What is False Certification Discharge?
Student Loan Cancellation due to False Certification
One of the primary ways in which to have a student loan canceled is if there was any false certification involved. False certification is broadly defined and contains four basic elements. Only one of the four elements needs to be present in order to file an application for discharge under false certification. The four elements within false certification are if you were unable to benefit from the education through no fault of your own, if you had a disqualifying status where you should not have been admitted to the school, if you did not authorize the loan to be taken out in your name, or if you were the victim of identity theft.
Unable To Benefit aka Ability To Benefit (ATB)
This particularly applies to those that do not have the required qualifying education to be admitted to a school or program. In this situation a school is taught at a certain level and students are expected to be able to comprehend the information and benefit from the education. If the student has not reached the level of formal education to benefit from the program, many schools have an exam they administer in order to see if that student can participate at the level necessary in order to learn at the school. If this exam is not handled properly, then the student may have a claim that they relied on the school to properly test them for their ability to succeed at the school. If the test administrator uses a test not approved by the Department of Education, or if they allow cheating, collaboration, or extra time over and above the time the exam was designed to take, then it is possible some students will pass that are not truly qualified. If any of this occurred, then there may be a chance the loan can be discharged because the student was allowed into a program for which they were “unable to benefit”.
Disqualifying Status
When a school accepts a student into a program where they are working toward a specific license, certification, or career it is important that the school not take student loan money for students that are not qualified to work in those careers. The reason discharge is allowed is because the school itself is at fault for misleading the student and taking the student loan money. For example, if a person is being trained in the school to be a bank employee and yet they have a felony in their background. The student can apply for discharge because a bank cannot hire a person with any type of felony conviction in their record per FDIC rules. Another example would be a person that has a history of losing consciousness. If a school allows them into a truck driver program and yet the state will not issue a truck driver license to a person who has a history of losing consciousness, then that student can file for discharge of that student loan debt under the disqualifying status provision.
Forgery
If the financial aid office or any employee of the school a person is attending applies for and cashes a student loan check in the name of a student without that student’s authorization or signature, then the student can seek discharge of that debt. This only applies if it is a school official that has obtained the loan and cashed the check. It does not apply if the student is claiming a third party that is not related to the school has done this.
Identity Theft
This applies under two circumstances. The first is if the person obtains the loan in the students name and they attend the school using that name. In this instance it is identity theft and the student whose name was used can seek a discharge. The second instance is when a student attends a school and a loan is taken in their name by another party using their information. In both instances a loan was fraudulently obtained using the legitimate person’s information. To seek a discharge in these circumstances the person must obtain a court judgment showing they were a victim of criminal identity theft.
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