How to Dispute Unauthorized or Unqualified Student Loan Debt
Updated: May 16
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.
When a school falsely certifies a borrower's eligibility for federal aid, a False Certification Cancellation (also known as discharge) is available.
False certification discharges are available for FFEL (Federal Family Education Loan) and Direct Loans. If the child on whose behalf the loan was taken out qualifies, parent PLUS (Parent Loans for Undergraduate Students) loan borrowers are eligible. Only loans taken out in whole or in part on or after January 1, 1986, are eligible for forgiveness.
You are no longer liable to repay the loan, or any charges or costs related to the student debt if the false certification discharge is granted. Furthermore, you have the right to be compensated for any payments made on the loan, whether voluntary or involuntary. You are no longer in default on these loans, and the lender is required to assist you in repairing your credit history.
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.
If your education was tailored to a specific profession, and you are unable to work in that field due to a felony conviction, age, physical or mental condition, or other related reasons which disqualify you from meeting your state’s legal requirements for employment, and you had this status at the time your loan application was certified, even if your school knew about your disqualification status, you are then eligible for a loan discharge for this type of false certification.
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.
Any evidence that you attempted to contest the debt should be included. Police reports, court records, or an FTC identity theft affidavit could all be used as evidence (available here). Even if you do not know who the forger is, you can use this form.
If you feel your school in any way misled you or falsified documents, you may be eligible for discharge of your student loans. Have questions regarding False Certification Cancellation, or any other type of student loan programs that are available? Contact TitanPrep now