What to do if you lose your financial aid

Financial aid makes it easier for students to pay tuition and other educational costs, but there are certain scenarios in which you can lose your financial aid. Although you can recover it under certain circumstances, you may need to consider alternatives in the meantime.

Here’s what to know about financial aid suspension, how losing financial aid can affect you, and what steps you can take to get it back.

Reasons why you are losing financial aid

There are a few situations that can cause you to lose financial aid:

  • Your income or that of your parents has increased: Some financial aid depends on your income and that of your parents. If this income has increased beyond a set threshold, your financial assistance program may be reduced accordingly.
  • You have not maintained satisfactory academic progress: One of the many requirements you must meet to retain your financial aid is to maintain a certain GPA set by your school. If your grades have dropped below that or you have an incomplete class or withdrawal, it could cause you to lose access to all financial aid, including federal loans.
  • You are not registered part-time: You must be enrolled at least half-time to access some forms of federal financial aid. If you take a lighter course load this semester, you may not qualify for federal student loans unless you add more credits to your schedule.
  • You have advanced in your program: Some schools offer certain types of financial aid to first-year students, but once you have advanced through your program, these school-specific forms of financial aid may no longer be available.
  • You are incarcerated: If you are incarcerated in a federal or state facility, you will not be eligible for most forms of federal financial assistance. If you are incarcerated in a facility that is not federally or state-run, you may be able to get a Pell Grant.
  • You do not meet the other basic eligibility requirements: The US Department of Education maintains a list of basic eligibility requirements for federal financial aid. It covers things like citizenship, registration, student loan default, and other criteria. If your school’s financial aid office finds that you are missing one or more of these requirements, you may lose your financial aid altogether.

Different schools have different programs for their students, but the suspension of federal financial aid applies from school to school because it comes from the federal government and not from the educational institution. If you lose your eligibility for aid at a school and then transfer, you will not automatically regain your eligibility.

How to get your financial aid back

Depending on the situation, your financial aid may have been reduced or withdrawn. Either way, the recovery process will depend on why you lost it.

In some cases, such as when your school doesn’t offer certain scholarships to upper-class students, or your parents’ income has gone up and probably won’t go down, you might not be able to get back what you lost.

But in other cases, the steps to follow are directly related to the reason for the suspension. For example, if you are incarcerated, you will have to wait to be released. If you have defaulted on a federal student loan, you will need to get the loan into default. And if you’re not enrolled at least half-time, you’ll need to add more classes to reach that threshold.

If you lost your financial aid due to school problems, you can appeal the decision to your school’s financial aid office. There may have been extenuating circumstances, such as a death in the family or a long-term illness, that made it difficult for you to meet college requirements, and providing this information could help you reverse the decision.

If you are unsure of the reason for the loss of financial aid or what to do next, contact your school’s financial aid office for details and assistance.

How to pay for your education without financial aid

There are several ways to get the funding you need to pay for your tuition and other expenses, even if you’ve lost your federal financial aid.

Scholarships and grants

Depending on the situation, you may still be able to get scholarships and grants from your school. Otherwise, take the time to search various scholarship search engines and apply for scholarships and grants from private organizations.

These programs are separate from the federal financial aid program, so you don’t have to worry about your financial aid suspension affecting your eligibility.

Student loans

If your or your parents’ income has increased or if you have simply lost school-specific financial aid, you may still be able to take out federal student loans.

However, if your situation has caused you to lose access to all federal financial aid, you may need to consider private student loans instead. Unlike federal loans, private student loans require a credit check, which means you might need a parent to co-sign the loan.

If you don’t have a co-signer, you can also consider a revenue-sharing agreement, which provides you with the money you need immediately in exchange for payments based on a percentage of your earnings after graduation.

Part-time or full-time work

Depending on your course load and other factors, you may be able to secure part-time or even full-time employment while in school. Even if you can’t work much during the school year, you could work full-time during the summer to earn money to pay at least some of your college expenses.

Consider a more affordable option

Remember that the suspension of federal financial aid will be carried over to another school. But if you transfer to an online school, community college, or state university, you may be able to cut your expenses enough to make college more affordable. And if you have lost your eligibility due to poor grades, you can take this opportunity to work hard to improve your grades.

Before transferring, however, check how many of your credits will transfer from your current school and whether they will still count towards your degree. In some cases, a required course from one school may be considered an elective by another.

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