Ability to Benefit (ATB) is one category of false certification cancellation (or discharge). If you did not have a high school diploma or G.E.D. when you went to the school, the school had the responsibility to make sure you could benefit from the educational program, usually by giving an exam. This is called an “ability to benefit” exam. You can get the loan discharged if there were serious problems with the exam, including problems with the way it was administered or if the school did not use an approved exam or failed to give an exam.
ALERT: As of July 1, 2012, most borrowers without high school diplomas or GEDs are no longer eligible for federal student aid. There are some important exceptions, including for students who have completed a secondary school education in a home school setting. A more recent exception allows students without high school diplomas or equivalencies to qualify for federal student aid if they are enrolled in “eligible career pathway programs.” The Department has provided some guidance on how to define career pathway programs, but it still remains to be seen how this will work in practice.
The Department of Education considers the following examples to be proof of “Ability to Benefit” falsification. These are examples only, not a complete list of criteria:
- A test requiring an independent test administrator was not properly administered;
- The school allowed a student to retake the test earlier than the minimum prescribed waiting period or more frequently than allowed;
- The school allowed more time than permitted to take the test, did not use all required portions of the test, supplied answers to students, allowed students to discuss the answers among themselves, or passed a student whose score did not meet minimum standards,
- The test was not approved by the Department of Education, or
- The school failed to give a test as required.
Even if an approved ATB test is used, a false certification discharge may still be granted if the student was not given the appropriate portion of the approved test or if there were other problems with the test or the way the school administered the test.
How to Apply for an Ability to Benefit Discharge
In most cases, you will have to fill out a false certification/ability to benefit form to apply. (There are limited cases in which the government will accept an oral application).
There is no deadline to apply for these discharges. If you are still current on your loan, in most cases you should send to your loan servicer. You should send by certified mail and get a receipt. It is a good idea to contact your servicer to make sure you are sending the application to the correct address.
If the address to which you are requested to send payment is the National Payment Center in Greenville, TX, you should submit your completed form to:
United States Department of Education
Federal Student Aid
50 United Nations Plaza/Room 1240
San Francisco, CA 94102
(*You should check to make sure this is the current address before sending your application. It is a good idea to get a return receipt in case you later have to prove that you mailed the application)
It is important to submit as much information as possible to support the application. In some cases, a state or federal agency may have issued a report about problems with the school’s ATB exams. You can ask for The Department of Education’s files on a school through a Freedom of Information Act (FOIA) request.
Both the Department of Education’s Office of Hearings and Appeals and Office of Inspector General have reports on-line. Some of these reports include helpful information about problems at particular schools.
If the false certification discharge is granted, you are no longer obligated to repay the loan or any charges or costs associated with the loan. In addition, you have the right to be reimbursed for all amounts paid on the loan, whether those payments were voluntary or involuntary. You are no longer in default on these loans and the loan holder must help clean up your credit history. If the discharge is denied, you may first seek review from the Department of Education and then if necessary, appeal to federal court. In most cases, there is a 30 day time period to send in an appeal.