| Student loans are tough, since they can't be dissolved | | | | aren't covered, but any misconduct is a defense to |
| in bankruptcy unless some extraordinary hardship | | | | debt. There are three types of falsification that qualify: |
| exists. Furthermore, while many states will limit how | | | | (1) falsification of a non-high-school graduate's ability to |
| long collection activity can occur on most debts, | | | | benefit from the school's program, (2) enrollment of the |
| student loans have no limit. Collection agencies will | | | | student in a job training program for which the student |
| wreak havoc on a credit report for years and years | | | | cannot meet the minimum state employment |
| by performing inquiries and doggedly going after those | | | | requirements for the job he or she is being trained for, |
| in default. But there are ways of dealing with student | | | | or (3) forgery or alteration of the student loan note or |
| loan entries, many of which may surprise you. | | | | checks.o The school failed to pay a refund owed to a |
| Discharge the Loan | | | | student. This applies to the following federal loans |
| The Higher Education Act (HEA) provides for student | | | | issued after January 1, 1986: Guaranteed Student |
| loans to be discharged under the following six | | | | (Stafford) Loans, Unsubsidized Stafford Loans, |
| circumstances:o The school closed while the student | | | | Supplemental Loans for Students (SLSs), PLUS Loans, |
| was still enrolled. The school must have closed either | | | | and Federal Direct Loans. Perkins Loans aren't |
| when the student was enrolled or within 90 days of | | | | covered, but any misconduct is a defense to debt.o |
| enrollment. This applies to FFELs, Federal Direct Loans, | | | | The borrower is permanently and totally disabled.o The |
| and Perkins Loans (aka National Direct Student Loans, | | | | borrower dies.o The borrower filed for bankruptcy. |
| or NDSLs) received at least in part on or after January | | | | Certain conditions must be met, and it's not easy to get |
| 1, 1986. The secretary of education determines the | | | | student loans included. |
| closure date.o The school falsely certified a student's | | | | In the event of discharge, the loan holder is required to |
| eligibility. This applies to FFELs and Federal Direct | | | | inform the bureaus to delete all adverse credit history |
| Loans issued after January 1, 1986. Perkins Loans | | | | assigned to the loan. |