What to do if you lose financial aid

Don't worry—you can get financial aid back

Let’s say you’ve filed your FAFSA^®, received your financial aid offer, and are enjoying the semester. Then, you’re notified that your financial aid has been taken away. You’re probably wondering why you lost it—and how you can get it back.

Here’s what you should know about financial aid eligibility:

Why financial aid offers may be revoked or lost

Before we look at the reasons why financial aid may be revoked, let’s review some of the Department of Education’s basic eligibility requirements.^{footnote 1}

You must

• Have a demonstrated financial need
• Be a U.S. citizen, eligible non-citizen, or have a green card
• Be enrolled at least half-time in an eligible degree or certificate program
• Have a valid Social Security number
• Maintain satisfactory academic progress (SAP)
• Not be in default on a federal student loan
• Agree that you’ll use federal student aid only for education purposes
• Show you’re qualified to obtain a college or career school degree

Every year you receive financial aid, you must continue to meet these criteria. If you don’t, the school might withdraw their assistance. Here are several other common reasons why financial aid might be withdrawn^{footnote 2}:

• Not continuing to meet the basic eligibility criteria (see above) 
• Not making Satisfactory Academic Progress (SAP). SAP is a guideline schools use to monitor whether you can continue receiving financial aid. The guidelines may be listed on your school’s website, or you can get them at your financial aid office. Schools have to check your academic progress at least once a year.
  • Low grades: Perhaps you haven’t maintained at least a 2.0 GPA on a 4.0 scale (a C average). It’s important to note that in a number of schools, a GPA lower than 2.0 will place you on academic probation, so not only could your funding be in jeopardy, but possibly your future at the school overall.
  • Not enough academic progress: If you haven’t passed a minimum of classes or earned enough credits toward your degree, your financial aid could be withdrawn. In order to show progress, you may have to prove you’re on track to graduate within a certain number of years.

  By the way, some private scholarships are also dependent on your GPA, so you could lose those with low grades as well.

• Not being enrolled at least part-time in your program. If you choose to take fewer than the minimum courses required to be considered a part-time student, you could lose your financial aid. You may choose to register for fewer classes for any number of reasons—just remember the financial impact that you could experience.
• Defaulting on a previous federal student loan. If you have a student loan that you’ve missed payments on and as a result, defaulted, you may lose financial aid eligibility.
• Not completing the process. Did you finish all the steps required to accept your financial aid? For example, did you overlook an email from your school? You may have been asked to officially accept your financial aid offer. If you fail to meet the deadline, the money may be given to another student.

What to do if you’ve lost a financial aid offer

Don’t panic, but don’t put off taking action, either. Many schools will send a warning if it looks like you’re failing the SAP requirement, but it helps to be proactive. Talk to your school’s financial aid office about whether you have a valid case and for advice on how to appeal.

Here are a few ways you can try to get back lost financial aid:

• Talk to the pros. Go to your school’s financial aid office right away. They’ve got experience with this and can suggest alternatives or ways to re-apply for the aid.
• Consider a tutor: If grades are the problem, you can see if tutoring programs are available on campus. 
• Appeal the SAP decision. If your SAP is not satisfactory, they can withdraw your financial aid eligibility, but it is possible to appeal an SAP decision. If there were legitimate causes for your academic decline, you can file an appeal with your school. You need to clearly and specifically describe—with proof—what caused your academic decline.^{footnote 3}
  
  Examples of reasons that can cause a decline include:
  • Personal changes, like the birth of a child or a death in your family
  • Severe physical injury or psychological problems, especially if the condition is being treated medically
  • Financial circumstances, like a lack of money forcing you to drop out or move off-campus
  • If you’re in your final semester, some schools may waive the SAP requirement if it looks like you’ll graduate

If your issues are ongoing, you might need to take a leave of absence. Note, however, that you may not be automatically eligible for financial aid when you come back. On the other hand, if you’re working on correcting the issue that caused your grades to decline, a school may decide that you’re on the right track to bring grades up again next semester.

• Correct any previous defaults^{footnote 4}. Make sure you’re current with any existing student loans. This may include “rehabilitating” a federal Direct Loan, which may let you pay a lower amount, or consolidating the loan. Contact your loan servicer to find out what options are available to you.

Appealing the financial aid decision

Can you get your financial aid back? It depends. If you can correct the issue (bring your grades up, take more classes, clear up defaults, etc.) then you may be eligible for it again—but probably not for the semester when you’re making the changes. Don’t assume that you’ll get it automatically even after you’ve made changes. Here are some tips on how to get your financial aid back and conduct the appeal:

If you do decide to appeal the school’s decision, you’ll need to write a “financial aid appeal letter.”

• Find out from your financial aid office who the letter should be addressed to and if there are any specific forms you should use.
• Be very specific—and honest—about the situation and how this impacted your academic performance.
• Add documentation to your letter that proves the situation and the impact on your life. If you’ve paid off a previous default, add that paperwork. If you’re experiencing a physical or psychological situation, add proof from your doctors, medical bills, etc.

If you’ve lost financial aid and can’t get it back

Even if you’re approved for future financial aid, it probably won’t be for another semester. So, you’ll need to find a way to fill that gap so you can keep paying for school. You can check with your school to see if there’s a payment plan so you can pay over a few months instead of all at once. 

If you need money for next semester, there are a few possibilities:

• Apply for private scholarships. There are a ton of resources out there to help you find money for school that you won't have to pay back. For example, Scholarship Search by Sallie can help you find and apply for free money opportunities for school. Best part? You don’t have to register—and you can use filters to narrow down your search based on your background, major, the state you live in, and more.
• Look for a part-time job. A part-time gig may help you pay for part of your housing, or other expenses like textbooks and supplies. Be mindful that you’ll need to balance work with your studies so you’re not jeopardizing your grades.
  
• Apply for a private student loan. It’s not tied to your financial aid eligibility and may be available even if you’re attending school less than part-time. Private student loans are credit-based, so you may need a cosigner.

Summary: Getting back your financial aid

•  The key to maintaining your financial aid? Don’t lose it in the first place. Make sure you know what your school expects of you, including the minimum GPA and credit load required.  
•  If you think you might lose your financial aid, talk to your school’s financial aid office ASAP. Whether it’s raising your grades or taking more classes, you may be able to get ahead of the decision.
•  If you have an acceptable reason for falling short of SAP requirements, you might be able to appeal the loss of your financial aid. The appeal needs to be specific and include proof that the situation really did impact your grades. 
• If you need funding to make up for the temporary loss of financial aid, private scholarships and/or private student loans might help you pay for the semester until you’re eligible for financial aid again.