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Student Loans

What to Do If You Maxed Out Financial Aid

Students might experience a financial aid shortfall when paying for school. For example, the government has set federal student loan limits that determine how much you can borrow each year. If you qualify for a Pell Grant, those have annual limits too.

Running out of financial aid can be stressful, but there are ways to manage costs without interrupting your studies. Here’s what to do if financial aid is not enough.

What to do if you run out of financial aid before the semester 

Federal financial aid is typically disbursed to your school at the beginning of the semester. Here’s what to do if you’re on the verge of starting classes and realize your aid package isn’t sufficient.

Step 1: Contact your financial aid office

If you won’t have enough money for the upcoming semester, contact your school’s financial aid office. The financial aid office may be able to help you find alternative funding options to pay for school. 

Some options might include:

  • School-based loans
  • Emergency aid
  • Tuition payment plans
  • Scholarships and grants
  • Work-study

You could ask the school to reconsider your financial aid award. Schools do sometimes have flexibility to increase aid packages.

Write a financial aid award appeal letter explaining why you should be granted more aid. The school doesn’t have to approve your request, but it may be worth appealing if you have special circumstances demonstrating financial need. 

Step 2: Make sure you filed FAFSA

Completing the Free Application for Federal Student Aid (FAFSA) is the first step in applying for federal financial aid. Your school uses the information you provide to determine how much and what type of aid you qualify for. The FAFSA is typically available from October 1 to June 30, but don’t wait too long.

Does aid run out? Yes, in the sense that there are annual limits on how much you can borrow or qualify for in Pell Grant funding. Federal loan limits are based on your enrollment year, dependency status, and type of loan. 

Colleges have a limited pool of money, so filling out the FAFSA earlier is better. If your circumstances have changed since you filled it out, let the financial aid office in your school know.

If your school told you that you don’t have enough aid to cover your costs for the semester, review your financial aid award as determined by the FAFSA. Specifically, ensure that you’re maxing out all the federal aid you’re eligible to receive. Let the school know that you need more money or might have to consider other options.

Step  3: Apply for scholarships and grants

Unlike student loans, scholarships and grants do not need to be repaid. They’re free money designed to help college students pay for tuition or other education-related expenses. Scholarships may be merit-based or need-based, while grants are usually need-based. 

Here are steps to explore your options:

  • Talk to your financial aid office to see if you qualify for any available or unclaimed school-based scholarships or grants
  • Look into state, nonprofit, and private organizations for scholarship offerings. Search for niche scholarships or grants for which you may qualify (e.g., child of a veteran, minority, merit-based, etc.).
  • Consider if you qualify for program-based federal scholarship or grant funding. For example, the National Health Service Corps (NHSC) scholarship program offers funding to students pursuing degrees in eligible health care fields. 

Many scholarships and grants have application deadlines, lengthy review processes, and they likely won’t be helpful in a pinch because it may take too long to receive money if you win one. Apply for as many scholarships and grants as possible in case one comes through during a future school year.

Some scholarships or grants may require a service commitment in exchange for funding. For example, students who receive NHSC scholarships must commit to at least two years of service at an approved site after graduation. 

Step 4: Get a part-time job

Juggling a full course load and a part-time job isn’t ideal, but getting a job or enrolling in a work-study program could offset some of your expenses.

Federal work-study funding is available to undergraduate and graduate students who have demonstrated financial need.  You apply for work-study through your school’s financial aid office.

If work-study isn’t an option, cast the net wider and consider part-time jobs. Look for jobs on-campus or with local businesses. Also, consider freelancing online, tutoring, or doing gig work to earn money for school. 

Step 5: Consider reducing your credits

You may be able to get a job to cover some of the costs but find that you don’t have enough time to work. By reducing the number of credits you take each semester temporarily, you may be able to earn enough to pay for school. 

Keep in mind that if you reduce the credits you take enough, you will only be considered a part-time student. This may affect your financial aid. Make sure you discuss this option with your school’s financial aid office. Reducing your credits to part time often reduces the costs as well.

Step 6: Apply for private student loans

If you’ve used all your federal aid, have applied for scholarships and grants, and have considered a part-time job but still don’t have enough money to pay for school, private student loans may be the option of last resort

Private student loans are offered by private lenders rather than the federal government. Each lender is different regarding how much you can borrow, eligibility requirements, and the timeline for applying for loans. Shop around to find the best option if you’re interested in using private student loans for school. 

The FAFSA isn’t a requirement to apply for private student loans. Insead, fill out the lender’s application. Private student loan lenders often have a minimum credit score requirement to qualify, so you might need a cosigner to get approved for funding. 

