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7 ways your financial aid can get suspended

Did you know your siblings could cause you to lose out on funds?

Just because you’re eligible for financial aid now doesn’t mean you’re eligible forever. You could lose your eligibility for scholarships, grants and even federal aid for a number of reasons, from failing classes to taking a semester off. However, there are steps you can take to regain eligibility — or apply for other scholarships instead.

1. Your family income increased

Mom got a new higher-paying job? If your family’s maximum income increases enough to push you into a new tax bracket, you might lose your eligibility for some need-based financial aid. At the very least, you’ll get a reduced financial aid package. This is especially true at schools like Stanford that meet 100% of financial need.

What to do about it

Explain the situation to your family and ask if they’d be willing to cover what you lost in financial aid. If not, you might want to focus on applying for merit-based scholarships, which don’t consider financial need.

2. Your GPA didn’t make the cut

Most financial aid programs have a minimum GPA you need to maintain to remain eligible. This is usually around a 2.0 for need-based scholarships and at least a 3.0 for merit-based scholarships. The Department of Education (DoE) requires you to make satisfactory academic progress (SAP) when you apply for federal student aid, which is defined by your school.

What to do about it

Focus on getting those grades back up. Go to study sessions, hire a tutor and put extra time into your school work to get your GPA above the cut. You likely won’t be able to get aid back until your grades have improved — unless you’ve had a medical emergency or other extraordinary circumstance that took your focus away from school.

If you lose eligibility based on your school’s SAP requirements, you can usually file an appeal. Each school has a different procedure for appeals, so reach out to the financial aid office for instructions. Typically, you need to write a letter explaining why you failed to meet SAP and what measures you plan on taking to get your grades back up, along with supporting documents.

More ways you can lose your eligibility for federal loans

3. You failed or withdrew from too many classes

Federal student aid and some private scholarships, grants and loans require you to fulfill a certain number of attempted credits — typically around 75%. Withdrawing from or failing a class can lower this percentage and make you ineligible for financial aid. This is usually a part of your school’s requirements for SAP in addition to a minimum GPA.

What to do about it

Got a legitimate reason for withdrawing or failing a class? File a SAP appeal with your school or explain the situation to your scholarship program. Otherwise, apply for outside scholarships or loans that don’t have a SAP requirement — private student loans might be your best bet. You can often get that percentage up simply by passing more courses.

4. You dropped below half-time enrollment

Federal student aid as well as most scholarships and loans require you to enroll as a half-time student at the very least. Some might even require you to maintain full-time enrollment to stay eligible. If you drop a class and don’t replace it with another course — or just decide to take a light semester — you could lose your aid.

What to do about it

If you have time to register for another course, sign up as soon as you can. Your school might also offer other ways to earn credits, such as taking on an unpaid internship. Reach out to your academic adviser and the financial aid office to find out what steps you can take to regain your eligibility.

5. You’re no longer a first-year student

Many schools offer more scholarship and grant opportunities to first-year students. Other scholarship, grant and loan programs are only available for a limited number of years — especially scholarships from endowment funds outside of your school.

What to do about it

Look for other financial aid opportunities you can qualify for after your first year. Some scholarship and student loan programs are only available after you’ve finished a year or two of school, so you might want to start with those. Talk to your departmental adviser and your school’s financial aid office to learn more about your options.

6. Your sibling graduated from college

The DoE and several other financial aid programs consider how many siblings you have who are also in college when calculating how much need-based aid you’re eligible for. If they graduate, your family is usually expected to be able to contribute more toward your education, lowering your financial aid award.

What to do about it

Talk to your family about how much they can afford to contribute. If they’re willing to offer more funds, you don’t need to do anything. Otherwise, look into merit-based scholarships and student loans. Or if it’s not much of a change, you might be able to cover the cost by taking on a part-time job while in school.

7. You missed out on community service or internship requirements

Many merit-based scholarships require you to log a specific number of hours for community service or sign up for an internship to remain eligible. Failing to do so makes you ineligible to receive the scholarship for later years. And in some cases, you might have to return the scholarship if you fail to meet the requirements.

What to do about it

Talk to your financial aid office or the point of contact at the scholarship program. If you weren’t able to meet the service or internship requirement through no fault of your own, you might be allowed to keep the funds and remain eligible.

For example, if you signed up for an internship that you found through the program and the company didn’t fully understand the terms of the agreement, your school might waive the requirement or help you find a new internship. Otherwise, see if there’s a way you can make up for the requirement.

5 steps to take after losing financial aid

Just because you lost eligibility for financial aid doesn’t mean you’ll have to pay for college out of pocket. Here are a few steps you can take to get your aid back or otherwise cover the cost of attendance (COA):

  1. Appeal your aid. Write a financial aid appeal letter to your school explaining why you think you should get more aid. Contact your school’s financial aid office to learn what the process is.
  2. Apply for outside scholarships and grants. Outside funding from nonprofits and other organizations is designed to supplement your school’s financial aid package. Apply to scholarships and grants before taking out student loans to lower your post-graduation debt load.
  3. Get a part-time job. Even a minimum-wage job can make a dent in the amount you need to borrow to cover your personal expenses. Just make sure it doesn’t hurt your grades.
  4. Take out federal loans first. Once you’re sure you aren’t going to get any more gift aid — funds you don’t have to repay — look to federal student loans to cover your COA. These are generally less expensive and more flexible than private student loans.
  5. Get a private student loan. As a last resort, you can cover your remaining expenses with a private student loan.

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Bottom line

There are several ways you can lose your financial aid eligibility — and some are through no fault of your own. But staying on top of your grades, not withdrawing from classes and signing up for enough credits can help you remain eligible.

You can learn more about how paying for school works with our guide to student loans.

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