School-related Issues

False Certification of Ability to Benefit

A Stafford Loan can be discharged if the school admitted you based on your ability to benefit from the training, but you weren't properly tested to measure that ability or you failed the test. To apply for this discharge, you will need to complete the Loan Discharge Application: False Certification (Ability to Benefit) form. If you had a high school diploma or GED when you enrolled in the program, you're ineligible for this discharge because those documents are sufficient to establish your ability to benefit from further training after high school. You may not be eligible for a discharge if you received a GED before you completed your program of study at the college or career school or if you completed a developmental or remedial program at the school.

False Certification due to Disqualifying Status

You may also be eligible for this type of discharge if you did not meet the physical or legal requirements of your state to enroll in the program or to work in the career for which you were training, regardless of whether you had a high school diploma or GED certificate. To apply for this type of discharge, complete and submit the Loan Discharge Application: False Certification (Disqualifying Status) form to your loan holder.

False Certification: Unauthorized Signature

If you believe someone forged your signature on your FFELP promissory note or authorization for electronic fund transfer, you must attach five different samples of your signature to and complete the Loan Discharge Application: False Certification (Unauthorized Signature / Unauthorized Payment) form. At least two of the samples must be on documents that are clearly dated within a year before or after the date of the contested signature. You may not be eligible if the loan was used to pay your school charges for the portion of the program of study you completed (whether the payment was by a credit to your account or by cash or check).

Unpaid Refund by the School

You might qualify for partial discharge of a FFELP or Direct Loan if your school failed to pay your loan holder a refund required under federal law. Only the amount of the unpaid refund will be discharged. You may qualify for this partial discharge whether the school is closed or opened. To apply for this discharge you must complete the Loan Discharge Application: Unpaid Refund form and forward to the loan holder.

Closed School

If your school closes while you are enrolled and you cannot complete your program because of the closure, your student loan may be eligible for discharge. If you were on an approved leave of absence, you are considered to have been enrolled at the school. If your school closed within 90 days after you withdrew, you are also considered eligible for the discharge. However, your loan cannot be cancelled because of personal circumstances that caused you to withdraw more than 90 days before the school closed.

You are not eligible for the discharge if you are completing a comparable educational program at another school. If you complete such a program at another school after your loan is discharged, you might have to pay back the amount of the discharge. If you haven't received a diploma or certificate but have completed all the coursework for the program, you're not eligible for the discharge.

To apply for this discharge, you will need to complete the Loan Discharge Application: School Closure form. Mail the completed form to your loan holder.

Getting your academic records from a closed school

Contact the state licensing agency in the state in which the school was located to ask whether the state made arrangements to store the records. The records might be useful in substantiating your claim for a loan discharge. For your convenience, we are providing a listing of telephone numbers for State Licensing Agencies.

Note that your loan cannot be discharged because you weren't satisfied with the school's services. Your loan can't be discharged solely because you believe the school

  • Provided poor training or had unqualified instructors or inadequate equipment,
  • Did not provide job placement or other services that it promised, or
  • Engaged in fraudulent activities (other than falsely certifying the loan).