School-related cancellations offer very broad relief, but are available only in limited circumstances. There is no such thing as a “bad school” cancellation that allows you to cancel your loans because you were dissatisfied with the instruction, degree, job placement services, or other aspects of the school you attended. The school related discharges described in this section are quite narrow. But they are worth reviewing because you can get very broad relief if you qualify for one of these cancellations. All of the school-related cancellations require you to fill out an application form.
The four main categories of school-related cancellations are:
1. Closed School: This cancellation is available if you attended a school that closed while you were a student there or if you withdrew shortly before the school closed.
2. False Certification: There are four categories of false certification cancellations.
3. Unpaid Refund: You do not always have to pay the full amount if you left school early.
4. Borrower Defenses: You may be able to get a full or partial cancellation based on claims you can raise about specific problems with the school.
Compromise and Settlement
The government has broad discretion to “compromise and settle” student loan debts. This means that if you don’t qualify for a discharge or debt cancellation, you may still ask the Department of Education (often through your servicer) to cancel your debt and/or provide a refund based on your complaint about your school. The Department, however, is not required to approve this request.