As a college student, you might need financial aids, student loans, and payment plans to pay for the college tuition and expenses. So, if you end up losing your financial grant, it can get challenging to continue your studies.
That's why if you're here because you're afraid of losing your financial aid at one school, don't worry. We'll guide you through many options you can opt for if things don't go well for you.
What is financial aid for students and where does financial aid come from?
Financial aid is the type of monetary help that you get for your college tuition and other educational expenses. It comes in various forms, one of which is scholarships.
These are scholarship programs specifically designed for students with financial difficulties. They use the money received from charitable organizations or private companies to fund these programs.
For this reason, they do not have any fixed rules but may differ according to each institution's regulations. Most of them are usually based on academic excellence because good grades at school can be used to prove that you're capable enough to finance your college education without having to run into other types of debt like student loans.
When it comes to disbursing funds for different scholarships, some colleges deal with outside agencies that manage them. You'll then be required to complete an application and submit other documents such as your FAFSA form.
The Federal Pell Grant is another type of financial aid that students can get from the government. They're given to students who need help paying for school every year, but they also depend on you and your family's income and assets - hence, they can decrease or increase your financial aid eligibility each year.
Who can receive financial student aid?
Most types of financial aid can be given to various students with different social backgrounds. The most common form of financial aid is student loans, but it also covers other forms like grants, scholarships, and work-study programs.
Most of these are usually based on academic excellence or neediness because they're meant for needy students who often come from disadvantaged groups in society. Not only that, but you'll also have to meet some basic requirements before applying for any type of financial aid program.
Some examples include having good grades in school (which means earning at least a 2.0 GPA), being enrolled in certain types like federal Pell Grants only available to low-income applicants, and having an acceptable amount of money coming in every year (for instance, if you have a family of five or more people living under one roof, your household income will have to meet the set requirements).
How does financial aid help students?
Financial aid helps college students pay for school. There are various types of these like scholarships, grants, work-study programs, and student loans.
One important thing that they all share is that you won't need to pay them back because they're considered gifts from certain donors or sponsors. You'll only be required to earn good grades at school in order to maintain your eligibility for each program offered by different institutions.
However, even with financial aids available for students, there are also some limitations you need to take note of. Some of them include the amount of money you can get, how long you can receive it for, and if these are awarded to everyone in the student body.
What happens when financial aid is lost?
Financial aid can be taken away from students even though they've worked hard to earn it. This means that your eligibility is subject to termination - all thanks to certain factors like academic deficiencies.
For instance, the suspension of your financial aid due to low grades depends on each institution's policy. But when this happens, there are ways for you to continue receiving them again once you have improved your major GPA or earned enough units in college back.
Reasons for losing financial aid
- It could be that either you or your parents earned a high amount of money. So, the aid gets canceled during that year.
- With grants that need requalifying after a semester or a whole year, you stay at risk of losing them. It is because you might not requalify for them after the semester or the year ends.
- You failed to maintain your required GPA and overall academic performance.
- You fail to fulfill the required attendance, significant to receive the financial grant.
- Changing majors and transferring schools could disqualify you from receiving a specific aid.
- Defaulting on a student loan and not being able to reach fruitful negotiations to take care of the issue.
What happens if I drop out of school with my financial aid and what to do?
Your options depend on your situation. You don't need to drop out of college because your financial aid gets suspended. You can look for your school's appeals process to get it back or find new programs that provide financial aids. Consulting your school's financial aid office would help you find the right procedure.
For dealing with defaulting on a student loan situation, you must get out of the default. Then you can request more financial help. You can do this by returning the loan and requesting a lower payment. If that fails, you file for an unemployment deferral to cut down your monthly payments. You can also request a modified payment plan through income-based repayment plans.
If your GPA drops, you can work it out with the decision committee of your school. You can promise them to work harder and improve your academic performance. But if this doesn't work out, you can request for a suspension of aid until you are able to requalify.
If the attendance issue happens, appeal the decision of the committee. You must attend your classes with diligence to show improvement.