Can you request more financial aid during the semester?

So far, we’ve discussed what to do if you run out of financial aid before the semester starts. But what can you do if you’re short on aid mid-semester? You may have options to make up the gap and continue your schooling, which we’ll dig into next.

Step 1: Contact your financial aid office

Contact your school’s financial aid office to find out what options you have to pay for school. It’s OK if you’ve already maxed out your student loans or run out of financial aid; they can help you figure out the best option.

They may suggest:

  • A payment plan: This option allows you to return what you’ve borrowed through monthly out-of-pocket payments. A payment plan prevents you from paying a lump sum upfront and gives you time to earn income or obtain other funding. Setting up a payment plan can also help you to avoid steep late fees. 
  • Additional grants or scholarships: Apply to any grants or scholarships offered locally by your school, county, or state. Online database searches could also turn up scholarships specific to your field of study. Apply to as many as possible and if you have concerns that a scholarship or grant opportunity may not be legit, contact the school to verify that it is.
  • Student loan options: If you haven’t hit federal student loan limits, you should be able to get one mid-semester as long as you filled out the FAFSA before the semester started. If you’ve already hit those limits, your financial aid office may recommend that you consider alternative options like private student loans or a Direct PLUS Loan. We discuss these options further in Step 4. 

Your school might be able to extend an emergency loan to help you cover expenses. These loans may be used for school or other costs, such as medical expenses or car repair. 

The amount you can borrow is usually small, and there are typically criteria you’ll need to meet. For example, you may need to be enrolled at least half-time and be able to provide proof of financial hardship. And you may have to agree to repay the loans before you graduate. 

Step 2: Consider getting a job

As mentioned, getting a job may not be ideal if you’re carrying a strenuous course load. But it could be one of the best options to pay for school if you run out of financial aid halfway through the year. 

When considering part-time job options, think about what might work best for your schedule. For most students, working while in school shouldn’t affect financial aid eligibility, but it’s important to feel that you’re getting paid appropriately for your time. 

Colleges are big employers, so it may even be possible to find a part-time job within the college.

Step 3: Ask family or friends for help

No one likes asking for money, but if you’ve maxed out your student loans, run out of financial aid, and can’t afford your tuition, you may need to consider asking others for help.

Borrowing money from family or friends allows flexibility because you can define repayment terms and avoid the high-interest rates often associated with personal loans and credit cards. And friends and family aren’t likely to subject you to a credit check. 

Here are some tips to help you ask friends or family for money:

  • Create a budget: Use a tool like Excel to list your living expenses, school costs, and any income. Providing a budget as a reference will show that you are fiscally responsible despite running out of funding and hopefully instill confidence that you will properly manage any loaned money. 
  • Define terms: Are you asking for a personal loan that will be paid back—with or without interest—over time? Or are you asking for a monetary gift? Present a few options to your family or friends and see which one is the most agreeable for you both.
  • Name an amount: Use your budget to determine how much money you will need to get through the rest of the semester. Ask for that amount or split it up and ask for lower amounts from multiple people.
  • Be prepared and responsible: Borrowing money can change your relationship dynamics and cause added stress with family and friends. It’s good to anticipate this change, but it also could be beneficial to follow up and show them how you’ve used the money responsibly. 

Step 4: Apply for student loans during the semester

If all else fails, your final option is to apply for a student loan to cover your remaining costs. Learn how the loan will work and what it will cost you in the long run.

Consider federal student loans first

Max out federal student loans before you fill the gap with private loans. You can likely get a federal loan if you filled out the FAFSA before the semester began. Federal student loans have low fixed interest rates, flexible repayment options, and the opportunity to qualify for loan forgiveness. 

You may also consider a federal Direct PLUS Loan. If you are an undergraduate, you can ask a parent to apply for a Parent PLUS Loan. If you’re a graduate student, you’re eligible to apply directly for a Grad PLUS Loan. Keep in mind that credit history is considered for PLUS loans. 

There are no maximums for PLUS loans, but keep in mind the cost of the loan and how long it might take for you to pay the loan back.

You’ve maxed out federal student loans. Now what?

If you’ve maxed out federal direct loan eligibility, look into the best private student loans to pay for school. Private loans should be considered after federal loans because they typically have fewer repayment options and their terms vary. However, you can most likely take one out in the middle of the semester if you’re eligible.

You’ll likely need a cosigner with a good credit score to qualify, but you might be able to find some student loans without a cosigner. The interest rates you pay for these private loans may be higher than those you might qualify for with a credit-worthy cosigner. 

Learn more about how to pay for college.