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No GED or High School Diploma? Your Student Loans May Be Cancelled, Discharged, and Forgiven.

Written by Steve Rhode

Despite what many think, there are reasonable rules and allowances for forgiving federal student loans in cases of school failure, fraud, disability, or other issues. For private student loans, as of now you are still primarily screwed.

One little known discharge rule is for those that were enrolled in colleges without having a GED or high school diploma.

For those students, the Department of Education has a simple process that may result in the elimination of your loan and forgiveness of the debt.

But before you start jumping up and down to celebrate, there is a bit of a disclaimer here. This only applies to people who were enrolled and took out federal student loans for courses of study that required a GED or high school diploma in order to benefit from the program.

But schools, like community colleges, can admit people without GEDs or high school diplomas and get paid with student loans and not be eligible for discharge, as long as the school performed a test to measure the students “ability to benefit” from the education.

A college may require students without a GED or high school diploma to first take an assessment or placement tests to measure the students ability to get a benefit from the course of study. The school may then require you to take a series of classes as part of your studies that would then allow you to be awarded a GED and then go on to complete your college degree.

For example, Remington College says:

We’re now offering a free GED prep course: Not only is the course free, but we’ll also pay for your first GED exam attempt! This means you have an opportunity to get your GED at no cost and won’t have to pursue college acceptance without one. – Source

Owens Community College says:

Do I need a High School Diploma or GED to start classes at Owens? No. Students do not need to have a high school diploma or GED to begin taking classes at Owens. However, in order to receive a degree or certificate from Owens, students must have a GED before they graduate. Students may take classes at Owens while working on their GED however, it is encouraged that they get their High School Diploma or GED prior to beginning classes at Owens. To be eligible for federal financial aid, students who do not achieve certain scores on the placement test must have a high school diploma or GED. – Source

But let’s say you are one of the students that was enrolled in higher education without taking placement tests or put into a course of study that would result in a GED.

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In that case your federal student loans (does not apply to private student loans) may be completely forgiven.

The Department of Education says:

Every school must certify that students are eligible for a federal student loan. For students without a high school diploma or GED, this means the school must demonstrate that the student is academically able to benefit from the school’s programs before the student can take out a loan. If a school falsely certified you for a program for which you did not qualify, you may be eligible for loan cancellation.

Ability to benefit cancellation only applies to fraudulent certification. It does not apply to schools that misrepresent their education programs, the quality of their facilities and faculty, or their ability to help you find employment in your field of study. – Source

If you feel this applies to your situation, you should complete this form to have your loan discharged.


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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


  • Oh my God. Same is happens to me. But, they don’t wan’t to accept my loan discharge. The school told me that I doesn’t need diploma, and everything was with the phone. I enrolled at online classes, and they said that I reported that I have diploma. But, I said no that’s not true. Now I am at serious problems.

  • Thank u so much for this great piece of information this really helps out my situation a lot…… Thank You Again!!!!

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