What To Do If You Lose Your Financial Aid

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There are several ways to pay for your education without financial aid – you may still qualify for non-federal scholarships or other last-minute alternatives. The last thing you want to do is panic. Losing your financial aid isn’t always permanent.

In some cases, you can take steps to regain your eligibility. Learning what to do after your school suspends your financial aid can help you pay for school next semester and beyond.

How to get your financial aid back

If you’re wondering what to do after losing financial aid, talk to your financial aid office, especially if you’re unsure about why you lost it. It can help you understand what caused the change and navigate the best path forward. You may even be able to recover the aid.

But what if it isn’t just a simple fix, or you lost aid due to circumstances beyond your control? You can appeal the school’s decision by submitting a formal request in writing. Here’s how to move forward:

1. Confirm the reason why you lost your financial aid. 
2. Ask for the right point of contact to submit an appeal. 
3. Complete any forms required by the financial aid office (if applicable). 
4. Write a letter that details your circumstances and why you believe a different decision is warranted. 
5. Gather any supporting documentation to substantiate your claims. 
6. Mail your letter, supporting documents and the required forms (if applicable) to the financial aid office.

10 Possible reasons for losing financial aid

Several situations can cause you to lose financial aid. Here are some of the most common reasons and options you may have to reinstate your financial aid:

1. Your income or your parents’ income increased

Need-based financial aid, such as federal work-study, depends on your income and your parents’ income. Your school may reduce your financial aid package if that income exceeds a certain threshold. 

If your parents’ income has increased and won’t go back down, you may not be able to get back what you’ve lost.

2. You received excess federal aid 

There are instances where the amount of aid awarded to the student exceeds the eligibility threshold. In this case, you’d be ineligible for additional aid until you repay the excess, either in a lump sum or through a payment arrangement.

3. You didn’t maintain satisfactory academic progress

One of the many requirements you must meet to keep your financial aid is maintaining a certain GPA set by your school. If your grades dip below that or you have an incomplete class or withdrawal, it could cause you to lose access to all financial aid, including federal loans.

Be sure to speak with your school to confirm what requirements must be met to regain your eligibility for aid.

4. You’re not enrolled half time

You need to be enrolled at least half time to access some forms of federal financial aid. If you take a lighter course load, you may not qualify for federal student loans unless you add more credits to your schedule.

5. You’ve advanced in your program

Some schools offer certain types of financial aid for incoming first-year students, but once you’ve advanced in your program, those school-specific forms of financial aid may no longer be available.

6. You’re incarcerated

If you’re incarcerated in a federal or state institution, you won’t be eligible for most forms of federal financial aid, but you may be able to get a Pell Grant. That said, you could regain eligibility once released from incarceration.

7. You don’t meet other basic eligibility requirements

The U.S. Department of Education has basic eligibility requirements for federal financial aid. It includes citizenship, enrollment, student loan default and other criteria. If your school’s financial aid office finds that you’re missing one or more of these requirements, you may lose your financial aid altogether. In such cases, be sure to inquire about actions you can take to reinstate your eligibility.

8. You failed to make student loan payments

Defaulting on federal student loans can mean bad news for your credit health. If you plan to enroll in school and use federal aid to cover the cost of attendance, you’d be ineligible for funding until the delinquency is resolved through repayment, rehabilitation or consolidation.

9. You didn’t earn your diploma

A missing or invalid high school diploma is another reason why you could lose your eligibility to receive financial aid. The latter typically occurs when students attend high schools that award diplomas not formally recognized by their state of residence. Reach out to your college’s financial aid office for advice on the next steps.

10. You have a judgment lien for a federal debt

Failing to pay federal debt in a timely manner can sometimes result in judgment liens placed on your property. If you fall into this category, access to financial aid will likely be restricted until you pay what’s owed or enter into a payment arrangement.

How to pay for college without financial aid

You can get the funding you need to pay 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. If not, take some 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 income or your parents’ has increased or you’ve lost school-specific financial aid, you may still be able to take out federal student loans, but if your situation caused you to lose access to all federal financial aid, you may have to consider private student loans instead. Unlike federal loans, private student loans require a credit check, meaning you may need a parent to cosign the loan.

  If you don’t have a cosigner, you may also consider an income-share agreement, which provides the money you need in exchange for payments based on a percentage of your income after you graduate.

  You can also look into private student loans that don’t require a good credit score, but these will likely cost much more. Before you apply, read up on how to get a student loan with bad credit, including how to choose a private student loan lender.

• Part- or full-time work
  

  Depending on your course load and other factors, you may be able to get a part-time job – maybe even full-time – while you’re in school. There are even opportunities to work online from the comfort of your room. Even if you can’t work much during the school year, you could work full-time during the summer to earn some money to pay for at least part of your college expenses.

• Consider a more affordable option
  

  Remember, federal financial aid suspension will carry over to another school, but if you transfer to an online school, a community college or a state university, you may be able to reduce your expenses enough to make college more affordable. If you’ve lost your eligibility due to poor grades, you can use this opportunity to work hard to bring your grades back up.

  Before you transfer, check to see how many of your credits will transfer from your current school and whether they’ll still count toward your degree. In some cases, one school’s required course may be considered an elective course by another.

• Consider a tuition payment plan
  

  If you can’t afford to cover your tuition bill in a lump sum before the deadline, you may not be out of luck. Contact the billing office at your school and request a payment plan to make the balance more manageable. In some instances, they may even agree to waive late payment fees to help you get back on track.

• Research needs-based programs
  

  Food and healthcare costs could easily stretch your budget thin. Instead of suffering in silence or letting your pride get in the way, consider applying for food assistance through the USDA’s Supplemental Nutrition Assistance Program (SNAP). You can also look into meal plans offered by your school, and if you still need support, lean on local food pantries to get the nourishment you need.

  If you need affordable health insurance, apply for a policy through the Health Insurance Marketplace. It’s also worth reaching out to your school to ask about in-house health insurance policies.

Bottom line

If you lose federal financial aid, contact your school’s financial aid office promptly for guidance on how to possibly regain eligibility. It could be a simple fix or a more significant issue that warrants an appeal. There are also circumstances where you may not be able to regain what you lost, or it could take some time to resolve the issue and start receiving aid again.

If so, you can use several alternative options to pay for school, like private student loans, grants or income-share agreements. Depending on your course load, you can pick up a part-time or full-time job. Or you may need to transfer to a school that’s more affordable to continue your education.