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[Q&A] What to Do If You Lost Your Financial Aid

Federal financial aid isn’t guaranteed, and you may lose eligibility due to poor academic performance, incarceration, or issues with your citizenship status, among other factors. 

You can regain eligibility for financial aid, but you may wonder how you’ll pay for school in the meantime. Several options may be available to you, though it’s important to do whatever you can to qualify for federal benefits again. Here’s what you need to know about the potential reasons for losing access to federal financial aid and your options for covering expenses until you regain eligibility.

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6 reasons you lost your financial aid and what to do about it

The Department of Education requires college students to meet certain criteria to qualify for federal financial aid

If you lose eligibility, the suspension usually isn’t permanent. Understanding why you’ve lost eligibility and what you can do to regain it can help you determine your next steps. Here are some of the more common reasons for losing eligibility.

1. Academic performance 

To maintain eligibility for financial aid, you’ll need to maintain satisfactory academic progress. That typically means maintaining a grade point average of 2.0 or higher and graduating within 150% of the normal time frame for your program. 

How to get your financial aid back: If your grades slipped due to an unusual circumstance, such as a death in the family or a severe illness or injury, talk to your school’s financial aid office about appealing the decision. Otherwise, you may just need to get your grades back up above your school’s minimum requirement. 

How long will it take? As little as one semester. 

2. Your or your parents’ income increased

While your financial aid won’t be suspended due to an increase in your parents’ income, you may no longer be eligible for certain types of aid. If you’re wondering why you lost a Pell Grant or why your financial aid went down, your options may be limited.

How to get your financial aid back: If your parents’ income doesn’t return to its previous level, you may need to wait until you become an independent student. At that point, you no longer need to include your parents’ income on your Free Application for Federal Student Aid (FAFSA).

How long will it take? Varies depending on how you might qualify as an independent student.

3. You drop below half-time enrollment

One of the basic eligibility requirements for federal student loans is that you must be enrolled at least half-time, which translates to six credit hours per term. You can still qualify for Pell Grants and the work-study program if you’re a part-time student. 

If you already have federal student loans, you’ll need to start making payments six months after you drop below half-time status. 

How to get your financial aid back: To regain eligibility for federal student loans, adjust your schedule to return to half-time enrollment and ensure your loans go back into deferment.

How long will it take? As little as one semester.

4. You transferred schools

To transfer to a new school, you’ll need to first withdraw from your current college. When that happens, the financial aid package you received through your first school may end. What’s more, if you lose eligibility while at one school, the suspension may follow you to another one. 

How to get your financial aid back: Once you transfer to the new school, contact the financial aid office to find out whether any of the financial aid you were eligible for will transfer with you. If not, you must update your FAFSA to include the new school. 

You’ll also need to communicate with your previous school’s financial aid office to make sure your account is settled. This may include paying back some of the aid you received to avoid having your transcripts withheld. 

How long will it take? Varies depending on each school’s transfer process.

5. You’re incarcerated

If you’re incarcerated, your eligibility for federal student aid will be limited. For example, you can’t take out student loans, but you may qualify for federal grants or the federal work-study program.

How to get your financial aid back: You can regain full eligibility for federal financial aid once you’re no longer incarcerated.

How long will it take? Varies depending on your sentence. 

6. Your eligible noncitizen status has changed

If you were eligible for federal aid with a qualifying visa or other form of status, that eligibility may change if your status has expired or been revoked.  

How to get your financial aid back: You can regain your eligibility by reinstating your eligible noncitizen status or by becoming a U.S. citizen or permanent resident.

How long will it take? Varies depending on which path you take. 

If I lost my financial aid, how do I pay for school?

If you’re unable to regain your eligibility for financial aid or you want to continue your education while you work to regain eligibility, here are a few ways you can still get what you need to pay for school.

