Refinancing with Earnest
Refinancing rates from 1.81% APR. Checking your rates won’t affect your credit score.
In general, it makes sense to take out federal loans over private loans. They usually have lower interest rates, more generous repayment terms, and you get access to benefits like income-driven repayment plans. But in some situations, you might lose federal financial aid eligibility and be unable to take out federal student loans.
However, if you lose your eligibility for federal student loans, that does not mean you are out of options. You may be able to regain access by taking action.
Student loan requirements and financial aid eligibility
To be eligible for federal loans, you must be a valid U.S. citizen or eligible noncitizen and have a valid Social Security Number. To receive loans, you need to enroll in an accredited institution and show academic progress.
You will also need to show proof that you completed high school, such as submitting your diploma or General Educational Development (GED) certificate.
But even if you meet these requirements, you can still lose your eligibility. Below are four common situations and how to regain eligibility.
Defaulted on student loans
If you defaulted on your federal loans, and are now planning to go back to school, you need to get out of default before the government will allow you to take out new loans.
Your loans are considered in default if they are overdue for 270 days or more. To get out of default, you must either pay your loans in full or enter a rehabilitation program. Alternatively, you can consolidate your loans with a private lender, paying back the federal loans in full.
To rehabilitate your debt, federal regulations require you to make nine consecutive on-time payments within ten months. Once you have completed the ten months of payments, your credit will improve, and your account will be back in good standing, regaining your financial aid eligibility.
To maintain financial aid eligibility, you need to show satisfactory academic progress (SAP). One measure of SAP is your grades. The government requires students to maintain at least a C grade-point average, but some schools have their own standards as well.
Additionally, you have to demonstrate that you are on track to graduate. Federal regulations state that you must complete your degree with 150 percent of the program’s time frame. For example, if you are pursuing a bachelor’s degree, you would need to complete the program in six years. If it took longer than that, you would be ineligible for federal aid.
If your grades start slipping and you lose access to federal student loans, you may be able to get them back. You can file an appeal directly with your school explaining why your grades slipped. In extenuating circumstances, such as an illness, death in the family, or other situation, the school can reestablish your eligibility.
In other cases, you can at least be put on probation. From there, you can submit an academic plan, and explain how you plan to improve your grades. You might include how you’ll work with a tutor, join a study group, or take a remedial course. The school can make you eligible for federal aid again as long as you adhere to the academic plan.
Convicted of a drug offense
According to the National Center for Policy Analysis, one in 400 students is rejected for federal student aid because of a drug conviction.
If you lost your financial aid eligibility because of a drug offense, you might be able to regain it early. To become eligible, you can complete an approved drug rehabilitation program or pass two random drug tests handled by a drug rehabilitation company.
Once you complete these requirements, you can contact your financial aid office and get the federal aid you need.
Received more student aid by accident
If you accidentally received more federal aid or grants than you were supposed to get, you may become ineligible for future loans. Even if it was a mistake on the lender’s part, you bear the responsibility to fix it.
In most cases, to regain your eligibility, you need to repay the excess amount. You can pay it back all at once, or, if doing so would be a hardship, you can set up a repayment plan.
Once the amount is repaid, you will be able to get federal aid.
Regaining financial aid eligibility
If you lost your eligibility for student loans, contact your school’s financial aid office to create a plan to regain access to federal aid. In many cases, you become eligible again after taking some simple remedial steps.
For more information on understanding your loan options, check out this article on federal versus private loans.
Need a student loan?Here are our top student loan lenders of 2019!
|* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
1 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1)All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
(2)This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
(3)As certified by your school and less any other financial aid you might receive. Minimum $1,000.
Information advertised valid as of 11/4/2019. Variable interest rates may increase after consummation.
2 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
3 Important Disclosures for Discover.
Discover's lowest rates shown are for the undergraduate loan and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.
4 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restrictions. Loans are offered through CommonBond Lending, LLC (NMLS #1175900).
5 Important Disclosures for Citizens.
Undergraduate Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of November 1, 2019, the one-month LIBOR rate is 1.80%. Variable interest rates range from 2.90% – 11.16% (2.90% – 11.01% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 4.72% – 12.19% (4.72% – 12.04% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co-signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan.
Citizens Bank Student Loan Eligibility: Borrowers must be enrolled at least half-time in a degree-granting program at an eligible institution. Borrowers must be a U.S. citizen or permanent resident or an international borrower/eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For borrowers who have not attained the age of majority in their state of residence, a co-signer is required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens Bank- participating school.
Please Note: International Students are not eligible for the multi-year approval feature.
|2.84% – 10.97%1||Undergraduate, Graduate, and Parents|
|3.12% – 10.54%*,2||Undergraduate and Graduate|
|3.37% – 11.87%3||Undergraduate and Graduate|
|3.52% – 9.50%4||Undergraduate and Graduate|
|2.90% – 11.16%5||Undergraduate and Graduate|