School-related cancellations offer very broad relief, but are available only in limited circumstances. It is worth reviewing these cancellations even though the eligibility criteria are narrow because qualified borrowers can get very broad relief. In most cases, you will need to fill out an application form to get relief.
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: Ability to Benefit; Disqualifying Status; Forgery; and Identity Theft.
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.