False Certification Discharge: Current Categories and Proof

False Certification Discharge addresses specific defects in a school's certification of federal loan eligibility or handling of a loan payment. It is separate from Borrower Defense. Relief is limited to the affected loan or unauthorized payment and requires facts that satisfy the applicable category.

High school completion and graduation status

A claim may involve a student who reported not having a high school diploma or equivalent and did not meet the alternative-to-graduation requirements in effect when the loan was originated. It may also involve high school graduation status or a diploma falsified by the school or by a third party to which the school referred the student. The applicable requirements depend on the loan's origination date.

A condition disqualifying employment

A school may falsely certify a student who, because of a physical or mental condition, age, criminal record, or another reason accepted by the Secretary, would not meet State requirements for employment in the occupation for which the training program was intended. This ground concerns the requirements in the student's State of residence when the loan was originated, not a general federal-aid disqualification.

Unauthorized signature and unauthorized payment

An unauthorized signature claim requires that the borrower did not sign the loan application or promissory note and did not authorize the school to sign. Signing a document without understanding it is not, by itself, an unauthorized signature. An unauthorized payment claim concerns a school endorsing a loan check or signing an electronic-funds-transfer authorization without permission; relief also depends on whether the proceeds were delivered to the student or applied to charges the student owed the school.

Identity theft

The crime of identity theft is a separate false-certification ground. The applicant must establish unauthorized use of identifying information, must not have knowingly received or benefited from the loan proceeds, and must provide supporting evidence. The regulation identifies examples such as an identity-theft judgment, an FTC identity-theft affidavit, a police report, or documented credit-report disputes.

Application, relief, and taxes

The application is made under penalty of perjury and must demonstrate the elements of the selected ground. Collection may be suspended while eligibility is evaluated, but payments can still be received. If approved, false-certification relief can include the affected loan, charges, collection costs, reimbursement, and credit-report corrections; unauthorized-payment relief is limited to the discharged payment. Loan program and date rules must be confirmed. For discharges after 2025, federal and state tax results should be reviewed rather than assumed to be exempt.