School Related Student Loan Cancellation
There are few ways in which someone can have a student loan canceled using a school related argument. For example, those that feel they went to a school that did not provide them with a proper education, job placement services, or left you with other unfulfilled promises cannot simply cancel the loan. But given the fact that there are some legitimate issues that arise with schools, there are a few circumstances that may give you hope in cancellation.
School Closure
One reason for cancellation that is oftentimes granted is if you were attending a school that was closed during your enrollment or if you chose to leave a school within 90 days of its closure. If the school only closes one of many locations then the location you were attending must be the one that was closed. If this has happened to you and if your student loan was originated after 1986 then you may be granted cancellation. This cancellation is not automatically granted, but it does allow you to apply for it. This application covers all Perkins, Stafford, PLUS, and Federal Family Education Loans.
False Certification
Under this category one or more of your qualifications or the schools certifications were not properly presented and you were essentially defrauded. This includes if the person attending the school fraudulently claimed they were you. The four categories within this are ability to benefit (ATB), disqualifying status, forgery, and identity theft.
Ability To Benefit (ATB)
Many programs have a minimum standard educational level that is required to be able to understand the coursework and benefit from the program. For example, a person that has graduated high school or has the equivalent GED may be the minimum standard for the school. A person that does not have this attained level of education may not be able to complete coursework or understand what is expected of them. Many schools have a standardized exam that they give these students in order to determine if they have the ability to benefit from the educational programs offered by the school. If the student passes this “ability to benefit” test then they are allowed into the program.
But if the test is not properly administered, if students are allowed to cheat, if they are given more time than necessary, or if the test is not approved by the federal department of education then it is possible that you have a claim to cancel your student loans that were acquired to enter this program. The foundation for the argument is that you did not or could not benefit from the school because you were not qualified. You did not know you were not qualified because the school did not administer the test properly and therefore it is through no fault of your own.
Disqualifying Status
If you are allowed to attend a school in order to achieve a certification or degree in a field for which you are not eligible to be employed, you may seek discharge of that student loan under the disqualifying status provision. An example of this type of situation would be a person that attends a professional driver training program only to find out that their history of passing out disqualifies them from attaining driver certification from their state. Or for a person attending a school that teaches you to be in the security industry but that their criminal history disqualifies them from getting a security license. The same for a person attending school to be an annuity broker only to discover their background disqualifies them from selling annuities. These are all examples of situations where the school should have not taken the money from the loan and should not have admitted the student. Therefore the stud en can be relieved of the burden of them loan through having it discharged.
Forgery
This is a simple case where the school itself completes your loan paperwork, obtains the loan, and cashes the loan check without your signature or authorization. If the school does this and does not have either your signature nor your authorization it is possible for you to get that debt discharged. The important restriction to this is that it must be the school that has forged your signature and not a third party not related to the school.
Identity Theft
This is situation where you must prove that you were the victim of identity theft and that the party that received the loans and attended the school was not you. It can also apply if you did go to the school but you did not obtain the loans. These cases are difficult to prove and difficult to use as a qualification for discharge. But if you are the legitimate victim if this type of crime it is worth your time to make certain all aspects of it are handled.
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