Losing your federal financial aid eligibility can be devastating. It can even make obtaining a college degree practically impossible until you can get your aid back to cover tuition and other expenses. If you’ve previously lost your financial aid from failing to maintain satisfactory academic progress or not making regular student loan payments, here are some tips that can help you get back on track.
Talk to the Financial Aid Office
It never hurts to speak with a financial aid representative one-on-one. Start a dialogue with your school’s financial aid office to help you determine how you lost your aid in the first place.
In some cases, it might be due to your parents making more money, which has pushed them into a different tax bracket, or because scholarships are more readily available for freshmen than other students.
Once you know why you didn’t meet the requirements for financial aid, you’ll be in a better position to negotiate your options and figure out where to go from there.
Make an Appeal
One of the most common reasons for losing financial aid eligibility from one academic year to the next is failing to make good grades. You must maintain a satisfactory academic progress to continue receiving federal financial aid.
This means passing classes and completing enough credits to continue moving toward your degree completion. However, extenuating circumstances might prevent you from maintaining these requirements, such as experiencing an injury, an illness, or a death in the family.
Each school has different requirements for satisfactory academic progress, so check with your financial aid department to review the policy. If any special circumstances occurred that kept you from passing classes or taking the required number of credits, go over them with your financial aid advisor.
Transfer to a Cheaper School
In certain situations, your only option might be to transfer to a more affordable school until you can improve your GPA. Work on getting your grades back up by taking general education courses at a local community college. These classes can be inexpensive enough to pay out of pocket, especially if you only take one or two at a time.
If you still have access to private loans or other nonfederal student aid options, the cheaper cost can make your money stretch further while you work toward getting back in good academic standing. Once you’ve boosted your GPA, you can then reapply for financial aid at your preferred school. Just make sure that any credits you take at a different institution will transfer; otherwise, making the switch won’t be worth it.
Take Out a Private Loan
Taking out a private student loan should be a last resort, but it can help you cover college expenses while you’re trying to regain satisfactory academic standing. Just be cautious when using private loans, as they do not come with the same protections as federal loans. For example, you might be responsible for making payments on private loans while still in school. You also can’t use any income-based repayment plans like those offered with federal financing.
Get Out of Default
Another reason many students lose their financial aid eligibility is because they’ve taken time away from school, their student loan repayments have kicked in, and they’ve failed to make timely payments. If this has happened to you, and you’ve found yourself in deferment, contact your loan service provider to discuss how you can remedy the situation.
In general, there are three ways to get out of student loan default: loan rehabilitation, loan consolidation, and repaying the loan in full.
Because most borrowers looking to requalify for financial aid can’t afford to repay the entire loan amount, loan rehabilitation and consolidation are your best bets. Loan rehabilitation requires you to sign an agreement to make a series of nine monthly payments over 10 consecutive months. You can only rehabilitate a defaulted student loan once, though, so use this option wisely.
Loan consolidation is an option almost every college student considers after graduating, and it can also work if you’re in default. Consolidation is combining your student loans into one Direct Consolidation Loan. To consolidate a defaulted federal loan, however, you must agree to the new loan under an income-driven repayment plan or make three consecutive, on-time monthly payments on the defaulted loan before consolidating.
Regaining your financial aid eligibility takes effort, but in the end, it’s worth it. You’ll be able to continue your higher education and work toward a more promising future.