Switching schools might disqualify some financial aid you qualified for before. So, look for new aid programs at your new college. Or appeal the decision and tell them your situation. You'll be given other options to continue receiving financial aid.
The same goes for changing majors. If you lose the financial aid you received for your original major, you can look for new grant programs available for your new major. If making a lot of money is the reason for losing aid, you can apply for more student loans instead of scholarships.
Do I lose financial aid for failing a class?
In general, it's unlikely that one class would jeopardize your financial aid status. However, it is critical to understand the specifics of your program's rules in order to accurately assess the influence of a failing course. For example, many financial aid programs require students to maintain a certain grade point average (GPA) in order to remain eligible for funding. So, if your GPA falls below the minimum requirement because of a failing grade, you could lose your financial aid.
If you lose financial aid at one school, can you get it at another?
First of all, you must be eligible as per the FAFSA. You can't get financial aid if you are no longer eligible. Since losing aid is due to restrictions on your eligibility, this means that you will be disqualified at all schools.
You can still get it from a different college as long as the new school has a similar program for students like yours. You must also make sure that there's a similar academic environment and requirements for receiving the aid to qualify again.
Also, you must follow the guidelines of the Department of Education (DOE). In some cases, students who fail to qualify for a merit-based grant at one school can get it at another.
You can lose financial aid for many reasons. But you don't need to worry about losing it because there are solutions available for most situations. You can always find new schools that provide similar programs or appeal the decision of your school's committee.
Often students transfer to those colleges where they can receive more financial assistance. So, if you follow correct procedures and work closely with your financial aid office:
- You can find suitable options to keep your existing grant even if you transfer to another school
- Apply for new scholarships and financial aid programs.
Reinstating Financial Aid at Another School
You can still receive financial aid even if you are no longer attending your current college or university. Your eligibility is held unless you're awarded other financial aid at other colleges within a limited time.
Suspension of federal student loans should become an issue taken into consideration because that could mean soaring debt due to interest accrued while idle in repayment status. This should be followed by an active search for solutions once this happens. Look for the right avenues offered by government agencies and informational guides toward regulating this situation.
Reinstating federal student loans should become an issue taken into consideration because that could mean soaring debt due to interest accrued while idle in repayment status. This should be followed by an active search for solutions once this happens. Look for the right avenues offered by government agencies and informational guides toward regulating this situation.
Transfering financial aid between schools
If you apply for financial aid at a different school and meet the requirements of their student assistance program, then you might be able to transfer it between schools. Also, if your current college or university has a policy allowing students to switch their financial aid from one type of award into another:
Then you'll most likely qualify for that as well.
If a student transfers schools during an enrollment period using a two-step verification process, they can still receive federal need-based aid on both campuses until the appropriate deadline arrives. This applies even if the new school is not part of Title IV or FFEL programs. However, this will not affect private scholarships which would have been awarded based on the student's record at their original institution.
Most schools place a hold on your financial aid when you withdraw from classes, so it's important to understand if and how you can get this back before enrolling.
Before transferring to another college or university, find out about the process for reinstating federal student loans at that institution – similar processes may be required by both of your previous and new institutions as well as the Department of Education.
If your school places a hold on all student accounts during withdrawal, make an appointment with a counselor in the office of financial aid at your current school to discuss what process they follow for reinstating student loans or grants after transfer.
Be aware that the student's former school must process any financial aid refunds within 30 days. This includes all forms of federal loans, grants, and scholarships like Direct Subsidized Loans or Pell Grants which are repaid directly to the Department of Education by your college.
If you withdraw after the deadline, you will most likely forfeit your eligibility for this money including already-awarded grants that must be returned to the government. It is important not to repay these funds yourself in order to avoid repayment penalties associated with federal student loans.
You don't need to give up on college because of financial issues. If you lose your financial aid, there are options for you to earn it back or find new ones. Don't let yourself be downhearted by this because there's always a way around everything as long as you have the willingness to keep trying.
In addition, if your case is lost in the appeals committee, then try again another year through a different process that could favor your needs and requirements. It's hard going through all of these situations but don't forget that with faith and determination, you'll achieve what you want in life no matter how many times you fail.