If a school falsely certifies a borrower's eligibility for federal student loan(s) or the borrower does not authorize payment discharge for the loan(s), the loan(s) are eligible for discharge due to false certification.
This discharge option is only for loans received on or after January 1, 1986. Direct Loan and FFEL Program loans are eligible for false loan certification discharges.
False Certification due to Unauthorized Signature
If a school official falsely signs the borrower’s name on a loan application or master promissory note and the borrower is therefore unable to benefit from the funds, or if a loan is falsely certified due to identity theft, the relevant loans are eligible for discharge by false certification.
False Certification of Student Eligibility
If a school falsely certifies a student's ability to benefit (ATB) from the education received in exchange for federal student loan funds, those funds are eligible for discharge by false certification.
The most common ATB discharge occurs when a student enrolls in college classes without having a high school diploma or GED and he or she receives federal financial aid.
A borrower can also qualify for an ATB discharge due to a disqualifying status. If he or she is unable to meet the legal requirements for employment in his or her state of residence in the occupation for which the program of study was intended due to age (upon completion of training), physical or mental condition, criminal record, or other reason. This disqualifying status must have existed at the time the loan was issued.
Another way a loan can be cancelled because due to ATB is if a borrower receives loans for classes attended but the classes were not offered in the borrower’s primary language, providing that the school did not first verify the student's ability to benefit from classes offered in the alternate language.