Federal student aid is a financial lifeline for college students. According to the College Board, the average undergraduate student received $14,400 in federal financial aid through grants, federal student loans, and educational tax credits and deductions during the 2016-17 school year.
To access these resources, college students must meet and maintain specific requirements. So what happens if you don’t and you lose federal financial aid eligibility? Find out how you can regain federal student aid eligibility — or how to pay for college if you can’t.
How federal financial aid eligibility works
The Department of Education has clear guidelines for federal student aid eligibility. Students will need to meet these requirements to receive any financial aid.
There are the basic requirements for eligibility, such as U.S. citizenship and a Social Security number. There are also continuing requirements for federal financial aid eligibility:
- Make “satisfactory academic progress” by maintaining adequate grades and completing enough credits.
- File a Free Application for Federal Student Aid (FAFSA) for each school year.
- Keep existing federal student loans in good standing.
- No convictions of possessing or selling illegal drugs.
As a college student, you should be aware of how your choices could cost you your federal student loan eligibility or access to grants and other aid.
If you don’t meet these guidelines, it can cost you access to federal student loans, grants, and more. And you’re left with far fewer ways to pay for college and cover their educational costs.
How to pay for college if you lose eligibility
If you’ve relied on grants and federal student loans to pay for college, losing your federal financial aid eligibility could put your schooling in jeopardy. You’ll need to look into other options for paying for school. Here are some options.
Address your federal financial aid eligibility issue
First, you can try to fix the problem that is making you ineligible for federal aid or student loans. If you can resolve your eligibility issue, you might regain access to federal financial aid that you can use to cover costs.
In many cases, there are steps you can take to regain federal student aid eligibility. This could be relatively easy — as simple as correcting or filing a FAFSA. Or it could be a more involved process with a plan you’ll need months to complete.
If you’ve had your federal financial aid eligibility revoked by your school, sit down with someone in the financial aid department to review your options. They might be able to help you figure out what your options are and get you on the path to full eligibility once more.
Decide your next educational steps
If it looks like you won’t be able to get your financial aid eligibility back right away, you’ll need to think about your next steps for schooling.
Maybe you lost eligibility due to poor academic performance, for example. Many schools require that you show improvement and progress to regain your eligibility.
You’ll typically need to continue taking classes — but without financial aid eligibility, you won’t have access to loans or aid to pay for these costs. This can create a circular problem in which you need financial aid eligibility to afford to take more courses, but you cannot regain eligibility without taking more courses.
Depending on why you lost it, regaining eligibility can take a semester — or it can take more than a year. You’ll need to decide what to do about college in the mean time. Do you need to stop attending because you can’t afford it? Can you afford tuition if you switch to part-time attendance? Once you know your educational costs, you can start looking into your options to pay for them.
Apply for grants and scholarships
Before turning to other forms of debt, such as applying for private student loans, exhaust all of your other financial aid options first. Even if you don’t qualify for any more federal grants or loans, you might be able to qualify for grants and scholarships from the state, nonprofit organizations, and private companies.
Unlike loans, which have to be repaid with interest, grants and scholarships are free money. In most cases, you never have to repay them. Plus, you can combine multiple grants and scholarships to pay for school, decreasing how much you need to borrow.
Take out private student loans
If you lose federal student loan eligibility, you might still be able to get private student loans to cover the costs. Private student loans differ from federal student loans in some key ways and aren’t always as advantageous for the borrower. However, without eligibility for federal student loans, they can be a useful tool to cover the gap so you can complete your degree.
One big difference is that private student lenders require students to meet certain lending requirements. Most lenders will want to see a credit score in the mid-600s or higher to approve you for a private student loan. Many will also factor in your income and employment history.
However, college students aren’t known for their stellar credit and high income. Many have just entered adulthood and are not yet financially established, and will have trouble qualifying for private student loans.If this is you, consider getting a private student loan with a cosigner. A cosigner is a second person who is well-qualified for the loan and agrees to repay the debt if you default.
Before taking out a loan, make sure you compare offers from multiple private student loan lenders to ensure you get the best deal.
Work your way through college
Of course, you can pay your college costs out of pocket — though working your way through college is less feasible than ever. With today’s higher college costs, a low-paying job won’t cut it — minimum wage simply hasn’t grown as fast as the costs of higher education.
You’ll need to earn enough to at least cover your college tuition and costs, and likely your living costs as well. Make it your mission to hunt down a college job that pays more than minimum wage.
Covering your costs out-of-pocket will also be more doable if you’re attending a low-cost college. If you can’t afford a full credit load, consider scaling back the number of credits you’re enrolled in each semester. If you’re paying for fewer credits at a time, it’ll be easier to come up with the cash to pay as you go. It will also free you up to work more hours.
Ask for help
Lastly, if you have one, turn to your safety net for help. If your parents can afford to help you without sacrificing their financial health, ask them for help paying for college. Remind them that they can write off your education costs they pay for on their taxes.
If cash to cover your costs isn’t an option, you can discuss other forms of support, such as:
- Living at home, rent-free, to help cut your costs.
- Helping you network and search for a better-paying job.
- Giving you a family loan to pay for college.
- Agreeing to cosign a private student loan.
Unfortunately, the answer to how to pay for college will likely never be an easy one to answer. Without federal financial aid, you’re left at the mercy of private lenders and parents. Work toward eligibility and in the meantime take your time to understand the pros and cons of your available options.
Kat Tretina contributed to this article.
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|1 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.
2 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.
Information advertised valid as of 4/1/2019. Variable interest rates may increase after consummation.
3 Important Disclosures for Discover.
* 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 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. ©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
7 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.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|4.24% – 13.24%1||Undergraduate and Graduate|
|4.07% – 11.32%2||Undergraduate, Graduate, and Parents|
|4.84% – 13.49%3||Undergraduate and Graduate|
|4.50% – 11.35%*,4||Undergraduate and Graduate|
|4.25% – 13.25%5||Undergraduate and Graduate|
|6.08% – 7.22%6||Undergraduate and Graduate|
|3.95% – 9.81%7||Undergraduate, Graduate, and Parents|
|4.45% – 12.42%8||Undergraduate, Graduate, and Parents|