There is a common misconception that if a student is justifiably dissatisfied with their educational experience and is able to get into contact with the right (and somewhat mysterious) officials, that a student loan may be discharged under the “bad school” cancellation policy. While many people believe this would be a reasonable thing to do, the fact of the matter is that a “bad school” cancellation does not – and cannot – exist. The issue is far too objective for any student, educational institution or lending body to deal with in a consistent and fair fashion, and there are far too many factors involved to insure a just conclusion. However, because sometimes there are issues at a school that can spiral out of control and literally destroy the learning environment, some lenders do account for certain school issues when they collect on your debt. However, this is not called a loan cancellation, but a defense to collection. It is important to distinguish between the two when you are making an argument to a lender or even to a judge.

There are three reasons that a school can be deemed a “bad school” and that might allow you to avoid repayment of part of your student loan debt:

1. School Closure

If a school closed while you were attending, or if you withdrew from that institution within 90 days of its closing, then you may be eligible for a credit toward your student loans that you accumulated while at that school. If your loans are consolidated, you can only apply this credit to loans directly related to the school, and you may need to show that you were unable to complete your learning career at a different branch of the school in order to be eligible for the credit.

2. False Certification

There are a number of ways that you can claim false certification from a school. For example, if you did not have the background to benefit from the advanced level of learning that you were undertaking when you entered the school, then sometimes the school can be held responsible for repayment of loans that you took out to go there. Identity theft may also fall in this category if another person took out student loans in your name using your social security number. Also, if a school forged your signature on documents in order to get the loans, the school may be held accountable for the debt.

3. Unpaid Tuition Refunds

If you leave school early, generally before you have completed 60 percent of the schooling cycle for which you took out a student loan, then you may be eligible for a partial refund on that loan because you did not use the services that you took it out to pay for. These refunds can be difficult to obtain if you received a check for your loan, but if the loan was paid directly toward your tuition, then the lender can get part of that money back from the school when you withdraw. However, if the school does not initiate this repayment, then usually the lender will target you, the holder of the loan. If you believe that you may be eligible for a partial or full refund from a student loan, you should contact your lender and the school financial aid offices to find out what their policies are.