If you need help paying for school, you know federal student aid is the best place to start. Beyond grants and work-study programs, the federal government also offers low-interest student loans with flexible payment plans and even forgiveness programs. Utilizing your federal aid options can help make college more affordable.
However, it’s possible to lose your eligibility for federal aid. In certain circumstances, you might not be able to apply for grants or even take out federal loans. If you’re struggling to figure out how to pay for college, here’s what you need to know about losing and regaining your federal aid eligibility.
3 situations that disqualify you from federal student aid
If you’re a U.S. citizen or permanent resident, you likely qualify to receive federal aid. However, you don’t necessarily stay eligible forever. It’s possible to lose your eligibility in the following situations.
1. You’ve been convicted of a drug offense
If you were convicted of a drug offense while receiving federal aid, such as grants, loans, or a work-study program, you’ll no longer be eligible to receive future aid.
If you do receive federal aid after a drug conviction and the government finds out, you’ll have to repay any financial aid you received.
2. You’re in default on your federal student loans
If you have federal student loans in default, you’re ineligible to receive federal aid. Your loans are considered to be in default if you fall behind on payments by 270 days or more.
Entering default has serious consequences. Besides no longer qualifying for federal aid, you could also face wage garnishment or even lose your tax refund.
3. You haven’t made satisfactory academic progress
To continue to qualify for federal student aid, including student loans, you need to make satisfactory academic progress. That means you must be earning good enough grades and completing enough credits to earn your degree within an acceptable time frame.
Each school has its own policies on what counts as satisfactory progress for financial aid, including:
What GPA you need to maintain
How quickly you move toward graduation
How often the school will evaluate your progress
What happens if you don’t make satisfactory progress
Check your student handbook for guidance on what criteria you need to meet. You can also contact your school’s financial aid office.
How to pay for college if you’re ineligible for federal aid
Finding out that you don’t qualify for federal student aid can be devastating. But it’s important that you don’t give up hope. You can still achieve your academic goals by exploring these alternatives.
1. Fix your situation
Losing your federal aid eligibility is a big deal. However, it’s not always permanent. In some circumstances, you might be able to regain eligibility.
Here’s what you can do to fix your situation in the following scenarios:
If you were convicted of a drug offense: If your status was suspended because of a drug conviction, you can regain eligibility ahead of schedule by completing an approved drug rehabilitation program or by passing two unannounced drug tests.
If you defaulted on your loans: You can become eligible for federal aid by getting out of default. You can do so by entering a loan rehabilitation program or by paying your debt off in full. For more information, check out this article on ways to get out of default.
If your grades slipped or you didn’t complete enough credit hours: If you didn’t meet your school’s academic progress requirements, contact your financial aid office about how to get back on track. You might be able to regain eligibility by completing a semester with a full course load and maintaining good grades.
2. Research scholarships and grants
When you’re thinking of how to pay for college, make sure you explore options beyond federal aid. There are a number of private scholarships and grants you might qualify for despite any issues you’ve had in the past.
Best of all, most grants and scholarships are “free money.” That means you usually don’t have to pay them back like you do with student loans. Scholarships and grants can help reduce how much you have to spend on your education and how much you need to borrow in loans.
Here are the best places to find free money for college.
3. Consider private student loans
If you’ve exhausted your other options, private student loans can help you fill the gap. Unlike federal loans, private student loans come from private banks or financial organizations. They have different eligibility requirements, so you might be able to qualify for a private loan even if you’re ineligible for federal ones.
Private loans do tend to have higher interest rates and stricter repayment terms than federal loans. However, if you need money to complete your degree, private loans can be an important tool to get an education.
Financing your education
Figuring out how to pay for college can be overwhelming, especially if you find out that you no longer qualify for federal student aid. However, it’s important not to let those setbacks keep you from finishing your degree. By researching your available options, you can get back on track and get your diploma.
Need a student loan?Here are our top student loan lenders of 2018!
|1 Important Disclosures for CollegeAve.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or Nationwide Bank, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 11/1/2018. Variable interest rates may increase after consummation.
2 Important Disclosures for Discover.
3 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
* 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.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for PNC.
PNC Bank is one of the nation’s largest education loan providers. For over 40 years, PNC has been committed to helping students and their families make possible the adventure of college.
6 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2018 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
7 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
8 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
9 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.94% – 12.78%1||Undergraduate, Graduate, and Parents|
|4.04% – 13.04%3||Undergraduate and Graduate|
|4.34% – 12.99%2||Undergraduate and Graduate|
|4.12% – 10.98%*,4||Undergraduate and Graduate|
|5.03% – 11.23%5||Undergraduate and Graduate|
|4.12% – 13.13%6||Undergraduate and Graduate|
|4.92% – 10.01%7||Undergraduate and Graduate|
|3.72% – 9.68%8||Undergraduate, Graduate, and Parents|
|4.26% – 12.13%9||Undergraduate, Graduate, and Parents|