How to Dispute Unauthorized or Unqualified Student Loan Debt
Student borrowers are responsible for repaying their valid loans. However, if you were unqualified to receive the loans, or if your school falsely certified your eligibility to receive a loan, you may be eligible to cancel that debt through a False Certification Discharge.
There are four types of false certification that may qualify a federal student loan for discharge:
Ability to Benefit
The eligibility for a federal student loan to attend a school is based on the borrower’s ability to benefit from the courses. A borrower can have his/her loan discharged if he/she can show that he/she failed to meet the Ability to Benefit requirement at the time his/her school determined that he/she met these requirements. Examples include:
A high school diploma or GED is required to support the ability to benefit from a post-secondary education or training program. Those students who completed a high school equivalent education, e.g., through homeschooling, are excepted from submitting a high school diploma.
An alternative ability to benefit may refer to students enrolled in eligible career pathways programs and who either passed an approved test administered by a school or finished six units of equivalent coursework toward a certificate or degree.
Another way to qualify for this type of false certification is when a school was required to give you an “ability to benefit” exam but failed to do so. If you find yourself qualified for this type of false certification, you may fill out the form here, and coordinate with your student loan servicer.
You are also eligible for this type of false certification if your school was involved with the following types of unauthorized activities:
When your school signed your loan application or promissory note without your consent. For a loan cancellation due to your loan being unauthorized, you must
(1) state that you did not sign the loan document or authorize the school to do so, (2) provide five different specimens of your signature. Remember that two of these specimens must be within a year before or after a date of the signature being contested.
If your school signed for your lender to transfer funds to them without your consent, it makes you eligible for a false certification discharge under this type of unauthorized activity. For a loan cancellation, you must:
(1) state that you did not endorse the loan check or sign the authorization for electronic funds transfer, and that you did not authorize the school to do so,
(2) provide 5 specimens of your signature where the two of these signatures must have been made within or before or after the date of the contested signature, and
(3) state that the proceeds of the contested disbursement were not delivered to you or applied to charges you owe to the school.
If an employee of the school provided an unauthorized signature on your loan documents or payments, you may then be qualified for a loan discharge. In a circumstance such as this one, you may use this form for your application. Identity Theft If your signature was forged by someone who is not a school employee, the Department of Education’s regulations prescribe the following steps for you to obtain a loan discharge:
Certify that you did not sign the promissory note, or any other means of identification used to obtain the loan.
Certify that you did not receive any benefit from the proceeds of the loan.
Present a copy of a local, state, or federal court verdict or judgment that determines you were a victim of identity theft.
If the judicial determination of the crime does not state that the loan was obtained because of identity theft, you must provide the following:
Five different specimens of your signature where two of these must be from within a year before or after the date of the contested signature.
A statement of facts which demonstrates that eligibility for the loan in question was falsely certified because of the crime of identity that was committed against you.
You may check the free credit report to check if someone else has taken out a loan in your name. If you find yourself a victim of identity theft, you need to coordinate this with your loan servicer.
If you find yourself eligible for False Certification Discharge, you may apply as soon as possible to the Department of Education’s Federal Student Aid’s website. There is no deadline for you to apply, but the sooner you apply, the sooner that your discharge will be granted, if you are eligible. Remember that each of the three types of false certification has a separate application. If the application for discharge is denied, you will be responsible for repaying your loan. If you believe that your application was wrongfully denied or if you have additional documents which may support your claim, you can ask the Department of Education about this.
Common Law Forgery Discharge
This new option is not technically a discharge for false certification. Many borrowers who do not fall into the restricted fraudulent certification categories, however, nonetheless require assistance.
This new form and procedure apply to a larger range of people who claim they never applied for or requested a loan. If you did not sign the promissory note or request the loan the Department is trying to collect, and you do not believe a school official was responsible for taking out the loan in your name, you should use this form.