If you received a Federal Direct or a FFEL Program Loan on or after January 1, 1986, you may qualify for a False Certification discharge if you (or the student for whom a parent received a PLUS loan) to receive the loan was falsely certified by an eligible school.

Your eligibility to borrow is considered to have been falsely certified if the school:

• Admitted you on the basis of ability to benefit from its training and you did not meet the applicable requirements for admission on the basis of ability to benefit; or
• Signed your name without your authorization on the loan application or promissory note.

In order to permit a student to borrow a Federal Direct or FFEL Program Loan, schools are required to certify that student borrowers who lack a high school diploma or GED have the ability to benefit from the training offered by the institution.

False certification of a student borrower's eligibility occurs, for example, if the school failed to test such a student's ability to benefit or conducted testing in an improper manner. Schools may satisfy the ability to benefit requirements, for example, by testing students or offering courses in remedial education. Student borrowers who have a physical, mental, or legal status or condition at the time of enrollment that would legally bar employment in their field of study may also be eligible for False Certification loan discharge. Misrepresentations, by the school, on the other hand, regarding the school's educational program or its financial or administrative capability, including the school's placement services or the quality of the school's facilities, faculty, or equipment are not part of the process of "certification" of the student's eligibility to borrow and do not entitle the borrower to False Certification loan discharge.

If your loan is discharged, you will not owe any more payments on the loan, and you will get a refund of payments you have made in the past. Also, if the loan is discharged, the servicing agency will tell credit reporting agencies that the loan was discharged, and any adverse credit history resulting from nonpayment of the discharged loan will be deleted. In addition, your discharged loan will not prevent you from applying for federal student financial aid.

The full criteria by which borrowers may qualify for such a discharge are set forth in Department of Education regulations 34 C.F.R. 682.402(e) (1994).