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.
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.
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.
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.
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.
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.
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.
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.
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.
Compare the Best Student Loan Refinance Rates
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Student Debt Relief Loan Refinancing Advertiser Disclosure
College Ave: College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
College Ave Refi Education loans are not currently available to residents of Maine.
1 – The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
2 – $5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees. Information advertised valid as of 04/26/2019. Variable interest rates may increase after consummation.
3 – This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
ELFI: Subject to credit approval. Terms and conditions apply. To qualify for refinancing or student loans consolidation through ELFI, you must have at least $15,000 in student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary institution.
LendKey: Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
CommonBond: Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate.
Splash Financial: Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval.com
Earnest: To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest’s fixed-rate loan rates range from 3.89% APR (with autopay) to 7.89% APR (with autopay). Variable rate loan rates range from 2.50% APR (with autopay) to 7.27% APR (with autopay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms of 10 years or less. For loan terms of 10 to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 0.26% and 5.03% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 23, 2019 and are subject to change based on market conditions and borrower eligibility.
Auto Pay Discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/23/19. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at email@example.com, or call 888-601-2801 for more information on our student loan refinance product.