Key takeaways
- Federal financial aid for students includes direct loans, Pell Grants, the work-study program, and more.
- Certain factors can impact financial aid eligibility, such as citizenship status, education history, and demonstrated need.
- Always complete the FAFSA even if you don’t qualify for federal assistance as schools often use the form to determine institutional aid.
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Federal student financial aid is financial assistance for college through the United States Department of Education. It includes loans and grants, such as the Pell Grant. Most students qualify for some type of federal aid, but certain situations can disqualify students, including citizenship status, grades, and more. We’ve outlined these examples below and provided tips on how to regain eligibility to help make college more affordable.
What can prevent you from being eligible for federal student financial aid?
These factors can impact your eligibility for federal student aid.
Not completing the FAFSA
To apply for any federal financial aid, you must complete the Free Application for Federal Student Aid (FAFSA) each year. Without a completed form, colleges and scholarship organizations don’t have access to your Student Aid Index (SAI) to determine your financial need and award an aid package.
Check school FAFSA deadlines to maximize your eligibility for the Pell Grant and institutional aid, as money does run out the longer you wait. Aim to complete it as soon as you can after October 1 for the following academic year.
Financial need
Some federal aid programs require you to have demonstrated need. For example, all eligible students can receive Direct Unsubsidized Loans but only those with demonstrated financial need can take out Direct Subsidized Loans. You also need to show demonstrated need for the Pell Grant and federal work-study program.
Your financial situation impacts how much you’re eligible for. A student with more need will generally receive a larger financial aid package than a student with less need. In addition, federal aid programs only cover up to the cost of attendance (COA). If other financial aid sources, such as outside scholarships, pay for the entire COA, you won’t receive federal aid.
Incarceration
You cannot take out federal student loans if you’re currently incarcerated or confined. However, you might be eligible for the Federal Supplemental Educational Opportunity Grant (FSEOG) and a Federal Work-Study (FWS) job. Incarcerated and confined students may also receive the Pell Grant, but those in federal or state facilities can only use the grant on approved prison education programs.
All limitations are lifted once you’re no longer incarcerated or confined. You can actually apply for FAFSA before you’re released if you plan to continue your education immediately after.
Citizenship status
You can only receive federal financial aid if you’re a U.S. citizen or eligible noncitizen, such as:
- U.S. nationals, including natives of American Samoa or Swains Island
- U.S. permanent residents who have I-151, I-551 or I-551C
- Individuals who have Arrival-Departure Records (I-94) from the U.S. Citizenship and Immigration Services with approved designations
Education history
Students have to show they’re prepared for higher education with a high school diploma, General Education Development (GED) certificate, state-recognized equivalent, or completed homeschool education.
If you’ve already attended college, you might not be eligible for further financial aid. For example, you can’t receive the Pell Grant again if you’ve already earned a bachelor’s degree, received a professional degree, or you’ve used the grant for 12 semesters.
Failure to maintain satisfactory academic progress
Students need to meet satisfactory academic progress (SAP) standards to maintain federal financial aid eligibility, including:
- GPA: You must maintain above a certain GPA, as determined by the school, and at least a 2.0.
- Enrollment status: You need to attend school at least half-time (six credit hours per semester). If you fall below, you’ll have to start making payments on any federal student loans you borrowed in six months. You’ll also be eligible for less money from the Pell Grant or loans if you take fewer than 12 credits per semester.
- Course completion: Federal financial aid requires you to have at least a 66.6% course completion rate, meaning you can only withdraw from or fail a certain number of classes.
Many non-federal scholarships and grants also require you to maintain SAP to receive aid or renew awards. Keep in mind that colleges have their own SAP benchmarks that may be higher than the federal government’s. You can be asked to leave the school if you fail to improve your performance during the probationary period.
School or certificate program
Many colleges, universities, and higher education institutions participate in federal student aid programs – but not all. You can check if your school participates through the Federal School Code Search.
Defaulted on federal student loans
If you are currently in default on federal student loans, you cannot take out additional federal student loans. You need to get out of default or make at least six consecutive monthly payments. Contact your loan servicer for more information.
How to regain federal student financial aid
Your recourse for regaining federal student financial aid depends on your situation.
For example if you’re not maintaining SAP, you can take steps to improve your grades, such as working with a tutor and meeting with your advisor. If you believe there’s been an error with your SAP, you can appeal the school’s decision.
In most cases, students simply need to complete the FAFSA with their parents to be eligible for federal aid. However, even if you’re not eligible, still complete the form. Most colleges, organizations, and states use the FAFSA to determine and award other types of aid including grants and merit scholarships. If you don’t turn in the application, you likely won’t be considered for any aid.
If you have concerns about your federal financial aid eligibility, reach out to your school’s financial aid department to discuss the next steps.
Federal aid isn’t the only way to pay for college. Scholarships can cut the cost of your education or even pay for a full ride. Find awards you qualify for through our Scholarship Search Tool.
