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Issue Paper 6

Session 3: February 12-15, 2018

Issue: False Certification

Statutory cites: §437(c) of the Higher Education Act of 1965, as amended (HEA)

Regulatory cites: 34 CFR 685.215

Summary of change: Amends application requirements for false certification discharges to reflect 

current practice, which requires that a borrower applying for a false certification discharge submit a 

completed application form, rather than a sworn statement. The proposed regulations also update the 

regulatory requirements regarding false certification of eligibility of non-high school graduates for Direct 

Loans. 

Changes: See regulatory text below.

§ 685.215 Discharge for false certification of student eligibility or unauthorized payment

(a) Basis for discharge—(1) False certification. The Secretary discharges a borrower's (and any 

endorser's) obligation to repay a Direct Loan in accordance with the provisions of this section if a school 

falsely certifies the eligibility of the borrower (or the student on whose behalf a parent borrowed) to 

receive the loan. The Secretary considers a student's eligibility to borrow to have been falsely certified 

by the school if the school—

(i) Certified the student's eligibility for a Direct Loan on the basis of ability to benefit from its training 

and the for a student who did not have a high school diploma or its recognized equivalent and did not 

meet the alternative eligibility requirements eligibility requirements described in 34 CFR part 668 and 

section 484(d) of the Act,as applicable at the time the loan was originated;

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(c) Borrower qualification for discharge. In order to qualify for discharge under this section, the 

borrower must submit to the Secretary an application for discharge on a form approved by the 

Secretary, and the factual assertions in the application statementmust be true and made under penalty 

of perjury. The statementapplication need not be notarized, but all statements made therein must be 

made by the borrower under penalty of perjury In the applicationstatement, the borrower’s responses

must demonstrate to the satisfaction of the Secretary that the must meet the requirements in 

paragraphs (c) (1) through (6) of this section have been met.

(1) Ability to benefitHigh school diploma or equivalent. In the case of a borrower requesting a discharge 

based on not having had a high school diploma and not having met the alternative eligibility 

requirements defective testing of the student's ability to benefit, the application requires the borrower 

must statetomust certify that the borrower (or the student on whose behalf a parent borrowed)—
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(i) Received a disbursement of a loan, in whole or in part, on or after January 1, 1986, to attend a school; 

and

(ii) Received a Direct Loan at that school ,and on the basis of an ability to benefit from the school's 

trainingand did notmeet have a high school diploma or its recognized equivalent, and did not meet the 

alternative to graduation from high school theeligibility requirements described in 34 CFR part 668 and 

section 484(d) of the Act, as applicable at the time the loan was originated; 

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(d) Discharge procedures. (1) If the Secretary determines that a borrower's Direct Loan may be eligible 

for a discharge under this section, the Secretary provides mails the borrower andisclosure the 

application described in paragraph (dc). and anThe application, which explainsation of the qualifications 

and procedures for obtaining a discharge. The Secretary also promptly suspends any efforts to collect 

from the borrower on any affected loan. The Secretary may continue to receive borrower payments.

(2) If the borrower fails to submit the written request and sworn statement a completed application 

described in paragraph (c) of this section within 60 days of the date the Secretary suspended collection 

efforts Secretary's mailing the disclosure application, the Secretary resumes collection and grants 

forbearance of principal and interest for the period in which collection activity was suspended. The 

Secretary may capitalize any interest accrued and not paid during that period.

(3) If the borrower submits athe written request and sworn statement completed application described 

in paragraph (c) of the section, the Secretary determines whether to grant a request for discharge under 

this section by reviewing the request and sworn statementapplication in light of information available 

from the Secretary's records and from other sources, including including, but not limited to, guaranty 

agencies, State authorities, and cognizant accrediting associations.

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