Policy Change Affecting False Certification Discharge

The U.S. Department of Education (ED) recently released a Dear Guaranty Agency Partner Letter, G-00-01, announcing a policy change affecting the "employment attempt" provisions of the Federal Family Education Loan Program (FFELP) false certification discharge regulations set forth in CFR 682.402(e)(3)(ii)(C).  A recent U.S. Court of Appeals decision ruled invalid the employment attempt provisions included in the false certification regulations.  ED has decided to extend the application of this decision to all borrowers who apply for false certification discharge.
 
As a result, in order to be eligible for a false certification discharge, borrowers will only be required to demonstrate that the school admitted them and certified their eligibility to borrow based on their ability-to-benefit from the program offered at the school, but did so without complying with the statutory ability-to-benefit requirements in place at the time of the student's enrollment (34 CFR 682.402(e)(3)(ii)(B)). Borrowers will no longer have to demonstrate that they meet the employment attempt requirements set forth in CFR 682.402(e)(3)(ii)(C).
 
ED is in the process of discussing necessary regulatory changes to reflect the change in policy.  Effective July 2000, guaranty agencies should issue decisions on false certification applications consistent with policy guidance set forth in G-00-01.
 
Any questions concerning the policy change affecting false certification discharge regulations should be directed to the following ED contacts: Daniel Madzelan at (202) 502-7816 or Pamela Moran or George Harris at (202) 708-8242.  A copy of this Dear Guaranty Agency Partner Letter can be found on ED's web site at http://www.ifap.ed.gov.  If you are unable to access this web site and would like a hard copy of the letter, or if you have any questions related to this Bulletin, please contact the UHEAA Policy and Training Department at (801) 321-7166 or by e-mail at cjudd@utahsbr.edu.