was not approved by the Department of Education, and the test administrator helped Amy with some of the answers. Because the school failed to properly administer the test, Amy is likely eligible for discharge due to the ability to benefit student loan false certification.
2. Disqualifying Status
This type of false certification occurs if and when the student is unable to meet the legal requirements for employment in his or her area of study in his or her state of residence. This can be due to age (upon completion of training), criminal record, a physical or mental condition, or any other reason excepted by the U.S. Department of Education. The disqualifying condition must have existed at the time the loan was disbursed.
Example:
Sam lives and attends school in Illinois. He has a felony record and has served time in prison. He enrolled in a program at the local college and received federal financial aid to earn his degree in nutrition to become a dietician, not realizing that felons are unable to serve as dieticians in his state. Sam may be eligible for loan discharge because of Disqualifying Status.
3. Forgery
Forgery, also referred to as “unauthorized signature”, is another type of student loan false certification discharge. You may be eligible for this type if your school forged your name on the loan papers or check endorsements.
Forgery is one of the more difficult types of student loan false certification discharge to qualify for because in order to qualify, you must not have received the proceeds of the loan.
The program also does not apply in all cases where a signature was forged—it only applies if someone who is affiliated with the school forged your signature.
If someone else—unaffiliated with the school—signed a loan document or check endorsement without your authorization, you may still be able to claim forgery as a defense to the collection of your loan, a type of lawsuit.
Example:
Jeff applied for admission for Fall 2017. He needed financial aid, so used the FAFSA to apply. However, the month before school was due to start, Jeff received an inheritance and no longer needed the loans he’d applied for.
Months later, Jeff realized that the loans had gone through anyway, but he’d never signed for them, nor had he received a disbursement. Someone in the financial aid office had forged his signature on the loan document in order to complete the loan process, even though he no longer needed the loan. Because his signature was forged by someone affiliated with the school, Jeff is eligible for discharge due to forgery.
4. Identity Theft
This final category is available only if the false certification occurred as a result of identity theft. If someone unlawfully took out student loans in your name for their own benefit, it’s possible to have the loans discharged.
To qualify for student loan false certification due to identity theft, you must submit a police report and/or the person who committed the theft must be convicted of the crime. You must also submit any evidence you may have of the identity theft, as requested, to the U.S. Department of Education or your loan holder.
Additionally, you will need to assist with any proceedings related to the investigation and/or prosecution of the crime.
Identify theft student loan false certification discharge is only available for loans received on or after July 1, 2006.
Example:
Judy received her student loans in 2005 when she attended college. She had been paying them off up until 2015, when she noticed something out of place on her credit report. After looking into it further, Judy realized, someone had taken out a new loan in her name, earlier in 2015.
Because she is the victim of identity theft, Judy must report the crime to the police and assist in any investigation or prosecution measures. Because the loan was unauthorized and a result of the crime of identity theft, Judy is eligible for false certification discharge.
How to Apply for Student Loan False Certification Discharge
Ability to Benefit:
To apply for student loan false certification discharge due inability to benefit, fill out a Loan Discharge Application: False Certification (Ability to Benefit) form provided by the U.S. Department of Education.
If you are still current on your loan, you should send this application to your loan servicer. Do so via certified mail and get a receipt. Make sure to contact your loan servicer ahead of time to ensure you send the application to the correct address.
Disqualifying Status:
In most cases of disqualifying status, you’ll need to fill out a Loan Discharge Application: False Certification (Disqualifying Status) application provided by the U.S. Department of Education.
Follow the directions above for sending this application to your lender or creditor.
Forgery:
To apply for student loan false certification discharge due inability to benefit, fill out a Loan Discharge Application: False Certification (Unauthorized Signature/Payment) form provided by the U.S. Department of Education.
Follow the directions above for sending this application to your lender or creditor.
Identity Theft:
To apply for discharge due to identity theft, file a police report and identity theft report, and contact the loan holder.
What Happens if You Qualify?
If false certification discharge is granted, you will no longer be obligated to repay the loan or any of the fees and charges associated with the loan. If you’ve already paid a portion of the loan or any fees—whether voluntarily or involuntarily—you also have the right to reimbursement of those funds. If you went into default on the loan, you will no longer be in default once discharge is granted, and the lender or creditor must help correct the damage done to your credit score.
What Happens if You’re Denied?
If your application for student loan false certification discharge is denied, you have the right to seek review from the Department of Education. If you are still denied but you feel you have the right to discharge due to false certification, you can appeal to federal court. Usually, you have 30 days to send in your appeal.
Seek Help With Student Loan False Certification Discharge
We hope this article has helped you determine and apply for a false certification discharge. If you don’t think you will qualify, take a look at some of the federal student loan forgiveness programs.