Look into scholarships, work-study programs, or part-time work. Consider tuition payment plans if your school’s financial aid office offers this option, and look at a less expensive school or community college. Also, other federal benefits such as ROTC or public service programs that pay your way or pay off the student’s loans.
The most financially responsible choice will depend on your situation. A rule of thumb is to borrow only what you need and to pay as little as possible out of pocket while reducing or mitigating student debt when and where possible.

Erin Kinkade, CFP®
Erin Kinkade , CFP®, ChFC®

Grants

Depending on your situation, you may still be eligible for federal grants. Even if you don’t, see whether your school or state education agency offers grants for college students. Unlike student loans, grants don’t need to be repaid.

Scholarships

While you may no longer be eligible for federal financial aid, you might still qualify for need-based and merit-based scholarships from your school. 

You can also research and apply for private scholarships from local and national organizations, private companies, and more. Websites Scholarships.com, Fastweb, and Peterson’s maintain databases with millions of scholarship and grant opportunities for you to explore.

Part-time job

While it may not be ideal, you may consider working part-time while you attend school to help pay for some of your tuition or for other living expenses. Colleges and universities often offer jobs to students on campus, so you can easily transition from class to work.

It can also be helpful to look for opportunities off campus to see whether you can earn a higher wage. 

Tuition assistance

Many private employers offer tuition assistance as an employee benefit. The federal government allows you to receive up to $5,250 per year in educational assistance without incurring taxes on the benefit.

If you already have a job, check with your employer to see whether it offers a tuition assistance benefit. If not, you may consider looking at other employers in the area. Just keep in mind that some might have a mandatory waiting period before you can qualify for the perk. Also, some programs may be limited to study related to your job.

Private student loans

If your financial aid is suspended, you likely can’t qualify for federal student loans. However, you may still be able to apply for private student loans. Private lenders base your eligibility on your enrollment status and your creditworthiness.

You may need a cosigner to help you get approved, especially if you have little or no personal income and have yet to build a credit history. 

If you want to consider private student loans, it’s important to shop around and compare rate quotes from several lenders to ensure that you get the best offer. Credible makes it easy to compare prequalified rates from several lenders. Here are several of our top choices to help you get started with your research:

Company Best for… Rating (0-5)
Best for Less Than Half-Time Enrollment
Best for Cosigners
Best for Multi-Year Approval
Best for No Fees
Best Member Benefits

FAQ for students who have lost their financial aid

Can you reapply for financial aid after losing it?

Yes, you can reapply for financial aid after losing it. If you lose eligibility due to not meeting academic progress requirements or other reasons, you can take steps to regain eligibility and then submit a new FAFSA. Keep in mind that financial aid eligibility isn’t automatically restored—you’ll need to meet the requirements first.

For example, if you lost aid due to poor academic performance, you may need to improve your grades before reapplying. Each school has different policies, so it’s important to check with your school’s financial aid office to understand the specific steps you need to take.

How can I regain my financial aid eligibility?

To regain your financial aid eligibility, you’ll need to address the issue that caused you to lose it. If poor academic performance is the reason, improving your grades or completing enough credits to meet Satisfactory Academic Progress (SAP) requirements is usually necessary. 

If extenuating circumstances contributed to your situation, you can file an appeal with your school and provide supporting documentation. Some schools may allow you to regain eligibility through a financial aid probation period, where you must meet specific academic standards. If aid can’t be immediately reinstated, you may need to pay for classes out of pocket to demonstrate your ability to meet academic requirements.

How long does financial aid suspension last?

The duration of a financial aid suspension depends on the reason you lost eligibility and how soon you address it. For instance, if you’re on academic probation, the suspension may last one semester, with eligibility restored once you meet the required academic standards. 

If you owe money to your school or the government, the suspension will continue until you pay off the debt or set up an approved repayment plan. If you failed to meet SAP standards, the suspension will remain in effect until you improve your grades or complete enough credits. Each school has its own policies regarding financial aid suspensions, so it’s essential to contact your school’s financial aid office for guidance tailored to your situation.